Document:

Exhibit 4.4

                  Registration Rights Agreement

     This Registration Rights Agreement (the "Agreement") is made
and  entered  into  as  of  the 30th   day  of  June,  2003  (the
"Effective   Date")  between  Innovo  Group,  Inc.,  a   Delaware
corporation  (the "Company"), and the parties set  forth  on  the
signature  page  and Exhibit A hereto (each,  a  "Purchaser"  and
collectively, the "Purchasers").

                        R e c i t a l s:

      A.    The Purchasers have purchased shares of the Company's
Common   Stock   (as  defined  below)  pursuant  to  Subscription
Agreements  (each,  a "Subscription Agreement" and  collectively,
the  "Subscription Agreements") by and between  the  Company  and
each Purchaser.

      B.    The  Company has issued a warrant (the "Warrant")  to
purchase 300,000 shares of the Company's Common Stock to  Sanders
Morris Harris Inc., a Texas corporation ("SMH").

      C.    The  Company, the Purchasers, and SMH desire  to  set
forth the registration rights to be granted by the Company to the
Purchasers and SMH.

      Now,  Therefore,  in consideration of the mutual  promises,
representations, warranties, covenants, and conditions set  forth
herein  and in the Subscription Agreements, the parties  mutually
agree as follows:

                       A g r e e m e n t:

     1.    Certain  Definitions.  As used in this Agreement,  the
following terms shall have the following respective meanings:

      "Approved Market" means the Nasdaq National Market, the New
York Stock Exchange, Inc., or the American Stock Exchange, Inc.

      "Business  Day"  means any day of the year,  other  than  a
Saturday,  Sunday,  or  other  day on  which  the  Commission  is
required or authorized to close.

      "Certificate of Incorporation" means the Fifth Amended  and
Restated  Certificate of Incorporation of the  Company  as  filed
with the Secretary of State of the State of Delaware, as the same
may be amended from time to time.

     "Closing Date" means June 30, 2003, or such other time as is
mutually  agreed between the Company and the Purchasers  for  the
closing of the sale referred to in Recital A above.

     "Commission" means the Securities and Exchange Commission or
any other federal agency at the time administering the Securities
Act.

      "Common Stock" means the common stock, par value $0.10  per
share, of the Company and any and all shares of capital stock  or
other equity securities of: (i) the Company which are added to or
exchanged  or substituted for the Common Stock by reason  of  the
declaration of any stock dividend or stock split, the issuance of
any   distribution   or   the   reclassification,   readjustment,
recapitalization  or  other  such  modification  of  the  capital
structure of the Company; and (ii) any other corporation, now  or
hereafter  organized  under  the  laws  of  any  state  or  other
governmental  authority, with which the Company is merged,  which
results  from  any consolidation or reorganization to  which  the
Company is a party, or to which is sold all or substantially  all
of the shares or assets of the Company, if immediately after such
merger, consolidation, reorganization or sale, the Company or the
stockholders of the Company own equity securities having  in  the
aggregate  more than 50% of the total voting power of such  other
corporation.

     "Exchange Act" means the Securities Exchange Act of 1934, as
amended,   and  the  rules  and  regulations  of  the  Commission
promulgated thereunder.

      "Family  Member" means (a) with respect to any  individual,
such  individual's  spouse, any descendants (whether  natural  or
adopted), any trust all of the beneficial interests of which  are
owned  by  any of such individuals or by any of such  individuals
together with any organization described in Section 501(c)(3)  of
the  Internal Revenue Code of 1986, as amended, the estate of any
such individual, and any corporation, association, partnership or
limited  liability company all of the equity interests  of  which
are  owned  by  those  above  described  individuals,  trusts  or
organizations  and (b) with respect to any trust, the  owners  of
the beneficial interests of such trust.

      "Form S-3" means such form under the Securities Act  as  in
effect  on  the  date hereof or any registration form  under  the
Securities  Act  subsequently adopted by  the  Commission,  which
permits inclusion or incorporation of substantial information  by
reference  to  other  documents filed by  the  Company  with  the
Commission.

      "Holder"  means  each  Purchaser,  SMH,  or  any  of  their
respective successors and Permitted Assigns who acquire rights in
accordance  with  this Agreement with respect to the  Registrable
Securities  directly  or  indirectly from  a  Purchaser  or  SMH,
including from any Permitted Assignee.

      "Inspector" means any attorney, accountant, or other  agent
retained  by  a  Purchaser for the purposes provided  in  Section
4(j).

      "Majority Holders" means at any time Holders of a  majority
of the Registrable Securities.

       "Permitted   Assignee"  means  (a)  with  respect   to   a
partnership,  its partners or former partners in accordance  with
their  partnership interests, (b) with respect to a  corporation,
its  shareholders  in  accordance  with  their  interest  in  the
corporation, (c) with respect to a limited liability company, its
members  or  former members in accordance with their interest  in
the  limited liability company, (d) with respect to an individual
party,  any  Family Member of such party, (e) an entity  that  is
controlled  by,  controls,  or is under  common  control  with  a
transferor, or (f) a party to this Agreement.

      The  terms  "register,"  "registered,"  and  "registration"
refers  to  a  registration effected by preparing  and  filing  a
registration statement in compliance with the Securities Act, and
the   declaration  or  ordering  of  the  effectiveness  of  such
registration statement.

     "Registrable Securities" means shares of Common Stock issued
to  each  Purchaser  pursuant to the Subscription  Agreements  or
issued or issuable to SMH pursuant to the Warrant, excluding  (i)
any Registrable Securities that have been publicly sold or may be
sold  immediately without registration under the  Securities  Act
either  pursuant to Rule 144 of the Securities Act or  otherwise;
(ii) any Registrable Securities sold by a person in a transaction
pursuant  to a registration statement filed under the  Securities
Act  or  (iii) any Registrable Securities that are  at  the  time
subject   to  an  effective  registration  statement  under   the
Securities Act.

     "Registration Default Date" means the date which is 90  days
following   the   Closing  Date;  provided,   however,   if   the
Registration Statement is subject to review by the SEC staff  the
Registration  Default Date shall be the date which  is  150  days
following the Closing Date.

     "Registration Default Period" means the period following the

Registration Default Date during which any Registration Event

occurs and is continuing.

