Exhibit 1
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated January 28, 2000 by and between PTB Acquisition Company,
LLC, a Delaware limited liability company (the "Assignor"), and Ontario Teachers
Pension Plan Board, a non-share capital corporation continued under the
Teachers' Pension Act, R.S.O., 1990 Chapter T.1 (the "Assignee").
The Assignor is party to that certain Stock Purchase Agreement, dated
November 16, 1999 (the "Stock Purchase Agreement;" unless otherwise defined
herein, terms defined in the Stock Purchase Agreement are used herein as therein
defined), by and between the Assignor, and Paragon Trade Brands, Inc., a
Delaware corporation (the "Seller"), pursuant to which the Assignor has agreed
to purchase from Reorganized Paragon, up to 11,712,635 shares of New Common
Stock, under the terms and subject to the conditions set forth therein.
The Assignee has heretofore delivered to Assignor Assignee's commitment to
purchase as a co-investor alongside the Assignor up to $25 million of New Common
Stock. Pursuant to Section 13.14 of the Stock Purchase Agreement, the Assignor
is permitted to assign its right to purchase any or all of the Purchased Shares
to one or more assignees. The Assignor desires to assign to the Assignee, and
the Assignee desires to be assigned and to assume, the obligations of the
Assignor under the Stock Purchase Agreement to purchase not less than $23.5
million nor more $25 million of New Common Stock, under the terms and condition
set forth herein.
Accordingly, the Assignor and the Assignee hereby agree as follows:
1. The Assignor hereby sells and assigns to the Assignee without recourse
and without representation or warranty (other than as expressly provided
herein), and the Assignee hereby purchases and assumes from the Assignor, the
right and obligation of the Assignor under the Stock Purchase Agreement to
purchase from the Seller at the Closing under the terms and conditions of the
Stock Purchase Agreement not less than 2,350,000 nor more than 2,500,000 shares
of New Common Stock at a purchase price equal to $10.00 per share. The exact
number of shares to be purchased by the Assignee shall be set forth in a written
notice from the Assignor delivered to the Assignee not later than 2 days prior
to the Closing Date. The Assignor and Assignee further agree that at the Closing
they shall each enter into, execute and deliver a Stockholders Agreement,
substantially in the form of Exhibit A hereto (the "Stockholders Agreement"),
and a Registration Rights Agreement, substantially in the form of Exhibit B
hereto (the "Registration Rights Agreement").
2. The Assignor (i) represents and warrants that (a) it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim, (b) it is duly organized,
validly existing and in good standing under the Laws of the jurisdiction under
which it was organized and has all requisite power and authority to own, lease
and operate its properties and to carry on its business as now being conducted,
(c) it has the full legal right and power and all authority and approvals
required to enter into, execute and deliver this Agreement, the Stockholders
Agreement and the Registration Rights Agreement and to perform fully its
obligations hereunder and thereunder, (d) this Agreement has been, and the
Stockholders Agreement and the Registration Rights Agreement, when executed and
delivered at the Closing will be, duly executed and delivered by the Assignor,
and this Agreement is, and in the case of each of the Stockholders Agreement and
the Registration Rights Agreement, when executed and delivered at the Closing,
will be, a valid and binding obligation of Assignor enforceable against the
Assignor in accordance with its terms, (e) the execution and delivery by the
Assignor of this Agreement do not, the execution and delivery by the Assignor at
the Closing of the Stockholders Agreement and the Registration Rights Agreement
will not, and the consummation of the transactions contemplated by this
Agreement, the Stockholders Agreement and the Registration Rights Agreement, and
the performance by the Assignor of its obligations hereunder and thereunder will
not (1) violate any provision of the Assignor's governing or organizational
documents; (2) require the Assignee to obtain any consent, approval,
authorization or action of, or make any filing with or give any notice to, any
Governmental Body or any other person; (3) violate, conflict with or result in
the breach of any of the terms and conditions of, result in a material
modification of the effect of, otherwise cause the termination of or give any
other contracting party the right to terminate, or constitute (or with notice or
lapse of time or both constitute) a default under, any Contract to which the
Assignor is a party or by or to which such assignee or any of its properties is
or may be bound or subject; or (4) violate any Law or Order of any Governmental
Body applicable to the Assignor. The Assignor makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations of the Seller made in or in connection with the
Stock Purchase Agreement or any other documents entered or delivered or to be
entered into or delivered by the Seller in connection therewith, PROVIDED, that
the Assignor assigns, transfers and conveys to the Assignee such statements,
representations and warranties of the Seller pertaining to the shares of New
Common Stock to be purchased by the Assignee pursuant hereto.
