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                                   EXHIBIT 4.1

                                                        March 29, 2004

R.G. Barry Corporation
13405 Yarmouth Road
Pickerington, OH 43147

                               FACTORING AGREEMENT

Ladies and Gentlemen:

         We are pleased to confirm the terms and conditions that will govern our
funds in use accounting, notification factoring arrangement with advances (the
"Agreement").

         1. SALE OF ACCOUNTS

         You sell and assign to us, and we purchase as absolute owner, all
accounts, (other than accounts due from customers which are denominated in a
currency other than United States or Canadian Dollars, and other than sales to
Barry GBR Limited and sales to Wal-Mart Stores located in Mexico), arising from
your sales of inventory or rendition of services, including those under any
trade names, through any divisions and through any selling agent (collectively,
the "Accounts" and individually, an "Account").

         2. CREDIT APPROVAL

         2.1 Requests for credit approval for all of your orders must be
submitted to our Credit Department via computer by either: (a) On-Line Terminal
Access, or (b) Electronic Batch Transmission. If you are unable to submit orders
via computer, then orders can be submitted over the phone, by fax or in writing.
All credit decisions by our Credit Department (including approvals, declines and
holds) will be sent to you daily by a Credit Decisions Report, which constitutes
the official record of our credit decisions. Credit approvals will be effective
only if shipment is made or services are rendered within thirty (30) days from
the completion date specified in our credit approval. Credit approval of any
Account may be withdrawn by us any time before delivery is made or services are
rendered.

         2.2 We assume the Credit Risk on each Account approved in the Credit
Decision Report. "Credit Risk" means the customer's failure to pay the Account
in full when due on its longest maturity solely because of its financial
inability to pay. If there is any change in the amount, terms, shipping date or
delivery date for any shipment of goods or rendition of services (other than
accepting returns and granting allowances as provided in section 8 below), you
must submit a change of terms request to us, and, if such pertains to a Factor
Risk Account, then we shall advise you of our decision either to retain the
Credit Risk or to withdraw the credit approval. Accounts on which we bear the
Credit Risk are referred to collectively as "Factor Risk Accounts", and
individually as a "Factor Risk Account".

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Accounts on which you bear some or all of the risk as to credit are referred to
collectively as "Client Risk Accounts", and individually as a "Client Risk
Account".

         2.3 We shall have no liability to you or to any person, firm or entity
for declining, withholding or withdrawing credit approval on any order. If we
decline to credit approve an order and furnish to you any information regarding
the credit standing of that customer, such information is confidential and you
agree not to reveal same to the customer, your sales agent or any third party.
You agree that we have no obligation to perform, in any respect, any contracts
relating to any Accounts.

         3. INVOICING

         You agree to place a notice (in form and content acceptable to us) on
each invoice and invoice equivalent that the Account is sold, assigned and
payable only to us, and to take all necessary steps so that payments and
remittance information are directed to us. All invoices, or their equivalents,
will be promptly mailed or otherwise transmitted by you to your customers at
your expense. You will provide us with copies of all invoices (or the equivalent
thereof if the invoices were sent electronically), confirmation of the sale of
the Accounts to us and proof of shipment or delivery, all as we may reasonably
request. If you fail to provide us with copies of such invoices (or equivalents)
or such proofs when requested by us, we will not bear any Credit Risk as to
those Accounts.