      "Registration Event" means the occurrence  of  any  of  the
following events:

           (a)   the  Company  fails to file  with  the  SEC  the
     Registration  Statement on or before the date by  which  the
     Company  is  required  to  file the  Registration  Statement
     pursuant to Section 3(a),

           (b)   the  Registration Statement covering Registrable
     Securities is not declared effective by the Commission on or
     before the Registration Default Date,

          (c)  after the SEC Effective Date, sales cannot be made
     pursuant  to  the  Registration  Statement  for  any  reason
     (including without limitation by reason of a stop order,  or
     the  Company's failure to update the Registration Statement)
     but except as excused pursuant to Section 3(a), or

           (d)   the  Common  Stock generally or the  Registrable
     Securities  specifically  are not  listed  or  included  for
     quotation  on an Approved Market, or trading of  the  Common
     Stock  is suspended or halted on the Approved Market,  which
     at  the time constitutes the principal market for the Common
     Stock.

     "Registration  Statement" means the  registration  statement
required to be filed by the Company pursuant to Section 3(a).

      "Securities  Act"  means the Securities  Act  of  1933,  as
amended,   or   any  similar  federal  statute   promulgated   in
replacement  thereof,  and  the  rules  and  regulations  of  the
Commission thereunder, all as the same shall be in effect at  the
time.

      "SEC  Effective  Date"  means  the  date  the  Registration
Statement is declared effective by the Commission.

     "S-3 Blackout Period" means, with respect to a registration,
a period in each case commencing on the day immediately after the
Company  notifies the Purchasers and SMH that they are  required,
pursuant  to  Section  4(f),  to  suspend  offers  and  sales  of
Registrable  Securities during which the  Company,  in  the  good
faith judgment of its Board of Directors, determines (because  of
the  existence  of,  or  in  anticipation  of,  any  acquisition,
financing  activity, or other transaction involving the  Company,
or the unavailability for reasons beyond the Company's control of
any  required  financial  statements, disclosure  of  information
which  is in its best interest not to publicly disclose,  or  any
other  event or condition of similar significance to the Company)
that   the  registration  and  distribution  of  the  Registrable
Securities to be covered by such registration statement, if  any,
would   be   seriously  detrimental  to  the  Company   and   its
shareholders and ending on the earlier of (1) the date upon which
the  material non-public information commencing the S-3  Blackout
Period  is  disclosed to the public or ceases to be material  and
(2)  such  time as the Company notifies the selling Holders  that
the  Company will no longer delay such filing of the Registration
Statement,  recommence  taking steps to  make  such  Registration
Statement effective, or allow sales pursuant to such Registration
Statement  to  resume; provided, however, that the Company  shall
limit  its use of S-3 Blackout Periods, in the aggregate,  to  45
Trading Days in any 12-month period.

      "Trading  Day"  means a day on whichever (a)  the  national
securities  exchange, (b) the Nasdaq Stock Market,  or  (c)  such
other  securities  market, in any such case  which  at  the  time
constitutes the principal securities market for the Common Stock,
is open for general trading of securities.

      2.   Term.  This Agreement shall continue in full force and
effect for a period of two (2) year from the Effective Date.

     3.   Registration.

      (a)   Registration on Form S-3.  As promptly as  reasonably
practicable  after the date hereof, but in any  event  not  later
than  60  days  after the Closing Date (the "Registration  Filing
Date"),  the  Company shall use its commercially reasonable  best
efforts   to  file  with  the  Commission  a  shelf  registration
statement  on Form S-3 relating to the resale by the  Holders  of
all  of  the Registrable Securities; provided, however, that  the
Company  shall  not be obligated to effect any such registration,
qualification  or  compliance pursuant to this Section  3(a),  or
keep  such registration effective pursuant to Section 4:  (i)  in
any  particular  jurisdiction  in  which  the  Company  would  be
required to qualify to do business as a foreign corporation or as
a  dealer in securities under the securities or blue sky laws  of
such  jurisdiction or to execute a general consent to service  of
process   in   effecting  such  registration,  qualification   or
compliance,  in each case where it has not already  done  so;  or
(ii) during any S-3 Blackout Period.

     (b)  Other Registrations.  Prior to the SEC Effective Date,

the Company will not, without the prior written consent of the

Majority Holders, file or request the acceleration of any other

registration statement filed with the Commission, and during any

time subsequent to the SEC Effective Date when the Registration

Statement for any reason is not available for use by any Holder

for the resale of any Registrable Securities, the Company shall

not, without the prior written consent of the Majority Holders,

file any other registration statement or any amendment thereto

with the Commission under the Securities Act or request the

acceleration of the effectiveness of any other registration

statement previously filed with the Commission, other than (A)

any registration statement on Form S-8 and (B) any registration

statement or amendment which the Company is required to file or

as to which the Company is required to request acceleration

pursuant to any obligation in effect on the date of execution and

delivery of this Agreement.

     (c)  Failure to File Registration Statement. If a
Registration Event occurs, then the Company will make payments to
each Purchaser as partial liquidated damages for the minimum
amount of damages to the Purchaser by reason thereof, and not as
a penalty, at the rate of $0.05 per share of Common Stock held by
such Purchaser per month, for each calendar month of the
Registration Default Period (pro rated for any period less than
30 days).  Each such payment shall be due and payable within five
(5) days after the end of each calendar month of the Registration
Default Period until the termination of the Registration Default
Period and within five (5) days after such termination.  Such
payments shall be in partial compensation to each Purchaser, and
shall not constitute such Purchaser's exclusive remedy for such
events.  The Registration Default Period shall terminate upon (i)
the filing of the Registration Statement in the case of clause
(a) of the definition of "Registration Event," (ii) the SEC
Effective Date in the case of clause (b) of the definition of
"Registration Event," (iii) the ability of the Purchaser to
effect sales pursuant to the Registration Statement in the case
of clause (c) of the definition of "Registration Event," (iv) the
listing or inclusion and/or trading of the Common Stock on an
Approved Market, as the case may be, in the case of clause (d) of
the definition of "Registration Event," and (v) in the case of
the events described in clauses (b) and (c) of the definition of
"Registration Event," the earlier termination of the Registration
Period.  The amounts payable as partial liquidated damages
pursuant to this paragraph shall be payable in lawful money of
the United States.  Amounts payable as partial liquidated damages
to each Purchaser hereunder shall cease when such Purchaser no
longer holds the Registrable Securities.

