Document:

Letter of Intent to Purchase Twill mill

  Exhibit 10.67.1
 TARRANT APPAREL GROUP
 (dba Fashion Resource)
3151 E. Washington
Boulevard
 Los Angeles, CA 90023
 Tel:  (323) 780-8250  Fax:  (323) 780-0751
 Trans Textil International, S.A. de C.V.
 Inmobiliaria Cuadros, S.A. de C.V.
 Kamel Nacif

Edgar Allen Poe No. 231
 Col. Polanco, C.P. 11550
 Mexico, D.F.
                     Re: 
Purchase of Textile Mill
 Gentlemen:
                     This letter will confirm our agreement in principle concerning the purchase by Tarrant Mexico,
S. de R.L. de C.V. or its designee(s) (“Tarrant Mexico”), a wholly-owned subsidiary of Tarrant Apparel Group (“Tarrant”), of a textile mill located in Tlaxcala, Mexico, from Trans Textil International, S.A. de C.V.
(formerly, “Tex Transas, S.A. de C.V.) (“Trans Textil”) and Inmobiliaria Cuadros, S.A. de C.V. (“Cuadros”).
           1.       Background.  In December 1998, Tarrant Mexico entered into a Facility Development Agreement with
Trans Textil under which Tarrant Mexico would have the right to purchase a textile mill and related apparel processing facilities (the “Facility”) to be developed by Trans Textil.
                     During November  1999, Tarrant Mexico leased a portion of the Facility to wash, finish and pack
apparel.
                     Trans Textil completed construction of the Facility in November
2000.
                     In October 2000, Tarrant Mexico (i) amended the terms of the
Facility Development Agreement, including extending the term of the option to purchase the Facility to September 30, 2002, (ii) sold to Trans Textil for U.S. $33,820,275 certain denim manufacturing equipment and other personal property
purchased by Tarrant Mexico for use in the Facility, (iii) sold to Trans Textil for U.S. $1,412,225 certain cotton, work-in-progress and fabric manufactured in the pre-production testing of the Facility, (iv) leased to Trans Textil certain
denim manufacturing equipment purchased by the Company for use at the Facility, and (v) obtained a right of first refusal from

  
  Trans Textil to purchase all the production capacity of the Facility.  The purchase price of such equipment and inventory,
together with approximately U.S. $12.5 million previously advanced by Tarrant Mexico to Trans Textil in connection with the development of the Facility, is represented by a promissory note of Trans Textil (the “Note”), the outstanding
balance (including accrued interest) of which on August 30, 2002 was approximately U.S. $44,899,000.
                     The land and building related to the Facility (the “Real Property”) are owned by Cuadros. 
Kamel Nacif is the principal shareholder of Trans Textil and Cuadros.
           2.       Purchase of the
Facility.
                     (a)       Tarrant Mexico will
purchase from Trans Textil all equipment and other tangible personal property (the “Equipment”) located at the Facility, or otherwise required to enable the Facility to perform in accordance with the specifications established in
accordance with the Facility Development Agreement, including, but not limited to, all equipment and other tangible personal property sold by Tarrant Mexico to Trans Textil pursuant to that certain Equipment Purchase Agreement dated as of
October 5, 2000.
                     (b)       Tarrant
Mexico will purchase all the issued and outstanding capital stock of Cuadros (the “Shares”), and Mr. Nacif will cause the holders of the Shares to sell the same to Tarrant Mexico.
                     (c)       The Equipment Lease dated as of October 16, 2000,
between Tarrant Mexico as lessor and Trans Textil as lessee, will be terminated, and Trans Textil will deliver all equipment subject to such lease to the Facility or to such other location as Tarrant Mexico may specify.
                     (d)       The Production Agreement dated as of October 16, 2000,
between Tarrant Mexico and Trans Textil, will be terminated.
                     (e)       Tarrant Mexico will acquire the Equipment and the Shares free
and clear of any lien, claim, charge or other encumbrance.  Tarrant Mexico will not assume any liability of Trans Textil, Cuadros or the Facility, and Mr. Nacif will indemnify and hold harmless Tarrant Mexico from any such
liability.
           3.       Purchase Price.
                     (a)       The purchase price for the Equipment will be as
follows:

