Document:

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                                                                   EXHIBIT 10.35

                         EMPLOYMENT SEPARATION AGREEMENT
                          AND MUTUAL RELEASE OF CLAIMS

         THIS AGREEMENT is made as of the 19th day of August, 2002, by and
between William Lenich ("Executive") and R.G. Barry Corporation, an Ohio
corporation (the "Company").

                              W I T N E S S E T H:

         WHEREAS, Executive is currently employed by the Company as its
President and Chief Operating Officer pursuant to an Employment Agreement dated
February 19, 2001 between the Company and Executive (the "Employment
Agreement"), and is also a director of the Company; and

         WHEREAS, Executive and the Company desire to formalize the terms of
Executive's separation of employment from the Company and his ceasing to be an
officer and director of the Company and its subsidiaries.

         NOW, THEREFORE, in consideration of the promises and the agreements and
mutual covenants and promises contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:

         1. TERMINATION OF EMPLOYMENT; RESIGNATION AS DIRECTOR. Effective August
19, 2002 (the "Date of Termination"), Executive shall cease to be an employee
and officer of the Company and each of its subsidiaries. In addition, Executive
hereby tenders his resignation as a member of the Board of Directors of the
Company and each of its subsidiaries, effective as of the Date of Termination.
Following the Date of Termination, Executive shall have no employment or other
work-related responsibilities to the Company. Executive's employment with the
Company will be deemed to have been terminated by the Company without Cause, as
that term is defined in the Employment Agreement, except that Executive will
only be entitled to the payments and benefits provided in this Agreement.

         2. TERMINATION OF THE EMPLOYMENT AGREEMENT. Executive and the Company
agree that the Employment Agreement shall terminate and be null and void
effective as of the Date of Termination, except that pursuant to and in
accordance with Section 5.03[2] of the Employment Agreement, all unvested
Options (as defined in the Employment Agreement) held by Executive will become
fully vested as of the Date of Termination, and all Options, including Options
vested prior to the Date of Termination and Options vesting as of the Date of
Termination, will be exercisable to the extent permitted under the terms of the
option plans under which they were granted and the individual option agreements
under which they were issued.

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         3. CONSIDERATION FOR AGREEMENT. Executive agrees and acknowledges that
the payments and benefits set forth herein will be paid and/or provided by the
Company no sooner than eight days after execution of this Agreement, provided
Executive does not exercise his right of revocation set forth in Paragraph 12 of
this Agreement.

         4. PAYMENTS TO EXECUTIVE. Unless the Company exercises its Mitigation
Rights as set forth in Paragraph 6 of this Agreement, the Company shall pay the
Executive nine payments of Thirty Seven Thousand, Five Hundred Dollars ($37,500)
each. The first of these nine payments shall be made eight days after the
execution of this Agreement (provided the Executive does not exercise his right
of revocation set forth in Paragraph 12) and the following eight payments will
be made on the first day of each successive month for the next eight months,
beginning on October 1, 2002 (the "Payment Period"). The parties agree and
acknowledge that payments provided for in this Paragraph shall not be deemed
severance payments and the Company shall issue a 1099 Form for the payments made
to Executive.

         5. NON-COMPETE AND NON-SOLICITATION PROVISIONS. In consideration for
the payments made in Paragraph 4 of this Agreement and other good and valuable
consideration set forth herein and subject to the provisions of Paragraph 6 of
this Agreement, Executive, for a period of twelve months from the Date of
Termination (the "Non-Compete Period"), agrees to the following:

                  (a)      Executive will not directly or indirectly engage in,
                           assist or have an active interest in (whether as
                           proprietor, partner, investor, shareholder, officer,
                           director or any type of principal whatsoever) or
                           enter the employment of or act as agent for or
                           adviser or consultant to any person or entity engaged
                           in (or is about to become engaged in) the
                           manufacturing and/or wholesaling of [1] slippers or
                           [2] any other product that then comprises more than
                           ten percent of the Company's gross revenues for its
                           most recently completed fiscal year or the annualized
                           gross revenues for its current fiscal year. However,
                           the restrictions described in this Paragraph 5(a)
                           will not be applied to: [1] prevent Executive from
                           obtaining subsequent employment (of any kind) with a
                           diversified retailer (e.g., Macys, Sears Roebuck
                           and/or Nine West Group, etc.); or [2] prevent
                           Executive from purchasing, for investment purposes
                           only, any stock or other corporate security that is
                           listed on a national securities exchange or quoted in
                           any national market system, so long as such stock or
                           other corporate security owned by Executive does not
                           represent more than five percent of the market value
                           or voting power of the total stock or other corporate
                           securities of that class;

                  (b)      Executive will not, on his own behalf or on behalf of
                           any other person, partnership, association,
                           corporation or other entity, solicit or in any manner
                           attempt to influence or induce any employee of the
                           Company or its subsidiaries to leave the employment
                           of the

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                           Company or its subsidiaries nor will Executive use or
                           disclose to any person, partnership, association,
                           corporation or other entity any information obtained
                           while an employee of the Company concerning the names
                           and addresses of the employees of the Company or its
                           subsidiaries.

         6. MITIGATION RIGHTS. If Executive secures full-time employment with
another employer in any capacity during the Payment Period ("Full-Time
Employment"), the Executive shall notify, in writing, the Company's Chief
Executive Officer no later than ten days after Full-Time Employment is secured
of the following: (1) the Executive's starting date of Full-Time Employment; (2)
the name of the employer; (3) the location where Executive will be primarily
employed; and (4) the Executive's monthly rate of compensation to be received
through the Full-Time Employment (the "Notice"). If Executive secures Full-Time
Employment during the Payment Period, the Company shall have the right to elect
to reduce any remaining payments due and owing under Paragraph 4 of this
Agreement by the gross monthly compensation earned by the Executive in the
Full-Time Employment if the Company notifies the Executive within ten days of
the later of the Company's receipt of the Notice or the Executive's first day of
Full-Time Employment as disclosed by Executive in the Notice of its desire to
exercise its rights under this Paragraph 6 ("Mitigation Rights"). If the Company
exercises its Mitigation Rights, the Non-Compete Period shall terminate ninety
days after the Executive's first day of Full-Time Employment as disclosed by
Executive in the Notice. If the Company does not exercise its Mitigation Rights
or if the Executive does not secure Full-Time Employment, neither the
Non-Compete Period nor the Payment Period shall be altered by this Paragraph 6.
The parties acknowledge that the Executive intends to diligently seek Full-Time
Employment during the Payment Period; however, this Agreement does not obligate
Executive to either seek or obtain Full-Time Employment.

         7. ADDITIONAL CONSIDERATION. In consideration of the Employee's
promises and covenants set forth herein, the Company further agrees:

                  (a)      To provide to Executive and his eligible dependents,
                           at the Company's expense during the Payment Period,
                           all medical, dental, prescription drug and
                           hospitalization insurance coverages and benefits
                           provided by the Company to its executive officers.
                           The Company's obligations under this Paragraph 7(a)
                           shall cease if the Company exercises its Mitigation
                           Rights. Upon the termination of such Company provided
                           coverage, the Executive shall have the right to
                           extend coverage pursuant to the Consolidated Omnibus
                           Budget Reconciliation Act of 1986, 29 U.S.C. Sections
                           1161, et seq. ("COBRA") for up to 18 months and the
                           Employee agrees that this Agreement satisfies the
                           notice requirements of COBRA provided, that the
                           Company delivers to Executive a COBRA election form
                           in a timely manner following the termination of such
                           coverage;

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                  (b)      To pay or reimburse Executive for all reasonable
                           costs and expenses incurred in packing and moving his
                           personal property from Ohio and in paying the
                           remaining monthly payments owing under a lease for
                           his current residence in Central Ohio; provided that
                           the maximum amount of costs and expenses which the
                           Company shall be obligated to pay or reimburse under
                           this Paragraph 7(b) shall not exceed $5,000; and

                  (c)      To pay Executive all accrued wages and vacation and
                           to reimburse Executive's reasonable business expenses
                           incurred prior to the Date of Termination pursuant to
                           the Company's normal practices and procedures.

         8. PAYMENT OF EXECUTIVE'S TAXES. Executive agrees that he is solely and
legally responsible to pay any all applicable income taxes on the payments and
benefits provided pursuant to this Agreement and further agrees to indemnify and
hold harmless the Company (and its officers, directors, shareholders, employees,
agents, affiliates, subsidiaries, divisions, successors and assigns) from any
claim or liability for any taxes, penalties or interest for which he is
responsible as a result of his failure to pay any applicable income taxes on the
payments and benefits provided to him pursuant to this Agreement.

         9. NON-DISPARAGEMENT. Executive agrees to refrain from making any
statements in respect of the Company or any of its subsidiaries, their
respective officers or directors, or any business or services engaged in or
performed by any of them, which would detract from their commercial, personal or
professional reputations. The Company and its officers and directors agree to
refrain from making any public statements in respect of Executive which would
detract from Executive's personal or professional reputation. Notwithstanding
the foregoing, nothing in Paragraph 9 shall prevent the Company or any person
from responding to incorrect, disparaging, or derogatory public statements or
from making any truthful statements to enforce the terms of this Agreement.

