<PAGE>

                                                                   Exhibit 10.36

                                                          (BANK OF AMERICA LOGO)

                                                         as of December 12, 2005

Movado Group, Inc.
650 From Road,
Paramus, NJ 07652

Dear Sir or Madam:

We are pleased to advise you that Bank of America, N. A., successor by merger to
Fleet National Bank (the "Bank") hereby agrees to consider requests from Movado
Group, Inc. (the "Company") from time to time, for short-term loans ("Loans")
and documentary letters of credit for the importation of merchandise inventory
("Letters of Credit"). Any extension of credit hereunder (whether a Loan or a
Letter of Credit) shall be made available at the sole discretion of the Bank but
in any event subject to the following: (a) the Bank shall have determined that
money market conditions are favorable for it to acquire loan assets, (b) the
Bank shall continue to be satisfied with the Borrower's business, financial
condition and prospects and the condition and prospects of the industry in which
the Borrower is engaged, (c) the Bank shall have received Company's most current
quarterly and annual financial statements and any other financial information
regarding the Company which the Bank shall reasonably request from time to time,
and (d) the Company shall have maintained and be maintaining a satisfactory
relationship with the Bank and:

Loan and Letters of Credit Requests: Each request for a Loan and/or Letter of
Credit will be, at the Bank's option, reviewed by the Bank and an independent
credit analysis and assessment will be made each time a request is received. In
the event that the Bank agrees to lend pursuant to any such request by the
Company, any such Loan shall be evidenced by the promissory note enclosed with
this letter (the "Note") and be subject to the conditions therein contained and
in any other documentation in form and substance satisfactory to the Bank. The
Bank may respond to any request for a Loan or Letter of Credit for a stated
amount with a Loan or Letter of Credit for a different amount, date or maturity,
or may decline to respond entirely.

Maximum Amount of Loans and Letters of Credit: The aggregate amount of Loans and
Letters of Credit at any time outstanding shall not exceed $20,000,000 and the
maximum amount of Letters of Credit at any time outstanding shall not exceed
$2,000,000.

(US OLYMPIC TEAMS 2000-2004 LOGO)


                                       1

<PAGE>

Expiration and Maturity Date: Requests for extensions of credit must be made on
or before June 16, 2006. All Loans will be payable on June 16, 2006. All Letters
of Credit shall expire no later than 180 days from issuance.

Interest Rate: Loans shall bear interest, at the Company's election, at a rate
per annum equal to either (i) a fluctuating rate equal to the Prime Rate, or
(ii) such other fixed rate as may be agreed upon between the Company and the
Bank for an interest period which is also then agreed upon (a Loan bearing
interest at this rate is sometimes called an "Agreed Rate Loan"). The term
"Prime Rate" shall be as defined in the Note, Interest shall be payable monthly
in arrears based on a 360-day year and, for Agreed Rate Loans, on the last day
of the applicable Interest Period.

Letter of Credit Fees: Letters of Credit shall be issued at the Bank's standard
fees and charges in effect from time to time therefor.

Additional provisions:

All obligations of the Company owing to the Bank shall continue to be
unconditionally guaranteed by all active domestic subsidiaries of the Company
(collectively, the "Guarantors") pursuant to the Bank's standard form of
guarantee (collectively, the "Guarantees").

The Company shall continue to provide the following to the Bank:

     The consolidated and consolidating balance sheet for the Company and its
     subsidiaries, consolidated and consolidating statement of income and
     consolidated statement of cash flow: (i) audited and certified without
     qualification by accountants satisfactory to the Bank, within 120 days of
     fiscal year end and (ii) certified by the Company's chief financial
     officer, within 75 days of the last day of each fiscal quarter.

     Notices of defaults.

     Such other statements and reports as shall be reasonably requested by the
     Bank.

This letter agreement replaces, supersedes, amends and restates in its entirety
the letter agreement from the Bank to the Company dated October 31, 2005, as
amended.

If the terms of this letter are acceptable to you, please indicate your
acceptance by signing and returning the enclosed copy of this letter and
documentation to the Bank on or before December 12, 2005. This letter shall be
unenforceable against the Bank unless so signed and returned on or before such
date.


                                        2

<PAGE>

Please contact us if you have any questions. We look forward to continuing our
relationship.

                                        Very truly yours,

                                        BANK OF AMERICA, N. A.,
                                        Successor by merger to Fleet National
                                        Bank


                                        By: /s/ Rich Williams
                                            ------------------------------------
                                        Name: Rich Williams
                                        Title: Credit Products Officer


ACCEPTED AND AGREED
ON DECEMBER 12, 2005

MOVADO GROUP, INC.


By: /s/ T F Michno
    ---------------------------------
Name: T F Michno
Title: General Counsel

Guarantor signatures on next page


                                        3

<PAGE>

Each of the guarantors indicated below hereby consents to this letter agreement
and reaffirms its continuing liability under its respective guarantees in
respect of the above letter agreement and all the documents, instruments and
agreements executed pursuant thereto or in connection therewith, without offset,
defense or counterclaim (any such offset, defense or counterclaim as may exist
being hereby irrevocably waived by each such guarantor).

