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,
would become a
default) under, or give to others any rights of terminatio
