REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of September 15, 1999 (this
"Agreement"), is made by and between TITAN MOTORCYCLE CO. OF AMERICA, a Nevada
corporation (the "Company"), and the person named on the signature page hereto
(the "Initial Investor").
W I T N E S S E T H:
WHEREAS, in connection with the Subscription Agreement, dated as of
September 15, 1999, between the Initial Investor and the Company (the
"Subscription Agreement"), the Company has agreed, upon the terms and subject to
the conditions of the Subscription Agreement, to issue and sell to the Initial
Investor shares (the "Preferred Shares") of Series A Convertible Preferred
Stock, $.001 par value (the "Series A Preferred Stock"), of the Company as
provided in the Subscription Agreement, which Preferred Shares are convertible
into shares (the "Conversion Shares") of Common Stock, $.001 par value (the
"Common Stock"), of the Company, and to issue common stock purchase warrants
(the "Warrants") to purchase shares (the "Warrant Shares") of Common Stock; and
WHEREAS, to induce the Initial Investor to execute and deliver the
Subscription Agreement, the Company has agreed to provide certain registration
rights under the Securities Act of 1933, as amended, and the rules and
regulations thereunder, or any similar successor statute (collectively, the
"1933 Act"), and applicable state securities laws with respect to the Conversion
Shares and the Warrant Shares;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Initial
Investor hereby agree as follows:
1. DEFINITIONS.
(a) As used in this Agreement, the following terms shall have the following
meanings:
"Blackout Period" means the period of up to 30 consecutive days commencing
on the day immediately after the date the Company notifies the Investors that
they are required, pursuant to Section 4(d), to suspend offers and sales of
Registrable Securities as a result of an event or circumstance described in
Section 3(f)(1) during which period, by reason of Section 3(f)(2), the Company
is not required to amend the Registration Statement or to supplement the
prospectus contained therein; PROVIDED, HOWEVER, that in each case the Company
shall have determined, in its reasonable judgment, that public disclosure of
such event or circumstance at such time would be detrimental to the Company.
"Certificate of Designations" means the Certificate of Designations of the
Series A Convertible Preferred Stock establishing and designating the Series A
Preferred Stock and fixing the rights and preferences of such series as filed by
the Company with the Secretary of State of the State of Nevada.
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"Computation Date" means, if a Registration Event occurs, any of (1) the
date which is 30 days after such Registration Event occurs, if any Registration
Event is continuing on such date, (2) each date which is 30 days after a
Computation Date, if any Registration Event is continuing on such date, and (3)
the date on which all Registration Events cease to continue.
"Investor" or "Investors" means the Initial Investor and any transferee or
assignee who agrees to become bound by the provisions of this Agreement in
accordance with Section 9 hereof.
"Majority Holders" means those persons who hold a majority of the shares of
Series A Preferred Stock which are then outstanding, including such shares
originally issued pursuant to the Subscription Agreement and the Other
Subscription Agreement.
"Nasdaq" means the Nasdaq SmallCap Market.
"1934 Act" means the Securities Exchange Act of 1934, as amended.
"register," "registered," and "registration" refer to a registration
effected by preparing and filing a Registration Statement or Statements in
compliance with the 1933 Act and pursuant to Rule 415 under the 1933 Act or any
successor rule providing for offering securities on a continuous basis ("Rule
415"), and the declaration or ordering of effectiveness of such Registration
Statement by the SEC.
"Registrable Securities" means the Conversion Shares and the Warrant
Shares.
"Registration Event" shall mean (1) the Company fails to file the
Registration Statement which is required to be filed by the Company pursuant to
Section 2(a) with the SEC within 30 days after the Closing Date, (2) the
Registration Statement covering the Registrable Securities which is required to
be filed by the Company pursuant to the first sentence of Section 2(a) hereof is
not effective within 120 days after the Closing Date, (3) the Company fails to
submit a request for acceleration of the effective date of the Registration
Statement in accordance with Section 3(a), (4) the Registration Statement
required to be filed by the Company pursuant to Section 2(a) shall cease to be
available for use by any Investor who is named therein as a selling stockholder
for any reason (including, without limitation, by reason of an SEC stop order, a
material misstatement or omission in such Registration Statement or the
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information contained in such Registration Statement having become outdated)
other than a Blackout Period, (5) the Common Stock ceases to be listed for
trading on any of the New York Stock Exchange, the American Stock Exchange,
Inc., the Nasdaq National Market or the Nasdaq, or (6) a holder of shares of
Series A Preferred Stock having become unable to convert any shares of Series A
Preferred Stock in accordance with Section 10(a) of the Certificate of
Designations (other than by reason of the 4.9% limitation on beneficial
ownership set forth therein or a redemption or repurchase thereof).
"Registration Period" means the period from the Closing Date to the
earliest of (i) the date which is five years after the SEC Effective Date, (ii)
the date on which each Investor may sell all Registrable Securities owned by
such Investor or which such Investor has any right to acquire without
registration under the 1933 Act pursuant to subsection (k) of Rule 144, without
restriction on the manner of sale or the volume of securities which may be sold
in any period and without the requirement for the giving of any notice to, or
the making of any filing with, the SEC and (iii) the date on which the Investors
no longer beneficially own or have any right to acquire any Registrable
Securities.
"Registration Statement" means a registration statement of the Company
under the 1933 Act, including any amendment thereto.
"Rule 144" means Rule 144 promulgated under the 1933 Act or any other
similar rule or regulation of the SEC that may at any time permit a holder of
any securities to sell securities of the Company to the public without
registration under the 1933 Act.
"SEC" means the Securities and Exchange Commission.
"SEC Effective Date" means the date the Registration Statement is declared
effective by the SEC.
"SEC Filing Date" means the date the Registration Statement is first filed
with the SEC pursuant to Section 2(a).
(b) Capitalized terms defined in the introductory paragraph or the recitals
to this Agreement shall have the respective meanings therein provided.
Capitalized terms used herein and not otherwise defined herein shall have the
respective meanings set forth in the Subscription Agreement.
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2. REGISTRATION.
