ASSET CONTRIBUTION AND STOCK PURCHASE AGREEMENT

 

                                                                       EXHIBIT 2

 

 

                 ASSET CONTRIBUTION AND STOCK PURCHASE AGREEMENT

 

         THIS ASSET  CONTRIBUTION AND STOCK PURCHASE AGREEMENT (THE "AGREEMENT")

is entered  into  effective  as of the __ day of January,  2004,  by and between

LINCOLN INTERNATIONAL CORPORATION, A KENTUCKY corporation ("Lincoln"), and AUSA,

INC., a Kentucky corporation ("AUSA").

 

                  WHEREAS,  Lincoln desires to contribute,  assign, transfer and

deliver to AUSA all of  Lincoln's  right,  title and  interest  to the assets of

Lincoln in consideration of AUSA's obligations hereunder.

 

         NOW,  THEREFORE,  in consideration  of the covenants,  representations,

conditions  and  agreements  set forth  herein and for other  good and  valuable

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

parties hereto agree as follows:

 

                                   ARTICLE I

 

            ASSET CONTRIBUTION AND PURCHASE AND SALE OF COMMON STOCK

 

         1.1  CONTRIBUTION.  Contemporaneously  with the  execution and delivery

hereof,  and upon the terms and  conditions  hereof,  Lincoln shall  contribute,

assign,  transfer and deliver to AUSA,  and AUSA shall accept,  all of Lincoln's

right,  title  and  interest  in and  to all  the  assets,  properties,  rights,

licenses,   permits,   contracts,  causes  of  action,  claims,  operations  and

businesses  of  Lincoln  of every  kind and  description  which  are owned by or

licensed  to Lincoln as the same shall  exist on the  Closing  Date (as  defined

herein),  other than the Retained Assets (defined below) or any of the foregoing

that relate solely to the Retained Assets, wherever located, whether tangible or

intangible,  personal or mixed,  that are owned by, leased by, licensed to or in

the possession of Lincoln,  whether or not reflected on the books and records of

Lincoln  (the  collective  assets,   properties,   rights,  licenses,   permits,

contracts, causes of action, claims, operations and businesses to be transferred

to AUSA by Lincoln  pursuant hereto are referred to  collectively  herein as the

"PURCHASED  ASSETS." For purposes hereof,  the term "Retained  Assets" means (i)

all cash on hand,  (ii) all  amounts  credit in any  checking,  savings or other

account with any financial  institution  in the name of "Lincoln  International"

(as opposed to accounts  in the name of  "Accounting  USA" which are part of the

Purchased  Assets) excepting $25,000 which shall be part of the Purchased Assets

and shall be transferred by Lincoln to AUSA at the Closing, (iii) checks payable

to "Lincoln  International" (as opposed to "Accounting USA") received by Lincoln

prior to the date hereof,  (iv) checks payable to "Lincoln  International"  that

have been deposited by Lincoln with any financial institution, but have not been

collected  as well as all  rights  of  Lincoln  as an  entity  regulated  by the

Securities and Exchange Commission and its rights to be listed or registered for

trading on any market and its registrations  with the SEC, National  Association

of Securities  Dealers and/or any State governmental  entities.  For purposes of

this Agreement, the Purchased Assets shall include without limitation:

 

                  (a) all trade  fixtures,  machinery  and  equipment,  computer

equipment  (including  hardware and  software),  office  equipment and supplies,

other supplies, furniture, parts, fuel and other tangible personal property (and

interests in any of the foregoing) owned or used (whether or not currently used)

 

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by Lincoln (the "PERSONAL PROPERTY"), and any additions or accessions thereto or

substitutions therefor or proceeds thereof;

 

                  (b) any real  property  and  interests  in real  property  and

buildings,   structures   and   improvements   thereon   (including   easements,

rights-of-way, water rights, tenements, hereditaments,  appurtenances,  fixtures

and other real property rights appertaining  thereto) leased or owned by Lincoln

(the "REAL PROPERTY");

 

                  (c) all  right,  title  and  interest  of  Lincoln  under  all

contracts,  agreements,  understandings,  options,  leases,  licenses, sales and

purchase  orders,  commitments  and other  instruments  of any kind  whatsoever,

whether  written  or  oral,  and  all   non-disclosure,   non-solicitation   and

non-competition  agreements  entered into with current and former  employees of,

and consultants to, the Company together with all rights of refund, discount (to

the extent transferable or assignable) and offset and all privileges,  deposits,

claims,  causes of action  and  options  relating  or  pertaining  thereto  (the

"CONTRACTS");

 

                  (d) (i) all United States (including the individual states and

territories of the United States) and foreign  registered  patents,  trademarks,

service marks and trade names (including,  without  limitation,  the name "AUSA,

Inc.");  unregistered  trademarks (including trade dress), patent, service marks

and trade names;  trademark;  service mark and trade name applications;  product

designations; internet domain names; designs; manufacturing processes; formulae;

software;  trade secrets;  registered  copyrights;  and unregistered  copyrights

(along with all  transferable  license  rights  pertaining  thereto);  and other

intellectual  property  belonging to, used in or pertaining to Lincoln,  and the

goodwill  and going  concern  value of  Lincoln  in  connection  therewith  (the

"INTELLECTUAL PROPERTY");

