AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER

BY AND AMONG

UNIVERCELL HOLDINGS, INC.

AND

UNIVERCELL RECALL ACQUISITION CORPORATION

AND

RECALL MAIL CORPORATION

AND

CONTROLLING UNIVERCELL SHAREHOLDER

AND

CONTROLLING RECALL SHAREHOLDERS

 

 

 

1

 

 

TABLE OF CONTENTS

BACKGROUND

1

1.

Plan of Merger.

1

2.

Securities Laws Compliance.

4

3.

The Closing.

5

4.

Representations and Warranties of the UniverCell Parties.

6

5.

Representations and Warranties of Recall and the Controlling Recall Shareholders.

13

6.

Representations and Warranties of the Controlling Recall Shareholders and

Controlling UniverCell Shareholder.

21

7.

Covenants of The Parties.

22

8.

Covenants of UniverCell.

23

9.

Covenants of Recall.

24

10.

Covenants of the Controlling Recall Shareholders and Controlling UniverCell

Shareholder.

26

11.

Conditions Precedent to Obligations of Recall.

26

12.

Conditions Precedent to Obligations of the UniverCell Parties.

27

13.

Indemnification.

27

14.

Termination.

32

15.

Definitions.

33

16.

General Matters.

39

 

 

 

2

 

 

AGREEMENT AND PLAN OF MERGER

 

THIS AGREEMENT AND PLAN OF MERGER is made as of May 19, 2005 by and among UniverCell Holdings, Inc., a Florida corporation (“UniverCell”), UniverCell Recall Acquisition Corporation, a Delaware corporation and Wholly-Owned Subsidiary of UniverCell (the “Merger Subsidiary”), Sean Y. Fulda (the “Controlling UniverCell Shareholder” and together with UniverCell and the Merger Subsidiary, the “UniverCell Parties”), Recall Mail Corporation, a Delaware corporation (“Recall”), and the Recall Shareholders executing this Agreement (the “Controlling Recall Shareholders” and together with Recall, the “Recall Parties”). UniverCell, Recall, the Merger Subsidiary, the Controlling UniverCell Shareholder and each of the Controlling Recall Shareholders are sometimes individually referred to herein as a “Party” and sometimes collectively referred to herein as the “Parties.” Certain other terms are used herein as defined below in Section 15 or elsewhere in this Agreement.

BACKGROUND

 

UniverCell, the Merger Subsidiary and Recall desire to effect the Merger of the Merger Subsidiary with and into Recall in accordance with the DGCL and, to the extent applicable, the FBCA.  This Agreement sets forth the terms and conditions under which the Merger Subsidiary will merge with and into Recall (the “Merger”). The Parties intend that upon completion of the Merger, Recall will be a Wholly-Owned Subsidiary of UniverCell.UniverCell

The Merger Subsidiary is a Wholly-Owned Subsidiary of UniverCell, has been formed solely to facilitate the Merger and has not conducted nor will it conduct any business or activity other than in connection with the Merger.

The Board of Directors of Recall has approved and adopted this Agreement, the Merger and the other Transactions contemplated by this Agreement and has recommended that the Recall Shareholders approve and adopt this Agreement, the Merger and the other Transactions contemplated by this Agreement in accordance with the DGCL.

The respective Boards of Directors of UniverCell and the Merger Subsidiary have approved and adopted this Agreement, the Merger and the other Transactions contemplated by this Agreement in accordance with applicable Law and the Board of Directors of UniverCell has recommended that the UniverCell shareholders approve and adopt this Agreement, the Merger and the other Transactions contemplated by this Agreement in accordance with applicable Law.

NOW, THEREFORE, in consideration of the mutual promises, covenants, representations and warranties contained and made herein and of the mutual benefits to be derived herefrom, and intending to be legally bound hereby, the Parties agree as follows:

1.

  Plan of Merger.

(a)

The Merger. Upon the terms and subject to the conditions hereof, and in accordance with the relevant provisions of the DGCL and the FBCA, at the Effective Time, the Merger Subsidiary shall be merged with and into Recall. Following the Merger, Recall shall continue as the surviving corporation (the “Surviving Corporation”) and shall continue its separate corporate existence under the Laws of the State of Delaware, and the separate corporate existence of Merger Subsidiary shall cease.

(b)

Effective Time. As soon as practicable, but in any event within one (1) Business Day after the satisfaction or waiver of all conditions to the Merger, the Parties shall file or cause

 

3

 

 

to be filed with the Secretary of State of the State of Delaware a certificate of merger (the “Certificate of Merger”) in such form as is required by the DGCL and shall file with the Secretary of State of the State of Florida such documents necessary to effect all of the Transactions contemplated in this Agreement under the FBCA. The Effective Time of the Merger shall  mean the later of the time the Certificate of Merger is filed with the Secretary of State of the State of Delaware or the time and date specified in the Certificate of Merger filed with the Secretary of State of the State of Delaware (the “Effective Time”).

(c)

Effect .  The Merger shall have the effects set forth in Section 259(a) of the DGCL.

(d)

Charter Documents of the Surviving Corporation. The Certificate of Incorporation of Recall as in effect immediately prior to the Effective Time of the Merger shall be the Certificate of Incorporation of the Surviving Corporation. At the Effective Time of the Merger, the Bylaws of Recall as in effect immediately prior to the Effective Time of the Merger shall be the Bylaws of the Surviving Corporation.

(e)

Officers of the Surviving Corporation. The individuals identified on Schedule 1(e) shall, from and after the Effective Time of the Merger, be the officers of Recall and each such person shall hold the office specified in such Schedule 1(e) until his or her respective successor shall have been duly appointed or elected and qualified or until his or her earlier death, resignation or removal in accordance with the Recall’s Certificate of Incorporation and Bylaws.

