SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                  FORM 10-SB/A1

                   GENERAL FORM FOR REGISTRATION OF SECURITIES

     Pursuant to Section 12(b) or (g) of the Securities Exchange Act of 1934

                              TITAN MOTORCYCLE CO.
                              --------------------
                                   OF AMERICA
                                   ----------
             (Exact name of registrant as specified in its charter)

            Nevada                                              86-0776876
            ------                                              ----------
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                               Identification No.)

      2222 West Peoria Avenue
        Phoenix, Arizona                                            85029
        ----------------                                            -----
(Address of principal executive offices)                         (Zip Code)

Registrant's telephone number, including area code:             (602) 861-6977
                                                              ------------------

Securities to be registered pursuant to Section 12(b) of the Act:    NONE

Securities to be registered pursuant to Section 12(g) of the Act:   COMMON STOCK
                                                                    ------------

                          See Exhibit Index at Page 68

                                        1

                 INFORMATION REQUIRED IN REGISTRATION STATEMENT
                                     PART I

NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain  matters  discussed  in this  Registration  Statement  on Form  10SB are
"forward- looking statements." These forward-looking statements can generally be
identified as such because the context of the statement  will include words such
as the Company  "believes,"  "anticipates,"  "expects,"  "estimates" or words of
similar meaning. Similarly, statements that describe the Company's future plans,
objectives or goals are also  forward-looking  statements.  Such forward-looking
statements are subject to certain risks and uncertainties which are described in
close  proximity  to such  statements  and which could cause  actual  results to
differ  materially  from  those  anticipated  as of the  date  of  this  report.
Shareholders,  potential investors and other readers are urged to consider these
factors in evaluating  the  forward-looking  statements and are cautioned not to
place undue reliance on such  forward-looking  statements.  The  forward-looking
statements  included  herein are only made as of the date of this report and the
Company  undertakes  no  obligation  to  publicly  update  such  forward-looking
statements to reflect subsequent events or circumstances.

PART I, ITEM 1. DESCRIPTION OF BUSINESS

         The genesis of Titan  Motorcycle  Co. of America  ("Titan") was a small
retail  aftermarket  motorcycle  shop known as Paragon Custom Cycles in Phoenix,
Arizona,  which was owned and operated by the Company  founder,  Patrick  Keery.
Paragon specialized in aftermarket Harley DavidsonTM customizations, repairs and
upgrades,  as well as the sale of a wide range of optional  equipment  and parts
for the Harley Davidson line.

         Through the design talents of its founder, Paragon became known for its
unique award winning Harley Davidson customizations. It was not unusual for such
customizations to increase a stock vehicle's cost by 50% to 100% of the original
purchase  price. In the customizing  process,  a good deal of factory  installed
hardware was removed and discarded and major design restrictions improved.

         Paragon  evolved to designing and building custom large V-twin cylinder
motorcycles  from the  ground  up using  various  OEM  parts.  Although  various
configurations   are  used  both  domestically  and   internationally  to  power

                                        2

   
motorcycles;  including one, two and four cylinder engines, the engine of choice
in the United  States for the  larger  displacement  cruiser  and  touring  bike
classes of  motorcycles is the V-twin  engine.  This engine design  features two
cylinders configured in a 45(degree) "V" shaped orientation.

         By 1994, the  aftermarket  Harley Davidson parts market had gestated to
the point  where all major and  minor  components,  including  engine  and drive
trains,  needed to design and build a unique custom  motorcycle  from  inception
were  readily  available.  While  quality  and  continuity  of supply were major
challenges,  a well  connected  shop owner could secure the necessary  parts and
labor to build the customer's dream creation.

         Paragon,  under the design  and  engineering  skills of its  president,
Patrick Keery,  became the shop of choice for more and more customers who sought
him out to have their concept bikes built.

         Initially,  the  process  was  somewhat  long and  tedious.  It was not
unusual for the total  elapsed  time from the design  concept to delivery of the
finished  product  to be as long as six  months.  The  selling  price  for  such
vehicles could easily reach the $40,000 to $50,000 range.

         In late 1994,  Patrick  approached his principal  financial backer (and
father)  with  the idea of  creating  an  integrated  manufacturing  company  to
dramatically  reduce the cost of production while enhancing delivery for new and
unique custom designed and manufactured V-twin cruiser motorcycle products. This
approach  did not  require  the  essential  rebuilding  of  other  large  V-twin
production configurations.  The idea was to implement this design and production
concept in a disciplined  "cell"  manufacturing  process and environment where a
small  team or single  individual  artisan  would  essentially  build the custom
motorcycle using readily available and scientifically  arranged component parts.
The disciplined cell manufacturing process is a production methodology whereby a
complete motorcycle is built from all components by a single builder/technician,
as opposed to an assembly line methodology where a team of individuals  assemble
a finished  motorcycle  by  repetitive,  individual  processes  such as when one
worker puts on the wheels, another worker installs a motor, etc.

         The principal  suppliers of the Company,  and the parts  purchased from
these suppliers are identified in the table on the following page.

                                        3

   
     VENDOR                    CITY AND STATE               PARTS PURCHASED
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
S&S CYCLE                       VIOLA, WI                 MOTORS/MOTOR PARTS
- --------------------------------------------------------------------------------
DAYTEC                          HESPERIA, CA              FRAMES/SHEET METAL
- --------------------------------------------------------------------------------
CUSTOM CHROME                   MORGAN HILL, CA               MISC. PARTS
- --------------------------------------------------------------------------------
PERFORMANCE MACHINE             LA PALMA, CA                 WHEELS/ROTORS
- --------------------------------------------------------------------------------
BANDIT MACHINE WORKS            LANCASTER, PA                  CLUTCHES
- --------------------------------------------------------------------------------
DEANO'S                         TEMPE, AZ                        PAINT
- --------------------------------------------------------------------------------
URSCHEL MANUFACTURING           SCOTTSDALE, AZ           FORWARD CONTROL/PEGS
- --------------------------------------------------------------------------------
WORKS PERFORMANCE               CANOGA PARK, CA                 SHOCKS
- --------------------------------------------------------------------------------
EXTREME MACHINE                 PHOENIX, AZ                 MACHINED PARTS
- --------------------------------------------------------------------------------
JIMS USA                        CAMARILLO, CA          TRANSMISSIONS/MOTOR PARTS
- --------------------------------------------------------------------------------
         There are  alternative  sources for all items  listed in the table.  In
some cases there might be temporary  delays in the  manufacturing  process while
alternate  suppliers gear up to meet production level  requirements.  Because of
the current parts inventories of the Company, these delays are not considered to
be material.

         The present  Company was  incorporated  in 1994 employing the foregoing
production techniques. Shortly after the incorporation,  it became apparent that
the Company needed additional  capital to grow and that it would be advantageous
to seek out and  complete a merger  with a publicly  held  company  which,  as a
result, would provide both a public market and a new source of capital.  Readily
available  was  Mojave  Financial  Services,   Inc.  At  the  time,  Mojave  was
essentially  inactive.  A merger  was  completed  in June of 1996,  with  Mojave
Financial Services, Inc. contributing its capital; and, as the surviving entity,
assuming the name Titan Motorcycle Co. of America, a Nevada  corporation.  Titan
Motorcycle Co. of America, the pre-merger entity, was incorporated as an Arizona
successor  corporation  to Paragon on  December  12,  1994 and ceased  existence
pursuant to the foregoing  merger and name change.  The  integrated  Company has
existed and continues since the date of merger on June 11, 1996.

                                        4

   
         Research and  development  activities  of the Company are  ongoing.  In
calendar years 1996 and 1997, the Company has expended approximately $76,000 and
$218,000 respectively in research and development.  In the first seven months of
1998, the Company has expended $113,000 in research and development.

         The Company  provides a six month warranty for all parts and labor with
regard to its motorcycle products. In calendar year 1997, the Company recorded a
reserve for  warranty  expense of  $155,000.  The  Company has also  obtained an
extended  warranty  for the  period of six  months to two and half  years (for a
total  warranty  of 3  years).  The  Company  pays  $230 for each  bike for this
extended warranty protection.

         All present financial  statements and other disclosures  concerning the
Company are based upon the merger accounting.  The merger was accounted for as a
recapitalization  of Titan  because the  shareholders  of Titan  controlled  the
Company after the acquisition.  There was no adjustment to the carrying value of
the assets or liabilities of Titan in the exchange. The Company is the acquiring
entity for legal  purposes  and Titan is the  surviving  entity  for  accounting
purposes. In the merger, Titan assumed $8,000 of debt of Mojave.

         Since  the  merger,  Titan has  traded as a public  entity on a limited
market basis.  Brokers quoting the stock on the NASD  Electronic  Bulletin Board
are Paragon Capital Corporation of Boca Rotan, Florida (1-800-521-8877); Harold,
Thompson,  Magid and Company of Jersey City, New Jersey  (212-233-2200);  Sharpe
Capital  Corporation of New York, NY  (212-791-8700);  and Alpine  Securities of
Salt Lake City, Utah (1-800-
274-5588).

         In March of 1997,  the Company  authorized a two-for-one  (2:1) forward
stock split. In April 1997, November 1997 to January 1998 and February 1998, the
Company privately placed 1,000,000, 500,000 and 166,667 shares, respectively, of
its Common  Stock.  In January 1998,  the Company  agreed to issue an additional
60,000 to an industry  publications  company as part of an agreement whereby the
Company  would  receive  publishing  and  advertising  services.  As part of the
consideration for this transaction for publishing and advertising services,  the
Company  provided the publishing  company with $125,000 of Titan  motorcycles in
calendar  year 1997 and will provide the  publishing  company with an additional
$125,000 of Titan motorcycles in December 1998.

         The stock  transactions  referred to in the preceding  paragraph raised
the total number of issued and  outstanding  shares of the Company to 16,437,333

                                        5

as  of  the  current  date.  Of  this  amount,   the  three  principal  officers
collectively  hold  approximately  61.4% of the  issued and  outstanding  common
stock,   prior  to  exercise  of  existing   options.   Such  individuals  would
collectively hold 61.9% of the outstanding  shares,  after the exercise of their
current options.

         DESCRIPTION OF THE COMPANY
         --------------------------

         The  Company  has  recently  moved  to its  present  manufacturing  and
distribution facilities at 2222 West Peoria Avenue,  Phoenix,  Arizona 85029. It
presently occupies a leased structure having approximately 64,000 square feet of
combined  administrative,  manufacturing,  assembly and distribution  space. The
Company has a current five year lease on this premises at the rate of $29,295.00
per month.

         It is  reasonably  anticipated  that the  present  physical  facilities
should be adequate for the Company's anticipated  manufacturing and distribution
needs into 1999.

         The Company believes it has developed a unique design and manufacturing
process for the large customized  displacement  motorcycle industry. The Company
offers eight (8) custom model configurations,  all of which lead the competition
in power to weight ratios,  ride and handling  refinements  and the capacity for
future custom configuration. In addition, the Company brings a unique service to
its  customers by allowing the  customers to  specifically  "predesign"  the end
product down to the customization of colors and finish.  The completed  product,
in its custom design  configuration and based upon one of the basic models,  can
be  delivered  within  eight to ten weeks of an order.  Customers  not  desiring
individual  customization  can choose one of the basic custom models in standard
finish and configuration and be assured of prompt delivery,  usually from dealer
stock.

         Titan  believes  itself to be the market  leader in  customized  V-twin
motorcycles as evidenced by its rapidly expanding distribution network.  Company
owned outlets, new designs and the introduction of two new models in 1998 should
insure continuing leadership in this market niche.

         This custom  manufacturing  and service concept is made possible by the
application  of a  small  production  team  or  single  skilled  artisan  who is
responsible  for assembling  each unit from  component  parts.  This  technician
further  continues  to service his vehicle  through  road testing and during the
warranty period to ensure complete customer satisfaction.

                                        6

         The  Company  believes  it  is  unique  in  providing  this  degree  of
customization  resulting in essentially a "hand built" new vehicle at a cost and
design  advantage to  purchasing a typical  stock model  V-twin,  such as Harley
DavidsonTM,  YamahaTM,  or  HondaTM,  and  paying for  customization  through an
individual  shop.  Additionally,  the  customer  is  assured of state of the art
design,  assembly and testing technology.  For comparison purposes, the price of
the basic Titan models range from the top of the line "Gecko", currently selling
for  $28,495,  to the basic  model  "Coyote"  at  $23,995.  This  compares  to a
non-customized  similar  displacement  stock  Harley  Davidson at  approximately
$15,000 to $20,000.  Currently the products of the Company are being distributed
through 53 domestic dealers, and 17 foreign dealers with current expansion plans
underway.

         FINANCIAL INFORMATION
         ---------------------

         The financial  information  concerning the Registrant's  prior years of
operation  and the first six  months of  calendar  year 1998 is found in Part I,
Item 2: Financial
    
Information.

         EMPLOYEES
         ---------

         As of March 31, 1998, the Company had 142 full-time employees,  of whom
123 work in engineering  and  manufacturing;  seven work full-time in marketing;
and 12 work in staff and  administration.  The  Company  is not  subject  to any
collective  bargaining  agreement.  The Company  anticipates adding supervisory,
engineering,  manufacturing,  marketing and administrative  staff as the Company
expands its production in 1998.

         FOREIGN OPERATIONS
         ------------------

         The foreign  operations of the Company  consist  solely of sales of its
products through non-U.S. distributors of the motorcycles of the Company. In its
first year of foreign operations,  the revenues from its foreign operations were
$2,032,413.00.  Foreign sales in 1997 were $1,681,613.00.  The number of foreign
distributors  is expanding  and the Company  anticipates  that,  with  continued
expansion  in the number of  distributors,  it will more than double its foreign
sales in 1998.

                                        7

         SUBSIDIARIES OF THE COMPANY
         ---------------------------

         The  Company  has only one  subsidiary.  Titan  Motorcycle  GmbH,  Alte
Hersfelder  Str. 30, 36289  Friedewald,  Germany is wholly owned by the Company.
Titan  Motorcycle  GmbH  was  established  in April  1998 to set up a  marketing
organization  for the Company in Europe.  Its function is to coordinate with and
offer support to dealers and other marketing partners in Europe, to organize and
participate  in trade  shows and develop  product  advertising  and  promotional
activities  for Titan and its  authorized  dealers,  and to  establish a central
office in Europe to handle the Company's business affairs.

PART I, ITEM 2. FINANCIAL INFORMATION.

         The  selected  financial  data  set  forth  below  should  be  read  in
connection  with,  and is  limited  by,  the more  complete  information  in the
attached Consolidated Financial Statements and the notes thereto.

                   12/31/97        12/31/96       12/31/95      12/31/94
- --------------------------------------------------------------------------------
Revenue          13,064,145       4,983,876        625,284           0
- --------------------------------------------------------------------------------
Net Loss         (1,673,743)        (95,496)      (257,513)       (213)
- --------------------------------------------------------------------------------
Loss Per              (0.11)          (0.01)         (0.02)      (0.00)
Share 1
- --------------------------------------------------------------------------------
Total Assets      8,769,057       3,318,289        187,244           0
- --------------------------------------------------------------------------------
Long-Term         1,928,664         502,521        252,113           0
Obligations
- --------------------------------------------------------------------------------

                      MANAGEMENT'S DISCUSSION AND ANALYSIS

         The  audited  financial  statements  for the  last  calendar  year  are
enclosed with this  Registration  Statement and contain the Company's  financial
statements for the calendar
- --------
         1 These figures have been restated to reflect the  two-for-one  forward
split of the stock of the Company which took effect in March 1997.

                                        8

   
year ending December 31, 1997.  Reference is made to the Consolidated  Financial
Statements filed with this  Registration  Statement for greater detail regarding
the  financial  position  of the  Company.  The  unaudited  half year  financial
statements of the Company are also included in this Registration Statement.

         Effective  January 1, 1998,  the  Company  adopted a fiscal  accounting
period as opposed to the calendar  accounting  period of prior years. The effect
of this change is that all quarters are now comprised of thirteen weeks,  ending
Saturday at midnight  instead of the last  calendar day of the month.  The first
two fiscal  months of a quarter  have four weeks each and the last fiscal  month
has five weeks.  Although this conversion  results in a difference of only a few
days in the accounting  period for 1998, the use of fiscal month accounting is a
common practice for manufacturing  companies and simplifies  internal  inventory
and accounting functions.

Six Month Period Ended July 4, 1998, Compared with Six Month Period Ended June
30, 1997

OVERALL

Net Sales for the period in 1998 of $12.9  million were $7.2  million,  or 128%,
higher  than net sales for the same period in 1997.  The Company  realized a net
profit  of  $319,569,  or  $0.02  per  share,  in 1998  compared  with a loss of
$554,018,  or $0.04 per share, for the same period in 1997. The Company has paid
no dividends to date and currently has no plans to do so.

RESULTS OF OPERATIONS
MOTORCYCLE UNIT SHIPMENTS AND NET SALES

                                       1998      1997    INCREASE   % CHANGE
                                       ----      ----    --------    --------
Motorcycle Units                         489       210       279     132.9%

Net Sales (in 000's):
Motorcycles                          $12,632   $ 5,632   $ 7,000     124.3%

Motorcycle Parts and Accessories     $   252   $    23   $   229     895.7%

    Total Motorcycles and Parts      $12,884   $ 5,655   $ 7,229     127.8%

The Company's business continues to consist predominantly of motorcycles at this
point. A small portion of the business is in parts and accessories.  The Company
introduced its initial product  offering in the Clothing and Accessories line in
late 1997.

                                        9

   
While these  segments  have not been material to date,  the Company  anticipates
these  segments could grow to 10-20% of total sales at some point in the future.
These segments represented about 20% of  Harley-Davidson's  total sales in 1997.
While  Titan  does not expect to  duplicate  this  volume,  the mix of parts and
accessories for Titan could approach this level.

The continued  growth in  motorcycle  shipments is due to several  reasons.  The
continuing growth in reputation of the Company's motorcycles,  and the resulting
demand this has created,  remains the primary growth driver. This, combined with
the continuing growth in the dealership network and the Company's  investment in
new equipment and staff to meet the growing  demand,  has led to dramatic growth
in shipments.

Company  management  continues  to be  gratified  by the  success  that has been
realized  to  date  and  the  overwhelming  acceptance  of its  products  in the
marketplace  since its  inception.  During the last 3 1/2 years the  Company has
seen growth in revenues  from $625,000 in 1995 to over  $13,000,000  in 1997 and
now the first half of 1998  continues to experience  the same  dramatic  growth,
with sales of over  $12,880,000  compared with $5,650,000 for the same period in
1997 (up 128%).  During this same  period,  the dealer  network has grown from 1
location in Phoenix to over 75 dealerships  worldwide with over 20  applications
from potential new dealers currently being evaluated by the Company. The Company
is pleased with the strength of the network that includes Easyrider  franchises,
Harley Davidson dealers,  independent dealers and Titan dealerships. The Company
believes this  expanding  network is one key element in the continued  growth of
the business.

From the outset,  Titan has been  dedicated  to building  the finest  production
performance  motorcycle  available  while  providing the customer the ability to
customize  their  motorcycle  to a degree  previously  available  only  from low
volume, custom builders. It is this focus on quality and providing the very best
production  motorcycle available that provides the strong reputation the Company
has been able to develop so far and the foundation for continuing  growth in the
future.

The Company was very pleased to be able to report its first profit at the end of
the first quarter of 1998 and show continued improvement with its second quarter
results.  This  profitability  is due in large  part to cost  reduction  efforts
driven by engineering  changes and  cooperative  efforts with key suppliers,  as
well as to focused efforts on managing SG&A expenses.  As these efforts continue
and as volume continues to grow, the Company anticipates continued higher levels
of profit in the future.

                                       10

   
The  Company  began  1997  at a  production  rate of 5 - 7 units  per  week  and
increased  that  through the year to reach 18 units per week by  year-end.  This
rate has  continued to increase with  production  exceeding 25 units per week in
June 1998.  In 1998,  the  Company is  continuing  to invest in its  engineering
capability and infrastructure to allow it to grow production to a level of up to
3000 units per year in its present facility.  For 1998, the Company's production
target is to exceed  1200 units.  The  Company  plans to continue to develop its
existing  facilities  and  human  resources,  as well as add  others  as  demand
warrants,  to meet the growing market acceptance of its products.  The Company's
ability to reach these production  levels will depend on several factors.  First
and foremost  will be its ability to continue to create high levels of demand in
both the domestic and  international  markets.  Once this is  accomplished,  the
Company  must  be able to  continue  to  increase  efficiencies  in its  current
facilities through engineering  advances,  adding facilities for both motorcycle
and parts production,  working with its developing supplier base, and continuing
to attract production,  engineering and support talent to the Company. There are
no  assurances  that the Company  will be able to  accomplish  all these  things
simultaneously  or in the time frame to match sales  demand.  The Company  could
also  experience  delays in its growth or  production  as the result of supplier
issues,  labor  shortages,  or  unforseen  competitive  action,  as well as from
natural  causes.  These  risks,  if not  offset,  could  negatively  impact  the
Company's performance and its resulting cash flow.

GROSS PROFIT

                             1998       1997     INCREASE    % CHANGE
                             ----       ----     --------     --------
Gross profit (In 000's)     $3,448     $1,022     $2,426        137%

In the first 6 months of 1998, gross profit increased $2,425,705,  or 137.3%, as
compared to the same period in 1997 due to the increased volume and margins. The
gross profit  margin was 26.8% as compared  with 18.1% in 1997.  The 1998 margin
has been  positively  impacted by an average  price per unit increase of 4.2% as
the mix of bikes changed to reflect  higher levels of  customization  on ordered
units and more orders for high-end models.  The Company has started to realize a
substantial  increase  in its Gross  Profit  in 1998 as a result of  significant
engineering  and cost  reduction  efforts that have been put in place during the
past 9 months as well as the  increase in  customization  of its  products.  The
Company has  targeted a Gross Profit  Margin of over 30% for its total  business
within the next 3-5 years.

                                       11

   
The Company believes this Gross Margin level is possible due to several factors:
         o         In the first 6 months of 1998, the gross margin has increased
                   to 26.7% from 18.8% in 1997,
         o         There have been  additional  cost reductions for
                   component  parts  identified and in process that
                   have  not  yet  been   reflected   in  financial
                   statements,
         o         Additional  cost  reductions  of more than 5% of
                   sales have been identified and engineering  work
                   begun with anticipated impact in 1999, and
         o         Management  believes that  competitors have been
                   able to achieve  these  margins on products with
                   lower average selling prices.

OPERATING EXPENSES

                                  1998       1997      INCREASE     % CHANGE
                                  ----       ----      --------     --------
Operating Expenses (In 000's)    $3,016     $1,587      $1,429        90.1%

Total operating expense for 1998 increased  $1,429,062,  or 90.1%, over the same
period of 1997. This increase was due to a number of causes,  including, but not
limited to: an increase in advertising,  trade shows and promotional  activities
to build the Company's brand name and recognition and drive higher sales levels;
an increase in lease expense  associated  with moving into the new facility;  an
increase in research &  development  activity;  and an increase in salaries  and
wages  attributed to building both the management and support staff necessary to
support a rapidly growing and significantly larger company.  While the increases
were substantial,  both as a percentage of the prior year and in actual dollars,
it  was  in  keeping  with  the   Company's   plan  to  continue  to  invest  in
infrastructure  and  growth  while  becoming  profitable  in 1998 and the coming
years.

CONSOLIDATED INCOME TAXES

The  Company's  effective tax rate was 0.0% in both 1998 and 1997 as it recorded
losses  during  1997 and prior  years  and is  benefitting  from tax loss  carry
forwards  during 1998.  The Company  currently  has a tax loss carry  forward of
approximately $1.7 million.

                                       12

Calendar Year Ended December 31, 1997, Compared with Calendar Year Ended
December 31, 1996

OVERALL

Net Sales for 1997 of $13.1 million were $8.1 million,  or 162%, higher than net
sales for 1996. The Company  incurred a net loss of $1.67 million,  or $0.11 per
share,  in 1997 compared with a loss of $95,496,  or $0.01 per share,  for 1996.
The Company has paid no dividends to date and currently has no plans to do so.

RESULTS OF OPERATIONS
MOTORCYCLE UNIT SHIPMENTS AND NET SALES

                                        1997       1996    INCREASE   % CHANGE
                                        ----       ----    --------   --------

Motorcycle Units                           500       181       319     176.2%

Net Sales (in 000's):
     Motorcycles                       $12,870   $ 4,939   $ 7,931     160.6%

Motorcycle Parts and Accessories       $   194   $    45   $   149     331.1%

Total Motorcycles and Parts            $13,064   $ 4,984   $ 8,080     162.1%

As can be seen from the above chart,  the  Company's  business  consists  almost
totally of  motorcycles  at this point. A small amount of business has been done
in parts and accessories to date and the Company  introduced its initial product
line in Clothing and  Accessories  in late 1997.  While these  segments have not
been material to date, the Company anticipates these segments could grow to 10 -
20% of total sales at some point in the future.

The increase in motorcycle shipments is due to several reasons. Chief among them
is the  continuing  growth in reputation of the  Company's  motorcycles  and the
resulting  demand  this has  created.  This,  combined  with the  growth  in the
dealership  network and the Company's  investment in new facilities and staff to
meet the  growing  demand,  has led to  dramatic  growth in  shipments.  Company
management  has been gratified by the success that has been realized to date and
the  overwhelming  acceptance  of its  products  in the  marketplace  since  its
inception.  Over the last 3 years,  the Company has seen growth in revenues from
$625,000  in 1995  to over  $13,000,000  in  1997.  The  first  quarter  of 1998
continued to experience the same dramatic growth,  with sales of over $5,300,000
compared with $1,900,000 for the same period in 1997 (up 179%). During this same

                                       13

period, the dealer network of the Company has grown from one location in Phoenix
to over 60 dealerships  worldwide with over 20  applications  from potential new
dealers  currently being evaluated by the Company.  Management of the Company is
also  pleased  with  the  strength  of  the  network  that  includes   Easyrider
franchises,  Harley Davidson dealers, independent dealers and Titan dealerships.
The Company believes this expanding  network is one key element in the continued
growth of the business.

From the outset,  Titan has been  dedicated  to building  the finest  production
performance  motorcycle  available  while  providing the customer the ability to
customize their motorcycle to a degree previously available only from low volume
custom  builders.  The  Company is proud to be  recognized  by various  industry
periodicals as the leader in its chosen market.2 It is this focus on quality and
providing the very best production motorcycle available that provides the strong
reputation  the Company has been able to develop so far, and the  foundation for
growth for the future.

Over the past year, the Company has invested in building an infrastructure  that
will not only enable it to continue to support this growth,  but also to develop
new models and features for its customer base. Part of this investment is in the
Company's  engineering  capability,  which is focused on developing new products
and  components  as well as  continuing  to improve on the current  products and
production  processes.   Other  investments  have  been  made  in  building  the
management team of the Company, developing marketing capabilities, and upgrading
computer systems to support the continued growth of the business.

Finally,  the Company was very  pleased to be able to report its first profit at
the end of the first  quarter of 1998.  While  small,  it  occurred  one quarter
earlier than the Company  anticipated and despite poor weather due to El Nino in
many areas of the country where sales  typically occur during the winter months.
This  profitability  is due in large part to cost  reduction  efforts  driven by
engineering  changes and cooperative  efforts with key suppliers,  as well as to
focused efforts on managing SG&A expenses. As these efforts
- --------
   
         2 Representative  articles are as follows: Cycle World, March 1998; Hot
Bikes Magazine,  April 1997; Hot Bikes,  September 1996; and Hot Rod Bikes,  May
1996.

                                       14

continue and as volume continues to grow, the Company anticipates  significantly
higher levels of profit in the future.

The  Company  began  1997  at a  production  rate of 5 - 7 units  per  week  and
increased that through the year to reach 18 units per week by year-end. This was
facilitated by a move to a new location in March, 1997 that increased  available
space  from  8,000 to  64,000  square  feet  and the  employment  of  additional
craftsmen to support the higher build level.  In 1998, the Company is continuing
to invest in its engineering  capability and  infrastructure to allow it to grow
production to a level of up to 3000 units per year in the existing facility. For
1998, the Company's production target is to exceed 1200 units. The Company plans
to continue to develop its existing  facilities and human resources,  as well as
add others as demand warrants, to meet the growing demand for its products.  The
Company  plans on  continued  high  levels of growth  for at least the next five
years.

While projecting sales for the future is an inexact process at best, the Company
believes that growth will continue for some of the following reasons:
                      o        Management  believes  that the overall  growth of
                               the  industry  is strong and has been  out-pacing
                               the basic economy for several years;
                      o        As the baby boomer  generation  continues to age,
                               their  disposable  income  continues to increase,
                               and this demographic group represents the largest
                               segment of the Company's market;
                      o        Since  inception,  the Company has been  capacity
                               constrained   and  demand  for  its  product  has
                               exceeded its ability to produce;
                      o        The Company's  dealership  network is still young
                               and continues to expand,  opening new  geographic
                               markets to the Company.  The dealerships also are
                               early in the life cycle of this product, and same
                               store  sales  are  expected  to  increase  as the
                               product's reputation grows in the market place;
                      o        The   international   market  is  still   largely
                               untapped. Management of the Company believes that
                               the international market represents approximately
                               30% of Harley-Davidson's sales; and
                      o        The  Company  has new  products  in the  planning
                               stage  that  should add to its  product  line and
                               expand its revenue base.

The Company's  ability to reach these  production  levels will depend on several
factors.  First and  foremost  will be its  ability to  continue  to create high
levels of demand in both the domestic and  international  markets.  Once this is
accomplished,  the Company must be able to continue to increase  efficiencies in
its current facilities through engineering advances,  adding facilities for both
motorcycle and parts production,  working with its developing supplier base, and
continuing to attract production, engineering and support talent to the Company.
There are no assurances the Company will be able to do all these things

                                       15

simultaneously or in a timely way to match sales demand.  The Company could also
experience  delays in its growth or production as the result of supplier issues,
labor  shortages,  or unforeseen  competitive  actions,  as well as from natural
causes.  These risks, if not offset,  could  negatively  impact on the Company's
performance and it's resulting cash flow.

In 1997, the worldwide  market for  heavyweight  motorcycles  (651+cc)  exceeded
500,000 units,  with  approximately  40% of that market in North  America.  This
market grew at 15.7%  worldwide and 14.8%  domestically.3  With a market size of
over one-half a million  units and  presently  growing at a rate of about 75,000
units per year, the Company  currently has a minor position in both the domestic
and world-wide markets.  This should provide substantial room for growth for the
Company  without  having to compete on price in the  marketplace.  In fact,  the
price of its products, combined with the quality and reputation it has achieved,
has allowed the Company to effectively create its own market segment. While data
is not currently  available to the Company by price segment, it believes that it
has a significant market share for motorcycles in the over $25,000 price segment
domestically and has positioned itself well for growth in these segments in both
the European and Asian markets.

GROSS PROFIT
                                     1997        1996      INCREASE     % CHANGE
                                     ----        ----      --------     --------
Gross Profit (In 000's)             $2,457      $1,300      $1,157        88.9%

In 1997, gross profit increased $1,156,395, or 88.9%, as compared to 1996 due to
the increased  volume.  The gross profit margin was 18.8% as compared with 26.1%
in 1996.  The 1997 margin was  negatively  affected by an average price per unit
decrease  of 5% as the mix of bikes  changed to more  standard  models and fewer
bikes (as a portion  of total  units  sold)  containing  high-end  options.  The
Company has seen this trend start to reverse  itself in 1998,  with  dealers and
customers  requesting  higher levels of  customization on ordered units and more
high-end models.  The Company also saw its cost of goods sold increase  slightly
as a result of the change in facilities  and costs  associated  with  ramping-up
both the new facility  and new  employees as the  production  rates grew.  These
"ramping up" activities  consist  principally  of amassing the various  elements
necessary  to rapidly  increase  unit  production  output,  including:
o     adding  additional  expanded  floor space for  manufacturing,  storage and
      personnel offices,
o     adding  additional  staff,  both  hourly  and  salaried,   throughout  the
      organization,

- --------
   3 Data from the Motorcycle Industry Council.

                                       16

   
o    adding  inventories  of raw materials and work in process to support higher
     volume production, and 
o    adding  additional  production  equipment to facilitate  higher unit volume
     output.

The Company anticipates a substantial  increase in its Gross Profit in 1998 as a
result of significant  engineering  and cost reduction  efforts,  as well as the
increase in  customization  of its  products.  The Company has  targeted a Gross
Margin of 30% for its total  business  within the next three to five  years.  As
mentioned at page 11, in the  discussion  of the results of  operations  for the
first six months of 1998,  the Company  achieved a gross profit margin of 26.8%.
The management of the Company has a reasonable expectation of achieving its goal
of 30% gross margin by continuing to pursue the measures  discussed at pages 12,
and by benefitting from volume purchases of components,  by vertical integration
by  manufacturing  more parts  in-house,  and by  redesigning  components of its
motorcycles.

OPERATING EXPENSES
                                        1997       1996     INCREASE    % CHANGE
                                        ----       ----     --------    --------
Operating Expenses (In 000's)          $4,077     $1,385     $2,692       194.4%

Total operating  expense for 1997 increased  $2,692,808,  or 194.4%,  over 1996.
This increase was due to a number of causes,  including,  but not limited to the
following  principal  factors  listed in descending  order of  importance:
o    an  increase  in  salaries  and  wages  attributed  to  building  both  the
     management  and support  staff  necessary to support a rapidly  growing and
     significantly larger Company,
o    an increase in lease expense associated with moving into the new facility,
o    a  substantial   increase  in  advertising,   trade  show  and  promotional
     activities  to build the  Company's  brand name and  recognition  and drive
     higher sales levels, and
o    an increase in research & development activity.

Each of these factors are the result of direct management action and are part of
a  continuing  trend to expand  production,  marketing,  facilities  and product
improvements.  While the increases were substantial, both as a percentage of the
prior year and in actual  dollars,  it was in keeping with the Company's plan to
invest heavily in infrastructure in 1997, to set the stage for profitable growth
in 1998 and the coming years.

CONSOLIDATED INCOME TAXES

The  Company's  effective tax rate was 0.0% in both 1997 and 1996 as it recorded
losses for both years.  The Company  currently  has a tax loss carry  forward of
approximately $2.0 million.

                                       17

Calendar Year Ended December 31, 1996, Compared with Calendar Year Ended
December 31, 1995

OVERALL

Net Sales for 1996 of $5.0 million were $4.4 million,  or 697%,  higher than net
sales for 1995. The Company incurred a net loss of $95,496,  or $0.01 per share,
in 1996  compared  with a loss of $257,513,  or $0.02 per share,  for 1995.  The
Company paid no dividends in calendar year 1995 or 1996.

RESULTS OF OPERATIONS
MOTORCYCLE UNIT SHIPMENTS AND NET SALES

                                              1996        1995     INCREASE   % CHANGE
                                              ----        ----     --------    -------

Motorcycle Units                                181         24        157       654.2%

Net Sales (in 000's):
     Motorcycles                             $4,939     $  625     $4,314       690.2%

     Motorcycle Parts and Accessories        $   45          0     $   45        NA

     Total Motorcycles and Parts             $4,984     $  625     $4,319       697%

The Company's  business consisted almost totally of motorcycles at this point in
time. A small amount of business had been done in parts and accessories in 1996.

The increase in  motorcycle  shipments was due to several  reasons.  Chief among
them is the growth in the quality  reputation of the Company's  motorcycles  and
the  resulting  demand this has created.  This  combined  with the growth in the
dealership network,  the Company's  commitment to marketing efforts,  and a full
year of  production  allowed the  Company to  increase  its revenue by almost an
order of magnitude over 1995.

The Company  began 1996 at a production  rate of 2 units per week and  increased
that to reach 5 - 7 units per week by year-end. In 1997, the Company invested in
its engineering  capability and infrastructure to allow it to grow production to
a level of up to 500 units per year.

The Company's ability to reach these production levels has depended upon several
factors.  Its ability to create higher levels of demand in both the domestic and
international markets was the primary catalyst for this growth.

                                       18

GROSS PROFIT
                                      1996        1995     INCREASE    % CHANGE
                                      ----        ----     --------    --------
Gross Profit (In 000's)             $1,300      $   17      $1,283      7547%

In 1996,  gross  profit  increased  $1,282,722  as  compared  to 1995 due to the
increased  volume.  The gross profit  margin was 26.1% as compared  with 2.8% in
1995. The 1996 margin was positively affected by a full year of production,  and
the ability to work with vendors to obtain price breaks as volumes increased.

