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Excelsior-Henderson Closes on Industrial Development Revenue Bond

3 August 1998

Excelsior-Henderson Completes $6.1 Million Industrial Development Revenue Bond
    BELLE PLAINE, Minn., July 31 -- Excelsior-Henderson
Motorcycle Manufacturing Company today announced the closing to
escrow of a $6.1 million Industrial Development Revenue Bond facilitated by
the Economic Development Authority of the City of Belle Plaine, Minn. with the
Bond purchased in total by FINOVA Public Finance, Inc., a subsidiary of FINOVA
Capital Corporation.  The loan is a seven and one-half year term loan secured
by certain factory equipment and product tooling.  The Bond carries a face
interest rate of 10.40%, and includes a common stock warrant to purchase
196,500 shares with an exercise price of $9.00 per share. The proceeds, net of
a $1.1 million debt service reserve, may be drawn for certain past and future
equipment and product tooling purchases.
    Tom Rootness, Senior Vice President & CFO, stated, "Excelsior-Henderson is
pleased to have FINOVA, a national New York Stock Exchange company, provide
this debt financing_one more milestone in our financing plan."  Mr. Rootness
also stated that "FINOVA's creativity and aggressiveness helped us structure
this deal and create a 'partnership' atmosphere between Excelsior-Henderson
and FINOVA."
    Excelsior-Henderson Motorcycle Manufacturing Company is a pre-revenue
company which plans to manufacture, market and sell premium heavyweight
American cruisers and touring motorcycles, as well as related parts, apparel
and accessories branded with a name that evokes an authentic American
motorcycling heritage and lifestyle.  The Company will distribute its products
through a quality, nationally recognized dealer network.  Excelsior-Henderson
is one of only two authentic American motorcycle companies exclusively
committed to the manufacture of motorcycles.  The production-intent 1999
Super X motorcycle will be unveiled August 3, 1998, during Sturgis Rally and
Races.  Motorcycle production is scheduled to begin during the fourth quarter
of 1998.
    Notes Concerning Forward Looking Statements:
    This press release contains forward-looking statements regarding the plan
of the Company to produce and sell the first 1999 Super X motorcycles during
the fourth quarter of 1998 that involve risks and uncertainties.  The
Company's actual results could differ materially from those anticipated in
these forward-looking statements as a result of the factors set forth below
and the factors described from time to time in the Company's reports on file
with the Securities and Exchange Commission, including but not limited to the
Company's Annual Report on Form 10-K for the fiscal year ended January 3, 1998
and the Company's Quarterly Report on Form 10-Q for the quarter ended April 4,
    Factors that may affect the timing of production of the Super X include
problems in acquisition, installation and successful operation of the
motorcycle production equipment, the ability of the Company to locate
competent suppliers or obtain adequate quantities of components and supplies
at reasonable costs, the ability of the Company to obtain inventory and
working capital financing as needed, the ability of the Company to hire
additional qualified personnel and the ability of the Company's engineering
and manufacturing staff to design, engineer and produce the Super X.  In
addition, for the Company to be successful, its products must be manufactured
to meet high quality standards in production volumes.  The transition from
prototype to mass production will involve various risks and uncertainties that
may not be apparent at this time and there can be no assurance that the
Company will be able to successfully react to unanticipated difficulties and
commence mass production in late 1998.  In addition, the Company will be
required to obtain certain government approvals and certifications prior to
sales of the Super X.  Potential delays and costs that could result from
obtaining such approvals could result in a delay in motorcycle production.