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ASHA Corporation Brings Suit Against Dana's Spicer Axle Division

15 September 1998

ASHA Corporation Brings Suit Against Dana's Spicer Axle Division to Enforce Rights to "GERODISC" System Technology

    SANTA BARBARA, Calif.--Sept. 14, 1998--ASHA Corporation has brought suit against Dana Corporation's Spicer Axle Division to enforce rights to the proprietary GERODISC(TM) System Technology developed and licensed by ASHA.
    The suit presents claims for breach of contract, unjust enrichment and fraud in relation to Dana's obtaining a license from ASHA in December, 1994 to use GERODISC(TM) System technology on the 1999 Jeep Grand Cherokee vehicle program. Dana's Spicer Axle Division then terminated that license in June, 1998, just prior to the start of volume production and shipment of front and rear axles to Chrysler Corporation. This action preceded by only days additional OEM awards to Dana of ASHA GERODISC(TM) technology projects.
    The GERODISC(TM) System technology is used in hydro-mechanical traction control devices. A GERODISC(TM) differential or coupling is a self-activating device that can prevent wheel spin and improve traction and handling. GERODISC(TM) System technology was selected for the 1999 Jeep Grand Cherokee vehicle program over competing traction control technologies.
    The ASHA - Dana/Spicer Axle license granted exclusive rights to "front driving axle applications" through December 31, 2000, and non-exclusive rights to "rear driving axle applications." The license required Dana/Spicer Axle Division to use its best efforts to manufacture and to sell products licensed under the agreement. The lawsuit asserts Dana did not perform its obligations once it gained access to ASHA's GERODISC(TM) System technology and qualified to supply axles to Chrysler for the 1999 Jeep Grand Cherokee vehicle program.
    Jack McCormack, ASHA's Chairman and CEO stated, "The potential of this type of action is to be expected when a company is dealing in the licensing of intellectual properties and proprietary concepts to automotive manufacturers and Tier I suppliers. The Dana action does not represent major volume in the overall licensing of GERODISC(TM), however ASHA will aggressively seek to defend its patents and licenses."
    ASHA Corporation, headquartered in Santa Barbara, California, develops advanced technology products and automotive design and manufacturing techniques for the global automotive industry. The stock is traded on the NASDAQ SmallCap Market
    Visit ASHA's Website at http://www.ashacorp.com for further information.