ANNEX II
TO
SUBSCRIPTION AGREEMENT
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE RESOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY
THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT.
Right to Purchase 62,500 Shares of Common
Stock of Titan Motorcycle Co. of America
TITAN MOTORCYCLE CO. OF AMERICA
COMMON STOCK PURCHASE WARRANT
NO. W-B-2
TITAN MOTORCYCLE CO. OF AMERICA, a Nevada corporation (the "Company"),
hereby certifies that, for value received, ▇▇▇▇ INVESTMENT GROUP LIMITED or
registered assigns (the "Holder"), is entitled, subject to the terms set forth
below, to purchase from the Company at any time or from time to time after the
date hereof, and before 5:00 p.m., New York City time, on the Expiration Date
(as hereinafter defined), 62,500 fully paid and nonassessable shares of Common
Stock (as hereinafter defined) at a purchase price per share equal to the
Purchase Price (as hereinafter defined). The number of such shares of Common
Stock and the Purchase Price are subject to adjustment as provided in this
Warrant.
As used herein the following terms, unless the context otherwise requires,
have the following respective meanings:
"Closing Price" means $2.25 (subject to equitable adjustments from
time to time on terms reasonably determined by the Board of Directors of
the Company for stock splits, stock dividends, combinations,
recapitalizations, reclassifications and similar events occurring or with
respect to which "ex-" trading commences on or after the Issuance Date).
"Common Stock" includes the Company's Common Stock, $.001 par value
per share, as authorized on the date hereof, and any other securities into
which or for which the Common Stock may be converted or exchanged pursuant
to a plan of recapitalization, reorganization, merger, sale of assets or
otherwise.
"Company" shall include Titan Motorcycle Co. of America and any
corporation that shall succeed to or assume the obligations of Titan
Motorcycle Co. of America hereunder in accordance with the terms hereof.
"Expiration Date" means March 9, 2005.
"Issuance Date" means the first date of original issuance of this
Warrant.
"1934 Act" means the Securities Exchange Act of 1934, as amended.
"1933 Act" means the Securities Act of 1933, as amended.
"Other Securities" refers to any stock (other than Common Stock) and
other securities of the Company or any other person (corporate or
otherwise) which the Holder at any time shall be entitled to receive, or
shall have received, on the exercise of this Warrant, in lieu of or in
addition to Common Stock, or which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to Section 4.
"Purchase Price" shall mean $2.00 per share, subject to adjustment as
provided in this Warrant.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of March 7, 2000 by and between the Company and the
original Holder of this Warrant, as amended from time to time in accordance
with its terms.
"Subscription Agreement" means the Subscription Agreement, dated as of
March 7, 2000, by and between the Company and the original Holder of this
Warrant, as amended from time to time in accordance with its terms.
"Trading Day" means a day on which the principal securities market for
the Common Stock is open for general trading of securities.
1. EXERCISE OF WARRANT.
1.1 EXERCISE. (a) This Warrant may be exercised by the Holder hereof in
full or in part at any time or from time to time during the exercise period
specified in the first paragraph hereof until the Expiration Date by surrender
of this Warrant and the subscription form annexed hereto (duly executed by the
Holder), to the Company's transfer agent and registrar for the Common Stock,
with a copy to the Company, and by making payment, in cash or by certified or
official bank check payable to the order of the Company, in the amount obtained
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by multiplying (a) the number of shares of Common Stock designated by the Holder
in the subscription form by (b) the Purchase Price then in effect. On any
partial exercise the Company will forthwith issue and deliver to or upon the
order of the Holder hereof a new Warrant or Warrants of like tenor, in the name
of the Holder hereof or as the Holder (upon payment by the Holder of any
applicable transfer taxes) may request, providing in the aggregate on the face
or faces thereof for the purchase of the number of shares of Common Stock for
which such Warrant or Warrants may still be exercised.
