RXI HOLDINGS INC, 8-K, 1996-06-21

RXI HOLDINGS INC
8-K, 1996-06-21
PLASTICS PRODUCTS, NEC

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<PAGE>

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

__________

FORM 8-K

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date the earliest event reported) JUNE 6, 1996
------------------------------

RXI Holdings, Inc.
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)

DELAWARE
- --------------------------------------------------------------------------------
(State or other jurisdiction of Incorporation)

33-94420 95-4426626
- -------------------------- --------------------------------
(Commission File Number) (I.R.S. Employer Identification No.)

11111 SANTA MONICA BOULEVARD, SUITE 270 LOS ANGELES, CALIFORNIA 90025
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip code)

(310) 473-7005
- --------------------------------------------------------------------------------
Registrant's Telephone Number, Including Area Code)

- --------------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)

<PAGE>

ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.

On June 6, 1996, RXI Plastics, Inc. ("Company"), a wholly-owned
subsidiary of Registrant, sold to Texberry Acquisition, Inc. all of the
outstanding stock of Texberry Container Corporation ("Texberry"), a wholly-owned
subsidiary of the Company, pursuant to a Stock Purchase Agreement, dated as of
May 15, 1996, and effective as of June 1, 1996, among the Company, Registrant
and Texberry Acquisition, Inc. (the "Agreement").

The sale price for the disposition was $13,879,719, consisting of
$1,625,097 in cash, an unsecured, subordinated deferred payment in the
principal amount of $2,250,000, guaranteed by the corporate parent of
Texberry Acquisition, Inc., $2,628,369 deposited into an escrow account
pursuant to an Escrow Agreement, the assumption of $3,376,253 of the
accounts payable of Texberry and the assumption of $4,000,000 in principal
amount due to The CIT Group/Business Credit, Inc.. The sale price was based
on the fair market value of the assets (including goodwill) and liabilities
of Texberry.

In connection with the sale of Texberry, the Registrant and various of
its subsidiaries entered into supply and distribution agreements with Texberry,
pursuant to which the Company agreed to sell to Texberry products manufactured
by the Company on specified terms. As part of the sale, Texberry was released
from its guaranty of Registrant's 14% Senior Secured Notes due 2002 and from all
indebtedness due Registrant by Texberry.

In contemplation of the sale of Texberry, Registrant effectuated an
internal reorganization whereby the shares of its subsidiaries, Patrick
Plastics, Inc. and Texberry, were transferred to the Company and the
manufacturing assets and business (and associated liabilities) of Texberry were
transferred to Company.

Following completion of the sale of Texberry, all of the subsidiaries
of Company were merged into Company and Company became the only subsidiary of
Registrant. All of Registrant's business operations are conducted by Company.

ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS

(b) PRO FORMA FINANCIAL INFORMATION. Pro forma financial
statements of Registrant and Subsidiaries for the twelve months ended June 30,
1995, and as at and for the nine months ending March 31, 1996, are attached at
Pages F-5, F-2 and F-8, respectively.

(c) EXHIBITS. The following exhibits are filed as exhibits to this
current report on Form 8-K, and none have been incorporated by reference to any
other registration statement, report or other document.

EXHIBIT NUMBER DESCRIPTION

2.3 Stock Purchase Agreement, dated as of May 15, 1996,
between the Company, Registrant and Texberry
Acquisition, Inc.

2.4 Guaranty Agreement, dated as of June 5, 1996 by Kranson
Industries, Inc. for the benefit of RXI Plastics, Inc.

<PAGE>

10.17 Subordination Agreement, dated June 5, 1996, by and
between Texberry Acquisition, Inc., Bank One,
Indianapolis, NA, RXI Plastics, Inc. and RXI Holdings,
Inc.

10.18 Escrow Agreement, dated June 5, 1996, by and between
Texberry Acquisition, Inc., RXI Plastics, Inc., RXI
Holdings, Inc. and Mercantile Bank of St. Louis, NA.

-3-

<PAGE>

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

RXI Holdings, Inc.

June 21, 1996 By:_____________________________________
Leon Farahnik, President
and Chief Executive Officer

By:____________________________________
Marvin Liebman,
Chief Financial Officer

M:\PSM\TEXBERRY.8K

-4-
<PAGE>

UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

The following pro forma consolidated financial information of the Company
presents the unaudited consolidated balance sheet as of March 31, 1996, and the
unaudited consolidated statements of operations for the year ended June 30, 1995
and for the nine months ended March 31, 1996. The pro forma consolidated balance
sheet gives effect to the acquisition of Vanguard Plastics of California, Inc.
("Vanguard") (as set forth in the Company's Form 8-K as filed with the
Securities and Exchange Commission on May 24, 1996)(File Number 033-94420) and
to the disposition of the distribution business of Texberry Container
Corporation ("Texberry Distribution") as if both transactions had occurred on
March 31, 1996. The pro forma consolidated statement of operations for the year
ended June 30, 1995 gives effect to the acquisition of Vanguard, the acquisition
of Continental Plastics, Inc. ("Continental") and the issuance of $60 million of
14% senior notes due 2002 (the "Issuance") (both as set forth in the Company's
Registration Statement on Form S-4 as filed with the Securities and Exchange
Commission on October 10, 1995)(File Number 033-94420) and to the
disposition of Texberry Distribution, as if each of these transactions had
occurred on July 1, 1994. The pro forma consolidated statement of operations for
the nine months ended March 31, 1996 gives effect to the acquisition of Vanguard
and the disposition of Texberry Distribution as if both transactions had
occurred on July 1, 1995.

The pro forma consolidated financial statements should be read in
conjunction with the Company's Consolidated Financial Statements and
"Management's Discussion and Analysis" appearing in the Company's Registration
Statement on Form S-4, which are incorporated herein by this reference. The pro
forma consolidated balance sheet and statements of operations do not purport to
present what the Company's actual statement of financial condition or results of
operations would have been had such transactions in fact occurred on such dates.
The pro forma consolidated statements of operations also do not purport to
project the results of operations of the Company for the current year or for any
other period.

F-1

<PAGE>

RXI HOLDINGS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET

As of March 31, 1996
(dollars in thousands)

<TABLE>
<CAPTION>
Pro Forma Pro Forma
Vanguard Adjustments Adjustments
Company Plastics, Inc. for the for the Pro Forma
Historical Historical Acquisition Disposition Adjusted
---------- -------------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 254 $ 288 $ (288) (e) $ 1,624 (h) $ 1,878
Accounts receivable 10,348 1,554 (222) (f) (2,831) (g) 8,849
Inventories 12,359 1,098 (100) (a) (2,109) (g) 11,248
Prepaid expenses and other current assets 644 88 732
Income tax refund receivable 211 86 297
Current deferred income taxes 876 45 921
-------- ------ ------- -------- --------
Total current assets 24,692 3,159 (610) (3,316) 23,925

Deferred payment from purchaser - - 2,250 (h) 2,250
Funds held in escrow - (h)
Property, plant and equipment, net 36,692 1,525 (1,292) (a) (6) (i) 36,919
Intangible assets, net 34,094 - (6,514) (i) 27,580
Other assets 436 231 369 (a) 1,036
-------- ------ ------- -------- --------
TOTAL ASSETS $ 95,914 $4,915 $(1,533) $ (7,586) $ 91,710
-------- ------ ------- -------- --------
-------- ------ ------- -------- --------

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:
Current portion of long-term obligations $ 175 $ 200 $ (200) (c) $ 175
Accounts payable 7,956 894 (222) (f) (2,900) (g) 5,728
Accrued liabilities-other 3,702 139 200 (a) (490) (g) 3,551
Accrued interest 1,473 - 1,473
Revolving line of credit 12,348 683 (188) (c)(e) (4,000) (j) 8,843
-------- ------ ------- -------- --------
Total current liabilities 25,654 1,916 (410) (7,390) 19,770
-------- ------ ------- -------- --------

Long-term obligations, less current maturities 64,788 600 1,276 (c)(d) 66,664
-------- ------ ------- -------- --------

Deferred income taxes 2,699 (50) (k) 2,649
-------- - -------- --------

Redeemable stock 803 803
-------- --------

Shareholders' Equity:
Series A preferred stock 9 - 9
Series B preferred stock 5 - 5
Common stock 3 500 (500) (b) 3
Warrants 1,608 - 1,608
Additional paid-in capital 13,296 - 13,296
Retained earnings (deficit) (12,951) 1,899 (1,899) (b) (146) (k) (13,097)
-------- ------ ------- -------- --------
Total shareholders' equity 1,970 2,399 (2,399) (146) 1,824
-------- ------ ------- -------- --------

-------- ------ ------- -------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 95,914 $4,915 $(1,533) $ (7,586) $ 91,710
-------- ------ ------- -------- --------
-------- ------ ------- -------- --------
</TABLE>

See accompanying notes to unaudited pro forma consolidated balance sheet.

F-2

<PAGE>

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
(DOLLARS IN THOUSANDS)

NOTES TO PRO FORMA ADJUSTMENTS FOR THE ACQUISITION

(a) The Vanguard acquisition has been accounted for as a purchase. The total
purchase cost will be allocated to Vanguard's assets and liabilities based
on their relative fair values as of the closing date of the acquisition,
based on valuations and other studies which are not yet complete. The
excess of the fair value of the net assets acquired over the purchase
cost may result in negative goodwill which will be allocated to property,
plant and equipment.

The purchase cost and preliminary allocation of the excess of the net book
value of the assets acquired over their purchase cost is as follows:

<TABLE>
<CAPTION>
<S> <C>
Purchase of Vanguard's outstanding common equity. . . . . . . . . $1,176
Fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . 200
------
Total purchase cost . . . . . . . . . . . . . . . . . . . . 1,376
------

Net book value of net assets acquired . . . . . . . . . . . . . . 2,399
------
Excess of net book value over total purchase cost . . . . . . . . $1,023
------
------

Preliminary adjustments to bring historical book values to
fair value and allocate negative goodwill:
Inventories . . . . . . . . . . . . . . . . . . . . . . . . $ 100
Property, plant & equipment . . . . . . . . . . . . . . . . 1,292
Deferred income taxes. . . . . . . . . . . . . . . . . . . . (369)
------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,023
------
------
</TABLE>

(b) Reflects purchase of existing stockholders' equity.

<TABLE>
<CAPTION>
<S> <C>
Revolving line of credit . . . . . . . . . . . . . . . . . . $ 683
Current portion of long-term obligations . . . . . . . . . . 200
Long-term obligations . . . . . . . . . . . . . . . . . . . 600
------
Total . . . . . . . . . . . . . . . . . . . . . . . . . $1,483
------
------
</TABLE>

(d) Reflects the issuance of indebtedness in connection with the acquisition as
follows:

<TABLE>
<CAPTION>
<S> <C>
Seller note . . . . . . . . . . . . . . . . . . . . . . . . $ 576
Secured term debt . . . . . . . . . . . . . . . . . . . . . 1,300
------
Total . . . . . . . . . . . . . . . . . . . . . . . . . $1,876
------
------
</TABLE>

(e) Reflects the application of cash and initial draw on the new revolving
line of credit facility to fund the balance of the acquisition in the
amounts of $288 and $495, respectively.

(f) Reflects the elimination of accounts receivable and accounts payable
related to sales by Vanguard to the Company.

F-3

<PAGE>

NOTES TO PRO FORMA ADJUSTMENTS FOR THE DISPOSITION

(g) Reflects the sale of accounts receivable and inventories totalling $2,831
and $2,109, respectively, and the assumption by the purchaser of accounts
payable and accrued expenses of $2,900 and $490, respectively.

(h) The total net proceeds from the disposition were $6,502 including $2,628
deposited to an escrow account to be held by a designated trustee and
remitted to the Company at the end of a one year escrow period. The
amount remitted to the Company may be subject to adjustment based on the
performance of the Texberry Distribution business during the twelve
months ending May 31, 1997. The Company will not recognize any of the
proceeds held in escrow until such funds are paid to the Company. The
remaining proceeds from the disposition are as follows:

<TABLE>
<CAPTION>
<S> <C>
Deferred payment from purchaser . . . . . . . . . . $2,250
Cash received at close . . . . . . . . . . . . . . 1,624
------
Total . . . . . . . . . . . . . . . . . . . . $3,874
------
------
</TABLE>

(i) Reflects the disposition of $6 of fixed assets and $6,514 of goodwill
related to the business sold.

(j) Reflects the assumption by the purchaser of $4,000 of revolving line of
credit liability.

(k) Reflects the loss realized from the disposition as follows:

<TABLE>
<CAPTION>
<S> <C>
Assets sold:
Accounts receivable . . . . . . . . . . . . . . . $ 2,831
Inventories . . . . . . . . . . . . . . . . . . . 2,109
Fixed assets . . . . . . . . . . . . . . . . . . . 6
Goodwill . . . . . . . . . . . . . . . . . . . . . 6,514
-------
Total assets sold . . . . . . . . . . . . . . 11,460
-------
Liabilities assumed:
Accounts payable . . . . . . . . . . . . . . . . . 2,900
Accrued liabilties . . . . . . . . . . . . . . . . 490
Revolving line of credit obligation . . . . . . . 4,000
-------
Total liabilities assumed . . . . . . . . . . 7,390
-------
Net assets sold . . . . . . . . . . . . . . . . . . . . 4,070
Proceeds received . . . . . . . . . . . . . . . . . . . 3,874
-------
Loss on disposition before income taxes . . . . . . . . (196)
Benefit for income taxes on loss from disposition . . . 50
-------
Net loss on sale . . . . . . . . . . . . . . . . . . . $ (146)
-------
-------
</TABLE>

F-4

<PAGE>

RXI HOLDINGS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

Year Ended June 30, 1995
(dollars in thousands)

<TABLE>
<CAPTION>
Continental
Plastics, Inc. Pro Forma
Historical Adjustments Pro Forma
Vanguard (period July 1, for the Adjustments
Company Plastics, Inc. 1994 to February Issuance and for the Pro Forma
Historical Historical(a) 10, 1995)(b) Acquisitions Disposition Adjusted(c)
---------- -------------- ---------------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net sales $86,779 $11,584 $9,038 $(1,045) (d) $(32,104) (i) $74,252
Cost of sales 66,756 9,931 5,679 (1,103) (d)(e) (25,573) (i) 55,690
------- ------- ------ ------- -------- -------
Gross profit 20,023 1,653 3,359 58 (6,531) 18,562
Operating expenses 19,338 1,098 2,009 386 (e) (4,133) (j) 18,698
------- ------- ------ ------- -------- -------
Income from operations 685 555 1,350 (328) (2,398) (136)
------- ------- ------ ------- -------- -------
Other expense (income):
Interest 7,284 195 832 2,231 (f) (787) (k) 9,755
Other (102) - 20 (82)
------- ------- ------ ------- -------- -------
Total 7,182 195 852 2,231 (787) 9,673
------- ------- ------ ------- -------- -------
Income (loss) before income taxes (6,497) 360 498 (2,559) (1,611) (9,809)
Provision (benefit) for income taxes (1,877) 87 296 (1,024) (g) (644) (g) (3,162)
------- ------- ------ ------- -------- -------
Income (loss) before minority interest (4,620) 273 202 (1,535) (967) (6,647)
Minority interest in income of
subsidiary (10) - - 10 (h) - -
------- ------- ------ ------- -------- -------
Net income (loss) $(4,630) $ 273 $ 202 $(1,525) $ (967) $(6,647)
------- ------- ------ ------- -------- -------
------- ------- ------ ------- -------- -------
</TABLE>

See accompanying notes to unaudited pro forma
consolidated statement of operations.

F-5

<PAGE>

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 1995

(a) Vanguard Historical amounts reflect the operations of Vanguard from July 1,
1994 to June 30, 1995.

(b) Continental Historical amounts reflect the operations of Continental from
July 1, 1994 to February 10, 1995 (its date of acquisition).

(c) Pro forma amounts reflect the Company's operating results as if the
Issuance, the acquisitions and the disposition had all occurred on July 1,
1994.

NOTES TO PRO FORMA ADJUSTMENTS FOR THE ACQUISITIONS AND ISSUANCE

(d) Reflects adjustment for sales and cost of sales by Vanguard to the Company
totalling $1,045.

(e) Reflects adjustments to Continental's and Vanguard's cost of sales,
selling, general and administrative expenses for the following:

Selling, General
Cost of Sales and Administrative
------------- ------------------
<S> <C> <C>
Pro forma amortization of Continental goodwill
over a useful life of 15 years . . . . . . . . . . . . $ --- $ 447
Less historical amortization . . . . . . . . . . . . . --- (61)
Additional depreciation expense related to the
increase in the book value of Continental's
property and equipment as a result of purchase
accounting adjustments . . . . . . . . . . . . . . . . 187 ---
Reduction in depreciation expense related
to the adjustment to Vanguard's property and
equipment as a result of purchase
accounting adjustments. . . . . . . . . . . . . . . . . (245) ---
----- -----
$ (58) $ 386
----- -----
----- -----
</TABLE>

(f) Reflects adjustment to interest expense for the Issuance and acquisitions
as follows:

<TABLE>
<CAPTION>
<S> <C>
Interest on $60,000,000 face amount of Senior
Notes at 14% . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,400
Amortization of original issue discount on Senior Notes . . . . . . . 106
Interest on average balance of new line of credit of
$10,500,000 at 9% . . . . . . . . . . . . . . . . . . . . . . . . . . 945
Interest on $4,500,000 Seller Note at 8% . . . . . . . . . . . . . . 360
Amortization of deferred financing costs relating to the Issuance . . 521
Interest on $1,300,000 term note issued in connection with the
purchase of Vanguard at 10.5%. . . . . . . . . . . . . . . . . . . . 126
Interest on $576,000 Vanguard Seller Note at 10% . . . . . . . . . . 54
-------
Pro forma interest expense for the Issuance and the Acquisitions . . 10,512
Less Company historical interest expense (net of $21 of interest
relating to other term obligations) . . . . . . . . . . . . . . . . . 7,263
Less Continental historical interest . . . . . . . . . . . . . . . . 822
Less Vanguard historical interest . . . . . . . . . . . . . . . . . . 196
-------
Net adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,231
-------
-------
</TABLE>

(g) The benefit for income taxes is computed by applying the combined statutory
rate of 40%.

(h) Reflects the elimination of minority interest which was reacquired in
October 1994.

F-6

<PAGE>

NOTES TO PRO FORMA ADJUSTMENTS FOR THE DISPOSITION

(i) Reflects adjustment for historical sales and cost of sales to distribution
customers which were sold to the Purchaser as part of the disposition.

(j) Reflects adjustments to the Company's selling, general and administrative
expenses for the following:

<TABLE>
<CAPTION>
Selling, General
and Administrative
------------------

<S> <C>
Elimination of amortization expense related to the
goodwill of Texberry Distribution . . . . . . . . . . . $ 293
Eliminate expenses related to branch
operations sold . . . . . . . . . . . . . . . . . . . . 2,114
Eliminate personnel expenses related to
reductions in staffing as a result of the
disposition . . . . . . . . . . . . . . . . . . . . . . 1,726
-------
$ 4,133
-------
-------
</TABLE>

(k) Reflects adjustments to interest income/expense as a result of the
Disposition as follows:

<TABLE>
<CAPTION>
<S> <C>
Interest income on the $2,250,000 deferred payment
from purchaser at 10% . . . . . . . . . . . . . . . . . $ 225
Reduction in interest expense arising from the
application of proceeds from the Disposition
to reduce the Company's short-term debt . . . . . . . . 162
Reduction in interest expense arising from the
assumption of debt by the purchaser . . . . . . . . . . 400
-----
Total adjustment . . . . . . . . . . . . . . . . . . . $ 787
-----
-----
</TABLE>

F-7

<PAGE>

RXI HOLDINGS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

Nine Months Ended March 31, 1996
(dollars in thousands)

<TABLE>
<CAPTION>
Pro Forma Pro Forma
Vanguard Adjustments Adjustments
Company Plastics, Inc. for the for the Pro Forma
Historical Historical (a) Acquisition Disposition Adjusted(b)
---------- -------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net sales $70,164 $8,086 $ (942) (c) $(22,327) (f) $54,981
Cost of sales 55,029 6,959 (1,126) (c)(d) (17,878) (f) 42,984
------- ------ ------- -------- -------
Gross profit 15,135 1,127 184 (4,449) 11,997
Operating expenses 13,245 715 (3,101) (g) 10,859
------- ------ ------- -------- -------
Income from operations 1,890 412 184 (1,348) 1,138
------- ------ ------- -------- -------
Other expense (income):
Interest 7,962 117 29 (e) (591) (h) 7,517
Other 78 - 78
------- ------ ------- -------- -------
Total 8,040 117 29 (591) 7,595
------- ------ ------- -------- -------
Income (loss) before income taxes (6,150) 295 155 (757) (6,457)
Provision (benefit) for income taxes (1,547) 62 (i) (303) (i) (1,788)
------- ------ ------- -------- -------
Net income (loss) $(4,603) $ 295 $ 93 $ (454) $(4,669)
------- ------ ------- -------- -------
------- ------ ------- -------- -------
OTHER DATA:

</TABLE>

See accompanying notes to unaudited pro forma
consolidated statement of operations.

F-8

<PAGE>

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED MARCH 31, 1996

(a) Vanguard Historical amounts reflect the operations of Vanguard from July 1,
1995 to March 31, 1996.

(b) Pro forma amounts reflect the Company's operating results as if the
acquisition of Vanguard and the Disposition occurred on July 1, 1995.

(c) Reflects adjustment to sales and cost of sales of $942 to eliminate the
impact of sales from Vanguard to the Company.

(d) Reflects the reduction in depreciation expense totalling $184 related to
the adjustment to Vanguard's property and equipment as a result of
purchase accounting adjustments.

(e) Reflects adjustment to interest expense for the Vanguard acquisition as
follows:

<TABLE>
<CAPTION>
<S> <C>
Interest on average balance of new line of credit of
$500,000 at 9% . . . . . . . . . . . . . . . . . . . . . . . . . $ 37
Interest on $1,300,000 term note issued in connection with the
purchase of Vanguard at 10.5%. . . . . . . . . . . . . . . . . . 75
Interest on $576,000 Vanguard Seller Note at 10% . . . . . . . . 34
----
Pro forma interest expense for the Vanguard acquisition . . . . . 146
Less Vanguard historical interest . . . . . . . . . . . . . . . . 117
----
Net adjustment . . . . . . . . . . . . . . . . . . . . . . . . . $ 29
----
----
</TABLE>

(f) Reflects adjustment for historical sales and cost of sales to distribution
customers which were sold to the Purchaser as part of the disposition.

(g) Reflects adjustments to the Company's selling, general and administrative
expenses for the following:

<TABLE>
<CAPTION>
Selling, General
and Administrative
------------------
<S> <C>
Elimination of amortization expense related to the
goodwill of Texberry Distribution . . . . . . . . . . . $ 220
Eliminate expenses related to branch
operations sold . . . . . . . . . . . . . . . . . . . . 1,586
Eliminate personnel expenses related to
reductions in staffing as a result of the
disposition . . . . . . . . . . . . . . . . . . . . . . 1,295
-------
$ 3,101
-------
-------
</TABLE>

(h) Reflects adjustments to interest income/expense as a result of the
Disposition as follows:

<TABLE>
<CAPTION>
<S> <C>
Interest income on the $2,250,000 note receivable
from purchaser at 10% . . . . . . . . . . . . . . . . . $ 169
Reduction in interest expense arising from the
application of proceeds from the Disposition to
to reduce the Company's short-term debt . . . . . . . . 122
Reduction in interest expense arising from the
assumption of debt by the purchaser . . . . . . . . . . 300
-----
Total adjustment . . . . . . . . . . . . . . . . . . . $ 591
-----
-----
</TABLE>

(i) The provision (benefit) for income taxes is computed by applying the
combined statutory rate of 40%.

F-9

<PAGE>
EXHIBIT 2.3

STOCK PURCHASE AGREEMENT

between

TEXBERRY ACQUISITION, INC.

and

RXI HOLDINGS, INC. and
RXI PLASTICS, INC.

Dated as of May 15, 1996

<PAGE>
TABLE OF CONTENTS

PAGE
----

1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

"Accountants" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Accounts Receivable" . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Applicable Contract" . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Assigned Goods". . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Best Efforts". . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Breach". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Business". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Business Financial Information". . . . . . . . . . . . . . . . . . . . 2
"Business Liabilities". . . . . . . . . . . . . . . . . . . . . . . . . 2
"Buyer" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Cash Payment". . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"CIT" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Closing" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Closing Date". . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Closing List". . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Code". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Common Customers". . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Company" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Consent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Contemplated Transactions" . . . . . . . . . . . . . . . . . . . . . . 2
"Contract". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Damages" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Deferred Payment". . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Disclosure Schedules". . . . . . . . . . . . . . . . . . . . . . . . . 3
"Disputed Payables" . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Distribution Agreement". . . . . . . . . . . . . . . . . . . . . . . . 3
"Effective Time". . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Encumbrance" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Engagement Letter" . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Environment" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Environmental, Health, and Safety Liabilities" . . . . . . . . . . . . 3
"Environmental Law" . . . . . . . . . . . . . . . . . . . . . . . . . . 4
"ERISA" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
"Escrow". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
"Escrow Agent". . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
"Escrow Agreement". . . . . . . . . . . . . . . . . . . . . . . . . . . 5
"Escrow Deposit". . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
"Estimated Balance Sheet" . . . . . . . . . . . . . . . . . . . . . . . 5
"Facilities". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
"Formation" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
"GAAP". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
"Governmental Authorization". . . . . . . . . . . . . . . . . . . . . . 5
"Governmental Body" . . . . . . . . . . . . . . . . . . . . . . . . . . 5
"Gross Margin Shortfall". . . . . . . . . . . . . . . . . . . . . . . . 5
"Hazardous Activity". . . . . . . . . . . . . . . . . . . . . . . . . . 5
"Hazardous Materials" . . . . . . . . . . . . . . . . . . . . . . . . . 5
"HSR Act" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
"Indemnified Persons" . . . . . . . . . . . . . . . . . . . . . . . . . 5
"Initial Adjustment". . . . . . . . . . . . . . . . . . . . . . . . . . 6
"Intellectual Property Assets". . . . . . . . . . . . . . . . . . . . . 6
"Intercompany Obligations". . . . . . . . . . . . . . . . . . . . . . . 6
"IRS" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
"Knowledge" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
"Kranson" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

- i -

<PAGE>

"Kranson Guaranty". . . . . . . . . . . . . . . . . . . . . . . . . . . 6
"Leased Tangible Personal Property" . . . . . . . . . . . . . . . . . . 6
"Legal Requirement" . . . . . . . . . . . . . . . . . . . . . . . . . . 6
"LFH" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
"Lists" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
"Material Contracts". . . . . . . . . . . . . . . . . . . . . . . . . . 6
"Measuring Period". . . . . . . . . . . . . . . . . . . . . . . . . . . 6
"Name License Agreement". . . . . . . . . . . . . . . . . . . . . . . . 6
"Noncompetition Agreements" . . . . . . . . . . . . . . . . . . . . . . 6
"Non-Transferred Goods" . . . . . . . . . . . . . . . . . . . . . . . . 6
"Occupational Safety and Health Law". . . . . . . . . . . . . . . . . . 6
"Order" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
"Ordinary Course of Business" . . . . . . . . . . . . . . . . . . . . . 7
"Organizational Documents". . . . . . . . . . . . . . . . . . . . . . . 7
"Person". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
"Plan". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
"Prepaids". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
"Proceeding". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
"Proprietary Rights Agreement". . . . . . . . . . . . . . . . . . . . . 7
"Purchase Price". . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
"Related Person". . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
"Release" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
"Representative". . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
"Returns" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
"RXI" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
"Securities Act". . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
"Seller". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
"Seller's Releases" . . . . . . . . . . . . . . . . . . . . . . . . . . 8
"Shares". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
"Shortfall Payment" . . . . . . . . . . . . . . . . . . . . . . . . . . 8
"Subordination Agreement" . . . . . . . . . . . . . . . . . . . . . . . 8
"Subsidiary". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
"Supply Agreement". . . . . . . . . . . . . . . . . . . . . . . . . . . 8
"Tangible Personal Property". . . . . . . . . . . . . . . . . . . . . . 8
"Tax" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
"Tax Benefits". . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
"Tax Return". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
"Trade Secrets" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

2. SALE AND TRANSFER OF SHARES; CLOSING. . . . . . . . . . . . . . . . . . 9

2.1. SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.2. PURCHASE PRICE . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.3. CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.4. CLOSING OBLIGATIONS. . . . . . . . . . . . . . . . . . . . . . . 10
2.5. ADJUSTMENTS OF PURCHASE PRICE. . . . . . . . . . . . . . . . . . 13
2.6. ESCROW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.7. DEFERRED PAYMENT AMOUNT AVAILABILITY . . . . . . . . . . . . . . 19

3. REPRESENTATIONS AND WARRANTIES OF SELLER. . . . . . . . . . . . . . . . 19

3.1. ORGANIZATION AND GOOD STANDING . . . . . . . . . . . . . . . . . 19
3.2. AUTHORITY; NO CONFLICT . . . . . . . . . . . . . . . . . . . . . 19
3.3. CAPITALIZATION . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.4. FINANCIAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . 21
3.5. BOOKS AND RECORDS. . . . . . . . . . . . . . . . . . . . . . . . 21
3.6. REAL AND PERSONAL PROPERTY . . . . . . . . . . . . . . . . . . . 21
3.7. CUSTOMERS AND SUPPLIERS. . . . . . . . . . . . . . . . . . . . . 24
3.8. ACCOUNTS RECEIVABLE. . . . . . . . . . . . . . . . . . . . . . . 24
3.9. INVENTORY. . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.10. NO UNDISCLOSED LIABILITIES . . . . . . . . . . . . . . . . . . . 25

