Document:

EXHIBIT 10.2

                   DISTRIBUTION AGREEMENT

     This DISTRIBUTION AGREEMENT (this "Distribution
Agreement") made as of this [11] day of August, 2000
("Effective Date"), by and between Inmvo Group, Inc., a
Delaware corporation with its principal executive offices at
1808 N. Cherry Street, Knoxville, TN 31917 ("Innovo") and
Commerce Investment Group, LLC, a           limited
liability company having its principal executive offices at
5804 East Slauson Avenue, Commerce, California 90040
("Commerce") is being made concurrently with the SUPPLY
AGREEMENT ("Supply Agreement."), having the same effective
date, by and between Commerce and Innovo.
                          RECITALS:

     A.   Innovo is in the business of selling merchandise
          including t-shirts, canvas and denim bags and
          other related products.

     B.   Commerce and Innovo desire to enter into this
          Distribution Agreement concurrently with the Supply
          Agreement between Commerce and Innovo, whereby
          Commerce will manufacture and supply products for
          Innovo under the terms and conditions set forth in
          the Supply Agreement and Commerce will distribute
          Innovo's products as   set forth herein, both
          pursuant to an aggregate "Minimum Obligation"
          (defined below).

     C.   Commerce shall be entitled to subcontract its
          obligations hereunder to Apparel Distribution
          Services, LLC, a California Limited Liability
          Company ("ADS"). ADS is in the business of providing
          specialized logistic services including warehousing,
          forwarding, distribution and related services.

     NOW THEREFORE, and in consideration of the mutual
promises, covenants, representations and good and
valuable consideration set forth herein, the adequacy of
which is hereby acknowledged, the parties hereto agree
as follows:

1.  INNOVO'S MINIMUM OBLIGATION Innovo agrees to purchase
from Commerce within 90 calendar days of execution of this
Distribution Agreement such amount of "D & O       Services"
(as defined below) so that an aggregate total of Three Million
Dollars (US $3,000,000) of goods and services is supplied
under both of the Supply Agreement and the Distribution
Agreement (the "Minimum Obligation").

2. COMMERCE'S OBLIGATIONS

     2.1  Distribution Pursuant to the terms of this
Distribution Agreement, Commerce shall distribute the Innovo
products listed in Exhibit A, attached hereto ("Distributed
Products") to those third party businesses identified in
advance to Commerce by Innovo. Commerce will not be
responsible for locating buyers on behalf of Innovo for the
Distributed Products. Commerce will only be responsible for
wholesale distribution. From time to time, Exhibit A may be
revised upon the agreement of the parties.

     2.2  Distributed Products not in Commerce's Possession To
the extent the Distributed Products include goods not already
being warehoused by Commerce, Innovo will be solely
responsible for making (and paying for) any and all
arrangements to deliver such goods to

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Commerce's warehouse facility (identified below) within a
reasonable time frame for Commerce to distribute such goods.

     2.3 Warehouse Facility The handling, storage and
fulfillment services for the Distributed Products will
be rendered by Comrnerce at the following facility

          6121 Peachtree
          Street Commerce,
          California 90040

     2.4   Services and Performances   In accordance with the
terms  of this Distribution Agreement, Commerce will  provide
the  following  services (collectively referred  to  as  "D&O
Services"):

          2.4.1     Distribution Services

               (a)  All warehousing functions

               (b)  receiving

               (c)  storage

               (d)  shipping, including shipping supplies

               (e)  order processing

               (f)  maintenance of perpetual inventory

               (g)  all direct labor and
                     management services

               (h)  space

               (i)  utilities

               (j)  maintenance and repair

               (k)  medical insurance

          2.4.2     Operations Services

               (a)  Order Entry

               (b)  Customer Service

               (c)  MIS

               (d)  Order Allocation

               (e)  Billing

               (f)  Office Supplies

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3.  TERRITORY  Subject to any legal or governmental
restrictions, including but not limited to customs and/or
embargo restrictions, Commerce shall distribute the Distributed
Products to any
third party throughout the world.

4.   TERM AND TERMINATION

     4.1  Term  The term of this Distribution Agreement
shall continue from the Effective Date for a period of
two (2) years ("Term").

     4.2  Termination  This Agreement maybe immediately
terminated by either party upon (i) failure of the other party
to comply with laws and regulations which materially affect
such party's contracting rights or reputation and where such
failure is not cured within thirty (30) days of receipt of
written notice thereof; or (ii) any material breach of this
Distribution Agreement by the other      party which is not
cured within thirty (30) days of receipt of written notice
thereof.

     4.3  Renewal Term  This Agreement will automatically
renew for consecutive two (2) year terms under the same terms
and conditions set forth herein ("Renewal Term") unless
terminated by either party upon delivering written notice to
the other party at least ninety (90) days prior to the end of
the then existing term. The Renewal Term shall not be subject
to Section 1 of this Distribution Agreement. The prices for
D&O Services shall be renegotiated in good faith by the
parties hereto, based on increases in labor and overhead
costs, as further defined in Section 5.4 below.

     4.4 Duties Upon Expiration or Termination of this

     Distribution Agreement To the extent that there are any
remaining Distributed Products being warehoused by Commerce
at the time of expiration or termination of this Distribution
Agreement, Innovo will make arrangements to retrieve such
Distributed Products. In the event Commerce transfers the
Distributed Products to Innovo or a third party identified by
Innovo, Commerce will be compensated for any and all costs
and the fair market value of their services in transferring
the Distributed Products. In the event there are any monies
owed by Innovo to Commerce at the time of such expiration or
termination of this Distribution Agreement, Commerce will
have the right to retain any remaining Distributed Products
until payment of such monies are made to Commerce or sell the
Distributed Products and distribute to Innovo any monies in
excess of the amount due Commerce (minus Commerce's costs and
expenses in selling the Distributed Products).