         10. GENERAL RELEASE BY EXECUTIVE. Executive, for himself and for his
heirs, executors, administrators and assigns, does hereby knowingly and
voluntarily, fully and forever, release, acquit and discharge the Company, its
subsidiaries and their respective successors, assigns, officers, directors,
shareholders, agents, attorneys and employees and the respective heirs,
executors, administrators, successors and assigns thereof (collectively, the
"Company Parties") from any and all claims, demands, damages, expenses,
liabilities, judgments, actions and causes of action, including claims for
attorneys' fees, which Executive now has or may in the future have arising under
any federal, state or local statutory or common law or agreement or contract,
whether in law or in equity, whether in any federal or state court or arbitral
body or before any administrative agency of any federal, state, county or
municipal government, relating directly or indirectly to, or resulting directly
or indirectly from, (i) Executive's employment with or service as an officer of
the Company or any subsidiary of the

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Company and the termination of his employment and service as an officer with the
Company or any subsidiary; (ii) all claims relating to or arising out of the
terms and conditions of any such employment or the terms and conditions of the
Employment Agreement, (iii) all alleged wrongful terminations, breaches of
contract and/or personal injury claims of any description; or (iv) any other
matters relating to Executive's past or present relationship with any of the
Company Parties, including but not limited to all claims under Title VII of the
Civil Rights Act of 1964, all claims under the Fair Labor Standards Act, all
claims under the Equal Pay Act, all claims under Ohio Revised Code Sections
4112.01 through 4112.99, all claims under the Worker Adjustment and Retraining
Notice Act (WARN), all claims under the Americans with Disabilities Act, all
claims under the Family and Medical Leave Act, all claims under the Occupational
Safety and Health Act, and all claims arising under the Age Discrimination in
Employment Act of 1967 and the Older Workers' Benefit Protection Act, all as
amended. Notwithstanding the foregoing, Executive does not release any of the
following claims or rights:

                  (a)      Any right to enforce this Agreement or the option
                           agreements between Executive and the Company;

                  (b)      All rights of Executive under and pursuant to the
                           terms of Company employee benefit plans in which he
                           is or was a participant and has vested rights
                           thereunder, including rights under the Stock Option
                           Agreement dated as of February 19, 2001 pursuant to
                           which he received an option to purchase 88,767 common
                           shares of the Company, the Stock Option Agreement
                           dated as of February 19, 2001 pursuant to which he
                           received an option to purchase 1,325 common shares of
                           the Company, the Stock Option Agreement dated as of
                           February 19, 2001 pursuant to which he received an
                           option to purchase 100,000 common shares of the
                           Company, and the Stock Option Agreement dated
                           December 26, 2001 pursuant to which he received an
                           option to purchase 150,000 common shares of the
                           Company; and

                  (c)      Any right to indemnification in accordance with the
                           articles of incorporation, code of regulations, or
                           other corporate governance document of the Company or
                           its subsidiaries or any applicable insurance policy
                           with respect to any liability Executive has or might
                           have incurred as an employee, officer, or director of
                           the Company or its subsidiaries

         11. GENERAL RELEASE BY THE COMPANY. The Company does hereby on behalf
of itself, its successors, subsidiaries and assigns, knowingly and voluntarily,
fully and forever release, acquit and discharge Executive and his heirs,
executors, administrators, successors and assigns from any and all claims,
demands, damages, expenses, liabilities, judgments, actions and causes of
action, including claims for attorneys' fees, which the Company now has or may
in the future have arising under any federal, state or local

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statutory or common law or agreement or contract, whether in law or in equity,
whether in any federal or state court or arbitral body or before any
administrative agency of any federal, state, county or municipal government,
relating directly or indirectly to, or resulting directly or indirectly from,
(i) Executive's service as an employee or officer of the Company or any
subsidiary of the Company or the separation of Executive's employment with the
Company or any subsidiary of the Company; (ii) all claims relating to or arising
out of the terms and conditions of any such employment or service as an officer;
(iii) all alleged wrongful conduct, breaches of contract and/or personal injury
claims of any description; or (iv) any other matters relating to Executive's
past or present relationship with the Company. Notwithstanding the foregoing,
the Company does not release any of the following rights or claims:

                  (a)      Any right to enforce this Agreement;

                  (b)      Any right to enforce the terms and conditions of any
                           employee benefit plan in which Executive is or was a
                           participant, including the stock option agreements
                           referred to in Paragraph 10 above; and

                  (c)      Any defenses the Company or its subsidiaries have or
                           may have under the indemnification and/or insurance
                           policies set forth in Clause (c) of Paragraph 10 of
                           this Agreement.

         12. ADDITIONAL AGREEMENTS OF EXECUTIVE. Executive agrees that the
payments and benefits to be provided to him under this Agreement are not to be
construed as an admission of any obligation or liability on the part of the
Company. The Company denies any liability in this matter. Exclusively as this
Agreement pertains to Executive's release of claims under the Age Discrimination
in Employment Act, Executive, pursuant to and in compliance with rights afforded
him under the Older Workers Benefit Protection Act: (i) is advised that he does
not waive rights or claims that arise after the date on which this Agreement is
signed by him and the Company; (ii) is advised to consult with an attorney prior
to executing this Agreement; (iii) is given a period 21 days from the receipt of
this Agreement within which to consider it; and (iv) is given a period of seven
days following the signing of this Agreement in which to revoke it. A revocation
of this Agreement shall be effective only on the delivery of a written
revocation to the Company within the seven-day time period set forth above. This
Agreement shall not become effective or enforceable until this seven-day
revocation period has expired. Employee's knowing and voluntary execution of
this Agreement is an express acknowledgment and agreement that he has had the
opportunity to review this Agreement with his attorney; that he has received
consideration under this Agreement in addition to anything of value to which he
was otherwise already entitled; that he was afforded a 21-day period of time to
consider it before executing it; that he was given a seven-day period in which
to revoke this Agreement after it was signed; and that he agrees this Agreement
is written in a manner that enables him to fully understand its content and
meaning. Executive agrees that he has read this Agreement in its entirety and

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that his agreement to all of its provisions is made freely, voluntarily, and
with full knowledge and understanding of its contents.

         13. ARBITRATION. Except for claims and actions brought pursuant to and
governed by Paragraph 16 of this Agreement, Executive and Company agree that
arbitration will be the exclusive means of resolving all disputes or questions
arising out of or relating to this Agreement. Any arbitration may be initiated
by either the Executive or the Company by written notice to the other specifying
the subject of the requested arbitration. The arbitration shall be conducted as
follows:

         (a)      The arbitration will take place in Columbus, Ohio (or another
                  location mutually agreed upon by the Company and Executive)
                  and will be conducted in accordance with the rules of the
                  American Arbitration Association in effect when the
                  arbitration begins. Any determination or award made or
                  approved by the arbitrator will be final and binding on the
                  Company and Executive. Judgment upon any award made in any
                  arbitration may be entered and enforced in any court having
                  competent jurisdiction.

         (b)      The costs of arbitration (including legal and other
                  professional fees incurred) will be borne solely by the party
                  who incurs such costs regardless of the result of the
                  arbitration.

         14. ASSISTANCE IN LITIGATION. Subject to the Executive's reasonable
business commitments, Executive agrees that he will make himself reasonably
available upon reasonable notice to cooperate with and assist the Company in the
prosecution of and defense of claims, actions, assertions, lawsuits, and
arbitrations of and defense of any claims, actions, assertions, lawsuits, and
arbitrations that are currently pending or that may arise in the future.
Executive's assistance to the Company shall include, but not be limited to,
agreeing to speak informally with the Company and the Company's counsel on the
matters, providing any documentation and information to the Company that may be
relevant to the matters, only speaking or providing documentation and
information to third parties as required by law or with the consent of the
Company, and testifying on behalf of the Company. The Company agrees to
reimburse the Executive for reasonable expenses actually incurred in connection
with such assistance, including, but not limited to, reimbursement of lost wages
incurred as a result of this Paragraph. If Executive's assistance required under
this Paragraph exceeds ten days in any thirty day period, the parties will agree
upon an hourly rate of compensation for all hours of assistance except for hours
of testimony. The parties agree and understand that Executive's obligations
under this Paragraph shall cease two years from the Date of Termination.

         15. TRADE SECRETS. Executive understands and agrees that due to his
position with the Company, Executive has received confidential and proprietary
information relating to the business affairs of the Company and its subsidiaries
("Trade Secrets"), including, but not limited to, technical information, product
information and formulae, processes, business and marketing plans, strategies,
customer information and other

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information concerning the Company's and the Company's subsidiaries' products,
promotions, development, financing, expansion plans, business policies and
practices, salaries and benefits and other forms of information considered by
the Company and its subsidiaries to be proprietary and confidential and in the
nature of trade secrets. Executive agrees that he will keep Trade Secrets
confidential and will not disclose such information, either directly or
indirectly, to any third person or entity without the Company's prior written
consent or use such information for his benefit or the benefit of any third
person without the Company's prior written consent. This confidentiality
restriction has no temporal, geographical or territorial restrictions; provided,
however, that if, in the written opinion of counsel, Executive is legally
compelled to disclose Trade Secrets to any tribunal, disclosure of only those
Trade Secrets that that counsel advises in writing are legally required to be
disclosed will not be considered a violation of this Paragraph but only if
Executive gives the Company reasonable advance notice that such disclosure will
be required.

         16. REMEDIES AVAILABLE AS TO NON-COMPETE, NON-SOLICITATION AND TRADE
SECRETS OBLIGATION. The Parties recognize that the Company will have no adequate
remedy at law for breach by Executive of the restrictions imposed by Paragraphs
5 and 15 of this Agreement and that the Company and its subsidiaries could
suffer substantial and irreparable damage if Executive breaches any of these
restrictions. For this reason, Executive agrees that, if Executive breaches any
of the restrictions imposed under Paragraphs 5 and 15 of this Agreement, the
Company and its subsidiaries, in addition to the right to seek monetary damages,
may seek a temporary and/or permanent injunction to restrain any breach or
threatened breach of these restrictions or a decree of specific performance,
mandamus, or other appropriate remedy to enforce compliance with the
restrictions imposed under this article. Further, the parties agree that any
court of competent jurisdiction situated in Franklin County, Ohio, shall have
exclusive jurisdiction and venue relating to any suit or other legal proceedings
concerning the breach of Paragraphs 5 and 15 of this Agreement.

         17. RETURN OF COMPANY PROPERTY. Within fifteen business days after the
Executive's Date of Termination, Executive shall promptly return to the Company
all property other than personal property, including keys, notes, memoranda,
writings, lists, files, reports, customer lists, correspondence, tapes, disks,
cards, surveys, maps, logs, machines, technical data, formulae or any other
tangible property or document and any and all copies, duplicates or
reproductions thereof that have been produced by, received by or otherwise been
submitted to Executive in the course of his employment with the Company. For
purposes of this Paragraph, "personal property" includes Executive's rolodex if
Executive provides the Company with a copy of all non-personal information
contained in the rolodex within this fifteen business day period.

