EXHIBIT 10.31.1
July 19, 2007
TAVEX ALGODONERA, ▇.▇.
▇▇▇▇▇▇ 17 MADRID 28004
RE: PAYMENT AND SECURITY RELEASE
Dear Sirs:
Reference is hereby made to that certain letter agreement dated March
21, 2007 (the "LETTER AGREEMENT"), that sets forth the terms of an agreement by
and among: (A) Construcciones Solticio, S.A. de C.V. (erroneously referred to as
Solticio, S.A. de C.V. in the Letter Agreement) ("SOLTICIO"), Inmobiliaria
▇▇▇▇▇▇▇, ▇.▇. de C.V. ("INMOBILIARIA"), and ▇▇▇▇▇▇▇▇ y ▇▇▇▇▇▇ Textiles, S.A. de
C.V. ("ACOTEX" and together with Solticio and Inmobiliaria, the "SELLERS"); (B)
Tarrant Luxembourgh S.a.r.l. ("TAG LUX"); and (C) Tavex Algodonera, S.A.
("Tavex"). The parties desire to amend the Letter Agreement as provided in this
letter agreement (this "Amendment"). Capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed to such terms under
the Letter Agreement.
The parties hereto agree as follows:
1. EXCLUSIVITY; GOOD FAITH. ▇▇▇ ▇▇▇ ▇▇▇▇▇▇ confirms that all
commitments undertaken by TAG LUX during the Exclusivity Period, including the
period accorded to Tavex to exercise the Option, shall be extended until
September 1, 2007.
2. OPTION. Paragraph 2 of the Letter Agreement is hereby amended
to read in its entirety as follows:
"OPTION. At any time prior to expiration of the Exclusivity Period,
Tavex shall have the right and option (the "OPTION"), but not the obligation,
which Option may be exercised by Tavex in its sole discretion by delivering
notice (whether by personal delivery, courier service, certified mail,
electronic means or facsimile) to TAG LUX to the domicile indicated next to TAG
▇▇▇'s signature hereunder, to cause the release and discharge of the Liens on
the Collateral by paying to TAG LUX an amount of U.S. $17'750,000.00 (SEVENTEEN
MILLION SEVEN HUNDRED FIFTY THOUSAND U.S. DOLLARS) (the "PAYOFF AMOUNT"),
through a bank draft payable to TAG LUX issued by the London branch of a
European or Mexican bank of recognized standing (which may be the London branch
of BBVA Financial Group), on the same day that Tavex exercises the Option.
If Tavex exercises the Option, TAG LUX shall accept the payments
referred to above from Tavex. Upon receipt of the Payoff Amount: (i) all Liens
on the Collateral and the Obligations shall forever terminate, (ii) TAG LUX
forgives and waives any remaining claim that TAG LUX (or any of its Affiliates)
may have over assets of the Sellers or over any installation built in the lots
owned by the Sellers and that are to be purchased by Tavex (or one of its
Affiliates); and (iii) TAG LUX shall execute on such date such documents
(including public deeds granted before a notary public) and take such further
actions on or after such date as reasonably requested by Tavex or the Sellers to
provide for the full release and discharge of the Liens and the other matters
referred to herein. ▇▇▇▇▇ agrees to pay all filing fees and other costs incurred
in connection with the release of the Liens.
TAG LUX and the Sellers hereby covenant for the benefit of Tavex to
perform any and all actions and to enter into such agreements and/or other
instruments (including public deeds granted before a notary
public) as are deemed reasonably necessary and/or convenient by Tavex in order
to give full effect to said release and discharge (including with respect to any
mortgages or pledges held by TAG LUX). Furthermore, the parties hereto agree to
act at all times on a good faith basis and to diligently perform their
respective duties and obligations hereunder."
3. FABRIC COMMITMENT. Paragraph 4 of the Letter Agreement is
hereby amended to read in its entirety as follows:
"FABRIC PURCHASE COMMITMENT. If Tavex exercises the Option and pays in
full the Payoff Amount, TAG LUX hereby agrees to purchase from Tavex denim
fabric made in the plants owned (directly or indirectly) by Tavex and which are
acquired from the Sellers amounting to 500,000 (FIVE HUNDRED THOUSAND) linear
yards at a price of ExWorks at $2.50 per yard. All such fabric shall be
purchased by TAG LUX and shipped by TAVEX before October 31, 2007 and paid by
TAG LUX on December 27, 2007. Sales will be ExWorks on the premises of the
plants owned (directly or indirectly) by Tavex and which are to be acquired from
the Sellers. All such fabric shall be of oe/ring stretched or similar quality,
and shall be subject to inspection by an independent third party (which third
party may be SGS or Buro Veritas). Payments by TAG LUX on the purchases of
fabric made herein shall be secured by an irrevocable letter of credit issued by
a banking institution of recognized standing in the United States of America or
Hong Kong acceptable to Tavex, which letter of credit shall be issued on the day
TAG LUX receives in full the Payoff Amount; provided that Tavex notifies TAG LUX
with at least two business days in advance of the issuance of such letter of
credit."
4. Exhibits. The Letter Agreement is hereby amended to delete
Exhibits A, B, C and D, which Exhibits shall no longer comprise a part of the
Letter Agreement.
5. MISCELLANEOUS. Except as expressly set forth in this
Amendment, all of the terms of the Letter Agreement shall remain in full force
and effect. All references in the Letter Agreement to "Letter", "hereunder",
"hereof", or words of like import referring to the Letter Agreement shall mean
and be a reference to the Letter Agreement as and to the extent it is amended by
this Amendment. This Amendment shall be construed, and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with the
applicable laws in Madrid, Spain.
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If you are in agreement with the terms of this Amendment, please
indicate your acceptance thereof by signing in the appropriate space below and
returning one fully-executed counterpart hereof to TAG LUX at your earliest
convenience.
Very truly yours,
CONSTRUCCIONES SOLTICIO, S.A. DE .C.V.
INMOBILIARIA ▇▇▇▇▇▇▇, ▇.▇. DE C.V.
ACABADOS Y ▇▇▇▇▇▇ TEXTILES, S.A. DE C.V.
By: /S/ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: General Manager
TARRANT LUXEMBOURG S.A.R.L.
By: /S/ ▇▇▇▇▇▇ ▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇
Title: Manager
Agreed and accepted
TAVEX ALGODONERA, S.A.
By: /S/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: CEO
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