(f)

Directors of the Surviving Corporation .  The individuals identified on Schedule 1(f) shall, from and after the Effective Time of the Merger, be the directors of Recall until their respective successors shall have been duly appointed or elected and qualified or until their earlier death, resignation or removal in accordance with Recall’s Certificate of Incorporation and Bylaws.

(g)

Charter Documents of UniverCell.  At the Effective Time of the Merger, UniverCell’s Certificate of Incorporation and Bylaws shall be amended and restated to reflect, among other things, that UniverCell is changing its name to BigString Corporation.  The form of UniverCell’s Amended and Restated Certificate of Incorporation is attached to this Agreement as Exhibit A and the form of UniverCell’s Amended and Restated Bylaws is attached to this Agreement as Exhibit B.

(h)

Officers of UniverCell. The individuals identified on Schedule 1(h) shall, from and after the Effective Time of the Merger, be the officers of UniverCell and each such person shall hold the office specified in such Schedule 1(h) until his or her respective successor shall have been duly appointed or elected and qualified or until his or her earlier death, resignation or removal in accordance with UniverCell’s Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws.  Each of the current officers of UniverCell shall resign as of the Effective Time.

(i)

Directors of UniverCell .  The individuals identified on Schedule 1(i) shall, from and after the Effective Time of the Merger, be the directors of UniverCell until their respective successors shall have been duly appointed or elected and qualified or until their earlier death, resignation or removal in accordance with UniverCell’s Amended and Restated Certificate of

 

4

 

 

Incorporation and Amended and Restated Bylaws.  Each of the current directors of UniverCell shall resign as of the Effective Time.

(j)

Conversion of Shares of UniverCell Common Stock; Conversion or Cancellation of Recall Shares; Change of Name.   At the Effective Time of the Merger:

(i)

Each share of UniverCell Common Stock issued and outstanding immediately before the Effective Time of the Merger (other than shares held by any Person who is a Dissenting Shareholder) shall, by virtue of the Merger, be converted into and represent one-thirtieth (1/30) of one (1) share of UniverCell Common Stock.

(ii)

Each Person who is a Recall Shareholder immediately before the Effective Time of the Merger (other than any Person who is a Dissenting Shareholder) shall, by virtue of the Merger be entitled to receive one (1) share (the “Conversion Number”), of UniverCell Common Stock (the “UniverCell Shares”) in exchange for each issued and outstanding share of Recall Common Stock (collectively, the “Recall Shares”) held by the Recall Shareholder immediately prior to the Effective Time of the Merger. Each of the Recall Shares that, immediately prior to the Effective Time of the Merger, is held by Recall as treasury stock shall by virtue of the Merger be canceled and retired without payment of any consideration.

(iii)

Each share of common stock of the Merger Subsidiary issued and outstanding immediately before the Effective Time of the Merger shall, by virtue of the Merger, be converted into and represent one (1) share of Recall Common Stock.

(iv)

No fractional UniverCell Shares shall be issued in the Merger.

(v)

The name of UniverCell shall be changed to BigString Corporation.

(k)

Exchange of Certificates for UniverCell Shares.

(i)

As promptly as practicable after the Effective Time of the Merger, Recall shall cause to be mailed to each Recall Shareholder a form of letter of transmittal (“Letter of Transmittal”).  After the Effective Time of the Merger, each Recall Shareholder, upon surrender to UniverCell of a Recall stock certificate or certificates, together with the completed and duly executed Letter of Transmittal, and each UniverCell Shareholder, upon surrender to UniverCell of a UniverCell a stock certificate of certificates, will be entitled to receive a certificate or certificates evidencing the number of shares of UniverCell Shares into which his, her or its shares of Recall Common Stock have been converted in connection with the Merger. Until so surrendered, each Recall stock certificate shall, after the Effective Time of the Merger, represent for all purposes, only the right to receive UniverCell Shares as provided herein.

(ii)

If any portion of UniverCell Shares are to be issued to a Person other than the registered holder of shares of Recall Common Stock or UniverCell Common Stock formerly represented by the certificate or certificates surrendered, it shall be a condition to issuance of the new certificates that the certificate or certificates so surrendered shall be properly endorsed or otherwise be in proper form for transfer and that the Person requesting such new certificates shall pay to UniverCell any transfer or other Taxes required as a result of such issuance to a Person other than the registered holder of such shares of Recall Common Stock or UniverCell Common Stock or establish to the satisfaction of UniverCell that such Tax has been paid or is not payable.

 

5

 

 

(iii)

No dividends or other distributions with respect to the UniverCell Shares shall be paid to a Recall Shareholder until the certificate(s) representing the Recall Shareholder’s shares of Recall Common Stock are surrendered as provided in this Section 1(k). Upon such surrender, there shall be paid, without interest, to the Person in whose name the certificates representing the UniverCell Shares into which such shares of Recall Common Stock were converted are registered, all dividends and other distributions payable in respect of such securities on a date subsequent to, and in respect of a record date after, the Effective Time, less the amount of withholding Taxes which may be required thereon.

(iv)

If any certificate shall have been lost, stolen or destroyed, then upon the making of an affidavit of that fact by the Person claiming such certificate to be lost, stolen or destroyed and, if required by UniverCell, the posting by such Person of a bond in such reasonable amount as UniverCell may direct as indemnity against any claim that may be made against it with respect to such certificate, UniverCell shall issue in exchange for such lost, stolen or destroyed certificate the consideration provided for, and in accordance with the procedures set forth, in this Section 1(k) and, if applicable, any unpaid dividends and distributions with respect to UniverCell Shares deliverable in respect thereof pursuant to this Agreement.