(b) Notwithstanding any other provision of this Warrant, in no event shall
the Holder be entitled at any time to purchase a number of shares of Common
Stock on exercise of this Warrant in excess of that number of shares upon
purchase of which the sum of (1) the number of shares of Common Stock
beneficially owned by the Holder and all persons whose beneficial ownership of
shares of Common Stock would be aggregated with the Holder's beneficial
ownership of shares of Common Stock for purposes of Section 13(d) of the 1934
Act and Regulation 13D-G thereunder, (each such person other than the Holder an
"Aggregated Person" and all such persons other than the Holder, collectively,
the "Aggregated Persons") (other than shares of Common Stock deemed beneficially
owned through the ownership by the Holder and all Aggregated Persons of the
Holder of the unexercised portion of this Warrant and the unexercised or
unconverted portion of any other security of the Company which contains similar
provisions) and (2) the number of shares of Common Stock issuable upon exercise
of the portion of this Warrant with respect to which the determination in this
sentence is being made, would result in beneficial ownership by the Holder and
all Aggregated Persons of the Holder of more than 4.9% of the outstanding shares
of Common Stock. For purposes of the immediately preceding sentence, beneficial
ownership shall be determined in accordance with Section 13(d) of the 1934 Act
and Regulation 13D-G thereunder, except as otherwise provided in clause (1) of
the immediately preceding sentence.
1.2 NET ISSUANCE. Notwithstanding anything to the contrary contained in
Section 1.1, if on the date this Warrant is exercised or on the date the Company
delivers stock certificates in connection with such exercise pursuant to Section
2 below (a) the Registration Statement (as defined in the Registration Rights
Agreement) is not available to the Holder for the public resale of any of the
shares of Common Stock issued upon exercise of this Warrant or (b) the Company
is not in compliance in all material respects with its obligations to the Holder
(including, without limitation, its obligations under this Warrant, the
Subscription Agreement, the Registration Rights Agreement and the Certificate of
Designations (as defined in the Subscription Agreement)), the Holder may elect
to exercise this Warrant in whole or in part by receiving shares of Common Stock
equal to the net issuance value (as determined below) of this Warrant, or any
part hereof, upon surrender of this Warrant to the Company's transfer agent and
registrar for the Common Stock together with the subscription form annexed
hereto (duly executed by the Holder), in which event the Company shall issue to
the Holder a number of shares of Common Stock computed using the following
formula:
X = Y (A-B)
A
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where: X = the number of shares of Common Stock to be issued to the Holder
Y = the number of shares of Common Stock as to which this Warrant
is to be exercised
A = the current fair market value of one share of Common Stock
calculated as of the last Trading Day immediately preceding the
exercise of this Warrant
B = the Purchase Price
As used herein, current fair market value of Common Stock as of a specified
date shall mean with respect to each share of Common Stock the closing sale
price of the Common Stock on the principal securities market on which the Common
Stock may at the time be listed or, if there have been no sales on any such
exchange on such day, the average of the highest bid and lowest asked prices on
the principal securities market at the end of such day, or, if on such day the
Common Stock is not so listed, the average of the representative bid and asked
prices quoted in the Nasdaq System as of 4:00 p.m., New York City time, or, if
on such day the Common Stock is not quoted in the Nasdaq System, the average of
the highest bid and lowest asked price on such day in the domestic
over-the-counter market as reported by the National Quotation Bureau,
Incorporated, or any similar successor organization, in each such case averaged
over a period of five consecutive Trading Days consisting of the day as of which
the current fair market value of a share of Common Stock is being determined (or
if such day is not a Trading Day, the Trading Day next preceding such day) and
the four consecutive Trading Days prior to such day. If on the date for which
current fair market value is to be determined the Common Stock is not listed on
any securities exchange or quoted in the Nasdaq System or the over-the-counter
market, the current fair market value of Common Stock shall be the highest price
per share which the Company could then obtain from a willing buyer (not a
current employee or director) for shares of Common Stock sold by the Company,
from authorized but unissued shares, as determined in good faith by the Board of
Directors of the Company, unless prior to such date the Company has become
subject to a merger, acquisition or other consolidation pursuant to which the
Company is not the surviving party, in which case the current fair market value
of the Common Stock shall be deemed to be the value received by the holders of
the Company's Common Stock for each share thereof pursuant to the Company's
acquisition.
