SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
TARRANT APPAREL GROUP
(Name of Issuer)
Common Stock, no par value per share
(Title of Class of Securities)
876289 109
(CUSIP Number)
Guggenheim Capital, LLC
227 West Monroe Street, Suite 4900
Chicago, IL 60606
Attn: James L. Foorman
(312) 827-0100
with a copy to:
Dennis Sullivan
Sullivan & Cromwell LLP
1701 Pennsylvania Avenue, N.W.
Washington, DC 20006-5805
(202) 956-7500
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
June 16, 2006
(Date of Event which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
Schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
[_].
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934, as amended (the "Act"), or otherwise subject to the liabilities of that
section of the Act but shall be subject to all other provisions of the Act
(however, see the Notes).
Page 2 of 14 pages
CUSIP No. 876289 109
--------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
Guggenheim Capital, LLC
--------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [X]
--------------------------------------------------------------------------------
3. SEC Use Only
--------------------------------------------------------------------------------
4. SOURCE OF FUNDS
Not Applicable
--------------------------------------------------------------------------------
5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
--------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
7. SOLE VOTING POWER
-0-
-------------------------------------------------------
Number Of Shares 8. SHARED VOTING POWER
Beneficially Owned
By Each Reporting 3,500,000 (1)
Persons With -------------------------------------------------------
9. SOLE DISPOSITIVE POWER
-0-
-------------------------------------------------------
10. SHARED DISPOSITIVE POWER
3,500,000 (1)
--------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,500,000
--------------------------------------------------------------------------------
12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_]
--------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
10.3%
--------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
HC, OO
--------------------------------------------------------------------------------
(1) Power over 1,892,857 shares is exercised through Guggenheim Investment
Management, LLC, which is a subsidiary of Guggenheim Capital, LLC. Power
over 1,607,143 shares is exercised through Midland Advisors Company, which
is a subsidiary of Guggenheim Capital, LLC.
-2-
Page 3 of 14 pages
CUSIP No. 876289 109
--------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
Guggenheim Investment Management, LLC
--------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [X]
--------------------------------------------------------------------------------
3. SEC Use Only
--------------------------------------------------------------------------------
4. SOURCE OF FUNDS
Not Applicable
--------------------------------------------------------------------------------
5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
--------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
7. SOLE VOTING POWER
-0-
-------------------------------------------------------
Number Of Shares 8. SHARED VOTING POWER
Beneficially Owned
By Each Reporting 1,892,857
Persons With -------------------------------------------------------
9. SOLE DISPOSITIVE POWER
-0-
-------------------------------------------------------
10. SHARED DISPOSITIVE POWER
1,892,857
--------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,892,857
--------------------------------------------------------------------------------
12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [X]
(1)
--------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.8%
--------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
IA, OO
--------------------------------------------------------------------------------
(1) Guggenheim Investment Management, LLC disclaims membership in a group, and
thus disclaims beneficial ownership of securities beneficially owned
directly by North American Company for Life and Health Insurance and
Midland National Life Insurance Company.
-3-
Page 4 of 14 pages
CUSIP No. 876289 109
--------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
Orpheus Holdings, LLC
--------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [X]
--------------------------------------------------------------------------------
3. SEC Use Only
--------------------------------------------------------------------------------
4. SOURCE OF FUNDS
WC
--------------------------------------------------------------------------------
5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
--------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
7. SOLE VOTING POWER
1,892,857 (1)
-------------------------------------------------------
Number Of Shares 8. SHARED VOTING POWER
Beneficially Owned
By Each Reporting -0-
Persons With -------------------------------------------------------
9. SOLE DISPOSITIVE POWER
1,892,857 (1)
-------------------------------------------------------
10. SHARED DISPOSITIVE POWER
-0-
--------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,892,857 (1)
--------------------------------------------------------------------------------
12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [X]
(2)
--------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.8%
--------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
WC
--------------------------------------------------------------------------------
(1) Power is exercised through Guggenheim Investment Management, LLC, which is
the manager of Orpheus Holdings, LLC.