	  
 	 (i)
 	 three million shares of the Common Stock of Tarrant (the “Tarrant Shares”);
 

 -2-

  

	  
 	 (ii)
 	 an amount equal to the difference between (A) U.S. $12.0 million and (B) any amounts (other than the Note) owed by Trans Textil or any of its affiliates to Tarrant or any of its
affiliates, which amount will be payable in cash on the closing date; and
 
	  
 	  
 	  
 
	  
 	 (iii)
 	 cancellation of the Note.
 

                     (b)       The purchase price for the Shares will consist of a number of
shares of the capital stock of Tarrant Mexico such that after the issuance thereof, the current shareholders of Cuadros will own 25% of the outstanding shares of the capital stock of Tarrant Mexico (the “Minority Interest”).

          4.       Definitive Agreement.
                     (a)     This letter does not constitute a binding commitment on the part of
either Tarrant Mexico, Trans Textil, Cuadros or Mr. Nacif to consummate the transactions contemplated hereby, and no such party shall be under any legal obligation except as set forth in duly executed definitive agreements containing detailed
terms, conditions, covenants, representations and warranties satisfactory to all parties (the “Agreement”).
                     (b)     Immediately upon the execution of this letter by all parties hereto,
counsel for Tarrant Mexico will prepare the Agreement, and the respective parties will use reasonable commercial efforts to review, revise, execute and deliver the Agreement as quickly as practicable.
                     (c)     The Agreement will contain all representations and warranties by Trans
Textil, Cuadros and Mr. Nacif which are customary in transactions of this nature, including, but not limited to, representations and warranties regarding the organization of Trans Textil and Cuadros; the standing and authority of Trans Textil,
Cuadros and Mr. Nacif to execute, deliver and perform the Agreement; the enforceability of the Agreement; the ownership of the Shares; the absence of any defect in the Equipment or the Real Property; the absence of any liabilities of Cuadros;
the operation of the Facility to date in accordance with all applicable laws, including, but not limited to, all environmental, health and safety and employment laws; and the absence of any environmental claim with respect to the Real
Property.  The Agreement will provide that each party will indemnify the others from any loss relating to any breach by the indemnifying party of any of its representations, warranties or covenants.
                     (d)     The Agreement will provide that the obligations of Tarrant Mexico to
consummate the transactions contemplated thereby will be contingent upon the satisfaction of such conditions precedent as are customary in transactions of this
 -3-

  
  nature, including, but not limited to, the accuracy of Trans Textil’s, Cuadros’ and Mr. Nacif’s
representations and warranties; the satisfaction by Trans Textil, Cuadros and Mr. Nacif of their covenants and agreements; the absence of litigation which could prevent or make illegal such transactions; the absence of any adverse change in the
business, condition or prospects of the Facility; the receipt of all other necessary approvals or consents of third parties (in each case without the imposition of any condition not acceptable to Tarrant Mexico in its sole and absolute discretion);
compliance with all applicable laws and regulations; completion by Tarrant Mexico and its advisers of a due diligence examination of the Facility and the business of Trans Textil and Cuadros to the complete satisfaction of Tarrant Mexico in its sole
discretion; the completion of an audit of the financial statements of the Facility by a firm of independent auditors satisfactory to Tarrant Mexico in its sole discretion; and the receipt by Tarrant Mexico of a fairness opinion from Wedbush Morgan
Securities.
           5.       Notices.  Each party shall promptly notify the others of (i) any
notice or other communication from any person alleging that the consent of such person is or may be required in connection with the transactions contemplated hereby, (ii) any notice or other communication from any governmental or regulatory
agency or authority in connection with the transactions contemplated hereby and (iii) any actions, suits, claims, investigations or proceedings commenced or, to the best of its knowledge threatened, against, relating to, involving or otherwise
affecting the Facility or Cuadros or which relate to the consummation of the transactions contemplated hereby.
           6.       Publicity.  All press releases and other public announcements by any party relating to the transactions
contemplated hereby will be subject to the prior review and approval of the other parties, which approval will not be unreasonably withheld; provided, however, that the party proposing the same will provide prior written notice of such press
release or announcement (including the text thereof) to the other party at least two (2) business days prior to the issuance of the same.
           7.       Costs.  Each party will pay its own costs and expenses incurred in connection with the transactions
contemplated hereby.  Each party represents and agrees that it is not and will not become obligated to pay any finder’s fee, commission or similar payment to any agent, broker or finder in connection with the transactions contemplated
hereby.
           8.       Termination.  Either party will have the right, in its sole and absolute
discretion, for any reason or no reason, to terminate the negotiations concerning the transactions contemplated hereby by giving written notice thereof to the other parties.
 -4-