2. DELIVERY OF STOCK CERTIFICATES, ETC., ON EXERCISE. As soon as
practicable after the exercise of this Warrant, and in any event within three
Trading Days thereafter, the Company at its expense (including the payment by it
of any applicable issue or stamp taxes) will cause to be issued in the name of
and delivered to the Holder hereof, or as the Holder (upon payment by the Holder
of any applicable transfer taxes) may direct, a certificate or certificates for
the number of fully paid and nonassessable shares of Common Stock (or Other
Securities) to which the Holder shall be entitled on such exercise, in such
denominations as may be requested by the Holder, plus, in lieu of any fractional
share to which the Holder would otherwise be entitled, cash equal to such
fraction multiplied by the then current fair market value (as determined in
accordance with subsection 1.2) of one full share, together with any other stock
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or other securities and property (including cash, where applicable) to which the
Holder is entitled upon such exercise pursuant to Section 1 or otherwise. Upon
exercise of this Warrant as provided herein, the Company's obligation to issue
and deliver the certificates for Common Stock shall be absolute and
unconditional, irrespective of the absence of any action by the Holder to
enforce the same, any waiver or consent with respect to any provision thereof,
the recovery of any judgment against any person or any action to enforce the
same, any failure or delay in the enforcement of any other obligation of the
Company to the Holder, or any setoff, counterclaim, recoupment, limitation or
termination, or any breach or alleged breach by the Holder or any other person
of any obligation to the Company, and irrespective of any other circumstance
which might otherwise limit such obligation of the Company to the Holder in
connection with such exercise. If the Company fails to issue and deliver the
certificates for the Common Stock to the Holder pursuant to the first sentence
of this paragraph as and when required to do so, in addition to any other
liabilities the Company may have hereunder and under applicable law, the Company
shall pay or reimburse the Holder on demand for all out-of-pocket expenses
including, without limitation, reasonable fees and expenses of legal counsel
incurred by the Holder as a result of such failure.
3. ADJUSTMENT FOR DIVIDENDS IN OTHER STOCK, PROPERTY, ETC.;
RECLASSIFICATION, ETC. In case at any time or from time to time after the
Issuance Date, all the holders of Common Stock (or Other Securities) shall have
received, or (on or after the record date fixed for the determination of
stockholders eligible to receive) shall have become entitled to receive, without
payment therefor,
(a) other or additional stock or other securities or property (other
than cash) by way of dividend, or
(b) any cash (excluding cash dividends payable solely out of earnings
or earned surplus of the Company), or
(c) other or additional stock or other securities or property
(including cash) by way of spin-off, split-up, reclassification,
recapitalization, combination of shares or similar corporate rearrangement,
other than additional shares of Common Stock (or Other Securities) issued as a
stock dividend or in a stock-split (adjustments in respect of which are provided
for in Section 5), then and in each such case the Holder, on the exercise hereof
as provided in Section 1, shall be entitled to receive the amount of stock and
other securities and property (including cash in the cases referred to in
subdivisions (b) and (c) of this Section 3; PROVIDED, HOWEVEr, that if such
property is not then available, the Company shall either (A) substitute cash or
property of equivalent value or (B) reduce the Purchase Price and/or increase
the number of shares of Common Stock issuable upon the exercise of this Warrant
to reflect the value of the property distributable to stockholders, in each case
in a manner reasonably satisfactory to the Holder) which the Holder would hold
on the date of such exercise if on the date thereof the Holder had been the
holder of record of the number of shares of Common Stock called for on the face
of this Warrant and had thereafter, during the period from the date hereof to
and including the date of such exercise, retained such shares and all such other
or additional stock and other securities and property (including cash in the
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case referred to in subdivisions (b) and (c) of this Section 3) receivable by
the Holder as aforesaid during such period, giving effect to all adjustments
called for during such period by Section 4. Notwithstanding anything in this
Section 3 to the contrary, no adjustments pursuant to this Section 3 shall
actually be made until the cumulative effect of the adjustments called for by
this Section 3 since the date of the last adjustment actually made would change
the amount of stock or other securities and property which the Holder would hold
by more than 1%.