         4. REPRESENTATIONS AND WARRANTIES

         4.1 You represent and warrant that: each Account is based upon a bona
fide sale and delivery of inventory or rendition of services made by you in the
ordinary course of business; the inventory being sold and the Accounts created
are your exclusive property and are not, and will not be, subject to any lien,
consignment arrangement, encumbrance or security interest other than in our
favor other than Permitted Liens provided, however, that we shall have no Credit
Risk with respect to any Account which is encumbered by any lien or security
interest other than ours; all amounts are due in United States or Canadian
Dollars; all original invoices bear notice of the sale and assignment to us; any
taxes or fees relating to your Accounts or inventory are solely your
responsibility; and none of the Accounts factored with us hereunder represent
sales to any subsidiary, affiliate or parent company. You also warrant and
represent that: your customers have accepted the goods or services and owe and
are obligated to pay the full amounts stated in the invoices according to their
terms, without dispute, claim, offset, defense, deduction, rejection,
recoupment, counterclaim or contra account, other than in the regular course of
business, other than as to returns and allowances as provided in section 8 below
(the foregoing being referred to in this Agreement as "Customer Claims").
"Permitted Liens" shall mean (i) statutory liens of landlords, carriers,
warehousemen, mechanics, materialmen or suppliers incurred in the ordinary
course of business and securing amounts not yet due or declared to be due by the
claimant thereunder, (ii) liens or security interests in our favor, (iii) zoning
restrictions and easements, rights of way, licenses, covenants and other
restrictions affecting the use of real property that do not individually or in
the aggregate have a Material Adverse Effect on your ability to use such real
property for its intended purpose, (iv) liens securing the payment of taxes or
other governmental charges not yet delinquent or being contested in good faith
and by appropriate proceedings, (v) liens incurred or deposits made in the
ordinary course of your business in connection with

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capitalized leases or purchase money security interests for purchase of, and
applying only to, machinery and equipment (vi) pledges or deposits in connection
with worker's compensation, unemployment insurance and other social security
legislation; (vii) grants of security and rights of setoff in deposit accounts,
securities and other properties held at banks or financial institutions to
secure the payment or reimbursement under overdraft, acceptance and other
facilities, and (viii) rights of setoff, banker's lien and other similar rights
arising solely by operation of law.

         4.2 You further represent and warrant that: your legal name is exactly
as set forth on the signature page of this Agreement, you are a duly organized
and validly existing business organization incorporated or registered in the
state of Ohio, and are qualified to do business in all states where required,
except where the failure to so qualify would not have a material adverse effect
on any of our Collateral, your business, operations, condition or prospects (a
"Material Adverse Effect"); the final form of the draft financial statements
provided by you to us for the period ending January 3, 2004 accurately reflect
your financial condition as of that date except for non-cash accounting
adjustments that are currently in discussion and there has been no material
adverse change in your financial condition since the date of those financial
statements. You agree to furnish us with such information concerning your
business affairs and financial condition as we may reasonably request from time
to time, including your consolidated financial statements as of the end of such
year, audited by a firm of independent, certified public accountants, selected
by you and acceptable to us. As of the date hereof KPMG is acceptable to us.

         4.3 You agree that you will promptly notify us of any change in your:
name, state of incorporation or registration, location of your chief executive
office, place(s) of business, and legal or business structure. Further, you
agree that you will promptly notify us of any law suits or proceedings against
you, which if adversely decided, would have a Material Adverse Effect or where
the claims asserted in such law suits or proceedings are $1,000,000 or higher.

         5. PURCHASE OF ACCOUNTS

         We shall purchase the Accounts for the gross amount of the respective
invoices, less: factoring fees or charges, trade and cash discounts allowable
to, or taken by, your customers, credits, cash on account and allowances
("Purchase Price"). Our purchase of the Accounts will be reflected on the
Statement of Account (defined in section 10 below), which we shall render to
you, which will also reflect all credits and discounts made available to your
customers.

         6. ADVANCES

         At your request, and in our sole discretion, we may advance funds to
you (which together with all Obligations charged to your loan account,
"Advances") and provide assistance in opening letters of credit ("L/C's") on
your behalf up to the lesser of (a) $35,000,000 (the "Maximum Facility Amount")
or (b) the Borrowing Base.

         The Borrowing Base shall be determined by CIT in its sole discretion
and shall be the difference between:

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         (A) the sum of:

                  (1)      up to 85% of the net amount of Factor Risk Accounts,
plus

                  (2)      the lower of: (A) $16,000,000 or (B) the Inventory
Formula Availability (as such term is defined below), plus

                  (3)      the lower of: (A) $4,000,000 or (B) an amount equal
to 50% of the appraised Distressed Fair Market Value ("DFMV") of your eligible
intellectual property assets, including the "Dearfoams", "Ezfeet" and
"Terrasoles" trademarks (the "IP Assets"), plus

                  (4)      an overformula amount of advances and letters of
credit of up to $3,500,000 during the period from April 1st to and including
October 31st of each year as we may determine in our sole and absolute
discretion and subject to, among other things, your acceptable cash flow
projections and such other information as we may request from time to time (the
"Overformula Amount"), minus,

         (B)      such reserves against availability which we may deem necessary
in our sole and absolute discretion and the aggregate face amount of outstanding
L/C's.