(a) MANDATORY REGISTRATION. (1) The Company shall prepare, and on or prior
to the date which is 30 days after the Closing Date, file with the SEC a
Registration Statement on Form S-3 which, on the date of filing with the SEC,
covers the resale by the Initial Investor of a number of shares of Common Stock
at least equal to the sum of (x) a number of shares of Common Stock equal to
175% of the number of shares of Common Stock issuable upon conversion of the
Preferred Shares, determined as if the Preferred Shares, together with 24 months
of accrued and unpaid dividends thereon, were converted in full at the Fixed
Conversion Price (as defined in the Certificate of Designations) on the SEC
Filing Date PLUS (y) the number of Warrant Shares (in each case determined
without regard to the limitations on beneficial ownership contained in the
proviso to the second sentence of Section 10(a) of the Certificate of
Designations and Section 1.1(b) of the Warrants). If at any time the number of
shares of Common Stock included in the Registration Statement required to be
filed as provided in the first sentence of this Section 2(a) shall be
insufficient to cover 125% of the number of shares of Common Stock issuable on
conversion in full of the unconverted Preferred Shares plus the number of
Warrant Shares issuable upon exercise of the unexercised portion of the
Warrants, then promptly, but in no event later than 20 days after such
insufficiency shall occur, the Company shall file with the SEC an additional
Registration Statement on Form S-3 (which shall not constitute a post-effective
amendment to the Registration Statement filed pursuant to the first sentence of
this Section 2(a)), covering such number of shares of Common Stock as shall be
sufficient to permit such conversion and exercise. For all purposes of this
Agreement such additional Registration Statement shall be deemed to be the
Registration Statement required to be filed by the Company pursuant to Section
2(a) of this Agreement, and the Company and the Investors shall have the same
rights and obligations with respect to such additional Registration Statement as
they shall have with respect to the initial Registration Statement required to
be filed by the Company pursuant to this Section 2(a). The Registration
Statement shall not include securities to be sold for the account of any selling
securityholder other than the Investors and the investors contemplated by the
registration rights agreement entered into by the Company in connection with the
Other Subscription Agreement.
(2) Prior to the SEC Effective Date or during any time subsequent to the
SEC Effective Date when the Registration Statement for any reason is not
available for use by any Investor for the resale of any of Registrable
Securities, the Company shall not file any other registration statement or any
amendment thereto with the SEC under the 1933 Act or request the acceleration of
the effectiveness of any other registration statement previously filed with the
SEC, other than any registration statement on Form S-4 or Form S-8.
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(b) CERTAIN OFFERINGS. If any offering pursuant to a Registration Statement
pursuant to Section 2(a) hereof involves an underwritten offering, Investors who
hold a majority in interest of the Registrable Securities subject to such
underwritten offering shall have the right to select one legal counsel for the
Investors and an investment banker or bankers and manager or managers to
administer the offering, which investment banker or bankers or manager or
managers shall be reasonably satisfactory to the Company. The Investors who hold
the Registrable Securities to be included in such underwriting shall pay all
underwriting discounts and commissions and other fees and expenses of such
investment banker or bankers and manager or managers so selected in accordance
with this Section 2(b) (other than fees and expenses relating to registration of
Registrable Securities under federal or state securities laws, which are payable
by the Company pursuant to Section 5 hereof) with respect to their Registrable
Securities and the fees and expenses of such legal counsel so selected by the
Investors.
(c) PAYMENTS BY THE COMPANY. If a Registration Event occurs, on each
Computation Date the Company shall pay each Investor an amount in cash equal to
1.5% of the aggregate subscription price paid by such Investor for the Preferred
Shares pursuant to the Subscription Agreement (pro rated for any period of less
than 30 days). Each such payment shall be made by wire transfer in immediately
available funds on each Computation Date to such account as shall be specified
for such purpose by each Investor. Any such amount which is not paid when due
shall bear interest at the rate of 14% per annum (or such other rate as shall be
the maximum rate allowable by applicable law) until paid in full.
(d) PIGGY-BACK REGISTRATIONS. If at any time the Company shall determine to
prepare and file with the SEC a Registration Statement relating to an offering
for its own account or the account of others under the 1933 Act of any of its
equity securities, other than on Form S-4 or Form S-8 or their then equivalents
relating to equity securities to be issued solely in connection with any
acquisition of any entity or business or equity securities issuable in
connection with stock option or other employee benefit plans, the Company shall
send to each Investor who is entitled to registration rights under this Section
2(d) written notice of such determination and, if within ten (10) days after
receipt of such notice, such Investor shall so request in writing, the Company
shall include in such Registration Statement all or any part of the Registrable
Securities such Investor requests to be registered, except that if, in
connection with any underwritten public offering for the account of the Company,
the managing underwriter(s) thereof shall impose a limitation on the number of
shares of Common Stock which may be included in the Registration Statement
because, in such underwriter(s)' judgment, such limitation is necessary to
effect an orderly public distribution of the securities to be sold by the
Company, then the Company shall be obligated to include in such Registration
Statement only such limited portion of the Registrable Securities with respect
to which such Investor has requested inclusion hereunder. Any exclusion of
Registrable Securities shall be made pro rata among the Investors seeking to
include Registrable Securities, in proportion to the number of Registrable
Securities sought to be included by such Investors; PROVIDED, HOWEVER, that the
Company shall not exclude any Registrable Securities unless the Company has
first excluded all outstanding securities the holders of which are not entitled
by right to inclusion of securities in such Registration Statement; and PROVIDED
FURTHER, HOWEVER, that, after giving effect to the immediately preceding
proviso, any exclusion of Registrable Securities shall be made pro rata with
holders of other securities having the right to include such securities in the
Registration Statement, based on the number of securities for which registration
is requested except to the extent such pro rata exclusion of such other
securities is prohibited under any written agreement entered into by the Company
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with the holder of such other securities prior to the date of this Agreement, in
which case such other securities shall be excluded, if at all, in accordance
with the terms of such agreement. No right to registration of Registrable
Securities under this Section 2(d) shall be construed to limit any registration
required under Section 2(a) hereof. The obligations of the Company under this
Section 2(d) may be waived by Investors holding a majority in interest of the
Registrable Securities and shall expire after the Company has afforded the
opportunity for the Investors to exercise registration rights under this Section
2(d) for two registrations; PROVIDED, HOWEVER, that any Investor who shall have
had any Registrable Securities excluded from any Registration Statement in
accordance with this Section 2(d) shall be entitled to include in an additional
Registration Statement filed by the Company the Registrable Securities so
excluded. Notwithstanding any other provision of this Agreement, if the
Registration Statement required to be filed pursuant to Section 2(a) of this
Agreement shall have been ordered effective by the SEC and the Company shall
have maintained the effectiveness of such Registration Statement as required by
this Agreement and if the Company shall otherwise have complied in all material
respects with its obligations under this Agreement, then the Company shall not
be obligated to register any Registrable Securities on such Registration
Statement referred to in this Section 2(d).
