UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): November 2, 2007
TARRANT APPAREL GROUP
(Exact Name of Registrant as Specified in Charter)
CALIFORNIA 0-26006 95-4181026
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
3151 EAST WASHINGTON BOULEVARD
LOS ANGELES, CALIFORNIA 90023
(Address of Principal Executive Offices) (Zip Code)
(323) 780-8250
(Registrant's Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[_] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.02 TERMINATION OF A MATERIAL DEFINITIVE AGREEMENT.
PAYOFF OF CREDIT FACILITY WITH GUGGENHEIM CORPORATE FUNDING, LLC
On November 2, 2007, we terminated our credit agreement, entered
into in June 2006 with certain lenders and Guggenheim Corporate Funding, LLC
("Guggenheim"), as administrative agent and collateral agent for the lenders.
Previously, on September 26, 2007, we repaid all amounts due under the credit
facility with Guggenheim. At that time, the outstanding principal balance and
accrued interest under the credit facility was approximately $15.7 million. In
connection with the pay-off of this credit facility, Guggenheim and the lenders
agreed to waive the early prepayment penalty provided for in the credit
agreement and the credit agreement and other loan documents have been
terminated.
We originally entered into the credit agreement with the lenders and
Guggenheim in June 2006. The credit facility provided for borrowings of up to
$65 million, consisting of an initial term loan of up to $25 million (of which
we borrowed $15.5 million) and an additional term loan of up to $40 million
available to finance acquisitions acceptable to Guggenheim. All amounts under
the term loans were to become due and payable in December 2010. Interest under
this facility was payable monthly, with the interest rate equal to the LIBOR
rate plus an applicable margin based on our debt leverage ratio. Our obligations
under the Guggenheim credit facility were secured by a lien on substantially all
of our assets and our domestic subsidiaries, including a pledge of the equity
interests of our domestic subsidiaries and 65% of our Luxembourg subsidiary. The
credit facility contained customary financial covenants, including covenants
that we maintain minimum levels of EBITDA and interest coverage ratios and
limitations on additional indebtedness.
In connection with the Guggenheim credit facility, on June 16, 2006,
we issued the lenders under this facility warrants to purchase shares of our
common stock, which are currently exercisable for a total of 3,500,000 shares of
our common stock. These warrants have a term of 10 years from the date of
issuance. These warrants are exercisable at a price of $1.88 per share with
respect to 20% of the shares, $2.00 per share with respect to 20% of the shares,
$3.00 per share with respect to 20% of the shares, $3.75 per share with respect
to 20% of the shares and $4.50 per share with respect to 20% of the shares. The
exercise prices are subject to adjustment for certain dilutive issuances
pursuant to the terms of the warrants.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TARRANT APPAREL GROUP
Date: November 6, 2007 By: /S/ DAVID BURKE
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David Burke, Chief Financial Officer
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