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Cereus and Eltrax Agree to Merge

Total solutions provider Cereus Technology Partners, Inc. and integrated e-solutions and ASP Eltrax Systems, Inc. announced today that they have signed a definitive agreement to merge, creating a Full Service Provider (FSP).

Both firms are based in Atlanta and pursue similar market opportunities with complementary business strategies.

Cereus is led by Steve Odom, former Chairman and chief executive officer of World Access. According to the companies, The Cereus management team will hold the same positions once the companies combine.

"Eltrax has tremendous strengths and core competencies in ASP applications, managed network services and customer care," explained Odom. "Combining our strength in front and back office development and integrated solutions with the strengths of Eltrax will result in a formidable entity in B2B e-commerce FSP solutions."

William O'Reilly, current Chairman and chief executive officer, Eltrax, will become Chairman of the nine-member board of the combined company.

"We are very excited about this combination with Cereus because it significantly accelerates the business plans for both companies," O'Reilly said, who served on the board of World Access. "I am confident in Steve's abilities. During the four years that Steve was with World Access, its annualized revenues grew from $15 million to $700 million. Combining Cereus' management team with our talented group of individuals will create an explosive force in the e-solutions and FSP space."

As part of the transaction, Cereus will provide interim management services to Eltrax prior to the closing of the merger, which is still subject to approval by the shareholders of both companies.

According to the companies, the merger will be structured as a tax-free reorganization and accounted for as a purchase. Each Cereus share will be converted into 1.67 shares of Eltrax, subject to adjustment for the sale of certain assets of Eltrax's hospitality business.

Cereus will invest up to $5 million in Eltrax in the form of convertible subordinated note prior to closing, which is conditioned on Cereus having over $12-13 million of cash at closing and on Cereus and Eltrax raising an additional $20 million in new cash through additional equity and/or the sale of some or all of Eltrax hospitality business.

In related news, Eltrax's Customer Relationship Management service was selected by Egarden.com to manage Egarden.com's customer relations and online interactions between lawn and garden buyers and suppliers from initial order through delivery.

Eltrax will utilize Octane 2000, its CRM ASP software, to initially provide customer care help desk support for Egarden.com. Online customers will access the Eltrax help desk using a dedicated toll-free number e-mail or chat.