(2) Orpheus Holdings, LLC disclaims membership in a group, and thus disclaims
beneficial ownership of securities beneficially owned directly by North
American Company for Life and Health Insurance and Midland National Life
Insurance Company.
-4-
Page 5 of 14 pages
CUSIP No. 876289 109
--------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
Midland Advisors Company
--------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [X]
--------------------------------------------------------------------------------
3. SEC Use Only
--------------------------------------------------------------------------------
4. SOURCE OF FUNDS
Not Applicable
--------------------------------------------------------------------------------
5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
--------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
South Dakota
--------------------------------------------------------------------------------
7. SOLE VOTING POWER
-0-
-------------------------------------------------------
Number Of Shares 8. SHARED VOTING POWER
Beneficially Owned
By Each Reporting 1,607,143
Persons With -------------------------------------------------------
9. SOLE DISPOSITIVE POWER
-0-
-------------------------------------------------------
10. SHARED DISPOSITIVE POWER
1,607,143
--------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,607,143
--------------------------------------------------------------------------------
12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [X]
(1)
--------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.0%
--------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
OO
--------------------------------------------------------------------------------
(1) Midland Advisors Company disclaims membership in a group, and thus
disclaims beneficial ownership of securities beneficially owned directly by
Orpheus Holdings, LLC.
-5-
Page 6 of 14 pages
CUSIP No. 876289 109
--------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
North American Company for Life and Health Insurance
--------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [X]
--------------------------------------------------------------------------------
3. SEC Use Only
--------------------------------------------------------------------------------
4. SOURCE OF FUNDS
WC
--------------------------------------------------------------------------------
5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
--------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Illinois
--------------------------------------------------------------------------------
7. SOLE VOTING POWER
642,857 (1)
-------------------------------------------------------
Number Of Shares 8. SHARED VOTING POWER
Beneficially Owned
By Each Reporting -0-
Persons With -------------------------------------------------------
9. SOLE DISPOSITIVE POWER
642,857 (1)
-------------------------------------------------------
10. SHARED DISPOSITIVE POWER
-0-
--------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
642,857 (1)
--------------------------------------------------------------------------------
12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [X]
(2)
--------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.1%
--------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
OO
--------------------------------------------------------------------------------
(1) Power is exercised through Midland Advisors Company, which is the agent of
North American Company for Life and Health Insurance.
(2) North American Company for Life and Health Insurance disclaims membership
in a group, and thus disclaims beneficial ownership of securities
beneficially owned directly by Orpheus Holdings, LLC and Midland National
Life Insurance Company.
-6-
Page 7 of 14 pages
CUSIP No. 876289 109
--------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
Midland National Life Insurance Company
--------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [X]
--------------------------------------------------------------------------------
3. SEC Use Only
--------------------------------------------------------------------------------
4. SOURCE OF FUNDS
WC
--------------------------------------------------------------------------------
5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
--------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Iowa
--------------------------------------------------------------------------------
7. SOLE VOTING POWER
964,286 (1)
-------------------------------------------------------
Number Of Shares 8. SHARED VOTING POWER
Beneficially Owned
By Each Reporting -0-
Persons With -------------------------------------------------------
9. SOLE DISPOSITIVE POWER
964,286 (1)
-------------------------------------------------------
10. SHARED DISPOSITIVE POWER
-0-
--------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
964,286 (1)
--------------------------------------------------------------------------------
12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [X]
(2)
--------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.1%
--------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
OO
--------------------------------------------------------------------------------
(1) Power is exercised through Midland Advisors Company, which is the agent of
Midland National Life Insurance Company.
(2) Midland National Life Insurance Company disclaims membership in a group,
and thus disclaims beneficial ownership of securities beneficially owned
directly by Orpheus Holdings, LLC and North American Company for Life and
Health Insurance.
