SEPARATION AND DISTRIBUTION AGREEMENT
THIS
SEPARATION AND DISTRIBUTION AGREEMENT
(“Agreement”) is made as of May 25, 2007 by and between Bedminster National
Corp., a Nevada corporation (the “BNC”), and Bedminster Capital Corp., a
Nevada corporation and a wholly-owned subsidiary of Bedminster National
Corp. (“BNC”).
RECITALS
WHEREAS,
BNC has
decided to separate BCC’s business and to distribute the common stock of BCC on
a 1-for-1 basis to the holders of BNC Class A and Class B common stock (the
"Distribution");
WHEREAS,
on or
before ___, 2007 (the "Distribution Date"), BNC will transfer to the transfer
agent for the benefit of the holders of record of BNC Class A and Class B common
stock at the close of business on ___, 2007 (the "Record Date"), without any
consideration being paid by such holders, the shares of BCC Class A and Class
B
common stock then owned by BNC;
AGREEMENT
NOW,
THEREFORE,
in
consideration of the mutual promises contained herein, the parties hereby agree
as follows:
1.
THE PLAN OF DISTRIBUTION.
1.1
Transactions Prior to Distribution.
1.1.1
Assets and Liabilities of BCC; Other Transactions.
On or
prior to the date hereof, BNC and BCC shall maintain any and all assets and
liabilities owned by each entity. Neither BNC nor BCC will transfer any of
their
assets and liabilities pursuant to this Agreement.
1.1.2 Record
Date.
BNC’s
Board of Directors, or, if so directed by resolution of BNC’s Board of
Directors, a Committee appointed for such purposes (the “Committee”) shall set
the Record Date on which a record of BNC shareholders shall be taken so as
to
determine which shareholders shall be provided the Information Statement and
receive the Distribution.
1.1.3
Effective Date.
BNC
Board shall establish the Effective Date upon which the Distribution shall
take
place and the spin off shall be effective, provided that such date shall be
no
fewer than 20 days following the Record Date. In the event for any reason that
BNC Board determines to postpone the spin off, the Effective Date shall be
the
date rescheduled by BNC Board to be the date upon which the Distribution shall
take place.
1.1.4
Delivery of BCC Stock.
On or
prior to the Distribution Date, BNC will transfer to its transfer agent for
the
benefit of holders of record of BNC Class A and Class B common stock at the
close of business on the Record Date, the shares of BCC Class A and Class B
common stock then owned by BNC. Prior to the Distribution Date, the Parties
shall take such action with respect to the BCC Class A and Class B common stock
as is required to complete the Distribution on the basis of 1 share of BCC
Class
A and Class B common stock for every 1 share of BNC Class A and Class B common
stock outstanding at the close of business on the Record Date. BNC shall
instruct the transfer agent to distribute such BCC shares to the holders of
record of BNC Class A and Class B common stock at the close of business on
the
Record Date. All of the shares of BCC so issued shall be fully paid and
nonassessable. The Distribution shall be effective on the Distribution
Date.
1.2
The Distribution.
1.2.1
Distribution of BCC Stock. BNC
shall
as soon as practical after the Effective Date distribute to BNC shareholders
who
held BNC Class A and Class B common stock on the Record Date certificates
representing the shares of BCC Class A and Class B common stock held by BNC
on
the basis of 1 share of BCC Class A and Class B common stock for each 1 share
of
BNC Class A and Class B common stock held by such shareholder.
1.2.2
Conditions. The
consummation of this Agreement is subject to the following
conditions:
(a)
BNC and
BCC shall have obtained all orders, rulings, consents or approvals, governmental
or otherwise, necessary to permit them to perform this Agreement in accordance
with its terms.
(b)
On the
Effective Date, each party shall furnish to the other all such documents and
certificates, including assignments and conveyances, as shall, in the opinion
of
counsel, be required to consummate this Agreement.
1.3
Termination and Amendment. Notwithstanding
the approval of this Agreement by BNC Board and the BCC Board, at any time
prior
to the Effective Date, this Agreement may be terminated, or the Effective Date
may be delayed, by BNC Board acting in its sole discretion, and the terms hereof
may be amended by the mutual consent of BNC Board and the BCC
Board.
2.
PROVISION OF SERVICES AND SPECIFICATION OF ON-GOING
RELATIONSHIPS.
2.1
Services. The
following terms hereof shall apply with respect to the services to be provided
between and among the parties (collectively, “Services”).
2.1.1
General Assistance. From
and
after the Effective Date for a period of two (2) years, BNC and BCC shall
generally make their respective employees available to each other as necessary
to support the respective activities of each party in areas including, without
limitation, (a) advice and services relating to legal matters, (b) accounting,
(c) taxation and financial services, and (d) human resources.
2.1.2
Exceptions to Requirement to Provide Services. Neither
BNC nor BCC shall be obliged to provide Services to the other if:
(a)
doing so
would unreasonably interfere with the performance by any employee of services
for his employer or otherwise cause unreasonable burden on the party otherwise
obliged to provide Services;
(b)
it is
not in a position to provide the Services by reason of an absence of past
participation, involvement or familiarity with such matters or the absence
of
personnel competent to perform such services; or
(c)
the
performance of such Services present an unavoidable conflict of interest between
BNC and BCC.