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<PAGE>

3.11. TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.12. NO MATERIAL ADVERSE CHANGE . . . . . . . . . . . . . . . . . . . 26
3.13. EMPLOYEE BENEFITS. . . . . . . . . . . . . . . . . . . . . . . . 27
3.14. COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL
AUTHORIZATIONS . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.15. LEGAL PROCEEDINGS; ORDERS. . . . . . . . . . . . . . . . . . . . 31
3.16. ABSENCE OF CERTAIN CHANGES AND EVENTS. . . . . . . . . . . . . . 32
3.17. CONTRACTS; NO DEFAULTS . . . . . . . . . . . . . . . . . . . . . 33
3.18. INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
3.19. ENVIRONMENTAL MATTERS. . . . . . . . . . . . . . . . . . . . . . 36
3.20. EMPLOYEES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
3.21. LABOR DISPUTES; COMPLIANCE . . . . . . . . . . . . . . . . . . . 39
3.22. INTELLECTUAL PROPERTY. . . . . . . . . . . . . . . . . . . . . . 39
3.23. CERTAIN PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . 41
3.24. DISCLOSURE . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
3.25. RELATIONSHIPS WITH RELATED PERSONS . . . . . . . . . . . . . . . 42
3.26. BROKERS OR FINDERS . . . . . . . . . . . . . . . . . . . . . . . 42
3.27. BANK ACCOUNTS. . . . . . . . . . . . . . . . . . . . . . . . . . 42
3.28. DIRECTORS AND OFFICERS . . . . . . . . . . . . . . . . . . . . . 42
3.29. CONDUCT OF BUSINESS. . . . . . . . . . . . . . . . . . . . . . . 42
3.30. PRODUCT WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . 42
3.31. REBATES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
3.32. SALES AND ASSETS . . . . . . . . . . . . . . . . . . . . . . . . 42
3.33. THE FORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . 43
3.34. INTERCOMPANY OBLIGATIONS . . . . . . . . . . . . . . . . . . . . 43

4. REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . . . . . 43

4.1. ORGANIZATION AND GOOD STANDING . . . . . . . . . . . . . . . . . 43
4.2. AUTHORITY; NO CONFLICT . . . . . . . . . . . . . . . . . . . . . 43
4.3. INVESTMENT INTENT. . . . . . . . . . . . . . . . . . . . . . . . 44
4.4. CERTAIN PROCEEDINGS. . . . . . . . . . . . . . . . . . . . . . . 44
4.5. BROKERS OR FINDERS . . . . . . . . . . . . . . . . . . . . . . . 44
4.6. SALES AND ASSETS . . . . . . . . . . . . . . . . . . . . . . . . 44

5. COVENANTS OF SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . 44

5.1. EMPLOYEES OF THE BUSINESS. . . . . . . . . . . . . . . . . . . . 44
5.2. CONTINUATION COVERAGE. . . . . . . . . . . . . . . . . . . . . . 45
5.3. CERTAIN PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . 45

6. [INTENTIONALLY OMITTED.]. . . . . . . . . . . . . . . . . . . . . . . . 45

7. [INTENTIONALLY OMITTED.]. . . . . . . . . . . . . . . . . . . . . . . . 45

8. [INTENTIONALLY OMITTED.]. . . . . . . . . . . . . . . . . . . . . . . . 45

9. [INTENTIONALLY OMITTED.]. . . . . . . . . . . . . . . . . . . . . . . . 45

10. INDEMNIFICATION; REMEDIES . . . . . . . . . . . . . . . . . . . . . . . 45

10.1. SURVIVAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
10.2. INDEMNIFICATION AND REIMBURSEMENT BY RXI AND SELLER. . . . . . . 45
10.3. INDEMNIFICATION AND REIMBURSEMENT BY RXI AND SELLER --
MANUFACTURING BUSINESS AND ENVIRONMENTAL MATTERS . . . . . . . . 46
10.4. INDEMNIFICATION AND REIMBURSEMENT BY BUYER . . . . . . . . . . . 47
10.5. TIME LIMITATIONS . . . . . . . . . . . . . . . . . . . . . . . . 48
10.6. LIMITATIONS ON AMOUNT -- SELLER. . . . . . . . . . . . . . . . . 48
10.7. LIMITATIONS ON AMOUNT -- BUYER . . . . . . . . . . . . . . . . . 48
10.8. SPECIAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . 48
10.9. PROCEDURE FOR INDEMNIFICATION -- THIRD PARTY CLAIMS. . . . . . . 48

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<PAGE>

10.10. PROCEDURE FOR INDEMNIFICATION -- OTHER CLAIMS. . . . . . . . . . 49
10.11. PAYMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

11. OTHER COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

11.1. TAX MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . 51
11.2. COMPUTER SUPPORT SERVICES. . . . . . . . . . . . . . . . . . . . 53
11.3. TEMPORARY LEASE. . . . . . . . . . . . . . . . . . . . . . . . . 53
11.4. EXPENSES.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
11.5. PUBLIC ANNOUNCEMENTS . . . . . . . . . . . . . . . . . . . . . . 53
11.6. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
11.7. JURISDICTION; SERVICE OF PROCESS . . . . . . . . . . . . . . . . 54
11.8. FURTHER ASSURANCES; BOOKS AND RECORDS. . . . . . . . . . . . . . 54
11.9. WAIVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
11.10. ENTIRE AGREEMENT AND MODIFICATION. . . . . . . . . . . . . . . . 55
11.11. DISCLOSURE SCHEDULE. . . . . . . . . . . . . . . . . . . . . . . 55
11.12. ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS . . . . . . . 55
11.13. SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . 56
11.14. SECTION HEADINGS, CONSTRUCTION . . . . . . . . . . . . . . . . . 56
11.15. TIME OF ESSENCE. . . . . . . . . . . . . . . . . . . . . . . . . 56
11.16. GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . . . 56
11.17. INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
11.18. 401(k) PLAN. . . . . . . . . . . . . . . . . . . . . . . . . . . 56
11.19. COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . 57

EXHIBITS
- --------

EXHIBIT 2.2(c) KRANSON GUARANTY
EXHIBIT 2.4(a)(ii) SELLER'S RELEASES
EXHIBIT 2.4(a)(iii) NONCOMPETITION AGREEMENTS
EXHIBIT 2.4(a)(iv) SUPPLY AGREEMENT
EXHIBIT 2.4(a)(v) DISTRIBUTION AGREEMENT
EXHIBIT 2.4(a)(ix) NAME LICENSE AGREEMENT
EXHIBIT 2.4(a)(xxii) SIDLEY & AUSTIN OPINION
EXHIBIT 2.4(a)(xxiii) SUBORDINATION AGREEMENT
EXHIBIT 2.4(a)(xxiv) LOCKBOX AGREEMENT
EXHIBIT 2.4(b)(xiii) HUSCH & EPPENBERGER OPINION

SCHEDULES
- ---------

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<PAGE>

SCHEDULE 3.4(ii) BUSINESS FINANCIAL INFORMATION FOR THE PERIOD ENDED
JUNE 30, 1995
SCHEDULE 3.4(iii) BUSINESS FINANCIAL INFORMATION FOR THE PERIOD ENDED
DECEMBER 31, 1995
SCHEDULE 3.4(iv) LISTS
SCHEDULE 3.4(v) EXCEPTIONS TO BUSINESS FINANCIAL INFORMATION AND LISTS
SCHEDULE 3.6(a) LEASED REAL PROPERTY
SCHEDULE 3.6(b) OWNED REAL PROPERTY
SCHEDULE 3.6(d) REAL PROPERTY ENCUMBRANCES
SCHEDULE 3.6(e) OWNED TANGIBLE PERSONAL PROPERTY
SCHEDULE 3.6(f) LEASED TANGIBLE PERSONAL PROPERTY
SCHEDULE 3.6(h) DEPOSITS AND PREPAID EXPENSES
SCHEDULE 3.7 SUPPLIERS
SCHEDULE 3.8(a) ACCOUNTS RECEIVABLE EXCEPTION
SCHEDULE 3.8(b) ACCOUNTS RECEIVABLE
SCHEDULE 3.10 UNDISCLOSED LIABILITIES
SCHEDULE 3.11(a) TAX RETURNS
SCHEDULE 3.11(b) TAX AUDITS
SCHEDULE 3.11(c) PROPOSED TAX ASSESSMENTS
SCHEDULE 3.12 MATERIAL ADVERSE CHANGES
SCHEDULE 3.13(b)(i) COMPANY PLANS
SCHEDULE 3.13(b)(v) PLAN OBLIGATIONS
SCHEDULE 3.13(d) PLAN EXCEPTIONS
SCHEDULE 3.14(a) COMPLIANCE WITH LEGAL REQUIREMENTS
SCHEDULE 3.14(b) GOVERNMENTAL AUTHORIZATIONS
SCHEDULE 3.15(a) LEGAL PROCEEDINGS
SCHEDULE 3.15(b) ORDERS
SCHEDULE 3.15(c) COMPLIANCE WITH ORDERS
SCHEDULE 3.16 CERTAIN CHANGES AND EVENTS
SCHEDULE 3.17(a) CONTRACTS
SCHEDULE 3.17(b) CONTRACT ENFORCEABILITY
SCHEDULE 3.17(c) CONTRACT COMPLIANCE
SCHEDULE 3.17(e) CONTRACT VIOLATION
SCHEDULE 3.18(a) INSURANCE
SCHEDULE 3.18(b) SELF INSURANCE
SCHEDULE 3.18(c) INSURANCE EXPERIENCE
SCHEDULE 3.18(d) QUALITY OF INSURANCE
SCHEDULE 3.19 ENVIRONMENTAL MATTERS
SCHEDULE 3.19(h) EMPLOYEE HEALTH AND SAFETY MATTERS, ETC.
SCHEDULE 3.20(a) EMPLOYEES
SCHEDULE 3.20(d) COBRA
SCHEDULE 3.22(c) INTELLECTUAL PROPERTY AGREEMENTS
SCHEDULE 3.22(d) PATENTS
SCHEDULE 3.22(e)(i) MARKS
SCHEDULE 3.22(e)(ii) REGISTERED MARK EXCEPTIONS
SCHEDULE 3.22(f) COPYRIGHTS
SCHEDULE 3.22(f)(ii) COPYRIGHT REGISTRATION EXCEPTIONS
SCHEDULE 3.27 BANK ACCOUNTS
SCHEDULE 3.29 CONDUCT OF BUSINESS
SCHEDULE 3.30 PRODUCT WARRANTIES
SCHEDULE 3.31 REBATE POLICIES
SCHEDULE 3.33 RELEASES
SCHEDULE 4.2(a) REQUIRED CONSENTS, ETC.
SCHEDULE 4.2(b) NO CONFLICT
SCHEDULE 5.1 POST-CLOSING EMPLOYEES
SCHEDULE 11.2 COMPUTER SUPPORT SERVICES

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<PAGE>

STOCK PURCHASE AGREEMENT

This stock purchase agreement (the "Agreement") is made as of May 15, 1996,
and is effective as of the Effective Time, by and between Texberry Acquisition
Inc., a Missouri corporation ("Buyer"), RXI Holdings, Inc., a Delaware
corporation ("RXI"), and RXI Plastics, Inc., a Delaware Corporation ("Seller").

RECITALS

A. Seller is a wholly-owned subsidiary of RXI.

B. Seller owns 25,000 shares of the common stock, no par value per share,
and 3,750 shares of the 8% cumulative preferred stock, no par value per share of
Texberry Container Corporation, a Texas corporation (the "Company"), which
shares of common and 8% cumulative preferred stock constitute all of the issued
and outstanding shares of capital stock of Company (the "Shares"). Seller
desires to sell, and Buyer desires to purchase, the Shares for the consideration
and on the terms and conditions set forth in this Agreement.

C. The Company heretofore has been engaged in the business of
manufacturing plastic containers (the "Manufacturing Business") and the business
of the distribution of bottleware, containers, caps, closures, and other such
products manufactured by the Company and other unaffiliated manufacturers (the
"Business").

D. Effective before the Effective Time of this Agreement, the Company
assigned, transferred, and conveyed all of the assets, properties, and Contracts
used by the Company in, or arising from or in connection with, the Manufacturing
Business to Seller in consideration of the Seller's assumption of all of the
liabilities and obligations of any kind, whether known or unknown, fixed or
contingent, of the Company other than those liabilities and obligations arising
from or in connection with the Business and specifically retained by the Company
in accordance with the terms of this Agreement (all of the foregoing being the
"Formation"). As a part of the Formation, RXI contributed the Shares to the
Seller.

E. Effective before the Effective Time of this Agreement, the Company also
assigned, transferred, and conveyed all of the inventories used in the Business
to the Seller, and the Seller sold all such inventories back to the Company.

AGREEMENT

The parties, intending to be legally bound, agree as follows:

1. DEFINITIONS

For purposes of this Agreement, the following terms have the meanings
specified or referred to in this Section 1.

"Accountants" -- as defined in Section 2.6.

"Accounts Receivable" -- the customer and other accounts receivable arising
from the conduct of the Business to and including the Effective Time and all
promissory notes, letters of credit, guarantees, or other similar assurances of
payment in favor of the Company that arise from or in connection with such
customer or other accounts receivable.

"Applicable Contract" -- any Contract (including Contracts assigned to the
Seller in the Formation) (a) under which the Company has or may acquire any
rights, (b) under which the Company has or may become subject to any obligation

<PAGE>

or liability, or (c) by which the Company or any of the assets owned or used by
the Company is or may become bound.

"Assigned Goods" -- as defined in Section 2.5(b).

"Best Efforts" -- the reasonable efforts that a prudent Person desirous of
achieving a result would use in similar circumstances to ensure that such result
is achieved as expeditiously as possible taking into account the relative cost
and effort required as compared to the value or materiality of the result sought
to be achieved.

"Breach" -- A "Breach" of a representation, warranty, covenant, obligation,
or other provision of this Agreement or any instrument delivered pursuant to
this Agreement will be deemed to have occurred if there is or has been (a) any
inaccuracy in or breach of, or any failure to perform or comply with, such
representation, warranty, covenant, obligation, or other provision, or (b) any
other occurrence or circumstance that is or was inconsistent with such
representation, warranty, covenant, obligation, or other provision, and the term
"Breach" means any such inaccuracy, breach, failure, occurrence, or
circumstance.

"Business" -- as defined in Recital C of this Agreement.

"Business Financial Information" -- as defined in Section 3.4.

"Business Liabilities" -- the Company's indebtedness for borrowed money to
CIT (not to exceed $4,000,000) and, subject to Section 2.5 of this Agreement,
the Company's trade accounts payable (none of which shall be aged more than 45
days on the date of this Agreement or, if having terms greater than 45 days are
not more than 15 days past due) and accrued expenses outstanding arising, in
each case, solely from or in connection with the operation of the Business.

"Buyer" -- as defined in the first paragraph of this Agreement.

"Cash Payment" -- as defined in Section 2.2(a).

"CIT" -- The CIT Group.Business Credit, Inc.

"Closing" -- as defined in Section 2.3.

"Closing Date" -- June 5, 1996, the date upon which this Agreement was
executed.

"Closing List" -- as defined in Section 2.2(a).

"Code" -- the Internal Revenue Code of 1986, as amended, or any successor
law, and regulations issued by the IRS pursuant to the Internal Revenue Code or
any successor law.

"Common Customers" -- as defined in Section 2.6.

"Company" -- as defined in Recital B of this Agreement.

"Consent" -- any approval, ratification, waiver, clearance, or other
authorization (including any Governmental Authorization).

"Contemplated Transactions" -- all of the transactions contemplated by this
Agreement, including:

(a) the sale of the Shares by Seller to Buyer;

<PAGE>
(b) the execution, delivery, and performance of the Supply
Agreement, Distribution Agreement, Name License Agreement,
Kranson Guaranty, Escrow Agreement, Noncompetition Agreement,
the Subordination Agreement, and the Seller's Release;

(d) Buyer's acquisition and ownership of the Shares and exercise of
control over the Company from and after the Closing Date.

"Contract" -- any agreement, contract, obligation, promise, commitment, or
undertaking (whether written or oral and whether express or implied) that is
legally binding.

"Damages" -- as defined in Section 10.2.

"Deferred Payment" -- as defined in Section 2.2(a).

"Disclosure Schedules" -- the Schedules to this Agreement.

"Disputed Payables" -- as defined in Section 2.5(f)(i).

"Distribution Agreement" -- as defined in Section 2.4(a)(vi).

"Effective Time" -- 12:01 a.m. central daylight savings time, June 1, 1996.

"Encumbrance" -- any charge, community property interest, condition,
equitable interest, lien, option, pledge, security interest, mortgage, deed of
trust, right of first refusal or other purchase right, title retention agreement
(or lease in the nature thereof), or restriction of any kind or voting (in the
case of any security), transfer, receipt of income, or exercise of any other
attribute of ownership.

"Engagement Letter" -- as defined in Section 2.5(c).

"Environment" -- soil, land surface or subsurface strata, surface waters
(including navigable waters and ocean waters), groundwater, drinking water
supply, stream sediments, ambient air (including indoor air), plant and animal
life, and any other environmental medium or natural resource.

"Environmental, Health, and Safety Liabilities" -- any cost, damages,
penalty, fine, expense, liability, obligation, or other responsibility arising
from or under Environmental Law or Occupational Safety and Health Law including,
but not limited to:

(a) fines, penalties, judgments, awards, settlements, legal or
administrative proceedings, damages, losses, or demands and
response, remedial, or inspection costs, and expenses arising
under Environmental Law or Occupational Safety and Health Law;

(b) financial responsibility under Environmental Law or Occupational
Safety and Health Law for costs of cleanup or corrective action,
including any cleanup, removal, containment, or other remediation
or response actions ("Clean-up") required by applicable
Environmental Law or Occupational Safety and Health Law (whether
or not such Clean-up has been required or requested by any
Governmental Body or any other Person) and for any natural
resource damages; or

<PAGE>

(c) any other compliance, corrective, or remedial measures required
under Environmental Law or Occupational Safety and Health Law.

The terms "removal," "remedial," "response action", and "release" will include
but not be limited to the types of activities covered by the United States
Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C.
Section 9601 et seq., as amended ("CERCLA"), and any equivalent actions
conducted pursuant to other federal, state or local authority, regardless of
size or significance to the Environment.

"Environmental Law" -- any Legal Requirement designed:
(a) to advise appropriate Governmental Bodies, employees, and the
public of intended or actual releases, discharges or emissions of
pollutants or hazardous substances or materials of the presence,
use, management or processing of hazardous substances, materials,
chemicals or wastes, of violations of discharge limits, or of
prohibitions and of the commencement of activities, such as
resource extraction or construction.

(b) to prevent, regulate, or minimize acceptably the release of
pollutants, chemicals, or hazardous substances or materials into
the Environment;

(c) to reduce the quantities, prevent the release, control the
generation, transport, or management, and minimize the hazardous
characteristics of wastes that are generated;

(d) to assure that products, substances, and materials are designed,
formulated, packaged, labeled, marked, sold, or used so that they
do not present unreasonable risks to human health or the
Environment when manufactured, used, processed, managed, or
disposed of;

(e) to protect resources, species, or ecological amenities;

(f) to acceptably minimize the risks inherent in transportation of
Hazardous Materials, hazardous substances, pollutants, oil,
wastes, petroleum, or other potentially harmful substances;

(g) to Clean Up pollutants, hazardous substances or materials,
wastes, or petroleum that have been released, prevent the threat
of release, or pay or contribute to the costs of such Clean Up or
prevention; or

(h) to make responsible or potentially responsible parties pay
private parties, governmental authorities, or groups of them, for
damages done to their health or Environment, or to permit self-
appointed representatives of the public interest to recover for
injuries done to public assets.

(i) to regulate the treatment, storage, disposal, dispensing, and
handling of Hazardous Materials.

"ERISA" -- the Employee Retirement Income Security Act of 1974 or any
successor law, and regulations and rules issued pursuant to that Act or any
successor law.

"Escrow" -- as defined in Section 2.6.

"Escrow Agent" -- as defined in Section 2.6.

<PAGE>

"Escrow Agreement" -- as defined in Section 2.6.

"Escrow Deposit" -- as defined in Section 2.6.

"Estimated Balance Sheet" -- as defined in Section 2.5(a).

"Facilities" -- any real property, leaseholds, or other interests currently
or formerly owned, leased, or operated by the Company (or any predecessor Person
whose liabilities the Company has assumed by contract, as a successor or assign,
or as a matter of law) and any buildings, plants, structures, currently or
formerly owned, leased, or operated by the Company (or any predecessor Person
any liabilities of whom the Company has assumed by contract, as a successor or
assign, or as a matter of law).

"Formation" -- as defined in Recital D.

"GAAP" -- generally accepted United States accounting principles.

"Governmental Authorization" -- any approval, consent, license, permit,
waiver, clearance, or other authorization issued, granted, given, or otherwise
made available by or under the authority of any Governmental Body or pursuant to
any Legal Requirement.

"Governmental Body" - any:

(a) federal, state, county, city, town, village, district, or other
jurisdiction of any nature;

(b) federal, state, local, municipal, or other government;

(c) governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department,
instrumentality, official, or entity and any court or other
tribunal);

(d) body exercising or entitled to exercise any administrative,
executive, judicial, legislative, policy, regulatory, or taxing
authority or power of any nature.

"Gross Margin Shortfall" -- as defined in Section 2.6(b).

"Hazardous Activity" -- the distribution, generation, handling, importing,
management, manufacturing, processing, production, refinement, Release,
emission, discharge, storage, transfer, transportation, treatment, or use
(including any withdrawal or other use of groundwater) of Hazardous Materials
in, on, under, about, or from the Facilities or any part thereof into the
Environment.

"Hazardous Materials" -- any substance that is now listed, defined,
designated, or classified as, or otherwise determined to be, hazardous,
radioactive, harmful, or toxic or a pollutant or a contaminant under or pursuant
to any Environmental Law or Occupational Safety and Health Law and any waste
thereof, including any admixture or solution thereof, and specifically including
petroleum and all derivatives thereof or synthetic substitutes therefor, PCBs
and asbestos or asbestos-containing materials.

"HSR Act" -- the Hart-Scott-Rodino Antitrust Improvements Act of 1976 or
any successor law, and regulations and rules issued pursuant to that Act or any
successor law.

"Indemnified Persons" -- as defined in Section 10.2.

<PAGE>

"Initial Adjustment" -- as defined in Section 2.5(a).

"Intellectual Property Assets" -- as defined in Section 3.22.

"Intercompany Obligations" -- all intercompany notes, cash advances and
payables between RXI and its Subsidiaries other than the Company on the one
hand, and the Company, on the other hand, except for trade payables and accounts
receivable, if any, arising from transactions between the Company and any of RXI
and such Subsidiaries involving the purchase and sale of goods or services in
the ordinary course of business of the Business, as shown on the books and
records of RXI and such Subsidiaries and the Company as of the Closing Date.

"IRS" -- the United States Internal Revenue Service or any successor
agency, and, to the extent relevant, the United States Department of the
Treasury.

"Knowledge" -- an individual will be deemed to have "Knowledge" of a
particular fact or other matter if such individual is actually aware of such
fact or other matter or should reasonably be aware of such fact or other matter.

A Person (other than an individual) will be deemed to have "Knowledge" of a
particular fact or other matter if any individual who is serving as a director
or officer of such Person has Knowledge of such fact or other matter, provided
that in the case of RXI and Seller, RXI and Seller will be deemed to have
"Knowledge" of a particular matter only if Harvey Casey, Richard Zirkler, Leon
Farahnik, Marvin Liebman, John Buckley, J.C. Bryan, Brad Borden, Hal Curren,
Mike Schlosser, or James Marshall had Knowledge of such fact or matter.

"Kranson" -- Kranson Industries, Inc., a Missouri corporation.

"Kranson Guaranty" -- as defined in Section 2.2(c).

"Leased Tangible Personal Property" -- as defined in Section 3.6(f).

"Legal Requirement" -- any federal, state, county, local, municipal,
subdivision, foreign, constitution, law, ordinance, code, regulation, statute,
or treaty.

"LFH" -- Lopata, Flegel & Hoffman & Co.

"Lists" -- as defined in Section 3.4.

"Material Contracts" -- as defined in Section 3.17(a).

"Measuring Period" -- as defined in Section 2.6(b).

"Name License Agreement" -- as defined in Section 2.4(a)(x).

"Noncompetition Agreements" -- as defined in Section 2.4(a)(iii).

"Non-Transferred Goods" -- as defined in Section 2.5(d).

"Occupational Safety and Health Law" -- any Legal Requirement designed to
provide safe and healthful working conditions and to reduce occupational safety
and health hazards, and any governmental program promulgated pursuant to any
Legal Requirement designed to provide safe and healthful working conditions.

"Order" -- any award, decision, injunction, judgment, order, ruling,
subpoena, or verdict entered, issued, made, or rendered by any court,
administrative agency, or other Governmental Body or by an arbitrator.

<PAGE>

"Ordinary Course of Business" -- an action taken by a Person will be deemed
to have been taken in the "Ordinary Course of Business" only if:

(a) such action is consistent with the past practices of such Person
and is taken in the ordinary course of the normal operations of
such Person; and

(b) such action is not required to be authorized by the board of
directors of such Person (or by any Person or group of Persons
exercising similar authority) and is not required to be
specifically authorized by the parent company (if any) of such
Person;

"Organizational Documents" -- (a) the articles or certificates of
incorporation and the bylaws of a corporation; (b) the partnership agreement and
any statement of partnership of a general partnership; (c) the limited
partnership agreement and the certificate of limited partnership of a limited
partnership; (d) the articles of organization and operating agreement of a
limited liability company, (e) any charter or similar document adopted or filed
in connection with the creation, formation, or organization of any other Person;
and (f) any amendment to any of the foregoing.

"Person" -- any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, Governmental Body, or other
entity.

"Plan" -- as defined in Section 3.13.

"Prepaids" -- as defined in Section 2.5(a).

"Proceeding" -- any action, arbitration, audit, hearing, investigation,
litigation, or suit (whether civil, criminal, administrative, investigative, or
informal) commenced, brought, conducted, or heard by or before, or otherwise
involving, any Court, Governmental Body, or arbitrator.

"Proprietary Rights Agreement" -- as defined in Section 3.20(b).

"Purchase Price" -- as defined in Section 2.2(a).

"Related Person" -- with respect to a particular individual:

(a) each other member of such individual's Family;

(b) any Person that is directly or indirectly controlled by any one
or more members of such individual's Family;

(c) any Person in which members of such individual's Family hold
(individually or in the aggregate) a Material Interest; and

(d) any Person with respect to which one or more members of such
individual's Family serves as a director, officer, partner,
executor, or trustee (or in a similar capacity).

With respect to a specified Person other than an individual:

(a) any Person that directly or indirectly controls, is directly or
indirectly controlled by, or is directly or indirectly under
common control with such specified Person; and

<PAGE>

(b) each Person that serves as a director, officer, partner,
executor, or trustee of such specified Person (or in a similar
capacity).

For purposes of this definition, (a) the "Family" of an individual includes (i)
the individual, (ii) the individual's spouse, (iii) any other natural person who
is related to the individual or the individual's spouse within the first degree,
and (iv) any other natural person who resides with such individual, and (b)
"Material Interest" means direct or indirect beneficial ownership (as defined in
Rule 13d-3 under the Securities Exchange Act of 1934) of voting securities or
other voting interests representing at least 10% of the outstanding voting power
of a Person or equity securities or other equity interests representing at least
10% of the outstanding equity securities or equity interests in a Person.

"Release" -- any spilling, leaking, emitting, discharging, depositing,
escaping, leaching, dumping, or other releasing into the Environment, including
migration or movement of any such releases in the Environment.

"Representative" -- with respect to a particular Person, any director,
officer, agent, consultant, or other representative of such Person, including
legal counsel, accountants, and financial advisors.

"Returns" -- as defined in Section 2.5(d).

"RXI" -- as defined in the first paragraph of this Agreement.

"Securities Act" -- the Securities Act of 1933 or any successor law, and
regulations and rules issued pursuant to that Act or any successor law.

"Seller" -- as defined in the first paragraph of this Agreement.

"Seller's Releases" -- as defined in Section 2.4(a)(ii).

"Shares" -- as defined in Recital B of this Agreement.

"Shortfall Payment" -- as defined in Section 2.6(b).

"Subordination Agreement" -- as defined in Section 2.4(a)(xxiii).

"Subsidiary" -- with respect to any Person (the "Owner"), any corporation
or other Person of which securities or other interests having the power to elect
a majority of that corporation's or other Person's board of directors or similar
governing body or Persons, or otherwise having the power to direct the business
and policies of that corporation or other Person (other than securities or other
interests having such power only upon the happening of a contingency that has
not occurred) are held by the Owner or one or more of its Subsidiaries; when
used without reference to a particular Person, "Subsidiary" means a Subsidiary
of the Company.

"Supply Agreement" -- as defined in Section 2.4(a)(v).

"Tangible Personal Property" -- as defined in Section 3.6(e).

"Tax" -- any tax (including, without limitation, any income tax, capital
gains tax, value-added tax, excise tax, sales tax, or real or personal property
tax), levy, assessment (including, without limitation, any subdivision or
utility, business, or service district assessments), deficiency, or other fee,
and any related charge or amount (including, without limitation, any fine,
penalty, interest, or addition to tax), imposed, assessed, or collected by or
under the authority of any Governmental Body.

<PAGE>

"Tax Benefits" -- as defined in Section 2.5(g).

"Tax Return" -- any returns, reports, information statements, and other
documentation (including any additional or supporting material) filed or
maintained, or required to be filed or maintained, in connection with the
calculation, determination, assessment, or collection of any Tax.

"Trade Secrets" -- all of the Business' software, product specifications,
data, technical information, computer software (and the data contained therein),
formulas, compositions, processes, plans, blue prints, designs, sketches,
photographs, drawings, samples, inventions, improvements, customer and supplier
lists (including former, current, and prospective customers), mailing lists,
policy and procedure manuals, market research reports and data prepared for the
Business, current and anticipated customer requirements, price lists (including
the prices and other terms upon which the Company sells or has sold products of
the Business or at which it buys or has bought materials, components, or other
supplies for the Business), business plans and budgets, confidential information
about the Company's relations with the employees of the Business (including
salaries, job classifications, and skill levels), customer buying patterns,
customer past orders and future needs, customer requirements (including, without
limitation, closure systems, filing lines, and product/resin compatibility),
customer contact persons, specific items supplied to customers, customer sales
and profitability data, and details of vendors matched to specific items
supplied, excluding any of the foregoing that relates to products manufactured
by the Manufacturing Business even if sold by the Business.

2. SALE AND TRANSFER OF SHARES; CLOSING

2.1. SHARES. Subject to the terms and conditions of this Agreement,
at the Closing, RXI will cause Seller to sell and transfer, and Seller will
sell and transfer to Buyer, and Buyer will purchase from Seller, the Shares,
with such sale to be effective as of the Effective Time.

2.2. PURCHASE PRICE.

(a) Subject to the adjustments hereinafter provided, the
purchase price (the "Purchase Price") for the Shares will be $15,000,000,
which shall have the following three components: (i) a deferred payment in
an initial amount of $2,250,000 payable in full on the fifth anniversary of
the Closing Date (the "Deferred Payment"), (ii) the Company's Business
Liabilities as of the close of business on the business day immediately
preceding the Effective Time, which will be retained by the Company and a
detailed listing of which is set forth on Schedule 2.2(a) to this Agreement
(the "Closing List"), and (iii) subject to Sections 2.5 and 2.6 of this
Agreement, a cash payment at Closing(the "Cash Payment") that is the
difference between $15,000,000 and the sum of the initial Deferred Payment
amount plus the Company's Business Liabilities.

(b) The outstanding Deferred Payment amount shall bear
interest at the rate of ten percent (10%) per annum, payable quarterly on
March 31, June 30, September 30, and December 31 of each year, with the first
payment being due on June 30, 1996. Interest will be computed for the actual
number of days elapsed based upon a year of 365 days. The Buyer may prepay
the outstanding Deferred Payment amount in whole or in part at any time and
from time to time without penalty or premium, together with all accrued but
unpaid interest on the amount prepaid. If any payment of interest on the
outstanding Deferred Payment amount is not paid when due and remains unpaid
ten (10) days after notice from Seller to Buyer that such amount was not paid
when due, the outstanding Deferred Payment amount shall immediately become
due and payable in full. All overdue payments of the principal amount of the
outstanding Deferred Payment amount (and unpaid interest thereon), and all
unpaid interest shall bear interest at the rate of 13% per annum or the
highest rate permitted by law, whichever is less from the

<PAGE>

date when due through the date when paid. If any payment of interest is not
paid when due, or within ten (10) days thereafter, all unpaid principal shall
bear interest at 13% per annum during all periods that such unpaid interest
remains unpaid.

(c) Kranson will fully and unconditionally guaranty the
payment of the outstanding Deferred Payment amount (as adjusted by Purchase
Price adjustments under Section 2.5 of this Agreement and by any adjustment
under Section 2.7 of this Agreement) and all accrued but unpaid interest
thereon pursuant to a guaranty agreement in substantially the form of Exhibit
2.2(c) to this Agreement, to be executed and delivered by Kranson
concurrently herewith (the "Kranson Guaranty").

(d) The Deferred Payment amount (as the same may be reduced
pursuant to Section 2.7 of this Agreement) together with all accrued but
unpaid interest thereon shall be subject to mandatory prepayment on the later
of (x) the date that payment is made pursuant to Section 4(e) of the Escrow
Agreement or (y) the occurrence of any of (i) the closing of a public
offering pursuant to a registration statement (other than registration
statement on Forms S-4 or S-8 or their successor forms) for a sale of the
common stock of Buyer, Kranson, or any Subsidiary of Kranson that generates
net proceeds to the issuer of at least $10,000,000, (ii) the filing of a
petition for relief under the Revised Bankruptcy Code with respect to Buyer
or Kranson, (iii) the completion of a transaction as a result of which
Kenneth Kranzberg and/or Richard Glassman and any of their Related Persons
own in the aggregate less than 50.1% of the voting securities of the Buyer or
Kranson, (iv) a material breach by Kranson under the Guaranty not cured
within ten (10) days after written notice, or (v) a sale or transfer or other
disposition of all or substantially all of the assets of Kranson excluding,
however, Kranson's grant of any liens on such assets to its lenders, in each
case without regard to whether the Subordination Agreement bars the payment.

(e) As used in Section 2.2(d) only, the term "control" means
the ability of a Person or group of Persons, by virtue of their ownership of
capital stock of, or voting arrangements with respect to, the Buyer or
Kranson, to elect or designate a majority of the members of the Boards of
Directors of Buyer or Kranson.

(f) As used in Section 2.2(d), the term "bankruptcy" means
(i) the filing of an involuntary proceeding under Chapter 7 of the United
States Bankruptcy Code against Buyer or Kranson that is not dismissed or
stayed within 60 days after it is commenced, (ii) the filing of a voluntary
bankruptcy proceeding by Buyer or Kranson under Chapter 7 or 11 of the United
States Bankruptcy Code, (iii) an assignment for the benefit of creditors by
Buyer or Kranson, and (iv) the commencement of any proceeding against Buyer
or Kranson seeking liquidation, winding up, arrangement, adjustment,
protection, relief, or composition of the debt of Buyer or Kranson or the
appointment of a receiver for Buyer or Kranson, which if instituted by a
Person other than Buyer or Kranson is not dismissed or stayed within 60 days
after it is commenced.

2.3. CLOSING. The purchase and sale (the "Closing") provided for in this
Agreement will take place at the offices Husch & Eppenberger, 100 North
Broadway, Suite 1300, St. Louis, Missouri 63102, beginning at 9:00 a.m. (central
time) concurrently with the execution of this Agreement by RXI, Seller, and
Buyer.

2.4. CLOSING OBLIGATIONS. At the Closing:

(a) Seller and RXI will deliver or cause to be delivered to
Buyer:

<PAGE>

(i) certificates representing the Shares, duly endorsed
(or accompanied by duly executed blank stock powers),
with signatures guaranteed by a commercial bank, trust
company, or by a member firm of the New York Stock
Exchange, for transfer to Buyer;

(ii) releases in substantially the form of Exhibit 2.4a(ii)
executed by Seller and RXI and their respective
Representatives who served as directors or officers of
the Company before the Closing (collectively,
"Seller's Releases");

(iii) a noncompetition agreement in substantially the form
of Exhibit 2.4a(iii) to this Agreement, executed by
RXI and Seller (collectively, the "Noncompetition
Agreement");

(iv) a supply agreement in substantially the form of
Exhibit 2.4(a)(iv) to this Agreement, executed by the
Seller (the "Supply Agreement") and the other
documents to be delivered thereunder;

(v) a distribution agreement in substantially the form of
Exhibit 2.4(a)(v) to this Agreement, executed by RXI
and Seller (the "Distribution Agreement");

(vi) resignations of all of RXI's and Seller's
Representatives as officers and directors of the
Company and terminations, without any liability on
behalf of the Company, of the consulting agreements
between the Company and RXI's and Seller's
Representatives, all of which are listed on Schedule
2.4(a)(vi) hereto;

(vii) complete releases, fully effective as of the Effect-
ive Time, in form reasonably satisfactory to Buyer of
the Encumbrances identified on Schedule 2.4(a)(vii)
and the Company's liabilities and obligations to the
creditors listed on Schedule 2.4(a)(vii) hereto;

(viii) complete releases, fully effective as of the Effect-
ive Time, in form reasonably satisfactory to Buyer of
the Company's liabilities and obligations under the
Contracts specified on Schedule 2.4(a)(viii);

(ix) an agreement with respect to the use of the name
Texberry" in substantially the form of Exhibit
2.4(a)(ix) to this Agreement executed by the Seller
(the "Name License Agreement");

(x) the Escrow Agreement executed by RXI and the Seller;

(xi) the list of customers of the Business required by
Section 2.6;

(xii) the list of Accounts Receivable required by Section
2.5(e);

<PAGE>

(xiii) the lists of accounts payable and accrued expenses
and Disputed Payables required by Section 2.5(f);

(xiv) consents, estoppel certificates, and lien waivers
(substantially in the form provided by Buyer to
Seller) and set forth on Schedule 2(a)(xiv);

(xv) a fully executed copy of the agreement specified in
the last sentence of Section 3.34 of this Agreement;

(xvi) the long form of the Company's Articles of
Incorporation certified by the Secretary of State of
Texas and copy of the Company's bylaws, certified by
the Company's secretary;

(xvii) the long forms of RXI's and the Seller's certificates
of incorporation certified by the Secretary of State
of Delaware;

(xviii)certificates of good standing for the Seller in the
states of Delaware and West Virginia and RXI in
Delaware and California;

(xix) certificates of good standing for the Company in the
states of Texas and Louisiana and all other states in
which the Company's conduct of the Business requires
the Company to be qualified to do business;

(xx) RXI's report on Form 10-Q for its quarter and nine
months ended March 31, 1996, as filed by RXI with the
Securities and Exchange Commission;

(xxi) copies of all agreements, instruments, corporate
resolutions, and other documents used to effect the
Formation, in form and substance satisfactory to Buyer
in its sole discretion, and without limiting the
foregoing, including evidence of the Seller's products
liability, general liability, and other insurance with
respect to liabilities to third parties, in each case
naming the Company as an additional insured;

(xxii) the opinion of Sidley & Austin in substantially the
form of Exhibit 2.4(a)(xxii);

(xxiii)a subordination agreement in substantially the form
of Exhibit 2.4(a)(xxiii) (the "Subordination
Agreement");

(xxiv) an agreement in substantially the form of Exhibit
2.4(a)(xxiv) executed by Seller, CIT, and Bank One
Texas (the "Lockbox Agreement"); and

(xxv) the certificates of insurance specified in Section
11.17 of this Agreement.

(b) Buyer will deliver, or cause to be delivered, to Seller:

<PAGE>

(i) the Cash Payment, payable by wire transfer in
immediately available funds, provided that $3,750,000
of the Cash Payment (subject to adjustment as provided
in this Agreement) shall be deposited in the Escrow
pursuant to Section 2.6 of this Agreement;

(ii) the Distribution Agreement, executed by the Company;

(iii) the Supply Agreement, executed by the Buyer and the
Company;

(iv) the Noncompetition Agreement, executed by the Buyer
and the Company;

(v) the Kranson Guaranty, executed by Kranson;

(vi) the Name License Agreement, executed by the Buyer and
the Company;

(vii) any lease guarantees required by lessors of leased
property to be retained by the Company, executed by
the Buyer or Kranson (as may be required by such
Lessors);

(viii) the Escrow Agreement, executed by the Buyer and the
Company;

(ix) a release in substantially the form of Exhibit
2.4(b)(ix), executed by the Company of RXI's and
Seller's Representatives who served as officers or
directors of the Company;

(x) the Articles of Incorporation of the Buyer, certified
by the Missouri Secretary of State;

(xi) a certificate of good standing of the Buyer in the
State of Missouri;

(xii) the list of the Common Customers locations required
under Section 2.6(b) of this Agreement;

(xiii) the opinion of Husch & Eppenberger in substantially
the form of Exhibit 2.4(b)(xiii) hereto;

(xiv) the Subordination Agreement, executed by the Buyer;
and

(xv) the Lockbox Agreement, executed by Buyer, the Company,
and Bank One Indianapolis.

(c) As a part of the Purchase Price, but subject to Section
2.5, at and after the Closing, the Buyer shall (i) cause the Company to
retain and timely pay, or make provision for the payment in full of, the
Business Liabilities outstanding at the Effective Time, and (ii) hold RXI and
Seller harmless from any Damages they may incur as a result of the Company's
failure to timely pay and discharge all of the Business Liabilities.

2.5. ADJUSTMENTS OF PURCHASE PRICE.

<PAGE>
(a) The Seller shall prepare an estimated balance sheet for the
Business as of the close of business on the business day immediately preceding
the Effective Time(the "Estimated Balance Sheet"), a copy of which is attached
hereto as Schedule 2.5(a). The Estimated Balance Sheet will be based upon the
Company's balance sheet for the Business as of the close of business on March
31, 1996, prepared from the Company's perpetual inventory and general ledger and
carried forward for the transactions occurring each day thereafter to and
including the business day immediately preceding the Effective Time. The Seller
shall prepare the Estimated Balance Sheet in accordance with GAAP consistently
applied in accordance with the Company's past practices with respect to the
Business except that there shall be no reserve for doubtful Accounts Receivable
of the Business. At the Closing, the Seller shall provide the Buyer with a copy
of the Estimated Balance Sheet and related workpapers, and the Buyer and Seller
will use the Estimated Balance Sheet and related workpapers to estimate, for the
purpose of determining the Cash Payment, (A)(i) the amount of cash held by the
Company with respect to the Business, (ii) the amount by which the Accounts
Receivable arising from the Business total more or less than $4,000,000, and
(iii) the amount by which the Business' inventories, determined at the Company's
cost on a weighted average basis (which approximates FIFO), total more or less
than $2,100,000, and (B) the aggregate amount of the Business Liabilities and
the amount of accounts payable and accrued expenses included therein. Based
upon such determinations, the Purchase Price shall be subject to the following
initial adjustments (the "Initial Adjustment"):

(i) If the accounts payable and accrued expenses included
in the Business Liabilities at the Effective Time
aggregate more than $3,300,000, RXI and the Seller
shall pay the Buyer at Closing the amount of such
excess in immediately available funds.

(ii) The Cash Payment component of the Purchase Price shall
be increased by the amount of cash held by the Company
at the Effective Time.

(iii) If the Company's Accounts Receivable arising from the
Business exceed $4,000,000 at the Effective Time, the
Escrow Deposit shall be increased by the amount of the
excess.

(iv) If the Company's Accounts Receivable arising from the
Business are less than $4,000,000 at the Effective
Time, the Escrow Deposit will be reduced by the amount
of the shortfall.

(v) If the Business' inventories at the Effective Time are
less than $2,100,000, the Escrow Deposit will be
reduced by the amount of the shortfall.

(vi) If the Business' inventories at the Effective Time are
more than $2,100,000, the amount of the excess up to
$300,000 shall be included in the Escrow Deposit.

(vii) The Business Liabilities at the Effective Time shall
be decreased on a dollar for dollar basis by the
amount of the deposits, prepaid expenses, and other
similar items (the "Prepaids") reflected on the
Estimated Balance Sheet, and the Cash Payment
component of the Purchase Price shall be reduced by
all liabilities and obligations at the Effective

<PAGE>

Time remaining to be satisfied and performed by the
Company under the Company's Modification to Employment
Agreement dated August 4, 1995, with Joseph Borden if
such liabilities and obligations are not included in
the Business Liabilities.

If aggregate adjustments made in favor of the Buyer with respect to the
Accounts Receivable and inventories of the Business exceed $3,750,000, the
amount of such excess shall reduce the Deferred Payment amount.

(b) If the amount of the Business' inventories exceeds
$2,400,000 at the Effective Time, within five (5) business days after the
Closing, the Company shall assign and transfer to the Seller inventories of
finished goods mutually selected by Buyer and RXI having a value, determined
on a weighted average basis at the Company's cost (which approximates FIFO),
equal to such excess (the "Assigned Goods"). If within such five (5) day
period Buyer and RXI fail to agree upon the items constituting Assigned Goods
to be assigned and transferred to the Seller, the Assigned Goods shall be the
actual finished goods having a value (determined as provided in the preceding
sentence) equal to such remaining excess that were most recently received by
the Company before the Closing, taken in order from newer to older. After
the Closing, the Company shall purchase Assigned Goods from time to time from
the Seller as and when the Company requires supplies of the kind of products
included in the Assigned Goods in the Ordinary Course of Business, provided,
however, that notwithstanding any noncompetition covenants or agreements of
the Seller and its affiliated companies, the Seller may sell to third
parties, including customers of the Company, any of the Assigned Goods that
the Company has not purchased from the Seller within 90 days after the
Closing. The purchase price for Assigned Goods to be paid by the Company
shall be the value of such goods determined as provided in this Section 2.5
at the time they were assigned to the Seller.

(c) During the period from June 1, 1996, through June 4,
1996, (i) all shipments of products received by the Seller for use in the
Business shall be segregated from the Seller's inventories on hand as of the
close of business on the last business day immediately preceding the
Effective Time, (ii) Seller shall make no shipments to customers of products
of the Business, and (iii) Seller shall not take any action to incur any
accounts payable. During the period from June 1, 1996, through June 4, 1996,
the Seller and Buyer will also conduct a physical count of the inventories of
the Business, which representatives of LFH will observe. Pursuant to the
engagement letter attached hereto as Schedule 2.5(c) (the "Engagement
Letter"), LFH will prepare and deliver to RXI, Seller, Buyer, and the Escrow
Agent within 90 days after the Closing an audit report (containing an
unqualified opinion) setting forth the valuation of the beginning inventories
of the Business (which inventories shall not include any items manufactured
by the Company or the Seller or its affiliates) prepared in accordance with
GAAP on a weighted average basis at the lower of market or the Company's
cost, including freight (which approximates FIFO), together with LFH's
written determination of (i) the amount of such inventories valued at the
lower of the Company's cost or market, (ii) the amount of the writedowns from
cost to market, and (iii) the amount by which the sum of (i) and (ii) above
differs from the value of inventories of the Business shown on the Estimated
Balance Sheet. LFH's audit report and written determination of such
difference shall be conclusive and binding upon, RXI, Seller, Buyer, and the
Escrow Agent. If LFH's written determination of such difference in the
inventories of the Business results in the Business' inventories having a
value that is higher than the inventories shown in the Estimated Balance
Sheet, the Purchase Price shall be increased by the Buyer's depositing into
the Escrow, and the Escrow Deposit being increased by, the amount of any
increase in the inventories (provided that if the amount of the increase
results in inventories in excess of $2,400,000, the excess shall be treated
in accordance with Section 2.5(b) of this Agreement). The Purchase Price
shall be adjusted and there shall be paid out to the Buyer or its

<PAGE>
designee from the Escrow, and the amount of the Escrow Deposit shall be
decreased by, the amount by which the inventories of the Business, as
specified in LFH's written determination, are less than the inventories
reflected on the Estimated Balance Sheet, provided that if the amount to be
paid out exceeds the outstanding Escrow Deposit, the Deferred Payment amount
will be reduced by the amount of the excess.

(d) If any items included in the inventories of the Business
at the Effective Time (other than Assigned Goods not purchased by the Company
and certain discontinued items excluded from the inventories of the Business
at the Effective Time (the "Non-Transferred Goods")) remain unsold 180 days
after the Closing Date because they are damaged, obsolete, or otherwise
unsalable in the ordinary course of business of the Company as conducted by
Buyer for at least the Buyer's cost, the Company shall return such items to
the Seller (the "Returns"). Buyer agrees that for a period of not less than
six months from the Closing Date, the Company will continue to offer all
items included in the inventories of the Business for sale in the ordinary
course of business of the Company as conducted by Buyer. If the aggregate
Returns exceed $25,000, the Purchase Price shall be reduced by the amount of
the excess which shall be withdrawn from the Escrow and paid to the Buyer or
its designee, and if the excess is greater than the outstanding Escrow
Deposit, the remaining excess shall then reduce the Deferred Payment amount.
Notwithstanding any noncompetition agreement or covenant to which the Seller
is a party, the Seller may sell Returns or Non-Transferred Goods to any
Person. The amount of any such excess shall be determined by LFH, which will
prepare and deliver to Buyer, Seller, RXI, and the Escrow Agent a special
report setting forth each item included in the Returns, the quantity thereof,
and the cost thereof at Buyer's purchase price hereunder, together with LFH's
computation of such excess, and LFH's special report and determination of
such excess shall be conclusive and binding on the parties to this Agreement
and the Escrow Agent.

(e) (i) At Closing, the Seller shall deliver to Buyer a
list of all outstanding Accounts Receivable as of the Effective Time by open
invoice as of the close of business on the last business day before the
Closing Date, showing the aging of such Accounts Receivables. Following the
Closing, the Buyer shall cause the Company to use its Best Efforts to collect
the Accounts Receivable (including refusal to ship any order to a customer
having outstanding Accounts Receivable aged more than ninety (90) days after
their invoice date), and all payments received during such period on a
customer's Accounts Receivable shall be applied to the oldest Accounts
Receivable unless the customer asserts a claim under product warranty,
shortage or other bona fide defense to payment. The Buyer shall cause the
Company to provide the Seller with monthly reports on the collection of
Accounts Receivable.

(ii) If any Accounts Receivable remain uncollected 180
days after the Closing Date, the Purchase Price shall be decreased by an
amount equal to the aggregate amount of the uncollected Accounts Receivable,
which shall be withdrawn from the Escrow and paid to the Buyer or its
designee, and if the amount to be paid to the Buyer exceeds the outstanding
Escrow Deposit, the excess shall reduce the Deferred Payment amount. Buyer,
at its sole election, may cause the Company to assign any or all such
uncollected Accounts Receivable to the Seller, without recourse to the Buyer
or the Company. If the Company retains any such uncollected Accounts
Receivable, it shall continue to attempt to collect such Accounts Receivable
but it need not use its Best Efforts to do so, and if the Company
subsequently collects any such Accounts Receivable, whether in whole or in
part, the Purchase Price shall be increased by the Company's depositing the
collected amounts in the Escrow, and the Escrow Deposit will be increased by
the deposit.

(iii) The Seller may attempt to recover products sold by the
Company to account debtors of the uncollected Accounts Receivable that the

<PAGE>
Company assigns to the Seller, and, notwithstanding any noncompetition
covenants or agreements of the Seller and its affiliated companies, the
Seller may resell such recovered products to third parties, including
customers of the Company.

(iv) All collections of Accounts Receivable by the
Company between the Effective Time and the close of business on June 3, 1996,
shall be credited to the Seller and shall reduce the Cash Payment component
of the Purchase Price on a dollar for dollar basis but shall be considered a
part of the Purchase Price.

(f) (i) At the Closing, the Seller shall designate in
writing to the Buyer all of the accounts payable not included on the Closing
List that the Company is disputing (the "Disputed Payables") and stating the
basis for each such dispute. Seller and RXI shall indemnify and hold Buyer
and the Company harmless from and against all Disputed Payables and all
costs, liabilities, or damages to the Company arising from or in connection
therewith.

(ii) If after the Closing the Company or the Buyer pays
(with the consent of the Seller or pursuant to Section 2.5(f)(iii)) or is
required to pay any account payable or expense of the Company (including any
Disputed Payable) that arose before the Effective Time and is not included in
the Closing List, the Purchase Price shall be reduced by the amount of such
payment which shall be withdrawn from the Escrow and paid to the Buyer or its
designee, and the Escrow Deposit shall be reduced accordingly. If the amount
of such payments made by the Company or the Buyer exceed the outstanding
Escrow Deposit, the amount of such excess shall reduce the Deferred Payment
amount.

(iii) Buyer shall have the right, in good faith, to pay,
without Seller's consent, any Disputed Payable or any other amount included
within Section 2.5(f)(ii) claimed to be owing by a Person who supplied the
Business in calendar year 1995 $100,000 or more of goods and service.

(g) If after the Closing Date the Company uses any federal or
state net operating loss carryforwards or state tax credits generated from
the operation of the businesses of the Company before the Effective Time (the
"Tax Benefits"), the Purchase Price shall be increased, and Buyer will cause
the Company to pay Seller the amount of cash savings on tax payments actually
realized by the Company as and when it uses the Tax Benefits. Within 120
days after the end of each of its fiscal years (until the Tax Benefits have
been fully used or have expired), the Buyer shall cause the Company to give
the Seller written notice of the Tax Benefits applied by the Company with
respect to Taxes payable by it for such Tax Benefits.

(h) There shall be added to all reductions in principal of
the outstanding Deferred Payment amount all interest previously paid on the
amount of such reductions between the Closing Date and the date of such
reductions and all accrued but unpaid interest on such amounts shall be
reversed and canceled. If there shall occur an increase in the outstanding
Deferred Payment amount, the Buyer shall include in the interest payment on
the outstanding Deferred Payment amount next occurring after the date of such
increase an amount equal to the interest on such increase, determined in
accordance with Section 2.2(b) of this Agreement, from the Closing Date to
the date of such increase.

(i) If the aggregate amount of reductions of the Deferred
Payment under Sections 2.5(a)-(h) of this Agreement exceeds the sum of
$2,250,000 plus any increases to the Deferred Payment amount, RXI and the
Seller shall promptly, upon receipt of notice from Buyer, pay to the Buyer
the amount of such excess together with interest thereon determined in
accordance with Section 2.5(b) and 2.5(h) of this Agreement.

<PAGE> (j) Notwithstanding anything to the contrary in this
Agreement, in no event shall the sum of the Cash Payment (which includes the
Escrow Deposit as adjusted by the Initial Adjustment) and the Company's
indebtedness to CIT, included in the Business Liabilities exceed the total of
$9,750,000 plus all cash held by the Company on the Closing Date, provided
that after giving effect to the Initial Adjustment, such sum may be less than
the total of $9,750,000 plus all cash held by the Company on the Closing Date.

2.6. ESCROW.

(a) From the Cash Payment payable by Buyer to Seller at
Closing, Buyer shall deposit (or cause to be deposited) in an interest
bearing account (the "Escrow") with Mercantile Bank of St. Louis, N.A. (the
"Escrow Agent"), the principal sum of $3,750,000 adjusted as hereinbefore
provided and subject to further increase or decrease as provided in this
Agreement (the "Escrow Deposit"). At the Closing, Buyer, Seller, and the
Escrow Agent will enter into an Escrow Agreement in form and substance
reasonably satisfactory to each of them (the "Escrow Agreement"). The
principal amount of the Escrow Deposit, as adjusted from time to time as
hereinbefore provided and as provided in Section 10 hereof and less the
amount paid to the Buyer as set forth below, will be paid to Seller within
ten (10) days after delivers the special audit and certification to RXI,
Seller, Buyer, and the Escrow Agent as provided under Section 2.6(c) of this
Agreement. All interest earned on the Escrow Deposit will be allocated
between Seller and the Buyer in proportion to the cash paid to each party at
the close of the Escrow, provided that in the case of payments from the
Escrow to the Buyer or its designee in accordance with Section 2 of this
Agreement, such payments shall include the amount of interest earned thereon
from the date of the Closing to the date of payment.

(b) At the close of the Escrow, Buyer shall receive a payment
of $3.87 of the remaining Escrow Deposit for each $1.00 of Gross Margin
Shortfall (as hereinafter defined), with such payment being the "Shortfall
Payment." The "Gross Margin Shortfall" is the amount, if any, by which the
actual gross profits realized by the Business during the measuring period
beginning June 1, 1996, and ending May 31, 1997 (such period being the
"Measuring Period") are less than $5,500,000. For the purposes of this
Section 2.6(b), gross profit will be measured using inventories determined on
a weighted average basis at the lower of cost or market, including freight
(which approximates FIFO), in accordance with GAAP and after all freight and
delivery costs applicable to all sales have been deducted. In determining
the gross profits realized by the Business there shall be included in sales
by the Business all sales made by the Company and the Buyer and its other
affiliates to customers of the Business set forth on Schedule 2.6(b)(i)
without regard to place of shipment of the goods sold, excluding, however,
all sales made by Kranson's existing branch locations and affiliates to
common customers of Kranson and the Company (the "Common Customers") set
forth on Schedule 2.6(b)(ii), a list of which Kranson will prepare based upon
information provided it by the Company and delivered to Seller at Closing,
but including all sales made by Kranson's Dallas branch, whether or not to
existing customers of the Business. During the twelve month period, Buyer
will not, and will cause the Company and Kranson not to, transfer sales to
Common Customers by the Company and Kranson's Dallas branch to other
locations operated by Kranson or its affiliates.

(c) To establish the actual gross profits of the Business
during the Measuring Period, LFH shall, pursuant to the Engagement Letter,
prepare and deliver to RXI, Seller, Buyer, and the Escrow Agent within 90
days after the end of the Measuring Period, an audit report (containing an
unqualified opinion) setting forth the gross profits for the Measuring
Period, together with LFH's determination, based on the gross profits of the
Business during the Measuring Period set forth in the audit report, of the
Gross Margin Shortfall and the amount of the Shortfall Payment. LFH will
deliver copies of the audit report to

<PAGE>
RXI, Seller, Buyer, and the Escrow Agent and will certify to RXI, Seller,
Buyer, and the Escrow Agent the amount of such gross profits, Gross Margin
Shortfall, and Shortfall Payment, which certification shall be conclusive and
binding upon RXI, Seller, Buyer, and the Escrow Agent.

2.7. DEFERRED PAYMENT AMOUNT AVAILABILITY. If as a result of
reductions of the Escrow Deposit or any other payments to Buyer from the
Escrow under Sections 2.5 and 10 of this Agreement, the outstanding Escrow
Deposit shall be less than the aggregate Shortfall Payment, the outstanding
Deferred Payment amount shall be reduced by the amount of such excess.

3. REPRESENTATIONS AND WARRANTIES OF SELLER

Seller and RXI represent and warrant to Buyer as follows:

3.1. ORGANIZATION AND GOOD STANDING

(a) The Company is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Texas 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. Schedule
3.1(a) sets forth each jurisdiction in which the Company is qualified to do
business. There are no jurisdictions not scheduled in which the nature of
the Company's business operations or the ownership of its property requires
it to qualify or register to do business.

(b) Pursuant to Section 2.4 of this Agreement, Seller has
furnished Buyer true and complete copies of the Company's Organizational
Documents, as amended to date, certified as of recent date in the case of the
articles of incorporation, by the secretary of State of the State of Texas,
and in the case of the bylaws, certified by the Company's Secretary. The
Organizational Documents of the Company are in full force and effect, and
have not been amended since the respective dates of such certifications.

(c) Except as set forth on Schedule 3.1(c) to this Agreement,
the Company does not own or control, directly or indirectly, of record or
beneficially, any stock, equity, voting, ownership, or other interest in any
corporation, partnership, joint venture, trust, association, organization or
other entity.

