EXHIBIT 10.2.1
AMENDMENT NO. 1 TO REGISTRATION RIGHTS AGREEMENT
This AMENDMENT NO. 1 TO REGISTRATION RIGHTS AGREEMENT, is made and
entered into as of August 11, 2006 (this "AMENDMENT"), by and among Tarrant
Apparel Group, a California corporation (the "COMPANY"), and the purchasers
signatory hereto (each such purchaser is a "PURCHASER" and all such purchasers
are, collectively, the "PURCHASERS").
W I T N E S S E T H:
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WHEREAS, the Company and the Purchasers have entered into that
Registration Rights Agreement dated as of June 16, 2006 (the "AGREEMENT"),
pursuant to which the Company granted the Purchasers certain registration rights
with respect to shares of the Company's Common Stock issuable upon exercise of
warrants; and
WHEREAS, the parties hereto desire to amend the Agreement to give
effect to the changes set forth below.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
contained and other good and valuable consideration, the sufficiency of which is
hereby acknowledged, it is agreed that the Agreement is amended as follows:
1. DEFINITIONS
Capitalized terms defined in the Agreement and not otherwise defined
herein shall have the meanings assigned to them in the Agreement. The words
"herein," "hereof" and "hereunder" and other words of similar import refer to
this Amendment as a whole.
2. AMENDMENTS
2.1. AMENDMENT TO SECTION 2. Section 2 of the Agreement is amended to add
the following paragraph as a new Section 2(b):
"(b) If: (i) a Registration Statement is not filed on or prior to
the Filing Date, or (ii) a Registration Statement filed or required to be filed
hereunder is not declared effective by the Commission on or prior to the 60th
calendar following its Effectiveness Date (any such failure or breach being
referred to as an "EVENT" and the date on which such Event occurs being referred
to as "EVENT DATE"), then in addition to any other rights the Holders may have
hereunder or under applicable law, the Company shall pay to each Holder an
amount in cash, as partial liquidated damages and not as a penalty, equal to one
percent (1%) of the aggregate Exercise Price (as such term is defined in the
Warrants) paid or payable by such Holder pursuant to the Warrants for any
Registrable Securities then held by such Holder per month, for each calendar
month until the Event is cured (pro rata for any period less than a full month);
PROVIDED, HOWEVER, that no such
liquidated damages shall be payable to a Holder with respect to any share of
Registrable Securities issuable upon exercise of the Warrants for any period in
which either (x) the Exercise Price for such share is greater than the Current
Market Value (as such term is defined in the Warrants) or (y) the Holder does
not have right to exercise the Warrant for such share of Registrable Securities
on such date; PROVIDED, FURTHER, that in no event shall the aggregate liquidated
damages payable by the Company to any of the Holders exceed 20% of the aggregate
Exercise Price paid or payable by such Holder pursuant to the Warrants for any
Registrable Securities. The liquidated damages pursuant to the terms hereof
shall apply on a daily pro rata basis for any portion of a month prior to the
cure of an Event for which such payments are required. Each such payment shall
be due and payable within 5 days after each monthly anniversary of the Event
Date until the Event is cured and within 5 days after the date of such cure. If
the Company fails to pay any partial liquidated damages pursuant to this Section
in full within seven days after the date payable, the Company will pay interest
thereon at the rate of 15% per annum (or such lesser maximum amount that is
permitted to be paid by applicable law) to the Holder, accruing daily from the
date such partial liquidated damages are due until such amounts, plus all such
interest therein, are paid in full. Amounts payable as liquidated damages to
each Holder hereunder with respect to each share of Registrable Securities shall
cease upon the earlier of (i) when the Holder has sold or otherwise transferred
such share of Registrable Securities, unless the purchaser or transferee
constitutes a Holder (in which case the amounts shall thereafter be payable to
such purchaser or transferee) or (ii) upon the expiration of the Effectiveness
Period."
2.2. AMENDMENT TO SECTION 6(B). Section 6(b) of the Agreement is amended in
its entirety to read as follows:
"(b) NO PIGGYBACK ON REGISTRATIONS. Neither the Company nor any of
its security holders (other than the Holders in such capacity pursuant hereto)
may include securities of the Company in the Registration Statement other than
the Registrable Securities; provided, however, that notwithstanding the
foregoing each Holder agrees and consents to the inclusion of an additional
60,000 shares of the Company's Common Stock (other than the Registrable
Securities) in the initial Registration Statement for the registration of the
resale of such shares by the holder thereof. The Company shall not file any
other registration statements until the initial Registration Statement required
hereunder is declared effective by the Commission, provided that this Section
6(b) shall not prohibit the Company from filing amendments to registration
statements already filed."
2.3. FULL FORCE AND EFFECT. Except as expressly modified by this Amendment,
the Agreement shall remain in full force and effect. Each reference in the
Agreement to "this Agreement" or "hereto" or "hereunder" shall mean the
Agreement as amended by this Amendment, unless the context otherwise requires.
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3. MISCELLANEOUS
3.1. GOVERNING LAW. All questions concerning the construction, validity,
enforcement and interpretation of this Amendment shall be determined in
accordance with the provisions of the Agreement.
3.2. CONFLICT OF TERMS. Except as otherwise provided in this Amendment, if
any provision contained in this Amendment is in conflict with, or inconsistent
with, any provision in any of the Agreement, the provision contained in this
Amendment shall govern and control.
3.3. SEVERABILITY. If any term, provision, covenant or restriction of this
Amendment is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their reasonable best efforts to find and employ an alternative means to achieve
the same or substantially the same result as that contemplated by such term,
provision, covenant or restriction. It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable..
3.4. HEADINGS. The headings in this Amendment are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
3.5. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first written above.
TARRANT APPAREL GROUP
By: /S/ XXXXXXX XXXXX
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Name: Xxxxxxx Xxxxx
Title: Chief Financial Officer
[SIGNATURE PAGE TO AMENDMENT NO. 1 TO
REGISTRATION RIGHTS AGREEMENT]
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ORPHEUS HOLDINGS LLC
By: GUGGENHEIM INVESTMENT MANAGEMENT, LLC as Manager
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
NORTH AMERICAN COMPANY FOR LIFE AND HEALTH INSURANCE
By: MIDLAND ADVISORS COMPANY as its Agent
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
MIDLAND NATIONAL LIFE INSURANCE COMPANY
By: MIDLAND ADVISORS COMPANY as its Agent
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
DURHAM CAPITAL CORPORATION
By:
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Name:
Title:
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