         18. MISCELLANEOUS. This Agreement sets forth the entire agreement
between the parties hereto and fully supersedes any and all prior agreements or
understandings, whether oral or written, between the parties hereto, except as
and to the extent specifically set forth herein. It shall be interpreted and
enforced under the laws of the State of Ohio. If for any reason any portion of
this Agreement is deemed invalid or unenforceable, all remaining parts shall
remain binding and in full force and effect. This

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Agreement is binding upon and shall inure to the benefit of the party's
successors and assigns.

         19. EXECUTION. This Agreement may be executed in multiple counterparts,
each of which shall constitute an original, and all of which shall constitute a
single Agreement.

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above mentioned.

The Company:                                    Executive:

R.G. BARRY CORPORATION                          /s/ William Lenich
                                                -------------------------
                                                William Lenich

By /s/ Gordon Zacks
   ------------------------------
   Gordon Zacks, Chairman and CEO

                                       9<PAGE>
                                                                   EXHIBIT 10.46

                                LICENSE AGREEMENT

This License Agreement (this "Agreement") is made to be effective as of January
7, 2003 (the "Effective Date"), by and between R.G. Barry Corporation, an Ohio
corporation having its principal business offices located at 13405 Yarmouth
Road, N.W., Pickerington, Ohio 43147, United States of America ("Licensor"),
R.G. Barry International, Inc., an Ohio corporation having its principal
business offices located at 13405 Yarmouth Road, N.W., Pickerington, Ohio 43147,
United States of America ("International"), Barry (G.B.R.) Limited, a business
entity organized under the laws of Great Britain having its principal business
offices located at Lockhill Factory, 162 High Street, Street, Somerset, England
BA160NH ("UK Licensee"), and GBR Limited, a business entity organized under the
laws of Great Britain and having its principal business offices located at
Lockhill Factory, 162 High Street, Somerset, England BA160NH ("GBR Limited").
GBR Limited shall be a party to this Agreement solely for the purposes of (1)
agreeing to the termination of the April 9, 2000 Agreement (as hereinafter
defined), as provided in Section 1(a) of this Agreement, and (2) agreeing to
execute an Unconditional Guaranty, in the form attached as Exhibit C to this
Agreement, for the benefit of Licensor, of certain of the payment obligations of
UK Licensee to Licensor, as provided in Section 1(b) of this Agreement.
International shall be a party to this Agreement solely for the purpose of
agreeing to the assignment and transfer of assets and obligations of
International's Paris office, as provided in Section 2(c) of this Agreement.

                                   BACKGROUND

A. Licensor manufactures, markets and sells throughout the world a wide range of
branded and privately labeled comfort footwear products.

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B. UK Licensee markets and sells comfort footwear under Licensor's brands in the
United Kingdom and the Republic of Ireland, and other, private labeled, products
in the United Kingdom and elsewhere.

C. During the period  commencing as of April 9, 2000 and continuing  through the
Effective  Date,  Licensor  and UK Licensee  have been,  along with GBR Limited,
parties to that certain Agreement, dated as of April 9, 2000 (the "April 9, 2000
Agreement"),  pursuant to which UK  Licensee  was  organized  for the purpose of
distributing slippers manufactured by Licensor,  GBR Limited and others within a
territory including the United Kingdom and the Republic of Ireland.

D. Licensor and UK Licensee, along with GBR Limited, desire to terminate the
April 9, 2000 Agreement, and Licensor and UK Licensee desire to enter into a new
business relationship pursuant to which Licensor will grant licenses to UK
Licensee and to Comfort Group (as hereinafter defined) to make, have made, use,
import, offer and sell within the Territory (as hereinafter defined) certain
products within certain of Licensor's product lines and for Comfort Group to
assume the bulk of International's operation located in Paris, France (the
"Paris Operation"), all according to the terms and conditions set forth below.

                                    AGREEMENT

NOW, THEREFORE, in consideration of the foregoing and the covenants of the
parties contained herein, Licensor and UK Licensee (and GBR Limited, for the
limited purposes of Section 1 hereof, and International, for the limited
purposes of Section 2(c) hereof), and, once formed and upon its execution of
this Agreement, Comfort Group, agree as follows, each intending to be legally
bound hereby.

<PAGE>

Section 1.  TERMINATION OF THE APRIL 9, 2000 AGREEMENT; EXECUTION OF
            UNCONDITIONAL GUARANTY.

         (a) Licensor, UK Licensee and GBR Limited hereby agree that, as of the
Effective Date hereof, the April 9, 2000 Agreement is hereby terminated and,
with the two exceptions (i) and (ii) set forth below in this Section 1(a), shall
be of no effect:

                  (i) notwithstanding the termination of the April 9, 2000
                  Agreement, UK Licensee shall, on or before the date that it
                  executes this Agreement, pay to Licensor all amounts owed by
                  UK Licensee to Licensor under the April 9, 2000 Agreement for
                  products purchased from Licensor, as well as for processing
                  fees, as provided by Section 6(b) of the April 9, 2000
                  Agreement, and royalty fees, as provided by Section 5(b) of
                  the April 9, 2000 Agreement, and such payment obligations
                  shall survive the termination of the April 9, 2000 Agreement.
                  (ii) notwithstanding the termination of the April 9, 2000
                  Agreement, respecting products to be sold by UK Licensee for
                  the Spring 2003 fashion season, the provisions of Section 4(a)
                  and of Section 6(b) of the April 9, 2000 Agreement shall be
                  applicable.

         (b) GBR Limited hereby agrees to execute, on the date that it executes
this Agreement, an Unconditional Guaranty, in the form attached as Exhibit C to
this Agreement, of UK Licensee's obligations to pay to Licensor the Initial
License Fee (as hereinafter defined).

Section 2.  TRANSITIONAL ITEMS.

         (a) During the period commencing on the Effective Date, and ending upon
May 30, 2003 (the "Transition Period"), Licensor shall have the right to sell
certain aged inventory of the

<PAGE>

Products (as hereinafter defined) within the Territory, and such sales shall not
be deemed to be a breach of this Agreement.

         (b) Prior to May 1, 2003, UK Licensee shall take action to organize a
single-shareholder limited liability company under, and in compliance with,
French law in the name of "Comfort Group, S.A.R.L." or "Comfort Group, E.U.R.L."
(hereinafter, "Comfort Group"), which limited liability company shall be
organized as a wholly-owned subsidiary of UK Licensee. Once UK Licensee has
received governmental certification of registration of Comfort Group, UK
Licensee shall (i) provide a copy of such certification to Licensor and (ii)
cause Comfort Group to execute this Agreement, to become a party to this
Agreement and to assume and become responsible for all obligations of Comfort
Group specified in this Agreement. On or before May 1, 2003, UK Licensee shall
deliver to Licensor written evidence that Comfort Group has become a party to
this Agreement. Even prior to the execution of this Agreement by Comfort Group,
this Agreement shall constitute a legally enforceable agreement among Licensor,
International, UK Licensee and GBR Limited.

         In the event that UK Licensee is unable to complete the organization
and registration of Comfort Group as provided above, such failure shall not
constitute a default by UK Licensee hereunder; provided, however, that UK
Licensee shall be obligated to perform all of the obligations of Comfort Group
provided hereunder.

         (c) After the organization of Comfort Group and on or before June 1,
2003, the parties hereto shall arrange for International to irrevocably assign
and transfer to Comfort Group those assets of the Paris Operation, including
those certain employment agreements and/or relationships between International
and those employees in its Paris office whose names are set forth on Exhibit E
attached hereto (the "Transferred Employees"), all customer lists for

<PAGE>

International's Paris office, the vehicle leases for International's Paris
office and certain office furniture and equipment used in International's Paris
office, with such assignment and transfer to be evidenced by appropriate
agreements and documents of conveyance and assignment. Each of Exhibit F
(Vehicle Lease Agreements To Be Assigned), Exhibit G (Personal Property Assets
To Be Conveyed), and Exhibit H (Customer List) attached hereto shall be
completed by Licensor and provided to UK Licensee on or before January 31, 2003.
The parties hereto hereby acknowledge that none of the assets to be assigned
pursuant to this Section 2(c) is a right in intellectual property, including,
without limitation, rights in trademarks or product designs. International shall
receive as consideration for such transaction involving the transfer to Comfort
Group of an ongoing business the One Hundred Thousand Dollars ($100,000.00)
payment by UK Licensee referenced in Section 11(a)(i) hereof. Such payment
amount was negotiated and agreed upon by Licensor and UK Licensee. Licensor
shall defend, indemnify and hold harmless UK Licensee and Comfort Group, and the
directors, officers, shareholders, employees and agents of each of them, from
all losses and expenses incurred in connection with any legal action or claim
arising out of or otherwise connected with International's operation of the
Paris Operation prior to the effective date of the assignment transaction
described in this Section 2(c).

                  The parties acknowledge and agree that:

                           (i) in accordance with EC Directive (European
                           Directive) 77/187 (known as the Acquired Rights
                           Directive), as subsequently enacted into French law
                           by statute or common law or otherwise ("the Relevant
                           Provisions"), the contracts of employment between
                           International and each of the Transferred Employees
                           will transfer to Comfort Group; and

<PAGE>
                           (ii) Licensor shall indemnify and keep Comfort Group
                           and UK Licensee indemnified against all costs,
                           claims, losses, liabilities and expenses which
                           Comfort Group may incur:

                                    (A) arising out of or in connection with any
                                    claim made by a Transferred Employee which
                                    relates to his employment by International
                                    prior to the effective date of assignment;

                                    (B) in relation to anything done or omitted
                                    to be done before the effective date of
                                    assignment by International by way of
                                    consultation with, or the provision of
                                    information to, any persons employed by
                                    International prior to the effective date of
                                    assignment, or any trade union or elected
                                    representatives of any such persons, which
                                    Comfort Group may incur pursuant to the
                                    Relevant Provisions; and

                                    (C) in the event that a person who is not a
                                    Transferred Employee at the effective date
                                    of assignment is held to be or it is held
                                    that he should have been employed by Comfort
                                    Group as a consequence of the Relevant
                                    Provisions. For the avoidance of doubt, this
                                    provision shall include but is not limited
                                    to, Thierry Civetta.

Other than as described in the two immediately preceding sentences, UK Licensee
and Comfort Group shall assume all liabilities associated with the employment
agreements/relationships and vehicle leases assigned pursuant to the assignment
transaction described in this Section 2(c) arising on or after the effective
date of such assignment.