-7-
Page 8 of 14 pages
ITEM 1. SECURITY AND ISSUER.
The class of equity securities to which this Statement on Schedule 13D
(this "Statement") relates is the common stock, no par value per share (the
"Common Stock"), of Tarrant Apparel Group, a California corporation ("TAG"). The
principal executive offices of TAG are located at 3151 East Washington Blvd.,
Los Angeles, CA 90023.
ITEM 2. IDENTITY AND BACKGROUND.
This Schedule 13D is being filed jointly by (i) Guggenheim Capital,
LLC, a Delaware limited liability company ("GC"), (ii) Guggenheim Investment
Management, LLC, a Delaware limited liability company ("GIM"), (iii) Orpheus
Holdings, LLC, a Delaware limited liability company ("Orpheus"), (iv) Midlands
Advisors Company, an [Iowa corporation] ("MAC"), (v) North American Company for
Life and Health Insurance, an Illinois corporation ("NACOLAH") and (vi) Midland
National Life Insurance Company, an Iowa corporation ("MNLIC"). GC, GIM,
Orpheus, MAC, NACOLAH and MNLIC are sometimes hereinafter referred to as the
"Reporting Persons." The Reporting Persons are making this single, joint filing
because they may be deemed to constitute a "group" within the meaning of Section
13(d)(3) of the Act, although neither the fact of this filing nor anything
contained herein shall be deemed to be an admission by the Reporting Persons
that a group exists.
The state of organization for each of GC, GIM and Orpheus is Delaware.
The state of organization for MAC is South Dakota. The state of organization for
MNLIC is Iowa. The state or organization for NACOLAH is Illinois. The principal
business address of GC, which also serves as its principal office, is 227 West
Monroe Street, Chicago, IL 60606. The principal business address of GIM and
Orpheus, which also serves as their principal office, is located at 135 East
57th Street, New York, NY 10022. The principal business address of MAC, which
also serves as its principal office, is located at 200 East 10th Street, Suite
301, Sioux Falls, SD 57104. The principal business address of MNLIC, which also
serves as its principal office, is located at One Midland Plaza, Sioux Falls, SD
57193. The principal business address of NACOLAH, which also serves as its
principal office, is located at 525 West Van Buren, Chicago, IL 60607.
The principal business of Orpheus is to make direct and indirect loans
and investments in corporate interests. The principal business of GIM is to
serve as the manager of Orpheus and other investment entities. The principal
business of GC is to provide diversified investment services. The principal
business of MNLIC and NACOLAH is to provide insurance and annuity related
products and services. The principal business of MAC is to serve as investment
agent of MNLIC and NACOLAH and other investment entities.
Schedules 1 through 6 hereto set forth the following information with
respect to each executive officer and director or manager of the Reporting
Persons: (i) name, (ii) business address, (iii) citizenship and (iv) present
principal occupation or employment and the name of any other corporation or
other organization in which such employment is conducted.
During the past five years, none of the Reporting Persons, nor to the
best of their knowledge, any person identified on Schedules 1 through 6 has (i)
been convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such
-8-
Page 9 of 14 pages
proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, Federal
or state securities laws or finding any violation with respect to such laws.
The Reporting Persons have entered into a Joint Filing Agreement, dated
as of June 26, 2006, a copy of which is attached hereto as Exhibit 8.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
On June 16, 2006, Orpheus, MNLIC and NACOLAH acquired warrants (the
"Warrants") immediately exercisable for 1,892,857, 964,286 and 642,857 shares of
Common Stock respectively, pursuant to the Warrants Purchase Agreement (the
"Purchase Agreement"), dated June 16, 2006, among TAG, Orpheus, MNLIC, NACOLAH,
and Durham Capital Corporation, a New York corporation. Pursuant to the Purchase
Agreement, on June 16, 2006, TAG issued the Warrants in connection with the
execution of a $65 million credit facility (the "Credit Facility") described in
the Credit Agreement (the "Credit Agreement"), dated June 16, 2006, among TAG,
certain subsidiary borrowers and guarantors, Guggenheim Corporate Funding, LLC,
an affiliate of GIM, as administrative agent and collateral agent for the
lenders, and Orpheus, MNLIC and NACOLAH as lenders. The Credit Facility under
the Credit Agreement consists of an initial term loan facility with availability
of up to $25 million and an additional term loan of up to $40 million will be
available under this facility to finance acquisitions acceptable to Guggenheim.