3.2. AUTHORITY; NO CONFLICT

(a) This Agreement constitutes the legal, valid, and binding
obligation of Seller, enforceable against Seller in accordance with its
terms. Upon the execution and delivery by Seller and its affiliated companies
of the Supply Agreement, Name License Agreement, Distribution Agreement,
Escrow Agreement, Seller's Release, Noncompetition Agreement, and all other
agreements between Seller and its affiliates, as one party, and Buyer and/or
the Company, as the other party, required under Section 2.4(a) of this
Agreement (collectively, the "Seller's Closing Documents"), the Seller's
Closing Documents will constitute the legal, valid, and binding obligations
of Seller and the other affiliates of the Seller who are parties to the
Seller's Closing Documents enforceable against Seller and such affiliates in
accordance with their respective terms. Seller and such affiliates have the
absolute and unrestricted right, power, authority, and capacity to execute
and deliver this Agreement and the Seller's Closing Documents and to perform
their respective obligations under this Agreement and the Seller's Closing
Documents. The form, execution, and delivery of this Agreement and the
Seller's Closing Documents and the performance by the Seller and its
affiliates of their respective obligations hereunder and thereunder have been
duly approved by the Seller's board of directors and the

<PAGE>
boards of directors of such affiliates. Except as set forth in Schedule
3.2(a) to this Agreement, no other permits, licenses, Consents, clearances,
or proceedings of any kind are required for the Seller's and its affiliates'
execution, delivery, and performance of this Agreement and the Seller's
Closing Documents under (i) the Organizational Documents of the Seller and
such affiliates, (ii) any judgment, order, writ, injunction, decree,
ordinance, law, rule, regulation, resolution, or instrument of any federal,
state, or local Governmental Body binding on the Seller or such affiliate, or
(iii) any indenture, instrument, or other Contract to which any of the
Company, the Seller, or such affiliates are a party, or by which the Company,
the Seller, or the Seller's affiliates are bound.

(b) Except as set forth in Schedules 3.2(b)(i) through (vii)
to this Agreement, 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
Company, or (B) any resolution adopted by the board of directors or the
stockholders of the Company;

(ii) contravene, conflict with, or result in a
violation of, or give any Governmental Body or other Person the right to
challenge any of the Contemplated Transactions or to exercise any remedy or
obtain any relief under, any Legal Requirement or any Order to which the
Company, Seller, or RXI or any of the assets owned or used by the Company,
may be subject;

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

(iv) cause Buyer or the Company to become subject to,
or to become liable for the payment of, any Tax;

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

(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 Applicable
Contract; or

(vii) result in the imposition or creation of any
Encumbrance upon or with respect to any of the assets owned by the Company
and used in the Business or otherwise used by the Company in the Business.

Except as set forth in Schedule 3.2(b)(viii) to this Agreement, the
Company is not 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 Contemplated Transactions.

(c) The Company has obtained all Governmental Authorizations
from Governmental Bodies that are legally necessary or are material,
singularly or in the aggregate, to the operation of its businesses. All such
Governmental Authorizations obtained by the Company are in full force and
effect and are listed on Schedule 3.2(c) to this Agreement. The Company is
in compliance in all material respects with the terms of all such
Governmental Authorizations and with all requirements, standards and
procedures of the Governmental Bodies that issued such Governmental
Authorizations, and there does not exist under any of the

<PAGE>

foregoing any default or event of default or event which, with notice or
lapse of time or both, would constitute an event of default under, or violation
of, any such Governmental Authorizations by the Company.

3.3. CAPITALIZATION. The authorized equity securities of the Company
consist of 100,000 shares of common stock, no par value, and 5,000 shares of
preferred stock, no par value per share, issuable in one or more series.
Twenty-five thousand shares of such common stock and 3,750 shares of 8%
cumulative preferred stock are issued and outstanding and such common and
preferred stock in the aggregate constitute the Shares, which are the only
issued and outstanding equity securities of the Company. Seller is the sole
record and beneficial owner and holder of the Shares. Seller is delivering the
Shares to Buyer free and clear of all Encumbrances and without any legend or
other reference to any purported Encumbrance appearing upon any certificate
representing the Shares. All of the outstanding equity securities of the
Company have been duly authorized and validly issued and are fully paid and
nonassessable. There are no Contracts, calls, options, warrants, rights,
subscriptions, obligations, or other commitments of the Company or the Seller
directly or indirectly relating to the authorization, issuance, sale, transfer,
or other disposition or the repurchase or other acquisition of any equity
securities or other securities (including, within limitations, securities
convertible into or exchangeable for equity securities) of the Company. None of
the outstanding equity securities or other securities of the Company was issued
in violation of the Securities Act or any other Legal Requirement. The Company
does not own, or have 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.

3.4. FINANCIAL INFORMATION. Seller has delivered to Buyer: (i)
financial information for the Business for the fiscal year ended June 30, 1994,
in the form attached hereto as Schedule 3.4(i), (ii) financial information for
the Business for the fiscal year ended June 30, 1995, in the form attached
hereto as Schedule 3.4(ii), (iii) financial information for the Business for the
twelve months ended December 31, 1995, in the form attached hereto as Schedule
3.4(iii) (with the financial information identified in clauses (i) - (iii) being
collectively the "Business Financial Information"), and (iv) a listing of the
customers of the Business during the twelve months ended December 31, 1995, the
sales to each such customer, and the gross profit realized from such sales to
each such customer, in the form attached hereto as Schedule 3.4(iv) (the
"Lists"). Subject to the exceptions set forth on Schedule 3.4(v), the Business
Financial Information fairly present the results of operations of the Business
for the periods then ended and were prepared in accordance with GAAP,
consistently applied. Except as set forth in Schedule 3.4(v), the Lists fully
and accurately set forth all of the customers of the Business during the twelve
months ended December 31, 1995, and the sales to each such customer during such
period and the gross profits realized from such sales. The Business Financial
Information and the Lists are collectively referred to as the "Financial
Information."

3.5. BOOKS AND RECORDS. The books of account, ledgers, financial
records, data, minute books, stock record books, and other records of the
Company, all of which have been made available to Buyer, 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 Company contain accurate and complete records of all
meetings held of, and corporate action taken by, the stockholders, the Board of
Directors, and committees of the Board of Directors of the Company, and no
meeting of the stockholders, the Board of Directors, or any such 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 Company.

<PAGE>
3.6. REAL AND PERSONAL PROPERTY.
(a) The Company does not lease any real property other than
the premises identified in Schedule 3.6(a) to this Agreement, which sets
forth a complete list including location, of all land, plants, warehouses,
office buildings, stores and other buildings and real property leased, rented
or occupied by the Company. Schedule 3.6(a) also identifies all such leased
real property that the Company has transferred by lease assignment to the
Seller before the Closing Date as a part of the Formation. Except as set
forth on Schedule 3.6(a), Seller has obtained and delivered to the Company
complete releases of all of the Company's liabilities and obligations under
the leases for all real properties transferred to the Seller in the
Formation. With respect to each real property leased or rented by the
Company as tenant or lessee, Schedule 3.6(a) lists the name and address of
the parties (including any assignees or sublessees), to each lease or other
agreement creating such real property interest. No such lease is recorded on
the books and records of the Company as a capital lease. True, correct and
complete copies of each lease, mortgage, or other instrument referred to in
such Schedule that were not transferred to the Seller in the Formation have
been delivered to the Buyer and each is in full force and effect and
constitutes a legal, valid, and binding obligation of the Company, and, to
the Knowledge of Seller and RXI, constitutes a legal, valid, and binding
obligation of the other parties thereto, enforceable in accordance with its
terms, and there is not under any of such instruments any existing default or
event of default or event which with notice or lapse of time or both would
constitute an event of default by the Company or, to the Knowledge of Seller
and RXI, by any other party thereto.

(b) Schedule 3.6(b) to this Agreement sets forth a complete
list including location, of all land, plants, warehouses, office buildings,
stores and other buildings and real property owned by the Company at any time
between January 1, 1996, and the Closing Date, all of which the Company has
transferred to the Seller before the Closing Date in the Formation. With
respect to each such property, Schedule 3.6(b) lists the name and address of
the parties to each lease, mortgage, or other instrument encumbering such
property and the terms thereof. True, correct, and complete copies of each
lease, mortgage or other instrument referred to in such Schedule have been
delivered to Buyer, and Seller has obtained and delivered to the Company a
complete release of all liabilities and obligations of the Company under each
such lease, mortgage, or other instrument. The Company has not entered into
any options to purchase, rights of first refusal, contracts of purchase and
sale or options to lease affecting any such real property except as shown on
Schedule 3.6(b). No tenants are entitled to any rental or other concessions
except as disclosed on such Schedule. Seller has delivered to Buyer copies
of all title insurance policies, and surveys in the possession of the Seller
or the Company that relate to such real property.

(c) All real property leased or used by the Company is in
compliance in all material respects with all applicable Legal Requirements
and is able to be used for commercial, manufacturing, and industrial purposes
as currently operated without any governmental restrictions or limitations
thereon, except as provided in permits and licenses held by the Company or
transferred to the Seller in the Formation. All real property owned, leased,
or used by the Company that was transferred to the Seller in the Formation
was as of the date of the Formation in compliance in all material respects
with all applicable Legal Requirements. To Seller's and RXI's knowledge,
there are no notices or claims made by Governmental Bodies of any violations
relating to any buildings or real property leased, occupied, owned, or used
by the Company or transferred to the Seller in the Formation of any
applicable law, ordinance, code, or regulation or the operations of the
Company or any other tenant conducted therein. To Seller's and RXI's
Knowledge, all buildings, fixtures, mechanical systems (including electrical,
plumbing and heating), and roof, and structural systems used in connection
with the operation of the Business are in good operating condition and

<PAGE>
repair, ordinary wear and tear excepted, and are sufficient for the
continued conduct of the Business after the Closing in substantially the same
manner as the Business was conducted before the Closing. To Seller's and
RXI's Knowledge, no material expenditures are required to be made by the
Company for the repair or maintenance of any improvements currently on any
such premises used in connection with the operation of the Business or for
the construction or modification of any improvements necessary for any real
property leased or owned by the Company and used in connection with the
operation of the Business to comply in the future with any requirement of
existing law. No challenges or appeals are pending, or to the Knowledge of
the Seller and RXI, threatened regarding the amount of the Taxes payable by
the Company on, or the assessed valuation of, any premises owned or leased by
the Company (including premises transferred to the Seller in the Formation),
and no special arrangements or agreements exist between the Company and any
Governmental Body with respect thereto. No Tax assessment (other than
normal, annual general real estate Tax assessments) is pending or, to the
Knowledge of Seller and RXI, threatened against the Company with respect to
any portion of any leased or owned premises (including premises transferred
to the Seller in the Formation).

(d) Except as set forth on Schedule 3.6(d) to this Agreement,
the real properties owned by the Company are free and clear of all
Encumbrances and the real properties leased by the Company that were not
transferred to the Seller in the Formation are not subject to any restriction
on the use thereof in connection with the operation of the Business except as
provided in the leases of such properties.

(e) Schedule 3.6(e) to this Agreement describes each item of
tangible personal property (except Inventory) with a present book value in
excess of $5,000 (the "Tangible Personal Property") owned by the Company and
used in connection with the operation of the Business. Schedule 3.6(e) also
lists all molds owned by the Company and used in connection with the
operation of the Business (as distinct from the Manufacturing Business),
without regard to their original purchase prices or original book values.
Schedule 3.6(e) also identifies the name and address of the Person having
possession of each such mold. With respect to each item of Tangible Personal
Property owned by the Company and used in connection with the operation of
the Business, Schedule 3.6(e) lists the type and quantity of such property,
its current book value, and each Encumbrance thereon, the holder thereof, and
the amount and repayment terms of any debt or obligation which such
Encumbrance secures.

(f) Schedule 3.6(f) attached hereto describes each item of
leased tangible personal property (except Inventory) with a remaining
aggregate projected amount of lease payments in excess of $25,000 (the
"Leased Tangible Personal Property") (i) transferred to the Seller in the
Formation, and (ii) retained by the Company after the Formation. With
respect to each such item of Leased Tangible Personal Property, Schedule
3.6(f) lists the kind and quantity of such property and the parties to the
lease or rental agreement, including assignees and sublessees. Except as
noted in Schedule 3.6(f), no such lease is recorded on the books and records
of the Company as a capital lease. Each lease or other instrument referred
to on such Schedule and retained by the Company after the Formation is in
full force and effect and constitutes a legal, valid and binding obligation
of the Company and, to the Knowledge of Seller and RXI, constitutes a legal,
valid, and binding obligation of the other parties thereto, enforceable in
accordance with its terms, and there is not under any of such leases any
existing default or event of default or event which with notice or lapse of
time or both would constitute a default by the Company or, to the Knowledge
of Seller and RXI, by any other party thereto that in either case would
result in a termination or acceleration under any such lease. With respect
to the Leased Tangible Personal Property transferred to the Seller in the
Formation, the Seller and RXI have obtained and delivered to the Company
complete releases of all of the Company's liabilities and obligations of the
leases therefor.

<PAGE>
(g) The Company either owns or holds by valid subsisting
lease all Tangible Personal Property or Leased Tangible Personal Property
used by it in connection with the operation of the Business and reflected in
the Estimated Balance Sheet. Except as set forth in Schedule 3.6(e) or
3.6(f), no Tangible Personal Property or Leased Tangible Personal Property
used by the Company in connection with the operation of the Business is held
under any lease, security agreement, conditional sale contract, installment
sale contract or is subject to any Encumbrance, or is located at a place not
in the possession of the Company.

(h) Schedule 3.6(h) to this Agreement lists all deposits,
Prepaids, and other similar assets of the Company used in connection with the
Business, all of which arose in the ordinary Course of Business of the
Business.

3.7. CUSTOMERS AND SUPPLIERS. Schedule 3.7 attached hereto sets
forth as of December 31, 1995, and for the twelve months then ended, the name
and amounts of purchases from each supplier of merchandise to the Business
during such period, and all such purchase amounts (excluding freight charges)
are fully reflected in costs of sales in the Business Statement for the
twelve months ended December 31, 1995. Schedule 3.7 also contains copies of
the forms of purchase order for inventory and other supplies and sales
invoices for finished goods used by the Company in the Business. To Seller's
and RXI's Knowledge, there exist no present threatened or reasonably
foreseeable circumstances involving customers, suppliers, or sales
representatives that would adversely affect the Business or prevent its
conduct after the consummation of the transactions contemplated by this
Agreement in essentially the same manner in which it has heretofore been
conducted.

3.8. ACCOUNTS RECEIVABLE.

(a) All Accounts Receivable that are reflected on the
accounting records of the Company as of the Closing Date and the Estimated
Balance Sheet (collectively, the "Accounts Receivable") represent valid
obligations arising from shipments actually made or services actually
performed prior to Closing in the Ordinary Course of Business. Except as set
forth on Schedule 3.8(a), there is no contest, claim, or right of set-off,
other than returns in the Ordinary Course of Business, with any Account
Receivable debtor relating to the amount or validity of such Account
Receivable. Schedule 3.8(a) to this Agreement also contains a complete and
accurate list of all Accounts Receivable as of the close of business on the
business day immediately preceding the Effective Time, which list sets forth
the aging of such Accounts Receivable.

(b) Schedule 3.8(b) to this Agreement also sets forth with
respect to each note receivable of the Company outstanding as of the date
hereof, the name and address of the maker and any endorsers, the date, the
original dollar amount, the current outstanding balance, terms of payment and
a description of any assets securing such note. Except as indicated on
Schedule 3.8(b) to this Agreement, no note receivable is in default and the
Company has not granted any waiver or extension of time for payment with
respect to any note receivable. Each such note receivable represents valid
obligations arising from sales actually made or services actually performed
in the Ordinary Course of Business. All such notes receivable will be
collectible in full in accordance with their terms.

3.9. INVENTORY. All inventories of the Business, whether or not
reflected in the accounting records of the Company, consist of a quality and
quantity usable and salable in the Ordinary Course of Business, except for
obsolete items and items of below-standard quality, all of which have been
written off or written down to net realizable value on the accounting records
of the Company as of the Effective Time and on the Estimated Balance Sheet.
All inventories of the Business not written off have been priced at the lower
of cost or market on a weighted average basis (which approximates FIFO). The
quantities

<PAGE>

of each item of inventory of the Business are not excessive, but are
reasonable in the present circumstances of the Business. All inventories of
the Business are properly stored and in compliance with all applicable laws,
rules, and regulations of Governmental Bodies.

3.10. NO UNDISCLOSED LIABILITIES. Other than (i) as set forth in
Schedule 3.10 to this Agreement and (ii) accounts payable or expenses
described in Section 2.5(f) for which the Buyer receives indemnification
payments from Seller or RXI or with respect to which Buyer receives payments
from the Escrow Deposit, the Company has 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 accounting records of the Company (and previously disclosed to
Buyer) and on the Estimated Balance Sheet.

3.11. TAXES.

(a) The 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 it, either separately or as a member of a group of corporations,
pursuant to applicable Legal Requirements. Seller has delivered to Buyer
copies of, and Schedule 3.11(a) to this Agreement contains a complete and
accurate list of, all such Tax Returns filed since August 1, 1992, or such
earlier date as may be applicable to any Tax Returns that remain open for
audit. The 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 Seller or the Company, except such
Taxes, if any, as are listed in Schedule 3.11(a) to this Agreement and are
being contested in good faith and as to which adequate reserves (determined
in accordance with GAAP) have been or will be provided the accounting records
of the Company or Seller and the Estimated Balance Sheet.

(b) Except as set forth on Schedule 3.11(b), the United
States federal, state, and local income Tax Returns of the Company have been
audited by the IRS or relevant state or local tax authorities or are closed
by the applicable statute of limitations for all taxable years through 1991.
Schedule 3.11(b) to this Agreement contains a complete and accurate list of
all audits (including audits in process and audits not yet commenced but with
respect to which notices of audit have been received by the Seller or the
Company) 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 Schedule 3.11(b) to this Agreement, are being contested in good
faith by appropriate proceedings. RXI and Seller have delivered to Buyer
correct and complete copies of all IRS examination reports and statements of
deficiencies assessed against or agreed to by the Company or RXI with respect
to United States federal income Tax Returns filed by the Company or any group
of corporations including the Company on or after August 1, 1992. Except as
described in Schedule 3.11(b) to this Agreement, neither the Seller nor the
Company has 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 Company or for
which the Company may be liable.

(c) The charges, accruals, and reserves with respect to Taxes
on the respective books of the Company are adequate (determined in accordance
with GAAP) and are at least equal to the Company's liability for Taxes.
There exists no proposed tax assessment against the Company except as
disclosed in the accounting records of the Company, or Schedule 3.11(c) to
this Agreement. No consent to the application of Section 341(f)(2) of the
Code has been filed with respect to any property or assets held, acquired, or
to be acquired by the Company for use in the Business. All Taxes that the
Company is or was required

<PAGE>

by Legal Requirements to withhold or collect have been duly withheld or
collected and, to the extent required, have been paid to the proper
Governmental Body or other Person.

(d) All Tax Returns filed by (or that include on a
consolidated basis) the Company are true, correct, and complete. No such Tax
Return contains a disclosure statement under Section 6662(d)(2)(B)(ii) of the
Code or any similar provision of any state, local, or foreign Legal
Requirement. There is no tax sharing, tax allocation, or tax indemnity
agreement that will require any payment by the Company after the date of this
Agreement. The Company is not, and within the five year period preceding the
Closing Date has not been, an "S" corporation.

(e) Except as set forth on Schedule 3.11(e) to this
Agreement, (i) there are no Tax rulings, requests for rulings, or closing
agreements to which the Company is a party and which could affect the
Company's liability for Taxes for any period ending on or after the Closing
Date; (ii) neither Seller nor the Company has taken any action not in
accordance with past practice that would have the effect of deferring any Tax
liability for the Company from any taxable period ending on or before the
Effective Time to any taxable period ending after the Effective Time; (iii)
no power of attorney has been granted with respect to any matter relating to
Taxes of the Company that is currently in force; (iv) none of the property of
the Company used in the Business is required to be treated as owned by
another person pursuant to Section 168(f)(8) of the Code (as in effect prior
to its amendment by the Tax Reform Act of 1986) or is "tax exempt use
property" within the meaning of Section 168(h) of the Code; (v) neither the
Seller nor the Company has participated in or cooperated in an international
boycott, within the meaning of Section 999 of the Code, nor has any such
corporation had operations which are or may hereafter become reportable under
Section 999 of the Code; (vi) the Company has not disposed of property in a
transaction currently being accounted for under the installment method
pursuant to Section 453 or 453A of the Code; (vii) the Company has no
corporate acquisition indebtedness, as described in Section 279(b) of the
Code; (viii) the Company has not agreed to make, nor is it required to make,
any adjustment under Section 481(a) of the Code by reason of a change in
accounting method or otherwise; (ix) the Company has not been a United States
real property holding corporation (as defined in Section 879(c)(2) of the
Code) (or similar provision of state law) during the applicable period
specified in Section 897(c)(1)(A)(ii) of the Code; and (x) the Company has
not, nor has it ever had, a permanent establishment (as defined in any
applicable tax treaty or convention between the United States and such
foreign country), branch or office in any foreign country or possession of
the United States.

(f) Since RXI acquired the Company, the Company has been
included as a part of RXI's consolidated group for the purposes of filing Tax
Returns of RXI.

(g) To the Knowledge of RXI and Seller, after giving effect
to (i) RXI's estimated consolidated losses for the fiscal year ending June
30, 1996, (ii) RXI's consolidated net operating loss carryforward, and (iii)
the Formation and the Contemplated Transactions, the consolidated group of
RXI and its Subsidiaries will not be required to pay any federal income taxes
for the fiscal year ending June 30, 1996, or any state income taxes for the
1996 tax year aggregating more than $250,000.

(h) At the time of the Formation, Seller had an adjusted
basis for federal income tax purposes in the intercompany indebtedness owed
to it by the Company no less than the outstanding principal amount of the
intercompany indebtedness contributed by Seller to the capital of the Company
in connection with the Formation.

<PAGE>
3.12. NO MATERIAL ADVERSE CHANGE. Except as set forth on Schedule
3.12, since December 31, 1995, there has not been any material adverse change
in the Business or its operations or financial condition or the properties or
assets used by the Company in connection with the operation of the Business,
and no event has occurred or circumstance exists that is likely to result in
such a material adverse change. Without limiting the generality of the
foregoing sentence, except as set forth on Schedule 3.12, since December 31,
1995, there has been no (i) material adverse change in the condition
(financial or otherwise) of the assets of the Company used in connection with
the operation of the Business, the equity or liabilities of the Company as
they relate to the Business, or the earnings or, to Seller's and RXI's
Knowledge, the business of the Business; (ii) damage to, or destruction or
loss of, any of the properties or other items used in connection with the
operation of the Business and carried in the accounts of the Company at more
than $10,000 not covered by insurance; (iii) union organizing efforts, labor
interruption, or labor dispute affecting the Business; (iv) resignation,
retirement, or termination of the employment of any key employees of the
Company engaged in the Business; (v) material reduction in the sales of the
Business to the ten largest customers each in each branch location of the
Business measured in terms of gross profit dollars; (vi) material reduction
in the sales of the Business to the ten largest national customers of the
Business measured in gross profit dollars; or (viii) material reduction of
purchases for the Business by the Company from the ten largest suppliers of
the Business measured in dollar purchases.

3.13. EMPLOYEE BENEFITS

(a) As used in this Section 3.13, the following terms have
the meanings set forth below. "Company Other Benefit Obligation" means an
Other Benefit Obligation owed, adopted, or followed by the Company or an
ERISA Affiliate.

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

"Company VEBA" means a VEBA whose members include employees of the
Company or any ERISA Affiliate.

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

"Multiemployer Plan" has the meaning given in ERISA Section 3(37)(A).

"Other Benefit Obligations" means all obligations, arrangements, or
customary practices 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 Code Section 312.

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

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

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

<PAGE>
"Plan Sponsor" has the meaning given in ERISA Section 3(16)(B).

"Qualified Plan" means any Plan that meets or purports to meet the
requirements or Code Section 401(a).

"Title IV Plans" means all Pension Plans that are subject to Title IV of
ERISA, 29 U.S.C. Section 1301 et seq., other than Multiemployer Plans.

"VEBA" means a voluntary employees' beneficiary association under Code
Section 501(c)(9).

"Welfare Plan" has the meaning given in ERISA Section 3(1).

(b) (i) Schedule 3.13(b)(i) to this Agreement contains a
complete and accurate list of all Company Plans, Company Other Benefit
Obligations, and Company VEBAs, and identifies as such all Company Plans that
are Qualified Plans or (B) Multi-Employer Plans.

(ii) Neither the Company nor any ERISA Affiliate has at
any time within the six year period prior to the date hereof maintained,
participated in or contributed to a Title IV Plan, any Multi-Employer Plan,
or any Plan, other than a Pension Plan, which provides for post-retirement
benefits other than pension benefits.

(i) all documents that set forth the terms of each
Company Plan, Company Other Benefit Obligation, or Company VEBA and of any
related trust, including (A) all plan descriptions and summary plan
descriptions of Company Plans for which Seller or the 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, Company Other Benefit
Obligations, and Company VEBAs for which a plan description or summary plan
description is not required;

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

(iii) all collective bargaining agreements pursuant to
which contributions have been made or obligations incurred (including both
pension and welfare benefits) by the Company and the ERISA Affiliates of the
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 or
Company Other Benefit Obligation that is not otherwise in writing;

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

(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, Company Other Benefit
Obligation, or Company VEBA;

(viii) all reports submitted within the three years
preceding the date of this Agreement by third party administrators, actuaries,

<PAGE>

investment managers, consultants, or other independent contractors with
respect to any Company Plan, Company Other Benefit Obligation, or Company
VEBA;

(ix) the Form 5500 filed for the most recent plan years
with respect to the Company Plan identified in Section 11.18 hereto and any
other Company Plan to be continued by the Company after the Closing,
including all schedules thereto and the opinions of independent accountants;

(x) all notices that were given by the Company or any
ERISA Affiliate or any Company Plan to the IRS, the PBGC, or any participant
or beneficiary with respect to a Company Plan, Company Other Benefit
Obligation, or Company VEBA, pursuant to statute, within the three years
preceding the date of this Agreement, including notices that are expressly
mentioned elsewhere in this Section 3.13;

(xi) all notices with respect to a Company Plan, Company
Other Benefit Obligation, or Company VEBA that were given by the IRS, the
PBGC, or the Department of Labor to the Company, any ERISA Affiliate of the
Company, or any Company Plan within the three years preceding the date of
this Agreement; and.

(xii) with respect to Qualified Plans and VEBAs, the most
recent determination letter for each Plan of the Company that is a Qualified
Plan and the most recent exemption letter for each VEBA.

(d) Except as set forth in Schedule 3.13(d) to this Agreement:

(i) The Company has performed in all material respects
all of its obligations under all Company Plans, Company Other Benefit
Obligations, and Company VEBAs. The Company has made appropriate entries in
its financial records and statements for all obligations and liabilities
under such Plans, VEBAs, and Obligations that have accrued but are not due.

(ii) To the Knowledge of Seller and RXI, no statement,
either written or oral, has been made by the Company to any Person with
regard to any Plan or Other Benefit Obligation that was not in accordance
with the Plan or Other Benefit Obligation and that could have a material
adverse economic consequence to the Company or to Buyer.

(iii) The Company, with respect to all Company Plans,
Company Other Benefits Obligations, and Company VEBAs, is, and each Company
Plan, Company Other Benefit Obligation, and Company VEBA is, in compliance in
all material respects with ERISA, the Code, and other applicable Laws
including the provisions of such Laws expressly mentioned in this Section
3.13, and with any applicable collective bargaining agreement.

(A) To the Knowledge of Seller and RXI, no
transaction prohibited by ERISA Section 406 and no
"prohibited transaction" under Code Section 4975(c) have
occurred with respect to any Company Plan.

(B) The Company has incurred no tax or excise tax
liability under Chapter 43 of the Code with respect to any
Plan.

(C) To the Knowledge of Seller and RXI, all filings
required by ERISA and the Code as to each Plan have been
timely filed, and all notices and disclosures to participants
required by either ERISA or the Code have been timely
provided.

<PAGE>

(iv) No event has occurred or circumstance exists that
is likely to result in a material increase in premium costs of Company Plans
and Company Other Benefit Obligations that are insured, or a material
increase in benefit costs of such Plans and Obligations that are self-insured.

(v) Other than claims for benefits submitted by
participants or beneficiaries, no claim against, or legal proceeding
involving, any Company Plan, Company Other Benefit Obligation, or Company
VEBA is pending or, to Seller's Knowledge, is threatened.

(vi) The IRS has issued a favorable determination letter
with respect to the qualification of each Qualified Plan of the Company under
Code Section 401(a); and tax exempt status under Code Section 501(a) of each
trust thereunder. Each Company VEBA is exempt from federal income tax. To
the Knowledge of Seller and RXI, no event has occurred or circumstance exists
that will or could give rise to disqualification or loss of tax-exempt status
of any such Plan or trust.

(vii) Neither the Company nor any ERISA Affiliate has
withdrawn from any Multiemployer Plan with respect to which there is any
outstanding liability as of the date of this Agreement. To the Knowledge of
Seller and RXI no event has occurred or circumstance exists that could
reasonably result in withdrawal from the participation in or the termination,
reorganization, or insolvency of, any Multiemployer Plan that could result in
any liability of either the Company or Buyer to a Multiemployer Plan.

(viii) Neither the Company nor any ERISA Affiliate has
received notice from any Multiemployer 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.

(ix) To the Knowledge of Seller and RXI, no
Multiemployer Plan to which the Company or any ERISA Affiliate 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.

(x) Seller and the Company have complied in all
material respects with the provisions of ERISA Section 601 et seq. and Code
Section 4980B.

(xi) No payment that is owed or may become due to any
director, officer, employee, or agent of the Company will be non-deductible
to the Company or subject to tax under Code Section 280G or Section 4999; nor
will the Company be required to "gross up" or otherwise compensate any such
person because of the imposition of any excise tax on a payment to such
person.

(xii) The consummation of the Contemplated Transactions
will not result in the payment, vesting, or acceleration of any benefit under
a Company Plan, Other Company Benefit Obligation, or Company VEBA.

3.14. COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL AUTHORIZATIONS

(a) Except as set forth in Schedule 3.14(a) to this Agreement:

(i) the Company is, and at all times since January 1,
1993 has been, in compliance in all material respects with each Legal
Requirement that is or was 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

<PAGE>

violation by the Company of, or a failure on the part of the Company
to comply with, any Legal Requirement in all material respects, or (B) may
give rise to any material obligation on the part of the Company to undertake,
or to bear all or any portion of the cost of, any remedial action of any
nature; and

(iii) to the Seller's and RXI's Knowledge, except as set
forth on Schedule 3.19, the Company has not received, at any time since
January 1, 1993, 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
Legal Requirement, or (B) any actual, alleged, possible, or potential
obligation on the part of the Company to undertake, or to bear all or any
portion of the cost of, any remedial action of any nature.