(e) ELIGIBILITY FOR FORM S-3. As of October 1, 1999, the Company will meet
the requirements for the use of Form S-3 for registration of the Registrable
Securities for resale by the Investors. The Company shall file all reports
required to be filed by the Company with the SEC in a timely manner so as to
maintain such eligibility for the use of Form S-3.
3. OBLIGATIONS OF THE COMPANY. In connection with the registration of the
Registrable Securities, the Company shall:
(a) prepare promptly, and file with the SEC not later than 30 days after
the Closing Date, a Registration Statement with respect to the number of
Registrable Securities provided in Section 2(a), and thereafter to use its best
efforts to cause each Registration Statement relating to Registrable Securities
to become effective as soon as possible after such filing, and keep the
Registration Statement effective pursuant to Rule 415 at all times during the
Registration Period; submit to the SEC, within three Business Days after the
Company learns that no review of the Registration Statement will be made by the
staff of the SEC or that the staff of the SEC has no further comments on the
Registration Statement, as the case may be, a request for acceleration of
effectiveness of the Registration Statement to a time and date not later than 48
hours after the submission of such request; notify the Investors of the
effectiveness of the Registration Statement on the date the Registration
Statement is declared effective; and the Company represents and warrants to, and
covenants and agrees with, the Investors that the Registration Statement
(including any amendments or supplements thereto and prospectuses contained
therein), at the time it is first filed with the SEC, at the time it is ordered
effective by the SEC and at all times during which it is required to be
effective hereunder (and each such amendment and supplement at the time it is
filed with the SEC and at all times during which it is available for use in
connection with the offer and sale of the Registrable Securities) shall not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein, or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading;
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(b) prepare and file with the SEC such amendments (including post-effective
amendments) and supplements to the Registration Statement and the prospectus
used in connection with the Registration Statement as may be necessary to keep
the Registration Statement effective at all times during the Registration
Period, and, during the Registration Period, comply with the provisions of the
1933 Act with respect to the disposition of all Registrable Securities of the
Company covered by the Registration Statement until such time as all of such
Registrable Securities have been disposed of in accordance with the intended
methods of disposition by the seller or sellers thereof as set forth in the
Registration Statement;
(c) furnish to each Investor whose Registrable Securities are included in
the Registration Statement and its legal counsel, (1) promptly after the same is
prepared and publicly distributed, filed with the SEC or received by the
Company, one copy of the Registration Statement and any amendment thereto, each
preliminary prospectus and prospectus and each amendment or supplement thereto,
each letter written by or on behalf of the Company to the SEC or the staff of
the SEC and each item of correspondence from the SEC or the staff of the SEC
relating to such Registration Statement (other than any portion of any thereof
which contains information for which the Company has sought confidential
treatment) and (2) such number of copies of a prospectus, including a
preliminary prospectus, and all amendments and supplements thereto and such
other documents, as such Investor may reasonably request in order to facilitate
the disposition of the Registrable Securities owned by such Investor;
(d) use reasonable efforts to (i) register and qualify the Registrable
Securities covered by the Registration Statement under such securities or blue
sky laws of such jurisdictions as the Investors who hold a majority in interest
of the Registrable Securities being offered reasonably request, (ii) prepare and
file in those jurisdictions such amendments (including post-effective
amendments) and supplements to such registrations and qualifications as may be
necessary to maintain the effectiveness thereof at all times until the end of
the Registration Period, (iii) take such other actions as may be necessary to
maintain such registrations and qualifications in effect at all times during the
Registration Period and (iv) take all other actions reasonably necessary or
advisable to qualify the Registrable Securities for sale in such jurisdictions;
PROVIDED, HOWEVER, that the Company shall not be required in connection
therewith or as a condition thereto (I) to qualify to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 3(d), (II) to subject itself to general taxation in any such
jurisdiction, (III) to file a general consent to service of process in any such
jurisdiction, (IV) to provide any undertakings that cause more than nominal
expense or burden to the Company or (V) to make any change in its Certificate of
Incorporation or by-laws, which in each case the Board of Directors of the
Company determines to be contrary to the best interests of the Company and its
stockholders;
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(e) in the event that the Registrable Securities are being offered in an
underwritten offering, enter into and perform its obligations under an
underwriting agreement, in usual and customary form, including, without
limitation, customary indemnification and contribution obligations, with the
underwriters of such offering;
(f) (1) as promptly as practicable after becoming aware of such event or
circumstance, notify each Investor of any event or circumstance of which the
Company has knowledge (or in the case of an event giving rise to a Blackout
Period, notify each Investor of the existence of such an event or circumstance
without disclosing the substance thereof), as a result of which the prospectus
included in the Registration Statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and use its best
efforts promptly to prepare a supplement or amendment to the Registration
Statement to correct such untrue statement or omission, file such supplement or
amendment with the SEC at such time as shall permit the Investors to sell
Registrable Securities pursuant to the Registration Statement as promptly as
practicable, and deliver a number of copies of such supplement or amendment to
each Investor as such Investor may reasonably request;
(2) notwithstanding Section 3(f)(1) above, if at any time the Company
notifies the Investors as contemplated by Section 3(f)(1) that the event giving
rise to such notice relates to a development involving the Company which
occurred subsequent to the later of (x) the SEC Effective Date and (y) the
latest date prior to such notice on which the Company has amended or
supplemented the Registration Statement, then the Company shall not be required
to use best efforts to make such amendment during a Blackout Period; PROVIDED,
HOWEVER, that (i) the aggregate number of days on which any Blackout Period is
in effect may not exceed 30 days (whether or not consecutive) in any period of
12 consecutive months; (ii) no more than two Blackout Periods may commence in
any period of 12 consecutive months; (iii) no Blackout Period may commence
within 60 days after the end of an earlier Blackout Period; and (iv) if a
Blackout Period continues for five or more days, on or before the fifth day
thereof the Company shall deliver to each Investor a certified copy of a
resolution of the Company's Board of Directors confirming that such Blackout
Period complies with the definition thereof in Section 1(a);
(g) as promptly as practicable after becoming aware of such event, notify
each Investor who holds Registrable Securities being sold (or, in the event of
an underwritten offering, the managing underwriters) of the issuance by the SEC
of any stop order or other suspension of effectiveness of the Registration
Statement at the earliest possible time;
(h) permit a single firm of counsel designated as selling stockholders'
counsel by the Investors who hold a majority in interest of the Registrable
Securities being sold to review and comment on the Registration Statement and
