SHARE EXCHANGE AGREEMENT

 

 

                                                                     EXHIBIT 2.1

 

 

                            SHARE EXCHANGE AGREEMENT

 

         THIS SHARE EXCHANGE AGREEMENT (the "Agreement") is made and entered

into as of this ____ day of January, 2004 (the "Effective Date") by and between

TELS Corporation, a Utah corporation (the "Company") and, Hampton & Hampton,

P.A., a ______________ corporation, ("Hampton") and Von Hampton, the sole

shareholder of Hampton (the "Shareholder").

 

         WHEREAS, the respective Board of Directors of Hampton and the Company

deem the acquisition by the Company of all of the issued and outstanding capital

stock of Hampton on the terms set forth in this Agreement to be desirable,

generally to the welfare and advantage of each, and in the best interests of the

shareholders of each;

 

         NOW THEREFORE, in consideration of the mutual promises and the

covenants and promises hereinafter contained, and other good and valuable

consideration, the receipt and sufficiency of which are hereby acknowledged, the

parties hereto, intending to be legally bound hereby, agree as follows:

 

SECTION 1. EXCHANGE OF SHARES.

 

         1.1 Exchange. On the terms and subject to the conditions set forth in

this Agreement, at the Closing the Shareholder will sell, convey, transfer and

assign to the Company, and the Company will purchase and accept from the

Shareholder all right, title and interest in and to the issued and outstanding

shares of common stock of Hampton, owned by Shareholder in exchange for three

million shares of restricted common stock of the Company.

 

         1.2 Assets. As of the date of Closing, the assets of Hampton shall

consist of the Contracts, Intellectual Property, Tangible and Intangible Assets

and Records and Documents described in Section 1.2 (a) through (d) hereof

(collectively, the "Assets"), free and clear of all liens.

 

                  (a) Contracts. All rights and benefits of the Shareholder

under all agreements associated with the Assets, any and all other license and

other agreements (if any), including, without limitation, those set forth on

Schedule 1.2 (a). "Contracts" means all contracts, agreements and other

arrangements whether written or oral, to which Hampton is a party as to which

the breach, non-performance, failure to renew, or cancellation could have a

material adverse effect on the Assets.

 

                  (b) Intellectual Property. All rights, title and interest in

and to, all United States and foreign licenses, copyrights (registered and

unregistered) and copyright applications, and Computer Software and other rights

associated with the foregoing, existing now or in the future with respect to the

Assets, including, without limitation the right to sue for past infringement

thereof and all other proprietary rights that Hampton owns, licenses, or

possesses

 

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the right to use with respect to the Assets (collectively, the "Intellectual

Property"). The Intellectual Property is listed on Schedule 1.2 (b). "Computer

Software" means all computer source codes, programs, data files, and other

software (including both applications software and operating software),

including all machine readable code, printed listings of code, documentation,

and related property and information relating to the Assets.

 

                  (c) Tangible and Intangible Assets. All tangible and

intangible personal property rights of Hampton in and to the Assets (the

"Tangible and Intangible Assets"), which are reflected on Schedule1.2 (c).

 

                  (d) Records and Documents. All books, records, files, papers,

databases, and other data (whether such information is stored in print, on

electronic media, or pursuant to any audio or video recording) located at

Hampton's facilities or elsewhere in Hampton's custody or control (directly or

indirectly), or pertaining to the Assets, all of which are reflected on Schedule

1.2(d).

 

                  (e) Bank Accounts. Attached hereto as Schedule 1.2(e) is a

listing of all bank accounts and account numbers which are currently held by

Hampton The Shareholder shall take such steps as necessary in order for the

Company or its designees to be named as signatories.

 

                  (f) Financial Statements. Attached hereto as Schedule 1.2(f)

are the Financial statements for Hampton dated December 31, 2003. Said

statements have been prepared using Generally Accepted Accounting Principles.

These financial statements fairly present the financial position of Hampton as

of the dates set forth in the unaudited financial statements. The unaudited

financial statements have been prepared in conformity with generally accepted

accounting principles consistently applied and consistent with the books and

records of Hampton. There has been no material change in the financial condition

of Hampton since the date of the financial statements. All known liabilities of

the Company are set forth in the financial statements and there are not

undisclosed liabilities of any kind or nature.

 

         If the December 31, 2003 audited financial statements reflect a

material change in the financial condition of Hampton from that which was

previously represented in the unaudited December 31, 2003 financial statements

which have previously been delivered to the Company, the Company may, in its

sole and absolute discretion choose not to proceed with Closing and this

Agreement will be of no further force or effect and each party shall be liable

for their respective costs. Notwithstanding the foregoing, it is agreed and

understood that following closing Hampton will forgive the outstanding account

receivable from the Shareholder.