OPERATING EXPENSES
                                      1996       1995    INCREASE     % CHANGE
                                      ----       ----    --------     --------
Operating Expenses (In 000's)       $1,385     $  266     $1,119       420.7%

Total operating  expense for 1996 increased  $1,118,182,  or 420.7%,  over 1995.
This  increase was due to growth in all expense  areas except R&D as the Company
took  advantage  of its initial  development  activity,  and made a  substantial
investment  in  developing  its  market  as  well as the  infrastructure  of the
Company.

CONSOLIDATED INCOME TAXES

The  Company's  effective tax rate was 0.0% in both 1996 and 1995 as it recorded
losses for both years. The Company had a tax loss carry forward of approximately
$350,000 at year-end 1996.

WORKING CAPITAL MANAGEMENT
- --------------------------

The Company supplies  motorcycles to its dealers in one of two ways.  First, the
dealer can specify the motorcycle  completely with customized paint and selected
options with a lead time of 6-8 weeks,  sometimes  slightly  longer  during peak
season. Alternatively, the dealer can select a completed bike from the Company's
available  Finished Goods inventory list for immediate  shipment or one from the
current  production  schedule that will be available inside the normal lead time
window.  The Company  builds some  inventory (up to one month's  production)  of
finished motorcycles during the winter months that is consumed during the spring
peak season.  During the rest of the year the Company  normally  maintains a low
level of finished goods inventory.

Motorcycles are typically  either floored with major  financial  institutions by
the dealer or are paid for in full prior to shipment by the Company. The Company
receives  payment for floored  bikes within 2 weeks of shipment.  During  winter
months the  Company  may  provide  free  flooring  for dealers for up to 90 days
depending on model and stock situation to help smooth  shipments and keep higher
levels of product available for customers.

                                       19

Parts used to build the bikes are usually  available with short lead times,  but
some  parts do  require  up to ten  weeks.  Due to high  quality  standards  and
reliability  of delivery,  the Company sets  slightly  high  stocking  levels to
assure the  availability  of parts to  production.  The  Company  has an ongoing
program to continue to upgrade its supplier base and to bring  additional  parts
in house for  production,  reducing  required  inventory  levels as well as part
costs.

The  Company  has  built a strong  network  of  dealers  both  domestically  and
internationally.  Collectively,  there are almost 70 dealers  currently in place
with more being added every month. There are 4 types of dealers in the Company's
network;  independent dealers, Easyrider stores and franchises,  existing Harley
Davidson dealers,  and Titan  dealerships.  In 1997, no dealer  represented more
than 10% of the  Company's  revenue and only 2 were over 5%. To date in 1998,  3
dealers with common  ownership  (Titan of Los Angeles,  Titan of Las Vegas,  and
Paragon  Custom dba Titan of  Phoenix)  represent  25% of the  Company's  sales.
Majority  ownership of these  dealerships are held by principals in the Company.
No other dealer represents more than 5% of sales.

As of May 15, backlog orders stood at approximately $3.8 million,  compared with
approximately  $2.4  million at the same time in 1997.  The Company is presently
completing  more than 25 motorcycles  each week. At this  production  volume the
entire backlog can be shipped within 3 months.

DESCRIPTION OF MARKETS
- ----------------------

Surprisingly  to some,  the typical  buyer of the  Company's  products is a male
businessman  or  professional  between 35 - 55 years of age, who has  previously
owned a production  line  motorcycle.  The average age of a motorcycle  owner is
increasing,  with the customer's median annual earnings exceeding $50,000.00. It
is  anticipated  that the  population  of  foreign  motorcycle  enthusiasts  may
actually  increase  at a  greater  rate  near  the end of the  century  than the
domestic market.

It is generally  accepted that demand for the customized  V-twin motorcycle will
significantly outstrip production through the end of the millennium. At present,
the Company occupies a unique niche and is without any significant competitor in
its  capacity  to  produce,  from the ground up, a  customized  high-end  V-twin
motorcycle  on a production  basis,  while  preserving  the capacity to complete
special orders. The Company does not anticipate significant  competition in this
sector for the next twelve to twenty-four months.

                                       20

Several companies compete in the market in the below $20,000 price range, headed
by Harley-Davidson who is clearly the dominant manufacturer.  There is currently
no  indication  that they  intend to move into  Titan's  market  niche,  but the
possibility  of that  happening at some time in the future cannot be discounted.
There are other  builders  that are  currently  smaller  than the Company in the
below  $20,000  price range that are  starting to produce  some  motorcycles  at
higher  prices.  None of these  builders  has any  significant  position  in the
Titan's niche at this time.

Over the next three years, the Company projects it can increase its market share
of V-twin  motorcycles,  including  both  production  line  products  and custom
models, from its projected 0.5% market share in 1997 to 2% by the year 2000. The
Company  estimates  that it has a  greater  than 50%  market  share  for  V-twin
motorcycles  over  $25,000 and  anticipates  that this  market  sector will also
continue to increase.

ENVIRONMENTAL CONTROLS
- ----------------------

The Company's products meet all federal and state emission requirements and have
been approved by the EPA and DOT.

The Company's  manufacturing  facilities also meet all federal,  state and local
environmental  requirements.  The primary  area of  potential  discharge  is the
Company's paint facility, which meets all required standards.  Expansion of this
area would require  additional capital  requirements,  but it is not anticipated
that this would have any  significant  material  effect on  earnings  or capital
expenditures at this time.

OTHER MATTERS

IMPACT OF YEAR 2000
- -------------------

                                       21

       
   
     The "Year 2000 Problem" exists because many existing  computer programs use
only the last two digits to refer to a year.  Therefore,  these  programs do not
properly  recognize  a year  that  begins  with  "20"  instead  of "19".  If not
corrected, many computer applications could fail or create erroneous results.

     The Company has  completed  an  analysis  of its  internal  systems and the
potential  for  issues  associated  with  the year  2000  problem.  All  Company
information systems already are or will be compliant before the end of 1998. The
Company  began in 1997 to bring  on-line new systems to support both  operations
and financial  reporting  requirements as part as of building the infrastructure
to support the Company's growth. As part of the conversion, the Company received
assurances from its software suppliers that all systems are year 2000 compliant.
To this point in time, the Company has installed  modules that address inventory
management, purchasing components, shop floor control and production scheduling,
and  receiving.  The remaining  modules that include  order entry,  shipping and
invoicing,  and accounting are in the conversion process now and are expected to
be operational before year end 1998.

     Relative to Non-IT  systems,  the Company is currently  investigating  this
area for  potential  problems.  As the  Company  does not have a high  degree of
sophisticated  equipment  in  its  production  process,  the  Company  does  not
anticipate any major issues or cost to remediate. Again, this analysis should be
complete  before  year-end  1998,  along  with a complete  plan to  address  any
identified issues.

     With  regard  to third  party  year  2000  issues,  the  Company  has begun
discussions  with its  supplier  base  (and is  currently  surveying  them),  to
ascertain the potential for a negative  impact on the Company's  operations  and
what steps are being taken to ensure  continuity of supply of parts and service.
While the  Company  believes  its plans are  adequate to deal with the year 2000
issues  internally,  and  will be  compliant  on a  timely  basis,  there  is no
guarantee  that all  suppliers  and  other  parties  that are  essential  to the
Company's operations will do so.

                                       22

   
The failure of any supplier to adequately  address this issue in a timely manner
will result in the Company  looking to other  suppliers to fill the need.  While
the Company is single sourced for many of its components,  there are alternative
suppliers for all required parts. The potential  exists for a material  negative
effect on Company  operations if a key supplier does not adequately  address the
issue in a timely  manner.  The Company will be working  with all key  suppliers
throughout this time period to ensure continuity of supply.

     The Company has also evaluated the risks  associated  with this problem and
its customers through discussions with key dealers. As the ordering process from
dealers is a manual  one,  and stocks of  motorcycles  on  dealer's  floors is a
relatively low number  (typically  between 5 and 25 units),  the Company and the
dealers  involved in these  discussions  believe that the year 2000 problem will
have no material impact to either the dealers or the Company.

     The  Company's  cost to  become  year 2000  compliant  is  minimal  and not
material to this  point,  nor  expected to be in the future.  As the Company had
already planned its systems conversions to facilitate its growth,  there were no
incremental  costs  associated  with  insuring  those  systems  were  year  2000
compliant.  As a result,  costs of the effort are mainly focused on following up
with suppliers to determine their level of compliance.  These costs are imbedded
in  other   activities   and  are  not  expected  to  be  material   (less  than
$50,000.00/year in both 1998 and 1999).

     The most reasonable likely worst case Year 2000 scenario would be for a key
supplier to not become compliant.  If no steps were taken to address this issue,
it could result in the  Company's  operations  being shut down until the problem
was resolved. As discussed above, the Company is in the process of analyzing the
readiness  of  all  its  suppliers  to  assure  continuity  of  supply,  so  the
probability of such a scenario is not yet known.

     As the  specifics  of  potential  problems  are not yet  known,  a detailed
contingency plan has not yet been developed. Once more information is known from
the survey of vendors, a specific  contingency plan for likely scenarios will be
developed.  The Company would  anticipate this being completed by the end of the
first quarter of 1999.

     After  identifying the likelihood of such an event,  the Company would take
some or all of the following steps:
            o   Work with the vendor to put in place a manual back-up system to
                assure continued supply until the vendor becomes compliant,
            o   Bring on line an alternate vendor with the capacity to meet 100%
                of the Company's supply requirements, or
            o   Put in place  additional raw material  inventory at either
                the vendor's location or in the Company's  warehouse until
                continuity of supply is assured.

                                       23

LIQUIDITY AND CAPITAL RESOURCES

The Company used $5.56 million of cash in operating  activities in 1997 compared
with  $1.87  million  in  1996.  Net  losses  adjusted  for   depreciation   and
amortization consumed $1.58 million.  Inventories increased $5.0 million in 1997
over  the $1.5  million  increase  in 1996,  as the  Company  continued  to ramp
production as well as stockpile some finished goods in  anticipation of a strong
spring  season.  Accounts  receivable  increased by only $240,000 as the Company
entered into a manufacturer's flooring agreement with Transamerica, whereby most
dealers finance their motorcycle  inventory  directly with  Transamerica and the
Company  receives funds in a more timely manner.  This  effectively  reduces the
Company's  outstanding  receivables  substantially,  and  resulted in only a 32%
increase in  receivable  dollars on a sales  increase of 162%.  The  contractual
agreement  with  Transamerica  is at no cost to the Company,  but provides for a
repurchase  obligation on the part of the Company should a Titan dealership fail
to meet its financial  obligation  and  Transamerica  seizes  motorcycles in new
condition  upon a  dealer's  default.  When Titan  invoices  a dealer  using the
Transamerica  program,  a copy of the invoice is sent to  Transamerica by Titan,
and Transamerica pays the Company in full within 7 to 10 calendar days.  Capital
expenditures totaled $621,000 in 1997 compared with $51,000 in 1996.

These expenditures were  predominantly  associated with bringing on line the new
manufacturing  facility and the purchase of a large truck for  transporting  and
displaying product at various trade and dealer shows.

Cash was provided  through the issuance and sale of stock for $4 million in 1997
as  compared  with $2.5  million  in 1996.  Additionally,  the  Company  had net
borrowings  of $1.4 million in 1997 as compared  with $256,  000 in 1996. A more
detailed  description  of cash  flows  can be  found in the  attached  financial
statements.

INFLATION
- ---------

         Inflation  rates have been trending upward recently after several years
of low to moderate  increases.  Inflation will result in the escalation of costs
as  well  as  increasing   operating  expenses  for  the  Company.  The  Company
anticipates  the  ability to offset  most of these  increases  through  its cost
reduction program, provided that inflation rates do not accelerate dramatically.

FOREIGN RISK FACTORS
- --------------------

         The  primary  risk to foreign  sales is the state of the economy in the
Company's overseas markets. This evidences itself both in the willingness of the

                                       24

marketplace to purchase the product and in the exchange  rates for  transactions
which  ultimately  impacts  the final price of the product of the Company in the
dealer's  country.  Other risks  include  the  relative  strength of  individual
dealerships in their  respective  countries,  marketing  expertise of the dealer
network,  transportation  delays associated with shipping products from Phoenix,
and individual  country  regulatory  requirements.  The Company  believes it has
taken the necessary steps and signed up strong dealers in the countries where it
is currently  represented to mitigate the above risks,  except for those related
to country economics.

PART  I, ITEM 3. DESCRIPTION OF PROPERTY.

         In March 1997,  the  Company  moved to its  present  manufacturing  and
distribution facilities to 2222 West Peoria Avenue,  Phoenix,  Arizona 85029. On
August 7, 1997,  the Company  entered into a second lease with the same landlord
for an adjacent  parcel of  property.  Under the  combined  leases,  the Company
presently occupies a leased structure having approximately 64,000 square feet of
combined  administrative,   manufacturing,   assembly  and  distribution  space.
Approximately  10,000 square feet are devoted to offices with the remaining area
dedicated to production and  warehouse.  The Company has just entered the second
year of a current five year lease on this premises at an aggregate  rate for the
two leases of  $29,295.00  per month.  The form of the leases and the addenda to
the leases are included as Exhibits 6.1 and 6.2 of this Registration  Statement.
The Company has maintained its former leased facility at 2002 East Indian School
Road,  Phoenix,  Arizona for certain  limited  purposes  for the full lease term
ending July 1, 1998.  The  Companyhas  extended the use of such  facilities on a
month to  month  basis at the end of the  term at the  current  monthly  cost of
$3,978.

         It is  reasonably  anticipated  that the  present  physical  facilities
should be adequate for the Company's anticipated  manufacturing and distribution
needs into 1999.

PART I, ITEM 4.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
                 OWNERS AND MANAGEMENT.

         As of the June 1, 1998,  the  Company had  16,437,333  shares of common
stock  outstanding.  The chart  below  sets  forth  the  ownership,  or  claimed
ownership,  of certain  individuals  and entities.  This chart  discloses  those
persons known by the Board of Directors to have, or to claim to have, beneficial
ownership of more than 5% of the  outstanding  shares of the common stock of the
Company as of June 1, 1998;  of all  directors  and  executive  officers  of the
Company; and of the directors and officers of the Company as a group.

                                       25

Name and Address                 Number of Shares     Percent of Class
of Beneficial Owner             Beneficially Owned
   
- --------------------------------------------------------------------------------
Francis S. Keery
8973 N. 45th Street                    3,599,772 4         21.7%
Phoenix, Az 85028
- --------------------------------------------------------------------------------
Patrick Keery
8973 N. 45th Street                    3,098,549 5         18.7%
Phoenix, Az 85028
- --------------------------------------------------------------------------------
Barbara S. Keery
12460 N. 116th Street                  3,478,334           21.2%
Scottsdale, Az 85259
- --------------------------------------------------------------------------------
Harry H. Birkenruth
81 Ball Hill Road                              0            0.0%
Storrs, CT 06268
- --------------------------------------------------------------------------------
H.B. Tony Turner
6116 East Yucca Road                           0            0.0%
Paradise Valley, AZ 85253
- --------------------------------------------------------------------------------
Robert V. Peltier
7253 S. Terrace Lane                           0            0.0%
Tempe, Az 85283
- --------------------------------------------------------------------------------
Robert P. Lobban
1326 E. Treasure Cove Dr.                  7,000         less than 0.1%
Gilbert, Az 85234
- --------------------------------------------------------------------------------
Mark G. Green
15850 N. Thompson Peak Pkwy. #2032             0            0.0%
Scottsdale, Az 85260
- --------------------------------------------------------------------------------
Officers and Directors                 10,183,655 3,4      61.0%
as  a group (8 members)
- --------------------------------------------------------------------------------

- --------
     4 Includes 150,000 shares underlying unexercised employee options.

     5 Includes 100,000 shares underlying unexercised employee options.

                                       26

PART I, ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS.

         The directors and executive officers of the Company are as follows:

     Name               Age        Positions Held             Period of Service
- --------------------------------------------------------------------------------
Francis S. Keery        54      Chairman of the Board        Since August 1994
                                and CEO
- --------------------------------------------------------------------------------
Patrick Keery           28      President and Director       Since 1993
- --------------------------------------------------------------------------------
Barbara S. Keery        55      Vice President, Secretary    Since 1996
                                and Director
- --------------------------------------------------------------------------------
   
Harry H. Birkenruth     66      Director                     Since August 1998
- --------------------------------------------------------------------------------
H.B. Tony Turner        67      Director                     Since August 1998
- --------------------------------------------------------------------------------
Robert V. Peltier       45      Operations Manager           Since 1996
- --------------------------------------------------------------------------------
Robert P. Lobban        43      Chief Financial Officer      Since 1997
- --------------------------------------------------------------------------------
Mark G. Green           38      National Sales Manager       Since 1996
- --------------------------------------------------------------------------------

         The Board of Directors  of the Company  held five  meetings in calendar
year 1997 and eight  meetings to date in calendar year 1998.  All directors were
present at these meetings.

         Each of the members of the Board of Directors of the Company  serve for
a one year term, or until their successors are elected.  Mr.  Birkenruth and Mr.
Turner have accepted  appointments to serve as the only members of the audit and
compensation committees of Titan's Board of Directors.

         None of the  directors,  officers  or 5%  owners  of the  stock  of the
Company is involved in any significant legal proceedings adverse to the Company.

         One of Titan's greatest assets is its uniquely  specialized  management
team. Information regarding the key members of this team are provided below.

                                       27

         Frank (Francis S.) Keery - Chairman and CEO
         -------------------------------------------

         Frank Keery, age 54, currently resides with his wife, Barbara Keery, in
Phoenix, Arizona.

         Mr.  Frank  Keery  received  a B.S.  degree  in  Engineering  from  the
University  of  Detroit  in 1966 and an MBA  degree  from  Western  New  England
University in 1969.

         Subsequent to completion of his formal  education,  Mr. Frank Keery has
held various  administrative  and finance  related  positions.  For 17 years Mr.
Keery worked with Rogers Corporation,  an AMEX listed  corporation,  involved in
international automotive and electrical sales and marketing. In this capacity he
served   variously  as  an  executive  in  charge  of  new  division   startups,
manufacturing management,  operation "turnarounds", and international sales from
approximately  1969 to 1986. Most of these  assignments  carried full profit and
loss responsibilities of independent units.

         From 1986 to 1994,  Mr. Frank Keery was primarily  employed in multiple
positions as an outside and in-house business consultant. In 1989 to 1991 he was
the CEO for Swanson Manufacturing, Inc.

         For the three-year period ending in August 1994, Frank Keery was CEO of
the Company  Store,  a privately  held mail order  company  with annual sales of
approximately Eighty Million Dollars ($80,000,000.00).

         From August 1994 to the present, Mr. Keery has been chairman of Paragon
Custom Cycles,  which later became Titan Motorcycle of America. In this capacity
he has used his management and marketing experience as the chairman of the board
and CEO.

         Patrick Keery - President/Director
         ----------------------------------

         Patrick Keery, age 29, resides in Scottsdale, Arizona.

         Mr. Keery has been  President of Titan since  inception,  and owned and
operated its predecessor entity, Paragon Custom Cycles. Mr. Patrick Keery brings
unique  skills  in  the  assembly,   design  and  engineering  of  custom  built
motorcycles.

         Mr. Patrick Keery is a 1992 graduate of Arizona State  University where
he obtained a B.S. degree in finance.

                                       28

         Since 1993, Mr. Keery operated and was the owner and manager of Paragon
Custom Cycles doing custom design,  assembly and rebuilding of essentially large
displacement  motorcycles  until he  became  the  President  of the  reorganized
Company in December of 1995.

         During  the  period  of 1992 to 1993,  Mr.  Patrick  Keery  worked as a
financial  analyst for the George S. May  International  Co., a consulting  firm
specializing in providing services to small to medium capital companies.

         Mr.  Keery is heavily  involved  in  developing  the  Company's  dealer
network and overseeing the sales and marketing  efforts.  He continues to play a
lead role in motorcycle styling and product development.

         Barbara Keery - Vice President/Secretary/Director
         -------------------------------------------------

         Barbara Keery, age 55, currently resides with her husband, Frank Keery,
in Phoenix, Arizona.

         Barbara S. Keery received her Masters Degree in Business Education from
the  University  of  Connecticut  in 1970 and her  Bachelors  Degree in Business
Education  from the State  University  of New York at Albany.  From 1964 through
1969 she taught high school  administration  business  courses in South Windsor,
Connecticut and Oak Park, Michigan.  As a licensed real estate agent, she served
on the  chairman's  board of Russ Lyon Realty and was a member of the Scottsdale
Million Dollar Club in 1987 and 1988.

         From its  inception  in 1996,  Mrs.  Keery has served as the  corporate
secretary  and  Vice-President  for the  Company.  In 1997,  a new  division was
created for the clothing and accessory line which is primarily  administered  by
Mrs. Keery.

         Harry H. Birkenruth - Director
         ------------------------------

         Harry  H.  Birkenruth,  age  66,  resides  with  his  wife  in  Storrs,
Connecticut.

         Mr. Birkenruth  graduated with high honors from the City College of New
York in 1953. In 1957 he graduated with  distinction  from the Harvard  Graduate
School  of  Business  Administration.  In  1960  Mr.  Birkenruth  joined  Rogers
Corporation  and  became its Chief  Financial  Officer in 1967 and served as its
Senior Vice President Polymer Products in 1986. Rogers Corporation is engaged in
the sale of materials and

                                       29

   
components to the electronics and automotive industries with its principal place
of business in Rogers, Connecticut.

         Beginning in 1990, Mr. Birkenruth served as Executive Vice President of
Rogers  Corporation  and in April 1992 became its President and Chief  Executive
Officer until March 31, 1997,  when he became Chairman of the Board of Directors
of the company.  On June 30, 1998, Mr. Birkenruth  retired as Chairman of Rogers
Corporation and continues to serve as a director and consultant to the company.

         For the past two  years,  Mr.  Birkenruth  has also  served as the Vice
Chairman  of the Board of  Directors  of  Instrument  Manufacturing  Company,  a
company specializing in electrical cable diagnostic instruments.

         Mr.  Birkenruth  has  previously  served as a member  of the  Executive
Committee  and Board of  Directors  of the  Connecticut  Business  and  Industry
Association;   a  member  of  the  Board  of  Overseers  of  the  University  of
Connecticut's  School of Business;  as a Trustee of the  Connecticut  Policy and
Economic  Counsel;  and has  served  several  terms as a member  of the Board of
Trustees and as an incorporator of the Windham Community Memorial Hospital.

         H. B. Tony Turner
         -----------------

         Tony Turner, age 67, resides in Paradise Valley, Arizona.

         Mr.  Turner  graduated  in  1958  with a  Bachelors  degree  from  Duke
University.  In 1962 he graduated from the Harvard  Graduate  School of Business
Administration.

         Subsequent  to his  graduation  from  graduate  school,  Mr. Turner has
engaged  in a broad  variety  of  work  experiences  including  as  Chairman  to
President and CEO of Ardshield,  Inc., a leverage by-out and investment  banking
firm  (1980-1992);  Executive Vice President and Director of Investment  Banking
for Shearson  Haden Stone (1978- 1980);  Vice  President in the leverage  by-out
department of Oppenheimer & Co. (1976- 1978);  Vice President  Finance and Chief
Administrative  Officer of N-REN Corp.,  a privately  held  fertilizer  company;
Assistant  Secretary  for  Administration  of the U.S.  Department  of  Commerce
(1973-1975);  First Vice President and Director of Mitchum, Jones & Templeton, a
regional  investment  banking  company  (1967-1973);  Treasurer  and Director of
Corporate  Planning  of  Star-Kist  Foods,  Inc.,  a  subsidiary  of H.J.  Heinz
(1964-1967);  and  Controller  of a financial  corporation  of Arizona  where he
served as the Chief Accounting Officer of a financial holding company.

                                       30

         Robert V. Peltier - Operations Manager
         --------------------------------------

         Robert V. Peltier,  age 45,  resides with his wife and family in Tempe,
Arizona.

         Dr.  Peltier  obtained his Ph.D. in  Engineering  from  Kennedy-Western
University  in 1994,  his  masters  degree in  Engineering  from San Diego State
University in 1981,  and his B.S. in  Engineering  from the same  institution in
1974. Dr. Peltier has also  completed  advanced  course work in contract law and
business finance and management.

         From 1983 - 1987 Dr.  Peltier  served as an  adjunct  professor  at the
National University in San Diego, California.  During the period of 1984 to 1987
he was also a project manager for Energy  Factors,  Inc. and was involved in the
design and engineering of cogeneration facilities and power plants.

         Dr.  Peltier was a professor at Arizona State  University  from 1987 to
1994. From 1995 to 1997 Dr. Peltier has been an adjunct  professor in Mechanical
Engineering at the  University of Houston.  He has also served from 1994 to 1997
as a Managing Engineer with Stewart & Stevenson Services, Inc. of Houston, Texas
where he managed  the  production  engineering  group.  Stewart &  Stevenson  is
involved in the design and manufacture of gas turbines.

         Dr. Peltier, an avid motorcyclist, has been associated with the Company
as the chief engineer since early 1997, and his contributions to design,  safety
and  performance  aspects  of  the  motorcycles  are  deemed  to be of  critical
importance. In mid-1997 he also assumed responsibility for general operations.

         Robert P. Lobban - Chief Financial Officer
         ------------------------------------------

         Mr. Robert P. Lobban,  age 43,  currently  resides in Gilbert,  Arizona
with his wife Susan.

         Mr. Lobban holds a Masters of Business  Administration  Degree (M.B.A.)
from Harvard  Graduate  School of Business which he obtained in 1981. Mr. Lobban
earlier  obtained a B.S.  degree in  Industrial  Engineering  from  Northeastern
University  in 1977.  He graduated  first in his class and was a Magna Cum Laude
graduate.

         During  the  period  of  his  formal  education,  Mr.  Lobban  obtained
considerable  practical  experience  in working  in  full-time  positions  as an
engineer,  analyst  and  supervisor  with such  companies  as Digital  Equipment
Corporation,  Texas  Instruments,  New England Medical Center  Hospitals and the
Phillips Manufacturing Company.

                                       31

From 1981 through 1982, he worked as a Controller with the Fiberloys Division of
the Rogers Corporation. From 1982 to 1984 he was the Controller for the Flexible
Interconnections  Division of Rogers  Corporation  in Chandler,  Arizona and was
promoted to  Administrative  Manager with that from 1984 through 1987. From 1987
through 1988 he worked for Pacific Biosystems, Inc., a start-up company involved
in the medical  equipment  industry as its Vice  President  and Chief  Financial
Officer.

         In 1988, he joined Gemini  Consulting as a Consultant  and was promoted
through several  positions to the level of Principal.  In these  positions,  Mr.
Lobban was responsible for leading large teams in multi-million  dollar projects
to improve the financial  performance of over 30 companies,  most in the Fortune
500. Gemini  Consulting of Morristown,  New Jersey is an international  business
consulting  firm.  In 1995,  he joined  the George  Group of Dallas,  Texas as a
Director  and then  Vice-  President,  where  he was  responsible  for  managing
multiple client engagements in turnaround/major improvement situations.

         During  1997 he  became  associated  full-time  with  the  Company  and
provides  valuable service as its Chief Financial  Officer  supervising  general
accounting,   finance,  investor  relations,   information  systems,  and  human
resources as well as its procurement and materials management  functions.  He is
also charged with leading the Company's cost reduction efforts.

         Mark G. Green - National Sales Manager
         --------------------------------------

         Mark G. Green, age 38, resides in Scottsdale, Arizona.

         Mr.  Green  obtained an  associate  degree from  Saddleback  College in
Mission Viejo, California in 1979. He has also completed most of the course work
required for a B.S. degree in Sports Medicine from California  State  University
at Fullerton.

         Mr. Green came to Titan in 1996 with over 15 years of motorcycle retail
experience.  His experience  includes sales of Japanese products,  as well as on
the  Harley  Davidson  line.  From  1981 to 1983 he  worked  for  Pacific  Coast
Honda/Suzuki. From 1983 to 1994, he was finance manager for Champion Motorcycles
of Costa Mesa, California.

         During 1994 to 1996 he was the National  Sales Manager of Biker's Dream
headquartered in Santa Ana,  California.  During this tenure the number of units
sold  increased  from 60 to 275 per year.  In his  capacity  as  National  Sales
Manager for Biker's  Dream,  he opened ten new super stores  across the country.
Mr. Green was

                                       32

also responsible for developing a detailed sales manual including all aspects of
sales, insurance and registration of motorcycles.

         Mr.  Green has  formulated  similar  sales and closing  procedures  for
Titan.  He is  responsible  for dealer  training  and all  marketing  activities
including trade shows,  print and radio advertising,  and cooperative  marketing
programs  with  other   corporations  such  as  Playboy,   the  World  Wrestling
Federation, R.J. Reynolds, and the Arizona Cardinals.

PART I, ITEM 6. EXECUTIVE COMPENSATION.

         The table set forth below contains  information  about the remuneration
received and accrued during the last three fiscal years from the Company and its
subsidiaries  by the CEO of the  Company.  None of the  employees of the Company
have received salary and bonuses of $100,000 or more in any calendar year.

Name and      Year      Salary ($)     Bonus ($)    Other            Securities
Principal                                           Annual           Underlying
Position                                            Compensation     Options or
                                                    ($)              SARs (#)
- -------------------------------------------------------------------------------
Frank Keery   1997      61,153.70      1,154        6,9426                  0
Chairman/CEO  1996      59,999.96          0                          150,000
              1995           0             0                                0

                  In  December  1996,  the  Board of  Directors  of the  Company
adopted the Titan Motorcycle Co. of America Stock Option and Incentive Plan (the
"Plan").  Under the Plan, Incentive Stock Options ("ISOs"),  Non-qualified Stock
Options,   Stock  Appreciation  Rights  ("SARs"),   Restricted  Stock,  Dividend
Equivalents  and  Performance  Shares may be awarded to key  employees  of Titan
Motorcycle Co. of America and its subsidiaries.

                  A  committee  consisting  of at least  two  Board  members  is
authorized  to  administer  the Plan and is  authorized  to  select  from  among
eligible  employees  those  persons  who will  receive  awards,  to  select  the
appropriate  form of awards and to determine  the terms and  conditions  of such
awards. After taking into consideration the
- --------
     6 Of the amount reflected,  $5,824  represents an automotive  allowance for
     Frank Keery.

                                       33

March 1997 two-for-one forward split of the stock of the Company,  the aggregate
number of  shares  of stock  subject  to  awards  under the Plan may not  exceed
2,000,000.

                  The  committee  may make awards of ISOs,  Non-qualified  Stock
Options, SARs, Restricted Stock, Dividend Equivalents and Performance Shares, or
any  combination  of the  foregoing,  to officers and other key employees of the
Company and its subsidiaries.  For purposes of the Plan, the "key employees" are
those employees who, in the opinion of the Committee, are mainly responsible for
the continued  growth,  development  and financial  success of the Company.  The
committee is not required to make awards to every  individual  who is an officer
or key employee,  but it may not make any award to any  individual who is not an
officer or key employee.

                  An ISO is a stock  option  that  satisfies  certain  technical
requirements specified in Section 422 of the Internal Revenue Code (the "Code").
Under the Code, ISOs may only be granted to employees. In order for an option to
qualify as an ISO, the price  specified in the option must equal the fair market
value of the stock at the date of the grant,  and the option must lapse no later
than 10 years from the date of the grant.  As a general rule,  the stock subject
to ISOs which are first  exercisable by an employee in any calendar year may not
have a value of more  than  $100,000  as of the  date of  grant.  Certain  other
requirements must also be met.

                  A Non-qualified Stock Option is any stock option other than an
ISO. These options are referred to as  "non-qualified"  because they do not meet
the  requirements  of, and are not  eligible  for the  favorable  tax  treatment
provided by Section  422 of the Code.  Subject to  applicable  federal and state
securities  laws,  non-qualified  options  can be  subject  to  such  terms  and
conditions as the committee  determines in its discretion.  Thus, for example, a
Non-qualified Stock Option could be granted which has an exercise price which is
less than the stock's fair market value on the date of grant.

                  A Stock  Appreciation Right ("SAR") is the right granted to an
employee to receive the  appreciation  in the value of a share of Company  stock
over a certain  period of time.  Under the Plan, the Company may pay that amount
in cash or in Company stock or in a combination  of both.  SARs are often issued
in  conjunction  with a grant of stock  options  to give the  employee  the cash
necessary to exercise the option and/or pay the tax attributable to the exercise
of the option (in the case of a Non-qualified  Stock Option).  Although SARs can
be exercised  independently of an option,  in such cases, the underlying  option
lapses to the extent the SARs are exercised.

                                       34

                  The Plan also  authorizes  the  committee to award  Restricted
Stock to employees. Under the Restricted Stock feature of the Plan, the employee
is granted a specified  number of shares of the Company's  stock.  However,  his
ownership with respect to such stock is subject to certain restrictions,  and if
the employee violates any of the restrictions during the period specified by the
Committee,  he forfeits his stock. The committee may, in its discretion,  impose
any restrictions on an employee's  Restricted Stock Award. It may not,  however,
require the employee to make any payment for the Restricted Stock.

                  The  Plan   authorizes   the   committee  to  grant   dividend
equivalents  in connection  with  options.  Dividend  equivalents  are rights to
receive additional shares of Company stock at the time of exercise of the option
to which such dividend equivalents apply. Dividend equivalents are always issued
in connection with an option, however, they can be issued at the time the option
is granted or after the option is granted.

                  Under the Plan,  the  committee  may grant  performance  share
units to an employee  which are to be credited to a  performance  share  account
maintained  for the employee.  Each  performance  share unit is deemed to be the
equivalent of one share of Company stock.  An award of  performance  shares does
not entitle an employee to any ownership, dividend, voting, or other rights of a
shareholder  until  distribution  is made in the form of  shares  of  stock.  No
employee  may receive as  performance  shares  units more than 30 percent of the
aggregate number of shares that can be awarded under the Plan.

                  As  of  June  1,  1998,  the  Company  has  granted  ISOs  and
Non-qualified  Stock  Options for an  aggregate of 865,000  shares of stock.  No
grants have been made of any of the other  categories of awards  available under
the Plan.

                  Stock  options  awarded in fiscal  year 1997 under the Plan of
the Company are as follows:

  Name        Number of       Date        % of Total     Exercise    Expiration
              Securities      Awarded     Options/SARs    or Base       Date
              Underlying                   Granted to      Price
             Options/SARs                 Employees in    ($/Sh)
               Granted (#)                Fiscal Year
- --------------------------------------------------------------------------------
Gary Smith      60,000        1/8/97          100%         $3.00       1/8/07

                                       35

PART I, ITEM 7. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS

                  Prior to the  formation  of Titan  Motorcycle  Co. of America,
Patrick Keery and Frank Keery had been  conducting the business of  after-market
customizations of Harley Davidson motorcycles in the Phoenix area under the name
of Paragon  Custom Cycles.  The Phoenix  dealership for the Company has retained
this name for reasons of established  name  recognition  in the Maricopa  County
market.  This  distributorship  is  owned  by the  President  and the CEO of the
Company,  and sells the products of the Company  under the  standard  dealership
contract of the Company without any special concessions or contract provisions.

                  In early 1998, the CEO and the President of the Company joined
with a  third-party  investor to purchase  the Los Angeles,  California  and Las
Vegas, Nevada  distributorships  of the Company.  Bryant Cragun, the third-party
investor,  is the principal of an investment  banking firm that has assisted the
Company in capital  raising  functions.  These three  individuals  have formed a
limited  liability  company  known as BPF,  LLC.  The Los  Angeles and Las Vegas
distributorships  had been in need of significant  capital infusions,  at a time
when the Company was unable to invest in any of its  distributorships.  To date,
BPF, LLC has provided $207,000 to the Las Vegas  distributorship and $255,000 to
the Los Angeles  distributorships.  These two distributorships are continuing to
sell the products of the Company under the standard  dealership  contract of the
Company without any special concessions or contract provisions.

PART I, ITEM 8. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE
REGISTERED.

                  The  Company  has  authorized  Ninety  Million  common  shares
(90,000,000)  having a par value of %0.001 per share. The Company  presently has
only one class of common shares.

