<PAGE> 1
As Filed With The Securities And Exchange Commission On April 21, 2000
Registration Statement No. 333-______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------------
TITAN MOTORCYCLE CO. OF AMERICA
(Exact name of registrant as specified in its Charter)
NEVADA 86-0776876
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2222 WEST PEORIA AVENUE
PHOENIX, ARIZONA 85029
(602) 861-6977
(Address, including zip code, and telephone number,
including area code, of principal executive offices)
-------------------------------
FRANCIS S. KEERY, CHIEF EXECUTIVE OFFICER
TITAN MOTORCYCLE CO. OF AMERICA
2222 WEST PEORIA AVENUE
PHOENIX, ARIZONA 85029
(602) 861-6977
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
-------------------------------
COPY TO:
STEVEN D. PIDGEON, ESQ.
SNELL & WILMER L.L.P.
ONE ARIZONA CENTER
PHOENIX, ARIZONA 85004-0001
(602) 382-6000
--------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after this registration statement becomes effective.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, check the following box. [ ]
<PAGE> 2
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering.
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
<PAGE> 3
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Maximum Proposed Maximum
Title of Each Class of Amount to be Offering Price Aggregate Amount of
Securities to be Registered Registered Per Share Offering Price Registration Fee
--------------------------- ---------- --------- -------------- ----------------
<S> <C> <C> <C> <C>
Common Stock, $.001 par value 2,502,500 Shares(1) $ 1.406(2) $ 3,518,515.00 $ 928.89
Total 2,502,500 Shares(1) $ 3,518,515.00 $ 928.89
</TABLE>
(1) Shares of common stock that may be offered pursuant to this Registration
Statement consist of 2,240,000 shares issuable upon conversion of 2,000 shares
of Series B Convertible Preferred Stock and 262,500 shares issuable upon
exercise of certain warrants. For purposes of estimating the number of shares of
common stock to be included in this Registration Statement, we calculated (i)
175% of the number of shares of common stock issuable in connection with the
conversion of the Series B Convertible Preferred Stock, determined as if the
Series B Convertible Preferred Stock, together with twenty-four months of
accrued and unpaid dividends thereon (Series B Convertible Preferred Stock
holders are entitled to dividends, if declared by the Board, at a rate of $60.00
per year per share), were converted in full at the fixed conversion price of
$1.75 on the date this Registration Statement is first filed plus (ii) 100% of
the number of shares of common stock issuable upon exercise of the warrants.
Pursuant to Rule 416 under the Securities Act of 1933, as amended, this
Registration Statement also covers such indeterminate additional shares of
common stock as may become issuable as a result of stock splits, stock dividends
or other similar transactions.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c), based upon the average of the high and low prices of
the common stock on April 18, 2000, as reported by the Nasdaq SmallCap Market.
----------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
<PAGE> 4
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THESE
SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
PROSPECTUS
Titan Motorcycle Co. of America
2,502,500 Common Shares
This prospectus relates to shares of our common stock that may be sold
by the selling stockholders named under the section of this prospectus entitled
"Selling Stockholders." The selling stockholders may sell some or all of the
common stock through ordinary brokerage transactions, directly to market makers
of our shares, or through any of the other means described in the section
entitled "Plan of Distribution" beginning on page 12.
The selling stockholders will receive all of the proceeds from the sale
of the common stock, less any brokerage or other expenses of sale incurred by
them. We are paying for the costs of registering the shares covered by this
prospectus.
Our common stock is traded on the Nasdaq SmallCap Market under the
symbol "TMOT." The closing sales price of our common stock as reported by the
Nasdaq SmallCap Market on April 18, 2000 was $1.50 per share.
-----------------------------
BEFORE PURCHASING ANY OF THE SHARES COVERED BY THIS PROSPECTUS, CAREFULLY READ
AND CONSIDER THE RISK FACTORS INCLUDED IN THE SECTION ENTITLED "RISK FACTORS"
BEGINNING ON PAGE 1. YOU SHOULD BE PREPARED TO ACCEPT ANY AND ALL OF THE RISKS
ASSOCIATED WITH PURCHASING THE SHARES, INCLUDING A LOSS OF ALL OF YOUR
INVESTMENT.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED THE SALE OF THE COMMON STOCK OR DETERMINED THAT THE
INFORMATION IN THIS PROSPECTUS IS ACCURATE OR COMPLETE. IT IS ILLEGAL FOR ANY
PERSON TO TELL YOU OTHERWISE.
-------------------------
The date of this prospectus is _______ ___, 2000.
<PAGE> 5
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
TITAN MOTORCYCLE CO. OF AMERICA.................................................................................. 1
RISK FACTORS..................................................................................................... 1
FORWARD LOOKING STATEMENTS....................................................................................... 6
USE OF PROCEEDS.................................................................................................. 8
SELLING STOCKHOLDERS............................................................................................. 8
DESCRIPTION OF SECURITIES........................................................................................ 9
PLAN OF DISTRIBUTION............................................................................................. 12
LEGAL OPINIONS................................................................................................... 13
EXPERTS.......................................................................................................... 13
WHERE YOU CAN FIND MORE INFORMATION.............................................................................. 13
</TABLE>
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE
IN THIS PROSPECTUS AND IN ANY ACCOMPANYING PROSPECTUS SUPPLEMENT. NO ONE HAS
BEEN AUTHORIZED TO PROVIDE YOU WITH DIFFERENT INFORMATION.
THE COMMON STOCK IS NOT BEING OFFERED IN ANY JURISDICTION WHERE THE OFFER IS NOT
PERMITTED.
YOU SHOULD NOT ASSUME THAT THE INFORMATION IN THIS PROSPECTUS OR ANY PROSPECTUS
SUPPLEMENT IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF THE
DOCUMENTS.
<PAGE> 6
TITAN MOTORCYCLE CO. OF AMERICA
We design and manufacture high-end customized heavyweight motorcycles.
We build both highly customized, individually assembled motorcycles and
high-end, assembly-line produced motorcycles. A heavyweight motorcycle is a
motorcycle with an engine size or displacement of 651 cubic centimeters or
greater. Our products are distributed through a network of 61 domestic dealers
and 20 foreign dealers.
We currently maintain three product lines.
PREMIUM MOTORCYCLES: We manufacture seven premium models with a package
of over 200 custom options. Customers design their motorcycles by choosing
colors, paint design, finish, fenders and various performance and aesthetic
enhancements. Premium models are typically constructed and delivered in six to
ten weeks from the order date. Our premium models represented approximately 75%
of our fiscal year 1999 revenues. The average retail selling price for our
premium models is approximately $35,000.
"PHOENIX BY TITAN" MOTORCYCLES: Our "Phoenix by Titan" line of
motorcycles was introduced in March 1999. We manufacture four "Phoenix by Titan"
models with six standard customization packages available through our
dealerships. Our Phoenix models represented approximately 23% of our fiscal year
1999 revenues The average retail selling price for the "Phoenix by Titan" models
is approximately $20,000 to $25,000.
APPAREL AND ACCESSORIES: We have recently developed a line of Titan
apparel and accessories. We are also developing a premium line of upgrade parts
which are compatible with Titan and other "V Twin" motorcycles.
We are a Nevada corporation, formed on January 10, 1995. Our principal
executive offices are located at 2222 West Peoria Avenue, Phoenix, Arizona and
our telephone number is (602) 861-6977.
RISK FACTORS
BEFORE PURCHASING ANY OF THE SHARES COVERED BY THIS PROSPECTUS, YOU SHOULD
CAREFULLY READ AND CONSIDER THE RISK FACTORS SET FORTH BELOW. YOU SHOULD BE
PREPARED TO ACCEPT ANY AND ALL OF THE RISKS ASSOCIATED WITH PURCHASING THE
SHARES, INCLUDING A LOSS OF ALL OF YOUR INVESTMENT.
WE HAVE A HISTORY OF LOSSES AND WE MAY LOSE MONEY IN THE FUTURE
Although we earned $237,479 in net income for the fiscal year 1998, we
incurred losses of $257,463 in fiscal year 1995, $95,496 in fiscal year 1996 and
$1.7 million in 1997. In the fiscal year 1999 we incurred losses of $8,060,282.
We expect to incur further losses in the first quarter of 2000 and may continue
to incur losses thereafter. Given our history of losses, we cannot assure you
that we will ever be profitable.
WE MAY BE UNABLE TO REGAIN PROFITABILITY IF WE DO NOT GENERATE AN INCREASE IN
CONSUMER DEMAND FOR OUR PRODUCTS
To regain profitability, we need to generate an increased level of
market acceptance for our products. Our success depends on our ability to meet
the following objectives, none of which we may achieve:
- increase consumer awareness of our products;
- establish a reputation for high quality;
- increase sales through our independent third party dealers;
and
- expand our dealer network.
We cannot assure you that we will meet these objectives.
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COMPLICATIONS IN THE ESTABLISHMENT AND INTEGRATION OF OUR NEW "PHOENIX BY TITAN"
LINE OF MOTORCYCLES COULD MATERIALLY ADVERSELY AFFECT OUR EXPENSES, GROSS
MARGINS AND OPERATING RESULTS
We recently introduced our "Phoenix by Titan" line of heavyweight
motorcycles. Unlike our custom motorcycles, we manufacture these motorcycles in
four models through an assembly line process. Six standard customization
packages are available through the dealerships for each of the four models.
While initial orders have been substantial, there can be no assurance that we
will be able to accomplish the following goals:
- effectively manage any start up difficulties that we may experience;
- successfully adapt to an assembly line manufacturing process; and
- gain or maintain consumer acceptance of this product line.
Also, we cannot assure you that this line, which is less expensive,
will not take sales away from our higher end custom motorcycles or that we will
not face other difficulties in introducing this line. Any of these issues could
materially adversely affect our expenses, gross margins and operating results.
WE CANNOT ASSURE YOU THAT WE WILL BE ABLE TO SUCCESSFULLY IMPLEMENT OUR NEW
MANAGEMENT INFORMATION SYSTEM WHICH COULD RESULT IN A DISRUPTION OF OUR BUSINESS
AND COULD HAVE A NEGATIVE AFFECT ON OUR OPERATIONS
We recently installed a new management information system. This system
will monitor our inventory, production, billing and other operational aspects of
our business. We cannot assure you that we will be able to successfully operate
and utilize this new system which could result in a disruption of our business
and could have a negative affect on our operations.
WE SELL A DISCRETIONARY PRODUCT AND A DOWNTURN IN THE ECONOMY COULD NEGATIVELY
AFFECT OUR GROWTH AND PROFITABILITY
Motorcycles in the high-end customized heavyweight market are
discretionary purchase items. A recession or economic downturn may reduce
consumer spending and negatively affect our growth and profitability. An
economic downturn could result from a number of factors outside of our control,
including:
- employment levels;
- business conditions;
- interest rates;
- inflation levels; and
- taxation rates.
COMPETITION IN OUR MARKET HAS INCREASED SUBSTANTIALLY AND MAY RESULT IN PRICE
REDUCTIONS, REDUCED GROSS MARGINS AND A LOSS OF OUR MARKET SHARE
While we operate in the high-end segment of the heavyweight cruiser
market, the overall heavyweight cruiser market has recently experienced a
substantial increase in production capacity and new entrants. Some of our
competitors have technical, production, personnel and financial resources that
exceed ours and we cannot assure you that the competition will not materially
adversely affect our business, financial condition or results of operations. The
increased competition could result in price reductions, reduced gross margins
and a loss in our market share.
Major competitors in the heavyweight cruiser market are:
- Harley-Davidson(TM), the heavyweight cruiser market leader,
which is reportedly increasing its capacity to over 160,000
units from approximately 148,000 units;
- BMW which entered the segment in 1997 with their "R1200C" model;
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- Excelsior-Henderson, which recently entered the market with their
"Super X" model; and
- Polaris, which recently entered the market with their "Victory V92C"
model.
OUR PRODUCTS COULD CONTAIN DEFECTS CREATING PRODUCT RECALLS AND WARRANTY CLAIMS
WHICH COULD MATERIALLY ADVERSELY AFFECT OUR FUTURE SALES AND PROFITABILITY
Our products could contain unforeseen defects. These defects could
create product recalls or warranty claims that could increase our costs and
affect profitability. Significant and continuous defects could negatively impact
the goodwill and quality associated with our name. Defects could also give rise
to litigation which could result in our liability for judgments which could have
a significant impact on our business, operations and financial condition.
Product recalls resulting from unforeseen defects could subject us to a
significant financial commitment and have a significant impact on our business,
operations and financial condition.
WE ARE SUBJECT TO CONTINGENT LIABILITIES UNDER A DEALER FLOOR PLAN FINANCING
PROGRAM WHICH COULD EXPOSE US TO SIGNIFICANT FINANCIAL OBLIGATIONS
Approximately 51 of our dealers receive floor plan financing for our
products through TransAmerica Commercial Finance Corporation, Deutsche Financial
Services or Bombardier Financial. The dealers are the obligors under these floor
plan agreements and are responsible for all principal and interest payments.
However, we are subject to a standard repurchase agreement which requires us to
buy back any of our motorcycles at the wholesale price if the dealer defaults
and the motorcycles are repossessed by one of these floor plan providers. While
we have only had to repurchase less than $700,000 worth of our motorcycles since
August of 1997, as of February 29, 2000, total outstanding obligations of all 51
dealers was approximately $13,800,000. Our profitability would be significantly
negatively impacted if we were forced to repurchase a large number of these
motorcycles.
WE MAY NOT BE ABLE TO RAISE THE ADDITIONAL CAPITAL REQUIRED TO EXECUTE OUR
BUSINESS PLAN
We expect to continue to incur significant capital expenses in
continuing to expand our production lines, introduce new product lines and
increase unit capacity. Additional financing may not be available on terms
favorable to us, or at all. If adequate funds are not available or are not
available on acceptable terms, we may not be able to execute our business plan
or take advantage of our business opportunities. In addition, if we elect to
raise capital by issuing additional shares of stock, existing stockholders may
incur dilution.
A LARGE PORTION OF OUR REVENUE COMES FROM A SMALL NUMBER OF CUSTOMERS, THE LOSS
OF WHICH COULD MATERIALLY AND ADVERSELY AFFECT OUR OPERATING RESULTS
Francis S. Keery, our Chief Executive Officer, and Patrick Keery, our
President, each own 33% of BPF Holdings, LLC, which currently owns four
motorcycle retail stores which are Titan dealers and carry our products. The
four stores are: Titan of Phoenix, Titan of Los Angeles, Titan of Las Vegas and,
most recently, Titan of Houston. In 1999, approximately 23.3% of the Company's
sales were to BPF-owned stores. The loss of the BPF dealerships would have a
material adverse affect on our operating results.
WE DEPEND HEAVILY ON THIRD PARTY PARTS SUPPLIERS AND ANY SIGNIFICANT ADVERSE
VARIATION IN QUANTITY, QUALITY OR COST WOULD NEGATIVELY AFFECT OUR OPERATIONS
We operate primarily as an assembler and rely heavily on a number of
major component manufacturers to supply us with almost all of our parts. Any
significant adverse variation in quantity, quality or cost would adversely
affect our volume and cost of production until we could identify alternative
sources of supply.
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WE DEPEND ON FOREIGN VENDORS FOR CERTAIN COMPONENT PARTS WHICH EXPOSES US TO
RISKS THAT COULD MATERIALLY AND ADVERSELY AFFECT OUR OPERATING RESULTS
We depend on foreign vendors for certain component parts which exposes
us to additional risks. Our reliance on foreign vendors exposes us to risks such
as:
- currency fluctuations which may adversely affect the value of goods
purchased;
- trade restrictions;
- changes in tariffs; and
- difficulties in enforcing supply arrangements.
The occurrence of any of these risks could materially and adversely
affect our operating results.
