Document:

EX-10.1

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as of the
25th day of June, 2007, by and among Joseph M. Dahan (“Employee”) and Innovo Group Inc.,
a Delaware corporation (the “Company”).

W I T N E S S E T H:

WHEREAS, the Company and the Employee previously entered into that certain Employment
Agreement date February 6, 2007;

WHEREAS, the Company desires to employ Employee on the revised terms and conditions set forth
in this Agreement and Employee desires to be employed by the Company on such revised terms and
conditions;

WHEREAS, in connection with the employment, the Company and the Employee have entered into a
separate merger agreement with an entity in which Employee is the sole stockholder (the “Merger”);

WHEREAS, the parties wish to execute this Agreement as of the date hereof to become effective
without further action by the parties if and when all of the conditions set forth in Section I.B.
are met; and

NOW, THEREFORE, in consideration of the respective representations, warranties and covenants
hereinafter set forth, the parties agree as follows:

	I.	 	EMPLOYMENT.

	 	A.	 	The Company agrees to employ Employee and Employee agrees to remain in the
employ of the Company, upon the terms and subject to the conditions provided herein.

	 	B.	 	This Agreement shall become effective immediately after the date on which all
of the following conditions precedent have been fulfilled:

	 	i)	 	The Company and Employee have executed this
Agreement and consummated the Merger.

	 	C.	 	Nothing herein shall require the Company to use anything other than its good
faith efforts to fulfill the conditions described above. Notwithstanding anything to
the contrary, it is expressly understood that the obligations contained in this
Agreement shall not become effective or enforceable against the parties until the
Effective Date occurs. “Effective Date” shall mean the date when the condition of
Section I.B. is satisfied.

1

	II.	 	POSITION, DUTIES AND RESPONSIBILITIES.

	 	A.	 	Employee shall serve as Creative Director of the Brand or in such other
capacity or capacities as shall be mutually agreed upon from time to time by Employee
and Company. For the purpose of this Agreement, the term “Brand” shall mean the Joe’s®
and Joe’s Jeans® branded products, with the exceptions set forth in this Agreement.
Employee shall report directly to the Chief Executive Officer of Company (the “CEO”),
and shall hold the title of “Creative Director” of the Brand.

	 	B.	 	Employee’s duties and responsibilities as Creative Director shall include, but
not be limited to, overseeing, directing and exploiting the Brand. Such oversight,
direction and exploitation shall include management and supervision of the creative
process of the Brand which results in the final product of the Brand entering the
marketplace.

	 	C.	 	Employee recognizes the duties and responsibilities set forth hereinabove are
essential and material services being provided to the Company, and as a result thereof
Employee shall devote substantially all of his business time, attention and efforts in
the faithful performance of his duties hereunder in a manner that shall faithfully and
diligently further the business and interests of the Company. Notwithstanding the
foregoing, Employee shall be entitled to spend certain business time and attention on
charitable or personal causes, provided that such time and attention does not
materially interfere with his duties and responsibilities under this Agreement.

	 	D.	 	In the performance of Employee’s duties, he shall use reasonable best efforts
to ensure that the quality of his performance and work in connection with the Brand
maintain the image and presence of the Brand at a level consistent with such image as
of the date of the execution of this Agreement.

	 	E.	 	Employee further acknowledges and agrees that, as a result of his fiduciary
obligations to the Company in connection with his position as an employee of the
Company and a member of its Board of Directors, he shall not take personal advantage of
any business opportunity that arises during his employment with the Company which may
be a benefit to the Company (except as otherwise permitted under Section II.F) unless
all material facts regarding such opportunity are promptly reported to the Board for
consideration by the Company and the disinterested members of the Board determine to
reject the opportunity and to approve Employee’s participation therein.

	 	F.	 	Employee and Company further acknowledge that Employee’s spouse is involved in
certain aspects of the apparel industry which, as of the date of the Merger, are not
directly competitive to the Brand. Employee agrees that this relationship and said
spouse’s involvement in the apparel industry shall in no way interfere with his ability
to perform his duties and responsibilities hereunder. The Employee and Company agree
that any direct or indirect financial or pecuniary interest which Employee may have in
any such business may not be deemed a violation of this Agreement. Company agrees that
so long as Employee’s spouse’s involvement in the apparel industry continues to not
directly compete with the Brand in the premium denim apparel market that such
involvement shall not be deemed a violation of Employee’s obligations hereunder.