                  The  Company  has also  authorized  Ten  Million  (10,000,000)
shares of preferred  stock having a par value of $0.001 per share.  The Articles
of  Incorporation  of Titan do not specify  rights of the preferred  stock,  but
authorize the Board of Directors of the Company to establish  such rights at the
time  that  preferred  stock  is  issued.  As of the  date of this  Registration
Statement,  no preferred shares are issued or outstanding and no specific rights
have been established for such stock.

                  At June 1, 1998, there were 16,437,333  shares of Common Stock
issued  and  outstanding,  and held by more than 500  shareholders.  Holders  of

                                       36

Common  Stock are  entitled to one vote per share for the  election of directors
and on all matters submitted to a vote of shareholders.  There are no cumulative
voting  rights  for the  election  of  directors.  Holders  of Common  Stock are
entitled to receive dividends as and when declared by the Board of Directors out
of funds legally available  therefore.  Holders of Common Stock are not entitled
to preemptive  rights.  The Common Stock to be registered is not  convertible to
any  other  debt or  security  installment.  In the  event  of the  liquidation,
dissolution  or  winding up of the  Company,  the holder of each share of Common
Stock is  entitled  to share  equally  in any  balance of the  Company's  assets
available for distribution to shareholders.  Outstanding  shares of Common Stock
are not subject to any further call or assessment.

                                     PART II

PART II, ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE
REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.

                  The stock of the  Company  is  traded  on the NASD  Electronic
Bulletin  Board.  As of June 1, 1998,  there were more than 534  shareholders of
record of the stock of the Company.  As of the same date,  Sixteen  Million Four
Hundred Thirty- Seven Thousand Three Hundred Thirty Three (16,437,333) shares of
stock were  outstanding.  Actual  trading  volume of the stock of the Company in
calendar year 1997 has been moderate.  A significant portion of the stock of the
Company is held by nonU.S. investors.

                  Provided  in the  following  table is the  price  range of the
Company's  stock for the eight most  recent  quarters  (adjusted  to reflect the
March 1997  two-for-one  forward split of the stock of the  Company),  and as of
August 27, 1998. The referenced  quotations do not reflect  inter-dealer prices,
dealer  retail  markup,  markdown,  or  commissions,  and  may  not  necessarily
represent actual transactions.

                                       37

                           PRICE RANGE OF COMMON STOCK
                                 Bid Quotations
- --------------------------------------------------------------------------------
Quarter & Year                   High Bid                          Low Bid
- --------------------------------------------------------------------------------
2nd 1996                         Not Traded                        Not Traded
- --------------------------------------------------------------------------------
3rd 1996                         3.81                              3.00
- --------------------------------------------------------------------------------
4th 1996                         3.63                              3.25
- --------------------------------------------------------------------------------
1st 1997                         7.50                              3.31
- --------------------------------------------------------------------------------
2nd 1997                         6.25                              4.50
- --------------------------------------------------------------------------------
3rd 1997                         6.13                              5.50
- --------------------------------------------------------------------------------
4th 1997                         6.13                              4.5
- --------------------------------------------------------------------------------
1st 1998                         4.75                              3.00
- --------------------------------------------------------------------------------
2nd 1998                         6.75                              3.37
- --------------------------------------------------------------------------------
   
   August 27, 1998                 bid $    4.62                   ask $    4.94

                  The Company has paid no  dividends  on common stock during its
two most recent calendar years, and has no present intention to pay dividends in
calendar year 1998.

PART II, ITEM 2. LEGAL PROCEEDINGS.

         The Company  presently  is involved  as a defendant  in a civil  action
filed against it in the Superior  Court (court of general  jurisdiction)  in and
for Maricopa County,  Arizona,  Civil No.  CV98-03681,  arising out of a dispute
over  payment for and the  adequacy of services  performed  by the  plaintiff in
completing  a paint  room  for the  Company.  The  amount  alleged  owing is the
principal  sum of  $52,898.59.  The Company  disputes the claims and has filed a
counterclaim.  In all events,  it is not believed the outcome of this litigation
will have any  material  affect on the  Company's  business.  The Company is not
aware of any other claims or litigation.

PART II, ITEM 3. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

                  The Company has no  disagreement  with its  accountants on the
accounting and financial disclosures contained in this Registration Statement or
as an exhibit hereto.

                                       38

PART II, ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.

                  Set forth below is a table summarizing all transactions of the
sale of  securities  of the Company for the past three years,  which  securities
were not  registered  under the  Securities  Act. The table does not include the
employee options granted pursuant to the 1996 Incentive Stock Option Plan of the
Company discussed in Item 6 of Part I of this Registration Statement.

        Date                      No. of              Name or Class of                 Consideration
                                  Shares                Purchaser(s)
- -----------------------------------------------------------------------------------------------------------------------------------
                                                                      
1     June 1996                 5,500,000        Shareholders of Paragon          Merger of Paragon Custom
                                                 Custom Cycles                    Cycles  into Mojave Financial
                                                                                  Services, Inc.
- -----------------------------------------------------------------------------------------------------------------------------------
2     September 1996            1,500,000        Non-U.S. investors               $1,500,000
- -----------------------------------------------------------------------------------------------------------------------------------
3     October 1996                333,333        Non-U.S. investors               $1,000,000
- -----------------------------------------------------------------------------------------------------------------------------------
4     March 1997                7,355,000        All of the then existing         Issued pursuant to the 2 for 1
                                                 shareholders of the              forward split of the stock of the
                                                 Company                          Company
- -----------------------------------------------------------------------------------------------------------------------------------
5     April 1997                1,000,000        Non-U.S. investors               $2,500,000
- -----------------------------------------------------------------------------------------------------------------------------------
6     November 1997               500,000        Non-U.S. investors               $1,500,000
      to January 1998
- -----------------------------------------------------------------------------------------------------------------------------------
7     January 1998                 60,000        Publication trade supplier       $250,000 of printing and
                                                                                  advertising  services
- -----------------------------------------------------------------------------------------------------------------------------------
8     February 1998               166,667        Non-U.S. investors               $500,000
- -----------------------------------------------------------------------------------------------------------------------------------

                  Transactions  1, 4 and 7 are deemed  exempt from  registration
pursuant  to the  provisions  of  Regulation  D adopted  by the  Securities  and
Exchange Commission. Transaction 7 is a transaction under Rule 505 of Regulation
D and is documented by a signed investment intent letter of the purchaser.  Such
purchaser is an accredited investor.  The certificates  representing each of the
issued shares bear an appropriate  restrictive legend, and the transfer agent of
the  Company  has been given stop  transfer  instructions  with regard to shares
issued  under  any  Regulation  D  exemption.  Each  of  the  purchasers  in the
Regulation D transactions had a pre-existing  relationship with the Company. The
recipients of the stock in transaction 1 were the shareholders of Paragon Custom
Cycles,  and possessed more information  regarding the business to be pursued by
the  surviving  corporation  in the merger  transaction  than any other  person.
Transaction

                                       39

   
1  resulted  in the  issuance  of  shares  of  common  stock  under  Rule 505 of
Regulation D to Frank,  Patrick and Barbara Keery,  each of whom qualified as an
accredited  investor.  Such individuals have served as officers and directors of
the  Company  since  the  time of the  merger  with  Mojave,  and  were the sole
shareholders  of Paragon  Custom  Cycles prior to the merger.  Transaction 4 was
merely a private placement to the existing  shareholders of the Company pursuant
to a  two-for-one  forward  split of the stock of the  Company.  In  addition to
possible  exemption  from  registration  under  Regulation  D as to  some or all
shareholders,  the issuance of the shares  pursuant to the split of the stock of
the Company is exempt from registration under Release No. 33-929, July 29, 1936,
17 CFR 231.929.

                  The remaining transactions are deemed exempt from registration
pursuant  to the  provisions  of  Regulation  S adopted  by the  Securities  and
Exchange  Commission.  Each  of  these  transactions  is  documented  by  signed
subscription  agreements.  The  Company  reasonably  believes,  and  each of the
purchasers  specifically  warranted and represented to the Company, that (a) the
purchaser was not a U.S. person as that term is defined under  Regulation S; (b)
at the time the buy order for the securities was  originated,  the purchaser was
outside the United States and was outside of the United States as of the date of
the execution and delivery of the purchaser's  subscription  agreement;  (c) the
purchaser was purchasing the securities for its own account and not on behalf of
any U.S. person;  (d) the sale had not been pre-arranged with a purchaser in the
United States;  (e) all offers and resales of the securities  would only be made
in compliance with the provisions of Regulation S; and (f) the sales transaction
was made in  compliance  with all of the laws of the  country of domicile of the
purchaser, and of any political subdivision thereof, and the customary practices
and  documentation  of such  jurisdictions.  The  certificates  representing the
shares issued in such transactions bear an appropriate  restrictive  legend, and
the transfer agent of the Company has been given stop transfer instructions with
regard to shares issued under any Regulation S exemption.

                  The  Company has  monitored  the flow of  Regulation  S shares
issued by the Company  and is not aware of any shares  which have been sold back
into the United  States,  or to U. S.  persons  (as  defined  in Rule  902(o) of
Regulation  S),  within  one  year of the  later  of (a) the date of sale by the
Company of the  Regulation S shares,  or (b) the date of the resale by a foreign
underwriter  of the last of any shares of a tranch of securities  which were not
held by the underwriter as its private  investment.  All individuals or entities
who did not purchase their shares  directly from the Company and who request the
removal of the  restrictive  legend from shares  issued  under  Regulation S are
required  to  sign  a  representation  letter  certifying  the  accuracy  of the
statements set forth in subparagraphs (a) and (b) of this paragraph.

                                       40

                  No  commission  or  finders  fees  were  paid  on  any  of the
referenced transactions.

PART II, ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

         The Company  has  included in its  Restated  Articles of  Incorporation
provisions to indemnify  its  directors and officers from personal  liability to
the Company or any of its shareholders for damages for the breach of a fiduciary
duty.  The  Restated  Articles  also  provide for rights of  indemnification  as
allowed under the laws of the state of Nevada.  Additionally,  the Bylaws of the
corporation may be amended to allow for additional rights of  indemnification by
the corporation.  The directors and officers enjoy rights of indemnification for
defending  criminal or civil actions,  suits, or proceedings  involving  alleged
acts or  omissions  by the  director  or officer  while  acting in said  party's
capacity on behalf of the  corporation.  The  corporation  does not  indemnify a
director or officer for any acts or omissions involving intentional  misconduct,
fraud,  or a  knowing  violation  of law  or the  payment  of  distributions  in
violation of Nevada Revised Statutes Section 78.300.

         Insofar as indemnification for liabilities arising under the Securities
Act may be  permitted to  directors,  officers  and  controlling  persons of the
Company  pursuant  to such  indemnification  provisions,  the  Company  has been
advised that, in the opinion of the  Securities  and Exchange  Commission,  such
indemnification  is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.

                                       41

                                    PART F/S

                         TITAN MOTORCYCLE CO. OF AMERICA

                      CONSOLIDATED FINANCIAL STATEMENTS AND
                              REPORT OF INDEPENDENT
                          CERTIFIED PUBLIC ACCOUNTANTS

                           December 31, 1997 and 1996

                                       42

                                 C O N T E N T S

   
Independent Auditors' Report .................................................44

Consolidated Balance Sheet ...................................................45

Consolidated Statements of Operations.........................................47

Consolidated Statements of Stockholders' Equity  .............................49

Consolidated Statements of Cash Flows ........................................50

Notes to the Consolidated Financial Statements ...............................51

                                       43

                          INDEPENDENT AUDITORS' REPORT
                          ----------------------------

To the Board of Directors and Stockholders
Titan Motorcycle Co. of America
Phoenix, Arizona

We have audited the accompanying  consolidated balance sheet of Titan Motorcycle
Co. of America as of December 31, 1997 and the related  consolidated  statements
of operations, stockholders' equity, and cash flows for the years ended December
31,  1997  and  1996.   These   consolidated   financial   statements   are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our audit.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable  assurance about whether the  consolidated  financial  statements are
free of material  misstatement.  An audit includes  examining,  on a test basis,
evidence  supporting the amounts and disclosures in the  consolidated  financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
consolidated  financial  statement  presentation.  We  believe  that our  audits
provide a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects,  the consolidated  financial position of Titan
Motorcycle Co. of America as of December 31, 1997 and the  consolidated  results
of its  operations  and its cash flows for the years ended December 31, 1997 and
1996 in conformity with generally accepted accounting principles.

Jones, Jensen & Company
Salt Lake City, Utah
March 12, 1998

                                       44

                         TITAN MOTORCYCLE CO. OF AMERICA
                           Consolidated Balance Sheet

                                     ASSETS
                                     ------

                                                           December 31,
                                                              1997
                                                              ----
 
CURRENT ASSETS

  Cash                                           $            85,468
  Accounts receivable, net (Note 2)                          974,461
  Inventory (Note 3)                                       6,635,917
  Prepaid expenses                                           381,160
                                                           ---------

    Total Current Assets                                   8,077,006
                                                           ---------
EQUIPMENT (NOTE 4)

  Autos and trucks                                           228,017
  Machinery and equipment                                    199,226
  Office equipment                                           211,495
  Displays                                                    41,534
  Leasehold improvements                                      24,177
  Less: accumulated depreciation                            (121,749)
                                                           ---------

    Total Equipment                                          582,700
                                                           ---------

OTHER ASSETS

  Deposits                                                    55,063
  Trademarks                                                  54,288
                                                           ---------

    Total Other Assets                                       109,351
                                                           ---------

    TOTAL ASSETS                                 $         8,769,057
                                                 =         =========

        The accompanying notes are an integral part of these consolidated
                             financial statements.

                                       45

                         TITAN MOTORCYCLE CO. OF AMERICA
                     Consolidated Balance Sheet (Continued)

                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------

                                                                         December 31,
                                                                          1997
                                                                          ----
CURRENT LIABILITIES

  Accounts payable                                                     $ 2,052,731
  Accrued expenses                                                         216,657
  Income tax payable                                                            50
  Deposits payable                                                         100,940
                                                                       -----------

    Total Current Liabilities                                            2,370,378
                                                                       -----------

LONG-TERM LIABILITIES

  Notes payable - related parties (Note 5)                               1,928,664
                                                                       -----------

    Total Long-Term Liabilities                                          1,928,664
                                                                       -----------

    TOTAL LIABILITIES                                                    4,299,042
                                                                       -----------

COMMITMENTS AND CONTINGENCIES  (Note 6)

STOCKHOLDERS' EQUITY

  Common stock, par value $.001; 100,000,000 shares authorized;
   16,210,666 shares issued and outstanding                                 16,211
  Additional paid-in capital                                             6,480,769
  Accumulated deficit                                                   (2,026,965)
                                                                       -----------

    TOTAL STOCKHOLDERS' EQUITY                                           4,470,015
                                                                       -----------

    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                         $ 8,769,057
                                                                       ===========

        The accompanying notes are an integral part of these consolidated
                             financial statements.

                                       46

                         TITAN MOTORCYCLE CO. OF AMERICA
                      Consolidated Statements of Operations

                                                            For the Years Ended
                                                                 December 31,
                                                                 ------------
                                                       1997                   1996
                                                       ----                   ----

SALES, NET                                $         13,064,145    $        4,983,876

COST OF GOODS SOLD                                  10,607,602             3,683,728
                                                    ----------             ---------

     Gross Profit                                    2,456,543             1,300,148
                                                     ---------             ---------

OPERATING EXPENSES

  Advertising                                          114,874                97,537
  Auto and truck expense                                92,480                14,609
  Bank charges                                           1,543                   833
  Contributions                                         17,237                 1,700
  Depreciation expense                                  89,994                29,178
  Freight and postage                                  466,057               184,762
  Insurance                                            356,212               125,814
  Legal and accounting                                  87,867                38,852
  Office supplies and expense                          393,313                79,332
  Printing                                              30,244                 9,005
  Research and development                             186,206                76,196
  Rent                                                 230,824                43,702
  Repairs and maintenance                               45,700                14,069
  Salaries and wages                                 1,271,310               506,663
  Taxes and licenses                                    17,305                 3,223
  Telephone and utilities                              177,627                45,474
  Trade show and promotion                             498,670               113,706
                                                       -------               -------

     Total Operating Expenses                        4,077,463             1,384,655
                                                     ---------             ---------

     (Loss) from Operations                         (1,620,920)              (84,507)
                                                    ----------               -------

OTHER INCOME (EXPENSE)

  Gain (loss) on currency translation                    9,331                -
  Other income                                          70,394                -
  Interest income                                       -                     16,043
  Interest expense                                    (126,163)              (15,726)
  Bad debt expense                                      (6,385)              (11,256)
                                                        ------               -------

     Total Other Income (Expense)         $            (52,823)   $          (10,939)
                                          -            -------    -          -------

        The accompanying notes are an integral part of these consolidated
                             financial statements.

                                       47

                         TITAN MOTORCYCLE CO. OF AMERICA
                Consolidated Statements of Operations (Continued)

                                                      For the Years Ended
                                                          December 31,
                                                          ------------
                                                 1997                    1996
                                                 ----                    ----

NET (LOSS) BEFORE INCOME TAXES      $         (1,673,743)   $          (95,446)
                                    =
Income taxes                                      -                         50
                                                  ------                    --

NET (LOSS)                          $         (1,673,743)   $          (95,496)
                                    =         ==========    =          =======

WEIGHTED AVERAGE NUMBER OF
 SHARES OUTSTANDING                           15,508,839            12,774,860
                                              ==========            ==========

NET LOSS PER SHARE                  $              (0.11)   $            (0.01)
                                    =              =====    =            =====

        The accompanying notes are an integral part of these consolidated
                             financial statements.

                                       48

                         TITAN MOTORCYCLE CO. OF AMERICA
                 Consolidated Statements of Stockholders' Equity

                                                                                   Additional
                                                                Common Stock        Paid-in          Accumulated
                                                Shares             Amount           Capital           Deficit

Balance, December 31, 1995                   11,000,000   $        11,000    $       (6,000)   $     (257,726)

Recapitalization (See Note 1)                    44,000                44            (8,044)           -

Issuance of common stock for cash
 at $0.50 per share                           3,000,000             3,000         1,497,000            -

Issuance of common stock for cash at
 $1.50 per share                                666,666               667           999,333            -

Net loss for the year ended
 December 31, 1996                               -                 -                 -                (95,496)
                                                 ------            ------            ------           -------

Balance, December 31, 1996                   14,710,666            14,711         2,482,289          (353,222)

Issuance of common stock for cash at
 $2.50 per share                              1,000,000             1,000         2,498,980            -

Issuance of common stock for cash at
 $3.00 per share                                500,000               500         1,499,500            -

Net loss for the year ended
 December 31, 1997                               -                 -                 -             (1,673,743)
                                                 ------            ------            ------        ----------

Balance, December 31, 1997                   16,210,666   $        16,211    $    6,480,769    $   (2,026,965)
                                             ==========   =        ======    =    =========    =   ==========

        The accompanying notes are an integral part of these consolidated
                             financial statements.

                                       49

                         TITAN MOTORCYCLE CO. OF AMERICA
                      Consolidated Statements of Cash Flows

                                                                                For the Years Ended
                                                                                   December 31,
                                                                                   ------------
                                                                               1997             1996
                                                                            -----------    -----------
                                                                                             
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net (loss)                                                               $(1,673,743)   $   (95,496)
  Adjustments to reconcile net (loss)
   to net cash used in operating activities:
    Depreciation and amortization                                               89,994         29,178
    Allowance for bad debts                                                      6,385           --
Changes in operating assets and liabilities:
    (Increase) decrease in accounts receivable                                (240,472)      (734,255)
    (Increase) decrease in inventory                                        (5,013,787)    (1,479,592)
    (Increase) decrease in other assets                                       (423,374)       (61,147)
    Increase (decrease) in accounts payable                                  1,587,530        398,868
    Increase (decrease) in deposits payable                                    (54,728)        40,611
    Increase (decrease) in accrued expenses                                    165,586         36,654
    Increase (decrease) in accrued interest payable                               --           (5,895)
                                                                            -----------    -----------

     Net Cash Used in Operating Activities                                  (5,556,609)    (1,871,074)
                                                                            -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:

  Purchases of property and equipment                                         (620,844)       (51,251)
                                                                            -----------    -----------

     Net Cash Used in Investing Activities                                    (620,844)       (51,251)
                                                                            -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:

  Issuance of stock                                                          4,000,000      2,500,000
  New borrowings from related parties                                        1,426,142        256,303
                                                                            -----------    -----------

     Net Cash Provided by Financing Activities                               5,426,142      2,756,303
                                                                            -----------    -----------

NET INCREASE (DECREASE) IN CASH                                               (751,311)       833,978

CASH AND CASH EQUIVALENTS AT
 BEGINNING OF YEAR                                                             836,779          2,801
                                                                            -----------    -----------

CASH AND CASH EQUIVALENTS AT END
 OF YEAR                                                                   $    85,468    $   836,779
                                                                            ===========    ===========

CASH PAID FOR:

  Interest                                                                 $      --      $    24,142
  Income taxes                                                             $      --      $        50

        The accompanying notes are an integral part of these consolidated
                             financial statements.

                                       50

                         TITAN MOTORCYCLE CO. OF AMERICA
                 Notes to the Consolidated Financial Statements
                           December 31, 1997 and 1996

NOTE 1 -     ORGANIZATION AND DESCRIPTION OF BUSINESS

             The financial  statements  presented are those of Titan  Motorcycle
             Co. of America (Company). The Company was incorporated in the State
             of Nevada on January 10, 1995 to carry on any lawful activity under
             the laws of Nevada.  On June 11, 1996,  Mojave Financial  Services,
             Inc.  changed  its name to  Titan  Motorcycle  Co.  of  America  in
             conjunction  with the merger with Titan  Motorcycle Co. of America.
             Prior to the  acquisition of Titan  Motorcycle Co. of America,  the
             Company  had been  seeking  to merge  with an  existing,  operating
             company.

             Titan   Motorcycle   Co.  of  America   (premerger)   (Titan)   was
             incorporated  in the State of Arizona on  December  12,  1994.  The
             Company  manufactures  custom design  motorcycles and sells them to
             authorized dealers or to the general public.

             On June  11,  1996,  Mojave  Financial  Services,  Inc.  and  Titan
             Motorcycle  Co.  of  America  completed  an  Agreement  and Plan of
             Reorganization  whereby the Company issued 11,000,000 shares of its
             common stock in exchange for all of the outstanding common stock of
             Titan.   Immediately   prior   to  the   Agreement   and   Plan  of
             Reorganization,  the  Company  had  44,000  shares of common  stock
             issued and outstanding.

             The  acquisition was accounted for as a  recapitalization  of Titan
             because the  shareholders of Titan controlled the Company after the
             acquisition.  Therefore,  Titan is treated as the acquiring entity.
             There was no  adjustment  to the  carrying  value of the  assets or
             liabilities of Titan in the exchange.  The Company is the acquiring
             entity for legal  purposes  and Titan is the  surviving  entity for
             accounting  purposes.  On June 11, 1996,  the  shareholders  of the
             Company   authorized  a  reverse  stock  split  of  1-for-10.   All
             references  to  shares  of common  stock  have  been  retroactively
             restated.  On March  17,  1997,  the  shareholders  of the  Company
             authorized  a forward  stock split of 2-for-1.  All  references  to
             shares of common stock have been retroactively restated.

NOTE 2 -     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

             a.   Accounting Method

             The Company's  financial  statements are prepared using the accrual
             method of  accounting.  The  Company has elected a December 31 year
             end.

             b.   Income Taxes

             As of December 31, 1997 and  December  31, 1996,  the Company had a
             net operating loss  carryforward for federal income tax purposes of
             approximately $2,027,000 and $349,000 respectively that may be used
             in future years to offset  taxable  income.  The net operating loss
             carryforward  will begin to expire in 2011.  The tax benefit of the
             cumulative carry forwards has been offset by a valuation  allowance
             of the same amount.

                                       51

                         TITAN MOTORCYCLE CO. OF AMERICA
                 Notes to the Consolidated Financial Statements
                           December 31, 1997 and 1996

NOTE 2 -     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

             c.   Cash Equivalents

             The Company considers all highly liquid investments with a maturity
             of three months or less to be cash equivalents.

             d.   Inventory

             Inventories  of raw  materials,  finished goods and work in process
             are  stated  at the  lower  of  cost  or  market.  The  cost of the
             inventory  includes  the  purchase  price and direct  costs such as
             freight-in.

             e.   Revenue Recognition

             The Company's  revenue is derived primarily from the sale of custom
             built  motorcycles.  The revenue is recognized  upon completion and
             shipment to the customer.  The cost of work in-process and finished
             goods includes all direct materials, labor and those indirect costs
             related to the  motorcycles.  Selling,  general and  administrative
             costs are expensed as incurred.

             f.   Principles of Consolidation

             The  consolidated  financial  statements  include  those  of  Titan
             Motorcycle  Co.  of  America  (of  Arizona)  and  Mojave  Financial
             Services,  Inc. (of Nevada). All significant  intercompany accounts
             and transactions have been eliminated.

             g.   Estimates

             The   preparation  of  financial   statements  in  conformity  with
             generally accepted  accounting  principles  requires  management to
             make estimates and assumptions  that affect the reported amounts of
             assets and  liabilities  and  disclosure of  contingent  assets and
             liabilities  at  the  date  of the  financial  statements  and  the
             reported  amounts of revenues  and  expenses  during the  reporting
             period. Actual results could differ from those estimates.

             h.   Allowance for Doubtful Accounts

             The Company's accounts receivable are shown net of an allowance for
             doubtful  accounts of $17,252 and $11,256 at December  31, 1997 and
             December 31, 1996, respectively.

             i. Reclassification

             Certain  December  31,  1996  balances  have been  reclassified  to
             conform   with  the   December   31,   1997   financial   statement
             presentation.

             j. Advertising Expense

             The Company expenses advertising costs as incurred.

                                       52

                         TITAN MOTORCYCLE CO. OF AMERICA
                 Notes to the Consolidated Financial Statements
                           December 31, 1997 and 1996

NOTE 3 -     INVENTORY

             Inventories  for December 31, 1997 and December 31, 1996  consisted
             of the following:

                                                          1997                   1996
                                                       ----------             ----------

             Finished goods                    $        1,678,543    $          213,689
             Work-in-process                              816,127               198,498
             Raw materials and supplies                 4,141,247             1,209,943
                                                       ----------             ----------

                  Total                        $        6,635,917    $        1,622,130
                                                       ==========             ==========

NOTE 4 -     EQUIPMENT

             All  equipment is accounted for at cost.  Equipment is  depreciated
             over its estimated useful live using accelerated  methods.  For the
             years ended  December  31, 1997 and  December  31, 1996 the Company
             expensed $89,994 and $29,178 in depreciation.

NOTE 5 -     NOTE PAYABLE - RELATED PARTY

             Long-term  debt at  December  31,  1997  and 1996  consists  of the
             following:

                                                                                              1997                  1996
                                                                                           ----------            ----------
                                                                                                                 
             Note payable to a related party, unsecured,  bearing interest at 8%
              with  principal  payments  beginning  on  January 1, 2000 with the
              balance being paid off in 3 years
              or as jointly agreed by the parties at that time.                   $        1,928,664    $          502,521

             Less Current Portion                                                              -                     -
                                                                                             ------                  -

                                                                                  $        1,928,664    $          502,521
                                                                                  =        =========    =          =======

             Future maturities of long-term debt are as follows:

                  2000                                                                                  $          642,888
                  2001                                                                                             642,888
                  2002                                                                                             642,888
                  2003                                                                                                 -
                  Thereafter                                                                                           -
                                                                                                                  ---------

                              Total                                                                      $        1,928,664
                                                                                                         =        =========

             Accrued  interest at December  31, 1997 and 1996 was  $128,684  and
             $2,521, respectively.

                                       53

                         TITAN MOTORCYCLE CO. OF AMERICA
                 Notes to the Consolidated Financial Statements
                           December 31, 1997 and 1996

NOTE 6 -     COMMITMENTS AND CONTINGENCIES

             a.  Office Lease

             The Company leases its office and warehouse  space.  Future minimum
             lease  payments  required  under  the  operating  agreement  are as
             follows:

                                                                    Operating
                                                                      Lease
                                                                      -----

             1998                                        $           269,332
             1999                                                    321,432
             2000                                                    338,686
             2001                                                    368,904
             2002 and thereafter                                     830,034
                                                                     -------

                  Total minimum lease payments           $         2,128,388
                                                         =         =========

             b.  Product Warranty

             The Company  provides a limited  warranty on its  motorcycles.  The
             warranty  period is thirty six (36) months.  The Company  bears the
             costs of warranty  work for the first six (6)  months.  The Company
             has experienced  only minimal costs  associated with warranty work.
             The remaining  warranty  period is covered by a warranty  insurance
             policy  which  is  purchased,  by the  Company,  from an  insurance
             carrier.

             c.  Litigation

             The Company  presently is involved as a defendant in a civil action
             filed   against  it  in  the  Superior   Court  (court  of  general
             jurisdiction)  in and  for  Maricopa  County,  Arizona,  Civil  No.
             CV98-03681,  arising  out of a  dispute  over  payment  for and the
             adequacy of services  performed by the  plaintiff  in  completing a
             paint  room  for the  Company.  The  amount  alleged  owing  is the
             principal sum of $52,899.  The Company  disputes the claims and has
             filed a counterclaim. In all events, it is not believed the outcome
             of this  litigation  will have any material affect on the Company's
             business.  The  Company  is  not  aware  of  any  other  claims  or
             litigation.

NOTE 7 -     CONCENTRATIONS OF RISK

             a.  Cash

             The Company maintains a savings account at a financial  institution
             located in Phoenix,  Arizona. The account is insured by the Federal
             Deposit  Insurance  Corporation  up  to  $100,000.   The  Company's
             balances occasionally exceed that amount.

             b.  Accounts Receivable

             The Company provides for accounts receivable as part of operations.
             Management  does not believe  that the Company is subject to credit
             risks outside the normal course of business.

                                       54

                         TITAN MOTORCYCLE CO. OF AMERICA
                 Notes to the Consolidated Financial Statements
                           December 31, 1997 and 1996

NOTE 8 -     CUSTOMERS AND EXPORT SALES

             During 1997 and 1996,  the Company  operated one  industry  segment
             which  includes the  manufacturing  and  marketing of custom design
             motorcycles

             The  Company's  financial  instruments  subject to credit  risk are
             primarily trade accounts receivable from its customers.

                                                    For the Years Ended
                                                       December 31,
                                                       ------------
                                               1997                   1996
                                               ----                   ----

             Foreign sales           $       1,681,613     $       2,032,413
             Domestic sales                 11,382,532             2,951,463
                                            ----------             ---------

                                     $      13,064,145     $       4,983,876
                                     =      ==========     =       =========

NOTE 9 -     INCENTIVE STOCK OPTION PLAN

             In November 1996, the Company established an incentive stock option
             plan for the  management  and key  employees  of the  Company.  The
             options  were  awarded  at the  trading  price of the stock and are
             exercisable in a ten year period.

                                               November 27,         January 8,
             Dates issued                         1996                  1997
                                              ------------         ------------

             Number of options issued              364,000                60,000
             Exercise price              $            2.50     $            3.00

             Total options outstanding at December 31, 1997 was 424,000.

NOTE 10 - SUBSEQUENT EVENTS

             Prepaid Advertising
             -------------------

             In 1998,  the Company  issued 60,000 shares of its common stock and
             agreed to  transfer  $250,000  of its  motorcycles  over a two year
             period to a publishing  company for advertising  services valued at
             $500,000, which will be used in 1998 and 1999.

             Amendment to Articles of Incorporation
             --------------------------------------

             The Company  amended its  Articles of  Incorporation  to change the
             number of common shares  authorized from 100,000,000 to 90,000,000,
             par value  $0.001,  and to  authorize  the  issuance of  10,000,000
             shares of $0.001 par value preferred stock.

             Stock Options Issued
             --------------------

             On January 28, 1998, the Company issued an additional 441,000 stock
             options with an exercise price of $3.00 per share,  which expire on
             January 28, 2008.

