<PAGE>

                         WAREHOUSE SUBLEASE AGREEMENT



                                BY AND BETWEEN



                            THE INNOVO GROUP, INC.



                                      AND



                        TICE ENGINEERING & SALES, INC.



                        DATED:  DECEMBER _______, 1999
<PAGE>

                               TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S>                                                                      <C>
1.   Premises............................................................. 2
2.   Term................................................................. 2
3.   Early Termination.................................................... 3
4.   Minimum Rent......................................................... 3
5.   Reimbursement of Renovation Costs.................................... 3
6.   Tenant's Use and Operation........................................... 3
7.   Utilities............................................................ 4
8.   Landlord's Duty to Repair............................................ 4
9.   Tenant's Duty to Repair; Alterations................................. 4
10.  Hazardous Substances................................................. 4
11.  Surrender of Leased Premises......................................... 5
12.  Property of Tenant................................................... 5
13.  Waiver of Subrogation................................................ 5
14.  Insurance and Indemnity.............................................. 5
15.  Partial Destruction.................................................. 5
16.  Substantial Destruction.............................................. 6
17.  Right of Termination................................................. 6
18.  Eminent Domain....................................................... 7
19.  Rights of Landlord's Lender.......................................... 7
20.  Quiet Enjoyment...................................................... 7
21.  Subordination........................................................ 8
22.  Indemnity... ........................................................ 8
23.  Attorney's Fees and Expenses......................................... 8
24.  Tenant Assignment and Subletting..................................... 8
25.  Events of Default and Remedies....................................... 8
26.  Notices..............................................................10
27.  Successors...........................................................10
28.  Governing Law........................................................10
29.  Landlord's Exculpatory Clause........................................10
30.  Entire and Binding Agreement.........................................11
31.  Addenda..............................................................11

EXHIBITS

A.   Site Plan............................................................12
B.   Legal Description....................................................13
</TABLE>

                                       1
<PAGE>

                         WAREHOUSE SUBLEASE AGREEMENT

     THIS WAREHOUSE SUBLEASE AGREEMENT is made and entered into this _____ day
of December, 1999, by and between THE INNOVO GROUP, INC., a Delaware
corporation, (referred to as "Landlord"), and TICE ENGINEERING & SALES, INC., a
Tennessee corporation (referred to as "Tenant").

                              W I T N E S S E T H:

1.   Premises:  Landlord hereby subleases to Tenant, and Tenant subleases and
     --------
     accepts, the Premises containing approximately Forty-Four Thousand (44,000)
     square feet of warehouse space with such warehouse space outlined and
     designated on the site plan attached hereto as Exhibit A which is
     incorporated herein by reference (such space is referred to collectively
     hereinafter as the "Leased Premises"). The Leased Premises are part of the
     approximately 300,000 square foot warehouse complex known as "Levi Place"
     (which includes the warehouse space shown on the attached site plan and two
     separate office buildings totaling approximately 9,000 square feet and
     located adjacent to such warehouse space) formerly owned by Levi Strauss &
     Company (such complex, including the two office buildings, is referred to
     hereinafter collectively as the "Warehouse").  The location of the
     Warehouse is on North Cherry Street in Knoxville, Tennessee and the legal
     description of the land upon which the Warehouse is located is attached
     hereto as Exhibit B (such land referred to hereinafter as the "Land").
     The Land and the Warehouse are referred to collectively hereinafter as the
     "Project."  A certain portion of the Project is deemed common area (the
     "Common Area"), such Common Area to include but not be limited to certain
     parking areas, driveways, entrances and exits thereto, service roads,
     loading facilities, sidewalks, ramps, landscaped areas, exterior stairways,
     restroom facilities, and all other uses in common by the Tenant and all the
     Tenants in the Project, however, those elements of parking, driveways,
     entrances and exits, loading facilities, and restroom facilities that are
     located within the Leased Premises shall not be deemed to be common areas.

     Tenant shall have first right of refusal to sublease space in the Warehouse
     adjacent to the Leased Premises on the same terms and conditions as
     contained herein, subject to the pre-existing rights of other Tenants in
     the Project. The Tenant shall exercise such right within thirty (30) days
     upon receiving notification from Landlord that such space is being
     requested by a third party by sending its request for such space to the
     Landlord in writing by certified mail, return receipt requested.