5.  PRICING FOR COMMERCE'S SERVICES  As consideration for the
Distribution Services, the Operations Services, and
reimbursement for the packaging and ticketing costs associated
with the Distribution and Operations Services contemplated
herein, Innovo will pay Commerce a fixed rate in accordance
with Exhibit A attached hereto (collectively the "Unit
Rate(s)").

     5.1 On an annual basis, the Unit Rate(s) may be increased
based upon economic factors. Any requests for increases in the
Unit Rates that Commerce submits to Innovo shall be accompanied
by supporting documentation. In no event shall the Unit Rates be
increased more than the lesser of five percent (5%) per annum or
the annual increase in the Consumer Price Index   (CPI) for the
corresponding year. In the event that the parties, after good
faith negotiation, are unable to agree upon the increase to the
Unit Rates, the matter shall be submitted to arbitration.
Pending the final decision of the arbitrator, this Distribution
Agreement shall stay in full force and effect.

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6. FEES, EXPENSES AND PAYMENT CONDITIONS

     6.1  Other Costs The costs for all other items associated
with the provision of the Services contemplated herein,
including, but not limited to freight, office supplies, and
postage, shall be invoiced to and paid by Innovo on a monthly
basis based on the actual cost of any such items
purchases for each given month.

     6.2  Special Handling Fees  Special activities such as
quality control, annual inventory, customized repairs,
customized finishing, labeling, tagging or packaging, and
specialized administrative and management projects shall be
performed by Commerce only after receipt of a written
authorization from Innovo containing mutually agreed upon fixed
hourly rates for such special activities. These activities will
be invoiced to Innovo on a monthly basis, based on the actual
number of hours worked.

     6.3    Taxes,  Customs  and  Duties   Innovo  will   be
responsible for paying any and all taxes, customs and duties
and   other  related  charges  levied  by  any  jurisdiction
pertaining  to importation or exportation of the Distributed
Products.

7.   COMPENSATION TO COMMERCE FOR ITS SERVICES

     7.1  Invoices

          7.1.1  Commerce will invoice Innovo on a monthly
basis for the past month's fees, costs and expenses.
Payments by Innovo will be made directly to Commerce
immediately upon receipt of such invoices.

          7.1.2  If Innovo fails to pay any fees or charges
when due, Commerce may charge Innovo a late payment charge
of one and one-half percent (1 1/2%) per month on the past
dues balance and cancel or delay any future shipment of the
products.

     7.2  Form of Payment For The Services During The  Term
Payment for the Distributed Products and Services set forth
herein  shall be paid to Commerce in the form of  cash  via
check or wire transfer.

8. AUDITING PROCEDURES

     8.1  At the end of the second and fourth quarters, an
accounting of the inventory held by Commerce may be taken by
Innovo. Overages and shortages will be balanced to a net result
at the end of each fiscal year.

     8.2  If there is a net shortage of units after the
overages and shortages have been balanced to a net result, then
Commerce shall pay to Innovo the cost price per unit.

     8.3  If there is a net overage of units after the overages
and shortages have been balanced to a net result, which is
attributable to a previous erroneous inventory count and for
which Commerce has paid Innovo the cost price per unit in
accordance with Section 8.2 above, then Innovo shall reimburse
to Commerce the cost price per unit.

<PAGE>

9.  INSURANCE

    9.1 All Distributed Products shall be insured by Commerce
while in the custody and under the control of Commerce, for
the benefit of both Innovo and Commerce. Commerce represents
that it is insured for professional and third party
liabilities on standard business conditions. Except in cases
of Force Majeure and only in cases of proven negligence or
misconduct, Commerce shall be liable for property damage
and/or loss caused during the performance of Services.

     9.2  Commerce shall, upon request of Innovo, furnish
Innovo with copies of all insurance policies concerning its
standard business liability coverage and Commerce shall ensure
that premiums due with respect to such insurance policies are
timely and fully paid and are in full force and effect.

     9.3  Waiver of Subrogation  Innovo and Commerce shall
each secure an appropriate clause in, or an endorsement upon,
each insurance policy required by this section, pursuant to
which the insurance company waives subrogation or permits the
insured, prior to any loss, to agree with a third party to
waive any claim it might have had against said third party
without invalidating the coverage under the insurance policy.
Each party hereby releases the other and its affiliates with
respect to any claim (including a claim for negligence) which
it might otherwise have against them for injury, loss, damage
or destruction occurring during the term of this Distribution
Agreement to the extent actually covered by policies
maintained by Innovo or Commerce as required pursuant to this
section.

10.  SECURITY, SAFETY AND ENVIRONMENTAL MATTERS

     10.1      As soon as practicable after the execution of
this Distribution Agreement, Innovo shall provide Commerce
with a listing of its representatives and any other authorized
third parties who may have access to the Distributed Products
and act on behalf of Innovo. Commerce will only allow
employees or agents (i e third party carriers) of Commerce,
Innovo and/or authorized third parties to have access to the
Distributed Products as necessary to administer the terms of
this Distribution Agreement. Innovo authorized personnel shall
have access at all reasonable times after notice, and without
notice in event of emergencies.

     10.2 Commerce shall, at its sole cost, provide and
maintain adequate and customary security measures, including,
but not limited to, alarms, gates and locks, relating to the
warehouse facility.

