Exhibit 4.6
XXXXXX FAMILY TRUST AGREEMENT
THIS XXXXXX FAMILY TRUST AGREEMENT, is made and entered into this 15th day
of February, 2005 between Xxxxxx X. Xxxxxx, having an address c/o Coates
International, Inc. 0000 Xxxxxxx #00 & Xxxxxxxxx Xxxx, Xxxx Xxxxxxxx, Xxx Xxxxxx
00000, Xxxxxxx X. Xxxxxx, having an address 000 Xxxxx Xxxxxxx Xxxxx 71,
Apartment No. 1, Spring Lake, NJ 07762-2001 and the Xxxxxx Trust, having an
address c/o Coates International, Inc. 0000 Xxxxxxx #00 & Xxxxxxxxx Xxxx, Xxxx
Xxxxxxxx, Xxx Xxxxxx 00000 (hereinafter collectively, the "Settlors", or
individually, a "Settlor") and Xxxx X. Xx Xxxxxxx, M.D., having an address 0
Xxxx Xxxxxx, Xxxxx 000, XX Xxx 000, Xxxxxxxxx, Xxx Xxxxxx 00000 (hereinafter
called the "Trustee")
Recitals
A. The Settlors possess full power to convey, sell, assign, and deal
with their shares of the common stock of Xxxxxx Motorcycle Company, Ltd.,
a Delaware corporation (the "Company"), which shares represent a majority
of the issued and outstanding Company shares, empowering them to control
all of the corporate and business affairs of the Company.
B. Xxxxxx X. Xxxxxx and Xxxxxxx X. Xxxxxx desire to focus on, and
dedicate all of their respective time and work efforts to, the business
being conducted by Xxxxxx International, Ltd., an affiliate of the
Company.
C. In order to avoid any conflict of interests, or an appearance of
any such conflict, which may arise out of, or in connection with, the
performance of their respective duties and obligations while conducting
the corporate and business affairs of Xxxxxx International, Ltd., Xxxxxx
X. Xxxxxx and Xxxxxxx X. Xxxxxx desire to establish and create a trust
(the "Trust"), pursuant to the general provisions of which all of their
Company shares, as well as those shares beneficially owned by the Xxxxxx
Trust, shall be delivered to an independent Trustee named herein who shall
have absolute possession and control, including the right to vote as the
record owner, over the Company shares transferred by the Settlors to the
Trustee pursuant to the terms and provisions set forth herein.
D. The primary purpose of this Trust is to confer on the Trustee the
sole responsibility to administer the Trust and to manage the Trust
assets, to wit, all of the Company shares beneficially owned by the
Settlors, without the participation by, or the knowledge of, the Settlors.
Accordingly, the Settlors and the Trustee agree as follows:
Section I. Transfer in Trust
(a) Settlors hereby transfer and deliver to Trustee, in trust, all
of the shares of the common Stock of the Company (the "Stock") described in
Exhibit "A" attached and incorporated by reference herein. Settlors represent to
the Trustee that the Stock represents the entire beneficial and record ownership
interests they possess in the Company. The receipt of the Stock is acknowledged
by Trustee. The Stock, together with any other property that may later become
subject to this Trust, shall constitute the Trust assets, and shall be held,
administered, and distributed by Trustee as provided in this Trust Agreement.
(b) During the term of this Trust Agreement, the Settlors shall not take
any action, give any direction to or make any disposition in respect of the
Stock except as shall be required to effectuate the terms and provisions of this
Trust Agreement.
(c) Settlors shall not make any direct or indirect communication with the
Trustee with respect to the trust created by this Trust Agreement ("Trust")
unless the communication is in writing, and unless it relates only:
(i) To a request for a distribution in cash, if available as a
result of the sale of the Stock held in the Trust, or
(ii) To the notification of the Trustee of a law, regulation, court order
or administrative order subsequently applicable to a Settlor which
prohibits the Settlor from holding or owning the Stock or which requires
the liquidation of the Stock of a Settlor.
Section II. Disposition of the Stock or Proceeds From the Sale Thereof
Except as may expressly be set forth below, the Trustee shall hold the
Stock and exercise all rights of the owner thereof in connection therewith as
further provided for herein during the term of this Trust Agreement. During the
term of this Trust Agreement and as long as the Trustee is empowered or
authorized to sell of any of the Stock, he shall comply with all of the laws,
rules and regulations promulgated under the Securities Act of 1933, as amended,
the Securities Exchange Act of 1934, as amended, and the applicable rules and
regulations of the American Stock Exchange or other national stock exchange and
their respective successors where the Company's securities may be listed for
trading. The Trustee shall be permitted to undertake the following with respect
to the Stock during the term of this Trust Agreement:
(a) Sale of Stock. Commencing six (6) months following the final
closing of the contemplated initial public offering of the Company's
common stock, the Settlors may authorize the Trustee to sell part or all
of the Stock in compliance with applicable federal and state securities
laws. A Settlor's authorization to the Trustee to sell part or all of his
or its Stock shall be in writing and shall identify the terms and
conditions for the contemplated sale. Upon receipt of a Settlor's written
authorization, the Trustee shall use his good faith efforts within a
reasonable time. to prepare any and all documents and obtain any required
third party consents or legal opinions necessary to effectuate the sale of
the Stock, including but not limited to making any necessary
communications with the Company's transfer agent and corporate officers.