WE DEPEND HEAVILY ON INDEPENDENT THIRD PARTY DEALERS AND OUR RESULTS OF
OPERATIONS COULD BE NEGATIVELY IMPACTED IF THE DEALERS FAIL TO ADEQUATELY
PROMOTE OUR PRODUCTS, IMAGE AND NAME
Failures by independent third party dealers to adequately promote our
products could negatively affect our results of operations. Our products are
sold primarily through independent dealers. As a result, we are unable to fully
control the presentation, delivery and service of our products to the final
customer. We depend heavily on our dealers' willingness and ability to promote
our products, image and name.
OUR GROWTH DEPENDS ON OUR ABILITY TO EXPAND OUR DISTRIBUTION NETWORK AND SUPPORT
DEALERS AND WE CANNOT ASSURE YOU THAT THIS STRATEGY WILL BE SUCCESSFUL
We plan to expand our dealer network to implement our growth strategy.
We cannot assure you that we will be able to attract additional dealers or that
these dealers will be successful in selling our products.
We plan to support our dealers in the following ways:
- facilitating floor plan financing and incentives;
- providing continuing education about our products;
- supplying parts and accessories; and
- providing training to sales and service personnel.
Any difficulties in the continued execution of this plan may cause us
to lose dealers or experience difficulties in attracting new dealers and could
cause the distribution of our products to be adversely affected.
WE ARE ATTEMPTING TO ESTABLISH SALES OPERATIONS IN FOREIGN MARKETS WHICH
REQUIRES SIGNIFICANT MANAGEMENT ATTENTION AND FINANCIAL RESOURCES AND THIS
STRATEGY MAY NOT BE SUCCESSFUL
We are attempting to establish sales operations in foreign markets, and
we cannot assure you that we will be able to successfully manage the inherent
risks and complications associated with operating in foreign markets.
These risks and complications of operating in foreign markets include the
following:
- selecting and monitoring dealers;
- establishing effective dealer training;
- transporting inventory;
- parts availability;
- changes in diplomatic and trade relationships;
- tariffs;
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- currency exchange rate; and
- unexpected changes in regulatory requirements.
OUR BUSINESS WILL SUFFER IF WE ARE UNABLE TO KEEP OUR SENIOR EXECUTIVE OFFICERS
AND KEY EMPLOYEES
We rely considerably on the abilities of Francis S. Keery, our Chairman
and Chief Executive Officer and Patrick Keery, our President. We also depend to
a significant extent upon the performance of our executive management team. The
unavailability or loss of services of any of these individuals, or the failure
to attract and retain qualified personnel to replace them, could have a material
adverse affect on our business. We only have a non-competition agreement with
our Chief Financial Officer and we cannot assure you that his agreement will be
enforceable or effective in retaining him. Also, we cannot assure you that our
other executive officers will not leave us.
OUR FINANCIAL CONDITION AND OUR ABILITY TO FULLY IMPLEMENT OUR EXPANSION PLANS
COULD BE NEGATIVELY IMPACTED IF WE FAIL TO EFFECTIVELY MANAGE OUR GROWTH
Our rapid growth has placed, and is expected to continue to place, a
significant strain on our managerial and operational resources. Our failure to
effectively manage our growth could negatively impact our operations. Our
ability to support future growth will depend on our ability to find qualified
employees and suitable expansion space for our manufacturing operations and
improving our managerial and production capabilities. We cannot assure you that
we will be able to continue to manage future growth successfully.
WE ARE SUBJECT TO VARIOUS ENVIRONMENTAL REGULATIONS AND OUR FAILURE TO COMPLY
COULD NEGATIVELY IMPACT OUR OPERATIONS
We are subject to various federal, state and local environmental
regulations. Our failure to comply with these regulations could result in any
one or more of the following:
- restrictions on our ability to expand or modify our current
operations or facilities;
- significant expenditures in achieving compliance with the
regulations;
- significant liabilities exceeding our available resources; and
- cessation of our operations.
Our business and assets could be materially adversely affected if
environmental regulations require that we modify our facilities or otherwise
limit our ability to conduct our operations. Any significant expenses incurred
as a result of environmental liabilities could have a material adverse affect on
our business, operating results and financial condition.
OUR FAILURE TO COMPLY WITH VARIOUS REGULATORY APPROVALS AND GOVERNMENTAL
REGULATIONS COULD NEGATIVELY IMPACT OUR OPERATIONS
Our motorcycles must comply with certain governmental approvals and
certifications regarding noise, emissions and safety characteristics. Our
failure to comply with these requirements could prevent us or delay us from
selling our products which would have a significant negative impact on our
operations.
OUR QUARTERLY RESULTS MAY FLUCTUATE SIGNIFICANTLY WHICH MAY RESULT IN THE
VOLATILITY OF OUR STOCK PRICE
Our quarterly operating results may fluctuate significantly as a result
of a variety of factors, many of which are outside of our control. These factors
include:
- manufacturing delays;
- the amount and timing of orders from dealers;
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- disruptions in the supply of key components and parts;
- seasonal variations in the sale of our products; and
- general economic conditions.
WE COULD BE REQUIRED TO REDEEM OUR SERIES A AND SERIES B CONVERTIBLE PREFERRED
STOCK AT A PREMIUM WHICH WOULD REQUIRE A LARGE EXPENDITURE OF CAPITAL AND COULD
HAVE A MATERIAL ADVERSE AFFECT ON OUR FINANCIAL CONDITION
The holders of our Series A and Series B Convertible Preferred Stock
have the right to force us to redeem their Preferred Stock at a premium upon the
occurrence of certain events. The redemption of our Series A or Series B
Convertible Preferred Stock would require a large expenditure of capital and we
may not have sufficient funds to satisfy the redemption. In addition, you could
face further dilution of your ownership percentage as a result of a decline in
the market price of our common stock which would result in an increase in the
number of shares of common stock issuable upon conversion of the Series A or
Series B Convertible Preferred Stock, or in the event of certain defaults under
the Series A or Series B Preferred Stock, which could result in a dilution
adjustment. Any such event could adversely affect the price of our stock and
ability to raise additional capital.
WE MAY ISSUE ADDITIONAL STOCK AND DILUTE YOUR OWNERSHIP PERCENTAGE
Certain events over which you have no control could result in the
issuance of additional shares of our common stock, which would dilute your
ownership percentage. We may issue additional shares of common stock or
preferred stock:
- to raise additional capital or finance acquisitions;
- upon the exercise or conversion of outstanding options, warrants and
shares of convertible preferred stock; or
- in lieu of cash payment of dividends.
There are currently outstanding convertible preferred stock, warrants,
and options to acquire up to 8,810,867 additional shares of common stock. If
converted or exercised, these securities will dilute your percentage ownership
of common stock. These securities, unlike common stock, provide for antidilution
protection upon the occurrence of stock dividends, combinations, capital
reorganizations and other events. If one or more of these events occurs, the
number of shares of common stock that may be acquired upon conversion or
exercise would increase.
OUR GOVERNING DOCUMENTS AND NEVADA LAW CONTAIN PROVISIONS THAT COULD PREVENT
TRANSACTIONS IN WHICH YOU WOULD RECEIVE A PREMIUM FOR YOUR STOCK
Our Articles of Incorporation and the Nevada Revised Statutes contain
provisions that could have the affect of delaying, deferring, or preventing a
change in control and the opportunity to sell your shares at a premium over
current market prices. Although these provisions are intended to protect us and
our stockholders from unwanted takeovers, their effect could hinder or prevent
transactions in which you might otherwise receive a premium for your common
stock over then-current market prices, and may limit your ability to approve
transactions which may be in your best interests. As a result, the mere
existence of these provisions could adversely affect the price of our common
stock.
FORWARD LOOKING STATEMENTS
This prospectus contains or incorporates forward-looking statements
including statements regarding, among other items, our business strategy, growth
strategy, and anticipated trends in our business. We may make additional written
or oral forward-looking statements from time to time in filings with the
Securities and Exchange Commission or otherwise. When we use the words
"believe," "expect," "anticipate," "project" and similar expressions, this
should alert you that this is a forward-looking statement. Forward-looking
statements speak only as of the date the statement is made. These
forward-looking statements are based largely on our expectations. They
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are subject to a number of risks and uncertainties, some of which cannot be
predicted or quantified and are beyond our control. Future events and actual
results could differ materially from those set forth in, contemplated by, or
underlying the forward-looking statements. Statements in this prospectus, and in
documents incorporated into this prospectus, including those set forth in "Risk
Factors" describe factors, among others, that could contribute to or cause these
differences. In light of these risks and uncertainties, there can be no
assurance that the forward-looking information contained in this prospectus will
in fact transpire or prove to be accurate. All subsequent written and oral
forward-looking statements attributable to us or persons acting on our behalf
are expressly qualified in their entirety by this section.
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USE OF PROCEEDS
We will not receive any proceeds from the sale of any shares offered by
this prospectus.
SELLING STOCKHOLDERS
The following table provides information about the selling
stockholders. The shares offered by this prospectus will be offered from time to
time by the selling stockholders named below, or by pledgees, donees,
transferees or other successors in interest to them.
The shares shown as offered by Advantage Fund II Ltd. and Koch
Investment Group Limited under this prospectus may be issued upon conversion of
Series B Convertible Preferred Stock and exercise of warrants acquired by these
selling stockholders from us in a private placement on March 9, 2000. Under the
terms of the Series B Convertible Preferred Stock and the warrants, no selling
stockholder can convert Series B Convertible Preferred Stock or exercise
warrants to the extent such conversion or exercise would cause the selling
stockholder's beneficial ownership of our common stock (excluding shares
underlying unconverted Series B Convertible Preferred Stock and unexercised
warrants) to exceed 4.9% of the outstanding shares of common stock.
<TABLE>
<CAPTION>
SHARES OWNED
AFTER OFFERING PERCENTAGE OF
MAXIMUM NUMBER OF (ASSUMING ALL COMMON STOCK
NAME OF SELLING SHARES OWNED SHARES TO BE SOLD SHARES OFFERED OWNED AFTER
STOCKHOLDERS PRIOR TO THE OFFERING(1) IN THE OFFERING ARE SOLD) OFFERING
------------ --------------------- --------------- --------- --------
<S> <C> <C> <C> <C>
Advantage Fund II Ltd. 2,669,124(1) 1,867,500(2)(3) 1,521,623 8.8%
Koch Investment Group 893,456(1) 622,500(2)(4) 510,965 3%
Limited
Robert K. Schacter 8,550 8,550 0 0%
Thomas J. Griesel 2,135 2,135 0 0%
Richard Cohn 3,690 1,190 0 0%
Financial West Group 625 625 0 0%
</TABLE>
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(1) Represents the number of shares held directly plus the number of
shares issuable upon the conversion of Series A Convertible
Preferred Stock at the initial fixed conversion price of $2.6812,
including conversion of two years of accrued dividends thereon,
the conversion of Series B Convertible Preferred Stock at the
initial fixed conversion price of $1.75, including conversion of
two years of accrued dividends thereon, and exercise of warrants
issued in connection with the Series A and Series B Convertible
Preferred Stock. The shares issuable upon conversion of the Series
A Convertible Preferred Stock and the Series A warrants were
previously registered for resale under the Securities Act on
Registration Statement No. 333-89171. The Series A Convertible
Preferred Stock and the Series A warrants contain a 4.9%
beneficial ownership limitation similar to that of the Series B
Convertible Preferred Stock and the Series B warrants described
above.
(2) In accordance with the Registration Rights Agreements between us
and these selling stockholders, the number of shares shown as
offered by this prospectus represents 175% of the number of shares
issuable upon conversion of the Series B Convertible Preferred
Stock as described in note (1) plus the shares issuable upon
exercise of the Series B warrants.
(3) Genesee International, Inc., the investment manager of Advantage
Fund II Ltd., may be deemed to beneficially own the shares
offered by Advantage through its shared dispositive and voting
power over such shares. Mr. Donald R. Morken, the controlling
stockholder of Genesee International, may be deemed to control
the exercise by Genesee International of such shared
dispositive and voting power over such shares.
(4) Koch Industries, Inc., the indirect parent company of Koch
Investment Group Limited, may be deemed to beneficially own the
shares offered by Koch Investment Group Limited through its shared
dispositive and voting power over such shares. Messrs. Charles
Koch and David Koch, the majority stockholders of Koch Industries,
may be deemed to control the exercise by Koch Industries of such
shared dispositive and voting power over such shares.
As of the date of this prospectus, the selling stockholders do not hold
any other securities in Titan other than the shares being offered under this
prospectus, the Series A Convertible Preferred Stock, the Series B Convertible
Preferred Stock and the warrants described above. None of the selling
stockholders has had any material relationship with us within the past three
years.
DESCRIPTION OF SECURITIES
We are authorized to issue up to 90,000,000 shares of common stock and
10,000,000 shares of preferred stock. As of April 19, 2000, 17,181,187 shares of
common stock were issued and outstanding. Additionally, as of April 19, 2000, we
have outstanding options to purchase 1,285,000 shares of our common stock,
warrants to purchase 660,467 of our common stock, 3,973 shares of our Series A
Convertible Preferred Stock and 2,000 shares of our Series B Convertible
Preferred Stock.
Our Board of Directors has the authority, without further action by the
stockholders, to issue a total of up to 10,000,000 preferred shares in one or
more series and to fix the rights, preferences, privileges and restrictions
granted to or imposed upon any series of unissued preferred shares and to
determine the number of shares constituting any series and the designation of
the series, without any further vote or action by the stockholders.
The following summary of certain provisions of the common stock and
preferred shares does not purport to be complete and is subject to, and is
qualified in its entirety by, our amended Articles of Incorporation, Restated
Bylaws, our Certificates of Designations with respect to our Series A and Series
B Convertible Preferred Stock, and by the provisions of applicable law.
COMMON STOCK
The holders of our common stock are entitled to one vote per share on
all matters on which stockholders are entitled to vote. Subject to the rights of
holders of any class or series of shares, including preferred shares, having a
preference over the common stock as to dividends or upon liquidation, the
holders of our common stock are also entitled to dividends as may be declared by
our Board of Directors out of funds that are lawfully available,
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<PAGE> 15
and are entitled upon liquidation to receive pro rata the assets that are
available for distribution to holders of common stock. Holders of the common
stock have no preemptive, subscription, or conversion rights. The common stock
is not subject to assessment and has no redemption provisions.
SERIES A CONVERTIBLE PREFERRED STOCK
We have 3,973 shares of Series A Convertible Preferred Stock
authorized, issued and outstanding. The Series A Convertible Preferred Stock is
currently convertible at any time into a maximum of 3,429,400 shares of our
common stock at a fixed conversion price of $2.6812 which represents the average
market price of our common stock for the ten days prior to the issuance of the
Series A Convertible Preferred Stock on September 17, 1999, the date we sold the
Series A Convertible Preferred Stock. Commencing September 17, 2000, the
conversion price is adjusted every six months to be the lesser of (a) 130% of
the prior conversion price or (b) 90% of the average market price for the ten
days prior to such adjustment date. The conversion price is subject to further
adjustment under certain other circumstances, including our inability to provide
the Series A Convertible Preferred Stockholders with common stock certificates
on a timely basis after receiving notice of their conversion, and our failure to
pay any applicable redemption price when due. Upon an adjustment of the
conversion price, the number of shares into which the Series A Convertible
Preferred Stock may be converted is also adjusted. The number of shares of
common stock underlying the Series A Convertible Preferred Stock is also subject
to adjustment for stock splits, stock dividends, combinations, capital
reorganizations and similar events relating to our common stock.
Dividends at the rate of $60 per annum per share are payable in cash
or, at our option, may be added to the value of the Series A Convertible
Preferred Stock subject to conversion and to the $1,000 per share liquidation
preference of the Series A Convertible Preferred Stock.