2.1.3
Payment for Services. Each
party shall be entitled to receive payment from the other party for the
reasonable costs and expenses of providing such services.
2.2
Access to Information and Witnesses.
Subsequent
to the Distribution, each of BNC and BCC may have in its possession or under
its
control (or the control of persons or firms which have rendered services to
or
otherwise done business with it) books, records, contracts, instruments, data
and other information (collectively, “Information”) which may prove necessary to
the other in connection with the other's business. Accordingly, at all times
subsequent to the Record Date, (i) BNC agrees to provide to BCC, and BCC agrees
to provide to BNC, upon the other's request, at all reasonable times, full
and
complete access to (including access to persons or firms possessing
Information), and duplication rights with respect to, any and all such
Information as the other may reasonably request and require in the conduct
of
its business; and (ii) BNC agrees to use its best efforts to make available
to
BCC, and BCC agrees to use its best efforts to make available to BNC, upon
the
other's request, their respective officers, directors, employees and agents
as
witnesses to the extent that such persons may reasonably be required in
connection with any legal, administrative or other proceedings in which BCC
or
BNC, as the case may be, may from time to time be involved. Information shall
include without limitation information sought for audit, accounting, regulatory
filing, claims, litigation and tax purposes as well as for purposes of
fulfilling disclosure and reporting obligations under federal and state
securities laws.
The
party
providing Information or making witnesses available shall be entitled to receive
from the other party, upon the presentation of invoices therefor, payment as
calculated in Section 2.1.3 above. This provision is intended for the
convenience of the parties in administrative matters, and all information that
is by its nature privileged or confidential will be subject to release only
in
the event a confidentiality agreement reasonably acceptable to the releasing
party is executed at the time of the release.
2.3
Mail and Other Items.
Subsequent
to the Distribution, each of BNC and BCC may receive mail, deliveries, faxes,
email, packages and other communications properly belonging to the other.
Accordingly, at all times subsequent to the Record Date, each of BNC and BCC
authorizes the other to receive and open mail, deliveries, faxes, email,
packages and other communications received by it and not unambiguously intended
for the other party or any of the other party's officers and/or directors
specifically in their capacities as such, and to retain the same to the extent
that they relate to the business of the receiving party. To the extent that
they
do not relate to the business of the receiving party and do relate to the
business of the other party, or to the extent that they relate to both
businesses, the receiving party shall promptly contact the other party for
delivery instructions and such mail, telegrams, packages or other communications
(or, in case the same relate to both businesses, copies thereof) shall promptly
be forwarded to the other party in accordance with its delivery instructions.
The provisions of this Section 2.3 are not intended to and shall not be deemed
to constitute an authorization by either BNC or BCC to permit the other to
accept service of process on its behalf and neither party is nor shall be deemed
to be the agent of the other for service of process purposes.
2.4
Indemnification.
2.4.1
BCC
shall be liable for all liabilities and obligations retained by BCC
(collectively, the “BCC Liabilities”), including tax liabilities and
obligations. BNC shall be liable for all liabilities and obligations retained
by
BNC (the “BNC Liabilities”), including tax liabilities and obligations. BCC
shall be responsible for all “Distribution Liabilities” (defined as expenses,
costs, or liabilities directly related to the Distribution) which are incurred
or accrued prior to, or following, the Effective Date; including tax liabilities
and obligations.
2.4.2
BCC
agrees to indemnify, defend and hold harmless BNC and its officers, directors,
employees, agents and affiliates from and against any and all losses,
liabilities, claims, damages, costs and expenses (including without limitation
reasonable attorneys' fees) arising out of or related in any manner to the
BCC
Liabilities.
2.4.3
BNC
agrees to indemnify, defend and hold harmless BCC and its officers, directors,
employees, agents and affiliates from and against any and all losses,
liabilities, claims, damages, costs and expenses (including without limitation
reasonable attorneys' fees) arising out of or related in any manner to BNC
Liabilities.
2.4.4
If any
action is brought or any claim is made against a party or controlling person
with respect to which indemnity may be sought (the “Indemnified Party”), the
Indemnified Party shall, with reasonable promptness after the receipt of
information indicating that an action has been or is likely to be instituted
or
a claim has been or is likely to be made, notify the party from whom
indemnification is to be sought (the “Indemnifying Party”) in writing of such
action or claim and the Indemnifying Party shall have the obligation to assume
the defense of such action or claim, including the employment of counsel
reasonably satisfactory to the Indemnified Party; provided, however, that the
Indemnifying Party shall not be entitled to settle such action or claim on
behalf of the Indemnified Party without the prior written consent of the
Indemnified Party, (which consent shall not unreasonably be withheld, if, but
only if, such settlement would not, in addition to the payment of money, impose
an unreasonable and material burden on the Indemnified Party, such as a consent
judgment or injunction). Such Indemnified Party shall have the right to employ
its own counsel in any such case, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Party unless the employment of
such
counsel shall have been authorized in writing by the Indemnifying Party in
connection with the defense of such action or claim or the Indemnifying Party
shall not have employed counsel to take charge of the defense of such action
or
claim or such Indemnified Party shall have reasonably concluded that there
may
be defenses available to it which are different from or in addition to those
available to the Indemnifying Party (in which case the Indemnifying Party shall
not have the right to direct any different or additional defense of such action
or claim on behalf of the Indemnified Party), in any of which events such fees
and expenses shall be borne by the Indemnifying Party.