all amendments and supplements thereto a reasonable period of time prior to
their filing with the SEC;
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(i) make generally available to its security holders as soon as practical,
but not later than ninety (90) days after the close of the period covered
thereby, an earnings statement (in form complying with the provisions of Rule
158 under the 0000 Xxx) covering a twelve-month period beginning not later than
the first day of the Company's fiscal quarter next following the effective date
of the Registration Statement;
(j) in connection with any underwritten offering, at the request of the
Investors who hold a majority in interest of the Registrable Securities being
sold, furnish on the date that Registrable Securities are delivered to an
underwriter, if any, for sale in connection with the Registration Statement (i)
a letter, dated such date, from the Company's independent certified public
accountants in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public offering,
addressed to the underwriters; and (ii) an opinion, dated such date, from
counsel representing the Company for purposes of such Registration Statement, in
form and substance as is customarily given in an underwritten public offering,
addressed to the underwriters and the Investors; PROVIDED, in each case, that
the Investors make any confirmations or agreements to or with the Company, its
accountants or its counsel as are necessary or required by applicable
professional requirements;
(k) make available for inspection by any Investor, any underwriter
participating in any disposition pursuant to the Registration Statement, and any
attorney, accountant or other agent retained by any such Investor or underwriter
(collectively, the "Inspectors"), all pertinent financial and other records,
pertinent corporate documents and properties of the Company (collectively, the
"Records"), as shall be reasonably necessary to enable each Investor to exercise
its due diligence responsibility, and cause the Company's officers, directors
and employees to supply all information which any Inspector may reasonably
request for purposes of such due diligence; PROVIDED, HOWEVER, that each
Inspector shall hold in confidence and shall not make any disclosure (except to
an Investor) of any Record or other information which the Company determines in
good faith to be confidential, and the Inspectors are so notified or aware of
this status, unless (i) the disclosure of such Records is necessary to avoid or
correct a misstatement or omission in any Registration Statement, (ii) the
release of such Records is ordered pursuant to a subpoena or other order from a
court or government body of competent jurisdiction or (iii) the information in
such Records has been made generally available to the public other than by
disclosure in violation of this or any other agreement. The Company shall not be
required to disclose any confidential information in such Records to any
Inspector until and unless such Inspector shall have entered into
confidentiality agreements (in form and substance satisfactory to the Company)
with the Company with respect thereto, substantially in the form of this Section
3(k). Each Investor agrees that it shall, upon learning that disclosure of such
Records is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt notice to the Company and allow
the Company, at the Company's own expense, to undertake appropriate action to
prevent disclosure of, or to obtain a protective order for, the Records deemed
confidential. The Company shall hold in confidence and shall not make any
disclosure of information concerning an Investor provided to the Company
pursuant to Section 4(e) hereof unless (i) disclosure of such information is
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necessary to comply with federal or state securities laws, (ii) the disclosure
of such information is necessary to avoid or correct a misstatement or omission
in any Registration Statement, (iii) the release of such information is ordered
pursuant to a subpoena or other order from a court or governmental body of
competent jurisdiction or (iv) such information has been made generally
available to the public other than by disclosure in violation of this or any
other agreement. The Company agrees that it shall, upon learning that disclosure
of such information concerning an Investor is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
notice to such Investor and allow such Investor, at such Investor's own expense,
to undertake appropriate action to prevent disclosure of, or to obtain a
protective order for, such information;
(l) use its best efforts (i) to cause all the Registrable Securities
covered by the Registration Statement to be listed on the Nasdaq or such other
principal securities market on which securities of the same class or series
issued by the Company are then listed or traded or (ii) if securities of the
same class or series as the Registrable Securities are not then listed on Nasdaq
or any such other securities market, to cause all of the Registrable Securities
covered by the Registration Statement to be listed on the New York Stock
Exchange, the American Stock Exchange or the Nasdaq National Market;
(m) provide a transfer agent and registrar, which may be a single entity,
for the Registrable Securities not later than the effective date of the
Registration Statement;
(n) cooperate with the Investors who hold Registrable Securities being
offered and the managing underwriter or underwriters, if any, to facilitate the
timely preparation and delivery of certificates (not bearing any restrictive
legends) representing Registrable Securities to be offered pursuant to the
Registration Statement and enable such certificates to be in such denominations
or amounts, as the case may be, as the managing underwriter or underwriters, if
any, or the Investors may reasonably request and registered in such names as the
managing underwriter or underwriters, if any, or the Investors may request; and,
within three Business Days after a Registration Statement which includes
Registrable Securities is ordered effective by the SEC, the Company shall
deliver to the transfer agent for the Registrable Securities (with copies to the
Investors whose Registrable Securities are included in such Registration
Statement) an instruction substantially in the form attached hereto as EXHIBIT 1
and shall cause legal counsel selected by the Company to deliver to the
Investors opinions of such counsel in the forms attached hereto as EXHIBIT 2-A
and EXHIBIT 2-B (with copies to the Company's transfer agent);
(o) during the period the Company is required to maintain effectiveness of
the Registration Statement pursuant to Section 3(a), the Company shall not bid
for or purchase any Common Stock or any right to purchase Common Stock or
attempt to induce any person to purchase any such security or right if such bid,
purchase or attempt would in any way limit the right of the Investors to sell
Registrable Securities by reason of the limitations set forth in Regulation M
under the 1934 Act; and
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(p) take all other reasonable actions necessary to expedite and facilitate
disposition by the Investors of the Registrable Securities pursuant to the
Registration Statement.
4. OBLIGATIONS OF THE INVESTORS. In connection with the registration of the
Registrable Securities, the Investors shall have the following obligations:
(a) It shall be a condition precedent to the obligations of the Company to
complete the registration pursuant to this Agreement with respect to the
Registrable Securities of a particular Investor that such Investor shall furnish
to the Company such information regarding itself, the Registrable Securities
held by it and the intended method of disposition of the Registrable Securities
held by it as shall be reasonably required to effect the registration of such
Registrable Securities and shall execute such documents in connection with such
registration as the Company may reasonably request. At least five days prior to
the first anticipated filing date of the Registration Statement, the Company
shall notify each Investor of the information the Company requires from each
such Investor (the "Requested Information") if any of such Investor's
Registrable Securities are eligible for inclusion in the Registration Statement.
