XS, Inc. Secures $20 Million For Acceleration of Agriculture E-commerce Site; Morgan Stanley Dean Witter Private Equity Provides Financing.

RESEARCH TRIANGLE PARK, N.C.--(BUSINESS WIRE)--Nov. 18, 1999--

XS, Inc., parent company of XSAg.com, an e-commerce exchange site for trading agricultural products, today announced that it has entered into definitive agreements with Morgan Stanley Dean Witter Private Equity for a $20 million round of financing to fund the rapid expansion of the company. Launched in January, XSAg.com is expected to process $100 million in transactions next year.

"The agricultural industry recognizes the need to have an efficient market for production inputs," said XS, Inc. founder and Chief Executive Officer Fulton Breen. Morgan Stanley Dean Witter Venture Partners ("MSDW Venture Partners") is the lead investor of the $20 million in venture capital being provided to XS.

"We're extremely pleased to be backing XS, Inc.," said Guy de Chazal, Managing Director of MSDW Venture Partners. "As Internet-based business-to-business e-commerce has become a reality, Morgan Stanley Dean Witter Private Equity is investing in companies that are leading this revolution in their respective industries. We are confident that XS will become the e-commerce leader for the American farmer's purchases of agricultural products."

XSAg.com has experienced dramatic growth through the summer and fall. It has expanded from facilitating agricultural chemical transactions to include seeds, and will soon be offering equipment and parts, fertilizer and veterinary products. XSAg.com simplifies the buying and selling process by enabling manufacturers, distributors, dealers and growers to conduct secure transactions on its site in total anonymity throughout the entire process. Transaction sizes have ranged from $2,000 to $150,000.

Proceeds of Financing To Fund Site Expansion, Marketing

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The majority of the $20 million will be invested in the continued evolution and expansion of the Company's virtual marketplace, and accelerating awareness, understanding and enthusiasm for XSAg.com among the 350,000 targeted American producers and distribution channel members.

Marketing plans include advertising, direct marketing and public relations campaigns that deliver the company's strategic positioning to its core audiences. "We must effectively communicate to the American farmer that XSAg.com is much more than the simple site facilitating the buying and selling of agricultural inputs. The American agricultural industry is increasingly being threatened by lower cost producers of commodities. Just as an exchange floor has brought about efficient global trading of these commodities, XSAg.com allows users to put our exchange floor to work for them buying or selling agricultural inputs," Mr. Breen explained.

"By using the efficient trading floor model, growers can take control of their costs and by extension, their lifestyle. The grower is much more motivated than a corporate purchasing agent to adopt Internet technology to save money. The grower is the CEO of his company. He's experiencing depressed crop prices, he understands the auction model and he must cut costs to stay in business," he said.

Morgan Stanley Dean Witter Venture Partners is part of the private equity business of Morgan Stanley Dean Witter (NYSE: MWD), a preeminent global financial services firm. Since its inception 15 years ago, Venture Partners has invested over $450 million in more than 90 companies in the United States. Venture Partners manages a group of funds that invest in emerging growth companies within the information technology and healthcare industries primarily in the United States.

Morgan Stanley Dean Witter Capital Partners

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Morgan Stanley Dean Witter Capital Partners is part of the private equity business of Morgan Stanley Dean Witter (NYSE: MWD), a preeminent global financial services firm. Since its inception 15 years ago, Capital Partners has invested over $3 billion of equity investments in more than 60 companies around the world. Capital Partners manages a group of funds that invest in companies operating in a broad range of industries including telecommunications, financial services, healthcare, technology, energy and chemicals on a global basis.

XS, Inc.

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Using proprietary software, XSAg.com provides a secure auction site for manufacturers, distributors and dealers to sell chemicals, seeds and other agricultural products to farmers across the nation at discounts of up to 30 percent or more. XSAg.com acts as a neutral market maker - bringing buyers and sellers together - and provides a seamless e-commerce fulfillment operation, including discounted freight, credit facilities and transfer of funds. For information regarding the corporation visit www.xsinc.com.