Document:

forsgateindustrial.htm

    Exhibit
10.42

    

    

    

    FIRST AMENDMENT OF
LEASE

    

    

               THIS FIRST AMENDMENT OF LEASE
dated as of February 27, 2009 by and between FORSGATE INDUSTRIAL COMPLEX, a
limited partnership with an address at 400 Hollister Road, Teterboro, New
Jersey  07608 (hereinafter called “Landlord”) and MOVADO GROUP, INC., a New York
corporation, having its principal offices at 650 From Road, Paramus, New
Jersey  07652 (hereinafter called “Tenant”).

    

    W
I T N E S S E T H:

    

               WHEREAS, Landlord and Tenant
entered into a Lease dated May 22, 2000 (the “Lease”), for approximately 99,962
square feet in a building (the “Premises”) located on property more commonly
known as 105 State Street, Moonachie, New Jersey; and

    

    WHEREAS, Tenant and Landlord
desire to amend the Lease to, among other things, extend the term of the
Lease.

    

    NOW THEREFORE, for ten dollars
and other good and valuable consideration, the parties agree as
follows:

    

    1. The term
of the Lease is hereby extended.  Accordingly, Paragraph 1(d) of the
Lease shall be deleted and replaced with the following language:

     

    “To commence on June 1, 2000 and to
terminate on July 31, 2019.”

     

    2. Effective
on April 1, 2009, Fixed Rent shall be as set forth below and, accordingly,
Paragraph 1(e) of the Lease shall be amended as follows:

     

    
      	
               
      

            	
              “Tenant
      shall pay to the Landlord as Fixed Rent for the demised premises
      commencing on March 1, 2009 to and through July 31, 2014, the sum of SEVEN
      HUNDRED FORTY-NINE THOUSAND SEVEN HUNDRED FIFTEEN AND NO/100 ($749,715.00)
      DOLLARS per annum, payable in equal monthly installments of SIXTY-TWO
      THOUSAND FOUR HUNDRED SEVENTY-SIX AND 25/100 ($62,476.25) DOLLARS, and
      commencing September 1, 2014 through August 31, 2019, the sum of EIGHT
      HUNDRED NINETY-FOUR THOUSAND SIX HUNDRED SIXTY THOUSAND AND NO/100
      ($894,660.00) DOLLARS per annum, payable in equal monthly installments of
      SEVENTY-FOUR THOUSAND FIVE HUNDRED FIFTY-FIVE THOUSAND AND NO/100
      ($74,555.00) DOLLARS.

            

    

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    

     

    Provided
the Lease is in full force and effect and Tenant is not in default after any
required notice and beyond any applicable cure period, Fixed Rent shall abate
from March 1, 2009 to and through July 31, 2009.”

     

    3. The
second paragraph of Paragraph 4 and Exhibit Y shall be deleted.  The
Deferred Rent schedule shall no longer be applicable.

     

    4. Paragraph
35 of the Lease shall be deleted and replaced with the following:

     

    “35.  NOTICES.                                           All
notices, demands and requests which may or are required to be given by either
party to the other shall be in writing.  All notices, demands and
requests by the Landlord to the Tenant shall be sent by recognized overnight
courier or by United States Certified Mail, postage prepaid, Return Receipt
Requested, addressed to the Tenant, to the attention of General Counsel, with a
simultaneous copy to the Senior Vice President, at the Premises, with a copy to
Tenant at the address specified on the first page of the First Amendment of
Lease, or at such other place as the Tenant may from time to time designate in a
written notice to the Landlord.  All notices, demands and requests by
the Tenant to the Landlord shall be sent by recognized overnight courier or by
United States Certified Mail, postage prepaid, Return Receipt Requested,
addressed to the Landlord at the address shown on the first page of this Lease
or at such other place as the Landlord may from time to time designate in a
written notice to the Tenant.  Notices, demands and requests which
shall be served upon the Landlord or the Tenant in the manner aforesaid shall be
deemed sufficiently served or given for all pur­poses hereunder at the time
such notice, demand or request shall be mailed, if sent by certified mail, or on
the date of the delivery, if sent by overnight courier.

     

    5. Paragraph
46A shall be deleted in its entirety.

     

    6. Upon the
expiration of the Lease, Tenant shall surrender the Premises in the condition
required under the terms of the Lease.  Notwithstanding the foregoing,
with respect to any alterations, additions or improvements made to the Premises,
Tenant’s obligation to restore the Premises to the condition which it was
originally delivered to Tenant as set forth in Paragraph 13 shall mean that
Tenant is obligated to restore the Premises to the condition shown on Exhibit 1
attached hereto and Tenant shall be obligated to remove only such alterations,
additions and/or improvements which are not shown on Exhibit
1.  Notwithstanding the preceding sentence, upon surrender, with
respect to the exterior perimeter of the Building which is shown on the attached
pictures, Tenant shall not  be obligated to restore any alterations,
additions and/or improvements to the exterior perimeter which are shown in such
pictures except that Tenant shall be obligated 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    to
replace the loading dock doors and levelers in the rear of the Building and
remove the compactor.

     

    7. Tenant
represents that its North American Industry Classification System number
(“NAICS”) is 334518.  If Tenant’s operations at the Premises are
outside of those industrial operations covered by ISRA, and if the NJDEP is not
granting letters of non-applicability for operations outside of ISRA, Tenant
agrees that it shall, six (6) months prior to the termination of the Lease, (i)
execute and deliver to Landlord an application for a letter of non-applicability
under ISRA from the NJDEP with respect to the Premises, and certify, represent
and warrant to Landlord the accuracy of such application, which certification,
representation and warranty shall survive the termination of the Lease and (ii)
represent to Landlord that its NAICS number is 334518 and its operations are
outside of those industrial operations covered by ISRA.

     

    8. Except as
expressly modified herein, all of the provisions of the Lease shall remain
unchanged and in full force and effect and Landlord and Tenant ratify and
confirm the terms of the Lease.

     

    

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

                          IN
WITNESS WHEREOF the parties have executed this Amendment on the day and year
first above written.

    

    

    
      	
              WITNESS

               

               

               

               

              /s/ Andrew L. Moss

               

               

              /s/ Andrew L. Moss

            	
              FORSGATE INDUSTRIAL
      COMPLEX,

               

              Landlord

               

               

              By:  /s/ Charles Klatskin

              Charles Klatskin, General
      Partner

               

               

              By: /s/ Stephen Seiden

              Stephen Seiden, General
      Partner

            
	 
      	 
      
	
              WITNESS

               

               

               

               

               

              /s/ Sallie A. DeMarsilis

            	
              MOVADO
      GROUP, INC.

               

              Tenant

               

               

              By:  /s/ Rick Cote

              Name: Rick Cote

              Title: COO

            
	 
      	 
      

    

     

     

     

    
      
        
           

           

        

         

      

      
        4jvagreement.htm

    

      EXHIBIT
10.47 **

       

      Execution
Copy

       

      DATED                                                                                                                      May
1, 2007

       

      

       

      

       

      

       

      SWICO
LIMITED

       

      and

      

      MOVADO
GROUP, INC.

       

      and

       

      MGS
DISTRIBUTION LIMITED

       

      

       

      

       

      ____________________________________________

       

      JOINT
VENTURE AGREEMENT

      ____________________________________________

       

      

      

      **
CONFIDENTIAL PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED FROM:

      
        	
                (1)  

              	
                THE
      FOLLOWING PAGES OF THE FOUR DISTRIBUTORSHIP AGREEMENTS ANNEXED HERETO
      COLLECTIVELY AS ANNEX B: TOMMY HILFIGER AGREEMENT - PAGES 6 AND 18; JUICY
      COUTURE AGREEMENT – PAGES 6, 7 AND 19; HUGO BOSS AGREEMENT – PAGES 6 AND
      18; LACOSTE AGREEMENT – PAGES 38 AND 39 AND SCHEDULE
  VIII;

              

      

      
        	
                (2)  

              	
                ANNEX
      B TO (WHICH IS THE LAST PAGE OF) THE SERVICE AGREEMENT ANNEXED HERETO AS
      ANNEX C;

              

      

      
        	
                (3)  

              	
                ALL
      OF ANNEX D

              

      

      AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION (“SEC”) PUSUANT TO RULE
24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (“1934
ACT”)

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      TABLE
OF CONTENTS

      

       

      1.           INTERPRETATION [INSERT PAGE NUMBER]

       

       

      2.           ESTABLISHMENT
OF THE COMPANY [INSERT PAGE
NUMBER]

       

       

      3.           BUSINESS OF
THE COMPANY AND INITIAL OPERATIONS [INSERT PAGE NUMBER]

       

       

      4.           CORPORATE
GOVERNANCE AND MANAGEMENT [INSERT PAGE
NUMBER]

       

       

      5.           REPORTING
AND INFORMATION RIGHTS [INSERT PAGE
NUMBER]

       

       

      6.           RESTRICTIONS
ON TRANSFER OF SHARES [INSERT PAGE
NUMBER]

       

       

      7.           SWICO
CHANGE OF CONTROL [INSERT PAGE
NUMBER]

       

       

      8.           FINANCIAL
PERFORMANCE [INSERT PAGE
NUMBER]

       

       

      9.           BUY OUT
RIGHT [INSERT PAGE
NUMBER]

       

       

      10.           COVENANTS [INSERT PAGE NUMBER]

       

       

      11.           REPRESENTATIONS
AND WARRANTIES [INSERT PAGE
NUMBER]

       

       

      12.           FEES AND
EXPENSES [INSERT PAGE
NUMBER]

       

       

      13.           CONFIDENTIALITY [INSERT PAGE NUMBER]

       

       

      14.           PUBLICITY [INSERT PAGE NUMBER]

       

       

      15.           TERMINATION
AND BREACH [INSERT PAGE
NUMBER]

       

       

      16.           NOTICES [INSERT PAGE NUMBER]

       

       

      17.           MISCELLANEOUS [INSERT PAGE NUMBER]

       

       

      18.           GOVERNING
LAW AND JURISDICTION [INSERT PAGE
NUMBER]

       

      

      
        	
                 
      

              	
                List
      of Annexes

              

      

       

      Annex
A:  The Company governing documents

       

      Annex
B:  Distribution Agreements

       

      Annex
C:  Service Agreement

       

      Annex
D:  5-year business plan

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      THIS JOINT VENTURE AGREEMENT
is made on the 1st day of  May, 2007

       

      BETWEEN:

       

      SWICO LIMITED a company
incorporated under the laws of England, having its registered office at Meadway
House, Meadway, Haslemere, Surrey GU27 1NN, England, registered number 469666
(“Swico”)
;

       

      and

      

      MOVADO GROUP, INC. a company
incorporated under the laws of New York, having its principle office at 650 From
Road, Paramus, NJ 07652, U.S.A.  (“MGI”);

       

      and

       

      MGS  DISTRIBUTION
LIMITED a corporation incorporated under the laws of England, having its
registered office c/o Swico, Meadway, Haslemere, Surrey GU27 1NN, England,
registered
number                      (“Company”).

       

      

      WHEREAS
:

      
        	
                (A)

              	
                MGI
      wishes to develop its activities in the United Kingdom through, among
      other actions, the development of licensed brands and direct access to the
      market.

              

      

      

      
        	
                (B)

              	
                Swico
      is a watch distributor in the United Kingdom and is currently the
      distributor there of Hugo Boss watches under an agreement with MGI’s
      Affiliate, MGI Luxury Group, S.A., dated May 1, 2005 (“Swico HB
      Distributorship”).  In order to grow and secure the current
      business of its domestic markets, Swico is searching for new brands for
      distribution and a strong partner to develop for the long
      term.

              

      

      

      
        	
                (C)

              	
                In
      view of their satisfactory relationship and common objectives, Swico and
      MGI (collectively, the “Shareholders”)
      wish to create a joint venture relationship through ownership in the
      Company of, respectively, a 51% interest by MGI (or an entity that is
      owned 100% by MGI) and a 49% interest by
Swico.

              

      

      

      
        	
                (D)

              	
                The
      Shareholders wish to set forth herein certain matters relating to the
      establishment of the Company, the management and operations thereof, as
      well as the transfers by the Shareholders of their interests in the
      Company.

              

      

      

      NOW THEREFORE, in
consideration of the premises and the mutual covenants set forth herein, the
Shareholders agree as follows:

      

       

      
        	
                1.  

              	
                INTERPRETATION

              

      

       

      
        	
                1.1  

              	
                Definitions:  Unless
      the context otherwise requires, the following terms shall have the
      following meanings for purposes of this
  Agreement.

              

      

       

      "Affiliate" means,
with respect to any Person, any other Person that, either directly or indirectly
through one or more intermediate Persons, controls, is controlled by or is under
common control with such first Person.

       

      "Control" of a Person
means (i) ownership of more than 50% of the equity share capital or voting
rights of such Person or (ii) the power to direct the management or
policies of a Person, whether through the ownership of more than 50% of the
voting power of such Person, through the power to appoint at least half of the
members of the board of directors or similar governing body of such Person,
through contractual arrangements or otherwise.

       

      "Person" means any
natural person, firm, company, governmental authority, joint venture,
partnership, association or other entity (whether or not having separate legal
personality).

       

      "Related Party" means
(i) any shareholder, director or officer of the Company, (ii) any Relative of a
shareholder, director or officer of the Company and (iii) any Person in
which any shareholder, director or any officer of the Company or any Relative
thereof has any interest, other than a passive shareholding of less than 5% in a
company whose shares are listed on a recognized investment exchange or dealt in
on the Alternative Investment Market of the London Stock Exchange.

       

      "Relative" of a
natural Person means any spouse, parent, grandparent, child, grandchild or
sibling of such Person and any offspring of any of the foregoing.

       

      "Shares" means the
ordinary shares [of £1 each] in the capital of the Company.

