SECOND AMENDMENT TO LOAN AGREEMENT


     THIS SECOND AMENDMENT TO LOAN AGREEMENT (this  "Amendment") is entered into
as of August 21, 1998, by and between TITAN MOTORCYCLE CO. OF AMERICA,  a Nevada
corporation ("Borrower"), and WELLS FARGO BANK, NATIONAL ASSOCIATION ("Lender").

                                    RECITALS

     WHEREAS, Borrower is currently indebted to Lender pursuant to the terms and
conditions of that certain Loan Agreement  between  Borrower and Lender dated as
of April 10, 1998 ("Loan Agreement").

     WHEREAS,  Lender and Borrower  have agreed to certain  changes in the terms
and conditions set forth in the Loan Agreement and have agreed to amend the Loan
Agreement to reflect said changes.

     NOW, THEREFORE, for valuable consideration,  the receipt and sufficiency of
which are hereby acknowledged,  the parties hereto agree that the Loan Agreement
shall be amended as follows:

     1.  Paragraph  1.16 is hereby  deleted in its entirety  with the  following
substituted therefor:

     " 1.16 "Maximum Amount" shall mean the amount of $6,600,000.00."

     2. Paragraph  2.1(c) is hereby amended by adding the following  sentence to
the end thereof:

          "Notwithstanding  the  foregoing,  but still  subject  to the  Maximum
          Amount,  Borrower  shall be permitted to have a temporary  overadvance
          facility under the Line of Credit such that outstanding borrowings may
          exceed the borrowing  base provided for by this Agreement by an amount
          not to exceed Eight Hundred Thousand Dollars  ($800,000.00) during the
          period beginning August 21, 1998, and ending on October 31, 1998."

     3.  Paragraph  8.14 is hereby  deleted in its entirety  with the  following
substituted therefor:

     " 8.14 Perpetual Inventory System. Implement, by no later than November 30,
1998, a fully functional perpetual inventory system satisfactory to Lender."

     4.  Borrower  shall  pay to  Lender  an  amendment  fee in  the  amount  of
$2,400.00,  which  shall be fully  earned as of and  payable on the date of this
Amendment.

     5. The Line of Credit Note is replaced and superseded by the Line of Credit
Note in the form attached hereto as Exhibit A.

     6. Except as specifically  provided herein, all terms and conditions of the
Loan Agreement remain in full force and effect,  without waiver or modification.
All terms defined in the Loan Agreement shall have the same meaning when used in
this Amendment. This Amendment and the Loan Agreement shall be read together, as
one document.

     7. Borrower hereby remakes all representations and warranties  contained in
the Loan  Agreement and reaffirms  all  covenants  set forth  therein.  Borrower
further  certifies that as of the date of this Amendment and except as set forth
in this  Amendment,  there  exists no Event of  Default  as  defined in the Loan
Agreement,  nor any  condition,  act or event which with the giving of notice or
the passage of time or both would constitute any such Event of Default.

     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Amendment to be
executed as of the day and year first written above.

TITAN MOTORCYCLE CO. OF                        WELLS FARGO BANK,
AMERICA                                        NATIONAL ASSOCIATION

By: /s/ Robert P. Lobban                       By: /s/ Gerald W. Widasky
    --------------------------                     -----------------------------
Title: Chief Financial Officer                 Title: Vice President
       -----------------------                        --------------------------

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