Document DM39ZoEDmaJGGRQLo5vLx1ZY5

MAFCO CONSOLIDATED GROUP INC (Form- 10-K, Received 03/28/1997 00 00 0.. Page 19 of 116 Company, with respect to the Pullman Claims As of the date of the Company's assumption of the Pullman Claims, Koll was defending approximately 360 claims that individuals had contracted asbestosrelated diseases by reason of their work maintaining or 17 repairing Pullman cars. Management believes that costs related to these approximately 360 claims will not have a material adverse effect on the Company ITEM 2. PROPERTIES As of December 31, 1996, the principal properties owned or leased by the Company for use in its business included Location Principal Use Owned or Leased McAdoo, Pennsylvania Cayey, Puerto Rico La Roraana, Dominican Republic Comerio, Puerto Rico Richmond, Virginia Danli, Honduras Maypen, Jamaica Fort Lauderdale, Florida Mass market cigar manufacturing and distribution Mass market cigar manufacturing Premium cigar manufacturing Tobacco dressing Pipe tobacco manufacturing and premium cigar distribution Premium cigar manufacturing Premium cigar manufacturing Administrative office Owned Owned Leased Owned Leased Owned Owned Leased The Company believes that its existing and planned manufacturing facilities and distribution centers are adequate for the current level of the Company's operations The Company believes that additional facilities, if necessary, would be readily available on a timely basis on commercially reasonable terms. For 1997, the Company is expanding its existing manufacturing facilities in the Dominican Republic and Honduras and acquiring additional manufacturing equipment for a total expected cost of approximately $4 million Further, the Company believes that the leased space that houses its existing manufacturing and distribution facilities is not unique and could be readily replaced, if necessary, at the end of the terms of its existmg leases on commercially reasonable terms The Company's leases have expiration dates ranging from 1999 to 2000, many of which are renewable at the option of the Company All of the principal properties owned by the Company are subject to first priority hens granted m favor of the lenders under the credit agreement, as amended to February 3,1997 (the "Credit Agreement") of Consolidated Cigar Corporation ("Consolidated Cigar"), a wholly-owned subsidiary of Cigar Holdings The Company has excess capacity in all of its cigar and pipe tobacco plants The Company's ability to take advantage of such excess capacity by mcreasing shift operations and the production of premium and mass market cigars may be limited by the availability of trained laborers and shortages in the supply of tobacco The Company believes that its facilities are well maintained and m substantial compliance with httpV/www edgarpro.com/EFX_dll/EDGARpro dll`?FetchFihngHTMLl?ID=969943&Ses . 10/19/2003