Exhibit 10.86

**AGREEMENT**

 

AGREEMENT made and entered into as of the 15th day of March, 2006 between ENCORE MARKETING INTERNATIONAL, INC., a Delaware corporation (“Encore”), with offices located at 4055 Forbes Boulevard, Lanham, Maryland 20706 and HANOVER DIRECT, INC., a Delaware corporation (“HDI”), with offices located at 1500 Harbor Boulevard, Weehawken, New Jersey 07086.  

 

**Recitals**

Encore is a developer, marketer and administrator of consumer membership services;

 

HDI is engaged in the direct marketing business and operates a portfolio of catalogs (“**HDI Catalogs**”) and associated e-commerce websites (“HDI Websites”) through the wholly owned corporations and limited liability companies listed on attached Schedule A (“HDI Affiliates”).  (A reference in this Agreement to HDI shall be deemed, where the context requires, including the HDI Affiliates.)  HDI operates telephone call centers and markets membership programs on inbound order calls placed by HDI Catalog customers.  HDI also markets membership programs on the HDI Websites.  

 

Keystone Internet Services, LLC **(“Keystone”),**a wholly owned HDI subsidiary, provides product fulfillment, distribution, call center, e-commerce and related technical and support services to third party direct marketers.  Some of Keystone’s HDI Affiliates as indicated on  attached Schedule B (such HDI Affiliates are referred to as “**Third Party HDI Affiliates”)**permit Keystone, from time to time, to market membership programs to their customers on inbound order calls received at HDI call centers and/or on their related websites where HDI/Keystone provides e-commerce services (“**Third Party Websites**”).

 

Encore and HDI wish to enter into this Agreement whereby HDI will market, and Encore will supply, the membership programs described in Schedule C (“**Programs**”) on inbound order calls   placed by HDI Catalog customers and the customers of Third Party HDI Affiliates (“**Telephone Customers**”) at HDI’s call centers and on HDI Websites and the Third Party Websites (collectively, the “**Participating Websites**”).

 

**NOW, THEREFORE**, in consideration of the mutual covenants and promises contained in this Agreement, the receipt and sufficiency of which are hereby acknowledged, HDI and Encore agree as follows:

 
| **1.** | **HDI RESPONSIBILITIES** |
|--------|--------------------------|

 

1.1   **Marketing Responsibilities.**HDI shall market and offer the Programs on (i) inbound order calls by Telephone Customers, (ii) the Participating Websites and (iii) such other marketing channels as the parties may mutually agree.  Except as otherwise provided for in Section 1.1.1, (i) HDI will use its best efforts to ensure that a Program offer is made to all Telephone Customers on inbound order calls and to all customers who have purchased product online at the Participating Websites and (ii) during the term of this Agreement the only membership programs HDI will offer to its customers will be Encore supplied membership programs.  For purposes of this Agreement, a membership program shall mean a program or service where discounts, information and/or benefits are delivered to a consumer or business in exchange for a recurring membership feeon a negative option or similar basis, including, but not limited to, programs or services similar to Programs, but shall not include loyalty programs such as HDI’s Buyer’s Clubs that are offered by HDI or any of the Third Party HDI Affiliates that promote the sale of the offeror’s merchandise.  The parties agree that HDI may amend Schedules 

 

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