<PAGE>
 
Offer To Purchase and Consent Solicitation Statement
 
                          DOMINION TEXTILE (USA) INC.
 
  OFFER TO PURCHASE FOR CASH ANY AND ALL OUTSTANDING 9 1/4% GUARANTEED SENIOR
   NOTES DUE APRIL 1, 2006 AND SOLICITATION OF CONSENTS FOR AMENDMENT OF THE
                               RELATED INDENTURE
 
                               ----------------
 
  Dominion Textile (USA) Inc., a Delaware corporation (the "Company"), hereby
offers to purchase for cash, upon the terms and subject to the conditions set
forth in this Offer to Purchase and Consent Solicitation Statement (as it may
be amended or supplemented from time to time, the "Statement") and in the
accompanying Consent and Letter of Transmittal (the "Consent and Letter of
Transmittal" and, together with this Statement, the "Offer"), any and all of
its outstanding 9 1/4% Guaranteed Senior Notes due April 1, 2006 (the "Notes")
from each registered holder thereof (each a "Holder" and, collectively, the
"Holders").
 
  The consideration for each $1,000 principal amount of Notes tendered
pursuant to the Offer shall be the price (calculated as described in Schedule
I to this Statement) equal to (i) the present value on the Payment Date (as
defined herein) of $1,046.25 per $1,000 principal amount of Notes (the amount
payable on April 1, 2001, which is the first date on which the Notes are
redeemable (the "Earliest Redemption Date")), determined on the basis of the
yield (the "Tender Offer Yield") to the Earliest Redemption Date equal to the
sum of (x) the yield on the 6 3/8% U.S. Treasury Note due March 31, 2001 (the
"Reference Security"), as calculated by the Dealer Manager in accordance with
standard market practice, based on the bid price for such Reference Security
as of 2:00 p.m., New York City time on January 9, 1998, the tenth business day
immediately preceding the scheduled Tender Offer Expiration Date (the "Price
Determination Date"), as displayed on the Bloomberg Government Pricing Monitor
on "Page PX5" (the "Bloomberg Page") (or, if any relevant price is not
available on a timely
 
                                                  (Continued on following page)
 
 
 THE SOLICITATION WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON JANUARY 9,
 1998 IF ON SUCH DATE THE COMPANY HAS RECEIVED THE REQUISITE CONSENTS (AS
 DEFINED HEREIN) OR THE FIRST DATE THEREAFTER THAT THE COMPANY RECEIVES THE
 REQUISITE CONSENTS FROM HOLDERS OF THE NOTES (THE "CONSENT EXPIRATION
 DATE"). THE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON JANUARY
 26, 1998 UNLESS EXTENDED (SUCH DATE, AS THE SAME MAY BE EXTENDED, THE
 "TENDER OFFER EXPIRATION DATE"). HOLDERS WHO DESIRE TO RECEIVE THE CONSENT
 PAYMENT AND THE TENDER OFFER CONSIDERATION MUST VALIDLY CONSENT TO THE
 PROPOSED AMENDMENTS ON OR PRIOR TO THE CONSENT EXPIRATION DATE. HOLDERS WHO
 TENDER AFTER THE CONSENT EXPIRATION DATE WILL RECEIVE ONLY THE TENDER OFFER
 CONSIDERATION. CONSENTS MAY ONLY BE REVOKED ON OR PRIOR TO THE CONSENT
 EXPIRATION DATE. TENDERS OF NOTES MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE
 TENDER OFFER EXPIRATION DATE.
 
 
                               ----------------
 
      The Dealer Manager for the Offer and the Solicitation Agent for the
                               Solicitation is:
 
                             CHASE SECURITIES INC.
 
December 23, 1997
<PAGE>
 
(Cover page continued)
 
basis on the Bloomberg Page or is manifestly erroneous, such other recognized
quotation source as the Dealer Manager shall select in its sole discretion)
plus (y) 50 basis points, the fixed spread (the "Fixed Spread") (such price
being rounded to the nearest cent per $1,000 principal amount of Notes), minus
(ii) $10.00 per $1,000 principal amount of Notes, which is equal to the
Consent Payment referred to below (such amount, the "Tender Offer
Consideration"), plus accrued and unpaid interest to, but not including, the
Payment Date (as defined herein).
 
  In conjunction with the Offer, the Company hereby solicits (the
"Solicitation") consents (the "Consents") of registered Holders of the Notes
to certain proposed amendments (the "Proposed Amendments") to the Indenture
dated as of April 1, 1996 (the "Indenture"), between the Company, Dominion
Textile Inc., a corporation duly organized and existing under the laws of
Canada ("Dominion" or the "Parent Guarantor") and First Union National Bank,
as trustee (the "Trustee"), pursuant to which the Notes were issued, which
amendments would, among other things, eliminate substantially all of the
covenants contained in the Indenture. Subject to the terms and conditions set
forth in this Statement and the Consent and Letter of Transmittal, the Company
hereby offers to pay to each registered Holder who validly consents to the
Proposed Amendments on or prior to the Consent Expiration Date an amount in
cash (the "Consent Payment") equal to 1% of the principal amount ($10.00 for
each $1,000 principal amount) of Notes for which Consents have been validly
delivered and not validly revoked as of the Consent Expiration Date, with such
payment to be made on the Payment Date if, but only if, such Holder's Notes
are accepted for payment pursuant to the terms of the Offer. The Consent
Payment plus the Tender Offer Consideration is referred to herein as the
"Total Consideration."
 
  If the Proposed Amendments are adopted and the Offer is consummated, Notes
that are not tendered, or that are not accepted for purchase pursuant to the
Offer, will remain outstanding, but will be subject to the terms of the
Indenture as modified by the Supplemental Indenture (as defined below)
described under Item 5, "Proposed Amendments." If a Holder does not properly
tender Notes pursuant to the Offer on or prior to the Consent Expiration Date,
or Consents either are not properly delivered, or are revoked and not properly
redelivered, on or prior to the Consent Expiration Date, such Holder will not
receive the Consent Payment, even though the Proposed Amendments will be
effective as to all Notes that are not purchased pursuant to the Offer.
Adoption of the Proposed Amendments may have adverse consequences for Holders
of Notes who do not validly tender Notes pursuant to the Offer. As a result of
the adoption of the Proposed Amendments, Holders of such outstanding Notes
will not be entitled to the benefit of substantially all of the covenants
presently contained in the Indenture. In addition, the consummation of certain
transactions upon which the Offer is conditioned will result in the sale of
substantially all of the assets of the Company and the Parent Guarantor. In
connection with the Business Unit Sales, PGI or GLI (each as defined below)
may determine that it is in their respective interest to acquire certain
portions of the Company with the remaining limited obligations of the Company
under the Indenture. Finally, the trading market for any Notes not properly
tendered pursuant to the Offer is likely to be significantly more limited in
the future if the Offer is consummated. See Item 5, "Proposed Amendments,"
Item 2, "Certain Significant Considerations," and Item 9, "Conditions to the
Offer."
 
  Holders who tender Notes pursuant to the Offer on or prior to the Consent
Expiration Date are obligated to Consent to the Proposed Amendments. The
completion, execution and delivery of a Consent and Letter of Transmittal in
connection with a tender of Notes pursuant to the Offer on or prior to the
Consent Expiration Date will be deemed to constitute the delivery of Consents
with respect to the Notes tendered. Holders may not deliver Consents in the
Solicitation without tendering their Notes in the Offer.
 
  The Company and the Trustee intend to execute a supplemental indenture (the
"Supplemental Indenture") to the Indenture providing for the Proposed
Amendments promptly after the Consent Expiration Date. Although the
Supplemental Indenture containing the Proposed Amendments will have been
executed by the Company and the Trustee promptly after the Consent Expiration
Date, the Proposed Amendments will not become effective unless and until the
Notes are accepted for purchase by the Company pursuant to the Offer, which is
expected to occur promptly after the Tender Offer Expiration Date.
 
                                     -ii-
<PAGE>
 
(Cover page continued)
 
  If the Notes are accepted for payment pursuant to the Offer, Holders who
validly tender Notes pursuant to the Offer on or prior to the Consent
Expiration Date and do not withdraw such tender or revoke such Consent will
receive the Total Consideration, which is equal to the Tender Offer
Consideration plus the Consent Payment. Holders who validly tender Notes and
deliver Consents pursuant to the Offer on or prior to the Consent Expiration
Date may not thereafter revoke such Consent after the Consent Expiration Date.
Holders who validly tender their Notes after the Consent Expiration Date will
receive only the Tender Offer Consideration and not the Consent Payment.
 
  Upon the terms and subject to the conditions of the Offer and the
Solicitation (including, if the Offer or Solicitation is extended or amended,
the terms and conditions of any such extension or amendment) and applicable
law, the Company will (i) purchase all Notes validly tendered on or prior to
the Tender Offer Expiration Date (and not withdrawn) pursuant to the Offer,
and (ii) pay for all Consents validly delivered on or prior to the Consent
Expiration Date (and not revoked) pursuant to the Solicitation, promptly
following the Tender Offer Expiration Date.
 
  Notwithstanding any other provision of the Offer or the Solicitation, the
Company's obligation to accept for purchase, and to pay for, Notes validly
tendered pursuant to the Offer and the Company's obligation to make Consent
Payments is conditioned upon (a) the Supplemental Indenture Condition, (b) the
Business Unit Sales Condition, (c) the 2003 Tender Condition and (d) the
General Conditions (each as defined herein). See Item 9, "Conditions to the
Offer."
 
  In the event that the Offer and the Solicitation are withdrawn or otherwise
not completed, the Tender Offer Consideration and Consent Payment will not be
paid or become payable to Holders of the Notes who have validly tendered their
Notes and delivered Consents in connection with the Offer and the
Solicitation. In any such event, the Notes previously tendered pursuant to the
Offer will be promptly returned to the tendering Holder and the Supplemental
Indenture will not become operative.
 
 
   See Item 2, "Certain Significant Considerations," and Item 10, "Certain
 U.S. Federal Income Tax Considerations," for discussions of certain factors
 that should be considered in evaluating the Offer and the Solicitation. See
 Item 9, "Conditions to the Offer" for certain factors upon which the
 Company's obligations under the Offer are conditioned. See Item 5, "Proposed
 Amendments," for a description of the Proposed Amendments.
 
 
                                     -iii-
<PAGE>
 
(Cover page continued)
 
                                   IMPORTANT
 
  Any Holder desiring to tender Notes and deliver Consents should either (a)
in the case of a Holder who holds physical certificates evidencing such Notes,
complete and sign the Consent and Letter of Transmittal (or a manually signed
facsimile thereof) in accordance with the instructions therein, have the
signature thereon guaranteed (if required by Instruction 1 of the Consent and
the Letter of Transmittal) and send or deliver such manually signed Consent
and Letter of Transmittal (or a manually signed facsimile thereof), together
with certificates evidencing such Notes being tendered and any other required
documents to Harris Trust Company of New York, as Depositary (the
"Depositary"), at its address set forth on the back cover of this Statement,
or (b) in the case of a beneficial owner who holds Notes in book-entry form,
request such beneficial owner's broker, dealer, commercial bank, trust company
or other nominee to effect the transaction on behalf of such beneficial owner.
See Item 7, "Procedures for Tendering Notes and Delivering Consents."
 
  Any Holder who desires to tender Notes but who cannot comply with the
procedures set forth herein for tender on a timely basis or whose certificates
for Notes are not immediately available, may nevertheless tender the Notes by
following the procedures for guaranteed delivery set forth under Item 7,
"Procedures for Tendering Notes and Delivering Consents--Guaranteed Delivery."
The procedures for guaranteed delivery of Notes will not operate to effect the
timely delivery of the related Consent for purposes of determining eligibility
to receive a Consent Payment.
 
  The Depository Trust Company ("DTC") has authorized DTC participants that
hold Notes on behalf of beneficial owners of Notes through DTC to tender their
Notes and consent to the Proposed Amendments as if they were Holders. To
effect a tender and deliver a Consent, DTC participants should transmit their
acceptance to DTC through the DTC Automated Tender Offer Program ("ATOP"), for
which the transaction will be eligible, and follow the procedure for book-
entry transfer set forth in Item 7, "Procedures for Tendering Notes and
Delivering Consents." A beneficial owner of Notes that are held of record by a
broker, dealer, commercial bank, trust company or other nominee must instruct
such broker, dealer, commercial bank, trust company or other nominee to tender
the Notes and deliver the related Consents on the beneficial owner's behalf.
See Item 7, "Procedures for Tendering Notes and Delivering Consents."
 
  Tendering Holders will not be obligated to pay brokerage fees or commissions
or the fees and expenses of the Dealer Manager, the Information Agent or the
Depositary. See Item 11, "The Dealer Manager, the Information Agent and the
Depositary."
 
  Questions and requests for assistance may be directed to MacKenzie Partners,
Inc., the Information Agent, or Chase Securities Inc., the Dealer Manager, at
their respective addresses and telephone numbers set forth on the back cover
of this Statement. Additional copies of this Statement, the Consent and Letter
of Transmittal, the Notice of Guaranteed Delivery and other related materials
may be obtained from the Information Agent. Beneficial owners may also contact
their brokers, dealers, commercial banks or trust companies through which they
hold the Notes with questions and requests for assistance.
 
  THIS STATEMENT CONSTITUTES NEITHER AN OFFER TO PURCHASE NOR A SOLICITATION
OF CONSENTS IN ANY JURISDICTION IN WHICH, OR TO OR FROM ANY PERSON TO OR FROM
WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION UNDER APPLICABLE
SECURITIES OR BLUE SKY LAWS. THE DELIVERY OF THIS STATEMENT SHALL NOT UNDER
ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN
IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN
NO CHANGE IN THE INFORMATION SET FORTH HEREIN OR IN ANY ATTACHMENTS HERETO OR
IN THE AFFAIRS OF THE COMPANY OR ANY OF ITS SUBSIDIARIES OR AFFILIATES SINCE
THE DATE HEREOF.
 
  NEITHER THE COMPANY NOR THE DEALER MANAGER MAKE ANY RECOMMENDATION AS TO
WHETHER HOLDERS SHOULD TENDER NOTES PURSUANT TO THE OFFER OR PROVIDE CONSENTS
TO THE PROPOSED AMENDMENTS.
 