	 	G.	 	Employee and Company acknowledge that as Creative Director of the Brand for the
Company, Employee shall have the authority to perform his duties and responsibilities
without interference by the Company. However, without the prior written consent of
Company, Employee shall not cause or permit the Company to:

	 	i)	 	sell, exchange, lease, mortgage, pledge, charge
or otherwise transfer or encumber all or any portion of any material
assets of the Company or any subsidiary;

	 	ii)	 	enter into any material transaction or series
of related material transactions involving capital expenditures, which
in the aggregate are deemed to be material, including incoming lease
commitments, purchases of equipment or inventory or other expenditures
that are not consistent with any established budget of the Company then
in effect;

	 	iii)	 	enter into or amend any material agreement,
commitment or other transaction, or any series of related agreements,
commitments or other transactions between the Company and any
affiliate; or

	 	iv)	 	take any material action outside the ordinary
course of business.

	 	v)	 	For the purposes of this Section II.G.,
“material” shall mean an amount, action, inaction, item of significance
or importance which if spent, obligated, performed or not performed or
altered may result in an adverse effect upon the condition (financial
or otherwise), earnings, business or business prospects, properties or
operations of the Company and its subsidiaries, considered as one
enterprise.

	III.	 	COMPENSATION AND BENEFITS.

	 	A.	 	So long as this Agreement is in full force and effect and except as otherwise
set forth herein, the Company shall pay Employee an annual base salary in the amount of
$300,000 per year (the “Salary”) with such annual adjustments as the Compensation
Committee of the Board of Directors, in its sole and absolute discretion may award to
Employee. All Salary payments shall be made in accordance with the Company’s regular
payroll policy and subject to withholding for taxes as required by law.

	 	B.	 	Employee shall also be entitled to receive those benefits outlined in the
Company’s Employee Handbook in effect during the Term of this Agreement and any
additional benefits received by other named executive officers of Company, if any,
including bonus payments made in the sole and absolute discretion of the Compensation
Committee of the Board of Directors.

	 	C.	 	Employee is authorized to incur necessary and customary expenses in connection
with the business of the Company, including expenses for entertainment, trade
association meetings, travel, promotion and similar matters, consistent with the
Company’s policies as in effect from time to time. The Company will pay or reimburse
Employee for such expenses in accordance with the established expense reimbursement
policy then in effect for employees of the Company.

	IV.	 	TERM. Employee’s employment shall commence on the Effective Date, and shall
terminate five (5) years from the Effective Date, unless terminated sooner as provided in this
Agreement (the “Initial Term”). Thereafter, Employee’s employment shall continue for
consecutive one (1) year periods, unless terminated sooner as provided in this Agreement (each
period a “Renewal Term”).

	V.	 	TERMINATION.

	 	A.	 	If Employee is determined to be Disabled (as defined below), Employee’s
employment may be terminated upon sixty (60) days written notice. If Employee’s
employment is terminated under this Section V.A of this Agreement, then the Company
shall pay to Employee (or his legal representative) his salary through the date of
termination as well as any benefits to which Employee may be entitled as of the date of
termination under the benefit plans referred to in Section III.B of this Agreement, but
the Company will be responsible for no other payments of any nature to employee if
termination occurs under this provision.

For purposes of this Agreement, “Disabled” shall mean the Employee is unable, as a
result of a medically determinable physical or mental illness or incapacity and
notwithstanding reasonable accommodation by the Company, to satisfactorily perform his
duties under this Agreement for a continuous period of 180 consecutive days, or for shorter
periods aggregating 270 days during any period of 12 consecutive months, without any hope or
expectation of an ability to resume such duties in the immediate future. Notwithstanding
the foregoing, if an insurance company providing group long-term disability insurance for
the Company’s employees determines that Employee is entitled to disability benefit payments
thereunder, then it shall conclusively be determined that the Employee is Disabled. If no
such insurance is then in force or if no such determination has been made, the determination
of whether the Employee is Disabled, in the absence of an insurance company determination
for disability benefits, shall be made by a majority of the independent members of the
Company’s Board of Directors (as “independent director” is defined by Nasdaq corporate
governance rules) (the “Independent Directors”) based on the advice and determination of a
competent medical doctor selected and compensated by the Company. If a physical
examination, medical reports and advice or other evidence is required to enable such
determination, Employee shall submit to such examination by such medical doctor and shall
consent to the transfer and disclosure to the Company of such information. If Employee
withdraws or refuses to provide such consent, then solely for the purposes of this
Agreement, there shall be a presumption upon which the Company may rely that Employee is
Disabled.

