CONFORMED COPY
MASTER SEPARATION AGREEMENT
dated as of
January 29, 1998
among
POLYMER GROUP, INC.,
GALEY & LORD, INC.
and
DT ACQUISITION INC.,
DOMINION TEXTILE INC.
and the other parties named herein
- 1 -
TABLE OF CONTENTS
----------------
PAGE
ARTICLE 1
Definitions
Section 1.01. DEFINED TERMS 2
ARTICLE 2
The Transactions
Section 2.01. TOTAL PURCHASE PRICE 16
Section 2.02. PURCHASE AND SALE OF BUSINESSES 16
Section 2.03. ASSUMPTION OF LIABILITIES 17
Section 2.04. METHODS OF TRANSFER AND ASSUMPTION 17
Section 2.05. FINAL TAKE-UP AND WINDING UP 18
Section 2.06. TRANSFER OF CAPITAL STOCK AND ASSETS; CERTAIN OTHER TRANSACTIONS 19
Section 2.07. CONSENTS; NONASSIGNABLE CONTRACTS 21
Section 2.08. OTHER AGREEMENTS 22
Section 2.09. INTERCOMPANY BALANCE AND EXPENSE TRUE-UP. 22
ARTICLE 3
Representations and Warranties
Section 3.01. REPRESENTATIONS AND WARRANTIES OF G&L 23
Section 3.02. REPRESENTATIONS AND WARRANTIES OF PGI 24
Section 3.03. ASSETS AND CAPITAL STOCK TRANSFERRED "AS IS." 25
ARTICLE 4
Conditions
Section 4.01. CONDITIONS TO THE OBLIGATIONS OF G&L 25
Section 4.02. CONDITIONS TO THE OBLIGATIONS OF PGI 26
ARTICLE 5
Disclosure and Access to Information
Section 5.01. RESTRICTIONS ON DISCLOSURE OF INFORMATION 27
Section 5.02. LEGALLY REQUIRED DISCLOSURE OF CONFIDENTIAL INFORMATION 27
Section 5.03. ACCESS TO INFORMATION 28
Section 5.04. PRODUCTION OF WITNESSES 29
Section 5.05. REIMBURSEMENT 29
- i -
ARTICLE 6
Insurance Matters
Section 6.01. COOPERATION IN INSURANCE MATTERS 29
Section 6.02. COLLECTION OF INSURANCE PROCEEDS 30
Section 6.03. OTHER INSURANCE MATTERS 30
ARTICLE 7
Employees; Intercompany Arrangements
Section 7.01. EMPLOYEE MATTERS 30
Section 7.02. INTERCOMPANY ARRANGEMENTS 31
Section 7.03. PRODUCTS, SUPPLIES AND DOCUMENTS. 31
ARTICLE 8
Survival
Section 8.01. NO SURVIVAL OF REPRESENTATIVES AND WARRANTIES. 32
Section 8.02. SURVIVAL OF AGREEMENTS 32
ARTICLE 9
Indemnification
Section 9.01. INDEMNIFICATION BY G&L 32
Section 9.02. INDEMNIFICATION BY PGI 32
Section 9.03 INDEMNIFICATION CONCERNING PROPORTIONAL LIABILITIES AND
SPLIT LIABILITIES 33
Section 9.04. INDEMNIFICATION PROCEDURES. 33
Section 9.05. CERTAIN LIMITATIONS 34
Section 9.06. EXCLUSIVITY OF TAX INDEMNIFICATION 35
ARTICLE 10
Miscellaneous
Section 10.01. ENTIRE AGREEMENT 35
Section 10.02. GOVERNING LAW 36
Section 10.03. DESCRIPTIVE HEADINGS; CONSTRUCTION 36
Section 10.04. NOTICES 36
Section 10.05. PARTIES IN INTEREST 37
Section 10.06. COUNTERPARTS 37
Section 10.07. BINDING EFFECT; ASSIGNMENT 37
Section 10.08. DISPUTE RESOLUTION 38
Section 10.09. SEVERABILITY 38
- ii -
Section 10.10. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE 39
Section 10.11. AMENDMENT 39
Section 10.12. EMPLOYMENT SOLICITATION 39
Section 10.13. EXPENSES 39
- iii -
EXHIBITS AND ANNEXES
Exhibit A Acquisition Agreement
Exhibit B Operating Agreement
Exhibit C Calculation of Purchase Price
Exhibit D Consent with respect to Nordlys S.A.
Annex 2.06(a) Stock Sale Agreement by and between Polymer Group, Inc. and DT
Acquisition Inc. re: 3427790 Canada Limited
Annex 2.06(c) Stock Sale Agreement by and between Galey & Lord Incorporated
and DT Acquisition Inc. re: Dominion Textile International (Asia)
Pte. Ltd.
Annex 2.06(d)(1) and (2) (1) Stock Sale Agreement by and between Albuma
S.A. and Dominion Textile International B.V. re:
Klopman International SpA (2) Stock Sale Agreement by
and between Albuma S.A. and Dominion Textile
International B.V. re: Swift Textiles France S.A.
Annex 2.06(e) Stock Sale Agreement by and between Albuma S.A. and Dominion
Textile International B.V. re: Dominion Textile France S.a.r.L.
Annex 2.06(f)(1) and (2) (1) Stock Sale Agreement by and between Chicopee
Holdings, B.V. and Dominion Textile International
B.V. re: Nordlys U.K. Ltd. (2) Stock Sale Agreement
by and between Chicopee Holdings, B.V. and Dominion
Textile International B.V. re: Geca-Tapes B.V.
Annex 2.06(j) Stock Sale Agreement by and between Galey & Lord
Incorporated and Dominion Textile (USA) Inc. re: DT
(USA) Exports Inc. and Swift Textiles Inc.
Annex 2.06(l) Stock Sale Agreement by and between Polymer Group,
Inc. and DT Acquisition Inc. re: Dominion Textile
(USA) Inc.
Annex 2.06(m) Stock Sale Agreement by and between Polymer Group,
Inc. and DT Acquisition Inc. re: Dominion Textile
Mauritius, Inc.
Annex 2.06(n) Stock Sale Agreement by and between Galey & Lord
Incorporated and DT Acquisition Inc. re: 3427803
Canada Limited
- iv -
MASTER SEPARATION AGREEMENT
This Master Separation Agreement (this "Agreement"), dated as of
January 29, 1998, is made by and among Polymer Group, Inc., a Delaware
corporation ("PGI"), Galey & Lord, Inc., a Delaware corporation ("G&L"),
Dominion Textile Inc., a corporation organized under the laws of Canada
("Dominion"), DT Acquisition Inc., a corporation organized under the laws of
Canada ("DTA"), Dominion Textile International (Asia) Pte. Ltd, a corporation
organized under the laws of Singapore ("DomTex (Asia)"), Dominion Textile
International B.V., a corporation organized under the laws of the Netherlands
("DomTex B.V."), Dominion Textile (USA) Inc., a Delaware corporation ("DT
(USA)"), Albuma S.A., a corporation organized under the laws of the Republic of
France ("Albuma"), and Chicopee Holdings, B.V., a corporation organized under
the laws of the Netherlands ("Chicopee Holdings"). The parties to this Agreement
are each referred to as a "Party" and collectively as the "Parties". All amounts
in this Agreement shall be in United States dollars unless otherwise indicated.
RECITALS
WHEREAS, PGI, G&L, DTA and ZB Holdings, Inc., a South Carolina
corporation ("ZBH"), have entered into an agreement dated as of October 27,
1997, as amended (the "Acquisition Agreement"), in which it is contemplated that
DTA would commence a tender offer to acquire all of the outstanding common
shares and First Preferred shares of Dominion;
WHEREAS, on December 19, 1997, and December 29, 1997, pursuant to its
Offer to Purchase dated October 29, 1997, as amended and varied, DTA acquired
approximately 98% of the outstanding common shares and approximately 96% of the
outstanding First Preferred shares of Dominion, and in connection with the
transactions contemplated herein, will acquire all of the remaining outstanding
common shares and First Preferred shares of Dominion pursuant to a merger
consummated in accordance with Section 206 of the Canada Business Corporations
Act;
WHEREAS, following DTA's purchase of the remaining outstanding common
shares and First Preferred shares of Dominion, DTA and Dominion intend to
consummate a winding up (the "Winding Up") in which DTA shall acquire all of the
assets and assume all of the liabilities of Dominion, and all of the outstanding
common shares and First Preferred shares of Dominion shall be redeemed and
eliminated;
WHEREAS, Dominion's business primarily consists of the Apparel Fabrics
Business, the Nonwovens Business and the DIFCO Business (each as defined); and
WHEREAS, pursuant to the Acquisition Agreement and subsequent
agreements among the Parties thereto, (i) PGI intends to acquire the Nonwovens
Business and the DIFCO Business, including each of their respective liabilities,
from DTA and certain of its Subsidiaries and (ii) G&L intends to acquire the
Apparel Fabrics Business, including its respective liabilities, from DTA and
certain of its Subsidiaries (collectively, the "Break-Up");
- 1 -
NOW, THEREFORE, in consideration of the foregoing and the covenants and
agreements set forth below, the Parties agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.01. DEFINED TERMS. The terms set forth below, as used herein,
shall have the following meanings:
"2003 Notes" means the $150.0 million aggregate principal outstanding
87/8% Guaranteed Senior Notes due 2003 of DT (USA) issued pursuant to the
Indenture dated as of November 1, 1993 among DT (USA), Dominion and First Union
National Bank (as successor trustee).
"2006 Notes" means the $125.0 million aggregate principal outstanding 9
1/4% Guaranteed Senior Notes due 2006 of DT (USA) issued pursuant to the
Indenture dated as of April 1, 1996 among DT (USA), Dominion and First Union
National Bank (as successor trustee).
"2003 Tender Offer" means the offer by DT (USA) to repurchase any and
all outstanding 2003 Notes pursuant to the Offer to Purchase and Consent
Solicitation Statement dated December 23, 1997 and accompanying Consent and
Letter of Transmittal.
"2006 Tender Offer" means the offer by DT (USA) to repurchase any and
all outstanding 2006 Notes pursuant to the Offer to Purchase and Consent
Solicitation Statement dated December 23, 1997 and accompanying Consent and
Letter of Transmittal.
"Acquisition Agreement" has the meaning set forth in the preface above,
a copy of which is attached hereto as Exhibit A.
"Acquisition Relationship" means the relationship among G&L, PGI, DTA,
Dominion and Dominion's direct and indirect Subsidiaries as a result of the
Acquisition Agreement, the Operating Agreement and the undertaking of such
parties to consummate the transactions contemplated by this Agreement.
"Affiliate" of any specified Person means any other Person directly or
indirectly Controlling, Controlled by, or under common Control with, such
specified Person.
"Albuma" has the meaning set forth in the preface above.
"Ancillary Separation Agreements" means the Employee Matters Agreement,
the Intellectual Property Agreements, the Insurance Matters Agreement, the
Shared Assets and Liabilities Agreement, the Tax Matters Agreement, the
Transition Services Agreement, and any other agreements to be entered into among
the Parties hereto with respect to the relationships of the Parties after the
Break-Up Time, as referred to in Section 2.08 herein.
- 2 -
"Apparel Fabrics Assets" means all right, title and interest (including
minority interests) of DTA (as determined immediately following the Winding Up),
Dominion (as determined immediately preceding the Winding Up) and any of their
Subsidiaries, in and to all Assets that are used primarily in or held primarily
for use in the operations of the Apparel Fabrics Business, including the Apparel
Fabrics Cash, the Apparel Fabrics Facilities, the Apparel Fabrics Intellectual
Property, the Apparel Fabrics Contracts, the Assets of the Apparel Fabrics
Employee Arrangements and the Apparel Fabrics Employee Benefit Plans as provided
in the Employee Matters Agreement, any capital stock of any of the Apparel
Fabrics Subsidiaries, and the rights of G&L and the Apparel Fabrics Subsidiaries
under the Transaction Agreements; provided, notwithstanding the foregoing, the
Apparel Fabrics Assets shall not include any (i) Nonwovens Assets, (ii) DIFCO
Assets, (iii) Split Assets, or (iv) Proportional Assets.
"Apparel Fabrics Business" means the apparel fabrics businesses
heretofore or currently engaged in by DTA, Dominion or its Subsidiaries (or
their predecessors) as reported in the apparel fabrics segment (or its
predecessor segment) in Dominion's most recent financial statements (but
excluding any former or discontinued operations and DIFCO), including as
conducted through:
(A) the Swift Denim division of Dominion;
(B) the Dominion Cotton Services business of Dominion;
(C) the Dominion Holdings Companies;
(D) nine indirect wholly-owned Subsidiaries of Dominion, being
(i) Swift Textiles Inc., a Delaware corporation, (ii)
Swift Denim Services, Inc., a Delaware corporation, (iii)
DT (USA) Exports Inc., a corporation organized under the
laws of Barbados, (iv) Swift Textiles (Far East) Ltd., a
company organized under the laws of Hong Kong, (v) Domtex
Industries (Far East) Ltd., a corporation organized under
the laws of Hong Kong, (vi) Klopman GmbH, a corporation
organized under the laws of Germany, (vii) Klopman A.G., a
corporation organized under the laws of Switzerland,
(viii) Klopman Espana S.A., a corporation organized under
the laws of Spain, and (ix) Klopman International Ltd., a
corporation organized under the laws of Ireland; and
(E) seven indirect Subsidiaries or Investments of Dominion,
being (i) Klopman International S.p.A., a company
organized under the laws of Italy, (ii) Swift Textiles
Europe Ltd., a company organized under the laws of the
Republic of Ireland (50%) interest, (iii) Tismade S.A., a
corporation organized under the laws of France (50%
interest), (iv) Sitex S.A., a corporation organized under
the laws of Tunisia (22% interest), (v) Swift Textiles
France S.A., a corporation organized under the laws of the
Republic of France (50% interest), (vi) Swift Textiles
S.r.1., a corporation organized under the laws of Italy
(49% interest), and (vii) Somotex International S.A., a
corporation organized under the laws of Tunisia (37%
interest).
