Document:

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                                                                   EXHIBIT 10.91

                              HANOVER DIRECT, INC.

                                       AND

                                  SUBSIDIARIES

                            CORPORATE CODE OF CONDUCT
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                                TABLE OF CONTENTS

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<S>     <C>                                                                        <C>
I.      CITIZENSHIP AND PUBLIC RESPONSIBILITY........................................3
   1.   COMPLIANCE WITH LAWS, RULES AND REGULATIONS..................................3
   2.   RELATIONS WITH CUSTOMERS.....................................................3
   3.   STATEMENTS IN ADVERTISING....................................................4
   4.   COMPETITION..................................................................4
   5.   PROPER ACCOUNTING AND FINANCIAL INTEGRITY....................................5
   6.   ACCURATE PERIODIC REPORTS....................................................5
II.     USE OF COMPANY ASSETS, FACILITIES AND SERVICES...............................6
   1.   IMPROPER PAYMENTS............................................................6
   2.   POLITICAL CONTRIBUTIONS......................................................6
   3.   SAFEGUARDING ASSETS..........................................................7
III.    SELECTION OF VENDORS AND SUPPLIERS OF GOODS AND SERVICES.....................7
IV.     CONFLICT OF INTEREST; CORPORATE OPPORTUNITY..................................7
V.      SECURITIES TRADING...........................................................8
   1.   INSIDE INFORMATION...........................................................8
   2.   TRADING GUIDELINES...........................................................9
   3.   REPORTING AND OTHER OBLIGATIONS.............................................10
VI.     ENVIRONMENT, HEALTH AND SAFETY..............................................10
VII.    EMPLOYMENT ISSUES...........................................................10
   1.   EQUAL OPPORTUNITY...........................................................10
   2.   HARASSMENT AND DISCRIMINATION...............................................10
   3.   DRUG AND ALCOHOL ABUSE......................................................12
   4.   DISABILITY..................................................................13
VIII.   INFORMATION SYSTEM USE......................................................13
   1.   INFORMATION SYSTEM..........................................................13
   2.   BUSINESS RECORDS & DOCUMENTATION............................................13
   3.   USING THE INFORMATION SYSTEM................................................13
   4.   OBTAINING SECURITY ACCESS...................................................13
   5.   INTERNET USE................................................................14
   6.   RESTRICTED INFORMATION......................................................14
   7.   PROTECTION OF COMPANY ELECTRONIC DATA AND INFORMATION
         PASSWORDS/VIRUSES/DATA SECURITY............................................14
   8.   NON-STANDARD SOFTWARE.......................................................15
   9.   REMOTE ACCESS...............................................................15
   10.  UNACCEPTABLE ACTIVITIES.....................................................15
   11.  REPORTING SECURITY PROBLEMS.................................................16
IX.     CONFIDENTIAL INFORMATION....................................................16
X.      DUTY TO RETURN CONFIDENTIAL INFORMATION AND COMPANY PROPERTY UPON
         SEPARATION FROM THE COMPANY................................................17
XI.     INTERNAL COMMUNICATION AND ENFORCEMENT OF POLICY............................17
XII.    REPORTING OF ANY ILLEGAL OR UNETHICAL BEHAVIOR..............................17
XIII.   AMENDMENTS TO AND WAIVERS OF THE CODE OF CONDUCT............................18
XIV.    COMPLIANCE PROCEDURES.......................................................18
XV.     INTERPRETATION OF CODE OF CONDUCT AND EFFECTS OF FAILURE TO COMPLY..........18
XVI.    STATEMENT NOT A CONTRACT OF EMPLOYMENT......................................18
XVII.   NAMES AND NUMBERS...........................................................19
</TABLE>
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                              HANOVER DIRECT, INC.
                                       AND
                                  SUBSIDIARIES

                            CORPORATE CODE OF CONDUCT

This Corporate Code of Conduct (the "Code of Conduct") has been unanimously
adopted by the Board of Directors of Hanover Direct, Inc. (the "Company") and is
intended to apply to all business activities conducted on behalf of the Company.
References in this Code of Conduct to the Company means the Company or any of
its subsidiaries. (March 1, 2003)

I.    CITIZENSHIP AND PUBLIC RESPONSIBILITY

The success of the Company is predicated on conducting business affairs in a way
that is socially responsible while seeking to promote that most important
dynamic of private enterprise: earning the profits which make possible the
continued existence and growth of the enterprise, the satisfaction of investors'
expectations of a fair return on their investment, the providing of jobs for
employees, and a contribution to the well-being of our various communities.

1.    COMPLIANCE WITH LAWS, RULES AND REGULATIONS

Recognition of the public interest must be a permanent commitment of the Company
in the conduct of its affairs. The activities of the Company and all of its
employees, officers and directors ("employees"), acting on its behalf must
always be in full compliance with both the letter and spirit of all laws, rules
and regulations applicable to our business. Furthermore, no employee should
assist any third party in violating any applicable law, rule or regulation. This
principle applies whether or not such assistance is, itself, unlawful. All
employees must respect and obey the laws of the cities, states and countries in
which we operate and avoid even the appearance of impropriety. When there is a
doubt as to the lawfulness of any proposed activity, advice must be sought from
the Executive Vice President - Human Resources & Legal.

Violation of applicable laws, rules or regulations may subject the Company, as
well as any employees involved, to severe adverse consequences, including
imposition of injunctions, monetary damages (which could far exceed the value of
any gain realized as a result of the violation, and which may be tripled in
certain cases), fines and criminal penalties, including imprisonment. In
addition, actual or apparent violations of applicable laws, rules and
regulations by the Company or its employees can undermine the confidence of the
Company's customers, investors, creditors and bankers, as well as that of the
general public. Employees who fail to comply with this Code of Conduct and
applicable laws will be subject to disciplinary measures up to and including
termination of employment from the Company.

2.    RELATIONS WITH CUSTOMERS

It shall be part of the Company's fundamental and unswerving objectives and
policies:

      to provide customers with quality merchandise and service at fair prices;

      to deal with customers fairly, honestly and courteously;

      to attempt in good faith to ascertain and satisfy the needs of customers;
      and

      to live up to its obligations to customers and to satisfy customers'
      legitimate complaints fairly and with dispatch, forever mindful of the
      fact that a satisfied customer is one of the Company's most valued assets.

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3.    STATEMENTS IN ADVERTISING

The Company's reputation for integrity is a priceless asset and the product of
continuous effort by all of us. Our promotional literature, such as catalogs and
web sites, must protect and enhance this reputation by providing complete and
unambiguous performance characterizations of our products. Advertising must
avoid deliberately misleading statements regarding our products or those of
competitors. Statements about the Company's products and comparisons with
competitive offerings shall be based on factual data.

4.    COMPETITION

The purpose of the U.S. antitrust laws is to preserve our free enterprise
system. Antitrust policy is founded on the belief that the public interest is
best served by vigorous and fair competition -- that is, competition free from
collusive agreements among competitors. The management of the Company is
committed to those philosophies. While the Company will compete aggressively and
creatively in its business activities, its efforts in the marketplace shall be
conducted in a fair and ethical manner in strict accordance with the letter and
spirit of applicable antitrust and trade practice laws.

Company employees should also be aware of the serious criminal and civil
consequences of violations of those laws. First, violation of the antitrust laws
may be prosecuted as a felony, and conviction may result in very heavy corporate
and individual fines, and substantial prison sentences. Second, court
injunctions obtained by the U.S. Department of Justice or a State Attorney
General, or orders by the Federal Trade Commission ("FTC"), may place severe
restrictions on Company operations. Violation of a court injunction is
punishable by fine or imprisonment; and violation of an FTC order can result in
substantial monetary penalties. Finally, persons injured by reason of violations
of certain of the antitrust laws may sue and recover triple the amount of their
actual damages.

The antitrust laws forbid collusion between competitors to restrain trade, as
well as attempts or conspiracies to monopolize by means of predatory or unfair
tactics; and prohibits certain restrictive arrangements with customers,
particularly those that fix resale prices, or otherwise unreasonably restrain
customers' sales or purchases of merchandise. Any agreement, mutual consent or
understanding, whether express or implied, oral or written, may be sufficient to
establish collusion. It would be flatly illegal to collude with competitors to:

-     raise, lower, maintain, stabilize or otherwise fix prices, discounts,
      allowances, credit terms or any other element of price;

-     fix the price at which merchandise will be purchased from suppliers and
      vendors or resold by customers and concessionaires;

-     limit or control production or sales;

-     allocate customers, or divide markets or marketing territories; or

-     boycott suppliers, vendors, concessionaires or customers.

Obviously, no Company employee shall participate in any such collusive
arrangement or practice with a competitor. Nor may any employee engage in any
predatory or unfair conduct designed to exclude competition; enter into, or
discuss, any arrangement with a customer to fix resale prices; or, except with
the prior approval of the Company's Executive Vice President - Human Resources &
Legal, enter into any arrangement with a customer otherwise restricting its
ability to purchase or sell merchandise. Whenever there is a question as to
whether an act or practice may violate the antitrust laws, the Executive Vice
President - Human Resources & Legal must be contacted.

It is equally important to avoid contacts and dealings with competitors that
might lead to an inference of collusion. Accordingly, no Company employee shall
discuss, or remain present while anyone else

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discusses, with a competitor any of the above topics, including prices (past,
present or future), pricing procedures, profit levels, selection of resources,
merchandising plans or other competitive business information. If a simple
refusal to participate is not sufficient to end the discussion, a Company
employee should walk out of the meeting or gathering and promptly report the
incident to the Executive Vice President - Human Resources & Legal.

