June, 18, 1999: The lawsuit filed on June 9^th in Middle District Court by the Pennsylvania Public Interest Research Group, Inc. and four others is frivolous and without merit.

First and foremost, the mill is in compliance with all applicable wastewater discharge permits and agreements referred to in the lawsuit with the Pennsylvania Department of Environmental Protection and all applicable federal laws.

We are, in good faith, working diligently to reduce color and have plan in place to further reduce color. The Company’s plans to spend $32 million in the next few years to achieve several environmental improvements, including a 50% reduction in effluent color.

In the last decade alone, the Company has spent in excess of $170 million to improve the Spring Grove mill’s environmental performance. As part of that effort, effluent color has already been cut in half. The New Century Project, which was announced in April, will yield another 50% reduction in color as well as the elimination of elemental chlorine from the bleaching process. This project represents our ongoing, voluntary efforts to achieve further environmental improvements and exceed regulatory requirements.

Industry data collected by EPA shows the Spring Grove mill has one of the best wastewater treatment facilities of its kind in the nation. In addition, the Spring Grove mill has helped set the standard for the paper industry since it installed its wastewater treatment system in the 1950s. Today, the mill consistently achieves some of the lowest color levels within the paper industry.

The Company is in agreement with the plaintiffs’ apparent goal of continued improvement to the environment and the quality of the Codorus Creek. The Company has made significant improvements to meet this goal and through its New Century Project, remains committed to make additional significant improvements in the future. The Company is proud of its environmental record and is confident that the lawsuit filed is without merit.