- 3 -
"Apparel Fabrics Cash" means 57.4% of all Cash.
"Apparel Fabrics Contracts" means all Contracts pursuant to which DTA,
Dominion or any of their Subsidiaries (determined immediately prior to the
Break-Up) is a Party with respect to the Apparel Fabrics Business.
"Apparel Fabrics Debt" means all Debt of DTA or any Apparel Fabrics
Subsidiary, in each case directly related to the Apparel Fabrics Business,
outstanding as of the Break-Up Time.
"Apparel Fabrics Employee Arrangements" means Employee Arrangements
relating to Employees of the Apparel Fabrics Business.
"Apparel Fabrics Employee Benefit Plans" means any Employee Benefit
Plan which provides benefits exclusively for Apparel Fabrics Employees.
"Apparel Fabrics Employees" means employees of the Apparel Fabrics
Business.
"Apparel Fabrics Facilities" means the real property and facilities
currently owned by, or leased to, DTA, Dominion or any of their Subsidiaries in
connection with the operation of the Apparel Fabrics Business.
"Apparel Fabrics Intellectual Property" means all right, title and
interest of DTA, Dominion or any of their Subsidiaries in and to Intellectual
Property relating primarily to the Apparel Fabrics Business. In no event shall
Apparel Fabrics Intellectual Property include the ownership of Dual Use
Technology or any trademark, servicemark or trade or company name which contains
the name "Poly-Bond," "Nordlys," "Dominion," or any other trade name, trademark
or logo of the Nonwovens or DIFCO Businesses or derivatives thereof; provided,
however, that the Apparel Fabrics Intellectual Property shall include G&L's or
its Subsidiaries' rights under the Intellectual Property Agreements contemplated
by this Agreement.
"Apparel Fabrics Liabilities" means all Liabilities relating primarily
to, or arising primarily out of, the Apparel Fabrics Business as conducted at
any time prior to, on or after the Closing Date, including (i) all Liabilities
relating to or arising out of the Apparel Fabrics Assets, (ii) all Apparel
Fabrics Debt together with accrued but unpaid interest thereon at the Break-Up
Time; (iii) all Liabilities with respect to Apparel Fabrics Employees and
Retired Apparel Fabrics Employees, (iv) all Liabilities arising under the
Apparel Fabrics Employee Arrangements and the Apparel Fabrics Employee Benefit
Plans; and (v) all obligations of DTA, Dominion and the Dominion Holding
Companies (each with respect to the Apparel Fabrics Business only) and each of
the Apparel Fabrics Subsidiaries created pursuant to the Transaction Agreements;
provided, notwithstanding the foregoing, the Apparel Fabrics Liabilities shall
not include any (a) Nonwovens Liabilities, (b) DIFCO Liabilities, (c) Split
Liabilities or (d) Proportional Liabilities.
- 4 -
"Apparel Fabrics Subsidiaries" means those Subsidiaries and Investments
of DTA and Dominion comprising the Apparel Fabrics Business (including DomTex
(Asia), DomTex B.V. and those Persons identified in clauses (D) and (E) of the
definition of Apparel Fabrics Business), and SD MergerCo.
"Assets" means any and all assets, properties and rights, whether
tangible or intangible, whether real, personal or mixed, whether fixed,
contingent or otherwise, and wherever located, including, without limitation,
the following:
(i) real property interests (including leases and subleases),
land, plants, buildings and improvements, easements,
rights-of-way and other appurtenants thereto;
(ii) machinery, equipment, vehicles, furniture and fixtures,
leasehold improvements, supplies, repair parts, tools, plant,
laboratory and office equipment and other tangible personal
property, together with any rights or claims arising out of
the breach of any express or implied warranty by the
manufacturers or sellers of any of such assets or any
component part thereof;
(iii) inventories, including raw materials, work-in-process,
finished goods, parts, and accessories;
(iv) notes, loans and accounts receivable (whether current or
not current), interests as beneficiary under letters of
credit, advances and performance and surety bonds;
(v) banker's acceptances, shares of stock, bonds, debentures,
evidences of indebtedness, certificates of interest or
participation in profit-sharing agreements, collateral-trust
certificates, investment contracts, voting trust certificates,
puts, calls, straddles, options, swaps, collars, caps and
other securities or hedging arrangements of any kind;
(vi) financial, accounting and operating data and records
including, without limitation, books, records, electronic
data, notes, sales and sales promotional data, advertising
materials, credit information, cost and pricing information,
customer and supplier lists, reference catalogs, payroll and
personnel records, minute books, stock ledgers, stock transfer
records and other similar property, rights and information;
(vii) Intellectual Property;
(viii) Contracts and all rights therein;
(ix) prepaid expenses, deposits and retentions held by third
parties;
- 5 -
(x) claims, causes of action, choses in action, rights under
insurance policies, rights under express or implied
warranties, rights of recovery, rights of setoff, and rights
of subrogation;
(xi) licenses, franchises, permits, authorizations and
approvals; and
(xii) goodwill and going concern value.
"Break-Up" has the meaning set forth in the preface above.
"Break-Up Time" shall be 3:00 p.m., New York City time, on the Closing
Date, the effective time of the final step of the transactions set forth in
Sections 2.05 and 2.06.
"Businesses" means the Apparel Fabrics Business, the Nonwovens Business
and the DIFCO Business.
"Business Day" means a day other than a Saturday, a Sunday or a day on
which banking institutions located in the State of New York are authorized or
obligated by law or executive order to close.
"Cash" means the total of all cash and cash equivalents of the Dominion
Companies, whether held in Dominion or in any of its direct or indirect
Subsidiary or Investments, as of the Closing Date (immediately preceding the
Winding Up).
"Closing Date" means January 29, 1998.
"Code" has the meaning set forth in the preface above.
"Confidential Information" means with respect to any Party hereto, (a)
any Information concerning such Party, its business or any of its Affiliates
that was obtained by another Party hereto prior to the Break-Up Time, (b) any
Information concerning such Party that is obtained by another Party under
Section 5.03, or (c) any other Information obtained by, or furnished to, another
Party hereto that (i) is marked "Confidential," "Proprietary," "Company Private"
or words of similar import by the Party owning such Information, or any
Affiliate of such Party, or (ii) the Party owning such Information has notified
such other Party in writing that such Information is confidential or secret;
provided, however, that any Information provided by DTA, Dominion (including
DIFCO) or any of the Apparel Fabrics Subsidiaries or Nonwovens Subsidiaries to
G&L or PGI regarding the Apparel Fabrics Business (in the case of G&L) or the
Nonwovens Business or the DIFCO Business (in the case of PGI), shall not be
deemed Confidential Information with respect to the use of such Information in
their respective Business(es) by G&L and PGI, as the case may be.
"Contracts" means any contract, agreement, lease, license, sales order,
purchase order, instrument or other commitment that is binding on any Person or
any part of its property under applicable law.
- 6 -
"Control" means the possession, direct or indirect, of the power to
direct or cause the direction of the management of the policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
"Controlling" and "Controlled" have the corollary meanings ascribed thereto.
"Corporate Debt" means the 2003 Notes and the 2006 Notes and any other
Debt that is not Apparel Business Debt, Nonwovens Debt, DIFCO Debt or Debt with
respect to discontinued operations or otherwise characterized as a Split
Liability.
"Debt" means all indebtedness of DTA, Dominion and its Subsidiaries,
including, without limitation (i) all obligations for borrowed money or
evidenced by bonds, debentures, notes, letters of credit or other similar
interests, and (ii) any interest, principal, prepayment premiums or penalties,
defeasance costs, tender payments, breakage costs or other fees or expenses in
respect of those items listed in clause (i) above.
"DIFCO" means the Dominion Industrial Fabrics Company division of
Dominion, as operated immediately prior to the Winding Up and the Break-Up.
"DIFCO Adjustment" means the adjustment to the purchase price (as set
forth in Section 2.01 and reflected in Exhibit C) paid by G&L and PGI based on
DIFCO's earnings before interest, tax, depreciation and amortization, as
described in Section 3(f) of the Acquisition Agreement, equal to an increase to
PGI of 2.6% (of the total cost to acquire Dominion) and a corresponding decrease
of 2.6% to G&L.
"DIFCO Assets" means all right, title and interest (including minority
interests) of DTA (as determined immediately following the Winding Up), Dominion
(as determined immediately preceding the Winding Up) and any of their
Subsidiaries, in and to all Assets that are used primarily in or held primarily
for use in the operations of the DIFCO Business, including the DIFCO Facilities,
the DIFCO Intellectual Property, the DIFCO Contracts, the Assets of the DIFCO
Employee Arrangements and the DIFCO Employee Benefit Plans as provided in the
Employee Matters Agreement, the capital stock of DIFCO MergerCo, and the rights
of PGI and DIFCO MergerCo under the Transaction Agreements; provided,
notwithstanding the foregoing, the DIFCO Assets shall not include any (i)
Apparel Fabrics Assets, (ii) Nonwovens Assets, (iii) Split Assets, or (iv)
Proportional Assets.
"DIFCO Business" means the businesses heretofore and immediately prior
to the Winding Up and the Break-Up engaged in by Dominion through DIFCO,
including the design and production of custom fabrics for industrial flame
resistant protective clothing, coating fabrics for abrasives, upholstery
flocking and other coating end-uses, and specialty fabrics for industrial cut
and sew and other applications.
"DIFCO Contracts" means all Contracts pursuant to which Dominion is a
Party with respect to the DIFCO Business.
- 7 -
"DIFCO Debt" means all Debt of DTA directly related to the DIFCO
Business and outstanding as of the Break-Up Time.
"DIFCO Employee Arrangements" means Employee Arrangements relating to
DIFCO Employees.
"DIFCO Employee Benefit Plans" means any Employee Benefit Plan which
provides benefits exclusively for DIFCO Employees.
"DIFCO Employees" means any employee of the DIFCO Business.
"DIFCO Facilities" means the real property and facilities currently
owned by, or leased to, DTA or Dominion for the benefit of DIFCO.
"DIFCO Intellectual Property" means all right, title and interest of
DTA or Dominion in and to the Intellectual Property relating primarily to the
DIFCO Business. In no event shall DIFCO Intellectual Property include the
ownership of Dual Use Technology or any trademark, servicemark or trade or
company name which contains the name "Poly-Bond," "Nordlys," "Swift," "Swift
Textiles," "Swift Denim," "Klopman" or any other trade name, trademark or logo
of the Apparel Fabrics or Nonwovens Businesses or derivatives thereof; provided,
however, that the DIFCO Intellectual Property shall include the rights of PGI,
DTA and DIFCO MergerCo under the Intellectual Property Agreements contemplated
by this Agreement.
"DIFCO Liabilities" means all Liabilities relating primarily to, or
arising primarily out of, the DIFCO Business as conducted at any time prior to,
on or after the Closing Date, including (i) all Liabilities relating to or
arising out of the DIFCO Assets, (ii) the DIFCO Debt, together with accrued and
unpaid interest thereon at the Break-Up Time, (iii) all Liabilities with respect
to DIFCO Employees and Retired DIFCO Employees (iv) all Liabilities arising
under the DIFCO Employee Arrangements and DIFCO Employee Benefit Plans, and (v)
the obligations of DTA and Dominion (with respect to the DIFCO Business) and
DIFCO MergerCo created pursuant to the Transaction Agreements; provided,
notwithstanding the foregoing, the DIFCO Liabilities shall not include any (a)
Apparel Fabrics Liabilities, (b) Nonwovens Liabilities, (c) Split Liabilities,
or (d) Proportional Liabilities.
"DIFCO MergerCo" means 3427790 Canada Limited Inc., a Canadian
corporation to which all of the DIFCO Assets and DIFCO Liabilities are being
contributed in connection with the transactions contemplated herein.
"Dominion" has the meaning set forth in the preface above.
"Dominion Companies" means Dominion and all direct or indirect wholly
owned Subsidiaries and the portion of all other Subsidiaries and Investments
owned directly or indirectly by Dominion.
- 8 -
"Dominion Holding Companies" means DT (USA), Domtex Industries, Inc.,
Dominion Textile Mauritius Inc., DomTex B.V., DomTex (Asia) and Albuma.
"Dominion Terminated Benefit Plan" means the Employee Benefit Plan of
Dominion Executive Retirement Income Plan presently being wound up in connection
with the transactions contemplated herein.
"DomTex (Asia)" has the meaning set forth in the preface above.
"DomTex B.V." has the meaning set forth in the preface above.
"DTA" has the meaning set forth in the preface above.
"DT (USA)" has the meaning set forth in the preface above.
"Dual Use Technology" shall mean all Intellectual Property: (i) (A)
developed by Dominion or any of its Subsidiaries for the Apparel Fabrics
Business that is useful in the Nonwovens Business or the DIFCO Business as
conducted immediately prior to the Closing Date and (B) which covers components
manufactured or processes that are to be utilized by the Nonwovens Business or
the DIFCO Business, or (ii) (A) developed by Dominion or any of its Subsidiaries
for the Nonwovens Business or the DIFCO Business that is useful in the Apparel
Fabrics Business as conducted immediately prior to the Closing Date and (B)
which covers components manufactured or processes that are to be utilized by the
Apparel Fabrics Business. For purposes of this Agreement, Dual Use Technology
shall include (w) the rights to the name "Dominion", (x) all management
information systems maintained by Dominion for joint use of or which manage
information for the Apparel Fabrics Business, the Nonwovens Business and/or the
DIFCO Business, (y) with respect to patents, patent applications and invention
disclosures, shall consist of the patents, patent applications and invention
disclosures to be identified in the Intellectual Property Agreements, and (z)
the computer internet access numbers, and G&L and PGI agree to negotiate the
terms and conditions of such Dual Use Technology in the Intellectual Property
Agreements consistent with the principles set forth herein and the allocation of
Proportional Assets.