                                       55

   
                         TITAN MOTORCYCLE CO. OF AMERICA

                        Consolidated Financial Statements

                         July 4, 1998 and June 30, 1997

                                       56

   
                                    CONTENTS

Consolidated Balance Sheets...................................................58

Consolidated Statements of Operations.........................................60

Consolidated Statements of Stockholders' Equity...............................62

Consolidated Statements of Cash Flows.........................................63

Notes to the Consolidated Financial Statements................................64

                                       57

                                         
                         TITAN MOTORCYCLE CO. OF AMERICA
                           Consolidated Balance Sheets

                                     ASSETS
                                     ------

                                                    July 4,               December 31,
                                                     1998                    1997
                                                     ----                    ----
                                                   (Unaudited)
CURRENT ASSETS

  Cash                                      $          -          $          85,468
  Accounts receivable, net (Note 2)                 3,312,183               974,461
  Inventory (Note 3)                                9,975,186             6,635,917
  Prepaid expenses                                    816,057               381,160
                                                      -------               -------

    Total Current Assets                           14,103,426             8,077,006
                                                   ----------             ---------

EQUIPMENT (NOTE 4)

  Autos and trucks                                    228,017               228,017
  Machinery and equipment                             233,666               199,226
  Office equipment                                    254,170               211,495
  Displays                                             41,534                41,534
  Leasehold improvements                               24,177                24,177
  Less: accumulated depreciation                     (208,227)             (121,749)
                                                     --------              --------   

    Total Equipment                                   573,337               582,700
                                                      -------               -------

OTHER ASSETS

  Deposits                                             55,063                55,063
  Trademarks                                           62,371                54,288
                                                       ------                ------

    Total Other Assets                                117,434               109,351
                                                      -------               -------

    TOTAL ASSETS                            $      14,794,197     $       8,769,057
                                            =      ==========     =       =========

    

                                       58

   
                         TITAN MOTORCYCLE CO. OF AMERICA
                     Consolidated Balance Sheets (Continued)

                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------

                                                                   July 4,              December 31,
                                                                    1998                   1997
                                                                    ----                   ----
                                                                 (Unaudited)
CURRENT LIABILITIES
                                                                                     
  Cash overdraft                                           $         522,351     $           -
  Accounts payable                                                 2,755,990             2,052,731
  Accrued expenses                                                   382,970               216,657
  Income tax payable                                                      50                    50
  Deposits payable                                                    51,235               100,940
                                                                      ------               -------

    Total Current Liabilities                                      3,712,596             2,370,378
                                                                   ---------             ---------

LONG-TERM LIABILITIES

  Note payable - bank (Note 5)                                     3,519,135                -
  Notes payable - related parties (Note 5)                         2,022,882             1,928,664
                                                                   ---------             ---------

    Total Long-Term Liabilities                                    5,542,017             1,928,664
                                                                   ---------             ---------

    TOTAL LIABILITIES                                              9,254,613             4,299,042
                                                                   ---------             ---------

COMMITMENTS AND CONTINGENCIES  (Note 6)

STOCKHOLDERS' EQUITY

  Common stock, par value $.001; 100,000,000
   shares authorized; 16,437,333 and 16,210,666
   shares issued and outstanding, respectively                        16,438                16,211
  Additional paid-in capital                                       7,230,542             6,480,769
  Accumulated deficit                                             (1,707,396)           (2,026,965)
                                                                  ----------            ----------

    TOTAL STOCKHOLDERS' EQUITY                                     5,539,584             4,470,015
                                                                   ---------             ---------

    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY             $      14,794,197     $       8,769,057
                                                           =      ==========     =       =========

                                       59

   
                         TITAN MOTORCYCLE CO. OF AMERICA
                      Consolidated Statements of Operations
                                   (Unaudited)

                                                  For the            For the
                                                 Twenty Six         Six Months                 For the
                                                 Weeks Ended          Ended               Three Months Ended
                                                   July 4,           June 30,          July 4,           June 30,
                                                    1998               1997              1998             1997
                                                 -----------        ---------         ---------        ---------

SALES, NET                                   $    12,884,047    $   5,654,669     $   7,521,696    $   3,754,090

COST OF GOODS SOLD                                 9,435,863        4,632,190         5,474,954        3,058,659
                                                   ---------        ---------         ---------        ---------

     Gross Profit                                  3,448,184        1,022,479         2,046,742          695,431
                                                   ---------        ---------         ---------          -------

OPERATING EXPENSES

   Advertising                                       132,902           29,875            29,960           23,188
   Auto and truck expense                             14,448           24,035             2,060            6,079
   Bank charges                                       14,995            1,011            10,743              971
   Depreciation expense                              128,162           27,264            98,183           17,584
   Freight and postage                               304,643          180,212           255,618          159,028
   Insurance                                         233,332          168,131           144,193           99,983
   Legal and accounting                               60,787           30,029            36,223           16,282
   Office supplies and expense                       557,311          224,352           273,048           74,515
   Printing                                           22,486           19,606            11,622           10,478
   Research and development                           54,865           54,080            25,539           44,351
   Rent                                              187,410           83,447           101,219           71,467
   Repairs and maintenance                            58,988           15,351            37,391           12,144
   Salaries and wages                                802,453          413,623           448,865          241,569
   Taxes and licenses                                 67,240           44,081            33,582           31,141
   Telephone and utilities                            99,634           56,068            53,682           38,655
   Trade show and promotion                          276,846          216,275           153,006          117,146
                                                     -------          -------           -------          -------

     Total Operating Expenses                      3,016,502        1,587,440         1,714,934          964,581
                                                   ---------        ---------         ---------          -------

     Income (Loss) from Operations                   431,682         (564,961)          331,808         (269,150)
                                                     -------         --------           -------         --------   

OTHER INCOME (EXPENSE)

   Gain (loss) on currency translation                 3,653            3,095             2,183            3,583
   Other income                                        4,642           62,998               685           48,150
   Interest expense                                 (120,408)         (55,150)          (74,112)         (35,506)
                                                    --------          -------           -------          -------   

     Total Other Income (Expense)            $      (112,113)   $      10,943     $     (71,244)   $      16,227
                                             -      --------    -      ------     -     -------    -      ------

                                       60

   
                         TITAN MOTORCYCLE CO. OF AMERICA
                Consolidated Statements of Operations (Continued)
                                  ( Unaudited)

                                                   For the           For the
                                                  Twenty Six        Six Months                  For the
                                                 Weeks Ended           Ended               Three Months Ended
                                                    July 4,           June 30,          July 4,           June 30,
                                                     1998              1997              1998              1997
                                                 -----------        ----------        ----------        ----------

NET INCOME (LOSS) BEFORE
 INCOME TAXES                                $       319,569    $    (554,018)    $     260,564    $    (252,923)

INCOME TAXES                                          -                -                 -                -
                                                      ------           ------            ------           -

NET INCOME (LOSS)                            $       319,569    $    (554,018)    $     260,564    $    (252,923)
                                             =       =======    =    ========     =     =======    =    ======== 

WEIGHTED AVERAGE NUMBER OF
 SHARES OUTSTANDING                               16,324,000       15,460,666        16,294,000       14,891,000
                                                  ==========       ==========        ==========       ==========

NET INCOME (LOSS) PER SHARE                  $          0.02    $       (0.04)    $        0.01    $       (0.02)
                                             =          ====    =       =====     =        ====    =       ===== 

                                       61

   
                         TITAN MOTORCYCLE CO. OF AMERICA
                 Consolidated Statements of Stockholders' Equity

                                                                                     Additional
                                                          Common Stock                 Paid-in          Accumulated
                                                   Shares             Amount           Capital            Deficit
                                                   ------             ------           -------            -------

Balance, December 31, 1996                       14,710,666   $        14,711    $    2,482,289    $     (353,222)

Issuance of common stock for cash at
 $2.50 per share                                  1,000,000             1,000         2,498,980            -

Issuance of common stock for cash at
 $3.00 per share                                    500,000               500         1,499,500            -

Net loss for the year ended
 December 31, 1997                                   -                 -                 -             (1,673,743)
                                                     ------            ------            ------        ---------- 

Balance, December 31, 1997                       16,210,666            16,211         6,480,769        (2,026,965)

Issuance of common stock for cash at $3.00
 per share (unaudited)                              166,667               167           499,833            -

Issuance of common stock for prepaid
 advertising at $4.17 per share (unaudited)          60,000                60           249,940            -

Net income for the twenty-six weeks ended
 July 4, 1998 (unaudited)                            -                 -                 -                319,569
                                                     ------            ------            ------           -------

Balance, July 4,1998 (unaudited)                 16,437,333      $     16,438    $    7,230,542    $   (1,707,396)
                                                 ==========      =     ======    =    =========    =   ========== 

                                       62

   
                         TITAN MOTORCYCLE CO. OF AMERICA
                      Consolidated Statements of Cash Flows
                                   (Unaudited)

                                                            For the           For the
                                                           Twenty Six        Six Months                  For the
                                                           Weeks Ended         Ended                Three Months Ended
                                                             July 4,          June 30,          July 4,           June 30,
                                                              1998              1997              1998             1997
                                                          -----------        ----------         ----------        ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
                                                                                                           
  Net income (loss)                                    $      319,569    $    (554,018)   $      260,564    $    (252,923)
  Adjustments to reconcile net income (loss)
   to net cash used in operating activities:
    Depreciation and amortization                             351,133           36,177           251,064           23,809
  Changes in operating assets and liabilities:
    (Increase) decrease in accounts receivable             (2,337,722)      (2,228,324)       (1,481,429)      (1,706,843)
    (Increase) decrease in inventory                       (3,339,269)      (1,652,174)       (1,657,643)      (1,217,073)
    (Increase) decrease in other assets                      (442,980)        (163,537)         (248,329)         (51,722)
    Increase (decrease) in accounts payable                 1,225,610          889,674            59,767          999,554
    Increase (decrease) in deposits payable                   (49,705)          76,688          (150,735)          (9,724)
    Increase (decrease) in accrued expenses                   166,313           51,126            27,961           61,514
    Increase (decrease) in accrued interest
      payable                                                 165,031           55,350           129,525           52,399
                                                              -------           ------           -------           ------

      Net Cash Used in Operating Activities                (3,942,020)      (3,489,038)       (2,809,255)      (2,101,009)
                                                           ----------       ----------        ----------       ---------- 

CASH FLOWS FROM INVESTING ACTIVITIES:

  Purchases of property and equipment                         (77,115)        (425,195)          (59,880)         (74,069)
                                                              -------         --------           -------          ------- 

      Net Cash Used in Investing Activities                   (77,115)        (425,195)          (59,880)         (74,069)
                                                              -------         --------           -------          ------- 

CASH FLOWS FROM FINANCING ACTIVITIES:

  Payments on notes payable                                  (650,000)          -               (650,000)          -
  Proceeds from notes payable                               4,169,135           -              3,519,135           -
  Issuance of stock                                           500,000        2,000,000            -             2,000,000
  New borrowings from related parties                          -             1,299,980            -               299,980
                                                               ------        ---------            ------          -------

      Net Cash Provided by Financing Activities             4,019,135        3,299,980         2,869,135        2,299,980
                                                            ---------        ---------         ---------        ---------

NET INCREASE (DECREASE) IN CASH                                -              (614,253)           -               124,902

CASH AND CASH EQUIVALENTS AT
 BEGINNING OF PERIOD                                           -               836,779            -                97,624
                                                               ------          -------            ------           ------

CASH AND CASH EQUIVALENTS AT END
 OF PERIOD                                             $       -         $     222,526    $       -         $     222,526
                                                       =       ======    =     =======    =       ======    =     =======

SCHEDULE OF NON-CASH FINANCING ACTIVITIES:

  Common stock issued for prepaid advertising          $      250,000    $      -         $       -         $      -

CASH PAID FOR:

  Interest                                             $       -         $      -         $       -         $      -
  Income taxes                                         $       -         $      -         $       -         $      -

                         TITAN MOTORCYCLE CO. OF AMERICA
                 Notes to the Consolidated Financial Statements

                                       63

   
                         July 4, 1998 and June 30, 1997

NOTE 1 -     ORGANIZATION AND DESCRIPTION OF BUSINESS

             The financial  statements  presented are those of Titan  Motorcycle
             Co. of America (Company). The Company was incorporated in the State
             of Nevada on January 10, 1995 to carry on any lawful activity under
             the laws of Nevada.  On June 11, 1996,  Mojave Financial  Services,
             Inc.  changed  its name to  Titan  Motorcycle  Co.  of  America  in
             conjunction  with the merger with Titan  Motorcycle Co. of America.
             Prior to the  acquisition of Titan  Motorcycle Co. of America,  the
             Company  had been  seeking  to merge  with an  existing,  operating
             company.

             Titan   Motorcycle   Co.  of  America   (premerger)   (Titan)   was
             incorporated  in the State of Arizona on  December  12,  1994.  The
             Company  manufactures  custom design  motorcycles and sells them to
             authorized dealers or to the general public.

             On June  11,  1996,  Mojave  Financial  Services,  Inc.  and  Titan
             Motorcycle  Co.  of  America  completed  an  Agreement  and Plan of
             Reorganization  whereby the Company issued 11,000,000 shares of its
             common stock in exchange for all of the outstanding common stock of
             Titan.   Immediately   prior   to  the   Agreement   and   Plan  of
             Reorganization,  the  Company  had  44,000  shares of common  stock
             issued and outstanding.

             The  acquisition was accounted for as a  recapitalization  of Titan
             because the  shareholders of Titan controlled the Company after the
             acquisition.  Therefore,  Titan is treated as the acquiring entity.
             There was no  adjustment  to the  carrying  value of the  assets or
             liabilities of Titan in the exchange.  The Company is the acquiring
             entity for legal  purposes  and Titan is the  surviving  entity for
             accounting  purposes.  On June 11, 1996,  the  shareholders  of the
             Company   authorized  a  reverse  stock  split  of  1-for-10.   All
             references  to  shares  of common  stock  have  been  retroactively
             restated.  On February 17, 1997,  the  shareholders  of the Company
             authorized  a forward  stock split of 2-for-1.  All  references  to
             shares of common stock have been retroactively restated.

NOTE 2 -     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

             a.   Accounting Method

             The Company's  financial  statements are prepared using the accrual
             method of  accounting.  Effective  January 1, 1998, the Company has
             elected a 52 week fiscal year.
             Each quarter will consist of 13 weeks.

             b.   Income Taxes

             As of July 4, 1998 and  December  31,  1997,  the Company had a net
             operating  loss  carryforward  for federal  income tax  purposes of
             approximately  $1,707,000 and $2,027,000  respectively  that may be
             used in future years to offset  taxable  income.  The net operating
             loss  carryforward will begin to expire in 2011. The tax benefit of
             the  cumulative  carryforwards  has  been  offset  by  a  valuation
             allowance of the same amount.

                                       64

   
                         TITAN MOTORCYCLE CO. OF AMERICA
                 Notes to the Consolidated Financial Statements
                         July 4, 1998 and June 30, 1997

NOTE 2 -     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

             c.   Cash Equivalents

             The Company considers all highly liquid investments with a maturity
             of three months or less to be cash equivalents.

             d.   Inventory

             Inventories  of raw  materials,  finished goods and work in process
             are  stated  at the  lower  of  cost  or  market.  The  cost of the
             inventory  includes  the  purchase  price and direct  costs such as
             freight-in.

             e.   Revenue Recognition

             The Company's  revenue is derived primarily from the sale of custom
             built  motorcycles.  The revenue is recognized  upon completion and
             shipment to the customer.  The cost of work in-process and finished
             goods includes all direct materials, labor and those indirect costs
             related to the  motorcycles.  Selling,  general and  administrative
             costs are expensed as incurred.

             f.   Principles of Consolidation

             The  consolidated  financial  statements  include  those  of  Titan
             Motorcycle  Co.  of  America  (of  Arizona)  and  Mojave  Financial
             Services,  Inc. (of Nevada). All significant  intercompany accounts
             and transactions have been eliminated.

             g.   Estimates

             The   preparation  of  financial   statements  in  conformity  with
             generally accepted  accounting  principles  requires  management to
             make estimates and assumptions  that affect the reported amounts of
             assets and  liabilities  and  disclosure of  contingent  assets and
             liabilities  at  the  date  of the  financial  statements  and  the
             reported  amounts of revenues  and  expenses  during the  reporting
             period. Actual results could differ from those estimates.

             h.   Allowance for Doubtful Accounts

             The Company's accounts receivable are shown net of an allowance for
             doubtful  accounts  of  $17,252  and  $7,974  at July 4,  1998  and
             December 31, 1997, respectively.

             i. Reclassification

             Certain July 4, 1998  balances  have been  reclassified  to conform
             with the December 31, 1997 financial statement presentation.

             j. Advertising Expense

             The Company expenses advertising costs as incurred.

                                       65

   
                         TITAN MOTORCYCLE CO. OF AMERICA
                 Notes to the Consolidated Financial Statements
                         July 4, 1998 and June 30, 1997

NOTE 2 -     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

             k. Unaudited Financial Statements

             The accompanying  unaudited financial statements include all of the
             adjustments which, in the opinion of management,  are necessary for
             a fair  presentation.  Such adjustments are of a normal,  recurring
             nature.

NOTE 3 -     INVENTORY

             Inventories  for July 4,1998 and December 31, 1997 consisted of the
             following:

                                                   July 4,               December 31,
                                                    1998                 1997
                                                  (Unaudited)

             Finished goods                   $        1,562,109    $        1,678,543
             Work-in-process                             689,074               816,127
             Raw materials and supplies                7,724,003             4,141,247
                                                       ---------             ---------

                  Total                       $        9,975,186    $        6,635,917
                                              =        =========    =        =========

NOTE 4 -     EQUIPMENT

             All  equipment is accounted for at cost.  Equipment is  depreciated
             over its estimated useful life using accelerated  methods.  For the
             twenty-six  weeks ended July 4, 1998 and the six months  ended June
             30, 1997, the Company expensed $89,994 and $29,178 in depreciation,
             respectively.

NOTE 5 -     NOTE PAYABLE - RELATED PARTY

             Long-term  debt at July 4, 1998 and December  31, 1997  consists of
             the following:

                                                                                           July 4,               December 31,
                                                                                            1998                     1997
                                                                                            ----                     ----
                                                                                         (Unaudited)
                                                                                                              
             Line of credit payable to bank, bearing interest at prime plus .5%,
              due April 1, 2000, secured
              by inventory and receivables.                                         $        3,519,135    $           -

             Note payable to a related party, unsecured,  bearing interest at 8%
              with  principal  payments  beginning  on  January 1, 2000 with the
              balance being paid off in 3 years
              or as jointly agreed by the parties at that time.                              2,022,882             1,928,664

             Less Current Portion                                                                -                     -
                                                                                                ------                -----

                                                                                    $        5,542,017    $        1,928,664
                                                                                    =        =========    =        =========

                                       66

   
                         TITAN MOTORCYCLE CO. OF AMERICA
                 Notes to the Consolidated Financial Statements
                         July 4, 1998 and June 30, 1997

NOTE 5 -     NOTE PAYABLE - RELATED PARTY (Continued)

             Future maturities of long-term debt are as follows:

                  2000                                 $        4,193,429
                  2001                                            674,294
                  2002                                            674,294
                  2003                                             -
                  Thereafter                                       -
                                                                ---------

                         Total                         $        5,542,017
                                                       =        =========

             Accrued interest at July 4, 1998 and December 31, 1997 was $222,902
             and $128,684, respectively.

NOTE 6 -     COMMITMENTS AND CONTINGENCIES

             a.  Office Lease

             The Company leases its office and warehouse  space.  Future minimum
             lease  payments  required  under  the  operating  agreement  are as
             follows:
                                                            Operating
                                                              Lease
                                                              -----

             1998                                      $           269,332
             1999                                                  321,432
             2000                                                  338,686
             2001                                                  368,904
             2002 and thereafter                                   830,034
                                                                   -------

                  Total minimum lease payments         $         2,128,388
                                                       =         =========

             b.  Product Warranty

             The Company  provides a limited  warranty on its  motorcycles.  The
             warranty  period is thirty six (36) months.  The Company  bears the
             costs of warranty  work for the first six (6)  months.  The Company
             has experienced  only minimal costs  associated with warranty work.
             The remaining  warranty  period is covered by a warranty  insurance
             policy  which  is  purchased,  by the  Company,  from an  insurance
             carrier.

NOTE 7 -     CONCENTRATIONS OF RISK

             a.  Cash

             The Company maintains a savings account at a financial  institution
             located in Phoenix,  Arizona. The account is insured by the Federal
             Deposit  Insurance  Corporation  up  to  $100,000.   The  Company's
             balances occasionally exceed that amount.

             b.  Accounts Receivable

             The Company provides for accounts receivable as part of operations.
             Management  does not believe  that the Company is subject to credit
             risks outside the normal course of business.

                                       67

                                    PART III

        PART III, ITEMS 1 and 2. INDEX TO, AND DESCRIPTION OF, EXHIBITS

                                                                            Page
                                                                            ----

         (a) Financial statements filed as part of the Registration 
             Statement.

             Audited year end financial statements as of
   
             December 31, 1997 and 1996.......................................42

             Unaudited 6 month financial statements as of
             June 30, 1998 and 1997...........................................56

         (b)      Exhibits.

             2.1           Restated Articles of Incorporation
   
                                    of the Company............................70

             2.2           By-Laws of the Company.............................74

             3             Specimen of Common Stock Certificate...............84

             6.1           Form of real estate lease agreement between Holualoa 
                           Peoria
   
                                    Avenue Industrial, LLC and the Company....85

             6.2           Form of addendum to real estate lease.............107

             6.3           1997 Stock Option and Incentive Plan
   
                                    of the Company...........................118

             10.1          Consent of Bruce L. Dibb, P.C.....................135

             10.2          Consent of Jones, Jensen & Company, LLC...........136

                                       68

                                   SIGNATURES

         Pursuant to the  requirements of Section 12 of the Securities  Exchange
Act of 1934, the registrant  has duly caused this  Registration  Statement to be
signed on its behalf by the undersigned, thereunto duly authorized.

                       Titan Motorcycle Company of America

Date:        8/31/98                                 By:      /s/
     ---------------------                              ------------------------
                                                     Frank S. Keery
                                                     Chief Executive Officer

Date:        8/31/98                                 By:      /s/
     ---------------------                              ------------------------
                                                     Robert P. Lobban
                                                     Chief Financial Officer

form10SBaug27amend.627

                                       69

                                                                     EXHIBIT 2.1

                       RESTATED ARTICLES OF INCORPORATION
                                       OF
                         TITAN MOTORCYCLE CO. OF AMERICA

         The  undersigned,  pursuant  to and by virtue of  Chapter  78 of Nevada
Revised Statutes,  hereby adopt and acknowledge the following  Restated Articles
of Incorporation.

                                    ARTICLE I
                                    ---------

                                      NAME
                                      ----

         The name of the corporation is Titan Motorcycle Co. of America

                                   ARTICLE II
                                   ----------

                      RESIDENT AGENT AND REGISTERED OFFICE
                      ------------------------------------

         The name of the resident agent and the street address of the registered
office in the State of Nevada where  process may be served upon the  corporation
is Corporation  Trust Co. of Nevada,  1 East 1st Street,  Washoe County;  Nevada
89501.  The  corporation  may, from time to time, in the manner provided by law,
change the resident agent and the registered  office within the State of Nevada.
The  corporation  may also  maintain an office or offices for the conduct of its
business, either within or without the State of Nevada.

                                       70

                                   ARTICLE III
                                   -----------

                                  CAPITAL STOCK
                                  -------------

         Section 3.1 Authorized Shares. The aggregate number of shares which the
corporation shall have authority to issue is 100,000,000 shares, consisting of:

         (v)      90,000,000 shares of a single series of common stock, having a
                  par value of $.001 per share, each of which is entitled to one
                  vote  in  all  matters  on  which  the   stockholders  of  the
                  corporation  are  required or  permitted  to vote (the "Common
                  Shares"); and

         (w)      10,000,000  shares of preferred  stock,  having a par value of
                  $.001 per share (the "Preferred Shares").

         Section 3.2  Authority of Board of Directors  with Respect to Preferred
Shares.  The Board of  Directors  is vested with the  authority  to authorize by
resolution,  from time to time,  the issuance of the Preferred  Shares in one or
more series and,  subject to Sections  3.4, 3.5 and 3.6 below,  to prescribe the
number of  Preferred  Shares  within  each such  series and the  voting  powers,
designations, preferences, limitations, restrictions and relative rights of each
such series,  including voting powers,  preferences and relative rights that may
be superior to the Common Shares.

         Section 3.3 Consideration  for Shares.  The shares of the corporation's
stock  shall be issued for such  consideration  as shall be fixed,  from time to
time, by the Board of Directors.

         Section 3.4 Assessment of Stock. The shares of the corporation's stock,
after the amount of the  subscription  price has been fully  paid,  shall not be
assessable  for any  purpose,  and no stock  issued as fully  paid shall ever be
assessable or assessed. No stockholder of the corporation is individually liable
for the debts or liabilities of the corporation. These Articles of Incorporation
shall never be amended as to this Section 3.4.

         Section 3.5 No Cumulative  Voting for Directors.  No stockholder of the
corporation  shall be  entitled  to  cumulative  voting  of his  shares  for the
election of directors.

         Section 3.6  No Preemptive Rights.  No stockholder of the corporation
shall have any preemptive rights.

                                       71

                                   ARTICLE IV
                                   ----------

                             DIRECTORS AND OFFICERS
                             ----------------------

         Section 4.1 Number of Directors.  The members of the governing board of
the corporation are styled as directors.  The number of directors may be changed
from  time to time in such  manner  as shall be  provided  in the  bylaws of the
corporation.

         Section 4.2 Limited Liability of Directors and Officers. No director or
officer of the corporation  shall be personally liable to the corporation or any
of its  stockholders  for damages for breach of fiduciary  duty as a director or
officer;  provided,  however, that the foregoing provision does not eliminate or
limit the liability of a director or officer of the  corporation for (a) acts or
omissions which involve intentional misconduct,  fraud or a knowing violation of
law, or (b) the payment of distributions in violation of Nevada Revised Statutes
ss.78.300.

         Section 4.3  Payment of  Expenses.  In addition to any other  rights of
indemnification  permitted  by the law of the State of Nevada as may be provided
for by the  corporation in its bylaws or by agreement,  the expenses of officers
and  directors  incurred  in  defending  a civil  or  criminal  action,  suit or
proceeding,  involving  alleged act or  omissions of such officer or director in
his or her capacity as an officer or director of the  corporation,  must be paid
by  the  corporation  or  through  insurance  purchased  and  maintained  by the
corporation or through other financial arrangements made by the corporation,  as
they are incurred and in advance of the final disposition of the action, suit or
proceeding,  upon receipt of an  undertaking  by or on behalf of the director or
officer  to  repay  the  amount  if it is  ultimately  determined  by a court of
competent  jurisdiction  that he or she is not entitled to be indemnified by the
corporation.

         Section 4.4 Repeal and Conflicts. Any repeal or modification of Section
4.2 or 4.3 approved by the stockholders of the corporation  shall be prospective
only.  In the event of any  conflict  between  Section  4.2 or 4.3 and any other
Article of the corporation's Articles of Incorporation, the terms and provisions
of Section 4.2 or 4.3, as the case may be, shall control.

         IN WITNESS WHEREOF, the President and Secretary of the corporation have
executed these Restated Articles of Incorporation of Titan Motorcycle Co.
of America this 15th day of May, 1998.

                                       72

                                             /s/
                                            ------------------------------------
                                            Patrick Keery, President

                                             /s/
                                            ------------------------------------
                                            Barbara Keery, Secretary

STATE OF ARIZONA)
                ss.
COUNTY OF MARICOPA)

         On the 15th day of May, personally appeared before me, a Notary Public,
Patrick Keery and Barbara  Keery,  personally  known (or proved) to me to be the
persons  whose  names are  subscribed  to the  foregoing  Restated  Articles  of
Incorporation  of Titan Motorcycle Co. of America,  who  acknowledged  that they
executed the instrument.

(Seal)
                                                     /s/
                                                     ---------------------------
                                                     NOTARY PUBLIC

                                       73

                                                                     EXHIBIT 2.2
                                   BY-LAWS OF

                         TITAN MOTORCYCLE CO. OF AMERICA

                                    ARTICLE I

                             MEETING OF STOCKHOLDERS

         SECTION 1. The annual meeting of the  stockholders of the Company shall
be held at its office in Maricopa  County,  State of  Arizona,  on a date in the
month of May as designated  by the Board of Directors  each year, if not a legal
holiday,  and if a legal  holiday,  then on the next  succeeding day not a legal
holiday,  for the purpose of electing  directors  of the company to serve during
the  ensuing  year and for the  transaction  of such  other  business  as may be
brought before the meeting.

         At least five days' written notice  specifying the time and place, when
and where,  the annual  meeting  shall be convened,  shall be mailed in a United
States Post Office  addressed to each of the  stockholders of record at the time
of issuing  the notice at his or her, or its  address  last  known,  as the same
appears on the books of the company.

         SECTION 2.  Special  meetings  of the  stockholders  may be held at the
office of the company in the State of Arizona, or elsewhere,  whenever called by
the President,  or by the Board of Directors, or by vote of, or by an instrument
in writing  signed by the holders of 25% of the issued and  outstanding  capital
stock of the  company.  At least  ten  days'  written  notice  of such  meeting,
specifying  the day and hour and  place,  when and where such  meeting  shall be
convened,  and objects for calling the same,  shall be mailed in a United States
Post  Office,  addressed  to each of the  stockholders  of record at the time of
issuing the notice, at his or her or its address last known, as the same appears
on the books of the company.

         SECTION 3. If all the stockholders of the company shall waive notice of
a meeting, no notice of such meeting shall be required,  and whenever all of the
stockholders  shall meet in person or by proxy,  such meeting shall be valid for
all purposes  without call or notice,  and at such meeting any corporate  action
may be taken.  The written  certificate  of the officer or officers  calling any
meeting setting forth the substance of the notice, and the time and place of the
mailing of the same to the several stockholders, and the respective addresses to
which the same were mailed, shall be prima facie evidence of the manner and fact
of the calling and giving such notice.  If the address of any  stockholder  does
not appear upon the books of the company,  it will be  sufficient to address any
notice to such stockholder at the principal office of the corporation.

                                       74

         SECTION 4. All business lawful to be transacted by the  stockholders of
the company,  may be  transacted  at any special  meeting or at any  adjournment
thereof. Only such business,  however, shall be acted upon at special meeting of
the  stockholders  as shall have been  referred  to in the notice  calling  such
meetings,  but at any  stockholders'  meeting  at which  all of the  outstanding
capital stock of the company is represented,  either in person or by proxy,  any
lawful  business  may be  transacted,  and such  meeting  shall be valid for all
purposes.

         SECTION 5. At the  stockholders'  meetings  the holders of  Twenty-five
percent  (25%) in amount of the entire issued and  outstanding  capital stock of
the company, shall constitute a quorum for all purposes of such meetings.

         If the holders of the amount of stock  necessary to constitute a quorum
shall  fail to  attend,  in person or by proxy,  at the time and place  fixed by
these By-Laws for any annual meeting, or fixed by a notice as above provided for
a special meeting, a majority in Interest of the stockholders  present in person
or by  proxy  may  adjourn  from  time  to time  without  notice  other  than by
announcement  at the meeting,  until holders of the amount of stock requisite to
constitute  a quorum  shall  attend.  At any such  adjourned  meeting at which a
quorum shall be present,  any business may be  transacted  which might have been
transacted as originally called.

         SECTION 6. At each meeting of the stockholders  every stockholder shall
be  entitled  to vote in person or by his duly  authorized  proxy  appointed  by
instrument in writing  subscribed by such  stockholder or by his duly authorized
attorney.  Each stockholder shall have one vote for each share of stock standing
registered in his or her or its name on the books of the  corporation,  ten days
preceding the day of such meeting.  The votes for directors,  and upon demand by
any stockholder,  the votes upon any question before the meeting,  shall be viva
voce.

         At each meeting of the stockholders, a full, true and complete list, in
alphabetical  order, of all the  stockholders  entitled to vote at such meeting,
and indicating the number of shares held by each,  certified by the Secretary of
the Company, shall be furnished,  which list shall be prepared at least ten days
before such meeting, and shall be open to the inspection of the stockholders, or
their agents or proxies,  at the place where such meeting is to be held, and for
ten days prior  thereto.  Only the  persons in whose  names  shares of stock are
registered  on the books of the company for ten days  preceding the date of such
meeting, as evidenced by the list of stockholders,  shall be entitled to vote at
such  meeting.  Proxies  and powers of  Attorney  to vote must be filed with the
Secretary of the Company before an election or a meeting of the stockholders, or
they cannot be used at such election or meeting.

         SECTION  7. At each  meeting  of the  stockholders  the polls  shall be
opened and closed;  the proxies and ballots  issued,  received,  and be taken in
charge of, for the  purpose  of the  meeting,  and all  questions  touching  the
qualifications  of voters and the  validity of proxies,  and the  acceptance  or

                                       75

rejection of votes, shall be decided by two inspectors. Such inspectors shall be
appointed at the meeting by the presiding officer of the meeting.

         SECTION 8. At the stockholders' meetings, the regular order of business
shall be as follows:

         1. Reading and approval of the Minutes of previous meeting or meetings;
         2. Reports of the Board of  Director,  the  President,  Treasurer  and
            Secretary of the Company in the order named;
         3. Reports of Committee;
         4. Election of Directors;
         5. Unfinished Business;
         6. New Business;
         7. Adjournment.

                                   ARTICLE II

                          DIRECTORS AND THEIR MEETINGS

         SECTION 1. The Board of Directors of the Company shall consist of three
persons who shall be chosen by the stockholders  annually, at the annual meeting
of the  Company,  and who  shall  hold  office  for one year,  and  until  their
successors are elected and qualify.

         SECTION  2.  When any  vacancy  occurs  among the  Directors  by death,
resignation,  disqualification or other cause, the stockholders,  at any regular
or special  meeting,  or at any  adjourned  meeting  thereof,  or the  remaining
Directors,  by the  affirmative  vote  of a  majority  thereof,  shall  elect  a
successor to hold office for the  unexpired  portion of the term of the Director
whose  place shall have become  vacant and until his  successor  shall have been
elected and shall qualify.

         SECTION 3. Meeting of the Directors may be held at the principal office
of the company in the state of Arizona, or elsewhere, at such place or places as
the Board of Directors may, from time to time, determine.

         SECTION 4. Without  notice or call,  the Board of Directors  shall hold
its first annual  meeting for the year  immediately  after the annual meeting of
the  stockholders or immediately  after the election of Directors at such annual
meeting.

         Regular  meetings of the Board of Directors shall be held at the office
of the company in Maricopa County, State of Arizona, unless otherwise designated
by the Board of Directors.  Notice of such regular  meetings  shall be mailed to
each Director by the Secretary at least three days previous to the day fixed for
such  meetings,  but no  regular  meeting  shall be held void or invalid if such
notice is not given, provided. 

                                       76

the  meeting is held at the time and place  fixed by these  By-Laws  for holding
such regular meetings.

         Special  meetings of the Board of Directors  may be held on the call of
the President or Secretary on at least three days notice by mail or telegraph.

         Any meeting of the Board,  no matter  where  held,  at which all of the
members shall be present, even though without or of which notice shall have been
waived by all absentees,  provided a quorum shall be present, shall be valid for
all purposes unless otherwise  indicated in the notice calling the meeting or in
the waiver of notice.

         Any and all business may be  transacted  by any meeting of the Board of
Directors, either regular or special.

         SECTION  5. A  majority  of the  Board of  Directors  in  office  shall
constitute a quorum for the  transaction  of business,  but if at any meeting of
the Board there be less than a quorum  present,  a majority of those present may
adjourn  from time to time,  until a quorum  shall be present,  and no notice of
such adjournment  shall be required.  The Board of Directors may prescribe rules
not in conflict with these  By-Laws for the conduct of its  business;  provided,
however, that in the fixing of salaries of the officers of the corporation,  the
unanimous action of all of the Directors shall be required.

         SECTION  6. A Director need not be a stockholder of the corporation.

         SECTION  7. The  Directors  shall  be  allowed  and paid all  necessary
expenses  incurred in attending any meeting of the Board,  but shall not receive
any  compensation for their services as Directors until such time as the company
is able to declare and pay dividends on its capital stock.

         SECTION  8. The  Board   of  Directors  shall  make  a  report  to  the
stockholders  at annual  meetings of the  stockholders  of the  condition of the
company,  and shall, at request,  furnish each of the  stockholders  with a true
copy thereof.

         The Board of Directors in its discretion may submit any contract or act
for approval or  ratification at any annual meeting of the  stockholders  called
for the purpose of considering any such contract or act, which, it approved,  or
ratified by the vote of the  holders of a majority  of the capital  stock of the
company  represented  in person  or by proxy at such  meeting,  provided  that a
lawful quorum of stockholders be there represented in person or by proxy,  shall
be valid and binding upon the corporation and upon all the stockholders thereof,
as if it had been approved or ratified by every stockholder of the corporation.

         SECTION  9. The Board of  Directors  shall  have the power from time to
time to provide for the  management of the offices of the company in such manner
as they see fit,  and in  particular  from time to time to  delegate  any of the

                                       77

powers of the Board in the course of the current  business of the company to any
standing  or special  committee  or to any  officer or agent and to appoint  any
persons to be agents of the  company  with such powers  (including  the power to
subdelegate), and upon such terms as may be deemed fit.

         SECTION  10. The Board of  Directors  is vested with the  complete  and
unrestrained  authority in the management of all the affairs of the company, and
is  authorized to exercise for such purpose as the General Agent of the Company,
its entire corporate authority.

         SECTION 11. The  regular  order of business at meetings of the Board of
Directors shall be as follows:

         1.  Reading  and  approval of the  minutes of any  previous  meeting or
         meetings;  2.  Reports of officers  and  committeemen;  3.  Election of
         officers; 4. Unfinished business; 5. New business; 6. Adjournment.

                                   ARTICLE III

                            OFFICERS AND THEIR DUTIES

         SECTION 1. The Board of Directors,  at its first and after each meeting
after  the  annual  meeting  of  stockholders,   shall  elect  a  President,   a
Vice-President,  a Secretary  and a Treasurer,  to hold office for one year next
coming,  and until their successors are elected and qualify.  The offices of the
Secretary and Treasurer may be held by one person.

         Any  vacancy  in any of said  offices  may be  filled  by the  Board of
Directors. The Board of Directors may from time to time, by resolution,  appoint
such additional Vice Presidents and additional Assistant Secretaries,  Assistant
Treasurer and Transfer Agents of the company as it may deem advisable; prescribe
their duties, and fix their compensation,  and all such appointed officers shall
be  subject  to removal  at any time by the Board of  Directors.  All  officers,
agents,  and factors of the company shall be chosen and appointed in such manner
and shall hold their  office  for such  terms as the board of  Directors  may by
resolution prescribe.

         SECTION 2. The President shall be the executive  officer of the company
and shall  have the  supervision  and,  subject  to the  control of the Board of
Directors,  the direction of the Company's  affairs,  with full power to execute
all resolutions and orders of the Board of Directors not especially entrusted to
some  other  officer  of the  company.  He shall be a  member  of the  Executive
Committee,  and the Chairman  thereof;  he shall  preside at all meetings of the

                                       78

Board of Directors, and at all meetings of the stockholders,  and shall sign the
Certificates of Stock issued by the company, and shall perform such other duties
as shall be prescribed by the Board of Directors.

         SECTION 3. The  Vice-President  shall be vested with all the powers and
perform  all the duties of the  President  in his absence or  inability  to act,
including the signing of the Certificates of Stock issued by the company, and he
shall so  perform  such  other  duties  as shall be  prescribed  by the Board of
Directors.

         SECTION 4. The  Treasurer  shall have the  custody of all the funds and
securities of the company.  When  necessary or proper he shall endorse on behalf
of the company for collection  checks,  notes, and other  obligations;  he shall
deposit  all monies to the credit of the  company in such bank or banks or other
depository as the Board of Directors may  designate;  he shall sign all receipts
and  vouchers  for  payments  made by the  company,  except as herein  otherwise
provided.  He shall sign with the President all bills of exchange and promissory
notes of the  company;  he shall also have the care and  custody of the  stocks,
bonds,  certificates,  vouchers,  evidence of debts, securities,  and such other
property belonging to the company as the Board of Directors shall designate;  he
shall  sign all  papers  required  by law or by  those  Bylaws  or the  Board of
Directors  to be  signed by the  Treasurer.  Whenever  required  by the Board of
Directors,  he shall  render a  statement  of his cash  account;  he shall enter
regularly  in the books of the company to be kept by him for the  purpose,  full
and accurate  accounts of all monies  received and paid by him on account of the
company.  He shall at all  reasonable  times exhibit the books of account to any
Directors of the company during  business  hours,  and he shall perform all acts
incident  to the  position of  Treasurer  subject to the control of the Board of
Directors.