<PAGE>

                  Notwithstanding such transfer of certain assets and
liabilities of the Paris Operation, International shall deliver all orders for
products for the Spring 2003 fashion season from such listed customers which
orders were accepted by International prior to the closing of the described
assignment transaction, and International shall have the rights to collect all
amounts owed to it by such customers for products delivered.

         (d) In the event that either UK Licensee and/or GBR Limited, acting in
its sole discretion, purchases from Licensor any products remaining after the
Spring 2003 fashion season and warehoused at Licensor's warehouse and
distribution facility in Wales (the "Wales Facility"), such purchaser (UK
Licensee or GBR Limited) shall purchase such products at a price equal to
Licensor's standard costs for such products, in addition to any duties and/or
quota fees paid by Licensor respecting such products and any freight expense
incurred by Licensor to transport the products to the Wales Facility. The price
to be paid by such purchaser shall be F.O.B. Licensor's Wales Facility, and such
purchaser shall be responsible for paying all freight expenses to transport such
products between Licensor's Wales Facility and UK Licensee's facility. Licensor
shall provide thirty (30) days payment terms for the purchases described in this
paragraph. "Licensor's standard costs" shall mean Licensor's actual costs
reasonably attributable to the manufacture of such products, as determined by
Licensor. The re-sale of the products described in this Section 2(d) by UK
Licensee, Comfort Group (or GBR Limited) shall be included within the definition
of Net Sales for purposes of determining Royalty Fees under Section 11 hereof.

         (e) Licensor intends to close the Wales Facility during 2003. Licensor
intends to terminate the employment of Licensor's employees at the Wales
Facility on or before May 30, 2003. Licensor shall indemnify and hold harmless
UK Licensee and GBR Limited, and the

<PAGE>

directors, officers, shareholders, employees and agents of each of them, from
all losses and expenses incurred in connection with any legal action or claim
arising out of or otherwise connected with Licensor's termination of the
employment of Licensor's employees at the Wales Facility.

Section 3.  DEFINITIONS.
         (a) As used herein, "the Territory" shall mean the geographic area
included within the following countries: United Kingdom, Republic of Ireland,
and France. In addition, "the Territory" shall be deemed to include the rights
to sell and export the Products to the customers listed below for delivery to
such customers at the customers' facilities located within the associated
countries listed below opposite such customers:

               Country                         Customer
               -------                         --------
               Belgium                         Cora
               The Netherlands                 Cora
               Luxemburg                       Cora
               Spain                           Continente
               Germany                         Wal-Mart (Germany)
               Greece                          John Haidopoulos Import-Export.

In the event that UK Licensee desires to propose additional countries for
inclusion within the Territory, UK Licensee shall provide to Licensor written
notice of such proposed additional country(ies), along with UK Licensee's
business plan for such country(ies). Licensor shall, in its sole discretion,
determine whether or not it desires to accept UK Licensee's proposal and shall
communicate such determination to UK Licensee in writing, and such communication
shall become part of this Agreement.

         (b) As used herein, the "Products" shall be defined to include the
products in Licensor's "Dearfoams" and "Barry Comfort" product lines (the
"Product Lines") for the fashion

<PAGE>

seasons occurring during the Term hereof. "Products" shall not be deemed to
include any products manufactured by Licensor under private labeling agreements
with third parties pursuant to which goods manufactured by Licensor are produced
under the third party's trademark(s). In the event that Licensor establishes one
or more product lines other than the Product Lines and UK Licensee communicates
its desire to Licensor to amend the Agreement to add the products in such new
product line(s) to those Products licensed hereunder, Licensor shall, in its
sole discretion, determine whether or not it desires to agree to such amendment
hereof and shall communicate such determination to UK Licensee in writing, and
such communication shall become part of this Agreement.

         (c) As used herein, the "Licensed Business" shall be defined to mean
the business involving the sale of the Products operated by UK Licensee and the
business involving the sale of Products by Comfort Group under this Agreement.

         (d) As used herein, "Net Sales" shall mean the consolidated total sales
of the Products, and the consolidated total sales of any other comfort footwear
products (other than the Suede Products, as defined below) sold within the
Territory, by UK Licensee and by Comfort Group (at invoiced wholesale prices,
less returns and less customer discounts actually applied or taken by the
customer) during the applicable time period.

                  In the event that UK Licensee and/or Comfort Group sell suede
footwear products (the "Suede Products") under trademarks not included in the
Intellectual Property (as defined in Section 14(a) hereof), such sales shall not
be included within the definition of Net Sales.

                  In the event that UK Licensee and/or Comfort Group sell suede
footwear products under any of the trademarks included in the Intellectual
Property either within or outside of the Territory, such sales shall be included
within the definition of Net Sales.

<PAGE>

         (e) As used herein, "Licensed Rights" shall mean those proprietary
rights comprising Licensor's Intellectual Property necessary to make and sell
the Products in the Territory under this Agreement, as listed in Exhibit D
attached hereto, including know-how, product designs (whether or not patented or
registered), trademarks and service marks (whether or not registered) and
including any other proprietary rights which Licensor has or may claim to have
in the Products.

Section 4. TERM. The term (the "Term") of this Agreement shall commence upon the
Effective Date and, if not earlier terminated pursuant to the provisions of
Section 15 hereof and if not renewed pursuant to the provisions of Section 5
hereof, shall expire on May 31, 2008.

Section 5. RENEWAL. In the event that each of UK Licensee and Comfort Group has
been in substantially full compliance with this Agreement throughout the Term of
this Agreement and UK Licensee and Comfort Group desire that the Term of this
Agreement be renewed for one additional five (5) year renewal term, UK Licensee
and Comfort Group shall, on or before February 28, 2007, provide to Licensor a
detailed written business plan specifying UK Licensee's and Comfort Group's
proposed actions to further develop the Licensed Business during such renewal
term and their projections and expectations respecting such further development
of the Licensed Business during such renewal term. Additionally, UK Licensee and
Comfort Group shall respond promptly to any of Licensor's inquiries respecting
such business plan. After reviewing such business plan, Licensor shall have the
right, in its sole discretion, to decide whether to grant the renewal of this
Agreement for one additional five (5) year renewal term and shall, on or before
May 31, 2007, communicate to UK Licensee and Comfort Group in writing its
decision respecting the grant of such renewal. The grant of such renewal shall
be evidenced by

<PAGE>

the execution by the parties of a renewal License Agreement substantially in the
form of this Agreement, with the following exceptions:

         (a)      Sections 1 and 2 of this Agreement in the form set forth
                  herein will not be included in the renewal License Agreement;

         (b)      Section 11(a) regarding the Initial License Fee will not be
                  included in the renewal License Agreement;

         (c)      The provisions of the renewal License Agreement respecting
                  Royalty Fees may be different than those provisions set forth
                  in Sections 11(b), (c) and (d) hereof;

         (d)      The provisions of the renewal License Agreement regarding
                  advertising support will be different than those provisions
                  set forth in Section 12 hereof.

Section 6. GRANT OF LICENSED RIGHTS. Licensor hereby grants (a) to UK Licensee
the right and license, during the Term of this Agreement, to use the Licensed
Rights to make, have made, use, import, offer and sell the Products solely
within the United Kingdom and the Republic of Ireland, and (b) to Comfort Group
the right and license, during the Term of this Agreement, to use the Licensed
Rights to make, have made, use, import, offer and sell the Products solely
within France and to certain customers located within certain other European
countries, as set forth in Section 3(a). Subject to the exceptions provided by
Section 1(a)(ii) and Section 2(a) hereof and, during the Term of this Agreement
as long as each of UK Licensee and Comfort Group is in substantially full
compliance with the provisions of this Agreement, Licensor shall not (a) sell
the Products for delivery to customers located within the Territory, or (b)
grant a license to any third party to use the Licensed Rights to make, have
made, use, import, offer and sell the Products within the Territory.

<PAGE>

Section 7.  LICENSOR'S OBLIGATIONS. During the Term of this Agreement, Licensor
shall:

         (a) Assist, at no additional cost, UK Licensee and Comfort Group by
identifying, and in using, Licensor's manufacturing sources, including
assistance in the areas of manufacturing know-how, product procurement,
negotiation and quality assurance.

                  It is acknowledged and agreed by the parties hereto that UK
Licensee and Comfort Group shall have the right to contract with the
manufacturing facilities/entities of their choosing in order to purchase
inventories of products, including the Products. Each of UK Licensee and Comfort
Group agrees that, in the event that it decides to use Licensor's agent in Hong
Kong to assist it in the procurement and negotiation of the terms related to
manufacture of a particular order of products, it shall not separately become
involved in communications with any manufacturing sources for procurement or
negotiation of such order of products, but shall restrict its communications
respecting such order of products solely to Licensor's Hong Kong-based agent. UK
Licensee and Comfort Group acknowledge that, the failure of either of them to
fully comply with the immediately preceding provision could result in damage to
the sourcing relationship(s) with manufacturers of Licensor and Licensor's Hong
Kong-based agent.

                  It is acknowledged by the parties hereto that all agreements
with manufacturers of products to be procured for UK Licensee or Comfort Group
shall be entered into directly by UK Licensee and/or Comfort Group with such
manufacturers and that UK Licensee and Comfort Group, which will be solely
responsible for payments under such agreements, will be required to establish
letter of credit facilities in connection with such payment arrangements.

         (b) Permit UK Licensee and Comfort Group to use Licensor's Intellectual
Property (as defined in Section 14(a) and as listed in Exhibit D) in compliance
with the provisions of Section 14 hereof.

<PAGE>

         (c) Permit UK Licensee and Comfort Group to continue to make, have
made, use, import, offer and sell all existing Product Lines and any new
products added by Licensor to such existing Product Lines.

         (d) Assist, at no additional cost, UK Licensee and Comfort Group by
consulting with the representatives of same respecting product design and
specifications, by assisting with the preparation of product specification
packages, and by assisting with the preparation of product and sales samples.

         (e) In the event that UK Licensee or Comfort Group desires to purchase
Products from Licensor's Mexican manufacturing facility, Licensor will sell such
Products to such party at a price reflecting Licensor's standard costs
(including the overheard attributable to Licensor's manufacture of such
Products), F.O.B. shipping point.