(b) Schedule 3.14(b) to this Agreement contains a complete
and accurate list of each Governmental Authorization that is held by the
Company with respect to the Business or that otherwise relates to the
Business or to any of the assets owned or used by the Company in connection
with the Business. Each Governmental Authorization listed or required to be
listed in Schedule 3.14(b) to this Agreement is valid and in full force and
effect. Except as set forth in Schedule 3.14(b) to this Agreement:

(i) the Company is, and at all times since January 1,
1993, has been, in compliance in all material respects, with all of the terms
and requirements of each Governmental Authorization identified or required to
be identified in Schedule 3.14(b) to this Agreement;

(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 Governmental Authorization listed or required to be
listed in Schedule 3.14(b) to this Agreement, or (B) result directly or
indirectly in the revocation, withdrawal, suspension, cancellation, or
termination of, or any modification to, any Governmental Authorization listed
or required to be listed in Schedule 3.14(b) to this Agreement;

(iii) to the Seller's and RXI's Knowledge the Company has
not received, at any time since January 1, 1993, 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 listed or required to be listed in Schedule
3.14(b), or (B) any actual, proposed, possible, or potential revocation,
withdrawal, suspension, cancellation, termination of, or modification to any
Governmental Authorization listed or required to be listed in Schedule
3.14(b); and

(iv) all applications required to have been filed for
the renewal of the Governmental Authorizations listed or required to be
listed in Schedule 3.14(b) to this Agreement 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
have been duly made on a timely basis with the appropriate Governmental
Bodies.

The Governmental Authorizations listed in Schedule 3.14(b) to this Agreement
collectively constitute all of the Governmental Authorizations necessary to
permit the Company to lawfully conduct and operate the Business in the manner
it currently conducts and operates the Business and to permit the Company to
own and use its assets in connection with the operation of the Business in
the manner in which it currently owns and uses such assets.

3.15. LEGAL PROCEEDINGS; ORDERS

<PAGE>

(a) Except as set forth in Schedule 3.15(a) to this
Agreement, there is no pending Proceeding:

(i) that has been commenced by or against the Company;
or

(ii) that challenges, or seeks to prevent, delay, make
illegal, or otherwise interfere with, any of the Contemplated Transactions.
To the Knowledge of Seller and RXI, (1) no such 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.
Seller and RXI have delivered to Buyer copies of all pleadings,
correspondence, and other documents relating to each Proceeding listed in
Schedule 3.15(a) to this Agreement.

The Proceedings listed in Schedule 3.15(a) to this Agreement will not
have a material adverse effect on any business or the operations, assets,
condition, or prospects of the Company.

(b) Except as set forth in Schedule 3.15(b) to this Agreement:

(i) there is no Order to which the Company, or any of
the assets owned or used by the Company, is subject; and

(ii) the Seller and RXI are not subject to any Order
that relates to the Company or any of the assets owned or used by the Company.

(i) the Company is, and at all times since January 1,
1993, has been, in compliance in all material respects with all of the terms
and requirements of each Order to which it, or any of the assets owned or
used by it (including assets transferred to the Seller in the Formation), are
or have been subject;

(ii) no event has occurred or circumstance exists that
may constitute or result in (with or without notice or lapse of time) a
violation of or failure to comply with any term or requirement of any Order
in any material respect to which the Company, or any of the assets owned or
used by the Company (including assets transferred to the Seller in the
Formation), is subject; and

(iii) to Seller's and RXI's Knowledge the Company has not
received, at any time since January 1, 1993, any notice or other
communication (whether oral or written) from any Governmental Body regarding
any actual, alleged, possible, or potential violation of, or failure to
comply with, any term or requirement of any Order to which the Company, or
any of the assets owned or used by the Company (including assets transferred
to the Seller in the Formation, is or has been subject.

3.16. ABSENCE OF CERTAIN CHANGES AND EVENTS. Except as set forth
in Schedule 3.16 to this Agreement, since December 31, 1995, the Company has
conducted its businesses only in the ordinary Course of Business and there
has not been any:

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

<PAGE>

(b) amendment to the Organizational Documents of the
Company;

(c) 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 Company;

(d) entry into, modification or amendment of, termination of,
or receipt of notice of termination of any distributorship, dealer, or sales
representative agreement with respect to the Business;

(e) sale (other than sales of inventory in the Ordinary
Course of Business), lease, or other disposition of any asset or property of
the Company used in connection with the Business or mortgage, pledge, or
imposition of any lien or other Encumbrance on any such asset or property of
the Company;

(f) cancellation, modification, or waiver of any claims or
rights with a value to the Company with respect to the Business in excess of
$25,000;

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

(h) extension of payment terms on any Accounts Receivable or
conversion of any outstanding Accounts Receivable into a promissory note or
other deferred payment obligation of the Account Receivable debtor;

(i) destruction or disposal of books and records or any other
material data or files of the Company except in the Ordinary Course of
Business; or

(j) agreement by the Company to do any of the foregoing.

3.17. CONTRACTS; NO DEFAULTS.

(a) Schedule 3.17(a) to this Agreement contains a complete
and accurate list, and Seller has delivered to Buyer true and complete
copies, of:

(i) each Applicable Contract for the purchase or sale
of goods or services having a remaining term of one year or more;

(ii) each Applicable Contract that involves performance
of services or delivery of goods or materials by the Business of an amount or
value in excess of $50,000;

(iii) each Applicable Contract that involves performance
of services or delivery of goods or materials to the Business of an amount or
value in excess of $50,000;

(iv) each material Applicable Contract that was not
entered into in the Ordinary Course of Business;

(v) each licensing agreement or other Applicable
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 used in connection with the
Business;

(vi) each collective bargaining agreement and other
Applicable Contract to or with any labor union or other employee
representative

<PAGE>

of a group of employees relating to wages, hours, and other conditions of
employment;

(vii) each joint venture, partnership, and other Applicable
Contract (however named) involving a sharing of profits, losses, costs, or
liabilities by the Company with any other Person;

(viii) each Applicable Contract containing covenants that in
any way purport to restrict the Company's conduct of the Business or limit the
freedom of the Company to engage in the Business or to compete with any Person;

(ix) each Applicable Contract providing for payments to or by
any Person based on sales, purchases, or profits of the Business, other than
direct payments for goods;

(x) each power of attorney granted by the Company (or by the
Seller with respect to the Company or its assets) that is currently effective
and outstanding;

(xi) each Applicable Contract entered into other than in the
Ordinary Course of Business that contains or provides for an express undertaking
by the Company to be responsible for consequential damages;

(xii) each Applicable Contract for capital expenditures in
excess of $50,000;

(xiii) each Applicable Contract that is a consignment,
distributor, dealer, manufacturer, representative, sales agency, advertising, or
public relations agreement and that cannot be terminated by the Company upon no
more than thirty (30) days' notice;

(xiv) each Applicable contract providing for, or relating to,
the incurrence of indebtedness for borrowed money of the Company in excess of
$10,000;

(xv) each Applicable Contract relating to the employment,
compensation, or services of any present or former employee, consultant, or
independent contractor that is not terminable by the Company on thirty (30)
days' or less notice and that requires payment of compensation of $50,000 or
more in any twelve (12) consecutive months;

(xvi) any other Applicable Contracts involving aggregate
consideration and liabilities (including contingent liabilities) of more than
$250,000; and

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

The Contracts listed on Schedule 3.17(a) shall be referred to as "Material
Contracts."

(b) Except as set forth in Schedule 3.17(b) to this Agreement, to
the Knowledge of Seller and RXI, each Material Contract is in full force and
effect and is valid and enforceable in accordance with its terms.

(i) the Company is, and at all times since January 1, 1995
(or such later date that is the date of a specific Contract), has been, in
compliance in all material respects with all applicable terms and requirements
of each Material Contract;

<PAGE>

(ii) to the Knowledge of Seller and RXI, each other Person
that has or had any obligation or liability under any Material Contract is, and
at all times since January 1, 1995 (or such later date that is the date of a
specific Contract), has been, in compliance in all material respects 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 or both) will contravene, conflict with, or
result in a violation or breach of, or give the Company or, to the Knowledge of
Seller and RXI, 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 Material Contract; and

(iv) the Company has not given to or received from any other
Person, at any time since July 1, 1995, any notice or other communication
(whether oral or written) regarding any actual, alleged, possible, or potential
violation or breach of, or default under, any Material Contract.

(d) There are no renegotiations of, attempts to renegotiate, or
outstanding rights to renegotiate any material amounts paid or payable to the
Company under current or completed Material Contracts of the Business with any
Person having the contractual or statutory right to demand or require such
renegotiation, and no such Person has made written demand for such
renegotiation.

(e) Except as set forth on Schedule 3.17(e) to this Agreement, the
consummation of the transactions contemplated by this Agreement and all other
agreements and instruments entered into in connection with this Agreement will
not violate any term or conditions or terminate any of the Material Contracts,
and there is no requirement of obtaining the consent, approval, or act of, or
the making of any filing with, any party to any Material Contracts.

3.18. INSURANCE

(a) Schedule 3.18(a) to this Agreement contains a true and complete
declaration sheet summary of all policies of liability insurance to which the
Company or Seller is a party and under which the Company or its officers and
directors are currently insured.

(b) Schedule 3.18(b) to this Agreement describes:

(i) any self-insurance arrangement by or affecting the
Company, including any reserves established thereunder;

(ii) any currently effective contract or arrangement, other
than a policy of insurance, for the transfer or sharing of any risk by the
Company; and

(iii) all obligations of the Company to provide insurance
coverage to third parties (for example, under leases or service agreements) and
identifies the policy under which such coverage is provided.

(c) Schedule 3.18(c) to this Agreement sets forth for the Business
since July 1, 1993, for the insurance coverages specified in Section 3.18(a):

(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 $10,000, which sets forth:

(A) the name of the claimant; and

<PAGE>

(B) 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.

(d) Except as set forth on Schedule 3.18(d) to this Agreement:

(i) All policies set forth in Schedule 3.18(a) to this
Agreement and to which the Company or Seller is a party or that provide coverage
to the Company or any director thereof are, to the Knowledge of Seller and RXI
valid, outstanding, and enforceable, and to the Knowledge of Seller and RXI are
issued by an insurer that is financially sound and reputable.

(ii) Since January 1, 1993, none of the Seller, RXI, nor the
Company has, with respect to the Company, 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 that the issuer of any policy is not
willing or able to perform its obligations thereunder.

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

(iv) The Company and the Seller have given notice to the
insurer of all claims that may be insured by the policies listed on Schedule
3.18(a) to this Agreement.

(e) There are no outstanding claims for insurance coverage against
Container Insurance Company, Ltd., a dissolved British Virgin Islands
corporation ("CIC") that was a wholly owned subsidiary of the Company, and there
are no outstanding payment obligations with respect to any insurance coverage
provided by CIC. RXI and Seller know of no threatened claims or any basis for
any claims for insurance coverage against CIC or its successors and assigns.

3.19. ENVIRONMENTAL MATTERS. Except as set forth in Schedule 3.19 to this
Agreement:

(a) To the Knowledge of Seller and RXI, the Company is, and at all
times prior to the date hereof has been, in substantial compliance with, and has
not been and is not in material violation of any Environmental Law. Neither the
Seller nor the Company has received any Order, notice, request, communication,
inquiry, warning, citation, summons or directive from (i) any Governmental Body,
private citizen or entity, or (ii) the current or any prior owner or operator of
any Facilities, of (A) any violation or failure to comply with any Environmental
Law or Occupational Safety and Health Law, (B) of any Environmental, Health, and
Safety Liabilities with respect to any of the Facilities or any other properties
or assets (whether real, personal or mixed) in which the Company has had an
interest, or (C) with respect to any property or Facility at or to which
Hazardous Materials were transferred for purposes of disposal by the Company.
As used in this Section 3.19, "disposal" means transporting, treating, storing,
handling, transferring, discarding, recycling, testing, or receiving.

(b) There are no pending or, to the Knowledge of Seller and RXI,
threatened Encumbrances resulting from any Environmental, Health, and Safety
Liabilities or arising under or pursuant to any Environmental Law or
Occupational Safety and Health Law, with respect to or affecting any of the
Facilities.

<PAGE>

(c) To the Knowledge of Seller and RXI, the Company has no
Environmental, Health, and Safety Liabilities with respect to any of the
Facilities or any other properties or assets (whether real, personal or mixed)
in which the Company has or has had an interest.

(d) To the Knowledge of Seller and RXI, there are no Hazardous
Materials present on or in the Environment at the Facilities, including any
Hazardous Materials contained in barrels, above or underground storage tanks,
landfills, land deposits, dumps, equipment (whether movable 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 incorporated into any
structure therein or thereon except for those kinds and amounts of Hazardous
Materials which are necessary for, or a usual and lawful byproduct of, the
operation of the Company, including, without limitation, raw materials,
lubricants, cleaning supplies and wastes and emissions generated from the use,
processing and handling of such Hazardous Materials.

(e) To the Knowledge of Seller and RXI, there has been no Release
or threat of Release of any Hazardous Materials which require remediation or
will require under any Environmental Law or that may result in Environmental,
Health or Safety Liabilities (i) at or from the Facilities or (ii) at or from
any property to which Hazardous Materials were transferred by the Company for
purposes of disposal.

(f) Seller has delivered to Buyer true and complete copies of any
reports, audits, environmental assessments, studies, analyses, tests, or
monitoring possessed or initiated by Seller or the Company pertaining to
Environmental, Health, and Safety Liabilities or hazardous Materials in, on, or
under the Facilities, or concerning compliance by the Company with Environmental
Laws or Occupational Safety and Health Laws.

(g) Schedule 3.19(h) to this Agreement sets forth a complete list
as of the date hereof of the following documents prepared by, for, on behalf of
or with respect to the Company:

(i) all health and/or safety or environmental compliance
audit reports (and any responses or action plans) which were prepared since July
1, 1993;

(ii) all industrial hygiene and occupational safety surveys,
reports, and audits and personnel safety statistics prepared since July 1, 1993,
and required to be submitted to a Governmental Body;

(iii) summaries of all epidemiological or toxicological
studies, conducted by or on behalf of, or in the possession of the Company;

(iv) annual summaries of workers compensation liabilities
since July 1, 1993;

(v) all citations, notices of violations, letters of
warning, notices to comply, compliance inquiry letters, requests for
information, orders, consent orders, administrative or judicial enforcement
proceedings from Governmental Bodies with respect to environmental, health or
safety matters issued or pending since July 1, 1993;

(vi) reports and correspondence with respect to each
inspection by any Governmental Body concerning health, safety or environmental
matters conducted since July 1, 1993, and the results of each;

<PAGE>

(vii) all submissions since July 1, 1993, to the United States
Environmental Protection Agency with respect to Toxic Substances Control Act
Sections 8(a), 8(d), or 8(e);

(viii) all medical surveillance programs provided for employees
involved with raw materials and products (including waste products) used or
produced.

(ix) all discharge monitoring reports relating to wastewater
discharges submitted to a Governmental Body since July 1, 1993;

(x) all air emission surveys, reports, inventories or
questionnaires submitted to a Governmental Body since July 1, 1993;

(xi) all annual and biannual hazardous waste reports
submitted to a Governmental Body since July 1, 1993;

(xii) all Toxic Chemical Release Inventory (Form R) reports
submitted to a Governmental Authority Body since July 1, 1993;

The Company has supplied material safety data sheets, labels for all
hazardous substances and materials that are products of the Company or goods
handled or chemical substances or mixtures used by the Company or provided
labels regarding resin content of plastic containers in compliance in all
material respects with all applicable federal, state and local laws, rules,
regulations and ordinances. The recycled and heavy metal content of the
Company's plastic containers is and has been in compliance in all material
respects with all federal, state, and local laws and ordinances.

3.20. EMPLOYEES

(a) Schedule 3.20(a) to this Agreement contains a complete and
accurate list of the following information with respect to the Business for each
employee of the Company, including each employee on leave of absence or layoff
status: name, job title, current compensation paid or payable and any change in
compensation since January 1, 1996, vacation accrued, and service credited for
purposes of vesting and eligibility to participate under the 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 Pension Benefit Plan or Employee Welfare Benefit
Plan, or any other employee benefit plan.

(b) To Seller's and RXI's knowledge, no former or current employee
or current or former director of the Company is a party to, or is otherwise
bound by, any agreement or arrangement, including any confidentiality, non-
competition, or proprietary rights agreement, between such employee or director
and any other entity or person ("Proprietary Rights Agreement") that in any way
adversely affects (i) the performance of his duties as an employee of the
Business or director of the Company, or (ii) the ability of the Company to
conduct the Business, including, without limitation, any Proprietary Rights
Agreement with Seller or the Company by any such employee or director. To
Seller's Knowledge, no key employee employed by the Company in the Business and
listed on Buyer's schedule of anticipated employees of the Company after the
Closing intends to terminate his employment with the Company.

(c) Schedule 3.20(a) to this Agreement also contains a complete and
accurate list of the following information for each retired employee or director
of the Company and their dependents, receiving benefits or scheduled to receive
benefits from the Company in the future aggregating more than $10,000 per year
for such retired Person together with his or her dependents: name, pension

<PAGE>

benefit, pension option election, retiree medical insurance coverage, retiree
life insurance coverage, and other benefits.

(d) Schedule 3.20(d) to this Agreement contains a complete and
accurate list of the following information for each former or current employee
or director of the Company and each dependent of any current or former employee
or director of the Company receiving or scheduled to receive continuation
coverage from the Company under the provisions of ERISA Section 601 et seq. and
Code Section 4980B: name, kind of coverage, date the continuation coverage
commenced, and the expiration date of the continuation coverage.

3.21. LABOR DISPUTES; COMPLIANCE. Since July 1, 1993, the Company has not
been or is not a party to any collective bargaining or other labor Contract.
Since July 1, 1993, there has not been, there is not presently pending or
existing, and there is not threatened any strike, slowdown, picketing, work
stoppage, labor arbitration, or proceeding in respect of the grievance of any
employee, application or complaint filed by an employee or union with the
National Labor Relations Board or any comparable Governmental Body,
organizational activity, or other labor dispute against or affecting any of the
Company, and no application for certification of a collective bargaining agent
is pending or is threatened. There is no lockout of any employees by the
Company. The Company has complied in all material respects with all Legal
Requirements 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. The Company is not liable for the payment of any
taxes, fines, penalties, or other amounts, however designated, for failure to
comply with any of the foregoing Legal Requirements.

3.22. INTELLECTUAL PROPERTY

(a) INTELLECTUAL PROPERTY ASSETS. The term "Intellectual Property
Assets" includes:

(i) the name "Texberry", all fictional business names, trade
names, registered service marks, trade dress, logos, and applications for the
registration of any of the forging (collectively, "Marks");

(ii) all patents and patent applications (collectively,
"Patents");

(iii) all copyrights in both published works and unpublished
works (collectively, "Copyrights");

(iv) all rights in mask works (collectively, "Rights in Mask
Works");

(v) all Trade Secrets;

owned or used by the Company or Seller (as transferee of the Company) or
licensed by the Company or Seller (as transferred by the Company) as licensee or
licensor and other Contracts, understandings, licenses, arrangements, and
indemnities to which the Company relating or pertaining to assets included in
clauses (i) through (v).

(b) AGREEMENTS. There are no outstanding and, to Seller's and
RXI's Knowledge, no threatened disputes or disagreements with respect to any
such agreement relating to the Intellectual Property Assets to which the Company
is a party or by which the Company is bound, except for any license implied by
the sale of a product and common software programs with a value of less than
$10,000.

<PAGE>

(i) The Intellectual Property Assets of the Company and used
in connection with the Business are all those necessary for the operation of the
Business as it is currently conducted and have not been transferred to the
Seller. The Company's ownership interest, if any, in and to each of the
Intellectual Property Assets used in the Business, is free and clear of all
liens, security interests, charges, encumbrances, equities, and other adverse
claims, and except as set forth in Schedule 3.22(c) to this Agreement, the
Company has the right to use without payment to a third party all such
Intellectual Property Assets owned, held, or licensed by it.

(ii) To Seller's and RXI's Knowledge, no employee of the
Company has entered into any agreement 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 work to
anyone other than the Company.

(d) PATENTS

(i) Schedule 3.22(d) to this Agreement contains a complete
and accurate list and summary description of all Patents owned by the Company
and used in the Business, none of which have been transferred to the Seller.
The Company is the owner of all right, title, and interest in and to each such
Patent identified as owned by it, free and clear of all liens, security
interests, charges, encumbrances, entities, and other adverse claims.

(ii) None of the Company's Patents (including Patents
transferred to the Seller in the Formation) are infringed or, to Seller's and
RXI's Knowledge, have been challenged or threatened in any way. To the
Knowledge of Seller and RXI, no Patent (including Patents transferred to the
Seller in the Formation) and none of the products manufactured and sold, nor any
process or know-how used, by the Company or the Seller infringes or is alleged
to infringe any patent or other proprietary right of any other Person.

(e) MARKS

(i) Schedule 3.22(e)(i) to this Agreement contains a
complete and accurate list and summary description of all Marks used in the
Business, none of which have been transferred to the Seller. The Company is the
owner of all right, title, and interest in and to each such Mark identified as
owned by it, free and clear of all liens, security interests, charges,
encumbrances, equities, and other adverse claims.

(ii) Except as set forth on Schedule 3.22(e)(ii), all of the
Company's Marks used in the Business have been registered with the United States
Patent and Trademark Office.

(iii) To Seller's and RXI's Knowledge with respect to the
Company's Marks used in the Business, there is no potentially interfering
trademark or trademark application of any third party.

(iv) No Mark of the Company (including Marks transferred to
the Seller in the Formation) is infringed or, to Seller's and RXI's Knowledge,
has been challenged or threatened in any way. To Seller's and RXI's Knowledge
none of the Marks (including Marks transferred to the Seller in the Formation)
infringes or is alleged to infringe any trade name, trademark, or service mark
of any third party.

(f) COPYRIGHTS

<PAGE>

(i) Schedule 3.22(f) to this Agreement contains a complete
and accurate list and summary description of all Copyrights used in the
Business, none of which have been transferred to the Seller. The Company is the
owner of all right, title, and interest in and to each of the Copyrights
identified as owned by it, free and clear of all liens, security interests,
charges, encumbrances, equities, and other adverse claims.

(ii) Except as set forth on Schedule 3.22(f)(ii), all of the
Company's Copyrights have been registered and are currently in compliance with
formal legal requirements.

(iii) To Seller's and RXI's Knowledge, no Copyright of the
Company (including Copyrights transferred to the Seller in the Formation) is
infringed or, to Seller's Knowledge, has been challenged or threatened in any
way. None of the subject matter of any Copyrights (including Copyrights
transferred to the Seller in the Formation) infringes or is alleged to infringe
any copyright of any third party.

(g) TRADE SECRETS

(i) Seller, RXI, and the Company have taken all reasonable
precautions to protect the secrecy, confidentiality, and value of their Trade
Secrets.

(ii) The Company has good title and an absolute (but not
necessarily exclusive) right to use the Trade Secrets. To Seller's and RXI's
Knowledge, the Trade Secrets have not been used, divulged, or appropriated
either for the benefit of any Person (other than the Company) or to the
detriment of the Company. No Trade Secret is subject to any adverse claim or
has been challenged or threatened in any way.

(h) COPIES. Seller has provided Buyer with complete and accurate
copies of all Patents, Marks, and Copyrights, together with all registrations
and applications for registration of any of the foregoing.

3.23. CERTAIN PAYMENTS. Since July 1, 1993, neither the Company nor any
director, officer, agent, or employee of the Company acting in the apparent
scope of his authority, or any other Person associated with or acting in the
apparent scope of his authority for or on behalf of the 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, or (iii) to obtain special concessions or for special concessions
already obtained, for or in respect of the Company or any Affiliate of the
Company, or (b) established or maintained any fund or asset that has not been
recorded in the books and records of the Company.

3.24. DISCLOSURE

(a) No representation or warranty of Seller or RXI 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.

(b) There is no fact known to the Seller or RXI that has specific
application to the Seller or the Company (other than general economic or
industry conditions) and that materially adversely affects, or materially
threatens the assets, business, prospects, financial condition, or results of
operations of the Company or the Business that has not been set forth in this
Agreement or the Disclosure Schedule.

<PAGE>

3.25. RELATIONSHIPS WITH RELATED PERSONS. Neither the Seller, RXI, or any
Related Person of Seller, RXI, or of the Company has any interest in any
property (whether real, personal, or mixed and whether tangible or intangible)
having a fair market value of $25,000 or more, used in or pertaining to the
Business. Neither Seller, RXI, or any Related Person of Seller, RXI, or of the
Company owns, of record or as a beneficial owner, an equity interest or any
other financial or profit interest having a fair market value of $25,000 or more
in any Person that has business dealings or a material financial interest in any
transaction with the Company other than business dealings or transactions
conducted in the Ordinary Course of Business with the Company at substantially
prevailing market prices and on substantially prevailing market terms.

3.26. BROKERS OR FINDERS. Seller, RXI, and their respective agents have
incurred no obligation or liability, contingent or otherwise, for brokerage or
finders' fees or agents' commissions or other similar payment in connection with
this Agreement as a result of any action taken by Seller or RXI.

3.27. BANK ACCOUNTS. Except as set forth in Schedule 3.27, as of the date
of this Agreement, the Company has no bank account, instrument of deposit, or
safe deposit box.

3.28. DIRECTORS AND OFFICERS. Schedule 3.28 to this Agreement lists the
name and date of incumbency of each serving officer and director of the Company.

3.29. CONDUCT OF BUSINESS. Except as set forth on Schedule 3.29 to this
Agreement, since June 30, 1995, the Company has conducted the Business only in
the Ordinary Course of Business and in conformity with past practice and has
not, except in the Ordinary Course of Business, created, incurred or assumed, or
agreed to create, incur or assume, any indebtedness for borrowed money, or
entered into, as lessee, any capitalized lease obligations (as defined in
Statement of Financial Accounting Standards No. 13).

3.30. PRODUCT WARRANTIES. Set forth on Schedule 3.30 to this Agreement
are copies of all express written product warranties and guaranties now in
effect issued by the Company with respect to the Business' products and/or
services. No material product warranty claims are currently asserted in writing
or otherwise than in writing against the Company, and to the Knowledge of Seller
and RXI there exist or have occurred no facts or circumstance that would give
rise to any such material claims.

3.31. REBATES. Except as set forth on Schedule 3.31, the Company does not
provide or allow rebates in connection with the Business. Schedule 3.31 to this
Agreement also sets forth a summary of the Company's policies with respect to
discounts, allowances, and returns of the Business. Except as set forth on
Schedule 3.31, the Company does not sell any products of the Business on
consignment, on approval, or with any right of return except if such products
are non-conforming or defective.

3.32. SALES AND ASSETS. At the end of its most recent fiscal quarter, the
ultimate parent entity of the Seller had total assets of more than $10,000,000,
but less than $100,000,000, and during its most recently ended fiscal year had
total sales of more than $10,000,000, but less than $100,000,000. After giving
effect to and adding the amount of the assets and goodwill, determined in
accordance with GAAP purchase accounting, of Vanguard Plastics acquired by RXI
and Seller on May 9, 1996, to the assets of RXI reflected on its quarterly
report on Form 10-Q filed with the Securities and Exchange Commission on or
before May 15, 1996, for the quarter ended March 31, 1996, the ultimate parent
entity of the Seller had total assets of less than $100,000,000 as of 12:01 a.m.
Pacific daylight savings time May 10, 1996. The total assets and total sales of
such ultimate parent entity alone will not require a filing under the HSR Act
with respect to the Contemplated Transactions.

<PAGE>

3.33. THE FORMATION. Effective before the Effective Time, RXI has caused
the Company to assign, transfer, and convey to the Seller all of the assets,
properties, liabilities, obligations, and Contracts of the Company other than
the assets, properties, and Contracts employed by the Company in the Business
and those liabilities and obligations specifically retained by the Company in
accordance with the terms of this Agreement, and RXI has caused the Seller to
accept the assignment, transfer, and conveyance of all such assigned,
transferred, and conveyed assets, properties, liabilities, obligations, and
Contracts. Effective before the Effective Time, RXI also contributed all of the
Shares to the Seller. There were not included in the assets and properties that
the Company transferred to the Seller any container or closure molds owned by
the Company for use only in connection with the operation of the Business that
are in the possession of vendors to the Company. In connection with the
foregoing assignments and assumptions, the Seller has also caused the Seller to
assume and the Company to be released from any and all liabilities and
obligations arising under the Contracts and other agreements, instruments,
commitments, and understandings set forth on Schedule 3.33 to this Agreement.

3.34. INTERCOMPANY OBLIGATIONS. Effective immediately prior to the
Effective Time, all Intercompany Obligations were, for all purposes, netted as
between the appropriate obligors and obligees or contributed to the capital of
the Company and the resulting balances were canceled and discharged (with such
cancellation and discharge having effect immediately before the Effective Time)
with no Tax becoming due or payable by the Company as of or after the Closing
Date as a result thereof and, with the result that from and after the Effective
Time or the Closing there will be no further obligation or liability with
respect to any Intercompany Obligations as of the Effective Time. Effective
immediately prior to the Effective Time, Seller and RXI have executed and caused
each affiliate which is or has been included as a member of a consolidated,
combined, unitary or affiliated group filing consolidated, combined or unitary
Tax Returns and which includes the Company to execute an agreement canceling any
applicable tax sharing, tax allocation, tax indemnity or other similar agreement
with respect to the Company and releasing the Company from any further liability
with respect to Taxes of any such consolidated, combined, unitary or affiliated
group.

4. REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to Seller as follows:

4.1. ORGANIZATION AND GOOD STANDING. Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Missouri.

4.2. AUTHORITY; NO CONFLICT

(a) This Agreement constitutes the legal, valid and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms.
Upon the execution and delivery by Buyer and/or Kranson of the Supply Agreement,
Distribution Agreement, Name License Agreement, Escrow Agreement, Kranson
Guaranty, lease guaranties and Non-Competition Agreements (collectively, the
"Buyer's Closing Documents"), the Buyer's Closing Documents will constitute the
legal, valid and binding obligations of Buyer and Kranson enforceable against
Buyer and/or Kranson in accordance with their respective terms. Buyer and
Kranson have the absolute and unrestricted right, power, authority and capacity
to execute and deliver this Agreement and the Buyer's Closing Documents and to
perform their respective obligations under this Agreement and the Buyer's
Closing Documents. The form, execution and delivery of this Agreement and the
Buyer's Closing Documents and the performance by the Buyer and Kranson of their
respective obligations hereunder and thereunder have been duly approved by the
Buyer's board of managers and the board of directors of Kranson. Except as set
forth on Schedule 4.2(a) to this Agreement, no other permits, licenses,
Consents,

<PAGE>

clearances or proceedings of any kind are required for the Buyer's and
Kranson's execution, delivery and performance of this Agreement and the Buyer's
Closing Documents under (i) the Organizational Documents of the Buyer and
Kranson, (ii) any judgment, order, writ, injunction, decree, ordinance, law,
rule, regulation, resolution or instrument of any federal, state or local
Governmental Body, binding on Buyer or Kranson, or (iii) any indenture,
instrument or other Contract to which Buyer or Kranson are a party or by which
Buyer or Kranson are bound.

(b) Except as set forth in Schedule 4.2(b) to this Agreement,
neither the execution and delivery of this Agreement by Buyer nor the
consummation or performance of any of the Contemplated Transactions by Buyer
will give any Person the right to prevent, delay, or otherwise interfere with
any of the Contemplated Transactions pursuant to:

(i) any provision of Buyer's Organizational Documents;

(ii) any resolution adopted by the board of directors of
Buyer;

(iii) any Legal Requirement or Order to which Buyer may be
subject; or

(iv) any Contract to which Buyer is a party or by which Buyer
or its assets may be bound.

Except as set forth in Schedule 4.2(b) to this Agreement, Buyer is not and will
not be required to 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 Contemplated Transactions.

(c) Kranson owns all of the business operations of Northwestern
Bottle Company, which is an operating division of Kranson.

4.3. INVESTMENT INTENT. Buyer is acquiring the Shares for its own
account and not with a view to their distribution within the meaning of Section
2(11) of the Securities Act.

4.4. CERTAIN PROCEEDINGS. There is no pending Proceeding that has been
commenced against Buyer and that challenges, or may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of the
Contemplated Transactions, and to Buyer's Knowledge, no such Proceeding has been
threatened.

4.5. BROKERS OR FINDERS. Buyer and its officers and agents have incurred
no obligation or liability, contingent or otherwise, for brokerage or finders'
fees or agents' commissions or other similar payment in connection with this
Agreement, and Buyer will indemnify and hold Seller harmless from any such
payment alleged to be due by or through Buyer as a result of the action of Buyer
or its officers or agents.

4.6. SALES AND ASSETS. At the end of its most recent fiscal quarter, the
ultimate parent entity of the Buyer had total assets of more than $10,000,000,
but less than $100,000,000, and during its most recently ended fiscal year had
total sales of more than $10,000,000, but less than $100,000,000. The total
assets and total sales of such ultimate parent entity alone will not require a
filing under the HSR Act with respect to the Contemplated Transactions.

5. COVENANTS OF SELLER

5.1. EMPLOYEES OF THE BUSINESS. Immediately after completion of the
Closing, the Company will employ only those persons listed on Schedule 5.1 to

<PAGE>

this Agreement. (Nothing contained in the immediately preceding sentence
shall be construed to give any employee of the Company any legal or equitable
right to continued employment by the Company after the Closing Date.) Seller
and RXI shall pay, and indemnify and hold the Buyer and the Company harmless
from and against, all costs, expenses, liabilities, damages, litigation, and
claims of any kind arising from or in connection with the Company's
termination on or before the Closing Date of the employment of all of its
employees before the Closing Date that are not listed on Schedule 5.1 (and
without regard to whether any such terminated employees are or will be
employed by the Seller), including, without limitation, all earned but unpaid
salaries and wages (and all withholding and employment Taxes related
thereto), severance pay, accrued vacation and sick pay, and other benefits
and all liabilities and claims arising under the Workers Adjustment and
Retraining and Notification Act of 1988 (the "Warn Act"), and any similar law
of the States of Texas, Louisiana, and California, if applicable. Seller
shall be responsible for compliance with the Warn Act notices and all notices
required by any such Texas or Louisiana law. The Company shall be responsible
for the salaries, wages, and benefits of the employees listed on Schedule 5.1
from and after the Effective Time.

5.2. CONTINUATION COVERAGE. Notwithstanding anything to the contrary in
this Agreement, Seller and RXI shall retain all responsibility and liability for
compliance with and any payments under ERISA Section 601 et seq. and Code
Section 4980B with respect to former employees and directors of the Company and
each dependent of any dependent of any former employees or directors of the
Company receiving or entitled to receive as of the Closing Date continuation
coverage under such sections.

5.3. CERTAIN PAYMENTS. RXI and the Seller shall pay all accounts payable
and accrued expenses that arose from the conduct of the Manufacturing Business
before the Effective Time as such accounts payable become due. RXI and Seller
waive any and all claims or rights they may have to receive payment of any
unpaid dividends or other distributions on the Shares, whether declared, not
declared, or accrued.

6. [INTENTIONALLY OMITTED.]

7. [INTENTIONALLY OMITTED.]

8. [INTENTIONALLY OMITTED.]

9. [INTENTIONALLY OMITTED.]

10. INDEMNIFICATION; REMEDIES

10.1. SURVIVAL. All representations, warranties, covenants, and
obligations in this Agreement, the Disclosure Schedule, and any certificate or
document delivered pursuant to this Agreement will survive the Closing. The
right to indemnification, reimbursement, or other remedy based on such
representations, warranties, covenants, and obligations will not be affected by
any investigation conducted with respect to any such representation, warranty,
covenant, or obligation except to the extent Knowledge of the inaccuracy is
obtained or acquired before the Closing. The waiver of any condition based on
the accuracy of any representation or warranty, or on the performance of or
compliance with any covenant or obligation, will not affect the right to
indemnification, reimbursement, or other remedy based on such representations,
warranties, covenants, and obligations. Notwithstanding the foregoing, the
indemnification obligations of the Seller under Sections 10.2(c) and 10.3 shall
apply notwithstanding any Knowledge.

10.2. INDEMNIFICATION AND REIMBURSEMENT BY RXI AND SELLER. Subject to
Section 10.5 through 10.8 of this Agreement, RXI and Seller shall jointly and

<PAGE>

severally indemnify and hold harmless Buyer, the Company, and their
respective Representatives, stockholders, controlling persons, and affiliates
(collectively, the "Indemnified Persons"), and will reimburse the Indemnified
Persons, for any liability, damage, expense (including costs of investigation
and defense and reasonable attorneys' fees), or Taxes, whether or not
involving a third-party claim (collectively, "Damages"), arising directly or
indirectly from or in connection with:

(a) any Breach of any representation or warranty made by Seller in
this Agreement, the Disclosure Schedule, or any other certificate or document
delivered by Seller pursuant to this Agreement;

(b) any Breach by the Seller or RXI of any covenant or obligation
of the Seller in this Agreement;

(c) the conduct (including all actions and omission to act) and
operation of all businesses of the Company, the Seller and RXI and the Seller's
or RXI's Other Related Persons at any time before or after the Closing,
excluding, however, (i) Business Liabilities as of the close of business on the
business day immediately preceding the Effective Time, and (ii) the conduct and
operation of the Business after the Closing by the Company and the Buyer;

(d) 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 the Seller or the Company (or
any Person acting on their behalf) in connection with any of the Contemplated
Transactions.

In determining the amount of Damages, there shall be deducted (i) any
insurance recovery by Indemnified Person in respect thereof (and no right of
subrogation shall accrue hereunder to any insurer) and (ii) the amount of any
Tax benefit to the Indemnified Person (or any of its affiliates) with respect to
such loss or expense (after giving effect to the Tax effect of receipt of the
indemnification payments).

10.3. INDEMNIFICATION AND REIMBURSEMENT BY RXI AND SELLER -- MANUFACTURING
BUSINESS AND ENVIRONMENTAL MATTERS. In addition to the provisions of Section
10.2, RXI and Seller will jointly and severally indemnify and hold harmless
Buyer, the Company, and the other Indemnified Persons, and will jointly and
severally reimburse Buyer, the Company, and any other Indemnified Person, for
any Damages (including costs of Clean-up, containment, or other remediation)
arising from or in connection with:

(a) any liabilities or obligations relating to the Manufacturing
Business or claims asserted by any current or former employee of the
Manufacturing Business in each case whenever arising;

(b) any Environmental, Health, and Safety Liabilities arising out
of or relating to: (i)(A) the ownership, operation, or condition at any time on
or prior to the Closing Date of the Facilities or any other properties and
assets (whether real, personal, or mixed and whether tangible or intangible) in
which Seller or the Company has or had an interest, or (B) any Hazardous
Materials that were present on the Facilities or such other properties and
assets at any time on or prior to the Closing Date; or (ii)(A) any Hazardous
Materials, wherever located, that were, or were allegedly, generated,
transported, stored, treated, Released, or otherwise handled by Seller or the
Company or by any other Person for whose conduct they are or may be held
responsible at any time on or prior to the Closing Date, or (B) any Hazardous
Activities that were, or were allegedly, conducted by Seller or the Company or
by any other Person for whose conduct they are or may be held responsible; or

<PAGE>

(c) any bodily injury (including illness, disability, and death,
and regardless of when any such bodily injury occurred, was incurred, or
manifested itself), personal injury, property damage (including trespass,
nuisance, wrongful eviction, and deprivation of the use of real property), or
other damage of or to any Person, including any employee or former employee of
Seller or the Company or any other Person for whose conduct they are or may be
held responsible, in any way arising from or allegedly arising from any
Hazardous Activity conducted or allegedly conducted with respect to the
Facilities or the operation of the Company prior to the Closing Date, or from
any Hazardous Material that was (i) present or suspected to be present on or
before the Closing Date on or at the Facilities (or present or suspected to be
present on any other property, if such Hazardous Material emanated or allegedly
emanated from any of the Facilities and was present or suspected to be present
on any of the Facilities on or prior to the Closing Date) or (ii) Released or
allegedly Released by Seller or the Company or any other Person for whose
conduct they are or may be held responsible, at any time on or prior to the
Closing Date.

Seller will be entitled to control any Clean-up, any related Proceeding,
and, except as provided in the following sentence, any other Proceeding with
respect to which indemnity may be sought under this Section 10.3. The
procedure described in Section 10.9 will apply to any claim solely for
monetary damages relating to a matter covered by this Section 10.3.

Notwithstanding any of subsections (a), (b) or (c) above, RXI and Seller
will not have any liability, whether individually or jointly to indemnify
against Damages which consist solely of the diminution in value (including
damage to reputation and diminution in property value) of any of the assets of
the Company but which do not otherwise involve any Environmental, Health and
Safety Liability, nor require, under any Environmental Law or Occupational
Safety and Health law, any remediation or other expenditure of monies.

10.4. INDEMNIFICATION AND REIMBURSEMENT BY BUYER. Buyer will indemnify
and hold harmless RXI and Seller, and will reimburse RXI and Seller, for any
Damages arising from or in connection with (a) any Breach of any representation
or warranty made by Buyer in this Agreement or in any certificate delivered by
Buyer pursuant to this Agreement, (b) any Breach by Buyer of any covenant or
obligation of Buyer 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 such Person with Buyer (or any Person
acting on its behalf) in connection with any of the Contemplated Transactions,
(d) any Environmental, Health, and Safety Liabilities arising out of or relating
to (i)(A) the operation by the Company, Buyer, or any other Related Person of
the Buyer of any Facilities at any time after the Closing Date, (B) the
ownership, operation, or condition of any real property other than the
Facilities by the Buyer or any of its Related Persons (excluding any real
property owned, leased, or occupied by the Company before the Closing Date)(the
"Other Buyer Properties"), (C) any Hazardous Materials present on the Facilities
that were not present on the Facilities on or before the Closing Date, (D) any
Hazardous Materials present on the Other Buyer Properties, or (ii) Hazardous
Materials (other than Hazardous Materials present on the Facilities on or before
the Closing Date and Hazardous Materials generated, transported, stored,
treated, released, or otherwise handled by the Company on or before the Closing
Date), wherever located, that are generated, transported, stored, treated,
Released, or otherwise, handled by the Buyer or its Related Persons at any time
after the Closing Date, or (e) any bodily injury (including illness, disability,
and death), personal injury, or property damage (including trespass, nuisance,
wrongful eviction and deprivation of the use of real property) in any way
arising from Hazardous Materials that were (i) present only after the Closing
Date at the Facility or Other Buyer Properties (or present at another property
other than any property owned, leased, or occupied by Seller or RXI), but which
emanated from any of the Facilities at any time after the Closing Date, or (ii)
Released by the

<PAGE>

Buyer or the Company after the Closing. Nothing in this Section 10.4 shall
be construed as limiting the Seller's and RXI's obligations under Section
10.3 of this Agreement.

10.5. TIME LIMITATIONS. Except as provided in Section 10.8 of this
Agreement, Seller's and RXI's indemnification obligations under Section 10.2
shall terminate on the second anniversary of the Closing Date (unless Buyer has
asserted a claim before such date, in which case the Seller's and RXI's
indemnification obligations with respect to such claim shall continue after such
date until such claim is resolved). There shall be no time limitations on the
Buyer's indemnification obligation under Section 10.4 of this Agreement.

10.6. LIMITATIONS ON AMOUNT -- SELLER. Seller and RXI will have no
liability for indemnification under Section 10.2 of this Agreement until the
aggregate Damages against which Seller and RXI must indemnify exceed $135,000,
and such indemnification obligation shall apply in all events only to Damages in
excess of $135,000. Except as provided in Section 10.8 of this Agreement,
Seller shall have no indemnification obligation under Section 10.2 of this
Agreement for Damages aggregating more than the sum of the Deferred Payment
amount at Closing plus the Escrow Deposit at Closing after giving effect to the
Initial Adjustment.

10.7. LIMITATIONS ON AMOUNT -- BUYER. There shall be no limitations on
the amount of the Buyer's indemnification obligations under Section 10.4 of this
Agreement.

10.8. SPECIAL PROVISIONS.

(a) There shall be no contractual time limitation or limitation on
the amount of the Seller's and RXI's indemnification or payment obligations (i)
under Sections 2.5(a)(i), 2.5(f) (with respect to Disputed Payables and other
accounts payable and expenses described in Section 2.5(f)(ii)), 2.5(i), 5.1,
5.3, 10.3, 11.1(b) (with respect to the first sentence thereof), or 11.18 of
this Agreement, (ii) with respect to any Breach of a representation or warranty
of Seller and RXI contained in Sections 3.3, 3.11, and 3.19 (to the extent not
covered by Section 10.3 of this Agreement), (iii) with respect to any Breach of
a representation and warranty of Seller and RXI contained in this Agreement
about the Manufacturing Business, and (iv) under Sections 10.2(b)-(d) of this
Agreement. Notwithstanding the foregoing, the Buyer's sole remedy (i) for a
breach of the representations and warranties contained in Sections 3.8 and 3.9
of this Agreement shall be the Company's exercise of its rights under Sections
2.5(e) and 2.5(d), respectively, and (ii) for a breach of the representations
and warranties contained in Sections 3.4, 3.7, 3.12, 3.24(b), and 3.29 shall,
notwithstanding Buyer's Knowledge of any such breach, be the receipt of the
Shortfall Payment (computed as provided in Section 2.6(b) of this Agreement), if
any.

(b) Upon notice to Seller specifying in reasonable detail the basis
for such set-off, Buyer may set off and not pay any amount to which it may be
entitled under this Section 10 against amounts otherwise payable as the Deferred
Payment. The exercise of such right of set-off and nonpayment by Buyer in good
faith, whether or not ultimately determined to be justified, will not constitute
a Breach of this Agreement. Neither the exercise of nor the failure to exercise
such right of set-off will constitute an election of remedies or limit Buyer in
any manner in the enforcement of any other remedies that may be available to it.
Except as provided by this Agreement, Buyer shall have no right of set-off
against the Deferred Payment amount.

10.9. PROCEDURE FOR INDEMNIFICATION -- THIRD PARTY CLAIMS.

(a) If Seller or Buyer believes that any of the persons indemnified
hereunder has suffered or incurred any loss or incurred any expense,

<PAGE>

Buyer or Seller shall so notify the other promptly in writing (a "Claim
Notice"), describing such loss or expense, the amount thereof, if known, and
the method of computation of such loss or expense, all with reasonable
particularity and containing a reference to the provisions of this Agreement
or any other agreement or any certificate delivered pursuant hereto or
thereto in respect of which such loss or expense shall have occurred. If any
action at law or suit in equity is instituted by or against a third party
with respect to which any of the indemnified persons intends to claim any
liability or expense as loss or expense hereunder, any such indemnified
person shall promptly notify the indemnifying party of such action or suit.
Failure to give a Claim Notice shall not relieve the indemnifying party of
its obligations hereunder except to the extent it shall have been prejudiced
by such failure.

(b) Seller and Buyer agree that any indemnity against Damages
covered by Sections 10.1, 10.2 or 10.3 arising from any claim, demand, suit, or
other proceeding by a third party shall be governed by this Section 10.9. The
indemnifying persons hereunder shall have the right to conduct and control,
through counsel of their choosing, any third party claim, action or suit, and
the indemnifying persons may compromise or settle the same, provided that any of
the indemnifying persons shall give the indemnified persons advance notice of
any proposed compromise or settlement and the indemnified persons shall have
consented to such consent or settlement which consent shall not be unreasonably
withheld. The indemnifying persons shall permit the indemnified party to
participate in the defense of any such action or suit through counsel chosen by
the indemnified person provided that the fees and expenses of such counsel shall
be borne by the indemnified party. If the indemnified persons refuse to consent
to any settlement acceptable to the indemnifying party and such third party, the
indemnified persons shall thereafter bear the entire expense of defending such
claim, action or suit and the sole risk of liability beyond such amount which
would have resulted from such a settlement, and no amount beyond such amount
shall be claimed as Damages or expense hereunder. The indemnified person shall
not, without the written consent of the indemnifying party, pay, compromise, or
settle any such claim, action or suit, except that no such consent shall be
required if, following a written request from the indemnified person, the
indemnifying party shall fail, within 14 days after the making of such request,
to acknowledge and agree in writing that, if such claim, action or suit shall be
adversely determined, such indemnifying party has an obligation to provide
indemnification hereunder to such indemnified person. Notwithstanding the
foregoing, the indemnified person shall have the right to pay, settle or
compromise any such claim, action or suit without such consent, provided that in
such event the indemnified person shall waive any right to indemnity therefor
hereunder unless such consent is unreasonably withheld.

10.10. PROCEDURE FOR INDEMNIFICATION -- OTHER CLAIMS. A claim for
indemnification for any matter not involving a third-party claim or a dispute
under Section 4(d) of the Escrow Agreement may be asserted by notice to the
party from whom indemnification is sought and if not resolved by the parties
within 30 days after such notice shall be subject to arbitration to be conducted
as follows:

(a) The arbitration shall be conducted in New York City, New York.

(b) The arbitration proceedings will be conducted in accordance
with, and pursuant to, the then current commercial Arbitration Rules (the
"Arbitration Rules") of the American Arbitration Association as in effect in New
York City, New York, except to the extent the Arbitration Rules conflict with
the provisions of this Agreement, in which event the provisions of this
Agreement shall control.

<PAGE>

(c) For all claims aggregating up to $500,000, there will be a
single neutral arbitrator (the "Arbitrator"), and for all claims aggregating
$500,000 or more, there shall be three neutral arbitrators (collectively also
the "Arbitrator"), who will be selected by the parties, but if the parties are
unable to agree to the selection of a single arbitrator within 30 days, the
Arbitrator shall be selected in accordance with the usual rules and procedures
under the Arbitration Rules.

(d) The Arbitrator will have the power to grant all appropriate
legal and equitable relief, both by way of interim relief and as a part of the
final award, as may be granted by any court of competent jurisdiction, in order
to carry out the terms of this Agreement (including, without limitation,
declaratory and injunctive relief and damages, but excluding punitive or
exemplary damages). All awards and orders of the Arbitrator, including interim
relief, may be enforced by any court of competent jurisdiction.

(e) The parties intend that the arbitration proceedings be
conducted as expeditiously as possible and that reasonable rights of discovery
(including the right to depose witnesses, submit interrogatories and request
documents) be granted to each party. In that regard, the parties agree to work
together in good faith to arrive upon mutually acceptable procedures regarding
the time limits for, and type and degree of, such rights of discovery and the
periods of time within which the matters submitted to arbitration must be heard
and determined by the Arbitrator. If the parties are unable to so agree, such
issues will be submitted to the Arbitrator for determination. If proper notice
of any hearing has been given, the Arbitrator will have full power to proceed to
take evidence or to perform any other acts necessary to arbitrate the matter in
the absence of any party who fails to appear. At the request of any party, the
Arbitrator, attorneys, parties to the arbitration, witnesses, experts, court
reporters, or other persons present at the arbitration shall agree in writing to
maintain the strict confidentiality of the arbitration proceedings.

(f) Notwithstanding the foregoing, a party may apply to a court of
competent jurisdiction within the State of New York for relief in the form of a
temporary restraining order or preliminary injunction, or other provisional
remedy pending appointment of an Arbitrator or pending final determination of a
claim through arbitration in accordance with this Agreement. In the event a
dispute is submitted to arbitration hereunder during a period that one or the
other (or both) parties have executory obligations, the parties shall continue
to perform their respective obligations, subject to any interim relief that may
be ordered by the Arbitrator or by a court of competent jurisdiction pursuant to
the previous sentence.

(g) The parties, by written stipulation, may expand or contract the
rights, duties or obligations provided above, or otherwise modify the
arbitration procedures as suits their convenience, consistent with what is
otherwise permitted and feasible within the framework of the Arbitration Rules.

(h) Each party shall initially bear their own costs and expenses.
The prevailing party (if a prevailing party is determined to exist by the
Arbitrator) in any proceeding or action under this Agreement shall be entitled
to an award of all legal and accounting fees, expenses and other out-of-pocket
costs incurred by such party, including any costs and fees incurred by and
payable to the Arbitrator, in such proceeding or action, in addition to any
other damages or relief awarded, regardless of whether such proceeding or action
proceeds to final judgment, in each case in such amount as the Arbitrator
determines to be reasonable.

(i) Any decision or award of the Arbitrator shall be in writing and
reasoned with references to applicable authorities and precedents and shall be
final and binding upon the parties to the arbitration proceeding except for

<PAGE>

fraud or failure to provide a hearing. The parties hereto hereby waive to
the extent permitted by law any rights to appeal or to review of such award
by any court or tribunal. The parties agree that the award of the Arbitrator
may be enforced against the parties to the proceeding or their assets
wherever they may be found and that a judgment upon the award may be entered
in any court having jurisdiction thereof.

(j) The parties, their representatives, other participants and the
Arbitrator shall hold the existence, content and results of any arbitration
proceeding in confidence.

10.11. PAYMENT. If Seller and RXI are obligated to make an indemnification
payment (quantified pursuant to Sections 10.9 or 10.10 hereto or as agreed by
Buyer, Seller and RXI), to or on behalf of the Buyer, the Company, or their
respective Representatives, the Seller and RXI shall make such payment promptly
in immediately available funds, and if the Seller and RXI fail to make any such
payment, the amount of such payment may, at the option of the Buyer, Company, or
their respective Representatives entitled to receive such payment, be paid to
such Person from the Escrow, and the Escrow Deposit and Purchase Price shall be
reduced by the amount of such payment, provided that if the amount of the
payment from the Escrow is less than the indemnification payment due such
Person, the Deferred Payment amount shall be reduced by the amount of the unpaid
indemnification payment, and provided further that if the Deferred Payment
amount has been reduced to zero under this Agreement and the indemnification
payment has not been satisfied in full and is not subject to the limitation of
Section 10.6 of this Agreement, such Person may pursue all other rights or
remedies it may have against RXI and the Seller for the balance of the
indemnification payment remaining due. If, at the time the Seller is to receive
the outstanding Deferred Payment amount or a distribution from the Escrow
Deposit, there has been asserted a claim under Section 10.2 or 10.3 that is not
barred by Section 10.5 of this Agreement or there exists an outstanding claim
under Section 10.9 against an Indemnified Person that is not barred by Section
10.5 of this Agreement, the amount of such claim shall not be paid or
distributed to the Seller until such claim has been resolved and satisfied in
full by a payment to the Indemnified Person from the Escrow Account and/or a
reduction of the Deferred Payment amount.

11. OTHER COVENANTS

11.1. TAX MATTERS.

(a) Buyer and the Seller and RXI shall furnish or cause to be
furnished to each other (at reasonable times) upon reasonable request as
promptly as practicable such information (including access to personnel and
books and records pertinent to the Company and assistance as is reasonably
necessary for the preparation, review, audit and filing of any Tax Return, the
preparation for any Tax audit or the defense of any assessment or other similar
claim. The party requesting the information shall reimburse the other for the
outside nonemployee costs of providing such information. The party retaining
information to which this paragraph applies shall not dispose of such
information until two (2) months after the expiration of the applicable statute
of limitations (including any extension thereof) or two (2) months after a final
determination with respect to any proceeding and the party retaining such
information shall provide notice to the other party of its intention to dispose
of such information at least one (1) month prior to disposing of such
information.

(b) Seller and RXI shall be liable for and shall pay all Taxes
(whenever assessed) attributable to taxable periods (or for portions of periods)
ending on or prior to the Effective Time, except for those Taxes included in the
Estimated Balance Sheet. Buyer shall be liable for and shall pay all Taxes
(whenever assessed) applicable to the Business, attributable to taxable periods
(or for portions of periods) beginning after the Effective Time, provided,

<PAGE>

however, that Seller and RXI, rather than Buyer, shall be liable for and
shall pay all such Taxes attributable to taxable periods (or portions of
periods) beginning after the Effective Time if and solely to the extent such
Taxes are measured by and attributable to income which, as a result of an
audit by the IRS or any other taxing authority or a claim for refund filed by
Seller or RXI (or by the Company at the request of Seller or RXI), is shifted
from a taxable period ending on or prior to the Effective Time to a taxable
period beginning after the Effective Time. For purposes of this subsection
(b), any taxable periods beginning before and ending after the Effective Time
shall be treated as two partial periods, one ending on the Effective Time and
the other beginning after the Effective Time, except that Taxes (such as
property taxes) imposed on a periodic basis shall be allocated on a per diem
basis.

(c) After the Closing, Buyer shall promptly notify the Seller and
RXI in writing upon receipt by the Company of notice of any pending or
threatened Tax audits of or assessments against either of them for any period
ending on, prior to or including the Effective Time or which may affect the
determination of Taxes for which the Seller has responsibility. The Seller and
RXI shall promptly notify Buyer in writing upon receipt of notice of any pending
or threatened Tax audits of or assessments against the Company for all taxable
periods of the Company ending at or before the Effective Time.

Each party shall have the right, at its own expense, to control any audit
or determination by any authority, initiate any claim for refund or amended
return, and contest, resolve and defend against any assessment, notice of
deficiency, or other adjustment or proposed adjustment of Taxes for any taxable
period for which such party has the responsibility for the payment of Taxes,
provided, however, that such party shall consult with the other party with
respect to the resolution of any issue that would materially affect such other
party for any taxable period for which such other party has responsibility and
not settle any such issue, or file any amended return relating to such issue,
without the consent of the other party, which consent shall not be unreasonably
withheld. Where consent to a settlement is withheld by another party pursuant
to the preceding sentence, such other party may continue or initiate any further
proceedings at its own expense, provided, that the liability of the first party,
after giving effect to this Agreement, shall not exceed the liability that would
have resulted from the settlement or amended return. In the event that a party
to this Agreement is paid a refund to which, under the principles of this
Agreement, another party to this Agreement is entitled, the party receiving such
refund shall pay such refund to the party so entitled within seven (7) days of
the receipt of such refund by the first party.

(d) Tax Returns for the Company which are not due until after the
Effective Time shall be prepared and filed as follows:

(i) For all taxable periods of the Company ending on or
prior to the Effective Time, to the extent that the Company is permitted by law
to join any consolidated or combined Tax Return, Buyer shall consent to the
Company's joining such consolidated or combined Tax Return and Seller shall be
responsible for preparing and filing each such Tax Return for the Company.

(ii) For all taxable periods of the Company ending on or
prior to the Effective Time for which the Company is required by applicable law
to file a separate Tax Return, Seller shall prepare (or cause to be prepared)
such Tax Return, with Buyer's approval (not to be unreasonably withheld).
Seller shall remit to the Buyer the amount of Taxes shown as due on any such Tax
Return not later than ten (10) days prior to the due date thereof. Buyer shall
cause the Company to sign such Tax Return and file the Tax Return together with
the payment shown as due thereon with the applicable taxing authority.

<PAGE>

(iii) For any taxable period of the Company beginning before
and ending after the Effective Time, Seller shall prepare (or cause to be
prepared) such Tax Return, with Buyer's approval (not to be unreasonably
withheld) and Buyer shall cause the Company to sign such Tax Return and pay all
Taxes reflected thereon; provided, however, that Seller shall remit to Buyer,
not later than ten (10) days prior to the due date thereof, the portion of Taxes
shown as due on such Tax Return for which Seller has responsibility.

(iv) For all taxable periods of the Company beginning after
the Effective Time, Buyer shall be responsible for the preparation and filing of
all Tax Returns of the Company.

(e) Upon Seller's written request, Buyer will cause Company to
claim any and all Tax credits and file any and all applications for refunds of
Taxes to which Company may from time to time be entitled to claim or recover,
and which are in respect of Taxes paid by Company or Seller prior to the
Effective Time or by Seller after the Effective Time but which relate to periods
ending on or prior to the Effective Time, at the earliest date that such credits
and/or refunds become available. Seller shall reimburse Buyer and the Company
for all reasonable expenses incurred by Buyer and the Company in connection with
claiming any such Tax Credits or filing any such applications for refund of
Taxes.