     10.3 Commerce shall, at its sole cost, apply for and
maintain during the term of this Distribution Agreement all
licenses and authorizations required for performing the
Services. Commerce shall comply with all federal, state and
local applicable laws and regulations in performing the D & O
Services, including but not limited to those regarding safety,
health and environmental matters.

11.   MUTUAL REPRESENTATIONS AND WARRANTIES

     11.1 Each party represents and warrants to the other that
it has the right and authority to enter into this Distribution
Agreement and to perform all of its respective obligations and
undertakings herein. Each party further represents and warrants
to the other that (i) the rights and

<PAGE>

privileges granted or to be granted hereunder are and will at
all times be free and clear of any liens, claims, charges or
encumbrances; and (ii) neither party has done or omitted to do,
nor will do or omit to do, any act or thing that would or might
impair, encumber, or diminish the other party's full enjoyment
of the rights and privileges granted and to be granted under
this Distribution Agreement.

     11.2 Each party represents and warrants that it is duly
organized and existing in good standing under the laws of the
jurisdiction in which it is organized, is duly qualified and
in good standing as a foreign corporation in every state in
which the character of its business requires such
qualifications, and has the power to own its property and to
carry on its business as now being conducted.

12.  CONFIDENTIAL INFORMATION

     12.1 Each parry acknowledges and agrees that it may have
access to information, including, but not limited to,
intellectual property, trade secrets, business information,
ideas and expressions, which are proprietary to and/or embody
the substantial creative efforts of the other party
("Confidential Information"). The parties agree that
Confidential Information will remain the sole and exclusive
property of the disclosing party ("Disclosing Party"), and the
receiving party ("Receiving Party") agrees to maintain and
preserve the confidentiality of such information, including,
but without limitation, taking such steps to protect and
preserve the confidentiality of the Confidential Information
as it takes to preserve and protect the confidentiality of its
own confidential information. All materials and information
disclosed by either party to the other will be presumed to be
Confidential Information and will be so regarded by the
Receiving Parry unless, the Receiving Party can prove that the
materials or information are not Confidential Information. For
the purposes of this section:

     12.2 The  parties agree that the Confidential Information
will be disclosed for use by the Receiving Parry only for the
limited  and sole purpose of carrying out the terms  of  this
Distribution Agreement.

     12.3 The Receiving Parry agrees not to disclose or
permit any other person or entity access to the Confidential
Information, except that such disclosure will be permitted
to an employee, agent, representative or independent
contractor of the Receiving Party requiring access to the
same.

     12.4 The Receiving Party agrees (i) not to alter or
remove any identification of any copyright, trademark or
other proprietary rights notice which indicates the
ownership of any part of the Confidential Information, and
(ii) to notify the Disclosing Party of the circumstances
surrounding any possession, use or knowledge of the
Confidential Information by any person or entity other than
those authorized by this Distribution Agreement.

     12.5 Confidential Information will exclude any
information that (i) has been or is obtained by the
Receiving Party from a source independent of the Disclosing
Party and not receiving such information from the Disclosing
Party, (ii) is or becomes generally available to the public
other than as a result of an unauthorized disclosure by the
Disclosing Party or its personnel, or (iii) is independently
developed by the Receiving Parry without reliance in any way
on the Confidential Information provided by the Disclosing
Party, or (iv) the Receiving Party is required to disclose
under judicial order, regulatory requirement, or statutory
requirement, provided that the Receiving Party provides
written notice and an opportunity for the Disclosing Party
to take any available protective action prior to such disclosure.

 13. NONSOLICITATION

    13.1 Commerce hereby agrees with the Company that during
the term of each of the Supply Agreement and this
Distribution Agreement and for a period of two years
thereafter, it will not influence or attempt to influence,
directly or indirectly, customers of the Company or any of
its subsidiaries who are purchasing products similar in
nature to those being supplied and distributed pursuant to
the Supply Agreement and this Distribution Agreement, to
direct their business from the Company to any individual,
partnership, corporation or other entity.

14. INDEMNIFICATION

     14.1 Commerce's Indemnification  Commerce hereby agrees
to indemnify, defend, and hold Innovo harmless from any
claims, losses, liabilities, causes of action and costs
(including reasonable attorneys' fees) arising from, or on
account of, or related to any breach by Commerce of its
obligations, representations and warranties hereunder.

     14.2 Innovo's Indemnification  Innovo hereby agrees to
indemnify, defend, and hold Commerce harmless from any
claims, losses, liabilities, causes of action and costs
(including reasonable attorneys' fees) arising from, or on
account of, or related to any breach by Commerce of its
obligations, representations and warranties hereunder.

15.  GENERAL

     15.1 Governing Law. This Distribution Agreement shall be
interpreted in accordance with the laws of the State of
California, without regard to the conflicts of laws
principles thereof. The parties agree that jurisdiction over
and venue in any legal proceeding arising out of or relating
to this Distribution Agreement will exclusively be in the
state or federal courts located in California.

     15.2 Entire Agreement  This Distribution Agreement,
including the Exhibits attached hereto, constitutes the
entire agreement and understanding between the parties and
integrates all prior discussions between them related to its
subject matter. No modification of any of the terms of this
Distribution Agreement will be valid unless in writing and
signed by an authorized representative of each party.

     15.3 Assignment  This Distribution Agreement may not be
assigned by Innovo to any other person, firm, or entity
without the express written approval of Commerce. With the
exception of assignments to subsidiaries, affiliates and
related parties, Commerce may not assign this Distribution
Agreement to any other person, firm, or entity without the
express written approval of Innovo. Any attempt at assignment
in violation of this section will be null and void.