4. EXERCISE UPON REORGANIZATION, CONSOLIDATION, MERGER, ETC. In case at any
time or from time to time after the Issuance Date, the Company shall (a) effect
a reorganization, (b) consolidate with or merge into any other person, (c)
effect an exchange of outstanding shares of the Company for securities of any
other person or (d) transfer all or substantially all of its properties or
assets to any other person under any plan or arrangement contemplating the
dissolution of the Company, then, in each such case, as a condition of such
reorganization, consolidation, merger, share exchange, sale or conveyance, (i)
the Company shall give at least 15 days notice to the Holder of such pending
transaction whereby the Holder shall have the right to exercise this Warrant
prior to any such reorganization, consolidation, merger, share exchange, sale or
conveyance and (ii) if the Holder does not so exercise this Warrant in full, the
Company shall cause effective provisions to be made so that the Holder shall
have the right thereafter, by exercising this Warrant (in lieu of the shares of
Common Stock of the Company purchasable and receivable upon exercise of the
rights represented hereby immediately prior to such transaction) to purchase the
kind and amount of shares of stock and other securities and property (including
cash); PROVIDED, HOWEVER, that if such property is not then available, the
Company shall either (A) substitute cash or property of equivalent value or (B)
reduce the Purchase Price and/or increase the number of shares of Common Stock
issuable upon the exercise of this Warrant to reflect the value of the property
distributable to stockholders, in each case in a manner reasonably satisfactory
to the Holder) receivable upon such reorganization, consolidation, merger, share
exchange, sale or conveyance by a holder of the number of shares of Common Stock
that might have been received upon exercise of this Warrant immediately prior to
such reorganization, consolidation, merger, share exchange, sale or conveyance.
Any exercise of this Warrant pursuant to notice under this Section may, at the
option of the Holder, be conditioned upon the closing of such reorganization,
consolidation, merger, sale or conveyance which is the subject of the notice and
the exercise of this Warrant shall not be deemed to have occurred until
immediately prior to the closing of such transaction.
5. ADJUSTMENT FOR EXTRAORDINARY EVENTS. In the event that after the
Issuance Date the Company shall (i) issue additional shares of Common Stock as a
dividend or other distribution on outstanding Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common Stock, or (iii) combine its
outstanding shares of Common Stock into a smaller number of shares of Common
Stock, then, in each such event, the Purchase Price shall, simultaneously with
the happening of such event, be adjusted by multiplying the Purchase Price in
effect immediately prior to such event by a fraction, the numerator of which
shall be the number of shares of Common Stock outstanding immediately prior to
such event and the denominator of which shall be the number of shares of Common
Stock outstanding immediately after such event, and the product so obtained
shall thereafter be the Purchase Price then in effect. The Purchase Price, as so
adjusted, shall be readjusted in the same manner upon the happening of any
successive event or events described herein in this Section 5. The Holder shall
thereafter, on the exercise hereof as provided in Section 1, be entitled to
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receive that number of shares of Common Stock determined by multiplying the
number of shares of Common Stock which would be issuable on such exercise
immediately prior to such issuance by a fraction of which (i) the numerator is
the Purchase Price in effect immediately prior to such issuance and (ii) the
denominator is the Purchase Price in effect on the date of such exercise.
6. ADJUSTMENT FOR CERTAIN STOCK ISSUANCES. In case at any time the Company
shall issue shares of its Common Stock or debt or equity securities convertible
into or exercisable or exchangeable for shares of Common Stock (collectively,
the "Newly Issued Securities"), other than (i) an issuance pro rata to all
holders of its outstanding Common Stock, (ii) issuances pursuant to options,
warrants and convertible securities outstanding on the Issuance Date (including
securities issued pursuant to the Subscription Agreement) and (iii) issuances
pursuant to stock option plans and other stock-based plans or arrangements
approved by the Board of Directors of the Company, at a price below the Closing
Price in effect at the time of such issuance, then following such issuance of
Newly Issued Securities the number of shares of Common Stock which the Holder
shall be entitled to receive upon exercise of this Warrant shall be increased
and the Purchase Price shall be decreased to the respective amounts determined
pursuant to this Section 6. The number of shares of Common Stock purchasable
upon the exercise of this Warrant following any such adjustment shall be
determined by multiplying the number of shares purchasable upon exercise of this
Warrant immediately prior to such adjustment by a fraction, the numerator of
which shall be the sum of (a) the number of shares of Common Stock outstanding
immediately prior to the issuance of the Newly Issued Securities (calculated on
a fully-diluted basis assuming the exercise or conversion of all options,
warrants, purchase rights or convertible securities which are exercisable at the
time of the issuance of the Newly Issued Securities), plus (b) the number of