All amounts under the term loans become due and payable in December 2010. The
Credit Facility contains financial covenants, including covenants that TAG
maintain minimum levels of EBITDA and interest coverage ratios and limitations
on additional indebtedness, and negative covenants.
The Warrants have a term of 10 years. The Warrants are exercisable at a
price of $1.88 per share with respect to 20% of the shares of Common Stock
underlying the Warrant, $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.
The terms of the Warrants provide that upon the borrowing of an
additional amount of up to $2.5 million under the Credit Facility pursuant to
Section 2.3 of the Credit Agreement, the Warrants shall become exercisable for
178,571, 107,143 and 71,429 additional shares of Common Stock for Orpheus, MNLIC
and NACOLAH, respectively. The Credit Agreement provides that additional
Warrants will be issued to the lenders under the Credit Agreement in connection
with the funding of additional amounts under the Credit Facility.
ITEM 4. PURPOSE OF TRANSACTION.
The information contained in Item 6 of this Statement is hereby
incorporated by reference herein.
The Reporting Persons have acquired the Warrants in connection with
providing the commitments and term loans under the Credit Facility. The Warrants
were acquired for investment purposes. Consistent with the terms of the Credit
Agreement, the Reporting Persons have had, and may have in the future,
discussions with management of TAG and may make
-9-
Page 10 of 14 pages
suggestions concerning TAG's operations, prospects, business and financial
strategies, assets and liabilities, business and financing alternatives and such
other matters as the Reporting Persons may deem relevant to their extension of
credit. Each Reporting Person expects that it will, from time to time, review
its investment position in TAG and may, depending on market and other
conditions, choose to exercise the Warrants to obtain the underlying shares of
TAG Common Stock.
Whether the Reporting Persons exercise the Warrants, purchase any
additional securities of TAG, or dispose of any securities of TAG, and the
amount and timing of any such transactions, will depend upon the Reporting
Persons' individual continuing assessments of pertinent factors, including the
availability of securities of TAG for purchase at particular price levels, TAG's
and the particular Reporting Person's business and prospects, other business
investment opportunities available to the particular Reporting Person, economic
conditions, stock market conditions, money market conditions, the attitudes and
actions management of TAG, the availability and nature of opportunities to
dispose of the particular Reporting Person's interest in TAG, to realize trading
profits or minimize trading losses, and other plans and requirements of the
particular Reporting Person. Depending upon its individual assessments of these
factors from time to time, each Reporting Person may change its present
intentions as stated above, including determining to acquire additional
securities of TAG (by means of open market or privately negotiated purchases) or
to dispose of some or all of the securities of TAG held by or under the control
of such Reporting Person. In addition, each Reporting Person may from time to
time enter into equity swap or other derivative transactions with respect to its
investment in the securities of TAG. Each Reporting Person may have discussions
with the Company or take actions with respect to the covenants and agreements,
and any future draw-downs, under the Credit Agreement and related documents with
respect to the Credit Facility, and may waive or fail to waive any covenants and
take actions, including calling a default, with respect to its commitments under
the Credit Facility in its sole discretion.