                                     -iv-
<PAGE>
 
(Cover page continued)
 
                             AVAILABLE INFORMATION
 
  The Company and its parent, Dominion, have filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form F-10
and Form F-3 (Reg. Nos. 333-01764 and 333-01764-01) relating to the Notes and
their underlying guarantees by Dominion (such registration statements,
together with all amendments and exhibits, the "Registration Statements").
Dominion is also subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files reports and other information with the Commission. The
Indenture also provides that the Holders of the Notes are entitled to receive
annual and quarterly consolidated financial statements with respect to
Dominion (including certain summarized historical information with respect to
the Company), even if Dominion were no longer subject to the informational
requirements of the Exchange Act, provided that greater than 10% of the
initial principal amount of the Notes are outstanding.
 
  The Registration Statements and the reports filed by Dominion pursuant to
the Exchange Act as well as other information can be inspected and copied at
prescribed rates at the Public Reference Section of the Commission located at
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington D.C. 20549 and
at regional public reference facilities maintained by the Commission located
at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661; and Seven World Trade Center, Suite 1300, New York, New York 10048.
Copies of such material can be obtained from the Public Reference Section of
the Commission at prescribed rates. As a foreign issuer, Dominion does not
file reports or other information using the Commission's Electronic Data
Gathering, Analysis and Retrieval ("EDGAR") filing system.
 
  Dominion is a Canadian issuer that is permitted, under a multi-
jurisdictional disclosure system adopted in the United States, to prepare
certain informational filings in accordance with the disclosure requirements
of its home jurisdiction. Holders of the Notes should be aware that such
requirements may vary from those of the United States. In addition, Dominion's
financial statements incorporated herein by reference have been prepared in
accordance with Canadian generally accepted accounting principles and are
subject to Canadian accounting and auditor independence standards, and thus
may not be comparable to financial statements of United States companies.
 
                    INCORPORATION OF DOCUMENTS BY REFERENCE
 
  The following documents listed hereafter and filed with the Quebec
Securities Commission are incorporated herein by reference and shall be deemed
to be a part hereof:
 
  (a) The Consolidated Financial Statements of Dominion for the fiscal year
      ended June 30, 1997 and the Auditors' Report thereon.
 
  (b) The Annual Information Form of Dominion dated October 9, 1997.
 
  (c) The interim unaudited comparative consolidated financial statements for
      the period ended September 30, 1997 included in the quarterly report of
      Dominion for the first quarter of fiscal 1998.
 
  (d) The Management Proxy Circular of Dominion dated August 29, 1997 in
      connection with the annual meeting of shareholders held on October 29,
      1997.
 
  In addition, Dominion's Annual Report on Form 40-F for the year ended June
30, 1997 filed with the Commission pursuant to the Exchange Act shall be
incorporated herein by reference and shall be deemed to be a part hereof.
 
  All documents and reports filed with either the Commission or the Quebec
Securities Commission after the date of this Statement and on or prior to the
earlier of the Payment Date or termination of the Offer and Solicitation shall
be deemed incorporated herein by reference and shall be deemed to be a part
hereof from the
 
                                      -v-
<PAGE>
 
(Cover page continued)
 
date of filing of such documents and reports. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall
be deemed to be modified or superseded for purposes of this Statement to the
extent that a statement contained herein or in any subsequently filed document
or report that also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Statement.
 
  The Company will provide without charge to each person to whom this
Statement is delivered, upon the written request of such person, a copy of any
or all of the documents which are incorporated by reference herein, other than
exhibits to such documents which are not specifically incorporated by
reference herein. Requests should be directed to the Information Agent or the
Dealer Manager at their respective addresses set forth on the back cover page
hereof or to the Acting Secretary and General Counsel of Dominion, 1950
Sherbrooke Street West, Montreal, Quebec, Canada H3H 1E7, telephone number
(514) 989-6000. The information relating to the Company contained in this
Statement does not purport to be complete and should be read together with the
information contained in the incorporated documents.
 
  No person has been authorized to give any information or to make any
representation not contained in this Statement and, if given or made, such
information or representation may not be relied upon as having been authorized
by the Company, the Dealer Manager, the Depositary, or the Information Agent.
Neither the delivery of this Statement nor any purchase hereunder shall, under
any circumstances, create any implication that the information herein is
correct as of any time subsequent to the date hereof, or that there has been
no change in the affairs of the Company as of such date.
 
                                     -vi-
<PAGE>
 
                               TABLE OF CONTENTS
 
<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
<S>                                                                         <C>
SUMMARY...................................................................    1
 1. Terms of the Offer and the Solicitation...............................    7
 2. Certain Significant Considerations....................................   10
 3. Purpose of the Offer and the Solicitation.............................   11
 4. Certain Information Concerning the Company, Dominion, DT Acquisition
 and the Notes............................................................   11
 5. Proposed Amendments...................................................   12
 6. Acceptance for Payment and Payment for Notes; Acceptance of Consents..   14
 7. Procedures for Tendering Notes and Delivering Consents................   15
 8. Withdrawal of Tenders and Revocation of Consents......................   19
 9. Conditions to the Offer...............................................   20
10. Certain U.S. Federal Income Tax Consequences..........................   21
11. The Dealer Manager, the Information Agent and the Depositary..........   23
12. Fees and Expenses.....................................................   24
13. Source and Amount of Funds............................................   24
14. Miscellaneous.........................................................   24
Schedule I:Formula for calculation of Tender Offer Consideration and Total
 Consideration............................................................   25
Schedule II: Hypothetical illustration of the calculation of Tender Offer
         Consideration and Total Consideration............................   26
</TABLE>
<PAGE>
 
                                    SUMMARY
 
  The following summary is qualified in its entirety by the more detailed
information appearing elsewhere or incorporated by reference in this Statement
and the Consent and Letter of Transmittal. Capitalized terms have the meanings
assigned to them elsewhere in this Statement.
 
The Company.....................  Dominion Textile (USA) Inc., a Delaware
                                  corporation, is a wholly-owned subsidiary of
                                  Dominion. The Company is a holding company
                                  for the United States operations of Dominion.
 
Dominion........................  Dominion Textile Inc., a corporation
                                  organized under the laws of Canada, is a
                                  manufacturer and supplier of textile and
                                  textile related products with leading
                                  positions in selected markets and global
                                  manufacturing capabilities. Dominion is one
                                  of the world's largest manufacturers of high-
                                  end denim fabrics. It is also a supplier to
                                  the U.S. disposable diaper market and has
                                  significant non-woven, spunbond multidenier
                                  production capacity. Dominion operates
                                  manufacturing plants in five countries,
                                  including the United States, Canada and three
                                  European countries. On December 19, 1997, DT
                                  Acquisition acquired control of Dominion in
                                  the Dominion Tender Offer (as defined). See
                                  Item 4, "Certain Information Concerning the
                                  Company, Dominion, DT Acquisition and the
                                  Notes."
 
DT Acquisition..................  DT Acquisition Inc., a corporation organized
                                  under the laws of Canada, is an affiliate of
                                  Polymer Group, Inc., a Delaware corporation.
                                  DT Acquisition acquired approximately 96% of
                                  the outstanding first preferred shares and
                                  approximately 98% of the outstanding common
                                  shares of Dominion in the Dominion Tender
                                  Offer. See Item 4, "Certain Information
                                  Concerning the Company, Dominion, DT
                                  Acquisition and the Notes."
 
The Notes.......................  The Offer and the Solicitation are being made
                                  with respect to the Company's 9 1/4%
                                  Guaranteed Senior Notes due April 1, 2006.
                                  See Item 4, "Certain Information Concerning
                                  the Company, Dominion, DT Acquisition and the
                                  Notes."
 
The Offer.......................  The Company is offering to purchase for cash
                                  from each Holder, upon the terms and subject
                                  to the conditions described herein, any and
                                  all outstanding Notes. The consideration for
                                  each $1,000 principal amount of Notes
                                  tendered pursuant to the Offer shall be equal
                                  to (i) the present value on the Payment Date
                                  of $1,046.25 per Note, determined on the
                                  basis of the Tender Offer Yield to the
                                  Earliest Redemption Date of April 1, 2001
                                  equal to the sum of (x) the yield on the 6
                                  3/8% U.S. Treasury Note due March 31, 2001 as
                                  of 2:00 p.m., New York City time, on January
                                  9, 1998, the tenth business day immediately
                                  preceding the scheduled Tender Offer
                                  Expiration Date plus (y) 50 basis points,
                                  minus (ii) $10.00 per $1,000 principal amount
                                  of Notes. Each tendering Holder will also
                                  receive unpaid interest up to, but not
                                  including, the Payment
 
                                       1
<PAGE>
 
                                  Date. Holders who tender Notes pursuant to
                                  the Offer prior to the Consent Expiration
                                  Date are obligated to consent to the Proposed
                                  Amendments. The completion, execution and
                                  delivery of a Consent and Letter of
                                  Transmittal in connection with the tender of
                                  Notes pursuant to the Offer prior to the
                                  Consent Expiration Date will be deemed to
                                  constitute the delivery of Consents with
                                  respect to the Notes tendered. Holders may
                                  not deliver Consents in the Solicitation
                                  without tendering their Notes in the Offer.
                                  See Item 1, "Terms of the Offer and the
                                  Solicitation."
 
The Solicitation................  Upon the terms and subject to the conditions
                                  described herein, the Company is soliciting
                                  the Consents of Holders of Notes to the
                                  Proposed Amendments to the Indenture. Each
                                  Holder who consents to the Proposed
                                  Amendments prior to the Consent Expiration
                                  Date shall be entitled to a Consent Payment
                                  in the amount of 1% of the principal amount
                                  ($10.00 per $1,000 principal amount) of Notes
                                  with respect to which Consents are delivered.
                                  Each Holder who tenders Notes pursuant to the
                                  Offer on or prior to the Consent Expiration
                                  Date is obligated to consent to the Proposed
                                  Amendments, and the completion, execution and
                                  delivery of a Consent and Letter of
                                  Transmittal in connection with such a
                                  Holder's tender of Notes on or prior to the
                                  Consent Expiration Date will be deemed to
                                  constitute the delivery of Consents with
                                  respect to the Notes tendered. Holders may
                                  not deliver Consents in the Solicitation
                                  without tendering their Notes in the Offer.
                                  The Company intends to effect the Proposed
                                  Amendments by executing a Supplemental
                                  Indenture immediately following the Consent
                                  Expiration Date, assuming that the Requisite
                                  Consents (as defined herein) have been
                                  received. Although the Supplemental Indenture
                                  reflecting the Proposed Amendments will
                                  become effective upon execution by the
                                  Company, the Parent Guarantor and the Trustee
                                  immediately following the Consent Expiration
                                  Date (assuming the Requisite Consents have
                                  been received), the Proposed Amendments will
                                  not become operative until Notes are accepted
                                  for purchase by the Company pursuant to the
                                  Offer, and the Consent Payment will not be
                                  due and payable to those Holders who deliver
                                  Consents on or prior to the Consent
                                  Expiration Date until the Payment Date. See
                                  Item 1, "Terms of the Offer and the
                                  Solicitation," Item 5, "Proposed Amendments"
                                  and Item 6, "Acceptance for Payment and
                                  Payment of Notes; Acceptance of Consents."
 
Expiration......................  The Solicitation will expire at 5:00 p.m.,
                                  New York City time, on January 9, 1998,
                                  unless extended. The Offer will expire at
                                  5:00 p.m., New York City time, on January 26,
                                  1998, unless extended. See Item 1, "Terms of
                                  the Offer and the Solicitation."
 
                                       2
<PAGE>
 
 
Purpose of the Offer and the      On December 19, 1997, DT Acquisition acquired
Solicitation....................  approximately 96% of the outstanding first
                                  preferred and approximately 98% of the
                                  outstanding common shares of Dominion in the
                                  Dominion Tender Offer. In connection
                                  therewith, DT Acquisition entered into
                                  agreements to dispose of the two primary
                                  business units of Dominion in the Business
                                  Unit Sales (as defined herein). The Offer is
                                  being made for the purpose of repurchasing
                                  and retiring certain of the outstanding
                                  indebtedness of Dominion and its subsidiaries
                                  (including the Company) in order to
                                  effectuate the Business Unit Sales. See Item
                                  3, "Purpose of the Offer and the
                                  Solicitation."
 
Conditions to the Offer.........  The Offer is conditioned upon (a) the
                                  Supplemental Indenture Condition, (b) the
                                  Business Unit Sales Condition, (c) the 2003
                                  Tender Condition and (d) the General
                                  Conditions. See Item 9, "Conditions to the
                                  Offer."
 
Requisite Consents..............  The aggregate outstanding principal amount of
                                  the Notes is $125.0 million. The Proposed
                                  Amendments require the Consent of the Holders
                                  of at least a majority of the aggregate
                                  principal amount of Notes outstanding.
                                  Accordingly, the Proposed Amendments require
                                  the Consent of the Holders of Notes in an
                                  aggregate principal amount in excess of $62.5
                                  million. See Item 5, "Proposed Amendments."
 
The Proposed Amendments.........  The covenants in the Indenture set forth
                                  under the headings "Parent Guarantor and
                                  Issuer May Consolidate, Etc. and Purchases of
                                  Assets Only on Certain Terms," "Successor
                                  Substituted," "Existence," "Maintenance of
                                  Properties," "Payment of Taxes and Other
                                  Claims," "Maintenance of Insurance,"
                                  "Limitation on Consolidated Debt,"
                                  "Limitation on Debt and Preferred Stock of
                                  Restricted Subsidiaries," "Limitation on
                                  Restricted Payments," "Limitation on Dividend
                                  and Other Payment Restrictions Affecting
                                  Restricted Subsidiaries," "Limitation on
                                  Liens," "Limitation on Sale and Leaseback
                                  Transactions," "Limitation on Transactions
                                  with Affiliates and Related Persons,"
                                  "Limitation on Certain Sales of Capital Stock
                                  of Restricted Subsidiaries and Certain
                                  Assets," "Limitation on Issuances and Sales
                                  of Capital Stock of Wholly Owned Restricted
                                  Subsidiaries," "Ownership of the Issuer,"
                                  "Payment of Additional Amounts," and
                                  "Provision of Financial Information" would be
                                  eliminated from the Indenture. Such
                                  covenants, among other things, generally
                                  limit the Parent Guarantor's ability to (i)
                                  consolidate or merge with another entity,
                                  sell or lease substantially all of its
                                  assets, or acquire ownership interests in
                                  other entities, (ii) cause a successor to the
                                  Parent Guarantor or the Company (following a
                                  consolidation or merger) to assume the
                                  obligations under the Indenture, (iii) fail
                                  to maintain its corporate existence, (iv)
                                  fail to maintain its properties, (v) fail to
                                  pay taxes, (vi) underinsure property against
                                  loss or damage, or allow the Company to do
                                  the same, (vii) incur debt, (viii) permit the
                                  Company to incur debt or issue preferred
                                  stock, (ix) permit certain restrictions on
                                  the ability of the Company to
 
                                       3
<PAGE>
 
                                  pay dividends on capital stock, make loans to
                                  the Parent Guarantor or other Restricted
                                  Subsidiaries or transfer property to the
                                  Parent Guarantor or other Restricted
                                  Subsidiaries, declare or pay certain
                                  dividends, or permit the Company to do the
                                  same, (x) create liens on assets of the
                                  Parent Guarantor or permit the Company to do
                                  the same, (xi) enter into any sale or
                                  leaseback transactions or permit the Company
                                  to do the same, (xii) enter into certain
                                  transactions with affiliates, or permit the
                                  Company to do the same, (xiii) make asset
                                  dispositions, (xiv) issue, transfer, convey,
                                  sell or otherwise dispose of any Shares of
                                  Capital Stock of any Restricted Subsidiary,
                                  (xv) divest any of its interest in the
                                  Company, (xvi) fail to pay taxes and other
                                  amounts due to Canadian governmental
                                  authorities in respect of the Notes, and
                                  (xvii) fail to provide certain financial
                                  information to the Holders, or to permit the
                                  Company to do the same. See Item 5, "The
                                  Proposed Amendments."
 
