Letter Agreement Terminating License Agreement Between IP Holdings LLC and Innovo Inc.

Summary

IP Holdings LLC and Innovo Inc. have agreed to terminate their license agreement effective December 31, 2004. Innovo Inc. may continue shipping goods until that date, paying a reduced royalty rate of 2.5% of net sales plus an advertising royalty for goods shipped from August 1, 2004, to December 31, 2004. Innovo will not be required to contribute to product samples, fees, or staff participation in brand events and tradeshows going forward. All other contractual obligations between the parties will end on December 31, 2004, except for outstanding royalty payments, which remain due as scheduled.

EX-10.1 2 ex10_1.txt LETTER AGREEMENT BETWEEN IP HOLDINGS AND INNOVO INC. Exhibit 10.1 [Candies letterhead] The license agreement between IPH Management Corporation and Innovo Inc. is terminated as of December 31, 2004. Licensee will continue to ship goods through December 31, 2004, but for all goods shipped between August 1, 2004 thru December 31, 2004, licensee will pay a reduced royalty rate of two-and - -a-half percent of net sales, plus the advertising royalty. It is agreed that licensee will not contribute any monies toward product samples, fees and staff participation of all brand events and tradeshows going forward. Outstanding royalty payments from licensee to licensor are expected on schedule as outlined in existing agreement. Both parties will be absolved of all other contractual matters effective December 31, 2004. IP HOLDINGS LLC INNOVO INC. By: The Manager Licensee IP Holdings and Management Corporation /s/ Richard V. Danderline /s/ Pat Anderson - ------------------------- ---------------- Richard V. Danderline Pat Anderson President