       

      
        	
                1.2  

              	
                The
      following terms are defined in the indicated
  Clause:

              

      

       

      
        	
                “Board”

              	
                4.4.1

              
	
                "Business"

              	
                3.1

              
	
                “Business
      Plan”

              	
                8.1

              
	
                “Buy-Out
      Date”

              	
                9.1

              
	
                “Buy-Out
      Price”

              	
                9.2

              
	
                “Cash
      Flow Value”

              	
                9.2

              
	
                “Chairman”

              	
                4.4.2

              
	
                "Company"

              	
                Recitals

              
	
                "Confidential
      Information"

              	
                13.1

              
	
                “Director”

              	
                4.4.1

              
	
                “Distribution
      Agreements”

              	
                3.2

              
	
                "First
      Refusal Right"

              	
                6.5.2

              
	
                “Lock-up
      Expiration Date”

              	
                6.4

              
	
                “Non-Compete
      Covenant”

              	
                10.2.2

              
	
                "Offer
      Period"

              	
                6.5.2

              
	
                "Offer
      Price"

              	
                6.5.1

              
	
                “Offer
      Price Per Share”

              	
                6.5.1

              
	
                "Offered
      Shares"

              	
                6.5.1

              
	
                "Offeree"

              	
                6.5.1

              
	
                "Permitted
      Transferee"

              	
                6.3

              
	
                "Representatives"

              	
                13.1

              
	
                "Rules"

              	
                18.2

              
	
                “Service
      Agreement”

              	
                3.3

              
	
                "Shareholders"

              	
                Recitals

              
	
                “Shareholders’
      Meeting”

              	
                4.1

              
	
                "Tag-Along
      Right"

              	
                6.5.2

              
	
                "Transfer"

              	
                6.1

              
	
                "Transfer
      Notice"

              	
                6.5.1

              
	
                "Transferee"

              	
                6.5.1

              
	
                "Transferring
      Shareholder"

              	
                6.5.1

              
	
                “Swico
      Change of Control”

              	
                7.2

              
	
                “Swico
      HB Distributorship”

              	
                Recitals

              

      

      

       

      
        	
                2.  

              	
                ESTABLISHMENT
      OF THE COMPANY

              

      

       

      
        	
                2.1  

              	
                Contributions.    MGI
      shall subscribe for 51 Shares at a subscription price of £408,000,
      representing 51% of the total Shares to be in issue.  Swico
      shall subscribe for 49 Shares at a subscription price of £392,000, of
      which £372,000 shall be satisfied by Swico procuring the transfer to the
      Company of its inventory of Hugo Boss watches in saleable condition and
      related display material and spare parts for such watches, the aggregate
      fair market value of which is £372,000, and the balance of the
      subscription price of £20,000 shall be paid by Swico in cash so that the
      shareholding of Swico shall represent 49% of the total Shares to be in
      issue.  The Memorandum and Articles of Association of the
      Company are attached hereto as Annex
A.

              

      

       

      

       

       

      
        	
                3.  

              	
                BUSINESS
      OF THE COMPANY AND INITIAL OPERATIONS

              

      

       

      
        	
                3.1  

              	
                Principal
      Business.  The business of the Company shall be to sell,
      market and distribute in the United Kingdom certain watch brands pursuant
      to the Distribution Agreements (as defined below) (the "Business") in
      accordance with the Business Plan (as defined in Clause 8.1 below) and to engage in such other
      businesses or activities or make such other investments as may be approved
      by the Shareholders from time to time in accordance with this
      Agreement.

              

      

       

      
        	
                3.2  

              	
                Distribution
      Agreements.  MGI shall, or shall cause its appropriate
      Affiliate to, enter into exclusive distribution agreements, substantially
      in the form attached hereto as Annex B, except as the parties may
      otherwise agree (the “Distribution
      Agreements”), with the Company, and the Company will enter into the
      Distribution Agreements, pursuant to which MGI or its appropriate
      Affiliate shall grant to the Company the exclusive right to distribute
      HUGO BOSS, TOMMY HILFIGER, LACOSTE and JUICY COUTURE watches in the United
      Kingdom. Swico and MGI agree that, upon the effective date of the
      Distribution Agreement relating to the distribution of HUGO BOSS watches,
      they will take all action or cause their Affiliates, as the case may be,
      to take all action, to terminate the Swico HB
      Distributorship.  In addition, subject to Clause 10.2.2,
      MGI will, or will cause its appropriate Affiliate to, offer to the Company
      substantially similar watch distribution agreements in the United Kingdom
      for any other brands which may hereafter be licensed to MGI or any of its
      Affiliates, subject, in each case, to the terms, conditions and
      limitations set forth in each licence, and the Company shall enter into,
      and the Shareholders will take all action to cause the Company to enter
      into, such distribution agreements. All references in this Agreement to
      “Distribution Agreements” shall include all such additional distribution
      agreements as may be entered into from time to time by the Company and MGI
      or any of its Affiliates. Any failure by MGI or its Affiliates to offer or
      execute such additional distribution agreements shall be deemed to be a
      material breach by MGI of this Agreement, and any failure by either
      Shareholder to take all action to cause the Company to enter into such
      additional distribution agreements shall be deemed to be a material breach
      by such Shareholder of this
Agreement

              

      

       

      
        	
                3.3  

              	
                Service
      Agreement.  Swico shall enter into a service agreement,
      substantially in the form attached as Annex C, with the Company (the
      “Service Agreement”), and the Company shall enter into the Service
      Agreement with Swico pursuant to which Swico shall provide to the Company
      certain services relating to the day-to-day operations of the
      Business.

              

      

       

      

       

      
        	
                3.4  

              	
                Employees.

              

      

       

      
        	
                (a)  

              	
                Swico
      shall arrange in consultation with MGI the hiring of adequate staff,
      including sales staff, by the Company. Such staff shall include sales
      staff derived from employees of Swico currently dedicated to the HUGO BOSS
      brand. Swico shall assume the costs of transferring the employment of such
      employees to the Company.

              

      

       

      
        	
                (b)  

              	
                All
      employees shall be employed by the Company at market-standard rates of
      compensation with market-standard benefits. Employees transferred from
      Swico will benefit from the terms and conditions applicable to their
      employment on the date of transfer ; provided however that the Company
      shall in no event assume any liability or obligation (including, without
      limitation, pension liabilities or other accrued liabilities) owed by
      Swico to any such employees which arose prior to the date of their
      transfer. If, notwithstanding the foregoing, the Company shall be deemed
      to have assumed any such liability or obligation, then Swico will
      indemnify, defend and hold the Company harmless against and in respect of
      all such liabilities and obligations.  Swico shall indemnify and
      hold harmless the Company from and against any losses and expenses arising
      from any claim by any employee of Swico relating to such transfers or the
      transactions contemplated hereby, including without limitation any tax
      liability or any claim by any such employee that such employee’s
      employment should have been transferred to the
  Company.

              

      

       

      
        	
                (c)  

              	
                All
      agreements with employees (including those relating to compensation,
      commissions, benefits other agreements) shall be set forth in writing and
      made available for review by, and, if required pursuant to
      Clause 4.3.1, the approval of, the Chairman (as defined
      below).

              

      

       

      
        	
                3.5  

              	
                Insurance.  Swico
      shall cause the Company to be covered by Swico’s group umbrella insurance
      policies as part of the services provided pursuant to the Services
      Agreement, with the exception of marine insurance for goods in transit
      which coverage shall be provided by MGI as part of its umbrella coverage
      for Affiliates .  The Company shall reimburse to MGI MGI’s
      incremental costs incurred relating to such insurance coverage promptly
      upon receipt from MGI of an invoice
therefor.

              

      

       

      
        	
                3.6  

              	
                Systems.  At
      any time after the combined sales of the Company for any fiscal year
      exceed £10 million, upon the request of MGI, the Company shall implement
      and the Shareholders shall take all action to cause the Company to
      implement, and Swico shall (in connection with the services provided by it
      under the Service Agreement) implement, MGI’s information technology
      systems for accounting/financial
reporting.

              

      

       

      

       

       

      
        	
                4.  

              	
                CORPORATE
      GOVERNANCE AND MANAGEMENT

              

      

       

      
        	
                4.1  

              	
                General.  The
      Shareholders shall use their respective voting powers at general meetings
      of the Company (each a "Shareholders
      Meeting"), and shall take all other actions necessary, including
      action that may be taken through its shareholding in the Company, to give
      effect to all of the provisions of this Agreement, the Distribution
      Agreements and the Service Agreement.  In the event of any
      conflict between the terms of this Agreement, on the one hand, and the
      terms of the governing documents of the Company on the other hand, the
      terms of this Agreement shall
prevail.

              

      

       

      
        	
                4.2  

              	
                Managing
      Director.

              

      

       

      
        	
                4.2.1  

              	
                Appointment.  The
      Company shall be managed by a Managing Director. The Shareholders expect
      that Swico, based on its knowledge of the watch market in the United
      Kingdom, will furnish a recommendation for Managing Director to the
      Company for consideration. The Shareholders shall cause the Company to
      appoint as Managing Director the person recommended by Swico, following
      the prior approval of MGI, which shall not be withheld without good
      reason.  For the purposes of the preceding sentence, “good
      reason” shall include, without limitation, failure of the candidate to
      have satisfactory relations with retailers and failure of the candidate to
      have achieved satisfactory financial results (as compared to forecasted
      results) .  The Shareholders will cause the Company to remove
      the Managing Director upon request by Swico for any or no reason, or upon
      request by MGI, for good cause.  For the purposes of the
      preceding sentence, “good cause” shall include, without limitation, the
      failure of the Managing Director to properly manage the day-to-day
      activities of the Company, including without limitation the failure of the
      Managing Director to comply with the requirements set forth in
      Clause 4.2.3(b) below. The Managing Director shall devote all of his
      or her professional time to the business and operations of the Company;
      provided that if Mr. Keith Sheppard becomes the Managing Director, he
      shall devote such of his professional time to the business and operations
      of the Company as reasonably
necessary.

              

      

       

      
        	
                4.2.2  

              	
                Remuneration.  The
      remuneration of the Managing Director shall be determined and paid by the
      Company, subject to approval by the Chairman.  The Managing
      Director shall not have a separate employment contract, except as required
      by law and in no event shall the Managing Director be entitled to any
      severance payment of any kind whatsoever in the event of the termination
      of his employment by or resignation from the
  Company.

              

      

       

      
        	
                4.2.3  

              	
                Duties and Powers of
      the Managing Director.

              

      

       

      
        	
                 
      

              	
                (a)

              	
                Subject
      to the rights of the Chairman, the Board or of the Shareholders to approve
      certain specific decisions and actions as set forth in Clauses 4.3.1,
      4.3.2, 4.4.5 or 4.5.1 or as provided by
      applicable law, the Managing Director shall conduct the day-to-day
      activities of the Company.

              

      

       

      
        	
                 
      

              	
                (b)

              	
                The
      Managing Director shall:

              

      

       

      
        	
                 
      

              	
                (i)

              	
                promote
      the development of the Business;

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                ensure
      the continuity of the sales team
management;

              

      

       

      
        	
                 
      

              	
                (iii)

              	
                promote
      the continuity and development of customer
  relationships;

              

      

       

      
        	
                 
      

              	
                (iv)

              	
                liaise
      with Swico to ensure the continuity of the Swico personnel providing
      services to the Company pursuant to the Service
  Agreement;

              

      

       

      
        	
                 
      

              	
                (v)

              	
                prepare
      for review and approval by the Chairman a draft annual strategic plan,
      business plan and budget consistent with the Business Plan, and implement
      the approved annual strategic plan, business plan and
    budget;

              

      

       

      
        	
                 
      

              	
                (vi)

              	
                communicate
      regularly with the Chairman regarding the operations of the Company
      including meeting not less than quarterly with the Advisory Committee to
      discuss and review any material financial, commercial or strategic
      developments or issues, including, without limitation, any action taken by
      the Managing Director under
  Clause 4.2.3(c);

              

      

       

      
        	
                 
      

              	
                (vii)

              	
                cause
      the Company to adhere to the MGI group ethics and control policies as
      communicated by MGI from time to time and to comply with all procedures
      relating to MGI internal control over financial
  reporting;

              

      

       

      
        	
                 
      

              	
                (viii)

              	
                manage
      the employees of the
Company;  and

              

      

       

      
        	
                 
      

              	
                (xi)

              	
                comply
      with the requirements of this
Agreement.

              

      

       

      
        	
                 
      

              	
                (c)

              	
                Without
      limiting the provisions of sub-clause (a) above, the Managing
      Director may take the following actions without the prior approval of the
      Chairman or of the Board:

              

      

       

      
        	
                 
      

              	
                (i)

              	
                hire
      or terminate the employment of personnel having annual compensation of
      less than £50,000;

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                grant
      individual salary increases up to 10% higher than the increase based on
      the general cost of living index, or equivalent index in the United
      Kingdom, so long as total salary increases for such annual period do not
      exceed the budgeted salary
increases;

              

      

       

      
        	
                 
      

              	
                (iii)

              	
                negotiate
      and execute on behalf of the Company any commercial agreements in the
      ordinary course of business, consistent with past practice, if any,
      involving annual expenditures not to exceed the applicable budgeted amount
      for such expense category, or, absent a specific budgeted amount, the
      amount set forth in the Business Plan, or, absent any specific amount in
      the Business Plan, £50,000; and

              

      

       

      
        	
                 
      

              	
                (iv)

              	
                make
      payments from and deposits into the bank accounts of the Company in the
      ordinary course of business, consistent with past practice, if any, and to
      the extent not otherwise inconsistent with any other provision of this
      Agreement.

              

      

       

      
        	
                4.3  

              	
                Chairman.

              

      

       

      
        	
                 
      

              	
                4.3.1

              	
                Duties and Powers.
      The Chairman, who shall be appointed in accordance with
      Clause 4.4.2, shall have a role in the management of the business of
      the Company, as provided herein.  Without limiting the
      foregoing, the prior approval of the Chairman is required for any of the
      following decisions and actions to be taken, it being understood that the
      failure of the Managing Director to obtain the prior approval of the
      Chairman, or, failing approval by the Chairman, the approval of the
      Board,  with respect to any of the following shall be deemed to
      be a material breach by Swico of this Agreement referred to under
      Clause 15.2 of this Agreement; provided,
      that, in the event any annual budget has not been duly approved on or
      before December 31st
      of any year, then the Business Plan (during the first 5 years of this
      Agreement) or the budget of the previous year (after the fifth year of
      this Agreement) shall continue to apply on a temporary basis pending such
      approval:

              

      

       

      
        	
                 
      

              	
                (a)

              	
                hiring
      or termination of the employment of personnel with annual compensation in
      excess of £50,000 or of any Person who is a Relative of any Board member
      appointed by Swico or of the Managing
Director;

              

      

       

      
        	
                 
      

              	
                (b)

              	
                any
      action or decision that would represent a deviation of more than 5% with
      respect to any individual budget or Business Plan line
    item;

              

      

       

      
        	
                 
      

              	
                (c)

              	
                acquisition
      of fixed assets exceeding £50,000 individually or in the aggregate during
      any year, except to the extent specifically provided in the approved
      budget;

              

      

       

      
        	
                 
      

              	
                (d)

              	
                any
      material change to the marketing, sales or technology policies established
      by the Board;

              

      

       

      
        	
                 
      

              	
                (e)

              	
                incurrence
      of any liability in excess of £15,000 individually or collectively in any
      month, except to the extent specifically provided in the approved
      budget;

              

      

       

      
        	
                 
      

              	
                (f)

              	
                initiation
      or settlement of any litigation or claim exceeding
  £35,000;

              

      

       

      
        	
                 
      

              	
                (g)

              	
                entering
      into any contract not in the ordinary course of the business of the
      Company;

              

      

       

      
        	
                 
      

              	
                (h)

              	
                entering
      into any commercial agreements involving an annual amount exceeding
      £50,000, except to the extent specifically provided in the approved
      budget;

              

      

       

      
        	
                 
      

              	
                (i)

              	
                any
      decision or approval required in connection with the Service Agreement;
      and

              

      

       

      
        	
                 
      

              	
                (j)

              	
                making
      payments from the bank accounts of the Company other than in the ordinary
      course of business, except as otherwise expressly permitted by this
      Agreement.