Withdrawal Rights...............  Tenders of Notes pursuant to the Offer may be
                                  withdrawn after tender at any time on or
                                  prior to the Tender Offer Expiration Date,
                                  upon compliance with the procedures described
                                  herein. Tenders of Notes may also be
                                  withdrawn if the Offer is terminated without
                                  any Notes being purchased thereunder. A
                                  withdrawal of tendered Notes on or prior to
                                  the Consent Expiration Date shall be deemed a
                                  revocation of the related Consent. Consents
                                  may be revoked at any time on or prior to the
                                  Consent Expiration Date, but are thereafter
                                  irrevocable. Valid revocation of Consents
                                  will render a tender of Notes prior to the
                                  Consent Expiration Date defective, and,
                                  unless the Company waives such defect (or
                                  unless the Notes are withdrawn and re-
                                  tendered), the tendering Holder will not be
                                  eligible to receive the Tender Offer
                                  Consideration with respect to such Notes. See
                                  Item 8, "Withdrawal of Tenders and Revocation
                                  of Consents."
 
Source of Funds.................  Assuming 100% of the outstanding principal
                                  amount of Notes is tendered and accepted for
                                  payment, approximately $140.4 million is
                                  required to pay the Total Consideration in
                                  connection with the Offer and the
                                  Solicitation. Such funds will be obtained by
                                  the Company from proceeds of the Business
                                  Unit Sales and/or borrowings under the DT
                                  Credit Agreement (as defined). Each of PGI
                                  and GLI (each as defined) has obtained the
                                  financing necessary to complete its part of
                                  the Business Unit Sales. It is currently
                                  anticipated that the proceeds from the
                                  Business Unit Sales will provide all of the
                                  funds necessary to pay for the Notes
                                  purchased pursuant to the Offer.
 
Untendered Notes................  Notes not tendered and purchased pursuant to
                                  the Offer will remain outstanding. If the
                                  Requisite Consents are received and the
                                  Proposed Amendments become operative pursuant
                                  to the Supplemental Indenture, such Notes
                                  will not have the benefits of the restrictive
                                  covenants that will be eliminated from the
                                  Indenture by the Proposed Amendments. In
                                  addition, the
 
                                       4
<PAGE>
 
                                  consummation of the Business Unit Sales will
                                  result in the sale of substantially all of
                                  the assets of the Company and the Parent
                                  Guarantor. In connection with the Business
                                  Unit Sales, PGI or GLI may determine that it
                                  is in their respective interest to acquire
                                  certain portions of the Company with the
                                  remaining limited obligations of the Company
                                  under the Indenture. Further, as a result of
                                  the consummation of the Offer, the aggregate
                                  principal amount of the Notes that are
                                  outstanding will be significantly reduced,
                                  which may adversely affect the liquidity and,
                                  consequently, the market price for the Notes,
                                  if any, that remain outstanding after
                                  consummation of the Offer. See Item 2,
                                  "Certain Significant Considerations."
 
                                  Holders who tender only a portion of their
                                  Notes pursuant to the Offer will be issued
                                  Notes equal in principal amount to the
                                  unpurchased portion of the Notes surrendered.
 
Procedures for Tendering Notes
and Delivering Consents.........
                                  Any Holder desiring to tender Notes pursuant
                                  to the Offer and/or deliver Consents pursuant
                                  to the Solicitation should either (a) in the
                                  case of a Holder who holds physical
                                  certificates evidencing such Notes, complete
                                  and sign the enclosed Consent and Letter of
                                  Transmittal (or a manually signed facsimile
                                  thereof) in accordance with the instructions
                                  set forth therein, have the signature thereon
                                  guaranteed if required by Instruction 1 of
                                  the Consent and Letter of Transmittal, and
                                  send or deliver such manually signed Consent
                                  and Letter of Transmittal (or such manually
                                  signed facsimile), together with the
                                  certificates evidencing the Notes being
                                  tendered and any other required documents to
                                  the Depositary, or (b) in the case of Holders
                                  who hold Notes in book-entry form, request
                                  his or her broker, dealer, commercial bank,
                                  trust company or other nominee to effect the
                                  transaction for him or her. Beneficial owners
                                  of Notes that are registered in the name of a
                                  broker, dealer, commercial bank, trust
                                  company or other nominee must contact such
                                  broker dealer, commercial bank, trust company
                                  or other nominee if they desire to tender
                                  their Notes and deliver Consents. Holders of
                                  Notes who are tendering by book-entry
                                  transfer to the Depositary's account at DTC
                                  can execute the tender to DTC through ATOP,
                                  after which DTC will verify the acceptance
                                  and execute a book-entry delivery to the
                                  Depositary's account at DTC. Delivery of the
                                  Agent's Message by DTC will satisfy the terms
                                  of the Offer as to the tender of Notes;
                                  however, any Holder tendering on or prior to
                                  the Consent Expiration Date must also execute
                                  and deliver a Consent and Letter of
                                  Transmittal. To receive the Consent Payment,
                                  each Holder (including any Holder tendering
                                  Notes through ATOP) must deliver or cause to
                                  be delivered a completed and properly
                                  executed Consent and Letter of Transmittal
                                  and any other required documents to the
                                  Depositary on or prior to the Consent
                                  Expiration Date.
 
                                       5
<PAGE>
 
 
                                  A Holder who desires to tender Notes pursuant
                                  to the Offer and who cannot comply with the
                                  procedures set forth herein for tender or
                                  delivery on a timely basis or whose Notes are
                                  not immediately available may tender such
                                  Notes pursuant to the procedures for
                                  guaranteed delivery set forth herein. See
                                  Item 7, "Procedures for Tendering Notes and
                                  Delivering Consents."
 
Acceptance of Tendered Notes      Upon the terms of the Offer and the
and Payment.....................  Solicitation and upon satisfaction or waiver
                                  of the conditions thereto, the Company will
                                  accept for purchase Notes validly tendered
                                  (and not withdrawn) prior to the Tender Offer
                                  Expiration Date. Only Holders who validly
                                  tender Notes on or prior to the Consent
                                  Expiration Date (and do not withdraw such
                                  tender and revoke such Consent) will receive
                                  the Total Consideration, which includes the
                                  Consent Payment. Payment of the Total
                                  Consideration or the Tender Offer
                                  Consideration, as applicable, for Notes
                                  validly tendered and accepted for payment,
                                  will be made by deposit of such amounts, as
                                  applicable, with the Depositary who, in each
                                  case, will act as agent for the tendering and
                                  consenting Holders for the purpose of
                                  receiving payments from the Company and
                                  transmitting such payments to the tendering
                                  and consenting Holders. Such payments are
                                  expected to be made on the Payment Date,
                                  promptly following the acceptance of the
                                  Notes by the Company pursuant to the Offer.
                                  See Item 6, "Acceptance for Payment and
                                  Payment for Notes; Acceptance of Consents."
 
Certain Tax Considerations......  For a discussion of certain U.S. federal
                                  income tax consequences of the Offer and the
                                  Solicitation applicable to Holders of the
                                  Notes, see Item 10, "Certain U.S. Federal
                                  Income Tax Consequences."
 
Certain Significant               For a discussion of certain considerations
Considerations..................  relevant to the Offer and the Solicitation,
                                  see Item 2, "Certain Significant
                                  Considerations."
 
The Dealer Manager, the
Information Agent and the
Depositary......................
                                  Chase Securities Inc. has been retained as
                                  Dealer Manager in connection with the Offer
                                  and the Solicitation. In such capacities, the
                                  Dealer Manager may contact Holders regarding
                                  the Offer and the Solicitation and may
                                  request brokers, dealers, commercial banks,
                                  trust companies and other nominees to forward
                                  this Statement and related materials to
                                  beneficial owners of Notes. The Depositary is
                                  Harris Trust Company of New York. MacKenzie
                                  Partners, Inc. has been retained as the
                                  Information Agent in connection with the
                                  Offer and the Solicitation. The respective
                                  addresses and telephone numbers of the Dealer
                                  Manager, the Depositary and the Information
                                  Agent are set forth on the back cover of this
                                  Statement. See Item 11, "The Dealer Manager,
                                  the Information Agent, and the Depositary."
 
                                       6
<PAGE>
 
      TO HOLDERS OF THE 9 1/4% GUARANTEED SENIOR NOTES DUE APRIL 1, 2006
                        OF DOMINION TEXTILE (USA) INC.:
 
  THIS STATEMENT AND THE RELATED CONSENT AND LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS
MADE WITH RESPECT TO THE OFFER AND THE SOLICITATION.
 
1.TERMS OF THE OFFER AND THE SOLICITATION.
 
  Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension
or amendment) set forth herein and in the accompanying Consent and Letter of
Transmittal, the Company is offering to purchase for cash all of its
outstanding Notes at a price equal to (i) the present value on the Payment
Date (as defined herein) of $1,046.25 per $1,000 principal amount of Notes
(the amount payable on April 1, 2001, which is the first date on which the
Notes are redeemable (the "Earliest Redemption Date")), determined on the
basis of the yield (the "Tender Offer Yield") to the Earliest Redemption Date
equal to the sum of (x) the yield on the 6 3/8% U.S. Treasury Note due March
31, 2001 (the "Reference Security"), as calculated by the Dealer Manager in
accordance with standard market practice, based on the bid price for such
Reference Security as of 2:00 p.m., New York City time, on January 9, 1998,
the tenth (10th) business day immediately preceding the scheduled Tender Offer
Expiration Date (the "Price Determination Date"), as displayed on the
Bloomberg Government Pricing Monitor on "Page PX5" (the "Bloomberg Page") (or,
if any relevant price is not available on a timely basis on the Bloomberg Page
or is manifestly erroneous, such other recognized quotation source as the
Dealer Manager shall select in its sole discretion) plus (y) 50 basis points,
the fixed spread (the "Fixed Spread") (such price being rounded to the nearest
cent per $1,000 principal amount of Notes), minus (ii) $10.00 per $1,000
principal amount of Notes, which is equal to the Consent Payment referred to
below (such amount, the "Tender Offer Consideration"), plus accrued and unpaid
interest to, but not including, the Payment Date. Payment of the Total
Consideration (the Tender Offer Consideration plus the Consent Payment) or the
Tender Offer Consideration, as applicable, for Notes validly tendered and
accepted for payment shall be made promptly following the Tender Offer
Expiration Date (the "Payment Date").
 
  Although the Tender Offer Yield on the applicable Reference Treasury
Security on the Price Determination Date will be determined only from the
source noted above, information regarding the closing yield for the Reference
Treasury Security may also be found in The Wall Street Journal. The yield on
the Reference Treasury Security for the Notes as of 2:00 p.m., New York City
time, on December 22, 1997 was 5.74%. Accordingly, if such yield was
determined to be the yield on the Reference Treasury Security at the Price
Determination Date, and January 27, 1998 was the Payment Date for the Notes,
the Tender Offer Yield, the Tender Offer Consideration and the Total
Consideration per $1,000 principal amount of Notes would be 6.24%, $1,113.45
and $1,123.45, respectively. A hypothetical illustration of the calculation of
the Tender Offer Consideration and the Total Consideration for the Notes
demonstrating the application of the assumptions and methodologies to be used
in pricing the Offer is set forth in Schedule II hereto.
 
  Promptly after 2:00 p.m. on the Price Determination Date, and in any event
before 9:00 a.m., New York City time, on the following business day, the
Company will publicly announce the pricing information referred to above by
press release to the Dow Jones News Service.
 
  Prior to 2:00 p.m., New York City time, on the Price Determination Date,
holders may obtain hypothetical quotes of the yield on the Reference Treasury
Security (calculated as of a then recent time) and the resulting hypothetical
Tender Offer Consideration and the Total Consideration by contacting the
Dealer Manager at its telephone numbers set forth on the back cover of this
Statement. After such time on the Price Determination Date, holders may
ascertain the actual yield on the Reference Treasury Security as of the Price
Determination Date and the resulting actual Tender Offer Consideration and
Total Consideration by contacting the Dealer Manager at its telephone numbers
set forth on the back cover of this Statement.
 
                                       7
<PAGE>
 
  Because the Tender Offer Consideration and the Total Consideration prior to
the Price Determination Date are based on a fixed spread pricing formula that
is linked to the yield on the Reference Treasury Security, the actual amount
of cash that will be received by a tendering Holder pursuant to the Offer will
be affected by changes in such yield during the term of the Offer prior to
such Price Determination Date. After the Price Determination Date when the
Tender Offer Consideration and the Total Consideration are fixed, the actual
amount of cash that will be received by a tendering Holder pursuant to the
Offer will be known and holders will be able to ascertain the Tender Offer
Consideration and the Total Consideration in the manner described above.
 
