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                                                                    EXHIBIT 10.2

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

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

ALL AMOUNTS AT ANY TIME OWING BY THE MAKER OF THIS UNSECURED LINE OF CREDIT &
PROMISSORY NOTE (THIS "NOTE") TO THE PAYEE HEREUNDER ARE SUBORDINATED IN RIGHT
OF PAYMENT TO THE INDEFEASIBLE PAYMENT AND SATISFACTION IN FULL OF ALL PRESENT
AND FUTURE OBLIGATIONS, LIABILITIES AND INDEBTEDNESS OF THE MAKER OF THIS NOTE
TO CONGRESS FINANCIAL CORPORATION (AND ITS SUCCESSORS AND ASSIGNS), AS PROVIDED
BY AND AS OTHERWISE SUBJECT TO THE SUBORDINATION AGREEMENT, DATED AS OF MARCH
24, 2000, BETWEEN THE PAYEE AND CONGRESS FINANCIAL CORPORATION.

         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.




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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).

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 rule or
         regulation of any governmental authority applicable to Borrower.

4.       No approval, consent, waiver, authorization, registration, declaration
         or filing by, from or with any governmental authority or other person
         or entity is required in connection with the execution, delivery or
         performance by Borrower of this Note.

B.       COVENANTS

1.       Borrower shall at all times maintain its corporate existence and shall
         not merge or consolidate with any other entity (unless Borrower shall
         be the survivor) without Lender's consent.

2.       Borrower shall provide to Lender such information about its assets,
         liabilities and business as Lender shall from time to time reasonably
         request, including, without limitation, financial statements of
         Borrower and its subsidiaries.

C.       EVENTS OF DEFAULT

         An "Event of Default" shall exist under this Note if any of the
         following conditions or events shall occur and be continuing:

         (a)          Borrower defaults in the payment of any principal, fees or
                  interest on this Note when the same becomes due and payable,
                  whether at maturity or by declaration or otherwise; or




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         (b)          Borrower defaults in the performance of any other
                  obligation hereunder or any representation or warranty made by
                  Borrower in this Note proves to have been false or incorrect
                  in any material respect on the date as of which made; or

         (c)          Borrower (i) is unable to pay, or admits in writing its
                  inability to pay, its debts as they become due, (ii) files, or
                  consents by answer or otherwise to the filing against it of, a
                  petition for relief or reorganization or arrangement or any
                  other petition in bankruptcy, for liquidation or to take
                  advantage of any bankruptcy, insolvency, reorganization,
                  moratorium or other similar law of any jurisdiction, (iii)
                  makes an assignment for the benefit of its creditors, (iv)
                  consents to the appointment of a custodian, receiver, trustee
                  or other officer with similar powers with respect to it or
                  with respect to any substantial part of its property, (v) is
                  adjudicated as insolvent or to be liquidated, or (vi) takes
                  corporate action for the purpose of any of the foregoing; or

         (d)          A court or governmental authority of competent
                  jurisdiction enters an order appointing, without consent by
                  Borrower, a custodian, receiver, trustee or other officer with
                  similar powers with respect to it or with respect to any
                  substantial part of its property, or constituting an order for
                  relief or approving a petition for relief or reorganization or
                  any other petition in bankruptcy or for liquidation or to take
                  advantage of any bankruptcy or insolvency law of any
                  jurisdiction, or ordering the dissolution, winding-up or
                  liquidation of Borrower, or any such petition shall be filed
                  against Borrower.

                  Upon the occurrence of an Event of Default, Lender may, at its
         option, declare the entire unpaid principal balance of, and all accrued
         fees and interest on, this Note to be immediately due and payable. If
         an Event of Default described in paragraph (c) or (d) above has
         occurred, this Note shall automatically become immediately due and
         payable. Upon this Note becoming due and payable, whether automatically
         or by declaration, this Note will forthwith mature and the entire
         unpaid principal amount hereof, plus all accrued and unpaid interest
         hereon, shall all be immediately due and payable, in each and every
         case without presentment, demand, protest or further notice, all of
         which are hereby waived.

D.       MANDATORY REDUCTION; CONVERSION

                  The amount Lender is required to lend to Borrower under this
         Note prior to the Maturity Date (the "Commitment Amount") is initially
         $25,000,000 and is subject to reduction in accordance with the
         following sentence. The Commitment Amount shall be reduced at the times
         of any rights offering by



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Borrower, Hanover Brands, Inc. or erizon, inc. or any other equity offering(s)
or equity private placement(s) of Capital Stock (as defined in the Credit
Agreement) of any such companies after March 24, 2000 which offering or
placement may take the form, in whole or in part, of a conversion of outstanding
indebtedness under this Note to an Equity Interest (as defined in the Credit
Agreement) of a Borrower or Guarantor (each, as defined in the Credit
Agreement). The Commitment Amount shall be reduced by the net cash proceeds of
such offering or placement, to the extent that such net cash proceeds are not
required to reduce the Commitment Amount (as defined in the Credit Agreement)
pursuant to Section 2.6 of the Credit Agreement, plus the dollar amount of such
indebtedness converted. The "Credit Agreement" is that certain Credit Agreement
among Borrower, certain affiliates of Borrower and Lender dated as of March 24,
2000, as amended from time to time.

                  The contribution for an Equity Interest (as defined in the
         Credit Agreement) by the Lender may be contributed, at the Lender's
         option, by conversion of all or a designated portion of the principal
         amount of all advances made under the Note and then outstanding into
         such Equity Interest.

E.       GENERAL

                  In addition to the foregoing, Lender may proceed to protect
         and enforce its rights hereunder by an action at law, suit in equity or
         other appropriate proceeding, whether for the specific performance of
         any agreement contained herein, or for an injunction against a
         violation of any of the terms hereof or thereof, or in aid of the
         exercise of any power granted hereby or by law or otherwise.

                  Lender or its assignee may assign this Note to any person or
         entity without Borrower's consent. Lender or its assignee shall be
         entitled to apply this Note in payment of the price payable in respect
         of any equity infusion by Lender in erizon.

                  Failure of Lender to exercise any of its rights and remedies
         shall not constitute a waiver of the right to exercise the same at that
         or any other time. All rights and remedies of Lender shall be
         cumulative to the full extent permitted by law.

                  The invalidity or unenforceability of any provision of this
         Note shall not impair the validity or enforceability of any other
         provision of this Note.

                  This Note and the rights of Lender hereunder are subject to
         the terms of a Subordination Agreement between Lender and its
         subsidiaries and Congress Financial Corporation.




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     THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE
STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PROVISIONS.

         Accepted and Agreed to:

         By Hanover Direct, Inc.

         Name: /s/ Brian C. Harriss
         Print Name: Brian C. Harriss
         Title: SVP & CFO




         By Richemont Finance S.A.

         Name: /s/ Jan P. duPlessis
         Print Name: Jan P. duPlessis
         Title: Director


         Name: /s/ Alan Grieve
         Print Name: Alan Grieve
         Title: Director



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