         (f) In the event that (i) UK Licensee desires to obtain from Licensor
the ability to access and to use Licensor's ASI 400 technical infrastructure and
data processing system (the "System") to support the sales and distribution
operations of UK Licensee and Comfort Group, and (ii) Licensor and UK Licensee
are able to reach agreement upon the terms and conditions of such access and use
arrangement (to be the subject of a separate agreement) and (iii) use of the
System is made available to UK Licensee and Comfort Group pursuant to the terms
and conditions of such separate agreement, Licensor shall invoice UK Licensee
for Licensor's costs (including its overhead expenses and as determined by
Licensor acting in good faith) of providing such access and use and of extending
the use of the System to UK Licensee and Comfort Group, and UK Licensee shall
pay such invoices within thirty (30) days of receipt. Licensor shall have the
right to choose to provide such invoices on a monthly or quarterly basis.

<PAGE>

Section 8.  OBLIGATIONS OF UK LICENSEE AND COMFORT GROUP. During the Term of
this Agreement, each of UK Licensee and Comfort Group shall:

         (a) Exercise its best efforts to maximize its sales of the Products
within the Territory. The parties hereto acknowledge and agree that UK Licensee
and Comfort Group intend to sell both licensed Products as well as to continue
to develop and sell unlicensed products during the Term of this Agreement and
that the sale of such unlicensed products, whether or not included in the
calculation of Royalty Fees, shall not be deemed dilutive of their collective
"best efforts" to sell licensed Products.

         (b) Maintain an adequate staff of competent and trained personnel and
adequate facilities to fulfill its obligations and responsibilities under this
Agreement.

         (c) Use Licensor's Intellectual Property in full compliance with the
provisions of Section 14 hereof.

         (d) In connection with its execution of this Agreement, provide to
Licensor copies of each of GBR Limited's and UK Licensee's financial statements
(audited, if available) for its most recently completed fiscal year, as well as
the unaudited financial statements for such parties for the period between the
end of such fiscal year and the date hereof.

         (e) Furnish to Licensor the statutorily-required consolidated financial
statements for UK Licensee and Comfort Group within ninety (90) days of the end
of each of UK Licensee's and Comfort Group's fiscal years and furnish Licensor
upon request UK Licensee's and Comfort Group's sales information for the
products (including, without limitation, the Products) by customer and product
type.

         (f) Provide Licensor with weekly and monthly reports in the formats
attached as Exhibit B to this Agreement.

<PAGE>

         (g) In the event that UK Licensee or Comfort Group purchases from
Licensor any inventory of the Products, such purchaser shall arrange for payment
for such inventory purchases by irrevocable letter(s) of credit satisfactory to
Licensor.

                  The parties hereto hereby agree that, subject to the
indemnification provisions of Section 2(c), Comfort Group shall accept the
assignment of all employment agreements and employment relationships for all
employees of International in its Paris office and shall hire all employees
(with the exception of Thierry Civetta) of International's Paris office at the
levels of compensation and benefits to which such employees were entitled when
such employment relationships were assigned to Comfort Group.

Section 9.  PERFORMANCE STANDARDS APPLICABLE TO UK LICENSEE'S AND COMFORT
GROUP'S BUSINESS RELATIONSHIP WITH WAL-MART'S EUROPEAN AFFILIATES.

         In recognition of the importance that Licensor places on its customer
relationship with Wal-Mart in the United States, the following provisions shall
be applicable to UK Licensee's and Comfort Group's customer relationships with
Wal-Mart in Germany, and, if initiated in compliance with the provisions of
Section 3(a) of this Agreement, with Wal-Mart in any other European countries:

         (a) Throughout the Term of this Agreement, UK Licensee and Comfort
Group shall each, in its customer relationship(s) with Wal-Mart's European
affiliates, fully comply with the performance standards applicable to the
Wal-Mart customer relationship (which are based upon the performance standards
applicable to Licensor in its customer relationship with Wal-Mart in the United
States) as set forth on Exhibit A attached hereto and incorporated herein for
all purposes. Licensor shall have the right unilaterally to modify Exhibit A by
written notice to UK

<PAGE>

Licensee and Comfort Group based upon modifications to the performance standards
applicable to Licensor in its customer relationship with Wal-Mart in the United
States.

         (b) Licensor shall have, on a quarterly basis during the Term, the
right to review the status of the customer relationship between UK Licensee and
Wal-Mart's European operations, and Comfort Group and Wal-Mart's European
operations, to determine whether UK Licensee and Comfort Group are fully
complying with the performance standards referenced in Section 9(a) above. In
the event that Licensor, in its sole discretion exercised reasonably, determines
that either UK Licensee and/or Comfort Group are not in full compliance with
such performance standards, Licensor shall provide the non-complying party with
written notice specifying the failure(s) to comply with such performance
standards and setting forth a thirty (30) day period within which to cure such
failure(s) to comply with such performance standards. In the event that
Licensor, in its sole discretion exercised reasonably, determines that (i) UK
Licensee or Comfort Group has failed to fully comply with the referenced
performance standards during any two calendar years during the Term hereof, or
(ii) UK Licensee's or Comfort Group's actions or omissions respecting its
customer relationship with Wal-Mart's European affiliates are likely to cause
issues to arise in Licensor's customer relationship with Wal-Mart in the United
States, Licensor shall have the right, by providing written notice to UK
Licensee and Comfort Group, to terminate UK Licensee's and Comfort Group's
rights under this Agreement to sell the Products to any of Wal-Mart's European
affiliates. Any such termination shall be effective as of the later of the date
of such written notice or the termination effective date, if any, stated in such
written notice.

                  In the event that Licensor terminates the rights of UK
Licensee and Comfort Group under this Agreement to sell the Products to any of
Wal-Mart's European affiliates, UK

<PAGE>

Licensee and Comfort Group shall, during the Term of this Agreement, be
prohibited from selling any comfort footwear products (other than the Suede
Products sold under trademarks other than those included in the Intellectual
Property) to Wal-Mart's European affiliates. Termination of any rights to sell
Products to Wal-Mart under this Section 9 shall neither be considered a material
breach of this Agreement nor materially affect its remaining terms.

Section 10. SALES PERFORMANCE OBJECTIVES. During each calendar year during the
Term hereof, beginning with the 2004 calendar year, UK Licensee and Comfort
Group, collectively, shall be obligated to attain the following minimum sales
performance objective: the Net Sales of the Products for each such calendar year
must be greater than or equal to Two Million Seven Hundred Thousand Dollars
($2,700,000) ("Baseline Sales Amount"). The Baseline Sales Amount represents the
amount of sales that is ninety percent (90%) of the approximate amount of total
sales of the Products during calendar year 2002. In the event that UK Licensee
and Comfort Group collectively fail to attain such sales performance objective
in any calendar year during the Term, Licensor shall have the right to recommend
actions to be taken by UK Licensee and Comfort Group to prevent a recurrence of
the failure to attain such objective. In the event that UK Licensee and Comfort
Group collectively fail to attain such sales performance objective for two
consecutive calendar years during the Term of this Agreement, Licensor shall
have the right, in its sole discretion, to terminate this Agreement pursuant to
Section 15(b) hereof, with such termination having immediate effect as of the
date of Licensor's written termination notice.

         In the event that either Licensor or International delivers defective
products, or makes late deliveries of products, to customers within the
Territory during 2003 and UK Licensee and Comfort Group can demonstrate that
such deliveries have resulted in reductions in Net Sales by UK Licensee and/or
Comfort Group to the affected customers, the parties hereto agree to

<PAGE>

negotiate in good faith a modified Baseline Sales Amount to apply during the
remainder of the Term.

Section 11. COMPENSATION TO LICENSOR. In consideration of the ongoing business
transferred, and the rights granted, by Licensor to UK Licensee and Comfort
Group under this Agreement, UK Licensee shall pay to Licensor (or, in the case
of the One Hundred Thousand Dollars ($100,000.00) payment referenced in Section
11(a)(i) below, to R.G. Barry International, Inc.) the following compensation:

         (a) An initial license and business transfer fee (the "Initial License
Fee") in the total amount of Three Hundred Thousand Dollars ($300,000.00) made
up of two components: (i) One Hundred Thousand Dollars ($100,000.00)
attributable to the transfer of the business in France, as described in Section
2(c) hereof, with such amount due and payable to International on the one
hundred fiftieth (150th) day after the Effective Date hereof; and (ii) Two
Hundred Thousand Dollars ($200,000.00) attributable to the transfer hereunder of
the business located outside of France, with such amount due and payable to
Licensor in two payments - the first payment of One Hundred Thousand Dollars
($100,000.00) on the date of UK Licensee's execution of this Agreement and the
second payment of One Hundred Thousand Dollars ($100,000.00) on the three
hundred thirtieth (330th) day after the Effective Date hereof. The Initial
License Fee shall be fully earned upon execution of this Agreement. All amounts
and payments of the Initial License Fee shall be paid by UK Licensee to Licensor
(or, in the case of the One Hundred Thousand Dollars ($100,000.00) payment
referenced in Section 11(a)(i) above, to R.G. Barry International, Inc.) by bank
or certified check or by electronic funds transfer.

         (b) For the period commencing on June 1, 2003 and ending on May 31,
2004 (the "First Royalty Year"), UK Licensee shall pay to Licensor a royalty fee
(the "Royalty Fee") equal

<PAGE>

to the greater of (i) One Hundred Twenty Thousand Dollars ($120,000.00), or (ii)
Five Percent (5.00%) of Net Sales (as defined in Section 3(d) hereof) during
such First Royalty Year. The Royalty Fee for such First Royalty Year shall be
paid by UK Licensee in the form of four quarterly payments in the amount of
Thirty Thousand Dollars ($30,000.00) each. For purposes of this Section 11(b)
and for Section 11(c) and (d) hereof, applicable quarterly periods shall be June
through August, September through November, December through February, and March
through May. On or before June 30, 2004, UK Licensee shall make a determination
of, and shall report to Licensor in writing, the amount of Net Sales for the
First Royalty Year and the date of such determination. The currency exchange
rates to be used in any such determination shall be the rates published in The
Wall Street Journal for the day prior to the date of such determination. The
parties hereto agree that, in making such determination, the Net Sales of
Comfort Group shall be converted from Euros to U.S. Dollars, and the Net Sales
of UK Licensee shall be converted from British pounds to U.S. Dollars. If a Five
Percent (5.00%) share of Net Sales for such First Royalty Year is in an amount
greater than One Hundred Twenty Thousand Dollars ($120,000.00), then UK Licensee
shall be obligated to make an immediate additional Royalty Fee payment for such
just-completed First Royalty Year in the amount of the difference between the
Five Percent (5.00%) share of Net Sales and One Hundred Twenty Thousand Dollars
($120,000.00).