"Employee Arrangements" means all employment or consulting agreements,
collective bargaining agreements and all bonus and other incentive compensation,
deferred compensation, disability, severance, stock award, stock option or stock
purchase agreements, policies or arrangements with respect to the employment and
termination of employment of any employee, officer, director or other Person
employed at any time by DTA, Dominion or any of its Subsidiaries.
"Employee Benefit Plan" means any (a) nonqualified deferred
compensation or retirement plan or arrangement which is an Employee Pension
Benefit Plan, (b) qualified defined contribution retirement plan or arrangement
which is an Employee Pension Benefit Plan, (c) qualified defined benefit
retirement plan or arrangement which is an Employee Pension Benefit Plan, or (d)
Employee Welfare Benefit Plan, which DTA (as determined immediately following
the Winding Up), Dominion (as determined immediately preceding the Winding Up)
or any of their Subsidiaries maintains has
- 9 -
maintained or to which DTA, Dominion or any of its Subsidiaries has an
obligation or had an obligation to make contributions.
"Employee Pension Benefit Plan" has the meaning set forth in ERISA Sec.
3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in ERISA Sec.
3(1).
"Employee Matters Agreement" means the agreement to be entered into
pursuant to Section 2.08 among G&L, PGI and DTA (or their respective Affiliates)
with respect to, among other things, certain employee benefit and liability
issues.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Final Determination"means (i) with respect to federal income Taxes, a
"determination" as defined in Section 1313(a) of the Code or execution of an
Internal Revenue Service Form 870AD and, with respect to Taxes other than
federal income Taxes, any final determination of liability in respect of a Tax
that, under applicable law, is not subject to further appeal, review or
modification through proceedings or otherwise (including the expiration of a
statute of limitations or a period for the filing of claims for refunds, amended
returns or appeals from adverse determinations) or (ii) the payment of Tax by
G&L, PGI or any of their Affiliates, whichever is responsible for payment of
such Tax liability under applicable law, with respect to any item disallowed or
adjusted by a taxing authority, provided that such responsible party determines
that no action should be taken to recoup such payment and G&L (if the
responsible party is PGI or any of its Affiliates) or PGI (if the responsible
party is G&L or any of its Affiliates) agrees.
"G&L" has the meaning set forth in the preface above.
"G&L Contribution Note" means the $141.0 million subordinated
promissory note issued by DTA to G&L on December 19, 1997 in connection with the
take up of Dominion common shares and First Preferred shares by DTA.
"Indemnifying Party" means a Person that is obligated to provide
indemnification pursuant to Article 9 of this Agreement.
"Indemnitee" means a Person that is entitled to seek indemnification
pursuant to Article 9 of this Agreement.
"Information" means all records, books, contracts, instruments,
computer data and other data and information of any kind whatsoever.
"Insurance Matters Agreement" means the agreement to be entered into
pursuant to Section 2.08 among G&L, PGI and DTA (or their respective Affiliates)
with respect to, among other things, certain insurance matters and issues.
- 10 -
"Intellectual Property" means any and all domestic and foreign patents
and patent applications, together with any continuations, continuations-in-part
or divisional applications thereof, and all patents issuing thereon (including
reissues, renewals and re-examinations of the foregoing); invention disclosures;
mask works; net lists; copyrights, and copyright applications and registrations;
trademarks, servicemarks, service names, trade names, and trade dress, in each
case together with any applications and registrations therefor and all
appurtenant goodwill relating thereto; trade secrets, commercial and technical
information, know-how, proprietary or confidential information, including
engineering, production and other designs, notebooks, processes, drawings,
specifications, formulae, and technology; computer and electronic data
processing programs and software (object and source code), data bases and
documentation thereof; inventions (whether patented or not); and all other
intellectual property under the laws of any country throughout the world.
"Intellectual Property Agreements" means the agreements to be entered
into pursuant to Section 2.08 among G&L, PGI and DTA (or their respective
Affiliates) with respect to the treatment after the Break-Up Time of
Intellectual Property, including Dual Use Technology.
"InterTech" means The InterTech Group, Inc., a South Carolina
corporation.
"InterTech Contribution Note" means the $14,984,000 subordinated
promissory note issued by DTA to InterTech on December 19, 1997 in connection
with the take up of Dominion common shares and First Preferred shares by DTA.
"Investment" means with respect to any specified Person, any
corporation or other legal entity of which such Person owns, whether directly or
indirectly, any stock or other equity interest of more than 20% which is not a
Subsidiary.
"Liabilities" means any and all debts, liabilities, commitments and
obligations, whether fixed, contingent or absolute, matured or unmatured,
asserted or unasserted, liquidated or unliquidated, accrued or not accrued,
known or unknown, whenever or however arising (including, without limitation,
whether arising out of any Contract or tort based on negligence or strict
liability and any liability for Taxes) and whether or not the same would be
required by generally accepted accounting principles to be reflected in
financial statements or disclosed in the notes thereto.
"Nonwovens Assets" means all right, title and interest (including
minority interests) of DTA (as determined immediately following the Winding Up),
Dominion (as determined immediately preceding the Winding Up) and any of their
Subsidiaries in and to all Assets that are used primarily in or held primarily
for use in the operations of the Nonwovens Business, including the Nonwovens
Cash, the Nonwovens Facilities, the Nonwovens Intellectual Property, the
Nonwovens Contracts, the Assets of the Nonwovens Employee Arrangements and the
Nonwovens Employee Benefit Plans as provided in the Employee Matters Agreement,
the capital stock of any of the Nonwovens Subsidiaries and the rights of DTA, DT
(USA), PGI and the Nonwovens Subsidiaries under the Transaction Agreements;
provided, notwithstanding the foregoing, the Nonwovens Assets shall not include
any (i) Apparel Fabrics Assets, (ii) DIFCO Assets, (iii) Split Assets, or (iv)
Proportional Assets.
- 11 -
"Nonwovens Business" means the nonwovens fabrics businesses heretofore
or currently engaged in by DTA, Dominion or its Subsidiaries (or their
predecessors) as reported in the nonwovens fabrics segment (or its predecessor
segment) in Dominion's most recent financial statements (but excluding any
former or discontinued operations), including as conducted through:
(A) the Dominion Holding Companies;
(B) five indirect wholly-owned Subsidiaries of Dominion, being
(i) Poly-Bond Inc., a Delaware corporation, (ii) Dominion Textile
France S.a.r.L., a corporation organized under the laws of the Republic
of France, (iii) Nordlys S.A., a company organized under the laws of
the Republic of France, (iv) Nordlys UK Ltd., a corporation organized
under the laws of the United Kingdom, and (v) Geca-Tapes B.V., a
corporation organized under the laws of the Netherlands; and
(C) Nonwovens Cash" means 42.6% of all Cash.
"Nonwovens Contracts" means all Contracts pursuant to which DTA,
Dominion or any of their Subsidiaries (determined immediately prior to the
Break-Up) is a Party with respect to the Nonwovens Business.
"Nonwovens Debt" means all Debt of DTA or any Nonwovens Subsidiary, in
each case, directly related to the Nonwovens Business, outstanding as of the
Break-Up Time.
"Nonwovens Employee Arrangements" means Employee Arrangements for
Nonwovens Employees.
"Nonwovens Employee Benefit Plans" means any Employee Benefit Plan
which provides benefits exclusively for Employees of the Nonwovens Business.
"Nonwovens Employees" means employees of the Nonwovens Business.
"Nonwovens Facilities" means the real property and facilities that
currently are owned by, or leased to, DTA, Dominion or any of their Subsidiaries
in connection with the operation of the Nonwovens Business.
"Nonwovens Intellectual Property" means all right, title and interest
of DTA, Dominion or any of their Subsidiaries in and to the Intellectual
Property relating primarily to the Nonwovens Business. In no event shall
Nonwovens Intellectual Property include the ownership of Dual Use Technology or
any trademark, servicemark or trade or company name which contains the name
"Swift," "Swift Textiles," "Swift Denim," "Klopman," "Dominion") or any other
trade name,
- 12 -
trademark or logo of the Apparel Fabrics or DIFCO Businesses or derivatives
thereof; provided, however, that the Nonwovens Intellectual Property shall
include PGI or its Subsidiaries' rights under the Intellectual Property
Agreements contemplated by this Agreement.
"Nonwovens Liabilities" means all Liabilities relating primarily to, or
arising primarily out of, the Nonwovens Business as conducted at any time prior
to, on or after the Closing Date, including (i) all Liabilities relating to or
arising out of the Nonwovens Assets, (ii) all Nonwovens Debt, together with
accrued but unpaid interest thereon at the Break-Up Time, (iii) all Liabilities
with respect to Nonwovens Employees and Retired Nonwovens Employees, (iv) all
Liabilities under the Nonwovens Employee Arrangements and Nonwovens Employee
Benefit Plans, and (v) the obligations of DTA, Dominion and the Dominion Holding
Companies (each with respect to the Nonwovens Business only), and of each of the
Nonwovens Subsidiaries created pursuant to the Transaction Agreements; provided,
notwithstanding the foregoing, the Nonwovens Liabilities shall not include any
(a) Apparel Fabrics Liabilities, (b) DIFCO Liabilities, (c) Split Liabilities,
or (d) Proportional Liabilities.
"Nonwovens Subsidiaries" means those Subsidiaries of DTA and Dominion
comprising the Nonwovens Business, as identified in the definition thereof
(including DT (USA), DomTex Industries, Inc., Dominion Textile Mauritius Inc.
and Albuma).
"Operating Agreement" means the Operating Agreement by and among DTA,
PGI and G&L regarding Dominion, dated as of December 19, 1997, a copy of which
is attached hereto as Exhibit B.
"Other Employee Arrangements" has the meaning ascribed to such term in
the Employee Matters Agreement.
"Other Employee Benefit Plans" means any Employee Benefit Plan which
provides benefits for individuals who are Employees of Dominion or any of its
Subsidiaries, but who do not work primarily for any one of the Businesses.
"Party" or "Parties" has the meaning set forth in the preface above.
"Person" means an individual, partnership, limited liability company,
joint venture, corporation, trust, unincorporated association, any other entity,
or a government or any department or agency or other unit thereof.
"PGI" has the meaning set forth in the preface above.
"PGI Contribution Note" means the $25.0 million subordinated promissory
note issued by DTA to PGI on December 19, 1997 in connection with the take-up of
Dominion common shares and First Preferred shares by DTA.
- 13 -
"Prior Relationship" means the business and ownership relationships
among DTA, Dominion and Dominion's direct and indirect Subsidiaries at any time
prior to giving effect to the Winding Up, the Break-Up, and the other
transactions described or contemplated herein.
"Proportional Assets" means Assets that are part of, or resulted from,
the Businesses as a whole on a shared basis, and Assets arising from or
associated with the transactions contemplated by this Agreement and the other
Transaction Agreements, including transaction-related Tax Assets (including any
Tax benefits arising from the deductibility of bond redemption premiums, fees,
expenses or similar payments arising out of the Break-Up), Cash and corporate
Assets. Proportional Assets are to be shared 57.4% by G&L (as purchaser of the
Apparel Fabrics Business) and 42.6% by PGI (as purchaser of the Nonwovens
Business).
"Proportional Liabilities" means Liabilities that are part of, or
resulted from, the Businesses taken as a whole on a shared basis, and
Liabilities arising from or associated with the transactions contemplated by
this Agreement and the other Transaction Agreements, including (i) the Tax
Liabilities asociated with the transactions contemplated hereby, including Taxes
imposed in connection with separating the Apparel Fabrics Business and the
Nonwovens Business and transferring such businesses to G&L and PGI,
respectively, (ii) Tax Liabilities of DomTex (Asia) related to the loss of
Overseas Headquarters status and the loss of the exemption under Section 13(10)
of the Singapore Income Tax Act on dividends from DomTex B.V. to DomTex (Asia),
(iii) any litigation costs and expenses related to the Acquisition (but not
including any litigation which is solely among the parties hereto), (iv) any
Corporate Debt, (v) any corporate overhead Liabilities, (vi) any transaction
costs incurred by or on behalf of DTA or PGI solely in connection with the
proposed Acquisition, including an amount necessary to compensate PGI and DTA
for obtaining commitments for, and utilizing, the financing provided directly to
DTA by the Chase Manhattan Bank and First Union National Bank pursuant to the
commitment letter dated October 27, 1997 (including the interest expense
incurred for the amount necessary to complete the Acquisition and related
transactions), (vii) the principal amount of outstanding corporate indebtedness
assumed by PGI, G&L, the Nonwovens Business, the DIFCO Business or the Apparel
Fabrics Business or the amount paid to retire, repay or acquire outstanding
corporate indebtedness (whether in the nature of payments of principal,
interest, premiums, defeasance costs, tender payments, overdrafts, penalties,
breakage costs, fees, litigation expenses, other expenses or indemnitees
relating thereto) and Preferred Shares of Dominion, and (viii) similar
Liabilities, but not including (x) the investment banking and merger and
acquisition advisory fees specified in the definition of "Split Liabilities" or
(y) any transaction costs, commitment fees or financing fees, payable by either
PGI or G&L in connection with providing any other financing required to complete
the Acquisition or the subsequent purchase and sale of the Apparel Fabrics
Business and the Nonwovens Business. Proportional Liabilities are to be shared
57.4% by G&L (as purchaser of the Apparel Fabrics Business) and 42.6% by PGI (as
purchaser of the Nonwovens Business).