  Upon the terms and subject to the conditions of the Solicitation (including,
if the Solicitation is extended or amended, the terms and conditions of any
such extension or amendment), the Company also is soliciting Consents to the
Proposed Amendments to the Indenture from Holders, and is offering to pay to
each Holder who consents to the Proposed Amendments on or prior to the Consent
Expiration Date, a Consent Payment in cash in respect of Notes for which
Consents have been validly delivered and not validly revoked on or prior to
the Consent Expiration Date, with such payment to be made promptly following
the Tender Offer Expiration Date if, but only if, the Notes are accepted for
payment pursuant to the terms of the Offer. Holders who desire to tender their
Notes pursuant to the Offer and to receive the Total Consideration are
required to validly tender such Notes and consent to the Proposed Amendments
on or prior to the Consent Expiration Date. The completion, execution and
delivery of the Consent and Letter of Transmittal by a Holder in connection
with the tender of Notes will constitute the Consent of the tendering Holder
to the Proposed Amendments with respect to such Notes. If a Holder's Notes are
not properly tendered pursuant to the Offer on or prior to the Consent
Expiration Date, such Holder will not receive the Consent Payment, even though
the Proposed Amendments will be effective as to all Notes that are not
purchased in the Offer. The Company is not soliciting and will not accept
Consents to the Proposed Amendments from Holders who are not also tendering
their Notes pursuant to the Offer.
 
  If the Notes are accepted for payment pursuant to the Offer, Holders who
validly tender Notes pursuant to the Offer on or prior to the Consent
Expiration Date and do not withdraw such tender or revoke such Consent on or
prior to the Consent Expiration Date will receive the Total Consideration,
which is equal to the Tender Offer Consideration plus the Consent Payment.
Holders who validly tender Notes and deliver Consents pursuant to the Offer on
or prior to the Consent Expiration Date may not thereafter revoke such Consent
after the Consent Expiration Date. Holders who validly tender their Notes
after the Consent Expiration Date will receive only the Tender Offer
Consideration and not the Consent Payment.
 
  Holders may not deliver Consents without tendering their Notes in the Offer,
and may not revoke Consents on or prior to the Consent Expiration Date without
withdrawing the previously tendered Notes to which such Consent relates.
Holders may not withdraw previously tendered Notes on or prior to the Consent
Expiration Date without revoking the previously delivered Consents to which
such tender relates. Consents may not be revoked after the Consent Expiration
Date. Tenders of Notes may be withdrawn at any time prior to the Tender Offer
Expiration Date.
 
  All Notes validly tendered in accordance with the procedures set forth under
Item 7, "Procedures for Tendering Notes and Delivering Consents," and not
withdrawn in accordance with the procedures set forth under Item 8,
"Withdrawal of Tenders and Revocation of Consents," on or prior to the Consent
Expiration Date or the Tender Offer Expiration Date, as the case may be, will,
upon the terms and subject to the conditions hereof, including satisfaction of
the Supplemental Indenture Condition, the Business Unit Sales Condition, the
2003 Tender Condition and the General Conditions, be accepted for payment by
the Company, and payments will be made therefor, promptly after the Tender
Offer Expiration Date on the Payment Date.
 
  The Company, the Parent Guarantor and the Trustee intend to execute the
Supplemental Indenture promptly after the Consent Expiration Date, but the
elimination of the covenants set forth in the Supplemental Indenture will not
become operative unless and until the Notes are accepted for purchase by the
Company pursuant to the Offer, which is expected to occur promptly after the
later of (a) the Tender Offer Expiration Date or (b) subject
 
                                       8
<PAGE>
 
to Rule 14e-1 under the Exchange Act, the satisfaction or waiver of the
conditions to the Offer described herein. If the Offer is terminated or
withdrawn, or the Notes are not accepted for payment, the Supplemental
Indenture will not become operative, and no Tender Offer Consideration or
Consent Payment will be paid or payable. If any tendered Notes are not
purchased pursuant to the Offer for any reason, or certificates are submitted
evidencing more Notes than are tendered, such Notes not purchased will be
returned, without expense, to the tendering Holder (or, in the case of Notes
tendered by book-entry transfer, such Notes will be credited to the account
maintained at DTC from which such Notes were delivered) promptly following the
Tender Offer Expiration Date or termination of the Offer.
 
  IF THE REQUISITE CONSENTS ARE RECEIVED AND THE SUPPLEMENTAL INDENTURE HAS
BECOME OPERATIVE, THE PROPOSED AMENDMENTS WILL BE BINDING ON ALL NON-TENDERING
HOLDERS OF NOTES. ACCORDINGLY, CONSUMMATION OF THE OFFER AND THE ADOPTION OF
THE PROPOSED AMENDMENTS MAY HAVE ADVERSE CONSEQUENCES FOR HOLDERS WHO ELECT
NOT TO TENDER IN THE OFFER. SEE ITEM 2, "CERTAIN SIGNIFICANT CONSIDERATIONS."
 
  The Company's obligation to accept and pay for Notes validly tendered
pursuant to the Offer is conditioned upon satisfaction of (a) the Supplemental
Indenture Condition, (b) the Business Unit Sales Condition, (c) the 2003
Tender Condition and (d) the General Conditions. Consent Payments to Holders
who have validly consented to (and not revoked) the Proposed Amendments on or
prior to the Consent Expiration Date are conditioned upon the Company's
acceptance of Notes for purchase pursuant to the Offer. Subject to applicable
securities laws and the terms and conditions set forth in this Statement, the
Company reserves the right, on or prior to the Tender Offer Expiration Date,
to (i) waive any and all conditions to the Offer or the Solicitation, (ii)
extend or terminate the Offer or the Solicitation or (iii) otherwise amend the
Offer or the Solicitation in any respect. See Item 9, "Conditions to the
Offer." The rights reserved by the Company in this paragraph are in addition
to the Company's rights to terminate the Offer described under Item 9,
"Conditions to the Offer." Any extension, amendment or termination will be
followed promptly by public announcement thereof, the announcement in the case
of an extension of the Offer to be issued no later than 9:00 a.m., New York
City time, on the next business day after the previously scheduled Tender
Offer Expiration Date. Without limiting the manner in which any public
announcement may be made, the Company shall have no obligation to publish,
advertise or otherwise communicate any such public announcement other than by
issuing a release to the Dow Jones News Service.
 
  If the Company extends the Offer, or if, for any reason, the acceptance for
payment of, or the payment for, Notes is delayed or if the Company is unable
to accept for payment or pay for Notes pursuant to the Offer, then, without
prejudice to the Company's rights under the Offer, the Depositary may retain
tendered Notes on behalf of the Company, and such Notes may not be withdrawn
except to the extent tendering Holders are entitled to withdrawal rights as
described in Item 8, "Withdrawal of Tenders and Revocation of Consents."
However, the ability of the Company to delay the payment for Notes which the
Company has accepted for payment is limited by Rule 14e-l(c) under the
Exchange Act, which requires that a bidder pay the consideration offered or
return the securities deposited by or on behalf of holders of securities
promptly after the termination or withdrawal of a tender offer.
 
  If the Company makes a material change in the terms of the Offer or the
Solicitation or the information concerning the Offer or the Solicitation, the
Company will disseminate additional offering materials and extend such Offer
or, if applicable, the Solicitation, to the extent required by law. If the
Solicitation is amended on or prior to the Consent Expiration Date in a manner
determined by the Company to constitute a material adverse change to the
Holders of the Notes, the Company promptly will disclose such amendment and,
if necessary, extend the Solicitation for such Notes for a period deemed by
the Company to be adequate to permit Holders of the Notes to withdraw their
Notes and revoke their Consents. In addition, if the consideration to be paid
in the Offer is increased or decreased or the principal amount of Notes
subject to the Offer is decreased, the Offer will remain open at least 10
business days from the date the Company first gives notice to Holders, by
public announcement or otherwise, of such increase or decrease. See Item 8,
"Withdrawal of Tenders and Revocation of Consents."
 
 
                                       9
<PAGE>
 
2.CERTAIN SIGNIFICANT CONSIDERATIONS.
 
  The following considerations, in addition to the other information described
elsewhere in this Statement, should be carefully considered by each Holder
before deciding whether to participate in the Offer and the Solicitation.
 
  Effects of the Proposed Amendments. If the Proposed Amendments become
effective, Holders of Notes that are not tendered and purchased pursuant to
the Offer will no longer be entitled to the benefits of substantially all of
the covenants contained in the Indenture, which will be eliminated by the
Proposed Amendments. The Indenture, as amended with respect to the Notes, will
continue to govern the terms of all Notes that remain outstanding after the
consummation of the Offer. The elimination of these covenants and other
provisions would permit the Company and the Parent Guarantor to take certain
actions previously prohibited that could increase the credit risks with
respect to the Company and the Parent Guarantor, adversely affect the market
price and credit rating of the remaining Notes or otherwise be materially
adverse to the interests of Holders, which would otherwise not have been
permitted pursuant to the Indenture. In addition, in connection with the
Business Unit Sales, PGI or GLI may determine that it is in their respective
interest to acquire certain portions of the Company with the remaining limited
obligations of the Company under the Indenture. See Item 5, "Proposed
Amendments."
 
  Limited Trading Market. The Notes were issued in 1996 and are not listed on
any national or regional securities exchange. To the Company's knowledge, the
Notes are traded infrequently in transactions arranged through brokers.
Quotations for securities that are not widely traded, such as the Notes, may
differ from actual trading prices and should be viewed as approximations.
Holders are urged to contact their brokers with respect to current information
regarding the Notes. To the extent that Notes are tendered and accepted in the
Offer, any existing trading market for the remaining Notes may become more
limited. A debt security with a smaller outstanding principal amount available
for trading (a smaller "float") may command a lower price than would a
comparable debt security with a greater float. The reduced float may also make
the trading price of the Notes that are not tendered and accepted for payment
more volatile. Consequently, the liquidity, market value and price volatility
of Notes which remain outstanding may be adversely affected. Holders of
unpurchased Notes may attempt to obtain quotations for the Notes from their
brokers; however, there can be no assurance that any trading market will exist
for the Notes following consummation of the Offer. The extent of the public
market for the Notes following consummation of the Offer will depend upon the
number of Holders remaining at such time, the interest in maintaining a market
in such Notes on the part of securities firms and other factors.
 
  Change of Control Purchase Offer. Pursuant to Section 1017 of the Indenture,
within 30 days following a "Change of Control Triggering Event" (as defined in
the Indenture), the Company is required to commence an offer to purchase all
outstanding Notes at a purchase price equal to 101% of the principal amount of
each Note. This Offer is not being made pursuant to, or in accordance with,
the provisions of Section 1017 of the Indenture. A "Change of Control
Triggering Event" is deemed to occur if a "Change of Control" (as defined in
the Indenture) has occurred and a Rating Decline (as defined in the Indenture)
occurs. The acquisition of Dominion by DT Acquisition constitutes a "Change of
Control" under the Indenture. However, as of the date of the Offer, no Rating
Decline has occurred. In the event a Rating Decline occurs, and any Notes
remain outstanding at such time, the Company intends to comply with Section
1017 of the Indenture. The Company believes the amount that a Holder will
receive in the Offer will exceed the amount payable in an offer under Section
1017 of the Indenture. The offer under Section 1017 of the Indenture, if any,
will be made pursuant to a separate offer to purchase and related letter of
transmittal.
 
  Recent Acquisition and Proposed Sales. Pursuant to the Offer to Purchase
dated October 29, 1997, as supplemented by the Notices of Extension and
Variation dated November 18, 1997, November 28, 1997, December 2, 1997, and
December 15, 1997, approximately 96% of the outstanding first preferred shares
and approximately 98% of the outstanding common shares of the Company's
parent, Dominion, were acquired by DT Acquisition on December 19, 1997 (the
"Dominion Tender Offer"). DT Acquisition intends to acquire the remaining
outstanding first preferred and common shares on the same terms as such shares
were acquired in the Dominion Tender Offer pursuant to Section 206 of the
Canadian Business Corporation Act. In connection with
 
                                      10
<PAGE>
 
the Dominion Tender Offer, DT Acquisition entered into agreements to dispose
of the two primary business units of Dominion in the Business Unit Sales. The
Offer is being made for the purpose of repurchasing and retiring certain of
the outstanding indebtedness of Dominion and its subsidiaries (including the
Company) in order to effectuate the Business Unit Sales. There can be no
assurances that the Company or Dominion will be successful in repurchasing and
retiring other issuances of notes or sources of indebtedness, including
without limitation the 2003 Notes (as defined), the repurchase of which is
conditioned upon, among other things, the Offer and Solicitation.
 
  The ability of the Company and Dominion to effectuate the Business Unit
Sales will depend on multiple factors, many of which are not within the
control of the Company or Dominion. In addition, if the Business Unit Sales
are consummated, substantially all of the assets of the Company and Dominion
will be sold. As a result, the ability of the Company and Dominion to sustain
operations and thereby generate sufficient cash flow to meet interest
obligations to Holders will be substantially reduced or eliminated.
 
3.PURPOSE OF THE OFFER AND THE SOLICITATION.
 
  On December 19, 1997, DT Acquisition acquired approximately 96% of the
outstanding first preferred shares and approximately 98% of the outstanding
common shares of Dominion in the Dominion Tender Offer. In connection
therewith, DT Acquisition entered into agreements to dispose of the two
primary business units of Dominion in the Business Unit Sales. The principal
purpose of the Offer, which is conditioned upon the satisfaction of the
Supplemental Indenture Condition, the Business Unit Sales Condition, the 2003
Tender Condition and the General Conditions, is to acquire all of the
outstanding Notes in order to effectuate the Business Unit Sales. See Item 9,
"Conditions to the Offer."
 
  The purpose of the Solicitation and the Proposed Amendments is to eliminate
substantially all of the covenants contained in the Indenture, and, together
with the Offer, to permit the Company to effectuate the Business Unit Sales.
If the Requisite Consents are not obtained with respect to the Notes, the
covenants currently contained in the Indenture will continue to bind the
Company. In such event, the Company may, among other things, elect to exercise
its rights under Article Thirteen of the Indenture to defease the Notes, or
may engage in asset sales and comply with Section 1015 of the Indenture
governing sales of assets in order to carry out the Business Unit Sales.
 
  The Company expressly reserves the absolute right, in its sole discretion,
from time to time to purchase any Notes after the Tender Offer Expiration
Date, through open market or privately negotiated transactions, one or more
additional tender or exchange offers or otherwise on terms that may differ
materially from the terms of the Offer.
 
4.CERTAIN INFORMATION CONCERNING THE COMPANY, DOMINION, DT ACQUISITION AND THE
NOTES.
 
  The Company. The Company, a wholly-owned subsidiary of Dominion, is the
holding company for the United States operations of Dominion. The Company was
organized under the laws of the State of Delaware on June 17, 1976. In order
to effectuate the Business Unit Sales, the Company is offering to repurchase
all of the outstanding Notes and 2003 Notes (as defined). The principal
executive offices of the Company are located at 120 West 45th Street, 23rd
floor, New York, New York 10036-4003; the Company's telephone number is (212)
704-7600. For discussion of the Business Unit Sales and the 2003 Notes, see
Item 9, "Conditions to the Offer."
 