Except
as
expressly provided above, the Indemnifying Party shall not be liable to any
Indemnified Party for legal or other expenses incurred by such Indemnified
Party
in investigating, preparing or defending against such action or claim subsequent
to such time as the Indemnifying Party assumes the defense of such action or
claim.
Anything
in this Section 2.4 to the contrary notwithstanding, no Indemnifying Party
shall
be liable for any settlement of any such claim or action effected without its
written consent. In the event that any actions or claims could result in both
parties being liable to the other under these indemnification provisions, the
parties shall endeavor, acting reasonably and in good faith, to agree upon
a
manner of conducting the defense and/or settlement of such action or claim
with
a view to minimizing the legal expenses and associated costs that might
otherwise be incurred by the parties under the provisions of this Section
2.4.4.
2.4.5
For
purposes of this Section 2.4, losses, liabilities, claims, damages, costs and
expenses of past, present or future officers, directors, employees, agents
or
subsidiaries of BNC or BCC shall be deemed to have been suffered by BNC or
BCC,
as the case may be.
2.4.6
The
indemnification provided for in this Section 2.4 shall be subject to the
following provisions:
2.4.6.1
Any
amounts payable from BNC to BCC and from BCC to BNC shall first be offset
against each other with any net balance then payable upon demand;
2.4.6.2
The
indemnification provisions hereof shall survive the Effective Date and any
investigation made at any time by either of the parties. In addition, actual
prior knowledge by the Indemnified Party with respect to any matter as to which
indemnification may be sought shall not constitute a defense to the Indemnifying
Party or otherwise affect the Indemnified Party's rights to indemnification
pursuant to the provisions hereof; and
2.4.6.3
Subject
to the provisions of Section 2.4.6.1 and 2.4.6.2 above, the indemnification
provisions of this Section 2.4 are made for the sole benefit of BNC and BCC
and
shall not, except to the extent expressly stated otherwise herein, inure to
the
benefit of any third party.
4.
MISCELLANEOUS PROVISIONS OF GENERAL APPLICABILITY.
4.1
Entire Agreement. This
Agreement represents the entire agreement between the parties relating to the
subject matter hereof and supersedes any prior oral or written agreements or
undertakings between the parties to such matters. This Agreement alone fully
and
completely expresses the agreement of the parties relating to the subject matter
hereof. There are no other courses of dealing, understanding, agreements,
representations or warranties, written or oral, except as set forth herein.
This
Agreement may not be amended, canceled, revoked or otherwise modified except
by
written agreement executed by all of the parties hereto.
4.2
Benefit of Agreement. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors; provided, however, that this Agreement is
not
assignable, in whole or in part, directly or indirectly, by either party hereto
without the written consent of the other which consent shall not be unreasonably
withheld.
4.3
Further Documents; Compliance; Governmental Approvals. Both
BNC
and BCC shall make, execute, acknowledge and deliver such other instruments
and
documents, and take all such other actions, as may be reasonably required in
order to effectuate the purposes of this Agreement and to consummate the
transactions contemplated hereby. Both BNC and BCC shall, in connection with
entering into this Agreement, performing its obligations hereunder and taking
any and all actions relating hereto, (i) comply with all applicable laws,
regulations, orders and decrees, (ii) obtain all required consents and approvals
and make all required filings with any governmental agency, other regulatory
or
administrative agency, commission or similar authority, and (iii) promptly
provide the other with all such information as the other may reasonably request
in order to be able to comply with the provisions of this section.
4.4
Notices. All
communications hereunder shall be in writing and shall be either personally
delivered or sent by first class mail, national courier services or
facsimile.
4.5
Attorneys' Fees. In
the
event that any party maintains or defends any cause of action against another
party to this Agreement, the prevailing party shall be entitled to recover
all
reasonable attorneys' fees and costs of litigation and arbitration.
4.6
Governing Law. The
provisions of this Agreement shall be governed by and construed in accordance
with the laws of the State of New Jersey.
4.7
Headings. The
captions appearing in this Agreement are inserted only as a matter of
convenience and for reference and in no way define, limit or describe the scope
and intent of this Agreement or any of the provisions hereof.
[Remainder
of Page Intentionally Blank]
[Signature
Pages Follow]
IN
WITNESS WHEREOF,
the
parties hereto have executed this Agreement on the day and year set forth
below.
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BEDMINSTER
NATIONAL CORP.
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By:____________________________
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By:____________________________
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Name:
Xxxx Xxxxxxxx
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Name:
Xxxx Xxxxxxxx
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Title:
Chief Executive Officer
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Title:
Chief Executive Officer
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