Skip to main content
Find a Lawyer

Merger Agreement in Principle - FutureTrak International Inc. and Celerity Systems Inc.

                                        As of April 26, 1999

FutureTrak International, Inc.
3635 Park Central Boulevard North
Pompano Beach, FL 33064


      This Letter sets forth our mutual understanding and agreement in principle
pursuant to which FutureTrak International, Inc., a Florida corporation
("FutureTrak"), will merge with and into Celerity Systems, Inc., a Delaware
corporation ("Celerity"; Celerity and FutureTrak are sometimes hereinafter
referred to singly as a "Company" and together as the "Companies"), or a
subsidiary of Celerity.

      1. MERGER. Upon the consummation of the merger of FutureTrak with and into
Celerity or a subsidiary of Celerity upon the terms described in this Letter
(the "Merger"), Celerity will issue one share of the common stock of Celerity
for each issued and outstanding share of the common stock of FutureTrak. The
foregoing assumes that FutureTrak will, prior to Merger, consummate a 1 for 4
reverse split of its issued and outstanding shares of common stock, such that
9,546,195 shares of such common stock will be outstanding upon consummation of
the date of the Merger. The Companies agree that the Merger is intended to be a
tax-free reorganization for federal income tax purposes.

      2. OTHER TRANSACTIONS. The definitive agreements described in paragraph 5
of this Letter shall provide for the occurrence of the following, upon the
consummation of the Merger:

            (a)   the Board of Directors of Celerity shall consist of six
                  members: three representatives of FutureTrak and three
                  representatives of Celerity;

            (b)   Celerity shall change its name to FutureTrak International,
                  Inc. and shall change the symbol for its common stock to FTRK
                  or such similar symbol as may be available; and

            (c)   Celerity shall amend its Certificate of Incorporation to
                  increase its authorized capital stock as agreed to by the
                  Companies, including to permit the issuance of shares of its
                  common stock in the Merger and to reserve sufficient shares of
                  common stock for issuance in respect of outstanding common
                  stock equivalents.

      3. CLOSING CONDITIONS. The consummation of the Merger and related
transactions contemplated hereby by each of the Companies shall be subject to
the fulfillment of customary conditions, including the following conditions

            (a)   the negotiation and execution of a merger agreement and other
                  definitive agreements with respect to the transactions
                  contemplated hereby;

            (b)   the formal approval of the Board of Directors and, to the
                  extent required, the stockholders of each of the Companies to
                  the transactions contemplated hereby;

            (c)   receipt of all required third-party, regulatory and
                  governmental approvals; and

            (d)   the completion by each of the Companies of its "due diligence"
                  investigation concerning the other Company.

      4. CLOSING. It is anticipated that the consummation of the transactions
contemplated herein will occur on or before October 30, 1999, or such other date
as the parties may agree.

      5. DEFINITIVE AGREEMENTS. The definitive agreements with respect to the
transactions contemplated hereby will contain mutually agreeable representations
and warranties, mutually agreeable provisions for indemnification and other
appropriate and customary terms and conditions.

      6. CONFIDENTIALITY. Except to the extent that information with respect to
either Company provided by it, or discovered by the other Company, is in the
public domain without breach of any obligation of confidentiality, such
information concerning each Company is hereinafter referred to as "Confidential
Information." Prior to the consummation of the Merger, neither Company shall
disclose Confidential Information of the other, except on a confidential basis,
to its respective employees, accountants, attorneys and other professional
advisors or as otherwise expressly provided herein, without the prior written
consent of the other Company. If at any time either Company is requested or
required (by oral questions, interrogatories, requests for information or
documents, subpoenas or similar legal process) to disclose any Confidential
Information of the other Company, it (to the extent reasonably practical) shall
promptly notify the Company so that such Company may seek an appropriate
protective order and/or waive compliance with the provisions hereof. If, in the
absence of a protective order or the receipt of a waiver hereunder, in the
reasonable opinion of counsel for either Company, such Company is compelled to
disclose Confidential Information of the other Company to any tribunal or any
governmental agency, it may disclose such information to such tribunal or agency
without liability hereunder.

      7. EXPENSES. Except as may be otherwise provided in the definitive
agreement, the Companies shall each pay their respective expenses (including
fees and expenses of legal counsel) in connection with the transactions
contemplated hereby.