  Dominion. Dominion is a manufacturer and supplier of textile and textile
related products with leading positions in selected markets and global
manufacturing capabilities. Dominion is one of the world's largest
manufacturer of high-end denim fabrics. It is also a supplier to the U.S.
disposable diaper market and has significant non-woven, spunbond multidenier
production capacity. The Company operates manufacturing plants in five
countries, including the United States, Canada and three European countries.
Dominion was incorporated under the law of Canada by letters of patent dated
December 9, 1922 for the purpose of acquiring the entire undertaking of its
predecessor company. The predecessor company had been incorporated in 1905 to
amalgamate
 
                                      11
<PAGE>
 
the businesses of four cotton manufacturing companies. The principal executive
offices of Dominion are located at 1950 Sherbrooke Street West, Montreal,
Quebec, Canada H3H 1E7; Dominion's telephone number is (514) 969-6000.
 
  Dominion's operations primarily consist of two distinct lines of business:
the Apparel Fabric Business and the Nonwovens Business. The "Apparel Fabric
Business" consists of the apparel fabrics textile group businesses of Dominion
conducted primarily through the Swift Textiles Canada division of Dominion,
six direct or indirect wholly-owned subsidiaries of Dominion (being the
Company, Swift Textiles, Inc., a Delaware corporation, Dominion Textile (Asia)
Pte. Ltd., a company organized under the laws of Singapore, Swift Textiles
(Far East) Ltd., a company organized under the laws of Hong Kong, Dominion
Textile International B.V., a company organized under the laws of the
Netherlands, and Klopman International S.r.L., a company organized under the
laws of Italy) and Swift Textiles Europe Ltd., a company organized under the
laws of the Republic of Ireland. The "Nonwovens Business" consists of the
nonwovens group businesses of Dominion conducted primarily through the
Dominion Industrial Fabrics Company division ("DIFCO") of Dominion, two
indirect, wholly-owned subsidiaries of Dominion (being Poly-Bond Inc., a
Delaware corporation, and Nordlys S.A., a company organized under the laws of
the Republic of France) and the Dominion Nonwoven (South America) Argentinean
joint venture.
 
  DT Acquisition. DT Acquisition Inc. is an affiliate of Polymer Group, Inc.,
a Delaware corporation. DT Acquisition was organized under the laws of Canada
on October 21, 1997 for the purpose of acquiring control of Dominion. DT
Acquisition acquired control of Dominion in the Dominion Tender Offer on
December 19, 1997. The principal executive offices of DT Acquisition are
located at Suite 3000, Aetna Tower, P.O. Box 270, Toronto-Dominion Centre,
Toronto, Canada M5K IN2.
 
  The Notes. The Notes were issued by the Company on April 1, 1996 in the
aggregate principal amount of $125,000,000. The Notes, which are unsecured
senior obligations of the Company and mature on April 1, 2006, were issued
under the Indenture. Pursuant to the Indenture, the Notes may be redeemed on
or after April 1, 2001 at a price equal to 104.625% of the principal amount
outstanding. A form of the Indenture was filed as an exhibit to the Company's
registration statements on Form F-10 (Reg. No. 333-01764) and Form F-3 (Reg.
No. 333-01764-01).
 
5.PROPOSED AMENDMENTS.
 
  This section sets forth a brief description of the Proposed Amendments to
the Indenture for which Consents are being sought pursuant to the
Solicitation. The summaries of provisions of the Indenture set forth below are
qualified in their entirety by reference to the full and complete terms
contained in the Indenture. Capitalized terms appearing below but not defined
in this Statement have the meanings assigned to such terms in the Indenture.
 
  Deletion of Covenants in the Indenture. The Proposed Amendments would delete
in their entirety the following covenants and references thereto from the
Indenture as well as the events of default related to such covenants:
 
SECTION 801 . Parent Guarantor and Issuer May Consolidate, Etc. and Purchases
                of Assets Only on Certain Terms. This provision limits the
                terms under which the Parent Guarantor or the Company may
                consolidate or merge with or into another entity, sell or
                lease substantially all of its assets, or acquire capital
                stock or other ownership interests in other entities.
 
SECTION 802 . Successor Substituted. This provision requires the successor
                parent or successor issuer following any consolidation with or
                merger into the Parent Guarantor or the Company to be
                substituted for the Parent Guarantor or the Company, as the
                case may be, under the Indenture with the same effect as if
                such person had been named as the Parent Guarantor or the
                Company therein.
 
                                      12
<PAGE>
 
SECTION1004 . Existence. This provision currently requires the Company and the
                Parent Guarantor to preserve and keep in effect its existence,
                rights (charter and statutory) and franchises.
 
SECTION1005 . Maintenance of Properties. This provision currently requires the
                Parent Guarantor to maintain all material properties used in
                its business or the business of any Restricted Subsidiary.
 
SECTION1006 . Payment of Taxes and Other Claims. This provision currently
                requires the Parent Guarantor to pay all taxes, assessments
                and governmental charges levied against it or any Restricted
                Subsidiary.
 
SECTION1007 . Maintenance of Insurance. This provision currently requires the
                Parent Guarantor and each Restricted Subsidiary to keep all
                properties insured at commercial standards and to reinvest
                insurance proceeds from such policies.
 
SECTION1008 . Limitation on Consolidated Debt. This provision currently
                restricts the ability of the Parent Guarantor and its
                Restricted Subsidiaries to incur certain Indebtedness.
 
SECTION1009 . Limitation on Debt and Preferred Stock of Restricted
                Subsidiaries. This provision currently restricts the ability
                of the Parent Guarantor and its Restricted Subsidiaries to
                issue Preferred Stock or to incur certain other Indebtedness.
 
SECTION1010 . Limitation on Restricted Payments. This provision currently
                restricts the ability of the Parent Guarantor and its
                Restricted Subsidiaries to make certain Restricted Payments,
                including (i) dividends or distributions in respect of any
                shares of Capital Stock of the Parent Guarantor or of any
                Restricted Subsidiary, (ii) purchases, redemptions, other
                acquisitions or retirements of Capital Stock of the Parent
                Guarantor, any Restricted Subsidiary or any Related Person,
                including options, warrants or other rights to acquire such
                Capital Stock, held by persons other than the Company or any
                Wholly-Owned Restricted Subsidiary, (iii) Investments in or
                payments on guarantees of any obligations of Unrestricted
                Subsidiaries or Affiliates or Related Persons of the Parent
                Guarantor, and (iv) voluntary or optional principal payments,
                repurchases, redemptions, defeasances, retirements or other
                acquisitions of any subordinated indebtedness of the Parent
                Guarantor or the Company.
 
SECTION1011 . Limitation on Dividend and Other Payment Restrictions Affecting
                Restricted Subsidiaries. This provision currently restricts
                the Parent Guarantor and its Significant Restricted
                Subsidiaries from permitting to exist certain encumbrances or
                restrictions on the ability of any Significant Restricted
                Subsidiary to (i) pay dividends or make any other
                distributions on its Capital Stock or pay any Debt owed to the
                Parent Guarantor or any Restricted Subsidiary of the Parent
                Guarantor, (ii) make loans or advances to the Parent Guarantor
                or any Restricted Subsidiary of the Parent Guarantor, and
                (iii) transfer any property or assets to the Parent Guarantor
                or any Restricted Subsidiary of the Parent Guarantor, except
                in certain circumstances.
 
SECTION1012 . Limitation on Liens. This provision currently restricts the
                ability of the Parent Guarantor and its Restricted
                Subsidiaries to create, incur, affirm or suffer to exist any
                Lien upon any of its property or assets, except in certain
                circumstances.
 
SECTION1013 . Limitation on Sale and Leaseback Transactions. This provision
                currently restricts the ability of the Parent Guarantor and
                its Restricted Subsidiaries to enter into Sale and Leaseback
                transactions, except in certain circumstances.
 
SECTION1014 . Limitation on Transactions with Affiliates and Related Persons.
                This provision currently restricts the ability of the Parent
                Guarantor and its Restricted Subsidiaries to engage in certain
                transactions with Affiliates or Related Persons of the Parent
                Guarantor.
 
SECTION1015 . Limitation on Certain Sales of Capital Stock of Restricted
                Subsidiaries and Certain Assets. This provision currently
                restricts the ability of the Parent Guarantor and its
                Restricted Subsidiaries to make Asset Dispositions, except in
                certain circumstances.
 
                                      13
<PAGE>
 
SECTION1016 . Limitation on Issuances and Sales of Capital Stock of Wholly
                Owned Restricted Subsidiaries. This provision currently
                restricts the ability of the Parent Guarantor and its
                Restricted Subsidiaries to issue, transfer, convey, sell or
                otherwise dispose of any Shares of Capital Stock of any
                Restricted Subsidiary (except to the Parent Guarantor or a
                Wholly- Owned Subsidiary of the Parent Guarantor), except in
                certain circumstances.
 
SECTION1018 . Ownership of Issuer. This provision currently requires the
                Company to remain a wholly-owned subsidiary of the Parent
                Guarantor.
 
SECTION1019 . Payment of Additional Amounts. This provision currently requires
                the Parent Guarantor to make all payments under or with
                respect to the Notes free and clear of any present or future
                tax, duty, levy, impost, assessment or other governmental
                charge imposed or levied by the Government of Canada or of any
                province or territory thereof. Further, if the Parent
                Guarantor is required to withhold or deduct any Canadian taxes
                from any payment made under or with respect to the Notes, it
                must pay such amount as may be necessary so that the net
                amount received by each Holder will not be less than the
                amount received if such Canadian taxes had not been withheld
                or deducted.
 
SECTION1020 . Provision of Financial Information. This provision currently
                requires the Parent Guarantor to timely file with the
                Securities and Exchange Commission and to provide to Holders
                and the Trustee periodic and annual reports required to be
                filed under the Exchange Act, whether or not the Parent
                Guarantor is actually subject to those reporting requirements.
 
  Deletion of Definitions. The Proposed Amendments would delete definitions
from the Indenture when all references to such definitions would be eliminated
as a result of the foregoing.
 
  The Proposed Amendments with respect to the Indenture constitute a single
proposal and a consenting Holder must consent to the Proposed Amendments as an
entirety and may not consent selectively with respect to certain of the
Proposed Amendments.
 
  The Supplemental Indenture relating to the Indenture will be executed by the
Company, the Parent Guarantor and the Trustee on or promptly after the Consent
Expiration Date, but the modification or elimination of the covenants set
forth in the Supplemental Indenture will not become operative unless and until
the Notes are accepted for purchase by the Company pursuant to the Offer,
which is expected to occur promptly after the Tender Offer Expiration Date. If
the Requisite Consents are not obtained with respect to the Notes on or prior
to the Consent Expiration Date, no Supplemental Indenture relating to the
Indenture will be executed or become operative.
 
  IF THE PROPOSED AMENDMENTS ARE ADOPTED AND THE OFFER IS CONSUMMATED, NOTES
THAT ARE NOT TENDERED, OR THAT ARE NOT ACCEPTED FOR PURCHASE PURSUANT TO THE
OFFER, WILL REMAIN OUTSTANDING, BUT WILL BE SUBJECT TO THE TERMS OF THE
INDENTURE AS MODIFIED BY THE SUPPLEMENTAL INDENTURE.
 
  Pursuant to the terms of the Indenture, the Proposed Amendments require the
written consent of the Holders of not less than a majority in aggregate
principal amount of the then outstanding Notes issued pursuant to the
Indenture, excluding for such purposes any Notes owned at the time by the
Company, any obligor of the Notes and any of their affiliates (the "Requisite
Consents").
 
  The valid tender by a Holder of Notes pursuant to the Offer on or prior to
the Consent Expiration Date will be deemed to constitute the giving of a
Consent by such Holder to the Proposed Amendments with respect to such Notes.
The Company is not soliciting and will not accept Consents from Holders who
are not tendering their Notes pursuant to the Offer.
 
6.ACCEPTANCE FOR PAYMENT AND PAYMENT FOR NOTES; ACCEPTANCE OF CONSENTS.
 
  Upon the terms and subject to the conditions of the Offer (including if the
Offer is extended or amended, the terms and conditions of any such extension
or amendment) and applicable law, the Company will purchase,
 
                                      14
<PAGE>
 
by accepting for payment, and will pay for, all Notes validly tendered (and
not withdrawn) pursuant to the Offer on or prior to the Tender Offer
Expiration Date, such payment to be made by the deposit of the Tender Offer
Consideration and Consent Payment, as applicable, in immediately available
funds by the Company on the Payment Date with the Depositary. The Depositary
will act as agent for tendering Holders for the purpose of receiving payment
from the Company and transmitting such payment to tendering Holders. Under no
circumstances will interest on the Tender Offer Consideration and the Consent
Payment, as applicable, be paid by the Company by reason of any delay on
behalf of the Depositary in making such payment.
 
  The Company expressly reserves the right, in its sole discretion and subject
to Rule 14e-l(c) under the Exchange Act, to delay acceptance for payment of or
payment for Notes in order to comply, in whole or in part, with any applicable
law. See Item 9, "Conditions to the Offer." In all cases, payment by the
Depositary to Holders of the Tender Offer Consideration for Notes accepted for
purchase pursuant to the Offer or Consent Payments for Consents delivered on
or prior to the Consent Expiration Date will be made only after timely receipt
by the Depositary of (i) certificates representing such Notes or timely
confirmation of a book-entry transfer of such Notes into the Depositary's
account at DTC pursuant to the procedures set forth under Item 7, "Procedures
for Tendering Notes and Delivering Consents," (ii) a properly completed and
duly executed Consent and Letter of Transmittal (or manually signed facsimile
thereof) and (iii) any other documents required by the Consent and Letter of
Transmittal, as applicable.
 
  For purposes of the Offer, validly tendered Notes (or defectively tendered
Notes for which the Company has waived such defect) will be deemed to have
been accepted for payment by the Company if, as and when the Company gives
oral or written notice thereof to the Depositary. For purposes of the
Solicitation, Consents delivered to the Depositary will be deemed to have been
accepted by the Company if, as and when (a) the Company and the Trustee
execute the Supplemental Indenture promptly after the Consent Expiration Date,
and (b) the Company has accepted the Notes for purchase pursuant to the Offer.
 