Trade associations, trade shows and similar activities are particularly
sensitive because they provide an opportunity for gatherings of competitors. The
Company will support only those trade associations and activities that perform
useful and legitimate functions in the industry. Employees should attend
activities of trade associations at which competitors are present only with the
advance approval of management. In any such attendance, Company employees must
always be cautious and wary of informal get-togethers, and avoid any discussions
of prohibited topics.

5.    PROPER ACCOUNTING AND FINANCIAL INTEGRITY

All transactions must be executed only in accordance with management's general
or specific authorization. The Company's books, records and accounts must
reflect, accurately and fairly and within the Company's regular system of
accountability, all of the Company's transactions and the acquisition and
disposition of its assets. All transactions shall be accurately recorded to
permit the preparation of financial statements in conformity with generally
accepted accounting principles consistently applied and other applicable rules,
regulations and criteria, and to insure full accountability for all assets and
activities of the Company. Under no circumstances shall there be any unrecorded
funds or assets of the Company, regardless of the purposes for which such fund
or asset may have been intended, or any improper or inaccurate entry, knowingly
made on the books and records of the Company. No payment on behalf of the
Company shall be approved or made with the intention or understanding that any
part of such payment is to be used for a purpose other than that described by
the documents supporting the payment.

All employees must cooperate fully with the Company's internal audit staff,
independent auditors and counsel to enable them to discharge their
responsibilities to the fullest extent.

6.    ACCURATE PERIODIC REPORTS

As you are aware, full, fair, accurate, timely and understandable disclosure in
our periodic reports filed with the SEC and Amex is required by SEC and Amex
rules and is essential to our continued success. Please exercise the highest
standard of care in preparing such reports in accordance with the guidelines set
forth below, including, without limitation, the following:

-     All Company accounting records, as well as reports produced from those
      records, must be kept and presented in accordance with the laws of each
      applicable jurisdiction.

-     All records must fairly and accurately reflect the transactions or
      occurrences to which they relate.

-     All records must fairly and accurately reflect in reasonable detail the
      Company's assets, liabilities, revenues and expenses.

-     The Company's accounting records must not contain any intentionally false
      or intentionally misleading entries.

-     No transaction may be intentionally misclassified as to accounts,
      departments or accounting periods.

-     All transactions must be supported by accurate documentation in reasonable
      detail and recorded in the proper account and in the proper accounting
      period.

-     No information may be concealed from the internal auditors or the
      independent auditors (or the Audit Committee or Board of Directors).

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-     Compliance with Generally Accepted Accounting Principles and the Company's
      system of internal accounting controls is required at all times.

II.   USE OF COMPANY ASSETS, FACILITIES AND SERVICES

The use of Company assets, including proprietary information, facilities or
services for any unlawful, improper or unauthorized purposes is strictly
prohibited.

Employees shall not make any expenditures or otherwise make any commitments
affecting the Company's assets unless they have been properly authorized to do
so.

1.    IMPROPER PAYMENTS

No payments or gifts of anything of value (in money, property, discounts,
services, rebates or otherwise), regardless of form, shall be made or offered,
directly or indirectly, in the conduct of the Company's affairs:

-     to any domestic or foreign governments, agencies, officials, employees or
      agents, for purposes other than the satisfaction of lawful obligations; or

-     to any private party, involving the use of the Company's funds, assets or
      resources, except in the ordinary course of business.

Such payments or gifts, whether or not called gratuities and whether or not
expressly or impliedly in exchange for certain conduct, may be perceived to be
bribery or otherwise improper and are prohibited.

Payments to Domestic and Foreign Officials

Employees must comply with all laws prohibiting improper payments to domestic
and foreign officials, including the U.S. Foreign Corrupt Practices Act of 1977
(the "Act").

The Act prohibits an offer, payment, promise of payment or authorization of the
payment of any money or gift to a foreign official, foreign political party,
official of a foreign political party or candidate for political office to
influence any act or decision of such person or party to obtain or retain
business. The Act also prohibits a payment to any person with the intention that
all or a portion of that payment will be offered or given, directly or
indirectly, to any such political person for any such purpose. Although
so-called "grease" payments may not be illegal, the Company's policy is to avoid
such payments. If any employee finds that adherence to the Company's policy
would cause a substantial, adverse effect on operations, that fact should be
reported to the Company's Executive Vice President - Human Resources & Legal who
will determine whether an exception may lawfully be authorized. If the
facilitating payment is made, such payment must be properly entered and
identified on the books of the Company and all appropriate disclosures made.

The Act further requires compliance with generally accepted accounting
principles. The Company must continue to maintain financial records that, in
reasonable detail, accurately and fairly reflect transactions. In particular,
all bank accounts that receive or disburse funds on behalf of the Company shall
be properly authorized and any such transactions recorded on the official books
and records of the Company.

Violation of the Act is a criminal offense, subjecting the Company to
substantial fines and penalties and any officer, director, employee or
stockholder acting on behalf of the Company to imprisonment and fines. The Act
prohibits the Company from paying, directly or indirectly, a fine imposed upon
an individual pursuant to the Act.

2.    POLITICAL CONTRIBUTIONS

No contributions of Company funds, assets, services or use of facilities,
regardless of form, may be made or offered, directly or indirectly, by any
employee to any political party or any candidate for, or holder of,

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political office, either domestic or foreign. Furthermore, employees shall
refrain from applying any pressure to or harassing other employees in political
matters.

The foregoing is in no way intended to prohibit or discourage employees from
making personal contributions to political candidates or parties of their choice
or to participate in the political process, purely for the employees' own
account and on their own time. The Company will not reimburse personal
contributions by employees, directly or indirectly.

3.    SAFEGUARDING ASSETS

The Company's assets must be safeguarded against inadvertent loss as well as
against intentional misappropriation. Assets include not only cash, fixtures,
furniture and equipment, but also merchandise, business and product plans, trade
secrets, information technology and records and other proprietary or
confidential information and related matters.

III.  SELECTION OF VENDORS AND SUPPLIERS OF GOODS AND SERVICES

The selection of a vendor or other supplier of goods and services to the Company
must be based on quality, need, performance and cost.

In dealing with vendors, it is the responsibility of all employees to actively
promote the best interests of the Company, within legal limits, through
aggressive attention to opportunities and the obtaining of fair terms and
treatment for the Company.

IV.   CONFLICT OF INTEREST; CORPORATE OPPORTUNITY

No employee shall, directly or indirectly, engage or participate in, or
authorize, any transactions or arrangements involving, or raising questions of,
possible conflict, whether ethical or legal, between the interests of the
Company and the personal interests of the employee or his or her family. No
employee shall take for himself or herself personally any opportunity that
arises through the use of corporate property, information or position or shall
use corporate property, information or position for personal gain.

No employee or any member of his or her family shall, directly or indirectly,
acquire or hold any beneficial interest of any kind in any firm or entity that
does, or in the recent past did, business with the Company, or in any firm or
entity which is currently or prospectively competing in any manner with the
Company. This prohibition shall not apply to the acquisition or holding of any
security through a mutual fund or of any interest not in excess of 1% of any
class of securities listed on a national securities exchange or traded in an
established over-the-counter securities market. Activities and holdings that
have the appearance of impropriety are also to be avoided.

For purposes of this policy, a member of an employee's family shall include a
spouse, parents, stepparents, in-laws, siblings, children, stepchildren and any
other person residing in the employee's residence.

No employee or any member of his or her family shall, directly or indirectly,
seek, accept or retain gifts or other personal or business favors from any
vendor, supplier or customer of the Company or from any individual or
organization seeking to do business with the Company. A personal benefit means
any type of gift, gratuity, use of facilities, favor, entertainment, service,
loan, fee or compensation or anything of monetary value. Specific exceptions to
this prohibition will be made if there is no reasonable likelihood of improper
influence in the performance of duties on the part of the employee on behalf of
the Company and if the personal benefit falls into one of the following
categories:

-     normal business courtesies, such as meals, involving no more than ordinary
      amenities;

-     paid trips or guest accommodations in connection with proper Company
      business and with the prior approval of the Chief Financial Officer or the
      Executive Vice President - Human Resources & Legal;

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-     fees or other compensation received from any organization in which
      membership or an official position is held only if approved by the Chief
      Financial Officer or the Executive Vice President - Human Resources &
      Legal;

-     loans from financial institutions made in the ordinary course of their
      business on customary terms and at prevailing rates; or

-     gifts of nominal value (less than $200) during the holiday season.

No employee at the Vice President level or above or any member of his or her
family may compete with the Company. No employee at the Vice President level or
above or any member of his or her family may serve as a director, officer,
employee of or consultant to a competitor, vendor, supplier or other business
partner of the Company without the prior written approval of the Executive Vice
President - Human Resources & Legal.

No employee or any member of his or her family who directly or indirectly owns a
financial interest in, or has an obligation to, a competitor, supplier, customer
or other business partner of the Company, which interest or obligation is
significant to such employee or family member may conduct business with such
entity or person without the prior written approval of the Executive Vice
President - Human Resources & Legal.

No employee or any member of his or her family may act as a broker, finder or
other intermediary for his or her benefit or for the benefit of any third party
in a transaction involving the Company without the prior written approval of the
Executive Vice President - Human Resources & Legal.

Gifts or entertainment that have an aggregate value in any year in excess of
$200 are generally considered to be excessive and shall not be accepted by the
employee. This prohibition would also apply to common courtesies and
hospitalities if their scale or nature would in any way appear to affect the
impartiality of the employee or imply a conflict of interest. However, this
prohibition is not meant to preclude an employee's acceptance of business
entertainment that is not intended to influence loyalty of the employee to the
Company and, that is reasonable in nature, frequency and cost; for example, a
lunch, dinner or occasional athletic, social or cultural event, or participation
in corporate promotional events.