If at least one Business Day prior to the filing date the Company has not
received the Requested Information from an Investor (a "Non-Responsive
Investor"), then the Company may file the Registration Statement without
including Registrable Securities of such Non-Responsive Investor but, until the
Registration Statement is declared effective, the Company shall not be relieved
of its obligation to file a Registration Statement with the SEC relating to the
Registrable Securities of such Non-Responsive Investor promptly after such
Non-Responsive Investor provides the Requested Information;
(b) Each Investor by such Investor's acceptance of the Registrable
Securities agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of the Registration
Statement hereunder, unless such Investor has notified the Company in writing of
such Investor's election to exclude all of such Investor's Registrable
Securities from the Registration Statement;
(c) In the event Investors holding a majority in interest of the
Registrable Securities being registered determine to engage the services of an
underwriter, each Investor agrees to enter into and perform such Investor's
obligations under an underwriting agreement, in usual and customary form,
including, without limitation, customary indemnification and contribution
obligations, with the managing underwriter of such offering and take such other
actions as are reasonably required in order to expedite or facilitate the
disposition of the Registrable Securities, unless such Investor has notified the
Company in writing of such Investor's election to exclude all of such Investor's
Registrable Securities from the Registration Statement;
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(d) Each Investor agrees that, upon receipt of any notice from the Company
of the happening of any event of the kind described in Section 3(f) or 3(g),
such Investor will immediately discontinue disposition of Registrable Securities
pursuant to the Registration Statement covering such Registrable Securities
until such Investor's receipt of the copies of the supplemented or amended
prospectus contemplated by Section 3(f) or 3(g) and, if so directed by the
Company, such Investor shall deliver to the Company (at the expense of the
Company) or destroy (and deliver to the Company a certificate of destruction)
all copies in such Investor's possession of the prospectus covering such
Registrable Securities current at the time of receipt of such notice;
(e) No Investor may participate in any underwritten registration hereunder
unless such Investor (i) agrees to sell such Investor's Registrable Securities
on the basis provided in any underwriting arrangements approved by the Investors
entitled hereunder to approve such arrangements, (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements and (iii) agrees to pay its pro rata share of all underwriting
discounts and commissions and other fees and expenses of investment bankers and
any manager or managers of such underwriting and legal expenses of the
underwriters applicable with respect to its Registrable Securities, in each case
to the extent not payable by the Company pursuant to the terms of this
Agreement; and
(f) Each Investor agrees to take all reasonable actions necessary to comply
with the prospectus delivery requirements of the 1933 Act applicable to its
sales of Registrable Securities.
5. EXPENSES OF REGISTRATION. All reasonable expenses, other than
underwriting discounts and commissions and other fees and expenses of investment
bankers and other than brokerage commissions, incurred in connection with
registrations, filings or qualifications pursuant to Sections 2 and 3,
including, without limitation, all registration, listing and qualifications
fees, printers and accounting fees and the fees and disbursements of counsel for
the Company and the Investors (to the extent provided in the Subscription
Agreement), shall be borne by the Company, PROVIDED, HOWEVER, that the Investors
shall bear the fees and out-of-pocket expenses of the one legal counsel selected
by the Investors pursuant to Section 2(b) hereof.
6. INDEMNIFICATION. In the event any Registrable Securities are included in
a Registration Statement under this Agreement:
-12-
(a) To the extent permitted by law, the Company will indemnify and hold
harmless each Investor who holds such Registrable Securities, the directors, if
any, of such Investor, the officers, if any, of such Investor, each person, if
any, who controls any Investor within the meaning of the 1933 Act or the 1934
Act, any underwriter (as defined in the 0000 Xxx) for the Investors, the
directors, if any, of such underwriter and the officers, if any, of such
underwriter, and each person, if any, who controls any such underwriter within
the meaning of the 1933 Act or the 1934 Act (each, an "Indemnified Person"),
against any losses, claims, damages, liabilities or expenses (joint or several)
incurred (collectively, "Claims") to which any of them may become subject under
the 1933 Act, the 1934 Act or otherwise, insofar as such Claims (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon any of the following: (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
any post-effective amendment thereof or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, (ii) any untrue statement or alleged
untrue statement of a material fact contained in any preliminary prospectus if
used prior to the effective date of such Registration Statement, or contained in
the final prospectus (as amended or supplemented, if the Company files any
amendment thereof or supplement thereto with the SEC) or the omission or alleged
omission to state therein any material fact necessary to make the statements
made therein, in light of the circumstances under which the statements therein
were made, not misleading or (iii) any violation or alleged violation by the
Company of the 1933 Act, the 1934 Act, any state securities law or any rule or
regulation under the 1933 Act, the 1934 Act or any state securities law (the
matters in the foregoing clauses (i) through (iii) being, collectively,
"Violations"). Subject to the restrictions set forth in Section 6(d) with
respect to the number of legal counsel, the Company shall reimburse the
Investors and the other Indemnified Persons, promptly as such expenses are
incurred and are due and payable, for any legal fees or other reasonable
expenses incurred by them in connection with investigating or defending any such
Claim. Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(a): (I) shall not apply to
a Claim arising out of or based upon a Violation which occurs in reliance upon
and in conformity with information furnished in writing to the Company by any
Indemnified Person or underwriter for such Indemnified Person expressly for use
in connection with the preparation of the Registration Statement, the prospectus
or any such amendment thereof or supplement thereto, if such prospectus was
timely made available by the Company pursuant to Section 3(c) hereof; (II) with
respect to any preliminary prospectus shall not inure to the benefit of any such
person from whom the person asserting any such Claim purchased the Registrable
Securities that are the subject thereof (or to the benefit of any person
controlling such person) if the untrue statement or omission of material fact
contained in the preliminary prospectus was corrected in the prospectus, as then
amended or supplemented, if such prospectus was timely made available by the
Company pursuant to Section 3(c) hereof; and (III) shall not apply to amounts
paid in settlement of any Claim if such settlement is effected without the prior
written consent of the Company, which consent shall not be unreasonably
withheld. Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Indemnified Person and shall survive
the transfer of the Registrable Securities by the Investors pursuant to Section
9.