  
                      If the
foregoing accurately reflects our agreement in principle, please so indicate by executing the enclosed copy of this letter of intent and returning it to the undersigned on or before the 30th  of August, 2002.

	  
 	 Very truly yours,
 
	  
 	  
 
	  
 	 TARRANT MEXICO, S. de R.L. de C.V.
 
	  
 	  
 
	  
 	  
 
	  
 	 By: 
 	 /s/  TODD KAY
 	  
 
	  
 	  
 	 
 	  
 
	  
 	  
 
	 AGREED AND ACCEPTED
 
	 THIS 30th DAY OF AUGUST, 2002
 
	  
 
	 TRANS TEXTIL INTERNATIONAL, S.A. de C.V.
 
	  
 
	  
 
	 By  
 	 /s/ KAMEL NACIF
 	  
 
	  
 	 
 	  
 
	  
 	 Authorized Representative
 	  
 
	  
 	  
 
	  
 	  
 
	 INMOBILIARIA CUADROS, S.A. de C.V.
 
	  
 
	  
 
	 By  
 	 /s/ KAMEL NACIF
 	  
 
	  
 	 
 	  
 
	  
 	 Authorized Representative
 	  
 
	  
 	  
 
	  
 	  
 
	  
 	 /s/ KAMEL NACIF
 	  
 
	  
 	 
 	  
 
	  
 	 KAMEL NACIF
 	  
 
						

 -5-<PAGE>

                                                                   EXHIBIT 10.13

                            ADMINISTRATIVE AGREEMENT

     This Administrative Agreement (the "Agreement") is made effective as of
October 14, 2002 (the "Effective Date"), by and between Pacific Income Advisers,
a California corporation ("PIA"), and Anworth Mortgage Asset Corporation, a
Maryland corporation ("Anworth").

                                R E C I T A L S :
                                - - - - - - - -

     A. Anworth is in the business of investing primarily in United States
agency and other highly rated mortgage-backed securities that it acquires in the
secondary market.

     B. Anworth desires PIA to provide to it certain services and equipment as
it may require, and PIA desires to provide such services and equipment to
Anworth, in accordance with the terms and conditions hereof.

                               A G R E E M E N T :
                               - - - - - - - - -

     NOW, THEREFORE, in consideration of the foregoing recitals and the
agreements contained herein, the parties hereby agree as follows:

     1. Services to be Performed and Equipment to be Provided by PIA.
        ------------------------------------------------------------

        1.1 Services and Equipment. PIA shall furnish to Anworth and Anworth
            ----------------------
shall utilize the services and equipment described in Schedule A attached hereto
(collectively, the "Services and Equipment").

            During the term of this Agreement, PIA will use its best efforts to
conduct its duties hereunder in the best interests of Anworth and in a lawful
manner in compliance with applicable laws, statutes, rules and regulations. PIA
shall provide the Services and Equipment with the same degree of care, skill and
prudence customarily exercised by it for its own operations. The Services and
Equipment provided by PIA to Anworth shall be made available by PIA at such
level of utilization as Anworth may reasonably require following the date
hereof.