                                        MOVADO RETAIL GROUP, INC.,
                                        a New Jersey Corporation


                                        By: /s/ T F Michno
                                            ------------------------------------
                                        Name: T F Michno
                                        Title: General Counsel


                                        MOVADO LLC,
                                        a Delaware Limited Liability Company


                                        By: /s/ T F Michno
                                            ------------------------------------
                                        Name: T F Michno
                                        Title: General Counsel


                                        4

<PAGE>

                              BANK OF AMERICA, N.A.
                   SUCCESSOR BY MERGER TO FLEET NATIONAL BANK
                              AMENDED AND RESTATED
                                 PROMISSORY NOTE

$20,000,000.00                                           As of December 12, 2005

     No later than JUNE 16, 2006 (the "Maturity Date"), for value received,
MOVADO GROUP, INC., having its principal office at 650 From Road, Paramus, New
Jersey 07652 (the "Borrower"), promises to pay to the order of BANK OF AMERICA,
SUCCESSOR BY MERGER TO FLEET NATIONAL BANK, having an office at 1185 Avenue of
the Americas, New York, New York, 10036 (the "Bank"), at such office of the Bank
or at such other place as the holder hereof may from time to time appoint in
writing, in lawful money of the United States of America in immediately
available funds, the principal sum of TWENTY MILLION and 00/100 DOLLARS
($20,000,000.00) Dollars or such lesser amount as may then be the aggregate
unpaid principal balance of all loans made by the Bank to the Borrower hereunder
(each a "Loan" and collectively the "Loans") as shown on the books and records
of the Bank. The Borrower also promises to pay interest (computed on the basis
of a 360 day year for actual days elapsed) at said office in like money on the
unpaid principal amount of each Loan from time to time outstanding at a rate per
annum, to be elected by the Borrower at the time each Loan is made, equal to
either (i) a fluctuating rate equal to the Prime Rate, which rate will change
when and as the Prime Rate changes and which such changes in the rate of
interest resulting from changes in the Prime Rate shall take effect immediately
without notice or demand of any kind (a Loan bearing interest at this rate is
sometimes hereinafter called a "Prime Loan"), or (ii) a fixed rate as may be
agreed upon between the Borrower and the Bank (an "Agreed Rate") for an Interest
Period which is also then agreed upon (a Loan bearing interest at this rate is
sometimes hereinafter called an "Agreed Rate Loan"); provided, however, that (a)
no Interest Period with respect to an Agreed Rate Loan shall extend beyond the
Maturity Date, (b) if any Interest Period would otherwise end on a day which is
not a Business Day, that Interest Period shall be extended to the next
succeeding Business Day and (c) if prior to the end of any such Interest Period
of an Agreed Rate Loan the Borrower and the Bank fail to agree upon a new
Interest Period therefor so as to maintain such Loan as an Agreed Rate Loan
within the pertinent time set forth in Section 1 hereof, such Agreed Rate Loan
shall automatically be converted into a Prime Loan at the end of such Interest
Period and shall be maintained as such until a new Interest Period therefor is
agreed upon. Interest on each Loan shall be payable monthly on the first day of
each month commencing the first such day to occur after a Loan is made hereunder
and, together with unpaid principal, on the Maturity Date. Interest on Agreed
Rate Loans shall also be payable on the last day of each Interest Period
applicable thereto. The Borrower further agrees that upon and during the
continuance of an Event of Default and/or after any stated or any accelerated
maturity of Loans hereunder, all Loans shall bear interest (computed daily) at,
(i) with respect to Agreed Rate Loans, a rate equal to the greater of 2% per
annum in excess of the rate then applicable to Agreed Rate


<PAGE>

Loans and 2% per annum in excess of the rate then applicable to Prime Loans,
payable no later than the Maturity Date, and (ii) with respect to Prime Loans, a
rate equal to 2% per annum in excess of the rate then applicable to Prime Loans,
payable no later than the Maturity Date. Furthermore, if the entire amount of
any principal and/or interest required to be paid pursuant to this Note is not
paid in full within ten (10) days after the same is due, the Borrower shall
further pay to the Bank a late fee equal to five percent (5%) of the required
payment. In no event shall interest payable hereunder be in excess of the
maximum rate of interest permitted under applicable law. If any payment to be so
made hereunder becomes due and payable on a day other than a Business Day, such
payment shall be extended to the next succeeding Business Day and, to the extent
permitted by applicable law, interest thereon shall be payable at the then
applicable rate during such extension.

     All payments made in connection with this Note shall be in lawful money of
the United States in immediately available funds without counterclaim or setoff
and free and clear of and without any deduction or withholding for, any taxes or
other payments. All such payments shall be applied first to the payment of all
fees, expenses and other amounts due to the Bank (excluding principal and
interest), then to accrued interest, and the balance on account of outstanding
principal; provided, however, that after the occurrence of and during the
continuance of an Event of Default, payments will be applied to the obligations
of the Borrower to the Bank as the Bank determines in its sole discretion. The
Borrower hereby expressly authorizes the Bank to record on the attached schedule
the amount and date of each Loan, the rate of interest thereon, Interest Period
thereof and the date and amount of each payment of principal. All such notations
shall be presumptive as to the correctness thereof; provided, however, the
failure of the Bank to make any such notation shall not limit or otherwise
affect the obligations of the Borrower under this Note.

