MTH ELECTRIC TRAINS

November 8, 2006 - M.T.H. Electric Trains and Union Pacific Railroad are pleased to announce that they have amicably settled the trademark infringement case that U.P. filed against M.T.H in Omaha, Nebraska federal court. The settlement benefits both parties, as well the entire model railroad industry. It allows Union Pacific to continue to protect its intellectual property, and authorizes M.T.H.ﾒs use of Union Pacificﾒs trademarks and paint designs on model train products and accessories. Union Pacific has also decided to change its trademark-licensing program so that model railroad manufacturers will no longer have to pay a royalty, and will enjoy a perpetual license to use Union Pacific trademarks and paint designs on model railroad products.

In reacting to the end of the yearlong legal battle, M.T.H. recognized the commitment of U.P. to make a change. ﾓUP deserves a lot of the credit here,ﾔ M.T.H.'s founder and President Mike Wolf stressed. "UP's willingness to reconsider its position with regard to model train manufacturers' use of its trademarks allowed a deal to be struck. UP has long been a friend and a steward of the hobby and this new license reflects that."

Wolf added that the case was a big drain on M.T.H.ﾒs resources but worth the effort. "For seventy years, Union Pacific and the other railroads have worked with our industry to develop and nurture the model-railroading hobby. The UP license that had been in effect did not properly reflect that mutually beneficial and rewarding relationship."

Bob Turner, Senior Vice President Corporate Relations for Union Pacific, said, "Mike Wolf is to be commended for his commitment to the model railroad industry. His energy and passion helped us find a solution that will better reflect the positive relationship that Union Pacific and the model train industry have enjoyed for many years."

To help commemorate the new arrangement between UP and the model train industry, M.T.H. will release a yet-to-be determined Union Pacific-sanctioned commemorative model locomotive.

About Union Pacific

Union Pacific Corporation owns one of Americaﾒs leading transportation companies. Its principal operating company, Union Pacific Railroad, links 23 states in the western two-thirds of the country and serves the fastest-growing U.S. population centers. Union Pacificﾒs diversified business mix includes Agricultural Products, Automotive, Chemicals, Energy, Industrial Products and Intermodal. The railroad offers competitive long-haul routes from all major West Coast and Gulf Coast ports to eastern gateways. Union Pacific connects with Canadaﾒs rail systems and is the only railroad serving all six major gateways to Mexico, making it North Americaﾒs premier rail franchise.

About MTH Electric Trains.

In its 26-year history, M.T.H. Electric Trains has released more new O, Tinplate, One Gauge and HO Scale model trains than any of its competitors combined. Featuring the industry's highest quality ready-to-run starter sets, M.T.H. products come loaded with digital sound and control features in traditional railroad liveries and popular branded themes including the Coors Light Silver Bullet, NFL, Major League Baseball, Harley-Davidson, Caterpillar and more. As an innovative market leader, M.T.H. products have long been lauded for their use of modern technology to expand and nurture the hobby of model railroading.

For more information, contact M.T.H. Electric Trains, President Mike Wolf, 410-381-2580 or Union Pacific Railroad, Director Media Information, James Barnes, 402-544-3560.