        1.2 Inspection. PIA shall permit Anworth, and its authorized
            ----------
representatives, to enter upon PIA's premises during normal business hours for
the purpose of examining or inspecting Anworth's records or examining or making
extracts of Anworth's books and records related to the Services and Equipment;
provided, however, that the same shall be conducted without unreasonable
interference or disruption to the business and operation of PIA.

     2. Term and Termination.
        --------------------

        The original term of this Agreement shall end on October 13, 2003,
provided, that this Agreement shall thereafter automatically renew for
successive one-year terms, unless written notice of either parties' intent not
to renew is received by the other party no less than ninety (90)

<PAGE>

days prior to the expiration of the term or the applicable renewal period.
Notwithstanding the foregoing, Anworth shall have the sole and exclusive right
to terminate this Agreement without liability (other than for accrued but unpaid
liabilities provided hereunder) (i) for any reason upon thirty (30) days prior
written notice to PIA, and (ii) immediately upon any material breach by PIA of
its obligations hereunder.

     3. Compensation.
        ------------

        As full payment for the Services and Equipment provided hereunder,
Anworth shall pay PIA a quarterly fee (the "Fee") calculated as the product of
(a) Anworth's Market Capitalization (as defined below) for the immediately
preceding quarter multiplied by (b) the Applicable Percentage, as set forth in
the table below. The Fee shall be calculated quarterly in advance and paid on or
before the thirtieth day of the first month of each quarter. The Fee for any
partial quarter shall be prorated based on the number of days during such
quarter that this Agreement is in effect.

           Market Capitalization            Applicable Percentage
           ---------------------            ---------------------
            First $225 million                      0.07%

              All thereafter                       0.035%

        For purposes hereof, "Market Capitalization" shall mean for any quarter
the product of (a) the number of shares of each class of Anworth's publicly
traded equity issued and outstanding on the last trading day of the quarter
multiplied by (b) the closing price per share as reported on that day on the
exchange on which each such security is traded.

        If, for any reason, Anworth's requirements for the level, scope or type
of Services and Equipment to be provided above significantly decreases or
completely terminates at any time during the term of this Agreement, the Fee for
such Services and Equipment shall immediately be decreased or eliminated
accordingly.

        If this Agreement is terminated on any day other than the last day of
the quarter, then, within ten (10) days after such termination of this
Agreement, PIA shall refund to Anworth any Fee previously paid for such quarter
in excess of the prorated Fee amount for such quarter.

     4. Litigation.
        ----------

        PIA shall, as soon as it becomes aware of any threatened or potential
legal, administrative or other proceedings involving Anworth, promptly notify
Anworth of such threatened or potential proceeding in writing, and shall
promptly provide to Anworth the originals of any and all correspondence and
other documents related thereto that PIA receives.

        PIA also agrees to use its best efforts to make available to Anworth,
upon Anworth's request, PIA's officers, employees and agents as witnesses to the
extent that such persons may reasonably be required in connection with any
legal, administrative or other proceedings relating to the Services and
Equipment. Anworth agrees to reimburse PIA for its reasonable out-of

                                      -2-

<PAGE>

pocket expenses incurred in making such officers, employees and agents available
as witnesses at Anworth's request.

     5. Books and Records.
        -----------------

        5.1 Proprietary. All books of account, accounting and personnel records,
            -----------
customers' and suppliers' lists, documents, vouchers, letters and all other
papers and records (in whatever form stored or recorded) pertaining to the
Services and Equipment, and information provided to Anworth hereunder, shall be
the property of Anworth.

        5.2 Maintenance; Delivery. PIA agrees to maintain books and records
            ---------------------
pertaining to the Services and Equipment, and information provided hereunder,
in accordance with Anworth's internal control procedures and shall deliver all
such records to Anworth, at Anworth's sole expense, promptly upon the expiration
of this Agreement.

     6. Confidentiality.
        ---------------

        6.1 Duty of Confidentiality. The parties agree: (i) to hold in trust and
            -----------------------
maintain confidential, (ii) not to disclose to others without prior written
approval from the disclosing party, (iii) not to use for any purpose, other than
such purpose as may be authorized in writing by the disclosing party or pursuant
to this Agreement; and (iv) to prevent duplication of and disclosure to any
other party, any Information received from the disclosing party or developed,
presently held or continued to be held, or otherwise obtained, by the receiving
party under this Agreement.