(l)

Adjustments. If at any time during the period between the date of this Agreement and the Effective Time, any change in the outstanding shares of capital stock of UniverCell or Recall shall occur by reason of any reclassification, recapitalization, stock split or combination, exchange or readjustment of shares, or any stock dividend thereon with a record date during such period or any similar event, this Section 1 shall be appropriately adjusted; provided, however, that Recall shall be permitted up through the Effective Time to issue additional shares of Recall Common Stock in connection with the private placement thereof; provided, further, that in no event shall the shares of Recall Common Stock outstanding at the Effective Time exceed 49,500,000 shares.

(m)

No Further Transfer of Shares.  At and after the Effective Time, there shall be no transfers of shares of Recall Common Stock that were outstanding immediately prior to the Effective Time on the stock transfer books of Recall.  If, after the Effective Time, certificates are presented to Recall for transfer, such certificates shall be canceled and exchanged for the UniverCell Shares as provided in this Section 1.

(n)

Appraisal Rights .  In connection with the Merger and the other Transactions contemplated herein, the holders of shares of Recall Common Stock entitled to vote on the Merger shall be afforded appraisal rights pursuant to Section 262 of the DGLG and the holders of shares of UniverCell Common Stock entitled to vote on the Merger shall be afforded appraisal rights pursuant to Section 607.1302 of the FBCA.

2.

Securities Laws Compliance.

(a)

Purchaser Representative.  Promptly after execution and delivery of this Agreement, Recall shall, in consultation with its counsel:

(i)

determine which of its shareholders are not accredited investors,

 

6

 

 

(ii)

use its best efforts to cause each such shareholder to appoint as his, her or its purchaser representative a person meeting the requirements of Rule 501(h) of the SEC's Regulation D (“Regulation D”), and

(iii)

notify UniverCell of the identity of each such purchaser representative.

(b)

Information Statement.  As soon as reasonably practicable after the date hereof, the Parties shall jointly prepare and file with the SEC a joint notice of meeting/information statement relating to (i) the approval of the Merger and the other Transactions contemplated by this Agreement by the Controlling UniverCell Shareholder and the Controlling Recall Shareholders, and (ii) ratification by the controlling shareholder of UniverCell of the sale on March 9, 2005 of all of UniverCell's remaining assets to Sean Y. Fulda for $20,000.  The notice shall be in form and substance reasonably satisfactory to Recall and UniverCell and shall include

(i)

a statement of the rights, if any, of Dissenting Shareholders, and

(ii)

additional materials and information concerning the Merger and related Transactions, including the recommendation of the Board of Directors of Recall that the Recall Shareholders approve the Merger, the recommendation of the Board of Directors of UniverCell that the Shareholders of UniverCell approve the Merger and such additional information as is required by Rule 502(b) of Regulation D.

As soon as practicable after clearing SEC staff comments, if any, UniverCell and Recall shall distribute that joint notice of meeting/information statement to all holders of the securities of UniverCell and Recall entitled to vote on the Merger.

3.

The Closing.

(a)

Location, Date. The closing for the Merger and the other Transactions contemplated by this Agreement (the “Closing”) shall be held, unless the Parties agree otherwise, at the offices of Raice Paykin Greenblatt Lesser & Krieg, LLP in New York, New York at 4:00 p.m. (local New York City time) as promptly as practicable (and in any event within one Business Day) after satisfaction or waiver of the conditions to the Closing set forth in Sections 11 and 12 of this Agreement (other than those conditions precedent which may only be satisfied at the Closing itself) but, without the prior written consent of all of the Parties, not later than September 30, 2005. The date on which the Closing occurs is referred to herein as the “Closing Date.”

(b)

Deliveries.   At the Closing:

(i)

the Merger Subsidiary and Recall shall deliver or cause to be delivered to the Secretary of State of the State of Delaware a duly executed Certificate of Merger as required under the DGCL and the Parties shall take all such other and further actions as may be required by the DGCL, FBCA and any other applicable Law to make the Merger effective upon the terms and subject to the conditions hereof;

(ii)

UniverCell shall enter into consulting agreements with the Persons identified in Schedule 3(b)(ii), calling for the issuance of the numbers of UniverCell Shares and

 

7

 

 

warrants to purchase UniverCell Shares (the “Warrants”) in the amounts set forth in that Schedule.

(iii)

UniverCell shall issue to Sean Fulda, in full satisfaction of its obligations under his existing employment agreement with UniverCell, a promissory note in the principal amount of $500,000 substantially in the form attached hereto as Exhibit C (the “Note”).  The Note shall bear interest at the Mid-Term Annual Applicable Federal Rate in effect on the date of issuance, and all accrued interest and unpaid principal shall be due and payable on the date which is two (2) years from the date of issuance.  If the Note is not paid in full on its due date, such Note shall convert into the number of shares of UniverCell Common Stock equal to the quotient of the amount of the outstanding principal and accrued interest on the due date divided by the Market Price of the UniverCell Common Stock on the due date.  In the event Sean Fulda and the other Persons identified in the Note receive aggregate sale proceeds in excess of $1,000,000 in connection with the sale by them or for their account of shares of UniverCell Common Stock prior to the due date or the Market Price exceeds $0.75 at any time prior to the due date, all amounts, including unpaid interest, owed under the Note shall be forgiven and the Note shall be automatically canceled and of no further effect.  In addition, for each dollar ($1.00) of sale proceeds received by Sean Fulda and the other Persons identified in the Note in connection with the sale of shares of UniverCell Common Stock, the principal amount of the Note will be reduced by fifty cents ($0.50).  Such reduction in principal will be made on a monthly basis during the term of the Note.

(iv)

UniverCell shall enter into a Registration Rights Agreement substantially in the form attached hereto as Exhibit D with each of Sean Fulda and Telephonix Media Group.