Newly Issued Securities, and the denominator of which shall be the sum of (a)
the number of shares of Common Stock outstanding immediately prior to the
issuance of the Newly Issued Securities (calculated on a fully-diluted basis
assuming the conversion of all options, warrants, purchase rights or convertible
securities which are exercisable at the time of the issuance of the Newly Issued
Securities), plus (b) the number of shares of Common Stock which the aggregate
consideration, if any, received by the Company for the number of Newly Issued
Securities would purchase at a price equal to the Closing Price in effect at the
time of such issuance. Upon any adjustment under this Section 6, the number of
shares of Common Stock purchasable upon exercise of this Warrant in full
immediately after such adjustment shall be rounded to the nearest
one-one-hundredth of a share of Common Stock subject, however, to Section 2 of
this Warrant relating to fractional shares of Common Stock. Such adjustment of
the number of shares purchasable provided for in this Section 6 may be expressed
as the following mathematical formula:
X = W x [O+N]
------
[O+(A/C)]
where:
A = aggregate consideration received by the Company for the Newly
Issued Securities
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C = Closing Price in effect at the time of the issuance of the
Newly Issued Securities
N = number of Newly Issued Securities
O = number of shares of Common Stock outstanding (on a fully
diluted basis, as described above) prior to the issuance of the
Newly Issued Securities
W = number of shares issuable upon exercise of this Warrant prior
to the issuance of the Newly Issued Securities
X = number of shares issuable upon exercise of this Warrant after
the issuance of the Newly Issued Securities
Upon the issuance of such Newly Issued Securities, the Purchase Price shall,
simultaneously with the happening of such event, be adjusted by multiplying the
Purchase Price in effect immediately prior to such event by a fraction, the
numerator of which shall be the number of shares of Common Stock issuable upon
exercise of this Warrant prior to the issuance of the Newly Issued Securities
and the denominator of which shall be the number of shares of Common Stock
issuable upon the exercise of this Warrant after the issuance of the Newly
Issued Securities as provided in this Section 6, and the product so obtained
shall thereafter be the Purchase Price then in effect. The number of shares
issuable upon exercise of this Warrant and the Purchase Price, as each is so
adjusted, shall be readjusted in the same manner upon the happening of any
successive issuances of Newly Issued Securities described in this Section 6.
7. FURTHER ASSURANCES. The Company will take all action that may be
necessary or appropriate in order that the Company may validly and legally issue
fully paid and nonassessable shares of stock, free from all taxes, liens and
charges with respect to the issue thereof, on the exercise of all or any portion
of this Warrant from time to time outstanding.
8. NOTICES OF RECORD DATE, ETC. 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 on, 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 of the assets of the Company to or consolidation or
merger of the Company with or into any other person (other than a
wholly-owned subsidiary of the Company), or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company,
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then and in each such event the Company will mail or cause to be mailed to the
Holder, at least ten days prior to such record date, a notice 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, (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 (or Other
Securities) shall be entitled to exchange their shares of Common Stock (or Other
Securities) for securities or other property deliverable on such reorganization,
reclassification, recapitalization, transfer, consolidation, merger,
dissolution, liquidation or winding-up, and (iii) the amount and character of
any stock or other securities, or rights or options with respect thereto,
proposed to be issued or granted, the date of such proposed issue or grant and
the persons or class of persons to whom such proposed issue or grant is to be
offered or made. Such notice shall also state that the action in question or the
record date is subject to the effectiveness of a registration statement under
the 1933 Act, or a favorable vote of stockholders if either is required. Such
notice shall be mailed at least ten days prior to the date specified in such
notice on which any such action is to be taken or the record date, whichever is
earlier. Any failure to receive such notice shall not affect the corporate
action taken.
9. RESERVATION OF STOCK, ETC., ISSUABLE ON EXERCISE OF WARRANTS. The
Company will at all times reserve and keep available out of its authorized but
unissued shares of capital stock, solely for issuance and delivery on the
exercise of this Warrant, a sufficient number of shares of Common Stock (or
Other Securities) to effect the full exercise of this Warrant and the exercise,
conversion or exchange of any other warrant or security of the Company
exercisable for, convertible into, exchangeable for or otherwise entitling the
holder to acquire shares of Common Stock (or Other Securities), and if at any
time the number of authorized but unissued shares of Common Stock (or Other
Securities) shall not be sufficient to effect such exercise, conversion or
exchange, the Company shall take such action as may be necessary to increase its
authorized but unissued shares of Common Stock (or Other Securities) to such
number as shall be sufficient for such purposes.