        6.2 Information. "Information" shall mean all information disclosed by
            -----------
either party to the other orally, visually, in writing, or in any other tangible
form, and shall include, but is not limited to, all technical information,
financial plans, computer data bases, and similar information disclosed in
connection with this Agreement.

        6.3 Exceptions. The foregoing obligations of confidentiality,
            ----------
non-disclosure and non-use shall not apply to any Information to the extent that
the obligated party can show that: (i) such Information is or becomes knowledge
generally available to the public other than through the acts or omissions of
the obligated party; (ii) such Information is subsequently received by the
obligated party on a non-confidential basis from a third party who did not
receive it directly or indirectly from the disclosing party; or (iii) disclosure
of such Information is required under applicable law or regulations.

        Specific elements of Information shall not be deemed to come under the
above exceptions merely because they are embraced by more general Information
which is or becomes public knowledge.

     7. Indemnification. Anworth shall indemnify, defend and hold harmless PIA
        ---------------
and each of its directors, officers, employees and agents from and against all
direct damages, losses and out-of-pocket expenses (including reasonable legal
fees) ("Losses") caused by or arising out of the performance of PIA's
obligations and agreements hereunder, except where such Losses are caused by or
arise from PIA's bad faith, gross negligence, fraud or recklessness in the
performance or the failure in the performance of its duties hereunder.

                                      -3-

<PAGE>

     8. Miscellaneous.
        -------------

        8.1 No Partnership or Joint Venture. Nothing contained in this Agreement
            -------------------------------
shall constitute or be construed to be or create a partnership or joint venture
between PIA or its respective successors or assigns on the one hand and Anworth
or its respective successors or assigns, on the other hand.

        8.2 Assignment. Neither this Agreement nor any rights, duties or
            ----------
obligations hereunder may be assigned or delegated by any of the parties, in
whole or in part, whether voluntarily, by operation of law or otherwise. Any
attempted assignment or delegation in violation of this prohibition shall be
null and void. Subject to the foregoing, all of the terms and provisions hereof
shall be binding upon, and inure to the benefit of, the permitted successors and
assigns of the parties. Nothing contained herein, express or implied, is
intended to confer on any person other than the parties or their respective
permitted successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.

        8.3 Specific Performance. PIA acknowledges that the remedy at law for
            --------------------
any breach, or threatened breach, of its obligations and duties hereunder will
be inadequate and, accordingly, covenants and agrees that, with respect to any
rights or remedies that Anworth may have and regardless of whether such other
rights or remedies have been previously exercised, Anworth is entitled to such
equitable and injunctive relief as may be available.

        8.4 Notices. All notices and other communications required or permitted
            -------
hereunder shall be in writing, shall be deemed duly given upon actual receipt,
and shall be delivered (i) in person, (ii) by registered or certified mail (air
mail if addressed to an address outside of the country in which mailed), postage
prepaid, return receipt requested, (iii) by a generally recognized overnight
courier service which provides written acknowledgment by the addressee of
receipt, or (iv) by facsimile or other generally accepted means of electronic
transmission (provided that a copy of any notice delivered pursuant to this
clause (iv) shall also be sent pursuant to clause (ii)), addressed as follows:

            If to PIA:

            1299 Ocean Avenue
            Suite 210
            Santa Monica, California 90401
            Attention:  Heather U. Baines
            Telecopier:  310-434-0100

            If to Anworth:
            1299 Ocean Avenue
            Suite 250
            Santa Monica, California 90401
            Attention:       Thad M. Brown
            Telecopier:      310-434-0070

            or to such other addresses as may be specified by like notice to the
            other party.

                                      -4-

<PAGE>

        8.5  Applicable Law. This Agreement shall be governed by and construed
             --------------
in accordance with the laws of the State of California, without regard to
conflict of laws principles of any jurisdiction.

