EXHIBIT 99.1
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December 7, 2001
TO:
Registered holders of Warrant Certificates
(as defined in the below referenced Warrant Agreement)
and
Mellon Investor Services LLC, as Warrant Agent
(formerly known as ChaseMellon Shareholder Services, L.L.C.)
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxx
Reference is made to the Warrant Agreement, dated as of January 28,
2000 (the "Warrant Agreement"), between Paragon Trade Brands, Inc. ("Paragon")
and Mellon Investor Services LLC (formerly known as ChaseMellon Shareholder
Services, L.L.C.), as warrant agent. Unless otherwise defined in this letter,
capitalized terms have the respective meanings assigned to them in the Warrant
Agreement, a copy of which is attached to Paragon's most recent report on Form
10-K filed with Securities and Exchange Commission.
NOTICE IS HEREBY GIVEN pursuant to Section 4.9.3 of the Warrant
Agreement that pursuant to a Stock Purchase Agreement and Plan of Merger, dated
as of December 3, 2001 (the "Acquisition Agreement"), by and among Tyco
Healthcare Retail Group, Inc. ("Tyco Healthcare"), Tyco Healthcare Acquisition
Corp., Paragon, PTB Acquisition Company, LLC, Co-Investment Partners, L.P.,
Ontario Teachers' Pension Plan Board and Citicorp North America, Inc., Tyco
Healthcare has agreed to acquire, through related stock purchase and merger
transactions (together, the "Acquisition Transactions"), all of the shares of
Paragon common stock, par value $.01 per share (the "Common Stock"), outstanding
immediately prior to the consummation of the Acquisition Transactions, for a
purchase price of $43.50 per share in cash (the "Per Share Price"). Tyco
Healthcare's obligation to consummate the Acquisition Transactions is subject to
a number of conditions, but does not require Paragon stockholder approval. At
this time, no definite date has been established for the consummation of the
Acquisition Transactions, and there can be no assurance that the Acquisition
Transactions will be consummated. However, the Acquisition Transactions will not
be consummated prior to the end of 2001.
In the Acquisition Agreement, Tyco Healthcare has agreed that,
following consummation of the Acquisition Transactions (which will result in a
Qualified Change of Control), it will cause Paragon to call for redemption all
then outstanding Warrants pursuant to, and within the period of time permitted
by, Article 3 of the Warrant Agreement using the Per Share Price as the Current
Market Price for purposes of
computing the Call Price in accordance with Article 3 of the Warrant Agreement.
The date Paragon will call the Warrants for redemption, if and once the
Acquisition Transactions are consummated, is not known at this time. This Notice
serves only as notice of Xxxxxxx's proposal to effect a transaction in respect
of which notice is required to be given pursuant to Section 4.9.3 of the Warrant
Agreement and does not constitute a notice of call for redemption of the
Warrants.
PARAGON TRADE BRANDS, INC.
By: /s/ Xxxx Council
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Name: Xxxx Council
Title: Secretary