 

         1.3 Closing Date. The closing ("Closing") shall occur on or before

January ___, 2004 (the "Closing Date"). The Closing will take place at 10:00

a.m. at the offices of Newman, Pollock & Klein, LLP, 2101 NW Corporate Blvd.,

Suite 414, Boca Raton, FL 33431, or, at such other date, time and place or

manner, as may be agreed upon by the parties.

 

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          1.4       Delivery of Shares.

 

                  (a) At the Closing, the Shareholder shall deliver to the

Company a validly issued certificate representing the Hampton Shares duly

endorsed in blank or accompanied by stock powers duly executed in blank, with

all necessary stock transfer stamps affixed.

 

                  (b) At the Closing, the Company shall deliver to the

Shareholder a validly issued certificate representing the TELS Shares duly

endorsed in blank or accompanied by stock powers duly executed in blank, with

all necessary stock transfer stamps affixed.

 

SECTION 2. PURCHASE PRICE.

 

         2.1 Purchase Price. The Company shall convey, transfer, assign three

million unregistered shares of common stock of the Company ("Common Stock") in

exchange for all of the issued and outstanding shares of common stock of Hampton

held by Shareholder. The shares of Common Stock may only be resold in the future

under Rules 144 or 144A under the Securities Act of 1933 (the "Securities Act"),

subject to compliance with all of the provisions of the Rules. Rule 144 provides

that securities may be resold after a one-year holding period from the date of

payment subject to compliance with the Rule. Among other things, an order to

sell the securities may only be placed after Form 144 has been mailed to the

Securities and Exchange Commission, the securities must be sold to or through a

broker-dealer, the volume limitations must be met (i.e., the greater of 1% of

the outstanding shares or the average weekly trading volume for the four weeks

preceding the filing of Form 144) and there can be no solicitation of any buy

orders. Rule 144A applies to sales to institutions which are "qualified

institutional buyers".

 

         The share certificate to be delivered to the law firm of Newman,

Pollock & Klein, LLP to be held in escrow subject to Hampton completing any and

all required audit requirements as set forth in this Agreement.

 

SECTION 3. REPRESENTATIONS AND WARRANTIES.

 

         3.1 Hampton and Shareholder's Representations and Warranties. Hampton

and the Shareholder hereby represent and warrant to the Company, all of which

representations and warranties are true, complete, and correct in all respects

as of the date hereof and will be as of the Closing Date, as follows:

 

                   (a) Organization and Qualification. Hampton is a corporation

duly organized, validly existing and in good standing under the laws of the

jurisdiction of its incorporation. Hampton has all requisite power and authority

to own those properties and conduct those businesses presently owned or

conducted by it, and is duly qualified to do business as it is now being

conducted and is in good standing as a foreign corporation in each other

jurisdiction where the property owned, leased or used by it or the conduct of

its business makes such qualification necessary. The copies of the articles of

incorporation and bylaws of Hampton, which have been (or will be, at least two

days before the Closing Date) delivered to the Company, are complete

 

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and correct and are in full force and effect at the date hereof. There are, and

at the Closing will be, no outstanding subscriptions, options, warrants,

convertible securities, calls, commitments or agreements calling for or

requiring issuance or transfer, sale or other disposition of any shares of

capital stock of the Company or calling for or requiring the issuance of any

securities or rights convertible into or exchangeable (including on a contingent

basis) for shares of capital stock.

 

                  (b) Authorization; No Restrictions, Consents or Approvals.

Hampton and the Shareholder have full power and authority to enter into and

perform this Agreement. This Agreement has been duly executed by Hampton and the

Shareholder and constitutes the legal, valid, binding and enforceable obligation

of Hampton and the Shareholder, enforceable against Hampton and the Shareholder

in accordance with its terms. The execution and delivery of this Agreement, the

exchange of Shares and the consummation by Hampton of the transactions

contemplated herein, do not and will not on the Closing Date (i) conflict with

or violate any of the terms of the articles of incorporation and bylaws of

Hampton or any applicable law relating to the Shareholder or Hampton, (ii)