         As used herein, "Inventory Formula Availability" shall be an amount
equal to the sum of:

                  (1)      the lower of (i) up to 60% of the value of Eligible
Finished Goods Inventory calculated at the lower of cost or market value or (ii)
85% of the appraised Net Orderly Liquidation Value of Eligible Finished Goods
Inventory, plus

                  (2)      up to 60% of the face amount of eligible documentary
L/C's covering the purchase of Eligible Finished Goods Inventory, shipped or
to-be-shipped to an acceptable inventory location in the United States, and

         A subfacility of up to $3,000,000 shall be available for the issuance
of L/C's and a mutually agreed upon amount of standby L/C's (the "L/C
Sublimit"), provided that the aggregate outstanding amount of the undrawn amount
of all L/C's and Advances under the Factoring Agreement shall not exceed, at any
time, the lesser of: (A) the Maximum Facility Amount or (B) the Borrowing Base.
Eligibility of Inventory and IP Assets shall be determined by us in our sole and
absolute discretion.

         We have the right, at any time and from time to time, to hold any
reserves we deem reasonably necessary as security for the payment and
performance of any and all of your Obligations (defined in section 12 below).
All amounts you owe us, including all advances to you and any debit balance in
your Client Position Account (defined in section 10 below), and any Obligations,
are payable and may be charged to your account when due and as provided herein.

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         7. PAYMENT OF ACCOUNTS

         7.1 All payments received by us on the Accounts will be promptly
applied to your account with us after crediting your customer's account. No
checks, drafts or other instruments received by us will constitute final payment
of an Account unless and until such items have actually been collected.

         7.2 The amount of the Purchase Price of any Factor Risk Account which
remains unpaid will be deemed collected and will be credited to your account as
of the earlier of the following dates:

         (a)      the date of the Account's longest maturity if a proceeding or
                  petition is filed by or against the customer under any state
                  or federal bankruptcy or insolvency law, or if a receiver or
                  trustee is appointed for the customer; or

         (b)      the last day of the third month following the Account's
                  longest maturity date if such Account remains unpaid as of
                  said date without the occurrence of any of the events
                  specified in clause (a) above.

If any Factor Risk Account credited to you was not paid for any reason other
than Credit Risk, we shall reverse the credit and charge your account
accordingly, and such Account is then deemed to be a Client Risk Account.

         8. CUSTOMER CLAIMS AND CHARGE BACKS

         8.1 You must notify us promptly of any matter affecting, in any
material manner, the value, enforceability or collectibility of any Account and
of all Customer Claims. You agree to promptly issue credit memoranda or
otherwise adjust the customer's account upon accepting returns or granting
allowances. For full invoice credit memoranda, you agree to send duplicate
copies thereof to us and to confirm their assignment to us. You may continue to
do so until we have advised you that all such credits or allowances on Factor
Risk Accounts require our prior written approval. We shall cooperate with you in
the adjustment of Customer Claims, but we retain the right to adjust Customer
Claims on Factor Risk Accounts directly with customers, upon such terms as we in
our sole discretion may deem advisable.

         8.2 We may at any time charge back to your account the amount of: (a)
any Factor Risk Account which is not paid in full when due for any reason other
than Credit Risk; (b) any Factor Risk Account which is not paid in full when due
because of an act of God, civil strife, or war; (c) anticipation (interest)
deducted by a customer on any Account; (d) Customer Claims; (e) any Client Risk
Account which is not paid in full when due; and (f) any Account for which there
is a breach of any representation or warranty. We shall not bear the Credit Risk
on any Account charged back to you. A charge back does not constitute a
reassignment of an Account. We shall immediately charge any deduction taken by a
customer to your account.

         8.3 We may at any time charge to your account the amount of: (a)
payments we receive on Client Risk Accounts which we are required at any time to
turnover or return (including preference claims); (b) all remittance expenses
(including incoming wire

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charges, currency conversion fees and stop payment fees), other than stop
payment fees on Factor Risk Accounts; (c) out of pocket expenses, collection
agency fees and reasonable attorneys' fees incurred by us in collecting or
attempting to collect any Client Risk Account or any Obligation (defined in
section 12 below); and (d) our fees for handling collections on Client Risk
Accounts which you have requested us to process, as provided in the Guide (see
section 18.2 below).

