Unsecured Line Of Credit Agreement

HANOVER DIRECT, INC.
UNSECURED LINE OF CREDIT & PROMISSORY NOTE


$25,000,000 New York, New York
March 1, 2000


FOR VALUE RECEIVED, the undersigned, HANOVER DIRECT, INC., a Delaware corporation ("Borrower"), promises to pay to the order of RICHEMONT FINANCE, S.A., or its assigns ("Lender"), on or before the Maturity Date referred to below, TWENTY-FIVE MILLION DOLLARS ($25,000,000), or such lesser amount as shall then be outstanding under this Line of Credit and Promissory Note as evidenced by Lender's record of the loans made hereunder.


Fees: The Borrower will pay the Lender a monthly fee of $62,500 each month in arrears from the date of the Note up to the Maturity Date (as defined below).


Interest: The Borrower will pay the Lender monthly interest at a rate of 0.583% on the average monthly balance outstanding in arrears.


All outstanding principal, fees and interest not previously paid shall be due and payable in full on the date (the "Maturity Date") which is the earlier to occur of December 30, 2000 and the date on which Lender makes an equity infusion in Borrower or any of Borrower's subsidiaries. Principal, fees and interest on this Note are payable in lawful currency of the United States of America to the Lender at its principal office at 35 Boulevard, Prince Henri, L1724 Luxemborg, or as such other place as may be designated by Lender, in same day funds.


A. Representations and Warranties


1. Borrower is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation. Borrower has
the corporate power and authority to execute and deliver this Note and to
perform its obligations hereunder.


2. This Note has been duly authorized by all necessary corporate action on
the part of Borrower, and this Note constitutes a legal, valid and binding
obligation of Borrower enforceable against Borrower in accordance with its
terms, except as such enforceability may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and (ii) general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law). 2


3. The execution, delivery and performance by Borrower of this Note will not
(i) violate, or result in the creation of any lien in respect of any
property of Borrower under, any indenture, mortgage, deed of trust, loan,
purchase or credit agreement, lease, corporate charter or by-laws, or any
other agreement or instrument by which Borrower is bound, (ii) conflict
with or result in a breach of any of the terms, conditions or provisions
of any order, judgment, decree, or ruling of any court, arbitrator or
governmental authority applicable to Borrower or (iii) violate any
provision of any statute or other ru ...