conflict with, or result in a breach of any of the terms of, or result in the

acceleration of any indebtedness or obligations under, any agreement, obligation

or instrument by which the Shareholder or Hampton is bound or to which any

property of the Shareholder or Hampton is subject, or constitute a default

thereunder, (iii) result in the creation or imposition of any lien on any of the

assets of the Shareholder or Hampton, (iv) constitute an event permitting

termination of any agreement or instrument to which the Shareholder or Hampton

is a party or by which any property or asset of the Shareholder or Hampton is

bound or affected, pursuant to the terms of such agreement or instrument, or (v)

conflict with, or result in or constitute a default under or breach or violation

of or grounds for termination of, any license, permit or other governmental

authorization to which the Shareholder or Hampton is a party or by which the

Shareholder or Hampton may be bound, or result in the violation by the

Shareholder or Hampton of any laws to which the Shareholder or Hampton may be

subject, which would materially adversely affect the transactions contemplated

herein. No authorization, consent or approval of, notice to, or filing with, any

public body or governmental authority or any other person is necessary or

required in connection with the execution and delivery by Hampton and the

Shareholder of this Agreement or the performance by Hampton or the Shareholder

of his obligations hereunder.

 

                   (c) Capitalization. The authorized capitalization of Hampton

consists of __________ shares of common stock, $ ____ par value, __________ of

which are issued and outstanding and owned by the Shareholder. There are, and at

the Closing will be no outstanding subscriptions, options, warrants, convertible

securities, calls, commitments or agreements calling for or requiring issuance

or transfer, sale or other disposition of any shares of capital stock of the

Company or calling for or requiring the issuance of any securities or rights

convertible into or exchangeable (including on a contingent basis) for shares of

capital stock. All of the outstanding shares of the Company are duly authorized,

validly issued, fully paid and non-assessable. There are no dividends due, to be

paid or are in arrears with respect to any of the capital stock of Company.

 

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                  (d) Subsidiaries. Hampton has no subsidiaries and does not own

any interest in any corporation, partnership, joint venture, limited liability

company, association, trust or entity.

 

                  (e) Brokers' Fees. Hampton has no liability or obligation to

pay any fees or commissions to any broker, finder, or agent with respect to the

transactions contemplated by this Agreement for which the Company could become

liable or obligated.

 

                  (f) Litigation. There are no actions, suits, proceedings, or

investigations pending or, to the best of its knowledge, threatened or

contemplated against Hampton

 

                  (g) Assets. Hampton has good and marketable title to the

Assets, free and clear of any lien, which Assets are reflected on Schedules 1.2

(a), (b), (c) and (d). Such Assets are not subject to any Contracts other than

those listed on Schedule 1.2 (a).

 

                  (h) Employees. Attached hereto as schedule 3.1(h) is a list of

all Hampton employees together with the salaries of each and any agreed to

benefit packages. Except as noted in the schedule, there are no outstanding

employment agreements which cannot be terminated on 30 days prior written

notice.

 

                  (i) No Material Adverse Change. Since the Hampton Balance

Sheet Date, there has not been any material adverse change in the condition,

financial or otherwise, of Hampton's business, nor has there been any material

transaction entered into by Hampton Hampton has not incurred any material

obligations, contingent or otherwise except for legal and accounting fees and

expenses in connection with the transactions contemplated by this Agreement.

 

                  (j) Disclosure. No statement, representation or warranty by

Hampton and the Shareholder in this Agreement, including the Schedules hereto,

contains any untrue statement of material fact, or omits to state a material

fact, necessary to make such statements, representations and warranties not

misleading. There is no fact known to Hampton or the Shareholder which has

specific application to the Assets, and, so far as Hampton and the Shareholder

can reasonably foresee, materially threatens in the future, the Assets which has

not been set forth in this Agreement or the Schedules hereto.

 

                  (k) Ownership of the Shares. The Shareholder owns 100% of the

issued and outstanding shares of stock of Hampton. These Shares are owned free

and clear of any liens or encumbrances and that the Shareholder is free to

transfer these Shares without the consent of any third party.

 

                  (l) Restricted Securities. The Shareholder understands that

(a) the TELS Shares to be received by the Shareholder hereunder are

characterized as "restricted securities" under the federal securities laws

inasmuch as such securities are being acquired from the Company in a transaction

not involving a public offering and that under such laws and applicable

 

 

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regulations such securities may be resold without registration under the

Securities Act only in certain limited circumstances and (b) the certificate(s)

representing the TELS Shares shall bear the following legends:

 

                           THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE

                  NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS

                  AMENDED. THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE

                  SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR A

                  WRITTEN OPINION OF COUNSEL, REASONABLY ACCEPTABLE TO THE

                  ISSUER IN FORM AND