Polymer Group Inc.

March 5, 2003

      Compass Advisers, LLP ("Compass") provided financial advisory services to the Official Committee of Unsecured Creditors (the "Creditors Committee") during the Chapter 11 restructuring of Polymer Group Inc. ("Polymer"), then a debtor-in-possession.  Polymer manufactures engineered nonwoven fabrics and products for hygiene, medical, wiping and industrial applications.  At the time of the filing, Polymer was the third largest producer of nonwoven materials in the world, with 25 manufacturing facilities in 12 countries on four continents, and a leading supplier to major consumer and industrial product manufacturers.

      Before filing bankruptcy and without the consent of its creditors, Polymer had entered into a term sheet with Matlin Patterson Global Opportunities Partners ("GOP") for a recapitalization plan that would have caused disparate treatment for holders of the same classes of debt.  Under the GOP plan, GOP would have obtained approximately 87% of the equity of the recapitalized Polymer and non-GOP noteholders would have received illiquid debt instruments likely to trade at a fraction of their proposed principal amount.  Moreover, old equity holders would have received approximately 12.5% of the recapitalized equity even though noteholders would have been denuded of substantial value.  Prior to its selection by the Creditors Committee, Compass professionals had acted as financial advisor to an ad hoc committee of Polymer Group noteholders (the "Ad Hoc Noteholders Committee").  Compass evaluated the GOP plan on behalf of the Ad Hoc Noteholders Committee and promoted noteholder opposition to the plan.

      Once having filed Chapter 11, Polymer proceeded to draft the Amended Joint Plan of Reorganization, ("Polymer's POR"), again with virtually no input from the Creditors Committee.  Polymer's POR included a new $50.0 million note that could be converted into 44% of Polymer's equity.  As part of Compass' work for the Committee, Compass developed comprehensive financial projections and a valuation model of Polymer's business operations and capital structure, identified strategic alternatives for less expensive financing sources, and advised the Creditors Committee regarding alternative capital structures that could optimize unsecured creditor recoveries.  Compass assisted Creditors Committee counsel in drafting a letter that accompanied Polymer's POR and Disclosure Statement, which included the Creditors Committee's criticisms of Polymer's POR, and urging creditors to vote against it.   As a result of Compass' efforts, Polymer's initial POR was defeated.

      Ultimately, the Creditors Committee, with Compass' advice and assistance, negotiated a consensual POR. Under the consensual POR, all unsecured creditors were treated equally, exchanging their claims for 96% of the equity of Reorganized Polymer and the right to participate in their pro rata share of a new $50.0 million investment in convertible notes that could be converted into approximately 40% of the Reorganized Polymer.  The consensual POR also addressed and provided for substantial protective corporate governance procedures, and permitted the creation of a special purpose entity that would allow certain creditors not permitted to own equity to maintain their investment in the company.  Among other changes, unsecured creditors were given the right to appoint two directors to the board of Reorganized Polymer along with other significant minority protections.

      Compass believes its work was critical to support the Creditors Committee's objectives for an improved recovery to unsecured creditors, an improved form of capital structure and governance of the Reorganized Polymer, and better liquidity for the Polymer securities created in the bankruptcy.  The consensual POR was confirmed on January 3, 2003, and Polymer emerged from Chapter 11 on March 5, 2003.