(b) In connection with any Registration Statement in which an Investor is
participating, each such Investor agrees to indemnify and hold harmless, to the
same extent and in the same manner set forth in Section 6(a), the Company, each
of its directors, each of its officers who signs the Registration Statement,
each person, if any, who controls the Company within the meaning of the 1933 Act
or the 1934 Act, any underwriter and any other stockholder selling securities
pursuant to the Registration Statement or any of its directors or officers or
any person who controls such stockholder or underwriter within the meaning of
-13-
the 1933 Act or the 1934 Act (collectively and together with an Indemnified
Person, an "Indemnified Party"), against any Claim to which any of them may
become subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such
Claim arises out of or is based upon (i) any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in reliance upon and
in conformity with written information furnished to the Company by such Investor
expressly for use in connection with such Registration Statement or (ii) a
failure to comply with the prospectus delivery requirements of the 1933 Act; and
such Investor will reimburse any legal or other expenses reasonably incurred by
any Indemnified Party in connection with investigating or defending any such
Claim; PROVIDED, HOWEVER, that the indemnity agreement contained in this Section
6(b) shall not apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of such Investor, which
consent shall not be unreasonably withheld; PROVIDED, FURTHER, HOWEVER, that the
Investor shall be liable under this Section 6(b) for only that amount of a Claim
as does not exceed the amount by which the net proceeds to such Investor from
the sale of Registrable Securities pursuant to such Registration Statement
exceeds the cost of such Registrable Securities to such Investor. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of such Indemnified Party and shall survive the transfer of the
Registrable Securities by the Investors pursuant to Section 9. Notwithstanding
anything to the contrary contained herein, the indemnification agreement
contained in this Section 6(b) with respect to any preliminary prospectus shall
not inure to the benefit of any Indemnified Party if the untrue statement or
omission of material fact contained in the preliminary prospectus was corrected
on a timely basis in the prospectus, as then amended or supplemented.
(c) The Company shall be entitled to receive indemnities from underwriters,
selling brokers, dealer managers and similar securities industry professionals
participating in any distribution, to the same extent as provided above, with
respect to information so furnished in writing by such persons expressly for
inclusion in the Registration Statement.
(d) Promptly after receipt by an Indemnified Person or Indemnified Party
under this Section 6 of notice of the commencement of any action (including any
governmental action), such Indemnified Person or Indemnified Party shall, if a
Claim in respect thereof is to be made against any indemnifying party under this
Section 6, deliver to the indemnifying party a written notice of the
commencement thereof and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume control of the
defense thereof with counsel selected by the indemnifying party but reasonably
acceptable to the Indemnified Person or the Indemnified Party, as the case may
be; PROVIDED, HOWEVER, that an Indemnified Person or Indemnified Party shall
have the right to retain its own counsel with the fees and expenses to be paid
by the indemnifying party, if, in the reasonable opinion of counsel retained by
the indemnifying party, the representation by such counsel of the Indemnified
Person or Indemnified Party and the indemnifying party would be inappropriate
due to actual or potential differing interests between such Indemnified Person
or Indemnified Party and any other party represented by such counsel in such
proceeding. In such event, the Company shall pay for only one separate legal
counsel for the Investors; such legal counsel shall be selected by the Investors
holding a majority in interest of the Registrable Securities included in the
Registration Statement to which the Claim relates. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
-14-
commencement of any such action shall not relieve such indemnifying party of any
liability to the Indemnified Person or Indemnified Party under this Section 6,
except to the extent that the indemnifying party is prejudiced in its ability to
defend such action. The indemnification required by this Section 6 shall be made
by periodic payments of the amount thereof during the course of the
investigation or defense, as such expense, loss, damage or liability is incurred
and is due and payable.
7. CONTRIBUTION. To the extent any indemnification by an indemnifying party
is prohibited or limited by law, the indemnifying party agrees to make the
maximum contribution with respect to any amounts for which it would otherwise be
liable under Section 6 to the fullest extent permitted by law; PROVIDED,
HOWEVER, that (a) no contribution shall be made under circumstances where the
maker would not have been liable for indemnification under the fault standards
set forth in Section 6, (b) no seller of Registrable Securities guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 0000
Xxx) shall be entitled to contribution from any seller of Registrable Securities
who was not guilty of such fraudulent misrepresentation and (c) contribution by
any seller of Registrable Securities shall be limited in amount to the amount by
which the net amount of proceeds received by such seller from the sale of such
Registrable Securities exceeds the purchase price paid by such seller for such
Registrable Securities.
8. REPORTS UNDER 1934 ACT. With a view to making available to the Investors
the benefits of Rule 144, the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144;
(b) file with the SEC in a timely manner all reports and other documents
required of the Company under the 1933 Act and the 1934 Act; and
(c) furnish to each Investor so long as such Investor owns Registrable
Securities, promptly upon request, (i) a written statement by the Company that
it has complied with the reporting requirements of Rule 144 and the 1934 Act,
(ii) a copy of the most recent annual or quarterly report of the Company and
such other reports and documents so filed by the Company and (iii) such other
information as may be reasonably requested to permit the Investors to sell such
securities pursuant to Rule 144 without registration.
9. ASSIGNMENT OF THE REGISTRATION RIGHTS. The rights to have the Company
register Registrable Securities pursuant to this Agreement shall be
automatically assigned by the Investors to an Affiliate (as such term is defined
-15-
in the Certificate of Designations) thereof or to any transferee of all or any
portion of such securities which portion is not less than 100,000 shares of
Common Stock (or to any transferee of all or any portion of the Preferred Shares
or the Warrants which transfer is permitted by Sections 4(a) and 4(h) of the
Subscription Agreement) only if: (a) the Investor agrees in writing with the
transferee or assignee to assign such rights, and a copy of such agreement is
furnished to the Company within a reasonable time after such assignment, (b) the
Company is, within a reasonable time after such transfer or assignment,
furnished with written notice of (i) the name and address of such transferee or
assignee and (ii) the securities with respect to which such registration rights
are being transferred or assigned, (c) immediately following such transfer or
assignment the further disposition of such securities by the transferee or
assignee is
restricted under the 1933 Act and applicable state securities laws, and (d)
at or before the time the Company receives the written notice contemplated by
clause (b) of this sentence the transferee or assignee agrees in writing with
the Company to be bound by all of the provisions contained herein. In connection
with any such transfer the Company shall, at its sole cost and expense, promptly
after such assignment take such actions as shall be reasonably acceptable to the
Initial Investor and such transferee to assure that the Registration Statement
and related prospectus are available for use by such transferee for sales of the
Registrable Securities in respect of which the rights to registration have been
so assigned. In connection with any such assignment, each Investor shall have
the right to assign to such transferee such Investor's rights under the
Subscription Agreement by notice of such assignment to the Company. Following
such notice of assignment of rights under the Subscription Agreement, the
Company shall be obligated to such transferee, and such transferee shall be
obligated to the Company, to perform all of its covenants under the Subscription
Agreement as if such transferee were the Buyer under the Subscription Agreement.
10. AMENDMENT OF REGISTRATION RIGHTS. Any provision of this Agreement may
be amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Majority Holders. Any amendment or waiver effected in
accordance with this Section 10 shall be binding upon each Investor and the
Company.