Upon any sale of part or all of a Settlor's Stock, the Trustee shall
deliver the proceeds from such sale to the Settlor, less any reasonable
brokerage fees and administrative expenses arising out of the execution of
a Settlor's authorization to sell the Stock;
(b) Dividends, Etc. In the event the Trustee receives any
distribution of property or other consideration, distributed to the
beneficial owners of common shares of the Company during the term of this
Trust Agreement, the Trustee shall, in turn, distribute any such property
or other consideration received to the Settlors in proportion to the
amount of the Stock they transferred to the Trustees; and
(c) Merger, Etc. In the event the Trustee receives property or other
consideration in exchange for part or all of the Stock as a result of a
Company merger, consolidation, recapitalization or exchange of shares, the
Trustee shall distribute such property or other consideration to the
Settlors in proportion to the Stock they transferred to the Trustee,
provided, however, that in the event of any such merger, consolidation,
recapitalization or exchange of shares, the Trustee receives shares of a
company whose securities are registered pursuant to Section 12 of the
Securities Exchange Act of 1934, as amended, and provided further that
such shares represent 10% or more of its class of securities then issued
and outstanding, such shares shall remain in the custody of the Trustee
and be subject to the terms of this Trust Agreement and shall be treated
as the original Stock for all purposes hereunder.
Section III. Irrevocability of Trust
Each Settlor renounces for himself or itself, and for their respective
estates, any power to determine or control, by alteration, amendment,
revocation, or termination, or otherwise, the rights granted to the Trustee
under the terms and provisions of this Trust Agreement.
Section IV. Trustee's Voting of the Stock
Trustee shall be the record owner of the Stock and shall be vested with
voting rights connected to such ownership. Trustee shall have the right to vote
the Stock as a unit, and not otherwise, at all meetings of the stockholders of
the Company.
Section V. Other Powers of Trustee
In addition to the explicit powers and discretions granted to or vested in
the Trustee by this Trust Agreement, Trustee shall have the additional powers
and discretions, to be exercised only in a fiduciary capacity and in the
interest of the Settlors, to do all acts, institute all proceedings, and
exercise all rights and privileges in the management of the Trust as if the
absolute owner of it, that Trustee may deem necessary or proper for the
conservation and protection of the Stock until the termination of this Trust
Agreement.
Section VI. Compensation of Trustee
The Trustee agrees to administer the Trust without compensation.
Section VII. Successor Trustees
On Trustee's resignation, incapacity or inability to continue to act as
Trustee, Trustee shall appoint as successor Trustee ___________________[name],
of ___________________ [address], City of _________________[city], County of
__________________ [county], State of New Jersey. Any successor Trustee shall
have all the duties and powers assumed and conferred in this Trust Agreement on
Trustee, together with the power in any successor Trustee to appoint its own
successor. The appointment of a successor Trustee shall be made by an
acknowledged instrument delivered to the Settlors.
Section VIII. Trustee's Bond
Neither the Trustee nor successor Trustee shall be required to give any
bond or other security.
Section IX. Accounting
Except as provided in Section II of this Trust, the Trustee shall make no
accounting to the Settlors until the date of termination of this Trust
Agreement, at which time the Trustee shall make a full and proper accounting and
turn over to the Settlors any and all assets of the Trust.
Section X. Trustee's Acceptance; Law Governing Trust; Severability
This Trust has been accepted by Trustee and will be administered in the
State of New Jersey. The validity, construction, and all rights under this Trust
Agreement shall be governed by the laws of that state and all litigation
concerning the Trust shall be conducted in the Superior Court of New Jersey,
Monmouth County, and the parties hereto submit to the jurisdiction of that
court. If any provision of this Trust Agreement should be invalid or
unenforceable, the remaining provisions shall continue to be fully effective.
Section XI. Term of Trust-Duration
This Trust shall terminate upon the first to occur of the following:
(a) On the first anniversary date of the creation of the Trust in the
event the common stock of the Company has not been listed for trading on the
American Stock Exchange or other national stock exchange or successor exchanges;
or
(b) Upon the final sale of all the Stock or upon a merger or other capital
transaction described in Section II (c); or (c) Upon the tenth (10th)
anniversary date of the creation of the Trust.
Upon the termination of the Trust the Stock, if any then being held in
accordance with the terms of this Trust Agreement, shall be transferred by the
Trustee to the Settlors.