11.2. COMPUTER SUPPORT SERVICES. For 90 days following the Closing Date,
RXI and Seller will provide computer processing and support services to the
Company at each Business location operated by the Company during such period.
The processing and support services shall include but not be limited to those
set forth on Schedule 11.2 of this Agreement. During the 90 day period the
Buyer shall complete both the installation of its computer systems and software
at such locations and the training of the Company' personnel in the use of such
computers and software. At the execution of this Agreement and at another date
determined by Buyer during the 90 day period, the Seller shall deliver to Buyer
a copy of all of the data on Seller's computer systems about each Business
location (including, without limitation, the Business' inventories on hand or on
order, accounts receivable, accounts payable, customers, and vendors) in a
format and on a media that is mutually acceptable to Buyer, Seller, and RXI.

11.3. TEMPORARY LEASE. The Seller or one of its Subsidiaries shall lease
the Company 40,000 square feet of warehouse space and 550 square feet of office
space at 6040 Donaho, Houston, Texas, for up to 120 days after the Closing Date
at a monthly rental of $0.21 per square foot. Within the 120 day period, the
Buyer shall cause the Company to relocate to other premises, and the Company's
obligation to pay monthly rental shall terminate on the date of such relocation.

11.4. EXPENSES. Except as otherwise expressly provided in this Agreement,
each party to this Agreement will bear its respective expenses incurred in
connection with the preparation, execution, and performance of this Agreement
and the Contemplated Transactions, including all fees and expenses of agents,
representatives, counsel, and accountants. RXI will cause the Company not to
incur any out-of-pocket expenses in connection with this Agreement except to the
extent such expenses are incurred by Seller. In the event of termination of
this Agreement, the obligation of each party to pay its own expenses will be
subject to any rights of such party arising from a breach of this Agreement by
another party. All fees and reimbursable costs and expenses of LFH shall be
paid one half by Seller and one half by Buyer.

11.5. PUBLIC ANNOUNCEMENTS. Any public announcement or similar publicity
with respect to this Agreement or the Contemplated Transactions will be issued,
if at all, at such time and in such manner as the parties mutually determine.

<PAGE>

11.6. NOTICES. All notices, consents, waivers, and other communications
under this Agreement must be in writing and will be deemed to have been duly
given when (a) delivered by hand (with written confirmation of receipt), (b)
sent by telecopies (with written confirmation of receipt), provided that a copy
is mailed by certified mail, return receipt requested, (c) five (5) business
days after deposit in the U.S. Mails, if mailed first class, by certified mail
with a return receipt requested, or (d) when received by the addressee, if sent
by a nationally recognized overnight delivery service (receipt requested), in
each case to the appropriate addresses and telecopier numbers set forth below
(or to such other addresses and telecopier numbers as a party may designate by
notice to the other parties):

RXI and Seller: RXI Holdings, Inc.
11111 Santa Monica Boulevard, Suite 270
Los Angeles, California 90025

Attention: Leon Farahnik
Telecopy No. (310) 473-9592

with a copy to: Moshe J. Kupietzky, Esq.
Sidley & Austin
555 West Fifth Street
Los Angeles, California 90013-1010

Telecopy No. (213) 896-6600

Buyer: Texberry Acquisition, Inc.
460 North Lindbergh Boulevard
St. Louis, Missouri 63141-7808

Attention: Richard S. Glassman
Telecopier No. (314) 569-5087

with a copy to: Maury B. Poscover, Esq.
Husch & Eppenberger
100 N. Broadway, Suite 1300
St. Louis, Missouri 63102

Telecopy No. (314) 421-0239

11.7. JURISDICTION; SERVICE OF PROCESS. Any action or proceeding seeking
to enforce any provision of, or based on any right arising out of, this
Agreement may be brought against any of the parties in the courts of the State
of New York, County of New York, or, if it has or can acquire jurisdiction, in
the United States District Court for the Southern District of New York, and each
of the parties consents to the jurisdiction of such courts (and of the
appropriate appellate courts) in any such action or proceeding and waives any
objection to venue laid therein. Process in any action or proceeding referred
to in the preceding sentence may be served on any party anywhere in the world.

11.8. FURTHER ASSURANCES; BOOKS AND RECORDS.

(a) The parties agree (i) to furnish upon request to each other
such further information, (ii) to execute and deliver to each other such other
documents, and (iii) to do such other acts and things, all as the other party
may reasonably request for the purpose of carrying out the intent of this
Agreement and the documents referred to in this Agreement.

(b) Each of Seller, RXI, and Buyer shall preserve until the sixth
anniversary of the Closing Date all records possessed or to be possessed

<PAGE>

by such party relating to any of the assets, liabilities or business of the
Business prior to the Closing Date. After the Closing Date, when there is a
legitimate purpose, such party shall provide the other party and its
Representatives with reasonable access, upon prior reasonable written request
specifying the need therefor, during regular business hours, to (i) the
officers and employees of such party and (ii) the books of account and
records of such party, but, in each case, only to the extent relating to the
assets, liabilities, or business of the Business prior to the Effective Time,
and the other parties and their representatives shall have the right to make
copies of such books and records; provided, however, that the foregoing right
of access shall not be exercisable in such a manner as to interfere
unreasonably with the normal operations and business of such party; and
further, provided, that, as to so much of such information as constitutes
trade secrets or confidential business information of such party, the
requesting party and its officers, directors and representatives will use due
care not to disclose such information except (i) as required by law, (ii)
with the prior written consent of such party which consent shall not be
unreasonably withheld, or (iii) where such information becomes available to
the public generally, or becomes generally known to competitors of such
party, through sources other than the requesting party, its affiliates or its
officers, directors or representatives. Such records may nevertheless be
destroyed by a party if such party sends to the other parties written notice
of its intent to destroy records, specifying with particularity the contents
of the records to be destroyed. Such records may then be destroyed after the
30th day after such notice is given unless another party objects to the
destruction, in which case the party seeking to destroy the records shall
either agree to retain such records or deliver such records to the objecting
party.

11.9. WAIVER. The rights and remedies of the parties to this Agreement
are cumulative and not alternative. Neither the failure nor any delay by any
party in exercising any right, power, or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement or the documents referred to in this Agreement can be discharged
by one party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other party; (b) no waiver that may be
given by a party will be applicable except in the specific instance for which it
is given; and (c) no notice to or demand on one party will be deemed to be a
waiver of any obligation of such party or of the right of the party giving such
notice or demand to take further action without notice or demand as provided in
this Agreement or the documents referred to in this Agreement.

11.10. ENTIRE AGREEMENT AND MODIFICATION. This Agreement supersedes all
prior agreements between the parties with respect to its subject matter
(including the letter of intent between Buyer and Seller dated March 20, 1996,
and that certain Agreement dated April 23, 1996, among Kranson, Buyer, Company,
Seller, and RXI) and constitutes (along with the documents referred to in this
Agreement) a complete and exclusive statement of the terms of the agreement
between the parties with respect to its subject matter. This Agreement may not
be amended except by a written agreement executed by the parties hereto.

11.11. DISCLOSURE SCHEDULE. The disclosures in the Disclosure Schedule,
and those in any Supplement thereto, must relate only to the representation and
warranties in the Section of the Agreement to which they expressly relate and
not to any other representation or warranty in this Agreement.

11.12. ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS. No party to
this Agreement may assign any of its rights under this Agreement without the
prior consent of the other parties except that Buyer may assign any of its
rights

<PAGE>

under this Agreement to Kranson or any Subsidiary of Kranson. Subject to the
preceding sentence, this Agreement will apply to, be binding in all respects
upon, and inure to the benefit of the successors and permitted assigns of the
parties. Nothing expressed or referred to in this Agreement will be
construed to give any Person other than the parties to this Agreement any
legal or equitable right, remedy, or claim under or with respect to this
Agreement or any provision of this Agreement. This Agreement and all of its
provisions and conditions are for the sole and exclusive benefit of the
parties to this Agreement and their successors and assigns. Notwithstanding
anything to the contrary in this Section 11.12, the Buyer, Seller, and RXI
may make collateral assignments of their respective rights under this
Agreement to their respective lenders, including, without limitation, the
benefit of their respective representations and warranties and their
respective indemnification obligations, and the Buyer, Seller, and RXI may
make collateral assignments to their respective lenders of their respective
rights under the Escrow Agreement to receive disbursements from the Escrow.

11.13. SEVERABILITY. If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.

11.14. SECTION HEADINGS, CONSTRUCTION. The headings of Sections in this
Agreement are provided for convenience only and will not affect its construction
or interpretation. All references to "Sections" refer to the corresponding
Sections of this Agreement. All words used in this Agreement will be construed
to be of such gender or number as the circumstances require. Unless otherwise
expressly provided, the word "including" does not limit the preceding words or
terms.

11.15. TIME OF ESSENCE. With regard to all dates and time periods set
forth or referred to in this Agreement, time is of the essence.

11.16. GOVERNING LAW. This Agreement will be governed by and construed
under the laws of the State of New York without regard to conflicts of laws
principles.

11.17. INSURANCE. Following the Closing, Seller shall maintain its general
liability and products liability insurance coverages at their present levels for
a period of not less than three (3) years and shall include the Company as an
additional insured thereunder. Seller will provide the Company with
certificates of insurance at the Closing and at the time of annual renewals of
such insurance evidencing the Company as an additional insured under such
policies.

11.18. 401(k) PLAN. At the Closing the parties will take such action as
may be necessary to permit the Company to cease to be a participating employer
in Seller's 401(k) retirement plan (formerly Patrick Plastic, Inc.'s 401(k)
plan). Seller will also take action so as to permit the Company's employees who
were participants in such plan before the Closing and who will be employed by
Seller to continue to maintain their individual accounts in Seller's 401(k)
retirement plan. Seller and Buyer will take action to permit the Company's
employees who were participants in such plan before the Closing and who will be
employed by the Company immediately following the Closing to have their plan
accounts transferred to a 401(k) retirement plan adopted by Buyer or the Company
or Kranson. The Seller shall indemnify and hold the Company and the Buyer
harmless from and against any and all liabilities and damages that may now exist
or hereafter arise with respect to Seller's 401(k) retirement plan while the
Company was a participating employer in such plan.

<PAGE>

11.19. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.

RXI:

RXI Holdings, Inc.

By:_________________________
Name: Leon Farahnik
Title: Chairman

Seller:

RXI Plastics, Inc.

By:__________________________
Name: Leon Farahnik
Title: Chairman

Buyer:

Texberry Acquisition, Inc.

By:________________________
Name: Richard S. Glassman
Title: President

<PAGE>

A list of schedules to the Agreement, which have been omitted from the
filing, is set forth below. Registrant hereby agrees to furnish the Commission
upon request a copy of any omitted Schedule.

SCHEDULES

SCHEDULE 2.2(a) BUSINESS LIABILITIES
SCHEDULE 2.4(a)(vii) RELEASE OF ENCUMBRANCES AND LIABILITIES
SCHEDULE 2.4(a)(viii) RELEASE OF CONTRACTS
SCHEDULE 2.5(a) ESTIMATED BALANCE SHEET
SCHEDULE 2.5(c) LFH ENGAGEMENT LETTER
SCHEDULE 2.6(b)(i) CUSTOMERS OF THE BUSINESS
SCHEDULE 2.6(b)(ii) COMMON CUSTOMERS
SCHEDULE 3.1 QUALIFICATIONS
SCHEDULE 3.1(c) OWNERSHIP INTERESTS
SCHEDULE 3.2(a) REQUIRED CONSENTS, ETC.
SCHEDULE 3.2(b)(i) CONFLICTS WITH ORGANIZATIONAL DOCUMENTS
SCHEDULE 3.2(b)(ii) CONFLICTS WITH LEGAL REQUIREMENTS
SCHEDULE 3.2(b)(iii) CONFLICT WITH GOVERNMENTAL AUTHORIZATION
SCHEDULE 3.2(b)(iv) TAX LIABILITY
SCHEDULE 3.2(b)(v) TAX REASSESSMENTS
SCHEDULE 3.2(b)(vi) CONFLICTS WITH APPLICABLE CONTRACTS
SCHEDULE 3.2(b)(vii) ENCUMBRANCES CREATED
SCHEDULE 3.2(b)(viii) CONSENTS
SCHEDULE 3.4(ii) BUSINESS FINANCIAL INFORMATION FOR THE PERIOD ENDED
JUNE 30, 1995
SCHEDULE 3.4(iii) BUSINESS FINANCIAL INFORMATION FOR THE PERIOD ENDED
DECEMBER 31, 1995
SCHEDULE 3.4(iv) LISTS
SCHEDULE 3.4(v) EXCEPTIONS TO BUSINESS FINANCIAL INFORMATION AND LISTS
SCHEDULE 3.6(a) LEASED REAL PROPERTY
SCHEDULE 3.6(b) OWNED REAL PROPERTY
SCHEDULE 3.6(d) REAL PROPERTY ENCUMBRANCES
SCHEDULE 3.6(e) OWNED TANGIBLE PERSONAL PROPERTY
SCHEDULE 3.6(f) LEASED TANGIBLE PERSONAL PROPERTY
SCHEDULE 3.6(h) DEPOSITS AND PREPAID EXPENSES
SCHEDULE 3.7 SUPPLIERS
SCHEDULE 3.8(a) ACCOUNTS RECEIVABLE EXCEPTION
SCHEDULE 3.8(b) ACCOUNTS RECEIVABLE
SCHEDULE 3.10 UNDISCLOSED LIABILITIES
SCHEDULE 3.11(a) TAX RETURNS
SCHEDULE 3.11(b) TAX AUDITS
SCHEDULE 3.11(c) PROPOSED TAX ASSESSMENTS
SCHEDULE 3.12 MATERIAL ADVERSE CHANGES
SCHEDULE 3.13(b)(i) COMPANY PLANS
SCHEDULE 3.13(b)(v) PLAN OBLIGATIONS
SCHEDULE 3.13(d) PLAN EXCEPTIONS
SCHEDULE 3.14(a) COMPLIANCE WITH LEGAL REQUIREMENTS
SCHEDULE 3.14(b) GOVERNMENTAL AUTHORIZATIONS
SCHEDULE 3.15(a) LEGAL PROCEEDINGS
SCHEDULE 3.15(b) ORDERS
SCHEDULE 3.15(c) COMPLIANCE WITH ORDERS
SCHEDULE 3.16 CERTAIN CHANGES AND EVENTS
SCHEDULE 3.17(a) CONTRACTS
SCHEDULE 3.17(b) CONTRACT ENFORCEABILITY
SCHEDULE 3.17(c) CONTRACT COMPLIANCE
SCHEDULE 3.17(e) CONTRACT VIOLATION
SCHEDULE 3.18(a) INSURANCE

<PAGE>

SCHEDULE 3.18(b) SELF INSURANCE
SCHEDULE 3.18(c) INSURANCE EXPERIENCE
SCHEDULE 3.18(d) QUALITY OF INSURANCE
SCHEDULE 3.19 ENVIRONMENTAL MATTERS
SCHEDULE 3.19(h) EMPLOYEE HEALTH AND SAFETY MATTERS, ETC.
SCHEDULE 3.20(a) EMPLOYEES
SCHEDULE 3.20(d) COBRA
SCHEDULE 3.22(c) INTELLECTUAL PROPERTY AGREEMENTS
SCHEDULE 3.22(d) PATENTS
SCHEDULE 3.22(e)(i) MARKS
SCHEDULE 3.22(e)(ii) REGISTERED MARK EXCEPTIONS
SCHEDULE 3.22(f) COPYRIGHTS
SCHEDULE 3.22(f)(ii) COPYRIGHT REGISTRATION EXCEPTIONS
SCHEDULE 3.27 BANK ACCOUNTS
SCHEDULE 3.29 CONDUCT OF BUSINESS
SCHEDULE 3.30 PRODUCT WARRANTIES
SCHEDULE 3.31 REBATE POLICIES
SCHEDULE 3.33 RELEASES
SCHEDULE 4.2(a) REQUIRED CONSENTS, ETC.
SCHEDULE 4.2(b) NO CONFLICT
SCHEDULE 5.1 POST-CLOSING EMPLOYEES
SCHEDULE 11.2 COMPUTER SUPPORT SERVICES

<PAGE>

Exhibit 2.4

GUARANTY AGREEMENT

GUARANTY AGREEMENT ("Guaranty") dated as of June 5, 1996 by Kranson
Industries, Inc., a Missouri corporation (the "Guarantor"), to and for the
benefit of RXI Plastics, Inc., a Delaware corporation (the "Beneficiary").
Reference is hereby made to that certain Stock Purchase Agreement, by and
between the Beneficiary, RXI Holdings, Inc., a Delaware corporation, and
Texberry Acquisition, Inc., a Missouri corporation ("Buyer"), dated as of May
15, 1996 (the "Agreement"). Capitalized terms used and not defined herein shall
have the meanings given them in the Agreement.

WITNESSETH:

WHEREAS, the Beneficiary and Buyer are parties to the Agreement, concerning
the sale of all of the issued and outstanding shares of capital stock (the
"Shares") of Texberry Container Corporation, a Texas corporation (the
"Company");

WHEREAS, the Beneficiary requires that the Guarantor execute and deliver
this Guaranty to the Beneficiary as a condition precedent to the Closing under
the Agreement;

NOW, THEREFORE, in order to induce the Beneficiary to enter into the Stock
Purchase Agreement to sell the Shares to Buyer, and to execute and deliver the
Subordination Agreement referenced in the Stock Purchase Agreement, and for
other good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, the Guarantor hereby agrees with and for the benefit of the
Beneficiary as follows:

1. UNDERTAKING.

(a) The Guarantor hereby fully and unconditionally guarantees all
obligation of the Buyer (i) to pay the outstanding Deferred Payment amount and
interest thereon when and to the extent such payment are payable in accordance
with the Agreement, and (ii) to perform and make any payments required under
Section 10.4 of the Agreement.

(b) The Guarantor hereby agrees to cause Buyer to perform and
discharge fully and punctually all of Buyer's obligations under the Agreement.

(c) The Guarantor further represents and warrants that this Guaranty
constitutes the legal, valid and binding obligation of Guarantor, enforceable
against Guarantor in accordance with its terms. Guarantor is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Missouri, that it has the absolute and unrestricted right, power, authority and
capacity to execute and deliver this Guaranty and to perform its obligations
hereunder. The Guarantor's board of directors has duly and validly authorized
and approved the form, execution and delivery of this Guaranty and the
performance by the Guarantor of its obligations hereunder. No other permits,
licenses, Consents, clearances or proceedings of any kind are required for the
Guarantor's execution, delivery and performance of this Guaranty under, and
neither the execution, delivery nor performance of this Guaranty by Guarantor
will constitute a breach or default by Guarantor under, (i) the Organizational
Documents of the Guarantor, (ii) any judgment, order, writ, injunction, decree,
ordinance, law, rule, regulation, resolution or instrument of any federal, state
or local Governmental Body, binding on Guarantor or (iii) any indenture,
instrument or other Contract to which Guarantor is a party or by which Guarantor
is bound.

(d) This Guaranty is a guaranty of payment and performance and not
merely of collection. The Guarantor agrees that, if Buyer shall fail to timely

<PAGE>

perform and discharge promptly any of its obligations or to pay any monetary
obligations under the Agreement, whether or not performance is limited or
restricted as a result of the terms, provisions or conditions of the
Subordination Agreement, the Guarantor shall forthwith, upon demand, perform,
discharge or pay the same in the same manner, at the same times, and to the same
extent as Buyer is obligated to perform and pay the same without regard to the
terms, provisions, and conditions of the Subordination Agreement. The Guarantor
further agrees that the Beneficiary may proceed against the Guarantor to enforce
the provisions of this Guaranty without having first proceeded against Buyer
under the Agreement. Without limiting the generality of the foregoing,
Guarantor shall pay (i) interest as and when provided in Section 2.2(b) of the
Agreement, and (ii) principal as and when provided in Section 2.2(d) of the
Agreement irrespective of whether Buyer is permitted to pay such interest or
principal under the terms, provisions, or conditions of the Subordination
Agreement or whether the mandatory prepayment provisions set forth in Section
2.2(d) of the Agreement are deemed enforceable against Buyer.

(e) The Guarantor hereby agrees that all rights and remedies
available against Buyer under the Agreement (including rights to arbitration and
related procedures and remedies) shall also be available against and binding
upon the Guarantor hereunder.

(f) The Guarantor further agrees to pay any and all costs and
expenses, including, without limitation, accountant's and attorneys' fees,
disbursements and expenses, incurred by Beneficiary in enforcing any rights
under this Guaranty.

2. NO DISCHARGE. This Guaranty is a continuing guaranty and the
obligations of the Guarantor hereunder will not be discharged, affected,
impaired or released by: (a) any modification of, or amendment or supplement
to, the Agreement; (b) any waiver, consent, extension or other action or
inaction or any exercise or non-exercise of any right, remedy, or power; (c) any
insolvency, bankruptcy, reorganization, liquidation, dissolution, or similar
proceedings with respect to Buyer; or (d) any other occurrence, circumstances or
grounds whatsoever that would release a guarantor, except performance in full of
all obligations of Buyer in accordance with the terms and conditions of the
Agreement, as the same may be amended, modified, supplemented or terminated from
time to time.

3. REINSTATEMENT. The Guarantor agrees that this Guaranty shall be
automatically reinstated if and to the extent that any payment made by or on
behalf of Buyer pursuant to the Agreement is rescinded or must be otherwise
restored, whether as a result of any proceedings in bankruptcy or reorganization
or otherwise.

4. NOTICES. All notices and other communications which may be given
under this Guaranty shall be in writing and shall be deemed to have been duly
given when (a) delivered by hand (with written confirmation of receipt), (b)
sent by telecopier, provided that a copy is mailed by certified mail, return
receipt requested, (c) three (3) Business Days after deposit in the U.S. Mails,
if mailed first class, by certified mail, return receipt requested or (d) when
received by the addressee, if sent by a nationally recognized overnight delivery
service (receipt requested), in each case to the appropriate addresses and
telecopier numbers set forth as follows:

If to the Guarantor: Kranson Industries, Inc.
460 North Lindbergh
St. Louis, Missouri 63141
Attention: Richard S. Glassman, President

<PAGE>

Facsimile: 314/579-5087

with a copy to: Husch & Eppenberger
100 North Broadway, Suite 1300
St. Louis, Missouri 63102
Attention: Maury B. Poscover, Esq.
Facsimile: 314/421-0239

If to the Beneficiary: RXI Plastics, Inc.
11111 Santa Monica Boulevard
Suite 270
Los Angeles, California 90025
Attention: Leon Farahnik
Facsimile: 301-473-9592

with a copy to: Sidley & Austin
555 West Fifth Street
Suite 4000
Los Angeles, California 90013
Attention: Moshe J. Kupietzky, Esq.
Facsimile: 213/896-6600

or at such other place as any such party may designate by notice duly given in
accordance with this Section to the parties.

5. SEVERABILITY. Any provision of this Guaranty that is prohibited or
unenforceable in any jurisdiction or with respect to any provision herein shall,
as to such jurisdiction or provision, be ineffective only to the extent of such
prohibition or unenforceability but shall not invalidate or render unenforceable
such provision in any other jurisdiction, and shall not invalidate the remaining
provisions hereof.

6. MISCELLANEOUS.

(a) This Guaranty is a continuing guaranty and shall: (i) be binding
upon the Guarantor and its successors and assigns; (ii) inure to the benefit of,
and be enforceable by the Beneficiary, its successors, assigns and transferees,
including its successors, assigns and transferees under this Guaranty and the
Agreement, but shall not, and is not intended to, create rights in any third
party; (iii) not be waived, amended or modified without the prior written
consent of the Beneficiary; and (iv) be governed by, construed, applied or
enforced in accordance with, the laws of the State of New York (without regard
to the choice of law rules thereof), including all matters of construction,
validity and performance.

(b) Guarantor hereby waives promptness, diligence, notice of
acceptance and any other notice with respect to any of its obligations under the
Agreement and this Guaranty and any requirement that Beneficiary protect,
secure, perfect or insure any security interest or lien or any property subject
thereto or exhaust any right or take any action against Buyer or any other
Person or any collateral.

(c) No failure on the part of Beneficiary to exercise, and no delay
in exercising, any right hereunder shall operate as a waiver thereof; nor shall
any single or partial exercise of any right hereunder preclude any other or
further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.

(d) Guarantor hereby agrees that so long as it remains obligated
under this Guaranty it will not dissolve, merge with and into any other
corporation, or sell, convey, transfer or otherwise dispose of all or

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<PAGE>

substantially all of its assets without Beneficiary's prior written consent,
provided that no such consent shall be required with respect to any merger or
consolidation of the Guarantor into or with another entity shall be required if
the shareholders of the Guarantor and/or the immediate family members of Kenneth
Kranzberg and Richard Glassman control a majority of capital stock and voting
power of the resulting entity. Guarantor further agrees that it will not
execute any agreement or instrument with or in favor of any Party that expressly
limits or restricts Guarantor's ability to perform this Guaranty as and when
required hereunder.

(e) Guarantor hereby submits itself in any legal action or proceeding
relating to this Guaranty or for enforcement of any judgment in respect thereof,
to the non-exclusive general jurisdiction of the courts of the State of New
York, County of New York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any thereof.

(f) Guarantor hereby waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any such court
in New York, or that such proceeding was brought in an inconvenient court and
agrees not to plead or claim the same.

(g) Guarantor hereby agrees that service of process in any such legal
action or proceeding may be effected by mailing a copy thereof (by registered or
certified mail, postage prepaid) to its address set forth herein.

IN WITNESS WHEREOF, the Guarantor has executed this Guaranty as of the day
and year first above written.

KRANSON INDUSTRIES, INC.

By:___________________________
Name:
Title:

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<PAGE>
Exhibit 10.17

SUBORDINATION AGREEMENT

TEXBERRY ACQUISITION, INC., a Missouri corporation (the "Company"), BANK
ONE, INDIANAPOLIS, NATIONAL ASSOCIATION, a national banking association (the
"Bank"), RXI PLASTICS, INC., a Delaware corporation ("Plastics"), RXI HOLDINGS,
INC., a Delaware corporation ("Holdings") (Plastics and Holdings hereinafter
collectively, referred to as the "Junior Creditor"), agree as follows:

1. BACKGROUND -- DEFINITIONS. This Agreement is made in the context of
the following agreed state of facts:

a. The Bank, the Company, Texberry Container Corporation, a Texas
corporation ("Texberry"), Texberry Acquisition I, L.L.C., a Missouri limited
liability company ("LLC") and Kranson Industries, Inc. ("Kranson") are parties
to a Credit Agreement dated the date of this Subordination Agreement (the
"Credit Agreement") under the terms of which the Bank will make a term loan (the
"Term Loan") to the Company in the principal amount of $3,500,000. The Term Loan
is sometimes hereafter referred to as the "Loan." All obligations of the
Company to the Bank on account of the Loan as it reduces by payment by the
Company, whether such obligations now exist or arise hereafter, including
principal, interest and expenses of collection, and including any obligations on
account of any extension, renewal or restructuring of the Loan, are hereafter
referred to as the "Senior Obligations."

b. The Company is indebted to the Junior Creditor in the principal
amount of $2,250,000. The indebtedness of the Company to the Junior Creditor is
the "Deferred Payment" as set forth in Section 2.2(a) of the Stock Purchase
Agreement dated as of May 15, 1996 by and among Kranson, Company, RXI, and
Holdings (the "Payment Obligations"). The Payment Obligations, as the same may
be extended, renewed or restructured, are hereafter referred to as the "Junior
Obligations."

As used in this Agreement, the term "Loan Document" means any instrument or
document which evidences or secures the Senior Obligations or which expresses an
agreement between the Company and the Bank as to terms applicable to the Senior
Obligations. As used in this Agreement, the term "Default" means (i) the
failure of the Company to pay any installment of principal or interest on the
Loan when due, (ii) the failure of Texberry to pay any installment of principal
or interest on the Texberry Revolving Loan (as defined in the Credit Agreement)
when due, (iii) an Event of Default by the Company or Texberry under Section
8(f) of the Credit Agreement, (iv) the acceleration by the Bank of the Senior
Obligations such that the principal amount thereof becomes due and payable prior
to its scheduled due date, or (y) the commencement and continuance of any
Insolvency Proceeding involving the Company or Texberry. As used in this
Agreement, the term "Insolvency Proceeding" means the Company or Texberry
admitting in writing its inability to pay its debts as they mature, or an
administrative or judicial order of dissolution or determination of insolvency
being entered against the Company or Texberry; or the Company or Texberry
applying for, consenting to, or acquiescing in the appointment of a trustee or
receiver for the Company or Texberry or any property thereof, or the Company or
Texberry making a general assignment for the

<PAGE>

benefit of Creditors; or in the absence of such application, consent, or
acquiescence, a trustee or a receiver being appointed for the Company or
Texberry or for a substantial part of their respective property; or any
bankruptcy, reorganization, debt arrangement, or other proceeding under any
bankruptcy or insolvency law, or any dissolution of liquidation proceeding being
instituted by or against the Company or Texberry.

2. SUBORDINATION. Until payment in full of the Senior Obligations, the
Junior Obligations are and shall hereafter be subordinate and inferior in right
of payment to all of the Senior Obligations in the manner and as set forth in
this Agreement. Notwithstanding any provision to the contrary contained in the
documents evidencing the Junior Obligations, the Company shall not make and
shall not be required to make any payment on account of the principal of or
interest on the Junior Obligations until the Senior Obligations have been paid
in full, provided that (i) the Company may make the regularly scheduled payments
of interest and payments of principal provided for under the terms of the
documents evidencing the Junior Obligations so long as no Default has occurred
and is continuing or would occur as a result of such payment, and provided
further that no such payment shall be made more than ten (10) days prior to its
regularly scheduled due date, (ii) prior to a default under the documents
evidencing to Junior Obligations interest shall not accrue at a per annum rate
greater than ten percent (10%), and (iii) the Junior Creditor may receive in
payment of the Junior Obligations, shares of stock of the Company, or its
successor, as reorganized, or other securities issued by the Company (or any
other person provided for by a plan of reorganization) the payment terms of
which are subordinated at least to the same extent as the Junior Obligations to
the payment of the Senior Obligations which may at the time be outstanding and
the principal of which is due no earlier than the principal of the Junior
Obligations; provided that (A) the rights of the Bank are not impaired thereby
or the Bank shall have approved a plan of reorganization pursuant to which such
stock or securities are issued, and (B) such stock or securities are nonvoting
if issued other than in connection with an Insolvency Proceeding (collectively,
the "Junior Obligations"). Notwithstanding the foregoing, the period during
which performance of the Junior Obligations is prohibited under this Agreement
shall not exceed 270 days during any period of 365 days (each a "Standstill
Period").