              

      

       

      
        	
                 
      

              	
                4.3.2

              	
                With
      respect to the foregoing decisions and actions, the Managing Director
      shall notify the Chairman of the Managing Director’s recommendation for
      such decision or action.  The Chairman shall use reasonable
      efforts to inform the Managing Director of his decision thereon within
      five business days after such notification.  In the event the
      Chairman has not notified its decision to the Managing Director within
      such five business day period, the Managing Director may consider that the
      Chairman disagrees with the recommendation of the Managing Director and
      may submit such proposed decision or action to the Board for decision in
      accordance with Clause 4.3.3.  If the Chairman repeatedly
      fails to notify the Managing Director within such five business day period
      of its decision on any recommendation from the Managing Director, then
      Swico shall have the right to request that MGI replace the Chairman, which
      request MGI will consider in good
faith.

              

      

       

      
        	
                 
      

              	
                4.3.3

              	
                Disagreement of
      Managing Director and the Chairman.  Should the Managing
      Director and the Chairman disagree with respect to any of the decisions or
      actions set forth in Clause 4.3.1, either the Managing Director or
      the Chairman may submit such proposed decision or action to the Board for
      decision in accordance with this
Agreement.

              

      

       

      
        	
                 
      

              	
                4.3.4

              	
                Service
      Agreement.  The Managing Director shall consult the
      Chairman with respect to all decisions relating to the Service
      Agreement.  The Chairman shall have the opportunity to be
      present (including by telephone) or represented at all material
      discussions or reporting in connection with the Service Agreement, and the
      Managing Director shall provide the Chairman with copies of all material
      written communications and summaries of all material oral communications
      with Swico relating to the Service Agreement.  It is the
      intention of the Shareholders that the Chairman shall have the right in
      its sole discretion to make any decision to terminate the Service
      Agreement on behalf of the Company in accordance with Clause 5(b)
      thereof.  [Therefore, in the event the Chairman instructs the
      Managing Director to terminate the Service Agreement, the Managing
      Director shall so terminate the Service Agreement in accordance with the
      terms thereof.]  Any failure of the Managing Director to so
      follow the instructions of the Chairman expressed in compliance with the
      Service Agreement shall be deemed to be a material breach of this
      Agreement by Swico.

              

      

       

      
        	
                4.4  

              	
                Board of
      Directors.

              

      

       

      
        	
                4.4.1  

              	
                Number and
      Composition.  The board of directors of the Company (the
      “Board”)
      shall at all times shall be comprised of four members (each, a “Director”), two
      of whom shall be designated by MGI and two of whom shall be designated by
      Swico.

              

      

       

      
        	
                4.4.2  

              	
                Chairman.  The
      Board shall be presided by a Chairman (the “Chairman”).  He
      shall be designated (and may be removed at any time) by MGI from among the
      members of the Board appointed by MGI in accordance with Clause 4.4.1, provided, that
      MGI shall consult in good faith with Swico prior to so appointing the
      Chairman.  The Chairman shall not have a second or casting vote
      at any meeting of the Board or at any committee
  thereof.

              

      

       

      
        	
                 
      

              	
                4.4.3

              	
                Removal and
      Replacement of Directors.

              

      

       

      Each
Shareholder shall be entitled to remove and replace any Director appointed by it
as provided by Clause 4.4.1.. Each such Shareholder shall indemnify the Company
and keep the Company fully indemnified against any loss or damage or liability
(including without limitation all reasonable legal costs and expenses incurred)
suffered by the Company resulting from the removal or substitution of any
representative Director, or arising from any negligent act or omission of such
representative Director.

       

      
        	
                 
      

              	
                4.4.4

              	
                Board
      Meetings.

              

      

       

      
        	
                 
      

              	
                (a)

              	
                Meetings
      of the Board shall take place at least once every six-month
      period.

              

      

       

      
        	
                 
      

              	
                (b)

              	
                A
      meeting of the Board may be called by the Chairman or by any Director by
      giving notice in writing to the Company and the other Directors specifying
      the date, time and agenda for such meeting.   Not less than
      seven (7) days' notice shall be given to all Directors; provided, however, that
      such notice period (i) shall not apply in the case of an adjourned
      meeting and (ii) may be reduced with the written consent of all of
      the Directors.

              

      

       

      
        	
                 
      

              	
                (c)

              	
                All
      meetings of the Board shall require the presence in person, of both
      Directors appointed by MGI and both Directors appointed by
      Swico.  Any Director may, by written notice to all Directors
      transmitted by mail, electronic mail or facsimile, appoint his fellow
      representative Director as his alternate to attend and vote for such
      Director at any Board meeting and in which case such Director shall have
      two votes.

              

      

       

      
        	
                 
      

              	
                (d)

              	
                The
      adoption of any resolution of the Board shall require the unanimous
      approval of all Directors present or represented at a duly constituted
      meeting of the Board.  In the event the required affirmative
      vote is not obtained as to any proposed resolution, then the proposed
      resolution will not be adopted and, if it would have resulted in a
      modification of the Business Plan or this Agreement, the modification will
      not be adopted.  The Board shall not at any meeting adopt any
      resolution covering any matter that is not specified on the agenda for
      such meeting unless all Directors are present at such
    meeting.

              

      

       

      
        	
                 
      

              	
                (e)

              	
                Meetings
      of the Board, subject to applicable law, may be conducted via telephone or
      videoconference, with such participation constituting presence for
      purposes of the quorum requirement.  Meetings of the Board shall
      take place in England.

              

      

       

      
        	
                 
      

              	
                (f)

              	
                The
      costs of attendance of Directors at meetings of the Board shall, to the
      extent permitted by law, be borne by the
  Company.

              

      

       

      
        	
                 
      

              	
                (g)

              	
                Any
      action that may be taken by the Directors at a meeting of any Board may be
      taken by a written resolution signed by all of the Directors in lieu of a
      meeting.

              

      

       

      
        	
                 
      

              	
                4.4.5

              	
                Authority of
      Board.  The Board shall make all major decisions of the
      Company and all decisions outside the day- to-day business of the Company,
      except for (i) those decisions and actions that may be taken without
      such prior approval by the Managing Director alone or with the approval of
      the Chairman, in accordance with Clauses 4.2.3(c) or 4.3.1 and
      (ii) those decisions and actions that require the approval of the
      Shareholders in accordance with Clause 4.5.2.  In addition,
      the Board shall decide on any matter submitted to it by the Managing
      Director or the Chairman in case of disagreement between the Managing
      Director and the Chairman. Without limiting the foregoing, the following
      decisions and actions shall require the prior approval of the
      Board:

              

      

       

      
        	
                 
      

              	
                (a)

              	
                any
      acquisition or disposition of assets exceeding £15,000 individually or in
      any calendar month, other than as specifically approved by the Chairman or
      provided in the approved budget;

              

      

       

      
        	
                 
      

              	
                (b)

              	
                entry
      into any lease or sublease arrangement of real
  property;

              

      

       

      
        	
                 
      

              	
                (c)

              	
                any
      change to the agreed dividend policy set forth in Clause 10.1;

              

      

       

      
        	
                 
      

              	
                (d)

              	
                incurrence
      of indebtedness for borrowed money;

              

      

       

      
        	
                 
      

              	
                (e)

              	
                acquisition
      of the equity of another Person;

              

      

       

      
        	
                 
      

              	
                (f)

              	
                any
      participation in any joint venture or partnership;
  and

              

      

       

      
        	
                 
      

              	
                (g)

              	
                any
      material modification to the Business Plan (other than merely adopting
      annual budgets), including, without limitation, any such modification that
      results in: (i) a decrease in profitability by more than two percent
      (2.0%); (ii) an increase of expenses by more than five percent (5.0%)
      of the budgeted amount for such category of expenses; or (iii) an
      increase in working capital of more than five percent
    (5.0%);

              

      

       

      
        	
                 
      

              	
                (h)

              	
                approval
      of the annual budget and strategic plans and business plans proposed by
      the Managing Director and approved by the
  Chairman.

              

      

       

      

      
        	
                4.5  

              	
                Shareholder Meetings
      and Approval.

              

      

       

      
        	
                4.5.1  

              	
                Meetings of the
      Shareholders.  Shareholder meetings shall be promptly
      convened by the Chairman upon delivery to the Chairman of a written
      request therefor by any two Directors.  Shareholder Meetings may
      otherwise be convened as permitted or required by
      law.  

              

      

       

      
        	
                4.5.2  

              	
                Shareholder
      Approval.  The following actions and decisions relating
      shall require the approval of the Shareholders by a vote of at least 75%
      of all voting rights:

              

      

       

      
        	
                 
      

              	
                (a)

              	
                increase,
      amortization or reduction of
capital;

              

      

       

      
        	
                 
      

              	
                (b)

              	
                merger,
      spin-off, consolidation or transfer of any portion of the business or
      assets of any Company;

              

      

       

      
        	
                 
      

              	
                (c)

              	
                nomination
      of the statutory auditor;

              

      

       

      
        	
                 
      

              	
                (d)

              	
                approval
      of the annual accounts and affectation of the
  profit;

              

      

       

      
        	
                 
      

              	
                (e)

              	
                approval
      of agreements with any Related
Party;

              

      

       

      
        	
                 
      

              	
                (f)

              	
                transformation
      of the corporate form of the
Company;

              

      

       

      
        	
                 
      

              	
                (g)

              	
                dissolution,
      liquidation or reorganization or restructuring of the Company;
      and

              

      

       

      
        	
                 
      

              	
                (h)

              	
                all
      other matters for which shareholder approval is required in accordance
      with applicable law.

              

      

       

      

       

      
        	
                5.  

              	
                REPORTING
      AND INFORMATION RIGHTS

              

      

       

      
        	
                5.1  

              	
                Information
      Rights.  Each Shareholder and its authorized
      representatives, the Chairman, and each Director shall have the right,
      upon reasonable prior notice, during normal business hours to inspect from
      time to time the books and accounting records of the Company, to make
      extracts and copies therefrom at its own expense and to have full access
      to all of the Company's employees, property and assets.  The
      Managing Director shall ensure that the foregoing rights and access are
      provided.

              

      

       

      
        	
                5.2  

              	
                Books and
      Records.  The Company shall, and in particular the
      Managing Director shall cause the Company to, maintain proper, complete
      and accurate books of account in accordance with generally accepted
      accounting principles as applied by MGI and its Affiliates.  The
      Company shall have its accounts audited annually in accordance with such
      standards by a reputable firm of international accountants appointed by
      the Shareholders.  The Shareholders agree to take all action to
      cause the Company to appoint as statutory auditor the firm designated by
      MGI, with the initial firm serving as auditor to be
      PricewaterhouseCoopers.

              

      

       

      
        	
                5.3  

              	
                Reports.  The
      Company shall have or shall arrange to have furnished to it under the
      Service Agreement, or otherwise, sufficient accounting, technological and
      administrative personnel and infrastructure to satisfy the normal
      reporting requirements of the MGI group, as communicated by MGI to the
      Board and to the Managing Director from time to time, as well as the
      requirements of applicable law.   Without limiting the
      foregoing, the Company shall, and in particular the Managing Director
      shall cause the Company to, provide to the Board (i) unaudited
      financial data for the period just ended within  3 weeks after
      the end of each fiscal year and within 2 weeks after the end of each
      quarter (ii) within 2 months after the end of each fiscal year, the
      annual audited financial statements of the Company for such fiscal years,
      (iii) within  two weeks after the end of each quarter,
      quarterly unaudited financial statements of the Company for such quarter,
      (iv) within 20 days after the end of each month, a management report
      including without limitation key operating metrics (e.g. sales and return
      statistics), a comparison of operating results with the relevant operating
      budget and an  explanation of material differences between
      actual results and the budgeted amounts, if any and (v) such other
      reports as the Board may determine.  The failure of the Managing
      Director to comply with the foregoing reporting requirements within one
      week after notice of non-delivery of the report shall be deemed to be a
      material breach of this Agreement by
Swico.

              

      

       

      
        	
                5.4  

              	
                Budgets and Business
      Plans.  The Managing Director shall prepare proposed
      annual operating and capital budgets and business plans for the Company,
      which shall be submitted to the Chairman and to the Board  for
      approval.

              

      

       

       

      
        	
                6.  

              	
                RESTRICTIONS
      ON TRANSFER OF SHARES

              

      

       

      
        	
                6.1  

              	
                Limitation on
      Transfers.  No Shareholder shall sell, give, assign,
      pledge, encumber, grant a security interest in or otherwise dispose of any
      Shares (each, a "Transfer"),
      except as expressly permitted by this Clause 6.  Any attempt to Transfer any Shares
      in violation of the preceding sentence shall be null and void, and the
      Company shall not register any such
Transfer.

              

      

       

      
        	
                6.2  

              	
                Transfers.  Notwithstanding
      any other provision of this Agreement, no Transfer may be made unless
      (a) the transferee has agreed in writing to be bound by the terms and
      conditions of this Agreement and (b) the Transfer complies in all
      respects with the other applicable provisions of this Agreement and the
      governing documents of the Company.  The non-transferring
      Shareholder shall cooperate with the transferring Shareholder in respect
      of all transfers permitted
hereunder.

              

      

       

      
        	
                6.3  

              	
                Transfers to
      Affiliates.  Any Transfer by a Shareholder to an
      Affiliate thereof (a “Permitted
      Transferee”) may be made on the condition that the Permitted
      Transferee shall be bound by and agrees to all of the provisions of this
      Agreement and; provided, that
      the transferring Shareholder shall obtain the written consent to such
      Transfer from the other Shareholder, which shall not be unreasonably
      withheld.  Any Transfer made in accordance with the previous
      sentence may be made without compliance with the provisions of
      Clause 6.4 or 6.5.  If a Permitted Transferee after
      any such Transfer ceases to be an Affiliate of the transferring
      Shareholder, such Permitted Transferee shall transfer such Shares back to
      such transferring Shareholder.