"Representatives" means directors, officers, employees, agents,
consultants, advisors, accountants, attorneys and representatives.
- 14 -
"Retired Apparel Employees" has the meaning ascribed to such term in
the Employee Matters Agreement.
"Retired DIFCO Employees" has the meaning ascribed to such term in the
Employee Matters Agreement.
"Retired Nonwovens Employees" has the meaning ascribed to such term in
the Employee Matters Agreement.
"SD MergerCo" means 3427803 Canada Limited, a corporation organized
under the laws of Canada, to which all of the Apparel Fabrics Assets and Apparel
Fabrics Liabilities that previously constituted the Swift Denim division of
Dominion are being contributed in connection with the transactions contemplated
herein.
"Split Assets" shall mean (i) Assets of former or discontinued
operations (of any nature) including any Assets related to C.S. Brooks Corp.,
Dominion Textile Foundation, Dominion Yarn Corp., 159422 Canada Inc. and Pemtech
Builders Inc. and any Assets related to the Dominion Terminated Benefit Plan and
(ii) Assets not otherwise related to any of the Businesses, either individually
or as a whole on a shared basis; provided, in no event shall Split Assets
include Proportional Assets. Split Assets are to be shared 50.0% by G&L (as
purchaser of the Apparel Fabrics Business) and 40.0% by PGI (as purchaser of the
Nonwovens Business).
"Split Assets and Liabilities Agreement" means the agreement to be
entered into between G&L and PGI regarding the procedures of (a) disposition or
division of Split Assets (b) disposition or division of Proportional Assets, (c)
satisfaction or allocation of Split Liabilities and (d) satisfaction or
allocation of Proportional Liabilities, in each case pursuant to the terms and
conditions of this Agreement.
"Split Liabilities" shall mean (i) all Liabilities associated with
former or discontinued operations (of any nature) including any Liabilities
related to C.S. Brooks Corp., Dominion Textile Foundation, Dominion Yarn Corp.,
159422 Canada Inc. and Pemtech Builders Inc. and any Liabilities related to the
Dominion Terminated Benefit Plan, (ii) the Liabilities not otherwise arising
from or attributable to any of the Businesses, either individually or as a whole
on a shared basis, (iii) environmental, retiree medical, or similar Liabilities
related to former or discontinued operations, (iv) Liabilities related to
investment banking and merger and acquisition advisory fees incurred by or on
behalf of PGI or DTA in connection with the Acquisition; provided, in no event
shall Split Liabilities include Proportional Liabilities. Proportional
Liabilities are to be shared 50.0% by G&L (as purchaser of the Apparel Fabrics
Business) and 50.0% by PGI (as purchaser of the Nonwovens Business).
"Subsidiary" means with respect to any specified Person, any
corporation or other legal entity of which such Person or any of its
Subsidiaries Controls or owns, directly or indirectly, more than 50% of the
stock of other equity interest entitled to vote on the election of the members
to the board of directors or similar governing body.
- 15 -
"Tax" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code ss.59A),
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest, penalty,
or addition thereto, whether disputed or not.
"Tax Matters Agreement" means the agreement to be entered into pursuant
to Section 2.08 among G&L, PGI and DTA (or their respective Affiliates) with
respect to certain Tax matters.
"Third-Party Claim" means any claim, suit, arbitration, inquiry,
proceeding or investigation by or before any court, governmental or other
regulatory or administrative agency or commission or any arbitration tribunal
asserted by a Person other than any Party hereto or their respective Affiliates
which gives rise to a right of indemnification hereunder.
"Transaction Agreements" means this Agreement, the Stock Sale
Agreements attached hereto, the Acquisition Agreement, the Operating Agreement
and the Ancillary Separation Agreements.
"Transferee" means any Person that will receive a transfer of Assets
(including capital stock) pursuant to Article 2.
"Transferor" means any Person that will make a transfer of Assets
(including capital stock) pursuant to Article 2.
"Winding Up" means the winding up of Dominion with and into DTA, as
contemplated in Section 2.05.
"ZBH" has the meaning set forth in the preface above.
"ZBH Contribution Note" means the $54.0 million subordinated promissory
note issued by DTA to ZBH on December 19, 1997 in connection with the take up of
Dominion common shares and First Preferred shares by DTA.
ARTICLE 2
THE TRANSACTIONS
Section 2.01. TOTAL PURCHASE PRICE. On and subject to the terms and
conditions of this Agreement, (a) G&L shall purchase the Apparel Fabrics
Business for a total of $464,524,157.34 (b) PGI shall purchase the Nonwovens
Business and the DIFCO Business for a total of $351,695,749.27. Such amounts,
which are calculated in accordance with the terms described in the Acquisition
Agreement, including the DIFCO Adjustment, are set forth in detail on Exhibit C
hereto.
- 16 -
Section 2.02. PURCHASE AND SALE OF BUSINESSES. On the terms and
conditions set forth in this Agreement (including the manner in which each of
the transactions shall be consummated as described in Section 2.06) and in the
Stock Purchase Agreements attached hereto, the Parties agree that, on the
Closing Date, immediately following the Winding Up and related transactions
described in Section 2.05, the following shall occur:
(a) G&L (or any of its Subsidiaries) shall purchase from DTA, and DTA
shall sell, transfer, convey and deliver to G&L (or such Subsidiaries), free and
clear of all known liens or encumbrances in favor of G&L, all capital stock and
Assets which collectively comprise the Apparel Fabrics Business, including (i)
all outstanding shares of capital stock of the Apparel Fabrics Subsidiaries held
directly or indirectly by DTA, (ii) all Apparel Fabrics Assets held directly by
DTA, (iii) any Apparel Fabrics Assets not held by DTA or one of the Apparel
Fabrics Subsidiaries or otherwise not transferred pursuant to clauses (a)(i) and
(a)(ii) hereof, (iv) 50% of the Split Assets, and (vi) 57.4% of the Proportional
Assets.
(b) PGI (or any of its Subsidiaries) shall purchase from DTA, and DTA
shall sell, transfer, convey and deliver to PGI (or such Subsidiary), free and
clear of all known liens or encumbrances in favor of PGI: (1) all capital stock
and Assets which collectively comprise the Nonwovens Business, including (i) all
outstanding shares of capital stock of the Nonwovens Subsidiaries held directly
or indirectly by DTA, (ii) all Nonwovens Assets held directly by DTA, (iii) any
Nonwovens Assets not held by DTA or one of the Nonwovens Subsidiaries or
otherwise not transferred pursuant to the preceding clauses (i) and (ii), (iv)
50% of the Split Assets, and (v) 42.6% of the Proportional Assets; and (2) all
outstanding shares of capital stock of DIFCO MergerCo (which collectively
represent the DIFCO Business).
Section 2.03. ASSUMPTION OF LIABILITIES.
(a) Simultaneously with the actions referred to in Section 2.02(a), G&L
(or its chosen Subsidiaries), in partial consideration for the transfer of the
Apparel Fabrics Business, shall assume and on a timely basis pay, satisfy and
discharge (or cause its Subsidiaries to pay, satisfy and discharge) in
accordance with their terms, (i) any and all Apparel Fabrics Liabilities, (ii)
50% of all Split Liabilities, and (iii) 57.4% of all Proportional Liabilities.
(b) Simultaneously with the actions referred to in Section 2.02(b), PGI
(or its chosen Subsidiaries), in partial consideration for the transfer of the
Nonwovens and DIFCO Businesses, shall assume and on a timely basis pay, satisfy
and discharge (or cause its Subsidiaries to pay, satisfy and discharge) in
accordance with their terms, (i) any and all Nonwovens Liabilities, (ii) any and
all DIFCO Liabilities, (iii) 50% of all Split Liabilities, and (iv) 42.6% of all
Proportional Liabilities.
- 17 -
Section 2.04. METHODS OF TRANSFER AND ASSUMPTION.
(a) The Parties hereto agree that (i) any Transfer shall be effected by
delivery by the Transferor to the Transferee of (A) with respect to those Assets
which are evidenced by capital stock certificates or similar instruments,
certificates duly endorsed in blank or accompanied by stock powers or other
instruments of assignment executed in blank, (B) with respect to any real
property interest and/or any improvements thereon, a grant deed or the
equivalent thereof in accordance with local practice, and (C) with respect to
all other Assets, such good and sufficient instruments of contribution,
assignment, conveyance, transfer and delivery, in form and substance reasonably
satisfactory to the appropriate Transferor and Transferee, as shall be necessary
to vest in such Transferee, all of the Transferor's right, title and interest in
and to any such Assets, (ii) the assumption of the Liabilities contemplated
pursuant to Section 2.03 hereof shall be effected by delivery by the Party
assuming such Liability to the Party which is the obligor under such Liability,
of such good and sufficient instruments of assumption, in form and substance
reasonably satisfactory to such two Parties, as shall be necessary for the
assumption of such Liabilities. Each Party hereto also agrees to deliver to each
other Party hereto such other documents, instruments, certificates and
agreements as may be reasonably requested by any such other Party hereto in
connection with the transactions contemplated hereby and to take such further
action as may be reasonably necessary to carry out the provisions hereof,
including appropriate transfer instruments if an Apparel Fabrics Asset,
Nonwovens Asset or DIFCO Asset is inadvertently transferred to the incorrect
Transferee. Notwithstanding any provision to the contrary contained in this
Agreement, in the event and to the extent that there is any conflict between the
provisions of this Agreement and the provisions of any of the instruments of
transfer or assumption referred to in this Section 2.04, the provisions of this
Agreement shall prevail and govern.
(b) To the extent that any transfers contemplated hereby are not
consummated prior to or at the Break-Up Time, the Parties hereto covenant and
agree to take all actions reasonably necessary or appropriate to complete such
transfers as promptly thereafter as shall be practicable, it nonetheless being
understood and agreed to by each of the Parties that, subject to Section 2.07,
no Party shall be liable in any manner to any Person who is not a Party to this
Agreement for any failure of any Party of the transfers contemplated by this
Article 2 to be consummated on or subsequent to the Closing Date, whether or not
all of the Assets (including capital stock) to be transferred or the Liabilities
to be assumed pursuant to this Agreement shall have been legally transferred to
or assumed by the relevant Transferee. The Parties agree that as of the Break-Up
Time (a) G&L and PGI shall have, and shall be deemed to have acquired, complete
and sole beneficial ownership over all of the Apparel Fabrics Business (in the
case of G&L) and the Nonwovens and DIFCO Businesses (in the case of PGI),
respectively (including the Apparel Fabrics Assets, the Nonwovens Assets, the
DIFCO Assets, and their respective allocations of the Split Assets and the
Proportional Assets, as applicable), together with all of the rights, powers and
privileges incident thereto, and shall be deemed to have assumed in accordance
with the terms of this Agreement and the other Transaction Agreements all of the
Apparel Fabrics Liabilities (in the case of G&L), the Nonwovens and DIFCO
Liabilities (in the case of PGI), and their respective allocations of Split
Liabilities and the Proportional Liabilities, as applicable, and all of duties,
obligations and responsibilities incident thereto.
- 18 -
Section 2.05. FINAL TAKE-UP AND WINDING UP. On and subject to the terms
and conditions of this Agreement, the Parties will consummate the following
transactions on the Closing Date, in the immediate order of succession as
listed:
(a) DTA shall have acquired or acquire the remaining outstanding
566,199 common shares and 16 First Preferred shares of Dominion not owned by DTA
pursuant to a transaction in accordance with Section 206 of the Canadian
Business Corporation Act.
(b) DTA shall have made or make an election under Section 338 of the
Code with respect to the acquisition of the Dominion shares. DTA shall have
caused or cause each Subsidiary of Dominion, other than DT (USA) and each
Subsidiary directly held by DT (USA), to make a similar election under Section
338 of the Code.
(c) Pursuant to the terms of the 2003 Tender Offer and 2006 Tender
Offer, DT (USA) shall accept for purchase all 2003 Notes and 2006 Notes validly
tendered and not revoked as of the expiration date of each offer, and the
supplemental indentures (as described in the consent solicitations forming a
part of the 2003 Tender Offer and 2006 Tender Offer) shall become effective on
the terms set forth therein.
(d) PGI shall loan DTA [*] in exchange for a note from DTA; immediately
thereafter, DTA shall redeem the outstanding Second Preferred shares for [*]
(CDN [*]).
(e) DTA shall repay [*] plus accrued and unpaid interest, to The Chase
Manhattan Bank with respect to the DTA senior credit facility.
(f) DTA shall cause Dominion to, and Dominion shall, undergo a "winding
up" pursuant to which all Assets of Dominion shall be transferred to DTA and all
Liabilities of Dominion shall be assumed by DTA, and all of the outstanding
common shares and First Preferred shares of Dominion held by DTA shall be
redeemed.
(g) DTA shall contribute the DIFCO Assets as a capital contribution to
DIFCO MergerCo in exchange for 100 common shares and 100 preferred shares of
DIFCO MergerCo and the assumption by DIFCO MergerCo of the DIFCO Liabilities and
a note issued to DTA for [*].
(h) DTA shall contribute all Apparel Fabrics Assets directly owned by
DTA and immediately prior thereto used in the operation of the Swift Denim
division of Dominion as a capital contribution to SD MergerCo in exchange for
1000 common shares of SD MergerCo and the assumption by SD MergerCo of all
Apparel Fabrics Liabilities attributable to, arising out of or otherwise related
to the operation of the Swift Denim division or the Assets contributed to SD
MergerCo.
[*] Confidential Portions Omitted Where Indicated and Filed Separately with the
Commission.