     In consideration of the granting of the Loans evidenced by this Note, the
Borrower hereby agrees as follows:

     1. Loan Requests. Requests for Prime Loans and Agreed Rate Loans may be
made up until 1 p.m. on the date the Loan is to be made. Any request for a Loan
must be written. The Bank shall have no obligation to make any Loan hereunder.

     2. Prepayment. The Borrower may prepay any Prime Loan at any time in whole
or in part without premium or penalty. Each such prepayment shall be made
together with interest accrued thereon to and including the date of prepayment.
The Borrower may prepay an Agreed Rate Loan only upon at least three (3)
Business Days prior written notice to the Bank (which notice shall be
irrevocable) and any such prepayment shall occur only on the last day of the
Interest Period for such Agreed Rate Loan.

     3. Indemnity; Yield Protection. The Borrower shall pay to the Bank, upon
request of the Bank, such amount or amounts as shall be sufficient (in the
reasonable opinion of the Bank) to compensate it for any loss, cost, or
reasonable expense incurred as a result of: (i) any payment of an Agreed Rate
Loan on a date other than the last day of the

<PAGE>

Interest Period for such Loan; (ii) any failure by Borrower to borrow an Agreed
Rate Loan on the date specified by Borrower's written notice; (iii) any failure
of Borrower to pay an Agreed Rate Loan on the date for payment specified in
Borrower's written notice. Without limiting the foregoing, Borrower shall pay to
Bank a "yield maintenance fee" in an amount computed as follows: The current
rate for United States Treasury securities (bills on a discounted basis shall be
converted to a bond equivalent) with a maturity date closest to the term chosen
pursuant to the Fixed Rate Election as to which the prepayment is made, shall be
subtracted from Cost of Funds in effect at the time of prepayment. If the result
is zero or a negative number, there shall be no yield maintenance fee. If the
result is a positive number, then the resulting percentage shall be multiplied
by the amount of the principal balance being prepaid. The resulting amount shall
be divided by 360 and multiplied by the number of days remaining in the term
chosen pursuant to the Fixed Rate Election as to which the prepayment is made.
Said amount shall be reduced to present value calculated by using the above
referenced United States Treasury securities rate and the number of days
remaining in the term chosen pursuant to the Fixed Rate Election as to which
prepayment is made. The resulting amount shall be the yield maintenance fee due
to Bank upon the payment of an Agreed Rate Loan. Each reference in this
paragraph to "Fixed Rate Election" shall mean the election by Borrower of Loan
to bear interest based on an Agreed Rate. If by reason of an Event of Default,
the Bank elects to declare the Loans and/or the Note to be immediately due and
payable, then any yield maintenance fee with respect to an Agreed Rate Loan
shall become due and payable in the same manner as though the Borrower has
exercised such right of prepayment.

     For the purpose of this Section 3 the determination by the Bank of such
losses and reasonable expenses shall in the absence of manifest error, be
conclusive if made reasonably and in good faith.

     4. Increased Costs. If the Bank reasonably determines that the effect of
any applicable law or government regulation, guideline or order or the
interpretation thereof by any governmental authority charged with the
administration thereof (such as, for example, a change in official reserve
requirements which the Bank is required to maintain in respect of loans or
deposits or other funds procured for funding such loans) is to increase the cost
to the Bank of making or continuing Agreed Rate Loans hereunder or to reduce the
amount of any payment of principal or interest receivable by the Bank thereon,
then the Borrower will pay to the Bank such additional amounts as the Bank may
reasonably determine to be required to compensate the Bank for such additional
costs or reduction. Any additional payment under this section will be computed
from the effective date at which such additional costs have to be borne by the
Bank. A certificate as to any additional amounts payable pursuant to this
Section 4 setting forth the basis and method of determining such amounts shall
be conclusive, absent manifest error, as to the determination by the Bank set
forth therein if made reasonably and in good faith. The Borrower shall pay any
amounts so certified to it by the Bank within 10 days of receipt of any such
certificate.

     5. Warranties and Representations. The Borrower represents and warrants
that: a) it is a corporation duly organized, validly existing and in good
standing under the laws of