An employee should make every effort to refuse to accept, or to return, any gift
or gifts from a supplier, customer or other business partner exceeding $200 in
value. If the employee determines that the donor would be insulted or
embarrassed if the gift is refused or returned, a conflict can nevertheless be
avoided by promptly reporting the gift to the employee's supervisor and
delivering to the employee's supervisor the gift or a check payable to the
Company for the fair value of the gift (which the Company will donate to
charity).

V.    SECURITIES TRADING

1.    INSIDE INFORMATION

If an employee of the Company has material nonpublic (i.e., "inside")
information relating to the Company, it is our policy that neither that person
nor any related person:

-     may buy or sell securities of the Company (other than pursuant to a
      prearranged trading plan that complies with Rule 10b5-1 under the
      Securities Exchange Act of 1934, as amended, or engage in any other action
      to take advantage of that information, or

-     may pass that information on to any person outside the Company or suggest
      or otherwise recommend that any such person outside the Company buy or
      sell securities of the Company or engage in any other action to take
      advantage of that information.

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This policy continues to apply after termination of employment to the extent
that a former employee is in possession of material nonpublic information at the
time of termination. In such case, no trading may take place until the
information becomes public or ceases to be material.

This policy also applies to information, obtained in the course of employment
with, or by serving as a director or officer of the Company, relating to any
other company, including: our customers or suppliers, any company with which we
may be negotiating a major transaction or business combination, or any company
as to which we have an indirect or direct control relationship or a designee on
the board of directors. No employee may effect transactions in the securities of
any such other company while in possession of material nonpublic information
concerning such company that was obtained in the course of employment with, or
service as a director of, the Company.

Transactions that may be necessary or justifiable for independent reasons (such
as the need to raise money for an emergency expenditure) are no exception. Even
the appearance of an improper transaction must be avoided to preserve our
reputation for adhering to the highest standards of conduct.

What is "material"? Material information has been defined as any information
that a reasonable investor would consider important in a decision to buy, hold
or sell stock. In short, any information that could reasonably affect the price
of our stock. Either positive or negative information may be material. Common
examples of information that will frequently be regarded as material are:
projections of future earnings or losses, or other guidance concerning earnings;
a pending or proposed merger, joint venture, acquisition or tender offer; a
significant sale of assets or the disposition of a subsidiary or business unit;
changes in dividend policies or the declaration of a stock split or the offering
of additional securities; changes in senior management or other key employees;
significant legal or regulatory exposure due to a pending or threatened lawsuit
or investigation; impending bankruptcy or other financial liquidity problems;
and the gain or loss of a substantial customer or supplier.

Obviously, it is sometimes most difficult to determine materiality, particularly
on a prospective basis, and the facts in each case should be carefully weighed.
Remember, if your securities transactions become the subject of scrutiny, they
will be viewed after-the-fact with the benefit of hindsight. As a result, before
engaging in any transaction, you should carefully consider how regulators and
others might view your transaction in hindsight. Whenever there is a question
concerning materiality, the employee should either refrain from trading or
consult the Executive Vice President - Human Resources & Legal.What is
"non-public"? Information should be considered non-public if it has not been
broadly disclosed to the marketplace, such as through a press release or SEC
filing, and until the marketplace has had time to absorb the information. It
should be noted that the mere existence of widespread rumors or unconfirmed
press speculation concerning the information does not mean that the information
is adequately disseminated to the public.

2.    TRADING GUIDELINES

Investment by employees of the Company in the Company's stock is generally
desirable and not to be discouraged. However, such investments should be made
with caution, and with recognition of the legal prohibitions concerning the use
by corporate "insiders" of confidential information for their own profit.
Guidelines to aid employees in determining when trading in the Company's stock
is appropriate are set forth in the Company's "Policy on Trading in Company
Securities," updated and published annually, which is incorporated herein by
reference.

You generally may not trade, without prior permission, during any period which
the Executive Vice President - Human Resources & Legal has designated as a
blackout period for the Company, whether or not you possess any material inside
information about the Company. While the reasons for a blackout period will
generally not be given, the Executive Vice President - Human Resources & Legal
will attempt to limit such restrictions to those reasonably necessary in the
best interests of the Company.

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You generally may trade if no limitation on trading has been declared and you do
not possess any material information about the Company that has not been
publicly disclosed. The Executive Vice President - Human Resources & Legal has
established certain "safe trading windows" during which employees may trade
Company securities.

For further guidance, please refer to the Company's "Policy on Trading in
Company Securities" and the accompanying memorandum entitled "Blackout Periods
and Safe Trading Windows Under Securities Trading Policy," updated and published
annually, which are incorporated herein by reference.

If you have any questions as to whether it is appropriate to trade in a given
circumstance, contact the Executive Vice President - Human Resources & Legal for
advice prior to trading.

3.    REPORTING AND OTHER OBLIGATIONS

Executive officers, directors and significant beneficial owners of the Company
are also subject to specific reporting and other requirements under federal and
state securities laws. The Company will endeavor to assist each affected
individual in compliance with such laws. In order for the Company to do so, it
is incumbent upon such individuals to provide information to the Company
regarding share ownership and related matters promptly, fully and accurately. In
addition, each person who is or becomes a beneficial owner of more than 10% of
any class of the Company's equity securities must comply with the reporting
requirements of Section 16 of the Securities Exchange Act of 1934, as amended.

VI.   ENVIRONMENT, HEALTH AND SAFETY

The Company is committed to environmental, health and safety protection for its
employees, customers, neighbors and others who may be affected by its products
or activities. The laws and regulations in this area are complex, and violations
can result in severe criminal and civil penalties for the Company and
responsible employees. If you are faced with an environmental, health or safety
issue, you should promptly contact the Executive Vice President - Human
Resources & Legal to discuss the matter.

VII.  EMPLOYMENT ISSUES

1.    EQUAL OPPORTUNITY

The Company affords equal opportunity for employment, including equal treatment
in hiring, promotion, training, compensation, termination and disciplinary
action, to all individuals regardless of race, color, religion, national origin,
sex, sexual preference, marital status, veteran status or physical or mental
disability. Unlawful discrimination can expose the Company to substantial
damages and unfavorable publicity. All employees are required to conduct their
business activities with due regard for this policy.

2.    HARASSMENT AND DISCRIMINATION

The Company strives to maintain an atmosphere that is free from illegal
discrimination or harassment of any kind, including discrimination or harassment
on the basis of an individual's race, color, religion, sex (including
pregnancy), age, disability, religion, marital status, sexual orientation,
national origin, veteran status, or any other characteristic protected by
federal, state or local law.

The Company has a complaint procedure that employees should follow in the event
any employee feels that he or she has been the subject of any type of unlawful
harassment, including sexual harassment, or discrimination. Any employee found
to have violated this policy will be subject to such disciplinary action, as the
Company deems appropriate, up to and including immediate termination of
employment.

Sexual Harassment

It is the Company's policy to maintain a working environment free from sexual
harassment or conduct that might reasonably be perceived as constituting sexual
harassment. Sexual harassment means any unwelcome sexual advances or requests
for sexual favors or any conduct of a sexual nature when:

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-     Submission to such conduct is made either explicitly or implicitly a term
      or condition of an individual's employment;

-     Submission to or rejection of such conduct by an individual is used as the
      basis for an employment decision affecting such individual; or

-     Such conduct has the purpose or effect of substantially interfering with
      an individual's work performance or creating an intimidating, hostile or
      offensive working environment.

Although it would be impossible to list all conduct that would violate this
policy, the following are examples of conduct that the Company absolutely
prohibits:

-     Offensive comments, jokes or other sexually oriented statements or
      depictions;

-     Unwelcome sexual advances or flirtations;

-     Making unwelcome comments about a person's clothing, body, or personal
      life;

-     Unwanted hugs, touches, kisses or other physical contact;

-     Requests for sexual favors;

-     Derogatory, offensive or pornographic posters, signs, cartoons or
      drawings;

-     Transmitting, viewing or forwarding e-mails containing offensive,
      suggestive or lewd attachments, statements or jokes;

-     Uploading or downloading of inappropriate pictures or material onto
      Company computer systems; or

-     Retaliating against an employee for making a complaint or participating in
      an investigation concerning harassment or discrimination.

The above list is only illustrative of types of conduct that would violate this
policy and, as such, by no means represents an exclusive list of conduct or
types of conduct that could lead to disciplinary action, up to and including
termination of employment. Offensive and inappropriate behavior need not rise to
the level of sexual harassment within the meaning of applicable state and
federal law to be deemed a violation of this policy.

All employees must comply with this policy and take appropriate measures to
ensure that such conduct does not occur.

Individuals who engage in acts of sexual harassment may be subject to civil and
criminal penalties.

Harassment on Account of Other Protected Class Status

In addition to sexual harassment, it is a violation of the Company's policies to
engage in conduct that is harassing or disparaging of another on account of that
employee's race, color, religion, sex (including pregnancy), age, disability,
religion, marital status, sexual orientation, national origin, veteran status,
or any other characteristic protected by federal, state or local law. All
employees must comply with this policy and take appropriate measures to ensure
that such conduct does not occur. Employees who engage in such conduct will be
subject to discipline, up to and including termination, and may be subject to
civil and criminal penalties.

Discrimination

                                       11
<PAGE>
It is also a violation of the Company's policies to discriminate or to treat an
employee less favorably on account of that employee's race, color, religion, sex
(including pregnancy), age, disability, religion, marital status, sexual
orientation, national origin, veteran status, or any other characteristic
protected by federal, state or local law. All employees must comply with this
policy and take appropriate measures to ensure that such conduct does not occur.
Employees who engage in such conduct will be subject to discipline, up to and
including termination, and may be subject to civil penalties.