         (c) For each of the periods of June 1, 2004 through May 31, 2005 (the
"Second Royalty Year"), June 1, 2005 through May 31, 2006 (the "Third Royalty
Year"), June 1, 2006 through May 31, 2007 (the "Fourth Royalty Year"), and June
1, 2007 through May 31, 2008 (the "Fifth Royalty Year") (each a "Royalty Year"),
UK Licensee shall pay to Licensor a Royalty Fee equal to the greater of (i) One
Hundred Twenty Thousand Dollars ($120,000.00), or (ii) Eight

<PAGE>

Percent (8.00%) of Net Sales during such period as defined. The Royalty Fee for
each such Royalty Year shall be paid by UK Licensee in the form of four
quarterly payments in the amount of Thirty Thousand Dollars ($30,000.00) each.
On or before June 30th following the end of each such Royalty Year, UK Licensee
shall make a determination of, and shall report to Licensor in writing, the
amount of Net Sales for such period as defined and the date of such
determination. The parties hereto agree that, in making such determination, the
Net Sales of Comfort Group shall be converted from Euros to U.S. Dollars, and
the Net Sales of UK Licensee shall be converted from British pounds to U.S.
Dollars. The currency exchange rates to be used in any such determination shall
be the rates published in The Wall Street Journal for the day prior to the date
of such determination. If an Eight Percent (8.00%) share of Net Sales for such
Royalty Year is in an amount greater than One Hundred Twenty Thousand Dollars
($120,000.00), then UK Licensee shall be obligated to make an immediate
additional Royalty Fee payment from such just completed Royalty Year in the
amount of the difference between the Eight Percent (8.00%) share of Net Sales
and One Hundred Twenty Thousand Dollars ($120,000.00).

         (d) Commencing at such time as UK Licensee has made Royalty Fee
payments to Licensor totaling Six Hundred Thousand Dollars ($600,000.00) or more
and continuing until the effective date of the termination or expiration of this
Agreement, the applicable Royalty Fee shall be Eight Percent (8.00%) of Net
Sales, and such Royalty Fee shall be paid by UK Licensee to Licensor on a
quarterly basis, in arrears, within thirty (30) days of the end of each calendar
quarter.

         (e) Any payments required to be made hereunder which are not made in
finally collectable funds by the due date thereof shall bear interest from such
due date through the date that payment is made at an interest rate equal to 1.5%
per month.

<PAGE>

         (f) UK Licensee and Comfort Group shall keep complete and accurate
books and records with respect to Net Sales of all Products. Licensor shall have
the right, through its accountants, to inspect UK Licensee's and Comfort Group's
books and records relating to the subject matter of this Agreement at any time,
upon reasonable advance notice to UK Licensee and Comfort Group and during UK
Licensee's and Comfort Group's regular business hours and to make copies of any
of such books and records, provided that not more than one such inspection shall
be initiated by Licensor within any period of twelve (12) months during the
Term. To the extent that such an inspection discloses an underpayment of Royalty
Fees of five percent (5%) or greater, UK Licensee shall bear all of the costs of
such inspection.

         (g) UK Licensee and Comfort Group shall be responsible for payment of
any taxes imposed by local governmental tax authorities in the jurisdictions in
which UK Licensee and/or Comfort Group are doing business respecting the payment
of compensation by UK Licensee and/or Comfort Group to Licensor or International
hereunder.

Section 12. ADVERTISING SUPPORT OF BARRY COMFORT PRODUCT LINE IN FRANCE.

         Licensor and Comfort Group intend to carry out an advertising campaign
in support of the Barry Comfort Product Line in France (the "Barry Comfort
Campaign"), pursuant to the provisions of this Section 12. Licensor shall have
the right to select any advertising agencies to be used in connection with the
Barry Comfort Campaign. Further, Licensor shall have final approval/disapproval
rights respecting all advertising, all use of licensed Intellectual Property in
connection with Product advertising and all Product packaging, whether or not
related to the Barry Comfort Campaign. Either of Comfort Group (or UK Licensee)
shall be the contracting party with any advertising agencies and any other
suppliers related to the Barry Comfort Campaign

<PAGE>

and shall be fully responsible for all payments to such agencies and other
parties related to the Barry Comfort Campaign.

         During calendar year 2003, Comfort Group (and/or UK Licensee) shall
expend a total of One Hundred Fifty Thousand Dollars ($150,000) on the Barry
Comfort Campaign, and Licensor shall be obligated to reimburse Comfort Group
(and/or UK Licensee), for Comfort Group's (and/or UK Licensee's) documented
expenses (with such documentation meeting Licensor's requirements) attributable
to the 2003 Barry Comfort Campaign in an amount of Seventy-Five Thousand
($75,000). All reimbursements referenced in this Section 12 shall be paid by
Licensor within fourteen (14) days of Licensor's receipt from UK Licensee and
Comfort Group of complete documentation of expenses meeting its requirements.

         Prior to each of the subsequent years during the Term of this
Agreement, Comfort Group (and/or UK Licensee) shall determine a projected amount
of Net Sales within France for the upcoming year ("Projected Net Sales")and
shall be obligated to spend for the Barry Comfort Campaign in France, at a
minimum, Twelve Percent (12%) of such Projected Net Sales within France, not to
exceed Three Hundred Fifty Thousand Dollars ($350,000) annually, and, provided
that Comfort Group (and/or UK Licensee) fully performs its obligations under
this Section 12, Licensor shall be obligated, on an annual basis during the
Term, to reimburse Comfort Group (and/or UK Licensee), for one half (1/2) of
Comfort Group's (and/or UK Licensee's) documented actual expenses (with such
documentation meeting Licensor's requirements) attributable to the Barry Comfort
Campaign in France, in an amount not to exceed One Hundred Seventy-Five Thousand
($175,000) annually. (For example, if Comfort Group's Barry Comfort Campaign
advertising expenditure based on Projected Net Sales within France during 2004
is Three Hundred Thousand Dollars ($300,000), upon its receipt of the required
documentation of

<PAGE>

such expenditures, Licensor shall reimburse Comfort Group in the amount of One
Hundred Fifty Thousand Dollars ($150,000)).

         Either Licensor or Comfort Group shall have the option to fund
additional expenditures on advertising for the Barry Comfort Campaign in France,
but neither party shall be entitled to reimbursement without the written
agreement of the other party.

Section 13. CONFIDENTIALITY.

         (a) Each of Licensor, UK Licensee and Comfort Group agrees that it will
not disclose Confidential Information (as defined below) belonging to the other
party to any third person, except as is required to effect the intent of this
Agreement, by court order or by applicable law, and that it will use its best
efforts to cause all of its officers, employees, owners, affiliates and
representatives not to disclose Confidential Information to any third person.

         (b) As used herein, "Confidential Information" means any and all
proprietary or non-public information of either party hereto or of any affiliate
of either party hereto including, without limitation, the following: any and all
trade secrets, manufacturing processes and techniques, product designs, pricing,
price lists, financial plans and product plans, marketing strategies and
techniques, processes, inventions, computer programs, engineering or technical
data, drawings or designs or any other confidential or proprietary information.
"Confidential Information" does not include information which (i) is in the
public domain through no fault of the receiving party; (ii) is already known to
a party at the time of its receipt from another party; (iii) subsequently is
disclosed to a party by a third party without violation of any obligation by
said third party to any party; or (iv) which a party develops on its own without
the use or assistance of the other's Confidential Information.

<PAGE>

         (c) Each of the parties hereto acknowledges and agrees that its
obligations under this Section 13 are of special and unique character which give
them a peculiar value to the other party hereto and that the party to which any
Confidential Information belongs would suffer immediate and irreparable harm to
its goodwill and business which would not be compensable by damages alone in the
event that the other party hereto repudiates or breaches the provisions of this
Section 13 or threatens or attempts to do so. Each of the parties hereto
therefore expressly agrees, that, in addition to any other rights or remedies
which such party may have at law or in equity or by reason of this or any other
agreement, such party shall be entitled to obtain a temporary, preliminary
and/or permanent injunction in order to prevent or restrain any such breach by
the other party hereto or any agent, representative, employee and/or any other
person acting directly or indirectly, in concert or in participation with such
other party, and no party hereto shall be required to post a bond as a condition
for the granting of such relief.

Section 14: INTELLECTUAL PROPERTY

         (a) Grant and Territory (UK Licensee). Subject to the terms and
conditions of this Agreement, Licensor hereby grants to UK Licensee a
royalty-based, non-exclusive right, permission and privilege to use in the
United Kingdom and the Republic of Ireland: (1) the Intellectual Property listed
in Exhibit D, which is attached hereto and incorporated herein as if fully
rewritten, together with all common law marks, any unpatented and/or
unregistered design rights, and trade dress owned by Licensor, and the goodwill
associated with and ancillary to said marks, design rights, and trade dress
(collectively, the "Intellectual Property"); and (2) the name "Barry" in its
trade name in the United Kingdom and the Republic of Ireland.

         (b) Grant and Territory (Comfort Group). Subject to the terms and
conditions of this Agreement, Licensor hereby grants to Comfort Group a
royalty-based, non-exclusive right,

<PAGE>

permission and privilege to use within the portions of the Territory other than
the United Kingdom and the Republic of Ireland: (1) the Intellectual Property
listed in Exhibit D, together with all common law marks, any unpatented and/or
unregistered design rights, and trade dress owned by Licensor, and the goodwill
associated with and ancillary to said marks, design rights and trade dress
(collectively, the "Intellectual Property"); and (2) the name "Barry" in its
trade name within the portions of the Territory other than the United Kingdom
and the Republic of Ireland.