         9. HANDLING AND COLLECTING ACCOUNTS; RETURNED GOODS

         9.1 As owners of the Factor Risk Accounts, we have the right to: (a)
bring suit, or otherwise enforce collection, in your name or ours; (b) modify
the terms of payment, (c) settle, compromise or release, in whole or in part,
any amounts owing, and (d) issue credits in your name or ours. To the extent
applicable, you waive any and all claims and defenses based on suretyship. If
moneys are due and owing from a customer for both Factor Risk Accounts and
Client Risk Accounts, you agree that any payments or recoveries received on such
Accounts may be applied first to any Factor Risk Accounts. Once you have granted
or issued a discount, credit or allowance on any Account, you have no further
interest therein. Any checks, cash, notes or other documents or instruments,
proceeds or property received with respect to the Accounts must be held by you
in trust for us, separate from your own property, and immediately turned over to
us with proper endorsements. We may endorse your name or ours on any such check,
draft, instrument or document.

         9.2 As owners and assignees of the Accounts and all proceeds thereof,
upon our written notice, you will, at your expense, set aside, mark with our
name and hold in trust for us, any and all returned, rejected, reclaimed or
repossessed inventory ("Returned Goods"). Further, upon such notice, you agree
promptly: to notify us of all Returned Goods and, at our request, either to
deliver same to us, or to pay us the invoice price thereof, or to sell the same
for our account.

         10. STATEMENT OF ACCOUNT

         After the end of each month, we shall send you certain reports
reflecting Accounts purchased, Advances made, fees and charges and all other
financial transactions between us during that month ("Reports"). The Reports
sent to you each month include a Statement of Account reflecting transactions in
three sections: Accounts Receivable, Client Position Account and Funds In Use.
The Reports shall be deemed correct and binding upon you and shall constitute an
account stated between us unless we receive your written statement of exceptions
within thirty (30) days after same are mailed to you.

         11. GRANT OF SECURITY INTEREST

         11.1 You hereby assign and grant to us a continuing security interest
in all of your right, title and interest in and to all of your now existing and
future (herein collectively the "Collateral"): (a) accounts (including the
Accounts), instruments, documents, chattel paper (including electronic chattel
paper) and any other obligations owing to you; (b) unpaid seller's rights
(including rescission, repossession, replevin, reclamation and stoppage in
transit); (c) rights to any inventory represented by the foregoing, including
Returned Goods; (d) reserves and credit balances arising hereunder; (e)
guarantees, collateral,

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supporting obligations and letter of credit rights with respect to the
foregoing; (f) insurance policies, proceeds or rights relating to the foregoing;
(g) general intangibles (including all payment intangibles and all other rights
to payment), (h) federal, state and local income tax refunds; (i) cash and
non-cash proceeds of the foregoing; (j) Books and Records (defined in section 13
below) evidencing or pertaining to the foregoing; and (k) all now existing and
future patents and trademarks, including those registered in the United States
Patent and Trademark Office, the goodwill of the business in connection
therewith, and any and all proceeds, royalties and other fees which are or may
become due therefrom or for the use thereof.

         11.2 You agree to comply with all applicable laws to perfect our
security interest in collateral pledged to us hereunder, and to execute such
documents as we may require to effectuate the foregoing and to implement this
Agreement. You irrevocably authorize us to file financing statements and all
amendments and continuations with respect thereto, all in order to create,
perfect or maintain our security interest in the Collateral, and you hereby
ratify and confirm any and all financing statement, amendments and continuations
with respect thereto heretofore and hereafter filed by us pursuant to the
foregoing authorization.

         12. OBLIGATIONS SECURED

         The security interest granted hereunder and any lien or security
interest that we now or hereafter have in any of your other assets, collateral
or property, secure the payment and performance of all of your now existing and
future indebtedness and obligations to us, whether absolute or contingent,
whether arising under this Agreement or any other agreement or arrangement
between us, by operation of law or otherwise ("Obligations"). Obligations also
includes ledger debt (which means indebtedness for goods and services purchased
by you from any party whose accounts receivable are factored or financed by us),
and indebtedness arising under any guaranty, credit enhancement or other credit
support granted by you in our favor. Any reserves or balances to your credit and
any other assets, collateral or property of yours in our possession constitutes
security for any and all Obligations.