 

                  (e)   all  of  the   federal,   state   and   local   permits,

authorizations,  certificates, approvals, registrations,  variances, exceptions,

franchises,  grants  and  license  of every  kind and  character  to the  extent

assignment  thereof to AUSA is permitted by  applicable  law (the  "LICENSES AND

PERMITS");

 

                  (f) all prepaid charges and expenses of Lincoln, including any

such charges and expenses with respect to ad valorem  taxes,  leases and rentals

and utilities (the "PREPAID EXPENSES");

 

                  (g) all rights of Lincoln to insurance  proceeds  with respect

to claims for damages to the  Purchased  Assets  occurring  prior to the Closing

Date,  unless such proceeds (i) reimburse  Lincoln for repair or  restoration of

such  Purchased  Assets  prior to the Closing  Date or (ii) do not relate to the

replacement or restoration of Purchased Assets;

 

                  (h) all of Lincoln's rights, claims, credits, causes of action

or rights of set-off against third, whether liquidated or unliquidated, fixed or

contingent,  including  claims pursuant to all warranties,  representations  and

guarantees made by suppliers, manufacturers, contractors and other third parties

in connection with products or services purchased by or furnished to Lincoln for

or affecting any of the Purchased Assets;

 

                  (i) all  goodwill  associated  with  Lincoln or the  Purchased

Assets;

 

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                  (j) all  other or  additional  privileges,  rights,  interest,

properties  and assets owned by Lincoln of every kind and  description  wherever

located  that are  used or  intended  for use in  connection  with,  or that are

necessary  to or useful in the  continued  conduct of, the Business as presently

being conducted other than Retained Assets.

 

         1.2 CONTRIBUTION  CONSIDERATION.  At the Closing  (defined  below),  as

consideration for the contribution of the Purchased  Assets,  AUSA shall deliver

to Lincoln a stock certificate  evidencing 2,608 shares of validly issued, fully

paid and  non-assessable  shares of Common Stock, no par value (the "Shares") of

AUSA.

 

         1.3 THE  CLOSING.  The  closing of the  contribution  of the  Purchased

Assets (the  "Closing") and the issuance and sale of the Shares shall take place

at the offices of Pedley Zielke  Gordinier & Pence,  PLLC, 2000 Meidinger Tower,

462 South Fourth  Avenue,  Louisville,  Kentucky 40202 or at such other place as

the parties may  mutually  agree.  The Closing  shall be deemed  effective as of

11:59 p.m. on the date of the Closing (the "Closing Date").  Notwithstanding the

foregoing,  all  deliveries,  payments  and  other  transactions  and  documents

relating  to the  Closing  shall  be  interdependent  and none  shall be  deemed

effective  unless and until all are  effective  (except  to the extent  that the

party  entitled to the benefit  thereof has waived  satisfaction  or performance

thereof as a  condition  precedent  to the  Closing),  and shall be deemed to be

consummated simultaneously.

 

         1.4  ASSUMPTION  OF  LIABILITIES.  In addition  to the  issuance of the

Shares, as additional consideration for the contribution of the Purchased Assets

and in reliance upon the  representations,  warranties  and agreements set forth

herein,  AUSA shall assume all the  liabilities  of Lincoln  (collectively,  the

"Assumed  Liabilities")  existing  on the Closing  Date other than the  Retained

Liabilities  (as defined below).  For purposes  hereof,  "Retained  Liabilities"

shall mean  liabilities  maintained  in the name of Lincoln and not  incurred in

connection with the operations of its Accounting USA division, including without

limitation, Lincoln's accounting and audit fees, legal fees, operating expenses,

contingent liabilities and bank debt.

 

         1.5 RETAINED  LIABILITIES.  AUSA does not assume,  and shall not at any

time  hereafter  (including on or after the Closing Date) become liable for, any

liabilities  of  Lincoln  or any of  its  affiliates,  other  than  the  Assumed

Liabilities  (the  "RETAINED  Liabilities").  For the  avoidance  of doubt,  the

Retained Liabilities shall include only the following:

 

                  (a) any liability the existence of which  constitutes a breach

of any representation or warranty by Lincoln hereunder;

 

                  (b) all  liabilities  and  obligations  of Lincoln  under this

Agreement and any other agreement entered into in connection herewith; and

 

                  (c) any  liabilities  accruing  after  the  date  hereof  with

respect to any Retained Assets.

 

 

         1.6 ASSIGNMENT OF CERTAIN CONTRACTS.

 

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                  (a)  SCHEDULE  1.6 sets forth all  Contracts  which  require a

third party consent to assignment.  Nothing contained in this Agreement shall be

construed  as an attempt to agree to assign any  Contract  which is by its terms

non-assignable  without  the  consent of any other  party  thereto,  unless such

consent shall have been given. Lincoln shall use commercially reasonable efforts

to obtain all consents necessary to effect such assignment prior to the Closing.

