Exhibit 10.1

 

STATE OF SOUTH CAROLINA

)

IN THE COURT OF COMMON PLEAS

 

)

FOR THE NINTH JUDICIAL CIRCUIT

COUNTY OF CHARLESTON

)

CIVIL ACTION NO.: 03-CP-10-3389

 

)

 

The Intertech Group, Inc.,

)

 

 

)

 

Plaintiff,

)

SETTLEMENT AGREEMENT,

 

)

RECEIPT AND RELEASE

vs.

)

 

 

)

 

Polymer Group, Inc.,

)

 

 

)

 

Defendant.

)

 

 

)

 

 

SETTLEMENT AGREEMENT, RECEIPT AND RELEASE

FULL, FINAL AND COMPLETE RELEASE.

PLEASE READ CAREFULLY.

THIS RELEASE ENDS ALL CLAIMS OF EVERY NATURE.

 

THIS SETTLEMENT AGREEMENT, RECEIPT AND RELEASE is entered into as of this 29th
day of April, 2005 by and among

 

a)                    The Intertech Group, Inc., a Delaware corporation, on
behalf of itself and its past and present entities, successors, subsidiaries,
divisions, affiliated entities, shareholders, employees, officers, directors,
owners, partners, heirs, assigns, agents, attorneys and other representatives,
including but not limited to Jerry Zucker (hereinafter “TIG”), who, with PGI is
at times referred to herein as the “parties”;

 

b)                   Jerry Zucker individually and on behalf of his past and
present entities, subsidiaries, divisions, affiliated entities, shareholders,
employees, officers, directors, owners, partners, heirs, executors,
administrators, assigns, agents, attorneys and other representatives
(hereinafter “Zucker”);

 

c)                    ZS Associates LLC, a South Carolina limited liability
company, formerly ZS Associates, Inc., a South Carolina general partnership
(hereinafter “ZS Associates”) on behalf of itself and its past and present
entities, successors, subsidiaries, divisions, affiliated entities, members,
managers, shareholders, employees, officers, directors, owners, partners, heirs,
assigns, agents, attorneys and other representatives, including but not limited
to Zucker;

 

d)                   Polymer Group, Inc. (hereinafter “PGI”) a Delaware
corporation, who, with TIG is at times referred to herein as the “parties”; and

 

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e)                    the MatlinPatterson Releasees as defined in Paragraph 4 of
this Agreement.

 

WHEREAS, although ZS Associates, Zucker, and the MatlinPatterson Releasees were
not parties to the above captioned action, the parties have agreed as a
condition of settlement that ZS Associates, Zucker, and the MatlinPatterson
Releasees join this Settlement Agreement, Receipt and Release for the purpose of
releasing PGI and others as set forth below.   ZS Associates, Zucker, and the
MatlinPatterson Releasees have agreed to do so and therefore join in and agree
to be bound by this Settlement Agreement, Receipt and Release.  Further, the
parties, ZS Associates and Zucker, believe that the releases provided to the
MatlinPatterson Releasees are in the best interests of the parties, ZS
Associates and Zucker in light of the valuable consideration this Settlement
Agreement, Receipt and Release provides to TIG, ZS Associates and Zucker. TIG,
ZS Associates and Zucker have agreed to release the MatlinPatterson Releasees as
set forth herein. TIG, ZS Associates, and Zucker believe that the settlement of
the instant action is of value to them and constitutes valuable consideration to
them as that term is defined under South Carolina law.

 

WHEREAS, TIG is the lessee of a certain lease, as amended, (hereinafter “the
Lease”) between itself and ZS Associates, for the real property located at 4838
Jenkins Avenue in North Charleston, South Carolina (hereinafter “the Leased
Property”).

 

WHEREAS, PGI is a sub-lessee of the Lease, having subleased from TIG an 85%
undivided interest in the Leased Property (hereinafter “the Sublease”).  The
Lease between TIG and ZS Associates and the Sublease between PGI and TIG are
more fully and completely described in the Complaint filed in the instant action
and such description is incorporated by reference herein.

