AUGUSTA (AP) – The on-again, off-again sale of Eastern Pulp and Paper Corp. to a prospective buyer from Connecticut was back on track Friday after an independent state agency eased some of its conditions for financing the deal.

Initial word of an agreement came from Gov. John Baldacci, who said negotiators for the Finance Authority of Maine and First Paper Holding Corp. LLC worked into the night Thursday to come up with a plan that was approved by FAME’s board at an emergency meeting Friday.

Baldacci did not go into specifics, but said the agreement “recognizes the give and take on both sides.”

“The workers and the communities have won, and the state has won. This will be a giant step to getting those mills back up and running,” the governor said.

First Paper hopes to begin closing on the purchase by the end of next week, said Keith Van Scotter, a partner in the company. He said First Paper plans to reopen Eastern Pulp’s Lincoln mill soon after, putting most of the 350 idled employees back to work.

Earlier Thursday, principals of First Paper said conditions set by FAME on its $4.5 million loan guarantee and $1 million loan would be a deal breaker. One of the conditions would have made First Paper’s principals personally liable for a portion of the loan.

That condition was replaced with a commitment from the borrowers to work with FAME and the lenders on any subsequent sale or liquidation of the mills, said John Witherspoon, FAME’s chief executive officer.

Witherspoon said he was not subjected to any political pressure from the governor to set aside his fiduciary responsibilities to pave the way for the sale.

“The only pressure we felt was pressure from the people of Maine to see this deal happen,” he said.

Witherspoon said that while the major stumbling block to a sale had been removed, some other items still had to be worked out. He said he was hopeful that would happen.

Eastern Pulp filed for Chapter 11 bankruptcy protection in 2000. In February its status was changed to Chapter 7 liquidation. After ordering the mills abandoned, a bankruptcy judge took back the case and shepherded the various parties toward a deal for the sale of the company.

Van Scotter said the buyers were not interested in acquiring or reopening the Brewer mill, which is less competitive than the mill in Lincoln. He said the city of Brewer was involved in discussions to purchase the facility.

AP-ES-05-14-04 1749EDT