<PAGE>

the state of its incorporation and is qualified to do business and is in good
standing under the laws of every state where its failure to so qualify would
have a material and adverse effect on the business, operations, property or
other condition of the Borrower; b) the execution, issuance and delivery of this
Note by the Borrower are within its corporate powers and have been duly
authorized, and the Note is valid, binding and enforceable in accordance with
its terms, and is not in violation of law or of the terms of the Borrower's
Certificate of Incorporation or By-Laws and does not result in the breach of or
constitute a default under any indenture, agreement or undertaking to which the
Borrower is a party or by which it or its property may be bound or affected; c)
no authorization or approval or other action by, and no notice to or filing
with, any governmental authority or regulatory body is required for the due
execution, delivery and performance by the Borrower of this Note, except those
as have been obtained; d) the financial statements of the Borrower heretofore
furnished to the Bank are complete and correct in all material respects and
fairly represent the financial condition of the Borrower and its subsidiaries as
at the dates thereof and for the periods covered thereby, which financial
condition has not materially, adversely, changed since the date of the most
recently dated balance sheet heretofore furnished to the Bank; e) no Event of
Default (as hereinafter defined) has occurred and no event has occurred which
with the giving of notice or the lapse of time or both would constitute an Event
of Default; f) the Borrower shall not use any part of the proceeds of any Loan
to purchase or carry any margin stock within the meaning of Regulation U of the
Board of Governors of the Federal Reserve System or to extend credit to others
for the purpose of purchasing or carrying any margin stock; g) there is no
pending or, to the knowledge of the Borrower, threatened action or proceeding
affecting the Borrower before any court, governmental agency or arbitrator
which, if determined adversely to the Borrower would have a materially adverse
effect on the financial condition or operations of the Borrower except as
described in the financial statements of the Borrower heretofore furnished to
the Bank; and h) on the occasion of the granting of each Loan all
representations and warranties contained herein shall be true and correct and
with the same force and effect as though such representations and warranties had
been made on and as of the date of the making of each such Loan.

     6. Events of Default. Upon the occurrence of any of the following specified
events of default (each an "Event of Default"): a) default in making any payment
of principal, interest, or any other sum payable under this Note when due; or b)
default by the Borrower or any Guarantor (i) of any other obligation hereunder
or (ii) in the due payment of any other obligation owing to the Bank under this
Note or c) default by Borrower or any Guarantor in the due payment of any other
indebtedness for borrowed money or default in the observance or performance of
any covenant or condition contained in any agreement or instrument evidencing,
securing, or relating to any such indebtedness, which causes or permits the
acceleration of the maturity thereof, provided that the aggregate amount of such
indebtedness shall be $5,000,000 or more; or d) any representation or warranty
made by the Borrower herein or in any certificate furnished by the Borrower in
connection with the Loans evidenced hereby or pursuant to the provisions hereof,
proves untrue in any material respect; or e) the Borrower or any Guarantor
becomes insolvent or bankrupt, is generally not paying its debts as they become
due, or makes an assignment for the benefit of creditors, or a trustee or
receiver is appointed for the Borrower or any Guarantor or for the

<PAGE>

greater part of the properties of the Borrower or any Guarantor with the consent
of the Borrower or any such Guarantor, or if appointed without the consent of
the Borrower or any such Guarantor, such trustee or receiver is not discharged
within 30 days, or bankruptcy, reorganization, liquidation or similar
proceedings are instituted by or against the Borrower or any Guarantor under the
laws of any jurisdiction, and if instituted against the Borrower or any such
Guarantor are consented to by it or remain undismissed for 30 days, or a writ or
warrant of attachment or similar process shall be issued against a substantial
part of the property of the Borrower or any Guarantor not in the possession of
the Bank and same shall not be released or bonded within 30 days after levy; or
f) any garnishment, levy, writ or warrant of attachment or similar process shall
be issued and served against the Bank, which garnishment, levy, writ or warrant
of attachment or similar process relates to property of the Borrower or any
Guarantor in the possession of the Bank; or h) the Bank shall have determined,
in its reasonable discretion, that one or more conditions exist or events have
occurred which have resulted or may result in a material adverse change in the
business, properties or financial condition of the Borrower or any Guarantor as
determined in the reasonable discretion of the Bank or one or more other
conditions exist or events have occurred with respect to the Borrower or any
Guarantor which the Bank deems materially adverse; then, in any such event, and
at any time thereafter, if any Event of Default shall then be continuing, the
Bank may declare the principal and the accrued interest in respect of all Loans
under this Note to be, whereupon the Note shall become, immediately due and
payable without presentment, protest or other notice of any kind, all of which
are expressly waived by the Borrower.

     7. Set off. At any time, without demand or notice (any such notice being
expressly waived by the Borrower), the Bank may setoff any and all deposits,
credits, collateral and property, now or hereafter in the possession, custody,
safekeeping or control of the Bank or any entity under the control of Bank of
America Corporation and its successors or assigns, or in transit to any of them,
or any part thereof and apply same to any of the Liabilities or obligations of
the Borrower or any Guarantor even though unmatured and regardless of the
adequacy of any other collateral securing the Liabilities. ANY AND ALL RIGHTS TO
REQUIRE THE BANK TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER
COLLATERAL WHICH SECURES THE LIABILITIES, PRIOR TO EXERCISING ITS RIGHT OF
SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF THE BORROWER
OR ANY GUARANTOR ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED. The
term "Liabilities" shall include this Note and obligations and liabilities of
the Borrower to the Bank under this Note, now or hereafter existing, arising
directly between the Borrower and the Bank or acquired by assignment,
conditionally or as collateral security by the Bank, absolute or contingent,
joint and/or several, secure or unsecured, due or not due, contractual or
tortious, liquidated or unliquidated, arising by operation of law or otherwise,
direct or indirect, including, but without limiting the generality of the
foregoing, indebtedness, obligations or liabilities to the Bank of the Borrower
as a member of any partnership, syndicate, association or other group, and
whether incurred by the Borrower as principal, surety, endorser, guarantor,
accommodation party or otherwise.