2.   Term:  The original term of this Sublease shall be for a period of five (5)
     ----
     years (the "Base Term") from the Commencement Date hereinafter provided
     unless sooner terminated hereby.  Said term, and Tenant's obligation to pay
     rent, shall commence on the earlier of the following days (referred to as
     "Commencement Date"): (a) the date which is thirty (30) days after Tenant
     has been notified in writing by Landlord that the Leased Premises are ready
     for occupancy, or (b) the

                                       2
<PAGE>

     date on which Tenant shall open the Leased Premises for business. In the
     event the expiration of the thirty (30) day period does not occur on the
     first day of the month or Tenant shall have opened the Leased Premises for
     business on a day other than the first day of the month, then the term
     shall commence on the first day of the month next succeeding; provided,
     however, the Tenant shall pay rent for the fractional month on a per diem
     basis (calculated on the basis of a thirty day month) until the first day
     of the month when the term commences, and thereafter the rent shall be paid
     in equal monthly installments in advance on the first day of each month
     during the term of this Sublease. Tenant shall pay any rental payment for a
     fractional month on the first (1st) day of the month succeeding such
     fractional month. Notwithstanding the foregoing, if the Tenant has complied
     with all the terms and provisions of this Sublease and is not in default in
     any respect hereunder, Tenant shall have an option (the "Option") to
     sublease the Leased Premises after the termination of the Base Term for one
     (1) additional five (5) year period upon the same terms and conditions set
     forth herein (each such five year period referred to hereinafter
     individually as an "Option Term"); provided, however, Minimum Rent during
     the Option Term shall be One Hundred Ten Percent (110%) of the Minimum Rent
     of the Base. The Tenant shall exercise the Option by giving notice to the
     Landlord in writing by certified mail, return receipt requested, not less
     than one hundred twenty (120) days before the expiration of the Base Term
     and thereafter, not less than one hundred twenty (120) days prior to the
     expiration of any Option Term.

3.   Early Termination:  Tenant shall have right of early termination at the
     -----------------
     end of three (3) years by giving notice to the Landlord in writing by
     certified mail, return receipt requested, not less than six (6) months
     before three years after the Commencement Date of this Sublease. In the
     event of such early termination, all remaining unamortized renovation costs
     will be due and payable by Tenant in a lump sum upon the early termination
     date.

4.   Minimum Rent:  Tenant shall pay to the Landlord as minimum rent an annual
     ------------
     amount equal to $2.30 times the total square footage of the Leased Premises
     (the "Minimum Rent"), to include charges for real estate taxes and casualty
     insurance premiums. All Minimum Rent shall be paid in advance in equal
     monthly installments on the first day of each month at the address of the
     Landlord stated herein without demand, setoff or deduction. Minimum Rent
     for any partial months shall be prorated.

5.   Reimbursement of Renovation Costs:  Tenant shall reimburse Landlord for
     ---------------------------------
     agreed upon renovations to the Leased Premises up to a maximum of One
     Hundred Thousand Dollars ($100,000). Cost of renovations shall be
     reimburseable to Landlord to be amortized at Eight and One-half Percent
     (8.25%) over the Base Term of the five-year lease.

6.   Tenant's Use and Operation:  The Leased Premises shall be used and
     --------------------------
     occupied by Tenant solely as an office, warehouse and light manufacturing
     facility and for no other use without Landlord's prior written consent.
     Tenant shall comply with all

                                       3
<PAGE>

     rules, regulations and laws of any governmental authority with respect to
     use and occupancy of the Leased Premises.

7.   Utilities:  Electrical utility costs for lighting, manufacturing, plant and
     ---------
     office operations for the Leased Premises will be separately metered and
     shall be the responsibility of the Tenant upon separation of the meters on
     approximately  March 1, 2000 (utilities will be prorated between Landlord
     and Tenant from Commencement Date until utilities are separately metered) .
     Tenant shall make all deposits, and promptly pay all such utility charges
     in connection with the Leased Premises as the same shall become due and
     payable during the term of this Sublease.  Electrical utility costs of the
     chilling units and remaining utilities of gas, sewer and water will be pro-
     rated by Landlord, and the Tenant shall pay promptly as in when the same
     shall become due its Pro-Rata Share of all such utilities and all taxes or
     charges on such utility services which are used on or attributable to the
     Leased Premises which are not paid directly by the Tenant.