     4.     Registration  Procedures.   In  the  case   of   each
registration,  qualification,  or  compliance  effected  by   the
Company pursuant to Section 3 hereof, the Company will keep  each
Holder including securities therein reasonably advised in writing
as  to  the  initiation of each registration, qualification,  and
compliance and as to the completion thereof.  At its expense with
respect  to any registration statement filed pursuant to  Section
3,  the Company will use its commercially reasonable best efforts
to:

     (a)   prepare and file with the Commission with  respect  to
such Registrable Securities, a registration statement on Form  S-
3,  and  use  its commercially reasonable efforts to  cause  such
registration  statement to become and remain effective  at  least
for  a  period ending with the first to occur of (i) the sale  of
all Registrable Securities covered by the registration statement,
(ii)   the  availability  under  Rule  144  for  the  Holder   to
immediately,  freely resell without restriction  all  Registrable
Securities covered by the registration statement, and  (iii)  one
year  after  a registration statement filed pursuant  to  Section
3(a)  is  declared effective by the Commission  (in either  case,
the "Effectiveness Period"); provided, however, if at the end  of
such  one-year  period, any Holder is not  able  to  immediately,
freely  resell  all  Registrable Securities  that  it  owns,  the
Effectiveness Period shall continue until terminated pursuant  to
clause  (i)  or  (ii); provided that no later than five  business
days  before filing with the Commission a registration  statement
or prospectus or any amendments or supplements thereto, including
documents  incorporated by reference after the initial filing  of
any  registration statement, the Company shall (i) furnish to one
counsel ("Holders Counsel") selected by the Holders of a majority
of  the  Registrable  Securities  covered  by  such  registration
statement  copies  of  all such documents proposed  to  be  filed
(excluding   any  exhibits  other  than  applicable  underwriting
documents), in substantially the form proposed to be filed, which
documents  shall  be subject to the review of such  counsel,  and
(ii) notify each Holder of Registrable Securities covered by such
registration statement of any stop order issued or threatened  by
the  Commission  and  take  all reasonable  actions  required  to
prevent the entry of such stop order or to remove it if entered;

     (b)  if a registration statement is subject to review by the
Commission,  promptly  respond to  all  comments  and  diligently
pursue  resolution  of any comments to the  satisfaction  of  the
Commission;

     (c)   prepare  and file with the Commission such  amendments
and supplements to such registration statement and the prospectus
used  in  connection therewith as may be necessary to  keep  such
registration statement effective during the Effectiveness  Period
(but in any event at least until expiration  of the 90-day period
referred  to in Section 4(3) of the Securities Act and Rule  174,
or  any successor thereto, thereunder, if applicable), and comply
with  the  provisions of the Securities Act with respect  to  the
disposition  of  all  securities  covered  by  such  registration
statement  during  such period in accordance  with  the  intended
method(s) of disposition by the sellers thereof set forth in such
registration statement;

     (d)   furnish, without charge, to each Holder of Registrable
Securities   covered  by  such  registration  statement   (i)   a
reasonable  number  of  copies  of  such  registration  statement
(including  any exhibits thereto other than exhibits incorporated
by  reference),  each amendment and supplement  thereto  as  such
Holder  may request, (ii) such number of copies of the prospectus
included   in   such  registration  statement   (including   each
preliminary prospectus and any other prospectus filed under  Rule
424  under  the Securities Act) as such Holders may  request,  in
conformity with the requirements of the Securities Act, and (iii)
such  other  documents as such Holder may reasonably  request  in
order to facilitate the disposition of the Registrable Securities
owned by such Holder, but only during the Effectiveness Period;

     (e)   use  its  commercially  reasonable  best  efforts   to
register or qualify such Registrable Securities under such  other
applicable  securities or blue sky laws of such jurisdictions  as
any Holder of Registrable Securities covered by such registration
statement  reasonably  requests  as  may  be  necessary  for  the
marketability of the Registrable Securities (such request  to  be
made  by the time the applicable registration statement is deemed
effective  by the Commission) and do any and all other  acts  and
things  which may be reasonably necessary or advisable to  enable
such  Holder  to consummate the disposition in such jurisdictions
of the Registrable Securities owned by such Holder; provided that
the Company shall not be required to (i) qualify generally to  do
business  in  any  jurisdiction where it would not  otherwise  be
required  to  qualify but for this paragraph  (e),  (ii)  subject
itself to taxation in any such jurisdiction, or (iii) consent  to
general service of process in any such jurisdiction;

     (f)   immediately  notify each Holder  of  such  Registrable
Securities  at  any  time when a prospectus relating  thereto  is
required  to  be  delivered  under  the  Securities  Act  of  the
happening of any event which comes to the Company's attention  if
as  a  result  of  such  event the prospectus  included  in  such
registration statement contains an untrue statement of a material
fact  or  omits to state any material fact required to be  stated
therein   or  necessary  to  make  the  statements  therein   not
misleading and the Company shall promptly prepare and furnish  to
such  Holder  a  supplement or amendment to such  prospectus  (or
prepare  and file appropriate reports under the Exchange Act)  so
that,   as  thereafter  delivered  to  the  purchasers  of   such
Registrable  Securities, such prospectus  shall  not  contain  an
untrue statement of a material fact or omit to state any material
fact  required  to  be stated therein or necessary  to  make  the
statements therein not misleading, unless suspension of  the  use
of such prospectus otherwise is authorized herein or in the event
of  an  S-3  Blackout  Period, in which  case  no  supplement  or
amendment  need be furnished (or Exchange Act filing made)  until
the termination of such suspension or S-3 Blackout Period;

     (g)   comply, and continue to comply during the period  that
such  registration  statement is effective under  the  Securities
Act,  in  all material respects with the Securities Act  and  the
Exchange Act and with all applicable rules and regulations of the
Commission  with  respect to the disposition  of  all  securities
covered by such registration statement, and make available to its
security  holders, as soon as reasonably practicable, an earnings
statement covering the period of at least twelve (12) months, but
not more than eighteen (18) months, beginning with the first full
calendar  month  after  the effective date of  such  registration
statement,  which earnings statement shall satisfy the provisions
of Section 11(a) of the Securities Act.

     (h)  as promptly as practicable after becoming aware of such
event, notify each Holder of Registrable Securities being offered
or sold pursuant to the Registration Statement of the issuance by
the  Commission  of  any  stop  order  or  other  suspension   of
effectiveness  of  the  Registration Statement  at  the  earliest
possible time;

      (i)   permit  the  Holders of Registrable Securities  being
included  in the Registration Statement and their legal  counsel,
at  such  Holders'  sole cost and expense  (except  as  otherwise
specifically  provided  in  Section  6)  to  review  and  have  a
reasonable  opportunity to comment on the Registration  Statement
and  all  amendments  and  supplements  thereto  at  least  three
Business Days prior to their filing with the Commission and shall
not  file  any  such  document  to which  any  Holder  reasonably
objects;