 

WHEREAS, in the instant action TIG has alleged that, in addition to PGI’s
obligations to TIG under the Sublease, PGI is liable to TIG under the terms of a
certain Services Agreement, as amended, (hereinafter “the Services Agreement”)
for certain services provided to it from TIG in association with the Sublease. 
The Services Agreement between TIG and PGI is more fully and completely
described in the Complaint filed in the instant action and such description is
incorporated by reference herein.

 

WHEREAS, PGI no longer occupies the real property which is the subject of the
Lease, Sublease, and alleged Services Agreement, nor does it receive services
under the alleged Services Agreement.

 

WHEREAS, in August 2003, TIG filed the instant action against PGI and said
action is still pending.

 

WHEREAS, TIG has agreed to accept the payment described below on behalf of
itself, ZS Associates and Zucker as full and final payment of all amounts due
and owing or to become due and owing to TIG by PGI under the Lease, Sublease,
and alleged Services Agreement and any amounts owed by the PGI Releasees (as
defined in

 

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Paragraph 3 of this Agreement) and the MatlinPatterson Releasees to TIG, ZS
Associates and Zucker for whatever reason, and for any and all other claims in
the instant action and for the releases set forth in this Settlement Agreement,
Receipt And Release.

 

NOW, THEREFORE, in consideration of the mutual promises and obligations set
forth herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties, ZS Associates and
Zucker, hereto agree as follows:

 

1.                                      Payment by PGI to TIG.  TIG, on behalf
of TIG, ZS Associates and Zucker, hereby acknowledges and accepts from PGI the
payment of Three Million One Hundred Thousand and No/100 ($3,100,000.00) Dollars
as full and final payment of all amounts due and owing to TIG by PGI under the
Lease, Sublease, alleged Services Agreement, for any and all other claims in the
instant action, and as full and final payment of any and all amounts due and
owing to TIG, ZS Associates and Zucker by the PGI Releasees and the
MatlinPatterson Releasees and as consideration for the releases referenced in
this Settlement Agreement, Receipt And Release.  PGI and TIG agree that TIG
shall immediately dismiss the instant action with prejudice.  The parties shall
bear their own costs and fees, if any, in relation to any such dismissal.

 

2.                                      Intent of Settlement Agreement, Receipt
and Release.    The parties, ZS Associates and Zucker, recognize that over the
last several years they have had a variety of disputes, interactions and
business dealings with each other, the instant action being one of them.   It is
the intent of the parties, ZS Associates and Zucker, that this instant
Settlement Agreement, Receipt And Release resolve not only the claims set forth
in the instant action, but to also resolve any claims by TIG, ZS Associates, and
Zucker, whether known or unknown, ripe or inchoate, asserted or withheld,
whether arising from claims arising from or related to the Lease, Sublease and
alleged Services Agreement or otherwise against the PGI Releasees and the
MatlinPatterson Releasees.

 

Further, it is the intent of the parties, ZS Associates and Zucker, that TIG, ZS
Associates, and Zucker release the PGI Releasees and the MatlinPatterson
Releasees, from any and all charges, complaints, promises, covenants, contracts,
agreements, controversies, variances, damages, judgments, extents, executions,
remedies, actions, suits, dues, sums of money, accounts, reckonings, bonds,
bills, specialties, costs, losses, trespasses debts, duties, liabilities,
obligations, claims, rights, demands, actions or causes of actions and expenses
(including attorneys’ fees and costs), howsoever arising, and of any nature or
description whatsoever, known or unknown, asserted or unasserted, liquidated or
unliquidated, ripe or inchoate, at law or in equity including, without
limitation, any claim for equity or equity-related compensation, incentive
compensation, or any other compensation or remuneration whatsoever based on any
alleged promises or undertakings by or agreements with the PGI Releasees and/or
the MatlinPatterson Releasees from the beginning of time until as of the date of
this Agreement.

