Continued Subsidies from the German Government - 500 Beiträge pro Seite

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The Company`s business plan is significantly dependent on the availability of various types of subsidies for investments in the former East Germany. Currently, the new federal states of eastern Germany offer among the highest financial packages available under European Union regulations to promote investment in eastern Germany. However, the present package of subsidies is in effect only until 2004 and there is no assurance that they will be continued or replaced with equally attractive programs. In addition, as Germany is part of the European Union, it is bound by European Union law, which could mandate that the present package of subsidies be discontinued. If the subsidies are discontinued and not replaced, this would likely have a material adverse effect on the Company`s business.
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Der Entwickler und Hersteller von pharmazeutischen Produkten HYAL PHARMACEUTICAL (Kanada) wurde im Sommer 1998 häufig in den populären Aktien-Internetboards als "todsichere 100%-Chance" empfohlen. Damals notierte die Aktie bei etwa bei 3 DM. Jetzt haben die kanadischen Chefs einem Barabfindungsangebot in Höhe von CD$ 0.08 (etwa 0.05 Euro) durch die kanadische Firma Cangene zugestimmt. Davon werden die Aktionäre, die seit Mitte `98 "durchgehalten" haben, nicht gerade begeistert sein. Verlust für sie: ca. 95%. Die "100%-Chance" war also nicht so abwegig...

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Hyal Pharmaceutical Corporation announced that it will be seeking shareholder approval to change its name to "Cade Stuktur Corporation" to pursue the financing and development of infrastructure related projects in the former East Germany. The Company also announced that it had entered into an agreement with ZPR Zellstoff-und Papierfabrik Rosenthal Holding GmbH (ZHG), whereby ZHG would subscribe for 10 million common shares of the Company, would provide certain management and support to the Company, and would agree not to compete with the Company in its new business. The Company further announced that it had reached an agreement with Prada Holdings Ltd. to acquire a mineral royalty in the Wabush Iron Ore Mine.

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The B&B Loan Agreement is secured by: (i) assignment agreements (the "Assignment Agreements") under which Mercer and its subsidiaries, ZPR Zellstoff-und Papierfabrik Rosenthal Holding GmbH ("ZPR Holding") and Spezialpapierfabrik Blankenstein GmbH ("SPB") assign their respective interests in intercompany loans, in Mercer`s case outstanding from ZPR Holding and SP Holding, in ZPR Holding`s case, outstanding from SP Holding and in SPB`s case, outstanding from Zellstoff-und Papierfabrik Rosenthal GmbH & Co. KG ("ZPR & Co."); and (ii) securities pledge agreements (the "Securities Pledge Agreements") under which Mercer pledges its interest in all of the share capital of its wholly-owned subsidiaries, ZPR Holding, SP Holding and Dresden Papier Holdings GmbH ("DP Holdings"). SP Holding is a subsidiary through which Mercer holds its interest in the Stendal Project, ZPR & Co is a subsidiary through which Mercer holds its interest in its pulp mill located near Blankenstein and DP Holdings is the company through which Mercer holds its interest in its paper mills located at Heidenau and Fahrbucke.

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MERCER INTERNATIONAL INC

Contingent Liability results from any claim, action or other proceeding brought against the Parties as a result of Arbatax`s indirect interest and royalty arrangements relating to the Wabush Iron Ore Mine in Newfoundland, Canada, the Contingent Liability shall be allocated solely to Arbatax, who shall indemnify and save harmless Mercer from any and all costs, expenses, claims and liabilities relating thereto