We have the right to redeem the Series A Convertible Preferred Stock at
a premium, and under some circumstances, at the market price of the common stock
into which the Series A Convertible Preferred Stock would otherwise be
convertible into. The holders of the Series A Convertible Preferred Stock also
have the right to force us to redeem all or some of their Series A Convertible
Preferred Stock at a premium or at market under the following circumstances:
- there is no closing bid price reported for our common stock
for five consecutive trading days;
- our common stock ceases to be listed for trading on the Nasdaq
SmallCap Market;
- the holders of our Series A Convertible Preferred Stock are
unable, for 30 or more days (whether or not consecutive) to
sell their common stock issuable upon conversion of the Series
B Convertible Preferred Stock pursuant to an effective
registration statement;
- we default under any of the agreements relating to our sale of
the Series A Convertible Preferred Stock;
- certain business combination events;
- the adoption of any amendment to our Articles of Incorporation
materially adverse to the holders of the Series A Convertible
Preferred Stock without the consent of the holders of a
majority of the Series A Convertible Preferred Stock; and
- the holders of the Series A Convertible Preferred Stock are
unable to convert all of their shares because of limitations
under exchange or market rules that require stockholder
approval of certain stock issuances.
SERIES B CONVERTIBLE PREFERRED STOCK
We have 2,000 shares of Series B Convertible Preferred Stock
authorized, issued and outstanding. The Series B Convertible Preferred Stock is
currently convertible at any time into a maximum of 3,436,000 shares of our
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<PAGE> 16
common stock at a fixed conversion price of $1.75. Commencing March 9, 2001, the
conversion price is adjusted every six months to be the lesser of (a) the prior
conversion price or (b) the average market price for the ten days prior to such
adjustment date. The conversion price is subject to further adjustment under
certain other circumstances, including our inability to provide the Series B
Convertible Preferred Stockholders with common stock certificates on a timely
basis after receiving notice of their conversion, and our failure to pay any
applicable redemption price when due. Upon an adjustment of the conversion
price, the number of shares into which the Series B Convertible Preferred Stock
may be converted is also adjusted. The number of shares of common stock
underlying the Series B Convertible Preferred Stock is also subject to
adjustment for stock splits, stock dividends, combinations, capital
reorganizations and similar events relating to our common stock.
Dividends at the rate of $60 per annum per share are payable in cash
or, at our option, may be added to the value of the Series B Convertible
Preferred Stock subject to conversion and to the $1,000 per share liquidation
preference of the Series B Convertible Preferred Stock.
We have the right to redeem the Series B Convertible Preferred Stock at
a premium, and under some circumstances, at the market price of the common stock
into which the Series B Convertible Preferred Stock would otherwise be
convertible into. The holders of the Series B Convertible Preferred Stock also
have the right to force us to redeem all or some of their Series B Convertible
Preferred Stock at a premium or at market under the following circumstances:
- there is no closing bid price reported for our common stock
for five consecutive trading days;
- our common stock ceases to be listed for trading on the Nasdaq
SmallCap Market;
- the holders of our Series B Convertible Preferred Stock are
unable, for 30 or more days (whether or not consecutive) to
sell their common stock issuable upon conversion of the Series
B Convertible Preferred Stock pursuant to an effective
registration statement;
- we default under any of the agreements relating to our sale of
the Series B Convertible Preferred Stock;
- certain business combination events;
- the adoption of any amendment to our Articles of Incorporation
materially adverse to the holders of the Series B Convertible
Preferred Stock without the consent of the holders of a
majority of the Series B Convertible Preferred Stock; and
- the holders of the Series B Convertible Preferred Stock are
unable to convert all of their shares because of limitations
under exchange or market rules that require stockholder
approval of certain stock issuances.
WARRANTS
We also issued warrants in connection with the offering of our Series A
and Series B Convertible Preferred Stock. We issued warrants to purchase 372,967
shares of common stock to the Series A Convertible Preferred Stockholders and
warrants to purchase 250,000 shares of common stock to the Series B Convertible
Preferred Stockholders. We also issued warrants to purchase 25,000 shares of
common stock to Reedland Capital Partners and its designees as partial
compensation for their assistance in placing the Series A Convertible Preferred
Stock and warrants to purchase 12,500 to certain designees of Reedland Capital
Partners as partial compensation for their assistance in placing the Series B
Convertible Preferred Stock. The exercise price of the warrants associated with
the Series A transaction is $3.21744 per share. The exercise price of the
warrants associated with the Series B transaction is $2.00 per share. These
warrants, representing in the aggregate the right to purchase 660,467 shares of
common stock, are the only warrants we currently have outstanding. The warrants
associated with the Series A transaction expire on September 17, 2004, and the
warrants associated with the Series B transaction expire on March 9, 2005.
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<PAGE> 17
The exercise price and number of shares of common stock issuable upon
exercise of the warrants held by the Series A and Series B Convertible Preferred
Stockholders are subject to adjustment in certain events, including events of
default that are similar to those described above.
TRANSFER AGENT AND REGISTRAR
The Transfer Agent and Registrar for our common stock is Signature
Stock Transfer, Inc.
CHARTER PROVISIONS AND EFFECTS OF NEVADA LAW
Our Articles of Incorporation authorize our Board of Directors to issue
up to 10,0000,000 shares of preferred stock from time to time in one or more
designated series. Our Board of Directors, without approval of the stockholders,
is authorized to establish the voting powers, designations, preferences,
limitations, restrictions and relative rights of each series of preferred stock,
including voting powers, preferences and relative rights that may be superior to
our common stock. As of April 6, 2000, 4,000 shares of preferred stock have been
designated Series A Convertible Preferred Stock, of which 3,973 shares were
outstanding and 2,000 shares of preferred stock have been designated Series B
Convertible Preferred Stock, of which 2,000 shares were outstanding.
Sections 78.3791 through 78.3793 of the Nevada Revised Statutes
generally apply to any acquisition of outstanding voting securities of an
issuing corporation which results in the acquiror owning more than 20% of the
issuing corporation's then outstanding voting securities. An issuing corporation
is any Nevada corporation with at least 200 stockholders, at least 100 of which
are stockholders of record and Nevada residents, and which conducts business in
Nevada.
The securities acquired in a covered acquisition are denied voting
rights unless a majority of the security holders of the issuing corporation
approve the granting of voting rights. If permitted by the issuing corporation's
Articles of Incorporation or bylaws then in effect, voting securities acquired
in the covered acquisition are redeemable by the issuing corporation at the
average price paid for the securities by the acquiror if the acquiring person
has not given timely notice to the issuing corporation or if the stockholders of
the issuing corporation vote not to grant voting rights to the acquiring
person's securities.
Unless the issuing corporation's Articles of Incorporation or bylaws
then in effect provide otherwise, if the acquiring person acquired securities
having 50% or more of the voting power of the issuing corporation's outstanding
securities and the stockholders of the issuing corporation grant voting rights
to the acquiring person, then any stockholders of the issuing corporation who
voted against granting voting rights to the acquiring person may demand that the
issuing corporation purchase, for fair value, all or any portion of his
securities.
Our Articles of Incorporation and bylaws do not limit the effect of
these provisions.
PLAN OF DISTRIBUTION
The selling stockholders, their pledgees, donees, transferees or other
successors in interest may from time to time offer and sell all or a portion of
the shares in transactions on the Nasdaq SmallCap Market, or on any other
securities exchange or market on which the common stock is listed or traded, in
negotiated transactions or otherwise, at prices then prevailing or related to
the then-current market price or at negotiated prices. The selling stockholders
or their pledgees, donees, transferees or other successors in interest may sell
their shares directly or through agents or broker-dealers acting as principal or
agent, or in block trades or pursuant to a distribution by one or more
underwriters on a firm commitment or best-efforts basis. To the extent required,
the names of any agent or broker-dealer and applicable commissions or discounts
and any other required information with respect to any particular offer will be
set forth in an accompanying prospectus supplement. Each of the selling
stockholders and their pledgees, donees, transferees or other successors in
interest reserves the right to accept or reject, in whole or in part, any
proposed purchase of the shares to be made directly or through agents.
In connection with distributions of the shares, any selling stockholder
may enter into hedging transactions with broker-dealers and the broker-dealers
may engage in short sales of the shares in the course of hedging the
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<PAGE> 18
positions they assume with the selling stockholder. Any selling stockholder also
may sell the shares short and deliver the shares to close out such short
positions. Any selling stockholder also may enter into option or other
transactions with broker-dealers that involve the delivery of the shares to the
broker-dealers, which may then resell or otherwise transfer such shares. Any
selling stockholder also may loan or pledge the shares to a broker-dealer and
the broker-dealer may sell the shares so loaned or upon a default may sell or
otherwise transfer the pledged shares. The activities are limited by the
purchase agreement between us and the selling stockholders during periods when
the conversion price is subject to periodic adjustment.
The selling stockholders, any agents, dealers or underwriters that
participate with the selling stockholders in the resale of the shares of common
stock and the pledgees, donees, transferees or other successors in interest of
the selling stockholders may be deemed to be "underwriters" within the meaning
of the Securities Act, in which case any commissions received by such agents,
dealers or underwriters and a profit on the resale of the shares of common stock
purchased by them may be deemed underwriting commissions or discounts under the
Securities Act.
In order to comply with the securities laws of particular states, if
applicable, the shares may be sold only through registered or licensed brokers
or dealers.
There is no assurance that the selling stockholders will sell any or
all of the shares.
Pursuant to registration rights agreements between us and Advantage
Fund II Ltd. and Koch Investment Group Limited, we have agreed to pay all
expenses incurred in the registration of the shares, including the legal
expenses incurred by such selling stockholders. However, we are not responsible
for selling commissions and discounts, brokerage fees or any other expenses
incurred by the selling stockholders.
In addition to selling their common stock under this prospectus, the
selling stockholders may:
- transfer their common stock in other ways not involving market
makers or established trading markets, including by gift,
distribution, or other transfer; or
- sell their common stock under Rule 144 of the Securities Act.
LEGAL OPINIONS
James, Driggs, Walch, Santoro, Kearney, Johnson & Thompson will pass
upon the validity of the common stock offered under this prospectus.
EXPERTS
The consolidated financial statements of Titan Motorcycle Co. of
America appearing in our Annual Report (Form 10-KSB) for the fiscal year ended
January 1, 2000 have been audited by PriceWaterhouseCoopers LLP, independent
auditors, as set forth in their report thereon included therein and incorporated
herein by reference. These consolidated financial statements are incorporated
herein by reference in reliance upon the report given upon the authority of
PriceWaterhouseCoopers LLP as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
GOVERNMENT FILINGS: We file annual, quarterly and special reports and
other information with the Securities and Exchange Commission. You may read and
copy any document that we file at the Commission's Public Reference Room at 450
Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at its regional
offices located at 7 World Trade Center, 13th Floor, New York, New York 10048,
and at Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Please call the Commission at 1-800-SEC-0330 for more
information about the Public Reference Rooms. Most of our filings are also
available to you free of charge at the Commission's web site at
http://www.sec.gov.
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<PAGE> 19
STOCK MARKET: Our common stock is listed on the Nasdaq SmallCap Market
and similar information can be inspected and copied at the offices of the
National Association of Securities Dealers, Inc., 1735 K Street, N.W.,
Washington, D.C. 20006.
REGISTRATION STATEMENT: We have filed a registration statement under
the Securities Act with the Commission with respect to the common stock offered
under this prospectus. This prospectus is a part of the registration statement.
However, it does not contain all of the information contained in the
registration statement and its exhibits. You should refer to the registration
statement and its exhibits for further information about us and the common stock
offered under this prospectus.
INFORMATION INCORPORATED BY REFERENCE: The Commission allows us to
"incorporate by reference" the information we file with it, which means that we
can disclose important information to you by referring you to those documents.
The information incorporated by reference is an important part of this
prospectus, and information that we file later with the Commission will
automatically update and supersede this information. We have filed the following
documents with the Commission and they are incorporated by reference into this
prospectus:
- our Annual Report on Form 10-KSB for the fiscal year ended
January 1, 2000;
- our Proxy Statement for the 1999 Annual Meeting of
Stockholders, dated April 12, 1998;
- our Current Report on Form 8-K, including Exhibits, filed
March 24, 2000; and
- the description of our capital stock contained in our
registration statement on Form 10-SB, including all amendments
or reports filed for the purpose of updating the description
of our capital stock.
Please note that all other documents and reports filed under Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act following the date of this prospectus and
prior to the termination of this offering will be deemed to be incorporated by
reference into this prospectus and to be made a part of it from the date of the
filing of our reports and documents.
You may request free copies of these filings by writing or telephoning
us at the following address:
Investor Relations
Titan Motorcycle Co. of America
2222 West Peoria Avenue
Phoenix, Arizona 85029
(602) 861-6977
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<PAGE> 20
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following are the estimated expenses in connection with the
issuance and distribution of the securities being registered, all of which will
be paid by Titan:
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee $ 1,000
Nasdaq Listing Fee $ 7,500
Legal Fees and Expenses $ 75,000
Accounting Fees and Expenses $ 7,000
Transfer Agent Fees and Expenses $ 2,000
Miscellaneous $ 10,000
------------
TOTAL $ 102,500
</TABLE>
- -------------------
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Subsection 2 of Section 78.7502 of Chapter 78 of the Nevada Revised
Statutes (the "NRS") empowers a corporation to indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action or suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement or conviction or upon
a plea of nolo contendere or its equivalent does not, of itself, create a
presumption that the person did not act in good faith or in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation or that, with respect to any criminal action or proceeding, he had
reasonable cause to believe his actions were unlawful.
Subsection 2 of Section 78.7502 of the NRS empowers a corporation to
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above against expenses,
including attorneys' fees, actually and reasonably incurred by him in connection
with the defense or settlement of such action or suit if he acted under similar
standards to those described above expect that no indemnification may be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation or for amounts paid in settlement to
the corporation unless and only to the extent that the court in which such
action or suit was brought determines that, despite the adjudication of
liability, such person is fairly and reasonably entitled to indemnity for such
expenses as the court deems proper.
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<PAGE> 21
Section 78.7502 of the NRS further provides that to the extent a
director or officer of a corporation has been successful in the defense of any
action, suit or proceeding referred to in subsections (1) and (2) or in the
defense of any claim, issue or matter therein, he shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection therewith. Section 78.751 of the NRS provides that any
indemnification provided for by Section 78.7502 of the NRS (by court order or
otherwise) shall not be deemed exclusive of any other rights to which the
indemnified party may be entitled and that the scope of indemnification shall
continue as to directors, officers, employees or agents who have ceased to hold
such positions, and to their heirs, executors and administrators. Section 78.752
empowers the corporation to purchase and maintain insurance on behalf of a
director, officer, employee or agent of the corporation against any liability
asserted against him or incurred by him in any such capacity or arising out of
his status as such whether or not the corporation would have the power to
indemnify him against such liabilities under Section 78.7502.
Article 4.2 of our Articles of Incorporation provide that no director
or officer of ours shall be personally liable to us or any of our stockholders
for damages for breach of their fiduciary duty as a director or officer. This
provision, however, does not eliminate or limit the liability of our directors
or officers for:
- acts or omissions which involve intentional misconduct, fraud or a
knowing violation of law, or
- the payment of distributions in violation of Nevada Revised Statutes
Section 78.300.
Article VI of our bylaws provides for the indemnification of our
directors, officers, employees and agents in a manner substantially identical in
scope to that permitted under Section 78.7502 of the Nevada Revised Statutes.
The Bylaws provide that the expenses of officers and directors incurred in
defending any civil or criminal action, suit or proceeding shall be paid by us
as they are incurred and in advance of the final disposition of the action, suit
or proceeding, upon receipt of an undertaking by or on behalf of the director or
officer to repay the amount if it is ultimately determined by a court of
competent jurisdiction that he is not entitled to be indemnified.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
4.1 Certificate of Designations of the Series B Convertible Preferred Stock (incorporated by
reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed March 24,
2000).