 

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3.                                      TIG, ZS Associates, and Zucker Release. 
TIG, ZS Associates and Zucker hereby unconditionally and irrevocably release and
forever discharge PGI, its past and present entities, successors, subsidiaries,
divisions, affiliated entities, shareholders, employees, officers, directors,
owners, partners, heirs, assigns, agents, attorneys and other representatives
(“PGI Releasees”) and the MatlinPatterson Releasees from any and all claims
which TIG, ZS Associates and Zucker now have, has had or may hereafter claim to
have against the PGI Releasees or the MatlinPatterson Releasees whether arising
from or related to the Lease, Sublease and Services Agreement or otherwise. 
Further, TIG, ZS Associates and Zucker hereby unconditionally and irrevocably
release and forever discharge the PGI Releasees and the MatlinPatterson
Releasees from any and all debts, duties, liabilities, obligations, claims,
rights, demands, actions or causes of action, howsoever arising, and of any
nature whatsoever, known or unknown, asserted or unasserted, liquidated or
unliquidated, ripe or inchoate, at law or in equity including, without
limitation, any claim for equity or equity-related compensation, incentive
compensation, or any other compensation or remuneration whatsoever based on any
alleged promises or undertakings by or agreements with the PGI Releasees and/or
the MatlinPatterson Releasees from the beginning of time until as of the date of
this Agreement.

 

TIG, ZS Associates and Zucker hereby represent that TIG, ZS Associates and
Zucker, have not filed, and agree that they will not file, any additional
demands for arbitration, claims, complaints, charges or lawsuits against the PGI
Releasees or the MatlinPatterson Releasees for claims, whether at law or equity,
or for damages under the Lease, Sublease, and alleged Services Agreement or
arising from or related to the Lease, Sublease, and alleged Services Agreement
or otherwise.  TIG, ZS Associates and Zucker hereby further represent that TIG,
ZS Associates and Zucker have not filed, and agree that they will not file, any
additional demands for arbitration, claims, complaints, charges or lawsuits
against the PGI Releasees or the MatlinPatterson Releasees for claims, debts,
duties, liabilities, obligations, rights, demands, actions or causes of action,
howsoever arising, and of any nature whatsoever, known or unknown, asserted or
unasserted, liquidated or unliquidated, ripe or inchoate, at law or in equity
including, without limitation, any claim for equity or equity-related
compensation, incentive compensation, or any other compensation or remuneration
whatsoever based on any alleged promises or undertakings by or agreements with
the PGI Releasees and/or the MatlinPatterson Releasees from the beginning of
time until as of the date of this Agreement.

 

4.                                      MatlinPatterson Releasees. The parties,
ZS Associates and Zucker, agree that the MatlinPatterson Releasees as referenced
in this Settlement Agreement, Receipt and Release shall include, but are not
limited to, MatlinPatterson Global Opportunities Partners L.P., MatlinPatterson
Global Opportunities Partners (Bermuda) L.P., and MatlinPatterson Global
Opportunities Partners B, L.P. and their related entities, including, without
limitation, MatlinPatterson Global Partners LLC, MatlinPatterson Global Advisers
LLC, MatlinPatterson Asset Management LLC, MatlinPatterson LLC and all of their
subsidiaries, parent entities, affiliated companies, limited liability
companies, limited partnerships, joint venturers and other related entities, and
all of the foregoing entities’ respective predecessors, successors, heirs,
assigns,

 

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officers, directors, partners, limited partners, members, managers,
stockholders, employees, agents and representatives, and any and all persons
acting by, through, under, or in concert with any of them (all of the foregoing
in their capacities as shareholders and in any other capacity collectively, the
“MatlinPatterson Releasees”).

 

5.                                      PGI and MatlinPatterson Release.   The
PGI Releasees and the MatlinPatterson Releasees hereby unconditionally and
irrevocably release and forever discharge TIG, ZS Associates and Zucker, their
past and present entities, successors, subsidiaries, divisions, affiliated
entities, shareholders, employees, officers, directors, owners, partners, heirs,
assigns, agents, attorneys and other representatives (the “TIG Releasees”) from
any and all claims which the PGI Releasees or MatlinPatterson Releasees now
have, have had or may hereafter claim to have against the TIG Releasees whether
arising from or related to the Lease, Sublease and Services Agreement or
otherwise.  Further, the PGI Releasees and MatlinPatterson Releasees hereby
unconditionally and irrevocably release and forever discharge the TIG Releasees
from any and all debts, duties, liabilities, obligations, claims, rights,
demands, actions or causes of action, howsoever arising, and of any nature
whatsoever, known or unknown, asserted or unasserted, liquidated or
unliquidated, ripe or inchoate, at law or in equity including, without
limitation, any claim for equity or equity-related compensation, incentive
compensation, or any other compensation or remuneration whatsoever based on any
alleged promises or undertakings by or agreements with the TIG Releasees from
the beginning of time until as of the date of this Agreement.