Complaint Procedure

Employees who believe they have been subject to conduct in violation of this
policy should report such conduct immediately to his or her supervisor, a Human
Resources representative or the senior manager of his or her unit or facility.
Similarly, an employee who witnesses conduct that violates this policy should
report it immediately to his or her supervisor or to a Human Resources
representative or the senior manager of his or her unit or facility.

If for any reason an employee is uncomfortable approaching his or her supervisor
(for example, if the supervisor is the person the employee feels is engaging in
the offensive conduct), or if the employee feels that the matter is not being
addressed adequately, he or she should promptly bring it to the attention of the
next level of management, a Human Resources representative, or another member of
management with whom the employee feels comfortable.

Supervisors or managers who receive complaints of harassment or discrimination
from an employee are required to forward them immediately to a Human Resources
representative.

The Company will promptly conduct an investigation in response to specific
reported instances of violations of this policy. Upon request, employees are
required to cooperate fully in any investigation of specific reported instances
of violations of this policy. Retaliation or reprisal against an employee who
reports an alleged violation of this policy, or who provides information in any
investigation related thereto, is strictly prohibited and shall constitute a
violation of this policy.

Although the Company cannot guarantee complete confidentiality in matters of
harassment and discrimination, it will conduct its investigation in as
confidential a manner as possible under the circumstances.

If the investigation confirms that harassment, discrimination or other conduct
in violation of this policy has occurred, the Company will take prompt and
effective action to ensure that the offending conduct or act(s) do not continue.

Any employee found to have engaged in conduct prohibited by this policy will be
subject to discipline, up to and including termination. The Company does not
consider conduct in violation of this policy to be within the course and scope
of employment or the direct consequence of the discharge of one's duties.
Accordingly, to the extent permitted by law, the Company reserves the right not
to provide a defense or pay damages assessed against employees for conduct in
violation of this policy.

3.    DRUG AND ALCOHOL ABUSE

All Company entities will abide by applicable laws and regulations relative to
the possession or use of alcohol and drugs. Company policy prohibits the illegal
use, sale, purchase, transfer or possession of drugs by employees, or the
presence in one's system of alcohol or illegal drugs, while on Company premises.

Similarly, Company policy prohibits the use, sale, purchase, transfer or
possession of alcoholic beverages by employees while on Company premises, except
as authorized by the Company.

                                       12
<PAGE>
4.    DISABILITY

The Company is required to, and does, make reasonable accommodations to the
known physical or mental limitations of a qualified employee or applicant with a
disability if, with these accommodations, the person can perform the essential
functions of the job. The Company may be excused from making a reasonable
accommodation if the accommodation would impose an "undue hardship" on the
operation of its business.

VIII. INFORMATION SYSTEM USE

This policy is meant to govern the behavior of employees, contractors, vendors,
and third party agents of the Company with regard to the Company's Information
System, including Company records, software, e-mail, voice-mail, Internet,
electronic data, confidential information and third party consultants.

1.    INFORMATION SYSTEM

The Company's Information System is comprised of:

-     All of the computer hardware, software, computer networks, telephones,
      facsimile machines, voice-mail and e-mail systems, and Internet and
      Intranet sites which the Company owns, leases or maintains; and

-     Any files or business records that are created or stored on the system.

2.    BUSINESS RECORDS & DOCUMENTATION

-     Employees must keep private those business records or other documentation
      that are not generally available to the public or that the Company
      otherwise deems confidential.

-     Employees are generally prohibited from copying or distributing software
      that is owned by a third-party and licensed to the Company.

3.    USING THE INFORMATION SYSTEM

-     Each component of the Company's Information System, including any off-site
      use, should be used for purposes of the Company's business.

-     Privacy

      1)    Employees should not have any expectation of privacy with regard to
            use of the Company's Information System, including in their
            communications, computer files or workspaces. The Company reserves
            the right to review e-mail, voice-mail, facsimile messages, Internet
            or other electronic information systems. All such observations or
            examinations will be conducted in accord with federal and state
            regulations.

      2)    Any inappropriate or unauthorized use of the Company's Information
            System may be grounds for disciplinary action, up to and including
            termination of employment.

4.    OBTAINING SECURITY ACCESS

The confidentiality and integrity of data stored on the Company's computer
systems must be protected by access controls to ensure that only authorized
employees or third parties have access. This access shall be restricted to only
those capabilities that are appropriate to perform each employee's job duties.

                                       13
<PAGE>
5.    INTERNET USE

-     As a general rule, unless Internet access is directly related to an
      employee's job duties, employees should only access the Internet with
      their supervisor's approval. Widespread Internet access by employees can
      cause a strain on the Company's computer networks.

-     All Internet usage will be monitored and recorded. Non-work related sites
      may be restricted as determined by management. Excessive/ inappropriate
      "surfing" may result in removal of Internet access.

-     Employees are prohibited from copying or downloading software from the
      Internet. Such software could contain viruses or bugs that might damage
      the Company's computer systems, and the use of such software may require a
      fee charged to the employee or the Company.

6.    RESTRICTED INFORMATION

-     Employees are strictly prohibited from attempting to access any portion of
      the Company's Information System to which he or she is ordinarily denied
      access.

-     Any use by an employee of a password assigned to another party is strictly
      prohibited and may be grounds for dismissal.

7.    PROTECTION OF COMPANY ELECTRONIC DATA AND INFORMATION
      PASSWORDS/VIRUSES/DATA SECURITY

-     Passwords

      1)    Employees should memorize their password rather than write it down.

      2)    If employees disclose their password to a co-worker or a third
            party, they should change it promptly.

      3)    If the computer network permits, employees should change their
            passwords at least every 30 days.

-     Viruses

      1)    Always run the corporate standard, supported anti-virus software.
            Check the software often to make sure the virus definitions remain
            current.

      2)    NEVER open any files or macros attached to an email from an unknown,
            suspicious or untrustworthy source. Delete these attachments
            immediately, then "double delete" them by emptying your computer's
            Trash folder.

      3)    Because of virus exploits of email systems, you should be wary of
            any unexpected attachments from known and trustworthy sources as
            well. Contact the sender for verification before opening the file.

      4)    Never download files from unknown or suspicious sources. All
            downloaded files should be scanned with virus software prior to
            being opened or run.

-     Disks with confidential information should be kept in a secure place. They
      should not be left where they can be exposed to magnets or where beverages
      or other liquids can spill on them.

-     All PCs, laptops, and workstations should be secured with a
      password-protected screensaver with the automatic activation feature set
      at 10 minutes or less, or by logging-off when the host will be unattended.

-     Employees may not accept, use or share programs or data from unauthorized
      sources.

                                       14
<PAGE>
8.    NON-STANDARD SOFTWARE

-     Employees should refrain from installing any non-standard software on
      their PCs without permission of I.T. Network Management.

9.    REMOTE ACCESS

Remote access policy applies to all Company employees, contractors, vendors, and
agents with a Company-owned or personally-owned computer or workstations used to
connect to the Company network. It also applies to remote access connections
used to do work on behalf of the Company, including reading or sending email and
viewing the intranet web resources.

-     It is the responsibility of each individual with remote access privileges
      to ensure that their remote access connection is given the same
      consideration as the user's on-site connection.

-     At no time should login or password information be supplied to
      non-authorized users, not even family members. The authorized individual
      is responsible to ensure that non-authorized users do not violate any
      Company policies, do not perform illegal activities, and do not use the
      access for outside business interests.

-     All hosts connected to Company internal networks via remote access must
      use the most up-to-date anti-virus software. This includes personal
      computers.

-     The individual bears responsibility for any consequences should remote
      access be misused.

-     Remote access must be requested via the Help Desk following the procedures
      in the Obtaining Security Access section.

-     Remote access accounts will be monitored. If an account is not used for a
      period of six months, the account will expire and will no longer function.
      If remote access is subsequently required, the individual must request a
      new account as described above.

10.   UNACCEPTABLE ACTIVITIES

The following activities are strictly prohibited:

-     Introduction of malicious programs into the network or server (e.g.
      viruses, worms, trojan horses, e-mail bombs, etc.).

-     Effecting security breaches or disruptions of network communication.
      Security breaches include, but are not limited to, accessing data of which
      the employee is not an intended recipient or logging into a server or
      account that the employee is not expressly authorized to access, unless
      these duties are within the scope of regular duties. Disruption includes,
      but is not limited to, network sniffing, pinged floods, packet spoofing,
      denial of service, and forged routing information for malicious purposes.

-     Port scanning or security/password scanning is expressly prohibited unless
      prior approval is received from the Security Manager.

-     Executing any type of network monitoring which will intercept data not
      intended for the employee's host, unless this activity is part of the
      employee's normal job/duty and approved by the Security Manager.

-     Circumventing user authentication or security of any host, network, or
      account.

                                       15
<PAGE>
-     Using any program/script/command, or sending messages of any kind, with
      the intent to interfere with, or disable, a user's terminal session, via
      any means, locally or via the

11.   REPORTING SECURITY PROBLEMS

-     If sensitive Company information is lost, disclosed to unauthorized
      parties, or suspected of being lost or disclosed to unauthorized parties,
      the Security Manager must be notified immediately.

-     If any unauthorized use of the Company's information systems has taken
      place, or is suspected of taking place, whenever passwords or other system
      access control mechanisms are lost, stolen, or disclosed, or are suspected
      of being lost, stolen, or disclosed, the Security Manager must be notified
      immediately.

-     Because it may indicate a computer virus infection or similar security
      problem, all unusual systems behavior, such as missing files, frequent
      system crashes, misrouted messages, and the like must also be immediately
      reported. The specifics of security problems should not be discussed
      widely but should instead be shared on a need-to-know basis.

-     Employees must not "test the doors" (probe) security mechanisms unless
      they have first obtained permission from the Security Manager. If users
      probe security mechanisms, alarms will be triggered and resources will
      needlessly be spent tracking the activity.