4.2 Warrant issued to Advantage Fund II Ltd., dated March 9, 2000 (incorporated by reference to
Exhibit 4.2 to the Company's Current Report on Form 8-K filed March 24, 2000).
4.3 Warrant issued to Koch Investment Group Limited, dated March 9, 2000 (incorporated by
reference to Exhibit 4.3 to the Company's Current Report on Form 8-K filed March 24,
2000).
4.4 Warrant issued to Mr. Robert K. Schacter, dated March 7, 2000
4.5 Warrant issued to Mr. Thomas J. Griesel, dated March 7, 2000
4.6 Warrant issued to Financial West Group, dated March 7, 2000
4.7 Warrant issued to Mr. Richard Cohn, dated March 7, 2000
</TABLE>
II-2
<PAGE> 22
<TABLE>
<S> <C>
4.8 Registration Rights Agreement with Advantage Fund II Ltd., dated as of March 7, 2000
(incorporated by reference to Exhibit 4.5 to the Company's Current Report on Form 8-K
filed March 24, 2000).
4.9 Registration Rights Agreement with Koch Investment Group Limited, dated as of March 7,
2000 (incorporated by reference to Exhibit 4.6 to the Company's Current Report on Form
8-K filed March 24, 2000).
5 Opinion of James, Driggs, Walch, Santoro, Kearney, Johnson & Thompson regarding legality.
10.1 Subscription Agreement with Advantage Fund II Ltd., dated as of March 7, 2000
(incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K
filed March 24, 2000).
10.2 Subscription Agreement with Koch Investment Group Limited, dated as of March 7, 2000
(incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K
filed March 24, 2000).
23.1 Consent of PriceWaterhouseCoopers LLP
23.2 Consent of James, Driggs, Walch, Santoro, Kearney, Johnson & Thompson (included in
Exhibit 5).
24 Power of Attorney (included on signature page of registration statement).
</TABLE>
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration
statement to include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof;
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's Annual Report under Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report under Section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
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<PAGE> 23
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-4
<PAGE> 24
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Phoenix, State of Arizona, on April 20, 2000.
TITAN MOTORCYCLE CO. OF AMERICA
/s/ Francis S. Keery
-------------------------------------
Francis S. Keery, Chairman of the
Board of Directors and Chief
Executive Officer
Know all men by these presents, that each person whose signature
appears below constitutes and appoints Francis S. Keery, Robert P. Lobban,
Patrick Keery, and Barbara S. Keery, and each of them, his true and lawful
attorneys-in-fact and agent, with full powers of substitution and
resubstitution, for him and in his name, place, and stead, in any and all
capacities, to sign any and all amendments to this registration statement on
Form S-3 and to sign any registration statement for the same offering that is to
be effective upon filing pursuant to Rule 462(b) of the Securities Act of 1933,
and to file the same, with all exhibits thereto, and other documents in
connection therewith with the Securities and Exchange Commission, granting under
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done
in and about the premises as fully and to all intents and purposes as he might
or could do in person hereby ratifying and confirming all that said
attorneys-in-fact and agents, or his substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
.SIGNATURE TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ Francis S. Keery Chairman of the Board of Directors and Chief April 20, 2000
- ---------------------------------------- Executive Officer (Principal Executive Officer)
Francis S. Keery
/s/ Robert P. Lobban Chief Financial Officer (Principal Financial April 20, 2000
- ---------------------------------------- Officer and Principal Accounting Officer)
Robert P. Lobban
/s/ Patrick Keery President and Director April 20, 2000
- ----------------------------------------
Patrick Keery
/s/ Barbara S. Keery Vice President, Secretary and Director April 20, 2000
- ----------------------------------------
Barbara S. Keery
/s/ Harry H. Birkenruth Director April 20, 2000
- ----------------------------------------
Harry H. Birkenruth
/s/ H.B. Tony Turner Director April 20, 2000
- ----------------------------------------
H.B. Tony Turner
</TABLE>
II-5
<PAGE> 25
***INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- -------------- -----------
<S> <C>
4.1 Certificate of Designations of the Series B Convertible Preferred Stock (incorporated by
reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed March 24,
2000).
4.2 Warrant issued to Advantage Fund II Ltd., dated March 9, 2000 (incorporated by reference to
Exhibit 4.2 to the Company's Current Report on Form 8-K filed March 24, 2000).
4.3 Warrant issued to Koch Investment Group Limited, dated March 9, 2000 (incorporated by
reference to Exhibit 4.3 to the Company's Current Report on Form 8-K filed March 24,
2000).
4.4 Warrant issued to Mr. Robert K. Schacter, dated March 7, 2000
4.5 Warrant issued to Mr. Thomas J. Griesel, dated March 7, 2000
4.6 Warrant issued to Financial West Group, dated March 7, 2000
4.7 Warrant issued to Mr. Richard Cohn, dated March 7, 2000
4.8 Registration Rights Agreement with Advantage Fund II Ltd., dated as of March 7, 2000
(incorporated by reference to Exhibit 4.5 to the Company's Current Report on Form 8-K
filed March 24, 2000).
4.9 Registration Rights Agreement with Koch Investment Group Limited, dated as of March 7,
2000 (incorporated by reference to Exhibit 4.6 to the Company's Current Report on Form
8-K filed March 24, 2000).
5 Opinion of James, Driggs, Walch, Santoro, Kearney, Johnson & Thompson regarding legality.
10.1 Subscription Agreement with Advantage Fund II Ltd., dated as of March 7, 2000
(incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K
filed March 24, 2000).
10.2 Subscription Agreement with Koch Investment Group Limited, dated as of March 7, 2000
(incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K
filed March 24, 2000).
23.1 Consent of PriceWaterhouseCoopers LLP
23.2 Consent of James, Driggs, Walch, Santoro, Kearney, Johnson & Thompson (included in
Exhibit 5).
</TABLE>
<PAGE> 26
<TABLE>
<S> <C>
24 Power of Attorney (included on signature page of registration statement).
</TABLE>
<PAGE> 1
Exhibit 4.4
These securities have not been registered under the Securities Act of 1933 or
any state securities laws. These securities have been acquired for investment
and not with a view to distribution or resale, and may not be sold, mortgaged,
pledged, hypothecated or otherwise transferred without registration under the
Securities Act of 1933 and qualification under state securities laws, or an
opinion of counsel acceptable to the corporation that registration and
qualification is not required.
TITAN MOTORCYCLE CO. OF AMERICA
Common Stock Purchase Warrant
To Subscribe for and Purchase March 7, 2000
8,550 Shares of Common Stock of
TITAN MOTORCYCLE CO. OF AMERICA
THIS CERTIFIES that, for good and valuable consideration, the
sufficiency of which is hereby acknowledged, Mr. Robert K., Schacter or his
registered assigns (the "Holder") is entitled to subscribe for and purchase from
TITAN MOTORCYCLE CO. OF AMERICA, a Nevada corporation (hereinafter called the
"Company"), up to 8,550 shares (subject to adjustment as hereinafter provided)
of fully paid and non-assessable Common Stock of the Company (the "Common
Stock"), subject to the provisions and upon the terms and conditions hereinafter
set forth at the price of $2.00 per share (such price as may from time to time
be adjusted as provided herein is called the "Warrant Price"), at or prior to
5:00 p.m. Pacific time on March 7, 2005 (the "Exercise Period").
This Warrant and any Warrant subsequently issued upon exchange or transfer
hereof are hereinafter collectively called the "Warrant."
Section 1. EXERCISE OF WARRANT. The rights represented by this Warrant may
be exercised by the Holder, in whole or in part (but not as to fractional
shares) at any time or from time to time during the Exercise Period by the
completion of the purchase form attached hereto and by the surrender of this
Warrant (properly endorsed) at the office of the Company as it may designate by
notice in writing to the Holder hereof at the address of the Holder appearing on
the books of the Company, and by payment to the Company of the Warrant Price in
cash or by certified or official bank check, for each share being purchased. In
the event of any exercise of the rights represented by this Warrant, a
certificate or certificates for the shares of Common Stock so purchased,
registered in the name of the Holder or its nominee or other party designated in
the purchase form by the Holder hereof, shall be delivered to the Holder as soon
as practicable after the exercise of this Warrant, and in any event within five
(5) business days after the date on which the rights represented by this Warrant
shall have been so exercised; and, unless this Warrant has expired or has been
exercised in full, a new Warrant representing the number of shares (except a
remaining fractional share), if any, with respect to which this Warrant shall
not then have been exercised shall also be issued to the Holder within such
time. The person in whose name any certificate for shares of Common Stock is
issued upon exercise of this Warrant shall for all purposes be deemed to have
become the holder of record of such shares on the date on which this Warrant was
surrendered and payment of the Warrant is made, except that, if the
<PAGE> 2
date of such surrender and payment is a date on which the stock transfer books
of the Company are closed, such person shall be deemed to have become the holder
of such shares at the close of business on the next succeeding date on which the
stock transfer books are open. No fractional shares shall be issued upon
exercise of this Warrant and no payment or adjustment shall be made upon any
exercise on account of any cash dividends on the Common Stock issued upon such
exercise. If any fractional interest in a share of Common Stock would, except
for the provision of this Section 1, be delivered upon such exercise, the
Company, in lieu of delivery of a fractional share thereof, shall pay to the
Holder an amount in cash equal to the current market price of such fractional
share as determined in good faith by the Board of Directors of the Company.
Current market price means the closing price of the Common Stock on the relevant
date as reported on the Nasdaq SmallCap Market (or any national securities
exchange, national market including the Nasdaq National Market, or other
quotation system on which the Common Stock is then listed) or, if no prices are
reported for that date, such prices on the next preceding date for which closing
prices were reported, or if the Common Stock is not publicly traded, by such
methods or procedures as may be established from time to time by the Board of
Directors of the Company in good faith.
Section 2. STOCK SPLITS, CONSOLIDATION, MERGER, AND SALE. In the event that
before the issuance of the shares of Common Stock into which this Warrant may be
exercised the outstanding shares of Common Stock shall be split, combined, or
consolidated, by dividend, reclassification or otherwise, into a greater or
lesser number of shares of Common Stock or any other class or classes of stock,
as appropriate, the Warrant Price in effect immediately prior to such
combination or consolidation and the number of shares purchasable under this
Warrant shall, concurrently with the effectiveness of such combination or
consolidation, be proportionately adjusted. If there shall be effected any
consolidation or merger of the Company with another corporation, or a sale of
all or substantially all of the Company's assets to another corporation, and if
the holders of Common Stock shall be entitled pursuant to the terms of any such
transaction to receive stock, securities or assets with respect to or in
exchange for Common Stock, then, as a condition of such consolidation, merger or
sale, lawful and adequate provisions shall be made whereby the Holder of this
Warrant shall thereafter have the right to receive, upon the basis and upon the
terms and conditions specified herein and in lieu of the shares of Common Stock
immediately theretofore receivable upon the exercise of such Warrant, such
shares of stock, securities or assets as may be issuable or payable with respect
to or in exchange for a number of outstanding shares of such Common Stock equal
to the number of shares of such Common Stock immediately theretofore so
receivable had such consolidation, merger or sale not taken place, and in any
such case appropriate provisions shall be made with respect to the rights and
interests of the Holder to the end that the provisions hereof shall thereafter
be applicable, as nearly as may be, in relation to any shares of stock,
securities or assets thereafter deliverable upon the exercise of this Warrant.
(a) STOCK TO BE RESERVED. The Company will at all times reserve and
keep available out of its authorized Common Stock, solely for the purpose of
issue upon the exercise of this Warrant as herein provided, such number of
shares of Common Stock as shall then be issuable upon the exercise of this
Warrant.
<PAGE> 3
(b) ISSUE TAX. The issuance of certificates for shares of Common Stock
upon exercise of this Warrant shall be made without charge to the Holders of
this Warrant for any issuance tax in respect thereof provided that the Company
shall not be required to pay any tax which may be payable in respect of any
transfer involved in the issuance and delivery of any certificate in a name
other than that of the Holder of this Warrant, which shall be borne by the
Holder.
(c) CLOSING OF BOOKS. The Company will not close its transfer books to
impair any issuance of the shares of Common Stock upon the exercise of this
Warrant.
Section 3. NOTICES OF RECORD DATES. In the event of:
(a) any taking by the Company of a record of the holders of any class
of securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution (other than cash
dividends out of earned surplus), or any right to subscribe for, purchase or
otherwise acquire any shares of stock of any class or any other securities or
property, or to receive any other right, or
(b) any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any transfer of all or
substantially all the assets of the Company to or consolidation or merger of the
Company with or into any other corporation, or
(c) any voluntary or involuntary dissolution, liquidation or winding-up
of the Company, then and in each such event the Company will give notice to the
Holder of this Warrant specifying (i) the date on which any such record is to be
taken for the purpose of such dividend, distribution or right and stating the
amount and character of such dividend, distribution or right, and (ii) the date
on which any such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding-up is to take place,
and the time, if any is to be fixed, as of which the holders of record of Common
Stock will be entitled to exchange their shares of Common Stock for securities
or other property deliverable upon such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up. Such notice shall be given at least ten (10) days and not more than
ninety (90) days prior to the date therein specified, and such notice shall
state that the action in question or the record date is subject to the
effectiveness of a registration statement under the Securities Act of 1933, as
amended (the "Securities Act") or to a favorable vote of shareholders, if either
is required. Any failure to provide a notice hereunder shall not affect the
corporate action taken.
Section 4. NO SHAREHOLDER RIGHTS OR LIABILITIES. This Warrant shall not
entitle the Holder hereof to any voting rights or other rights as a shareholder
of the Company. No provision hereof, in the absence of affirmative action by the
Holder hereof to purchase shares of Common Stock, and no mere enumeration hereon
of the rights or privileges of the Holder hereof, shall give rise to any
liability of such Holder for the Warrant Price or as a shareholder of the
Company, whether such liability is asserted by the Company or by creditors of
the Company.
Section 5. REPRESENTATIONS OF HOLDER. The Holder hereby represents and
acknowledges to the Company as of the date hereof and as of each exercise of
this Warrant that:
<PAGE> 4
(a) this Warrant, the Common Stock issuable upon exercise of this
Warrant and any securities issued with respect to any of them by way of a stock
dividend or stock split or in connection with a recapitalization, merger,
consolidation or other reorganization will be "restricted securities" as such
term is used in the rules and regulations under the Securities Act; such
securities have not been and may not be registered under the Securities Act or
any state securities law; and such securities must be held indefinitely unless
registration is effected or transfer can be made pursuant to appropriate
exemptions;
(b) the Holder has read, and fully understands, the terms of this
Warrant set forth on its face and the attachments hereto, including the
restrictions on transfer contained herein;
(c) the Holder is purchasing for investment for its own account and not
with a view to or for sale in connection with any distribution of this Warrant
or the Common Stock of the Company issuable upon exercise of this Warrant and it
has no intention of selling such securities in a public distribution in
violation of the federal securities laws or any applicable state securities
laws;
(d) the Holder is an "accredited investor" within the meaning of
paragraph (a) of Rule 501 of Regulation D promulgated by the Securities and
Exchange Commission and an "excluded purchaser" within the meaning of Section
25102(f) of the California Corporate Securities Law of 1968; and
(e) the Company may affix the following legend (in addition to any
other legend(s), if any, required by applicable state corporate and/or
securities laws) to certificates for shares of Common Stock (or other
securities) issued upon exercise of this Warrant:
These securities have not been registered under the Securities Act of
1933 or any state securities laws. These securities have been acquired
for investment and not with a view to distribution or resale, and may
not be sold, mortgaged, pledged, hypothecated or otherwise transferred
without registration under the Securities Act of 1933 and qualification
under state securities laws, or an opinion of counsel acceptable to the
corporation that registration and qualification is not required.