  If any tendered Notes are not purchased pursuant to the Offer for any
reason, or certificates are submitted evidencing more Notes than are tendered,
such Notes not purchased will be returned, without expense, to the tendering
Holder (or, in the case of Notes tendered by book-entry transfer, such Notes
will be credited to the account maintained at DTC from which such Notes were
delivered), promptly following the Tender Offer Expiration Date or termination
of the Offer.
 
  The Company reserves the right to transfer or assign, in whole at any time
or in part from time to time, to one or more of its affiliates, the right to
purchase Notes tendered pursuant to the Offer, but any such transfer or
assignment will not relieve the Company of its obligations under the Offer or
prejudice the rights of tendering Holders to receive the Tender Offer
Consideration or Consent Payment, as applicable, pursuant to the Offer and
Solicitation.
 
  It is a condition precedent to the Company's obligation to purchase Notes
pursuant to the Offer that, among other conditions, the Supplemental Indenture
relating to the Indenture will have been executed. It is a condition
subsequent to the effectiveness of the Proposed Amendments contained in the
Supplemental Indenture that the Company accept for payment all Notes validly
tendered (and not withdrawn) pursuant to the Offer (in which event, the
Company will be obligated to promptly pay the Tender Offer Consideration and
the Consent Payment, as applicable, for the Notes so accepted). See Item 9,
"Conditions to the Offer."
 
7.PROCEDURES FOR TENDERING NOTES AND DELIVERING CONSENTS.
 
  Holders will not be entitled to receive the Total Consideration unless they
BOTH tender their Notes pursuant to the Offer AND deliver Consents to the
Proposed Amendments with respect to such Notes on or prior to the Consent
Expiration Date. The tender of Notes pursuant to the Offer and in accordance
with the procedures described below will constitute (i) a tender of the Notes
and (ii) the delivery of a Consent by such Holder with respect to such Notes
(if such tender is on or prior to the Consent Expiration Date). On or prior to
the Consent
 
                                      15
<PAGE>
 
Expiration Date, the Company is not soliciting and will not accept Consents to
the Proposed Amendments from Holders who are not tendering their Notes
pursuant to the Offer. Holders who tender after the Consent Expiration Date
will receive only the Tender Offer Consideration.
 
  The method of delivery of Notes and Consents and Letters of Transmittal, any
required signature guarantees and all other required documents, including
delivery through DTC and any acceptance of an Agent's Message transmitted
through ATOP, is at the election and risk of the person tendering Notes and
delivering the Consent and Letter of Transmittal and, except as otherwise
provided in the Consent and Letter of Transmittal, delivery will be deemed
made only when actually received by the Depositary. If delivery is by mail, it
is suggested that the Holder use properly insured, registered mail with return
receipt requested, and that the mailing be made sufficiently in advance of the
Consent Expiration Date or Tender Offer Expiration Date, as applicable, to
permit delivery to the Depositary on or prior to such date.
 
  Tender of and Consent for Notes. The tender by a Holder of Notes and
delivery of Consents (and subsequent acceptance of such tender by the Company)
pursuant to one of the procedures set forth below will constitute a binding
agreement between such Holder and the Company in accordance with the terms and
subject to the conditions set forth herein and in the Consent and Letter of
Transmittal.
 
  Only registered Holders are authorized to tender their Notes and deliver
their Consent to the Proposed Amendments. The procedures by which Notes may be
tendered and Consents given by beneficial owners who are not registered
Holders will depend upon the manner in which the Notes are held.
 
  Tender of Notes Held in Physical Form. To effectively tender Notes held in
physical form (and deliver the related Consents), a properly completed Consent
and Letter of Transmittal (or a manually signed facsimile thereof) duly
executed by the Holder thereof, and any other documents required by the
Consent and Letter of Transmittal, must be received by the Depositary at its
address set forth on the back cover of this Statement on or prior to the
Consent Expiration Date or the Tender Offer Expiration Date, as applicable. A
tender of Notes may also be effected through the deposit of Notes with DTC
combined with book-entry delivery as described below; however, a completed and
executed Consent and Letter of Transmittal is still required to effectuate the
valid delivery of related Consents with respect to such Notes. After the
Consent Expiration Date, a tendering Holder may comply with the guaranteed
delivery procedure set forth below if such Holder is unable to tender Notes on
or prior to the Tender Offer Expiration Date. The guaranteed delivery
procedure may not be used to tender Notes or deliver Consents on or prior to
the Consent Expiration Date. In order to receive both the Consent Payment and
the Tender Offer Consideration, the Notes and the Consent and Letter of
Transmittal must be received by the Depositary on or prior to the Consent
Expiration Date. Consents and Letters of Transmittal and Notes should be sent
only to the Depositary and should not be sent to the Company, the Information
Agent, the Dealer Manager or the Trustee.
 
  Tender of Notes Held Through DTC. To effectively tender Notes (and deliver
the related Consents) that are held through DTC, DTC participants should
either (i) properly complete and duly execute the Consent and Letter of
Transmittal (or a manually signed facsimile thereof), together with any other
documents required by the Consent and Letter of Transmittal, and mail or
deliver the Consent and Letter of Transmittal and such other documents to the
Depositary, or (ii) electronically transmit their acceptance through ATOP (and
thereby tender Notes), for which the transaction will be eligible, followed by
a properly completed and duly executed Consent and Letter of Transmittal
delivered to the Depositary to effectuate the delivery of the related Consent.
Upon receipt of such Holder's acceptance through ATOP, DTC will then edit and
verify the acceptance and send an Agent's Message (as defined below) to the
Depositary for its acceptance. Delivery of tendered Notes must be made to the
Depositary pursuant to the book-entry delivery procedures or the tendering DTC
participant must comply with the guaranteed delivery procedures, in each case
as set forth below, but such guaranteed delivery procedures may only be used
for tenders of Notes after the Consent Expiration Date.
 
  Except as provided below, unless the Notes being tendered are deposited with
the Depositary on or prior to the Consent Expiration Date or on or prior to
the Tender Offer Expiration Date, as the case may be (accompanied
 
                                      16
<PAGE>
 
by a properly completed and duly executed Consent and Letter of Transmittal,
as applicable), the Company may, at its option, treat such tender as defective
for purposes of the right to receive the Total Consideration or Tender Offer
Consideration, as applicable. Payment for the Notes will be made only against
deposit of the tendered Notes and delivery of any other required documents.
 
  Book-Entry Delivery Procedures. The Depositary will establish accounts with
respect to the Notes at DTC for purposes of the Offer within two business days
after the date of this Statement, and any financial institution that is a
participant in DTC may make book-entry delivery of the Notes and Consents by
causing DTC to transfer such Notes into the Depositary's account in accordance
with DTC's procedures for such transfer. However, although delivery of Notes
and Consents may be effected through book-entry transfer into the Depository's
account at DTC, the Consent and Letter of Transmittal (or a manually signed
facsimile thereof), with any required signature guarantees or an Agent's
Message (as defined below) in connection with a book-entry transfer, and any
other required documents, must, in any case, be transmitted to and received by
the Depositary at one or more of its addresses set forth on the back cover of
this Statement on or prior to the Consent Expiration Date or the Tender Offer
Expiration Date, as the case may be, or, to be validly tendered after the
Consent Expiration Date but on or prior to the Tender Offer Expiration Date,
the guaranteed delivery procedure described below must be complied with.
Holders who tender Notes after the Consent Expiration Date will only receive
the Tender Offer Consideration and will not be entitled to the Consent
Payment. Delivery of documents to DTC does not constitute delivery to the
Depositary. The confirmation of a book-entry transfer into the Depositary's
account at DTC as described above is referred to herein as a "Book-Entry
Confirmation."
 
  The term "Agent's Message" means a message transmitted by DTC to, and
received by, the Depositary and forming a part of the Book-Entry Confirmation,
which states that DTC has received an express acknowledgment from each
participant in DTC tendering the Notes and delivering the Consents and that
such participants have received the Consent and Letter of Transmittal and
agree to be bound by the terms of the Consent and Letter of Transmittal and
the Company may enforce such agreement against such participants.
 
  In order to validly deliver a Consent with respect to Notes transferred
pursuant to ATOP, a DTC participant using ATOP must also properly complete and
duly execute the Consent and Letter of Transmittal and deliver it to the
Depositary. Pursuant to authority granted by DTC, any DTC participant which
has Notes credited to its DTC account at any time (and thereby held of record
by DTC's nominee) may directly provide a Consent to the Proposed Amendments as
though it were the registered Holder by so completing, executing and
delivering the Consent and Letter of Transmittal.
 
  Signature Guarantees. Signatures on all Consents and Letters of Transmittal
must be guaranteed by a recognized participant in the Securities Transfer
Agents Medallion Program, the New York Stock Exchange Medallion Signature
Program or the Stock Exchange Medallion Program (each a "Medallion Signature
Guarantor"), unless the Notes tendered and Consents delivered thereby are
tendered and delivered (i) by a registered Holder of Notes (or by a
participant in DTC whose name appears on a security position listing as the
owner of such Notes) who has not completed any of the boxes entitled "Special
Payment Instructions" or "Special Delivery Instructions" on the Consent and
Letter of Transmittal, or (ii) for the account of a member firm of a
registered national securities exchange, a member of the National Association
of Securities Dealers, Inc. ("NASD") or a commercial bank or trust company
having an office or correspondent in the United States (each of the foregoing
being referred to as an "Eligible Institution"). See Instruction 1 of the
Consent and Letter of Transmittal. If the Notes are registered in the name of
a person other than the signer of the Consent and Letter of Transmittal or if
Notes not accepted for payment or not tendered are to be returned to a person
other than the registered Holder, then the signature on the Consent and Letter
of Transmittal accompanying the tendered Notes must be Guaranteed by a
Medallion Signature Guarantor as described above. See Instructions 1, 5 and 6
of the Consent and Letter of Transmittal.
 
  Guaranteed Delivery. If a registered Holder desires to tender Notes pursuant
to the Offer after the Consent Expiration Date and (a) certificates
representing such Notes are not immediately available, (b) time will not
permit such Holder's Consent and Letter of Transmittal, certificates
representing such Notes and all other
 
                                      17
<PAGE>
 
required documents to reach the Depositary on or prior to the Tender Offer
Expiration Date, or (c) the procedures for book-entry transfer (including
delivery of an Agent's Message) cannot be completed on or prior to the Tender
Offer Expiration Date, such Holder may nevertheless tender such Notes with the
effect that such tender will be deemed to have been received on or prior to
the Tender Offer Expiration Date if all the following conditions are
satisfied:
 
    (i) the tender is made by or through an Eligible Institution;
 
    (ii) a properly completed and duly executed Notice of Guaranteed
  Delivery, substantially in the form provided by the Company herewith, or an
  Agent's Message with respect to guaranteed delivery that is accepted by the
  Company, is received by the Depositary on or prior to the Tender Offer
  Expiration Date as provided below; and
 
    (iii) the certificates for the tendered Notes, in proper form for
  transfer (or a Book-Entry Confirmation of the transfer of such Notes into
  the Depositary's account at DTC as described above), together with a
  Consent and Letter of Transmittal (or manually signed facsimile thereof)
  properly completed and duly executed, with any signature guarantees and any
  other documents required by the Consent and Letter of Transmittal or a
  properly transmitted Agent's Message, are received by the Depositary within
  three business days after the date of execution of the Notice of Guaranteed
  Delivery.
 
  The Notice of Guaranteed Delivery may be sent by hand delivery, facsimile
transmission or mail to the Depositary and must include a guarantee by an
Eligible Institution in the form set forth in the Notice of Guaranteed
Delivery.
 
  UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID BY THE COMPANY BY REASON OF ANY
DELAY IN MAKING PAYMENT TO ANY PERSON USING THE GUARANTEED DELIVERY
PROCEDURES. THE TENDER OFFER CONSIDERATION FOR NOTES TENDERED PURSUANT TO THE
GUARANTEED DELIVERY PROCEDURES WILL BE THE SAME AS FOR NOTES DELIVERED TO THE
DEPOSITARY AFTER THE CONSENT EXPIRATION DATE AND ON OR PRIOR TO THE TENDER
OFFER EXPIRATION DATE, EVEN IF THE NOTES TO BE DELIVERED PURSUANT TO THE
GUARANTEED DELIVERY PROCEDURES ARE NOT SO DELIVERED TO THE DEPOSITARY, AND
THEREFORE PAYMENT BY THE DEPOSITARY ON ACCOUNT OF SUCH NOTES IS NOT MADE,
UNTIL AFTER THE PAYMENT DATE. HOLDERS SHOULD BE AWARE THAT, ON OR PRIOR TO THE
CONSENT EXPIRATION DATE, TENDERS OF NOTES AND THE RELATED CONSENTS CANNOT BE
DELIVERED USING THE GUARANTEED DELIVERY PROCESS AND THAT USE OF THE GUARANTEED
DELIVERY PROCESS COULD RESULT IN A TENDER OF NOTES AND THE RELATED CONSENT
BEING DEFECTIVE.
 
  Holders who tender Notes after the Consent Expiration Date will only receive
the Tender Offer Consideration and will not be entitled to the Consent
Payment. Notwithstanding any other provision hereof, payment of the Tender
Offer Consideration for Notes tendered and accepted for payment pursuant to
the Offer will, in all cases, be made only after receipt by the Depositary of
the tendered Notes (or Book-Entry Confirmation of the transfer of such Notes
into the Depositary's account at DTC as described above), and a Consent and
Letter of Transmittal (or manually signed facsimile thereof) with respect to
such Notes, properly completed and duly executed, with any signature
guarantees and any other documents required by the Consent and Letter of
Transmittal, or a properly transmitted Agent's Message.
 
  Backup U.S. Federal Income Tax Withholding. To prevent backup U.S. federal
income tax withholding, each tendering Holder of Notes must provide the
Depositary with such Holder's correct taxpayer identification number and
certify that such Holder is not subject to backup U.S. federal income tax
withholding by completing the Substitute Form W-9 included in the Consent and
Letter of Transmittal. See Item 10, "Certain U.S. Federal Income Tax
Consequences."
 
  Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of any tendered Notes
or delivery of Consents pursuant to any of the procedures described above will
be determined by the Company in the Company's sole discretion (whose
determination shall be final and binding). The Company expressly reserves the
absolute right, in its sole discretion, subject to applicable law, to reject
any or all tenders of any Notes or delivery of Consents determined by it not
to be in proper form or, in the case of Notes, if the acceptance for payment
of, or payment for, such Notes may, in the opinion of the
 
                                      18
<PAGE>
 
Company's counsel, be unlawful. The Company also reserves the absolute right,
in its sole discretion, subject to applicable law, to waive or amend any of
the conditions of the Offer or the Solicitation or to waive any defect or
irregularity in any tender with respect to Notes or delivery of Consents of
any particular Holder, whether or not similar defects or irregularities are
waived in the case of other Holders. The Company's interpretation of the terms
and conditions of the Offer and Solicitation (including the Consent and Letter
of Transmittal and the Instructions thereto) will be final and binding.
Neither the Company, the Depositary, the Dealer Manager, the Information
Agent, the Trustee or any other person will be under any duty to give
notification of any defects or irregularities in tenders or will incur any
liability for failure to give any such notification. If the Company waives its
right to reject a defective tender of Notes, the Holder will be entitled to
the Tender Offer Consideration and, if applicable, the Consent Payment.
 
8.WITHDRAWAL OF TENDERS AND REVOCATION OF CONSENTS.
 
  Tenders of Notes may be withdrawn at any time prior to the Tender Offer
Expiration Date. Consents may be revoked at any time on or prior to the
Consent Expiration Date. A valid withdrawal of tendered Notes effected on or
prior to the Consent Expiration Date will constitute the concurrent valid
revocation of such Holder's related Consent. Consents may not be revoked after
the Consent Expiration Date except in the limited circumstances described
below. In order for a Holder to revoke a Consent, such Holder must withdraw
the related tendered Notes. Tenders of Notes may be validly withdrawn if the
Offer is terminated without any Notes being purchased thereunder. In the event
of a termination of the Offer, the Notes tendered pursuant to the Offer will
be promptly returned to the tendering Holder and the Supplemental Indenture
will not become operative. If the Solicitation is amended on or prior to the
Consent Expiration Date in a manner determined by the Company to constitute a
material adverse change to the Holders of the Notes, the Company promptly will
disclose such amendment and, if necessary, extend the Solicitation for such
Notes for a period deemed by the Company to be adequate to permit Holders of
the Notes to withdraw their Notes and revoke their Consents. In addition, if
the consideration to be paid in the Offer is increased or decreased or the
principal amount of Notes subject to the Offer is decreased, the Offer will
remain open at least 10 business days from the date the Company first gives
notice to Holders, by public announcement or otherwise, of such increase or
decrease.
 
  On or prior to the Consent Expiration Date, and in the limited circumstances
described above for a withdrawal of a tender of Notes (and the concurrent
revocation of Consents, as the case may be) to be effective, a written or
facsimile transmission notice of withdrawal must be received by the Depositary
on or prior to the Consent Expiration Date at its address set forth on the
back cover of this Statement. Any such notice of withdrawal must (i) specify
the name of the person who tendered the Notes to be withdrawn, (ii) contain
the description of the Notes to be withdrawn and identify the certificate
number or numbers shown on the particular certificates evidencing such Notes
(unless such Notes were tendered by book-entry transfer) and the aggregate
principal amount represented by such Notes, and (iii) be signed by the Holder
of such Notes in the same manner as the original signature on the Consent and
Letter of Transmittal by which such Notes were tendered (including any
required signature Guarantees), or be accompanied by (x) documents of transfer
sufficient to have the Trustee register the transfer of the Notes into the
name of the person withdrawing such Notes and (y) a properly completed
irrevocable proxy authorizing such person to effect such withdrawal on behalf
of such Holder. If the Notes to be withdrawn have been delivered or otherwise
identified to the Depositary, a signed notice of withdrawal is effective
immediately upon written or facsimile notice of such withdrawal even if
physical release is not yet effected.
 
  Any valid revocation of Consents will automatically render the prior tender
of the Notes to which such Consents relate defective and the Company will have
the right, which it may waive, to reject such tender as invalid. Any permitted
withdrawal of Notes and revocation of Consents may not be rescinded, and any
Notes properly withdrawn will thereafter be deemed not validly tendered and
any Consents revoked will be deemed not validly delivered for purposes of the
Offer; provided, however, that withdrawn Notes may be re-tendered and revoked
Consents may be re-delivered by again following one of the appropriate
procedures described herein at any time on or prior to the Consent Expiration
Date. After the Consent Expiration Date, Consents may not be revoked, except
in the limited circumstances described above.
 
                                      19
<PAGE>
 
  If the Company extends the Offer or is delayed in its acceptance for
purchase of Notes or is unable to purchase Notes pursuant to the Offer for any
reason, then, without prejudice to the Company's rights hereunder, tendered
Notes may be retained by the Depositary on behalf of the Company and may not
be withdrawn (subject to Rule 14e-1(c) under the Exchange Act, which requires
that an offeror pay the consideration offered or return the securities
deposited by or on behalf of the investor promptly after the termination or
withdrawal of a tender offer), except as otherwise provided in this section.
 
  ALL QUESTIONS AS TO THE VALIDITY, FORM AND ELIGIBILITY (INCLUDING TIME OF
RECEIPT) OF NOTICES OF WITHDRAWAL AND REVOCATION OF CONSENTS WILL BE
DETERMINED BY THE COMPANY, IN THE COMPANY'S SOLE DISCRETION (WHOSE
DETERMINATION SHALL BE FINAL AND BINDING). NEITHER THE COMPANY, THE
DEPOSITARY, THE DEALER MANAGER, THE INFORMATION AGENT, THE TRUSTEE OR ANY
OTHER PERSON WILL BE UNDER ANY DUTY TO GIVE NOTIFICATION OF ANY DEFECTS OR
IRREGULARITIES IN ANY NOTICE OF WITHDRAWAL OR REVOCATION OF CONSENTS, OR INCUR
ANY LIABILITY FOR FAILURE TO GIVE ANY SUCH NOTIFICATION.
 
9.CONDITIONS TO THE OFFER.
 
  Notwithstanding any other provisions of the Offer and the Solicitation and
in addition to (and not in limitation of) the Company's rights to extend
and/or amend the Offer and the Solicitation, the Company shall not be required
to accept for payment, purchase or pay for, and may delay the acceptance for
payment of, or payment for, any tendered Notes, in each event subject to Rule
14e-1(c) under the Exchange Act, and may terminate the Offer and the
Solicitation, if the Supplemental Indenture Condition, the Business Unit Sales
Condition, the 2003 Tender Condition or the General Conditions shall not have
been satisfied.
 
  The "Supplemental Indenture Condition" shall mean receipt of the Requisite
Consents with respect to the Proposed Amendments and the execution of the
Supplemental Indenture providing for the Proposed Amendments.
 
  The "Business Unit Sales Condition" shall mean the consummation of (A) the
acquisition of the Apparel Fabric Business of Dominion (including certain
associated liabilities) by Galey & Lord Incorporated, a Delaware corporation
("GLI"), and (B) the acquisition of the Nonwovens Business of Dominion
(including certain associated liabilities) by Polymer Group, Inc., a Delaware
corporation ("PGI"), in each case as contemplated in the Purchase Agreement
dated October 27, 1997 among PGI, DT Acquisition and GLI (together, the
"Business Unit Sales"). PGI owns approximately 68% of DT Acquisition. The
InterTech Group, Inc., an affiliate of PGI, owns approximately 32% of DT
Acquisition.
 
  The "2003 Tender Condition" shall mean the successful completion of both the
tender offer and the consent solicitation with respect to the Company's 8 7/8%
Guaranteed Senior Notes due November 1, 2003 (the "2003 Notes"), which are
guaranteed by the Parent Guarantor and issued under the Indenture, dated as of
November 1, 1993, among the Company, the Parent Guarantor and First Union
National Bank, as Trustee. In order to consummate the Business Unit Sales, the
Company is offering to repurchase all of the outstanding 2003 Notes in
addition to the Offer with respect to the Notes set forth herein.
Consequently, the Offer is conditioned on the concurrent completion of the
tender offer and consent solicitation with respect to the 2003 Notes.
 
  The "General Conditions"' shall mean the conditions set forth below in
paragraphs (i) through (v). The General Conditions shall be deemed to have
been satisfied or waived unless any of the following conditions shall occur on
or prior to the Tender Offer Expiration Date.
 
    (i) There shall have been instituted, threatened or be pending any action
  or proceeding (or there shall have been any material adverse development in
  any action or proceeding currently instituted, threatened or pending)
  before or by any court, governmental, regulatory or administrative agency
  or instrumentality, or by any other person, in connection with the Offer or
  the Solicitation that is, or is reasonably likely to be, in the sole
  judgment of the Company, materially adverse to the business, operations,
  properties, condition (financial or otherwise), assets, liabilities or
  prospects of the Company and its subsidiaries, taken as a whole, or which
  would or might, in the sole judgment of the Company, prohibit, prevent,
  restrict or delay consummation of the Offer or the Solicitation;
 
                                      20
<PAGE>
 
    (ii) An order, statute, rule, regulation, executive order, stay, decree,
  judgment or injunction shall have been proposed, enacted, entered, issued,
  promulgated, enforced or deemed applicable by any court or governmental,
  regulatory or administrative agency or instrumentality that, in the sole
  judgment of the Company, would or might prohibit, prevent, restrict or
  delay consummation of the Offer or the Solicitation or that is, or is
  reasonably likely to be, in the sole judgment of the Company, materially
  adverse to the business, operations, properties, condition (financial or
  otherwise), assets, liabilities or prospects of the Company and its
  subsidiaries, taken as a whole, or Dominion;
 
    (iii) There shall have occurred or be likely to occur any event affecting
  the business or financial affairs of the Company or Dominion that, in the
  sole judgment of the Company, would or might prohibit, prevent, restrict or
  delay consummation of the Offer or the Solicitation;
 
    (iv) The Trustee under the Indenture shall have objected in any respect
  to, or taken action that could, in the sole judgment of the Company,
  adversely affect the consummation of the Offer or the Solicitation or the
  Company's ability to cause the Proposed Amendments to become operative or
  shall have taken any action that challenges the validity or effectiveness
  of the Supplemental Indenture or the procedures used by the Company in
  soliciting the Consents (including the form thereof) or in the making of
  the Offer or the Solicitation or the acceptance of, or payment for, the
  Notes or the Consents; or
 
    (v) There shall have occurred (1) any general suspension of, shortening
  of hours for, or limitation on prices for, trading in securities in the
  United States, Canadian, European or other major securities or financial
  markets, (2) any significant adverse change in the price of the Notes or
  any publicly traded securities of the Company or any of its affiliates in
  the United States, Canadian, European or other major securities or
  financial markets, (3) a material impairment in the trading market for debt
  securities, (4) a declaration of a banking moratorium or any suspension of
  payments in respect of banks in the United States, Canada, Europe or other
  major financial markets, (5) any limitation (whether or not mandatory) by
  any government or governmental, administrative or regulatory authority or
  agency, domestic or foreign, or other event that, in the reasonable
  judgment of the Company, might affect the extension of credit by banks or
  other lending institutions, (6) a commencement of a war or armed
  hostilities or other national or international calamity directly or
  indirectly involving the United States or Canada, or (7) in the case of any
  of the foregoing existing on the date hereof, a material acceleration or
  worsening thereof.
 
  The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company, in its sole discretion, regardless of the
circumstances giving rise to any such condition (including any action or
inaction by the Company) and may be waived by the Company, in whole or in
part, at any time and from time to time, in the sole discretion of the
Company, whether any other condition of the Offer and the Solicitation is also
waived. The failure by the Company at any time to exercise any of the
foregoing rights will not be deemed a waiver of any other right and each right
will be deemed an ongoing right which may be asserted at any time and from
time to time.
 
10.CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES.
 
  The following is a general summary of the principal United States federal
income tax consequences to a Holder of (i) the Offer and the Solicitation to
Holders of Notes and (ii) the retention of Notes and the adoption of the
Proposed Amendments. This summary is based upon current provisions of the
United States Internal Revenue Code of 1986, as amended (the "Code"),
applicable United States Treasury regulations promulgated thereunder, judicial
authority and current Internal Revenue Service ("IRS") rulings and practice,
all of which are subject to change, possibly on a retroactive basis. The tax
treatment of a Holder of Notes may vary depending upon such Holder's
particular situation, and certain Holders (including insurance companies, tax
exempt organizations, financial institutions, brokers, dealers, nonresident
aliens, foreign corporations, foreign partnerships or foreign estates or
trusts) might be subject to special rules not discussed below. This discussion
assumes that Notes are held as capital assets and is directed to Holders who
are United States persons. As used herein, a "Holder" means a beneficial owner
of a Note that is for United States federal income tax purposes (i) a citizen
or resident of the United States, (ii) a corporation, partnership or other
entity created or organized in or
 
                                      21
<PAGE>
 
under the laws of the United States or of any political subdivision thereof,
(iii) an estate whose income is subject to United States federal income tax
regardless of its source, (iv) a trust if a court within the United States is
able to exercise primary supervision over the administration of the trust and
one or more United States persons have the authority to control all
substantial decisions of the trust, or (v) any other person whose income or
gain in respect of a Note is effectively connected with the conduct of a
United States trade or business. No information is provided herein with
respect to foreign, state or local tax laws or estate and gift tax
considerations. Each Holder is urged to consult its own tax advisor regarding
federal, state, local, foreign and any other tax consequences of tendering the
Notes pursuant to the Offer or retaining the Notes, especially in light of the
Holder's particular circumstances.
 
  This summary is based in part on certain recently finalized United States
Treasury regulations addressing the United States federal income tax treatment
of modifications of debt instruments (the "Regulations"). The Regulations are
effective for modifications occurring on or after September 24, 1996 and may
be relied upon for modifications occurring after December 2, 1992. Therefore,
the Regulations will apply to the Offer and the Solicitation. No assurances
can be given that the treatment described herein of the Proposed Amendments or
the cash payments pursuant to the Offer will be accepted by the IRS or, if
challenged, by a court.
 
  Sale of Notes Pursuant to the Offer. In general, a Holder who receives cash
in exchange for Notes pursuant to the Offer will recognize gain or loss for
United States federal income tax purposes equal to the difference between (i)
the amount of cash received (other than cash attributable to accrued interest,
which will be taxable as ordinary income) in exchange for such Notes, and (ii)
such Holder's adjusted tax basis in such Notes at the time of the sale. A
Holder's adjusted tax basis for Notes generally will be the price such Holder
paid for the Notes increased by original issue discount which was previously
included in income by the Holder (including any original issue discount
includible in the taxable year of the sale prior to the sale) and by market
discount to the extent such market discount was previously included in income
by the Holder (including any market discount included in the taxable year of
the sale prior to the sale) and reduced (but not below zero) by amortized
premium and any payments received by the Holder other than interest payments.
 