10. TRANSFER OF WARRANT. This Warrant shall inure to the benefit of the
successors to and assigns of the Holder. This Warrant and all rights hereunder,
in whole or in part, are registrable at the office or agency of the Company
referred to below by the Holder hereof in person or by his duly authorized
attorney, upon surrender of this Warrant properly endorsed.
11. REGISTER OF WARRANTS. The Company shall maintain, at the principal
office of the Company (or such other office as it may designate by notice to the
Holder hereof), a register in which the Company shall record the name and
address of the person in whose name this Warrant has been issued, as well as the
name and address of each successor and prior owner of such Warrant. The Company
shall be entitled to treat the person in whose name this Warrant is so
registered as the sole and absolute owner of this Warrant for all purposes.
12. EXCHANGE OF WARRANT. This Warrant is exchangeable, upon the surrender
hereof by the Holder hereof at the office or agency of the Company referred to
in Section 11, for one or more new Warrants of like tenor representing in the
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aggregate the right to subscribe for and purchase the number of shares of Common
Stock which may be subscribed for and purchased hereunder, each of such new
Warrants to represent the right to subscribe for and purchase such number of
shares as shall be designated by said Holder hereof at the time of such
surrender.
13. REPLACEMENT OF WARRANT. On receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of this Warrant
and, in the case of any such loss, theft or destruction of this Warrant, on
delivery of an indemnity agreement or security reasonably satisfactory in form
and amount to the Company or, in the case of any such mutilation, on surrender
and cancellation of this Warrant, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
14. WARRANT AGENT. In accordance with the Transfer Agent Agreement, dated
as of March 7, 2000, by and among the Company, Signature Stock Transfer, Inc.,
as Transfer Agent and Registrar (the "Transfer Agent"), and the original Holder
of this Warrant and the other common stock purchase warrants of like tenor
issued by the Company in connection with the issuance of this Warrant, the
Company has appointed the Transfer Agent as the exercise agent for purposes of
issuing shares of Common Stock (or Other Securities) on the exercise of this
Warrant pursuant to Section 1. The Company may, by notice to the Holder, appoint
an agent having an office in the United States of America for the purpose of
exchanging this Warrant pursuant to Section 12 and replacing this Warrant
pursuant to Section 13, or either of the foregoing, and thereafter any such
exchange or replacement, as the case may be, shall be made at such office by
such agent.
15. REMEDIES. The Company stipulates that the remedies at law of the Holder
in the event of any default or threatened default by the Company in the
performance of or compliance with any of the terms of this Warrant are not and
will not be adequate, and that such terms may be specifically enforced by a
decree for the specific performance of any agreement contained herein or by an
injunction against a violation of any of the terms hereof or otherwise.
16. NO RIGHTS OR LIABILITIES AS A STOCKHOLDER. This Warrant shall not
entitle the Holder hereof to any voting rights or other rights as a stockholder
of the Company. No provision of this Warrant, in the absence of affirmative
action by the Holder hereof to purchase Common Stock, and no mere enumeration
herein of the rights or privileges of the Holder hereof, shall give rise to any
liability of the Holder for the Purchase Price or as a stockholder of the
Company, whether such liability is asserted by the Company or by creditors of
the Company.
17. NOTICES, ETC. All notices and other communications from the Company to
the registered Holder or from the registered Holder to the Company shall be
delivered personally (which shall include telephone line facsimile transmission
with answer back confirmation) or by courier and shall be effective upon
receipt, addressed to each party at the address or telephone line facsimile
transmission number for each party set forth in the Subscription Agreement or at
such other address or telephone line facsimile transmission number as a party
shall have provided to the other party in accordance with this provision.
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18. TRANSFER RESTRICTIONS. By acceptance of this Warrant, the Holder
represents to the Company that the Holder is an "accredited investor" as defined
in Regulation D under the 1933 Act, has reviewed the Company's periodic filings
made under the 1934 Act and desires no further information, is aware of the
risks of investing in the Company, and confirms that this Warrant is being
acquired for the Holder's own account and for the purpose of investment and not
with a view to, or for sale in connection with, the distribution thereof, nor
with any present intention of distributing or selling this Warrant or the Common
Stock issuable upon exercise of this Warrant. The Holder acknowledges and agrees
that this Warrant and, except as otherwise provided in the Registration Rights
Agreement, the shares of Common Stock issuable upon exercise of this Warrant (if
any) have not been (and at the time of acquisition by the Holder, will not have
been or will not be), registered under the 1933 Act or under the securities laws
of any state, in reliance upon certain exemptive provisions of such statutes.