(v)

UniverCell shall deliver the opinion of counsel referred to in Section 11(e) and the certificate referred to in Section 11(f)

(vi)

Recall shall deliver the opinion of counsel referred to in Section 12(f) and the certificate referred to in Section 12(g).

4.

Representations and Warranties of the UniverCell Parties.

 The UniverCell Parties jointly and severally represent and warrant to Recall as follows, except as otherwise set forth in Schedules to this Agreement (items disclosed in one Section of such Schedules shall apply to all other Sections unless specified otherwise):

(a)

Corporate. Each of UniverCell and the Merger Subsidiary is a corporation duly organized, validly existing and in good standing under the Laws of the jurisdiction under which it was incorporated. Each of UniverCell and the Merger Subsidiary is qualified to do business as a foreign corporation in any jurisdiction where it is required to be so qualified, except where the failure to be so qualified would not have a Material Adverse Effect. The Charter Documents and Bylaws of each of UniverCell and the Merger Subsidiary (all of which have been delivered or made available to Recall) have been duly adopted and are current, true, correct and complete and are in full force and effect. Each of UniverCell and the Merger Subsidiary has all necessary corporate power and authority to own, lease and operate its part of the UniverCell Assets and to carry on its part of the UniverCell Business as it is now being conducted. UniverCell has no subsidiaries other than the Merger Subsidiary.

 

8

 

 

(b)

Authorization. Each of UniverCell and the Merger Subsidiary has the requisite corporate power and authority to execute and deliver this Agreement and the other Transaction Documents to which either of them is a party and to perform the Transactions to be performed by each of them.  Such execution, delivery and performance by each of UniverCell and the Merger Subsidiary has been duly authorized by all necessary corporate action, other than the approval of this Agreement and the consummation of the Merger is subject to the approval of the holders of a majority of the outstanding shares of UniverCell Common Stock.  Each Transaction Document executed and delivered by each of the UniverCell Parties as of the date hereof has been duly executed and delivered by such UniverCell Party and constitutes a valid and binding obligation of such UniverCell Party enforceable against such UniverCell Party in accordance with its terms, and any Transaction Document executed and delivered by each UniverCell Party after the date hereof will be duly executed and delivered by such UniverCell Party and will constitute a valid and binding obligation of such UniverCell Party, enforceable against such UniverCell Party in accordance with its terms, except as otherwise limited by bankruptcy, insolvency, reorganization and other laws affecting creditors rights generally, and except that the remedy of specific performance or other equitable relief is available only at the discretion of the court before which enforcement is sought.

(c)

Validity of Contemplated Transactions.  Except for (i) compliance with the Securities Act, the Exchange Act  and applicable state securities Laws and (ii) the filing of the Certificate of Merger, with the Secretary of State of the State of Delaware, and such other documents as are necessary to effect the Transactions contemplated herein with the Secretary of State of the State of Florida, neither the execution and delivery by each UniverCell Party of the Transaction Documents to which it or he is or will be a party, nor the performance of the Transactions to be performed by it or him, will require any filing, consent or approval under or constitute a Default, or result in a loss of material benefit under, (A) any Law or Court Order applicable to any UniverCell Party or any of their properties or assets, (B) the Charter Documents or Bylaws of UniverCell or the Merger Subsidiary, or (C) any Contracts to which any UniverCell Party is a party or by which any of their properties or assets may be bound.

(d)

Capitalization and Stock Ownership.  The total authorized capital stock of UniverCell consists of 200,000,000 shares of UniverCell Common Stock, all of which shares are issued and outstanding on the date hereof. There will be 6,666,667 shares of UniverCell Common Stock issued and outstanding immediately after the Effective Time of the Merger, excluding the UniverCell Shares to be issued to the Recall Shareholders as a result of the Merger and any other shares of UniverCell Common Stock to be issued as contemplated in this Agreement. Except as set forth on Schedule 4(d), there are no existing options, warrants, calls, commitments or other rights of any character (including conversion or preemptive rights) relating to the acquisition of any issued or unissued capital stock or other securities of UniverCell. All of the issued and outstanding shares of UniverCell Common Stock are validly issued, fully paid and non-assessable. Except as set forth on Schedule 4(d), no options, warrants, calls, commitments or other rights of any character (including conversion or preemptive rights) will entitle any Person to acquire any securities of UniverCell or any Subsidiary thereof.

(e)

UniverCell Financial Statements. The audited consolidated balance sheet at December 31, 2004 and the related audited consolidated statements of income, cash flows, and

 

9

 

 

stockholder's equity for the period ending December 31, 2004 (the “UniverCell Financial Statements”) have been delivered to Recall. The UniverCell Financial Statements have been derived from the accounting books and records of UniverCell and have been prepared in accordance with GAAP applied on a consistent basis throughout the periods presented in the UniverCell Financial Statements (except for changes in accounting principles disclosed in the notes thereto).  The consolidated balance sheet included in the UniverCell Financial Statements presents fairly the financial position of UniverCell and its Subsidiaries as at the date thereof, and the consolidated statements of income, statements of shareholder’s equity and statements of cash flows included in such UniverCell Financial Statements present fairly the results of operations and cash flows of UniverCell and its Subsidiaries for the period indicated.  There have not been any material adverse changes in the financial position or condition of UniverCell or its Subsidiaries since December 31, 2004. For purposes of this Agreement, the consolidated balance sheet of UniverCell as of December 31, 2004 is referred to as the “UniverCell Balance Sheet” and the date thereof is referred to as the “UniverCell Balance Sheet Date.”

(f)

Taxes.