      (j)   make available for inspection by any Holder  and  any
Inspector retained by such Holder, at such Holder's sole expense,
all  Records  as  shall be reasonably necessary  to  enable  such
Holder  to  exercise its due diligence responsibility, and  cause
the  Company's officers, directors, and employees to  supply  all
information  which  such Holder or any Inspector  may  reasonably
request  for  purposes of such due diligence; provided,  however,
that such Holder shall hold in confidence and shall not make  any
disclosure  of any record or other information which the  Company
determines  in  good  faith  to be  confidential,  and  of  which
determination such Holder is so notified at the time such  Holder
receives  such  information, unless (i) the  disclosure  of  such
record  is  necessary  to  avoid or  correct  a  misstatement  or
omission  in  the  Registration Statement and a  reasonable  time
prior  to  such  disclosure the Holder shall  have  informed  the
Company  of the need to so correct such misstatement or  omission
and the Company shall have failed to correct such misstatement of
omission, (ii) the release of such record is ordered pursuant  to
a  subpoena or other order from a court or governmental  body  of
competent  jurisdiction or (iii) the information in  such  record
has  been  made generally available to the public other  than  by
disclosure  in  violation of this or any  other  agreement.   The
Company  shall  not  be  required to  disclose  any  confidential
information  in  such records to any Inspector until  and  unless
such   Inspector   shall  have  entered  into  a  confidentiality
agreement with the Company with respect thereto, substantially in
the  form of this Section 4(j), which agreement shall permit such
Inspector to disclose records to the Holder who has retained such
Inspector.  Each Holder agrees that it shall, upon learning  that
disclosure  of  such  Records is sought  in  or  by  a  court  or
governmental  body  of competent jurisdiction  or  through  other
means,  give prompt notice to the Company and allow the  Company,
at  the  Company's  expense, to undertake appropriate  action  to
prevent  disclosure of, or to obtain a protective order for,  the
records   deemed  confidential.   The  Company  shall   hold   in
confidence  and  shall  not  make any disclosure  of  information
concerning  an  Holder provided to the Company pursuant  to  this
Agreement  unless (i) disclosure of such information is necessary
to  comply with federal or state securities laws, (ii) disclosure
of   such  information  is  necessary  to  avoid  or  correct   a
misstatement  or  omission in the Registration  Statement,  (iii)
release of such information is ordered pursuant to a subpoena  or
other  order  from  a  court or governmental  body  of  competent
jurisdiction,  or (iv) such information has been  made  generally
available to the public other than by disclosure in violation  of
this  or any other agreement.  The Company agrees that it  shall,
upon  learning that disclosure of such information  concerning  a
Holder  is  sought  in  or  by a court or  governmental  body  of
competent jurisdiction or through other means, give prompt notice
to  such  Holder and allow such Holder, at such Holder's expense,
to  undertake appropriate action to prevent disclosure of, or  to
obtain a protective order for, such information;

      (k)   use  its  best efforts to cause all  the  Registrable
Securities covered by the Registration Statement to be quoted  on
the  Nasdaq  National  Market or such other principal  securities
market on which securities of the same class or series issued  by
the Company are then listed or traded;

      (l)  provide a transfer agent and registrar, which may be a
single entity, for the Registrable Securities at all times;

      (m)   cooperate with the Holders of Registrable  Securities
being   offered  pursuant  to  the  Registration   Statement   to
facilitate  the  timely preparation and delivery of  certificates
(not  bearing  any restrictive legends) representing  Registrable
Securities  to be offered pursuant to the Registration  Statement
and  enable  such  certificates to be in  such  denominations  or
amounts  as the Holders may reasonably request and registered  in
such names as the Holders may request;

      (n)   during the Registration Period, refrain from  bidding
for  or  purchasing  any Common Stock or any  right  to  purchase
Common  Stock or attempting to induce any Person to purchase  any
such security or right if such bid, purchase or attempt would  in
any  way  limit  the  right of the Holders  to  sell  Registrable
Securities by reason of the limitations set forth in Regulation M
under the 1934 Act; and

     (o)  take all other reasonable actions necessary to expedite
and  facilitate  disposition by the Holders  of  the  Registrable
Securities pursuant to the Registration Statement.

          5.    Suspension of Offers and Sales.  Each  Holder  of
     Registrable  Securities agrees that,  upon  receipt  of  any
     notice from the Company of the happening of any event of the
     kind described in Section 4(f) hereof or of the commencement
     of  an  S-3  Blackout Period, such Holder shall  discontinue
     disposition  of  Registrable  Securities  pursuant  to   the
     registration statement covering such Registrable  Securities
     until   such   Holder's  receipt  of  the  copies   of   the
     supplemented or amended prospectus contemplated  by  Section
     4(f) hereof or notice of the end of the S-3 Blackout Period,
     and,  if  so  directed  by the Company,  such  Holder  shall
     deliver to the Company (at the Company's expense) all copies
     (including,  without limitation, any and all drafts),  other
     than   permanent   file  copies,  then  in   such   Holder's
     possession,  of  the  prospectus covering  such  Registrable
     Securities  current at the time of receipt of  such  notice.
     In  the  event the Company shall give any such  notice,  the
     period  mentioned  in  Section  4(a)(iii)  hereof  shall  be
     extended by the greater of (i) ten business days or (ii) the
     number of days during the period from and including the date
     of the giving of such notice pursuant to Section 4(f) hereof
     to  and  including the date when each Holder of  Registrable
     Securities covered by such registration statement shall have
     received   the  copies  of  the  supplemented   or   amended
     prospectus contemplated by Section 4(f) hereof.

     6.    Registration  Expenses.  The  Company  shall  pay  all
expenses in connection with any registration, including,  without
limitation,  all  registration, filing, stock exchange  and  NASD
fees, printing expenses, all fees and expenses of complying  with
securities  or  blue  sky  laws, the fees  and  disbursements  of
counsel  for the Company and of its independent accountants,  and
the  reasonable  fees  and disbursements of  a  Holders  Counsel;
provided that, in any underwritten registration, each party shall
pay  for  its  own  underwriting discounts  and  commissions  and
transfer  taxes. Except as provided above in this Section  6  and
Section  9, the Company shall not be responsible for the expenses
of  any  attorney  or  other advisor  employed  by  a  Holder  of
Registrable Securities.

     7.    Assignment of Rights. No Holder may assign its  rights
under  this  Agreement  to any party without  the  prior  written
consent  of  the Company; provided, however, that  a  Holder  may
assign  its rights under this Agreement without such restrictions
to  a  Permitted  Assignee  as  long  as  (a)  such  transfer  or
assignment  is effected in accordance with applicable  securities
laws; (b) such transferee or assignee agrees in writing to become
subject  to  the terms of this Agreement; and (c) the Company  is
given  written  notice  by  such  Holder  of  such  transfer   or
assignment,  stating the name and address of  the  transferee  or
assignee and identifying the Registrable Securities with  respect
to which such rights are being transferred or assigned.

     8.    Information  by  Holder.  The  Holder  or  Holders  of
Registrable Securities included in any registration shall furnish
to  the Company such information regarding such Holder or Holders
and  the distribution proposed by such Holder or Holders  as  the
Company may request in writing.

