Exhibit 10.24
April 24, 2006
Mr. Paul Guez
Mr. Hubert Guez
Azteca Production International,
Inc.
5804 E. Slauson Avenue
Commerce, CA 90048
Gentlemen:
Reference is made to that certain
Promissory Note dated July 17, 2003 (the “Note”)
issued by Innovo Azteca Apparel, Inc., a California corporation
(“IAA”) in favor of Azteca Production International,
Inc. (“Azteca”). Reference is also made to that certain
Asset Purchase Agreement dated March 31, 2006, by and among
Cygne Designs, Inc. (“Cygne”), IAA and Innovo Group,
Inc., a Delaware corporation (“Innovo”), whereby Cygne
has agreed to purchase certain assets and properties and assume
certain liabilities (including outstanding obligations under the
Note and certain obligations of IAA and Innovo under the Buyer Earn
Out provision contained in Section 8.11 of that certain Asset
Purchase Agreement dated July 17, 2003, by and among IAA,
Innovo, Azteca, Sweet Sportswear, LLC, Hubert Guez and Paul Guez
(the “Earnout”)), used by IAA in the operation of the
private label portion of IAA’s business (the
“Transaction”).
This letter sets forth our
understanding regarding certain distributions to be made with
respect to Cygne’s assumption of liabilities under the Note
and the Earnout pursuant to the Transaction. Simultaneously with
the closing of the Transaction, the Note will be converted into
2,000,000 shares of Cygne common stock (the
“Shares�
