Lincoln Pulp and Paper Mill Purchased

New Owners to Restart Mill Operations Immediately

(May 28, 2004) – First Paper Holding, LLC, a Delaware Corporation, announced Friday that it has completed its purchase of assets of the formerly bankrupt Lincoln Pulp & Paper for approximately $25 million and will restart operations at the Lincoln mill immediately.

The newly formed company, which will do business as Lincoln Paper & Tissue, LLC, will employ approximately 350 people in the Lincoln region, with a sales force also on staff based in Massachusetts, Maine, Wisconsin and New Hampshire.

Primary assets involved in the acquisition include the pulp and paper mills in Lincoln, certain equipment from the paper mill in Brewer, Maine and an office building in Amherst, Mass. Financing was provided by ING Prime Rate Trust, Textron Financial, Finance Authority of Maine, Eastern Maine Development Corporation and the U. S. Small Business Administration.

There are no immediate plans to restart the Brewer facility, however discussions are still underway to effect the transfer of the remaining mill assets to a special development company formed by the City of Brewer.

“It’s been a long process but we are happy the acquisition is finally complete. This is great news for the community,” said Keith Van Scotter, the company’s new President and Chief Executive Officer. “It’s a great feeling to put people back to work and this is a fantastic work force that will be integral to the success of the business.”

Managing the new company will be Keith Van Scotter as President and Chief Executive Officer. Van Scotter has held senior management positions with Mead in Escanaba, Michigan and Fraser Papers in Stamford, CT and Edmundston, N.B. The Chief Financial Officer will be John Wissmann, whose industry background includes positions at Fisher International, Jaakko Poyry, and International Paper. Executive Vice President of Operations will be Doug Walsh, an industry veteran who formerly managed manufacturing for the Lincoln and Brewer mills.

A six-year labor contract is in place and many of the former Lincoln employees have joined the company, according to Keith Van Scotter.

Lincoln Paper & Tissue will focus on three product lines: tissue, paper; and pulp. Tissue products will target party goods and food services markets with special capabilities in deep colors and flexographic napkin stock as well as dry crepe tissue. Within the Fine Paper markets, the company will focus on its core business of Hi-Yield, Recycled products, with primary emphasis on Business Reply Card, Index, Cover, and Vellum –Bristol. Hardwood pulp (NBHK) will be available to the market in August.

“The plan is for the #7 tissue machine to start up immediately,” said Van Scotter. “The pulp mill will commence start up the week of June 14th. The week of June 21st will see the start up of #6 tissue machine, #4 paper machine and the pulp dryer and the #5 paper machine will start up shortly thereafter. The market for tissue and business reply card is strong and many customers have indicated their intention to commence business with Lincoln Paper & Tissue,” added Van Scotter.

The Lincoln mill utilizes oxygen bleaching and is known as very environmentally friendly.
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