If AUSA shall have elected to close the transactions contemplated hereby without

such  consent(s),  then  Lincoln  shall  continue  such  efforts to obtain  such

consent(s)  after the Closing  and Lincoln  shall  cooperate  with AUSA,  to the

maximum extent permitted by law and the specific  Contract and at Lincoln's cost

and  expense,  in any  reasonable  arrangement  designed (i) to provide the full

benefit of such  Contract to AUSA,  and (ii) to  facilitate  the  collection  of

monies as they become due and payable to Lincoln after the Closing Date pursuant

to every such Contract,  and Lincoln shall remit such monies to AUSA within five

(5) business days of collection.

 

                  (b)  AUSA,  at its  cost and  expense,  shall  perform  all of

Lincoln's  obligations due to be performed after the Closing Date under any such

non-assigned  Contract  that is included  among the Assumed  Liabilities  to the

extent (i) AUSA can perform such obligations without violating the terms of such

non-assigned  Contract,  and (ii) AUSA is being  provided  the  benefits of such

non-assigned  Contract.  To the extent Lincoln  continues its performance  under

such Contract for the benefit of AUSA,  AUSA shall pay all reasonable  costs and

expense of Lincoln's performance thereunder, and shall indemnify Lincoln for any

and all loss or expense  suffered or incurred by Lincoln  based upon,  resulting

from or arising out of its performance under such Contract, except to the extent

that such loss or expense  arises out of Lincoln's  willful  misconduct or gross

negligence.

 

         1.7  RELATED  AGREEMENTS  AND  OTHER  DELIVERIES.  In  addition  to the

foregoing, each of AUSA and Lincoln covenant and agree to execute the agreements

and make the deliveries described in Article V hereof at the Closing.

 

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                                   ARTICLE II

 

                    REPRESENTATIONS AND WARRANTIES OF LINCOLN

 

         Lincoln  represents  and warrants to AUSA,  which  representations  and

warranties  shall  survive the Closing in  accordance  with  Section 6.1, as set

forth below.

 

         2.1  ORGANIZATION  AND  QUALIFICATION.  Lincoln is a  corporation  duly

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

Commonwealth  of  Kentucky.  Lincoln  has  the  requisite  corporate  power  and

authority to carry on its business  utilizing the Purchased  Assets as it is now

being  conducted,  and is duly  qualified  or  licensed  to do  business in each

jurisdiction  where the  character of the  Purchased  Assets owned or held under

lease or the nature of its business  utilizing the  Purchased  Assets makes such

qualification  necessary,  except where the failure to be so qualified would not

reasonably be expected to have a Material  Adverse Effect.  A "Material  Adverse

Effect"  means a change in, or effect on, the  operations,  affairs,  prospects,

financial condition, results of operations, assets, liabilities, reserves or any

other aspect of the Purchased  Assets that results in a material  adverse effect

on, or a material adverse change in the Purchased Assets.

 

         2.2 AUTHORITY.  Lincoln has the necessary corporate power and authority

to execute and deliver this  Agreement  and all related  agreements  hereto (the

"Other Agreements") and to consummate the transactions  contemplated hereby. The

execution  and  delivery  of  this  Agreement  and  the   consummation   of  the

transactions   contemplated  hereby  by  Lincoln  have  been  duly  and  validly

authorized  and  approved by all  necessary  corporate  action of Lincoln and no

other corporate or stockholder  proceedings on the part of Lincoln, its Board of

Directors or  stockholders  are necessary to authorize or approve this Agreement

or to consummate the transactions  contemplated  hereby. This Agreement has been

duly  executed and  delivered by Lincoln  and,  assuming the due  authorization,

execution and delivery hereof by AUSA,  constitutes the legal, valid and binding

obligation of Lincoln, enforceable against Lincoln in accordance with its terms,

subject only to bankruptcy,  insolvency,  reorganization,  moratorium or similar

laws at the time in effect affecting the  enforceability  or rights of creditors

generally  and to  general  equitable  principles  which  may limit the right to

obtain equitable remedies.

 

         2.3  NO  CONFLICTS,  REQUIRED  FILINGS  AND  CONSENTS.  The  execution,

delivery and performance of this Agreement and all Other  Agreements by Lincoln,

the consummation by Lincoln of the transactions  contemplated hereby and thereby

and compliance by Lincoln with any of the provisions hereof do not and will not:

 

                  (a) conflict with or violate the Articles of  Incorporation or

bylaws of Lincoln;

 

                  (b) result in a material violation of any statute,  ordinance,

rule,  regulation,  order,  judgment  or decree  applicable  to  Lincoln  or the

Purchased Assets;

 

                  (c)  result in a  violation  or breach  of,  or  constitute  a

default (or an event that, with notice or lapse of time or both,