Section 6. RESTRICTIONS ON TRANSFER; REGISTRATION RIGHTS.
(a) The Holder may not transfer this Warrant without the written
consent of the Company and an opinion of counsel acceptable to the Company that
the transfer may be effected in compliance with exemptions under the Securities
Act and applicable state securities laws. The Holder may not transfer the Common
Stock underlying the Warrant unless there is an effective registration statement
in effect under the Securities Act and the transfer is qualified under
applicable state securities laws, or the Holder has delivered to the Company an
opinion of counsel acceptable to the Company that registration and qualification
is not required.
(b) The Company is obligated to cause a registration statement to be
filed under the Securities Act on or before April 7, 2000 pursuant to a
Registration Rights Agreement between the Company and Advantage Fund II Ltd. and
a Registration Rights Agreement between the Company and Koch Investment Group
Limited (the "Registration Statement"). The Company
<PAGE> 5
shall include in such Registration Statement all of the Common Stock issuable
upon conversion of the Warrant.
(c) All fees, disbursements, and out-of-pocket expenses incurred in
connection with the filing of the Registration Statement under Paragraph (a) of
Section 6 and in complying with applicable securities and Blue Sky laws shall be
borne by the Company, provided, however, that any expenses of the individual
Holder or holders of the underlying securities, including but not limited to the
Holder or holders' attorneys' fees and discounts and commissions, shall be borne
by the Holder and holders of the Common Stock. The Company at its expense will
supply the Holder and any holder of Common Stock with copies of the Registration
Statement and the prospectus or offering circular included therein and other
related documents in such quantities as may be reasonably requested by the
Holder or holder of Common Stock.
(d) The Company shall have no obligation to register the Warrant but
shall be obligated to register the Common Stock issuable upon exercise of the
Warrant in accordance with Paragraph (b) of Section 6.
(e) The Company agrees that it will use its best efforts to keep such
Registration Statement effective until March 7, 2005 or such earlier date as all
Common Stock covered by such Registration Statement have been disposed of
pursuant thereto.
(f) The Holder agrees to cooperate with the Company and to provide the
Company on its request with all information concerning the Holder, the Warrant
issued hereunder, any Common Stock acquired upon exercise of the Warrant and the
means or methods of intended disposition of the Common Stock pursuant to the
Registration Statement that may reasonably be requested by the Company in order
for the Company to perform its obligation under this Section 6.
Section 7. LOST, STOLEN, MUTILATED, OR DESTROYED WARRANT. If this Warrant
is lost, stolen, mutilated, or destroyed, the Company may, on such terms as to
indemnity or otherwise as it may in its discretion reasonably impose (which
shall, in the case of a mutilated Warrant, include the surrender thereof), issue
a new Warrant of like denomination and tenor as the Warrant so lost, stolen,
mutilated, or destroyed.
Section 8. PRESENTMENT. Prior to due presentment of this Warrant, together
with a completed assignment form attached hereto for registration of transfer,
the Company may deem and treat the Holder as the absolute owner of the Warrant,
notwithstanding any notation of ownership or other writing thereon, for the
purpose of any exercise thereof and for all other purposes, and the Company
shall not be affected by any notice to the contrary.
Section 9. NOTICE. Notice or demand pursuant to this Warrant shall be
sufficiently given or made, if sent by first-class mail, postage prepaid,
addressed, if to the Holder of this Warrant, to the Holder at its last known
address as it shall appear in the records of the Company, and if to the Company,
at 2222 West Peoria Avenue, Phoenix, Arizona 85029, Attention: Chief Financial
Officer. The Company may alter the address to which communications are to be
sent by giving notice of such change of address in conformity with the
provisions of this Section 9 for the giving of notice.
<PAGE> 6
Section 10. GOVERNING LAW. The validity, interpretation, and performance
of this Warrant shall be governed by the laws of the State of Arizona without
regard to principles of conflicts of laws.
Section 11. SUCCESSORS, ASSIGNS. Subject to the restrictions on transfer by
Holder set forth in Section 6 hereof, all the terms and provisions of the
Warrant shall be binding upon and inure to the benefit of and be enforceable by
the respective successors and assigns of the parties hereto.
Section 12. AMENDMENT. This Warrant may be modified, amended, or
terminated by a writing signed by the Company and the Holder.
Section 13. SEVERABILITY. Should any part but not the whole of this Warrant
for any reason be declared invalid, such decision shall not affect the validity
of any remaining portion, which remaining portion shall remain in force and
effect as if this Warrant had been executed with the invalid portion thereof
eliminated, and it is hereby declared the intention of the parties hereto that
they would have executed the remaining portion of this Warrant without including
therein any such part which may, for any reason, be hereafter declared invalid.
Section 14. NO IMPAIRMENT. The Company will not, by any voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Company, but will at all times in good
faith assist in the carrying out of all the provisions of this Warrant and in
the taking of all such action as may be necessary or appropriate in order to
protect the rights of the Holder of this Warrant against impairment.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 7
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed
and delivered on and as of the day and year first above written by one of its
officers thereunto duly authorized.
TITAN MOTORCYCLE CO. OF AMERICA,
a Nevada corporation
Dated: _______________________
By: ________________________________
Title: _______________________________
The undersigned Holder agrees and accepts this Warrant and acknowledges
that it has read and confirms each of the representations contained in Section
5.
ROBERT K. SCHACTER
________________________________
<PAGE> 8
PURCHASE FORM
(To be executed by the Warrant Holder if he desires to exercise the Warrant in
whole or in part)
To: TITAN MOTORCYCLE CO. OF AMERICA
The undersigned, whose Social Security or other identifying number is
_______________, hereby irrevocably exercises the attached Warrant, agrees to
purchase ______________ shares of Common Stock, and tenders payment herewith to
the order of TITAN MOTORCYCLE CO. OF AMERICA in the amount of
$_____________________________.
The undersigned requests that certificates for such shares be issued as
follows:
Name: ___________________________________
Address: ________________________________
________________________________
________________________________
Deliver to: _____________________________
Address: ________________________________
________________________________
________________________________
and, if the number of shares shall not be all the shares purchasable under the
Warrant, that a new Warrant for the balance remaining of the shares purchasable
under the attached Warrant be registered in the name of, and delivered to, the
undersigned at the address stated below:
Address: ________________________________
________________________________
________________________________
By this exercise,
The undersigned hereby reaffirms its representations and warrants set
forth in Section 5 of the Warrant as of the date hereof.
Dated:______________, _____ Signature: _________________________________
(Signature must conform in all respects to
the name of the Warrant Holder as specified
on the face of the Warrant, without
alteration, enlargement or any change
whatsoever)
<PAGE> 9
ASSIGNMENT
(To be executed by the Warrant Holder if he desires to effect a transfer of the
Warrant)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ____________ ______________________________, whose Social Security or other
identification number is _________________ [residing/located] at
____________________________ ____________________ the attached Warrant, and
appoints _____________________________ residing at
___________________________________________________________________________
the undersigned's attorney-in-fact to transfer said Warrant on the books of the
Company, with full power of substitution in the premises.
Dated:_______________, _____
In the presence of:
_________________________________ _______________________________________
(Signature must conform in all respects to
the name of the Warrant Holder as specified
on the face of the Warrant, without
alteration, enlargement or any change
whatsoever).
<PAGE> 1
Exhibit 4.5
These securities have not been registered under the Securities Act of 1933 or
any state securities laws. These securities have been acquired for investment
and not with a view to distribution or resale, and may not be sold, mortgaged,
pledged, hypothecated or otherwise transferred without registration under the
Securities Act of 1933 and qualification under state securities laws, or an
opinion of counsel acceptable to the corporation that registration and
qualification is not required.
TITAN MOTORCYCLE CO. OF AMERICA
Common Stock Purchase Warrant
To Subscribe for and Purchase March 7, 2000
2,135 Shares of Common Stock of
TITAN MOTORCYCLE CO. OF AMERICA
THIS CERTIFIES that, for good and valuable consideration, the
sufficiency of which is hereby acknowledged, Mr. Thomas J. Griesel or his
registered assigns (the "Holder") is entitled to subscribe for and purchase from
TITAN MOTORCYCLE CO. OF AMERICA, a Nevada corporation (hereinafter called the
"Company"), up to 2,135 shares (subject to adjustment as hereinafter provided)
of fully paid and non-assessable Common Stock of the Company (the "Common
Stock"), subject to the provisions and upon the terms and conditions hereinafter
set forth at the price of $2.00 per share (such price as may from time to time
be adjusted as provided herein is called the "Warrant Price"), at or prior to
5:00 p.m. Pacific time on March 7, 2005 (the "Exercise Period").
This Warrant and any Warrant subsequently issued upon exchange or transfer
hereof are hereinafter collectively called the "Warrant."
Section 1. EXERCISE OF WARRANT. The rights represented by this Warrant may
be exercised by the Holder, in whole or in part (but not as to fractional
shares) at any time or from time to time during the Exercise Period by the
completion of the purchase form attached hereto and by the surrender of this
Warrant (properly endorsed) at the office of the Company as it may designate by
notice in writing to the Holder hereof at the address of the Holder appearing on
the books of the Company, and by payment to the Company of the Warrant Price in
cash or by certified or official bank check, for each share being purchased. In
the event of any exercise of the rights represented by this Warrant, a
certificate or certificates for the shares of Common Stock so purchased,
registered in the name of the Holder or its nominee or other party designated in
the purchase form by the Holder hereof, shall be delivered to the Holder as soon
as practicable after the exercise of this Warrant, and in any event within five
(5) business days after the date on which the rights represented by this Warrant
shall have been so exercised; and, unless this Warrant has expired or has been
exercised in full, a new Warrant representing the number of shares (except a
remaining fractional share), if any, with respect to which this Warrant shall
not then have been exercised shall also be issued to the Holder within such
time. The person in whose name any certificate for shares of Common Stock is
issued upon exercise of this Warrant shall for all purposes be deemed to have
become the holder of record of such shares on the date on which this Warrant was
surrendered and payment of the Warrant is made, except that, if the
<PAGE> 2
date of such surrender and payment is a date on which the stock transfer books
of the Company are closed, such person shall be deemed to have become the holder
of such shares at the close of business on the next succeeding date on which the
stock transfer books are open. No fractional shares shall be issued upon
exercise of this Warrant and no payment or adjustment shall be made upon any
exercise on account of any cash dividends on the Common Stock issued upon such
exercise. If any fractional interest in a share of Common Stock would, except
for the provision of this Section 1, be delivered upon such exercise, the
Company, in lieu of delivery of a fractional share thereof, shall pay to the
Holder an amount in cash equal to the current market price of such fractional
share as determined in good faith by the Board of Directors of the Company.
Current market price means the closing price of the Common Stock on the relevant
date as reported on the Nasdaq SmallCap Market (or any national securities
exchange, national market including the Nasdaq National Market, or other
quotation system on which the Common Stock is then listed) or, if no prices are
reported for that date, such prices on the next preceding date for which closing
prices were reported, or if the Common Stock is not publicly traded, by such
methods or procedures as may be established from time to time by the Board of
Directors of the Company in good faith.
Section 2. STOCK SPLITS, CONSOLIDATION, MERGER, AND SALE. In the event that
before the issuance of the shares of Common Stock into which this Warrant may be
exercised the outstanding shares of Common Stock shall be split, combined, or
consolidated, by dividend, reclassification or otherwise, into a greater or
lesser number of shares of Common Stock or any other class or classes of stock,
as appropriate, the Warrant Price in effect immediately prior to such
combination or consolidation and the number of shares purchasable under this
Warrant shall, concurrently with the effectiveness of such combination or
consolidation, be proportionately adjusted. If there shall be effected any
consolidation or merger of the Company with another corporation, or a sale of
all or substantially all of the Company's assets to another corporation, and if
the holders of Common Stock shall be entitled pursuant to the terms of any such
transaction to receive stock, securities or assets with respect to or in
exchange for Common Stock, then, as a condition of such consolidation, merger or
sale, lawful and adequate provisions shall be made whereby the Holder of this
Warrant shall thereafter have the right to receive, upon the basis and upon the
terms and conditions specified herein and in lieu of the shares of Common Stock
immediately theretofore receivable upon the exercise of such Warrant, such
shares of stock, securities or assets as may be issuable or payable with respect
to or in exchange for a number of outstanding shares of such Common Stock equal
to the number of shares of such Common Stock immediately theretofore so
receivable had such consolidation, merger or sale not taken place, and in any
such case appropriate provisions shall be made with respect to the rights and
interests of the Holder to the end that the provisions hereof shall thereafter
be applicable, as nearly as may be, in relation to any shares of stock,
securities or assets thereafter deliverable upon the exercise of this Warrant.
(a) STOCK TO BE RESERVED. The Company will at all times reserve and
keep available out of its authorized Common Stock, solely for the purpose of
issue upon the exercise of this Warrant as herein provided, such number of
shares of Common Stock as shall then be issuable upon the exercise of this
Warrant.
<PAGE> 3
(b) ISSUE TAX. The issuance of certificates for shares of Common Stock
upon exercise of this Warrant shall be made without charge to the Holders of
this Warrant for any issuance tax in respect thereof provided that the Company
shall not be required to pay any tax which may be payable in respect of any
transfer involved in the issuance and delivery of any certificate in a name
other than that of the Holder of this Warrant, which shall be borne by the
Holder.
(c) CLOSING OF BOOKS. The Company will not close its transfer books to
impair any issuance of the shares of Common Stock upon the exercise of this
Warrant.
Section 3. NOTICES OF RECORD DATES. In the event of:
(a) any taking by the Company of a record of the holders of any class
of securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution (other than cash
dividends out of earned surplus), or any right to subscribe for, purchase or
otherwise acquire any shares of stock of any class or any other securities or
property, or to receive any other right, or
(b) any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any transfer of all or
substantially all the assets of the Company to or consolidation or merger of the
Company with or into any other corporation, or
(c) any voluntary or involuntary dissolution, liquidation or winding-up
of the Company, then and in each such event the Company will give notice to the
Holder of this Warrant specifying (i) the date on which any such record is to be
taken for the purpose of such dividend, distribution or right and stating the
amount and character of such dividend, distribution or right, and (ii) the date
on which any such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding-up is to take place,
and the time, if any is to be fixed, as of which the holders of record of Common
Stock will be entitled to exchange their shares of Common Stock for securities
or other property deliverable upon such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up. Such notice shall be given at least ten (10) days and not more than
ninety (90) days prior to the date therein specified, and such notice shall
state that the action in question or the record date is subject to the
effectiveness of a registration statement under the Securities Act of 1933, as
amended (the "Securities Act") or to a favorable vote of shareholders, if either
is required. Any failure to provide a notice hereunder shall not affect the
corporate action taken.
Section 4. NO SHAREHOLDER RIGHTS OR LIABILITIES. This Warrant shall not
entitle the Holder hereof to any voting rights or other rights as a shareholder
of the Company. No provision hereof, in the absence of affirmative action by the
Holder hereof to purchase shares of Common Stock, and no mere enumeration hereon
of the rights or privileges of the Holder hereof, shall give rise to any
liability of such Holder for the Warrant Price or as a shareholder of the
Company, whether such liability is asserted by the Company or by creditors of
the Company.