         13.  BOOKS AND RECORDS AND EXAMINATIONS

         13.1 You agree to maintain such Books and Records concerning the
Accounts as we may reasonably request and to reflect our ownership of the
Accounts therein. "Books and Records" means your accounting and financial
records (whether paper, computer or electronic), data, tapes, discs, or other
media, and all programs, files, records and procedure manuals relating thereto,
wherever located.

         13.2 Upon our reasonable request, you agree to make your Books and
Records available to us for examination and to permit us to make copies or
extracts thereof. Also, you agree to permit us to visit your premises during
your business hours and to conduct such examinations as we deem reasonably
necessary. To cover our costs and expenses of any such examinations, we shall
charge you a fee for each day, or part thereof, during which such examination is
conducted, plus any out-of-pocket costs and expenses incurred by us, as provided
in the Guide (see section 18.2 below).

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         14. INTEREST

         14.1 Interest is charged as of the last day of each month based on the
daily debit balances in your Funds In Use account for that month, at a rate
equal to one percent (1%) plus the Chase Prime Rate (defined below). The Chase
Prime Rate is the per annum rate of interest publicly announced by JPMorganChase
Bank (or its successor) in New York, New York from time to time as its prime
rate, and is not intended to be the lowest rate of interest charged by
JPMorganChase Bank to its borrowers. Any change in the rate of interest
hereunder due to a change in the Chase Prime Rate will take effect as of the
first of the month following such change in the Chase Prime Rate. All interest
is calculated on a 360 day year.

         14.2 If you, as a client of ours, purchase goods or services from
another client of ours and your payments on these invoices are not timely
received, a late interest payment, at our then late interest rate, will be
charged to your account with us and shall be deemed an Obligation under this
Agreement.

         14.3 In no event will interest charged hereunder exceed the highest
lawful rate. In the event, however, that we do receive interest in excess of the
highest lawful rate, you agree that your sole remedy would be to seek repayment
of such excess, and you irrevocably waive any and all other rights and remedies
which may be available to you under law or in equity.

         15. FACTORING FEES AND OTHER CHARGES

         15.1 For our services hereunder, you will pay us a factoring fee or
charge of one-half of one percent (.50%) of the gross face amount of all
Accounts factored with us, but in no event less than $1.00 per invoice. In
addition, except for Accounts due from Kohl's Department Stores representing
promotional sales for new store openings, you will pay a fee of one-quarter of
one percent (1/4 of 1%) of the gross face amount of each Account for each
thirty (30) day period or part thereof by which the longest terms of sale
applicable to such Account exceed sixty (60) days (whether as originally stated
or as a result of a change of terms requested by you or the customer). For
Accounts arising from sales to customers located outside the fifty states of the
United States of America, you will pay us an additional factoring fee of one
percent (1%) of the gross face amount of all such Accounts. All factoring fees
or charges are due and charged to your account upon our purchase of the
underlying Account. Commencing on even date herewith, if the actual factoring
fees or charges paid to us by you during any consecutive twelve-month period
commencing April 1, 2004 or part thereof ("Period"), is less than $400,000
("Minimum Factoring Fees"), we shall charge your account as of the end of such
Period with an amount equal to the difference between the actual factoring fees
or charges paid during such Period and said Minimum Factoring Fees.

         15.2 You agree to pay all out of pocket costs and expenses incurred by
us in connection with the preparation, execution, administration and enforcement
of this Agreement, including all reasonable fees and expenses attributable to
the services of our attorneys (whether in-house or outside), search fees and
public record filing fees. Furthermore, you agree to pay to us our fees (as more
fully set forth in the Guide, see section 18.2 below) including fees for: (a)
special reports prepared by us at your request;

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(b) wire transfers; (c) handling change of terms requests relating to Accounts;
and (d) your usage of our on-line computer services. Beginning on the first of
the month six months from the date hereof, you also agree to pay us our fees
for: (i) each new customer set-up on our customer accounts receivable data base
and each new customer relationship established for you; (ii) crediting your
account with proceeds of non-factored invoices received by us; and (iii) charge
backs of invoices factored with us that were paid directly to you. All such fees
will be charged to your account when incurred. Such fees may be changed by us
from time to time upon notice to you; however, any failure to give you such
notice does not constitute a breach of this Agreement and does not impair our
ability to institute any such change.