(i)

UniverCell (A) has filed (or, in the case of Tax Returns not yet due, will file) with the appropriate governmental agencies all material Tax Returns required to be filed on or before the Effective Time and all such Tax Returns filed were true, correct and complete in all material respects, and (B) has paid (or, in the case of Taxes not yet due, will pay), all Taxes shown on such tax returns.

(ii)

UniverCell has (A) duly paid or caused to be paid all material Taxes and all Taxes shown on Tax Returns that are or were due except to the extent that a sufficient reserve for Taxes has been reflected on the UniverCell Balance Sheet, and (B) provided a sufficient reserve on the UniverCell Balance Sheet for the payment of all Taxes not yet due and payable.

(iii)

No deficiency in respect of any Taxes which has been assessed against UniverCell remains unpaid, except for Taxes being contested in good faith, UniverCell has no knowledge of any unassessed Tax deficiencies or of any audits or investigations pending or threatened against UniverCell with respect to any Taxes.

(iv)

UniverCell has not extended or waived the application of any applicable statute of limitations of any jurisdiction regarding the assessment or collection of any Tax or any Tax Return.

(v)

There are no liens for Taxes upon any assets of UniverCell except for liens for current Taxes not yet due.

(vi)

UniverCell has to its knowledge (A) complied with all provisions of the Code relating to the withholding and payment of Taxes and (B) has made all deposits required by applicable Law to be made with respect to employees' withholding and other payroll, employment or other withholding or related Taxes.

(vii)

UniverCell is not a party to any contract, agreement, plan or arrangement that, individually or in the aggregate, or when taken together with any payment that may be made under this Agreement or any agreements contemplated hereby, could give rise to the payment of any “excess parachute payment” within the meaning of Section 280G of the Code.

 

10

 

 

(viii)

UniverCell is not a party to any agreement relating to the allocating or sharing of the payment of, or liability for, Taxes for any period (or portion thereof).

(ix)

To UniverCell's knowledge, except for the group of which UniverCell is presently the ultimate parent, UniverCell has never been a member of an affiliated group of corporations (within the meaning of Section 1504 of the Code).

(g)

Title to Assets and Related Matters. UniverCell has good and marketable title to the UniverCell Assets, free from any Encumbrances except (i) items described in any notes to the consolidated financial statements of UniverCell contained in UniverCell's Financial Statements, (ii) minor matters that would not have a Material Adverse Effect, and (iii) constitutional and statutory liens arising from the obligation to pay for the provision of materials or services not yet in Default and Taxes not yet due..

(h)

Real Property. UniverCell has never owned, and does not presently lease any real estate.  

(i)

Legal Proceedings; Compliance with Law; Governmental Permits.

(i)

Except as set forth in Schedule 4(i), there is no Litigation that is pending or, to UniverCell's knowledge, threatened against UniverCell. UniverCell is and has been in compliance with all applicable Laws, including Environmental Laws and applicable securities laws, except where the failure to be in compliance would not have a Material Adverse Effect. There has been no Default under any Laws applicable to UniverCell, including Environmental Laws except for any Defaults that have not had or would not have a Material Adverse Effect. There has been no Default with respect to any Court Order applicable to UniverCell. UniverCell has not received any written notice and no other communication has been received to the effect that it is not in compliance with any applicable Laws, and UniverCell has no reason to believe that any presently existing circumstances are likely to result in violations of any applicable Laws .

(ii)

To UniverCell’s knowledge, there is no Environmental Condition at any property formerly leased by UniverCell.

(iii)

UniverCell has all material consents, permits, franchises, licenses, concessions, registrations, certificates of occupancy, approvals and other authorizations of Governmental Authorities (collectively, the “Governmental Permits”) required in connection with the operation of its business as now being conducted, all of which are in full force and effect. UniverCell has complied, in all material respects, with all of its Governmental Permits.  The execution, delivery and performance of this Agreement and the consummation of the Transactions contemplated hereby will not (A) result in or give to any Person any right of termination, non-renewal, cancellation, acceleration or modification in or with respect to any such Governmental Permit, (B) result in or give to any Person any additional rights or entitlement to increased, additional, accelerated or guaranteed payments under any such Governmental Permit, or (C) result in any Encumbrance upon UniverCell or any of its Assets under the terms of any Governmental Permit.

(j)

Patents, Trademarks, etc. To UniverCell's knowledge, UniverCell has not infringed upon or unlawfully or wrongfully used any Intellectual Property owned or claimed by another Person. UniverCell has no Intellectual Property and has no business operations.

 

11

 

 

(k)

Absence of Certain Changes. Since the UniverCell Balance Sheet Date, UniverCell has conducted the UniverCell Business in the ordinary course and, except as disclosed in UniverCell’s SEC filings, there has not been:

(i)

any Material Adverse Effect on the UniverCell Business;

(ii)

any distribution or payment declared or made in respect of UniverCell's capital stock by way of dividends, purchase or redemption of shares or otherwise;

(iii)

any increase in the compensation payable or to become payable to any current director or officer of UniverCell, except for merit and seniority increases for employees made in the ordinary course of business consistent with past practices, nor any material change in any existing employment, severance, consulting arrangements or any UniverCell Benefit Plan;

(iv)

any sale, assignment or transfer of any UniverCell Assets, or any additions to or transactions involving any UniverCell Assets, other than those made in the ordinary course of business;

(v)

other than in the ordinary course of business, any waiver or release of any material claim or right or cancellation of any material debt held by UniverCell;

(vi)

any change in practice with respect to Taxes, or any election, change of any election, or revocation of any election with respect to Taxes, or any settlement or compromise of any dispute involving a Tax liability;

(vii)

(A) any creation, or assumption of, any long-term debt or any short-term debt for borrowed money other than under existing notes payable, lines of credit or other credit facility or in the ordinary course of business, (B) any assumption, granting of guarantees, endorsements or otherwise becoming liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, or (C) any loans, advances or capital contributions to, or investments in, any other Person;

(viii)

any material agreement, commitment or contract except agreements, commitments or contracts for the purchase, sale or lease of goods or services in the ordinary course of business;

(ix)

other than in the ordinary course of business, any authorization, recommendation, proposal or announcement of an intention to authorize, recommend or propose, or enter into any Contract with respect to, any (A) plan of liquidation or dissolution, (B) acquisition of a material amount of assets or securities, (C) disposition or Encumbrance of a material amount of assets or securities, (D) merger or consolidation, or (E) material change in its capitalization; or

(x)

any change in accounting procedure or practice.