              

      

       

      
        	
                6.4  

              	
                Prohibited
      Transfers.  Notwithstanding anything in this Agreement to
      the contrary, no Transfers, other than Transfers permitted pursuant to
      Clause 6.3, shall be made prior to July
      1, 2012 (the “Lock-up Expiration
      Date”).

              

      

       

      
        	
                6.5  

              	
                Transfers to Third
      Parties.

              

      

       

      
        	
                6.5.1  

              	
                Transfer
      Notice.  If a Shareholder (the "Transferring
      Shareholder") receives a bona fide offer to acquire Shares and the
      Transferring Shareholder proposes to accept such offer, the Transferring
      Shareholder shall send written notice (the "Transfer
      Notice") to the Company and the other Shareholder (the "Offeree"),
      which notice shall state (i) the name of the Transferring
      Shareholder, (ii) the name and address of the proposed transferee
      (the "Transferee"),
      (iii) the number of Shares to be Transferred (the "Offered
      Shares"), (iv) the amount and form of the proposed
      consideration for the Transfer, (v) the other terms and conditions of
      the proposed Transfer and (vi) confirmation that the Transferee is
      willing to purchase the Shares held by the Offeree on the same terms and
      conditions.  In the event that the proposed consideration for
      the Transfer includes consideration other than cash, the Transfer Notice
      shall include a calculation of the fair market value of such consideration
      and an explanation of the basis for such calculation.  The total
      value of the consideration for the proposed Transfer is referred to herein
      as the "Offer
      Price", and the “Offer Price Per
      Share” shall equal the Offer Price divided by the number of Offered
      Shares.

              

      

       

      
        	
                6.5.2  

              	
                Rights of
      Offeree.  For a period of 30 days after delivery of a
      Transfer Notice (the "Offer Period"),
      the Offeree shall have the right by delivering written notice to the
      Transferring Shareholder to such effect (the “First Refusal
      Right”) to (i) purchase in aggregate all, but not less than
      all, of the Offered Shares at a purchase price equal to the Offer Price,
      (ii) purchase 100% of the Shares held by the Transferring Shareholder
      and any Permitted Transferees to which the Transferring Shareholder shall
      have transferred Shares at a price equal to the Buyout Price,
      (iii) sell all of the Shares owned by it to the Transferee at a price
      equal to the Offer Price Per Share multiplied by the number of shares held
      by the Offeree and otherwise pursuant to the terms and conditions set
      forth in the Transfer Notice (the “Tag Along
      Right”) or (iv) withhold its consent to the sale by the
      Transferring Shareholder to the Transferee in its absolute discretion, in
      which event the Transferring Shareholder shall not consummate such
      Transfer. The notice delivered by the Offeree to the Transferring
      Shareholder shall state which of the foregoing alternatives (i-iv) the
      Offeree has elected.

              

      

       

      
        	
                6.5.3  

              	
                Sale to Third-Party
      Purchaser.  Unless the Offeree shall have elected during
      the Offer Period in accordance with Clause 6.5.1 to exercise its First Refusal Right, its
      Tag Along Right, to be bought out or to withhold its consent to the sale
      by the Transferring Shareholder to the Transferee, the Transferring
      Shareholder may Transfer all of the Offered Shares to the Transferee
      identified in the Transfer Notice on the terms and conditions set forth in
      the Transfer Notice; provided, that
      the Transfer shall be completed within three months after the giving of
      the Transfer Notice.

              

      

       

      

       

       

      
        	
                7.  

              	
                SWICO
      CHANGE OF CONTROL

              

      

       

      
        	
                7.1  

              	
                Change of Control of
      Swico.  Swico shall provide to MGI at least forty five
      (45) days prior notice of any Swico Change of Control.  MGI
      shall have the right to purchase all of the Shares held by Swico and all
      Permitted Transferees to which Swico shall have transferred Shares at the
      Buyout Price, by sending notice to such effect to Swico within thirty (30)
      days after receipt of such notice.

              

      

       

      
        	
                7.2  

              	
                Definition of Swico
      Change of Control.  A “Swico Change of
      Control” shall be deemed to occur if (i) any competitor of MGI
      acquires more than 5% of the shares or voting rights of Swico or any
      Affiliate thereof (or, in the event the shares of Swico become publicly
      traded on a recognized investment exchange, such competitor acquires more
      than 10% of the shares or voting rights of Swico or any Affiliate thereof)
      or (ii) Mr. Keith Sheppard ceases to spend at least 50% of his time
      in the active day-to-day management of Swico or its Affiliates for any
      reason other than death or permanent disability.  For the
      purposes of this Clause 7.2, Fossil,
      Swatch Group, Callanan International, Egana, Binda, Vestal and Advance,
      and any of their successors in interest, shall be deemed to be competitors
      of MGI, and, whether any other Person shall be considered to be a
      competitor of MGI shall be determined using reasonable judgment after
      taking into consideration the price, market position and placement at
      point of sale of the products of such
Person.

              

      

       

      

       

       

      
        	
                8.  

              	
                FINANCIAL
      PERFORMANCE

              

      

       

      
        	
                8.1  

              	
                Business
      Plan.  Attached hereto as Annex D is the agreed business
      plan for the Company setting out specific financial performance measures
      annually for the period ending January 31, 2012 and containing the
      underlying principles and assumptions on the basis of which the
      Shareholders agree that the Business will be run for the duration of this
      Agreement (such business plan, as expressly duly modified by the
      Shareholders in accordance with the terms of this Agreement, the “Business
      Plan”).

              

      

       

      
        	
                8.2  

              	
                Poor Financial
      Performance Year 5.  In the event that, (i) based on
      the audited consolidated financial statements of the Company for the years
      ended January 31, 2008 through January 31, 2012, the Company has a
      cumulative loss or (ii) based on the audited consolidated financial
      statements of the Company for the years ended January 31, 2011 and January
      31, 2012, the Company has failed to attain an average annual return on
      sales of at least 3%, then either Shareholder may elect by notice to the
      other Shareholder on or before April 30, 2012 to dissolve the Company, and
      both Shareholders shall vote in favour of such dissolution at the
      Shareholder Meeting duly convened for such purpose and shall otherwise
      co-operate in respect thereof.

              

      

       

      
        	
                8.3  

              	
                Poor Financial
      Performance Year 10.  In the event that, based on the
      audited consolidated financial statements of the Company for the years
      ended January 31, 2015 to January 31, 2017, the Company has failed to
      attain an average annual return on sales of at least 5%, then either
      Shareholder may elect by notice to the other Shareholder on or before
      April 30, 2017 to dissolve the Company, and both Shareholders shall vote
      in favour of such dissolution at the Shareholder Meeting duly convened for
      such purpose and shall otherwise co-operate in respect
      thereof.

              

      

       

      

       

       

      
        	
                9.  

              	
                BUY
      OUT RIGHT

              

      

       

      
        	
                9.1  

              	
                Buy-Out
      Right.  MGI shall have the right to purchase the Shares
      of Swico and all Permitted Transferees to which Swico shall have
      transferred Shares hereunder on July 1, 2017 and each fifth anniversary
      thereof (each such date or, if such date is not a business day, the next
      following business day, a “Buy-Out Date”),
      by notice to Swico at least eighteen (18) months prior to any Buy-Out
      Date, at the Buy-Out Price (as defined below).  Upon receipt of
      such notice, Swico and any such Permitted Transferees shall be required to
      so transfer their Shares to MGI on the Buy-Out
  Date.

              

      

       

      
        	
                9.2  

              	
                Buy-Out
      Price.  The “Buy-Out Price”
      shall equal the product of (i) the percentage of total Shares held by
      the transferring party(ies) and (ii) 5 multiplied by the “Cash Flow
      Value” (which is hereby defined as the average annual operating
      cash flow (EBIT) for the three fiscal years prior to the Buy-Out Date
      based on the audited consolidated financial statements of the Company),
      plus the net asset value of the Company (on a consolidated basis) on the
      Buy-Out Date (or minus the net liability value of Company (on a
      consolidated basis) on the Buy-Out Date, as the case may
    be).

              

      

       

      

       

       

      
        	
                10.  

              	
                COVENANTS

              

      

       

      
        	
                10.1  

              	
                Dividend
      Policy.  The Parties agree that a dividend equal to 75%
      of the distributable profits of the Company on a consolidated basis in any
      year shall be declared as a dividend to the Shareholders on or before the
      15th
      month after the end of such year, to the extent permitted by applicable
      law; provided, that
      such policy may be modified or waived pursuant to decision of the
      Board.

              

      

       

      
        	
                10.2  

              	
                Non-Competition.

              

      

       

      
        	
                10.2.1  

              	
                During
      the term of this Agreement, neither Swico nor its Affiliates shall without
      the prior consent of MGI, within any country where the Company regularly
      conducts business and distributes products, directly or indirectly
      distribute, sell or market any fashion watch brand that is competitive
      with any licensed brand distributed by or on behalf of MGI or any of its
      Affiliates in such country. Whether any fashion watch brand is competitive
      with any of MGI’s or its Affiliates’ licensed brands will be determined
      where applicable by reference to the applicable licence agreement itself;
      provided
      however that brands marketed by or on behalf of any of the following
      companies or their Affiliates shall be deemed to be competitive with the
      MGI licensed brands: Fossil, Swatch Group, Callanan International, Egana,
      Binda, Vestal and Advance.  Whether any other fashion brand
      shall be considered to be competitive with any MGI licensed brand shall be
      determined using reasonable judgment after taking into consideration brand
      message, price, market position, final consumer profile and placement at
      point of sale.  The Shareholders will consider appropriate
      exemptions from this provision in the event the Company commences to
      distribute products in any country other than the United Kingdom, where
      Swico or any of its Affiliates have pre-existing
  business.

              

      

       

      
        	
                10.2.2  

              	
                If
      Swico breaches any of the provisions of Clause 10.2.1 (the “Non-Compete
      Covenant”), MGI shall be released from its obligation to appoint
      the Company as distributor for any new MGI licensed
  brands.

              

      

       

      
        	
                10.2.3  

              	
                Swico
      agrees that the Non-Compete Covenant is reasonable in geographical and
      temporal scope and in all other respects.  If any court
      determines that the Non-Compete Covenant, or any part thereof, is invalid
      or unenforceable, the remainder thereof shall not thereby be affected and
      shall be given full effect without regard to the invalid
      portions.

              

      

       

      
        	
                10.2.4  

              	
                If
      any court determines that the Non-Compete Covenant is unenforceable
      because of the duration or geographic scope of such provision, such court
      shall have the power to reduce the duration or scope of such provision, as
      the case may be, and, in its reduced form, such provision shall then be
      enforceable.

              

      

       

      
        	
                10.3  

              	
                Non-Solicitation.  During
      the term of this Agreement and until the second anniversary of the valid
      termination or expiration thereof, neither MGI and its Affiliates, on the
      one hand, nor Swico and its Affiliates, on the other hand, shall recruit
      any employee, officer or director of the other for employment or as a
      consultant.

              

      

       

       

      
        	
                11.  

              	
                REPRESENTATIONS
      AND WARRANTIES

              

      

       

      
        	
                11.1  

              	
                Each
      Shareholder represents to the other Shareholder
  that:

              

      

       

      
        	
                 
      

              	
                11.1.1

              	
                such
      Shareholder has the full power and authority to enter into, execute and
      deliver this Agreement and to perform the transactions contemplated hereby
      and, if such Shareholder is not a natural Person, such Shareholder is duly
      incorporated or organized and existing under the laws of the jurisdiction
      of its incorporation or
organization;

              

      

       

      
        	
                 
      

              	
                11.1.2

              	
                the
      execution and delivery by such Shareholder of this Agreement and the
      performance by such Shareholder of the transactions contemplated hereby
      have been duly authorized by all necessary corporate or other action of
      such Shareholder;

              

      

       

      
        	
                 
      

              	
                11.1.3

              	
                assuming
      the due authorization, execution and delivery hereof by the other
      Shareholder, this Agreement constitutes the legal, valid and binding
      obligation of such Shareholder, enforceable against such Shareholder in
      accordance with its terms, except as such enforceability may be limited by
      applicable bankruptcy, insolvency, reorganization, moratorium or similar
      laws affecting creditors' rights generally;
and

              

      

       

      
        	
                 
      

              	
                11.1.4

              	
                the
      execution, delivery and performance of this Agreement by such Shareholder
      and the consummation of the transactions contemplated hereby will not
      (a) violate any provision of the organizational or governance
      documents of such Shareholder; (b) require such Shareholder to obtain
      any consent, approval or action of, or make any filing with or give any
      notice to, any governmental authority in such Shareholder's country of
      organization or any other Shareholder pursuant to any instrument, contract
      or other agreement to which such Shareholder is a party or by which such
      Shareholder is bound, or (c) conflict with or result in any breach of or
      default under any of the terms and conditions of any instrument, contract
      or other agreement by which such Shareholder is
  bound.

              

      

       

      

       

      
        	
                12.  

              	
                FEES
      AND EXPENSES

              

      

       

      
        	
                12.1  

              	
                Each
      Shareholder shall bear its own fees and expenses in connection with the
      preparation, execution and performance of this Agreement and the other
      documents contemplated hereby.

              

      

       

      

       

       

      
        	
                13.  

              	
                CONFIDENTIALITY

              

      

       

      
        	
                13.1  

              	
                General
      Obligation.  Each Shareholder undertakes that it shall
      not reveal, and shall use its reasonable efforts to ensure that its
      directors, officers, managers, partners, members, employees, legal,
      financial and professional advisors and bankers (collectively, "Representatives")
      do not reveal, to any third party any Confidential Information without the
      prior written consent of the Company or the Shareholder concerned, as the
      case may be.  The term "Confidential
      Information" as used in this Agreement means (a) any
      information concerning the organization, business, technology, finance,
      transactions or affairs of the Company and each Shareholder or any of
      their respective directors, officers or employees (whether conveyed in
      written, oral or in any other form and whether such information is
      furnished before, on or after the date of this Agreement) and (b) any
      information or materials prepared by a Shareholder or its Representatives
      that contains or otherwise reflects, or is generated from, Confidential
      Information.

              

      

       

      
        	
                13.2  

              	
                Exceptions.  The
      provisions of Clause 13.1 shall not
      apply to:

              

      

       

      
        	
                 
      

              	
                13.2.1

              	
                disclosure
      of Confidential Information that is or becomes generally available to the
      public other than as a result of disclosure by or at the direction of a
      Shareholder or any of its Representatives in violation of this
      Agreement;

              

      

       

      
        	
                 
      

              	
                13.2.2

              	
                disclosure
      by a Shareholder to its
Representatives;

              

      

       

      
        	
                 
      

              	
                13.2.3

              	
                disclosure,
      after giving prior notice to the other Parties to the extent practicable
      under the circumstances and subject to any practicable arrangements to
      protect confidentiality, to the extent required under the rules of any
      stock exchange or by applicable laws or governmental regulations or
      judicial or regulatory process or in connection with any judicial process
      regarding any legal action, suit or proceeding arising out of or relating
      to this Agreement; or

              

      

       

      
        	
                 
      

              	
                13.2.4

              	
                disclosure
      by any Shareholder of Confidential Information concerning the Company that
      is reasonably necessary in the ordinary course of business or otherwise in
      connection with transactions or proposed transactions of the
      Company.