IX.   CONFIDENTIAL INFORMATION

Safeguarding the confidential nature of information concerning the Company, its
present and prospective business, and its customers, suppliers and investors is
essential to the successful conduct of its business.

Confidential information is any non-public information or materials, whether in
verbal, paper, or electronic form, such as materials describing or relating to
computer software or systems, business and financial affairs, personnel matters,
operating procedures, marketing matters, and policies and procedures of the
Company or its employees, customers, vendors or other third parties.

Confidential information includes, but is not limited to, vendors, suppliers,
mailing lists and other customer information including credit or charge card
numbers, price and mark-up determinations, sales or sales trends of catalogs,
advertisements or particular items, cost of products or services paid by the
Company, budgets, and business and marketing plans. It includes any data that
could be used to infer information about the business activities of the Company
and its customers.

All information developed within the Company with respect to its business is
confidential and should not be disclosed to any person who is not a Company
employee. Nor should confidential information be left out in the open,
carelessly discarded or discussed in public (e.g., in an elevator where
unauthorized persons may have access to it).

All external communications intended for the general public, the financial
community or the press must be approved in writing by the Company's Chief
Executive Officer or the Executive Vice President - Human Resources & Legal in
advance.

No employee may use any confidential information relating to the Company,
regardless of the source of such information or the method of its acquisition,
for the purpose of furthering any private interest or as a means of realizing
any personal gain, directly or indirectly.

-     Confidential information will only be made available to employees if it is
      needed to perform their job responsibilities.

-     Employees must refrain from publicizing, disclosing, or allowing
      disclosure of any Company information without prior written authorization
      from the appropriate supervisor.

                                       16
<PAGE>
-     In order to safeguard the Company's confidential electronic data and
      information, employees should:

      1)    NOT discuss the affairs of the Company with or in the presence or
            persons (including other Company employees) who do not have a need
            to know the information.

      2)    Safeguard confidential material whether in the office or at home,
            and dispose of material with special care.

      3)    Control access to confidential systems and data.

X.    DUTY TO RETURN CONFIDENTIAL INFORMATION AND COMPANY PROPERTY UPON
      SEPARATION FROM THE COMPANY

Upon separation from the Company for any reason, employees and directors must
immediately deliver to the Company (and must not keep in their possession,
recreate, copy or deliver to anyone else) all Confidential Information and other
documents, materials, information or any other Company property developed in
part or in whole by the employee or director or otherwise belonging to the
Company, including but not limited to paper and electronic files, customer
lists, pricing lists, marketing materials, financial materials (including but
not limited to budgets, forecasts, projections, capital expenditure requests and
projects, and contingency plans), computer equipment, technology hardware and/or
software plans, software, ID badges, cell phones, company credit cards, beepers,
keys and key cards.

The duty of employees and directors to deliver to the Company all Confidential
Information and all other Company property upon separation from the Company is
absolute and is not contingent in any manner upon any verbal or written request
for the delivery of such material by the Company at the time of separation. The
Company's right to these materials is absolute and no one other than the Board
of Directors has the authority to waive this right and any such waiver must be
in writing.

XI.   INTERNAL COMMUNICATION AND ENFORCEMENT OF POLICY

Communication of the policies contained in this Code of Conduct will be made to
all employees of the Company who will be required to sign the attached
Acknowledgement of Receipt and Understanding at least annually.

It is important that each employee comply not only with the letter but, equally
importantly, the spirit of these policies. If you believe that one of the
Company's employees is acting in a manner that is not in compliance with this
policy, or that you have been requested to so act in such a manner, you should
immediately bring this matter to the attention of the Executive Vice President -
Human Resources & Legal or your supervisor or as set for in Section XV. In order
to encourage uninhibited communication of such matters, such communications will
be treated confidentially to the fullest extent possible and no disciplinary or
other retaliatory action will be taken against an employee who communicates such
matters.

XII.  REPORTING OF ANY ILLEGAL OR UNETHICAL BEHAVIOR

We have a strong commitment to conduct our business in a lawful and ethical
manner. Employees are encouraged to talk to supervisors, managers or other
appropriate personnel when in doubt about the best course of action in a
particular situation and to report violations of laws, rules, regulations or
this Code of Conduct. We prohibit retaliatory action against any employee who,
in good faith, reports a possible violation. It is unacceptable to file a report
knowing it to be false.

The Sarbanes-Oxley Act (the "Act") requires all publicly traded companies to
establish procedures for the receipt and treatment of complaints regarding
accounting, internal accounting controls or auditing matters. The Act also
requires employees to confidentially and anonymously report concerns regarding
questionable accounting or auditing matters. This includes any circumstances
where it is believed that fraud or other irregularities may be occurring within
the Company.

                                       17
<PAGE>
Any persons wishing to report such accounting issues can be assured the
situation will be handled with the highest level of anonymity and
confidentiality. In addition, there is a high level of protection granted under
the Act to persons reporting incidents. The Act states that the Company may not
discharge, harass or in any manner discriminate against any individual providing
information.

We encourage anyone with information regarding these matters to contact the
Internal Audit Director or the Chairman of the Company's Audit Committee, and
have established the confidential Employee Fraud Hotline to facilitate
communication. If you wish to provide information anonymously, please mail it in
a sealed envelope [addressed to "Audit Committee - Complaints" and place it in a
second envelope] addressed to the Internal Audit Director or the Chairman of the
Company's Audit Committee or leave a voice-mail at 1-800-429-1577.

XIII. AMENDMENTS TO AND WAIVERS OF THE CODE OF CONDUCT

Any amendment to and waiver of this Code of Conduct for executive officers or
directors will be made only by the Board of Directors and notified in writing
and will be promptly disclosed as required by law or stock exchange regulation.

XIV.  COMPLIANCE PROCEDURES

This Code cannot, and is not intended to, address all of the situations you may
encounter. There will be occasions where you are confronted by circumstances not
covered by policy or procedure and where you must make a judgment as to the
appropriate course of action. In those circumstances we encourage you to use
your common sense, and to contact your supervisor, manager or a member of human
resources for guidance.

If you do not feel comfortable discussing the matter with your supervisor,
manager or human resources, please call the Company's ombudsman who is Director
of Internal Audit or Chairman of the Audit Committee. The ombudsman provides
information, advice and suggestions regarding the topics addressed in this Code
of Conduct. We strive to ensure that all questions or concerns are handled
fairly, discreetly and thoroughly. You need not identify yourself.

XV.   INTERPRETATION OF CODE OF CONDUCT AND EFFECTS OF FAILURE TO COMPLY

Any questions regarding this Code of Conduct or its application should be
discussed with the Executive Vice President - Human Resources & Legal.

Conduct violative of this Code of Conduct is expressly outside the employee's
scope of employment. Any employee whose conduct violates this Code of Conduct
will be subject to disciplinary action by the Company, including, in the
Company's discretion, discharge and/or forfeiture of any benefits or rights
(including contractual rights) which, under applicable law, are forfeitable upon
discharge for cause, and to the enforcement of such other remedies as the
Company may have under applicable law.

The summaries of laws and regulations contained in this policy are brief and
necessarily omit many subtleties and variations that exist in such laws and
regulations, as well as many other laws and regulations that may impose
requirements upon the Company and its employees depending upon applicable
circumstances from time to time. In addition, the laws and regulations that
affect the Company may be supplemented, amended or repealed from time to time.
Therefore, you should request prior advice from Company legal counsel in case of
any question or uncertainty concerning the impact of applicable laws and
regulations upon your business activities.

XVI.  STATEMENT NOT A CONTRACT OF EMPLOYMENT

This statement sets forth a code of conduct to which employees are expected to
adhere. It is not a contract of employment and the Company retains all of its
rights in connection with the employment, discipline and/or termination of its
employees.

                                       18
<PAGE>
                              DIRECTOR'S STATEMENT

The Company is committed to maintaining the highest standards of personal and
professional conduct in the performance of its business activities. The
publication of this Code of Conduct is intended to reaffirm and formalize the
Company's established policies and to provide employees of the Company with
appropriate guidelines to help assure their understanding and compliance. The
Company and its affiliates have maintained a tradition of sound business
practices of which we are proud. We pledge to continue this tradition in a
manner that is in keeping with both the letter and spirit of the law and the
highest ethical standards.

THOMAS C. SHULL

For the Board of Directors of Hanover Direct, Inc.

XVII. NAMES AND NUMBERS

<TABLE>
<S>                                                                             <C>
     Chairman/President/Chief Executive Officer
     Thomas C. Shull............................................................(201) 272-3106

     Executive Vice President /Chief Financial Officer
     Edward M. Lambert..........................................................(201) 272-3325

     Executive Vice President/ Human Resources & Legal
     Brian C. Harriss...........................................................(201) 272-3224
</TABLE>

                                       19
<PAGE>
                  Acknowledgement of Receipt and Understanding
                            of Hanover Direct, Inc.'s
                            Corporate Code of Conduct

I hereby acknowledge that I have been provided with Hanover Direct, Inc.'s
Corporate Code of Conduct. I further acknowledge that I have read the Code of
Conduct in its entirety and that I understand it. I agree to observe the
policies and procedures contained in the Code of Conduct and have been advised
that, if I have any questions or concerns related to such policies and
procedures, I should discuss them with my supervisor or the Human Resources
Department. I understand that failing to abide by Hanover Direct, Inc.'s Code of
Conduct could lead to disciplinary action up to and including termination of
employment. I also understand that no one other than the Board of Directors has
the authority to waive any provision of this Code of Conduct and that any waiver
must be in writing.

My signature below indicates my understanding of Hanover Direct, Inc.'s Code of
Conduct and my agreement to abide by the policies and procedures contained
therein.