<PAGE>

     8. Definitions. As used herein:

          (a) "Business Day" means a day other than a Saturday, Sunday or other
day on which commercial banks in the State of New York are authorized or
required to close under the laws of the State of New York and to the extent
"Business Day" is used in the context of any other specific city it shall mean
any date on which commercial banks are open for business in that city.

          (b) "Cost of Funds" means the per annum rate of interest which the
Bank is required to pay, or is offering to pay, for wholesale liabilities,
adjusted for reserve requirements and such other requirements as may be imposed
by federal, state or local government and regulatory agencies, as reasonably
determined by the Bank.

          (c) "Guarantors" shall mean all active domestic subsidiaries of the
Borrower.

          (d) "Interest Period" means that period selected by the Borrower,
within the limitations of the first paragraph of this Note, during which an
Agreed Rate Loan may bear interest at an Agreed Rate.

          (e) "Loan Documents" means this Note, and each document, instrument or
agreement executed pursuant hereto or thereto or in connection herewith or
therewith.

          (f) "Prime Rate" means the variable per annum rate of interest so
designated from time to time by the Bank as its prime rate. The Prime Rate is a
reference rate and does not necessarily represent the lowest or best rate being
charged to any customer.

     9. Miscellaneous.

     (a) The Borrower shall pay on demand all reasonable expenses of the Bank in
connection with the preparation, administration, default, collection, waiver or
amendment of this Note or any of the other Loan Documents, and/or in connection
with Bank's exercise, preservation or enforcement of any of its rights, remedies
or options hereunder and/or thereunder, including, without limitation, fees of
outside legal counsel, accounting, consulting, brokerage or other similar
professional fees or expenses, and any fees or expenses associated with travel
or other costs relating to any appraisals or examinations conducted in
connection with the Liabilities or any collateral therefor, and the amount of
all such expenses shall, until paid, bear interest at the rate applicable to
principal hereunder (including any default rate) and be an obligation secured by
any collateral.

     (b) No modification or waiver of any provision of this Note shall be
effective unless such modification or waiver shall be in writing and signed by a
duly authorized officer of the Bank, and the same shall then be effective only
for the period and on the conditions and for the specific instances specified in
such writing. No failure or delay by the Bank in exercising any right, power or
privilege hereunder shall operate as a waiver thereof; nor shall

<PAGE>

any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any rights, power or privilege.

     (c) Borrower hereby waives presentment, notice of protest, notice of
dishonor, and any and all other notices or demands except as otherwise expressly
provided for herein.

     (d) This Note and the other Loan Documents shall be construed in accordance
with and governed by the laws of the State of New York (excluding the laws
applicable to conflicts or choice of law). The Borrower agrees that any suit for
the enforcement of this Note or any of the other Loan Documents may be brought
in the courts of the State of New York or any Federal court sitting therein and
consents to the nonexclusive jurisdiction of such court and service of process
in any such suit being made upon the Borrower by mail at the address set forth
in the first paragraph of this Note. The Borrower hereby waives any objection
that it may now or hereafter have to the venue of any such suit or any such
court or that such suit is brought in an inconvenient forum.

     (e) The Bank may at any time pledge all or any portion of its rights under
this Note and the other Loan Documents to any of the twelve (12) Federal Reserve
Banks organized under Section 4 of the Federal Reserve Act, 12 U.S.C. Section
341. No such pledge or enforcement thereof shall release the Bank from its
obligations under any of such Loan Documents.

     (f) All agreements between the Borrower (and each Guarantor and each other
party obligated for payment on this Note) and the Bank are hereby expressly
limited so that in no contingency or event whatsoever, whether by reason of
acceleration of maturity of the indebtedness evidenced hereby or otherwise,
shall the amount paid or agreed to be paid to the Bank for the use or the
forbearance of the indebtedness evidenced hereby exceed the maximum permissible
under applicable law. As used herein, the term "applicable law" shall mean the
law in effect as of the date hereof provided, however, that in the event there
is a change in the law which results in a higher permissible rate of interest,
then this Note shall be governed by such new law as of its effective date. In
this regard, it is expressly agreed that it is the intent of the Borrower and
the Bank in the execution, delivery and acceptance of this Note to contract in
strict compliance with the laws of the State of New York from time to time
in effect. If, under or from any circumstances whatsoever, fulfillment of any
provision hereof or of any of the Loan Documents at the time of performance of
such provision shall be due, shall involve transcending the limit of such
validity prescribed by applicable law, then the obligation to be fulfilled shall
automatically be reduced to the limits of such validity, and if under or from
circumstances whatsoever the Bank should ever receive as interest an amount
which would exceed the highest lawful rate, such amount which would be excessive
interest shall be applied to the reduction of the principal balance evidenced
hereby and not to the payment of interest. This provision shall control every
other provision of the Loan Documents between the Borrower, each Guarantor,
each other party obligated on this Note and the Bank.