              

      

       

      
        	
                13.3  

              	
                Disclosure to Third
      Parties.  Upon any Shareholder entering into negotiations
      with any Person with a view to Transferring any Shares to such Person,
      information in respect of the Company that is reasonably necessary to
      permit such Person to evaluate the business of the Company may be provided
      to such Person, provided that
      such Person has executed a confidentiality agreement in such form as may
      be reasonably required by the Board; and provided further that if
      such Person is involved in a business in competition with that of the
      Company, the Board may prohibit the disclosure of any such Confidential
      Information as the Board may
determine.

              

      

       

      

       

       

      
        	
                14.  

              	
                PUBLICITY

              

      

       

      
        	
                14.1  

              	
                Except
      as required by law or regulations of any stock exchange or by any
      governmental authority, no publicity release or public announcement
      concerning the relationship or involvement of the Parties shall be made by
      any Shareholder without advance approval thereof by the other Shareholder,
      which approval shall not be unreasonably
  withheld.

              

      

       

      

       

       

      
        	
                15.  

              	
                TERMINATION
      AND BREACH

              

      

       

      
        	
                15.1  

              	
                Term.  This
      Agreement shall become effective upon the execution hereof by the
      Shareholders and the Company and shall continue in effect until the
      earlier to occur of (a) the date on which the Company goes into
      liquidation or dissolution, any property or assets of the Company are
      placed in the hands of a receiver, trust custodian or liquidator or a
      winding up order in respect of the Company is issued, or (b) the date
      on which this Agreement is validly terminated in accordance with
      Clause 15.2 or (c) any date agreed
      upon in writing by the Shareholders or (e) where all the Shares are held
      by one Person.

              

      

       

      

       

      
        	
                15.2  

              	
                Breach.

              

      

       

      
        	
                 
      

              	
                15.2.1

              	
                Upon
      the material breach of this Agreement by any Shareholder, the
      non-breaching Shareholder may provide to the breaching Shareholder
      notification of such material breach, setting forth in reasonable detail
      therein the nature of such material breach.  The breaching
      Shareholder and the non-breaching Shareholder shall meet to discuss in
      good faith the material breach and the cure thereof. Following such
      discussion, formal notification (the “Notification”)
      may be given by the non-breaching Shareholder to the breaching Shareholder
      of the breach and requesting that the breaching Shareholder cure the
      breach.

              

      

       

      
        	
                 
      

              	
                15.2.2

              	
                If
      the breaching Shareholder shall not have cured such breach within 30 days
      after delivery of the Notification, the non-breaching Shareholder may,
      without prejudice to any other legal remedies it may have, within 60 days
      after expiration of such 30-day period, [(i) elect to terminate this
      Agreement and the Distribution Agreements], and dissolve and liquidate the
      Company (and the breaching Shareholder shall take all actions to
      co-operate in respect of the implementation of such dissolution and
      liquidation (including voting in favour thereof at the shareholder meeting
      duly convened for such purpose)) or (ii  elect to purchase the
      interests held by the breaching Shareholder and any Permitted Transferees
      thereof in the Company at a price equal to the product of (a) the
      percentage of total Shares held by the breaching Shareholder (and any
      Permitted Transferees thereof) and (b) 90% of 5 multiplied by the
      Cash Flow Value, plus the net asset value of the Company (on a
      consolidated basis) on the Buy-Out Date (or minus the net liability value
      of  the Company (on a consolidated basis) on the Buy-Out Date,
      as the case may be).  Notwithstanding the foregoing, if the
      Breach occurs during the 5 first years of activity (to January 31, 2012),
      such price will be equal to the multiple of (a) the percentage of
      total Shares held by the breaching Shareholder (and any Permitted
      Transferees thereof) and (b) 5 multiplied by the annual operating
      cash flow for the last fiscal year prior to the Buy-Out Date based on the
      audited consolidated financial statements of the Company, plus the net
      asset value of the Company (on a consolidated basis) on the Buy-Out Date
      (or minus the net liability value of the Company (on a consolidated basis)
      on the Buy-Out Date, as the case may be).  Alternatively the
      non-breaching Shareholder may offer to purchase the Shares held by the
      breaching Shareholder and any Permitted Transferees thereof in the Company
      at any other price to be negotiated by the
  Parties.

              

      

       

      
        	
                 
      

              	
                15.2.3

              	
                A
      “material breach” for purposes of this Clause 15.2 shall include the breach by a Shareholder
      of the provisions of this Agreement (including without limitation of the
      management rules, the decision-making process or the non-compete or
      non-solicitation undertakings) or a breach of the provisions of the
      Distribution Agreements or the Service Agreement (with any beach thereof
      by any Affiliate of MGI being attributed to MGI and any breach thereof by
      any Affiliate of Swico being attributed to Swico) resulting, in any of the
      foregoing events in damages to the Company in excess of
      £35,000.  Any material breach of, or actions inconsistent with,
      the terms of this Agreement (i) by the Managing Director or any
      Director designated by Swico shall be attributed to Swico, and
      (ii) by the Chairman or any Director designated by MGI shall be
      attributed to MGI.

              

      

       

      
        	
                15.3  

              	
                Damages.  In
      no event shall any Shareholder be required to pay indirect or
      consequential damages in respect of any breach by such Shareholder of any
      provision of this Agreement, except in the event of
  fraud.

              

      

       

      

       

       

      
        	
                16.  

              	
                NOTICES

              

      

       

      
        	
                16.1  

              	
                Each
      notice or other communication hereunder shall be in writing and delivered
      or sent to the relevant Shareholder at its address or fax number set out
      in Schedule 1 (or such other address or fax number as the addressee may
      specify to the other Parties).  Any notice or other
      communication  shall be deemed to have been delivered
      (a) if given or made by letter, when actually delivered to the
      relevant address; and (b) if given or made by fax, upon dispatch and
      the receipt of a transmission report confirming
  dispatch.

              

      

       

       

      
        	
                17.  

              	
                MISCELLANEOUS

              

      

       

      
        	
                17.1  

              	
                No
      Partnership.  The Shareholders expressly do not intend
      hereby to form a partnership, either general or limited, under any
      jurisdiction's partnership law.  The Shareholders do not intend
      to be partners one to another, or partners as to any third party, or
      create any fiduciary relationship among themselves, solely by virtue of
      their status as Shareholders.

              

      

       

      
        	
                17.2  

              	
                Discrepancies.  If
      there is any discrepancy between any provision of this Agreement and any
      provision of the governing documents of the Company, the provisions of
      this Agreement shall prevail, and the Parties shall procure that such
      governing documents are promptly amended, to the extent permitted by
      applicable law, in order to conform with this
  Agreement.

              

      

       

      
        	
                17.3  

              	
                Amendment.  This
      Agreement may not be amended, modified or supplemented except by a written
      instrument executed by each of the
Parties.

              

      

       

      
        	
                17.4  

              	
                Waiver.  No
      waiver of any provision of this Agreement shall be effective unless set
      forth in a written instrument signed by the Shareholder waiving such
      provision. No failure or delay by a Shareholder in exercising any right,
      power or remedy under this Agreement shall operate as a waiver thereof,
      nor shall any single or partial exercise of the same preclude any further
      exercise thereof or the exercise of any other right, power or
      remedy.  Without limiting the foregoing, no waiver by a
      Shareholder of any breach by the other Shareholder of any provision hereof
      shall be deemed to be a waiver of any subsequent breach of that or any
      other provision hereof.

              

      

       

      
        	
                17.5  

              	
                Entire
      Agreement.  This Agreement (together with the agreements
      attached as Annexes hereto) constitutes the whole agreement between the
      Parties relating to the subject matter hereof and supersedes any prior
      agreements or understandings relating to such subject
    matter.

              

      

       

      
        	
                17.6  

              	
                Severability.  Each
      and every obligation under this Agreement shall be treated as a separate
      obligation and shall be severally enforceable as such and in the event of
      any obligation or obligations being or becoming unenforceable in whole or
      in part.  To the extent that any provision or provisions of this
      Agreement are unenforceable they shall be deemed to be deleted from this
      Agreement, and any such deletion shall not affect the enforceability of
      this Agreement as remain not so
deleted.

              

      

       

      
        	
                17.7  

              	
                Assignment; Binding on
      Transferee.  The provisions of this Agreement shall be
      binding upon and inure to the benefit of the Parties hereto and their
      respective successors and Permitted Transferees and transferees under
      Clause 6.5 from and after the effective
      date hereof.  Neither Party may transfer its rights and
      obligations under this Agreement without the prior written consent, which
      shall not be unreasonably withheld, of the other
  Party.

              

      

       

       

      
        	
                18.  

              	
                GOVERNING
      LAW AND JURISDICTION

              

      

       

      
        	
                18.1  

              	
                This
      Agreement shall be governed by and construed in accordance with the laws
      of England.

              

      

       

      
        	
                18.2  

              	
                Disputes.

              

      

       

      
        	
                 
      

              	
                18.2.1

              	
                Any
      dispute or claim arising out of or in connection with or relating to this
      Agreement, or the breach, termination or invalidity hereof, including any
      claim for injunctive relief, shall be finally settled by arbitration under
      the Rules of Conciliation and Arbitration of the International Chamber of
      Commerce (the "Rules") as are
      in force at the time of any such arbitration.  For the purpose
      of such arbitration, there shall be three arbitrators appointed in
      accordance with the Rules.  The place of arbitration shall be in
      London.  All arbitration proceedings shall be conducted in the
      English language.   Judgment upon any arbitral award
      rendered hereunder may be entered in any court having jurisdiction, or
      application may be made to such court for a judicial acceptance of the
      award and an order of enforcement, as the case may
  be.

              

      

       

      
        	
                 
      

              	
                18.2.2

              	
                Each
      Shareholder shall co-operate in good faith to expedite (to the maximum
      extent practicable) the conduct of any arbitral proceedings commenced
      under this Agreement.

              

      

       

      
        	
                 
      

              	
                18.2.3

              	
                The
      costs and expenses of the arbitration, including, without limitation, the
      fees of the arbitrators shall be borne equally by each party to the
      dispute or claim, and each party shall pay its own fees, disbursements and
      other charges of its counsel.

              

      

       

      
        	
                 
      

              	
                18.2.4

              	
                Any
      award made by the arbitrators shall be final and binding on each of the
      Parties that were parties to the dispute.  The Shareholders
      expressly agree to waive the applicability of any laws and regulations
      that would otherwise give the right to appeal the decisions of the
      arbitrators or to seek specific performance in another forum so that there
      shall be no appeal to any court of law for the award of the arbitrators,
      and a Shareholder shall not challenge or resist the enforcement action
      taken by any other the other Shareholder in whose favour an award of the
      Arbitration Panel was given.

              

      

       

      IN WITNESS WHEREOF, the
undersigned have executed this Agreement on the date first above
written.

       

      

       

      SWICO
LIMITED                                                                           MOVADO
GROUP, INC.

       

      By: /s/
Keith R.
Sheppard                                                                                            By:
/s/ Timothy F. Michno

       

      Name:
K.R.
Sheppard                                                                                     Name:
T.F. Michno

       

      Title:
C.E.O.                                                                           Title:
General Counsel

       

      

       

      MGS
DISTRIBUTION LIMITED

       

      By: /s/
Keith R. Sheppard

       

      Name:
K.R. Sheppard

       

      Title:
Managing Director

       

      
        
          
            

             

            

             

             

             

            

             

            C:\Documents
and Settings\Debra\My Documents­Smithsons\MGI-Swico JV Agmt (draft
220207).doc

          

           

        

        
           

          
            

          

        

        
           

        

      

      Schedule
1

       

      SHAREHOLDERS

       

      
        	
                A.

              	
                Movado
      Group, Inc.

              

      

      
        	
                 
      

              	
                Principle
      Office: 650 From Road, Paramus, NJ
07652

              

      

      
        	
                 
      

              	
                Address
      for notification: same, to the attention of Jon Step, with a copy
      to:General Counsel, Movado Group, Inc., 650 From Road, Paramus, NJ 07652,
      U.S.A.

              

      

       

      

       

      B.           SWICO
LIMITED

      Registered Office: Meadway House,
Meadway, Haslemere, Surrey GU27 1NN England

      
        	
                 
      

              	
                Address
      for Notification: same as Registered
      Office                                                                     ,
      to theattention of Keith Sheppard

              

      

      

      
        

         

        

      

      SERVICE
AGREEMENT

       

      BETWEEN

       

      SWICO
LIMITED

       

      MOVADO
GROUP, INC

       

      and

       

      MGS
DISTRIBUTION LIMITED

       

      ——————————————————

       

      Dated as
of May 11, 2007

       

      ——————————————————

       

      
        

         

        

      

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      SERVICE
AGREEMENT

       

      SERVICE
AGREEMENT, dated as of May 11, 2007 (this “Agreement”), between
SWICO LIMITED a corporation incorporated under the laws of England, having its
registered office at Meadway, Haslemere, Surrey GU27 1NN, England, registered
number 469666  (“Swico”), MOVADO GROUP, INC., a corporation
incorporated under the laws of New York, having its principle office at 650 From
Road, Paramus, NJ 07652 (“MGI”) and  MGS DISTRIBUTION
LIMITED,  a corporation incorporated under the laws of England, having
its registered office at  c/o Swico, Meadway, Haslemere, Surrey GU27
1NN, England,   registered number  6183896
(“Company”).

       

      W I T N E
S S E T H:

       

      WHEREAS,
Swico has entered into a Joint Venture Agreement, dated as of May 11, 2007 with
the Company and MGI (the “JV Agreement”), pursuant to which Swico and MGI have
taken, respectively, a 51% and 49% interest in the Company and have established
a joint venture relationship relating to the sale, marketing and distribution of
certain watch brands in the United Kingdom; and

       

      WHEREAS,
it is contemplated in the JV Agreement that Swico will provide certain services
to the Company pursuant to a services agreement to be entered into between Swico
and the Company; and

       

      WHEREAS,
set forth in this Agreement are the terms and conditions of the services to be
provided by Swico to the Company as contemplated by the JV
Agreement.