     15.4 Notices All legal notices required or permitted
hereunder will be given in writing addressed to the
respective parties as set forth below and will, either be
(i) personally delivered, (ii) transmitted by postage prepaid
certified mail, return receipt requested, or (iii)
transmitted by nationally recognized private express courier,
and will be deemed to have been given on the date of receipt
if delivered personally, or three (3) days after deposit in
mail or express courier. Either party may change its address
for purposes hereof by written notice to the other in
accordance with the provisions of this Subsection. The
addresses for the parties are as follows:

     Commerce Investment Group, LLC:    Innovo Group, Inc.:
     5804 East Slauson Avenue           1808 N. Cherry Street
     Commerce, California 90040         Knoxville, TN 31917
     Attn: Deborah Greaves, Esq.        Attn: Jay Furrow

<PAGE>

     15.5      Rights to Injunctive Relief Both parties
acknowledge that remedies at law may be inadequate to provide
fun compensation in the event of a material breach relating to
either party's obligations, representations, and warranties
hereunder, and the non-breaching party will therefore be
entitled to seek injunctive relief in the event of any such
material breach.

     15.6 Force Majeure  No party will be liable for, or will be
considered to be in breach of or default under this Distribution
Agreement on account of, any delay or failure to perform as
required by this Distribution Agreement as a result of any causes
or conditions that are beyond such party's reasonable control
(such as war, riot, insurrection, rebellion, strike, lockout,
unavoidable casualty, or damage to personnel, material or
equipment, fire, flood, storm, earthquake, tornado, or any act of
God) and that such party is unable to overcome through the
exercise of commercially reasonable diligence. If any force
majeure event occurs, the affected party will give prompt written
notice to the other party and will use commercially reasonable
efforts to minimize the impact of the event. However, if a force
majeure event prevents a pant's performance of a material
covenant set forth herein, the other party can immediately
terminate this Distribution Agreement.

     15.7 Waiver  The waiver, express or implied, by either
parry of any breach of this Distribution Agreement by the
other party will not waive any subsequent breach by such party
of the same or a different kind.

     15.8 Headings The headings to the Sections and Exhibits
of this Distribution Agreement are included merely for
convenience of reference and will not affect the meaning of
the language included therein.

     15.9 Independent Contractors  The parties acknowledge and
agree that they are dealing with each other hereunder as
independent contractors. Nothing contained in this
Distribution Agreement will be interpreted as constituting
either party the joint venturer, employee or partner of the
other party or as conferring upon either party the power of
authority to bind the other party in any transaction with
third parties.

     15.10    Severability In the event any provision of this
Distribution Agreement is held by a court or other tribunal of
competent jurisdiction to be unenforceable, such provision
will be reformed only to the extent necessary to make it
enforceable, and the other provisions of this Distribution
Agreement will remain in full force and effect.

     15.11     Counterparts This Distribution Agreement may be
executed in two or more counterparts, each of which will be
deemed an original, but all of which together will constitute
one and the same instrument. For purposes hereof, a facsimile
copy of this Distribution Agreement, including the signature
pages hereto, will be deemed to be an original.
Notwithstanding the foregoing, the parties will deliver
original execution copies of this Distribution Agreement to
one another as soon as practicable following execution
thereof.

     15.12     Cooperation in Drafting All parties have
cooperated in the drafting and preparation of this
Distribution Agreement, and it will not be construed more
favorably for or against any party.

<PAGE>

    15.13 Attorney's Fees  Should either party hereto
initiate a legal or administrative action or arbitration
proceeding (an "Action") to enforce any of the terms or
conditions of this Distribution Agreement, the prevailing
party (as determined by the court, arbitrator or other fact-
finder) will be entitled to recover from the losing party
all reasonable costs of the Action including without
limitation attorneys' fees and costs.

    IN WITNESS WHERFOF, the parties have executed this
Distribution Agreement as of the Effective Date.

                         COMMERCE INVESTMENT GROUP, LLC

                         By:     /s/ Deborah Greaves
                                 --------------------
                         Name:   Deborah Greaves
                         Title:  Exec. V.P. & General
                                  Counsel

                        INNOVO GROUP, INC.

                         By:     /s/ Samuel Joseph Furrow, Jr.
                                 -----------------------------
                         Name:   Samuel Joseph Furrow, Jr.
                         Title:  COOEXHIBIT 10.3
                      LICENSE AGREEMENT

       This license agreement (this "Agreement") is made  as
of  the  day  of March 2001, between Michael Caruso  &  Co.,
Inc.,  a  California  corporation,  with  offices  at   400
Columbus Avenue, Valhalla, New York 10595 ("Licensor"),  and
Innovo, Inc., with offices at 2633 Kingston Pike, Suite 100,
Knoxville,   TN   37919  ("Licensee")   (collectively,   the
"Parties").

       WHEREAS, Licensor has, as a result of its substantial
use  and promotion, become identified with the trade  name,
trademark   and  service  mark  "BONGO",  particularly   for
footwear  and accessories and products and services  related
thereto,  and  as  a  result  of such  substantial  use  and
promotion  has  developed  a  reputation  for  products  and
accessories that represent a certain lifestyle, quality  and
distinctiveness; and

       WHEREAS,  Licensee desires to acquire the right  and
license from Licensor to use the trade name, trademarks  and
service:  mark,  whether  or not registered,  consisting  of
"BONGO",  and  such  variations and derivations  thereof  as
Licensor in its sole discretion shall designate as usable by
Licensee  (the  Licensed  Mark"),  in  connection  with  the
design,    manufacture,   sale,   marketing,   distribution,
advertising  and promotion of Articles (as defined  herein),
upon  such terms and subject to such conditions as set forth
herein.