	 	B.	 	The Company may terminate Employee’s employment for cause (“Cause”) if:

	 	i)	 	the Employee is convicted of or enters a plea
of guilty or nolo contendere to a felony or a crime involving moral
turpitude;

	 	ii)	 	the Employee materially breaches any provision
of this Agreement and such breach is not cured within forty five (45)
days of receipt by Employee of written notice thereof;

	 	iii)	 	the Employee encourages, solicits, persuades or
attempts to persuade, any Company employee, consultant, contractor,
customer, or potential customer to engage in any of the acts prohibited
by this Agreement; or

	 	iv)	 	the Employee violates any of the Company’s
policies and procedures as established from time to time and set forth
in the Company’s employee handbook or the Company’s Code of Ethics for
which such violation constitutes a breach of such Code of Ethics or
warrants termination of employment, including the Company’s sexual
harassment policy, or otherwise engages in an act that constitutes
sexual harassment.

If Employee’s employment is terminated under this Section V.B of this Agreement,
then the Company shall pay to Employee his Salary through the date of termination as
well as any benefits to which Employee may be entitled as of the date of termination
under the benefit plans referred to in Section III.B of this Agreement, but the
Company will be responsible for no other payments of any nature to Employee if
termination occurs under this provision.

	 	C.	 	The Company may terminate Employee’s employment without Cause at any time upon
two (2) weeks’ written notice to Employee. If Employee is terminated without Cause,
Employee will be entitled to receive, in addition to his Salary through the date of
termination (as determined and calculated under the provisions of Section III.A) as
well as any benefits to which Employee may be entitled as of the date of termination
under the benefit plans referred to in Section III.B of this Agreement, and an amount
equal to the then present value of the remaining Salary amounts due to Employee through
the end of the Initial Term of the Agreement or the Renewal Term, as applicable
(“Termination Severance”). The Company shall pay the Termination Severance to Employee
within 60 days of the date of termination; provided, however, that to the extent
required to avoid taxation under Section 409A(a) of the Internal Revenue Code (the
“Code”) the Company shall pay the Termination Severance on the date that is six months
plus one day after the date of termination. Notwithstanding the foregoing, if the
Company’s funds are not sufficient to pay the Termination Severance as scheduled
without jeopardizing the Company’s solvency, the Company shall pay the Termination
Severance during the first calendar year in which the Company’s funds are sufficient to
do so without jeopardizing the solvency of the Company. The Company shall also pay a
portion of Employee’s COBRA premium under the same terms as it pays the Company’s other
employees’ health insurance premiums for a period of one (1) year. Any such payments
made pursuant to this Section V.C will be subject to all standard and regular
withholdings.

	 	D.	 	Employee may terminate Employee’s employment upon written notice to the Company
within 30 days of any event that constitutes “Good Reason,” defined to mean (i) any
material breach of this Agreement by the Company which is not cured within thirty (30)
days of receipt by the Company of written notice thereof; or (ii) Employee’s decision
to terminate employment at any time after 18 months following a Change in Control (as
hereinafter defined). If Employee terminates for Good Reason, Employee will be
entitled to receive an amount equal to the Termination Severance, as defined in Section
V.C hereinabove. The Company shall pay Employee the Termination Severance within 60
days of the date of termination; provided, however, that to the extent required to
avoid taxation under Section 409A(a) of the Code, the Company shall pay the Termination
Severance on the date that is six months plus one day after the date of termination.
Notwithstanding the foregoing, if the Company’s funds are not sufficient to pay the
Termination Severance as scheduled without jeopardizing the Company’s solvency, the
Company shall pay the Termination Severance during the first calendar year in which the
Company’s funds are sufficient to do so without jeopardizing the solvency of the
Company. The Company shall also pay a portion of Employee’s COBRA premium under the
same terms as it pays the Company’s other employees’ health insurance premiums for a
period of one (1) year. Any such payments made pursuant to this Section V.D will be
subject to all standard and regular withholdings.

