Ultra Motorcycle Co. Settles Lawsuit With Mull Acres Investments

    MIRA LOMA, Calif.--Feb. 27, 2001--Ultra Motorcycle Co. announced that it recently settled litigation filed by Mull Acres Investments Inc., seeking to recover alleged damages of $730,000.
    The litigation arose out of a series of events dating back to UMC's January 1997 purchase of the motorcycle manufacturing assets of Mull Acres, then doing business as Ultra Kustom Cycles.
    In October 1997, Mull Acres entered into a settlement agreement with UMC to resolve a series of post-acquisition disputes, including UMC's claim that Mull Acres and its principals or associates were engaging in unlawful competitive business practices.
    To secure compliance with the terms of the settlement agreement, Mull Acres pledged to UMC 730,000 shares of Series B Preferred Stock which Mull Acres had received as partial consideration for the sale of the motorcycle manufacturing assets.
    In April 1998, UMC concluded that Mull Acres forfeited its interest in the Series B Preferred Stock due to violations by Mull Acres, and/or its principals or associates, of the October 1997 settlement agreement.
    In April 1999, Mull Acres filed suit against UMC to recover $730,000, the liquidation preference of the Series B Preferred Stock. In August 2000, UMC cross-complained against Mull Acres and certain of its principals or associates for alleged violations of the October 1997 settlement agreement and for other related claims.
    The settlement agreement provides, among other things, that Mull Acres recovers nothing from UMC, that Mull Acres agrees that it holds no interest in the Series B Preferred Stock and will dismiss its lawsuit with prejudice, and that all parties shall bear their own attorney's fees and costs. UMC has also agreed to waive any claims it may have had for damages and to dismiss its cross-complaint. All actions among the parties have been dismissed.