     9.   Indemnification.

     (a)   In  the  event  of the offer and sale  of  Registrable
Securities held by Holders under the Securities Act, the  Company
shall,  and  hereby  does, indemnify and hold  harmless,  to  the
fullest  extent  permitted by law, each  Holder,  its  directors,
officers,  partners,  each other person who  participates  as  an
underwriter in the offering or sale of such securities, and  each
other  person,  if any, who controls or is under  common  control
with  such  Holder or any such underwriter within the meaning  of
Section  15  of  the Securities Act, against any losses,  claims,
damages  or liabilities, joint or several, and expenses to  which
the  Holder or any such director, officer, partner or underwriter
or controlling person may become subject under the Securities Act
or   otherwise,   insofar  as  such  losses,   claims,   damages,
liabilities  or  expenses  (or actions  or  proceedings,  whether
commenced or threatened, in respect thereof) arise out of or  are
based  upon  any untrue statement or alleged untrue statement  of
any  material fact contained in any registration statement  under
which  such shares were registered under the Securities Act,  any
preliminary  prospectus, final prospectus or  summary  prospectus
contained therein, or any amendment or supplement thereto, or any
omission  or  alleged omission to state therein a  material  fact
required to be stated therein or necessary to make the statements
therein in light of the circumstances in which they were made not
misleading, and the Company shall reimburse the Holder, and  each
such  director,  officer,  partner, underwriter  and  controlling
person for any legal or any other expenses reasonably incurred by
them in connection with investigating, defending or settling  any
such  loss,  claim,  damage,  liability,  action  or  proceeding;
provided  that the Company shall not be liable in any  such  case
(i)  to  the extent that any such loss, claim, damage,  liability
(or  action  or proceeding in respect thereof) or expense  arises
out  of  or  is based upon an untrue statement or alleged  untrue
statement   in  or  omission  or  alleged  omission   from   such
registration  statement, any such preliminary  prospectus,  final
prospectus,  summary  prospectus,  amendment  or  supplement   in
reliance   upon  and  in  conformity  with  written   information
furnished  to the Company through an instrument duly executed  by
or  on behalf of such Holder specifically stating that it is  for
use  in  the preparation thereof or (ii) if the person  asserting
any  such loss, claim, damage, liability (or action or proceeding
in respect thereof) who purchased the Registrable Securities that
are  the  subject thereof did not receive a copy  of  an  amended
preliminary  prospectus  or the final prospectus  (or  the  final
prospectus as amended or supplemented) at or prior to the written
confirmation of the sale of such Registrable Securities  to  such
person because of the failure of such Holder or underwriter to so
provide  such  amended preliminary or final  prospectus  and  the
untrue  statement  or  alleged untrue statement  or  omission  or
alleged  omission  of  a material fact made in  such  preliminary
prospectus  was  corrected in the amended  preliminary  or  final
prospectus  (or the final prospectus as amended or supplemented).
Such  indemnity shall remain in full force and effect  regardless
of  any investigation made by or on behalf of the Holders, or any
such  director,  officer,  partner,  underwriter  or  controlling
person  and  shall  survive the transfer of such  shares  by  the
Holder.

     (b)   As a condition to including any Registrable Securities
to  be  offered  by a Holder in any registration statement  filed
pursuant  to this Agreement, each such Holder agrees to be  bound
by  the  terms  of  this  Section 9 and  to  indemnify  and  hold
harmless,  to  the fullest extent permitted by law, the  Company,
its  directors and officers, and each other person, if  any,  who
controls  the  Company within the meaning of Section  15  of  the
Securities   Act,   against  any  losses,  claims,   damages   or
liabilities, joint or several, to which the Company or  any  such
director  or  officer or controlling person  may  become  subject
under  the  Securities Act or otherwise, insofar as such  losses,
claims,  damages  or  liabilities  (or  actions  or  proceedings,
whether commenced or threatened, in respect thereof) arise out of
or  are  based  upon  any  untrue  statement  or  alleged  untrue
statement   in  or  omission  or  alleged  omission   from   such
registration   statement,  any  preliminary   prospectus,   final
prospectus  or  summary  prospectus  contained  therein,  or  any
amendment  or  supplement thereto, if such statement  or  alleged
statement  or omission or alleged omission was made  in  reliance
upon and in conformity with written information about such Holder
as  a  Holder of the Company furnished to the Company,  and  such
Holder  shall  reimburse  the Company, and  each  such  director,
officer,  and controlling person for any legal or other  expenses
reasonably  incurred  by them in connection  with  investigating,
defending,  or settling and such loss, claim, damage,  liability,
action,  or  proceeding; provided, however, that  such  indemnity
agreement found in this Section 8(b) shall in no event exceed the
gross  proceeds from the offering received by such Holder.   Such
indemnity  shall remain in full force and effect,  regardless  of
any investigation made by or on behalf of the Company or any such
director,  officer  or controlling person and shall  survive  the
transfer by any Holder of such shares.

     (c)   Promptly  after  receipt by an  indemnified  party  of
notice  of the commencement of any action or proceeding involving
a  claim referred to in Section 9(a) or (b) hereof (including any
governmental action), such indemnified party shall, if a claim in
respect thereof is to be made against an indemnifying party, give
written  notice to the indemnifying party of the commencement  of
such  action; provided that the failure of any indemnified  party
to   give  notice  as  provided  herein  shall  not  relieve  the
indemnifying party of its obligations under Section 9(a)  or  (b)
hereof,  except  to  the  extent that the indemnifying  party  is
actually prejudiced by such failure to give notice.  In case  any
such  action is brought against an indemnified party,  unless  in
the  reasonable judgment of counsel to such indemnified  party  a
conflict  of  interest between such indemnified and  indemnifying
parties may exist or the indemnified party may have defenses  not
available to the indemnifying party in respect of such claim, the
indemnifying  party shall be entitled to participate  in  and  to
assume  the defense thereof, with counsel reasonably satisfactory
to such indemnified party and, after notice from the indemnifying
party to such indemnified party of its election so to assume  the
defense  thereof, the indemnifying party shall not be  liable  to
such   indemnified  party  for  any  legal  or   other   expenses
subsequently  incurred  by  the latter  in  connection  with  the
defense  thereof,  unless in such indemnified party's  reasonable
judgment  a  conflict  of interest between such  indemnified  and
indemnifying  parties arises in respect of such claim  after  the
assumption  of  the  defenses thereof or the  indemnifying  party
fails  to  defend  such claim in a diligent  manner,  other  than
reasonable costs of investigation.  Neither an indemnified nor an
indemnifying  party  shall be liable for any  settlement  of  any
action   or   proceeding  effected  without  its   consent.    No
indemnifying party shall, without the consent of the  indemnified
party,  consent  to  entry  of any judgment  or  enter  into  any
settlement,  which  does  not include as  an  unconditional  term
thereof  the  giving  by  the  claimant  or  plaintiff  to   such
indemnified party of a release from all liability in  respect  of
such  claim  or  litigation.   Notwithstanding  anything  to  the
contrary set forth herein, and without limiting any of the rights
set  forth above, in any event any party shall have the right  to
retain,  at its own expense, counsel with respect to the  defense
of a claim.