<PAGE>

     (g) ARBITRATION AND WAIVER OF JURY TRIAL

     (i) THIS PARAGRAPH CONCERNS THE RESOLUTION OF ANY CONTROVERSIES OR CLAIMS
BETWEEN THE PARTIES, WHETHER ARISING IN CONTRACT, TORT OR BY STATUTE, INCLUDING
BUT NOT LIMITED TO CONTROVERSIES OR CLAIMS THAT ARISE OUT OF OR RELATE TO: (i)
THE LOAN DOCUMENTS (INCLUDING ANY RENEWALS, EXTENSIONS OR MODIFICATIONS); OR
(ii) ANY DOCUMENT RELATED TO THE NOTE ("COLLECTIVELY A "CLAIM"). FOR THE
PURPOSES OF THIS ARBITRATION PROVISION ONLY, THE TERM "PARTIES" SHALL INCLUDE
ANY PARENT CORPORATION, SUBSIDIARY OR AFFILIATE OF THE BANK INVOLVED IN THE
SERVICING, MANAGEMENT OR ADMINISTRATION OF ANY OBLIGATION DESCRIBED OR EVIDENCED
BY THE LOAN DOCUMENTS.

     (ii) AT THE REQUEST OF ANY PARTY TO THE LOAN DOCUMENTS, ANY CLAIM SHALL BE
RESOLVED BY BINDING ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION ACT
(TITLE 9, U.S. CODE) (THE "ACT"). THE ACT WILL APPLY EVEN THOUGH THE LOAN
DOCUMENTS PROVIDE THAT THEY ARE GOVERNED BY THE LAW OF A SPECIFIED STATE. THE
ARBITRATION WILL TAKE PLACE ON AN INDIVIDUAL BASIS WITHOUT RESORT TO ANY FORM OF
CLASS ACTION.

     (iii) ARBITRATION PROCEEDINGS WILL BE DETERMINED IN ACCORDANCE WITH THE
ACT, THE THEN-CURRENT RULES AND PROCEDURES FOR THE ARBITRATION OF FINANCIAL
SERVICES DISPUTES OF THE AMERICAN ARBITRATION ASSOCIATION OR ANY SUCCESSOR
THEREOF ("AAA"), AND THE TERMS OF THIS PARAGRAPH. IN THE EVENT OF ANY
INCONSISTENCY, THE TERMS OF THIS PARAGRAPH SHALL CONTROL. IF AAA IS UNWILLING OR
UNABLE TO (i) SERVE AS THE PROVIDER OF ARBITRATION OR (ii) ENFORCE ANY PROVISION
OF THIS ARBITRATION CLAUSE, ANY PARTY TO THE LOAN DOCUMENTS MAY SUBSTITUTE
ANOTHER ARBITRATION ORGANIZATION WITH SIMILAR PROCEDURES TO SERVE AS THE
PROVIDER OF ARBITRATION.

     (iv) THE ARBITRATION SHALL BE ADMINISTERED BY AAA AND CONDUCTED, UNLESS
OTHERWISE REQUIRED BY LAW, IN THE STATE SPECIFIED IN THE GOVERNING LAW SECTION
OF THE LOAN DOCUMENTS. ALL CLAIMS SHALL BE DETERMINED BY ONE ARBITRATOR;
HOWEVER, IF CLAIMS EXCEED FIVE MILLION DOLLARS ($5,000,000), UPON THE REQUEST OF
ANY PARTY, THE CLAIMS SHALL BE DECIDED BY THREE ARBITRATORS. All ARBITRATION
HEARINGS SHALL COMMENCE WITHIN NINETY (90) DAYS OF THE DEMAND FOR ARBITRATION
AND CLOSE WITHIN NINETY (90) DAYS OF COMMENCEMENT AND THE AWARD OF THE
ARBITRATOR(S) SHALL BE ISSUED WITHIN THIRTY (30) DAYS OF THE CLOSE OF THE
HEARING.

<PAGE>

HOWEVER, THE ARBITRATOR(S), UPON A SHOWING OF GOOD CAUSE, MAY EXTEND THE
COMMENCEMENT OF THE HEARING FOR UP TO AN ADDITIONAL SIXTY (60) DAYS. THE
ARBITRATOR(S) SHALL PROVIDE A CONCISE WRITTEN STATEMENT OF REASONS FOR THE
AWARD. THE ARBITRATION AWARD MAY BE SUBMITTED TO ANY COURT HAVING JURISDICTION
TO BE CONFIRMED, JUDGMENT ENTERED AND ENFORCED.

     (v) THE ARBITRATOR(S) WILL GIVE EFFECT TO STATUTES OF LIMITATION IN
DETERMINING ANY CLAIM AND MAY DISMISS THE ARBITRATION ON THE BASIS THAT THE
CLAIM IS BARRED. FOR PURPOSES OF THE APPLICATION OF THE STATUTE OF LIMITATIONS,
THE SERVICE ON AAA UNDER APPLICABLE AAA RULES OF A NOTICE OF CLAIM IS THE
EQUIVALENT OF THE FILING OF A LAWSUIT. ANY DISPUTE CONCERNING THIS ARBITRATION
PROVISION OR WHETHER A CLAIM IS ARBITRABLE SHALL BE DETERMINED BY THE
ARBITRATOR(S). THE ARBITRATOR(S) SHALL HAVE THE POWER TO AWARD LEGAL FEES
PURSUANT TO THE TERMS OF THE LOAN DOCUMENTS.