	 	E.	 	If a Change in Control (as hereinafter defined) occurs during the Initial Term
of this Agreement or Renewal Term and at any time within 18 months following such
Change in Control either the Company terminates the Employee’s employment without
Cause, or the Employee terminates employment with the Company for Good Reason, then the
Employee shall be entitled to an amount equal to the Termination Severance, as defined
in Section V.C hereinabove. The Company shall pay Employee the Termination Severance
within 60 days of the date of termination; provided, however, that to the extent
required to avoid taxation under Section 409A(a) of the Code, the Company shall pay the
Termination Severance on the date that is six months plus one day after the date of
termination. Any such payments made pursuant to this Section V.E will be subject to
all standard and regular withholdings. For purposes of this Agreement, “Change in
Control” shall be deemed to have occurred upon the closing of a transaction which: (i)
the Company sells or otherwise disposes of all or substantially all of its assets; (ii)
there is a merger or consolidation of Company with any other corporation or
corporations, provided that the shareholders of Company, as a group, do not hold,
immediately after such event, at least fifty percent (50%) of the voting power of the
surviving or successor corporation; (iii) any person or entity, including any “person”
as such term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), becomes the “beneficial owner” (as defined in Rule
13(d-3) under the Exchange Act) of Common Stock of Company representing fifty percent
(50%) or more of the combined voting power of the voting securities of Company
(exclusive of persons who are now officers or directors of Company); or (iv) the
approval by the shareholders of a liquidation or dissolution of the Company.

	 	F.	 	Employee may terminate this Agreement at any time for any reason upon ten
business days’ notice. In the event of termination under this Section V.F., then
Employee shall receive his pro rata Salary due as of the date of termination.

	VI.	 	DISCLOSURE OF INFORMATION. Employee shall not, at any time during or after the
expiration of the Initial Term or any Renewal Term, disclose to any Person, except as required
by law or as may be necessary to perform the duties and responsibilities hereunder, any
non-public information (including, without limitation, non-public information obtained prior
to the date hereof) concerning the business, clients or affairs of the Company, or any
affiliate of the Company, for any reason or purpose whatsoever unless such information becomes
publicly available or known for any reason other than in an unauthorized act of Employee.
Employee shall not make any use of any of such non-public information for his own purpose or
for the benefit of any Person except the Company. Upon the termination of Employee’s
employment at the Company, Employee shall return to the Company all property of the Company
and any affiliate of the Company then in the possession of Employee and all drawings, designs,
sketches, books, records, computer tapes, discs or other electronic media and all other
material containing non-public information concerning the business, clients or affairs of the
Company or any affiliate of the Company. Employee shall not retain copies of any material
required to be returned to the Company.

	VII.	 	INTELLECTUAL PROPERTY. Employee shall promptly disclose, grant and assign to the
Company for its use and benefit any and all marks, designs, logos, inventions, improvements,
business processes, technical information and suggestions relating in any way to the business
conducted by the Company, or any affiliate of the Company, which he may develop or which may
be acquired by Employee during the term of Employee’s employment at the Company (whether or
not during usual working hours), together with all trademarks, patent applications, letters
patent, copyrights and reissues thereof that may at any time be granted for or upon any such
mark, design, logo, invention, improvement, process or technical information, if applicable.
In connection therewith:

	 	A.	 	Employee shall without charge, but at the expense of the Company, promptly at
all times hereafter execute and deliver such applications, assignments, descriptions
and other instruments as may be necessary or proper in the sole opinion of the Company
to vest title to any such marks, designs, logos, inventions, improvements, business
processes, technical information, trademarks, patent applications, patents, copyrights
or reissues thereof in the Company and to enable it to obtain and maintain the entire
right and title thereto throughout the world;

	 	B.	 	Employee shall render to the Company at its expense all such assistance as it
may require in the prosecution of applications for said trademarks, patents, copyrights
or reissues thereof, in the prosecution or defense of interferences which may be
declared involving any said trademarks, applications, patents or copyrights and in any
litigation in which the Company or any of its affiliates may be involved relating to
any such trademarks, patents, inventions, improvements, processes or technical
information; and

	 	C.	 	for the avoidance of doubt, the foregoing provisions shall be deemed to include
an assignment of future copyrights in accordance with Section 201 of the Copyright Act
of 1986 and any amendment or re-enactment thereof relating in any way to the business
conducted by the Company or any affiliate of the Company.