         (c) Licensor's Use of Its Intellectual Property. Except as limited by
the provisions of Section 6 hereof, Licensor retains the right to use the
Intellectual Property within and outside the Territory, and UK Licensee and
Comfort Group recognize and acknowledge such right.

         (d) Use of Intellectual Property by UK Licensee and Comfort Group. UK
Licensee and Comfort Group are licensed to use the Intellectual Property only in
their respective parts of the Territory and only in accordance with the terms
and conditions contained herein. UK Licensee and Comfort Group shall use the
Intellectual Property only in connection with the advertising, marketing,
manufacturing, importation, sale, exportation and servicing of the Products and
subject to quality control guidelines as set forth herein and as may be
promulgated from time to time by Licensor. All use of the Intellectual Property
by UK Licensee and Comfort Group shall inure to the benefit of Licensor, and
each of UK Licensee and Comfort Group hereby disclaims any rights to any of the
Intellectual Property other than the rights licensed hereunder. Any use by UK
Licensee and/or Comfort Group of any of the Intellectual Property in any manner
other than as licensed or permitted hereunder shall constitute a material breach
of this Agreement.

<PAGE>

                  Licensor warrants and represents to UK Licensee and Comfort
Group that it has no knowledge of any infringements of the intellectual property
rights of third parties that will result from the use within the Territory as
contemplated hereunder by UK Licensee and Comfort Group of the Intellectual
Property licensed hereunder. In the event that UK Licensee and/or Comfort Group
become aware of infringement(s) by any third party within the Territory of any
of the Intellectual Property, UK Licensee and Comfort Group (i) shall promptly
notify Licensor in writing of same, and (ii) shall not assert the rights
licensed hereunder against such third party without the prior written consent of
Licensor.

         (e) Quality of Facilities. UK Licensee and Comfort Group shall use
their best efforts, skill and diligence in the operation of their respective
buying offices and distribution facilities ("Facilities"), and shall regulate
their respective employees so that they will be courteous and helpful to the
public. UK Licensee and Comfort Group shall operate their respective Facilities
in accordance with all laws and reasonable business standards and provide a
standard of service not less than that standard of quality as has been customary
for said services.

         (f) Quality of Products. UK Licensee and Comfort Group shall use their
best efforts, skill and diligence to insure that the quality of all of the
Products manufactured and/or sold by them which incorporate the Intellectual
Property is not less than the standard of quality as has been customary for such
Products. Licensor shall have the right, with reasonable advance notice to UK
Licensee and Comfort Group, to inspect the quality of the Products.

         (g) Limitation on Licenses. Nothing herein shall constitute a license
to UK Licensee or to Comfort Group to use Licensor's Intellectual Property
Rights except in connection with UK Licensee's or Comfort Group's manufacture,
use and sale of the Products as contemplated under this Agreement.

<PAGE>

         (h) Requirement of Licensor's Consent. Notwithstanding the foregoing,
UK Licensee and Comfort Group shall obtain Licensor's prior written consent to
the form and manner of their proposed uses of Licensor's trademarks and trade
names in all materials in connection with the sale of the Products.

Section 15. TERMINATION. In addition to any other right as provided herein, this
Agreement may be terminated as follows:

         (a) By any party if (i) any other party shall commence any case,
proceeding or other action under the any existing or future law of any country
or other jurisdiction relating to bankruptcy, insolvency, reorganization, or
relief of debtors, seeking to have an order for relief entered with respect to
such non-terminating party, or seeking to adjudicate such non-terminating party
a bankruptcy or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other similar relief for
such non-terminating party or its debts, or seeking appointment of a receiver,
trustee, custodian or other similar official for such non-terminating party or
for all or any substantial part of its assets, or such non-terminating party
shall make a general assignment for the benefit of its creditors; or (ii) there
shall be commenced against such non-terminating party any case, proceeding or
other action of a nature referred to in clause (i) above which remains
undismissed, undischarged or unbonded for a period of sixty (60) days; or (iii)
there shall be commenced against such non-terminating party any case, proceeding
or other action seeking issuance of a warrant of attachment, execution,
restraint or similar process against all or any substantial part of such party's
assets which result in the entry of an order for any such relief which shall not
have been vacated, discharged or stayed or bonded pending appeal within sixty
(60) days from the entry thereof; or (iv) such non-terminating party shall take
action in furtherance to or indicating such party's consent to, approval of or

<PAGE>

acquiescence in, any of the acts set forth in clauses (i), (ii) or (iii) above,
or (v) such non-terminating party shall generally not, or shall admit in writing
its inability to, pay its debts as the same become due and payable.

         (b) By Licensor upon ten (10) days' prior written notice, in the event
of a material breach of this Agreement by UK Licensee, Comfort Group or GBR
Limited, which breach shall not have been corrected within sixty (60) days after
written notice thereof by Licensor to UK Licensee, Comfort Group or GBR Limited.

         (c) By UK Licensee and/or Comfort Group upon ten (10) days' prior
written notice, in the event of a material breach of this Agreement by Licensor,
which breach shall not have been corrected within sixty (60) days after written
notice thereof by UK Licensee and/or Comfort Group to Licensor.

         Upon any termination of this Agreement, each party immediately shall
return to the other parties all proprietary property and/or Confidential
Information of such other parties, including, without limitation, product
specifications, product samples and product design materials. Further, each
party hereto shall pay in full all amounts owed to each other party hereunder.
In the event that (1) this Agreement expires by its terms, or (2) this Agreement
is terminated by Licensor for any of the reasons set forth in Section 15(a) or
Section 15(b), or (3) UK Licensee and/or Comfort Group seek to terminate this
Agreement at any time at which Licensor has the right to terminate this
Agreement pursuant to Section 15(a) or Section 15(b) above, and such expiration
or termination is effective prior to the payment by UK Licensee to Licensor of
at least Six Hundred Thousand Dollars ($600,000) in Royalty Fees, UK Licensee
shall, upon the effective date of such expiration or termination, pay to
Licensor the difference between $600,000 and the total amount of Royalty Fees
paid to date by UK Licensee to Licensor.

<PAGE>

                  However, in the event that this Agreement is properly
terminated by UK Licensee and/or Comfort Group as provided under Section 15(c),
Licensor shall be entitled to all Royalty Fees payable upon (i) Net Sales
computed as of the effective date of such termination, and (ii) all Royalty Fees
payable upon Net Sales of Products displaying any of the Intellectual Property,
regardless of the date of such sales; provided, however, that the provisions of
this paragraph shall be effective in lieu of any provisions respecting, and
regardless of, whether or not the total amount of Royalty Fees paid to Licensor
has reached Six Hundred Thousand Dollars ($600,000.00) as of the effective date
of such termination.

                  Upon the effective date of any expiration or termination of
this Agreement, UK Licensee and Comfort Group shall immediately cease the
submission of orders to manufacturers/suppliers for Products and or packaging
bearing any trademarks included in the Intellectual Property. UK Licensee and
Comfort Group shall be permitted during the period of nine (9) months following
the effective date of any termination or expiration of this Agreement to
complete the sale of any inventory of Products and/or packaging bearing any
trademarks included in the Intellectual Property.

                  The parties acknowledge and agree that, regardless of the
cause for termination of this Agreement, UK Licensee and Comfort Group shall be
entitled to continue the manufacture and sale of unlicensed products which may
have been included in the Royalty Fee calculation of Net Sales. Licensor's
receipt of Royalty Fees paid by UK Licensee and Comfort Group on those
unlicensed products included within the calculations of Net Sales shall be
deemed a fully paid up license on the effective date of such termination and, as
such, after the effective date of such termination, Licensor shall not interfere
with the continued sale of the same, with no additional Royalty Fees being
payable on the sale of any such unlicensed products.

<PAGE>

Section 16. OBLIGATIONS AFTER TERMINATION OR EXPIRATION; SURVIVAL OF PROVISIONS
            AFTER TERMINATION OR EXPIRATION.

         Upon the termination or expiration of this Agreement,

         (a) UK Licensee and Comfort Group shall immediately cease using, in any
manner whatsoever, Licensor's trademarks and service marks, unless otherwise
agreed in writing.

         (b) To the extent that Licensor has, during the Term hereof, granted
either to UK Licensee or Comfort Group rights to use any relevant patents or
design registrations solely owned by Licensor, UK Licensee and/or Comfort Group
shall immediately cease use of the subject matter of such patents and design
registrations, unless otherwise agreed in writing.

         (c) To the extent that Licensor and UK Licensee have, during the Term
hereof, cooperated in the development of any product designs or manufacturing
processes, each of the parties shall jointly own such rights and may
independently use such jointly-owned designs, whether or not patented or
registered, without accounting to the other. It is contemplated by the parties
hereto that, prior to beginning work on any jointly-developed designs, the
parties will execute a joint development agreement reflecting the provisions of
their agreement and the ownership of any resulting intellectual property.

         (d) Any know-how, jointly developed designs, customer and supplier
lists, and unlicensed product designs which have been shared among the parties
during the Term hereof and which is not the subject of a patent covering the
Territory, may be used by any party hereto for any purpose after the effective
date of the expiration or termination of this Agreement, without accounting to
the other party.

         (e) UK Licensee and Comfort Group shall immediately cease to use any
Trade Dress used by UK Licensee and/or Comfort Group in connection with any of
the Intellectual Property,

<PAGE>

unless otherwise agreed in writing. As used herein, "Trade Dress" shall be
defined as product packaging and shall not include any product configuration
rights.

         (f) The parties each acknowledge that it is a common practice among
those involved in the comfort footwear trade to design products which are either
identical or which embody significant features of a competing product. Thus, it
is agreed that UK Licensee and Comfort Group may offer such products under a
private label and shall be permitted to continue to sell the same following
termination or expiration of this Agreement without accounting to or
experiencing interference from Licensor.

         The provisions of Sections 2(c) and 2(e), 8, 9, 11, 12, 13, 14, 15, 16,
17, 19, 21, 26, 27 and 28 hereof shall survive any termination or expiration of
this Agreement.

Section 17. DISPUTE RESOLUTION.

         (a)      Negotiation Procedure.