     Tenant's "Pro-Rata Share" shall be a fraction, (i) the numerator of which
     shall be the number of square feet of the Warehouse leased by Tenant and
     (ii) the denominator of which shall be the total number of square feet in
     the Warehouse.  Tenant shall pay its Pro-Rata Share of the above expenses
     within twenty (20) days after receipt of a bill.

8.   Landlord's Duty to Repair:  Landlord shall keep and maintain in good
     -------------------------
     repair the foundation, exterior walls, roof, plumbing, main electrical
     system, HVAC, and Common Areas of the Warehouse and the structural portions
     of the Warehouse. Landlord shall have a reasonable time to begin repairs
     and in the event that Landlord fails to begin and make reasonable efforts
     towards the repairs then Tenant may withhold rent payments without penalty
     until reasonable maintenance has been successfully completed.

9.   Tenant's Duty to Repair; Alterations:  Except for the repairs to be
     ------------------------------------
     performed by Landlord, Tenant shall keep and maintain in good order,
     condition and repair the Leased Premises. Tenant shall be responsible for
     damages to the Leased Premises as a result of Tenant's negligence.

10.  Hazardous Substances:  Tenant shall not generate, store, treat, dispose of,
     --------------------
     install or otherwise permit any Hazardous Substances on, in, or under or in
     any way related to the Leased Premises, or any other portion of the Project
     or cause or permit any such generation, storage, treatment, disposal,
     installation or other use with respect thereto except in accordance with
     all laws, rules and regulations.  Tenant shall fully indemnify and hold
     Landlord harmless from any liability, damage, cost or expense that Landlord
     might otherwise suffer from Tenant's failure to fully comply with this
     provision.  This indemnity shall survive expiration or other termination of
     this Sublease.  As used herein, "Hazardous Substances" means and includes
     any substances, materials, elements or compounds that are listed as
     Hazardous Substances on any list adopted or maintained by any federal,
     state or local governmental authority or agency.

                                       4
<PAGE>

11.  Surrender of Leased Premises:  At the termination of the Base Term or any
     ----------------------------
     Option Term, if applicable, the Tenant does agree to deliver the Leased
     Premises in the same condition as received by it on the Commencement Date
     (subject to the removals hereinafter required), reasonable wear and tear
     excepted, and shall surrender all keys for the Leased Premises to Landlord
     at the place then fixed for the payment of rent and shall inform Landlord
     of all combination locks, safes and vaults, if any, in the Leased Premises.
     Any items remaining in the Leased Premises on the termination date of this
     Sublease shall be deemed abandoned for all purposes and shall become the
     property of Landlord and the latter may dispose of the same without
     liability of any type or nature. Any renovations or changes to the Leased
     Premises made by Tenant may be abandoned if their installation was approved
     by Landlord prior to their installation.

12.  Property of Tenant:  Tenant's property on the Leased Premises shall be at
     ------------------
     the sole risk and hazard of Tenant.  Landlord shall not be liable or
     responsible for any loss of or damage to Tenant or Tenant's property.

13.  Waiver of Subrogation:  If any property owned by Tenant and located on the
     ---------------------
     Leased Premises is damaged or destroyed by an insured peril, Landlord shall
     not have any liability to Tenant, nor to any insurer of Tenant, for such
     damage or destruction.  Tenant shall require all policies of risk insurance
     carried by it on its property on the Leased Premises to contain a provision
     in and by which the insurer shall waive its rights of subrogation against
     Landlord.