Section 5. REPRESENTATIONS OF HOLDER. The Holder hereby represents and
acknowledges to the Company as of the date hereof and as of each exercise of
this Warrant that:
<PAGE> 4
(a) this Warrant, the Common Stock issuable upon exercise of this
Warrant and any securities issued with respect to any of them by way of a stock
dividend or stock split or in connection with a recapitalization, merger,
consolidation or other reorganization will be "restricted securities" as such
term is used in the rules and regulations under the Securities Act; such
securities have not been and may not be registered under the Securities Act or
any state securities law; and such securities must be held indefinitely unless
registration is effected or transfer can be made pursuant to appropriate
exemptions;
(b) the Holder has read, and fully understands, the terms of this
Warrant set forth on its face and the attachments hereto, including the
restrictions on transfer contained herein;
(c) the Holder is purchasing for investment for its own account and not
with a view to or for sale in connection with any distribution of this Warrant
or the Common Stock of the Company issuable upon exercise of this Warrant and it
has no intention of selling such securities in a public distribution in
violation of the federal securities laws or any applicable state securities
laws;
(d) the Holder is an "accredited investor" within the meaning of
paragraph (a) of Rule 501 of Regulation D promulgated by the Securities and
Exchange Commission and an "excluded purchaser" within the meaning of Section
25102(f) of the California Corporate Securities Law of 1968; and
(e) the Company may affix the following legend (in addition to any
other legend(s), if any, required by applicable state corporate and/or
securities laws) to certificates for shares of Common Stock (or other
securities) issued upon exercise of this Warrant:
These securities have not been registered under the Securities Act of
1933 or any state securities laws. These securities have been acquired
for investment and not with a view to distribution or resale, and may
not be sold, mortgaged, pledged, hypothecated or otherwise transferred
without registration under the Securities Act of 1933 and qualification
under state securities laws, or an opinion of counsel acceptable to the
corporation that registration and qualification is not required.
Section 6. RESTRICTIONS ON TRANSFER; REGISTRATION RIGHTS.
(a) The Holder may not transfer this Warrant without the written
consent of the Company and an opinion of counsel acceptable to the Company that
the transfer may be effected in compliance with exemptions under the Securities
Act and applicable state securities laws. The Holder may not transfer the Common
Stock underlying the Warrant unless there is an effective registration statement
in effect under the Securities Act and the transfer is qualified under
applicable state securities laws, or the Holder has delivered to the Company an
opinion of counsel acceptable to the Company that registration and qualification
is not required.
(b) The Company is obligated to cause a registration statement to be
filed under the Securities Act on or before April 7, 2000 pursuant to a
Registration Rights Agreement between the Company and Advantage Fund II Ltd. and
a Registration Rights Agreement between the Company and Koch Investment Group
Limited (the "Registration Statement"). The Company
<PAGE> 5
shall include in such Registration Statement all of the Common Stock issuable
upon conversion of the Warrant.
(c) All fees, disbursements, and out-of-pocket expenses incurred in
connection with the filing of the Registration Statement under Paragraph (a) of
Section 6 and in complying with applicable securities and Blue Sky laws shall be
borne by the Company, provided, however, that any expenses of the individual
Holder or holders of the underlying securities, including but not limited to the
Holder or holders' attorneys' fees and discounts and commissions, shall be borne
by the Holder and holders of the Common Stock. The Company at its expense will
supply the Holder and any holder of Common Stock with copies of the Registration
Statement and the prospectus or offering circular included therein and other
related documents in such quantities as may be reasonably requested by the
Holder or holder of Common Stock.
(d) The Company shall have no obligation to register the Warrant but
shall be obligated to register the Common Stock issuable upon exercise of the
Warrant in accordance with Paragraph (b) of Section 6.
(e) The Company agrees that it will use its best efforts to keep such
Registration Statement effective until March 7, 2005 or such earlier date as all
Common Stock covered by such Registration Statement have been disposed of
pursuant thereto.
(f) The Holder agrees to cooperate with the Company and to provide the
Company on its request with all information concerning the Holder, the Warrant
issued hereunder, any Common Stock acquired upon exercise of the Warrant and the
means or methods of intended disposition of the Common Stock pursuant to the
Registration Statement that may reasonably be requested by the Company in order
for the Company to perform its obligation under this Section 6.
Section 7. LOST, STOLEN, MUTILATED, OR DESTROYED WARRANT. If this Warrant
is lost, stolen, mutilated, or destroyed, the Company may, on such terms as to
indemnity or otherwise as it may in its discretion reasonably impose (which
shall, in the case of a mutilated Warrant, include the surrender thereof), issue
a new Warrant of like denomination and tenor as the Warrant so lost, stolen,
mutilated, or destroyed.
Section 8. PRESENTMENT. Prior to due presentment of this Warrant, together
with a completed assignment form attached hereto for registration of transfer,
the Company may deem and treat the Holder as the absolute owner of the Warrant,
notwithstanding any notation of ownership or other writing thereon, for the
purpose of any exercise thereof and for all other purposes, and the Company
shall not be affected by any notice to the contrary.
Section 9. NOTICE. Notice or demand pursuant to this Warrant shall be
sufficiently given or made, if sent by first-class mail, postage prepaid,
addressed, if to the Holder of this Warrant, to the Holder at its last known
address as it shall appear in the records of the Company, and if to the Company,
at 2222 West Peoria Avenue, Phoenix, Arizona 85029, Attention: Chief Financial
Officer. The Company may alter the address to which communications are to be
sent by giving notice of such change of address in conformity with the
provisions of this Section 9 for the giving of notice.
<PAGE> 6
Section 10. GOVERNING LAW. The validity, interpretation, and performance
of this Warrant shall be governed by the laws of the State of Arizona without
regard to principles of conflicts of laws.
Section 11. SUCCESSORS, ASSIGNS. Subject to the restrictions on transfer by
Holder set forth in Section 6 hereof, all the terms and provisions of the
Warrant shall be binding upon and inure to the benefit of and be enforceable by
the respective successors and assigns of the parties hereto.
Section 12. AMENDMENT. This Warrant may be modified, amended, or terminated
by a writing signed by the Company and the Holder.
Section 13. SEVERABILITY. Should any part but not the whole of this Warrant
for any reason be declared invalid, such decision shall not affect the validity
of any remaining portion, which remaining portion shall remain in force and
effect as if this Warrant had been executed with the invalid portion thereof
eliminated, and it is hereby declared the intention of the parties hereto that
they would have executed the remaining portion of this Warrant without including
therein any such part which may, for any reason, be hereafter declared invalid.
Section 14. NO IMPAIRMENT. The Company will not, by any voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Company, but will at all times in good
faith assist in the carrying out of all the provisions of this Warrant and in
the taking of all such action as may be necessary or appropriate in order to
protect the rights of the Holder of this Warrant against impairment.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 7
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed
and delivered on and as of the day and year first above written by one of its
officers thereunto duly authorized.
TITAN MOTORCYCLE CO. OF AMERICA,
a Nevada corporation
Dated: ________________________
By: ________________________________
Title: _______________________________
The undersigned Holder agrees and accepts this Warrant and acknowledges
that it has read and confirms each of the representations contained in Section
5.
THOMAS J. GRIESEL
____________________________________
<PAGE> 8
PURCHASE FORM
(To be executed by the Warrant Holder if he desires to exercise the Warrant in
whole or in part)
To: TITAN MOTORCYCLE CO. OF AMERICA
The undersigned, whose Social Security or other identifying number is
_______________, hereby irrevocably exercises the attached Warrant, agrees to
purchase ______________ shares of Common Stock, and tenders payment herewith to
the order of TITAN MOTORCYCLE CO. OF AMERICA in the amount of $________________.
The undersigned requests that certificates for such shares be issued as
follows:
Name: ___________________________________
Address: ________________________________
________________________________
________________________________
Deliver to: _____________________________
Address: ________________________________
________________________________
________________________________
and, if the number of shares shall not be all the shares purchasable under the
Warrant, that a new Warrant for the balance remaining of the shares purchasable
under the attached Warrant be registered in the name of, and delivered to, the
undersigned at the address stated below:
Address: ________________________________
________________________________
________________________________
By this exercise,
The undersigned hereby reaffirms its representations and warrants set
forth in Section 5 of the Warrant as of the date hereof.
Dated:______________, _____ Signature: _________________________________
(Signature must conform in all respects to
the name of the Warrant Holder as specified
on the face of the Warrant, without
alteration, enlargement or any change
whatsoever)
<PAGE> 9
ASSIGNMENT
(To be executed by the Warrant Holder if he desires to effect a transfer of the
Warrant)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto __________________________________________, whose Social Security or other
identification number is _________________ [residing/located] at ______________
_________________________________________________ the attached Warrant, and
appoints _____________________________ residing at _____________________________
_____________________________________________ the undersigned's attorney-in-fact
to transfer said Warrant on the books of the Company, with full power of
substitution in the premises.
Dated:_______________, _____
In the presence of:
_________________________________ ______________________________________
(Signature must conform in all respects to
the name of the Warrant Holder as specified
on the face of the Warrant, without
alteration, enlargement or any change
whatsoever).
<PAGE> 1
Exhibit 4.6
These securities have not been registered under the Securities Act of 1933 or
any state securities laws. These securities have been acquired for investment
and not with a view to distribution or resale, and may not be sold, mortgaged,
pledged, hypothecated or otherwise transferred without registration under the
Securities Act of 1933 and qualification under state securities laws, or an
opinion of counsel acceptable to the corporation that registration and
qualification is not required.
TITAN MOTORCYCLE CO. OF AMERICA
Common Stock Purchase Warrant
To Subscribe for and Purchase March 7, 2000
625 Shares of Common Stock of
TITAN MOTORCYCLE CO. OF AMERICA
THIS CERTIFIES that, for good and valuable consideration, the
sufficiency of which is hereby acknowledged, Financial West Group or its
registered assigns (the "Holder") is entitled to subscribe for and purchase from
TITAN MOTORCYCLE CO. OF AMERICA, a Nevada corporation (hereinafter called the
"Company"), up to 625 shares (subject to adjustment as hereinafter provided) of
fully paid and non-assessable Common Stock of the Company (the "Common Stock"),
subject to the provisions and upon the terms and conditions hereinafter set
forth at the price of $2.00 per share (such price as may from time to time be
adjusted as provided herein is called the "Warrant Price"), at or prior to 5:00
p.m. Pacific time on March 7, 2005 (the "Exercise Period").
This Warrant and any Warrant subsequently issued upon exchange or transfer
hereof are hereinafter collectively called the "Warrant."
Section 1. EXERCISE OF WARRANT. The rights represented by this Warrant may
be exercised by the Holder, in whole or in part (but not as to fractional
shares) at any time or from time to time during the Exercise Period by the
completion of the purchase form attached hereto and by the surrender of this
Warrant (properly endorsed) at the office of the Company as it may designate by
notice in writing to the Holder hereof at the address of the Holder appearing on
the books of the Company, and by payment to the Company of the Warrant Price in
cash or by certified or official bank check, for each share being purchased. In
the event of any exercise of the rights represented by this Warrant, a
certificate or certificates for the shares of Common Stock so purchased,
registered in the name of the Holder or its nominee or other party designated in
the purchase form by the Holder hereof, shall be delivered to the Holder as soon
as practicable after the exercise of this Warrant, and in any event within five
(5) business days after the date on which the rights represented by this Warrant
shall have been so exercised; and, unless this Warrant has expired or has been
exercised in full, a new Warrant representing the number of shares (except a
remaining fractional share), if any, with respect to which this Warrant shall
not then have been exercised shall also be issued to the Holder within such
time. The person in whose name any certificate for shares of Common Stock is
issued upon exercise of this Warrant shall for all purposes be deemed to have
become the holder of record of such shares on the date on which this Warrant was
surrendered and payment of the Warrant is made, except that, if the
<PAGE> 2
date of such surrender and payment is a date on which the stock transfer books
of the Company are closed, such person shall be deemed to have become the holder
of such shares at the close of business on the next succeeding date on which the
stock transfer books are open. No fractional shares shall be issued upon
exercise of this Warrant and no payment or adjustment shall be made upon any
exercise on account of any cash dividends on the Common Stock issued upon such
exercise. If any fractional interest in a share of Common Stock would, except
for the provision of this Section 1, be delivered upon such exercise, the
Company, in lieu of delivery of a fractional share thereof, shall pay to the
Holder an amount in cash equal to the current market price of such fractional
share as determined in good faith by the Board of Directors of the Company.
Current market price means the closing price of the Common Stock on the relevant
date as reported on the Nasdaq SmallCap Market (or any national securities
exchange, national market including the Nasdaq National Market, or other
quotation system on which the Common Stock is then listed) or, if no prices are
reported for that date, such prices on the next preceding date for which closing
prices were reported, or if the Common Stock is not publicly traded, by such
methods or procedures as may be established from time to time by the Board of
Directors of the Company in good faith.
Section 2. STOCK SPLITS, CONSOLIDATION, MERGER, AND SALE. In the event that
before the issuance of the shares of Common Stock into which this Warrant may be
exercised the outstanding shares of Common Stock shall be split, combined, or
consolidated, by dividend, reclassification or otherwise, into a greater or
lesser number of shares of Common Stock or any other class or classes of stock,
as appropriate, the Warrant Price in effect immediately prior to such
combination or consolidation and the number of shares purchasable under this
Warrant shall, concurrently with the effectiveness of such combination or
consolidation, be proportionately adjusted. If there shall be effected any
consolidation or merger of the Company with another corporation, or a sale of
all or substantially all of the Company's assets to another corporation, and if
the holders of Common Stock shall be entitled pursuant to the terms of any such
transaction to receive stock, securities or assets with respect to or in
exchange for Common Stock, then, as a condition of such consolidation, merger or
sale, lawful and adequate provisions shall be made whereby the Holder of this
Warrant shall thereafter have the right to receive, upon the basis and upon the
terms and conditions specified herein and in lieu of the shares of Common Stock
immediately theretofore receivable upon the exercise of such Warrant, such
shares of stock, securities or assets as may be issuable or payable with respect
to or in exchange for a number of outstanding shares of such Common Stock equal
to the number of shares of such Common Stock immediately theretofore so
receivable had such consolidation, merger or sale not taken place, and in any
such case appropriate provisions shall be made with respect to the rights and
interests of the Holder to the end that the provisions hereof shall thereafter
be applicable, as nearly as may be, in relation to any shares of stock,
securities or assets thereafter deliverable upon the exercise of this Warrant.
(a) STOCK TO BE RESERVED. The Company will at all times reserve and
keep available out of its authorized Common Stock, solely for the purpose of
issue upon the exercise of this Warrant as herein provided, such number of
shares of Common Stock as shall then be issuable upon the exercise of this
Warrant.
<PAGE> 3
(b) ISSUE TAX. The issuance of certificates for shares of Common Stock
upon exercise of this Warrant shall be made without charge to the Holders of
this Warrant for any issuance tax in respect thereof provided that the Company
shall not be required to pay any tax which may be payable in respect of any
transfer involved in the issuance and delivery of any certificate in a name
other than that of the Holder of this Warrant, which shall be borne by the
Holder.
(c) CLOSING OF BOOKS. The Company will not close its transfer books to
impair any issuance of the shares of Common Stock upon the exercise of this
Warrant.
Section 3. NOTICES OF RECORD DATES. In the event of:
(a) any taking by the Company of a record of the holders of any class
of securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution (other than cash
dividends out of earned surplus), or any right to subscribe for, purchase or
otherwise acquire any shares of stock of any class or any other securities or
property, or to receive any other right, or
(b) any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any transfer of all or
substantially all the assets of the Company to or consolidation or merger of the
Company with or into any other corporation, or
(c) any voluntary or involuntary dissolution, liquidation or winding-up
of the Company, then and in each such event the Company will give notice to the
Holder of this Warrant specifying (i) the date on which any such record is to be
taken for the purpose of such dividend, distribution or right and stating the
amount and character of such dividend, distribution or right, and (ii) the date
on which any such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding-up is to take place,
and the time, if any is to be fixed, as of which the holders of record of Common
Stock will be entitled to exchange their shares of Common Stock for securities
or other property deliverable upon such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up. Such notice shall be given at least ten (10) days and not more than
ninety (90) days prior to the date therein specified, and such notice shall
state that the action in question or the record date is subject to the
effectiveness of a registration statement under the Securities Act of 1933, as
amended (the "Securities Act") or to a favorable vote of shareholders, if either
is required. Any failure to provide a notice hereunder shall not affect the
corporate action taken.
