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Excelsior-Henderson Announces Agreement On Proposed Reorganization Plan

27 March 2000

    BELLE PLAINE, Minn.--Excelsior-Henderson Motorcycle Motorcycle Manufacturing Company announced it had reached an agreement with E. H. Partners regarding a proposed plan of reorganization in its Chapter 11 Bankruptcy case. The Company anticipates it will file the proposed plan of reorganization in the near future. A term sheet regarding the proposed plan has been filed with the Bankruptcy Court in connection with a pending motion. Key creditor groups also support the proposed plan.

    Under the proposed plan, the Company will receive a substantial capital infusion from E.H. Partners. The proposed plan will provide that on its effective date, the Company's outstanding securities will be deemed cancelled and terminated, and the Company's obligations thereunder will be discharged. The proposed plan will not provide for the Company's current stockholders to retain or obtain any equity interest in the Company going forward. On the effective date, it is also anticipated that (i) the Company will receive a new equity cash infusion from E.H. Partners, (ii) secured creditors will receive restructured notes and (iii) unsecured creditors will receive, among other things, a pro-rata distribution of cash and the right to receive certain royalties based on the Company's gross sales, subject to a maximum amount. E.H. Partners will own all of the issued and outstanding equity of the Company following the effective date.

    The Company anticipates it will be filing a current report on Form 8-K within the next two weeks with further details regarding the proposed plan. The very brief summary set forth above is qualified in its entirety by reference to the proposed plan, a copy of which will be included in its Form 8-K. The proposed plan has not been approved by the Bankruptcy Court and is preliminary and subject to change. Effectiveness of the proposed plan is subject to confirmation by the Bankruptcy Court.