         The Treasurer  shall, if required by the Board of Directors,  give bond
to the company  conditioned  for the faithful  performance  of all his duties as
Treasurer in such sum, and with such surety as shall be approved by the Board of
Directors, with expense of such bond to be borne by the company.

         SECTION 5. The Board of Directors  may appoint an  Assistant  Treasurer
who shall have such powers and perform such duties as may be prescribed  for him
by the Treasurer of the company or by the Board of  Directors,  and the Board of
Directors shall require the Assistant Treasurer to give a bond to the company in
such sum and with such  security as it shall  approve,  as  conditioned  for the
faithful performance of his duties as Assistant  Treasurer,  the expense of such
bond to be borne by the company.

         SECTION 6. The Secretary  shall keep the Minutes of ail meetings of the
Board of Directors  and the Minutes of all meetings of the  stockholders  and of
the Executive  Committee in books provided for that purpose.  He shall attend to
the giving  and  serving of all  notices  of the  company;  he may sign with the
President  or  Vice-President,  in  the  name  of  the  Company,  all  contracts
authorized by the Board of Directors or Executive Committee;  he shall affix the

                                       79

corporate  seal of the  company  thereto  when so  authorized  by the  Board  of
Directors or  Executive  Committee;  he shall have the custody of the  corporate
seal of the company;  he shall affix the corporate seal to al,  certificates  of
stock duly  issued by the  company;  he shall have  charge of Stock  Certificate
Books,  Transfer books and Stock Ledgers, and such other books and papers as the
Board of Directors or the Executive  Committee may direct, all of which shall at
all reasonable times be open to the examination of any Director upon application
at the office of the company during  business  hours,  and he shall, in general,
perform all duties incident to the office of Secretary.

         SECTION 7. The Board of Directors  may appoint an  Assistant  Secretary
who shall have such powers and perform such duties as may be prescribed  for him
by the Secretary of the company or by the Board of Directors.

         SECTION 8.  Unless  otherwise  ordered by the Board of  Directors,  the
President shall have full power and authority in behalf of the company to attend
and to act and to vote at any meetings of the stockholders of any corporation in
which the company may hold stock,  and at any such  meetings,  shall possess and
may  exercise  any and all rights and powers  incident to the  ownership of such
stock, and which as the new owner thereof,  the company might have possessed and
exercised if present. The Board of Directors, by resolution,  from time to time,
may confer  like  powers on any person or persons in place of the  President  to
represent the company for the purposes in this section mentioned.

                                   ARTICLE IV

                                  CAPITAL STOCK

         SECTION 1. The  capital  stock of the  company  shall be issued in such
manner and at such times and upon such  conditions as shall be prescribed by the
Board of Directors.

         SECTION 2.  Ownership  of stock in the company  shall be  evidenced  by
certificates  of stock in such  forms as  shall be  prescribed  by the  Board of
Directors,  and  shall  be under  the  seal of the  company  and  signed  by the
President  or the  Vice-President  and also by the  Secretary or by an Assistant
Secretary.

         All  certificates  shall  be  consecutively  numbered;  the name of the
person owning the shares represented  thereby with the number of such shares and
the date of issue shall be entered on the company's books.

         No certificates  shall be valid unless it is signed by the President or
Vice-President and by the Secretary or Assistant Secretary.

                                       80

         All  certificates  surrendered  to the company shall be canceled and no
new certificate shall be issued until the former certificate for the same number
of shares shall have been surrendered or canceled.

         SECTION 3. No  transfer  of stock shall be valid as against the company
except on surrender and cancellation of the certificate therefor, accompanied by
an assignment or transfer by the owner therefor,  made either in person or under
assignment, a new certificate shall be issued therefor.

         Whenever  any  transfer  shall  be  expressed  as made  for  collateral
security and not absolutely, the same shall be so expressed in the entry of said
transfer on the books of the company.

         SECTION 4. The Board of  Directors  shall have power and  authority  to
make all such rules and  regulations  not  inconsistent  herewith as it may deem
expedient  concerning the issue,  transfer and  registration of certificates for
shares of the capital stock of the company.

         The Board of Directors may appoint a transfer  agent and a registrar of
transfers and may require all stock  certificates  to bear the signature of such
transfer agent and such registrar of transfer.

         SECTION 5. The Stock Transfer Books shall be closed for all meetings of
the  stockholders for the period of ten days prior to such meetings and shall be
closed for the payment of dividends during such periods as from time to time may
be fixed by the Board of  Directors,  and during such  periods no stock shall be
transferable.

         SECTION 6. Any person or persons applying for a certificate of stock in
lieu of one  alleged to have been lost or  destroyed,  shall make  affidavit  or
affirmation  of the fact,  and shall  deposit  with the  company  an  affidavit.
Whereupon, at the end of six months after the deposit of said affidavit and upon
such person or persons giving Bond of Indemnity to the company with surety to be
approved by the Board of Directors in double the current  value of stock against
any damage,  loss or  inconvenience  to the  company,  which may or can arise in
consequence  of a new or duplicate  certificate  being issued in lieu of the one
lost or missing, the Board of Directors may cause to be issued to such person or
persons  a new  certificate,  or a  duplicate  of the  certificate,  so  lost or
destroyed.  The Board of Directors may, in its  discretion  refuse to issue such
new  or  duplicate  certificate  save  upon  the  order  of  some  court  having
jurisdiction in.
such matter, anything herein to the contrary notwithstanding.

                                    ARTICLE V

                                OFFICES AND BOOKS

                                       81

         SECTION 1. The principal office of the corporation, in Arizona shall be
at 2222 West Peoria Avenue,  Phoenix,  Arizona 85029, and the company may have a
principal  office in any other state or territory as the Board of Directors  may
designate.

         SECTION 2. The Stock and  Transfer  Books and a copy of the By-Laws and
Articles of  Incorporation  of the company shall be kept at its principal office
in the County of Maricopa,  State of Arizona,  for the inspection of all who are
authorized or have the right to see the same, and for the transfer of stock. All
other books of the company  shall be kept at such places as may be prescribed by
the Board of Directors.

                                   ARTICLE VI

                                  MISCELLANEOUS

         SECTION 1. The Board of Directors  shall have power to reserve over and
above the capital stock paid in, such an amount in its discretion as it may deem
advisable  to fix as a  reserve  fund,  and  may,  from  time to  time,  declare
dividends from the  accumulated  profits of the company in excess of the amounts
so reserved,  and pay the same to the stockholders of the company, and may also,
if it deems the same advisable,  declare stock dividends of the unissued capital
stock of the company.

         SECTION 2. No agreement,  contract or obligation  (other than checks in
payment  of  indebtedness  incurred  by  authority  of the  Board of  Directors)
involving  the  payment  of monies or the  credit of the  company  for more than
$100,000 dollars, shall be made without the authority of the Board of Directors,
or of the Executive Committee acting as such.

         SECTION 3.  Unless  otherwise  ordered by the Board of  Directors,  all
agreements  and contracts  shall be signed by the President and the Secretary in
the name and on behalf of the company, and shall have the corporate seal thereto
affixed.

         SECTION 4. All monies of the corporation shall be deposited when and as
received by the Treasurer in such bank or banks or other  depository as may from
time to time be designated by the Board of Directors, and such deposits shall be
made in the name of the company.

         SECTION 5. No note, draft, acceptance, endorsement or other evidence of
indebtedness  shall be valid or  against  the  company  unless the same shall be
signed by the President or a Vice-President, and attested by the Secretary or an
Assistant Secretary,  or signed by the Treasurer or an Assistant Treasurer,  and
countersigned by the President,  Vice-President,  or Secretary,  except that the
Treasurer  or  an  Assistant  Treasurer  may,  without  countersignature,   make
endorsements for deposit to the credit of the company in all its duly authorized
depositories.

                                       82

         SECTION 6. No loan or advance of money  shall be made by the company to
any  stockholder  or  officer  therein,  unless  the  Board of  Directors  shall
otherwise authorize.

         SECTION 7. No director nor  executive  officer of the company  shall be
entitled  to any  salary or  compensation  for any  services  performed  for the
company,  unless such salary or compensation shall be fixed by resolution of the
Board of Directors, adopted by the unanimous vote of all the Directors voting in
favor thereof.

         SECTION 8. The company may take,  acquire,  hold,  mortgage,  sell,  or
otherwise deal in stocks or bonds or securities of any other corporation, if and
as often as the Board of Directors shall so elect.

         SECTION 9. The Directors  shall have power to authorize and cause to be
executed,  mortgages, and liens without limit as to amount upon the property and
franchise of this  corporation,  and pursuant to the affirmative vote, either in
person or by proxy, of the holders of a majority of the capital stock issued and
outstanding;  the Directors shall have the authority to dispose in any manner of
the whole property of this corporation.

         SECTION 10. The company shall have a corporate seal, the design thereof
being as follows:

                                   ARTICLE VII

                              AMENDMENT OF BY-LAWS

         SECTION 1.  Amendments  and changes of these By-Laws may be made at any
regular or special  meeting of the Board of Directors by a vote of not less than
all of the  entire  Board,  or may be made by a vote of, or a consent in writing
signed by the holders of, 51% of the issued and outstanding capital stock.

         KNOW ALL MEN BY THESE  PRESENTS:  That we, the  undersigned,  being the
directors of the above named  corporation,  do hereby  consent to the  foregoing
By-Laws and adopt the same as and for the By-Laws of said corporation.

         IN WITNESS WHEREOF, I have hereunto set my hand this 2nd day of June,
1998

                                                    /s/   Barbara Keery
                                                    ----------------------------
                                                    Secretary of the Corporation

                                       83

                                                                       EXHIBIT 3
                      Specimen of Common Stock Certificate
      NUMBER                                                           SHARES
      ------                                                           ------

                       TITAN MOTORCYCLE COMPANY OF AMERICA
               INCORPORATED UNDER THE LAWS OF THE STATE OF NEVADA

PAR VALUE $0.001                                           CUSIP NO. 888307 10 5
COMMON STOCK

THIS CERTIFIES THAT

is the owner of

            FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK
                           PAR VALUE OF $0.001 EACH OF
                       TITAN MOTORCYCLE COMPANY OF AMERICA
  transferable on the books of the Corporation in person or by duly authorized
 attorney upon surrender of this Certificate properly endorsed. This Certificate
  is not valid until countersigned by the Transfer Agent and registered by the
   Registrar. Witness the facsimile seal of the Corporation and the facsimile
                   signatures of its duly authorized officers.

                                    DATED

                                    Countersigned and Registered:
                                                         I DATA INC.
PRESIDENT                                     (Dallas, Texas) Transferable Agent
                                    By

                                                     Successor Transfer Agent
                                                Signature  Stock  Transfer  Inc.

SECRETARY                     [Corporate Seal]              Authorized Signature

                                       84

                                                                     EXHIBIT 6.1

                 STANDARD COMMERCIAL-INDUSTRIAL TRIPLE NET LEASE
                                BASIC TERMS SHEET

              This    Basic    Terms    Sheet   to   that    certain    Standard
Commercial-Industrial  Triple Net Lease between the parties  listed below is for
the convenience of the parties in quickly referencing certain of the basic terms
of the Lease. It is not intended to serve as a complete summary of the Lease. In
the event of any inconsistency between this Basic Terms Sheet and the Lease, the
applicable Lease provision shall prevail and control.

Date of Lease (See Paragraph 1):              December 16, 1996
- --------------               

Name of Lessor (See Paragraph 1):             Holualoa Peoria Avenue Industrial,
- --------------                                LLC,  an Arizona limited liability
                                                      company

Name of Lessee (See Paragraph 1):             Titan Motorcycle Co. of America, a
- --------------                                        Nevada Corporation

Lessee's Telephone Number:                    (602) 956-7893

Address of Premises (See Paragraph 2):        2222 W. Peoria Avenue, Suite B, 
                                                      Phoenix, Arizona
- --------------------                  

Approximate Gross Rentable
- --------------------------
 Area of Premises (See Paragraph 12):                 43,444 square feet
- ------------------                   

Lessee's Percentage of Insurance.
- --------------------------------
Real Property Tax
- -----------------
and CAM Amounts (See Paragraph 12):                   70.65%
- ----------------

Lease Commencement Date (See Section 3.1):            The business day following
- -----------------------                               full execution of this 
                                                      Lease

Lease Expiration Date (See Section 3.1):              March 31, 2002
- ----------------------

Monthly Base Rent (See Paragraph 4):          See Addendum
- ------------------                                        
Additional Rent:                              1.  Rental Tax (See Section 4.1)
- ----------------

                                              2.  Insurance Amount 
                                                  (See Section 8.10)

                                              3.  Real Property Tax Amount 
                                                  (Section 10.l)

                                              4.  CAM Amount (See Paragraph 11)

Lessee's Security Deposit 
(See Paragraph 6):                            $21,775
- --------------------------                  

                                       85

Lessee's Permitted Use 
- ---------------------- 
(See Section 6.1):            Assembly and sales of motorcycle parts and related
                              general office and administration (see Section
                              6.1(a) for a more complete description)

Address for Lessor:           Holualoa Peoria Avenue Industrial, LLC
- -------------------
                              c/o Wessex Service Companies
                              2828 N. Central Avenue, Suite #1060
                              Phoenix, Arizona 85004
                              Attn: Susan Maher

LESSOR:                                       LESSEE:
- -------                                       -------

HOLUALOA PEORIA AVENUE                        TITAN MOTORCYCLE CO. OF
INDUSTRIAL, LLC,                              AMERICA, INC. a Nevada corporation
an Arizona limited liability company

      By:  Holualoa Arizona, Inc.
           an Arizona corporation
      Its: General Partner

By:         /s/                             By:         /s/
          ----------------------------           --------------------------
Name:       Sandra Alter                    Name:    Francis S. Keery
          ----------------------------           --------------------------
Its:        Authorized Agent                Its:         C.E.O.
          ----------------------------           --------------------------
Date:       1/24/97                         Date:      1/24/97
         -----------------------------           --------------------------

                                       86

                 STANDARD COMMERCIAL-INDUSTRIAL TRIPLE NET LEASE

1. PARTIES. This Lease, dated December 16, 1996, for reference purposes only, is
made by and between Holualoa Peoria Avenue  Industrial,  LLC, an Arizona limited
partnership  ("Lessor"),  and Titan  Motorcycle  Co. of America,  Inc., a Nevada
corporation ("Lessee").

2. PREMISES.  Lessor  hereby  leases to Lessee and Lessee leases from Lessor for
the term,  at the rental,  and upon all the  conditions  set forth  herein,  the
premises demised by this Lease,  located at 2222 W. Peoria Avenue,  Suites B, C,
D, E (the "Premises"), together with a nonexclusive right to use the parking and
common areas  (collectively,  the "Common Areas"),  surrounding the Premises and
within the project  commonly known as Peoria Avenue  Industrial (the "Project").
The  location of the  Premises  and the  parameters  of the Common Areas and the
Project are shown on Exhibit  "A"  attached  hereto.  All  dimensions  and areas
quoted herein or in any exhibit attached hereto are approximate and are based on
gross rentable area,  rather than solely on areas designed for the exclusive use
and occupancy of tenants.

3. TERM.

      3.1.  TERM.  The term of this Lease  shall  commence on the  business  day
following  full execution of this Lease  ("Commencement  Date") and end on March
31, 2002 (expiration Date"),  unless sooner terminated pursuant to any provision
hereof  ("Term").  Lessor shall deliver  possession of the Premises to Lessee on
the Commencement Date.

     3.2.     INTENTIONALLY DELETED.

4. RENT.

      4.1.  MONTHLY BASE RENT.  Lessee shall pay to Lessor a monthly base rental
as set forth in the Addendum hereto. The monthly base rental due hereunder shall
be  payable  to Lessor by the first  day of each  month  during  the Term at the
address stared herein or to such other persons or at such other places as Lessor
may  designate in writing and shall be paid in lawful money of the United States
of America.  The Lessee further agrees to pay Lessor, in addition to the rent as
provided herein,  an privilege,  sales,  excise,  rental and other taxes (except
income taxes) imposed now or hereinafter  imposed by any governmental  authority
upon the rentals and all other amounts herein provided to be paid by the Lessee.
Said  payment  shall be in  addition to and  accompanying  each  monthly  rental
payment made by Lessee to Lessor.

The base rental set forth in this Section 4.1 is a  negotiated  figure and shall
govern whether or not the actual gross  rentable  square footage of the Premises
is the same as set forth in Paragraph  12 hereof.  Lessee shall have no right to
withhold,  deduct or offset any amount from the base monthly rental or any other
sum due  hereunder  even if the  actual  gross  rentable  square  footage of the
Premises is less than that set forth in Paragraph 12. Rent for any period during
the Term  which is for less than one month  shall be a pro rata  portion  of the
monthly instrument.

     4.2.    INTENTIONALLY DELETED.

5.  SECURITY  DEPOSIT.  Lessee shall deposit with Lessor upon  execution  hereof
Twenty-One Thousand Seven Hundred  Seventy-Five and no/100 Dollars  ($21,775.00)

                                       87

as security for Lessee's faithful performance of Lessee's obligations hereunder.
If  Lessee  fails to pay rent or  other  charges  due  hereunder,  or  otherwise
defaults with respect to any provision of the Lease,  Lessor may use,  apply, or
retain all or any  portion of said  deposit for the payment of any rent or other
charge in  default  or for the  payment  of any other sum for which  Lessor  may
become obligated by reason of Lessee's default,  or to compensate Lessor for any
lose or damage which Lessor may suffer thereby. If Lessor so uses or applies all
or any portion of said deposit,  Lessee shall within ten (10) days after written
demand therefor deposit cash with Lessor in an amount sufficient to restore said
deposit to the full amount  hereinabove  stated,  and Lessee's  failure to do so
shall be a material  breach of this Lease.  Lessor shall not be required to keep
said  deposit  separate  from its general  accounts.  If Lessee  performs all of
Lesses's  obligations  hereunder,  said  deposit,  or so much thereof as has not
theretofore  been  applied  by Lessor,  shall be  returned,  without  payment of
interest or other increment for its use, to Lessee (or, at Lessor's  option,  to
the last assignee,  if any, of Lessee's interest hereunder) at the expiration of
the Term and after  Lessee has vacated the  Premises.  Any  mortgagee of Lessor,
purchaser of the Project,  or  beneficiary  of a deed of trust shall be relieved
and  released  from any  obligation  to return  said  deposit  in the event such
mortgagee,  beneficiary  of deed of trust or purchaser  becomes the owner of the
Project by reason of  foreclosure  or  trustee's  sale  (including  deed in lieu
thereof) or  proceeding  in lieu of  foreclosure  or trustee's  sale unless said
deposit shall have been actually  delivered to such  mortgagee,  beneficiary  of
deed of trust or purchaser.  Such release, however, shall not relieve the person
or entity who owned the Project  immediately  prior to  acquisition  of title by
such  mortgagee,  beneficiary of deed of trust or purchaser of any obligation he
or it may have to return said deposit.

6. USE.

     6.1. PERMITTED USES.

            (a) The  Premises  are to be used  only  for the  design,  assembly,
sales,  and  distribution of new  motorcycles,  motorcycle  parts and motorcycle
accessories;   in  addition,  to  operation  willl  include  welding,  assembly,
painting, machinery, testing, polishing and other allied activities, and related
general office and administration ("Permitted Use") and for no other business or
purpose  whatsoever without the prior writted consent of Lessor. No act shall be
done in or about the Premises that is unlawful. Lessee shall not commit or allow
to be committed any waste upon the Premises,  or any public or pricated nuisance
or other act or thing which  unreasonably  disturbs  the quiet  enjoyment of any
other lessee in the Project, taking into accout, however, Lessee's Permitted Use
of the Premises.  If any of Lessee's machines or equipment  unreasonably disturb
any other lessee in the Project,  then Lessee shall provide adequate insulation,
or take  such  other  action  as may be  necessary  to  eliminate  the  noise or
disturbance.  Lessee, at its expense, shall comply with all laws relating to its
use and  occupancy of the Premises and shall observe such  reasonable  rules and
regulations  as may be adopted and made  available to Lessee by Lessor from time
to time for the safety,  care and cleanliness of the Premises or the Project and
for the preservation of good order therein.

            (b) Lessee  warrants  that the  operation of its  business  shall be
conducted in strict compliance with all applicable  recorded private  covenants,
conditions  and  restrictions  and  all  applicable  federal,  state  and  local
environmental,   safety  and  other  pertinent  laws,  rules,   regulations  and
ordinances and that any alterations  necessary to the Premises by reason of such
covenants,  conditions,  restrictions,  laws, rules, regulations and ordinances,

                                       88

including,  without limitation, The Americans With Disabilities Act, shall be at
Lessee's sole cost and expense.  Lessee  represents  and warrants to Lessor that
there is no risk to Lessee,  Lessee's  visitors  and others  using the  Premises
arising  from  Lessee's  operations.  Lessee  shall  indemnify,  defend and hold
harmless Lessor from and against any claim, liability, expense, lawsuit, loss or
other damage,  including reasonable attorneys' fees, arising from or relating to
Lessee's  use of the Premises or Lessee's  activities  within the Project or any
violations of the Americana with Disabilities Act due to the use of the Premises
by Lessee, its employees, subtenants, agents, guests or invitees.

      6.2.  CONDITION OF PREMISES.  Lessee hereby  accepts the Premises in their
condition  existing as of the date of the  execution  hereof or in the condition
described on the attached  Exhibit "B," whichever is applicable,  subject to all
applicable laws,  ordinances and regulations governing and regulating the use of
the Premises, and subject to all matters disclosed thereby.  Lessee acknowledges
that neither Lessor nor Lessor's agents has made any  representation or warranty
as to the  suitability of the Premises for the conduct of Lessee's  business and
that  Lessee  and  its  agents  and  contractors  have  been  provided  with  an
opportunity to thoroughly inspect the Premises and the Project.

     6.3. HAZARDOUS MATERIALS.

            (a) As used herein,  the term  "Hazardous  Material"  shall mean any
substance or material which has been  determined by any state,  federal or local
governmental  authority  to be  capable  of posing a risk of  injury to  health,
safety or property,  including all of those materials and substances  designated
as hazardous  or toxic by the city in which the  Premises are located,  the U.S.
Environmental  Protection Agency,  the Consumer Product Safety  Commission,  the
U.S.  Food and Drug  Administration,  the Arizona  Department  of  Environmental
Quality,  the Pima County  Department  of  Environmental  Quality,  or any other
governmental  agency now or  hereafter  authorized  to  regulate  materials  and
substances in the environment.

            (b) Lessee agrees not to introduce any Hazardous  Material in, on or
adjacent  to the  Premises  or in, on or  adjacent  to the  Project  without (i)
obtaining  Lessor's prior written  approval,  (ii) providing  Lessor with thirty
(30) days  prior  written  notice of the exact  amount,  nature,  and  manner of
intended  use  of  such  Hazardous  Materials,  and  (iii)  complying  with  all
applicable  federal,  state and local laws,  rules,  regulations,  policies  and
authorities  relating to the  storage,  use,  disposal and clean-up of Hazardous
Materials, including, but not limited to, the obtaining of all proper permits.

            (c) Lessee shall  immediately  notify  Lessor of any inquiry,  test,
investigation,  or  enforcement  proceeding by, against or directed at Lessee or
the Premises concerning a Hazardous  Material.  Lessee acknowledges that Lessor,
as the owner of the Premises,  shall have the right, at its election, in its own
name to negotiate,  defend, approve, and appeal, at Lessee's expense, any action
taken or order issued by any applicable  governmental authority with regard to a
Hazardous Material released onto the Premises or the Project by Lessee.
           (d) If Lessee's storage,  use or disposal of any Hazardous  Material
in, on or adjacent to the Premises or the Project  results in any  contamination
of the Premises, the Project, the soil, surface or groundwater thereunder or the
air above and around the  Premises  and the Project (i)  requiring  re-mediation
under federal, state or local statutes, ordinances,  regulations or policies, or
(ii) at  levels,  in excess of de  minimum  levels,  which are  unacceptable  to
Lessor,  in  Lessor's  reasonable  discretion,  Lessee  agrees to  clean-up  the
contamination immediately, at Lessee's sole cost and expense. 

                                       89

Lessee  further  agrees to indemnify,  defend ant hold Lessor  harmless from and
against any claims,  suits,  causes of action,  costs,  damages,  loss and fees,
including  attorneys'  fees and costs,  arising out of or in connection with (i)
any  clean-up  work,  inquiry or  enforcement  proceeding  relating to Hazardous
Materials  currently or hereafter  used,  stored or disposed of by Lessee or its
agents,  employees,  contractors  or  invitees  on or about the  Premises or the
Project, and (ii) the use, storage, disposal or release by Lessee or its agents,
employees,  contractors  or invitees of any Hazardous  Materials on or about the
Premises or the Project.

            (e) Notwithstanding any other right of entry granted to Lessor under
this  Lease,  Lessor  shall  have the  right to enter  the  Premises  or to have
consultants enter the Premises  throughout the Term at reasonable times and upon
reasonable  prior notice to Lessee for the purpose of  determining:  (1) whether
the  Premises  are  in  conformity  with  federal,  state  and  local  statutes,
regulations,   ordinances  and  policies,  including  those  pertaining  to  the
environmental  condition of the Premises;  (2) whether  Lessee has complied with
this Paragraph 6; and (3) the corrective measures, if any, required of Lessee to
ensure the safe use, storage and disposal of Hazardous Materiala.  Lessee agrees
to  provide  access  and  reasonable  assistance  for  such  inspections.   Such
inspections  may include,  but are not limited to,  entering  the Premises  with
machinery for the purpose of obtaining  laboratory samples.  Lessor shall not be
limited  in the number of such  inspections  during the Term.  If,  during  such
inspections,  it is found that Lessee's use of Hazardous Materials constitutes a
violation  of this Lease,  Lessee  shall  reimburse  Lessor for the cost of such
inspections within ten (10) days of receipt of a written statement therefor.  If
such  consultants  determine that the Premises are  contaminated  with Hazardous
Material  as a result  of a  release(s)  by Lessee  or are in  violation  of any
applicable  environmental  law,  and such  violation  did not exist prior to the
Commencement Date, Lessee shall, in a timely manner, and at its expense,  remove
such Hazardous  Materials or otherwise comply with the  recommendations  of such
consultants  to  the  reasonable  satisfaciton  of  Lessor  and  any  applicable
governmental  agencies. If Lesse fails to do so, Lessor, at its sole discretion,
may, in addition to all other remedies  available to Lessor under this Lease and
at law and in equity cause the violation and/or  contamination to be remedied at
Lessee's  sole cost and expense.  The right  granted to Lessor herein to inspect
the Premises  shall not create a duty on Lessor's  part to inspect the Premises,
or  leability  of Lessor for  Lessee's  use,  storage or disposal  of  Hazardous
Materials,  it being understood that Lessee shall be solely  responsible for all
liability in connection therewith.

            (f)  Lessee  shall   surrender  the  Premises  to  Lessor  upon  the
expiration or earlier  termination  of this free of Hazardous  Materials  (other
that those,  if any,  existing as of the  Commencement  date) and in a condition
which complies with all  governmental  statutes,  ordinances,  regulations,  and
policies,  recommendations  of  consultants  hired by  Lessor,  and  such  other
reasonable requiremeents as may be imposed by Lessor.

            (g)   Lessee's   obligations   under  this   Paragraph   6  and  all
indemnification  obligations  of Lessee  under  this  Lease  shall  survive  the
expiration or earlier termination of this Lease.

7. MAINTENANCE, REPAIRS AND ALTERATIONS.

      7.1.  LESSOR'S  OBLIGATIONS.  Subject to the provisions of Paragraph 9 and
except for damage  caused by any  negligent  or  intentional  act or omission of
Leased, Lessee's agents,  employees or invitees and except for Lessor's right to
include  certain  costs as Total Common Area Charges  pursuant to Paragraph  11,
Lessor, at Lessor's expense, shall keep in good order, condition, and repair the
foundations,  exterior and load bed walls, and the exterior roof of the Premises

                                       90

(including the structural support thereof).  Lessee expressly waives the benefit
of any statute now or hereafter in effect which would  otherwise  afford  Lessee
the right to make repairs at Lessors's expense or to terminate this Lease became
of Lessors failure to keep the Premises in good order, condition, and repair.

7.2. LESSEE'S OBLIGATIONS.

            (a) Lessee  shall,  at in  expense  throughout  the Term,  maintain,
service,  replace,  and keep in good repair the interior of the Premises  except
those items for which Lessor is specifically made responsible under Section 7.1.
and mechanical  equipment of the Premises,  and an other aspects of the Premises
including such items as floors, ceilings,  walls, doors, glass, plumbing, paint,
heating,  ventilating and air  conditioning  equipment,  partitions,  electrical
equipment,   wires,  and  electrical  fixtures,  and  surrender  same  upon  the
expiration of the Term in the same condition as received, ordinary wear and tear
excepted.  Lessee  shall give  Lessor  prompt  written  notice of any defects or
breakage in the structure,  equipment, fixtures, or of any unsafe condition upon
or within the Premised Maintenance, repairs, and replacements to the mechanical,
plumbing,  electrical,  and heating,  ventilating and air  conditioning  systems
serving the Premises shall be performed by licensed  contractors,  acceptable to
Lessor in its reasonable discretion.

            (b)  Lessee  shall  enter  into and keep in force  during the Term a
preventive  maintenance  contract with a licensed  heating and air  conditioning
contractor  acceptable  to  Lessor  providing  for the  regular  inspection  and
maintenance of the heating,  ventilating and air conditioning  equipment serving
the Premises.

            (c) On the  last  day of the  Term,  or on any  sooner  termination,
Lessee shall surrender the Premises to Lessor in the same condition as received,
broom  clean,  ordinary  usear  and tear and  damage  by fire or other  casualty
excepted.  Lessee  shall  repair any damage to the  Premises  occasioned  by the
removal of its trade  fixtures,  furnishings  and equipment  pursuant to Section
7.3, which repair shall include  without  limitation the patching and filling of
holes and repair of structural damage.

7.3. ALTERATIONS AND ADDITIONS.

            (a) Alterations,  improvement,  additions,  utility installations or
removal  of any  fixtures  may not be made to the  Premises  without  the  prior
written  consent of Lessor,  and any  alterations,  improvements,  additions  or
utility installations to the Premises, excepting movable furniture and machinery
and trade  fixtures,  shall, at Lessor's  option,  become part of the realty and
belong to Lessor  upon the  expiration  or earlier  termination  of this  Lease.
However,   this  shall  not  prevent  Lessee  from  installing  trade  fixtures,
machinery,   or  other  trade  equipment  in  conformance   with  an  applicable
ordinances,  regulations and laws. Lessee shall keep the Premises,  the building
in which  the  Premises  are  located,  and the land on which the  Premiers  are
situated free from any lien.  arising out of any work  performed  for,  material
furnished to, or obligations  incurred by the Lessee.  It is further  understood
and agreed  that under no  circumstance  is the Lessee to be deemed the agent of
the Lessor for any alteration,  repair, or construction within the Premises, the
same being done at the sole expense of the Lessee. All contractors, materialmen,
mechanics,  and laborers are hereby charged with notice that they must look only
to the  Lessee  for the  payment  of any  charge  for work  done  and  materials
furnished upon the Premises during the Term.

                                       91

            (b) Upon the expiration or sooner  termination  of the Term,  Lessee
shall,  upon  written  demand by Lessor,  at  Lessee's  sole  expense,  with due
diligence,  remove  any  alteration,  addition  or  improvement  made by Lessee,
designated by Lessor to be removed (except the Leasehold  Improvements described
in Exhibit "B"),  and repair any damage to the Premises  caused by such removal.
Lessee shad remove an of its movable  property and trade  fixtures  which can be
removed without damage to the Premises at the expiration or earlier  termination
of this Lease and shall pay Lessor for Al damages from injury to the Premises or
Project resulting from such removal.

8. INSURANCE; INDEMNITY.

      8.1.  LESSEE'S  LIABILITY  INSURANCE.  Lessee  shalt at Lessee's  expense,
obtain  and  keep in  force  curing  the Term a  policy  of  commercial  general
liability  insurance  written on an occurrence brain insuring Lessee against any
liability arising out of the use, occupancy,  or maintenance of the Premiaea and
ad  areas  appurtenant  thereto.   Such  insurance  shall  be  primary  and  not
contributing  with any  insurance  maintained  by Lessor,  shall have a combined
single limit of liability of  $2,000,000  and shall name Lessor as an additional
insured. The limits of said insurance shall not, however, limit the liability of
Lessee  hereunder.  Said insurance  shall have a Lessor's  Protective  Liability
endorsement  attached  thereto,  and  shall  contain  a  contractual   liability
endorsement  covering all  indemnification  obligations of Lessee hereunder.  If
Lessee shall fail to procure and maintain said insurance,  Lessor may, but shall
not be required to, procure and maintain the same, but at the expense of Lessee.

      8.2 LESSEE'S PROPERTY INSURANCE. Lessee shall, at Lessee's expense, obtain
and keep in force  during the Term a policy or  policies of  insurance  covering
loss or damage  to  Lessee's  personal  property,  merchandise,  stock in trade,
fixtures and equipment  located on the Premises from time to time, in the amount
of the full replacement value thereof,  providing  protection against all perils
included  within  the  classification  of fire,  extended  coverage,  vandalism,
malicious mischief, special extended perils (special form).

      8.3 LESSOR'S  LIABILITY  INCURANCE.  Lessor shall obtain and keep in force
during the Term a policy of commercial  general  liability  insurance written on
occurrence  basis  insuring  Lessor  against  any  liability  arising out of the
ownership,  use, occupancy, or maintenance of the Project,  including the Common
Areas.  Such  insurance  shall have a combined  single  limit of liability of at
least $2,000,000.

      8.4.  LESSOR'S PROPERTY  INSURANCE.  Lessor shall obtain and keep in force
during the Term a policy or policies of insurance covering lose or damage to the
Project,  in the  amount of the fun  replacement  value  thereof,  exclusive  of
footings  and  foundations,  providing  protection  against all perils  included
within the  classification  of fire,  extended  coverage,  vandalism,  malicious
mischief,  special extended peril. (special form). Lessee understands and agrees
that the  insurance  described  in this  Section  8.4 will  not  cover  Lessee's
personal property, merchandise, stock in trade, trade fixtures and equipment.

      8.5. BUSINESS  INTERRUPTION  INSURANCE.  Lessor may, at its option, obtain
and keep in force during the Term a policy of business interruption insurance in
an amount  sufficient  to cover any loss of income from the Project for a period
of twelve (12) months.

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      8.6.  INSURANCE  POLICIES.   Insurance  required  hereunder  shall  be  in
companies  rated "A-XII" or better by A. M. Beat Co., in Best's Key guide. On or
prior to the  Commencement  Date,  Lessee  shall  deliver  to  Lessor  copies of
policies of  liability  insurance  required  under  Section 8.1 and  policies of
casualty  insurance  required  by Section  8.2 or  certificates  evidencing  the
existence  and  amounts  of such  insurance,  and in the  case of the  liability
insurance  policy  indicating  that Lessor has been named an  addition!  insured
thereunder.  all  such  policies  and  certificates  of  insurance  shall  state
explicitly  that such insurance  shall not be cancelable or subject to reduction
of coverage or other modification except upon at least thirty (30) day's advance
written  notice by the  insurer to  Lessor.  Lessee  ahoy  furnish  Lessor  with
renewals  or  "binders"  thereof  not  Lena  than  ten  (10)  days  prior to the
cancellation  or termination of any such policy,  failing which,  if Lessor coca
not receive  such  renewals  or  "binders"  within one ( 1)  business  day after
written  request to Lessee,  Lessor may order such insurance and charge the cost
thereof to Lessee,  which amount shall be payable by Lessee upon demand.  Lessee
shall not do or permit to be done anything which shall  invalidate the insurance
policies  referred  to in  Sections  8.2 and 8.3.  Either  party may provide any
required  insurance under a so-called  blanket policy or policies covering other
parties and  locations  and may maintain  the  required  coverage by a so-called
umbrella  policy or policies,  so long as the  required  coverage is not thereby
diminished.