         15.3 Any tax or fee of any governmental authority imposed on or arising
from any transactions between us, any sales made by you, or any inventory
relating to such sales is your sole responsibility (other than income and
franchise taxes imposed on us which are not related to any specific transaction
between us). If we are required to withhold or pay any such tax or fee, or any
interest or penalties thereon, you hereby indemnify and hold us harmless
therefor and we shall charge your account with the full amount thereof.

         15.4 In addition to the fees and charges under this Agreement, you will
pay us, as of the date hereof, a facility fee in the amount of $262,500 for the
initial setup and implementation of your account with us.

         15.5 Provided there has occurred no Event of Default which is
continuing, we have agreed to negotiate with you in good faith to conclude a
three-year committed senior secured revolving line of credit under which
revolving loans and letters of credit would be made available to you pursuant to
a borrowing base based on eligible collateral (the "R/C Facility"). Such R/C
Facility would replace or amend this Agreement provided that you continue to
factor your accounts with us for a period of no less than twelve months from the
date hereof (after which you may elect to terminate the factoring arrangement)
and provided that an acceptable R/C Facility has been entered into prior to the
end of the first twelve-month period from the date hereof, there shall be no
facility fee payable with respect thereto. In the event the R/C Facility is
entered into after the first twelve-month period from the date hereof, an
additional facility fee for the R/C Facility may be charged in an amount to be
mutually agreed upon.

         16. TERMINATION

         16.1 Each of us may terminate this Agreement only as of an Anniversary
Date and then only by giving the other at least sixty (60) days prior written
notice of termination. "Anniversary Date" means the last day of the month
occurring three (3) years from the date hereof, and the same date in each year
thereafter. Upon any termination of this Agreement, we shall be entitled to the
unpaid portion of the Minimum Factoring Fees, if any, for such Period or Periods
for the remainder of the term of this Agreement, as applicable, and as provided
in section 15.1 above, as of the effective date of termination. We may terminate
this Agreement immediately, without prior notice to you, upon the occurrence and
during the continuance of an Event of Default (defined in section 17.1 below).

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         16.2 This Agreement remains effective between us until terminated as
herein provided. Unless sooner demanded, all Obligations will become immediately
due and payable upon any termination of this Agreement.

         16.3 All of our rights, liens and security interests hereunder continue
and remain in full force and effect after any termination of this Agreement and
pending a final accounting, we may withhold any balances in your account unless
we are supplied with an indemnity satisfactory to us to cover all Obligations.
You agree to continue to assign accounts receivable to us and to remit to us all
collections on accounts receivable, until all Obligations have been paid in full
or we have been supplied with an indemnity satisfactory to us to cover all
Obligations.

         17. EVENTS OF DEFAULT AND REMEDIES UPON DEFAULT

         17.1 It is an "Event of Default" under this Agreement if: (a) your
business ceases or a meeting of your creditors is called; (b) any bankruptcy,
insolvency, arrangement, reorganization, receivership or similar proceeding is
commenced by you under any federal or state law, or there is commenced against
you under any federal or state law such a proceeding and any such proceeding is
not dismissed within ninety (90) days of its commencement; (c) any
representation or warranty made by you in this Agreement is incorrect in any
material respect when made or you breach any covenant contained in this
Agreement; (d) you fail to pay any Obligation when due; (e) there shall be
issued or filed against you any tax lien, judgment, attachment or injunction,
which, if not dismissed within thirty (30) days from the issuance or filing
thereof, would have a Material Adverse Effect; and (f) we, in good faith, deem
ourselves insecure in any respect.

         17.2 After the occurrence of an Event of Default which is not waived by
us, we may terminate this Agreement without notice to you. We shall then have
immediate access to, and may remove from any premises where same may be located,
any and all Books and Records as may pertain to the Accounts, Returned Goods and
any other collateral hereunder. Furthermore, as may be necessary to administer
and enforce our rights in the Accounts, Returned Goods and any other collateral
hereunder, or to facilitate the collection or realization thereof, we have your
permission to: (a) use (at your expense) your personnel, supplies, equipment,
computers and space, at your place of business or elsewhere; and (b) notify
postal authorities to change the address for delivery of your mail to such
address as we may designate and to receive and open your mail. We agree to turn
over to you or your representative all mail not related to the aforesaid
purposes.