14.  Insurance and Indemnity:  Tenant agrees to indemnify and save harmless the
     -----------------------
     Landlord against all claims for damages to persons or property by reason of
     the use or occupancy of the Leased Premises, and all expenses incurred by
     Landlord, including attorney fees and court costs, unless caused by
     Landlord negligence.  Tenant further agrees that it will at all times
     during the term of this Sublease, at its expense, maintain and keep in
     force, liability and product insurance in the amount of One Million Dollars
     ($1,000,000.00) for injury to one (1) persons, and One Million Dollars
     ($1,000,000.00) for injuries in one (1) casualty and One Hundred Thousand
     ($100,000.00) for damage to property to indemnify the Landlord or the
     Tenant from any kind of accident or casualty whereby any person may be
     injured or killed in or at the Leased Premises.  Tenant shall deliver to
     Landlord a certificate of such insurance from an insurance company
     satisfactory to Landlord.  The policy shall further provide that it may not
     be cancelled without the Landlord first having received thirty (30) days
     notice of any cancellation.

     Landlord agrees that it will at all times during the term of this Sublease,
     at its expense, maintain and keep in force casualty loss insurance coverage
     on the Leased Premises.

15.  Partial Destruction:  If the Leased Premises are partially destroyed by
     -------------------
     fire or any other casualty (as reasonably determined by Landlord), and if
     two or more years remain on the Base Term or any Option Term, Landlord
     shall restore or

                                       5
<PAGE>

     repair the Leased Premises with reasonable diligence. In the event of such
     restoration or repair, Landlord shall expend such sums as required to
     repair or restore the Leased Premises to the condition it was in
     immediately prior to the date of the destruction; provided, Landlord shall
     not be obligated to expend any sums for repair or replacement of Tenant's
     property nor shall Landlord be obligated to expend sums in excess of the
     insurance proceeds received by Landlord as a result of such damage or
     destruction. A just and proportionate part of the rent payable by Tenant,
     to the extent that such damage or destruction renders the Leased Premises
     untenantable, shall abate from the date of such damage or destruction until
     the Leased Premises are repaired.

     In the event of a loss from fire or other casualty where the terms of this
     Lease do not require the Landlord to restore or repair the Warehouse,
     Landlord shall have an election not to rebuild or recondition the Leased
     Premises, which election shall be exercised by written notice thereof to
     Tenant, given within sixty (60) days from date of said loss.  If Landlord
     exercises such election, this Lease shall cease and terminate, effective on
     the date of such loss, and Tenant shall pay the accrued rent up to the date
     of such loss, or Landlord, if the rent has been paid beyond such date, will
     refund to Tenant the proportionate part of any such rent prepaid, and
     thereupon this lease shall become null and void, with no further obligation
     on the part of either party hereto, even though the building may at a later
     date be rebuilt, restored or reconditioned.  No damage or destruction shall
     allow Tenant to surrender possession of the Leased Premises, nor affect
     Tenant's liability for the payment of rent, except as specifically provided
     in this Sublease.

     If Landlord is required or elects to repair or rebuild the Leased Premises
     as herein provided, Landlord's obligation hereunder shall be limited to
     that work specifically designated herein as being Landlord's
     responsibility. Tenant shall repair or replace its merchandise, trade
     fixtures, furnishings, and equipment.

16.  Substantial Destruction:  If the Leased Premises are substantially
     -----------------------
     destroyed by fire or other casualty (as reasonably determined by Landlord),
     then Landlord shall have the option to terminate this Sublease by giving
     Tenant written notice within sixty (60) days after such destruction, and
     any unearned rent shall be apportioned and returned to Tenant. If Landlord
     does not elect to cancel this Sublease, then the same shall remain in full
     force and effect and Landlord shall proceed with all reasonable diligence
     to repair the Leased Premises. In the event of such restoration or repair,
     Landlord shall expend such sums as required to repair or restore the
     building to the condition it was in immediately prior to the date of the
     destruction; provided, Landlord shall not be obligated to expend any sums
     in excess of the insurance proceeds received by Landlord as a result of
     such damage or destruction. If such damage or destruction renders the
     Leased Premises untenantable, rent payable by Tenant shall abate from the
     date of such damage or destruction until the Leased Premises are repaired.