	VIII.	 	HEADINGS. Section and other headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

	IX.	 	INTEGRATED AGREEMENT. This Agreement constitutes the entire understanding and
agreement among the parties hereto with respect to the subject matter hereof, and there are no
other agreements, understandings, restrictions, representations or warranties among the
parties other than those set forth herein or provided for herein.

	X.	 	AMENDMENTS. This Agreement may be amended or modified at any time in any or all
respects, but only by an instrument in writing executed by the parties hereto.

	 	 	 	 	 
	XI.CHOICE OF LAW. The validity of the Agreement, the construction of its

	terms, and the determination of the rights and duties of the parties hereto

	shall be governed by and construed in accordance with the internal laws of

	the State of California excluding conflicts of law principles. Each party

	irrevocably (i) submits to the exclusive jurisdiction of any California

	state or federal court sitting in the Southern District of California, with

	respect to matters arising out of or relating hereto, (ii) agrees that all

	claims with respect to such action or proceeding may be heard and

	determined in such California state or federal court, (iii) waives to the

	fullest possible extent, the defense of an inconvenient forum, (iv) waives

	the right to a trial by jury and (v) agrees that a final judgment in any

	such action or proceeding shall be conclusive and may be enforced in other

	jurisdictions by suit on the judgment or in any other manner provided by

	law.
	 	 	 	 
	XII.NO STRICT CONSTRUCTION. The language used in this Agreement shall be

	deemed to be the language chosen by the parties to express their collective

	mutual intent, and no rule of strict construction shall be applied against

	any Person. The term “including” as used herein shall be by way of example

	and shall not be deemed to constitute a limitation of any term or provision

	contained herein.
	 	 	 	 
	XIII.ATTORNEY’S FEES AND COSTS. If an action at law or in equity is

	necessary to enforce or interpret any provision of this Agreement, each

	party shall bear its own expenses associated with enforcing or interpreting

	such provision.
	 	 	 	 
	XIV.NOTICES. All notices and other communications under this Agreement

	must be in writing and will be deemed to have been duly given when (a)

	delivered by hand and received by the addressee, or (b) delivered by a

	nationally recognized overnight delivery service and received by the

	addressee, in each case as follows:
	 	 	 	 
	If to Employee:
	 	Joseph M. Dahan
	1810 Rising Glen Road
Los Angeles, CA 90069
	 	 	 	 
	With a copy to:
	 	David P. Markman
	 
	 	Greenberg Traurig
	 
	 	2450 Colorado Avenue
	 
	 	Suite 400E
	 
	 	Santa Monica, CA  90404
	If to the Company:
	 	Marc Crossman or Chief Executive Officer
	 
	 	Innovo Group Inc.
	 
	 	5901 S. Eastern Avenue
	 
	 	Commerce, CA  90040
	With a copy to:
	 	Dustin Huffine or General Counsel
	 
	 	Innovo Group Inc.
	 
	 	5901 S. Eastern Avenue
	 
	 	Commerce, CA  90040

or to such other addresses as a party may designate by notice to the other parties.

XV. ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors, assigns, heirs, estate, legatees and legal
representatives. The rights and obligations of the Company under this Agreement may be assigned to
or assumed by any other Person. Employees’ rights or obligations hereunder may not be assigned to
or assumed by any other Person. Any assignment by the Company shall not affect the Employee’s
duties or responsibilities under this Agreement.