(l)

Corporate Records. The minute books of UniverCell and the Merger Subsidiary contain accurate, complete and current copies of all Charter Documents and Bylaws, including all amendments thereto, and of all minutes of meetings, resolutions and other proceedings of their Board of Directors and shareholders.

 

12

 

 

(m)

Finder's Fees. No Person is or will be entitled to any commission, finder's fee or other payment in connection with the Transactions based on arrangements made by or on behalf of any of the UniverCell Parties.

(n)

Insurance . UniverCell has no insurance.

(o)

Affiliate Transactions .

(i)

Schedule 4(o) contains a complete and correct list of (A) all agreements, contracts, arrangements, understandings, transfers of assets or liabilities or other commitments or transactions, whether or not entered into in the ordinary course of business, to or by which UniverCell, on the one hand, and any director or officer of UniverCell or any Affiliate of a director or officer of UniverCell, on the other hand, are a party or are otherwise bound or affected, and that are currently pending or in effect and (B) all agreements, contracts, arrangements, understandings, transfers of assets or liabilities or other commitments or transactions, whether or not entered into in the ordinary course of business, to or by UniverCell, on the one hand, and any employee or consultant of UniverCell or any of its Affiliates or any Affiliate of any such employee or consultant, on the other hand, which, individually or in the aggregate, are material to UniverCell’s business.  Each item set forth on Schedule 4(o) has been entered into the normal and ordinary course of UniverCell’s business and pursuant to the reasonable requirements thereof, and is based upon fair and reasonable terms no less favorable to UniverCell than it could have obtained in a comparable arm’s-length transaction with an unaffiliated Person.

(ii)

Except as disclosed in UniverCell’s SEC filings, no director, officer, employee or consultant of UniverCell or any Affiliate of a director, officer, employee or consultant of UniverCell, (A) owns, directly or indirectly, and whether on an individual, joint or other basis, any material financial interest in (1) any property or asset, real or personal, tangible or intangible, used in or held for use in connection with or pertaining to the UniverCell Business, or (2) any Person, that is a supplier, client or competitor of UniverCell, (B) serves as an officer, director, employee or consultant of any Person that is a supplier, client or competitor of UniverCell, or (C) is a debtor or creditor of UniverCell.

(p)

Employees and Labor Matters . UniverCell has no employees other than its President. UniverCell has previously furnished Recall a copy of its employment agreement with its President.  Such employment agreement will terminate at the Effective Time of the Merger.  UniverCell has complied in all material respects with all applicable Laws pertaining to the employment or termination of employment of its employees, including, without limitation, all such Laws relating to labor relations, equal employment opportunities, fair employment practices, prohibited discrimination or distinction and other similar employment activities.

(i)

UniverCell has no Benefit Plans.

(ii)

Each Benefit Plan previously maintained had been operated and administered in all material respects in accordance with its terms and applicable Law, including, without limitation, ERISA and the Code.  All contributions to and payments from the Benefit Plans were timely made.  All returns, reports and disclosures required to be made under ERISA, the Code or any other applicable Law with respect to the Benefit Plans were timely filed or

 

13

 

 

made, and all statements made on such returns, reports and disclosures were true and complete in all material respects.

(iii)

UniverCell has not at any time in the past, sponsored, participated in or contributed to, and does not have any current or contingent obligations or liabilities whatsoever with respect to any: (A) “defined benefit plan” within the meaning of Section 3(35) of ERISA subject to Title IV of ERISA or the minimum funding requirements of Code Section 412; (B) “multiemployer plan” within the meaning of Section 401(a)(3) of ERISA; (C) “I” within the meaning of Code Section 419; or (D) plan or arrangement that provides post retirement medical benefits (except to the extent required by Code Section 4980B or Part 6 of Subtitle B of Title I of ERISA (“COBRA”) or similar state law), post retirement death benefits or post retirement welfare benefits of any kind whatsoever.

(iv)

All contributions and payments of insurance premiums required to be made with respect to the Benefit Plans have been fully paid in such a manner as not to cause any interest, penalties or other amounts that have not been satisfied or discharged to be assessed against UniverCell with respect thereto.

(v)

UniverCell has complied in all material respects with the continuation coverage requirements under COBRA, and similar state law, applicable to any of the Benefit Plans.

(vi)

There has been no “prohibited transaction” or “reportable event” within the meaning of the Code or ERISA within the last sixty (60) months, or breach of fiduciary duty with respect to any of the Benefit Plans that could subject UniverCell, the Surviving Corporation or any of the Affiliates of UniverCell or the Surviving Corporation, or any of their respective ERISA Affiliates, to any tax, penalty or other liability under the Code or ERISA.

(vii)

There is no Litigation nor are there claims with respect to any of the Benefit Plans pending or, to the knowledge of UniverCell, threatened, and to the knowledge of UniverCell, there are no facts, events, conditions or circumstances that could give rise to any such Litigation or claim (other than routine claims for benefits from eligible participants or beneficiaries in the normal and ordinary course).  No Benefit Plan is the subject of any pending or, to UniverCell’s knowledge, threatened investigation or audit by the IRS, the U.S. Department of Labor or the Pension Benefit Guaranty Corporation or any other Governmental Authority.