--------------------------------            --------------------------------
Employee Signature                                        Date

--------------------------------
Print Name<PAGE>

                                                                   EXHIBIT 10.92

               THIRTIETH AMENDMENT TO LOAN AND SECURITY AGREEMENT

         THIS THIRTIETH AMENDMENT TO LOAN AND SECURITY AGREEMENT (this
"Amendment"), dated as of March 25, 2004, is entered into by and among CONGRESS
FINANCIAL CORPORATION, a Delaware corporation ("Lender"), BRAWN OF CALIFORNIA,
INC., a California corporation ("Brawn"), GUMP'S BY MAIL, INC., a Delaware
corporation ("GBM"), GUMP'S CORP., a California corporation ("Gump's"), HANOVER
REALTY, INC., a Virginia corporation ("Hanover Realty"), THE COMPANY STORE
FACTORY, INC., a Delaware corporation ("TCS Factory"), THE COMPANY OFFICE, INC.,
a Delaware corporation ("TCS Office"), SILHOUETTES, LLC, a Delaware limited
liability company ("Silhouettes LLC"), HANOVER COMPANY STORE, LLC, a Delaware
limited liability company ("HCS LLC"), DOMESTICATIONS, LLC, a Delaware limited
liability company ("Domestications LLC"), KEYSTONE INTERNET SERVICES, LLC, a
Delaware limited liability company ("KIS LLC"), and THE COMPANY STORE GROUP,
LLC, a Delaware limited liability company ("CSG LLC"; and, together with Brawn,
GBM, Gump's, Hanover Realty, TCS Factory, TCS Office, Silhouettes LLC, HCS LLC,
Domestications LLC and KIS LLC, collectively, "Borrowers" and each,
individually, a "Borrower"), HANOVER DIRECT, INC., a Delaware corporation
("Hanover"), HANOVER HOME FASHIONS GROUP, LLC, a Delaware limited liability
company ("HHFG LLC"), CLEARANCE WORLD OUTLETS, LLC, a Delaware limited liability
company ("Clearance World"), SCANDIA DOWN, LLC, a Delaware limited liability
company ("Scandia Down LLC"), LACROSSE FULFILLMENT, LLC, a Delaware limited
liability company ("LaCrosse LLC"), D.M. ADVERTISING, LLC, a Delaware limited
liability company ("DM Advertising LLC"), AMERICAN DOWN & TEXTILE, LLC, a
Delaware limited liability company ("ADT LLC"), and HANOVER GIFTS, INC., a
Virginia corporation ("Hanover Gifts"; and, together with Hanover, HHFG LLC,
Clearance World, Scandia Down LLC, LaCrosse LLC, DM Advertising LLC and ADT LLC,
collectively, "Guarantors" and each, individually, a "Guarantor").

                              W I T N E S S E T H:
                               - - - - - - - - - -

         WHEREAS, Borrowers, Guarantors and Lender are parties to the Loan and
Security Agreement, dated November 14, 1995, as amended by the First Amendment
to Loan and Security Agreement, dated February 22, 1996, the Second Amendment to
Loan and Security Agreement, dated April 16, 1996, the Third Amendment to Loan
and Security Agreement, dated May 24, 1996, the Fourth Amendment to Loan and
Security Agreement, dated May 31, 1996, the Fifth Amendment to Loan and Security
Agreement, dated September 11, 1996, the Sixth Amendment to Loan and Security
Agreement, dated as of December 5, 1996, the Seventh Amendment to Loan and
Security Agreement, dated as of December 18, 1996, the Eighth Amendment to Loan
and Security Agreement, dated as of March 26, 1997, the Ninth Amendment to Loan
and Security Agreement, dated as of April 18, 1997, the Tenth Amendment to Loan
and Security Agreement, dated as of October 31, 1997, the Eleventh Amendment to
Loan and Security Agreement, dated as of March 25, 1998, the Twelfth Amendment
to Loan and Security Agreement, dated as of September 30, 1998, the Thirteenth
Amendment to Loan and Security Agreement, dated as of September 30, 1998, the
Fourteenth Amendment to Loan and

<PAGE>

Security Agreement, dated as of February 28, 2000, the Fifteenth Amendment to
Loan and Security Agreement, dated as of March 24, 2000, the Sixteenth Amendment
to Loan and Security Agreement, dated as of August 8, 2000, the Seventeenth
Amendment to Loan and Security Agreement, dated as of January 5, 2001, the
Eighteenth Amendment to Loan and Security Agreement, dated as of November 12,
2001, the Nineteenth Amendment to Loan and Security Agreement, dated as of
December 18, 2001 (as amended hereby, the "Nineteenth Amendment to Loan
Agreement"), the Twentieth Amendment to Loan and Security Agreement, dated as of
March 5, 2002, the Twenty-First Amendment to Loan and Security Agreement, dated
as of March 21, 2002, the Twenty-Second Amendment to Loan and Security
Agreement, dated as of August 16, 2002, the Twenty-Third Amendment to Loan and
Security Agreement, dated as of December 27, 2002, the Twenty-Fourth Amendment
to Loan and Security Agreement, dated as of February 27, 2003, the Twenty-Fifth
Amendment to Loan and Security Agreement, dated as of April 21, 2003, the
Twenty-Sixth Amendment to Loan and Security Agreement, dated as of August 29,
2003, the Twenty-Seventh Amendment to Loan and Security Agreement, dated as of
October 31, 2003 (the "Twenty-Seventh Amendment to Loan Agreement"), the
Twenty-Eighth Amendment to Loan and Security Agreement, dated as of November 4,
2003, the Twenty-Ninth Amendment to Loan and Security Agreement, dated as of
November 25, 2003 (as so amended, the "Loan Agreement"), pursuant to which
Lender has made loans and advances to Borrowers;

         WHEREAS, Borrowers and Guarantors have requested that Lender (a) amend
the minimum amounts of Consolidated Working Capital, Consolidated Net Worth and
EBITDA that Hanover and its Subsidiaries are required to maintain, (b) waive the
Event of Default arising under Section 7.1(b) of the Loan Agreement by reason of
the failure to maintain the minimum amount of Working Capital for the fiscal
month ending December 27, 2003, and (d) amend certain other provisions of the
Loan Agreement; and

         WHEREAS, Lender is willing to enter into such amendments and grant such
waivers subject to the terms and conditions and to the extent set forth herein;

         NOW, THEREFORE, in consideration of the premises and covenants set
forth herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:

1.       DEFINITIONS.

           (a) AMENDMENT TO DEFINITION. All references to the term "Consolidated
Net Worth" in the Loan Agreement and the other Financing Agreements shall be
deemed and each such reference is hereby amended by replacing clause (f) with
the following .

          "(f) effective on and after March 1, 2004, solely for purposes of
     calculating Consolidated Net Worth of Hanover and its Subsidiaries for the
     fiscal month ending January 2004 and every fiscal month thereafter, to the
     extent that the provisions of Financial Accounting Standards No.150 ("FAS
     No.150") would not require Hanover to treat the Series C Participating
     Preferred Stock as a financial instrument and would not require Hanover to
     classify the liquidation preference feature of the Series C Participating
     Preferred Stock as a liability as provided by FAS 150, then the aggregate
     amounts of accretion for the liquidation preference of the Series C
     Participating Preferred Stock (utilizing the interest method of accounting)
     shall nevertheless be considered liabilities

                                       2
<PAGE>

     for purposes of determining compliance during applicable measurement
     periods set forth in Section 6.20 hereof."

          (b) INTERPRETATION. All capitalized terms used herein and not defined
herein shall have the meanings given to such terms in the Loan Agreement.

     2. CONSOLIDATED WORKING CAPITAL. Section 6.19(e) of the Loan Agreement is
hereby deleted in its entirety and replaced with the following:

          "(e) Hanover shall, commencing with the fiscal month ending January
     2004, and for each fiscal month thereafter in any fiscal year thereafter,
     maintain Consolidated Working Capital, calculated on a consolidated basis
     for Hanover and its Subsidiaries, of not less than the following amounts as
     at the end of each such fiscal month:

                           PERIOD                   AMOUNT
                           ------                -----------
                           January                $8,600,000
                           February               $8,500,000
                           March                  $8,000,000
                           April                  $8,600,000
                           May                    $7,700,000
                           June                   $8,100,000
                           July                   $9,800,000
                           August                $10,800,000
                           September             $10,600,000
                           October               $14,000,000
                           November              $14,300,000
                           December              $12,900,000"

     3. CONSOLIDATED NET WORTH. Section 6.20(e) of the Loan Agreement is hereby
deleted in its entirety and replaced with the following:

          "(e) Hanover shall, commencing with the fiscal month ending January
     2004 and for each fiscal month thereafter in any fiscal year thereafter,
     maintain Consolidated Net Worth, calculated on a consolidated basis for
     Hanover and its Subsidiaries, of not less than the following amounts as at
     the end of each such fiscal month:

                           PERIOD                  AMOUNT
                           ------               -------------
                           January              ($50,700,000)
                           February             ($52,300,000)
                           March                ($51,500,000)
                           April                ($51,500,000)
                           May                  ($52,100,000)
                           June                 ($51,400,000)
                           July                 ($51,700,000)
                           August               ($51,700,000)

                                       3
<PAGE>

                           September            ($49,200,000)
                           October              ($48,900,000)
                           November             ($46,200,000)
                           December             ($41,400,000)"

          4. EBITDA. Section 6.31(e) of the Loan Agreement is hereby deleted in
its entirety and replaced with the following:

          "(e) Hanover and its Subsidiaries shall not, as to any fiscal quarter
     during the fiscal year 2004 of Hanover and its Subsidiaries, permit EBITDA
     of Hanover and its Subsidiaries commencing on the first day of such fiscal
     year and ending on the last day of the applicable fiscal quarter set forth
     below on a cumulative year to date ("YTD") basis to be less than the
     respective amount set forth below opposite such fiscal quarter end YTD
     period:

                               Fiscal Quarter
                               End YTD Periods                    Cumulative
                             FOR FISCAL YEAR 2004                MINIMUM EBITDA
                  --------------------------------------------   --------------
            (i)   December 28, 2003 through March 27, 2004          - $0 -
            (ii)  December 28, 2003 through June 26, 2004         $1,750,000
            (iii) December 28, 2003 through September 25, 2004    $5,000,000
            (iv)  December 28, 2003 through December 25, 2004    $12,000,000"

          (f) Hanover and its Subsidiaries shall not, as to any fiscal quarter
     during the fiscal year 2005 of Hanover and its Subsidiaries, permit EBITDA
     of Hanover and its Subsidiaries commencing on the first day of such fiscal
     year and ending on the last day of the applicable fiscal quarter set forth
     below on a cumulative YTD basis to be less than the respective amount set
     forth below opposite such fiscal quarter end YTD period:

                               Fiscal Quarter
                               End YTD Periods                    Cumulative
                             FOR FISCAL YEAR 2005                MINIMUM EBITDA
                  --------------------------------------------   --------------
            (i)   December 26, 2004 through March 26, 2005           - $0 -
            (ii)  December 26, 2004 through June 25, 2004          $1,750,000
            (iii) December 26, 2004 through September 24, 2005     $5,000,000
            (iv)  December 26, 2004 through December 31, 2005     $12,000,000"

          (g) Hanover and its Subsidiaries shall not, as to any fiscal quarter
     during the fiscal year 2006 of Hanover and its Subsidiaries, permit EBITDA
     of Hanover and

                                       4
<PAGE>

     its Subsidiaries commencing on the first day of such fiscal year and ending
     on the last day of the applicable fiscal quarter set forth below on a
     cumulative YTD basis to be less than the respective amount set forth below
     opposite such fiscal quarter end YTD period:

                               Fiscal Quarter
                               End YTD Periods                    Cumulative
                             FOR FISCAL YEAR 2006                MINIMUM EBITDA
                  --------------------------------------------   --------------
           (i)    January 1, 2006 through April 1, 2006             - $0 -
           (ii)   January 1, 2006 through July 1, 2006             $1,750,000
           (iii)  January 1, 2006 through September 30, 2006       $5,000,000
           (iv)   January 1, 2006 through December 30, 2006       $12,000,000"

     5. EVENTS OF DEFAULT. Section 7.1(i) of the Loan Agreement is hereby
deleted in its entirety and replaced with the following:

         "(i)  any event shall occur as a result of which:

                           (A) the consolidated revenues of Hanover and its
                  Subsidiaries (i) in any fiscal month is thirty (30%) percent
                  less than the consolidated revenues of Hanover and its
                  Subsidiaries for the same fiscal month of the prior fiscal
                  year or (ii) in any twelve (12) month period in the aggregate
                  is twenty (20%) percent less than the consolidated revenues of
                  Hanover and its Subsidiaries for the immediately preceding
                  twelve (12) month period; PROVIDED, THAT, in either case, as
                  to any applicable measurement period, if Borrowers or
                  Guarantors have consummated an Asset Sale in accordance with
                  the terms and conditions hereof during such period, any
                  reduction in such consolidated revenues that is directly
                  attributable to the revenues of such Borrower or Guarantor
                  arising from the assets of such Borrower or Guarantor that
                  were sold pursuant to such Asset Sale; then such reduction
                  shall not be deemed a reduction for purposes of this clause
                  (A);

                           (B) the operations are suspended or terminated (other
                  than due to an embargo, condemnation, act of God or public
                  enemy or other casualty loss or force majeure) for ten (10)
                  days or more at any facility of a Borrower used in generating
                  more than twenty (20%) percent of the revenues of Borrowers on
                  a consolidated basis for the immediately preceding fiscal
                  year; PROVIDED, THAT, if Borrowers or Guarantors have
                  consummated an Asset Sale in accordance with the terms and
                  conditions hereof involving the sale of any such facility,
                  then the sale of a facility pursuant to such Asset Sale shall
                  not be deemed to be a suspension or termination of operations
                  at such facility;

                           (C) any strike, lockout, work stoppage or labor
                  dispute affects twenty (20%) percent or more of the aggregate
                  workforce of Borrowers;

                                       5
<PAGE>

                           (D) any law, regulation, order, judgment or decree of
                  any Governmental Authority shall exist, or any action, suit,
                  investigation, litigation or proceeding shall be pending or
                  threatened in writing in any court or before any arbitrator or
                  Governmental Authority that could reasonably be expected to
                  result in the loss of the ability to conduct any portion of
                  the business that accounted for more than ten (10%) percent of
                  the revenues of Hanover and its Subsidiaries on a consolidated
                  basis on the immediately preceding fiscal year;

                           (E) the loss, suspension, revocation or failure to
                  renew any permit or license now held or hereafter acquired by
                  a Borrower required in connection with the sale or
                  distribution of goods the sale of which gave rise to revenues
                  of more than ten (10%) percent in the immediately preceding
                  fiscal year;

                           (F) the Value of the Inventory in the possession of
                  Borrowers equal to thirty-five (35%) percent of the total
                  Value of Inventory of Borrowers in the aggregate is more than
                  six (6) months old;

                           (G) within any ninety (90) day period, the value of
                  Inventory (as calculated for this purpose as the lower of cost
                  or market) in the aggregate for all Borrowers exceeds the
                  lesser of $2,500,000 or the amount equal to five (5%) percent
                  of the total value (calculated as the lower of cost or market)
                  of all Inventory shall be subject to a product recall or
                  similar product defect occurrence (but any such Inventory
                  shall not be included in the calculation of such amount if a
                  Borrower has a valid and enforceable right to return such
                  Inventory to the supplier thereof in exchange for cash or
                  other immediately available funds so long as Agent determines
                  that the supplier has the financial ability to make all of
                  such payments;

                           (H) any vendor or group of vendors that accounts for
                  sales of goods to Borrowers in excess of ten (10%) percent of
                  the aggregate of Borrowers' then current goods sold to
                  customers in the ordinary course of business for the
                  immediately preceding fiscal year of Borrowers terminates its
                  sale agreement(s) with any Borrower or stops delivery of goods
                  to a Borrower for more than sixty (60) Business Days;

                           (I) a vendor or group of vendors change the credit
                  terms of sale of goods to Borrowers so that Borrowers are
                  required to purchase twenty (20%) percent or more of the
                  aggregate inventory of all Borrowers on a cash on delivery or
                  cash in advance basis;

                           (J) the aging of accounts payable of Borrowers
                  reflects that twenty (20%) percent or more of the total
                  balance owed is more than sixty (60) days past the due date;

                           (K) any embargo, condemnation, act of God or public
                  enemy or other casualty loss or force majeure occurs resulting
                  in the cessation or substantial curtailment of the receipt of
                  goods from vendors or from revenue producing activities of
                  Borrowers for more than thirty (30) days;

                                       6
<PAGE>

                           (L) contingent liabilities are incurred by Borrowers
                  and Guarantors in excess of $10,000,000 which would be
                  required to be reflected in a balance sheet prepared in
                  accordance with GAAP and which liabilities are not permitted
                  to be incurred under the terms and conditions hereof; or

                           (M) any of the President, Chief Executive Officer,
                  Chief Financial Officer or Chief Operating Officer of Borrower
                  is convicted of a felony criminal offense."

     6. WAIVER OF EVENT OF DEFAULT

         (a) Subject to the satisfaction of each of the conditions precedent set
forth herein, Lender hereby waives any Event of Default under Section 7.1(b) of
the Loan Agreement arising as a result of the failure of Hanover and its
Subsidiaries to maintain the minimum amounts of Working Capital required
pursuant to Section 6.19(d) of the Loan Agreement for the fiscal month ending
December 27, 2003.

         (b) Lender has not waived, is not by this Amendment waiving, and has no
intention of waiving, any Event of Default which may have occurred on or prior
to the date hereof, whether or not continuing on the date hereof, or which may
occur after the date hereof (whether the same or similar to the Event of Default
referred to in Section 6(a) hereof or otherwise), other than the specific Event
of Default referred to in Section 6(a) hereof, subject to the terms and
conditions set forth herein. The foregoing waiver shall not be construed as a
bar to or a waiver of any other or further Event of Default on any future
occasion, whether similar in kind or otherwise and shall not constitute a
waiver, express or implied, of any of the rights and remedies of Lender arising
under the terms of the Loan Agreement or any other Financing Agreements on any
future occasion or otherwise.

     7. FEES. In addition to all other fees, charges, interest and expenses
payable by Borrowers to Lender under the Loan Agreement and the other Financing
Agreements, Borrowers shall pay to Lender the following additional fees:

         (a) Borrowers shall pay to Lender, contemporaneously herewith, an
amendment fee in the amount of $75,000, which fee is fully earned as of the date
hereof and may be charged into the loan account(s) of any Borrower.

         (b) Tranche B Term Loan Borrowers shall pay to Lender,
contemporaneously herewith, an amendment fee in the amount of $50,000, which fee
is fully earned as of the date hereof and may be charged into the loan
account(s) of any Tranche B Term Loan Borrower.