11. MISCELLANEOUS.
(a) A person or entity is deemed to be a holder of Registrable Securities
whenever such person or entity owns of record such Registrable Securities. If
the Company receives conflicting instructions, notices or elections from two or
more persons or entities with respect to the same Registrable Securities, the
Company shall act upon the basis of instructions, notice or election received
from the registered owner of such Registrable Securities.
(b) Notices required or permitted to be given hereunder shall be in writing
and shall be deemed to be sufficiently given when personally delivered (by hand,
by courier, by telephone line facsimile transmission (with answer back
confirmation) or other means) (i) if to the Company, at 0000 Xxxx Xxxxxx Xxxxxx,
-00-
Xxxxxxx, Xxxxxxx 00000, Attention: Chief Executive Officer, telephone line
facsimile transmission number (000) 000-0000, (ii) if to the Initial Investor,
at 0000 Xxxx 00xx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxx 00000, Attention: Xxxx Xxxxxx,
telephone line facsimile transmission number (000) 000-0000 and (iii) if to any
other Investor, at such address as such Investor shall have provided in writing
to the Company, or at such other address as each such party furnishes by notice
given in accordance with this Section 11(b), and shall be effective upon
receipt.
(c) Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.
(d) This Agreement shall be enforced, governed by and construed in
accordance with the laws of the State of Arizona applicable to agreements made
and to be performed entirely within such State. In the event that any provision
of this Agreement is invalid or unenforceable under any applicable statute or
rule of law, then such provision shall be deemed inoperative to the extent that
it may conflict therewith and shall be deemed modified to conform with such
statute or rule of law. Any provision hereof which may prove invalid or
unenforceable under any law shall not affect the validity or enforceability of
any other provision hereof.
(e) This Agreement constitutes the entire agreement among the parties
hereto with respect to the subject matter hereof. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein. This Agreement supersedes all prior agreements and understandings among
the parties hereto with respect to the subject matter hereof.
(f) Subject to the requirements of Section 9 hereof, this Agreement shall
inure to the benefit of and be binding upon the successors and assigns of each
of the parties hereto.
(g) All pronouns and any variations thereof refer to the masculine,
feminine or neuter, singular or plural, as the context may require.
(h) The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof.
-17-
(i) The Company acknowledges that any failure by the Company to perform its
obligations under this Agreement, including, without limitation, the Company's
obligations under Section 3(n), or any delay in such performance could result in
damages to the Investors and the Company agrees that, in addition to any other
liability the Company may have by reason of any such failure or delay, the
Company shall be liable for all direct and consequential damages caused by any
such failure or delay.
(j) Each party shall do and perform, or cause to be done and performed, all
such further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as the other party may
reasonably request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated hereby.
(k) The language used in this Agreement will be deemed to be the language
chosen by the parties to express their mutual intent, and no rules of strict
construction will be applied against any party.
(l) This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which shall constitute one and the
same agreement. This Agreement, once executed by a party, may be delivered to
the other party hereto by telephone line facsimile transmission of a copy of
this Agreement bearing the signature of the party so delivering this Agreement.
-18-
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective officers thereunto duly authorized as of day and
year first above written.
TITAN MOTORCYCLE CO. OF AMERICA
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Executive Officer
XXXX INVESTMENT GROUP LIMITED
By: /s/ Xxxx Xxxxxx
------------------------------------
Name: Xxxx Xxxxxx
Title: Vice President
-19-
EXHIBIT 1
TO
REGISTRATION
RIGHTS AGREEMENT
[Company Letterhead]
[Date]
Signature Stock Transfer, Inc.,
as Conversion Agent, Warrant Agent and Registrar
00000 Xxxxxx Xxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Ladies and Gentlemen:
This letter shall serve as our irrevocable authorization and direction to
you [(1) to transfer or re-register the certificates for the shares of Common
Stock, $.001 par value (the "Common Stock"), of Titan Motorcycle Co. of America,
a Nevada corporation (the "Company"), represented by certificate numbers _______
and _______ for an aggregate of _______ shares (the "Outstanding Shares") of
Common Stock presently registered in the name of [Name of Investors] upon
surrender of such certificate(s) to you, notwithstanding the legend appearing on
such certificates, and (2)](1) to issue (a) shares (the "Conversion Shares") of
----------
(1) Omit if no conversions of Preferred Stock or exercises of Warrants have
occurred before SEC registration is declared effective.
1-20
Common Stock to or upon the order of the holder from time to time on conversion
of the shares (the "Preferred Shares") of Series A Convertible Preferred Stock,
$.001 par value, of the Company upon receipt by you of a Notice of Conversion of
Series A Convertible Preferred Stock in the form enclosed herewith, and (b)
shares (the "Warrant Shares") of Common Stock to or upon the order of the holder
from time to time on exercise of the Common Stock Purchase Warrants (the
"Warrants") exercisable for Common Stock issued by the Company upon receipt by
you of a Subscription Form from such holder in the form enclosed herewith. [The
transfer or re-registration of the certificates for the Outstanding Shares by
you should be made at such time as you are requested to do so by the record
holder of the Outstanding Shares. The certificate issued upon such transfer or
re-registration should be registered in such name as requested by the holder of
record of the certificate surrendered to you and should not bear any legend
which would restrict the transfer of the shares represented thereby. In
addition, you are hereby directed to remove any stop-transfer instruction
relating to the Outstanding Shares.] Certificates for the Conversion Shares and
Warrant Shares should not bear any restrictive legend and should not be subject
to any stop-transfer restriction.
Contemporaneously with the delivery of this letter, the Company is
delivering to you an opinion of Xxxxx & Xxxxxx LLP as to registration of the
resale of [the Outstanding Shares and]* the Conversion Shares and Warrant Shares
under the Securities Act of 1933, as amended.
Should you have any questions concerning this matter, please contact me.