17.  Right of Termination: Notwithstanding anything else to the contrary
     --------------------
     contained in this Sublease, Landlord, at its option, may terminate this
     Sublease on sixty

                                       6
<PAGE>

     (60) days' notice to Tenant after the occurrence of any one of the
     following: (i) the Leased Premises or the Warehouse shall be damaged or
     destroyed as a result of an occurrence that is not covered by Landlord's
     insurance; (ii) the Leased Premises or the Warehouse shall be damaged or
     destroyed and the cost to repair the same shall amount to more than twenty-
     five percent (25%) of the cost of replacement thereof; (iii) the Leased
     Premises shall be damaged or destroyed during the last two (2) years of the
     Base Term or Option Term, if applicable; or (iv) any or all of the
     buildings or Common Areas of the Project are damaged (whether or not the
     Leased Premises are damaged) to such an extent that, in the sole judgment
     of Landlord, the Warehouse cannot be operated as an economically viable
     unit. Tenant shall have reasonable time, which shall not be less than
     ninety (90) days, to vacate the premises in the event of termination under
     this provision.

18.  Eminent Domain:  If a portion of the Leased Premises shall be taken for
     --------------
     public improvements or otherwise under the exercise of the right of
     eminent domain, and the Leased Premises shall continue to be reasonably
     suitable for the use which is herein authorized then the rental herein
     provided shall be reduced from the date of such taking in direct proportion
     to the reduction in usefulness of the Leased Premises. If the Leased
     Premises, or a part thereof, sufficient to render the Leased Premises
     wholly unfit for the use herein authorized, shall be condemned or acquired
     in the exercise of the right of eminent domain, Tenant shall have the
     right, at Tenant's option, to terminate and cancel this Lease on thirty
     (30) days' prior written notice to Landlord, such notice to be given within
     sixty (60) days of the date of the taking, and Tenant shall be liable only
     for rents, reduced as provided herein as applicable, and other charges
     accrued and earned to the date of surrender of possession of the Leased
     Premises to Landlord and for the performance of other obligations maturing
     prior to said date. Tenant shall not be entitled to participate in or
     receive any part of the damages or award which may be paid to or awarded
     Landlord by reason of a taking except where said award shall provide for
     moving or other reimbursable expenses for Tenant under applicable statute.

19.  Rights of Landlord's Lender:  Notwithstanding anything contained herein
     ---------------------------
     to the contrary, the obligation of Landlord with respect to repairing or
     rebuilding the Leased Premises is subject to the prior right of Landlord's
     lender to receive insurance proceeds as a result of a fire or other
     casualty, with any obligation of Landlord to be limited to the extent
     insurance proceeds are received by Landlord for such repair or rebuilding.

20.  Quiet Enjoyment:  Landlord agrees that, if the Minimum Rent and other
     ---------------
     expenses required to be paid by Tenant pursuant to the terms of this
     Sublease are being paid in the manner and at the time prescribed and the
     covenants and obligations of the Tenant are being all and singularly kept,
     fulfilled and performed, Tenant shall lawfully and peaceably have, hold,
     possess, use and occupy and enjoy the Leased Premises so long as this
     Sublease remains in force, without hindrance,

                                       7
<PAGE>

     disturbance or molestation from Landlord, subject to the specific
     provisions of this Sublease.

21.  Subordination:  Subject to the Tenant's rights of quiet enjoyment as
     -------------
     heretofore provided, Tenant hereby subordinates all of its interest under
     this Sublease to the lien of any deed of trust or mortgage now or hereafter
     in force against the real estate or buildings of which the Leased Premises
     are a part.

22.  Indemnity:  Tenant shall indemnify and hold Landlord harmless from and
     ---------
     against all and any liability and expense of any kind, including reasonable
     attorneys' fees, arising from injuries or damages to persons or property
     in, on or about the Leased Premises arising out of or resulting in any way
     from any act or omission of Tenant, its agents, invitees, servants and
     employees, in the use of the Leased Premises. Tenant's property on the
     Premises shall be at the sole risk and hazard of Tenant.  Landlord shall
     not be liable or responsible for any loss of or damage to Tenant or
     Tenant's property.

     Landlord shall indemnify and hold Tenant harmless from and against all and
     any liability and expense of any kind, including reasonable attorneys'
     fees, arising from injuries or damages to persons or property in, on or
     about the Leased Premises arising out of or resulting in any way from any
     act or omission of Landlord, its agents, invitees, servants and employees,
     in connection with its ownership of the Leased Premises.