      8.7. WAIVER OF  SUBROGATION.  Lessee and Lessor each hereby waives any and
an rights of recovery  against the other,  or against  the  officers,  partners,
employees,  agent, and  representatives of the other, for loss of or drainage to
such waiving  party or its property or the property of others under its control,
where such loss or damage is  insured  against  and  actuary  covered  under any
property  insurance policy in force at the time of such lose or damage, but such
waiver extends only to the extent of the actual insurance  coverage.  Lessee and
Lessor shall, upon obtaining the policies of insurance required hereunder,  give
notice to the insurance  carrier or carriers that the foregoing mutual waiver of
subrogation is contained in this Lease.

      8.8.  INDEMNITY.  Lessee shall indemnify,  defend and hold harmless Lessor
and its managers,  members,  agents and  employees  from and against any and all
claims, losses, costs, liabilities and damages,  including,  without limitation,
attorneys'  fees and costs,  arising from Lessee's use of the Premises,  or from
the conduct of Lessee's  business or from any  activity,  work,  or things done,
permitted,  or suffered by Lessee in or about the  Premises,  and shall  further
indemnify,  defend and hold harmless  Lessor from and against any and all claims
arising  from any breach or  default in the  performance  of any  obligation  on
Lessee's part to be performed  under the terms of this Lease or arising from any
negligence  of  the  Lessee,  or  any of the  Lessee's  agents,  contractors  or
employees,  and from and  against  an  costs,  attorneys'  fees,  expenses,  and
liabilities  incurred  in the  defense  of any  such  claim  or  any  action  or
proceeding  brought thereon.  Lessee, as a material part of the consideration to
Lessor,  hereby assumes all risk of damage to property or injury to persona, in,
upon, or about the Premises  arising from any cause and Lessee hereby waives all
claims in respect  thereof against Lessor.  Lessor shall  indemnify,  defend and
hold  harmless  Lessee and its  officers,  directors,  shareholders,  agents and
employees from and against any and all claims,  losses,  costs,  liabilities and
damages, including, without limitation,  attorneys' fees and costs, arising from
any accident, injury or damage occurring on the Common Areas, but only if and to
the extent such claim,  loss,  cost,  liability or damage is covered by Lessor's
liability  insurance  provided for in Section 8.3 (or would have been covered by
such insurance if Lessor fails to maintain  same),  and shah further  indemnify,
defend and hold harmless Lessee from and against any and all claims arising from
any breach or default in the  performance  of any obligation on Lessor's part to

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be  performed  under the terms of this  Lease,  and from and  against all costs,
attorneys'  fees,  expenses and liabilities  incurred in the defense of any such
claim or any action or proceeding brought thereon.

       8.9.  EXEMPTION OF LESSOR FROM LIABILITY.

            (a) Lessee  hereby  agrees that  Lessor and its agents  shall not be
liable for injury to Lessee's  business or any loss of income  therefrom  or for
damage to the goods, wares,  merchandise,  or other property of Lessee, Lessee's
employees,  invitees,  customers,  or any other person in or about the Premises,
nor shall  Lessor be  liable  for  injury  to the  person  of  Lessee,  Lessee's
employees, agents or contractors,  whether such damage or injury is caused by or
results from fire, steam, electricity, gas, water or rain, or from the breakage,
leakage,  obstruction, or other defect of pipes, sprinklers,  wires, appliances,
plumbing,  air  conditioning or light  fixtures,  or from any other came whether
avid damage or injury results from conditions  arising upon the Premises or upon
other  portions of the building of which the Premises are a part,  or from other
sources or places,  and  regardless of whether the came of such damage or injury
or the means of repairing the same is inaccessible  to Lessee.  Lessor shall not
be liable for any damages  arising from any act or neglect of any other  lessee,
if any, of the building in which the Premises are located.

            (b) If any of Lessees personal  property shall be assessed and blued
with Lessor's real property,  Lessee shall pay Lessor the taxes  attributable to
Lessee within ten (10) days after receipt of a written  statement  setting forth
the taxes applicable to Lessee's property.

11. COMMON AREA CHARGES.

       11.1.  GENERALLY.  In  addition  to the rental and other  charges  herein
provided  to be paid by  Lessee  to  Lessor,  Lessee  shall  pay to  Lessor,  as
additional  rent and as Lessee's  share of the cost of  maintaining,  operating,
repairing and managing the Project,  Lea he's proportionate share (as defined in
Paragraph 12) of the Total Common Area Charges (as hereinafter  defined) for any
calendar  year during the Term (the "CAM  Amount").  Lessee  shall pay Lessor in
advance its monthly estimated proportionate share (as described in Paragraph 12)
of the Total Common Area Charges,  together with all applicable rental taxes due
thereon,  within ten (10) days after  receipt of an invoice from Lessor  setting
forth  Lessor's  estimate of such amount.  Within ninety (90) days following the
end of each calendar year during the Term or as soon thereafter as is reasonably
possible,  Lessor shall furnish Lessee with a statement of all Total Common Area
Charges for the Project for the preview calendar year indicating the computation
of  Lessee's  proportionate  share of the Total  Common  Area  Charges  for such
calendar  year and the payments  made by Lessee  during such  calendar year (the
"Actual  Statements").  If Lessee's aggregate estimated monthly payments actuary
paid to Lessor for the  calendar  year are greater than  Lessee's  proportionate
share of the Total  Common Area  Charges for such  calendar  year,  Lessor shall
promptly  pay the  excess to Lessee  or shall  apply the  excess to any past due
amounts owing from Lessee to Lessor,  if the payment made are less than Lessee's
proportionate  share,  Lessee shall pay the difference to Lessor within ten (10)
days of its receipt of such  statement.  Total Common Area Charges shall consist
of all costs and expenses of every type associated with the management,  repair,
maintenance,  and insuring of the Common Areas  including,  without  limitation,
costs and expenses for the  following:  gardening  and  landscaping,  utilities,
water and sewer charges;  premiums for liability,  property  damage and casualty
insurance and  workman's  compensation  insurance;  an personal  property  taxes
levied on or  attributable  to personal  property  used in  connection  with the
Common Areas;  straight line  depreciation on personal  property owned by Lessor

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which is consumed in the operation or maintenance of the Common Areas; rental or
lease payments paid by Lessor for rented or leased personal property used in the
operation  or  maintenance  of Common  Areas;  fees for required  licenses,  and
permits; refuse disposal charges; repairing, resurfacing, repaving, maintaining,
painting, lighting, cleaning, refuse removal, security and similar items; repair
and  maintenance of exterior roof and exterior  painting of the Project  (except
the initial painting of the exterior of the Project after the Commencement Date;
fees paid to property managers; and other similar costs and expense. relating to
the Common  Areas.  Said Total  Common Area  Charges  shall  further  include an
charges for regular preventive  maintenance  service,  repair and maintenance of
mechanical equipment including, without limitation, heating, ventilating and air
conditioning  equipment,  which serves the Common  Areas,  the cost of lighting,
maintenance  and repair of the  Project  identification  signs,  and the cost of
repairing  and  maintaining  the  plumbing,  electrical  and other  off-Premises
facilities serving the Premises or the Project. Notwithstanding the foregoing to
the contrary,  Total Common Area Charges shall include costs of a capital nature
(including,  without  limitation,  capital  improvement,  capital  replacements,
capital repairs,  capital equipment and capital tools) only to the extent of the
amortization on a straight-line basis of the same over the useful life (together
with interest at the rate of twelve percent ( 12%) per annum on the  unamortized
balance),  but only if the same  are:  (i)  reasonably  intended  to  produce  a
reduction in operating charges or energy consumption; or (ii) required after the
date of this  Lease  under  any  governmental  law or  regulation  that  was not
applicable to the Project or any portion  thereof at the  Commencement  Date; or
(in) for the  repair or  replacement  of any  equipment  needed to  operate  the
Project at the same quality level as prior to the replacement.

       11.2. LESSEE'S AUDIT RIGHT. If Lessee disputes the amount of Total Common
Area Charges set forth in any Actual Statement delivered by Lessor, Leases shall
have the  right,  to be  exercised,  if at al,  not  later  than six (6)  months
following receipt of such Actual Statement,  to cause Lessor's books and records
with respect to the preceding  calendar year to be audited by a certified public
accountant  mutually  acceptable to Lessor and Lessee. The amounts payable under
Section  11.1 by Lessor to  Lessee or by Lessee to  Lessor,  as the case may be,
shall be  appropriately  adjusted  on the  basis of such  audit.  If such  audit
discloses a liability for further refilled by Lessor to Lessee in excess of five
percent (5%) of the payment  previously  made by Lessee for such calendar  year,
Lessor shall pay for the cost of the audit; otherwise,  Lessee shall pay for the
cost of the audit.  If Lessee falls to request an audit within the six (6) month
period,  such Actual  Statement  shall be  conclusively  binding upon Lessor and
Lessee.

12.  PROPORTIONATE  SHARE. For purposes of Sections 8.10 and 10.1 and Paragraphs
11 and 13.  Lessee's  proportionate  share to be used to calculate the Insurance
Amount, the Real Property Tax Amount, the CAM Amount and Lessee's responsibility
for any  utilities  supplied to the Premises  which are not  separately  metered
shall be a  fraction,  the  numerator  of which is the total  first  floor  gram
rentable  square  footage of the Premises,  and the  denominator of which is the
total first floor grow rentable square footage of the entire Project,  from time
to  time.  The  parties  agree  that  as  of  the  Commencement  Date,  Lessee's
proportionate  share will be 70.65 percent,  which figure is derived by dividing
43,444 square feet by 61,492 square feet. Lessee's proportionate share as of the
Commencement  Date, as described above, is a negotiated  figure and shall govern
whether or not the actual  rentable  square  footage of the Premises  and/or the
entire Project as of the Commencement Date is the same as that described above.

13. UTILIZER. Lessee shall pay for an water, gas, heat, light, power, telephone,
and other  utilities end services  supplied to the  Premises,  together with any

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taxes  thereon.  If any  utility  supplied  to the  Premises  is not  separately
metered,  Lessee shall pay its proportionate  share of the cost thereof as Total
Common Area Charges.

14 ASSIGNMENT AND SUBLETTING

      14.1. LESSOR'S  CONSENT  REQUIRED.  Lessee  shall  not  voluntarily  or by
operation of law, assign, transfer,  mortgage,  sublet, or otherwise transfer or
encumber all or any part of Lessees  interest in this Lease or in the  Premises,
without  Lessor's prior written  consent.  Any attempted  assignment,  transfer,
mortgage,  encumbrance,  or subletting  without such consent shall be void,  and
shall constitute a breach of this Lease. Lessor shall not unreasonably  withhold
its consent to an assignment or sublease by Lessee.

      14.2. NO RELEASE OF LESSEE.  Regardless of Lessor's consent, no subletting
or assignment  shall release Lessee of Lessee's  obligation or alter the primary
liability of Lessee to pay the rent and to perform all other  obligations  to be
performed by Lessee  hereunder.  The acceptance of rent by Lessor from any other
person  shall not be deemed  to be a waiver by Lessor of any  provision  hereof.
Consent  to one  assignment  or  subletting  shall not be deemed  consent to any
subsequent assignment or subletting.

15.  DEFAULTS; REMEDIES.

       15.1. DEFAULTS. The occurrence of any one or more of the following events
shall constitute a material default and breach of this Lease by Lessee:

            (a) The abandonment of the Premises by Lessee.  For purposes hereof,
Lessee shall not be deemed to have abandoned the Premises merely by vacating the
same,  so long as Lessee  continues to comply with an of its  obligations  under
this Lease, including in obligation to pay rent and other sums due hereunder.

            (b) The  failure by Lessee to make any  payment of rent or any other
payment  required  to be made by Lessee  hereunder  within  ten (10) days  after
written notice from Lessor that the same is due.  Notwithstanding  the foregoing
to the contrary, Lessor shall not be required to give notice to Lessee that rent
or any other  payment  required to be made by Lessee  hereunder is due more than
once in any twelve (12) month period. Thereafter,  without notice, the faunae by
Lessee to make any such  payment  with ten ( 10) days of the date when due shall
constitute a material default and breach of this Lease by Lessee.

            (c)  The  failure  by  Lessee  to  observe  or  perform  any  of the
covenants, conditions or provisions of this Lease to be observed or performed by
Lessee,  other than described in Subsection  (b) above,  where such failure shad
continue  for a period of thirty (30) days after  written  notice  thereof  from
Lessor to Lessee; provided,  however, if the nature of such failure is such that
it cannot  reasonably  be cured  within the thirty (30) day period,  then Lessee
shall have such additional time as is reasonably  required to cure such failure,
but in no event more than ninety (90) days after  written  notice  thereof  from
Lessor to Lessee,  provided Lessee  commences to cure during the thirty (30) day
period and proceeds to cure with diligence and continuity.

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            (d) (i) The making by Lessee of any  general  assignment  or general
arrangement  for the benefit of creditors;  (ii) the filing by or against Lessee
of  a  petition  to  have  Lessee   adjudged  a  bankrupt  or  a  petition   for
reorganization or arrangement under any law relating to bankruptcy  (unless,  in
the case of a petition filed against Lessee,  the same is dismissed within sixty
(60) days); (iii) the appointment of a trustee or receiver to take possession of
substantially  all of  Lessee's  asset  located at the  Premises  or of Lessee's
interest in this Lease, where possession is not restored to Lessee within thirty
(30) days;  or (iv) the  attachment,  execution,  or other  judicial  seizure of
substantially  all of  Lessee's  assets  located at the  Premises or of Lessee's
interest in this Lease,  where such seizure is not discharged within thirty (30)
days.

            (e) The  chronic  delinquency  by Lessee in the  payment  of monthly
rental or any other  periodic  payment  required to be paid by Lessee under this
Lease.  "Chronic delinquency" shall mean failure by lessee to pay monthly rental
or any other  periodic  payment  required to be paid by Lessee under this Lease,
within ten ( 10) days as described in Section  15.1(b) above,  for any three (3)
months (consecutive or nonconsecutive)  during any twelve ( 12) month period. In
the event of the chronic delinquency,  at Lessor's option,  Lessor shah have the
additional   right  to   require   that   monthly   rental  be  paid  by  Lessee
quarter-annually, in advance, for the remainder of the Term

            (f) A  guarantor,  if  any,  of  this  Lease  revokes  or  otherwise
terminates,  or purports to revoke or otherwise  terminate  (by option of law or
otherwise), any guaranty of an or any portion of Lessee's obligations under this
Lease.

       15.2.  REMEDIES.  In the event of any such material  default or breach by
Lessee, Lessor may at any time thereafter,  with or without notice or demand and
without  limiting  Lessor in the  exercise  of any other  right or remedy  which
Lessor may have by reason of such default or breach:

            (a) Terminate  this Lease by any lawful means,  in which case Lessee
shall immediately surrender possession of the Premises to Lessor. In such event,
Lessor shall be entitled to recover from Lessee an damages incurred by Lessor by
reason of Lessee's default including, but not limited to, the cost of recovering
possession  of  the  Premises;   expenses  of  reletting,   including  necessary
renovation and alteration of the Premises,  reasonable  attorneys' fees, and any
real  estate  commission  actuary  paid;  the  "worth  at  the  time  of  award"
established by the court having jurisdiction  thereof of the amount by which the
unpaid rent and other  charges due for the balance of the Term after the time of
Lessee's default exceeds the amount of such rental lose for the same period that
Lessee  proves by clear  and  convincing  evidence  could  have been  reasonably
avoided; and that portion of the leasing commission paid by Lessor applicable to
the unexpired term of this Lease. Unpaid instalments of rent or other sums shall
bear  interest  from the date due at the rate of 15% per annum.  For purposes of
this  Section  16.2(a),  "worth at the time of award" of the amount  referred to
above shall be computed by discounting  each amount by a rate equal to the prime
rate (or in equivalent) of Bank One, Arizona at the time of the award, but in no
event more than an annual rate of ten percent (10%).

            (b) Re-enter  the  Premises,  without  terminating  this Lease,  and
remove any property from the Premises, in which case Lessor shall be entitled to
enforce all of Lessor's  rights and  remedies  under this Lease,  including  the
right to recover the rent and an other amounts due hereunder as they become due.
No  re-entry or taking  possession  of the  Premises by Lessor  pursuant to this
Section 15.2 or other action on Lessor's  part shall be construed as an election
to  terminate  the Lease unless a written  notice of such  intention is given to

                                       97

Lessee or unless the  termination  thereof  is  decreed by a court of  competent
jurisdiction.  Lessor's  election not to terminate  this Lease  pursuant to this
Section  15.2(b) or  pursuant  to any other  provision  of this Lease  shall not
preclude Lessor from  subsequently  electing to terminate this Lease or pursuing
any of its other remedies.

            (c) Maintain Lessee's right to possession,  in which case this Lease
shall  continue  in  effect,  whether or not Lessee  shall  have  abandoned  the
Premises.  In such event  Lessor  shall be  entitled  to enforce all of Lessor's
rights and remedies  under this Lease,  including  the right to recover the rent
and all other amounts due hereunder as they become due.

            (d) Pursue any other or additional remedy now or hereafter available
to  Lessor  under  the laws or  judicial  decisions  of the  State  of  Arizona,
including,  without limitation,  the imposition of a landlord's lien against any
property located within the Premises.

       15.3.  DEFAULT BY LESSOR.  Lessor  shall not be deemed in default  unless
Lessor falls to perform obligations required of Lessor within a reasonable time,
but in no event later than thirty  (30) days after  written  notice by Lessee to
Lessor and to the holder of any mortgage or teed of trust  covering the Premises
whose  name and  address  shall have  theretofore  been  furnished  to Lessee in
writing  specifying  wherein  Lessor  has failed to  perform  such  obligations;
provided,  however,  that if the nature of Lessor's obligation is such that more
than thirty (30) days are required for performance,  then Lessor shall not be in
default if Lessor commences performance within such 30-say period and thereafter
diligently  prosecutes  the same to  completion.  If  Lessor  does not  perform,
Lessor's  mortgagee  may perform in  Lessor's  place ant Lessee must accept such
performance.  Except in the event of an actual or constructive  eviction,  in no
event  shall  Lessee  have the  right to  terminate  this  Lease as a result  of
Lessor's  default,  and Lessee's  remedies shall be limited to damages and/or an
injunction. Notwithstanding the preceding sentence to the contrary, if Lessor or
its  mortgagee  falls to perform as required  above in this Section  15.3,  then
Lessee  shall be permitted  to males  reasonable  repairs to the Premises as set
forth in the default notice  referred to above from Lessee.  In the event Lessee
exercises its rights hereunder, Lessor will reimburse Lessee the reasonable cost
thereof within thirty (30) days  following  receipt of a copy of the invoice and
lien waiver from the  contractor  performing  such repairs.  In the event Lessor
falls to  reimburse  Lessee the cost of such  repairs  within  thirty  (30) days
following  Lessor's receipt of an invoice and lien waiver,  then Lessee shall be
permitted to withhold from the next  instrument of monthly base rental an amount
equal  to the  lesser  of (i) the  reasonable  cost for  such  repairs,  or (ii)
twenty-five  percent (25%) of the monthly base rental  otherwise due ant payable
for such month. In the event the reasonable cost of such repairs is greater than
twenty-five  percent  (25%) of the monthly base rental  payable for the month in
question,  then Lessee shall be permitted to withhold from future instalments of
monthly base rental an amount equal to twenty-five  percent (25%) of the monthly
base rental on a monthly basis until such time as the amount withheld equate the
cost incurred by Lessee in making such repairs.

       15.4.  LATE  CHARGES.  Lessee  hereby  acknowledges  that late payment by
Lessee to Lessor of rent and other sums due  hereunder win cause Lessor to incur
costs  not  contemplated  by this  Lease,  the  exact  amount  of which  will be
extremely  difficult to ascertain.  Such costs include,  but are not limited to,
processing  and  accounting  charges,  and late charges  which may be imposes on
Lessor  by the  terms of any  mortgage  or trust  deed  covering  the  Premises.
Accordingly,  if any  instalment  of rent or any other sum due from Lessee shall
not be received by Lessor or Lessor's  designee on or before the  expiration  of
any  applicable  cure period,  Lessee shall pay to Lessor a late charge equal to
five  percent (5%) of such overdue  amount.  The parties  hereby agree that such

                                       98

late charge  represents a fair and reasonable  estimate of the costs Lessor will
incur by reason of late  payment by Lessee.  Acceptance  of such late  charge by
Lessor shall in no event constitute a waiver of Lessee's default with respect to
such overdue amount nor prevent  Lessor from  exercising any of the other rights
and remedies granted hereunder.

16. CONDEMNATION. If less than twenty percent (20%) of the "gross rentable floor
area of the Premises is taken under the power of eminent  domain,  or sold under
the  threat  of the  exercise  of acid  power  (an of which  are  herein  called
"condemnation"),  this Lease shall  terminate  as to the part so taken as of the
date one (1) day prior to the earlier of the date when the condemning  authority
takes title or possession.  If twenty percent (20%) or more of the floor area of
the Premises is taken by  condemnation,  either  Lessor or Lessee may  terminate
this Lease by providing the other with written  notice  thereof  within ten (10)
days following the date when the condemning authority takes title or possession,
whichever  first occurs.  If neither  Lessor or Lessee elects to terminate  this
Lease in accordance  with the  foregoing,  this Lease shall remain in full force
and effect as to the  portion of the  Premises  remaining,  except that the rent
shall be  reduced in the  proportion  that the gross  rentable  floor area taken
bears to the total gross rentable floor area of the original Premises. Any award
for the  taking of all or any part of the  Premises  under the power of  eminent
domain or any payment  made under  threat of the exercise of such power shall be
the  property of Lessor,  whether such award shall be made as  compensation  for
diminution  in value  of the  leasehold  or for the  taking  of the  fee,  or as
severance damages; provided, however, that Lessee shall be entitled to any award
for lose or damage to Lessee's  trade  fixtures and removable  property.  In the
event that this Lease is not terminated by reason of such  condemnation,  Lessor
shalt to the  extent  of  severance  damages  actually  received  by  Lessor  in
connection with such  condemnation,  repair any damage to the Premises caused by
such condemnation  except to the extent that Lessee has been reimbursed therefor
by the  condemning  authority.  Lessee  shall  pay any  amount in excess of such
severance  damages required to complete such repair.  Lessor shall notify Lessee
within ten (10) days after becoming aware of a potential condemnation.

17. GENERAL PROVISIONS.

       17.1.  ESTOPPEL CERTIFICATE.

            (a) Lessee  shall at any time upon not less than ten (10) days prior
written  notice  from  Lessor  execute,  acknowledge  and  deliver  to  Lessor a
statement in writing (i)  certifying  that this Lease is unmodified  and in full
force and effect (or, if modified,  stating the nature of such  modification and
certifying that this Lease, as so modified, is in full force and effect) and the
tab to which  the rent and  other  charges  are paid in  advance,  if any;  (ii)
acknowledging that there are not, to Lessee's knowledge, any uncured defaults on
the part of Lessor  hereunder,  or specifying  such defaults if any are claimed;
and (iii) setting forth such other  statement  with respect to this Lease as may
be reasonably requested by Lessor. Any such statement may be conclusively relied
upon by any prospective purchaser or encumbrances of the Project.

            (b)  Lessee's  failure to deliver  such  statement  within such time
shall be conclusive upon Lessee (i) that this Lease is in full force and effect,
without modification except as may be represented by Lessor, (ii) that there are
no uncured  defaults in Lessor's  Performance.  and (iii) that not more than one
month's rent has been paid in advance.

                                       99

            (c) If Lessor  desires to finance or refinance  the Project,  or any
part thereof, Lessee hereby agrees to deliver to any lender designated by Lessor
such  financial  statements  of Lessee  as may be  reasonably  required  by such
lender.  Such statements  shall be received by Lessor in confidence and shall be
used only for the purpose herein set forth.

       17.2.  LESSOR'S  LIABILITY.  The term  "Lessor" as used herein shall mean
only the owner or owners at the time in  question of the fee title or a lessee's
interest in a ground lease of the Premises. In the event of any transfer of such
title or interest,  Lessor herein named (and in case of any subsequent transfers
the then grantor  shall be relieved  from and after the date of such transfer of
all  liability as respects  Lessor's  obligations  thereafter  to be  performed,
provided  that any funds in the hands of Lessor or the then  grantor at the time
of such  transfer,  in which Lessee has an  interest,  shall be delivered to the
grantee.  The  obligations  contained  in this Lease to be  performed  by Lessor
shall, subject as aforesaid, be binding on Lessor's successors and assigns, only
during their respective periods of ownership.

       17.3.  SEVERABILITY.  The  invalidity  of any  provision of this Lease as
determined  by a court of  competent  jurisdiction,  shall in no way  affect the
validity of any other provision hereof

       17.4.  INTEREST  ON  PAST-DUE  OBLIGATIONS.  Except as  expressly  herein
provided,  any amount due to Lessor not paid when due shall bear interest at the
rate of 15% per annum  from the date due.  Payment  of such  interest  shall not
excuse or cure any default by Lessee under this Lease.

       17.5. TIME OF ESSENCE. Time is of the essence.

       17.6. CAPTIONS. Section and paragraph captions are not a part hereof.

       17.7. INCORPORATION OF PRIOR AGREEMENTS;  AMENDMENTS. This Lease contains
an agreements  of the parties with respect to any matter  mentioned  herein.  No
prior  agreement  or  understanding  pertaining  to any  such  matter  shall  be
effective.  This Lease may be modified in writing only, signed by the parties in
interest at the time of the modification.

       17.8. NOTICES AND PAYMENTS. all notices and demands which may be required
or permitted to be given to either party hereunder shall be in writing,  and all
such  notices and demands  hereunder  shall be sent by certified  United  States
mail,  return  receipt  requested,  postage  prepaid,  or hand  delivered to the
addressee  set out below or to such other person or place as each party may from
time to time  designate in a notice to the other.  all  payments  due  hereunder
shall be aunt by  first  class  United  States  mail,  postage  prepaid  or hand
delivered  to the address of the Lessor set out below or to such other person or
place as Lessor may from time to time  designate in a notice to Lessee.  Notices
and  payments  shall be deemed given and made upon actual  receipt.  Any notice,
demand or payment  required or permitted to be given or made hereunder  shall be
addressed to Lessor and Lessee, respectively, at the addressee set forth below:

 If to Lessor:   Holualoa Peoria Avenue Industrial, LLC
                 4515 N. 16th Street, Suite 204
                 Phoenix, Arizona 85016
                 Attn: Sandy Alter

                 Holualoa Peoria Avenue Industrial, LLC

                                       100

                 c/o Wessex Companies
                 2828 N. Central Avenue, Suite 1060
                 Phoenix, Arizona 85004
                 Attn: Swan Mahr

                 Holualoa Peoria Avenue Industrial, LLC
                 75-5706 Hanama Place, Suite 104
                 Kailua-Kona, Hawaii 96740
                 Attn: Lynn Taube

 If to Lessee:   Titan Motorcycle Co. of America
                 2222 W. Peoria Avenue
                 Phoenix, Arizona 85029
                 Attn: Frank Keery, CEO

17.9.  MORTGAGEE PROTECTION

            (a) If, in connection  with  obtaining  financing for the Project or
any portion thereof,  Lessor's lender shall request reasonable  modifications to
this Lease as a  condition  to such  financing,  Lessee  shall not  unreasonably
withhold,  delay  or defer  in  consent  to such  modifications,  provided  such
modifications  do not materially  adversely  affect  Lessee's rights or increase
Lessee's obligations under this Lease.

            (b)  Lessee  agrees to give to any  trust  deed or  mortgage  holder
(beholders),  by prepaid certified mail, return receipt  requested,  at the same
time as it is given to Lessor,  a copy of any notice of default given to Lessor,
provided that prior h such notice Lessee has been notified,  in writing, (by way
of notice of assignment of rend and lessee, or otherwise) of the address of such
Holder.  Lessee  further  agrees  that if Lessor  shall have failed to cure such
default  within the time provided for in this Lease,  then the Holder shall have
an additional twenty (20) days after expiration of such period, or after receipt
of such  notice  from  Lessee (if such  notice to the Holder is required by this
Section 17.9(b)),  whichever shall last occur, within which to cure such default
or if such default cannot be cured within that time,  then such  additional time
as may be  necessary if within such twenty (20) days,  any Holder has  commenced
and  is  diligently  pursuing  the  remedies  necessary  to  cure  such  default
(including  but not  limited to  commencement  of  foreclosure  proceedings,  if
necessary,  to effect  such  cure),  in which  event  this  Lessee  shall not be
terminated.

       17.10.  WAIVERS.  No waiver by Lessor of any  provision  hereof  shall be
deemed a waiver of any other  provision  hereof or of any  subsequent  breach by
Lessee of the same or any other provision. Lessor's consent to or approval of an
act shall not be deemed to render  unnecessary the obtaining of Lessor's consent
to or approval of any subsequent act by Lessee. The acceptance of rent hereunder
by  Lessor  shall  not be a waiver  of any  preceding  breach  b  Lessee  of any
provision hereof, other than the failure of Lessee to pay the particular rent so
accepted,  regardless of Lessor's knowledge of such preceding breach at the time
of acceptance of such rent.

       17.11.  RECORDING.  Lessee shall not record this Lease  without  Lessor's
prior written  consent,  and such  recordation  shall,  at the option of Lessor,
constitute  a  non-curable  default of Lessee  hereunder.  At Lessee's  request,
Lessor shall  execute and allow the  recordation  of a short form  memorandum of

                                       101

this Lease, in form reasonably  acceptable to Lessor, only if prior to execution
thereof by Lessor, Lessee executes and delivers to Lessor, in recordable form, a
properly  acknowledged  quitclaim deed or other instrument  extinguishing all of
Lessee's  rights and  interests  in and to the  Project  and the  Premises,  and
designating Lessor as the grantee,  which deed or other instrument shall be held
by Lessor and may be recorded by Lessor upon the  termination  or  expiration of
this  Lease.  The  memorandum  may  disclose  Lessee's  right of first  offer to
purchase set forth in Paragraph 40 of the Addendum  hereto and Lessee's right of
First refusal set forth in Paragraph 41 of the Addendum hereto.

       17.12.  HOLDING OVER. If Lessee  remains in possession of the Premises or
any part thereof after the  expiration  of the Term hereof,  without the written
consent of Lessor,  such occupancy  shall be a tenancy at sufferance,  for which
Lessee shall pay a monthly base rental of one hundred twenty-five percent (125%)
of the monthly base rental in effect  immediately prior to the expiration of the
Term plus all other  charges  payable  hereunder,  and upon all the terms hereof
applicable to such a tenancy at sufferance.

       17.13.  CUMULATIVE  REMEDIES.  No remedy or election  hereunder  shall be
deemed  exclusive but shall,  wherever  possible,  be cumulative  with all other
remedies at law or in equity.

       17.14. COVENANTS AND CONDITIONS. Each provision of this Lease performable
by Lessee shall be deemed both a covenant and a condition.

       17.15.  BINDING  EFFECT;  CHOICE OF LAW.  Subject any  provisions  hereof
restricting  assignment or subletting  and subject to the  provisions of Section
17.2,  this  Lease  shall  bind the  parties,  their  personal  representatives,
successors and assigns. This Lease shall be governed by the laws of the State of
Arizona.

       17.16.  SUBORDINATION.

            (a) This  Lease,  at  Lessor's  option  and upon  written  notice to
Lessee, shall be automatically  subordinate to any ground lease, mortgage,  deed
of trust, or any other  hypothecation  for security now or hereafter placed upon
the Project and to any and an advances  made on the security  thereof and to all
renewals,  modifications,  consolidations,  replacement and extensions  thereof;
provided, however, as to any ground lease, mortgage, deed of trust, or any other
hypothecation for security hereafter placed upon the Project, such subordination
shall be conditioned upon the ground lessor,  mortgagee,  beneficiary under deed
of trust or  holder  of any  other  hypothecation  recording  a  non-disturbance
agreement in favor of Lessee in such party's  customary  form.  If Lessor or any
mortgagee, trustee, or ground lessor shall elect to have this Lease prior to the
lien of a mortgage, deed of trust or ground lease, and shall give written notice
thereof  to Lessee,  this  Lease  shall be  automatically  deemed  prior to such
mortgage,  deed of trust or ground  lease,  whether this Lease is dated prior or
subsequent to the date of said mortgage,  deed of trust,  or ground lease or the
date of recording thereof.

            (b) Lessee agrees to execute any commercially  reasonable  documents
required to further  evidence or effectuate such  subordination  or to make this
Lease prior to the lien of any mortgage,  dead of trust or ground lease,  as the
case may be, and  failing to do so within  ten (10) days after  written  demand,
does  hereby  make,  constitute,  and  irrevocably  appoint  Lessor as  Leesee's
attorney in fact and in Lessee's name, place and stead, to do so.

                                       102

       17.17.  ATTORNEYS'  FEES. If either party brings an action to enforce the
terms hereof or declare rights hereunder, the prevailing party shall be entitled
to its reasonable  attorneys' fees in any such action, on trial or appeal, to be
paid by as fixed by the court.

       17.18.  LESSOR'S ACCESS.  Lessor and Lessor's agents shall have the right
to enter the Premises at reasonable  times and upon  reasonable  prior notice to
Lessee  between 8 a.m.  and 5 p.m.  weekdays for the purpose of  inspecting  the
same, showing the same to prospective purchasers,  lenders, consultant and other
professionals and making such alterations, repairs, improvement, or additions to
the  Premises  or to the  building  of  which  they  are a part  as  Lessor  may
reasonably  deem  necessary or desirable.  In connection  with such entry and in
connection  with  carrying  out  any of  its  responsibilities  hereunder  or in
privileges  as the owner of the Project,  Lessor shall be entitled to erect such
scaffolding  and other  necessary  structures or equipment as reasonably  may be
required by the  character  of the work to be  performed,  provided  that Lessor
shall not unreasonably  interfere with the conduct of Lessee's business.  Except
as specifically  provided herein to the contrary,  no entry by Lessor  hereunder
nor any work  performed by Lessor to the Premises or the Project  shall  entitle
Lessee to  terminate  this Lease or to a reduction or abatement of rent or other
amounts owed by Lessee hereunder nor to any claim for damages. Lessor may at any
time place on or about the Premises any ordinary "For Sale," and during the last
six (6) months of the Term,  "For Lease" signs.  Lessor and Lessor's agent shall
have the right to enter the Premises at any time in the case of an emergency.

       17.19.  SIGNS  AND  AUCTIONS.  Lessee  shall  not place any sign upon the
Premises or conduct any auction from the Premises without Lessor's prior written
consent.

       17.20.  MERGER.  The voluntary or other surrender of this Lease by Lessee
or a mutual cancellation  thereof shall, at the option of Lessor,  terminate all
or any  existing  subtenancies  or may,  at the option of Lessor,  operate as an
assignment to Lessor of any or all of such subtenancies.

       17.21.  AUTHORITY.  If  Lessee  is a  corporation,  a  limited  liability
company,  partnership or other entity,  each individual  executing this Lease on
behalf of said entity  represents  and warrants  that he is duly  authorized  to
execute and deliver this Lease on behalf of said entity,  and that this Lease is
binding  upon  said  entity  in  accordance  with  its  terms.  If  Lessee  is a
corporation,  a limited company,  partnership or any other entity,  Lessee shall
deliver to Lessor,  upon Lessee's execution of this Lease,  evidence  reasonably
satisfactory  to Lessor of the authority of the person(s)  signing this Lease on
behalf of Lessee to do so and that Lessee has approved entering into this Lease.
Such  evidence  may include a  certified  copy of a  resolution  of the Board of
Directors or members or partners of said entity  authorizing  or  ratifying  the
execution of this Lease by a specific  person(s) or other similar  evidence.  In
absence of such evidence,  the  individual(s)  executing  this Lease  guarantees
payment and full performance of this Lease.
        17.22.  NSF CHECKS.  There will be a $50.00  service  charge  payable to
Lessor on all NSF  checks,  which  charge  shall be in  addition  to, and not in
substitution for, any late charges and interest due hereunder.

18. PARKING AND COMMON AREAS. The Lessee agents, employees and invitees shall be
entitled to park in common with other lessees of Lessor providing that it agrees
not to overburden the parking  facilities of the Project and agrees to cooperate
with the Lessor and other lessees in the use of the parking  facilities.  Lessor
specifically  reserves  the right,  in its  absolute  discretion,  to  determine
whether  parking  facilities  are  becoming  overburdened  and in such  event to

                                       103

allocate the parking  spaces among the Lessee and other  lessees,  their agents,
employees,  and business invitees using the parking  facilities in proportion to
each such Lessee's share of the space within the Project. All loading operations
for receipt or shipment of goods,  wares and  merchandise by the Lessee shall be
done in the rear of the Premises or in such area therein  which is  specifically
designated in writing by the Lessor.