     8. REPRESENTATIONS, WARRANTIES AND COVENANTS. Borrowers and Guarantors
represent, warrant and covenant with and to Lender as follows, which
representations, warranties and covenants are continuing and shall survive the
execution and delivery hereof, the truth and accuracy of, or compliance with
each, together with the representations, warranties and covenants in the other
Financing Agreements, being a condition of the effectiveness of this Amendment
and a continuing condition of the making or providing of any Revolving Loans or
Letter of Credit Accommodations by Lender to Borrowers:

         (a) This Amendment and each other agreement or instrument to be
executed and delivered by each Borrower or Guarantor hereunder have been duly
authorized, executed and

                                       7
<PAGE>

delivered by all necessary action on the part of each of Borrower and each
Guarantor which is a party hereto and thereto and, if necessary, their
respective stockholders (with respect to any corporation) or members (with
respect to any limited liability company), and is in full force and effect as of
the date hereof, as the case may be, and the agreements and obligations of each
Borrower and Guarantor, as the case may be, contained herein and therein
constitute legal, valid and binding obligations of each Borrower and Guarantor,
as the case may be, enforceable against them in accordance with their terms.

         (b) No action of, or filing with, or consent of any governmental or
public body or authority, and no consent of any other party, is required to
authorize, or is otherwise required in connection with, the execution, delivery
and performance of this Amendment and each other agreement or instrument to be
executed and delivered pursuant hereto and thereto.

(c) Neither the execution and delivery of this Agreement, the Chelsey
Subordinated Note, or any other agreements, documents or instruments in
connection therewith, nor the consummation of the transactions herein and
therein contemplated, nor compliance with the provisions thereof (i) has
violated or shall violate any Federal or State securities laws or any other law
or regulation or any order or decree of any court or governmental
instrumentality in any respect, or (ii) does, or shall conflict with or result
in the breach of, or constitute a default in any respect under any mortgage,
deed of trust, security agreement, agreement or instrument to which any Borrower
or Guarantor is a party or may be bound, or (iii) does or shall violate any
provision of the Certificate of Incorporation or By-Laws of any Borrower or
Guarantor.

         (d) Notwithstanding the provisions of Section 10(d) of the
Twenty-Seventh Amendment to Loan Agreement, on or before April 30, 2004,
Borrowers and Guarantors shall have entered into, each in form and substance
satisfactory to Lender, an Amended and Restated Loan and Security Agreement
among Lender, Borrowers and Guarantors and such other Financing Agreements or
amendments to or amendments and restatements of any existing Financing
Agreements as Lender shall request in connection with the amendment and
restatement of the Loan Agreement.

         (e) All of the representations and warranties set forth in the Loan
Agreement as amended hereby, and the other Financing Agreements, are true and
correct in all material respects after giving effect to the provisions of this
Amendment, except to the extent any such representation or warranty is made as
of a specified date, in which case such representation or warranty shall have
been true and correct as of such date.

         (f) After giving effect to the provisions of this Amendment, no Event
of Default or Incipient Default exists or has occurred and is continuing.

     9. CONDITIONS PRECEDENT. Concurrently with the execution and delivery
hereof(except to the extent otherwise indicated below), and as a further
condition to the effectiveness of this Amendment and the agreement of Lender to
the modifications and amendments set forth in this Amendment:

         (a) Lender shall have received a photocopy of an executed original or
executed original counterparts of this Amendment by facsimile (with the
originals to be delivered within

                                       8
<PAGE>

five (5) Banking Days after the date hereof), as the case may be, duly
authorized, executed and delivered by Borrowers and Guarantors;

         (b) Lender shall have received, in form and substance satisfactory to
Lender, Secretary's or Assistant Secretary's Certificates of Directors'
Resolutions with Shareholders' Consent evidencing the adoption and subsistence
of corporate resolutions approving the execution, delivery and performance by
Borrowers and Guarantors that are corporations of this Amendment and the
agreements, documents and instruments to be delivered pursuant to this
Amendment; and

         (c) each of Borrowers and Guarantors shall deliver, or cause to be
delivered, to Lender a true and correct copy of any consent, waiver or approval
to or of this Amendment, including, without limitation, Chelsey, which any
Borrower or Guarantor is required to obtain from any other Person, and such
consent, approval or waiver shall be in a form reasonably acceptable to Lender.

     10. EFFECT OF THIS AMENDMENT. This Amendment constitutes the entire
agreement of the parties with respect to the subject matter hereof, and
supersedes all prior oral or written communications, memoranda, proposals,
negotiations, discussions, term sheets and commitments with respect to the
subject matter hereof. Except as expressly provided herein, no other changes or
modifications to the Loan Agreement or any of the other Financing Agreements, or
waivers of or consents under any provisions of any of the foregoing, are
intended or implied by this Amendment, and in all other respects the Financing
Agreements are hereby specifically ratified, restated and confirmed by all
parties hereto as of the effective date hereof. To the extent that any provision
of the Loan Agreement or any of the other Financing Agreements conflicts with
any provision of this Amendment, the provision of this Amendment shall control.

     11. FURTHER ASSURANCES. Borrowers and Guarantors shall execute and deliver
such additional documents and take such additional action as may be reasonably
requested by Lender to effectuate the provisions and purposes of this Amendment.

     12. GOVERNING LAW. The validity, interpretation and enforcement of this
Amendment in any dispute arising out of the relationship between the parties
hereto, whether in contract, tort, equity or otherwise shall be governed by the
internal laws of the State of New York, without regard to any principle of
conflict of laws or other rule of law that would result in the application of
the law of any jurisdiction other than the State of New York.

     13. BINDING EFFECT. This Amendment shall be binding upon and inure to the
benefit of each of the parties hereto and their respective successors and
assigns.

     14. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, but all of such counterparts shall together constitute but one and
the same agreement. In making proof of this Amendment, it shall not be necessary
to produce or account for more than one counterpart thereof signed by each of
the parties hereto.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       9
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed on the day and year first written.

                         CONGRESS FINANCIAL CORPORATION

                                      By:         /S/ ERIC STORZ
                                         ----------------------------------

                                      Title:  VP
                                            -------------------------------

                                      BRAWN OF CALIFORNIA, INC.

                                      By:         /S/ STEVEN SEYMOUR
                                         --------------------------------------
                                      Name:   Steven Seymour
                                      Title:  President

                                      GUMP'S BY MAIL, INC.

                                      By:         /S/ JED POGRAN
                                         --------------------------------------
                                      Name:   Jed Pogran
                                      Title:  President

                                      GUMP'S CORP.

                                      By:         /S/ JED POGRAN
                                         --------------------------------------
                                      Name:    Jed Pogran
                                      Title:   President

                                      HANOVER REALTY, INC.

                                      By:         /S/ DOUG MITCHELL
                                         --------------------------------------
                                      Name:    Doug Mitchell
                                      Title:   President

                                      THE COMPANY STORE FACTORY, INC.

                                      By:         /S/ DAVID PIPKORN
                                         --------------------------------------
                                      Name:    David Pipkorn
                                      Title:   President

                     [SIGNATURES CONTINUE ON FOLLOWING PAGE]

                                       10
<PAGE>

                    [SIGNATURES CONTINUED FROM PREVIOUS PAGE]

                                      THE COMPANY OFFICE, INC.

                                      By:         /S/ DAVID PIPKORN
                                         --------------------------------------
                                      Name:   David Pipkorn
                                      Title:  President

                                      SILHOUETTES, LLC

                                      By:         /S/ CHARLES E. BLUE
                                         --------------------------------------
                                      Name:   Charles E. Blue
                                      Title:  President

                                      HANOVER COMPANY STORE, LLC

                                      By:         /S/ CHARLES E. BLUE
                                         --------------------------------------
                                      Name:   Charles E. Blue
                                      Title:  President

                                      DOMESTICATIONS, LLC

                                      By:         /S/ CHARLES E. BLUE
                                         --------------------------------------
                                      Name:   Charles E. Blue
                                      Title:  Vice President

                                      KEYSTONE INTERNET SERVICES, LLC

                                      By:         /S/ CHARLES E. BLUE
                                         --------------------------------------
                                      Name:   Charles E. Blue
                                      Title:  Vice President

                                      THE COMPANY STORE GROUP, LLC

                                      By:         /S/ CHARLES E. BLUE
                                         --------------------------------------
                                      Name:   Charles E. Blue
                                      Title:  President

                     [SIGNATURES CONTINUE ON FOLLOWING PAGE]

                                       11
<PAGE>

                    [SIGNATURES CONTINUED FROM PREVIOUS PAGE]

By their signatures
below, the undersigned
Guarantors acknowledge
and agree to be bound by
the applicable provisions
of this Amendment:

HANOVER DIRECT, INC.

By:          /S/ CHARLES E. BLUE
   -----------------------------------
Name:     Charles E. Blue
Title:    Senior Vice President and
          Chief Financial Officer

HANOVER HOME FASHIONS GROUP, LLC

By:          /S/ CHARLES E. BLUE
   -----------------------------------
Name:     Charles E. Blue
Title:    Vice President

CLEARANCE WORLD OUTLETS, LLC

By:          /S/ CHARLES E. BLUE
   -----------------------------------
Name:     Charles E. Blue
Title:    President

SCANDIA DOWN, LLC

By:          /S/ DAVID PIPKORN
   -----------------------------------
Name:     David Pipkorn
Title:    President

LA CROSSE FULFILLMENT, LLC

By:          /S/ CHARLES E. BLUE
   -----------------------------------
Name:     Charles E. Blue
Title:    President

                     [SIGNATURES CONTINUE ON FOLLOWING PAGE]

                                       12
<PAGE>

                    [SIGNATURES CONTINUED FROM PREVIOUS PAGE]

D.M. ADVERTISING, LLC

By:          /S/ CHARLES E. BLUE
   -----------------------------------
Name:     Charles E. Blue
Title:    President

AMERICAN DOWN & TEXTILE, LLC

By:          /S/ DAVID PIPKORN
   -----------------------------------
Name:     David Pipkorn
Title:    President

HANOVER GIFTS, INC.

By:          /S/ DOUG MITCHELL
   -----------------------------------
Name:     Doug Mitchell
Title:    President

                                       13

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