Except as described herein, at the present time the Reporting Persons
have no plans or proposals which relate to or would result in (a) the
acquisition by any person of additional securities of TAG, or the disposition of
securities of TAG, (b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving TAG or any of its subsidiaries, (c) a
sale or transfer of a material amount of the assets of TAG or any of its
subsidiaries, (d) any change in the present board of directors or management of
TAG, including any plans or proposals to change the number or term of directors
or to fill any existing vacancies on the board, (e) any material change in the
present capitalization or dividend policy of TAG, (f) any other material change
in TAG's business or corporate structure, (g) changes in TAG's charter, bylaws
or instruments corresponding thereto or other actions which may impede the
acquisition of control of TAG by any person, (h) a class of securities of TAG
being delisted from a national securities exchange or ceasing to be authorized
to be quoted in an inter-dealer quotation system of a registered national
securities association, (i) a class of equity securities of TAG becoming
eligible for termination of registration pursuant to Section 12(g)(4) of the Act
or (j) any action similar to any of those enumerated above. The Reporting
Persons, however, expect to evaluate on an ongoing basis TAG's financial
condition, business, operations and prospects, the market price of TAG Common
Stock, conditions in the securities markets generally, general economic and
industry conditions and other factors it deems appropriate. Accordingly, the
Reporting Persons reserve the right to change its plans and intentions at any
time, as it deems
-10-
Page 11 of 14 pages
appropriate, subject to relevant legal restrictions and certain contractual
restrictions described in Item 6 below.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
The information contained in Item 6 of this Statement is hereby
incorporated by reference herein.
(a) Percentage interest calculations for each Reporting Person are
based upon TAG having 30,543,763 total outstanding shares of Common Stock as of
May 12, 2006, according to TAG's most recent Form 10-Q filing (the "10-Q") on
May 16, 2006, plus such additional number of shares as would be created if the
respective Reporting Person exercised all of its Warrants.
Each Reporting Person disclaims beneficial ownership of all shares of
Common Stock in which such Reporting Person does not have a pecuniary interest.
(b) Orpheus is the owner of Warrants corresponding to 1,892,857
underlying shares of Common Stock. NACOLAH is the owner of Warrants
corresponding to 642,857 underlying shares of Common Stock. MNLIC is the owner
of Warrants corresponding to 964,286 underlying shares of Common Stock.
As the manager of Orpheus, GIM may be deemed to beneficially own
Warrants corresponding to 1,892,857 underlying shares of Common Stock. As the
agent of NACOLAH and MNLIC, MAC may be deemed to beneficially own Warrants
corresponding to 1,607,143 underlying shares of Common Stock. As the parent of
GIM and MAC, GC may be deemed to beneficially own Warrants corresponding to
3,500,000 underlying shares of Common Stock.
The Reporting Persons disclaim membership in a group, as defined in
Section 13(d)(3) of the Act. The amount of shares of Common Stock held by all
Reporting Persons in the aggregate hereunder equals 10.3% of TAG's Common Stock,
which percentage is calculated based upon the 30,543,763 shares of Common Stock
reported outstanding by TAG as of May 12, 2006, as disclosed in the 10-Q, and
the additional 3,500,000 shares of Common Stock that would be created if all
Reporting Persons exercised their Warrants.
(c) The Reporting Persons have not effected any transactions in TAG
Common Stock directly or indirectly during the 60 days prior to the date of this
Schedule 13D.
(d) No one other than the Reporting Persons has the power to exercise
the Warrants described in Item 3.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
Credit Agreement
----------------
A copy of the Credit Agreement is attached as Exhibit 1 hereto and is
incorporated by reference herein. The description of the Credit Agreement in
this Statement is subject to, and qualified in its entirety by, the full text of
the Credit Agreement.
-11-
Page 12 of 14 pages
Purchase Agreement
------------------
Subject to the terms and conditions set forth in the Purchase
Agreement, TAG agreed to issue the Warrants described in Item 5(b) of this form.
A copy of the Purchase Agreement is attached as Exhibit 2 hereto and is
incorporated by reference herein. The description of the Purchase Agreement in
this Statement is subject to, and qualified in its entirety by, the full text of
the Purchase Agreement.