XVI. SEVERABILITY. Each provision of the Agreement is intended to be severable. In the
event that any one or more of the provisions contained in this Agreement shall for any reason be
held to be invalid, illegal or unenforceable, the same shall not affect the validity or
enforceability of any other provision of this Agreement, but this Agreement shall be construed as
if such invalid, illegal or unenforceable provisions had never been contained herein.
Notwithstanding the foregoing, however, no provision shall be severed if it is clearly apparent
under the circumstances that the parties would not have entered into the Agreement without such
provision.

XVII. SURVIVAL. The provisions of Sections VI through XVII shall survive the termination
of the employment period or termination of this Agreement.

XVIII. DISPUTE RESOLUTION PROCEDURES.

	 	A.	 	Arbitration.

	 	i)	 	Agreement to Arbitrate Disputes. The
Company and Employee hereby agree that any dispute with any party
(including the Company’s affiliates, successors, predecessors,
contractors, employees and agents) that may arise from Employee’s
employment with the Company or the termination of Employee’s employment
with the Company and that cannot be resolved after negotiation and
mediation, if applicable, must be submitted for resolution by
mandatory, binding arbitration. The arbitration requirement applies to
all statutory, contractual and/or common law claims arising from
employment with the Company including but not limited to claims arising
under Title VII of the Civil Rights Act of 1964, the Age Discrimination
in Employment Act, the Equal Pay Act of 1963, the California Fair
Employment and Housing Act, the California Labor Code Sections 200, et
seq., 970 and 1050 et seq., the Fair Labor Standards Act and claims of
defamation under California Civil Code Section 44, et seq. or common
law. Both the Company and the Employee shall be precluded from
bringing or raising in court or another forum any dispute that was or
could have been submitted to binding arbitration. This arbitration
requirement does not apply to claims for workers’ compensation
benefits, claims arising under ERISA (29 U.S.C. § 1001 et seq.) or
provisional remedies under California Code of Civil Procedure Section
1281.8.

	 	ii)	 	Conduct of Arbitration. Binding
arbitration under this Agreement shall be conducted in Los Angeles
County, California, in accordance the applicable rules of Judicial
Arbitration and Mediation Service (JAMS) or any successor or related
service and any applicable state or local laws. The arbitration shall
be conducted before a neutral arbitrator selected by both parties in
accordance with such rules. The arbitrator shall be a neutral and
impartial lawyer with excellent academic and professional credentials
(i) who is or has been practicing law for at least 15 years,
specializing in either employment litigation or general corporate and
commercial matters, and (ii) who has had both training and experience
as an arbitrator or a judge and who has successfully arbitrated at
least ten cases. Any dispute with any party which arises from
Employee’s employment with the Company or termination of employment
with the Company must be submitted to binding arbitration within the
applicable statute of limitations prescribed by law; provided, however,
that the applicable limitations period will be deemed to be tolled
after the provision of a Dispute Notice during any period within which
the parties are actively engaged in negotiation pursuant to Section
VIII.A or mediation pursuant to Section VIII.B. For this purpose, the
parties will be “actively engaged” during the period subsequent to
either party providing the other party with a Dispute Notice through
the date either party provides written notice to the other party that
the negotiation or mediation is terminated (other than the termination
of a negotiation by a Mediation Notice, in which case the tolling will
continue). With the exception of a filing fee that shall not exceed
the cost to file a comparable claim in state or federal court, the
Company shall pay the fees and costs of the Arbitrator, and each party
shall pay for its own costs and attorneys’ fees. However, the
Arbitrator may award costs and or attorneys’ fees to the prevailing
party to the extent permitted by law. The parties will be permitted to
conduct discovery as provided by the California Code of Civil Procedure
Section 1283.05. The arbitrator shall, within thirty days of the
conclusion of the arbitration, issue a written opinion setting forth
the factual and legal bases for his or her decision. Judgment upon the
award rendered by the arbitrator may be entered in any court having
jurisdiction thereof.

	 	iii)	 	Acknowledgment. EMPLOYEE ACKNOWLEDGES
THAT HE HAS CAREFULLY READ THIS AGREEMENT, AND UNDERSTANDS AND AGREES
TO ITS TERMS. EMPLOYEE HAS ENTERED INTO THIS AGREEMENT VOLUNTARILY,
AND HAS NOT RELIED UPON ANY PROMISES OR REPRESENTATIONS OTHER THAN
THOSE CONTAINED HEREIN. EMPLOYEE UNDERSTANDS HE IS GIVING UP HIS RIGHT
TO A JURY TRIAL BY ENTERING INTO THIS AGREEMENT.