 

The PGI Releasees and the MatlinPatterson Releasees hereby represent that they
have not filed, and agree that they will not file, any additional demands for
arbitration, claims, complaints, charges or lawsuits against the TIG Releasees
for claims, whether at law or equity, or for damages under the Lease, Sublease,
and alleged Services Agreement or arising from or related to the Lease,
Sublease, and alleged Services Agreement or otherwise.  The PGI Releasees and
the MatlinPatterson Releasees hereby further represent that they have not filed,
and agree that they will not file, any additional demands for arbitration,
claims, complaints, charges or lawsuits against the TIG Releasees for claims,
debts, duties, liabilities, obligations, rights, demands, actions or causes of
action, howsoever arising, and of any nature whatsoever, known or unknown,
asserted or unasserted, liquidated or unliquidated, ripe or inchoate, at law or
in equity including, without limitation, any claim for equity or equity-related
compensation, incentive compensation, or any other compensation or remuneration
whatsoever based on any alleged promises or undertakings by or agreements with
the TIG Releasees from the beginning of time until as of the date of this
Agreement.

 

6.                                      Acknowledgments.  Each of the parties,
ZS Associates, Zucker, and the MatlinPatterson Releasees acknowledge, represent
and warrant as follows, with the understanding that the PGI Releasees and the
MatlinPatterson Releasees are relying thereon:

 

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(a)                                  They fully comprehend and understand all
the terms of this Settlement Agreement, Receipt and Release and its legal
effects;

 

(b)                                 They warrant that all corporate approvals
necessary for execution of this Settlement Agreement, Receipt and Release on
behalf of the signing entities have been properly obtained and the individuals
executing this Settlement Agreement, Receipt and Release are legally competent
and duly authorized to do so;

 

(c)                                  This Settlement Agreement, Receipt and
Release is executed knowingly and voluntarily and without reliance upon any
statement or representation of any third party or its representatives;

 

(d)                                 This Settlement Agreement, Receipt and
Release is enforceable against them in accordance with its terms;

 

(e)                                  They have had the benefit of legal counsel
of their own choice and have been afforded an opportunity to review this
Settlement Agreement, Receipt and Release with their legal counsel and that this
Settlement Agreement, Receipt and Release shall be construed as if collectively
drafted by them and their legal counsel; and

 

(f)                                    They have not assigned, pledged,
transferred, or otherwise conveyed any rights in this instant action or any
claims of any nature whether related or unrelated in whole or in part to, the
Lease, Sublease, and alleged Services Agreement or otherwise, in whole or in
part or any interest therein, to any third party nor have they purported to do
so.

 

7.                                      Counterparts.  This Settlement
Agreement, Receipt and Release may be executed simultaneously in several
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same agreement.

 

8.                                      Modification and Entire
Agreement.                                              No modification,
amendment, change, or addition to this Settlement Agreement, Receipt and Release
shall be binding upon the parties, ZS Associates, Zucker, and the
MatlinPatterson Releasees, unless reduced to writing and signed by the parties,
ZS Associates, Zucker, and MatlinPatterson Global Advisers LLC on behalf of the
MatlinPatterson Releasees.  This Settlement Agreement, Receipt and Release
constitutes the entire agreement between the parties, ZS Associates, Zucker, and
the MatlinPatterson Releasees, and is an integrated agreement as that term
applies under South Carolina law.