(viii)

None of UniverCell or any of its employees, officers or directors, or any other Person has made any statement or communication or provided any materials to any employee or former employee of UniverCell that provides for or could be construed as a contract, agreement or commitment by UniverCell or the Surviving Corporation or any of their Affiliates to provide for any pension, welfare, or other employee benefit or fringe benefit plan or arrangement to any such employee or former employee, whether before or after retirement or separation or otherwise.

(ix)

To UniverCell’s knowledge, no event or condition exists or is likely to arise by virtue of the Merger or other Transactions contemplated by this Agreement with respect to any of the employees of UniverCell or any of the Benefit Plans which could reasonably be

 

14

 

 

likely to result in any liability to UniverCell or the Surviving Corporation which could reasonably be expected to have a Material Adverse Effect.

(q)

Business Practices .  Neither UniverCell nor, to the knowledge of UniverCell, any of its directors, officers, agents, employees or representatives in their capacities as such has: (i) used any funds for unlawful contributions, unlawful gifts, unlawful entertainment or other unlawful expenses relating to political activity; (ii) directly or indirectly paid or delivered any fee, commission or other sum of money or item of property, however characterized, to any finder, agent or other party acting on behalf of or under the auspices of a governmental official or Governmental Authority, in the United States or any other country, which is in any manner related to UniverCell’s business that was illegal under any federal, state or local laws of the United States or any other country having jurisdiction; (iii) made any payment to any customer or subcontractor of UniverCell’s business or to any officer, director, partner, employee or agent of any such customer or subcontractor, for the unlawful influence of any such customer or subcontractor or any such officer, director, partner, employee or agent; (iv) engaged in any other unlawful reciprocal practice, or made any other unlawful payment or given any other unlawful consideration to any such customer or subcontractor any such officer, director, partner, employee or agent, in respect of UniverCell’s business; or (v) violated any federal, state or local campaign finance, election or similar laws.

(r)

Accuracy and Completeness of Information .  All information furnished, to be furnished or caused to be furnished to Recall by or on behalf of the UniverCell Parties for the purposes of or in connection with this Agreement, or the Transactions contemplated by this Agreement is or, if furnished after the date of this Agreement, shall be true and complete in all material respects and does not, and, if furnished after the date of this Agreement, shall not, contain any untrue statement of material fact or fail to state any material fact necessary to make such information not misleading.

(s)

Ownership of Merger Subsidiary; No Prior Activities. The Merger Subsidiary is a Wholly-Owned Subsidiary of UniverCell created solely for the purpose of effecting the Merger. As of the date hereof and the Effective Time of the Merger, except for Liabilities incurred in connection with its incorporation or organization and the Transactions and except for this Agreement and the other Transaction Documents, the Merger Subsidiary has not, nor will not, through the Effective Time of the Merger, directly or indirectly, through any Subsidiary or Affiliate of UniverCell, have any material Liabilities, engage in any material business activities of any type or kind whatsoever or enter into any agreements or arrangements with any Person.

5.

Representations and Warranties of Recall and the Controlling Recall Shareholders.

 Recall and each of the Controlling Recall Shareholders jointly and severally represent and warrant to UniverCell as follows, except as otherwise set forth in Schedules to this Agreement (items disclosed in one Section of such Schedules shall apply to all other Sections unless specified otherwise):

(a)

Corporate. Recall is a corporation duly organized, validly existing and in good standing under the Laws of the State of Delaware. Recall is qualified to do business as a foreign corporation in any jurisdiction where it is required to be so qualified, except where the failure to be so qualified would not have a Material Adverse Effect. The Charter Documents and Bylaws

 

15

 

 

of Recall (all of which have been delivered or made available to UniverCell) have been duly adopted and are current, true, correct and complete and are in full force and effect. Recall has all necessary corporate power and authority to own, lease and operate the Recall Assets and to carry on the Recall Business as it is now being conducted. Recall’s only Subsidiary is EmailEmissary, Inc., an Oklahoma corporation.  

(b)

Authorization. Recall has the requisite corporate power and authority to execute and deliver this Agreement and each of the other Transaction Documents to which it is a party and to perform the Transactions to be performed by it. Such execution, delivery and performance by Recall have been duly authorized by all necessary corporate action, other than the approval of this Agreement and the consummation of the Merger is subject to the approval of the holders of a majority of the outstanding shares of Recall Common Stock. Each Transaction Document executed and delivered by each of the Recall Parties as of the date hereof has been duly executed and delivered by such Recall Party and constitutes a valid and binding obligation of such Recall Party enforceable against such Recall Party in accordance with its terms, and any Transaction Document executed and delivered by each Recall Party after the date hereof will be duly executed and delivered by such Recall Party and will constitute a valid and binding obligation of such Recall Party, enforceable against such Recall Party in accordance with its terms, except as otherwise limited by bankruptcy, insolvency, reorganization and other laws affecting creditors rights generally, and except that the remedy of specific performance or other equitable relief is available only at the discretion of the court before which enforcement is sought.

(c)

  Validity of Contemplated Transactions. Except for (i) compliance with the Securities Act, the Exchange Act and applicable state securities Laws, and (ii) the filing of the Certificate of Merger with the Secretary of State of the State of Delaware, and such other documents as are necessary to effect the Transactions contemplated herein with the Secretary of State of the State of Florida, neither the execution and delivery by each Recall Party of the Transaction Documents to which it, he or she is or will be a party, nor the performance of the Transactions to be performed by it, him or her, will require any filing, consent or approval under or constitute a Default, or result in a loss of material benefit under, (A) any Law or Court Order applicable to any Recall Party or any of their properties or assets, (B) the Charter Documents or Bylaws of Recall, or (C) any Contracts to which any Recall Party is a party or by which any of their properties or assets may be bound.