- 19 -
Section 2.06. TRANSFER OF CAPITAL STOCK AND ASSETS; CERTAIN OTHER
TRANSACTIONS. On and subject to the terms and conditions of this Agreement,
following the actions to be taken in Section 2.05, the Parties will consummate
the following transactions, in the immediate order of succession as listed:
(a) Pursuant to the Stock Sale Agreement between such Parties attached
hereto as Annex 2.06(a), PGI shall purchase all of the outstanding shares of
capital stock of DIFCO MergerCo from DTA for total consideration of [*] cash and
the note issued by DIFCO MergerCo to DTA for an additional [*].
(b) DTA shall repay intercompany debt of [*] to DomTex (Asia) and [*]
to DomTex B.V.
(c) Pursuant to the Stock Sale Agreement between such Parties attached
hereto as Annex 2.06(c), DTA shall transfer to G&L all of the outstanding shares
of capital stock of DomTex (Asia), valued at [*], in partial satisfaction of the
G&L Contribution Note.
(d) Pursuant to the Stock Sale Agreements between such Parties attached
hereto as Annexes 2.06(d)(1) and 2.06(d)(2), Albuma shall transfer to DomTex
B.V. all of its shares of capital stock of Klopman International SpA
(representing a 26% interest) for total consideration of [*], and Albuma shall
transfer to DomTex B.V. all of its shares of capital stock of Swift Textiles
France S.A. (representing a 50% interest) for total consideration of [*].
(e) PGI shall loan Albuma [*] in exchange for a note; immediately
thereafter, pursuant to the Stock Sale Agreement between such Parties attached
hereto as Annex 2.06(e), DomTex B.V. shall transfer to Albuma S.A. all of its
shares of capital stock of Dominion Textile France S.a.r.L. for [*].
(f) PGI shall lend Chicopee Holdings, B.V. [*] in exchange for a note;
immediately thereafter, pursuant to the Stock Sale Agreements between such
Parties attached hereto as Annexes 2.06(f)(1) and 2.06(f)(2), Chicopee Holdings,
B.V. shall acquire all of the outstanding shares of Nordlys UK Ltd. from DomTex
B.V. for [*], and Chicopee Holdings, B.V. shall acquire all of the outstanding
shares of Geca-Tapes B.V. from DomTex B.V. for [*].
(g) PGI shall purchase from DomTex B.V. [*] of outstanding indebtedness
owed by Nordlys S.A. and Geca-Tapes B.V. to DomTex B.V. Pursuant to the Consent
attached hereto as Exhibit D, this indebtedness is being transferred in the
presence of an authorized representative of Nordlys S.A.
(h) DomTex B.V. shall lend [*] to DomTex (Asia) in exchange for a note;
immediately thereafter, DomTex (Asia) shall repay to DT (USA) a total of [*]
(representing principal and accrued interest), including [*] withholding taxes
to be forwarded to Singapore taxing authorities, with respect to the outstanding
intercompany convertible debt instruments (original aggregate principal amount
of [*]). [*] Confidential Portions Omitted Where Indicated and Filed Separately
with the Commission.
- 20 -
(i) DT (USA) shall make a capital contribution of all intercompany
debts owed to it by its wholly-owned Subsidiary, Swift Textiles Inc., to the
capital of Swift Textiles Inc.
(j) Pursuant to the Stock Sale Agreement between such Parties attached
hereto as Annex 2.06(j), G&L shall purchase all of the outstanding shares of
capital stock of DT (USA) Exports Inc. and all of the outstanding shares of
capital stock of Swift Textiles Inc. from DT (USA) for total consideration of
[*].
(k) Pursuant to the terms of the 2003 Tender Offer and 2006 Tender
Offer, DT (USA) shall forward [*] to the Depositary of the 2003 and 2006 Tender
Offers in respect of payment for all of the 2003 Notes and 2006 Notes previously
accepted for purchase; immediately thereafter, DT (USA) shall loan PGI [*] (in
exchange for an intercompany note).
(l) Pursuant to the Stock Sale Agreement between such Parties attached
hereto as Annex 2.06(l), DTA shall transfer to PGI all of the outstanding shares
of capital stock of DT (USA), valued at [*], in full satisfaction of its note
owed to PGI issued pursuant to Section 2.05(d).
(m) Pursuant to the Stock Sale Agreement between such Parties attached
hereto as Annex 2.06(m), DTA shall transfer to PGI all of the outstanding shares
of capital stock of Dominion Textile Mauritius, Inc. for total consideration of
[*].
(n) Pursuant to the Stock Sale Agreement between such Parties attached
hereto as Annex 2.06(n), DTA shall transfer to G&L all of the outstanding shares
of common stock of SD MergerCo for total consideration of [*], comprised of [*]
in cash and full satisfaction of the [*] outstanding balance of the G&L
Contribution Note.
(o) G&L shall purchase from DT (USA) the remainder of the outstanding
convertible note issued by DomTex (Asia) to DT (USA) (original aggregate
principal amount of [*]) for [*].
(p) DT (USA) shall repay [*] in indebtedness to DTA.
(q) DTA shall repay the PGI Contribution Note, the ZBH Contribution
Note and the InterTech Contribution Note, each with accrued but unpaid interest.
(r) DTA shall pay transaction related and other expenses.
(s) DTA shall redeem the 28 common shares of DTA held by InterTech for
total consideration of [*] (CDN [*]).
Section 2.07. CONSENTS; NONASSIGNABLE CONTRACTS. Notwithstanding
anything herein to the contrary, this Agreement shall not constitute an
agreement to assign any Contract or Asset if an assignment or attempted
assignment of the same without the consent or approval of another Person
[*] Confidential Portions Omitted Where Indicated and Filed Separtely with the
Commission.
- 21 -
would constitute a breach thereof or in any way impair the rights of a Party
thereunder. Each Party hereby agrees to use commercially reasonable efforts to
obtain (or cause its Subsidiaries to obtain) any consent or approval required to
assign any Contract or Asset pursuant to this Agreement; provided, however, that
the transferring Party shall not be obligated to pay any consideration therefor
(except for filing fees and other administrative charges) to the third party
from whom such consent or approval is requested. If any such consent is not
obtained or if an attempted assignment would be ineffective or would impair such
Party's rights under any such Contract or Asset so that the Party entitled to
the benefits of such purported transfer (the "Intended Transferee") would not
receive all such rights, then (x) the Party purporting to make such transfer
(the "Intended Transferor") shall use commercially reasonable efforts to provide
or cause to be provided to the Intended Transferee, to the extent permitted by
law, the benefits of any such Contract or Asset and the Intended Transferor
shall promptly pay or cause to be paid to the Intended Transferee when received
all moneys received by the Intended Transferor with respect to any such Contract
or Asset and (y) in consideration thereof the Intended Transferee shall pay,
perform and discharge on behalf of the Intended Transferor all of the Intended
Transferor's Liabilities thereunder in a timely manner and in accordance with
the terms thereof. In addition, the Intended Transferor shall take such other
actions as may reasonably be requested by the Intended Transferee in order to
place the Intended Transferee, insofar as reasonably possible, in the same
position as if such Contract or Asset had been transferred as contemplated
hereby and so all the benefits and burdens relating thereto, including
possession, use, risk of loss, potential for gain and dominion, control and
command, shall inure to the Intended Transferee. If and when such consents and
approvals are obtained, the transfer of the applicable Contract or Asset shall
be effected in accordance with the terms of this Agreement.
Section 2.08. OTHER AGREEMENTS.
(a) Within 90 days after the execution of this Agreement (and the
related Stock Sale Agreements attached hereto), the Parties hereto shall enter
into agreements, effective as of the BreakUp Time, embodying certain
relationships among such Parties after the Closing Date with respect to the
Apparel Fabrics Business, the Nonwovens Business and the DIFCO Business,
including the Tax Matters Agreement, the Employee Matters Agreement, the
Intellectual Property Agreements, the Insurance Matters Agreement, the
Transition Services Agreement and the Split Assets and Liabilities Agreement
(such agreements collectively referred to as the "Ancillary Separation
Agreements"). Each Party agrees to work in good faith to negotiate and execute
the Ancillary Separation Agreements, as soon as practicable following the
Closing Date, on terms consistent with those set forth and contemplated by this
Agreement and the Acquisition Agreement.
(b) Prior to the time at which the pertinent agreement described in
subsection (a) of this Section 2.08 has been executed, neither G&L nor PGI shall
take any material action (including the disposition of any such Assets or the
resolution, defense or settlement of any such Liabilities) with respect to any
Split Assets or Split Liabilities, Proportional Assets or Proportional
Liabilities, any Tax matters, Employee Benefit Plan matters, Intellectual
Property matters or intercompany transitional services without the express
written consent of G&L (in the case of PGI) or PGI (in the case of G&L). With
respect to any third party claims arising out of or relating to any Split
Assets, Split Liabilities, Proportional Assets, or Proportional Liabilities, PGI
and G&L agree to cooperate in good
- 22 -
faith with respect to the resolution, defense and/or settlement of such claims,
on terms and conditions consistent with Section 9.03 hereof.
Section 2.09. INTERCOMPANY BALANCE AND EXPENSE TRUE-UP.
(a) PGI and G&L each acknowledge that certain intercompany account
balances incorporated into the calculations of certain dollar amounts in this
Agreement (including the calculation of the Purchase Price herein) are based on
estimated balances as of December 31, 1997. Within 90 days from the Closing
Date, each of PGI and G&L shall ascertain the actual intercompany account
balances as of the Closing Date for each of their respective Subsidiaries as
they relate to the acquired Businesses, and shall work in good faith to settle
amounts owed between such Parties as a result of any differences in such
accounts. For the avoidance of doubt, no settlement of such balances shall
affect the agreement of the parties that after giving effect to Section 2.09(b),
57.4% of the Cash shall be the Assets of G&L (or its Subsidiaries and
Investments) and 42.6% of the Cash shall be the Assets of PGI (or its
Subsidiaries).
(b) Within 45 days of the Closing Date, (i) PGI and G&L shall calculate
and submit to each other final determinations of all fees and expenses
associated with the transactions contemplated herein and (ii) PGI and G&L shall
make a joint determination of Cash. To the extent that either (x) G&L (together
with its Subsidiaries and Investments) shall have received in excess of 57.4% of
Cash or (y) PGI (together with its Subsidiaries and Investments) shall have
received in excess of 42.6% of Cash, the party receiving such excess amount
shall make a cash payment to the other party so that following such payment G&L
(together with its Subsidiaries and Investments) shall have received 57.4% of
Cash and PGI (together with its Subsidiaries and Investments) shall have
received 42.6% of Cash. To the extent that such expenses constitute Split
Liabilities or Proportional Liabilities or otherwise affect the relative
purchase price to be paid by each Party (as contemplated herein and in the
Acquisition Agreement), PGI and G&L shall work in good faith to settle the net
difference resulting between the parties by virtue of such expenses pursuant to
the terms and conditions of this Agreement.
(c) In the event that any dispute arises with respect to payments to be
made pursuant to Section 2.09(a) or (b), the Parties shall resolve such dispute
in accordance with Section 10.08.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
Section 3.01. REPRESENTATIONS AND WARRANTIES OF G&L. G&L represents and
warrants to PGI that the statements contained in this Section 3.01 are true and
correct as of the date hereof.
(a) Organization. G&L is a corporation organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation.
- 23 -
(b) Authorization of Transaction. G&L and its Subsidiaries have full
power and authority pursuant to their corporate charters to execute and deliver
this Agreement and the other Transaction Agreements, as applicable, and to
perform their obligations thereunder. Each of this Agreement and the other
Transaction Agreements constitutes or will constitute the valid and legally
binding obligation of G&L (or any Subsidiary a party thereto), enforceable in
accordance with its respective terms and conditions. G&L need not give any
notice to, make any filing with, or obtain any authorization, consent, or
approval of any government or governmental agency in order to consummate the
transactions contemplated by the Transaction Agreements, except such as have
been given, made or obtained.
(c) Sufficient Funds. G&L and its Subsidiaries have cash available,
and/or has obtained binding commitments from one or more financial institutions,
in amounts sufficient to pay on the Closing Date the purchase price for the
Apparel Fabrics Business as provided in Article 2.
(d) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(A) violate any statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any government, governmental agency, or
court to which G&L (or any of its Subsidiaries) is subject or any provision of
their charter or bylaws or (B) conflict with, result in a breach of, constitute
a default under, result in the acceleration of, create in any Party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
G&L (or any of its Subsidiaries) is a Party or by which it is bound or to which
any of its assets is subject, in each case except as would not have a material
adverse effect on the ability of the Parties to consummate the transactions
contemplated by this Agreement.
(e) Investment. Neither G&L nor its Subsidiaries are acquiring the
shares of capital stock of any of the Apparel Fabrics Subsidiaries with a view
to or for sale in connection with any distribution thereof within the meaning of
the Securities Act.
Section 3.02. REPRESENTATIONS AND WARRANTIES OF PGI. PGI represents and
warrants to G&L that the statements contained in this Section 3.02 are true and
correct as of the date hereof.
(a) Organization. PGI and DTA are corporations organized, validly
existing and in good standing under the laws of the jurisdiction of their
incorporation.
(b) Authorization of Transaction. PGI and its Subsidiaries have full
power and authority pursuant to their corporate charters to execute and deliver
this Agreement and the other Agreements and to perform their obligations
thereunder. Each of this Agreement and the other Transaction Agreements
constitutes or will constitute the valid and legally binding obligation of PGI
and DTA (and any other Subsidiaries a party thereto), enforceable in accordance
with its respective terms and conditions. Neither PGI nor DTA need give any
notice to, make any filing with, or obtain any authorization, consent, or
approval of any government or governmental agency in order to consummate the
transactions contemplated by the Transaction Agreements, except such as have
been given, made or obtained.