 

9.                                      Settlement Not an Admission.  It is
understood and agreed that this Settlement Agreement, Receipt and Release is the
result of a good faith compromise settlement of disputed claims and that the
parties, ZS Associates, Zucker, and the MatlinPatterson Releasees, are entering
into this Settlement Agreement, Receipt and Release to avoid the expense,
disruption and uncertainty of further litigation regarding their respective
claims and defenses.  Entry into this Settlement Agreement, Receipt

 

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and Release does not constitute any admission of liability on the part of any
signatory, and liability from PGI or the MatlinPatterson Releasees to any
signatory to this Settlement Agreement, Receipt and Release is expressly denied.

 

10.                               Headings.  The headings of this Settlement
Agreement, Receipt and Release are for the convenience of the parties, ZS
Associates, Zucker, and the MatlinPatterson Releasees, only and shall not limit,
expand, modify, or aid in the interpretation or constructions of this Settlement
Agreement, Receipt and Release.

 

11.                               Successors and Assigns.  This Settlement
Agreement, Receipt and Release shall be binding upon and inure to the benefit of
the parties, ZS Associates, Zucker, and the MatlinPatterson Releasees, their
respective past and present entities, subsidiaries, divisions, affiliated
entities, shareholders, employees, successors, officers, directors, owners,
partners, heirs, assigns, agents, attorneys and other representatives.

 

12.                               Governing Law.  This Settlement Agreement,
Receipt and Release shall be governed by and construed under the laws of the
State of South Carolina.

 

13.                               Attorney’s Fees.       The parties, ZS
Associates, Zucker, and the MatlinPatterson Releasees, agree that they shall
each be responsible for their own attorney’s fees and costs which they have
incurred as a result of the instant action.

 

14.                               Representation of Comprehension of
Document.                             In entering into this Settlement
Agreement, Receipt and Release the parties, ZS Associates, Zucker, and the
MatlinPatterson Releasees represent that they have relied upon the legal advice
of their attorneys who are the attorneys of their own choice and that the terms
of this Settlement Agreement, Receipt and Release have been completely read and
explained to them by their attorneys, and that those terms are fully understood
and voluntarily accepted by each signatory to this Settlement Agreement, Receipt
and Release.

 

15.                               Non-Disparagement.  The parties, ZS
Associates, Zucker, and the MatlinPatterson Releasees agree that, except as may
be required by law, they will not disparage the other, or their respective
officers, employees, and agents for a time period of one year from the date of
this Agreement, and if asked about the other, they shall state simply that “our
business relationship has ended.  We had some issues that we worked through and
now we have settled them satisfactorily” or words substantially to that effect.

 

16.                               Non-Waiver.   The failure of any of the
signatories to this Agreement to insist upon or enforce strict performance of
any provision of this Agreement or to exercise any rights or remedies thereunder
will not be construed as a waiver by said signatory to assert or rely upon any
such performance right or remedy in that or any other instance.

 

17.                               Confidentiality.   The signatories to this
Agreement agree and understand that this Agreement and the terms and conditions
of the settlement reflected herein are confidential and shall not be disclosed
to third parties except to the

 

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signatories’ representative legal, accounting, or tax advisors or as may be
required by law or by any governmental, judicial, regulatory, or tax authority
or as required in connection with the fulfillment of any reporting
responsibilities in the ordinary course of business.  The signatories to this
Agreement acknowledge that officers, directors, shareholders, and employees of
the parties may learn of this settlement in the normal course of their
employment, and it is agreed that such knowledge is not a violation of this
paragraph.

 

18.                               Stipulation of Dismissal With Prejudice.  
Upon the execution of this Agreement, the parties will execute a Stipulation of
Dismissal with Prejudice in the action The Intertech Group, Inc. vs. Polymer
Group, Inc., Civil Action No. 03-CP-10-3389 which will promptly be filed in the
Court of Common Pleas for Charleston County, South Carolina in the form attached
as Exhibit A to this Agreement.

 

19.                               Severability.   The parties, ZS Associates,
Zucker, and the MatlinPatterson Releasees agree that the provisions contained
herein are not known or believed to be in violation of any federal, state, or
local law, rule or regulation.  In the event a court of competent jurisdiction
finds any provision herein or subpart thereof to be illegal or unenforceable,
the parties, ZS Associates, Zucker, and the MatlinPatterson Releasees agree that
the court shall modify said provisions or subparts thereof to make said
provisions or subparts thereof in this Agreement valid and enforceable.