      8. EXCLUSIVITY. Unless this Agreement has been terminated, during the
period ending 60 days following the date of this Letter, the Board of Directors
and officers of FutureTrak agree that they will not solicit proposals or provide
any information to any third party for the purpose of sale, tender offer or
merger with any entity except Celerity. Each such officer or director agrees
that he will vote his capital stock in favor of the Merger, and will not seek to
exercise any appraisal or dissenters rights with respect to the Merger. Should
any officer or director sell or otherwise dispose of any capital stock during
this period, he will retain legal proxy rights to such shares and will vote such
shares in favor of the Merger.

      9. PUBLIC DISCLOSURE. Subject to any applicable requirements of law,
neither of the Companies shall make any public disclosure concerning the subject
matter hereof or the transactions contemplated hereby without the prior written
consent of the other. The parties agree to prepare a mutually acceptable press
release or releases with respect to the transactions contemplated hereby which
will be released by the Companies on or about the date of the execution of this

      10. PREPARATION. Each of the Companies agrees to provide the other Company
and its advisors full access to its books, records and premises in order to
enable them to complete their "due diligence" with respect to the Merger and
related transactions. Subject to Section 11, each of the Companies agrees to
negotiate in good faith and cooperate with the other party in connection with
the preparation of definitive agreements, to use its commercially reasonable
efforts to complete such preparation and execute and deliver definitive
agreements prior to June 30, 1999 and to close the transactions contemplated
hereby as expeditiously as possible thereafter; provided that, if the Companies
conclude prior to June 30, 1999 that it is impractical for them to consummate
the Merger, subject to Section 11, each of the Companies agrees to negotiate in
good faith and cooperate with the other party in connection with the preparation
of definitive documents concerning another business combination intended to
achieve, as nearly as practicable, similar economic results for the Companies as
the Merger, if any such business combination is practicable, to use commercially
reasonable efforts to execute and deliver definitive agreements with respect
thereto prior to June 30, 1999 and to close the transactions contemplated hereby
as soon as practicable thereafter. The parties further agree to cooperate in
connection with the preparation of any required governmental or regulatory

      11. TERMINATION. The obligations of the Companies under this Letter may be
terminated (a) by mutual agreement of the Companies; (b) by either Company if
the definitive agreements have not been executed on or prior to June 30, 1999;
or (c) prior thereto, if the other Company is no longer negotiating in good
faith as provided in Section 10 or if the Board of Directors of such Company
determines in the good faith exercise of its fiduciary duties that such
termination is in the best interests of such Company. In the event either of the
Companies decides to terminate this Agreement, it shall, to the extent
reasonably practical, endeavor to inform the other Company of

the reasons for such decision, to provide the other Company ten days' prior
written notice of its intention to terminate and to afford the other party an
opportunity during such ten-business day period to address the reasons for such

      12. NATURE OF AGREEMENT. The Companies acknowledge that this Letter is a
statement of their mutual intention only, and unless definitive agreements are
executed and delivered by the Companies, there are no legally binding agreements
between the Companies with respect to the transactions contemplated hereby.
Notwithstanding the foregoing, the provisions of paragraphs 6, 7, 8, 9, 10 and
11 hereof shall constitute binding legal agreements, shall be enforceable
against the parties in accordance with their respective terms and shall survive
any termination of the transactions contemplated hereby.

      13. GOVERNING LAW. This Letter shall be governed by, and construed in
accordance with, the laws of the State of Delaware applicably to contracts made
and wholly to be performed within such state.

            If you are in agreement with the terms and conditions of this
Letter, please sign and date the enclosed duplicate of this Letter in the space
provided below and return it to the undersigned.

                                          Very truly yours,

                                          CELERITY SYSTEMS, INC.

                                          By: /s/ KENNETH D. VAN METER  
                                             Name:  Kenneth D. Van Meter
                                             Title: President/CEO

Accepted and agreed as of the 
27th day of April, 1999:


By: /s/ AHMAD MORADI                                
    Name:  Ahmad Moradi
    Title: CEO

Accepted and agreed with respect to 
Section 8 only, as of the 27th day 
of April, 1999:

/s/ AHMAD MORADI                                        
Ahmad Moradi

/s/ ROBERT KELNER                                         
Robert Kelner

/s/ WILLIAM TESSARO                                     
William Tessaro

/s/ STEPHEN REMONDINI                                 
Stephen Remondini

Was this helpful?

Copied to clipboard