     (d)   In the event that an indemnifying party does or is not
permitted to assume the defense of an action pursuant to  Section
9(c)  or in the case of the expense reimbursement obligation  set
forth  in  Section 9(a) and (b), the indemnification required  by
Section 9(a) and (b) hereof shall be made by periodic payments of
the  amount  thereof  during the course of the  investigation  or
defense, as and when bills received or expenses, losses, damages,
or liabilities are incurred.

     (e)   If the indemnification provided for in this Section  9
is held by a court of competent jurisdiction to be unavailable to
an  indemnified party with respect to any loss, liability, claim,
damage or expense referred to herein, the indemnifying party,  in
lieu of indemnifying such indemnified party hereunder, shall  (i)
contribute  to  the  amount paid or payable by  such  indemnified
party  as  a  result of such loss, liability,  claim,  damage  or
expense  as is appropriate to reflect the proportionate  relative
fault  of  the  indemnifying  party  on  the  one  hand  and  the
indemnified party on the other (determined by reference to, among
other things, whether the untrue or alleged untrue statement of a
material fact or omission relates to information supplied by  the
indemnifying  party  or the indemnified party  and  the  parties'
relative intent, knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission), or (ii)
if  the  allocation provided by clause (i) above is not permitted
by  applicable  law or provides a lesser sum to  the  indemnified
party  than  the  amount  hereinafter calculated,  not  only  the
proportionate  relative fault of the indemnifying party  and  the
indemnified party, but also the relative benefits received by the
indemnifying party on the one hand and the indemnified  party  on
the   other,   as   well   as   any  other   relevant   equitable
considerations.   No  indemnified  party  guilty  of   fraudulent
misrepresentation  (within the meaning of Section  11(f)  of  the
Securities  Act)  shall  be  entitled to  contribution  from  any
indemnifying  party  who  was  not  guilty  of  such   fraudulent
misrepresentation.

     (f)  Other Indemnification.  Indemnification similar to that
specified  in the preceding subsections of this Section  9  (with
appropriate modifications) shall be given by the Company and each
Holder  of  Registrable Securities with respect to  any  required
registration  or  other  qualification of  securities  under  any
federal  or  state  law  or regulation or governmental  authority
other than the Securities Act.

     10.  Miscellaneous

     (a)   Governing Law. This Agreement shall be governed by and
construed  in accordance with the laws of the State of Texas  and
the  United States of America, both substantive and remedial. Any
judicial proceeding brought against either of the parties to this
agreement  or  any dispute arising out of this Agreement  or  any
matter  related hereto may be brought in the courts of the  State
of  Texas or in the United States District Court for the Southern
District  of  Texas and, by its execution and  delivery  of  this
agreement,  each party to this Agreement accepts the jurisdiction
of  such courts. The foregoing consent to jurisdiction shall  not
be  deemed to confer rights on any person other than the  parties
to this Agreement.

     (b)   Successors and Assigns.  Except as otherwise  provided
herein, the provisions hereof shall inure to the benefit of,  and
be binding upon, the successors, Permitted Assigns, executors and
administrators of the parties hereto.  In the event  the  Company
merges  with, or is otherwise acquired by, a direct  or  indirect
subsidiary  of  a  publicly  traded company,  the  Company  shall
condition  the  merger or acquisition on the assumption  by  such
parent company of the Company's obligations under this Agreement.

     (c)   Entire Agreement.  This Agreement constitutes the full
and  entire understanding and agreement between the parties  with
regard to the subjects hereof.

     (d)  Notices, etc. All notices or other communications which
are  required  or  permitted under this  Agreement  shall  be  in
writing  and  sufficient  if  delivered  by  hand,  by  facsimile
transmission, by registered or certified mail, postage  pre-paid,
or  by  courier  or  overnight carrier, to  the  persons  at  the
addresses  set forth below (or at such other address  as  may  be
provided  hereunder), and shall be deemed to have been  delivered
as of the date so delivered:

     If to the Company:       Innovo Group, Inc.
                         5900 S. Eastern Ave., Suite 104
                         Commerce, California 90040
                         Attention:  Chief Executive Officer

     If to the Purchasers: To each Purchaser at the address
                         set forth on Exhibit A

     with a copy to:     Sanders Morris Harris Inc.
                         600 Travis, Suite 3100
                         Houston, Texas 77002
                         Attention: President

or at such other address as any party shall have furnished to the
other parties in writing.

     (e)   Delays or Omissions.  No delay or omission to exercise
any  right,  power  or  remedy accruing  to  any  Holder  of  any
Registrable Securities, upon any breach or default of the Company
under  this  Agreement, shall impair any  such  right,  power  or
remedy of such Holder nor shall it be construed to be a waiver of
any such breach or default, or an acquiescence therein, or of  or
in  any similar breach or default thereunder occurring; nor shall
any waiver of any single breach or default be deemed a waiver  of
any  other breach or default theretofore or thereafter occurring.
Any  waiver, permit, consent or approval of any kind or character
on  the  part of any Holder of any breach or default  under  this
Agreement,  or  any  waiver on the part  of  any  Holder  of  any
provisions  or conditions of this Agreement, must be  in  writing
and  shall be effective only to the extent specifically set forth
in  such writing.  All remedies, either under this Agreement,  or
by  law  or otherwise afforded to any holder, shall be cumulative
and not alternative.

     (f)   Counterparts.  This Agreement may be executed  in  any
number  of  counterparts,  each of  which  shall  be  enforceable
against the parties actually executing such counterparts, and all
of which together shall constitute one instrument.

     (g)   Severability.  In  the  case  any  provision  of  this
Agreement  shall  be  invalid,  illegal  or  unenforceable,   the
validity, legality and enforceability of the remaining provisions
shall not in any way be affected or impaired thereby.

     (h)   Amendments.  The provisions of this Agreement  may  be
amended  at  any  time  and  from time to  time,  and  particular
provisions of this Agreement may be waived, with and only with an
agreement or consent in writing signed by the Company and by  the
holders of an 80% majority of the number of shares of Registrable
Securities  outstanding  as  of the date  of  such  amendment  or
waiver. The Purchasers acknowledge that by the operation of  this
Section  10(h), the holders of an 80% majority of the outstanding
Registrable  Securities may have the right and power to  diminish
or eliminate all rights of the Purchasers under this Agreement.