19.  SAFETY.  Lessee shall maintain on the Premises at all times during the Term
hereof  an  adequate  number,  size  and  type  of  fire  extinguishers  as  are
appropriate to Lessee's business. Lessee will at all times adhere to good safety
practices or as may be required by safety inspectors.  No goods,  merchandise or
materials shall be kept, stored or sold by Lessee on or about the Premises which
are in any way hazardous.  Lessee, at in sole expense, shall comply with any and
all  requirements  of any insurance  organization  or company  necessary for the
maintenance  of  reasonable  few and public  liability  insurance  covering  the
Premises, the Project or any portion thereof.

20. ATTORNMENT. In the event any proceedings are brought for foreclosure,  or in
the event of the  exercise  of the power of sale under any  mortgage  or deed of
trust  covering the Premises,  the Lessee shall attorn to the purchaser upon any
such  foreclosure  or sale and recognize such purchaser as the Lessor under this
Lease.

21. NO ACCESS TO ROOF.  Lessee  shall have no right of access to the roof of the
Premises  or the  building  in which  the  Premises  are  located  and shall not
install,  repair or replace any aerial,  fan, air conditioner or other device on
the roof of the  Premises  or the  building  in which the  Premises  are located
without the prior written consent of Lessor. Any aerial, fan, air conditioner or
device  installed  without such written consent shall be subject to removal,  at
Lessee's expense, without notice, at any time.

22.  SUCCESS0RS  AND  ASSIGNS.  Subject  to any  provisions  hereof  restricting
assignment or  subletting  and subject to the  provisions  of Section 17.2,  the
covenant  and  conditions  herein  contained,  inure  to  and  bind  the  heirs,
successors, executors, administrators and assigns of the parties hereto.

23.  FINANCIAL  STATEMENTS.  Within fifteen ( 15) days after  Lessor's  request,
Lessee shall deliver to Lessor the current financial  statements of Lessee,  and
financial  statements  of the two  (2)  years  prior  to the  current  financial
statement year,  including a balance sheet and profit and loss statement for the
most recent  prior year,  all prepared in  accordance  with  generally  accepted
accounting principles  consistently  applied. Such financial statement,  balance
sheet and profit and loss statement  shall be certified as accurate by Lessee or
a  properly  authorized  representative  of Lessee  if Lessee is a  corporation,
partnership or other business entity. Lessor shall keep such Financial statement
of Lessee  confidential  and shall not copy or disclose their contents except to
Lessor's manager,  members,  lenders, and prospective purchasers of the Project.
24. NO ACCORD OR  SATISFACTION.  No  payment by Lessee or receipt by Lessor of a
lesser amount than the monthly rent and other sums due hereunder shall be deemed
to be other than on account of the  earliest  rent or other sums due,  nor shall
any endorsement or statement on any check or  accompanying  any check or payment
be deemed an accord  and  satisfaction;  and  Lessor  may  accept  such check or
payment without  prejudice to Lessor's right to recover the balance of such rent
or other sum or pursue any other remedy provided in this Lease.

                                       104

25. ACCEPTANCE.  This  Lease shall only become  effective  and binding upon full
execution hereof by Lessor and delivery of a fully executed copy to Lessee.

26. INABILITY TO PERFORM. This Lease and the obligations of the Lessee hereunder
shall not be affected or impaired because the Lessor is unable to fulfill any of
its obligations  hereunder or is delayed in doing so, if such inability or delay
is caused by reason of strike,  labor troubles,  acts of God, or any other cause
beyond the reasonable control of the Lessor.

27. INTENTIONALLY DELETED.

28. AlTERATIONS AND COMMON AREAS. Lessor shall have the right to make changes in
the Common Areas or any part thereof, including, without limitation,  changes in
the location of driveways,  entrances,  exits,  vehicular parking spaces and the
direction of traffic flow, and designation of restricted  areas, as Lessor deems
necessary or advisable for the proper and efficient operation and maintenance of
the Common Areas.  Notwithstanding the foregoing,  Lessor shall not make changes
in the Common Areas which maturity and adversely affect access to, or visibility
of, the Premises, except temporarily during periods of construction.

29.  REVISIONS OF EXHIBIT "A". It is expressly  agreed that the depiction of the
Premises,  the Project and the Common Areas on Exhibit "A" does not constitute a
representation, covenant, or warranty of any kind by Lessor, and Lessor reserves
the right to change the adze, location,  type and number of buildings within the
Project and the location, type, design and dimensions of the Common Areas.

30. OTHER  TENANTS.  Lessor  reserves  the  absolute  right to permit such other
tenancies and  businesses  in the Project as Lessor,  in the exercise of in sole
business judgment, shall determine to best promote the interests of the Project.
Lessee is not  relying on the  understanding,  nor does  Lessor  represent,  any
specific  lessee or number of lessees  shall during the Term occupy any space in
the Project.  Lessee hereby waives all defenses  arising from,  and Lessor shall
not be liable for damages  arising from,  any act or neglect of any other lessee
or from  Lessor's  acts or  omissions in  enforcing  any  provision of its lease
against  another  lessee,  whether or not  Lessor  has  notice of the  offending
lessee's  disturbing or unlawful act or the  opportunity to cure the disturbance
by invoking its powers under such other lease.

31.  NAME OF  PROJECT.  Lessor  shall  have the right to change  the name of the
Project  upon not less than  thirty  (30) days prior  written  notice to Lessee.
Lessee  agrees  that the name of the Project  shall be the sole  property of and
belong to Lessor.  From and after the  termination or expiration of the Term for
any reason whatsoever,  Lessee shall cease using the name of the Project for any
purpose.

32.  JOINT  OBLIGATION.  If  there  be more  than one  Lessee,  the  obligations
hereunder imposed shall be joint and several.

33. CONSENTS AND APPROVALS.  Except as specifically  otherwise stated herein, an
consents or APPROVALS  requested of Lessor hereunder may be granted or denied by
Lessor in its sole and absolute discretion.

                                       105

34. BASIC TERMS SHEET.  The Basic Terms Sheet to which this Lease is attached is
for the convenience of the parties in quickly  referencing  certain of the basic
terms of the Lease.  It is not  intended  to gene as a  complete  summary of the
Lease. In the event of any  inconsistency  between the Basic Terms Sheet and the
Lease, the applicable Lease provision shall prevail and control.

35. TRIPLE NET LEASE.  Lessee  acknowledges  that this is a Triple Net Lease and
that Lessee  shall do all acts and make all payments  connected  with or arising
out of its use and  occupation  of the  Premises  to the end  that  Lessor  shad
receive all rent  provided  for herein free and  undiminished  by any  expenses,
charges,  fees,  taxes and  assessment,  and Lessor  shall not be  obligated  to
perform  any acts or be  subject  to any  liabilities  or to make any  payments,
except as otherwise specifically and expressly provided in this Lease.

The parties hereto have executed this Lease on the dates  specified  immediately
adjacent to their respective signatures.

This Lease has been prepared for  submission to your attorney for trio approval.
No  representation  or  recommendation  is made by the  Lessor or its  agents or
employees  as to the  legal  effect  or tax  consequences  of this  Lease or the
transaction relating thereto.

LESSOR:                                    LESSEE:
- -------                                    -------

Holualoa Peoria Avenue                     Titan Motorcycle Co. of America, Inc.
Industrial, LLC,                           a Nevada corporation
an Arizona limited liability company

By:        /s/                             By:       /s/
     --------------------------                 --------------------------
Name:   Sandra M. Alter                    Name:   Francis S. Keery
     --------------------------                 --------------------------
Title:     Authorized Agent                Title:     C.E.O.
     --------------------------                 --------------------------
Date:     1/24/97                          Date:     1/24/97
     --------------------------                 --------------------------

                                       106

                                                                     EXHIBIT 6.2
                   ADDENDUM TO STANDARD COMMERCIAL-INDUSTRIAL
                                TRIPLE NET LEASE

              This Addendum to Standard  Commercial-Industrial  Triple Net Lease
("Addendum")  is  attached  to  and  incorporated  into  that  certain  Standard
Commercial-Industrial  Triple Net Lease,  dated as of December 16, 1996, between
Holualoa Peoria Avenue  Industrial,  LLC, an Arizona limited  liability  company
("Lessor"),   and  Titan  Motorcycle  Co.  of  America,   a  Nevada  corporation
("Lessee"),  (the "Lease").  In the event of any inconsistency between the terms
of the Lease and this Addendum,  the terms of this Addendum  shall  control.  As
hereinafter used, the term "Lease" means the Lease as amended by this Addendum.

 36.     Intentionally Deleted.
         ----------------------

37. HVAC and Mechanical  Equipment.  Notwithstanding the terms of Paragraph 7 of
the Lease to the contrary, during the first nine (9) months of the Term, Lessor,
shall, at its expense,  maintain,  service,  replace and keep in good repair the
heating, ventilating and air conditioning equipment and all mechanical equipment
serving the Premises;  provided,  however,  the  foregoing  obligation of Lessor
shall in no event include any of the Leasehold Improvements described on Exhibit
"B" to the Lease.

38. Monthly Base Rent. The monthly base rental shall commence April 1, 1997 (the
"Rental  Start  Date").  Monthly  base rental for the twenty  (20) month  period
commencing  on the Rental  Start Date shall be  Fifteen  Thousand  Five  Hundred
Twenty and no/100 Dollars  ($15,520.00)  triple net; monthly base rental for the
second  twenty (20) month  period  after the Rental Start Date shall be Eighteen
Thousand Two Hundred  Thirteen and no/100 Dollars  ($18,213.00)  triple net; and
monthly  base  rental for the third  twenty (20) month  period  after the Rental
Start  Date  shall be  Twenty  Thousand  Nine  Hundred  Six and  no/100  Dollars
($20,906.00) triple net. Lessee shall have the right to occupy the Premises from
the Commencement Date until the Rental Start Date rent free.

 39.     Extension Option.
         -----------------

         39.1  Lessor  hereby  grants to Lessee one (1) option  (the  "Extension
Option")  to extend the Term of the Lease for an  additional  period of five (5)
years (the  "Option  Terms),  on the same terms,  covenants  and  conditions  as
provided for in this Lease during the initial Term, except: (a) the monthly base
rent payable  during the Option Term shall be the "fair market  rental rate" for
the Premises as defined and determined in accordance with the Fair Market Rental
Rate Rider attached to this Lease as Exhibit "C" provided,  however, in no event
shall the  monthly  base rent  payable  during the Option  Term be less than the
Adjusted Monthly Base Rent in effect from time to time,  determined  pursuant to
Section 39.4 below;  (b) Lessor shall have no further  right to extend the Term;
and (c) the terms of Exhibit "B" shall be inapplicable to the Option Term.

                                       107

         39.2 The  Extension  Option  must be  exercised,  if at all, by written
notice ("Extension Notices) delivered by Lessee to Lessor no later than the date
which is one hundred  eighty (180) days prior to the  expiration  of the initial
Term. The Extension  Option shall, at Lessor's sole option,  not be deemed to be
properly  exercised if, at the time such Extension Option is exercised or on the
scheduled  commencement  date for the Option Term,  Lessee is then in default or
Lessee has been chronically  delinquent  during the initial Term as described in
Section 15.1(e) of the Lease.

         39.3 Notwithstanding  the  determination  of  fair  market  rental rate
pursuant  to Exhibit "C" or of Adjusted  Monthly  Base Rent  pursuant to Section
39.4,  in no event shall the monthly base rent  payable  during any month of the
Option  Term be less than the  monthly  base rent  payable  during the  previous
month.

         39.4 Adjusted  Monthly Base Rent shall be determined in accordance with
the  following  formula  on the  first  day of each of the five (5) years of the
Option Term (the "Adjustment Date(s)") and shall be in effect for the subsequent
12 months:

 Adjusted Monthly  Base Rent = monthly base rent as
                               of the day prior to applicable Adjustment
                               Date x (CPI-2/CPI-1).

 In applying the above, the following definitions shall be used:

             39.4.1               "Preceding  Year of the Lease Term" Means
                                  the 12 months  preceding  the  Applicable
                                  Adjustment Date.

             39.4.2               "Bureau"  means  the U.S.  Department  of
                                  Labor,  Bureau of Labor Statistics or any
                                  Successor  agency  that  shall  issue the
                                  indices or data referred to in Section
                                  39.1.1.3

             39.4.3               "CPI"  means the  monthly  indices of the
                                  Consumer Price Index, All Urban Consumers
                                  (CPI-U),  U.S.  City  Average,  All Items
                                  (1982-84 equals 100), issued by
                                  the Bureau.

             39.4.4               "CPI-1"  means  the  monthly  CPI for the
                                  Calendar  month  three (3) months  before
                                  The commencement of the Preceding Year Of
                                  the Lease Term.

                                       108

             39.4.5               "CPI-2"  means  the  monthly  CPI for the
                                  Calendar  month  three (3) months  before
                                  The applicable Adjustment Date.

             39.4.6 If at the time of the  computations  provided for in Section
39.4, no CPI is compiled and published by any agency of the federal  government,
the  statistics  reflecting  cost  of  living  increases,  as  compiled  by  any
institution or organization or individual  generally  recognized as an authority
by financial and insurance  institutions and acceptable to Lessor, shall be used
as a basis for such adjustments.

             39.4.7 If Adjusted Monthly Base Rent exceeds the fair market rental
rate for the  Premises,  Lessor shall  notify  Lessee in writing of the Adjusted
Monthly  Base Rent.  Such  notice  shall  include all the data used by Lessor in
calculating the Adjusted  Monthly Base Rent. In the event that Adjusted  Monthly
Base Rent is not  determined  prior to the  commencement  to any year during the
Option Term,  Lessee shall  continue to pay to Lessor the monthly base rent last
in effect until  Lessee is notified of the  Adjusted  Monthly Base Rent and that
the same exceeds the fair market rental rate for the Premises. Upon such notice,
Lessee shall  commence  paying  Adjusted  Monthly Base Rent at the time the next
monthly  base rent  payment is due,  at which time Lessee  shall also  reimburse
Lessor for the difference  between the amount of rental paid during such interim
period and the amount of the Adjusted Monthly Base Rent for said period.

40.      Right of First Offer to Purchase
         --------------------------------

             40.1 During the Term, before entering into an agreement to sell the
Project, Lessor will notify Lessee ("Lessor's Notice") of the purchase price and
other  material  terms upon which Lessor would be willing to sell the Project to
Lessee (the "Sales  Terms").  If within ten (10) days after  receipt of Lessor's
Notice,  Lessee  agrees in writing to purchase the Project upon the Sales Terms,
Lessor or its counsel will  prepare a formal  Purchase  and Sale  Agreement  and
Escrow  Instructions (the  "Agreement"),  which Agreement shall be acceptable to
Lessor in its sole and  absolute  discretion.  If Lessee  does not  deliver  its
notice of intent to purchase  the Project as offered in Lessor's  Notice  within
such ten (10) day period,  or if the Agreement  has not been fully  executed and
delivered  by Lessor  and  Lessee  within  ten (10) days  after  Lessor's  first
delivery of the  Agreement  to Lessee,  Lessor and Lessee  shall have no further
rights or obligations under this Paragraph 40, and Lessor will have the right to
sell  the  Project  to a third  party  at a price  and  upon  such  terms as are
acceptable  to  Lessor,  whether  or not such  price  and terms are more or less
favorable  than those  offered to Lessee.  This right of first offer to purchase
the  Project  is  personal  to  Titan  Motorcycle  Co.  of  America  and  is not
transferrable  except to an affiliate of Titan Motorcycle Co. of America ("Titan
Affiliate") in connection with an assignment of this Lease or in connection with
a sublease of all of the  Premises  for the entire  remaining  term (less any de
minimus reversion to Titan Motorcycle Co. of America),  where such assignment or
sublease transaction has been consented to by Lessor pursuant to Paragraph 14 of
the  Lease.  For  purposes  hereof,  a Titan  Affiliate  shall  mean  an  entity
controlled by or under common control with Titan Motorcycle Co. of America.

                                       109

             40.2 Time is of the essence of the provisions of this Paragraph 40.

             40.3 Lessor's  obligations  under this Paragraph 40 are conditioned
upon the  following:  (i) Lessee not being in default under this Lease as of the
date Lessor gives  Lessor's  Notice and no event having  occurred as of the date
Lessor  gives  Lessor's  Notice that with the giving of notice or the passage of
time would  constitute a default  under this Lease;  (ii) Lessee not having been
chronically  delinquent as described in Section 15.1(e) of the Lease at any time
prior to the date Lessor's  Notice is given;  and (iii) Lessor's  determination,
upon a review of  Lessee's  most  recent  financial  statements,  that  Lessee's
financial  condition  permits  it  to  fully  perform  in  accordance  with  the
Agreement.

             40.4  Except as set forth in  Section  17.11 of the  Lease,  Lessee
shall not allow its rights  under this  Paragraph  40 to be placed of record.  A
violation of the preceding  sentence shall terminate Lessee's rights pursuant to
this  Paragraph 40 and will  constitute an incurable and material  default under
this Lease.

             40.5 All of  Lessee's  rights  set forth in this  Paragraph  40 are
hereby  subordinated  to any  existing  or  future  mortgage  or deed  of  trust
encumbering the Project.

             40.6  If  Lessee  purchases  the  Property,  prepaid  rent  will be
credited against the purchase price.

41.          Right of First Refusal to Lease.
             --------------------------------

             41.1  Lessor  grants  Lessee a right of first  refusal  ("ROFR") to
lease any other space in the Project pursuant to this Paragraph 41.

             41.2 If, during the Term of this Lease, Lessor receives a bona fide
offer to lease any  portion of the  Project  from a third  party and  intends to
accept the offer,  or if Lessor decides to make an offer to lease any portion of
the Project,  Lessor will give a written copy of the offer  (either of which are
herein called a "Lease Offer") to Lessee either prior to acceptance of the offer
or after such  acceptance  (in which latter case,  the lease shall be subject to
Lessee's  rights  hereunder).  For purposes of this  Paragraph 41, a non-binding
letter of intent  shall be deemed a Lease  Offer.  Lessee will have the right to
match the offer received by Lessor or accept the offer made by Lessor by written
notice to Lessor given within eight (8) business days after Lessee's  receipt of
the offer ("Acceptance  Notice"). If Lessee matches or accepts the offer, as the
case may be, in writing,  Lessee  will be bound to lease such space  strictly in
accordance with the terms of the offer.

             41.3 The ROFR is a  continuing  right and,  subject to the terms of
this  Paragraph 41, shall apply to all Lease Offers made during the term of this
Lease,  whether or not Lessee has failed to match or accept any  previous  Lease
Offer pursuant to this Paragraph 41. If, and only if, (i) Lessee notifies Lessor
in writing  that  Lessee does not elect to lease the  applicable  portion of the
Project upon Lessee's receipt of any Lease Offer, or (ii) Lessee does not timely
deliver an  Acceptance  Notice to Lessor with respect to any Lease  Offer,  then

                                       110

Lessor shall have no further  obligation to lease the applicable  portion of the
Project to Lessee  pursuant to the  applicable  Lease  Offer,  and Lessor  shall
thereafter have the right to lease the applicable  portion of the Project to the
third party who initially made the Lease Offer or to whom Lessor  initially made
the Lease Offer,  or to any other person,  substantially  in accordance with the
terms of such Lease Offer. If Lessor does not sign a lease with such third party
or other  party  within  one  hundred  eighty  (180)  days after the date of the
original Lease Offer, or if the terms of a Lease Offer are materially changed to
the  advantage of such third party after it has been  delivered to Lessee,  then
Lessee will once again have the first right to lease the  applicable  portion of
the Project in  accordance  with the terms of this  Paragraph 41 and Lessor will
once again be obligated  to comply with the terms of this  Paragraph 41 prior to
leasing the applicable portion of the Project to anyone other than Lessee.

             41.4 Lessee  shall have no ROFR if at the time Lessor  gives Lessee
notice of the  Lease  Offer or if at the time set for the  commencement  date of
such new lease (i) a  default  exists  under  this  Lease,  or (ii) an event has
occurred  that would be a default  under this Lease after  either  notice or the
passage of time, or both, or (iii) Lessee has assigned all or part of this Lease
or has  sublet all or part of the  Property,  whether  with or without  Lessor's
consent.

             41.5 The ROFR is personal to Titan Motorcycle Co. of America,  Inc.
and may not be assigned by it except to a Titan  Affiliate in connection with an
assignment  of this Lease or a sublease  of all of the  Premises  for the entire
remaining  Term  (less  any de  minimum  reversion  to Titan  Motorcycle  Co. of
America), where such assignment or sublease transaction has been consented to by
Lessor  pursuant to  Paragraph 14 of the Lease.  Except as  expressly  permitted
above,  any attempted  assignment of the ROFR will be void,  will  terminate the
ROFR and will constitute an incurable and material default of this Lease.

             41.6  Except as set forth in  Section  17.11 of the  Lease,  Lessee
shall not allow its ROFR to be placed of record.  A violation  of the  preceding
sentence shall  terminate the ROFR and will constitute an incurable and material
default under this Lease.

             41.7 Time is strictly of the essence of each and every provision in
this Paragraph 41.

42.  Covenant  of  Quiet  Enjoyment.  Lessor  covenants  that so long as  Lessee
fulfills the conditions and covenants  required of it to be performed under this
Lease, Lessee will have peaceful and quiet possession of the Premises during the
term hereof.

43.  Brokers.  Lessor and Lessee  represent  and warrant to each other that they
have not had any  dealings  with any real estate  brokers,  finders or agents in
connection with this Lease other than CB Commercial Real Estate Group, Inc. (Pat
Feeney and Pete Wentis) (the  "Broker").  Lessor and Lessee agree to  indemnify,
defend (with counsel selected by the indemnified party and reasonably acceptable
to the  indemnifying  party)  and hold the other  party  and the other  parties'
nominees,  successors  and  assigns  harmless  from any and all  claims,  costs,
commissions,  fees, or damages by any person or firm whom the indemnifying party
authorized or employed,  or acted by implication to authorize or employ,  to act

                                       111

for the indemnifying  party in connection with this Lease.  Notwithstanding  the
foregoing,  Lessor  covenants  and  agrees  to pay all  commissions  owed to the
Broker.

                           LESSOR:

                                    Holualoa Peoria Avenue Industrial, LLC,
                                    An Arizona limited liability company

                                    By:     Holualoa Arizona, Inc.,
                                            An Arizona corporation
                                    Its:    Manager

                                            By: /s/
                                                -----------------------------
                                            Its: Authorized Agent
                                                -----------------------------
                           LESSEE:

                                    Titan Motorcycle Co. of America, Inc.,
                                    A Nevada corporation

                                            By: /s/
                                                -----------------------------
                                            Its: C.E.O.
                                                -----------------------------

                                       112

                                   EXHIBIT "B"

                              WORK LETTER AGREEMENT

              This Work Letter  Agreement  supplements  the Standard  Commercial
Industrial  Triple  Net Lease (the  "Lease"),  dated and  executed  concurrently
herewith, by and between Lessor and Lessee,  covering certain premises described
in the Lease (the "Premises").  All terms not defined herein shall have the same
meaning as set forth in the Lease.

1. Construction of Leasehold Improvements.
- ------------------------------------------

              1.1.  Leasehold  Improvements.  Lessee  shall  furnish and install
within  the  Premises  those  items  of  general  construction   (including  any
distribution to the Premises) of any utilities and heating,  ventilating and air
conditioning  service as is required to serve the  Premises)  shown on the plans
and specifications finally approved by Lessor and Lessee pursuant to Paragraph 2
below (the "Leasehold Improvements") in compliance with all applicable codes and
regulations.  The Leasehold  Improvements shall be constructed  substantially in
accordance  with the preliminary  specifications  and  architectural  renderings
described on Schedule 1 attached hereto (the "Preliminary Plans"). The Leasehold
Improvements  shall be  constructed  pursuant to this Work Letter  Agreement  by
Lessee's general contractor,  MD Construction,  Inc. ("Lessee's Contractor") and
subcontractors.  Lessee's  Contractor  shall not be  changed  without  the prior
written consent of Lessor.

              1.2.  Construction  Representatives.  Lessor hereby appoints Sandy
Alter as Lessor's representative  ("Lessor's  Representative") to act for Lessor
in all matters  covered by this Exhibit "B." Lessee hereby  appoints Frank Kerry
as Lessee's representative ("Lessee's  Representatives) to act for Lessee in all
matters  covered by this  Exhibit  "B." All  communications  with respect to the
matters covered by this Exhibit "B" shall be made to Lessor's  Representative or
Lessee's  Representative,  as the case  may be.  Either  party  may  change  its
representative under this Exhibit "B" at any time by written notice to the other
party.

2. Construction Plans for Premises.
- -----------------------------------

              2.1. Preparation of Space Plans. Lessee's Contractor shall prepare
preliminary space plans for the Premises. Lessee's Contractor shall also prepare
detailed  space  plans  sufficient  to convey  the  architectural  design of the
Premises and layout of the Leasehold  Improvements  therein ("Space Plans"). The
Space Plans shall be submitted to Lessor for Lessor's  reasonable  approval.  If
Lessor shall  disapprove of any portion of the Space Plans,  Lessor shall advise
Lessee in writing of such  disapproval  and the reasons  therefor.  Lessee shall
then submit to Lessor for Lessor's reasonable  approval, a redesign of the Space
Plans, incorporating those revisions required by Lessor.

              2.2.  Preparation  of Final  Plans.  Based on the  approved  Space
Plans,  Lessee  shall  cause an  architect  selected  by Lessee  and  reasonably
approved by Lessor (the  "Architect") to prepare complete  architectural  plans,

                                       113

drawings and specifications and complete engineering, mechanical, structural and
electrical  working  drawings  for  all of the  Leasehold  Improvements  for the
Premises  (collectively,   the  "Final  Plans")  showing:  (a)  the  subdivision
(including partitions and walls), layout,  lighting,  finish and decoration work
(including  carpeting  and other  floor  coverings)  desired  by Lessee  for the
Premises;  (b) all internal and external  communications  and utility facilities
which  will  require  conduiting  or other  improvements  from the  shell of the
building of which the Premises are a part (the  "Building)  and/or within common
areas;  and (c) all other  specifications  for the Leasehold  Improvements.  The
Final  Plans  shall be  approved  in the same  manner as provided in Section 2.1
above for  approval of Space  Plans.  Lessor  need not approve  Final Plans that
would require material alterations of the Building shell.

              2.3.  Requirements  of Lessee's Final Plans.  Lessee's Final Plans
shall include  locations and complete  dimensions  and shall:  (a) be compatible
with the Building shell and with the design,  construction  and equipment of the
Building;  (b) be compatible  with and of at least equal quality to the existing
improvements  in the  Building,  and (c)  comply  with all  applicable  laws and
ordinances, and the rules and regulations of all governmental authorities having
jurisdiction, and all applicable insurance regulations.

              2.4.  Changes to Shell of Building. If the approved Final Plans or
any amendment thereof or supplement  thereto shall require material  alterations
of the Building shell  (without  implying any obligation on Lessor to approve of
the same), such alterations shall be performed by Lessee's Contractor as part of
the  Leasehold  Improvements  and the cost of the Building  shell work caused by
such alterations shall be charged against the Allowance.

              2.5.  Approvals.  Lessee shall be solely responsible for obtaining
approval of the Final Plans by all  governmental  agencies having  jurisdiction,
including all necessary  permits and the temporary and permanent  certificate of
occupancy (or other required,  equivalent  approval from the local  governmental
authority  permitting  occupancy  of  the  Premises).  Lessor  shall  reasonably
cooperate with Lessee in obtaining such approvals.

3. Allowance for Leasehold Improvements.
- ----------------------------------------

              3.1. Allowance. Lessee shall receive from Lessor an allowance (the
"Allowances) of up to, but not exceeding,  $183,768.00, which Allowance shall be
used solely to contribute  toward payment of the Work Cost (as defined below) of
the Leasehold Improvements. All items of Leasehold Improvements,  whether or not
the cost  thereof is covered by the  Allowance,  shall  become the  property  of
Lessor upon  expiration or earlier  termination of the Lease and shall remain on
the  Premises at all times  during the Term of this Lease,  except as  otherwise
provided in Section 7.3 of the Lease.

              3.2.  Excess Work  Costs.  In the event that the actual Work Costs
exceed the  Allowance,  Lessee  shall pay such  excess and Lessor  shall have no
responsibility therefor. If prior to or during the construction of the Leasehold
Improvements,  Lessor  reasonably  estimates  that the Work Cost will exceed the
Allowance by more than $50,000.00,  Lessor may, at its option, require Lessee to
post a payment and performance  bond or other surety  satisfactory to Lessor for
the estimated  excess Work Cost.  Such excess shall be paid in  accordance  with

                                       114

Section 3.4 below. If the Allowance  exceeds the Work Cost,  Lessee shall not be
entitled to any payment, rent reduction or credit therefor.

              3.3.  Changes.  In the event that  changes  to the Space  Plans or
Final  Plans are  requested  by Lessee or required  by any  governmental  agency
subsequent  to Lessor's  approval  thereof,  such changes and the costs  thereof
shall  be  forwarded  to  Lessor  for  approval  (which  approval  shall  not be
unreasonably  withheld)  prior to  incorporation  into the work.  After Lessor's
approval of the changes and the costs thereof, the changes shall be incorporated
into the work by means of a change order.

              3.4.  Payment of Allowance.  The Allowance shall be paid by Lessor
in accordance with this Section 3.4. Lessee or Lessee's Contractor shall provide
Lessor by the  fifteenth  (15th)  day of each  calendar  month  with an  invoice
prepared by Lessee's  Contractor  (or Lessee's  Architect with respect to design
costs)  setting forth the Work Cost payable  since the last such  invoice.  Such
invoice shall be  accompanied  by (i) a certificate  from Lessee's  Architect or
Lessee's  Contractor  certifying that the Work Cost set forth in such invoice is
accurate  and that all Work  Costs set forth in prior  invoices  have been paid,
(ii) copies of all invoices from  subcontractors  setting forth the Work Cost on
Lessee's   Contractor's   invoice,   (iii)  receipts  from  such  subcontractors
acknowledging  payment  of the Work Cost set forth in prior  invoices,  and (iv)
copies of lien  waivers,  or  conditional  lien  waivers,  in both  Lessor's and
Lessee's favor, from Lessee's Contractor and subcontractors  (such waivers shall
be conditional with respect to the Work Cost set forth in the invoice which they
are  accompanying  and final with  respect to the Work Cost on prior  invoices).
Lessor's  approval  of all such  invoices  shall not be  unreasonably  withheld,
conditioned, or delayed. Lessor shall pay to Lessee's Contractor, or to Lessee's
Architect with respect to design costs, within ten (10) calendar days of receipt
of all of the foregoing, the Work Cost set forth on the invoice, less the amount
of the retention as described in Section 4.1 below, to the extent Lessor, in its
reasonable judgment, deems such Work Cost to be accurate. Upon exhaustion of the
Allowance it shall become  Lessee's  responsibility  to pay the Work Cost as set
forth on such  invoices,  also within  such ten (10)  calendar  day period,  and
Lessee shall  provide  Lessor  promptly upon  Lessor's  request with  reasonable
evidence of such payment.  Upon final completion of all work to be undertaken by
Lessee  (including  all  punchlist  items),  which  final  completion  shall  be
certified by the Architect and which final completion shall occur not later than
one (1) year after the Lease Commencement Date, Lessee shall execute and deliver
to Lessor a written  acknowledgment that the Leasehold Improvements are approved
by Lessee and a written  certificate  setting forth the amount and nature of all
costs  and  expenses  billed to Lessee in  connection  with the  design,  permit
approval and  construction of the Leasehold  Improvements.  Within ten (10) days
after Lessor's receipt of such certificate, accompanied by copies of all related
bills, invoices, receipts and final conditional lien waivers of all lien rights,
in recordable  form,  from Lessee's  Contractor and all  subcontractors,  Lessor
shall pay to Lessee the remaining  amount of such cost and  expenses,  including
the actual hold back provided in the construction contract, up to and including,
but not  exceeding,  the  Allowance.  Lessee  shall  receive  no  payment,  rent
reduction or credit for any unused portion of the Allowance. Lessor shall not be
obligated to pay any portion of the Allowance  for Work Cost incurred  after the
date that is one (1) year after the Lease Commencement Date. 
4. Construction.
- ----------------

                                       115

              4.1. Construction  Contract.  Not less than ten (10) days prior to
commencement of construction of the Leasehold  Improvements,  Lessee shall enter
into a  construction  contract with Lessee's  Contractor,  which  contract shall
provide  for the  retention  of not less than ten  percent  (10%) of the monthly
progress payments,  and shall otherwise be approved in writing by Lessor,  which
approval shall not be unreasonably  withheld or delayed.  Lessee shall be solely
responsible for the performance of the work of the Leasehold  Improvements to be
performed by Lessee's Contractor and any and all  subcontractors,  suppliers and
the like performing services for Lessee and/or Lessee's Contractor.

              4.2. Construction Schedule.  Prior to commencement of construction
of any Leasehold  Improvements,  Lessee shall  furnish to Lessor's  Construction
Representative  for  approval  in writing a  schedule  setting  forth  projected
completion dates.

              4.3.  Prosecution of Leasehold  Improvements.  Following  Lessor's
approval of the Final Plans, and Lessee and Lessee's  Contractor's  selection of
subcontractors  (as  approved  by  Lessor)  and  execution  of the  construction
contract pursuant to Section 4.1 above,  Lessee shall direct Lessee's Contractor
and  such  subcontractors  to  immediately   commence  and  diligently  complete
construction of the Leasehold Improvements; provided, however, Lessee shall have
up  to  one  year  after  the  Lease   Commencement  Date  to  finally  complete
construction  of the Leasehold  Improvements.  All Leasehold  Improvements  work
shall be  carried  out in  accordance  with  reasonable  rules  and  regulations
promulgated  by  Lessor.  Such  work  shall  be  performed   diligently,   in  a
first-class,  workmanlike  manner and in accordance  with all  applicable  laws.
Prior to  commencing  such work,  Lessee shall  furnish  Lessor with  sufficient
evidence that Lessee and Lessee's Contractor are carrying worker's  compensation
insurance  in  statutorily-required  amounts,  comprehensive  general  liability
insurance  and all other  insurance in compliance  with the Lease.  Lessor shall
have the right to enter the  Premises  at all times to  inspect  the work and to
post notices of  nonresponsibility.  Lessee shall ensure lien-free completion of
the Premises, and Lessee shall comply with all provisions of the Lease regarding
liens, including Paragraph 15 thereof.

     5. Work Cost.  'Work  Cost"  means:  (a) all design  and  engineering  fees
incurred in connection  with the  preparation of the  Preliminary  Plans,  Space
Plans and Final Plans (including the cost of Lessor's  consulting  engineers and
other  consultants);  (b) costs of  permits,  fees and taxes;  (c)  testing  and
inspecting  costs;  (d) the actual  costs and  charges for  material  and labor,
contractor's  profit and  contractor's  general  overhead  incurred by Lessee in
having the Leasehold  Improvements done; and (e) all other costs expended in the
construction of the Leasehold Improvements.

                                       116

                           LESSOR:

                                    Holualoa Peoria Avenue Industrial, LLC,
                                    An Arizona limited liability company

                                    By:     Holualoa Arizona, Inc.,
                                            An Arizona corporation
                                    Its:    Manager

                                            By: /s/
                                                -----------------------------
                                            Its: Authorized Agent
                                                -----------------------------
                           LESSEE:

                                    Titan Motorcycle Co. of America, Inc.,
                                    A Nevada corporation

                                            By: /s/
                                                -----------------------------
                                            Its: C.E.O.
                                                -----------------------------

                                       117

                                                                     EXHIBIT 6.3
                         TITAN MOTORCYCLE CO. OF AMERICA
                         STOCK OPTION AND INCENTIVE PLAN

                  1.       PURPOSE

                  The  purpose  of the Titan  Motorcycle  Co. of  America  Stock
Option and Incentive Plan (the "Plan") is to provide a means through which Titan
Motorcycle  Co. of America,  an Arizona  corporation,  (the  "Company")  and its
Subsidiaries may attract able persons to enter the employ of the Company and its
Subsidiaries  and to provide a means whereby  those key employees  upon whom the
responsibilities for the successful administration and management of the Company
and its Subsidiaries rest, and whose present and potential  contributions to the
welfare of the Company and its Subsidiaries  are of importance,  can acquire and
maintain stock ownership,  thereby strengthening their commitment to the welfare
of the  Company and its  Subsidiaries  and the desire to remain in the employ of
the Company and its Subsidiaries.