Section XII. Liability - Indemnification
The Trustee shall use his best judgment in exercising his powers under
this Trust, including voting the Stock as permitted under Section IV above, and
shall not be liable to the Settlors for any consequences resulting from the
exercise of his powers hereunder, including the consequences of any vote cast or
shareholder consent given by him in good faith and in the absence of gross
negligence. The Settlors hereby agree to defend the Trustee and to hold him
harmless from and against any liability of any nature whatsoever arising out of
or in connection with Trustee's performance under the terms of this Trust
Agreement except, however, in the event the Trustee is found by a court of
competent jurisdiction to have not acted in good faith or to have been liable
for gross negligence. By this indemnification, the Settlors, jointly and
severally, agree to pay for any and all costs, expenses, judgments or other
assessments based upon any liability assessed against the Trustee arising out of
any lawsuit, administrative proceeding or other action under this Trust
Agreement provided, however, that in the event the Trustee is found to have been
liable for acting in bad faith or for gross negligence in any such lawsuit,
administrative proceeding or other action, the Settlors shall be entitled to a
return, on demand, of any and all amounts of monies theretofore paid by Settlors
to Trustee under this Section XII indemnification.
Section XIII. Binding Effect
This Trust Agreement shall inure to the benefit of and be binding upon the
Settlors, their successors and assigns, and upon the Trustee.
Section XIV. Entire Agreement
This Trust Agreement supersedes all prior agreements between the parties
relating to its subject matter. There are no other understandings or agreements
between them concerning the subject matter.
Section XV. Notices
All notices or other documents under this Trust Agreement shall be in
writing and delivered personally or mailed by certified mail, return receipt
requested, postage prepaid, addressed to the parties at their addresses stated
herein.
Section XVI. Non-waiver
No delay or failure by a party to exercise any right under this Trust
Agreement, and no partial or single exercise of that right, shall constitute a
waiver of that or any other right, unless otherwise expressly provided herein.
Section XVII. Captions
The captions in this Trust Agreement are for convenience only and shall
not be used to interpret or construe its provisions.
Section XVIII. Counterparts
This Trust Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which together shall constitute one
and the same instrument.
In witness of the above, the Settlors and Trustee have executed this Trust
Agreement at Wall, New Jersey the day and year first above written.
SIGNATURES
SETTLORS:
/s/ Xxxxxx X. Xxxxxx
--------------------
Xxxxxx X. Xxxxxx
/s/ Xxxxxxx X. Xxxxxx
---------------------
Xxxxxxx X. Xxxxxx
The Xxxxxx Trust
/s/ Xxxxxx X. Xxxxxx
------------------------------
By: Xxxxxx X. Xxxxxx, Trustee
TRUSTEE:
/s/ Xxxx X. XxXxxxxxx
---------------------------
Xxxx X. XxXxxxxxx
[Acknowledgments]
State of New Jersey
County of Ocean ss.:
BE IT REMEMBERED, that on this 15th day of February, 2005, before me,
the subscriber, personally appeared Xxxxxx X. Xxxxxx, who I am satisfied, is the
Settlor mentioned in the foregoing instrument, to whom I first made known the
contents thereof, and thereupon he acknowledged that he signed, sealed and
delivered the same as his voluntary act and deed, for the uses and purposes
therein expressed
/s/ Xxxxxxx Xxxxxx
----------------------------
Notary Public
State of New Jersey
County of Ocean ss.:
BE IT REMEMBERED, that on this 15th day of February, 2005, before me,
the subscriber, personally appeared Xxxxxxx X. Xxxxxx, who I am satisfied, is
the Settlor mentioned in the foregoing instrument, to whom I first made known
the contents thereof, and thereupon he acknowledged that he signed, sealed and
delivered the same as his voluntary act and deed, for the uses and purposes
therein expressed
/s/ Xxxxxxx Xxxxxx
-----------------------
Notary Public
State of New Jersey
County of Ocean ss.:
BE IT REMEMBERED, that on this 15th day of February, 2005, before me,
the subscriber, personally appeared Xxxxxx X. Xxxxxx, who I am satisfied, is the
Trustee of The Xxxxxx Trust, a Settlor mentioned in the foregoing instrument, to
whom I first made known the contents thereof, and thereupon he acknowledged that
he signed, sealed and delivered the same as his voluntary act and deed, as the
Trustee of The Xxxxxx Trust for the uses and purposes therein expressed
/s/ Xxxxxxx Xxxxxx
------------------
Notary Public
State of New Jersey
County of Ocean ss.:
BE IT REMEMBERED, that on this 15th day of February, 2005, before me,
the subscriber, personally appeared Xxxx X. XxXxxxxxx, who I am satisfied, is
the Trustee mentioned in the foregoing instrument, to whom I first made known
the contents thereof, and thereupon he acknowledged that he signed, sealed and
delivered the same as his voluntary act and deed, for the uses and purposes
therein expressed
/s/ Xxxxxxx Xxxxxx
---------------------------
Notary Public
Exhibit A
Name of Settlor Number of Common Shares of Xxxxxx Motorcycle
Company, Ltd., Beneficially Owned___________
Xxxxxx X. Xxxxxx 3,007,500
Xxxxxxx X. Xxxxxx 2,424,000
The Xxxxxx Trust 3,000,000