The Holder further recognizes and acknowledges that because this Warrant and,
except as provided in the Registration Rights Agreement, the Common Stock
issuable upon exercise of this Warrant (if any) are unregistered, they may not
be eligible for resale, and may only be resold in the future pursuant to an
effective registration statement under the 1933 Act and any applicable state
securities laws, or pursuant to a valid exemption from such registration
requirements. Unless the shares of Common Stock issuable upon exercise of this
Warrant have theretofore been registered for resale under the 1933 Act, the
Company may require, as a condition to the issuance of Common Stock upon the
exercise of this Warrant (i) in the case of an exercise in accordance with
Section 1.1 hereof, a confirmation as of the date of exercise of the Holder's
representations pursuant to this Section 18, or (ii) in the case of an exercise
in accordance with Section 1.2 hereof, an opinion of counsel reasonably
satisfactory to the Company that the shares of Common Stock to be issued upon
such exercise may be issued without registration under the 1933 Act.
19. LEGEND. Unless theretofore registered for resale under the 1933 Act,
each certificate for shares issued upon exercise of this Warrant shall bear the
following legend:
The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended. The securities have been
acquired for investment and may not be resold, transferred or assigned
in the absence of an effective registration statement for the
securities under the Securities Act of 1933, as amended, or an opinion
of counsel reasonably acceptable to the Company that registration is
not required under said Act.
20. AMENDMENT; WAIVER. This Warrant and any terms hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. Notwithstanding any other provision of this Warrant or the
Subscription Agreement, in addition to the requirements of the immediately
preceding sentence, any amendment of (x) Section 1.1(b), (y) the definition of
the term Aggregated Person or (z) this sentence shall require approval by the
affirmative vote of the holders of a majority of the outstanding shares of
Common Stock, present in person or represented by proxy at a duly convened
meeting of stockholders of the Company, and entitled to vote, or the consent
thereto in writing by holders of a majority of the outstanding shares of Common
Stock, and the stockholders of the Company are hereby expressly made third party
beneficiaries of this sentence.
11
21. MISCELLANEOUS. This Warrant shall be construed and enforced in
accordance with and governed by the internal laws of the State of Arizona. The
headings in this Warrant are for purposes of reference only, and shall not limit
or otherwise affect any of the terms hereof. The invalidity or unenforceability
of any provision hereof shall in no way affect the validity or enforceability of
any other provision.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed on
its behalf by one of its officers thereunto duly authorized.
Dated: March 9, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇ ▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Title: Chief Executive Officer
12
FORM OF SUBSCRIPTION
TITAN MOTORCYCLE CO. OF AMERICA
(To be signed only on exercise of Warrant)
TO: Signature Stock Transfer & Trust, Inc., CC: Titan Motorcycle Co.
as Exercise Agent of America
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
1. The undersigned Holder of the attached original, executed Warrant hereby
elects to exercise its purchase right under such Warrant with respect to
______________ shares of Common Stock, as defined in the Warrant, of Titan
Motorcycle Co. of America, a Nevada corporation (the "Company").
2. The undersigned Holder (check one):
[ ] (a) elects to pay the aggregate purchase price for such shares of
Common Stock (the "Exercise Shares") (i) by lawful money of the United
States or the enclosed certified or official bank check payable in
United States dollars to the order of the Company in the amount of
$___________, or (ii) by wire transfer of United States funds to the
account of the Company in the amount of $____________, which transfer
has been made before or simultaneously with the delivery of this Form
of Subscription pursuant to the instructions of the Company;
or
[ ] (b) elects to receive shares of Common Stock having a value equal to
the value of the Warrant as permitted by and calculated in accordance
with Section 1.2 of the Warrant.
3. Please issue a stock certificate or certificates representing the
appropriate number of shares of Common Stock in the name of the undersigned or
in such other name as is specified below:
Name:
------------------------------------------
Address:
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4. The undersigned Holder confirms with respect to such Holder and the
shares of Common Stock issuable pursuant to this exercise the representations
set forth in Section 18 of the Warrant.
S-1
Dated: --------------------------------------------
--------- --, ---- (Signature must conform to name of Holder as
specified on the face of the Warrant)
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(Address)
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S-2