       

      NOW,
THEREFORE, the parties hereto agree as follows:

       

      19. SERVICES
GENERALLY.

       

      19.1 Services Provided by
Swico

       

      .  During
the term of this Agreement, Swico shall provide to the Company the services
described on Annex “A” hereto and otherwise as set forth in this Agreement (the
“Services”), in each case as requested by the Company.

       

      (b)        Exclusivity

       

      .  The
Company shall obtain the Services exclusively from Swico during the term of this
Agreement.

       

      Section
2.  Logistics
Services

       

      (a) Warehouse.  Swico
will maintain a warehouse facility and fulfillment center at the address first
set forth above or at such other location as may be reasonably acceptable to the
Company (the “Facility”) and within such Facility will maintain a secure,
contiguous dedicated area in such location as the Company shall reasonably
request exclusively for the storage of watches owned, consigned to and/or to be
sold by the Company (“Merchandise) sufficient for all the Merchandise on hand at
any one time in the Facility to be stored in such area (“Secure
Area”).  Swico will employ such measures to ensure that the Secure
Area is reasonably secure and that the Merchandise kept therein is reasonably
protected from loss and damage.  Such measures shall include (a)
keeping the Facility protected by alarms at all times; (b) providing full time
(twenty-four (24) hour/seven (7) day) video cameras; (c) utilizing secured
rolling cages for shipping and receiving and (d) using other measures as the
Company shall reasonably request.  Swico at all times will keep all
Merchandise on hand in the Facility in the Secure Area except those individual
items in receiving (as provided in section 2(b)) and in shipping (as provided in
section 2(c)).

      

      (b) Receiving.  Swico
will receive all Merchandise and all related materials, including, without
limitation, boxes, warranty cards, operating manuals, advertising material and
the like, and all other materials shipped to it, either by MGI, any of its
Affiliates or from retailers or other customers (“Accounts”) returning
Merchandise directly to the Facility, and, upon receipt of such Merchandise,
Swico will verify that the correct quantity, stock keeping unit (“SKU”) and
technical reference numbers are received and will visually check each item
received for defects, damage or other observable non-conforming variances. In
addition to the Merchandise to be received from MGI, its Affiliates and Accounts
as described above, Swico acknowledges that as of the date hereof, it is holding
certain additional Merchandise of the Company consisting of TOMMY HILFIGER,
LACOSTE and HUGO BOSS watches which are part of the Merchandise to be used for
the fulfillment of Customer Orders as provided hereunder. Swico shall make
appropriate records of and will store all Merchandise so verified and checked in
the Secure Area.  All non-conforming Merchandise will be segregated
from conforming Merchandise and stored in a separate location within the Secure
Area pending disposition in accordance with such instructions as the Company
shall advise, and a record will be made thereof by the employee performing the
check, identifying each non-conforming item by shipment or bill of lading
number, order number, date of receipt, SKU and technical reference number, and
such other information as the Company shall require. Swico will send the Company
weekly “Discrepancy and Defective Reports” setting out in detail all
non-conforming Merchandise and all shortages in shipments received in the prior
week.

      

                  (c)
Shipping.  Swico
will pick, pack and ship all Merchandise ordered by Accounts (“Customer Orders”)
in accordance with such procedures and instructions as the Company shall advise
from time to time.   All Merchandise shipped to Accounts will be
packaged with box, operating manual, warranty card, invoices, packing slips and
such other documents, packaging material, if any, as the Company shall instruct;
provided that MGI or its Affiliate shall have furnished such material to Swico
(except the invoices and packing slips which Swico shall print itself). Swico
will ship all Merchandise in fulfillment of Customer Orders by seventy two (72)
hours courier delivery, or otherwise as the Company shall instruct, at the
Company’s expense, within twenty-four (24) hours after Swico’s receipt of each
such order. The Company will obtain insurance coverage for any and all such
Merchandise in transit from the Facility to any Account.

      

                  (d)
Records   All  bills
of lading for all such shipments will be retained by Swico for at least twelve
(12) months after which time, unless sooner requested, such documents shall be
sent to the Company.

      

                  (e)
Information
Systems. Swico at all times will maintain an information system with full
functionality, and adequate, as reasonably determined by MGI, for the accurate
and timely reporting of all information pertaining to the Merchandise, including
inventory on hand, Merchandise available to ship, open orders, sales and
shipments made and such other information as required by MGI and the Company
(“Information System”).  Swico will perform periodic cycle counts of
the Merchandise and, once yearly, will conduct a  physical inventory
of Merchandise on hand and furnish the Company and MGI with a written report
detailing by SKU all such Merchandise and reconciling the inventory of
Merchandise on hand with Customer Orders received and all shipments made in
fulfillment thereof (respectively), each item of Merchandise so shipped
identified by SKU and technical reference number and such other information as
MGI or the Company shall require from time to time .  Swico will
notify MGI and the Company in advance of any annual physical inventory and each
of them shall each have the right to have a representative present during such
inventory.

      

                  (f)  Risk of
Loss.   Except for any loss or damage not covered by the
insurance procured pursuant to Section 2(g) hereof and resulting from Swico’s
breach of this Agreement or gross negligence or willful misconduct, the Company
shall at all times bear all risk of loss of or damage to the Merchandise in the
Facility, and, subject to Section 2(h) hereof, until delivery thereof is made to
the appropriate Account in fulfillment of a Customer Order.

      
 

                             (g)  Insurance.    Swico
shall procure on behalf of the Company and shall maintain in effect at all times
adequate insurance coverage for the Merchandise in the Facility against all
expected risks, including theft and destruction.  The Company, on
behalf of itself and all parties claiming by, through or under it, releases and
discharges Swico from all claims and liabilities arising from or caused by any
casualty or hazard covered in whole or in part by such insurance on the
Merchandise and waives any right of subrogation which might otherwise exist in
or accrue to any person on account thereof.

      

                  (h)  Indemnity.  Except
as provided in Sections 2(f) or 2(g), Swico shall be liable for, and shall
indemnify and hold the Company harmless against, any loss or damage arising out
of any act or omission on the part of Swico or its officers, employees, agents,
contractors and representatives in respect of or relating to any of the
Merchandise.

      

                  (i)  Physical
Inventory.  Each of MGI and the Company in its sole discretion,
at its sole expense and upon reasonable notice to Swico, reserves the right to
conduct, from time to time subsequent to the date hereof, physical inventories
of Merchandise held by Swico and to audit Swico's applicable inventory and sales
records and all other books and records pertaining to this
Agreement.  Swico agrees to fully cooperate and assist in conducting
any such inventory and/or audit.  Swico shall have the right to
observe and participate in the conduct of the inventory by MGI or the
Company.  Swico shall be solely responsible for
shrinkage  exceeding 0.20% annually (i.e., difference
between book and physical inventory) evidenced by either a physical inventory
conducted by Swico or as a result of a physical inventory conducted by MGI or
the Company.  Swico shall prepare and submit to the Company, within
ten (10) days after the completion of any physical inventory performed by or for
Swico, a report reconciling the Company’s outstanding Merchandise to physical
inventory on hand (the "Reconciliation Report").  The Reconciliation
Report shall list each item of Merchandise by SKU and by technical reference
number.  In the event of a discrepancy between the Reconciliation
Report prepared by Swico and the results of any inventory conducted by MGI or
the Company, the parties hereto shall attempt in good faith to mutually agree on
the resolution of such discrepancies failing which resolution within thirty (30)
days, the discrepancy will be reconciled by PricewaterhouseCoopers whose
determination shall be binding. The costs for such independent accountants shall
be borne equally by the parties.

      

      (j)   Title. Title to the
Merchandise shall remain and be vested at all times solely in the Company, and
Swico will not, and will not permit any other person to, encumber the
Merchandise or assert any interest, claim, lien, or right in or in respect of
the Merchandise.  Swico hereby waives any security interest it may
have or that it may be entitled to assert as a matter of law in the Merchandise,
including, without limitation, any warehouseman’s lien.  Swico will
not issue any warehouse receipt or any other document or instrument, negotiable
or non-negotiable, in respect of any of the Merchandise to any person or entity
other than the Company.

       

       

      SECTION 3. REPORTING AND
PLANNING.

       

      (a)           SWICO
shall provide to the Company before the 10th day of each month a full written
quality report regarding all Services provided by Swico for the preceding
month.  Such report shall include relevant details regarding all such
Services in order to permit the Company to monitor the quality and volume of the
Services provided, including (i) shipment indicators, (ii) repairs indicators,
(iii) returns indicators, (iv) bookkeeping indicators and (v) other information
as reasonably requested by the Company.

       

      (b)           At
least once per Quarter, the Managing Director of Swico and/or the Chairman of
Swico, and the Managing Director of the Company and the Chairman of the the
Company shall discuss the scope of the Services provided hereunder, the
expectations of the Company for the following month with respect to Services
anticipated to be required for such following month and generally any issues
related to the Services provided hereunder.  

       

      Section
4.  Prices
and Billing.

       

      Prices for
Services

       

      .  The
prices for the Services shall be as set forth on Annex B and shall consist of
the Base Fee and the Commission (as such terms are defined on Annex
B).  Any modification to such prices for any reason whatsoever shall
require the approval in writing of the Chairman and the Managing Director of the
Company, on the one hand, and Swico, on the other hand.

       

      19.2 Procedure

       

      .  Swico
shall submit to the Company on or after the 15th day of each month an invoice in
the amount of the monthly Base Fee due for Services rendered hereunder by Swico
during the preceding month.  Such invoice shall include all reasonable
detail regarding the Services provided and shall be payable by the Company
within 30 days after the date of delivery thereof to the Company. In addition,
and together with payment of the Base Fee, the Company shall pay Swico the
Commission as set forth on Annex B together with a statement of net sales on the
basis of which the Commission was calculated.

       

       

      SECTION 5. TERM AND
TERMINATION.

       

      (a)        Term

       

      .  Unless
otherwise terminated pursuant to Section 5(b), this Agreement will terminate
upon termination of the JV Agreement.  Section 7 shall survive any
such termination.

       

      (b)        Early
Termination

       

      .  (a)  In
the event the Company shall have obtained a good-faith written proposal of a
third party to provide all of the Services hereunder for a price equal to 85%
(or less) of the actual amounts invoiced for such Services by Swico (based on
the average of such actual amounts over the preceding six-month period), the
Company may provide notice to Swico (including a copy of such proposal) of the
Company’s  intention to terminate this Agreement with respect to all
of the Services; provided, that Swico shall have the right to continue to
provide the Services upon the terms and conditions set forth in such third-party
proposal by notice to such effect to the Company within 60 days following
delivery by the Company of its notification to Swico.   Should
Swico fail to so accept to provide the Services upon the terms and conditions
set forth in such third-party proposal within such time period, the Company may
terminate this Agreement by notice to Swico, such termination to be effective on
the tenth business day after such notification of termination.

       

      In the
event of a material breach by Swico of its obligations hereunder, which shall
include without limitation continuing provision of substandard Services, the
Company may provide notice of such material breach of Swico.  Such
notification shall include reasonable details regarding the nature of the
material breach, and Swico and the Chairman and Managing Director of the Company
shall meet to discuss the circumstances of such material breach and
possibilities for the cure thereof.  If Swico shall not have cured
such material breach within 60 days after such notification, the Company may
terminate this Agreement by delivery of written notice to Swico, such
termination to be effective immediately upon delivery of such
notification.

       

       

      SECTION 6.  FORCE
MAJEURE

       

      .  No
party shall be responsible for failure or delay in the performance of any
Services, nor shall any party be responsible for failure or delay in receiving
such Service, if caused by an act of God or public enemy, war, terrorism,
government acts or regulations, fire, flood, embargo, quarantine, epidemic,
labor stoppages beyond its reasonable control, accident, unusually severe
weather or other cause similar to the foregoing beyond their control (herein
called “Force Majeure”); provided, that the party affected by Force Majeure
shall have exercised all reasonable efforts to avoid or minimize the effects of
such event or condition.

       

       

      SECTION
7.  CONFIDENTIALITY.

       

      (a)  Confidential
Information

       

      .  Each
party recognizes that in the performance of this Agreement confidential and/or
proprietary information belonging to any other party regarding the Services may
be disclosed or become known to any other party or its respective affiliates
(“Confidential Information”).  Unless otherwise expressed in writing
to the other party, information that is exchanged between the parties shall be
presumed to be confidential and/or proprietary.  Each party agrees to
take, and to cause its affiliates to take, such precautions as such party
normally takes with its confidential and/or proprietary information to hold in
confidence all confidential and/or proprietary information with respect to the
Services that belong to the other party.

       

      (b)  Exceptions

       

      .  This
Section 7 shall not apply to:

       

      information
which, at the time of disclosure, is in the public domain;

       

      information
which, after its disclosure, becomes part of the public domain by publication or
otherwise, except in breach of this Agreement;

       

      information
which Swico or the Company shall receive from a third party; provided, however, that the
third party has the right to disclose the Confidential Information to Swico or
the Company, as the case may be; or

       

      information
which is required by law, rule or regulation (including the rules of any stock
exchange on which such party’s securities are listed) to be disclosed; provided that the
disclosing party provides prompt notice of such disclosure (and to the extent
practicable, shall provide such notice prior to such disclosure).

       

       

      SECTION
8.  MISCELLANEOUS.

       

      (a)  Notices

       

      .  All
communications provided for hereunder shall be in writing and shall be deemed to
be given when delivered in person or by overnight courier with receipt, when
telefaxed and received, or 5 days after being deposited with the postal service,
first-class, registered or certified, return receipt requested, with postage
paid and,

       

      
        	
                 
      

              	
                if
      to Swico:

              

      

       

      

       

      
        	
                 
      

              	
                            Meadway,
      Haslemere, Surrey GU27 1NN, England

              

      

       

      
        	
                 
      

              	
                                        Attention :
      Keith Sheppard

              

      

       

      
        	
                 
      

              	
                            Facsimile:

              

      

       

      
        	
                 
      

              	
                if
      to the Company

              

      

       

      
        	
                 
      

              	
                                        c/o
      Swico at the address above:

              

      

       

      
        	
                 
      

              	
                                        Attention:  Chairman

              

      

       

      
        	
                 
      

              	
                                        Facsimile:

              

      

       

      And a
copy to MGI by email at: tmichno@movadogroup.com

       

      or to
such other address as any such party shall designate by written notice to the
other party hereto.

       

      (b)    Standard of
Care     Swico shall provide the Services in all
material respects using substantially the same diligence and care as it uses in
performing similar services in respect of its own businesses.

       

      (c)   Non-Assignability

       

      .  This
Agreement shall inure to the benefit of and be binding on the parties hereto and
their respective successors and permitted assigns.  This Agreement
shall not be assigned by any party hereto without the express prior written
consent of the other parties, and any attempted assignment, without such
consent, shall be null and void. This agreement could be assigned by Swico to
any of its Affiliates (as defined in the JV Agreement).