                  (i) Agreement to Use Procedure. The parties have reached this
Agreement in good faith and in the belief that it is mutually advantageous to
them. In the same spirit of cooperation, they pledge to try to resolve any
dispute without litigation or arbitration. They agree that, if any dispute
arises between them, before beginning any legal action to interpret or enforce
this Agreement, they will first follow the procedures described in this Section
17(a). Good faith participation in these procedures to the greatest extent
reasonably possible, despite lack of cooperation by one or more of the other
parties, is a precondition to maintaining any legal action or arbitration to
interpret or enforce this Agreement.

                  (ii) Initiation of Procedures. The party that initiates these
procedures ("Initiating Party") must give written notice to the other party,
describing in general terms the nature of the dispute, specifying the Initiating
Party's claim for relief, and identifying one or

<PAGE>

more people with authority to settle the dispute for it. Such notice may take
the form of a "Notice to Cure Default." The party receiving the notice
("Responding Party") has ten (10) days within which to designate by written
notice to the Initiating Party one or more people with authority to settle the
dispute on the Responding Party's behalf. These people are called the
"Authorized Representatives."

                  (iii) Direct Negotiations. The Authorized Representatives may
investigate the dispute as they consider appropriate, but agree to meet in
person, by prearranged teleconference, or by videoconference within fourteen
(14) days from the date of the Initiating Party's written notice to discuss
resolution of the dispute. The Authorized Representatives may meet at any times
and places and as often as they agree.

                  (iv) Failure to Resolve Dispute. If the dispute has not been
resolved within thirty (30) days after the initial meeting, either party may
initiate arbitration, as provided below.

         (b) Arbitration. Any controversy or claim arising out of or relating to
this Agreement, or the breach hereof, which dispute has not been resolved within
thirty (30) days of the initial meeting, telephone conference or videoconference
referenced in Section 17(a)(iii) above, shall be fully and finally settled by
binding arbitration before a single arbitrator in Columbus, Ohio in accordance
with the Commercial Arbitration Rules of the American Arbitration Association
(the "Rules"), and judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction over the parties or their property. The
arbitrator shall be selected according to the Rules and shall be compensated for
his or her services during the arbitration at his or her customary hourly rate,
as well as receiving reimbursement for his or her reasonable expenses. The
parties shall have the right to the broadest investigation of the facts
surrounding the dispute (i.e., "pretrial discovery") as is then permitted by the
laws and judicial rules of the State of Ohio,

<PAGE>

provided that any dispute between the parties relating to such investigation
shall be submitted to the arbitrator for resolution. Each party shall have the
right to obtain interim injunctions and orders from the arbitrator or from the
Franklin County Court of Common Pleas, without prejudice to the right of either
party to demand arbitration in accordance herewith. Within thirty (30) days
following the conclusion of arbitral hearings, the arbitrator shall issue a
written decision, including, without limitation, any order(s) and award, stating
the arbitrator's reasons for the decision. The decision and award of the
arbitrator shall be conclusive and binding upon all parties thereto, and
judgment upon the award, including any partial, temporary or interim award, may
be entered in the Franklin County Court of Common Pleas. Each of the parties
hereto (a) acknowledges and agrees that any arbitration decision, order(s)
and/or award shall be binding and conclusive upon them, their principals,
successors, assigns and affiliates, and may be enforced against either or both
of them in the Franklin County Court of Common Pleas; (b) hereby submits to the
jurisdiction of such Court respecting the enforcement of the arbitration
decision, order(s) and/or award; and (c) hereby waives any right to contest, and
hereby agrees not to contest, the validity or enforceability of such award. Any
monetary damages included in the award shall bear post-award interest at rates
determined by the arbitrator to be appropriate and enforceable. Damages and
interest shall be awarded in U.S. dollars. All fees and expenses of the
arbitration, including, without limitation, the fees and expenses of the
arbitrator, shall be borne by the parties equally. However, each party shall
bear the expense of its own counsel, experts, witnesses and preparation and
presentations.

                  This arbitration provision shall not apply to any actions
available under local law seeking injunctive relief with regard to the use of
trademarks owned by Licensor and licensed

<PAGE>

hereunder. Any action seeking injunctive or similar extraordinary relief with
respect to such trademarks may be brought by Licensor in any court having
jurisdiction hereof.

Section 18. FORCE MAJEURE. No party shall be liable in damages or otherwise for
any delay or default in performing any obligation under this Agreement provided
such delay or default is caused by force majeure, such as war or insurrection,
terrorist act(s), strikes, fires, floods, earthquakes, work stoppages,
embargoes, or act of refusals to act on the part of governments or for other
such reasons beyond the control of said party. The party whose performance of
any obligation is directly affected or who has reason to believe such
performance may be affected by reason of force majeure causes shall as promptly
as possible given notice thereof to the other parties and shall also, within ten
(10) days thereafter, give written notice of the particulars of the event,
including supporting documents if available. The party so affected shall also
take responsible steps to resume performance hereunder with the least possible
delay.

                  In the event that this Agreement is terminated as a result of
a default by either UK Licensee and/or Comfort Group solely as a result of a
force majeure, Licensor shall be entitled to (i) all Royalty Fees payable upon
Net Sales computed as of the effective date of such termination, and (ii) all
Royalty Fees payable upon Net Sales of Products displaying any of the
Intellectual Property, regardless of the date of such sales; provided, however,
that the provisions of this paragraph shall be effective in lieu of any
provisions respecting, and regardless of, whether or not the total amount of
Royalty Fees paid to Licensor has reached Six Hundred Thousand Dollars
($600,000.00) as of the effective date of such termination.

Section 19. NOTICES. Any notice or other communication required or desired to be
given hereunder shall be in writing and delivered by personal delivery, by
certified mail (postage prepaid) or by facsimile transmission to the party to
which it is given at the address set forth

<PAGE>

below or such other address as shall be substituted and communicated by notice
to the other party. Notice shall be deemed effective on the earlier of (i)
receipt; (ii) in the case of certified mail on the third business day after
mailing; and (iii) in the case of facsimile transmission, on the first business
day after sending. The notice addresses of the respective parties are as
follows:

         If to UK Licensee or:      Barry (G.B.R.) Limited
         Comfort Group              Lockhill Factory
                                    162 High Street
                                    Somerset, England BA160NG
                                    Fax Number: 44 (0) 1458 446535

         If to Licensor:            R.G. Barry Corporation
                                    13405 Yarmouth Road, N.W.
                                    Pickerington, Ohio 43147
                                    Attention: Senior Vice President - Finance
                                               and Chief Financial Officer

                                    Fax Number: 614/860-8112

Section 20. ASSIGNMENT. No party hereto shall assign this Agreement, or any
rights provided hereunder, without the prior written consent of each of the
other parties, which consent shall not be unreasonably delayed or withheld, and
any assignment made without the written consent of the other parties shall be
null and void; provided, however, that Licensor shall have the right (a) to
assign this Agreement to any corporate affiliate of Licensor (as long as
Licensor continues to be liable for performance of its obligations hereunder, in
the event that the assignee fails to perform), and (b) after the two hundred
seventieth (270th) day after the Effective Date of this Agreement, to assign
this Agreement to any business entity unaffiliated with Licensor acquiring
substantially all the business and assets of Licensor. In the event that
Licensor so assigns this Agreement, Licensor shall promptly provide written
notice to UK Licensee of such assignment.

Section 21. GOVERNING LAW. This Agreement shall be governed in all respects by
and interpreted in accordance with the laws of the United States and the State
of Ohio applicable to

<PAGE>

contracts entered into and wholly performed within said State, irrespective of
any choice of law rules to the contrary. The United Nations Convention on
Contracts for the International Sale of Goods shall have no application to this
Agreement or actions hereunder or contemplated hereby.

Section 22. INTEGRATION. This Agreement, together with the exhibits attached,
constitutes the entire and whole Agreement among the parties and supersedes any
prior agreements or understandings.

Section 23. SEVERABILITY. In the event any one or more of the provisions
contained in this Agreement is invalid, illegal or unenforceable in any respect
(except due to force majeure or default of this Agreement), the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby. The parties shall in the first
instance seek to replace as far as possible such invalid, illegal or enforceable
provision with a valid, legal or enforceable provision and agree to amend the
Agreement to restore as far as possible the pre-existing economic balance among
the parties.

Section 24. NON-WAIVER OF RIGHTS. Failure of any party to enforce or exercise
any rights hereunder shall in no way be considered to be a waiver of such
rights, nor shall it preclude or prejudice such party from later enforcing or
exercising the same rights.

Section 25. AMENDMENTS. No amendment or modification to this Agreement shall be
effective unless it is made in writing and signed by each of the parties.

Section 26. DAMAGES LIMITATIONS. In no event shall any party hereto be liable
under this Agreement to any other party for exemplary, consequential or
incidental damages.

Section 27. U.S. DOLLARS. All references in this Agreement to dollars or any use
of the symbol "$" refers to United States dollars. All payments to be made under
this Agreement shall be made in United States dollars.

<PAGE>

Section 28. OTHER. This Agreement shall inure to the benefit of and be binding
upon each of the parties, their respective successors, assigns, heirs,
executors, administrators and legal representatives.

IN WITNESS WHEREOF, each of
the parties has caused this Agreement to be executed by its duly authorized
representative to be effective as of the Effective Date.

UK LICENSEE:                            LICENSOR:
BARRY (G.B.R.) LIMITED                  R.G. BARRY CORPORATION

By:   /s/ B J Malone                    By:  /s/ Daniel D. Viren
      -------------------------              ---------------------

Its:  Director                          Its: Senior Vice President-Finance, CFO
      -------------------------              ----------------------------------

Date: 20th January 2003                 Date: January 7, 2003
      -------------------------               ---------------

GBR LIMITED                             INTERNATIONAL: R.G. BARRY
                                          INTERNATIONAL, INC.

By:   /s/ Robert D Malone               By:  /s/ Daniel D. Viren
      --------------------------             -----------------------
Its:  Director                          Its: Senior Vice President-Finance, CFO
      --------------------------             ----------------------------------
Date: 20th March 2003                   Date: January 7, 2003
      --------------------------              ----------------

COMFORT GROUP, S.A.R.L.

By: /s/ B J Malone
   ---------------------------
Its:
     -------------------------
Date: 20th March 2003
     -------------------------

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