(d)

Capitalization and Stock Ownership. The total authorized capital stock of Recall consists of 50,000,000 shares of Recall Common Stock. Of such authorized capital stock, the only issued and outstanding shares on the date hereof are 43,416,800 shares of Recall Common Stock. Except for subscriptions for the purchase of shares of Recall Common Stock received by Recall in its ongoing private placement, there are no existing options, warrants, calls, commitments or other rights of any character (including conversion or preemptive rights) relating to the acquisition of any issued or unissued capital stock or other securities of Recall. All of the issued and outstanding shares of Recall Common Stock are validly issued, fully paid and non-assessable.  

(e)

Recall Financial Statements. The audited balance sheet at December 31, 2004 and the related audited statements of income, cash flows, and stockholder's equity for the period

 

16

 

 

ending December 31, 2004 (the “Recall Financial Statements”) will be delivered to UniverCell prior to the Effective Time.  The Recall Financial Statements will be derived from the accounting books and records of Recall and will have been prepared in accordance with GAAP applied on a consistent basis throughout the periods presented in the Recall Financial Statements (except for changes in accounting principles disclosed in the notes thereto).  The balance sheet included in the Recall Financial Statements will present fairly the financial position of Recall as at the date thereof, and the statements of income, statements of shareholder’s equity and statements of cash flows to be included in such Recall Financial Statements will present fairly the results of operations and cash flows of Recall for the periods indicated.  There have not been any material adverse changes in the financial position or condition of Recall since December 31, 2004. For purposes of this Agreement, the balance sheet of Recall as of December 31, 2004 is referred to as the “Recall Balance Sheet” and the date thereof is referred to as the “Recall Balance Sheet Date.”

(f)

Taxes.

(i)

Recall (i) has filed (or, in the case of Tax Returns not yet due, will file) with the appropriate governmental agencies all material Tax Returns required to be filed on or before the Effective Time and all such Tax Returns filed were true, correct and complete in all material respects, and (ii) has paid (or, in the case of Taxes not yet due, will pay), all Taxes shown on such Tax Returns.

(ii)

Recall has (i) duly paid or caused to be paid all material Taxes and all Taxes shown on Tax Returns that are or were due, except to the extent that a sufficient reserve for Taxes has been reflected on the Recall Balance Sheet and (ii) provided a sufficient reserve on the Recall Balance Sheet for the payment of all Taxes not yet due and payable.

(iii)

No deficiency in respect of any Taxes which has been assessed against Recall remains unpaid, except for Taxes being contested in good faith, and Recall has no knowledge of any unassessed Tax deficiencies or of any audits or investigations pending or threatened against Recall with respect to any Taxes.

(iv)

Recall has not extended or waived the application of any applicable statute of limitations of any jurisdiction regarding the assessment or collection of any Tax or any Tax Return.

(v)

There are no liens for Taxes upon any assets of Recall except for liens for current Taxes not yet due.

(vi)

Recall has to its knowledge (i) complied with all material provisions of the Code relating to the withholding and payment of Taxes and (ii) has made all deposits required by applicable Law to be made with respect to employees' withholding and other payroll, employment or other withholding or related Taxes.

(vii)

Recall is not a party to any contract, agreement, plan or arrangement that, individually or in the aggregate, or when taken together with any payment that may be made under this Agreement or any agreements contemplated hereby, could give rise to the payment of any “excess parachute payment” within the meaning of Section 280G of the Code.

 

17

 

 

(viii)

Recall is not a party to any agreement relating to the allocating or sharing of the payment of, or liability for, Taxes for any period (or portion thereof).

(ix)

To Recall's knowledge, Recall has never been a member of an affiliated group of corporations (within the meaning of Section 1504 of the Code).

(g)

Title to Assets and Related Matters. Recall has good and marketable title to the Recall Assets, free from any Encumbrances except (a) items described in any notes to the consolidated financial statements of Recall contained in Recall's Financial Statements, (b) minor matters that would not have a Material Adverse Effect, and (c) constitutional and statutory liens arising from the obligation to pay for the provision of materials or services not yet in Default and Taxes not yet due.

(h)

Real Property. All material real estate leased by Recall as of the date hereof and used in the operation of the Recall Business will be disclosed in the Recall Financial Statements. Each such lease is referred to herein as a “Lease.” The Leases constitute all of the leasehold interests in real property used or held for in connection with, necessary for the conduct of, or otherwise material to, Recall’s Business. As of the date hereof, Recall does not own any real property.

(i)

Recall has delivered to UniverCell correct and complete copies of the Leases.  Each Lease is legal, valid, binding, in full force and effect and enforceable against each party thereto, except to the extent that any failure to be so enforceable, individually and in the aggregate, has not had or resulted in and could not reasonably be expected to have or result in a Material Adverse Effect.  Recall is not in default, violation or breach in any material respect under any Lease, and to Recall’s knowledge, no event has occurred and is continuing that constitutes or, with notice or the passage of time or both, would constitute a default, violation or breach in any respect under any Lease that could reasonably be expected to have a Material Adverse Effect.  Each Lease grants the tenant under the Lease the exclusive right to use and occupy the premises and rights demised and intended to be demised thereunder.  Recall has good and valid title to the leasehold estate under the Leases free and clear of any Liens. Recall enjoys peaceful and undisturbed possession under the Leases.

(ii)

No Proceedings .  There are no proceedings in eminent domain or other similar proceedings pending or, to the knowledge of Recall, threatened, affecting any portion of the property subject to the Leases.  There exists no writ, injunction, decree, order or judgment outstanding, n