  If the Consent Payment is treated as a separate fee for consenting to the
Proposed Amendments, it is possible that such amount would be taxable as
ordinary income to the Holder (rather than as sales proceeds, discussed
above).
 
  Any gain or loss recognized on a sale of a Note pursuant to the Offer should
be capital gain or loss and will be long-term capital gain or loss if the
Holder has held the Note for more than eighteen months at the time of sale or
mid-term capital gain or loss if the Holder has held the Note for more than
twelve months, but less than eighteen months, at the time of sale. A Holder
who has acquired a Note with market discount generally will be required to
treat a portion of any gain on a sale of the Note as ordinary income to the
extent of the market discount accrued to the date of the disposition, less any
accrued market discount previously reported as ordinary income.
 
  Retention of Notes; Adoption of Proposed Amendments. In the case of a Holder
who does not tender its Notes pursuant to the Offer, the adoption of the
Proposed Amendments should not cause a deemed exchange of the Notes under the
Regulations because the Proposed Amendments should not constitute a
significant modification to the terms of the Notes for federal income tax
purposes. Alternatively, even if the Proposed Amendments were to cause a
deemed exchange of the Notes for federal income tax purposes, a Holder who
does not tender its Notes pursuant to the Offer should not recognize gain or
loss on such deemed exchange since such deemed exchange should qualify as a
tax-free recapitalization; provided, however, that to the extent that such
Holder were deemed to receive new Notes with a principal amount in excess of
the principal amount of the Notes surrendered, gain would be recognized to the
extent of such excess. There can be no assurance, however, that the IRS will
not take a contrary view. If an exchange were deemed to have occurred and such
exchange did not qualify as a recapitalization, a Holder would recognize gain
or loss on such exchange and would have a new holding period for the Notes.
 
                                      22
<PAGE>
 
  In the event that the adoption of the Proposed Amendments causes a deemed
exchange (whether or not the deemed exchange qualifies as a tax-free
recapitalization) and the issue price of the new Notes is less than their
principal amount, the new Notes would generally have original issue discount
and a Holder of such new Note would generally be required to include such
original issue discount in income as it accrues (regardless of whether such
Holder is a cash or accrual basis taxpayer).
 
  Backup Withholding and Information Reporting. In general, information
reporting requirements will apply to the payment of the gross proceeds of the
Offer to the Holders of Notes. Federal income tax law requires that a Holder
whose tendered Notes are accepted for payment must provide the Depositary (as
payor) with such Holder's correct taxpayer identification number ("TIN")
which, in the case of a Holder who is an individual, is his or her social
security number, and certain other information, or otherwise establish a basis
for exemption from backup withholding. Exempt Holders (including, among
others, all corporations and certain foreign individuals) are not subject to
these backup withholding and information reporting requirements.
 
  If the Depositary is not provided with the correct TIN or an adequate basis
for exemption, the Holder may be subject to a penalty imposed by the IRS and
the gross proceeds of the Offer paid to the Holder may be subject to a 31%
backup withholding tax. If withholding results in an overpayment of taxes, a
refund or credit may be obtained, provided that the required information is
provided to the IRS.
 
  To prevent backup withholding, each tendering Holder must complete the
Substitute Form W-9 provided in the Consent and Letter of Transmittal and
either (i) provide the Holder's correct TIN and certain other information
under penalties of perjury or (ii) provide an adequate basis for exemption.
 
11.THE DEALER MANAGER, THE INFORMATION AGENT AND THE DEPOSITARY.
 
  Chase Securities Inc. has been engaged to act as Dealer Manager and
Solicitation Agent in connection with the Offer and the Solicitation (the
"Dealer Manager"). In such capacity, the Dealer Manager may contact Holders of
Notes regarding the Offer and the Solicitation and may request brokers,
dealers, commercial banks, trust companies and other nominees to forward this
Statement and related materials to beneficial owners of Notes.
 
  The Company has agreed to indemnify the Dealer Manager against certain
liabilities, including certain liabilities under the federal securities laws.
The Dealer Manager and its affiliates have provided in the past, and are
currently providing other investment banking, commercial banking and financial
advisory services to PGI and its affiliates, including DT Acquisition. At any
given time, the Dealer Manager may trade the Notes of the Company for their
own accounts or for the accounts of customers and, accordingly, may hold a
long or short position in the Notes. Any Holder that has questions concerning
the terms of the Offer or the Solicitation may contact the Dealer Manager at
its address and telephone numbers set forth on the back cover of this
Statement.
 
  MacKenzie Partners, Inc. has been appointed Information Agent (the
"Information Agent") for the Offer and the Solicitation. Questions and
requests for assistance or additional copies of this Statement, the Consent
and Letter of Transmittal or the Notice of Guaranteed Delivery may be directed
to the Information Agent at the address and telephone numbers set forth on the
back cover of this Statement. Holders of Notes may also contact their broker,
dealer, commercial bank or trust company for assistance concerning the Offer
and Solicitation.
 
  Harris Trust Company of New York has been appointed as Depositary (the
"Depositary") for the Offer and the Solicitation. Consents and Letters of
Transmittal and all correspondence in connection with the Offer and the
Solicitation should be sent or delivered by each Holder or a beneficial
owner's broker, dealer, commercial bank, trust company or other nominee to the
Depositary at the addresses and telephone number set forth on the back cover
of this Statement. Any Holder or beneficial owner that has questions
concerning the procedures for tendering Notes or whose Notes have been
mutilated, lost, stolen or destroyed should contact the Depositary at the
addresses and telephone number set forth on the back cover of this Statement.
 
                                      23
<PAGE>
 
12.FEES AND EXPENSES.
 
  The Company will pay the Dealer Manager, the Information Agent and the
Depositary reasonable and customary fees for their services and will reimburse
them for their reasonable out-of-pocket expenses in connection therewith. The
Company will pay brokerage firms and other custodians, nominees and
fiduciaries the reasonable out-of-pocket expenses incurred by them in
forwarding copies of this Statement and related materials to the beneficial
owners of Notes.
 
13.SOURCE AND AMOUNT OF FUNDS.
 
  The total amount of funds required by the Company to pay the Total
Consideration in connection with the Offer and the Solicitation is estimated
to be approximately $140.4 million (assuming 100% of the outstanding principal
amount of Notes is tendered and accepted for payment). Such funds will be
obtained by the Company from the proceeds of the Business Unit Sales and/or
permitted borrowing through term and revolving commitments under the U.S. $600
million Credit Agreement, dated December 17, 1997, among the DT Acquisition,
various financial institutions, The Chase Manhattan Bank, as Administrative
Agent, and First Union National Bank, as Documentation Agent (the "DT Credit
Agreement"). In connection with the acquisition of the common shares and first
preferred shares of Dominion, DT Acquisition entered into the DT Credit
Agreement. Pursuant to the terms of the DT Credit Agreement, DT Acquisition is
permitted to borrow money for the purpose of defeasing the Notes under the
Indenture. In addition, following the amalgamation of DT Acquisition with
Dominion, DT Acquisition may borrow under the DT Credit Agreement for the
purpose of purchasing the Notes and the 2003 Notes. Consummation of the Offer
and the Solicitation is subject to satisfaction of the Supplemental Indenture
Condition, the Business Unit Sales Condition, the 2003 Tender Condition and
the General Conditions.
 
14.MISCELLANEOUS.
 
  The Offer and the Solicitation are being made to all Holders of the Notes.
The Company is not aware of any jurisdiction in which the making of the Offer
and the Solicitation is not in compliance with applicable law. If the Company
becomes aware of any jurisdiction in which the making of the Offer and the
Solicitation would not be in compliance with applicable law, the Company will
make a good faith effort to comply with any such law. If, after such good
faith effort, the Company cannot comply with any such law, the Offer and the
Solicitation will not be made to (nor will tenders of Notes and Consents be
accepted from or on behalf of) the owners of Notes residing in such
jurisdiction.
 
  No person has been authorized to give any information or make any
representation on behalf of the Company not contained in this Statement or in
the Consent and Letter of Transmittal and, if given or made, such information
or representation must not be relied upon as having been authorized.
 
                                          DOMINION TEXTILE (USA) INC.
 
December 23, 1997
 
                                      24
<PAGE>
 
                                  SCHEDULE I
 
YLD       =  The Tender Offer Yield equals the sum of the yield on the 6 3/8%
             U.S. Treasury Note due March 31, 2001 (the "Reference Security"),
             as calculated by the Dealer Manager in accordance with standard
             market practice, based on the bid price for such Reference
             Security as of 2:00 p.m., New York City time, on the Price
             Determination Date, as displayed on the Bloomberg Government
             Pricing Monitor on "Page PX5" (the "Bloomberg Page") (or, if any
             relevant price is not available on a timely basis on the
             Bloomberg Page or is manifestly erroneous, such other recognized
             quotation source as the Dealer Manager shall select in its sole
             discretion), plus 50 basis points, expressed as a decimal number.
 
CPN       =  the contractual rate of interest payable on a Note expressed as a
             decimal number.
 
N         =  the number of semi-annual interest payments, based on the
             Earliest Redemption Date, from (but not including) the expected
             Payment Date to (and including) the Earliest Redemption Date.
 
S         =  the number of days from and including the semi-annual interest
             payment date immediately preceding the expected Payment Date up
             to, but not including, the expected Payment Date. The number of
             days is computed using the 30/360 day-count method.
 
exp       =  Exponentiate. The term to the left of "exp" is raised to the
             power indicated by the term to the right of "exp."
 
CP        =  $10.00 per $1,000 principal amount of Notes, which is equal to
             the Consent Payment.
 
RV        =  the assumed redemption amount, based on the Earliest Redemption
             Date, for each note per $1,000 principal amount of a Note (as
             rounded to the nearest one hundredth of one percent).
 
Total
Consideration
          =  the Tender Offer Consideration plus the Consent Payment of a Note
             per $1,000 principal amount of a Note if tender is made on or
             prior to 5:00 p.m., New York City time, on the Consent Expiration
             Date. The Total Consideration is rounded to the nearest cent.
 
Tender
Offer
Consideration
          =  the applicable purchase price of a Note per $1,000 principal
             amount of a Note if tender is made after 5:00 p.m., New York City
             time, on the Consent Expiration Date. The Tender Offer
             Consideration is rounded to the nearest cent.
 
                                   N
Total
Consideration
          =                        S
                     RV          +      $1,000 (CPN/2)    - $1,000
                                                            (CPN/2)(S/180)
 
             -------------------   k=1-------------------
 
             (1 + YLD/2) exp (N       (1 + YLD/2) exp (k
                  - S/180)                 - S/180)
 
                                   N
Tender
Offer
Consideration
          =                        S
                     RV          +      $1,000 (CPN/2)    - $1,000
                                                            (CPN/2)(S/180) -
             -------------------      -------------------   CP
 
                                   k=1
 
             (1 + YLD/2) exp (N       (1 + YLD/2) exp (k
                  - S/180)                 - S/180)
 
                                      25
<PAGE>
 
                                  SCHEDULE II
 
  This Schedule provides a hypothetical illustration of the Total
Consideration (i.e., Tender Offer Consideration plus Consent Payment) of the 
9 1/4% Guaranteed Senior Notes due 2006 based on hypothetical data, and should,
therefore, be used solely for the purpose of obtaining an understanding of the
calculation of the Total Consideration, as quoted at hypothetical rates and
times, and should not be used or relied upon for any other purpose:
 
                    9 1/4% GUARANTEED SENIOR NOTES DUE 2006
 
Earliest Redemption     = April 1, 2001
Date
 
Reference Security      = 6 3/8% U.S. Treasury Note due March 31, 2001 as
                          displayed on the Bloomberg Government Pricing
                          Monitor on "Page PX5"
 
Fixed Spread            = 0.50% (50 basis points)
 
EXAMPLE
Assumed Pricing         = 2:00 p.m., New York City time, on January 9, 1998
Determination
 Date and Time
 
Assumed Payment Date    = January 27, 1998
 
Assumed Reference
Security
 Yield as of Assumed
Price
 Determination Date     = 5.74%
and Time
 
Fixed Spread            = 0.50%
 
YLD                     = 0.0624
 
CPN                     = 0.0925
 
N                       = 7
 
S                       = 116
 
RV                      = $1,046.25
 
CP                      = $10.00
 
Total Consideration     = $1,123.45
 
                           N
 
                           S
      $1,046.25         +       $1,000 (0.0925/2)     - $1,000
                                                        (0.0925/2)(116/180)
 
                          k=1
----------------------        ----------------------
 
(1 + 0.0624/2) exp (7        (1 + 0.0624/2) exp (k -
      - 116/180)                     116/180)
 
Tender Offer            = $1,113.45
Consideration
 
                           N
 
                           S
      $1,046.25         +       $1,000 (0.0925/2)  -$1,000 (0.0925/2)(116/180) -
                                                       $10.00
 
                          k=1
----------------------        ----------------------
 
1 + 0.0624/2) exp (7 -(      (1 + 0.0624/2) exp (k -
       116/180)                      116/180)
 
                                      26
<PAGE>
 
             The Depositary for the Offer and the Solicitation is:
 
                        HARRIS TRUST COMPANY OF NEW YORK
 
               By Mail:                     By Hand or Overnight Courier:
 Wall Street Station P.O. Box 1023 New             Receive Window
          York, NY 10268-1023                     Wall Street Plaza
                                             88 Pine Street, 19th Floor
                                                 New York, NY 10005
 
                           By Facsimile Transmission:
                        (for Eligible Institutions Only)
                             (212) 701-7636 or 7637
 
                   For Information Telephone (call collect):
                                 (212) 701-7624
 
  Any questions or requests for assistance or additional copies of this
Statement, the Consent and Letter of Transmittal or the Notice of Guaranteed
Delivery may be directed to the Information Agent at the telephone numbers and
address listed below. A Holder may also contact the Dealer Manager at the
telephone number set forth below or such Holder's broker, dealer, commercial
bank or trust company or nominee for assistance concerning the Offer and the
Solicitation.
 
          The Information Agent for the Offer and the Solicitation is:
 
                                      LOGO
 
                                156 Fifth Avenue
                            New York, New York 10010
                            (212) 929-5500 (collect)
                           Toll Free: (800) 322-2885
 
      The Dealer Manager for the Offer and the Solicitation Agent for the
                                Solicitation is:
 
                             CHASE SECURITIES INC.
 
                           270 Park Avenue, 4th Floor
                         New York, New York 10017-2070
                             Attention: Robert Berk
                         Call: (212) 270-1100 (collect)