Registration Rights Agreement
-----------------------------
TAG has agreed to file and use its best efforts to cause to be declared
effective a registration statement under the Securities Act of 1933, as amended,
with respect to the shares of Common Stock underlying the Warrants. A copy of
the Registration Rights Agreement is attached as Exhibit 3 hereto and is
incorporated by reference herein. The description of the Registration Rights
Agreement in this Statement is subject to, and qualified in its entirety by, the
full text of the Registration Rights Agreement.
Warrant Agreements
------------------
Copies of the Warrant Agreements are attached as Exhibits 4 through 6
hereto and are incorporated by reference herein. The description of the Warrant
Agreements in this Statement is subject to, and qualified in its entirety by,
the full text of the Warrant Agreements.
Co-Sale Letter Agreement
------------------------
Gerard Guez ("Guez") and Todd Kay ("Kay"), both shareholders, executive
officers and members of the board of directors of TAG, have agreed with Orpheus,
MNLIC and NACOLAH that such Reporting Persons shall have the right to
participate in certain proposed sales of TAG Common Stock not involving a public
offering by either Guez or Kay. Orpheus, MNLIC and NACOLAH are collectively
entitled to participate in an amount up to 33.33% of the total sale. A copy of
the Co-Sale Letter Agreement is attached as Exhibit 7 hereto and is incorporated
by reference herein. The description of the Co-Sale Letter Agreement in this
Statement is subject to, and qualified in its entirety by, the full text of the
Co-Sale Letter Agreement.
Except as set forth herein or in the exhibits filed herewith, there are
no other contracts, arrangements, understandings or relationships of the type
required to be disclosed in response to Item 6 of Schedule 13D.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 1: Credit Agreement, dated as of June 16, 2006, by and among Tarrant
Apparel Group, Fashion Resource (Tcl), Inc., Tag Mex, Inc.,
United Apparel Ventures, LLC, Private Brands, Inc., No! Jeans,
Inc., as Borrowers; the other Credit Parties party thereto from
time to time, as Guarantors; the Lenders party thereto from time
to time; and Guggenheim Corporate Funding, LLC, as Administrative
Agent and Collateral Agent for the Lenders.
-12-
Page 13 of 14 pages
Exhibit 2: Warrants Purchase Agreement, made and entered into as of June 16,
2006, among Tarrant Apparel Group, Inc., Orpheus Holdings, LLC,
North American Company for Life and Health Insurance, Midland
National Life Insurance Company and Durham Capital Corporation.
Exhibit 3: Registration Rights Agreement, made and entered into as of June
16, 2006, among Tarrant Apparel Group, Inc., Orpheus Holdings,
LLC, North American Company for Life and Health Insurance,
Midland National Life Insurance Company and Durham Capital
Corporation.
Exhibit 4: Warrant Agreement, dated as of June 16, 2006, by and between
Tarrant Apparel Group, Inc., and Orpheus Holdings, LLC.
Exhibit 5: Warrant Agreement, dated as of June 16, 2006, by and between
Tarrant Apparel Group, Inc., and North American Company for Life
and Health Insurance.
Exhibit 6: Warrant Agreement, dated as of June 16, 2006, by and between
Tarrant Apparel Group, Inc., and Midland National Life Insurance
Company.
Exhibit 7: Co-Sale Letter Agreement, made and entered into as of June 16,
2006, among Gerald Guez, Todd Kay, Orpheus Holdings, LLC, North
American Company for Life and Health Insurance and Midland
National Life Insurance Company.
Exhibit 8: Joint Filing Agreement, dated June 26, 2006 among Guggenheim
Investment Management, LLC, Orpheus Holdings, LLC, Midland
Advisors Company, North American Company for Life and Health
Insurance and Midland National Life Insurance Company.