23.  Attorneys' Fees and Expenses:  If Landlord or Tenant engages legal counsel
     ----------------------------
     for the enforcement of any of the terms of this Lease as a result of a
     default by the other party, whether for suit or other legal services
     required to secure compliance on the part of Landlord or Tenant, the
     defaulting party shall pay to the non-defaulting party upon demand said
     reasonable attorneys' fees and any other reasonable expenses incurred by
     such non-defaulting party.

24.  Tenant Assignment and Subletting:  Neither Tenant, any court officer
     --------------------------------
     thereof nor any receiver or trustee in bankruptcy shall assign or transfer
     this lease or any part thereof, or interest therein, or sublet the Leased
     Premises or any part thereof without Landlord's prior written consent which
     shall not be unreasonably withheld. Tenant shall always remain liable for
     any default of any assignee, transferee or subtenant.

25.  Events of Default and Remedies:  The occurrence of any of the following
     ------------------------------
     shall be an Event of Default:

     a.   Failure by Tenant to pay in full any rent payment or other sum payable
          hereunder within ten (10) days of the date such payment is due;

     b.   Failure by Tenant to perform of any of the terms or conditions of this
          Sublease, other than the payment of money, of for a period of thirty
          (30) days after notice thereof to Tenant by Landlord;

                                       8
<PAGE>

     c.   The abandonment of the Leased Premises as a going business by Tenant
          for any period exceeding thirty (30) consecutive days, regardless of
          whether Tenant continues to pay all rent.

In any of these Events of Default the Tenant's right to cure such Default shall
exist for Fifteen (15) days for any active Default. Upon the expiration of the
cure period after the occurrence of an Event of Default and exercise of such
remedies, Landlord may immediately or at any time thereafter re-enter the Leased
Premises and remove all persons and all or any property therefrom by any
suitable action or proceedings at law or in equity, or by force or otherwise,
without being liable for any prosecution therefor or damages therefrom except in
the case of negligence or willful actions of destruction, and repossess and
enjoy the Leased Premises, together with all additions, alterations and
improvements. Such re-entry shall not relieve Tenant from the obligation to make
the rental payments required by this Sublease at the time and in the manner
provided herein. Upon such re-entry Landlord may, but shall not be required to,
repair, remodel and/or change the character of the Leased Premises as Landlord
may see fit, and/or at any time relet the Leased Premises in whole or in part,
as the agent of Tenant, or otherwise, in the name of Landlord or of Tenant, as
Landlord shall see fit, and Landlord may receive the rents therefor, applying
the same first to the payment of such reasonable expenses as Landlord may have
incurred in entering, dispossessing, reletting, repairing or altering the Leased
Premises and then to the fulfillment of the covenants of Tenant herein,
including but not limited to, the rental payments required hereunder, retaining
any balances until the date the term of this Sublease would otherwise have
expired as security for the payment of all obligations of Tenant which may arise
and be unpaid during such period. If Landlord, after such re-entry, shall be
unable to obtain sufficient rent from the Leased Premises to pay the amount of
expenses hereinabove specified in addition to the payment of the rent required
hereunder, and fulfillment of the covenants of Tenant herein, Tenant shall pay
to Landlord such difference at the end of each month during the remainder of the
term. In attempting to relet the Leased Premises, Landlord shall be the sole
judge as to whether or not a proposed tenant is suitable and acceptable.
Landlord shall not, by receiving partial payments of rent in arrears, be deemed
to have waived any rights herein for non-payment of rent, or for any other
default on the part of Tenant. In addition to all of the remedies granted
Landlord in this respect, Landlord shall also have the right to invoke any
remedy allowed at law or equity to enforce Landlord's rights hereunder or any of
them, as if re-entry and other remedies were not herein provided for.

No remedy herein conferred upon or reserved to Landlord is intended to be
exclusive of any other available remedy or remedies, but each and every such
remedy shall be cumulative, and shall be in addition to every other remedy given
under this agreement or now or hereafter existing at law or in equity or by
statute. No delay or omission by Landlord to exercise any right or power
accruing upon any default of Tenant shall impair any such right or power or
shall be construed to be a waiver thereof, but any such right and power may be
exercised by Landlord at any

                                       9
<PAGE>

     time, from time to time and as often as may be deemed expedient. In order
     to entitle Landlord to exercise any remedy reserved to it hereunder, it
     shall not be necessary to give any notice, other than such notice as is
     expressly required by this agreement.