Section 4. NO SHAREHOLDER RIGHTS OR LIABILITIES. This Warrant shall not
entitle the Holder hereof to any voting rights or other rights as a shareholder
of the Company. No provision hereof, in the absence of affirmative action by the
Holder hereof to purchase shares of Common Stock, and no mere enumeration hereon
of the rights or privileges of the Holder hereof, shall give rise to any
liability of such Holder for the Warrant Price or as a shareholder of the
Company, whether such liability is asserted by the Company or by creditors of
the Company.
Section 5. REPRESENTATIONS OF HOLDER. The Holder hereby represents and
acknowledges to the Company as of the date hereof and as of each exercise of
this Warrant that:
<PAGE> 4
(a) this Warrant, the Common Stock issuable upon exercise of this
Warrant and any securities issued with respect to any of them by way of a stock
dividend or stock split or in connection with a recapitalization, merger,
consolidation or other reorganization will be "restricted securities" as such
term is used in the rules and regulations under the Securities Act; such
securities have not been and may not be registered under the Securities Act or
any state securities law; and such securities must be held indefinitely unless
registration is effected or transfer can be made pursuant to appropriate
exemptions;
(b) the Holder has read, and fully understands, the terms of this
Warrant set forth on its face and the attachments hereto, including the
restrictions on transfer contained herein;
(c) the Holder is purchasing for investment for its own account and not
with a view to or for sale in connection with any distribution of this Warrant
or the Common Stock of the Company issuable upon exercise of this Warrant and it
has no intention of selling such securities in a public distribution in
violation of the federal securities laws or any applicable state securities
laws;
(d) the Holder is an "accredited investor" within the meaning of
paragraph (a) of Rule 501 of Regulation D promulgated by the Securities and
Exchange Commission and an "excluded purchaser" within the meaning of Section
25102(f) of the California Corporate Securities Law of 1968; and
(e) the Company may affix the following legend (in addition to any
other legend(s), if any, required by applicable state corporate and/or
securities laws) to certificates for shares of Common Stock (or other
securities) issued upon exercise of this Warrant:
These securities have not been registered under the Securities Act of
1933 or any state securities laws. These securities have been acquired
for investment and not with a view to distribution or resale, and may
not be sold, mortgaged, pledged, hypothecated or otherwise transferred
without registration under the Securities Act of 1933 and qualification
under state securities laws, or an opinion of counsel acceptable to the
corporation that registration and qualification is not required.
Section 6. RESTRICTIONS ON TRANSFER; REGISTRATION RIGHTS.
(a) The Holder may not transfer this Warrant without the written
consent of the Company and an opinion of counsel acceptable to the Company that
the transfer may be effected in compliance with exemptions under the Securities
Act and applicable state securities laws. The Holder may not transfer the Common
Stock underlying the Warrant unless there is an effective registration statement
in effect under the Securities Act and the transfer is qualified under
applicable state securities laws, or the Holder has delivered to the Company an
opinion of counsel acceptable to the Company that registration and qualification
is not required.
(b) The Company is obligated to cause a registration statement to be
filed under the Securities Act on or before April 7, 2000 pursuant to a
Registration Rights Agreement between the Company and Advantage Fund II Ltd. and
a Registration Rights Agreement between the Company and Koch Investment Group
Limited (the "Registration Statement"). The Company
<PAGE> 5
shall include in such Registration Statement all of the Common Stock issuable
upon conversion of the Warrant.
(c) All fees, disbursements, and out-of-pocket expenses incurred in
connection with the filing of the Registration Statement under Paragraph (a) of
Section 6 and in complying with applicable securities and Blue Sky laws shall be
borne by the Company, provided, however, that any expenses of the individual
Holder or holders of the underlying securities, including but not limited to the
Holder or holders' attorneys' fees and discounts and commissions, shall be borne
by the Holder and holders of the Common Stock. The Company at its expense will
supply the Holder and any holder of Common Stock with copies of the Registration
Statement and the prospectus or offering circular included therein and other
related documents in such quantities as may be reasonably requested by the
Holder or holder of Common Stock.
(d) The Company shall have no obligation to register the Warrant but
shall be obligated to register the Common Stock issuable upon exercise of the
Warrant in accordance with Paragraph (b) of Section 6.
(e) The Company agrees that it will use its best efforts to keep such
Registration Statement effective until March 7, 2005 or such earlier date as all
Common Stock covered by such Registration Statement have been disposed of
pursuant thereto.
(f) The Holder agrees to cooperate with the Company and to provide the
Company on its request with all information concerning the Holder, the Warrant
issued hereunder, any Common Stock acquired upon exercise of the Warrant and the
means or methods of intended disposition of the Common Stock pursuant to the
Registration Statement that may reasonably be requested by the Company in order
for the Company to perform its obligation under this Section 6.
Section 7. LOST, STOLEN, MUTILATED, OR DESTROYED WARRANT. If this Warrant
is lost, stolen, mutilated, or destroyed, the Company may, on such terms as to
indemnity or otherwise as it may in its discretion reasonably impose (which
shall, in the case of a mutilated Warrant, include the surrender thereof), issue
a new Warrant of like denomination and tenor as the Warrant so lost, stolen,
mutilated, or destroyed.
Section 8. PRESENTMENT. Prior to due presentment of this Warrant, together
with a completed assignment form attached hereto for registration of transfer,
the Company may deem and treat the Holder as the absolute owner of the Warrant,
notwithstanding any notation of ownership or other writing thereon, for the
purpose of any exercise thereof and for all other purposes, and the Company
shall not be affected by any notice to the contrary.
Section 9. NOTICE. Notice or demand pursuant to this Warrant shall be
sufficiently given or made, if sent by first-class mail, postage prepaid,
addressed, if to the Holder of this Warrant, to the Holder at its last known
address as it shall appear in the records of the Company, and if to the Company,
at 2222 West Peoria Avenue, Phoenix, Arizona 85029, Attention: Chief Financial
Officer. The Company may alter the address to which communications are to be
sent by giving notice of such change of address in conformity with the
provisions of this Section 9 for the giving of notice.
<PAGE> 6
Section 10. GOVERNING LAW. The validity, interpretation, and performance
of this Warrant shall be governed by the laws of the State of Arizona without
regard to principles of conflicts of laws.
Section 11. SUCCESSORS, ASSIGNS. Subject to the restrictions on transfer by
Holder set forth in Section 6 hereof, all the terms and provisions of the
Warrant shall be binding upon and inure to the benefit of and be enforceable by
the respective successors and assigns of the parties hereto.
Section 12. AMENDMENT. This Warrant may be modified, amended, or
terminated by a writing signed by the Company and the Holder.
Section 13. SEVERABILITY. Should any part but not the whole of this Warrant
for any reason be declared invalid, such decision shall not affect the validity
of any remaining portion, which remaining portion shall remain in force and
effect as if this Warrant had been executed with the invalid portion thereof
eliminated, and it is hereby declared the intention of the parties hereto that
they would have executed the remaining portion of this Warrant without including
therein any such part which may, for any reason, be hereafter declared invalid.
Section 14. NO IMPAIRMENT. The Company will not, by any voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Company, but will at all times in good
faith assist in the carrying out of all the provisions of this Warrant and in
the taking of all such action as may be necessary or appropriate in order to
protect the rights of the Holder of this Warrant against impairment.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 7
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed
and delivered on and as of the day and year first above written by one of its
officers thereunto duly authorized.
TITAN MOTORCYCLE CO. OF AMERICA,
a Nevada corporation
Dated: __________________ ______________
By: ____________________________
Title: ________________________
The undersigned Holder agrees and accepts this Warrant and acknowledges
that it has read and confirms each of the representations contained in Section
5.
FINANCIAL WEST GROUP
________________________________
By:_____________________________
Its:____________________________
<PAGE> 8
PURCHASE FORM
(To be executed by the Warrant Holder if he desires to exercise the Warrant in
whole or in part)
To: TITAN MOTORCYCLE CO. OF AMERICA
The undersigned, whose Social Security or other identifying number is
_______________, hereby irrevocably exercises the attached Warrant, agrees to
purchase ______________ shares of Common Stock, and tenders payment herewith to
the order of TITAN MOTORCYCLE CO. OF AMERICA in the amount of
$_____________________________.
The undersigned requests that certificates for such shares be issued as follows:
Name: ___________________________________
Address: ________________________________
________________________________
________________________________
Deliver to: _____________________________
Address: ________________________________
________________________________
________________________________
and, if the number of shares shall not be all the shares purchasable under the
Warrant, that a new Warrant for the balance remaining of the shares purchasable
under the attached Warrant be registered in the name of, and delivered to, the
undersigned at the address stated below:
Address: ________________________________
________________________________
________________________________
By this exercise,
The undersigned hereby reaffirms its representations and warrants set
forth forth in Section 5 of the Warrant as of the date hereof.
Dated:______________, _____ Signature: _________________________________
(Signature must conform in
all respects to the name of
the Warrant Holder as
specified on the face of
the Warrant, without
alteration, enlargement or
any change whatsoever)
<PAGE> 9
ASSIGNMENT
(To be executed by the Warrant Holder if he desires to effect a transfer of the
Warrant)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ____________ ______________________________, whose Social Security or other
identification number is _________________ [residing/located] at
____________________________ ____________________ the attached Warrant, and
appoints _____________________________ residing at
________________________________________________________________________________
_____________________________________________ the undersigned's attorney-in-fact
to transfer said Warrant on the books of the Company, with full power of
substitution in the premises.
Dated:_______________, _____
In the presence of:
_________________________________ ____________________________
(Signature must conform in all respects
to the name of the Warrant Holder as
specified on the face of the Warrant,
without alteration, enlargement or any
change whatsoever).
<PAGE> 1
EXHIBIT 4.7
These securities have not been registered under the Securities Act of 1933 or
any state securities laws. These securities have been acquired for investment
and not with a view to distribution or resale, and may not be sold, mortgaged,
pledged, hypothecated or otherwise transferred without registration under the
Securities Act of 1933 and qualification under state securities laws, or an
opinion of counsel acceptable to the corporation that registration and
qualification is not required.
TITAN MOTORCYCLE CO. OF AMERICA
Common Stock Purchase Warrant
To Subscribe for and Purchase March 7, 2000
1,190 Shares of Common Stock of
TITAN MOTORCYCLE CO. OF AMERICA
THIS CERTIFIES that, for good and valuable consideration, the sufficiency
of which is hereby acknowledged, Mr. Richard Cohn or his registered assigns (the
"Holder") is entitled to subscribe for and purchase from TITAN MOTORCYCLE CO. OF
AMERICA, a Nevada corporation (hereinafter called the "Company"), up to 1,190
shares (subject to adjustment as hereinafter provided) of fully paid and
non-assessable Common Stock of the Company (the "Common Stock"), subject to the
provisions and upon the terms and conditions hereinafter set forth at the price
of $2.00 per share (such price as may from time to time be adjusted as provided
herein is called the "Warrant Price"), at or prior to 5:00 p.m. Pacific time on
March 7, 2005 (the "Exercise Period").
This Warrant and any Warrant subsequently issued upon exchange or transfer
hereof are hereinafter collectively called the "Warrant."
Section 1. EXERCISE OF WARRANT. The rights represented by this Warrant may
be exercised by the Holder, in whole or in part (but not as to fractional
shares) at any time or from time to time during the Exercise Period by the
completion of the purchase form attached hereto and by the surrender of this
Warrant (properly endorsed) at the office of the Company as it may designate by
notice in writing to the Holder hereof at the address of the Holder appearing on
the books of the Company, and by payment to the Company of the Warrant Price in
cash or by certified or official bank check, for each share being purchased. In
the event of any exercise of the rights represented by this Warrant, a
certificate or certificates for the shares of Common Stock so purchased,
registered in the name of the Holder or its nominee or other party designated in
the purchase form by the Holder hereof, shall be delivered to the Holder as soon
as practicable after the exercise of this Warrant, and in any event within five
(5) business days after the date on which the rights represented by this Warrant
shall have been so exercised; and, unless this Warrant has expired or has been
exercised in full, a new Warrant representing the number of shares (except a
remaining fractional share), if any, with respect to which this Warrant shall
not then have been exercised shall also be issued to the Holder within such
time. The person in whose name any certificate for shares of Common Stock is
issued upon exercise of this Warrant shall for all purposes be deemed to have
become the holder of record of such shares on the date on which this Warrant was
surrendered and payment of the Warrant is made, except that, if the
<PAGE> 2
date of such surrender and payment is a date on which the stock transfer books
of the Company are closed, such person shall be deemed to have become the holder
of such shares at the close of business on the next succeeding date on which the
stock transfer books are open. No fractional shares shall be issued upon
exercise of this Warrant and no payment or adjustment shall be made upon any
exercise on account of any cash dividends on the Common Stock issued upon such
exercise. If any fractional interest in a share of Common Stock would, except
for the provision of this Section 1, be delivered upon such exercise, the
Company, in lieu of delivery of a fractional share thereof, shall pay to the
Holder an amount in cash equal to the current market price of such fractional
share as determined in good faith by the Board of Directors of the Company.
Current market price means the closing price of the Common Stock on the relevant
date as reported on the Nasdaq SmallCap Market (or any national securities
exchange, national market including the Nasdaq National Market, or other
quotation system on which the Common Stock is then listed) or, if no prices are
reported for that date, such prices on the next preceding date for which closing
prices were reported, or if the Common Stock is not publicly traded, by such
methods or procedures as may be established from time to time by the Board of
Directors of the Company in good faith.
Section 2. STOCK SPLITS, CONSOLIDATION, MERGER, AND SALE. In the event that
before the issuance of the shares of Common Stock into which this Warrant may be
exercised the outstanding shares of Common Stock shall be split, combined, or
consolidated, by dividend, reclassification or otherwise, into a greater or
lesser number of shares of Common Stock or any other class or classes of stock,
as appropriate, the Warrant Price in effect immediately prior to such
combination or consolidation and the number of shares purchasable under this
Warrant shall, concurrently with the effectiveness of such combination or
consolidation, be proportionately adjusted. If there shall be effected any
consolidation or merger of the Company with another corporation, or a sale of
all or substantially all of the Company's assets to another corporation, and if
the holders of Common Stock shall be entitled pursuant to the terms of any such
transaction to receive stock, securities or assets with respect to or in
exchange for Common Stock, then, as a condition of such consolidation, merger or
sale, lawful and adequate provisions shall be made whereby the Holder of this
Warrant shall thereafter have the right to receive, upon the basis and upon the
terms and conditions specified herein and in lieu of the shares of Common Stock
immediately theretofore receivable upon the exercise of such Warrant, such
shares of stock, securities or assets as may be issuable or payable with respect
to or in exchange for a number of outstanding shares of such Common Stock equal
to the number of shares of such Common Stock immediately theretofore so
receivable had such consolidation, merger or sale not taken place, and in any
such case appropriate provisions shall be made with respect to the rights and
interests of the Holder to the end that the provisions hereof shall thereafter
be applicable, as nearly as may be, in relation to any shares of stock,
securities or assets thereafter deliverable upon the exercise of this Warrant.
(a) STOCK TO BE RESERVED. The Company will at all times reserve and
keep available out of its authorized Common Stock, solely for the purpose of
issue upon the exercise of this Warrant as herein provided, such number of
shares of Common Stock as shall then be issuable upon the exercise of this
Warrant.
<PAGE> 3
(b) ISSUE TAX. The issuance of certificates for shares of Common Stock
upon exercise of this Warrant shall be made without charge to the Holders of
this Warrant for any issuance tax in respect thereof provided that the Company
shall not be required to pay any tax which may be payable in respect of any
transfer involved in the issuance and delivery of any certificate in a name
other than that of the Holder of this Warrant, which shall be borne by the
Holder.