     (i)   Limitation on Subsequent Registration  Rights.   After
the  date  of this Agreement, the Company shall not, without  the
prior  written consent of the Holders of at least a  majority  of
the  Registrable  Securities  then outstanding,  enter  into  any
agreement with any holder or prospective holder of any securities
of  the  Company that would grant such holder registration rights
senior to those granted to the Holders hereunder.

     This Registration Rights Agreement is hereby executed as  of
the date first above written.

                                   COMPANY:

                                   INNOVO GROUP, INC.

                              By:  /s/ Samuel Joseph Furrow, Jr.
                              Name: Samuel Joseph Furrow, Jr.
                              Its: CEO

                                   PURCHASERS:

                                   The   Purchasers   listed   on
                                   Exhibit A attached hereto

                                   By:   SANDERS  MORRIS   HARRIS
                              INC.,
                                   Agent and Attorney-in-fact

                                   By:________________________________

Name:____________________________

Its:_______________________________

                              Exhibit A

                      Purchaser Information

               INNOVO GROUP OFFERING -- PURCHASERS
      INVESTOR               PRINCIPAL         SHARES   SUBSCRIPTI
                        RESIDENCE/EXECUTIVE    PURCHAS  ON AMOUNT
                              OFFICE             ED

 Apogee Fund, L.P.    201 Main St., Ste. 1555  275,000  915,750.00
                       Fort Worth, TX 76102
 Arthur Fields SEP    5800 Cart Rd., Ste. 400  30,000   99,900.00
                          Plano, TX 75023
Atlas Capital (Q.P.)  100 Crescent Ct., #880   22,000   73,260.00
        L.P.             Dallas, TX 75201
   Atlas Capital      100 Crescent Ct., #880   78,000   259,740.00
 Management Master       Dallas, TX 75201
     Fund, Ltd.
Bernard C. Byrd Jr.,      1924 Craigmore       30,000   99,900.00
  TTEE, Bernard C.     Charlotte, NC 28226-
Byrd Jr. Rev. Trust            6204
   Bill Haak and         22061 Chapman Rd.      6,000   $19,980.00
  Johnnie S. Haak,    Hempstead, TX 7745-8272
       JTWROS
     Brian Kuhn       3168 Mockingbird Knoll   30,000   99,900.00
                      LaVerne, CA 91750-2368
Charles Robbins, Sr.  8580 Cinderbed Rd., No.  45,000   149,850.00
                               2400
                        Newington, VA 22122

      Crescent            c/o Greenlight       90,090   299,999.70
 International Ltd.      (Switzerland) SA
                       84 Ave. Louis Casai,
                           P.O. Box 161
                       1216 Cointrin, Geneva
                            Switzerland
 Dean S. Oakey and       5724 Calpine Dr.      18,999   63,266.67
 Janis A. Oakey JT.      Malibu, CA 90265
        TEN.
  FlyLine Holdings     115 W. 2nd St., Ste.    200,000  666,000.00
        Ltd.                    103
                       Fort Worth, TX 76102
   Gail L. Oakey         3201 Waldheim Dr.     100,000  333,000.00
  Revocable Trust      Port Huron, MI 48060-
                               2312
 Greg D. Greenberg     8510 Abrams Rd., #508   30,000   99,900.00
        SEP              Dallas, TX 75243
  Hardy Fields SEP    2929 North Galloway 115  40,000   133,200.00
                        Mesquite, TX 75150
   IRA FBO Don A.     600 Travis, Suite 3100   30,030   100,000.00
      Sanders            Houston, TX 77002
IRA FBO Katherine U.  600 Travis, Suite 3100   30,030   100,000.00
      Sanders            Houston, TX 77002
   John S. Lemak        4410 Bordeaux Ave.     60,000   199,800.00
                         Dallas, TX 75205
Lakefront Partners,   600 Travis, Suite 3100   30,030   99,999.00
        Ltd.             Houston, TX 77002
Lossett Family Trust      1638 Garden St.      30,000   99,900.00
                        Redlands, CA 92373
   Myron Blalock      12 Greenway Plaza, No.   45,000   149,850.00
                               1400
                         Houston, TX 77046
 Paul A. Greenberg,    8220 Walnut Hill Lane   45,000   149,850.00
M.D., TTEE, Paul A.      Dallas, TX 75231
 Greenberg Employee
Profit Sharing Trust
  Precept Capital     100 Crescent Ct., Ste.   300,000  999,000.00
 Master Fund, G.P.              850
                         Dallas, TX 75201
     RAM, Ltd.         2100 Enterprise Ave.    200,000  666,000.00
                         Geneva, IL 60134
  Robert J. Zappia    30712 E. Sunset Dr. S.   15,000   49,950.00
                      Redlands, CA 92373-7448
Sanders Opportunity   600 Travis, Suite 3100   108,118  360,032.94
        Fund             Houston, TX 77002
  (Institutional),
        L.P.
Sanders Opportunity   600 Travis, Suite 3100   41,883   139,470.39
     Fund, L.P.          Houston, TX 77002
   Sandor Capital      2828 Routh St., Ste.    90,000   299,700.00
 Master Fund, L.P.              500
                         Dallas, TX 75201
     Scott Juda       237 South Irving Blvd.   10,000   33,300.00
                       Los Angeles, CA 90004
  The Falcon Cable     10900 Wilshire Blvd.,   200,000  666,000.00
       Trust                 Ste. 1500
                       Los Angeles, CA 90024
Twin Capital Growth   5800 Cart Rd., Ste. 400  30,000   99,900.00
        L.P.              Plano, TX 75023
  Westpark Capital    4965 Preston Park Blvd.  50,000   166,500.00
        L.P.                   #220
                          Plano, TX 75093
  William Solemene     4400 Williamsburg Rd.   225,000  749,250.00
                         Dallas, TX 75220
WS Opportunity Fund   300 Crescent Ct., Ste.   96,096   319,999.68
International, Ltd.             880
                         Dallas, TX 75201
   WS Opportunity     300 Crescent Ct., Ste.   204,205  680,002.65
    Master Fund                 880
                         Dallas, TX 75201
                                               2,835,4  $9,442,151
                                                 81        .03EXHIBIT 10.1

                      SUPPLY AGREEMENT

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

                          RECITALS

     A.   Innovo is, among  other things, a  seller of t-
          shirts, canvas and denim bags and other related
          products.

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

     C.   Commerce shall  be  entitled  to  subcontract its
          obligations  hereunder   to   Azteca   Production
          International,  Inc.,  a  California  corporation
          ("Azteca").   Azteca  is, among  other  things, a
          manufacturer of t-shirts, canvas  and denim  bags
          and other related products.