     (vi) THIS PARAGRAPH DOES NOT LIMIT THE RIGHT OF ANY PARTY TO: (I) EXERCISE
SELF-HELP REMEDIES, SUCH AS BUT NOT LIMITED TO, SETOFF; (II) INITIATE JUDICIAL
OR NON-JUDICIAL FORECLOSURE AGAINST ANY REAL OR PERSONAL PROPERTY COLLATERAL;
(III) EXERCISE ANY JUDICIAL OR POWER OF SALE RIGHTS, OR (IV) ACT IN A COURT OF
LAW TO OBTAIN AN INTERIM REMEDY, SUCH AS BUT NOT LIMITED TO, INJUNCTIVE RELIEF,
WRIT OF POSSESSION OR APPOINTMENT OF A RECEIVER, OR ADDITIONAL OR SUPPLEMENTARY
REMEDIES.

     (vii) THE FILING OF A COURT ACTION IS NOT INTENDED TO CONSTITUTE A WAIVER
OF THE RIGHT OF ANY PARTY, INCLUDING THE SUING PARTY, THEREAFTER TO REQUIRE
SUBMITTAL OF THE CLAIM TO ARBITRATION.

     (viii) BY AGREEING TO BINDING ARBITRATION, THE PARTIES IRREVOCABLY AND
VOLUNTARILY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
CLAIM. FURTHERMORE, WITHOUT INTENDING IN ANY WAY TO LIMIT THE LOAN DOCUMENTS TO
ARBITRATE, TO THE EXTENT ANY CLAIM IS NOT ARBITRATED, THE PARTIES IRREVOCABLY
AND VOLUNTARILY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
SUCH CLAIM. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES ENTERING
INTO THE LOAN DOCUMENTS.

     (ix) EXCEPT AS PROHIBITED BY -LAW, THE BORROWER HEREBY WAIVES ANY RIGHT IT
MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE
OR CONSEQUENTIAL

<PAGE>

DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. THE
BORROWER CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE BANK HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE BANK WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER. THIS WAIVER CONSTITUTES A
MATERIAL INDUCEMENT FOR THE BANK TO ACCEPT THIS NOTE AND MAKE THE LOANS.

     (h) Upon receipt of an affidavit of an officer of the Bank as to the loss,
theft, destruction or mutilation of this Note or any other Loan Document which
is not of public record, and, in the case of any such loss, theft, destruction
or mutilation, upon surrender and cancellation of such Note or other security
document, the Borrower will issue, in lieu thereof, a replacement Note or other
security document in the same principal amount thereof and otherwise of like
tenor.

     (i) The Bank shall have the unrestricted right at any time and from time to
time, and without the consent of or notice to the Borrower or any other party
obligated on this Note, to grant to one or more banks or other financial
institutions (each, a "Participant") participating interests in any obligation
of the Bank to extend credit to the Borrower and/or any or all of the
Liabilities held by the Bank. In the event of any such grant by the Bank of a
participating interest to a Participant, whether or not upon notice to the
Borrower, the Bank shall remain responsible for the performance of its
obligations hereunder and the Borrower shall continue to deal solely and
directly with the Bank in connection with the Bank's rights and obligations
hereunder. The Bank may furnish any information concerning the Borrower in its
possession from time to time to prospective assignees and Participants, provided
that the Bank shall require any such prospective assignee or Participant to
agree in writing to maintain the confidentiality of such information.

     (j) This Note shall be binding upon and inure to the benefit of the
Borrower, the Bank, all future holders of this Note and their respective
successors and assigns, except that the Borrower may not assign or transfer any
of its rights under this Note without the prior written consent of the Bank. The
term "Bank" as used herein shall be deemed to include the Bank and its
successors, endorsees and assigns. The Bank shall have the unrestricted right at
any time or from time to time, and without the Borrower's consent, to assign all
or any portion of its rights and obligations hereunder and/or under any of the
other Loan Documents to one or more Banks (each, an "Assignee"), and the
Borrower agrees that it shall execute, or cause to be executed, such documents,
including without limitation, amendments to this Note and to any other
documents, instruments and agreements executed in connection herewith as the
Bank shall deem necessary to effect the foregoing. In addition, at the request
of the Bank and any such Assignee, the Borrower shall issue one or more new
promissory notes, as applicable, to any such Assignee and, if the Bank has
retained any of its rights and obligations hereunder following such assignment,
to the Bank, which new promissory notes shall be issued in replacement of, but
not in discharge of, the liability evidenced by the promissory note held by the
Bank prior to such assignment and shall reflect the amount of Loans held by such
Assignee and the Bank after giving effect to such

<PAGE>

assignment. Upon the execution and delivery of appropriate assignment
documentation, amendments and any other documentation required by the Bank in
connection with such assignment, and the payment by Assignee of the purchase
price agreed to by the Bank, and such Assignee, such Assignee shall be a party
to this Agreement and shall have all of the rights and obligations of the Bank
hereunder and under each other assigned Loan Document (and under any and all
other guaranties, documents, instruments and agreements executed in connection
herewith) to the extent that such rights and obligations have been assigned by
the Bank pursuant to the assignment documentation between the Bank and such
Assignee, and the Bank shall be released from its obligations hereunder and
thereunder to a corresponding extent.