Very truly yours,
TITAN MOTORCYCLE CO. OF AMERICA
By:
------------------------------------
Name:
Title:
Enclosures
cc: [Names of Investors]
1-21
EXHIBIT 2-A
TO
REGISTRATION
RIGHTS AGREEMENT
[Doc 2: S&W Opinion]
__________ __, ____
[Names and Addresses of Investors]
TITAN MOTORCYCLE CO. OF AMERICA
SHARES OF COMMON STOCK
Ladies and Gentlemen:
We are special counsel to Titan Motorcycle Co. of America, a Nevada
corporation (the "Company"), and we understand that the Company has sold to
[Names of Investors] (the "Holders") an aggregate of 4,000 shares (the
"Preferred Shares") of the Company's Series A Convertible Preferred Stock, $.001
par value (the "Preferred Stock"), and issued to the Holders Common Stock
Purchase Warrants (the "Warrants"). The Preferred Shares were sold, and the
Warrants were issued, to the Holders pursuant to several Subscription
Agreements, dated as of September ___, 1999, by and between the Holders and the
Company (the "Subscription Agreements"). Pursuant to the several Registration
Rights Agreements, dated as of September ___, 1999, by and between the Company
and each Holder (the "Registration Rights Agreements") entered into in
connection with the purchase by the Holders of the Preferred Shares, the Company
agreed with each Holder, among other things, to register for resale (1) the
shares (the "Conversion Shares") of Common Stock issuable upon conversion of the
Preferred Shares and (2) the shares (the "Warrant Shares") of Common Stock
issuable upon exercise of the Warrants under the Securities Act of 1933, as
amended (the "1933 Act"), upon the terms provided in the Registration Rights
Agreements. The Conversion Shares and the Warrant Shares are referred to herein
collectively as the "Shares". Pursuant to the Registration Rights Agreements, on
, 1999 the Company filed a Registration Statement on Form S-3 (File No.
333-__________) (the "Registration Statement") with the Securities and Exchange
Commission (the "SEC") relating to the Shares, which names the Holders as
selling stockholders thereunder.
[Other introductory and scope of examination language to be inserted]
Based on the foregoing, we are of the opinion that:
(1) The Registration Statement and the Prospectus contained therein
(other than the financial statements and financial schedules and other
financial and statistical information contained or incorporated by
reference therein, as to which we have not been requested to and do not
express any opinion) comply as to form in all material respects with the
applicable requirements of the 1933 Act and the rules and regulations
promulgated thereunder; and
(2) The Registration Statement has become effective under the 1933 Act
and to our knowledge, no stop order proceedings with respect thereto have
been instituted or threatened by the SEC. The Shares have been registered
under the 1933 Act and may be resold by the respective Holders pursuant to
the Registration Statement.
We have participated in the preparation of the Registration Statement and
the Prospectus, including review and discussions with officers and other
representatives of the Company, representatives of the independent public
accountants for the Company, and your representatives at which the contents of
the Registration Statement and the Prospectus contained therein and related
matters were discussed, and, although we are not passing upon and do not assume
any responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement and the Prospectus contained therein, on
the basis of the foregoing, nothing has come to our attention that leads us to
believe either that the Registration Statement at the time the Registration
Statement became effective contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, or that the Prospectus contained in
the Registration Statement, as of its date, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (it being understood that we have not
been requested to and do not express any view with respect to the financial
statements and schedules and other financial and statistical data included or
incorporated by reference in the Registration Statement or the Prospectus
contained therein).
We express no opinion, and our comment in the foregoing paragraph does not
apply to, any reports or filings made by the Company under the Securities
Exchange Act of 1934 that are incorporated into the Registration Statement or
Prospectus.
Paragraph (2) of this opinion may be relied upon by Signature Stock
Transfer [INC.], as Transfer Agent, Warrant Agent and Registrar (the "Transfer
Agent"), as if addressed to the Transfer Agent.
Very truly yours,
cc: Signature Stock Transfer [INC.],
as Transfer Agent, Warrant Agent and Registrar
2-2
EXHIBIT 2-B
TO
REGISTRATION
RIGHTS AGREEMENT
[Doc 1: Utah Counsel]
__________ __, ____
[Names and Addresses of Investors]
TITAN MOTORCYCLE CO. OF AMERICA
SHARES OF COMMON STOCK
Ladies and Gentlemen:
We are special counsel to Titan Motorcycle Co. of America, a Nevada
corporation (the "Company"), and we understand that the Company has sold to
[Names of Investors] (the "Holders") an aggregate of 4,000 shares (the
"Preferred Shares") of the Company's Series A Convertible Preferred Stock, $.001
par value (the "Preferred Stock"), and issued to the Holders Common Stock
Purchase Warrants (the "Warrants"). The Preferred Shares were sold, and the
Warrants were issued, to the Holders pursuant to several Subscription
Agreements, dated as of September ___, 1999, by and between the Holders and the
Company (the "Subscription Agreements"). Pursuant to the several Registration
Rights Agreements, dated as of September ___, 1999, by and between the Company
and each Holder (the "Registration Rights Agreements") entered into in
connection with the purchase by the Holders of the Preferred Shares, the Company
agreed with each Holder, among other things, to register for resale (1) the
shares (the "Conversion Shares") of Common Stock issuable upon conversion of the
Preferred Shares and (2) the shares (the "Warrant Shares") of Common Stock
issuable upon exercise of the Warrants under the Securities Act of 1933, as
amended (the "1933 Act"), upon the terms provided in the Registration Rights
Agreements. The Conversion Shares and the Warrant Shares are referred to herein
collectively as the "Shares". Pursuant to the Registration Rights Agreements, on
, 1999 the Company filed a Registration Statement on Form S-3 (File No.
333-__________) (the "Registration Statement") with the Securities and Exchange
Commission (the "SEC") relating to the Shares, which names the Holders as
selling stockholders thereunder.
[Other introductory and scope of examination language to be inserted]
Based on the foregoing, we are of the opinion that since the Company
became a reporting Company under the 1934 Act [on October 28, 1998], the
Company has timely filed with the SEC all forms, reports and other
documents ("SEC Reports") required to be filed with the SEC under the
Securities Exchange Act of 1934, as amended (the "1934 Act"). All SEC
Reports complied, when filed, in all material respects, with all applicable
requirements of the 1933 Act and the 1934 Act;
2-1
In addition, we participated in the preparation of the SEC Reports,
including review and discussions with officers and other representatives of the
Company, and representatives of the independent public accountants for the
Company, at which the contents of the SEC Reports and related matters were
discussed, and, although we are not passing upon and do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the SEC Reports, on the basis of the foregoing, nothing has come to
our attention that leads us to believe either that the SEC Reports (after giving
effect to any updated changes to the information therein that may be set forth
in the Registration Statement) at the time the Registration Statement became
effective contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading (it being understood that we have not been requested to
and do not express any view with respect to the financial statements and
schedules and other financial and statistical data included or incorporated by
reference in the SEC Reports) or the Registration Statement.
Very truly yours,
cc: Signature Stock Transfer, Inc.,
as Transfer Agent, Warrant Agent and Registrar