-13-
Page 14 of 14 pages
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
June 26, 2006
Guggenheim Capital, LLC
/s/ Todd Boehly
---------------------------------------------
Name: Todd Boehly
Title: Managing Partner
Guggenheim Investment Management, LLC
/s/ Todd Boehly
---------------------------------------------
Name: Todd Boehly
Title: Managing Partner
Orpheus Holdings
By: Guggenheim Investment Management, LLC,
Manager
/s/ Todd Boehly
---------------------------------------------
Name: Todd Boehly
Title: Managing Partner
Midland Advisors Company
/s/ Todd Boehly
---------------------------------------------
Name: Todd Boehly
Title: Managing Partner
North American Company for Life and Health
Insurance
By: Midland Advisors Company, Agent
/s/ Todd Boehly
---------------------------------------------
Name: Todd Boehly
Title: Managing Partner
Midland National Life Insurance Company
By: Midland Advisors Company, Agent
/s/ Todd Boehly
---------------------------------------------
Name: Todd Boehly
Title: Managing Partner
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT
CONSTITUTES FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
-14-
SCHEDULE 1
DIRECTORS AND EXECUTIVE OFFICERS OF
GUGGENHEIM CAPITAL, LLC
Unless otherwise specified, the business address for each of the
individuals listed below is 227 West Monroe Street, Suite 4900,
Chicago, IL, 60606.
Each of the individuals listed below is a citizen of the United States
of America.
NAME PRESENT AND PRINCIPAL ADDRESS (if different)
OCCUPATION
--------------------------------------------------------------------------------
Jonathan T. Morley Executive Committee Member 135 East 57th Street
New York, NY 10022
--------------------------------------------------------------------------------
Mark R. Walter CEO
--------------------------------------------------------------------------------
Peter Lawson-Johnston Executive Committee Member 135 East 57th Street
New York, NY 10022
--------------------------------------------------------------------------------
Homer J. Holland CEO, Holland Partners Holland Partners
7301 E. Sundance Trail, D201
Po Box 5402
Carefree, AZ 85377
--------------------------------------------------------------------------------
SCHEDULE 2
DIRECTORS AND EXECUTIVE OFFICERS OF
GUGGENHEIM INVESTMENT MANAGEMENT, LLC
Unless otherwise specified, the business address for each of the
individuals listed below is 135 East 57th Street, New York, NY 10022.
Each of the individuals listed below is a citizen of the United States
of America.
NAME PRESENT AND PRINCIPAL ADDRESS (if different)
OCCUPATION
--------------------------------------------------------------------------------
Stephen D. Sautel Managing Director
--------------------------------------------------------------------------------
Todd L. Boehly Managing Director
--------------------------------------------------------------------------------
Adrian G.W. Duffy Managing Director
--------------------------------------------------------------------------------
Kenneth Nick Chief Compliance Officer
--------------------------------------------------------------------------------
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SCHEDULE 3
DIRECTORS AND EXECUTIVE OFFICERS OF
ORPHEUS HOLDINGS, LLC
Unless otherwise specified, the business address for each of the
individuals listed below is 135 East 57th Street, New York, NY 10022.
Each of the individuals listed below is a citizen of the United States
of America.
NAME PRESENT AND PRINCIPAL ADDRESS (if different)
OCCUPATION
--------------------------------------------------------------------------------
Donald J. Puglisi Director c/o Puglisi & Associates
850 Library Avenue, Suite 204
Newark, Delaware 19711
--------------------------------------------------------------------------------
-3-
SCHEDULE 4
DIRECTORS AND EXECUTIVE OFFICERS OF
MIDLAND ADVISORS COMPANY
Unless otherwise specified, the business address for each of the
individuals listed below is 200 East 10th Street, Suite 301, Sioux Falls, SD
57104.
Each of the individuals listed below is a citizen of the United States
of America.