     (k) This Note and the other Loan Documents are intended by the parties as
the final, complete and exclusive statement of the transactions evidenced
thereby. All prior or contemporaneous promises, agreements and understandings,
whether oral or written, are deemed to be superceded by this Note and such
other Loan Documents, and no party is relying on any promise, agreement or
understanding not set forth in this Note or such other Loan Documents. Neither
this Note nor any of such other Loan Documents may be amended or modified except
by a written instrument describing such amendment or modification executed by
the Borrower and the Bank.

     (l) This Note shall replace and supersede the Amended and Restated
Promissory Note made by the Borrower to the order of the Bank dated as of
October 31, 2005 (the "Prior Note"); provided, however, that the execution and
delivery of this Note shall not in any circumstance be deemed to have
terminated, extinguished or discharged the Borrower's indebtedness under such
Prior Note, all of which indebtedness shall continue under and be governed by
this Note and the documents, instruments and agreements executed pursuant hereto
or in connection herewith. This Note is a replacement, consolidation, amendment
and restatement of the Prior Note and IS NOT A NOVATION. The Borrower shall also
pay and this Note shall also evidence any and all unpaid interest on all Loans
made by the Bank to the Borrower pursuant to Prior Note, and at the interest
rate specified therein, for which this Note has been issued as replacement
therefor.

                                        MOVADO GROUP, INC.


                                        By: /s/ T F Michno
                                            ------------------------------------
                                        Name: T F Michno
                                        Title: General Counsel

<PAGE>

CORPORATE RESOLUTION                                       BANK OF AMERICA, N.A.

Date: 12/9, 2005

I, Timothy F. Michano, hereby certify that(1) I am the Secretary of Movado
Group, Inc, a corporation organized and existing under the laws of the State of
NY, (2) no proceedings are pending for the dissolution or liquidation of said
corporation and, to the best of my knowledge, no such proceedings are threatened
or contemplated, (3) the following is a true, accurate and compared extract from
the meetings of the Board of Directors of said corporation duly held on 11/28,
2005, at which meeting there was present, at all times, a quorum authorized to
transact the business hereinafter described, (4) the proceedings at said meeting
were in accordance with the charter and bylaws of this corporation, that the
votes taken remain in full force and effect and such votes have not been
revoked, annulled, amended or supplemented in any manner whatsoever, (5) no
other votes have been adopted or executed by the Board or any committee of the
Board relating to the authorization referred to in such votes and (6) each of
the persons named below the extract of the votes is a duly elected and qualified
and acting officer of this corporation as set forth below opposite such person's
name, the signature set forth opposite each such name is the genuine signature
of such person and each such person is authorized to act on behalf of this
corporation.

"Upon motion duly made and seconded, it was

VOTED: THAT   [ ] One signature   [X] Two signatures   [ ] Other:

of the authorized officers of this corporation be required and such officer(s)
is/are hereby authorized and empowered in the name of and on behalf of this
corporation:

1. To borrow money and to obtain credit for this corporation from and to settle
or compromise obligations with Bank of America, N.A. (the "Bank"), a national
banking association with its principal office in Charlotte North Carolina and
with offices in Hartford, Connecticut, on such terms as he/she/they deem proper
and to execute and deliver notes, drafts, acceptances, instruments of guaranty,
agreements and any other obligations of this corporation, containing such terms
and conditions and in such form as may be required by said Bank.

2. To pledge, mortgage, forbear and modify existing obligations, grant a
security interest in, or assign to said Bank as security for money borrowed or
credit obtained any and all assets and property of this corporation including,
without limitation, any of the stocks, bonds or other securities, bills
receivable, accounts, mortgages, merchandise, bills-of-lading, warehouse
receipts, insurance policies, certificates, contracts, inventory, machinery,
equipment and any other property, real or personal, tangible or intangible, held
by or belonging to this corporation, whether now owned or hereafter acquired and
of whatever nature and kind and wherever located, and to endorse, assign or
guarantee such of said assets and property as is necessary in the name of this
corporation.

3. To discount with said Bank upon such terms as he/she/they may deem proper any
bills receivable or any paper held by this corporation, with full authority to
endorse the same in the name of this corporation.

4. To take any and all actions as he/she/they deem necessary, desirable or
appropriate to effect the purposes of the above votes, including, but not
limited to, the execution and delivery of any and all documents, instruments,
agreements, certificates, declarations, statements, forms and other papers
required by said Bank in connection with any of the foregoing matters, any such
action to be conclusive evidence of his/her/their authority to act; and

VOTED: That the foregoing powers and authority shall continue and remain in full
force and effect until revoked or modified by votes of the Board and until
written notice of revocation or modification thereof has been received and
acknowledged, in writing, by an officer of the Bank."

<TABLE>
<CAPTION>
Name                   Title            Signature
----                   -----            ---------
<S>                    <C>              <C>


--------------------   --------------   ----------------------------------------
</TABLE>


                                        /s/ Timothy F. Michno
                                        ----------------------------------------
                                        Secretary/Clerk of the Corporation