Page 15 of 17 – SEC Filing
Item 6.
Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer
Item
6 of the Original Schedule 13D is hereby amended and supplemented as follows:
The information contained in Item 3 above
is hereby incorporated by reference.
SWIMS Purchase Agreement
Pursuant to the SWIMS Purchase Agreement,
the Issuer will provide certain demand and piggy-back registration rights with respect to shares of Common Stock beneficially owned
by the SWIMS Sellers. Each of TCP RG, LLC, TCP RG II, LLC and TCP Denim, LLC agrees that it will take actions reasonably necessary
to give effect to the registration rights of SWIMS Sellers, including by agreeing to cutbacks in a registered offering with respect
to their rights in the Registration Rights Agreement dated January 28, 2016.
SWIMS Warrant
By its terms, the SWIMS Warrant may only
be transferred to certain permitted transferees, and, until exercise, will not confer upon the holder of the SWIMS Warrant the
rights of a stockholder of the Issuer. The exercise price and the number of shares of Common Stock issuable on exercise of the
SWIMS Warrant will be adjusted upon certain corporate events, including stock splits, stock dividends, reverse stock splits, combinations,
recapitalizations and reorganizations and certain other events. Additionally, if the Issuer declares or makes any dividend or other
distribution of its assets to holders of the Common Stock (through return of capital, a distribution of cash, property or options
or otherwise), the holder of the Warrant will be entitled to participate in the distribution of assets to the same extent that
the holder would have participated if the holder held the number of shares issuable on exercise of the SWIMS Warrant as of the
record date for the distribution.
SWIMS Convertible Note
Upon any recapitalization, stock split,
stock dividend, reverse stock split or issuance of capital stock of the Issuer, the Issuer and the holder of the SWIMS Convertible
Note will negotiate in good faith to adjust the conversion price to preserve equitably the value of the SWIMS Convertible Note
after giving effect to such issuance or distribution.
Class A-1 Preferred Stock
The Class A-1 Preferred Shares issuable
upon exercise of the SWIMS Convertible Note, for which a certificate of designation has not yet been filed, will be senior to the
Common Stock upon liquidation and will have substantially all of the same rights, properties and privileges of the Series A Preferred
Stock. However, Class A-1 Preferred Shares will (i) contain only standard anti-dilution adjustments and (ii) contain no conversion
price adjustment set forth in Section 6(e) of the Series A Preferred Stock.
Each of the foregoing descriptions of the
SWIMS Purchase Agreement, the SWIMS Warrant, the SWIMS Convertible Note and the Class A-1 Preferred Stock does not purport to be
complete and is qualified in its entirety by reference to the full text of the SWIMS Purchase Agreement, the SWIMS Warrant, the
SWIMS Convertible Note, Amendment No. 1 to the SWIMS Convertible Note and the Certificate of Designation of 10% Series A Convertible
Preferred Stock, respectively, each of which is filed as an exhibit to this Amendment and is incorporated herein by reference.
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