- 24 -
(c) Sufficient Funds. PGI and its Subsidiaries have cash available,
and/or have obtained binding commitments from one or more financial
institutions, in amounts sufficient to pay on the Closing Date the purchase
price for the Nonwovens Business as provided in Article 2.
(d) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(A) violate any statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any government, governmental agency, or
court to which PGI (or any of its Subsidiaries) is subject or any provision of
their charter or bylaws or (B) conflict with, result in a breach of, constitute
a default under, result in the acceleration of, create in any Party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
PGI (or any of its Subsidiaries) is a Party or by which it is bound or to which
any of its assets is subject, in each case except as would not have a material
adverse effect on the ability of the Parties to consummate the transactions
contemplated by this Agreement.
(e) Investment. Neither PGI nor any of its Subsidiaries are acquiring
the shares of capital stock of any of the Nonwovens Subsidiaries with a view to
or for sale in connection with any distribution thereof within the meaning of
the Securities Act.
Section 3.03. ASSETS AND CAPITAL STOCK TRANSFERRED "AS IS."
(a) The Parties understand and agree that the Parties are not in this
Agreement or in any other agreement or document contemplated by this Agreement
(including the other Transaction Agreements) representing or warranting in any
way (a) as to the value or freedom from encumbrance of, or any other matter
concerning, any Assets or (b) as to the legal sufficiency to convey title to any
of the Assets by the execution and delivery of this Agreement and the Stock Sale
Agreements attached hereto, IT BEING AGREED AND UNDERSTOOD THAT ALL SUCH ASSETS
ARE BEING TRANSFERRED "AS IS," "WHERE IS," AND "WITH ALL FAULTS" and that each
Party shall bear the economic and legal risk that any conveyances of such assets
shall prove to be insufficient or that a Party's title to any such assets shall
be other than good and marketable and free from encumbrances. Similarly, the
Parties understand and agree that the Parties are not in this Agreement or in
any other agreement or document contemplated by this Agreement, representing or
warranting in any way that the obtaining of the consents or approvals, the
execution and delivery of any amendatory agreements and the making of the
filings and applications contemplated by this Agreement shall satisfy the
provisions of all applicable agreements or the requirements of all applicable
laws or judgments, it being understood and agree that, subject to Section 2.07
hereof, each Party shall bear the economic and legal risk that any necessary
consents or approvals are not obtained or that any requirements of law or
judgments are not complied with.
(b) Each Party acknowledges that it has had sufficient opportunity to
make whatever investigation it has deemed necessary and advisable for purposes
of determining whether or not to enter into the Transaction Agreements and
acknowledges and agrees that, EXCEPT TO THE EXTENT OF THE EXPRESS
REPRESENTATIONS, WARRANTIES, AGREEMENTS AND
- 25 -
COVENANTS CONTAINED IN THIS AGREEMENT, SUCH PARTY IS ACQUIRING THE APPAREL
FABRICS BUSINESS OR THE NONWOVENS AND DIFCO BUSINESSES, AS APPLICABLE, IN
RELIANCE UPON ITS OWN INVESTIGATION AND WITHOUT ANY REPRESENTATION OR WARRANTY
OF MERCHANTABILITY, FITNESS FOR ANY PARTICULAR PURPOSE OR ANY OTHER IMPLIED
WARRANTIES WHATSOEVER BY ANY OTHER PARTY TO THIS AGREEMENT.
ARTICLE 4
CONDITIONS
Section 4.01. CONDITIONS TO THE OBLIGATIONS OF G&L. The obligations of
G&L (and its Subsidiaries) to consummate the transactions contemplated hereby
shall be subject to the condition that each of the conditions set forth below
shall have been satisfied or waived by the Parties for whose benefit such
condition exists.
(a) the representations and warranties set forth in Section 3.02 shall
be true and correct in all material respects at and as of the Closing Date;
(b) provisions shall have been made for the G&L Contribution Note to be
repaid in full by DTA on the Closing Date;
(c) there shall not be any injunction, judgment, order, decree, ruling,
or charge in effect preventing consummation of any of the transactions
contemplated by this Agreement or the other Transaction Agreements;
(d) all applicable waiting periods (and any extensions thereof) under
the HSR Act and any applicable European or national merger regulations shall
have expired or otherwise been terminated;
(e) provisions shall have been made for the purchase by DT (USA) on the
Closing Date of all 2003 Notes and 2006 Notes validly tendered in the 2003
Tender Offer and the 2006 Tender Offer; and
(f) provisions shall have been made for the full repayment of all
senior indebtedness of Dominion and its Subsidiaries, and for the redemption of
all Second Preferred shares of Dominion by DTA on the Closing Date.
Section 4.02. CONDITIONS TO THE OBLIGATIONS OF PGI. The obligations of
PGI (and its Subsidiaries) to consummate the transactions contemplated hereby
shall be subject to the condition that each of the conditions set forth below
shall have been satisfied or waived by the Party for whose benefit such
condition exists.
- 26 -
(a) the representations and warranties set forth in Section 3.01 shall
be true and correct in all material respects at and as of the Closing Date;
(b) provisions shall have been made for the PGI Contribution Note, the
ZBH Contribution Note and the InterTech Contribution Note to be repaid in full
by DTA on the Closing Date;
(c) there shall not be any injunction, judgment, order, decree, ruling,
or charge in effect preventing consummation of any of the transactions
contemplated by this Agreement or the other Transaction Agreements;
(d) all applicable waiting periods (and any extensions thereof) under
the HSR Act and any applicable European or national merger regulations shall
have expired or otherwise been terminated;
(e) provisions shall have been made for the purchase by DT (USA) on the
Closing Date of all 2003 Notes and 2006 Notes validly tendered in the 2003
Tender Offer and the 2006 Tender Offer; and
(f) provisions shall have been made for the full repayment of all
senior indebtedness of Dominion and its Subsidiaries, and for the redemption of
all Second Preferred shares of Dominion by DTA on the Closing Date.
ARTICLE 5
DISCLOSURE AND ACCESS TO INFORMATION
Section 5.01. RESTRICTIONS ON DISCLOSURE OF INFORMATION.
(a) Without limiting its obligations under any other agreement between
or among the Parties hereto and/or any of their respective Affiliates relating
to confidentiality, subject to Section 5.02, each of the Parties hereto agrees
that it shall not, and shall not permit any of its Affiliates or Representatives
to, disclose any Confidential Information to any Person, other than to such
Affiliates, Representatives or lenders and other financing parties on a
need-to-know basis in connection with the purpose for which the Confidential
Information was originally disclosed. Notwithstanding the foregoing, each of the
Parties hereto and its respective Affiliates and Representatives may disclose
such Confidential Information, and such Information shall no longer be deemed
Confidential Information, to the extent that such Party can demonstrate that
such Confidential Information is or was (i) available to such Party (A) not as a
result of the Acquisition Relationship, and (B) outside the context of the Prior
Relationship, on a nonconfidential basis prior to its disclosure by the other
Party, (ii) in the public domain other than by the breach of this Agreement or
by breach of any other agreement between or among the Parties hereto and/or any
of their respective Affiliates relating to confidentiality, or (iii) lawfully
acquired outside the context of the Acquisition Relationship and the Prior
Relationship on a nonconfidential basis or independently developed by, or on
behalf of, such Party by Persons who do not have access to, or descriptions of,
any such Confidential Information.
- 27 -
(b) Each of the Parties hereto shall maintain, and shall cause their
respective Affiliates to maintain, policies and procedures, and develop such
further policies and procedures as shall from time to time become necessary or
appropriate, to ensure compliance with this Section 5.01.
(c) Notwithstanding any provision in this Agreement to the contrary,
this Section 5.01 shall not preclude the parties hereto from including any
Confidential Information in (i) any filings to be made pursuant to the
Securities Act of 1933, as amended, or the Securities and Exchange Act of 1934,
as amended, or (ii) any filings, correspondence or other information to be
provided to any Tax authority; provided, that (i) only such portion as is
reasonably necessary to be disclosed shall be disclosed, and (ii) the disclosing
party shall give the other Party five business days prior notice of any
disclosure, providing the Owning Party with a copy of the Confidential
Information to be disclosed at such time.
Section 5.02. LEGALLY REQUIRED DISCLOSURE OF CONFIDENTIAL INFORMATION.
If any of the Parties to this Agreement or any of their respective Affiliates or
Representatives becomes legally required to disclose any Confidential
Information, such disclosing Party shall promptly notify the Party owning the
Confidential Information (the "Owning Party") and shall use all commercially
reasonable efforts to cooperate with the Owning Party so that the Owning Party
may seek a protective order or other appropriate remedy and/or waive compliance
with this Section 5.02. All expenses incurred by the disclosing Party in seeking
a protective order or other remedy shall reasonably be borne by the Owning
Party. If such protective order or other remedy is not obtained, or if the
Owning Party waives compliance with this Section 5.02, the disclosing Party or
its Affiliate or Representative, as applicable, shall (a) disclose only that
portion of the Confidential Information which its legal counsel advises it is
compelled to disclose or else stand liable for contempt or suffer other similar
significant corporate censure or penalty, (b) use all commercially reasonable
efforts to obtain reliable assurance requested by the Owning Party that
confidential treatment will be accorded such Confidential Information, and (c)
promptly provide the Owning Party with a copy of the Confidential Information so
disclosed, in the same form and format so disclosed, together with a description
of all Persons to whom such Confidential Information was disclosed.
Section 5.03. ACCESS TO INFORMATION.
(a) Until the ten-year anniversary of the Closing Date, each of the
Parties hereto shall cooperate with and afford, and shall cause their respective
Affiliates and Representatives to cooperate with and afford, to the other Party
reasonable access upon reasonable advance written request to all Information
(other than Information protected from disclosure by the attorney client
privilege or work product doctrine) created prior to the Break-Up within such
Party's (or its Affiliates' or Representatives') possession. Access to the
requested information shall be provided so long as it relates to the requesting
Party's (the "Requestor") business, assets or liabilities, and access is
reasonably required by the Requestor as a result of the Parties' Prior
Relationship for purposes of auditing, accounting, claims or litigation (except
for claims or litigation between the Parties hereto), employee benefits,
regulatory or tax purposes or fulfilling disclosure or reporting obligations
including, without limitation, Information reasonably necessary for the
preparation of reports required
- 28 -
by or filed under the Securities Exchange Act of 1934, as amended, with respect
to any period entirely or partially prior to the Closing Date.
(b) Access as used in this Section 5.03 shall mean the obligation of a
Party in possession of Information (the "Possessor") requested by the Requestor
to exert its reasonable best efforts to locate all requested Information that is
owned and possessed by Possessor, its Affiliates or Representatives. The
Possessor, at its own expense, shall conduct a diligent search designed to
identify all requested Information and shall collect all such Information for
inspection by the Requestor during normal business hours at the Possessor's
place of business. Subject to confidentiality and/or security provisions as the
Possessor may reasonably deem necessary, the Requestor may have all requested
Information duplicated at Requestor's expense. Alternatively, the Possessor may
choose to deliver, at its own expense, all requested Information to the
Requestor in its original form. If so, the Possessor shall notify the Requestor
in writing at the time of delivery if such Information is to be returned to the
Possessor. In such case, the Requestor shall return such Information when no
longer needed to the Possessor at the Possessor's expense.
(c) In connection with providing Information pursuant to this Section
5.03, each of the Parties hereto shall upon the request of the other Party make
available its respective employees (and those of their respective Affiliates and
Representatives) to the extent that they are reasonably necessary to discuss and
explain all requested Information with and to the requesting Party.
(d) During the ten-year period described herein, the Parties shall
maintain Information in their possession at the Closing Date in accordance with
their respective corporate records retention policies; provided, however, that
prior to disposing of any Information in accordance with such policies, the
Parties hereto shall provide written notice to the other Party of its intent to
dispose of such Information and shall provide such other Party the opportunity
to take ownership and possession of such Information (at such other Party's sole
expense) within 90 days after such notice is delivered. If such other Party does
not confirm its intention in writing to take ownership and possession of such
Information within such 90-day period, the Party who possesses the Information
may proceed with the disposition of such Information. Written notice of intent
to dispose of Information shall include a description of the Information in
detail sufficient to allow the other Party to reasonably assess its potential
need to retain such Information.
Section 5.04. PRODUCTION OF WITNESSES. Until the six-year anniversary
of the Closing Date, each of the Parties hereto shall use all commercially
reasonable efforts, and shall cause each of their respective Affiliates to use
all commercially reasonable efforts, to make available to each other, upon
written request, its directors, officers, employees and other Representatives as
witnesses to the extent that any such Person may reasonably be required (giving
consideration to the business demands upon such Persons) in connection with any
legal, administrative or other proceedings in which the requesting Party may
from time to time be involved; provided, however, that with respect to any legal
or administrative proceedings relating to the tax liability of any of the
Parties hereto or any of their respective Affiliates, each of the Parties hereto
shall, and shall cause each of their respective Affiliates to, make their
directors, officers, employees and other Representatives available as witnesses
until
- 29 -
such time as the statute of limitations for all tax years prior to and including
the year in which the Break-Up is consummated have expired.
Section 5.05. REIMBURSEMENT. Each Party to this Agreement providing
access, information or witnesses to another Party pursuant to Sections 5.03 or
5.04 shall be entitled to receive from the recipient, upon the presentation of
invoices therefor, payment for all reasonable out-of-pocket costs and expenses
(excluding allocated compensation, salary and overhead expense) as may be
reasonably incurred in providing such information or witnesses.