(c) CLOSING OF BOOKS. The Company will not close its transfer books to
impair any issuance of the shares of Common Stock upon the exercise of this
Warrant.
Section 3. NOTICES OF RECORD DATES. In the event of:
(a) any taking by the Company of a record of the holders of any class
of securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution (other than cash
dividends out of earned surplus), or any right to subscribe for, purchase or
otherwise acquire any shares of stock of any class or any other securities or
property, or to receive any other right, or
(b) any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any transfer of all or
substantially all the assets of the Company to or consolidation or merger of the
Company with or into any other corporation, or
(c) any voluntary or involuntary dissolution, liquidation or winding-up
of the Company, then and in each such event the Company will give notice to the
Holder of this Warrant specifying (i) the date on which any such record is to be
taken for the purpose of such dividend, distribution or right and stating the
amount and character of such dividend, distribution or right, and (ii) the date
on which any such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding-up is to take place,
and the time, if any is to be fixed, as of which the holders of record of Common
Stock will be entitled to exchange their shares of Common Stock for securities
or other property deliverable upon such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up. Such notice shall be given at least ten (10) days and not more than
ninety (90) days prior to the date therein specified, and such notice shall
state that the action in question or the record date is subject to the
effectiveness of a registration statement under the Securities Act of 1933, as
amended (the "Securities Act") or to a favorable vote of shareholders, if either
is required. Any failure to provide a notice hereunder shall not affect the
corporate action taken.
Section 4. NO SHAREHOLDER RIGHTS OR LIABILITIES. This Warrant shall not
entitle the Holder hereof to any voting rights or other rights as a shareholder
of the Company. No provision hereof, in the absence of affirmative action by the
Holder hereof to purchase shares of Common Stock, and no mere enumeration hereon
of the rights or privileges of the Holder hereof, shall give rise to any
liability of such Holder for the Warrant Price or as a shareholder of the
Company, whether such liability is asserted by the Company or by creditors of
the Company.
Section 5. REPRESENTATIONS OF HOLDER. The Holder hereby represents and
acknowledges to the Company as of the date hereof and as of each exercise of
this Warrant that:
<PAGE> 4
(a) this Warrant, the Common Stock issuable upon exercise of this
Warrant and any securities issued with respect to any of them by way of a stock
dividend or stock split or in connection with a recapitalization, merger,
consolidation or other reorganization will be "restricted securities" as such
term is used in the rules and regulations under the Securities Act; such
securities have not been and may not be registered under the Securities Act or
any state securities law; and such securities must be held indefinitely unless
registration is effected or transfer can be made pursuant to appropriate
exemptions;
(b) the Holder has read, and fully understands, the terms of this
Warrant set forth on its face and the attachments hereto, including the
restrictions on transfer contained herein;
(c) the Holder is purchasing for investment for its own account and not
with a view to or for sale in connection with any distribution of this Warrant
or the Common Stock of the Company issuable upon exercise of this Warrant and it
has no intention of selling such securities in a public distribution in
violation of the federal securities laws or any applicable state securities
laws;
(d) the Holder is an "accredited investor" within the meaning of
paragraph (a) of Rule 501 of Regulation D promulgated by the Securities and
Exchange Commission and an "excluded purchaser" within the meaning of Section
25102(f) of the California Corporate Securities Law of 1968; and
(e) the Company may affix the following legend (in addition to any
other legend(s), if any, required by applicable state corporate and/or
securities laws) to certificates for shares of Common Stock (or other
securities) issued upon exercise of this Warrant:
These securities have not been registered under the Securities Act of
1933 or any state securities laws. These securities have been acquired
for investment and not with a view to distribution or resale, and may
not be sold, mortgaged, pledged, hypothecated or otherwise transferred
without registration under the Securities Act of 1933 and qualification
under state securities laws, or an opinion of counsel acceptable to the
corporation that registration and qualification is not required.
Section 6. RESTRICTIONS ON TRANSFER; REGISTRATION RIGHTS.
(a) The Holder may not transfer this Warrant without the written
consent of the Company and an opinion of counsel acceptable to the Company that
the transfer may be effected in compliance with exemptions under the Securities
Act and applicable state securities laws. The Holder may not transfer the Common
Stock underlying the Warrant unless there is an effective registration statement
in effect under the Securities Act and the transfer is qualified under
applicable state securities laws, or the Holder has delivered to the Company an
opinion of counsel acceptable to the Company that registration and qualification
is not required.
(b) The Company is obligated to cause a registration statement to be
filed under the Securities Act on or before April 7, 2000 pursuant to a
Registration Rights Agreement between the Company and Advantage Fund II Ltd. and
a Registration Rights Agreement between the Company and Koch Investment Group
Limited (the "Registration Statement"). The Company
<PAGE> 5
shall include in such Registration Statement all of the Common Stock issuable
upon conversion of the Warrant.
(c) All fees, disbursements, and out-of-pocket expenses incurred in
connection with the filing of the Registration Statement under Paragraph (a) of
Section 6 and in complying with applicable securities and Blue Sky laws shall be
borne by the Company, provided, however, that any expenses of the individual
Holder or holders of the underlying securities, including but not limited to the
Holder or holders' attorneys' fees and discounts and commissions, shall be borne
by the Holder and holders of the Common Stock. The Company at its expense will
supply the Holder and any holder of Common Stock with copies of the Registration
Statement and the prospectus or offering circular included therein and other
related documents in such quantities as may be reasonably requested by the
Holder or holder of Common Stock.
(d) The Company shall have no obligation to register the Warrant but
shall be obligated to register the Common Stock issuable upon exercise of the
Warrant in accordance with Paragraph (b) of Section 6.
(e) The Company agrees that it will use its best efforts to keep such
Registration Statement effective until March 7, 2005 or such earlier date as all
Common Stock covered by such Registration Statement have been disposed of
pursuant thereto.
(f) The Holder agrees to cooperate with the Company and to provide the
Company on its request with all information concerning the Holder, the Warrant
issued hereunder, any Common Stock acquired upon exercise of the Warrant and the
means or methods of intended disposition of the Common Stock pursuant to the
Registration Statement that may reasonably be requested by the Company in order
for the Company to perform its obligation under this Section 6.
Section 7. LOST, STOLEN, MUTILATED, OR DESTROYED WARRANT. If this Warrant
is lost, stolen, mutilated, or destroyed, the Company may, on such terms as to
indemnity or otherwise as it may in its discretion reasonably impose (which
shall, in the case of a mutilated Warrant, include the surrender thereof), issue
a new Warrant of like denomination and tenor as the Warrant so lost, stolen,
mutilated, or destroyed.
Section 8. PRESENTMENT. Prior to due presentment of this Warrant, together
with a completed assignment form attached hereto for registration of transfer,
the Company may deem and treat the Holder as the absolute owner of the Warrant,
notwithstanding any notation of ownership or other writing thereon, for the
purpose of any exercise thereof and for all other purposes, and the Company
shall not be affected by any notice to the contrary.
Section 9. NOTICE. Notice or demand pursuant to this Warrant shall be
sufficiently given or made, if sent by first-class mail, postage prepaid,
addressed, if to the Holder of this Warrant, to the Holder at its last known
address as it shall appear in the records of the Company, and if to the Company,
at 2222 West Peoria Avenue, Phoenix, Arizona 85029, Attention: Chief Financial
Officer. The Company may alter the address to which communications are to be
sent by giving notice of such change of address in conformity with the
provisions of this Section 9 for the giving of notice.
<PAGE> 6
Section 10. GOVERNING LAW. The validity, interpretation, and performance
of this Warrant shall be governed by the laws of the State of Arizona without
regard to principles of conflicts of laws.
Section 11. SUCCESSORS, ASSIGNS. Subject to the restrictions on transfer
by Holder set forth in Section 6 hereof, all the terms and provisions of the
Warrant shall be binding upon and inure to the benefit of and be enforceable by
the respective successors and assigns of the parties hereto.
Section 12. AMENDMENT. This Warrant may be modified, amended, or
terminated by a writing signed by the Company and the Holder.
Section 13. SEVERABILITY. Should any part but not the whole of this
Warrant for any reason be declared invalid, such decision shall not affect the
validity of any remaining portion, which remaining portion shall remain in force
and effect as if this Warrant had been executed with the invalid portion thereof
eliminated, and it is hereby declared the intention of the parties hereto that
they would have executed the remaining portion of this Warrant without including
therein any such part which may, for any reason, be hereafter declared invalid.
Section 14. NO IMPAIRMENT. The Company will not, by any voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Company, but will at all times in good
faith assist in the carrying out of all the provisions of this Warrant and in
the taking of all such action as may be necessary or appropriate in order to
protect the rights of the Holder of this Warrant against impairment.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 7
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed
and delivered on and as of the day and year first above written by one of its
officers thereunto duly authorized.
TITAN MOTORCYCLE CO. OF AMERICA,
a Nevada corporation
Dated: ____________ ______
By: ________________________________
Title: _____________________________
The undersigned Holder agrees and accepts this Warrant and acknowledges
that it has read and confirms each of the representations contained in Section
5.
RICHARD COHN
___________________________________
<PAGE> 8
PURCHASE FORM
(To be executed by the Warrant Holder if he desires to exercise the Warrant in
whole or in part)
To: TITAN MOTORCYCLE CO. OF AMERICA
The undersigned, whose Social Security or other identifying number is
_______________, hereby irrevocably exercises the attached Warrant, agrees to
purchase ______________ shares of Common Stock, and tenders payment herewith to
the order of TITAN MOTORCYCLE CO. OF AMERICA in the amount of
$_____________________________.
The undersigned requests that certificates for such shares be issued as follows:
Name: __________________________________
Address: ________________________________
________________________________
________________________________
Deliver to: _______________________________
Address: ________________________________
________________________________
________________________________
and, if the number of shares shall not be all the shares purchasable under the
Warrant, that a new Warrant for the balance remaining of the shares purchasable
under the attached Warrant be registered in the name of, and delivered to, the
undersigned at the address stated below:
Address: ________________________________
________________________________
________________________________
By this exercise,
The undersigned hereby reaffirms its representations and warrants set
forth forth in Section 5 of the Warrant as of the date hereof.
Dated:______________, _____ Signature: _________________________________
(Signature must conform in all respects
to the name of the Warrant Holder as
specified on the face of the Warrant,
without alteration, enlargement or any
change whatsoever)
<PAGE> 9
ASSIGNMENT
(To be executed by the Warrant Holder if he desires to effect a transfer of the
Warrant)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ____________ ______________________________, whose Social Security or other
identification number is _________________ [residing/located] at
____________________________ ____________________ the attached Warrant, and
appoints _____________________________ residing at
_______________________________________
_____________________________________________ the undersigned's attorney-in-fact
to transfer said Warrant on the books of the Company, with full power of
substitution in the premises.
Dated:_______________, _____
In the presence of:
_________________________________ ________________________________________
(Signature must conform in all respects
to the name of the Warrant Holder as
specified on the face of the Warrant,
without alteration, enlargement or any
change whatsoever).
<PAGE> 1
Exhibit 5
James, Driggs, Walch, Santoro,
Kearney, Johnson & Thompson
Attorneys
3773 Howard Hughes Parkway, Suite 290N
Las Vegas, Nevada 89109
tel (702) 791-0308
fax (702) 791-1912
Mark A. James email [email protected] James E. Whitmire, III
John E. Leach Bradley M. Ballard
Gregory J. Walch Elizabeth E. Wachsman
Nicholas J. Santoro L. Kirk Williams
Michael E. Kearney Dean S. Bennett
J. Douglas Driggs, Jr. Mark S. Katz
Richard F. Holley Kirby C. Gruchow, Jr.
David G. Johnson Jennifer Lazovich
Ronald J. Thompson Angela K. Rock
John E. Ham Rodney S. Woodbury
April 19, 2000
TITAN MOTORCYCLE CO. OF AMERICA
2222 West Peoria Avenue
Phoenix, Arizona 85029
Re: Issuance of Common Stock
Gentlemen:
We have acted as special Nevada counsel to Titan Motorcycle Co. of
America, a Nevada corporation (the "Company"), in connection with its
Registration Statement on Form S-3 (the "Registration Statement") filed under
the Securities Act of 1933, as amended (the "1933 Act"), relating to the
registration of, and covering the resale of the 2,502,500 shares of Common Stock
(the Shares ) issuable upon exercise of (1) the Series B Convertible Preferred
Stock, $.001 par value (the Preferred Stock ) and Common Stock Purchase Warrants
(the Investor Warrants ) which were issued to Advantage Fund II Ltd. and Koch
Investment Group Limited (the Investors ) pursuant to those two certain
Subscription Agreements, dated as of March 7, 2000, by and between the Holders
and the Company (the Subscription Agreements ), and (2) the Common Stock
Purchase Warrants (the Reedland Warrants ), which were issued to Reedland
Capital Partners ( Reedland ) and its designees pursuant to that certain
Engagement Letter between the Company and Reedland, dated August 20, 1999.
In rendering the opinions set forth herein, we have limited our factual
inquiry to (i) reliance on a certificate of the Secretary of the Company, (ii)
reliance on the facts and representations contained in the Registration
Statement, including, without limitation, those relating to the number of the
Company's Common Shares, without par value, which are authorized, issued or
reserved for issuance upon conversion or exercise of preferred shares, warrants
and options, and (iii) such documents, corporate records and other instruments
as we have deemed necessary or appropriate as a basis for the opinions expressed
below, including, without limitation, a certificate issued by the Secretary of
State of the State of Nevada dated March 2, 2000, attesting to the corporate
existence
<PAGE> 2
TITAN MOTORCYCLE CO. OF AMERICA
April 19, 2000
Page 2
of the Company in the State of Nevada, and telephonic verification with such
Secretary of State with respect to the Company's continued valid existence as of
the date hereof.
In our examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, the conformity
to original documents of all documents submitted to us as certified or
photostatic copies, and the authenticity of the originals of such copies. In
rendering the opinion expressed below, we have assumed that the Shares (i) will
conform in all material respects to the description thereof set forth in the
Registration Statement, (ii) were issued and delivered in accordance with the
terms of the Agreement, and (iii) were issued pursuant to an exemption from the
registration requirements of the 1933 Act pursuant to Section 4(2) of the 1933
Act.
Based upon the foregoing, and subject to the qualifications set forth
herein, we are of the opinion that the Shares to be issued upon the exercise of
the Preferred Stock, Investor Warrants, and Reedland Warrant will be validly
issued, fully paid, and nonassessable.
The foregoing opinion is limited to the current internal laws of the
State of Nevada (without giving effect to any conflict of law principles
thereof), and we have not considered, and express no opinion on, the laws of any
other jurisdiction. This opinion is based on the laws in effect and facts in
existence on the date of this letter, and we assume no obligation to revise or
supplement this letter should the law or facts, or both, change.
This opinion is intended solely for the use of the Company in
connection with the registration of the Shares. It may not be relied upon by any
other person or for any other purpose, or reproduced or filed publicly by any
person, without the written consent of James, Driggs, Walch, Santoro, Kearney,
Johnson & Thompson; provided, however, that we hereby consent to the filing of
this opinion as Exhibit 5 to the Registration Statement and to the references to
James, Driggs, Walch, Santoro, Kearney, Johnson & Thompson contained in the
Registration Statement.
Very truly yours,
JAMES, DRIGGS, WALCH, SANTORO,
JOHNSON, KEARNEY & THOMPSON
/s/ J. Douglas Driggs, Jr.
J. Douglas Driggs, Jr.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated April 14, 2000 relating to the
financial statements, which appear in Titan Motorcycle Co. of America's Annual
Report on Form 10-KSB for each of the two years in the period ended January 1,
2000. We also consent to the reference to us under the heading "Experts" in
such Registration Statement.
PricewaterhouseCoopers LLP
Phoenix, Arizona
April 20, 2000