       NOW THEREFORE, in consideration of the mutual
representations, warranties and covenants hereinafter set
forth, the Parties hereby agree as follows:

1. GRANT AND USF OF LICENSE.

  1.1    General. Licensor hereby grants to Licensee during
the Term (as defined In Section 2.1 and subject to the terms
and conditions of this Agreement, an exclusive right and
license, without the right to assign or sublicense any of
the rights hereunder, to use the Licensed Mark in connection
with the manufacture, sale, marketing, distribution,
advertising and promotion of bags, belts and small
leather/pvc goods (the "Articles") throughout the Territory
(as defined in Section 1.2).

  1.2     Territory. Licensee shall have the right to  sell,
market,   distribute,   advertise   and   promote   Articles
throughout  the United Stars, including its territories  and
possessions,  Mexico, Central and South America  and  Canada
(the  "Territory").  Notwithstanding the  foregoing,  it  is
understood  that Licensor only has applied for or registered
the  Licensed Mark in the countries set forth in  Exhibit  A
hereto, and that If Licensee desires to sell Articles within
a   country  not  included  in  Exhibit  A,  Licensor  shall
cooperate  with Licensee in applying for and/or  registering
such  mark  in  its  name,  but  Licensee  shall  be  solely
responsible far all such costs, expenses and fees associated
therewith and shall, upon Licensor's submission to  Licensee
of  documentation reflecting such costs, fees and  expenses,
promptly  reimburse  Licensor for any  and  all  amounts  so
expended by Licensor.

<PAGE>

  1.3     Best Efforts of Licensee. Licensee shall  use  its
best efforts to exploit the rights herein granted throughout
the  Territory and to sell the maximum quantity of  Articles
consistent   with   this  Agreement.  Licensee   shall   not
distribute or sell Articles in any country or region of  the
world outside the Territory or sell to any third party  that
it  has  reason  to:  believe may sell  or  export  Articles
outside the Territory.

  1.4    Reservation of Rights.  Licensor reserves all
rights to the Licensed Mark except such as are
specifically granted herein to Licensee.

  1.5     Trade  Shows   Licensee shall participate  in  all
major accessories markets and trade shows so as to sell  and
promote  a  maximum  of Articles during the  Term.  Licensee
shall beaR all costs associated with such shows.

  1.6  Showroom.  .Licensee shall have the right to  display
Articles  in the showroom operated by Unzipped- Apparel  LLC
("Unzipped"), located at 215 West 40th  Street, in New  York
City,  subject to approval of displays by Licensor and space
availability in the showroom as designated by Unzipped.

2. TERM.

  2.1     Term.  The  term of this Agreement  shall  be  the
period  commencing  as  of the date  hereof  and  continuing
through  March 31, 2003 (the "Term"). It Is understood  that
in  the  event that the Licensed Mark is sold or transferred
In  its  entirety prior to the end of the Term, this License
shall terminate upon the dosing of such sale or transfer.

  2.2     Definition of Year and Quarter. (a) The first Year
of the Term shall be the period from the date hereof through
March  31,  2002. The second Year of the Term shall  be  the
period   4/1/02-  3/31/03.  Each  quarter  'of   each   Year
(commencing January 1, April 1, July 1 and November 1) shall
be a "Quarter".

3.  MANUFACTURE OF ARTICLES; QUALITY CONTROL

  3.1     Production of Articles. Licensee shall, at its own
expense,  manufacture,  sell, market, distribute,  advertise
and  promote Articles bearing the Licensed Mark, along  with
any Packaging Materials (as defined in Section 3.2) used  in
connection  therewith, of a good quality that are  at  least
comparable to similar items offered at comparable prices for
the   BONGO   brand  and  of  such  style,  appearance   and
distinctiveness  so  as to protect and enhance,  and  in  no
manner reflect adversely upon, the prestige of Licensor  and
the Licensed Mark and the goodwill pertaining thereto.

  3.2  Contractors and Suppliers.  All Articles shall be
manufactured, sold, distributed, marketed,  advertised,
promoted, labeled, packaged  and,  if applicable, imported
in compliance with all applicable laws, rules  and
regulations. Licensee shall  use  such  legends, markings
and  notices  as may be required  by  law  on  the
Articles  and  on  any materials in which the  Articles  are
packaged, including, but not limited to tags, labels,
boxes and bags ("Packaging Materials").

<PAGE>

  3.3  Approvals by Licensor.  (a) Licensee shall submit  to
Licensor  for  product  and quality approval  pre-production
samples of all Articles or Packaging Materials, and any  and
all  items  or  components used or intended to  be  used  by
Licensee   In   connection  therewith.  If  Licensor   shall
disapprove  of  any  such Articles or  Packaging  Materials,
Licensee. shall use all commercially practicable efforts  to
refrain from using such item(s) or components) or to  modify
such  Articles or Packaging Materials so as to  comply  with
Licensor's  standards. Licensor shall have 10 Business  Days
from  the  time  of  submission  of  Articles  or  Packaging
Materials  by  Licensee to communicate  its  disapproval  to
Licensee of such Articles or Packaging Materials, and if  no
such disapproval is communicated, such Articles or Packaging
Materials shall be deemed approved. For the purposes of this
Agreement, "Business Day" means the days on which  banks  in
the  City  of New York are required to be open for business.
(b) After Licensor's approval has been obtained for Articles
or  Packaging Materials, Licensee shall not depart therefrom
in   any   material   manner  with  regard   to   materials,
workmanship,   design,  style  and  quality  without   again
obtaining prior approval from Licensor.