ARTICLE 6
INSURANCE MATTERS
Section 6.01. COOPERATION IN INSURANCE MATTERS. Prior to the Break-Up,
Dominion has maintained insurance programs which provide certain coverages for a
number of entities, including Dominion and certain or all of the Apparel Fabrics
Subsidiaries and Nonwovens Subsidiaries, their respective Affiliates, their
officers and directors, and other insured Parties. From and after the Break-Up
Time, except as provided herein, G&L and PGI shall be responsible for obtaining
and maintaining their own insurance programs with respect to the Businesses
acquired pursuant to this Agreement. Notwithstanding the foregoing, (1) each
Party, upon the request of any other Party, shall use commercially reasonable
efforts to assist such Party in the transition to its own separate insurance
coverage from and after the Break-Up Time, and shall provide such Party with any
information that is in its possession and is reasonably available and necessary
to either obtain such insurance coverage or to assist such Party in preventing
gaps in its insurance coverages, (2) each Party on the request of any other
Party shall cooperate with and use commercially reasonable efforts to assist
such Party in the collection of proceeds from insurance claims made under any
insurance policy for the benefit of any insured Party, and (3) neither G&L nor
PGI, nor any of their Affiliates, shall take any action that would jeopardize or
otherwise interfere with any Party's ability to collect any proceeds payable
pursuant to any insurance policy.
Section 6.02. COLLECTION OF INSURANCE PROCEEDS. In the event that
either G&L or PGI (or any of their respective Subsidiaries) collects insurance
proceeds with respect to a claim relating to Assets other than those acquired
with such Party's purchase of its respective Business or Businesses pursuant to
this Agreement, such Party shall promptly forward the portion of the proceeds of
the claim that relate to such nonacquired assets to the other Party. If the
claim results in proceeds with respect to any Proportional Assets or any
Proportional Liability, the proceeds shall be allocated 57.4% in favor of G&L
and 42.6% in favor of PGI. If the claim results in proceeds with respect to any
Split Assets or Split Liability, the proceeds shall be split 50/50 between G&L
and PGI.
Section 6.03. OTHER INSURANCE MATTERS. In addition to the provisions
set forth in this Agreement, the rights and obligations of each of the Parties
with respect to insurance matters, and the procedures for submitting claims with
respect to events, acts or omissions first occurring prior to the Break-Up Time,
shall be governed by the Insurance Matters Agreement.
- 30 -
ARTICLE 7
EMPLOYEES; INTERCOMPANY ARRANGEMENTS
Section 7.01. EMPLOYEE MATTERS.
(a) Effective as of the Break-Up Time, (i) those Apparel Fabrics
Employees who are employed by DTA or any of its Subsidiaries in the Apparel
Fabrics Business immediately after the Winding Up and prior to the Break-Up
Time, shall become employed by G&L or any of its Subsidiaries and (ii) those
Nonwovens Employees and DIFCO Employees who are employed by DTA or any of its
Subsidiaries in the Nonwovens and DIFCO Businesses immediately after the Winding
Up and prior to the Break-Up Time shall become employed by PGI or its
Subsidiaries.
(b) In addition to the provisions set forth in this Agreement, the
rights and obligations of the Parties with respect to (i) Employee Benefit Plans
for the benefit of employees and former employees (and their beneficiaries) of
Dominion and its Subsidiaries (including the Apparel Fabric Subsidiaries, the
Nonwovens Subsidiaries and DIFCO), (ii) all Contracts relating to medical,
dental and other services entered into by Dominion or any of such Subsidiaries
existing for the benefit of their employees, and (iii) any other employee
matters, shall be set forth in the Employee Matters Agreement.
(c) The parties hereby acknowledge that on January 27, 1998, G&L made a
payment of $3 million to the Pension Benefit Guaranty Corporation in connection
with Liabilities of certain Employee Benefits Plans that are specifically
identifiable with the Apparel Fabrics Business. In the event that any portion of
the Liability in respect of which such $3 million payment was made to the PBGC
is hereafter determined to be a Split Liability or Proportional Liability, then
such payment shall be taken into account in the calculation of Split Liabilities
and/or Proportional Liabilities, as the case may be.
Section 7.02. INTERCOMPANY ARRANGEMENTS.
(a) Except as specifically provided by this Agreement or the other
Transaction Agreements, to the extent that DTA, Dominion, any Apparel Fabric
Subsidiary, any Nonwovens Subsidiary or DIFCO are providing or selling, as of
the Closing Date, to each other, or charging each other for, any services or
products pursuant to any written agreement or arrangement, then such agreement
or arrangement shall not be deemed altered, amended or terminated as a result of
this Agreement or the consummation of the transactions contemplated hereby;
provided; however, that following the Closing Date, any services and products to
be provided which were not subject to a written agreement or arrangement shall
be provided only on an arm's length basis. Nothing in this Section 7.02 shall
require or authorize any Party to provide and charge each other for any services
other than on the terms and conditions specified herein or in the Ancillary
Separation Agreements.
- 31 -
(b) If not fully settled pursuant to the actions set forth in this
Article 2, the Parties hereto agree to take all action as may be necessary in
order to eliminate (whether through repayment, forgiveness or otherwise) all
intercompany balances outstanding as of the Break-Up Time between any of the
Parties within 60 days of the Closing Date.
Section 7.03. PRODUCTS, SUPPLIES AND DOCUMENTS. Each Party shall have
the right to use, for a period not to exceed six months following the Closing
Date, existing products, supplies and documents (including purchase orders,
forms, labels, shipping materials, catalogues, sales brochures, operating
manuals, instructional documents and similar materials, and advertising
material) being transferred to it pursuant to this Agreement which have
imprinted thereon any Intellectual Property not transferred to such Party as
part of such Party's respective acquired Business; provided, that each Party
agrees (i) to use only those such supplies and documents existing in inventory
as of the Closing Date, (ii) to conspicuously state on such supplies and
documents when used that they are no longer documents of the Party to whom such
Intellectual Property refers (or otherwise identifies), and (iii) to not order
or utilize in any manner any additional supplies or documents containing any
such Intellectual Property owned by another Party to this Agreement.
ARTICLE 8
SURVIVAL
Section 8.01. NO SURVIVAL OF REPRESENTATIVES AND WARRANTIES. None of
the representations and warranties of this Agreement shall survive the Closing
Date.
Section 8.02. SURVIVAL OF AGREEMENTS.
(a) Except as otherwise contemplated by this Agreement, all covenants
and agreements of the Parties contained in this Agreement shall survive the
Closing Date.
(b) The obligations of the Parties under this Agreement shall survive
the sale or other transfer by any of them of any Assets or businesses or the
assignment by any of them of any Liabilities. To the extent any Party transfers
to another Party other than a Subsidiary of such Party any of Apparel Fabric
Liabilities (in the case of G&L) or the Nonwovens or DIFCO Liabilities (in the
case of PGI), except for amounts of such Liabilities which are not material
individually or in the aggregate, such Party will cause the transferee of such
Liabilities to assume specifically its obligations with respect thereto under
this Agreement and will cause such transferee to fulfill its obligations related
to such Liabilities. In the event the transferee of the such Liabilities does
not fulfill its obligations with respect thereto, the relevant Party previously
transferring such Liabilities shall fulfill their obligations with respect
thereto.
ARTICLE 9
- 32 -
INDEMNIFICATION
Section 9.01. INDEMNIFICATION BY G&L. G&L shall indemnify, defend and
hold harmless PGI and its Subsidiaries, their respective successors-in-interest,
and each of their respective past and present Representatives (collectively, the
"PGI Indemnitees") against any losses, claims, damages, liabilities or actions,
arising, whether prior to or following the Break-Up, out of or in connection
with the Apparel Fabrics Liabilities (including in connection with any breach by
G&L or any of its Subsidiaries (including the Apparel Fabrics Subsidiaries) of
any terms of the Transaction Agreements), the Apparel Fabrics Assets or the
Apparel Fabrics Business, and G&L shall reimburse the PGI Indemnitees for any
legal or any other expenses reasonably incurred by any of them in connection
with investigating or defending any such loss, claim, damage, liability or
action.
Section 9.02. INDEMNIFICATION BY PGI. PGI shall indemnify, defend and
hold harmless G&L and its Subsidiaries, their respective successors-in-interest,
and each of their respective past and present Representatives (collectively, the
"G&L Indemnitees") against any losses, claims, damages, liabilities or actions,
arising, whether prior to or following the Break-Up, out of or in connection
with the Nonwovens Liabilities or the DIFCO Liabilities (including in connection
with any breach by PGI or any of its Subsidiaries (including the Nonwovens
Subsidiaries and DIFCO MergerCo) of any terms of the Transaction Agreements),
the Nonwovens or DIFCO Assets, or the Nonwovens or DIFCO Businesses, and PGI
shall reimburse the G&L Indemnitees for any legal or any other expenses
reasonably incurred by any of them in connection with investigating or defending
any such loss, claim, damage, liability or action.
Section 9.03. INDEMNIFICATION CONCERNING PROPORTIONAL LIABILITIES AND
SPLIT LIABILITIES.
(a) PGI shall indemnify, defend and hold harmless the G&L Indemnitees
against any losses (including reasonable legal fees and expenses), claims,
damages, liabilities or actions which may be incurred by the G&L Indemnitees,
whether prior to or following the Break-Up, which would be characterized as
Split Liabilities or Proportional Liabilities, in excess of (i) 50% of the
Aggregate Net Split Liabilities or (ii) 57.4% of the Aggregate Net Proportional
Liabilities, as the case may be.
(b) G&L shall indemnify, defend and hold harmless the PGI Indemnitees
against any losses, claims, damages, liabilities or actions which may be
incurred by the PGI Indemnitees, whether prior to or following the Break-Up,
which would be characterized as Split Liabilities or Proportional Liabilities,
in excess of (i) 50% of the Aggregate Net Split Liabilities or (ii) 42.6% of the
Aggregate Net Proportional Liabilities, as the case may be.
(c) For purposes of this Section 9.03 "Aggregate Net Split Liabilities"
means the aggregate net Split Liabilities after reducing such amount by the
aggregate amount of all Split Assets, and "Aggregate Net Proportional
Liabilities" means the aggregate net Proportional Liabilities after reducing
such amount by the aggregate amount of all Proportional Assets.
- 33 -
Section 9.04. INDEMNIFICATION PROCEDURES.
(a) If any Indemnitee receives notice of the assertion of any
Third-Party Claim with respect to which an Indemnifying Party is obligated under
this Agreement to provide indemnification, such Indemnitee shall give such
Indemnifying Party notice thereof (together with a copy of such Third-Party
Claim, process or other legal pleading) promptly after becoming aware of such
Third- Party Claim; provided, however, that the failure of any Indemnitee to
give notice as provided in this Section 9.04 shall not relieve any Indemnifying
Party of its obligations under this Section 9.04, except to the extent that such
Indemnifying Party is actually prejudiced by such failure to give notice. Such
notice shall describe such Third-Party Claim in reasonable detail.
(b) An Indemnifying Party, at such Indemnifying Party's own expense and
through counsel chosen by such Indemnifying Party (which counsel shall be
reasonably acceptable to the Indemnitee), may elect to defend any Third-Party
Claim. If an Indemnifying Party elects to defend a Third-Party Claim, then,
within ten Business Days after receiving notice of such Third-Party Claim (or
sooner, if the nature of such Third Party claim so requires), such Indemnifying
Party shall notify the Indemnitee of its intent to do so, and such Indemnitee
shall cooperate in the defense of such Third- Party Claim. Such Indemnifying
Party shall pay such Indemnitee's reasonable out-of-pocket expenses incurred in
connection with such cooperation. Such Indemnifying Party shall keep the
Indemnitee reasonably informed as to the status of the defense of such Third
Party Claim, and shall provide copies of documentation reasonably requested with
respect to such proceedings. After notice from an Indemnifying Party to an
Indemnitee of its election to assume the defense of a Third-Party Claim, such
Indemnifying Party shall not be liable to such Indemnitee under this Section
9.04 for any legal or other expenses subsequently incurred by such Indemnitee in
connection with the defense thereof other than those expenses referred to in the
preceding sentence; provided, however, that such Indemnitee shall have the right
to employ one law firm as counsel, together with a separate local law firm in
each applicable jurisdiction ("Separate Counsel"), to represent such Indemnitee
in any action or group of related actions (which firm or firms shall be
reasonably acceptable to the Indemnifying Party) if, in such Indemnitee's
reasonable judgment at any time, either a conflict of interest between such
Indemnitee and such Indemnifying Party exists in respect of such claim, or there
may be defenses available to such Indemnitee which are different from or in
addition to those available to such Indemnifying Party and the representation of
both Parties by the same counsel would be inappropriate, and in that event (i)
the reasonable fees and expenses of such Separate Counsel shall be paid by such
Indemnifying Party (it being understood, however, that the Indemnifying Party
shall not be liable for the expenses of more than one Separate Counsel
(excluding local counsel) with respect to any Third-Party Claim and (ii) each of
such Indemnifying Party and such Indemnitee shall have the right to conduct its
own defense in respect of such claim. If an Indemnifying Party elects not to
defend against a Third-Party Claim, or fails to notify an Indemnitee of its
election as provided in this Section 9.04 within the period of ten Business Days
described above, the Indemnitee may defend, compromise, and settle such
Third-Party Claim and shall be entitled to indemnification hereunder (to the
extent permitted hereunder); provided, however, that no such Indemnitee may
compromise or settle any such Third-Party Claim without the prior written
consent of the Indemnifying Party, which consent shall not be unreasonably
withheld or delayed. Notwithstanding the foregoing, the Indemnifying Party shall
not, without the prior written consent of the Indemnitee,
- 34 -
(i) settle or compromise any Third-Party Claim or consent to the entry of any
judgment which does not include as an unconditional term thereof the delivery by
the claimant or plaintiff to the Indemnitee of a written release from all
liability in respect of such Third-Party Claim or (ii) settle or compromise any
Third-Party Claim in any manner that would be reasonably likely to have a
material adverse effect on the Indemnitee.