26.  Notices:  All notices required or permitted by the terms of this Sublease
     -------
     must be given by hand-delivery, by telecopier (confirmed by U.S. Mail
     delivery) or United States registered or certified mail addressed to Tenant
     at the Leased Premises or as listed below and addressed to Landlord at:

               Landlord:

               The Innovo Group, Inc.
               1808-A North Cherry Street
               Knoxville, Tennessee 37917
               Telephone: (423) 546-1110
               Telecopier: (423) 546-9277

               Tenant:

               Tice Engineering & Sales, Inc.
               1808-B North Cherry Street
               Knoxville, TN 37917
               Telephone: (423) 922-7501
               Telecopier: (423) 922-3134

     The date when such notice shall be deemed to have been given shall be the
     date when it is deposited in the United States Mail, postage prepaid, in
     accordance with the provisions of this paragraph.  Any address herein
     specified may be changed from time to time by either party by written
     notice given to the other party as above provided.

27.  Successors:  The provisions, covenants and conditions of this Sublease
     ----------
     shall bind and inure to the benefit of the legal representatives,
     successors and assigns of each of the parties, except that no assignment or
     subletting by Tenant without the written consent of Landlord shall vest any
     right in the assignee or sublessee of Tenant.

28.  Governing Law:  The Sublease shall be governed by, and construed in
     -------------
     accordance with, the laws of Tennessee.

29.  Landlord's Exculpatory Clause:  In the event of a breach or default by
     -----------------------------
     Landlord of any of its obligations under this Lease, Tenant shall look
     solely to any right of offset allowed by law against any amounts due
     hereunder or to the equity of the Landlord in the Leased Premises for the
     satisfaction of Tenant's remedies, it being understood and agreed that the
     exculpation of Landlord (and its successors and assigns) shall be absolute.
     In the event of any sale of such land or interest, or

                                       10
<PAGE>

     assignment of Landlord's rights under this Sublease, Landlord shall be and
     hereby is released of all obligations of Landlord hereunder. It shall be
     deemed, without further agreement between the parties or their successors
     in interest, that the successor to Landlord's interest has assumed all
     obligations of Landlord hereunder. It is specifically understood and agreed
     that there shall be no personal liability of Landlord in respect to any of
     the covenants, conditions, or provisions of this Sublease.

30.  Entire and Binding Agreement:  This Lease contains all of the agreements
     ----------------------------
     between the parties hereto, and it may not be modified in any manner other
     than by agreement signed by all parties hereto or their successors in
     interest. In the event Tenant violates this covenant, Landlord reserves the
     right to either (i) terminate this Sublease, or (ii) revoke any rental or
     other concessions granted hereunder.

31.  Addenda:  All addenda and exhibits attached hereto are made a part of this
     -------
     Sublease for all purposes.


IN WITNESS WHEREOF, the parties hereto have executed this Sublease as of the day
and date first above written.

                         LANDLORD:

                              THE INNOVO GROUP, INC.


                              By: /s/ Samuel J. Furrow
                                  -----------------------------------
                              Name:   Samuel J. Furrow
                              Title:  CEO

                         TENANT:

                              TICE ENGINEERING & SALES, INC.


                              By: /s/ Charles R. West
                                  -----------------------------------
                              Name:   Charles R. West
                              Title:  President

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<PAGE>

                                   EXHIBIT A

                                   SITE PLAN

                                       12
<PAGE>

                                   EXHIBIT B

                               LEGAL DESCRIPTION


     A 17.022 acre parcel located on the east side of Cherry Street in
Knoxville, Tennessee, bordered on the south by Hoitt Avenue, containing a
warehouse building of approximately three hundred thousand (300,000) square feet
and two office buildings of approximately four thousand five hundred (4,500)
square feet each, all as depicted on boundary survey dated July 9, 1998,
prepared by Site, Incorporated.

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