         17.3 After the occurrence of an Event of Default which is not waived by
us, with respect to any other property or collateral in which we have a security
interest, we shall have all of the rights and remedies of a secured party under
Article 9 of the Uniform Commercial Code. If notice of intended disposition of
any such property or collateral is required by law, it is agreed that ten (10)
days notice constitutes reasonable notice. The net cash proceeds resulting from
the exercise of any of the foregoing rights, after deducting all charges, costs
and expenses (including reasonable attorneys' fees) will be applied by us to the
payment or satisfaction of the Obligations, whether due or to become due, in
such order as we may elect. You remain liable to us for any deficiencies. With
respect to Factor Risk Accounts and Returned Goods relating thereto, you hereby
confirm

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that we are the owners thereof, and that our rights of ownership permit us to
deal with this property as owner and you confirm that you have no legal interest
therein.

         18. MISCELLANEOUS PROVISIONS

         18.1 This Agreement, and all attendant documentation, as the same may
be amended from time to time, constitutes the entire agreement between us with
regard to the subject matter hereof, and supersedes any prior agreements or
understandings. This Agreement can be changed only by a writing signed by both
of us. Our failure or delay in exercising any right hereunder will not
constitute a waiver thereof or bar us from exercising any of our rights at any
time. The validity, interpretation and enforcement of this Agreement is governed
by the laws of the State of New York, excluding the conflict laws of such State.

         18.2 The Client Service Guide, as supplemented and amended from time to
time (the "Guide") has been furnished to you or is being furnished to you
concurrently with the signing of this Agreement, and by your signature below you
acknowledge receipt thereof. The Guide provides information on credit approval
processes, accounting procedures and fees. The procedures for Electronic Batch
Transmission are covered in supplemental instructions to the Guide. From time to
time, we may provide you with amendments, additions, modifications, revisions or
supplements to the Guide, which will be operative for transactions between us.
All information and exhibits contained in the Guide, on any screen accessed by
you, and on any print-outs, reports, statements or notices received by you are,
and will be, our exclusive property and are not to be disclosed to, or used by,
anyone other than you, your employees or your professional advisors, in whole or
in part, unless we have consented in writing.

         18.3 This Agreement binds and benefits each of us and our respective
successors and assigns, provided, however, that you may not assign this
Agreement or your rights hereunder without our prior written consent.

         18.4 Section headings are for convenience only and are not controlling.
The use of "including" means "including without limitation".

         18.5 If any provision of this Agreement is contrary to, prohibited by,
or deemed invalid under applicable laws or regulations, such provision will be
inapplicable and deemed omitted to such extent, but the remainder will not be
invalidated thereby and will be given effect so far as possible.

         19. JURY TRIAL WAIVER

         TO THE EXTENT PERMITTED BY APPLICABLE LAW, WE EACH HEREBY WAIVE ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING DIRECTLY OR
INDIRECTLY OUT OF THIS AGREEMENT, OR ANY OTHER AGREEMENT OR TRANSACTION BETWEEN
US OR TO WHICH WE ARE PARTIES.

         If the foregoing is in accordance with your understanding, please so
indicate by signing and returning to us the original and one copy of this
Agreement. This Agreement will take effect as of the date set forth above but
only after being accepted below by one of

<PAGE>

our officers in New York, after which we shall forward a fully executed copy to
you for your files.

                                    Very truly yours,

                                    THE CIT GROUP/COMMERCIAL SERVICES, INC.

                                    By /s/ Richard Lyons
                                       -----------------------------------------
                                       Name: Richard Lyons
                                       Title: Vice President

Read and Agreed to:

R.G. BARRY CORPORATION

By /s/ Thomas M. Von Lehman
   ---------------------------------
   Name: Thomas M. Von Lehman
   Title: President and CEO

                                    Accepted at:  New York, New York

                                    THE CIT GROUP/COMMERCIAL SERVICES, INC.

                                    By /s/ Stephen Leavenworth
                                       -----------------------------------------
                                       Name: Stephen Leavenworth
                                       Title: Sr. Vice President