3. The Assignee (i) confirms that it has received a copy of the Stock
Purchase Agreement and the Plan and such other documents and information as it
has deemed appropriate to make its own investment analysis and decision to enter
into this Assignment and Assumption Agreement; (ii) agrees that it has,
independently and without reliance upon the Assignor, and based on such
documents and information as it deems appropriate at the time, continued to make
its own credit decisions in taking or not taking action under the Stock Purchase
Agreement; (iii) represents and warrants to the Assignor and the Seller that (a)
the Assignee is duly organized, validly existing and in good standing under the
Laws of the jurisdiction under which it was organized and has all requisite
power and authority to own, lease and operate its properties and to carry on its
business as now being conducted, (b) the Assignee has the full legal right and
power and all authority and approvals required to enter into, execute and
deliver this Agreement, the Stockholders Agreement and the Registration Rights
Agreement and to perform fully its obligations hereunder and thereunder, (c)
this Agreement has been, and the Stockholders Agreement and the Registration
Rights Agreement, when executed and delivered at the Closing will be, duly
executed and delivered by the Assignee, and this Agreement is, and in the case
of each of the Stockholders Agreement and the Registration Rights Agreement,
when executed and delivered at the Closing, will be, a valid and binding
obligation of Assignee enforceable against the Assignee in accordance with its
terms, (d) the execution and delivery by the Assignee of this Agreement do not,
the execution and delivery by the Assignee at the Closing of the Stockholders
Agreement and the Registration Rights Agreement will not, and the consummation
of the transactions contemplated by this Agreement, the Stockholders Agreement
and the Registration Rights Agreement, and the performance by the Assignee of
its obligations hereunder and thereunder will not (1) violate any provision of
the Assignee's governing or organizational documents; (2) except for filings
under the HSR Act or the Canadian Acts, if required, require the Assignee to
obtain any consent, approval, authorization or action of, or make any filing
with or give any notice to, any Governmental Body or any other person; (3)
violate, conflict with or result in the breach of any of the terms and
conditions of, result in a material modification of the effect of, otherwise
cause the termination of or give any other contracting party the right to
terminate, or constitute (or with notice or lapse of time or both constitute) a
default under, any Contract to which the Assignee is a party or by or to which
such assignee or any of its properties is or may be bound or subject; or (4)
violate any Law or Order of any Governmental Body applicable to the Assignee;
and (e) the Assignee is an "Accredited Investor" within the meaning of Rule 501
of the Securities Act of 1933, as amended, and is purchasing the Purchased
Shares assigned to it hereunder for its own account for investment and not with
a view to public resale or distribution thereof.
4. The Assignor hereby agrees that it shall be responsible for making any
filing or obtaining any approval under the Canadian Acts triggered by the
consummation of the transactions provided in the Stock Purchase Agreement and
this Agreement, as the case may be, and the Assignee shall have no
responsibility in connection therewith, except that the Assignee agrees to
promptly provide the Assignor with such information regarding itself as the
Assignor may reasonably request to make any such filing or obtain any such
approval. The Assignee hereby represents that the purchase by it of the shares
of New Common Stock to be purchased by it pursuant hereto is exempt from the
notification requirements of the HSR Act.
5. The Assignor agrees that it shall promptly notify the Assignee if (i) it
learns of any breach by the Seller of any representation, warranty, covenant or
other agreement of the Seller under the Stock Purchase Agreement, or (ii) it
elects to terminate the Stock Purchase Agreement pursuant to Section 11.1
thereof.
6. This Assignment and Assumption Agreement shall automatically terminate
upon termination of the Stock Purchase Agreement pursuant to Section 11.1
thereof and shall become null and void and have no further force or effect.
7. THIS ASSIGNMENT AND ASSUMPTION AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE ENTIRELY PERFORMED WITHIN SUCH STATE.
8. Any notice or other communication required or permitted hereunder shall
be in writing and shall be delivered personally, sent by facsimile transmission
or sent by certified, registered or express mail, postage prepaid. Any such
notice shall be deemed given when so delivered personally, or sent by facsimile
transmission or, if mailed, five days after the date of deposit in the United
States mails, as follows:
(A) if to the Assignor, to:
PTB Acquisition Company, LLC
c/o Wellspring Capital Management, LLC
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx Drain, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(B) if to the Assignee, to:
Ontario Teachers Penion Plan
0000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxxxx Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxx Xxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any party may by notice given in accordance with this Section to the other
parties designate another address or person for receipt of notices hereunder.
9. This Agreement, together with the Stockholders Agreement and the
Registration Rights Agreement, contain the entire agreement among the parties
hereto with respect to the transactions contemplated hereby and thereby and
supersede all prior agreements, written or oral, with respect thereto.
10. This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute one and the same instrument.
Each counterpart may consist of a number of copies hereof each signed by less
than all, but together signed by all of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Assignment and Assumption Agreement, as of
the date first above written.
PTB ACQUISITION COMPANY, LLP,
as Assignor
By /S/ XXXX X. XXXXXXX
----------------------
Title: Vice President
ONTARIO TEACHERS PENSION PLAN
BOARD,
as Assignee
By /S/ XXXX XXXXXXX
----------------------
Title: Portfolio Manager