4. DISTRIBUTION OF ARTICLES.

  4.1  Distribution of Articles. The permitted  distribution
channels  for Articles shall be the same as the distribution
channels  through which Licensor sells its footwear  bearing
the  Licensed Mark and Unzipped sells Its jeanswear  bearing
the   Licensed  Mark,  This  includes  sales  of  off-season
Articles,  which may only be sold where Licensor  sells  its
off  season footwear. In no event shall Articles be sold  to
mass    merchandisers,   club   stores    or    discounters.
Notwithstanding the foregoing, Licensee shall  be  permitted
to  sell to the following off-price retailers: Marmaxx, Ross
Stores,   Value  City,  Burlington  Coat  Factory,   Rainbow
Apparel, Century 21 and Stein.

  4.2    No  Other  Chanels  or  Internet.  No  distribution
channel  (including on the Internet) other  than  those  set
forth  herein  is  permitted unless  Licensee  has  obtained
Licensor's prior approval.

  5. MINIMUM NET SALES AND ROYALTIES

  5.1  Minimum Net Sales. (a) In furtherance of  its  duties
and  obligations  hereunder, Licensee  shall  use  its  best
efforts   to  promote  diligently  the  manufacture,   sale,
marketing,  distribution,  advertisement  and  promotion  of
Articles in accordance with the terms of this Agreement, and
without  limiting  the generality of the foregoing,  achieve
Minimum Net Sales during the Term in the amount equal to  or
greater  than one million dollars ($1 million) "Minimum  Net
Sales")_

  5.2  $7,500 Payment. Licensee shall pay to Licensor, upon
the  execution  of this Agreement, the sum of  $7,500  (the
"Payment").  The  Payment  shall be  credited  against  the
payment  of Royalties to Licensor by Licensee as set  forth
herein.

<PAGE>

     5.3. Percentage Royalties. (a) Licensee shall pay  to
Licensor  percentage royalties equal to five percent  (5%)
of  Net  Sales ("Percentage Royalties"). It is  understood
that  Licensee shall guarantee payment to Licensor  during
the  Term  of  an amount equal to or greater than  $50,000
(5%  of Minimum Net Sales of $1 million). (b) In the event
that  at the end of the Term, Licensee has failed  to  pay
to  Licensor  Percentage Royalties in an amount  equal  or
greater  than  $50,000,  Licensee shall  pay  to  Licensor
within  10  days  following  the  end  of  the  Term,  the
difference  between  the  amount of  Percentage  Royalties
paid  and  $50,000, Notwithstanding the foregoing,  it  is
understood   that  in  the  event  that  the  License   is
terminated  as a result of a sale or transfer pursuant  to
Section  2.1, Licensee shall not be obligated to pay  such
differential amount upon termination.

     5.4  Advertising  Royalties. Licensee  shall  pay  to
Licensor  for contribution to advertising royalties  equal
to   two   percent   (2%)   of  Net  Sales   ("Advertising
Royalties",    together    with   Percentage    Royalties,
"Royalties").

     5.5  Definition  of Net Sales: For purposes  of  this
Agreement,  the term "Net Sales" shall mean the  aggregate
gross   invoiced  amount  in  United  States  dollars   of
Articles  shipped  by Licensee to customers  at  wholesale
prices   (invoiced   list  prices)   less   any   refunds,
allowances, deductions or credits for returns and  damages
that  are  directly  applicable to Products  and  actually
taken  by  Licensee's customers not to exceed ten  percent
(10%)  of  aggregate Net Sales in each Year. No deductions
shall  be  made  for other discounts, special  promotions,
advertising,  warehouse,  distribution  and  year-end   or
other   allowances,  or  any  other  costs   incurred   by
Licensee.  In  computing  Net Sales,  the  gross  invoiced
amount  resulting  from  any sale  of  Articles  shall  be
determined  based on the invoice price or amounts  charged
for  sales  to  unrelated parties  at  arm's  length,  and
Articles shall be considered finally "sold" upon the  date
of  billing,  shipping or payment, whichever event  occurs
first.

     5.6  .  Payment  of  Royalties. Royalties  shall  be
accounted for on the basis of each Quarter, end shall  be
paid  in  United States Dollars within thirty  (30)  days
following  the  last  day  of each  Quarter  (or  portion
thereof  in  the  event  of  prior  termination  of  this
Agreement  for  any  reason). All payments  shall  be  in
accordance with this Section and Section 11.5.

6. OWNERSHIP OF LICENSED MARK.

     6.1  Unauthorized Uses.  Licensee shall not use  the
Licensed  Mark,  in  whole  or  in  part,  as  any  other
corporate  name  or  trade name, or  in  any  manner  not
previously approved by Licensor. Licensee shall not  join
any name or names with the Licensed Mark so as to form  a
new  mark.  Licensee  shall take  no  action  that  shall
injure or degrade the reputation of the Licensed Mark.

     6.2   Licensor to Remain Owner. Licensee
acknowledges that Licensor is the owner of (or applicant
for) all right, title and interest in and to the Licensed
Mark in the Territory
and is also the owner of the goodwill attached or which
shall become attached thereto Licensee agrees that it
shall never challenge Licensor's ownership of or the
validity of the
Licensed Mark.

<PAGE>

     6.3  Notification to Licensor.  In the event Licensee
learns  of  any infringement or imitation of the  Licensed
Mark,  it  shall  give prompt written notice  to  Licensor
thereof. Licensor thereupon shall take such action  as  it
deems  advisable for the protection of its rights  in  and
to  the  Licensed Mark and Licensee shall  cooperate  with
Licensor in connection therewith.