The Company shall not be required to perform or omit any other act otherwise
required to be performed or omitted under the terms of the documents evidencing
the Junior Obligations or otherwise with respect to the Junior Obligations at
any time such performance or omission would result in the occurrence of a
Default, provided that such performance shall be prohibited only for the maximum
number of days for a Standstill Period as set forth above. The due date for any
payment or performance of any Junior Obligation shall be deemed to be extended
during any period in which such payment or performance is prevented by the
provisions of this Agreement, and no cause of action against the Company will
accrue to the Junior Creditor or any subsequent holder of the Junior Obligations
during the continuance of any such Standstill Period.

3. IMPROPER PAYMENT. Any amount paid by the Company to the Junior
Creditor in violation of any provision of this Agreement shall be received in
trust by the Junior Creditor for the benefit of the Bank and shall, with or
without demand, be immediately

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<PAGE>

delivered by the Junior Creditor to the Bank in the same form in which received,
with the addition only of such endorsements or assignments as may be necessary
to perfect the title of the Bank to such payment. Such amounts may be applied
by the Bank to any item of the Senior Obligations in such order as the Bank in
its discretion shall determine or may be returned to the Company at the Bank's
discretion. Upon the request of the Bank, the Company and the Junior Creditor
will execute such documents and perform all such other acts as may reasonably be
required to rescind premature performance of any Junior Obligation and to
reestablish, to the maximum extent practical, the STATUS QUO prior to such
premature performance.

4. AUTHORITY OF BANK TO ACT FOR JUNIOR CREDITOR. The Junior Creditor
appoints the Bank or, at the Bank's discretion any officer of the Bank, as the
Junior Creditor's attorney-in-fact, with full power of substitution, and with
the exclusive right and power to enforce claims arising on account of the Junior
Obligations by proof of debt, proof of claim or otherwise in any Insolvency
Proceeding in the absence of any such action by the Junior Creditor 30 days
prior to the bar or statutory date set by the court; to collect any assets of
the Company distributed in any such Proceeding by way of dividend or otherwise,
and to receive any securities (other than Junior Securities) of the Company or
of any reorganized entity emerging from any Insolvency Proceeding, which
securities are issued and distributed on account of the Junior Obligations; to
vote claims of the Junior Creditor arising on account of the Junior Obligations
in any Insolvency Proceeding and to accept or reject any plan of partial or
complete liquidation, reorganization, arrangement, composition or extension in
any Insolvency Proceeding; to execute any endorsement or assignment of the
documents or instruments evidencing the Junior Obligations required in
connection with any Insolvency Proceeding, and generally to take any action in
connection with any Insolvency Proceeding which the Junior Creditor would be
authorized to take but for this Agreement. Any authorized action taken by the
Bank or the Bank's officer pursuant to the power of attorney granted under the
terms of this Paragraph shall be taken for the use and benefit of the Bank, and
may be taken in the name of the Bank or in the name of the Junior Creditor and
without notice to the Junior Creditor. Such power of attorney is a power
coupled with an interest and shall be irrevocable until all of the Senior
Obligations have been satisfied in full.

5. DISTRIBUTIONS IN LIQUIDATION. In the event of the liquidation of the
Company or the distribution of any of its assets or the securities of any
successor an account of any liquidation, bankruptcy, receivership,
reorganization, general assignment for the benefit of creditors or similar
proceeding, the Junior Creditor shall not be entitled to any payment or
distribution (other than Junior Securities) on account of any Junior Obligation
until all Senior Obligations have been satisfied in full and the Junior Creditor
shall receive any money, securities or other property (other than Junior
Securities) distributed in any such proceeding to the Junior Creditor on account
of Junior Obligations in trust for the benefit of the Bank and shall deliver any
such property to the Bank in the same form as received, adding only such
endorsements or assignments as may be necessary to perfect the title of the Bank
to such property, for application to the satisfaction of the Senior Obligations
in such order as the Bank in its discretion may determine. Any excess of such
property remaining after satisfaction of all of the Senior Obligations shall be
returned to the Junior Creditor. The Bank may liquidate any noncash property
received from the Junior Creditor because of any

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<PAGE>

provision of this Section in the manner in which collateral may be liquidated
under the terms of the Uniform Commercial Code as enacted in the State of
Indiana, and such property may be liquidated in any order that the Bank shall
determine in the exercise of the Bank's sole discretion.

6. SUBORDINATION ABSOLUTE. The subordination of the Junior Obligations
to the Senior Obligations effected by this Subordination Agreement shall be
absolute and the Bank may from time to time, without the consent of or notice to
the Junior Creditor and without affecting the subordination of the Junior
Obligations to the Senior Obligations: (i) obtain a security interest in any
property to secure any of the Senior Obligations; (ii) obtain the primary or
secondary liability of any party or parties in addition to the Company with
respect to any of the Senior Obligations; (iii) extend or renew any of the
Senior Obligations for any period beyond their original due dates; (iv) release
or compromise any liability of any other party or parties primarily or
secondarily liable with respect to any of the Senior Obligations; (v) release
any security interest that the Bank might now have or hereafter obtain in any
property securing any of the Senior Obligations and permit any substitution or
exchange of any such property; (vi) extend loans and other credit accommodations
to the Company In addition to the Term Loan, provided that unless the Junior
Creditor should otherwise agree in writing, such additional credit
accommodations and loans and interest on such increased amount shall not be
entitled to the benefit of the subordination effected by this Agreement;
provided further that nothing contained in this Agreement shall be construed so
as to require the Bank to apply the proceeds of collateral or guaranties hold
for both the Senior Obligations and other obligations of the Company which are
not entitled to the benefit of this Agreement in any particular order.

7. NOTICE OF SUBORDINATION. At all times prior the payment in full of
the Senior Obligations, the Company and the Junior Creditor shall, cause the
following legend to be placed on the face of any promissory note evidencing the
Junior Obligations:

This Promissory Note is subject to a Subordination Agreement
dated June 5, 1996, in favor of BANK ONE, INDIANAPOLIS,
National Association.

A photocopy of any promissory note with such legend endorsed thereon shall
immediately be delivered to the Bank.

8. KRANSON GUARANTY OF JUNIOR OBLIGATIONS. The Bank acknowledges and
agrees that (i) the Junior Obligations are guaranteed by Kranson pursuant to its
Guaranty Agreement (as amended, modified or supplemented from time to time, the
"Kranson Guaranty), (ii) the execution, delivery and performance of the Kranson
Guaranty does not and will not contravene the Loan Documents, and (iii) the
obligations of Kranson pursuant to the Kranson Guaranty are not part of the
"Junior Obligations" and are not otherwise subject to the terms of this
Agreement.

9. SUBROGATION. After the payment in full of the Senior Obligations and
until the Junior Obligations have been paid in full, the Junior Creditor shall
be subrogated to the

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<PAGE>

rights of the Bank with respect to the collateral securing the Senior
Obligations and to receive payment or distributions with respect to the Senior
Obligations, to the extent that distributions otherwise payable to the Junior
Creditor have been applied to the payment of Senior Obligations in accordance
with the provisions of this Agreement. As between the Company, its creditors
other than the Bank and the Junior Creditor, a distribution applied to the
payment of the Senior Obligations in accordance with the provisions of this
Agreement which otherwise would have been made to the Junior Creditor shall not
be deemed a payment by the Company on the Senior Obligations. The subordination
provisions of this Agreement are and are intended solely for the purpose of
defining the relative rights of the Junior Creditor, on the one hand, and the
Bank, on the other hand, and nothing contained in this Agreement shall impair
the obligations of the Company, which are absolute and unconditional, to pay to
the Junior Creditor the Junior Obligations as and when the same shall become due
and payable In accordance with its terms.

10. NOTICE OF DEFAULT.

a. Each of the Bank and the Junior Creditor agrees to give to the
other copies of any written notices of default, termination, demand for payment,
acceleration, foreclosure, exercise of remedies and any other written notice of
a like nature, including, without limitation, any such notice which may be given
under or pursuant to the terms of any of the applicable Loan Documents, which
such part may give to the Company or Texberry hereafter, in each case
concurrently with, or as soon as practicable after, the giving of such notice to
the Company or Texberry; provided, however, that no failure of any party to give
a copy of any such notice as provided herein shall in any event affect the
validity or effectiveness of a notice or render the party liable to any other
party in any respect or relieve the Junior Creditor or the Bank of its
obligations and agreements contained herein.

b. The Junior Creditor shall not at any time be charged with
knowledge of the existence of any facts which would prohibit the making of any
payment to it, unless and until (i) the Junior Creditor shall have received
written notice thereof from the Company or from the Bank or (ii) the Junior
Creditor otherwise has actual knowledge of the existence of facts which would
prohibit the making of any payment to it. Prior to the receipt of any such
notice or acquisition of such actual knowledge the Junior Creditor shall be
entitled to assume conclusively that no such facts exist, without, however,
limiting any right of the Bank under this Agreement to recover from the Junior
Creditor any payment made in contravention of this Agreement.

c. The Junior Creditor shall be entitled to rely on the delivery to
it of a written notice by a person representing himself or herself to be agent
or representative of the Bank to establish that such notice has been given by
the Bank. Until the Junior Creditor shall have received notice from the Bank in
accordance with this Agreement designating a successor or assign of the Bank
together with the address thereof, tender of performance by the Junior Creditor
to the Bank shall satisfy the Junior Creditor's obligations to the Bank under
this Agreement.

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<PAGE>

11. NOTICES. Any notice, demand or other communication required or
permitted under the terms of this Agreement shall be in writing and shall be
made by overnight courier, or electronic facsimile or certified or registered
mail, return receipt requested, and shall be deemed to be received by the
addressee one (1) business day after dispatch. If sent by facsimile or
overnight courier service, and three (3) business days after mailing, if sent by
certified or registered mail. Notices shall be addressed as provided below:

a. If to the Junior Creditor:

RXI Holdings, Inc.
RXI Plastics, Inc.
11111 Santa Monica Boulevard
Suite 270
Los Angeles, California 90025
Fax No. (310) 473-9592

With a copy to:
Sidley & Austin
555 W. Fifth St.
Los Angeles, California 90013-1010
Attention: Moshe J. Kupietzky
Fax No. (213) 896-6600

b. If to the Bank:

Bank One, Indianapolis, National Association
Bank One Center/Tower
111 Monument Circle
P.O. Box 7700
Indianapolis, Indiana 46277-0119
Attention: Manager, Regional Banking B
Fax No. (317) 321-8830

or at such other address or to any successor or assign as any party may
designate by notice to the other parties in accordance with the provisions
hereof.

12. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Company and the Junior Creditor and the Junior Creditor's successors in interest
to the Junior Obligations and the Junior Obligations and shall inure to the
benefit of the Bank and its successors and assigns.

13. SEVERABILITY. If any provision of this Agreement is determined to be
illegal or unenforceable, such provision shall be doomed to be severable from
the balance of the provisions of this Agreement and the remaining provisions
shall be enforceable in accordance with their terms.

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<PAGE>

14. GOVERNING LAW. This Agreement is made under and will be governed in
all cases by the substantive laws of the State of Indiana, notwithstanding the
fact that Indiana conflicts of law rules might otherwise require the substantive
rules of law of another jurisdiction to apply.

Dated: June 5, 1996

TEXBERRY ACQUISITION, INC.

By:___________________________

___________________________
(Printed Name and Title)

BANK ONE, INDIANAPOLIS, NATIONAL ASSOCIATION

By:___________________________

___________________________
(Printed Name and Title)

RXI PLASTICS, INC.

By:___________________________

___________________________
(Printed Name and Title)

RXI HOLDINGS, INC.

By:___________________________

___________________________
(Printed Name and Title)

M:\PSM\PSM6A16.WP (6/18/96 3:48pm)

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Exhibit 10.18

ESCROW AGREEMENT

This Escrow Agreement, dated June 5, 1996, among Texberry Acquisition Inc.,
a Missouri corporation ("Buyer"), RXI Holdings, Inc., a Delaware corporation
("RXI"), RXI Plastics, Inc., a Delaware corporation ("Seller"), and Mercantile
Bank of St. Louis, N.A. ("Bank").

W I T N E S S E T H:

WHEREAS, by Stock Purchase Agreement dated as of May 15, 1996 (the
"Agreement of Sale"), Seller agreed to sell to Buyer all the issued and
outstanding shares of capital stock of Texberry Container Corporation, a Texas
corporation (the "Company"), subject to the terms, provisions and conditions set
forth in the Agreement of Sale;

WHEREAS, the Agreement of Sale provides that at the Closing of the
transactions contemplated thereby, Buyer will pay in immediately available funds
to Bank as escrow agent $3,750,000 (subject to the Initial Adjustment before
deposit as provided in the Agreement of Sale), representing a portion of the
Purchase Price, to be held by Bank subject to the terms and conditions of this
Escrow Agreement;

NOW, THEREFORE, in consideration of the premises and of other good and
valuable consideration, the parties hereto agree as follows:

1. DEFINITIONS. Except as hereinafter defined, capitalized terms used in
this Escrow Agreement will have the meanings set forth in Appendix A hereto.

2. APPOINTMENT OF ESCROW AGENT. Buyer, RXI, and Seller hereby appoint
Bank as escrow agent for the purposes set forth herein and Bank hereby accepts
such appointment on the terms herein provided. Bank hereby acknowledges receipt
from Buyer, RXI, and Seller of a counterpart of the Agreement of Sale duly
executed by such parties.

3. DEPOSIT OF ESCROW FUNDS. For the purposes herein set forth, Purchaser
on this date has deposited with Bank the sum of $2,628,369. The sum so
deposited, as adjusted from time to time in accordance with the Agreement of
Sale, is herein referred to as the "Escrow Deposit". The Escrow Deposit will be
held, invested, reinvested and disbursed by Bank in accordance with the terms
hereof, and all earnings (including interest) thereon to any specified date
shall be considered a part of the Escrow Deposit as of such date.

4. APPLICATION OF ESCROW DEPOSIT. The Escrow Deposit will be retained by
Bank and shall be distributed at any time, or from time to time, during the term
hereof as follows:

(a) If LFH delivers to the Bank its written determination that a
post-closing adjustment to the Purchase Price is required under Section
2.5(c) of the Agreement of Sale and as a result Buyer becomes entitled to a
payment from the Escrow Deposit, the Bank shall pay such amount to the
Buyer or its designee, together with all gross earnings (including
interest) thereon (less the proportionate part of any amounts due the Bank)
from the Closing Date to the date of the payment. If LFH delivers to the
Bank its written determination that a post-closing adjustment is required
under Section 2.5(c) of the Agreement of Sale and as a result Buyer becomes
obligated to increase the Escrow deposit, the Buyer shall pay the amount of
the increase to the Bank together with interest on

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such amount from the Closing Date to the date of payment computed at the same
rate as the gross earnings (including interest) actually earned on the Escrow
Deposit during such period. The Bank will assist Buyer and Seller in
establishing the applicable rate of gross earnings during such period.

(b) If the aggregate Returns under Section 2.5(d) of the Agreement of
Sale exceed $25,000 and the Bank receives the LFH special report specified
in Section 2.5(d) of the Agreement of Sale and LFH's calculation of such
excess, the Bank shall pay the amount of the excess to the Buyer or its
designee together with all gross earnings (including interest) accrued
thereon (less the proportionate part of any amounts due the Bank) from the
Closing Date to the date of such payment.

(c) If, in accordance with Section 2.5(e) of the Agreement of Sale,
there remain any uncollected Accounts Receivable 180 days after the Closing
Date and Buyer elects to assign any such uncollected Account Receivable to
Seller, the Buyer shall provide the Seller and the Bank a certificate
listing each such unpaid Account Receivable with respect to which such
payment has not been made and the total thereof and deliver to the Bank an
assignment without recourse in the form of Exhibit A-1 to this Agreement,
together with a UCC release by Buyer's lenders of any security interest in
such unpaid Accounts Receivable and a UCC-1 financing statement in the form
of Exhibit A-2 to this Agreement. Not more than five business days after
the date Bank receives such certificate, the Bank shall pay to the Buyer or
its designee the amount of such total together with all gross earnings
(including interest) thereon (less the proportionate part of any amounts
due the Bank) from the Closing Date to the date of the payment and deliver
the original assignment and release of security interest to the Seller.
If, after date the Buyer receives such payment, the Buyer or the Company
collects any amount of the uncollected Accounts Receivable, the Buyer shall
provide the Seller and the Bank with notice of the amount collected and
shall pay such amount to the Bank for inclusion in the Escrow Deposit
together with interest thereon computed at the same rate of gross earnings
(including interest) realized on the Escrow Deposit from the date the
amount of the subsequently collected Account Receivable was paid to Buyer
by Bank to the date the Buyer deposits the collected amount with the Bank.

(d) If the Buyer or the Company pays or is required to pay any
account payable or expense of the Company in accordance with Section
2.5(f)(ii) of the Agreement of Sale or if RXI and Seller fail to perform
their indemnification obligations under Section 2.5(f)(i) of the Agreement
of Sale despite written notice to Seller and RXI demanding such
performance, the Buyer shall give notice to the Seller and the Bank
certifying the amount of such account payable, expense, or unperformed
indemnification obligation, and, unless the Bank receives written notice
from Seller objecting thereto within ten (10) days after Bank's receipt of
the notice and certification from the Buyer, the Bank shall pay such amount
to the Buyer together with the gross earnings (including interest) thereon
(less the proportionate part of any amounts due the Bank) from the Closing
Date to the date of such payment. If the Bank receives such a written
objection from the Seller, the Bank shall promptly transmit a copy of such
objection notice to the other parties hereto and shall make no disbursement
with respect to any amount being contested as a result of such disagreement
until either (i) Buyer and Seller jointly notify the Bank of the amount to
be paid, or (ii) the Bank receives a written statement of findings issued
by the arbitrator(s) following arbitration proceedings conducted as
provided in Section 10.10 of the Agreement of Sale. As soon as possible
after the

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commencement of any such arbitration proceedings, Buyer and Seller will give the
Bank notice of the identity of the arbitrator or arbitrators.

(e) Not more than ten (10) days after the Bank receives a certificate
form LFH certifying the amount of the gross profit of the Business during
the Measuring Period, the Gross Margin Shortfall, and the amount of the
Shortfall Payment, the Bank will pay to the Buyer the LESSER of (i) the
Shortfall Payment together with the gross earnings (including interest)
thereon (less the proportionate part of any amounts due the Bank) from the
Closing Date to the date of such payment to the Buyer) or (ii) the Escrow
Deposit. Immediately thereafter in the case of a payment under clause (i)
of the immediately preceding sentence, the Bank shall pay to the Seller, or
to such other entity that the Seller may designate in writing, all amounts
remaining in the Escrow Deposit.

(f) The Buyer, RXI, and Seller acknowledge that the earnings
(including interest) on any amount paid by Bank to Buyer and Seller under
this Agreement may not be paid until the Bank receives payment of such
earnings from any money market fund or other investment entity in which the
principal amount of the Escrow Deposit is invested.

(g) If pursuant to the terms of that certain letter agreement dated
the date hereof among Buyer, RXI, and Seller (a copy of which Buyer and RXI
have provided to Bank), RXI gives notice of a payment due thereunder to
Buyer, Bank shall pay to Buyer the amount specified by RXI.

5. INVESTMENT OF ESCROW DEPOSIT. As soon as possible after the receipt
of the Escrow Deposit, Bank will invest the Escrow Deposit as set forth on
Exhibit B hereto (hereinafter called "Securities"), or as otherwise jointly
directed by Leon Farahnik ("Farahnik") on behalf of Seller and Richard S.
Glassman ("Glassman") on behalf of the Buyer (the "Other Securities"). In
investing and reinvesting the Escrow Deposit other than pursuant to such
directions, Bank will seek to obtain the best yields consistent with safety of
principal and ready marketability. To the extent not otherwise directed by
Farahnik and Glassman, Bank will have the authority to sell investments that it
has made from time to time as it will deem appropriate provided that there
results in no loss of principal or accrued interest or other earnings. All
income earned on the Escrow Deposit will be paid in the manner provided in
Section 4 of this Agreement. Bank will not be liable or responsible for any
loss resulting from any investment or reinvestment made at the direction of
Farahnik and Glassman pursuant to this Section 5.

6. LIABILITY OF BANK. The duties of Bank hereunder will be limited to
the observance of the express provisions of this Escrow Agreement. Bank will
not be subject to, or be obliged to recognize, any other agreement between the
parties hereto, including, without limitation, the Agreement of Sale, or
directions or instructions not specifically set forth as provided for herein.
Bank will not make any payment or disbursement from or out of the Escrow Deposit
that is not expressly authorized by this Escrow Agreement. Bank may rely upon
and act upon any instrument received by it pursuant to the provisions of this
Escrow Agreement which it reasonably believes to be genuine and in conformity
with the requirements of this Escrow Agreement, including, without limitation,
written statements or findings of arbitrators as set forth above. Bank
undertakes to use the same degree of care and skill in performing its services
hereunder as an ordinary prudent escrow agent would do or use under the
circumstances in the conduct of such person's own affairs. Bank will not be
liable for any action taken or not taken by it under the terms hereof in the
absence of breach of its obligations hereunder or gross negligence or willful
misconduct on its part. The Bank shall have no obligation to take any action to
cause the Buyer or Seller to make any contribution to the Escrow Deposit
required hereunder.

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7. INDEMNIFICATION OF BANK. Buyer hereby agrees to indemnify and hold
Bank harmless from and against any and all loss, cost, damage or expense
(including reasonable attorneys' fees) Bank may sustain by reason of its
services as escrow agent hereunder, which loss, cost, damage or expense is the
result of actions or omissions of Buyer, except any such loss, cost, damage or
expense (including reasonable attorneys' fees) incurred by reason of such acts
or omissions for which Bank is liable or responsible under the last sentence of
Section 6 hereof. Seller hereby agrees to indemnify and hold Bank harmless from
and against any and all loss, cost, damage or expense (including reasonable
attorneys' fees) Bank may sustain by reason of its services as escrow agent
hereunder, which loss, cost, damage or expense is the result of actions or
omissions of Seller, except any such loss, cost, damage or expense (including
reasonable attorneys' fees) incurred by reason of such acts or omissions for
which Bank is liable or responsible under the last sentence of Section 6 hereof.
Buyer and Seller shall jointly and severally indemnify and hold Bank harmless
from and against any and all loss, cost, damage or expense (including reasonable
attorneys' fees) Bank may sustain by reason of its services as escrow agent
hereunder, which loss, cost, damage or expense is the not the result of actions
or omissions of Seller or Buyer, except any such loss, cost, damage or expense
(including reasonable attorneys' fees) incurred by reason of such acts or
omissions for which Bank is liable or responsible under the last sentence of
Section 6 hereof. If either Buyer or Seller should threaten or commence
litigation to cause the Bank to take any action hereunder or with respect to the
distribution of the Escrow Deposit, the Bank may initiate an interpleader action
in any court having proper jurisdiction of such action.

8. FEES OF BANK. Buyer and Seller will each pay one-half of all fees of
Bank for service as escrow agent hereunder, which fees are set forth on Exhibit
C attached hereto.

9. DESIGNATIONS. Each of Buyer and Seller may, by notice to Bank,
designate one or more persons who will execute notices and from whom Bank may
take instructions hereunder or to whom Bank may give notices. Such designations
may be changed from time to time upon notice from Buyer or Seller. Until
further notice, Farahnik and Glassman are each designated as the respective
designees of Buyer and Seller to give or receive notices and/or instructions to
or from Bank. Bank will be entitled to rely conclusively on any action taken by
a person designated by each of Buyer and Seller.

10. RESIGNATION OF BANK. Bank may resign as escrow agent by giving each
of the parties hereto not less than 30 days' prior written notice of the
effective date of such resignation. If on or prior to the effective date of
such resignation, Bank has not received joint written instructions from the
parties hereto, it will thereupon deposit the Escrow Deposit into the registry
of a court of competent jurisdiction. The parties hereto intend that a
substitute escrow agent will be appointed to fulfill the duties of Bank
hereunder for the remaining term of this Escrow Agreement in the event of Bank's
resignation, and if Buyer and Seller cannot agree on a substitute escrow agent,
they will use their best efforts to derive a procedure to appoint a substitute
escrow agent.

11. NOTICES. All notices, requests, instructions and demands which may be
given by any party hereto to any other party in the course of the transactions
herein contemplated will be in writing and will be deemed given when (a)
delivered by hand (with written confirmation of receipt), (b) sent by
telecopier, provided that a copy is mailed by certified mail, return receipt
requested, (c) three (3) Business Days after deposit in the U.S. Mails, if
mailed first class, by certified mail, return receipt requested or (d) when
received by the addressee, if sent by a nationally recognized overnight delivery
service (receipt requested), in each case to the appropriate addresses and
telecopier numbers set forth as follows:

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(a) If to Buyer:

Texberry Acquisition, Inc.
460 North Lindbergh
St. Louis, Missouri 63141
Attention: Richard S. Glassman
Telephone: 314-569-3633
Fax: 314-579-5087

with a copy to:

Husch & Eppenberger
100 North Broadway, Suite 1300
St. Louis, Missouri 63102
Attention: Maury B. Poscover, Esq.
Telephone: 314-421-4800
Fax: 314-421-0239

(b) If to Sellers:

RXI Holdings, Inc.
11111 Santa Monica Boulevard, Suite 270
Los Angeles, California 90025
Attention: Leon Farahnik
Telephone: 310-473-7005
Fax: 310-473-9592

with a copy to:

Sidley & Austin
555 West Fifth Street
Los Angeles, California
Attention: Moshe J. Kupietzky, Esq.
Telephone: 213-896-6000
Fax: 213-896-6600

Mercantile Bank of St. Louis, N.A.
Corporate Trust Department, Tram 17-3
One Mercantile Center
Seventh and Washington
St. Louis, Missouri 63101
Attention: Robert Hertzenberg
Telephone: 314-425-2656
Fax: 314-425-3872

12. BINDING EFFECT. This Escrow Agreement will be binding upon and inure
to the benefit of the parties hereto and their representatives, successors and
assigns. This Escrow Agreement may not be assigned by any party hereto without
the consent of the other parties hereto, provided that the Buyer and Seller may
make collateral assignments of their respective interests in this Escrow
Agreement and all amounts payable to them hereunder to their respective lenders.

13. AMENDMENT AND TERMINATION. This Escrow Agreement may be amended or
canceled by and upon written notice to Bank at any time given jointly by Buyer
and Seller, but the duties and responsibilities of Bank may not be increased
without its consent.

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14. APPLICABLE LAW. This Escrow Agreement will be governed by and
construed in accordance with the laws of the State of New York.

15. COUNTERPARTS. This Escrow Agreement may be executed in multiple
counterparts, including facsimile transmitted counterparts, each of which will
be deemed an original, but all of which together will constitute but one and the
same instrument.

16. CAPTIONS AND PARAGRAPH HEADINGS. Captions and paragraph headings used
herein are for convenience only and are not part of this Escrow Agreement and
will not be used in construing it.

17. RECEIPT OF ESCROW DEPOSIT. The execution of this Escrow Agreement by
Bank will evidence its acceptance and agreement to the terms hereof, and its
receipt of the Escrow Amount.

IN WITNESS WHEREOF, the parties hereto have hereunto caused this Escrow
Agreement to be executed by their respective officers hereunto duly authorized,
as of the day and year first above written.

TEXBERRY ACQUISITION, INC.

By:_________________________
Title:______________________

RXI HOLDINGS, INC.

By:_________________________
Title:______________________

RXI PLASTICS, INC.

By:_________________________
Title:______________________

MERCANTILE BANK OF ST. LOUIS, N.A.

___________________________

By:________________________
Title:_____________________

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APPENDIX A

Definitions

"Business" -- the Company's business of distributing bottleware,
containers, caps, closures, and other similar products.

"Closing Date" -- the date of this Escrow Agreement.

"Effective Time" -- 12:01 a.m. central daylight savings time, June 1, 1996.

"Initial Adjustment" -- the adjustments to the Purchase Price set forth in
Section 2.5(a)(i) through (vii) of the Agreement of Sale.

"LHF" -- Lopata, Flegel, Hoffman & Co.

"Purchase Price" -- $15,000,000 (subject to the adjustments set forth in
the Agreement of Sale) to be paid by the Buyer for all of the issued and
outstanding shares of capital stock of the Company and having the components set
out in Section 2.2(a) of the Agreement of Sale.

"Returns" -- inventories of the Business at the Effective Time (other than
inventories assigned to the Seller pursuant to Section 2.5(b) of the Agreement
of Sale) that remain unsold after the Closing Date because they are damaged,
obsolete, or otherwise unsalable for at least Buyer's cost.

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EXHIBIT A-1

Form of Assignment

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EXHIBIT A-2

Form of UCC-1

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EXHIBIT B

Investment Instructions

Until such time as the Bank is otherwise instructed pursuant to paragraph 5
of the Escrow Agreement, the Bank is instructed to invest the Escrow Deposit in
United States Treasury bills, notes, or bonds having remaining maturities
between 85 and 95 days at the date of investment and having the highest
available yield.

The Bank is further instructed to provide each person or entity identified
in paragraph 11 of the Escrow Agreement with (i) written confirmation of each
purchase pursuant to the immediately prior paragraph, and (ii) quarterly reports
within thirty days after the end of each calendar quarter setting forth the
investments of the Escrow Deposit as of the last day of such quarter and the
yield thereon, investment income, and the Bank's fees under the Escrow Agreement
for such quarter.

______________________________
Leon Farahnik, on behalf of Seller

______________________________
Richard S. Glassman, on behalf of Buyer

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EXHIBIT C

Escrow Agent Fees