       

      (d)   Amendment;
Waiver.
This Agreement may be amended, supplemented or otherwise modified only by a
written instrument executed by each of the parties hereto.  No waiver
by any party of any of the provisions hereof shall be effective unless
explicitly set forth in writing and executed by the party so
waiving.  Except as provided in the preceding sentence, no action
taken pursuant to this Agreement, including any investigation by or on behalf of
any party, shall be deemed to constitute a waiver by the party taking such
action of compliance with any representations, warranties, covenants, or
agreements contained herein, and in any documents delivered or to be delivered
pursuant to this Agreement.  The waiver by any party hereto of a
breach of any provision of this Agreement shall not operate or be construed as a
waiver of any subsequent breach.

       

      (e)   Third
Parties

       

      .  This
Agreement does not create any rights, claims or benefits inuring to any Person
that is not a party hereto (except, where specifically so provided, for
affiliates of the parties who are entitled to receive Services) nor create or
establish any third party beneficiary hereto.

       

      (f)     Governing
Law

       

      .  This
Agreement and the rights and duties of the parties hereunder shall be governed
by, and construed in accordance with, the laws of England.

       

      (g)    Dispute
Resolution

       

      .  Any
dispute or claim arising out of or in connection with or relating to this
Agreement, or the breach, termination or invalidity hereof, including any claim
for injunctive relief, shall be finally settled by arbitration under the Rules
of Conciliation and Arbitration of the International Chamber of Commerce (the
"Rules") as are in force at the time of any such arbitration.  For the
purpose of such arbitration, there shall be three arbitrators appointed in
accordance with the Rules.  The place of arbitration shall be in
London.  All arbitration proceedings shall be conducted in the English
language.   Judgment upon any arbitral award rendered hereunder
may be entered in any court having jurisdiction, or application may be made to
such court for a judicial acceptance of the award and an order of enforcement,
as the case may be. Each of Swico and the Company shall cooperate in good faith
to expedite (to the maximum extent practicable) the conduct of any arbitral
proceedings commenced under this Agreement. The costs and expenses of the
arbitration, including, without limitation, the fees of the arbitrators, shall
be borne equally by each party to the dispute or claim, and each party shall pay
its own fees, disbursements and other charges of its counsel. Any award made by
the arbitrators shall be final and binding on each of the Parties that were
parties to the dispute.  The Parties expressly agree to waive the
applicability of any laws and regulations that would otherwise give the right to
appeal the decisions of the arbitrators or to seek specific performance in
another forum so that there shall be no appeal to any court of law for the award
of the arbitrators, and a Shareholder shall not challenge or resist the
enforcement action taken by the other Shareholder in whose favor an award of the
Arbitration Board was given.

       

      (h)   Entire
Agreement

       

      .  This
Agreement and the Joint Venture Agreement contain the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersede all prior agreements and understandings relating to such
subject matter; provided that in the event any provision of this Agreement and
the JV Agreement are in conflict in relation to the matters addressed by this
Agreement, the provisions of this Agreement shall prevail.  Any
capitalized term used but not defined herein shall have the meaning given such
term in the Joint Venture Agreement. Neither party shall be liable or bound to
any other party in any manner by any representations, warranties or covenants
relating to such subject matter except as specifically set forth herein or in
the JV Agreement.

       

      (i)    Severability

       

      .  If
any provision of this Agreement shall be declared by any court of competent
jurisdiction to be illegal, void or unenforceable, all other provisions of this
Agreement shall not be affected and shall remain in full force and
effect.

       

                              (j)    Employees   Notwithstanding
anything contained in this Agreement, (i) the individuals employed by Swico
who provide Services pursuant to this Agreement shall in no respect be
considered employees of  the Company for purposes of this Agreement;
(ii) Swico shall act as the sole employer of the individuals it employs and
shall not delegate any employment functions to the Company; (iii) Swico
shall have the sole responsibility for the day-to-day control and supervision of
the individuals whom it employs in connection with this Agreement and
(iv) Swico retain any and all liability with respect to the actions,
activities and conduct of such individuals in full (including any
employment-related claims, litigation or other assertions of liability or
responsibility).

       

      (k)    Scope of
Relationship.  The parties acknowledge and agree that the
relationship between them under this Agreement is that of independent
contractors and nothing contained in this Agreement or otherwise shall be
construed to constitute or create a partnership, agency relationship or joint
venture between such parties.  No party has the power or authority to
act on behalf of any other party, except as expressly set forth in this
Agreement or as authorized in writing by the other party.

       

      (l)    Further
Assurances

       

      .  From
time to time after the date hereof, as and when requested by a party hereto and
at such party’s expense, the other party shall, and shall cause its affiliates
to, execute and deliver all documents and instruments and take all other actions
as the requesting party may reasonably deem necessary or desirable to evidence
or effectuate any of the transactions contemplated hereby.

       

      [Signature
page follows]

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

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

       

      

       

      SWICO
LIMITED

       

      
        	
                 
      

              	
                By:

              	
                ________________________________

              

      

       

      
        	
                 
      

              	
                Name:

              

      

       

      
        	
                 
      

              	
                Title:

              

      

       

      MOVADO
GROUP,INC.

       

      
        	
                 
      

              	
                By:

              	
                ________________________________

              

      

       

      
        	
                 
      

              	
                Name:

              

      

       

      
        	
                 
      

              	
                Title:

              

      

       

      
        	
                 
      

              	
                MGS
      DISTRIBUTION LIMITED.

              

      

       

      
        	
                 
      

              	
                By:________________________________

              

      

      
        	
                 
      

              	
                      Name:

              

      

      
        	
                 
      

              	
                      Title:

              

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      
        	
                 
      

              	
                ANNEX  A

              

      

       

      

      Finance:

      

      Cost /
Profit centers management,

      Processing
sales and purchase invoices into the accounting system;

      Matching
of accounting system and bank accounts;

      Invoice
check and approval follow-up,

      Preparing
bank disbursements for signature and approval;

      Preparation
of quarterly management accounts (monthly P&L, quarterly
balance-sheet);

      Preparation
of monthly sales analysis;

      Preparation
of monthly management reports;

      Preparation
of Forecasts,

      Preparation
of Treasury reporting,

      Preparation
of statutory and US GAAP financial statements

      Maintenance
of credit control management, processing of customer payments,

      Preparation
of payroll journals for processing by outsourced payroll bureau;

      Accounting
closing process;

            Maintaining
cashbook records and reconciling to the accounting system and bank
accounts;

      Reconciliation
of accounting records to supporting schedules

      Preparation
of statutory and US GAAP financial statements

      

      Tax
:

      

      Tax
declaration with external auditors,

      Tax
control organization,

      Tax
reporting,

      

      Insurance
:

      

      
        	
                 
      

              	
                      Arrange
      for inclusion of the Company under Swico’s umbrella coverage (except for
      marine insurance for goods in
transit)

              

      

      Check of
insurance coverage and premium follow-up,

      Management
of all insurance claims,

      Contact
with corporate insurance and medical care,

      

      IS:

      

      Follow-up
of outsourced IS maintenance provider for network, PC and printers,

      Follow-up
of upgrades or purchase for both Soft and Hardware;

            Provide
basic service for Helpdesk (include trouble shooting/PC setup);

            Support
various inquiries/troubles about core business application;

      Maintain
the network

      

      Purchase
:

      

      Negotiation
with suppliers,

      Management
of general purchases : phones, cars, office supplies, copiers and faxes,
logistic costs,

      Follow-up
of free-lancers contracts,

      Savings
plan management,

      

      Human
Resources:

      

      Administration
of outsourced payroll bureau, income taxes and national insurance
declaration;

      Follow-up
and update of HR files, contracts update,

      Reporting
to authorities regarding HR data,

      Trainings
management,

      Part-time
agency management,

      

      Sales
Customer Service:

      

      Support
for forecasts, and monthly reporting,

      Margin
analysis,

            Processing
sales orders provided by Sub.;

            Taking
telephone sales orders from retail customer and seeking approval from
Sub;

            Dealing
with retail consumer queries regarding product availability and
pricing;

            Providing
back order information to Sub on request;

            Maintaining
product descriptions and pricing as approved by Sub;

      Invoicing
(post shipment) sales

      

      After-sales
Customer Service:

      

      Invoicing
retail customers and end consumers for spare parts, after-sales services and
repairs;

      Customer
receivables follow-up,

      Support
for forecasts, reporting.

      

      Logistics:

      

            Arrangement
of import and export of the goods and POS materials;

            QC
work for imported products and returns from the trade based on the QC
standard;

            Physical
stock taking on quarterly basis;

      Storage
of goods for resale, i.e. watches, straps and bracelets (incl. branded
packaging);

      Storage
of marketing and promotional materials,

      Maintenance
of perpetual inventory records for the above;

      Shipment
of goods & invoices to retail customers in accordance with sales
orders;

      Shipment
of after-sales serviced watches to retail customers and end
consumers;

      Shipment
of after-sales spare parts to retail customers and end consumers;

      Shipment
of branded displays and visuals to retail customers;

      Shipment
of branded catalogues and price list to retail customers and end
consumers;

      Participation
to mailing actions,

      
        
          
            012200-0075-02839-NY02.2382231.11

          

           

        

        
           

          
            

          

        

        
           

          
            -  -

            

          

        

      

      

      
        	
                 
      

              	
                ANNEX
      B

              

      

       

                                                                     Prices for the
Services

       

       

      Swico’s
total compensation for the duration of this Agreement for all Services rendered
shall consist of an annual base fee, in the amount set forth below (“Base Fee”),
and a commission (“Commission”) equal to * by any distributor (other than the
Company) appointed as the exclusive distributor of such Products in that country
(“Distributor”). For purposes of this Agreement, “Products” means watches sold
under any brand (other than TOMMY HILFIGER) which is licensed to MGI or any
Affiliate of MGI; provided such watches are also sold by the Company. The term
“net sales” means the price for the Products invoiced by the Distributor, net of
taxes, freight, duties, insurance and any discounts.

       

       

      Annual Base Fee
(£)

       

       

      Year 1
:     *

       

       

      Year 2
:     *

       

       

      Year 3
:     *

       

       

      Year 4
:     *

       

       

      Year 5
:     *

       

       

      Year 6
:     *

       

       

      Each year
after year 6 the annual Base Fee shall be three percent (3.0%) more than the
Base Fee in the immediately preceding year.

       

       

      

       

      *CONFIDENTIAL
PORTION OF THIS EXHIBIT OMITTED AND FILED SEPARATELY WITH THE SEC PURSUANT TO
RULE 24b-2 OF THE 1934 ACT

       

      

       

       

      

       

      

       

      JUICY
COUTURE

      DISTRIBUTORSHIP
AGREEMENT

      

      

      

      THIS
AGREEMENT is made and entered into as of May 11, 2007 (the “Effective Date”) by
and between SWISSAM PRODUCTS LTD. a corporation duly incorporated under the laws
of Hong Kong having its principal office at 1406 World Finance Centre, North
Tower, Harbour City, Tsimshatsui, Kowloon, Hong Kong (hereinafter referred to as
“Supplier”) and MGS DISTRIBUTION LIMITED, a corporation incorporated under the
laws of England having its principle office at c/o Swico, Meadway, Surrey GU 27
1NN, England (hereinafter referred to as the “Distributor”).

      

      RECITALS

      

      WHEREAS,
Swico Limited (“Swico”), Movado Group, Inc. (“MGI”) and
Distributor  have entered into a Joint Venture Agreement,
dated  May 11, 2007 (the “JV Agreement”), pursuant to which Swico and
MGI have established a joint venture relationship relating to the sale,
marketing and distribution of certain watch brands in the United
Kingdom.

       

      WHEREAS,
this Agreement is one of the Distribution Agreements as defined in the JV
Agreement.

       

                                      WHEREAS
Supplier is an Affiliate (as defined in the JV Agreement) of MGI and is engaged
in the development, design, manufacture, distribution and sale of the Products
(as hereinafter defined) and Supplier desires to appoint Distributor and
Distributor desires to be appointed, as the exclusive distributor of the
Products in the Territory (as hereinafter defined), in accordance with the terms
and conditions set forth hereinafter;

      

      NOW, THEREFORE, in consideration of the
premises and the mutual covenants herein contained, the parties hereto agree as
follows:

      

      1.           DEFINITIONS

      

      
        	
                1.1

              	
                In
      this Agreement, except where the context otherwise requires, the
      capitalized terms listed below shall have the respective meanings assigned
      to them as follows:

              

      

      

      
        	
                 
      

              	
                “Affiliate”

              	 	
                means
      as to either party, a person or entity which controls, is under common
      control with, or is controlled by such
party.

              

      

      

      
        	
                “Corporate
      Accounts”

              	
                means
      premium and incentive accounts and other corporate accounts which have
      been approved in writing by Licensor under the JC License for the purchase
      of Products solely for the use of the employees of such
      accounts.

              

      

      

      
        	
                 
      

              	
                “Products”

              	
                     means
      watches manufactured by or for Supplier and bearing one
      or     more of the
  Trademarks

              

      

      

      
        	
                 
      

              	
                “Territory”

              	
                means
      the United Kingdom (excluding Travel Retail
  Accounts).

              

      

      

      
        	
                 
      

              	
                “Licensor”

              	
                means
      the licensor under the JC License, including any successors and
      assigns.

              

      

      

      
        	
                 
      

              	
                “JC”

              	
                means
      Juicy Couture.

              

      

      

      
        	
                 
      

              	
                “JC
      License”

              	
                means
      the license agreement between SWISSAM PRODUCTS LIMITED, MOVADO GROUP, INC.
      and L.C. LICENSING, INC., as the same may be amended from time to time,
      pursuant to which Supplier has the right to use the Trademarks in
      connection with the manufacture, marketing, advertising, sale and
      distribution of the Products.

              

      

      

      
        	
                 
      

              	
                “JC
      Stores”

              	
                means
      retail and outlet stores, including flagship stores, owned or operated
      by  Licensor or by any of its
  Affiliates.

              

      

      

      
        	
                 
      

              	
                “Trademarks”

              	
                means
      all trademarks licensed to Supplier by Licensor under the JC License and
      used on or in connection with the Products, including, without limitation,
      JUICY, JUICY COUTURE or any other product that contains the name
      JUICY.

              

      

      

      
        	
                 
      

              	 	
                “Travel
      Retail Accounts”        means any
      account whose retail business consists of  in-flight duty free
      retail sales operations.

              

      

      

      

      
        	
                1.2  

              	
                Unless
      otherwise defined herein, each capitalized term used herein shall have the
      meaning as set forth in the JC
License.