XIV. DIRECTOR AND OFFICER INSURANCE. Company shall maintain during the Initial Term and
any Renewal Term of this Agreement and for no less than 6 years thereafter, adequate director and
officer insurance to cover any real or threatened claims, proceedings or lawsuits arising out of or
related to Employee’s employment by Company and performance of his duties and responsibilities
under this Agreement.

XX. CODE SECTION 409A. The Company and Employee acknowledge and agree that the
interpretation of Section 409A of the Code and its application to the terms of this Agreement is
uncertain and may be subject to change as additional guidance and interpretations become available.
Anything to the contrary herein notwithstanding, all benefits or payments provided by the Company
to the Employee that would be deemed to constitute “nonqualified deferred compensation” within the
meaning of Section 409A of the Code are intended to comply with Section 409A and, in the event that
any such benefit or payment is deemed to not comply with Section 409A, the Company and Employee
agree to renegotiate in good faith any such benefit or payment so that either (i) Section 409A will
not apply, or (ii) compliance with Section 409A will be achieved. In any event, the Company makes
no representation or warranty and the Company shall have no liability to Employee or any other
person if any provisions of this Agreement are determined to constitute “nonqualified deferred
compensation” within the meaning of Section 409A of the Code and the terms of such provisions do
not satisfy the additional conditions applicable to nonqualified deferred compensation under
Section 409A of the Code.

[Signature Page to Follow]

2

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

EMPLOYEE

/s/ Joseph M. Dahan

	 	 	Joseph M. Dahan

INNOVO GROUP INC.

By:/s/ Marc Crossman

Name:Marc Crossman

Title:President and CEO

3EX-10.2

THIRD AMENDMENT TO

COLLATERAL PROTECTION AGREEMENT

This Third Amendment to the Collateral Protection Agreement (“First Amendment”) is entered
into as of June 25, 2007, by and between JD Holdings Inc., a California corporation (“JD
Holdings”), and Innovo Group, Inc., a Delaware corporation (collectively, with its subsidiary Joe’s
Jeans, Inc., “Innovo”).

W I T N E S S E T H:

WHEREAS, Innovo and JD Holdings, successor to JD Design LLC, previously entered into that
certain Collateral Protection Agreement dated October 13, 2006, the First Amendment dated October
30, 2006 and the Second Amendment dated April 13, 2007; and

WHEREAS, the parties deem it to be in its best interest to modify the Collateral Protection
Agreement to amend the date set forth in Section 1.5.A.; and

NOW THEREFORE, FOR AND IN CONSIDERATION of the mutual promises, covenants and conditions set
forth herein, and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereby agree as follows:

1. Section 1.5 of the Collateral Protection Agreement, as amended by the Second Amendment, is
hereby amended by deleting the phrase “on June 30, 2007” and replacing it with “on December 31,
2007”.

2. Except as set forth herein or as amended by this Third Amendment, all other terms and
conditions of the Collateral Protection Agreement, the First Amendment and the Second Amendment
shall remain the same and shall be in full force and effect. Any capitalized terms not otherwise
defined herein shall have the same meaning as set forth in the Collateral Protection Agreement,
First Amendment or Second Amendment, as the case may be. In the event of a conflict between this
Third Amendment and the Collateral Protection Agreement, the Collateral Protection Agreement shall
govern.

3. This Third Amendment may be executed in two or more counterparts, each of which shall be
deemed to be an original, and all of which, taken together, shall constitute one and the same
instrument.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK. SIGNATURE PAGE FOLLOWS.]

1

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the
date first set forth above.

INNOVO GROUP INC.

	 	 	 
	By:

	 	/s/ Marc Crossman
	
 
	 	 
	Its:

	 	CEO, President and CFO

	 	 	JD HOLDINGS, INC.

	 	 	 
	By:

	 	/s/ Joseph M. Dahan
	
 
	 	 
	Its:

	 	President

2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00125-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00125-of-00352.parquet"}]]