     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. PRODUCTS, ORDERS AND PRICING

     1.1 Commerce  shall  supply  to  Innovo  the  Products
described in Exhibit  A  attached  hereto (the "Products"),
during the Term of  this  Supply  Agreement ("Manufacturing
Services"). The purchase price that Innovo will pay  Azteca
for each of the Products is also listed  in Exhibit A, From
time to time, Exhibit A may be revised to add Products upon
written agreement of the parties.

     1.2  All of the Products to be  manufactured hereunder
shall be made in accordance with all  applicable  laws  and
regulations.

     1.3 Minimum Obligations  Innovo agrees to  purchase  a
"Minimum Obligation" of One Million  Five  Hundred Thousand
Dollars (US $1,500,000) worth of Manufacturing Services and
D&O  Services  (as  defined in  the Distribution Agreement)
from Commerce at the execution of this Supply Agreement and
One Million Five Hundred  Thousand  Dollars (US $1,500,000)
worth of Manufacturing Services  and D&O Services within 90
calendar days of execution of this Supply Agreement.

     1.4  Placing of Subsequent Orders During  the  Term or
any Renewal Term of  this  Supply Agreement, on  a  monthly
basis, Innovo  shall  submit  written  purchase  orders  to
Commerce clearly setting forth the Products to be purchased
by Innovo and  requested  shipping dates  for  the  ordered
Products.

<PAGE>

2. TERM AND TERMINATION

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

     2.2   Termination  This  Supply   Agreement  may   be
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  Supply  Agreement by the
other party which is not cured within  thirty (30) days of
receipt of written notice thereof.

     2.3  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 1.3  of  this  Supply
Agreement. The prices for Products shall be  renegotiated
in good faith by the parties hereto, based  on  increases
in costs of raw materials and labor.

3.   DELIVERY Innovo shall provide Commerce with reasonable
lead  time  for all orders for purchase and Commerce  shall
timely  fulfill  all  orders for  purchases  received  from
Innovo   and   shall  deliver  the  Products   to   Apparel
Distribution   Services,  LLC  ("ADS")   or   wherever   so
instructed  by  Innovo according to a  reasonable  delivery
schedule.  The parties hereto shall in good faith negotiate
such delivery schedule.

4.   QUALITY CONTROL The quality of the Products, including,
among other things, the technical specifications in
manufacturing the products, shall meet the specifications
and standards of both parties, which specifications and
standards shall be reasonably based on the highest in the
industry. The parties hereto shall determine such quality in
good faith.

5. COMPENSATION TO COMMERCE FOR THE PRODUCTS 5.1

     5.1 Invoices

          5.1.1 Commerce shall invoice Innovo upon each
shipment of goods made against an Innovo purchase order.
Payments by Innovo will be made directly to Commerce
immediately upon receipt of such invoices.

          5.1.2 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
due balance and cancel or delay any future shipment of the
products.

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

     5.3 SALE OF IRREGULAR AND SECOND QUALITY PRODUCTS Innovo
and Commerce each shall use their marketing resources to sell
Products characterized as irregulars and seconds ("Seconds").
Commerce shall not invoice Innovo for any Seconds. However,
all proceeds from the sales of Seconds made by Innovo shall be
remitted to Commerce.

<PAGE>

6.  RISK OF LOSS Commerce shall bear the risk of loss of, or
damage to, the Products, until delivery in accordance with
instructions from Innovo.

7.   INSPECTION OF THE PRODUCTS Innovo and its representatives
may, from time to time, upon reasonable notice and during regular
business hours, inspect the manufacture of           Products and
conduct related quality control. In connection therewith,
Commerce shall provide reasonable assistance and access to
Commerce's facilities, personnel and materials. Commerce shall
comply with Innovo's reasonable quality and inspection procedures
during production and after
shipment.

8.   MUTUAL REPRESENTATIONS AND WARRANTIES

     8.1  Each party represents and warrants to the other
that it has the right and authority to enter into this
Supply 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
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 Supply Agreement.

     8.2  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.

9.   CONFIDENTIAL INFORMATION

     9.1  Each party 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 Party unless, the
Receiving Party can prove that the materials or information
are not Confidential Information. For the purposes of this
section:

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

     9.3  The Receiving Party 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.

<PAGE>

     9.4  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
Supply Agreement.

     9.5  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 Party
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.

10.  NONSOLICITATION

     10.1 Commerce hereby agrees with the Company that
during the term of each of this Supply Agreement and the
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
this Supply Agreement and the Distribution Agreement, to
direct their business from the Company to any individual,
partnership, corporation or other entity.

11.  INDEMNIFICATION

     11.1 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.

     11.2 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.

12.  GENERAL

     12.1      Governing Law This Supply 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 Supply Agreement will exclusively  be  in
the state or federal courts located in California.

     12.2 Entire Agreement  This Supply 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
the agreement will be valid unless in writing and signed
by an authorized representative of each party.

     12.3 Assignment   This Supply Agreement may not be
assigned by Innovo to any other person, firm, or entity
without the express written approval of Commerce and any

<PAGE>

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

     12.4 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           Innovo Group, Inc.:
          Group, LLC:
          5804 E. Slauson Ave.          1808 N. Cherry Street
          Commerce, CA 90040            Knoxville, TN 31917
          Attn: Deborah Greaves, Esq.   Attn: Jay Furrow

     12.5 Rights to. Injunctive Relief  Both parties
acknowledge that remedies at law may be inadequate to provide
full 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.

     12.6      Force Majeure  No party will be liable for,
or will be considered to be in breach of or default under
this Supply Agreement on account of, any delay or failure to
perform as required by this Supply 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 parry 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 party's' performance of a material
covenant set forth herein, the other parry can immediately
terminate this Supply Agreement.

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

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

     12.9 Independent Contractors The parties acknowledge
and agree that they are dealing with each other hereunder as
independent contractors. Nothing contained in this Supply
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.

     12.10     Severability  In the event any provision of
this Supply Agreement is held by a court or other tribunal
of competent jurisdiction to be unenforceable, such
provision will be reformed

<PAGE>

only to the extent necessary to make it enforceable, and the
other provisions of this Supply Agreement will, remain in
full force and effect,

     12.11     Counterparts  This Supply 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 Supply 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 Supply Agreement to one another as soon as
practicable following execution thereof,

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

     12.13      Attorney's Fees  Should wither party hereto
initiate a legal or administrative action or arbitration
proceeding (an "Action") to enforce any of the terms or
conditions of this Supply Agreement, the prevailing partly
(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 WEREOF, the parties have executed this Supply
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:     COO

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