 

20.                               Additional Documents.                     The
parties, ZS Associates, Zucker, and the MatlinPatterson Releasees agree to
cooperate fully and execute any and all supplementary documents and take all
additional actions which may be necessary or appropriate to give full force and
effect to the basic terms and intent of this Settlement Agreement, Receipt and
Release.

 

21.                               Effective Date.                   This
Settlement Agreement, Receipt and Release shall be effective as of the date that
the parties, ZS Associates, Zucker, and the MatlinPatterson Releasees execute
this Agreement.

 

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WITNESS WHEREOF, each of the undersigned has executed this Settlement Agreement,
Receipt and Release under seal as of the date first written above.

 

 

WITNESSES:

THE INTERTECH GROUP

 

 

 

 

 

 

 

 

 

Jerry Zucker

 

 

 

 

 

 

Its:

 

 

 

 

 

 

 

 

 

 

(CORPORATE SEAL)

 

SWORN to and subscribed before me this

 

            day of                               , 2004.

 

 

 

Notary Public for

 

My notary expires:

 

 

 

 

WITNESSES:

 

 

 

 

 

 

 

 

 

 

Jerry Zucker

 

 

 

 

 

 

Individually and on behalf of his past and present entities, subsidiaries,
divisions, affiliated entities, shareholders, employees, officers, directors,
owners, partners, heirs, executors, administrators, assigns, agents, attorneys
and other representatives

 

 

 

SWORN to and subscribed before me this

 

            day of                               , 2004.

 

 

 

Notary Public for

 

 

My notary expires:

 

 

 

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WITNESSES:

ZS ASSOCIATES, LLC

 

 

 

 

 

 

 

 

 

Jerry Zucker

 

 

 

 

 

 

Its:

 

 

 

 

 

 

 

 

 

 

(CORPORATE SEAL)

 

SWORN to and subscribed before me this

 

            day of                               , 2004.

 

 

 

Notary Public for

 

My notary expires:

 

 

 

 

WITNESSES:

POLYMER GROUP, INC.

 

 

 

 

 

 

 

 

 

James Schaeffer

 

 

 

 

 

 

Its: Chief Executive Officer

 

 

 

 

 

 

 

 

 

(CORPORATE SEAL)

 

SWORN to and subscribed before me this

 

            day of                               , 2004.

 

 

 

Notary Public for

 

My notary expires:

 

 

 

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WITNESSES:

MATLINPATTERSON GLOBAL
ADVISERS LLC, ON BEHALF OF ITSELF
AND THE MATLINPATTERSON
RELEASEES

 

 

 

 

 

 

 

 

 

Name:

 

 

 

 

 

 

Its:

 

 

 

 

 

 

 

 

 

 

(CORPORATE SEAL)

 

SWORN to and subscribed before me this

 

            day of                               , 2004.

 

 

 

Notary Public for

 

My notary expires:

 

 

 

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STATE OF SOUTH CAROLINA

)

IN THE COURT OF COMMON PLEAS

 

)

FOR THE NINTH JUDICIAL CIRCUIT

COUNTY OF CHARLESTON

)

CIVIL ACTION NO.: 03-CP-10-3389

 

)

 

The Intertech Group, Inc.,

)

 

 

)

 

Plaintiff,

)

Stipulation of Dismissal with

 

)

Prejudice

vs.

)

 

 

)

 

Polymer Group, Inc.,

)

 

 

)

 

Defendant.

)

 

 

)

 

 

The issues in the above-captioned action having been settled to the satisfaction
of all parties, now, therefore, pursuant to Rule 41(a)(1)(B), SCRCP, it is
hereby

 

STIPULATED, that the above-captioned action be, and hereby is, dismissed with
prejudice.

 

 

 

 

 

Richard M. Smith

 

Ben F. Easterlin, IV, Esquire

 

Michael Scardato

King & Spalding, LLP

MCNAIR LAW FIRM, P.A.

191 Peachtree Street.

Post Office Drawer 418

Atlanta Georgia 30303

Georgetown, SC 29442

 

 

 

Attorneys for Defendant

Attorney for Plaintiff

 

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