        8.6  Amendments and Waivers. No modification, amendment, termination or
             ----------------------
waiver of any provision of this Agreement, nor consent to any departure
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the parties, and then such waiver or consent shall be effective
only in the specific instance and for the purpose for which given. Neither any
course of dealing nor any failure or delay on the part of any of the parties in
exercising any right, power or privilege hereunder shall impair any such power,
right or privilege or operate as a waiver thereof or as a waiver or acquiescence
in any default, nor shall any single or partial exercise thereof preclude any
other or further exercise of any other right, power or privilege. No notice to
or demand on any of the parties in any case shall entitle such party to any
other or further notice or demand in the same, similar or other circumstances.

        8.7  Attorneys' Fees; Costs and Expenses. In any action or proceeding
             -----------------------------------
brought to enforce any provision of this Agreement, or where any provision
hereof is validly asserted as a defense, the successful party shall be entitled
to recover reasonable attorneys' fees in addition to its costs and expenses and
any other available remedy.

        8.8  Invalidity. If any provision of this Agreement is too broad to
             ----------
permit enforcement to its full extent, such provision shall nevertheless be
enforced to the maximum extent permitted by law, and each party agrees that such
provisions may be judicially modified accordingly in any proceeding brought to
enforce this Agreement. If any portion of this Agreement shall be held to be
indefinite, invalid or otherwise entirely unenforceable, the entire Agreement
shall not fail on account thereof. The balance of this Agreement shall continue
in full force and effect.

        8.9  Section and Other Headings. Section titles are for descriptive
             --------------------------
purposes only and shall not control or alter the meaning of this Agreement as
set forth in the text.

        8.10 Counterparts. This Agreement may be executed in one or more
             ------------
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each
party and delivered to each party.

        8.11 Further Actions. Subject to the terms and conditions of this
             ---------------
Agreement, each of the parties agrees to use all commercially reasonable efforts
to take, or cause to be taken, all action necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement.

                                      -5-

<PAGE>

         IN WITNESS WHEREOF, the parties have caused this Agreement to be signed
by their duly authorized respective officers, all as of the date first written
above.

                                      PACIFIC INCOME ADVISERS

                                      By:   /s/ Heather U. Baines
                                            ------------------------------------
                                            Name:  Heather U. Baines
                                            Title: President

                                      ANWORTH MORTGAGE ASSET CORPORATION

                                      By:   /s/ Thad M. Brown
                                         ---------------------------------------
                                         Name: Thad M. Brown
                                         Title:  Chief Financial Officer

                                      -6-

<PAGE>
                                   SCHEDULE A
                                   ----------

                             SERVICES AND EQUIPMENT
                             ----------------------

     1.     SERVICES:

     (i)    Administrative, secretarial, accounting and bookkeeping services;

     (ii)   Data processing, including, but not limited to, computer
programming, systems support, computer servers and computer operations;

     (iii)  Maintenance and repair of computer systems and office equipment;

     (iv)   Shareholder communication services, including, but not limited to,
distribution of written materials to shareholders of Anworth Mortgage Asset
Corporation;

     (v)    Portfolio accounting services and settlement services, including,
but not limited to, settlement of trades;

     (vi)   Employee and personnel services, including, but not limited to,
advisory services relating to employee benefit programs and other personnel
matters;

     (vii)  Research services, including, but not limited to, advisory services
relating to securities, market research and utilization of Bloomberg Financial
Services;

     (viii) Usage of telephone lines and T1 lines;

     (ix)   Usage of off-site storage facilities;

     (x)    Usage of parking facilities;

     (xi)   Graphic services for Anworth's Web site and for materials
distributed by Anworth, including, but not limited to, letterhead and
promotional materials; and

     (xii)  Receptionist services.

     2.     EQUIPMENT:

     (i)    Office furniture and equipment to be determined by the parties;

     (ii)   Computer equipment to be determined by the parties; and

     (iii)  Office and kitchen supplies.

                                   SCHEDULE A
                                      -1-

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