Section 9.05. CERTAIN LIMITATIONS.
(a) The amount of any indemnifiable losses or other liability for which
indemnification is provided under this Agreement shall be net of any amounts
actually recovered by the Indemnitee from third parties (including amounts
actually recovered under insurance policies) with respect to such indemnifiable
losses or other liability. Any Indemnifying Party hereunder shall be subrogated
to the rights of the Indemnitee upon payment in full of the amount of the
relevant indemnifiable loss. An insurer who would otherwise be obligated to pay
any claim shall not be relieved of the responsibility with respect thereto or,
solely by virtue of the indemnification provision hereof, have any subrogation
rights with respect thereto. If any Indemnitee recovers an amount from a third
party in respect of an indemnifiable loss for which indemnification is provided
in this Agreement after the full amount of such indemnifiable loss has been paid
by an Indemnifying Party or after an Indemnifying Party has made a partial
payment of such indemnifiable loss and the amount received from the third party
exceeds the remaining unpaid balance of such indemnifiable loss, then the
Indemnitee shall promptly remit to the Indemnifying Party the excess (if any) of
(A) the sum of the amount theretofore paid by such Indemnifying Party in respect
of such indemnifiable loss plus the amount received from the third party in
respect thereof, less (B) the full amount of such indemnifiable loss or other
liability.
(b) The amount of any loss or other liability for which indemnification
is provided under this Agreement shall be (i) increased to take account of any
net Tax cost incurred by the Indemnitee arising from the receipt or accrual of
an indemnification payment hereunder (i.e., grossed up for such increase) and
(ii) reduced to take account of any net Tax benefit realized by the Indemnitee
arising from incurring or paying such loss or other liability. In computing the
amount of any such Tax cost or Tax benefit, the Indemnitee shall be deemed to
recognize all other items of income, gain, loss, deduction or credit before
recognizing any item arising from the receipt or accrual of any indemnification
payment hereunder or incurring or paying any indemnified loss. Any
indemnification payment hereunder shall initially be made without regard to this
Section 9.05(b) and shall be increased or reduced to reflect any such net Tax
cost (including gross-up) or net Tax benefit only after the Indemnitee has
actually realized such cost or benefit. For purposes of this Agreement, an
Indemnitee shall be deemed to have "actually realized" a net Tax cost or a net
Tax benefit to the extent that, and at such time as, the amount of Taxes payable
by such Indemnitee is increased above or reduced below, as the case may be, the
amount of Taxes that such Indemnitee would be required to pay but for the
receipt or accrual of the indemnification payment or the incurrence or payment
of such loss, as the case may be. The amount of any increase or reduction
hereunder shall be adjusted to reflect any Final Determination with respect to
the Indemnitee's liability for Taxes, and payments between such indemnified
Parties to reflect such adjustment shall be made if necessary.
- 35 -
(c) Any indemnification payment made under this Agreement shall be
characterized for Tax purposes as if such payment were made immediately prior to
the Break-Up.
Section 9.06. EXCLUSIVITY OF TAX INDEMNIFICATION. Notwithstanding
anything in this Agreement to the contrary, the terms of the Tax Matters
Agreement shall govern the rights and obligations among the Parties with respect
to indemnification relating to Taxes.
ARTICLE 10
MISCELLANEOUS
Section 10.01. ENTIRE AGREEMENT. This Agreement, the Acquisition
Agreement, and the other Transaction Agreements collectively constitute the
entire agreement among the Parties with respect to the subject matter hereof and
supersede all prior written and oral and all contemporaneous oral agreements and
understandings with respect to the subject matter hereof. For the avoidance of
doubt, any references in the Acquisition Agreement to any proportional split of
Assets or Liabilities that was to be made 60% to the Apparel Fabrics Business
and 40% to the Nonwovens Business is hereby agreed to be 57.4% to the Apparel
Fabrics Business and 42.6% to the Nonwovens Business as a result of the DIFCO
Adjustment.
Section 10.02. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without giving
effect to any choice of law provision or rule (whether of the State of New York
or any other jurisdiction) that would cause the application of any jurisdiction
other than the State of New York.
Section 10.03. DESCRIPTIVE HEADINGS; CONSTRUCTION. The descriptive
headings herein are inserted for convenience of reference only and are not
intended to be part of or to affect the meaning or interpretation of this
Agreement. The Parties have participated jointly in the negotiation and drafting
of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the Parties and no presumption or burden of proof shall arise favoring or
disfavoring any Party by virtue of the authorship of any of the provisions of
this Agreement. Any reference to any federal, state, local, or foreign statute
or law shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise. The word "including" shall
mean including without limitation.
Section 10.04. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given when delivered
in person, by telecopy with telephonic confirmation to the receiving party
followed by delivery by overnight courier, by express or overnight mail
delivered by a nationally recognized air courier (delivery charges prepaid), or
by registered or certified mail (postage prepaid, return receipt requested) to
the respective Parties as follows:
- 36 -
if to PGI:
c/o Polymer Group, Inc.
4838 Jenkins Avenue
N. Charleston, SC 29405
Attention: Jerry Zucker
Telecopy: (803) 747-4092
with a copy to:
Kirkland & Ellis
200 East Randolph Drive
Chicago, IL 60601
Attention: H. Kurt von Moltke
Telecopy: (312) 861-2200
if to G&L:
c/o Galey & Lord, Inc.
980 Avenue of the Americas
4th Floor
New York, New York 10018
Attention: Arthur C. Wiener
Telecopy: (212) 465-3080
with a copy to:
Kirkland & Ellis
Citicorp Center
153 East 53rd Street
New York, New York 10022-4675
Attention: Kirk A. Radke
Telecopy: (212) 446-4900
or to such other address as the Party to whom notice is given may have
previously furnished to the others in writing in the manner set forth above. Any
notice or communication delivered in person shall be deemed effective on
delivery. Any notice or communication sent by telecopy or by air courier shall
be deemed effective on the first Business Day at the place at which such notice
or communication is received following the day on which such notice or
communication was sent. Any notice or communication sent by registered or
certified mail shall be deemed effective on the fifth Business Day at the place
from which such notice or communication was mailed following the day on which
such notice or communication was mailed.
- 37 -
Section 10.05. PARTIES IN INTEREST. This Agreement shall be binding
upon and inure solely to the benefit of each Party hereto, and nothing in this
Agreement, express or implied, is intended to confer upon any other Person any
rights or remedies of any nature whatsoever under or by reason of this
Agreement, except for Article 9 (which is intended to be for the benefit of the
Persons provided for therein and may be enforced by such Persons).
Section 10.06. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original but all of which
shall constitute one and the same agreement.
Section 10.07. BINDING EFFECT; ASSIGNMENT. This Agreement shall inure
to the benefit of and be binding upon the Parties hereto and their respective
legal representatives and successors. This Agreement may not be assigned by any
Party hereto; provided, PGI and G&L may each assign their rights under this
Agreement for collateral security purposes to the lenders providing financing
for the transactions contemplated hereby and all extensions, renewals,
replacements, refinancings and refundings thereof in whole or in part. The
Exhibits and Annexes attached hereto are an integral part of this Agreement and
are incorporated into this Agreement and made a part hereof.
Section 10.08. DISPUTE RESOLUTION. Except as otherwise set forth in the
Related Agreements, resolution of any and all disputes arising from or in
connection with this Agreement, whether based on contract, tort, or otherwise
(collectively, "Disputes"), shall be exclusively governed by and settled in
accordance with the provisions of this Section 10.08. The Parties hereto shall
use all commercially reasonable efforts to settle all Disputes without resorting
to mediation, arbitration or otherwise. If any Dispute remains unsettled, a
Party hereto may commence proceedings hereunder by delivering a written notice
from a Senior Vice President or comparable executive officer of such Party (the
"Demand") to the other Parties providing reasonable description of the Dispute
to the others and expressly requesting mediation hereunder. The Parties hereby
agree to submit all Disputes to non- binding mediation before a mediator
reasonably acceptable to all Parties involved in such Dispute. If, after such
mediation, the Parties subject to such mediation disagree regarding the
mediator's recommendation, such Dispute shall be submitted to arbitration under
the terms hereof, which arbitration shall be final, conclusive and binding upon
the Parties, their successors and assigns. The arbitration shall be conducted in
Chicago, Illinois or New York, New York by three arbitrators, each of whom has
at least eight years of transactional and mergers and acquisitions experience,
acting by majority vote (the "Panel") selected by agreement of the Parties not
later than ten (10) days after delivery of the Demand or, failing such
agreement, appointed pursuant to the commercial arbitration rules of the
American Arbitration Association, as amended from time to time (the "AAA
Rules"). If an arbitrator so selected becomes unable to serve, his or her
successors shall be similarly selected or appointed. The arbitration shall be
conducted pursuant to the Federal Arbitration Act and such procedures as the
Parties subject to such arbitration (each, a "Party") may agree, or, in the
absence of or failing such agreement, pursuant to the AAA Rules. The arbitrators
shall be instructed to make their determination pursuant to the terms and
conditions of this Agreement and the other Transactions Agreements.
Notwithstanding the foregoing: (i) each Party shall have the right to audit the
books and records of the other Party that are reasonably related to the Dispute;
(ii) each Party shall provide to the other, reasonably in advance of any
hearing, copies of all documents which a Party intends to present in such
hearing; and (iii) each Party shall be allowed to conduct reasonable discovery
through
- 38 -
written requests for information, document requests, requests for stipulation of
fact and depositions, the nature and extent of which discovery shall be
determined by the Parties; provided that if the Parties cannot agree on the
terms of such discovery, the nature and extent thereof shall be determined by
the Panel which shall take into account the needs of the Parties and the
desirability of making discovery expeditious and cost effective. The award shall
be in writing and shall specify the factual and legal basis for the award. The
Panel shall apportion all costs and expenses of arbitration, including the
Panel's fees and expenses and fees and expenses of experts, between the
prevailing and nonprevailing Party as the Panel deems fair and reasonable. The
Parties hereto agree that monetary damages may be inadequate and that any Party
by whom this Agreement is enforceable shall be entitled to seek specific
performance of the arbitrators' decision from a court of competent jurisdiction,
in addition to any other appropriate relief or remedy. Notwithstanding the
foregoing, in no event may the Panel award consequential, special, exemplary or
punitive damages. Any arbitration award shall be binding and enforceable against
the Parties hereto and judgment may be entered thereon in any court of competent
jurisdiction.
Section 10.09. SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any Party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the Parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the Parties as closely as possible in an acceptable manner to
the end that transactions contemplated hereby are fulfilled to the fullest
extent possible.
Section 10.10. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of any Party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement herein,
nor shall any single or partial exercise of any such right preclude other or
further exercise thereof or of any other right. All rights and remedies existing
under this Agreement are cumulative to, and not exclusive of, any rights or
remedies otherwise available.
Section 10.11. AMENDMENT. No change or amendment will be made to this
Agreement or the other Transaction Agreements except by an instrument in writing
signed on behalf of each of the Parties hereto.
Section 10.12. EMPLOYMENT SOLICITATION. For a period of 24 months
following the Closing Date no Party may, and will not permit any of its
Subsidiaries or agents to, directly or indirectly, solicit or recruit for its
employment any then-current employee of the other Parties, or their
Subsidiaries, without the prior written consent of the relevant other Party;
provided, however that nothing in this Section 10.12 shall (i) prohibit the
employment by any Party or its Subsidiaries of any employee of the other who
seeks employment on his or her own initiative without prior contact with him or
her initiated by any employee or agent of such Party, (ii) restrict the
operation of the Employee Matters Agreement, or (iii) prohibit the employment of
any person who applied for employment with any Party solely in response to any
public medium advertising.
- 39 -
Section 10.13. EXPENSES. Except as otherwise provided in this Agreement
or the other Transaction Agreements, all costs and expenses of G&L, PGI and
their respective Subsidiaries, incurred in connection with this Agreement
(whether or not payable as of the Closing Date) and with the consummation of the
transactions contemplated by this Agreement shall be paid by the Party incurring
such cost and expenses. Such costs and expenses shall include, without
limitation, investment banking, legal, accounting and printing costs and
expenses and transfer taxes; provided that any of such costs and expenses which
constitute Split Liabilities or Proportional Liabilities shall be paid in
accordance with Section 2.09.
* * *
- 40 -
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized on the day and
year first above written.
GALEY & LORD, INC.
By: /s/ Michael R. Harmon
Name: Michael R. Harmon
Title: Executive Vice-President
POLYMER GROUP, INC.
By: /s/ Jerry Zucker
Name: Jerry Zucker
Title: Chairman, President & CEO
DT ACQUISITION INC.
By: /s/ Jerry Zucker
Name: Jerry Zucker
Title: Authorized Signatory
DOMINION TEXTILE INC.
By: /s/ Jerry Zucker
Name: Jerry Zucker
Title: Authorized Signatory
S-1
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized on the day and
year first above written.
DOMINION TEXTILE INTERNATIONAL
(ASIA) PTE. LTD
By: /s/ Jerry Zucker
Name: Jerry Zucker
Title: Authorized Signatory
DOMINION TEXTILE INTERNATIONAL B.V.
By: /s/ Jerry Zucker
Name: Jerry Zucker
Title: Authorized Signatory
DOMINION TEXTILE (USA) INC.
By: /s/ Jerry Zucker
Name: Jerry Zucker
Title: Authorized Signatory
ALBUMA S.A.
By: /s/ Jerry Zucker
Name: Jerry Zucker
Title: Authorized Signatory
CHICOPEE HOLDINGS, B.V.
By: /s/ Jerry Zucker
Name: Jerry Zucker
Title: Chairman, President & CEO
S-2