     7. REPORTS; RECORDS; AUDITS.

     7.1  Quarterly Statements and Reports. Licensee shall
deliver  to Licensor, in a format acceptable to  Licensor,
within thirty (30) days after the end of each Quarter  (or
portion thereof, in the event of prior termination of  the
Term  for  any reason), a report, certified to be complete
and   accurate  by  Licensee's  Chief  Financial  Officer,
reflecting:  (i)  the  number of units  of  Articles  and,
where  appropriate, aggregate wholesale and retail  prices
by  categories  of  the Articles shipped  and/or  sold  by
Licensee  during  such  Quarter, (ii)  information  on  an
itemized  basis for any returns or markdowns  made  during
such  Quarter, and (iii) Net Sales and the computation  of
Royalties  payable  for such Quarter, together  with  such
other information as Licensor may reasonably require.

     7.2  Annual  Statements and Reports.  Licensee  shall
deliver  to Licensor within 60 days after the end of  each
applicable  Year  (or portion thereof,  in  the  event  of
prior  termination of the Term for any reason)  in  detail
reasonably  satisfactory  to Licensor,  statements  and  a
report  reflecting for such Year the information  provided
Quarter by Quarter pursuant to Section 7.1.

     7.3  Books  and  Records; Audits. (a) Licensee  shall
prepare  and  maintain,  in  such  manner  as  will  allow
accountants  to  perform  an  audit  in  accordance   with
generally  accepted  accounting principles,  complete  and
accurate  books  of  account.  and  records  covering  all
transactions   arising  out  of  or   relating   to   this
Agreement.    Licensor    and    its    duly    authorized
representatives shall have the right at any time and  from
time  to  time,  with  reasonable  notice  during  regular
business  hours,  to inspect and/or audit  said  books  of
account  and  records and examine all other documents  and
material  in  the  possession  or  under  the  control  of
Licensee  with  respect  to 'the subject  matter  of  this
Agreement.  If  an  audit reveals  a  deficiency  of  four
percent (4%) or greater between the amounts Licensee  owed
and  the  amounts  Licensee paid  to  Licensor  hereunder,
Licensee  shall  reimburse  Licensor  for  all  costs  and
expenses of the inspection or audit.

8. TFRMINATION.

     8.1  Nonpayment  of Financial Obligations.  Licensor
may  terminate this Agreement upon fifteen (15)  Business
Days  written notice if Licensee defaults In any of  its
payment  obligations  set forth  In  this  Agreement  and
thereafter fails to cure the default within such  fifteen
(15) day period.

     8.2  Material Breach of Agreement. Either party may
terminate this Agreement upon thirty (30) Business Days
written notice setting forth the nature of the breach if
the other party commits a material breach of any of its
obligations set forth in this Agreement and thereafter
fails to cure the breach within such thirty (30) day
period.

<PAGE>

9.   RIGHTS UPON TERMINATION

  9.1  Sell-Off:  Termination of  Production  (a)  Upon  the
expiration or termination of this Agreement, Licensee  shall
cease  all  manufacture,  distribution,  sale,  advertising,
promotion  and sourcing of Articles, except with respect  to
the  sell off of goods under Section 9.3 hereof. All labels,
tags,  and other such items and Packaging Materials  bearing
the Licensed Mark that are not required to complete work  in
process  shall be, at Licensor's option, sent-or shipped  to
Licensor immediately (at no cost to Licensor) or destroyed.

  9.2  Inventory. Upon the expiration or termination of this
Agreement, Licensee shall immediately deliver to Licensor  a
complete  and  accurate schedule of Licensee's inventory  of
finished Articles, related work-in-process then on hand  and
confirmed orders. Such schedule shall be prepared as of  the
close  of  business  an  the  date  of  such  expiration  or
termination and shall reflect Licensee's cost of  each  such
item.

  9.3   Sell-off.   If  Licensor  has  not  terminated   the
Agreement  based upon a material breach that would  diminish
the  value and reputation of the Licensed Mark, and Licensee
shall  be  entitled,  for  a  period  of  three  (3)  months
following  the expiration or termination of this  Agreement,
to  sell  and dispose of the Inventory. Such sales shall  be
made  subject  to all of the provisions of this  Agreement,
including but not limited to an accounting therefore and the
payment of Royalties thereon.

  9.4    Termination   of  Rights  Except  as   specifically
provided herein, upon the expiration or termination of  this
Agreement all of the rights of Licensee under this Agreement
shall  terminate forthwith and shall revert  immediately  to
Licensor and Licensee no longer shall have the right to  use
the Licensed Mark.

10.  HOLD HARMLESS.

  10.1.   Licensee's  Indemnification.  (a)  Licensee  shall
indemnify  and  hold  harmless  Licensor  and  each  of  its
directors,  officers,  employees,  contractors,  agents  and
affiliates  from  any  and  all  claims,  suits,  judgments,
losses,   damages   and   expenses,   including   reasonable
attorneys' fees, of any kind whatsoever brought by  a  third
party  (collectively, "Losses") that arise in any way  from:
(i)  Licensee's material breach of this Agreement; and  (ii)
the  manufacture, sale, distribution, production, promotion,
advertising,  or transportation of Articles, except  to  the
extent  that  such Losses are directly caused by  Licensor's
gross  negligence or willful misconduct. (b) throughout  the
Term  Licensee shall maintain products liability  insurance,
or  insurance  providing protection against  claims  of  the
nature  commonly  provided against  by  such  insurance,  in
either  case,  providing  coverage  against  claims  on   an
"occurrence" basis, in an amount not less than three million
dollars  ($3,000,000), with an aggregate limit of  not  less
than ($5,000,000).