NAME PRESENT AND PRINCIPAL ADDRESS (if different)
OCCUPATION
--------------------------------------------------------------------------------
E. John Fromelt Director and President
--------------------------------------------------------------------------------
Mark R. Walter Director 227 West Monroe, Suite 4900
Chicago, IL 60606
--------------------------------------------------------------------------------
Dominic J. Curcio Director 227 West Monroe, Suite 4900
Chicago, IL 60606
--------------------------------------------------------------------------------
Byron Scott Minerd Director 100 Wilshire Blvd.,
Santa Monica, CA 90401
--------------------------------------------------------------------------------
Tyson D. Rehfeld Vice President
--------------------------------------------------------------------------------
Scott W. Van Horssen Assistant Vice President
--------------------------------------------------------------------------------
-4-
SCHEDULE 5
DIRECTORS AND EXECUTIVE OFFICERS OF
NORTH AMERICAN COMPANY FOR LIFE AND HEALTH INSURANCE
Unless otherwise specified, the business address for each of the
individuals listed below is 525 West Van Buren, Chicago, IL 60607.
Each of the individuals listed below is a citizen of the United States
of America.
NAME PRESENT AND PRINCIPAL ADDRESS (if different)
OCCUPATION
--------------------------------------------------------------------------------
Gary J. Gaspar Director, Sr. Vice
President and CIO
--------------------------------------------------------------------------------
Michael M. Masterson Director, Chairman and CEO
--------------------------------------------------------------------------------
John J. Craig II Director and Sr. Vice
President
--------------------------------------------------------------------------------
Robert W. Korba Director 5949 Sherry Lane, Suite 1900
Dallas, TX 75225
--------------------------------------------------------------------------------
Roland C. Barker Director 5342 South Shore Drive
Chicago, IL 60615
--------------------------------------------------------------------------------
Willard Bunn III Director, Investment Baytree Bancorp
Banker
9 Market Square Court
Lake Forest, IL 60045-1406
--------------------------------------------------------------------------------
William D. Heinz Director, Attorney Jenner & Block
One IBm Plaza
Chicago, IL 60611
--------------------------------------------------------------------------------
Ronald H. Ridlehuber Director, President and COO
--------------------------------------------------------------------------------
Stephen P. Horvat Jr. Sr. Vice President -
General Counsel
and Secretary
--------------------------------------------------------------------------------
Thomas M. Meyer Sr. Vice President and One Midland Plaza
Treasurer
Sioux Falls, SD 57193
--------------------------------------------------------------------------------
Donald J. Iverson Sr. Vice President and One Midland Plaza
Actuary
Sioux Falls, SD 57193
--------------------------------------------------------------------------------
-5-
SCHEDULE 6
DIRECTORS AND EXECUTIVE OFFICERS OF
MIDLAND NATIONAL LIFE INSURANCE COMPANY
Unless otherwise specified, the business address for each of the
individuals listed below is One Midland Plaza, Sioux Falls, SD 57193.
Each of the individuals listed below is a citizen of the United States
of America.
NAME PRESENT AND PRINCIPAL ADDRESS (if different)
OCCUPATION
--------------------------------------------------------------------------------
Steven C. Palmitier Director, President and COO
--------------------------------------------------------------------------------
Michael M. Masterson Director, Chairman and CEO 525 West Van Buren
Chicago, IL 60607
--------------------------------------------------------------------------------
John J. Craig II Director and Sr. Vice 525 West Van Buren
President
Chicago, IL 60607
--------------------------------------------------------------------------------
Robert W. Korba Director 5949 Sherry Lane, Suite 1900
Dallas, TX 75225
--------------------------------------------------------------------------------
Donald J. Iverson Director, Sr. Vice
President and Actuary
--------------------------------------------------------------------------------
Stephen P. Horvat Jr. Sr. Vice President and 525 West Van Buren
Chief Legal Officer
Chicago, IL 60607
--------------------------------------------------------------------------------
Thomas M. Meyer Sr. Vice President and CFO
--------------------------------------------------------------------------------
-6-