                  A further purpose of the Plan is to provide such key employees
with  additional  incentive  and reward  opportunities  designed  to enhance the
profitable growth of the Company and its  Subsidiaries.  So that the appropriate
incentive can be provided, the Plan provides for granting non-qualified Options,
Incentive Stock Options,  Stock  Appreciation  Rights,  Restricted Stock Awards,
Performance  Shares  and  Dividend  Equivalents,   or  any  combination  of  the
foregoing.

                  2. DEFINITIONS

                  The following  definitions shall be applicable  throughout the
                  Plan:

                  a.  "Act"  means  the  Securities  Exchange  Act of  1934,  as
                  amended.

                  b. "Award" means,  individually or  collectively,  any Option,
                  Stock Appreciation Right, Restricted Stock Award,  Performance
                  Share Award, or Dividend Equivalent Award.

                  c. "Award Period" means a period of not less than three years.

                  d. "Board" means the Board of Directors of the Company.

                  e.  "Code"  means the  Internal  Revenue  Code of 1986 and any
                  regulations issued thereunder, as the same may be amended from
                  time to time.

                                       118

                  f.  "Committee"  means the committee of the Board described in
                  Section 4.

                  g. "Company" means Titan Motorcycle Co. of America.

                  h. "Date of Grant"  means the date on which the granting of an
                  Award is authorized by the Committee or such later date as may
                  be specified by the Committee in such authorization.

                  i. "Dividend Equivalent" means the Award granted under Section
                  11.

                  j. "Eligible  Employee" means any person regularly employed by
                  the Company or a Subsidiary on a full-time basis who satisfies
                  all of the requirements of Section 6.

                  k. "Fair Market Value" means as follows:

                           (i)  For  periods  during  which  the  Stock  is  not
                  regularly traded on an established securities market, it shall
                  be the  value of a share of Stock as  determined  by the Board
                  based on an appraisal of the Company by an  independent  third
                  party as of the Valuation Date  coinciding with or immediately
                  preceding the particular date on which Fair Market Value is to
                  be determined.

                           (ii) For periods during which the Stock is regularly
                  traded on an established securities market,

                                    (A)   For   Options,   SARs   and   Dividend
                           Equivalents,  it shall be the  average of the highest
                           price and the lowest  price at which the Stock  shall
                           have been reported as sold on a generally  recognized
                           stock exchange (the "Exchange") or quoted pursuant to
                           an  inter-dealer   quotation  system  of  a  national
                           securities  association  registered  with the  United
                           States   Securities  and  Exchange   Commission  (the
                           "Quotation System") on a specified date;

                                    (B) For Performance  Share Awards,  it shall
                           be the average of the reported  closing prices of the
                           Stock on the  Exchange  or  Quotation  System  for 30
                           consecutive trading days prior to the Valuation Date.

                  l. "Holder" means an Eligible Employee who has been granted an
                      Award.

                  m. "Incentive Stock Option" means an Option within the meaning
         of Section 422 of the Code.

                                       119

                  n. "Normal Termination" means Termination:

                                    (i) At retirement pursuant to the Company or
                          Subsidiary retirement plan covering the Holder,

                                    (ii) For permanent and total disability,  or
                                    (iii) For any  other  reason,  other  than a
                                    Termination for cause,
                           provided that the Committee has approved, in writing,
                           the  continuation  of any Option  outstanding  on the
                           date of the Holder's Termination.

                  o.  "Option"  means an Award  granted  under  Section 7 of the
                       Plan.

                  p. "Performance  Share" means an Award granted under Section 9
         of the Plan.

                  q.  "Plan"  means the Titan  Motorcycle  Co. of America  Stock
         Option and  Incentive  Plan, as set forth herein and as the same may be
         amended from time to time.

                  r.  "Restricted  Stock  Award"  means an Award  granted  under
         Section 10 of the Plan.

                  s. "Stock" means Common Stock of the Company as defined in the
         Company's  Articles of Incorporation,  unless, at any time prior to the
         grant of the first Award under the Plan, the Committee, in its sole and
         absolute  discretion,  designates an alternative  class of stock of the
         Company as "Stock" for purposes of this Plan,  and such  designation is
         consistent  with  applicable  law;  and  such  other  stock as shall be
         substituted therefor as provided in Section 13.

                  t. "Stock  Appreciation Right" or "SAR" means an Award granted
         pursuant to Section 8 of the Plan.

                  u.  "Subsidiary"  means any corporation of which a majority of
         the  outstanding  voting  stock or voting power is  beneficially  owned
         directly or indirectly by the Company.

                  v.  "Termination"  means  separation  from employment with the
         Company or any of its Subsidiaries for any reason other than death.

                  w.       "Valuation Date" means as follows:

                                    (i) For  purposes  of  determining  the Fair
                           Market Value under Section 2k(i), the last day of the
                           fiscal  year of the  Company  and such other dates as
                           the Committee shall determine in its discretion; and

                                       120

                                    (ii) For purposes of determining Fair Market
                           Value of  Performance  Shares  Awards  under  Section
                           2k(ii)(B),  the  first  day of the year in which  the
                           Award is made for  purposes of  granting  Performance
                           Share Awards and the first business day following the
                           end of the Award  Period  for the  purpose  of making
                           Performance Share payments.

                  3.       EFFECTIVE DATE, DURATION AND SHAREHOLDER
         APPROVAL

                  The Plan will become  effective  on the date it is approved by
the  shareholders  of the  Company  holding a majority of the  Company's  voting
stock. Awards may be made as provided herein for a period of 10 years after such
date.

                  The Plan shall  continue in effect until all matters  relating
to the payment of Awards and administration of the Plan have been settled.

                  4.       ADMINISTRATION

                  The Committee  shall  administer the Plan. The Committee shall
consist of at least two  individuals  who are members of the Board,  and, to the
extent required to comply with Section 16(b) of the Act and/or Section 162(m) of
the Code, who are "disinterested  persons," as such term is defined in the rules
and regulations  issued under Section 16(b) and/or Section 162(m). A majority of
the Committee shall  constitute a quorum.  The acts of a majority of the members
present at any meeting at which a quorum is present and acts approved in writing
by a majority of the  Committee in lieu of a meeting shall be deemed the acts of
the  Committee.  No member of the  Committee,  while  serving as such,  shall be
eligible to receive an Award under the Plan. Except as otherwise provided in the
Plan, the Committee shall have exclusive power, authority and discretion to:

                  a.  Select Eligible Employees to participate in the Plan.

                  b.  Determine the Awards to be made to each Eligible  Employee
                      selected.

                  c.  Determine the time or times when Awards will be made.

                  d.  Determine  the  conditions   (including  the   performance
         requirements) to which the payment of Awards may be subject.

                  e.  Prescribe the form or forms evidencing Awards.

                  f. Establish, adopt or revise such rules and regulations as it
         may deem necessary or advisable for the administration of the Plan.

                  g. Make all determinations relating to the Plan.

                                       121

                  The  Committee's  interpretation  of the  Plan  or any  Awards
granted pursuant thereto and all decisions and  determinations  by the Committee
with respect to the Plan shall be final, binding, and conclusive on all parties.

                  5.       SHARES SUBJECT TO THE PLAN

                  The Committee  may, from time to time,  grant Awards to one or
more Eligible Employees; provided, however, that:

                  (i) Subject to Section 13, the  aggregate  number of shares of
         Stock made subject to Awards under this Plan may not exceed 1,000,000.

                  (ii)  Shares  shall be deemed to have been used in  payment of
         SARs and Performance  Shares only if such shares are actually delivered
         to the Holder.

                  (iii) To the extent that an Award  lapses or the rights of its
         Holder terminate, any shares of Stock subject to such Award shall again
         be available for the grant of an Award,  but only if the Holder has not
         received any  benefits of ownership  from such shares prior to the time
         of such  lapse or  termination.  A Holder  shall  not be deemed to have
         received  benefits of ownership  with  respect to shares  subject to an
         Award merely  because the Holder has voting rights with respect to such
         shares or where  dividends  accumulate  with  respect to such shares if
         such  dividends are forfeited by the Holder when and if the  underlying
         shares of Stock are forfeited.

                  (iv) Stock  delivered by the Company in  settlement  under the
         Plan may be authorized and unissued  Stock,  Stock held in the treasury
         of the Company,  Stock purchased on the open market, or Stock purchased
         by private  purchase at prices no higher than the Fair Market  Value as
         defined in Section 2k at the time of purchase.

                  6.       ELIGIBILITY

                  Officers and key employees of the Company and its Subsidiaries
who, in the opinion of the Committee,  are mainly  responsible for the continued
growth and development  and financial  success of the business of the Company or
one or more of its Subsidiaries shall be eligible to be granted Awards under the
Plan.  Subject to the provisions of the Plan, the Committee shall,  from time to
time,  select from such  eligible  persons those to whom Awards shall be granted
and determine the size or amount of each such Award.

                                       122

                  7.       STOCK OPTIONS

                  One or more Options can be granted to any  Eligible  Employee.
Each Option so granted shall be subject to the following conditions:

                  a. Option price.  The option price per share of Stock shall be
         set by the  grant,  provided  that in the  case of an  Incentive  Stock
         Option,  the  option  price per share may not be less than Fair  Market
         Value at the Date of Grant.

                  b. Form of payment. Upon the exercise of all or any part of an
         Option,  the option price shall be payable in full by check,  in shares
         of Stock owned by the Holder to the extent  permitted by law, or in any
         combination  thereof  at the  election  of the  Holder.  Payment of the
         option  price with shares of Stock owned by the Holder shall be made by
         assigning and delivering  such shares to the Company.  The shares shall
         be valued at Fair  Market  Value on the  exercise  date of the  Option.
         Except as  otherwise  provided by law or the terms of the Stock  Option
         Agreement,  the option  price may also be paid by the Holder  directing
         the Company to withhold  from the shares of Stock that would  otherwise
         be issued upon  exercise  of the Option that number of shares  having a
         Fair Market Value on the  exercise  date equal to the option  price.  A
         Holder  who  elects  to  exercise  all or any  part  of his  Option  by
         directing  the  Company to  withhold  shares  subject to the  exercised
         Option  shall  notify the  Company in writing of his intent to do so. A
         Holder  electing to pay the option price in such manner  shall  receive
         the  number of shares of Stock  determined  pursuant  to the  following
         formula:

         Number     Number of Shares           Fair Market Value         Option
         of      =  as to which the      x     on Exercise Date  - Price
                                               -------------------------
         Shares     Option is to be            Fair Market Value
                    exercised                  on Exercise Date

                  c. Other terms and  conditions.  If the Holder has not died or
         terminated,  the Option  shall  become  exercisable  in such manner and
         within such period or periods,  not to exceed 10 years from its Date of
         Grant, as set forth in the Stock Option Agreement upon payment in full,
         in any manner permitted under Section 7b. Except as otherwise  provided
         in this Plan or in the applicable  Stock Option  Agreement,  any Option
         may be exercised  in whole or in part at any time.  An Option may lapse
         under the following circumstances:

                           (i) Prior to the Holder's  termination  of employment
                  for any reason, the Option shall lapse ten (10) years after it
                  is granted, unless an earlier time is set
                  by the grant.

                                       123

                           (ii) If the Holder  separates from  employment  other
                  than by  Normal  Termination,  it  shall  lapse at the time of
                  Termination.

                           (iii)  If  the  Holder's   Termination  is  a  Normal
                  Termination,  it shall  lapse  three  months  after his Normal
                  Termination.

                           (iv) If the Holder dies  within the option  period or
                  within three months after Normal Termination, the Option shall
                  lapse unless it is exercised  within the option  period and in
                  no event later than 15 months  after the date of the  Holder's
                  death. Upon the Holder's death, any exercisable Options may be
                  exercised   by   the   Holder's   legal    representative   or
                  representatives,  by the person or persons  entitled  to do so
                  under the Holder's  last will and  testament or, if the Holder
                  shall fail to make testamentary  disposition of such Option or
                  shall die  intestate,  by the  person or persons  entitled  to
                  receive said Option under the  applicable  laws of descent and
                  distribution.

                  d. Stock Option Agreement.  Each Option granted under the Plan
         shall be evidenced by a "Stock  Option  Agreement"  between the Company
         and the  Holder of the  Option  containing  such  provisions  as may be
         determined  by the  Committee,  subject  to  the  following  terms  and
         conditions.

                           (i) Any Option or portion thereof that is exercisable
                  shall  be  exercisable  for the  full  amount  or for any part
                  thereof, except as otherwise determined by the grant.

                           (ii) Every share purchased through the exercise of an
                  Option shall be paid for in full at the time of the  exercise.
                  Each Option  shall cease to be  exercisable,  as to any share,
                  when the Holder purchases the share or exercises a related SAR
                  or when the Option lapses.

                           (iii) Options shall not be transferable by the Holder
                  except by will or the laws of  descent  and  distribution  and
                  shall be  exercisable  during the Hold er's  lifetime  only by
                  him.

                           (iv)   Notwithstanding   any  provision  (other  than
                  Section  7e),  in the event of a public  tender for all or any
                  portion  of the  Stock  or in the  event  that a pro  posal to
                  merge, consolidate,  or otherwise combine with another company
                  is submitted for  shareholder  approval,  the Committee may in
                  its sole discretion  declare  previously granted Options to be
                  immediately exercisable.

                  e. Individual  dollar  limitations.  The aggregate Fair Market
         Value  (determined  as of the time the Option is granted) of all shares
         of Stock  with  respect  to which  Incentive  Stock  Options  are first
         exercisable by any Holder in any calendar year may not exceed $100,000.

                                       124

                  8.       STOCK APPRECIATION RIGHTS

                  Any Option granted under the Plan may include a SAR, either at
the time of grant or by amendment.  SARs may also be separately granted pursuant
to an Award.  Such SARs  shall be  subject  to such  terms  and  conditions  not
inconsistent  with  the  Plan  as the  Committee  shall  impose,  including  the
following:

                  a. Right to exercise. A SAR issued pursuant to an Option shall
         be exercisable  to the extent the Option is  exercisable  and only with
         the consent of the Committee.  A SAR which is not issued pursuant to an
         Option shall only be exercisable  during the Award period  specified in
         the Stock  rights  agreement.  Unless  otherwise  provided in the Stock
         rights  agreement,  the Holder's right to exercise any outstanding SARs
         shall  terminate upon the Holder's  termination of employment  with the
         Company and its Subsidiaries for any reason,  including but not limited
         to, resignation, discharge, death or disability.

                  b. Failure  to  exercise.  If,  on the last day of the  option
         period or specified  Award  period,  the Fair Market Value of the Stock
         exceeds the option price or SAR price  determined at the time the Award
         is granted, and the Holder has not exercised such SAR, such right shall
         be deemed to have been exercised by the Holder on such last day.

                  c. Payment.  An exercisable SAR granted  pursuant to an Option
         shall entitle the Holder to surrender  unexercised  the Option in which
         it is  included,  or any  portion  thereof,  and to receive in exchange
         therefor an amount equal to the excess of the "value",  as  hereinafter
         defined,  of one  share  of Stock  over  the  option  price  per  share
         multiplied  by the  number of shares  subject  to the Option or portion
         thereof  which is so  surrendered.  Upon  exercise  of a SAR not issued
         pursuant to an Option, the Holder shall receive Stock and/or cash in an
         amount  equal to that  number of shares  of Stock  having an  aggregate
         value  equal to the  excess of the value of one share of Stock over the
         SAR price  specified in the Stock rights  agreement  multiplied  by the
         number of SARs  exercised.  The Committee may, in its sole  discretion,
         elect to have the  Company  settle its  obligation  arising  out of the
         exercise  of a SAR by the  payment of cash,  the  delivery of shares of
         Stock  having an aggregate  value equal to the amount of the  Company's
         obligation as  determined  pursuant to this Section 8c, or partially by
         the  payment of cash and  partially  by the  delivery  of  shares.  The
         Committee  shall  also have the  right to place  such  limitations  and
         restrictions on the Company's  obligation to make such cash payments or
         deliver  shares under SARs as the  Committee,  in its sole  discretion,
         deems to be in the best  interest of the  Company.  The term "value" as
         applied to shares  shall be Fair  Market  Value on the trading day next
         preceding the date on which the SAR is exercised.  To the extent that a
         SAR included in an Option is exercised,  such Option shall be deemed to
         have been exercised, and shall not be deemed to have lapsed.

                  d. Other limitations.  Such other limitations as the Committee
         and/or the Stock  Option  Agreement  or Stock  rights  agreement  shall
         impose.

                                       125

                  9.       PERFORMANCE SHARES

                  Each Performance Share shall be deemed to be the equivalent of
one share of Stock.  The Award of  Performance  Shares  under the Plan shall not
entitle  the Holder to any  interest  in or to any  dividend,  voting,  or other
rights of a shareholder of the Company.  Performance Shares shall be credited to
a Performance  Share account to be maintained for each Holder.  The value of the
Performance Shares in a Holder's  Performance Share account at the time of Award
or the time of payment shall be an amount equal to the Fair Market Value at such
time of an equivalent  number of shares of the Stock  (subject to the limitation
provided in Section 9c).

                  a. Award grants.  Performance  Share Awards may be made by the
         Committee,   in  its   discretion,   taking  into  account  a  Holder's
         responsibility level, performance,  potential, cash compensation level,
         the Fair Market Value of the Stock at the time of the Awards,  and such
         other factors as it deems  appropriate.  Grants of  Performance  Shares
         shall be  deemed to have  been on  January 1 of the year in which  such
         grants are made.

                  The Committee  shall not, over the term of the Plan,  grant to
         any single  Holder as  Performance  Shares  more than 30 percent of the
         maximum number of shares of Stock which may be granted under  Paragraph
         5a. Awards  cancelled or portions of Awards not paid out in full to any
         single  Holder  shall not be included  for  purposes  of applying  this
         limitation.

                  b. Right to payment of Performance  Shares.  Following the end
         of the  Award  Period,  the  Holder  of a  Performance  Share  shall be
         entitled to receive payment from his Performance Share account based on
         the  achievement  or  performance  measures for such Award  Period,  as
         determined  by the  Committee.  The  Committee  shall have the right to
         establish  criteria for measuring  executive  performance  prior to the
         beginning  of the Award  Period but subject to such later  revisions as
         the  Committee  shall  deem  appropriate  to  reflect   significant  or
         unforeseen events or changes.

         In the event a Holder  terminates  employment  during an Award  Period,
         payment of outstanding Performance Share Awards will be as follows:

                           (i)  If  the  Holder  resigns  or is  discharged,  no
                  payment  will  be  made  and  the  Award  will  be  completely
                  forfeited.

                           (ii) If the Holder retires pursuant to the Company or
                  Subsidiary  retirement  plan covering that Holder,  the Holder
                  will be entitled to payment at the end of the Award  Period in
                  an amount  which  bears the same  relationship  to the Award's
                  Fair  Market  Value upon the  Valuation  Date as the period of
                  service  completed  after  the grant of the Award but prior to
                  the retirement bears to the Award Period.

                                       126

                           (iii) If the  Holder  dies or becomes  disabled,  the
                  Holder (or his designated  beneficiary or the person  entitled
                  to his Performance  Shares under Section 12d) will be entitled
                  to payment at the end of the Award Period of a prorated amount
                  which is determined  in the same manner as the amount  payable
                  under Section 9b(ii).

                  c. Form and  timing of  payment.  No  payment  of  Performance
         Shares  shall  be made  prior to the end of an  Award  Period.  Payment
         therefor  shall be made as soon as  practicable  after the  receipt  of
         audited financial  statements relating to the last year of such period.
         The  Committee  may, in its  discretion,  limit the  Company's  payment
         obligation for Performance Shares to the lesser of Fair Market Value at
         the time of payment or an amount  equal to not more than 200 percent of
         the Fair Market Value at the time such Performance Shares were granted.

                  The payment to which a Holder  shall be entitled at the end of
         an Award Period shall be a dollar amount equal to the Fair Market Value
         on the  Valuation  Date (or such lesser  amounts as the  Committee  may
         establish)  of the  number of shares  of Stock  equal to the  number of
         Performance Shares earned and payable to him in accordance with Section
         9b. Payment shall normally be made 50 percent in cash and 50 percent in
         Stock.  The  Committee,  however,  may authorize  payment in such other
         combinations  of cash and Stock or all in cash or all in  Stock,  as it
         deems appropriate.

                  The  number of shares of Stock to be paid in lieu of cash will
         be  determined  by dividing the portion of the payment not paid in cash
         by:

                           (i) The  Fair  Market  Value  of Stock on the date on
                           which the shares are issued by the Company, or

                           (ii) The price per share  paid for  shares  purchased
                           for  a  Holder's   account   should   the   Committee
                           determine,  in  its  discretion,   to  authorize  the
                           purchase  of shares  on  behalf of the  Holder on the
                           open market or through private purchase.

                  10.      RESTRICTED STOCK AWARDS

                  a. Restriction  period to be established by the Committee.  At
         the  time a  Restricted  Stock  Award  is  made,  the  Committee  shall
         establish a period of time (the  "Restriction  Period")  applicable  to
         such Award, which shall not be less than three years. At the discretion
         of the  Committee,  each  Restricted  Stock  Award may have a different
         Restriction  Period.  In the  event of a public  tender  for all or any
         portion  of the Stock or in the  event  that any  proposal  to merge or
         consolidate  the  Company  with  another  company is  submitted  to the
         shareholders  for a vote,  the  Committee  may in its  sole  discretion
         change or eliminate the Restriction Period.  Except as permitted above,
         under  Section 10c, or pursuant to Section 13, the  Restriction  Period
         applicable to a particular Restricted Stock Award shall not be changed.
                  b. Other  terms and  conditions.  Stock  awards  pursuant to a
         Restricted  Stock Award  shall be  represented  by a stock  certificate

                                       127

         registered  in the name of the Holder of such  Restricted  Stock Award.
         The Holder shall have the right to enjoy all shareholder  rights during
         the Restriction Period with the exception that:

                           (i) The Holder  shall not be  entitled to delivery of
                           the stock  certificate  until the Restriction  Period
                           has expired.

                           (ii) The Company may either issue  shares  subject to
                           such restrictive legends

                  and/or stop transfer  instructions as it deems  appropriate or
                  provide  for  retention  of  custody  of the Stock  during the
                  Restriction Period.

                           (iii)  The  Holder  may not sell,  transfer,  pledge,
                           exchange,  hypothecate,  or otherwise  dispose of the
                           Stock during the Restricted Period.  (iv) A breach of
                           the terms and conditions established by the Committee
                           pursuant to the Restricted  Stock Award shall cause a
                           forfeiture  of the  Restricted  Stock Award,  and any
                           dividends withheld thereon.

                           (v) Cash and Stock dividends may be either  currently
                           paid or  withheld  by the  Company  for the  Holder's
                           account. At the discretion of the Committee, interest
                           may be paid on the amount of cash dividends withheld,
                           including  cash  dividends on stock  dividends,  at a
                           rate and subject to such terms as shall be determined
                           by the Committee.

                  c.  Forfeiture  provisions.  In the event a Holder  terminates
         employment during a Restriction Period, his right to a Restricted Stock
         Award will be determined as follows:

                           (i) If the Holder resigns or is discharged, the Award
                           will be completely forfeited.

                           (ii) Except as otherwise provided in Section 10c(iv),
                           if the Holder  retires,  pursuant  to the  Company or
                           Subsidiary  retirement plan covering that Holder, the
                           Holder will be vested in that portion of the Award as
                           bears the same  relationship  to the entire  Award as
                           the period of service completed beginning on the date
                           the  Award  was made and  ending  on such  retirement
                           bears to the Restriction Period.

                           (iii)  Except  as   otherwise   provided  in  Section
                           10c(iv), if the Holder dies or becomes disabled,  the
                           Holder (or his  designated  beneficiary or the person
                           entitled to his  Restricted  Stock under Section 12d)
                           will be vested in a portion of the  Award,  with such
                           portion to be  determined  in the same  manner as the
                           portion under Section 10c(ii).

                           (iv)  Notwithstanding  Section  10c(ii) and (iii), if
                           one  or  more  of  the   restrictions   placed  on  a
                           Restricted  Stock Award by the  Committee  require an
                           action by the  Holder or the  occurrence  of an event

                                       128

                           other  than  the  passage  of time,  and  the  Holder
                           retires,   dies  or  becomes  disabled   before  such
                           restriction or restrictions have  been satisfied, the
                           Holder  shall not be vested  in  any  portion  of the
                           Award unless the Committee,  in its sole and absolute
                           discretion,  elects  to  waive  satisfaction  of such
                           restriction   or   restrictions  as  a  condition  of
                           receipt of all or any part of the Award.

         Any portion of a  Restricted  Stock Award in which the Holder is vested
         shall be received as soon as practicable following termination.

                  d.  Payment  for  Restricted  Stock.  A  Holder  shall  not be
         required  to  make  any  payment  for  Stock  received  pursuant  to  a
         Restricted Stock Award.

                  11.      DIVIDEND EQUIVALENTS

                  Any Option granted under the Plan may include at no additional
cost Dividend Equivalents, either at the time of grant or by amendment. Dividend
Equivalents will be based on the dividends declared on the Stock on record dates
during the period between the date an Option is granted or the date the Dividend
Equivalents are granted,  if later, and the date such Option is exercised.  Such
Dividend  Equivalents  shall be converted to  additional  shares of the Stock as
follows:

   Number of Dividend         Number of Shares              Dividend
   Equivalent Shares     =    Under the Option      x       per Share
                              ----------------              ---------
                                                            Book Value of Share

                  The Dividend Equivalents earned with respect to a Holder shall
be  distributed  to the Holder (or his  successor  in  interest)  in the form of
shares of the Stock at the time the Option is  exercised.  Dividend  Equivalents
shall be computed,  as of each  dividend  record date,  both with respect to the
number of shares  under the  Option and with  respect to the number of  Dividend
Equivalent shares previously earned by the Holder (or his successor in interest)
and not issued during the period prior to the dividend record date. For purposes
of this  Section 11, the book value of a share of the Stock shall be  determined
in accordance with the Company's regular established  accounting practices as of
the last business day of the month  immediately  preceding  the dividend  record
date.

                  12.      GENERAL

                  a.  Government  and other  regulations.  The obligation of the
         Company  to make  payment  of  Awards  in Stock or  otherwise  shall be
         subject to all applicable laws,  rules,  and  regulations,  and to such
         approvals by government agencies as may be required.  The Company shall
         be under no obligation to register under the Securities Act of 1933, as
         amended  (the  "1933  Act"),  any of the shares of Stock paid under the
         Plan. If the shares paid under the Plan may in certain circumstances be
         exempt from  registration  under the 1933 Act, the Company may restrict
         the  transfer of such shares in such  manner as it deems  advisable  to
         ensure the availability of any such exemption.

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                  b.  Tax   withholding.   The  Company  or  a  Subsidiary,   as
         appropriate,  shall have the right to deduct  from all  Awards  paid in
         cash  any  federal,  state  or local  taxes  as  required  by law to be
         withheld  with respect to such cash payments and, in the case of Awards
         paid in Stock,  the Holder may be  required  to pay to the Company or a
         Subsidiary,  by check,  in shares of Stock  owned by the  Holder to the
         extent  permitted by law, or in any combination  thereof elected by the
         Holder, the amount of any such taxes which the Company or Subsidiary is
         required to withhold with respect to such Stock.  Payment of taxes with
         shares of Stock  owned by the  Holder  shall be made by  assigning  and
         delivering  such shares to the Company.  Such shares shall be valued at
         Fair Market Value on the business day immediately preceding the date on
         which such  shares  are  assigned  or  delivered.  Except as  otherwise
         provided  by law or the terms of the  governing  Award  agreement,  any
         taxes which are  required to be withheld  with respect to an Award paid
         in Stock  may  also be paid by the  Holder  directing  the  Company  to
         withhold  from the  shares  of Stock  that  would  otherwise  be issued
         pursuant to the Award, that number of shares having a Fair Market Value
         on the earlier of the date the Award is exercised or the date the Award
         is paid (the  "Applicable  Date")  equal to the taxes due. A Holder who
         elects to pay any taxes due by directing the Company to withhold shares
         subject to the Award shall  notify the Company in writing of his intent
         to do so. A Holder  making such  election  shall  receive the number of
         shares of Stock determined pursuant to the following formula.

         Number          Number of             Fair Market Value     Taxes
         of         =    Shares Subject   x    on Applicable Date -  Due
                                               -------------------------
         Shares          to Award              Fair Market Value on
                                               Applicable Date

                  c. Claim to Awards and employment rights. No employee or other
person  shall  have any claim or right to be  granted  an Award  under the Plan.
Neither  this Plan nor any action taken  hereunder  shall be construed as giving
any  employee  any  right to be  retained  in the  employ  of the  Company  or a
Subsidiary.

                  d.  Beneficiaries.  Except as otherwise provided in Section 7,
         dealing with  Options,  or in the agreement  evidencing  an Award,  any
         payment of Awards due under  this Plan to a  deceased  Holder  shall be
         paid to the  beneficiary  designated  by the  Holder and filed with the
         Committee,  provided that if the Holder is married,  a designation of a
         person other than the Holder's spouse as his  beneficiary  with respect
         to more than 50 percent of the Holder's interest in the Award shall not
         be effective  without the written consent of the Holder's spouse. If no
         such  beneficiary has been  designated or survives the Holder,  payment
         shall be made to the person entitled thereto under the Holder's will or
         the laws of  descent  and  distribution.  Subject to the  foregoing,  a
         beneficiary  designation  may be  changed or revoked by a Holder at any
         time provided the change or revocation is filed with the Committee.

                  e. Nontransferability.  Subject to Sections 7d(iii) and 12d, a
person's rights and interests under the Plan, including amounts payable, may not
be  assigned,  pledged,  or  transferred,  provided  that a person's  rights and
interests under the Plan may be assigned,

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pledged or transferred  pursuant to a domestic  relations  order which satisfies
the requirements for a "qualified domestic relations order" set forth in Section
414(p)(1)(A) of the Code.

                  f.  Indemnification.  Each  person who is or shall have been a
member of the Committee or of the Board shall be  indemnified  and held harmless
by the Company against and from any loss, cost,  liability,  or expense that may
be imposed upon or reasonably  incurred by him in  connection  with or resulting
from any claim,  action,  suit,  or  proceeding to which he may be a party or in
which he may be  involved  by reason of any  action or  failure to act under the
Plan and  against and from any and all amounts  paid by him in  satisfaction  of
judgment in such  action,  suit,  or  proceeding  against him. He shall give the
Company an opportunity, at its own expense, to handle and defend the same before
he undertakes to handle and defend it on his own behalf.  The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification to
which such persons may be entitled under the Company's Articles of Incorporation
or By-Laws, as a matter of law, or otherwise,  or any power that the Company may
have to indemnify them or hold them harmless.

                  g. Reliance on reports.  Each member of the Committee and each
member of the Board shall be fully  justified in relying or acting in good faith
upon any report made by the  independent  public  accountants of the Company and
its Subsidiaries and upon any other information furnished in connection with the
Plan by any person or persons other than  himself.  In no event shall any person
who is or shall  have been a member of the  Committee  or of the Board be liable
for any  determination  made or other action taken,  including the furnishing of
information, or failure to act, if in good faith.

                  h.  Relationship to other benefits.  No payment under the Plan
shall be taken into  account in  determining  any  benefits  under any  pension,
retirement,  savings, profit sharing, group insurance,  welfare or other benefit
plan of the Company or any Subsidiary.

                  i. Expenses.  The expenses of administering  the Plan shall be
borne by the Company and its Subsidiaries.

                  j. Pronouns.  Masculine  pronouns and other words of masculine
gender shall refer to both men and women.

                  k.  Titles  and  headings.  The  titles  and  headings  of the
sections in the Plan are for  convenience of reference only, and in the event of
any conflict,  the text of the Plan, rather than such titles or headings,  shall
control.

                  l. Fractional  shares.  No fractional shares of stock shall be
issued and the Committee shall determine, in its discretion,  whether cash shall
be given in lieu of fractional shares or whether such fractional shares shall be
eliminated by rounding up or rounding down.

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         13.      CHANGES IN CAPITAL STRUCTURE

                  In the event a stock dividend is declared upon the Stock,  the
shares of Stock then  subject  to each  Award (and the number of shares  subject
thereto) shall be increased  proportionately without any change in the aggregate
purchase  price  therefor.  In the  event  the Stock  shall be  changed  into or
exchanged for a different number or class of shares of stock or stock of another
corporation, whether through reorganization,  recapitalization,  stock split-up,
combination of shares,  merger or consolidation,  there shall be substituted for
each such share of Stock then subject to each Award (and for each share of Stock
then  subject  thereto)  the number and class of shares of Stock into which each
outstanding share of Stock shall be so exchanged,  all without any change in the
aggregate purchase price for the shares then subject to each Award.

                  Subject to any  required  action by the  stockholders,  if the
Company  shall be the  surviving  or  resulting  corporation  in any  merger  or
consolidation,  any Award  granted  hereunder  shall pertain to and apply to the
securities  or rights to which a holder of the number of shares of Stock subject
to the Award would have been  entitled;  but a dissolution or liquidation of the
Company or a merger or  consolidation  in which the Company is not the surviving
or resulting corporation, shall, in the sole discretion of the Committee:

                  (a) Cause  every Award  outstanding  hereunder  to  terminate,
         except that the surviving or resulting corporation, in its absolute and
         uncontrolled  discretion,  may tender an option or options to  purchase
         its shares or exercise such rights on terms and  conditions,  as to the
         number of shares and rights and  otherwise,  which shall  substantially
         preserve  the rights and  benefits of any Award then  outstanding  here
         under; or

                  (b)  Subject  to the  requirements  of Section  7e,  give each
         Holder the right to exercise  Options  and/or other Awards prior to the
         occurrence of the event otherwise  terminating the Options and/or other
         Awards  over such  period as the  Committee,  in its sole and  absolute
         discretion, shall determine.

         14.      AMENDMENTS AND TERMINATION

                  The Board may at any time terminate the Plan.

                  The Board  may,  at any time,  or from time to time,  amend or
suspend and, if suspended,  reinstate,  the Plan, in whole or in part, provided,
however,  that  the  Board's  authority  hereunder  shall  be  subject  to  such
restriction  as may be required to comply with Section  16(b) of the Code and/or
Section 162(m) of the Code.

                  The  Committee  may  cancel  or reduce  or  otherwise  alter a
Holder's  outstanding Awards thereunder if, in its judgment,  (a) such action is
necessary to comply with applicable securities laws, or (b) such action would be
in the best  interests  of the  Company  provided  that it obtains  the  written
consent of the Holder.

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                  IN WITNESS  WHEREOF,  the  Company  has caused this Plan to be
executed by its duly authorized representative this 11th day of December, 1996.

                                                 TITAN MOTORCYCLE CO. OF AMERICA

                                                 By   /s/ Frank Keery
                                                   -----------------------------
                                                      Its CEO

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                                                                    EXHIBIT 10.1

                         Consent of Bruce L. Dibb, P.C.

Board of Directors
Titan Motorcycle Co. of America
Phoenix, Arizona

         The  undersigned  hereby consents to the use of the name of the firm of
the  undersigned  and  to the  use of any  opinion  or any  statement  that  the
undersigned  has  reviewed  or  passed  upon  any  written  information  in  the
Registration Statement. In giving this consent the undersigned is required under
any act, or under the Rules and Regulations of the Commission thereunder.

                                                     Sincerely,

                                                     /s/   Bruce L. Dibb P.C.

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                                                                    EXHIBIT 10.2

                        CONSENT OF INDEPENDENT AUDITORS'
                        --------------------------------

Board of Directors
Titan Motorcycle Co. of America
Phoenix, Arizona

   
We consent to the use in this Registration  Statement of Titan Motorcycle Co. of
America on Form 10-SB/A1, of our report dated March 12, 1998 of Titan Motorcycle
Co. of America for the years ended December 31, 1997 and 1996, which are part of
this Registration Statement,  and to all references to our firm included in this
Registration Statement.

 /s/  Jones, Jensen & Company

Jones, Jensen & Company
Salt Lake City, Utah
   
August 31, 1998

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