<PAGE>

  10.2   Licensor's Indemnification. Licensor shall  defend,
indemnify  and  hold  Licensee and each  of  its  directors,
officers,  employees,  contractors, agents  and  affiliates,
harmless  from and against any Losses of any kind whatsoever
that  arise  in  any way from any actual or alleged  patent,
trademark,  trade dress or copyright infringement  resulting
from  the  use of the Licensed Mark by Licensee as permitted
or  authorized under this Agreement to the extent that  such
Losses  are  not  caused by Licensee's gross  negligence  or
willful misconduct.

11. MISCELLANEQLLS.

  11.1.  Governing  Law  Forum.  This  Agreement  shall   be
interpreted and construed In accordance with the laws of the
State  of  New York, without regard to its internal conflict
of  laws  principles.  In  connection  with  any  litigation
relating   hereto,  the  Parties  shall  subject  themselves
exclusively  to  the jurisdiction of the federal  and  state
courts sitting within the City of New York.

  11.2   Binding  Effect.  The rights  and  obligations  set
forth  in  this  Agreement shall be binding upon  and  shall
inure  to  the benefit of the legal successors and permitted
assigns of Licensor and Licensee.

  11.3   No Partnership. Nothing in this Agreement shall  be
construed to create a partnership or joint venture among the
Parties.  Nothing  herein  shall  be  construed  to  appoint
Licensee  as  an  agent for Licensor in  other  arrangements
outside of this Agreement.

  11.4.  Licensor's  Sole  Discretion.  Unless  specifically
stated  otherwise herein, it is understood and  agreed  that
where this Agreement provides that Licensor shall approve of
any  matter,  such approval or disapproval  shall  be  based
solely on Licensor's subjective standards and determined  in
accordance with Licensor's sole and absolute discretion,

  11.5      Manner  of Payment. All amounts  payable  to
Licensor by Licensee pursuant to this Agreement shall  be
paid  by  wire  transfer  in  United  States  Dollars  by
Licensee  to  Licensor in accordance with the  reasonable
instructions  of  Licensor,  or  by  check  sent  to  the
attention  of  Richard Danderline,  Candie's,  Inc.,  400
Columbus Avenue, Valhalla, New York, 10595. Checks should
be  made payable to "Michael Caruso & Co., Inc.",  or  to
such  payee  as Licensor shall designate at any  time  by
written notice to Licensee.

  11.6  Interest. If Licensee fails to make  any  payment
due  hereunder, the unpaid balance shall  be  subject  to
interest  charges per month equal to the  prime  rate  in
effect  at Licensor's principal commercial lender  as  of
the  date  that the amount is due, plus three points.  If
Licensor must take legal action to collect any amount due
under  this  Agreement,  Licensee  shall  pay  Licensor's
collection costs, including attorneys' fees

  11.7    Assignment.   Licensee  shall  not  assign   or
sublicense  any  of  its  rights  under  this  Agreement,
including the right to distribute Articles or to  appoint
any  manager  or  agent in connection therewith,  to  any
other  Person  without  the  prior  written  consent   of
Licensor.

<PAGE>

   11.8  Severability. If any portion of this  Agreement  is
held   to   be  invalid  or  unenforceable,  the   remaining
provisions  shall not be affected and shall remain  in  full
force and effect. In the event that any portion or clause of
this  Agreement is rendered invalid, that portion or  clause
shall  be  stricken  here from, and  the  remainder  of  the
Agreement shall remain in full force and effect.

  11.9  Modification  or  Waiver   This  Agreement  may   be
modified  or a requirement thereof waived only by a  writing
signed  by  all  Parties. The waiver of any requirement  set
forth  in  this Agreement shall not constitute  a  permanent
waiver  of  that  requirement  or  a  waiver  of  any  other
provision hereof.

  11.10 Notices (a) All notices, requests, waivers, consents
and other communications hereunder  shall  be  in  writing
and  shall  be  personally delivered,  mailed  by  overnight
mail,  overnight  courier, certified   U.S.  Mail,  postage
prepaid,  return   receipt requested  or  faxed (with
confirmation of receipt)  to  the addresses first named
above.

  11.11  Entire  Agreament.  This  Agreement  embodies   the
entire  agreement of the Parties with respect to the subject
matter  hereof  and  there  are  no  further  agreements  or
understandings  among  the  Parties  with  respect  to  such
subject matter,

  IN WITNESS WHEREOF, this Agreement has been duly executed
and delivered as of the date first above written,

CANDIE'S INC.                 INNOVO, INC.

By:                           By: /s/ Samuel Joseph Furrow, Jr
                                 -----------------------------
Name:                         Name: Samuel Joseph Furrow, Jr.
Title:                        Title: President

<PAGE>

             BONGO MARK REGISTRATION INFORMATION

        [FOR CANADA, MEXICO, PANAMA & UNITED STATES]

<PAGE>

                       INNOVO GROUP INC.

July 26, 2002

Ms. Allison H. Bilotta
Director, Licensing & New Business Development
Candie's, Inc.
215 West 40th Street
New York, NY 10018

RE: License Agreement between Michael Caruso & Co., and
     Innovo, Inc.

Dear Allison:

This letter confirms that we have agreed to give up our
right to design, manufacture, market, sell, promote,
distribute, and/or advertise Bongo belts under the agreement
dated March 26, 2001.

Very truly,

/s/ Jay Furrow
--------------
Jay Furrow
President, Innovo Group Inc.

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