              

      

      

      

      
        	
                2.

              	
                APPOINTMENT

              

      

      

      
        	
                2.1  

              	
                Subject
      to the terms and conditions contained herein, for the term of this
      Agreement, Supplier hereby appoints Distributor as the exclusive wholesale
      distributor for marketing, distribution and sales of the Products in the
      Territory (with the exception of sales to Corporate Accounts), and
      Distributor hereby accepts such appointment.  Notwithstanding
      anything to the contrary contained herein, Supplier may permit Distributor
      to sell  Products to certain Corporate Accounts located within
      the Territory on a case by case basis subject to the approval by Licensor
      as provided in theJC License and as Supplier may, in its sole and absolute
      discretion designate in writing from time to
  time.

              

      

      

      
        	
                 
      

              	
                2.2       Distributor
      shall purchase all Products directly from Supplier, or from one or more
      other sources nominated in writing by Supplier, subject to Distributor’s
      right to purchase Products (a) from other distributors with which Supplier
      has contracted for the distribution of the Products (“Approved
      Distributors”) that are located in Switzerland, the European Union, the
      European Economic Area or any other country with which the European Union
      has concluded a free trade agreement (in the aggregate, the “European
      Area”) and (b) from approved retailers that satisfy the conditions set
      forth in Section 8.2 hereof (“Approved Retailers”) located in the European
      Area (provided that prior to exercising such right Distributor receives
      written confirmation from Supplier that each such other distributor is an
      Approved Distributor and that each such retailer is an Approved Retailer).
      Such Approved Distributors and Approved Retailers, only, are included
      within and comprise the JC selective distribution
  network.

              

      

      

      
        	
                 
      

              	
                2.3      Distributor
      shall sell the Products only to Approved Retailers in the Territory and,
      within the European Area, only within the JC selective distribution
      network.  Distributor shall refrain, outside the Territory and
      in relation to the Products, from actively soliciting orders, establishing
      any branch or maintaining any distribution depots.  In no event
      will Distributor sell or continue selling Products to any retailer that
      does not satisfy the conditions in Section 8.2 of this
      Agreement.

              

      

      

      
        	
                2.4

              	
                Distributor
      shall use reasonable commercial efforts to advertise, promote, market,
      distribute and sell the Products in the Territory.  Without
      limiting the generality of the foregoing, Distributor shall at all times
      maintain adequate stocks of Products to meet demand for the Products in
      the Territory by those retailers, if any, not being direct shipped by
      Supplier and Distributor will use reasonable efforts to avoid accumulating
      excess inventory not in line with its forecasts. Distributor shall
      maintain an adequate sales force for the effective distribution and sale
      of the Products in the Territory including at least one (1) full time
      watch division manager to supervise/manage a dedicated sales manager and
      sales executive for the Products, experienced in managing a watch
      distribution business and one (1) full time marketing manager working on
      the advertising and promotion of the
Products.

              

      

      

      
        	
                2.5  

              	
                During
      the term of this Agreement Distributor shall not directly or indirectly
      distribute any other watch brands which, in the determination of Supplier,
      compete with the Products in the Territory.  No other brand
      licensed to MGI or any Affiliate of MGI shall be deemed to compete with
      the Products.

              

      

      

      
        	
                2.6  

              	
                The
      parties acknowledge that under the Joint Venture Agreement each of Swico
      and MGI, as the only shareholders of Distributor, has the right under
      section 15.2 of the JV Agreement, to dissolve, or to purchase the other’s
      interest in, Distributor. Accordingly, if either Swico or MGI (the
      “Non-breaching Party”) elects under the foregoing provision of the JV
      Agreement to  purchase the other party’s interest in,
      Distributor and (a) written notice from Swico and MGI confirming such
      election has been provided to Supplier and Distributor and (b) the
      Non-breaching Party also notifies Supplier that it wishes this Agreement
      to be assigned, then effective upon the date specified in such notice from
      the Non-breaching Party (or, absent the specification of any date, then as
      soon as reasonably practicable) Supplier shall assign all of Distributor’s
      right, title and interest in and under this Agreement to such
      Non-breaching Party or to any Affiliate of such Non-Breaching Party as
      specified in such notice. Distributor hereby grants Supplier a power of
      attorney for purposes of Supplier executing and delivering on behalf of
      Distributor any and all documents or other instruments necessary to effect
      such assignment.

              

      

      

      
        	
                3.  

              	
                ORDERING,
      SHIPMENT AND PRICES

              

      

      

      
        	
                3.1  

              	
                From
      time to time Distributor shall submit purchase orders for the Products to
      Supplier.  All purchase orders shall be subject to acceptance by
      Supplier, which acceptance may, at Supplier’s option, be evidenced by the
      issuance of written confirmations or acknowledgments. Supplier hereby
      reserves the absolute right to reject the whole or any part of any
      purchase order for any commercially valid reason, including, without
      limitation, Distributor’s credit condition or its accumulation of excess
      or non-current inventory or its failure otherwise to adhere to the terms
      and conditions of this Agreement, notwithstanding that any such rejection
      may prevent Distributor from achieving its Minimum Purchase Requirements.
      Subject to Sections 3.2 and 11.1, all purchase orders shall be irrevocable
      after acceptance by Supplier; provided, however, that Distributor may
      reschedule or cancel that portion of any purchase order pertaining to
      Products which Supplier fails to deliver as confirmed within thirty (30)
      days after the later of the advised delivery date or shipping date.
      Distributor will provide Supplier with a four (4) month rolling forecast
      of its anticipated order volume monthly by SKU, for the four (4) month
      period.  Supplier will use reasonable efforts to deliver the
      Products ordered in accordance with the forecast within three (3) months
      after acceptance of the purchase order by Supplier and to deliver all
      other Product orders within three (3) to five (5) months after acceptance
      of the purchase order.  As soon as is reasonably practicable
      after acceptance of each purchase order, Supplier shall advise Distributor
      of the shipping dates applicable to such order.  All shipping
      dates so advised are estimates only and Supplier shall not have any
      liability for failure to actually ship by such dates or to deliver by
      Distributor’s requested delivery dates.  Supplier shall notify
      Distributor in the event of any anticipated delay in shipping dates of
      thirty (30) days or more. Each order submitted by Distributor will specify
      a “ship to” address which shall be Distributor’s address or the address
      for one of Distributor’s customers.

              

      

      

      
        	
                3.2  

              	
                The
      purchase prices for all Products purchased by Distributor shall be in
      Euros and based on Supplier’s suggested retail price in effect in the
      European Union as of the date of shipment. Such prices shall be calculated
      based on the discount structure as set forth on Schedule A annexed hereto.
      Supplier will provide current price lists for the Products to Distributor
      from time to time and shall have the right to modify such prices at any
      time; provided, however, that no price increase shall become effective
      sooner than sixty (60) days after written notice thereof to
      Distributor.  Supplier will give Distributor prior notice of all
      such price changes. For all orders shipped before the effective date of
      any price increase, the applicable price shall be the price in effect on
      the date of shipment.  With respect to orders for the Products
      that have been accepted by Supplier but which have not been shipped as of
      the effective date of a price increase, the applicable price shall be the
      price in effect on the date of shipment; provided that if the price
      increase is more than ten percent (10%) of the last applicable price,
      Distributor shall have the right within ten (10) days from the effective
      date of the price increase to cancel all or any part of the order for the
      Products subject to such price increase upon notice to Supplier. All
      prices are ex-works Supplier’s distribution
  facility.

              

      

      

      3.3                 Unless
otherwise agreed in writing by Distributor and Supplier, all Products shall be
deemed delivered to Distributor when delivered by Supplier or Supplier’s freight
forwarder or distribution center into the possession of a carrier designated by
Supplier.  Distributor shall bear all risk of loss, damage or shortage
pertaining to the Products after delivery to carrier for shipment to the
designated “ship to” address on the corresponding purchase order.  All
costs of delivery, including, without limitation, all costs for freight, import
licenses, customs duties or other duties or imposts, insurance and special
handling shall be paid by Distributor. All payments are to be made in Euros in
accordance with Supplier’s standard terms of sale which are incorporated herein
by reference (except to the extent inconsistent with any of the express terms
contained herein) net ninety (90) days after invoice date.  A discount
of two percent (2%) is granted for cash payment in advance.

       

      

       

      3.4                 No
provisions contained in Distributor’s orders which are different from or
additional to the terms and conditions of this Agreement shall be binding on the
parties hereto or applicable to the sale of the Products unless signed by a duly
authorized representative of each of the parties as provided by Section 13.9
hereof.    Distributor shall have sole responsibility for
invoicing its customers and for the collection of all amounts due from them for
Product shipped to them either by Distributor or by Supplier in accordance with
the “ship to” designation made on the applicable purchase orders. In no event
shall non-payment by any such customer or any claim or allegation any customer
may have against Distributor constitute grounds for any off set, deduction,
claim or defense on the part of Distributor against Supplier or in respect of
any obligation due to Supplier and Distributor shall pay Supplier all amounts
due to Supplier in accordance with the terms of this Agreement without off set
or deduction for any amounts claimed to be due to Distributor by
Supplier.

       

      

       

      
        	
                4.  

              	
                MINIMUM
      TURNOVER REQUIREMENTS

              

      

      

       

      
        	
                4.1

              	
                Each
      contract year for the duration of this Agreement, Distributor will make
      minimum sales of Products in the Territory (“Minimum Turnover
      Requirement”) equal to at least sixty percent (60%) of the amount of
      Product sales as budgeted in the Business Plan annexed to the JV
      Agreement.  Notwithstanding the foregoing there shall be no
      Minimum Turnover Requirement for the first contract
  year.

              

      

       

      
        	
                4.2  

              	
                Sales
      in excess of the Minimum Turnover Requirement in any contract year shall
      be neither carried over nor credited toward the Minimum Turnover
      Requirement of a subsequent contract
year.

              

      

      

      
        	
                5.

              	
                ADVERTISING
      AND PROMOTION

              

      

      

      
        	
                5.1

              	
                As
      used herein “advertising” means only the publication in print or broadcast
      media of advertisements approved by Supplier and “promotion” means all
      other forms of Product promotion, other than advertising, approved by
      Supplier including, without limitation, point of sale material, co-op
      advertising, marketing, public relations, special events and the
      like.  All advertising and promotions (including, without
      limitation, the methods, media selection, layouts, venue and timing
      thereof) shall be subject to the prior written approval of
      Supplier.  Distributor shall submit all proposed and promotion
      materials for approval at least four (4) weeks prior to the first
      anticipated use thereof and shall not engage in any advertising or
      promotion or use any such materials without Supplier’s prior written
      approval. Unless otherwise expressly approved in writing by Supplier,
      Distributor will use only such materials including, without limitation,
      point of sale material, packaging, advertising and ancillary material
      furnished by Supplier.

              

      

      

      
        	
                 
      

              	
                5.2        Distributor
      shall conduct all advertising and promotion of the Products in the
      Territory at its own expense, subject to matching a portion of such
      expenditures by Supplier as hereinafter provided.  At a minimum,
      Distributor shall expend each contract year for approved advertising and
      promotion an amount equal to  *  of Distributor’s
      budgeted sales of Products for such contract year. Distributor’s budgeted
      sales of Products for the first through the fifth contract years are set
      forth in Annex D to the JV Agreement and Distributor’s budgeted sales each
      contract year thereafter shall be as contained in the annual business plan
      and budget as adopted in accordance with the provisions of the JV
      Agreement at or before the beginning of each contract year, or, at such
      time, if any, that the JV Agreement is no longer in effect, then as
      approved by Distributor in good faith consultation with Supplier, and may
      be adjusted in the same manner quarterly. So long as Distributor satisfies
      its advertising and promotion commitment as set forth in this Section
      5.2,

              

      

      *CONFIDENTIAL
PORTION OF THIS EXHIBIT OMITTED AND FILED SEPARATELY WITH THE SEC PURSUANT TO
RULE 24b-2 OF THE 1934 ACT

      
        	
                 
      

              	
                             then
      Supplier will match such expenditures each contract year by spending an
      amount on advertising and/or promotion equal to  *  of
      the Net Invoiced Cost of Distributor’s Product purchases in such year
      (“Supplier’s Advertising Amount”). “Net Invoiced Cost” means the invoiced
      price actually paid by Distributor to Supplier net of all discounts, all
      costs referred to in Section 3.3 hereof, all credits for returns and all
      uncollected amounts. There shall be deemed included as part of Supplier’s
      Advertising Amount each year an amount equal to up to  * of the
      Net Invoiced Cost of Distributor’s Product purchases in such year that is
      spent by Supplier in connection with JC’s advertising and promotion
      campaign (“Image Program”), which final amount shall be determined in
      accordance with the requirements of the JC License.  Distributor
      acknowledges that the way the funds allocated to the Image Fund will be
      spent by Supplier is that Supplier will pay such amount directly to
      Licensor or its Affiliates under the JC License. Supplier’s obligation
      hereunder to spend Supplier’s Advertising Amount in any contract year is
      contingent on Supplier receiving from Distributor within thirty (30) days
      after the end of each quarter in such contract year, a
      statement  setting out and showing Distributor’s advertising
      expenditures and promotion expenditures incurred during such prior
      quarterly period (supported by invoices and other documents reasonably
      acceptable to Supplier, substantiating the expenditures for Distributor’s
      approved advertising and promotion); and provided further that such costs
      are no less, on a proportionate basis, than the minimum required
      expenditures set forth in this Section 5.2.  In the event
      Distributor’s actual Product sales for any contract year (other than the
      final contract year of this Agreement) exceed the total budged sales for
      such year on which its advertising and promotion expenditures for the year
      were based, then Distributor shall spend an amount equal to
      *  of such excess in the following contract
  year.

              

      

      

      5.3        Distributor
will use only such materials for fixturing at the point of sale as are approved
by Supplier in writing.

       

      
        	
                6.

              	
                REPORTING

              

      

      
        	
                6.1

              	
                Quarterly
      (beginning with the quarter ending July 31, 2007 and from time to time at
      the reasonable request of Supplier, Distributor shall furnish Supplier
      with a comprehensive written report in reasonable detail regarding (i) the
      advertising, promotions, distribution and sales of the Products for the
      immediately proceeding quarter or such other relevant period as Supplier
      may reasonably request; (ii) Distributor’s market analysis; and (iii) such
      other matters as Supplier shall
request.

              

      

      

      
        	
                6.2

              	
                Distributor
      will consult with Supplier, as Supplier shall reasonably request for
      purposes of determining a marketing plan for distribution of the Products
      in the Territory each year.  Such plan shall be followed by
      Distributor.

              

      

      *CONFIDENTIAL
PORTION OF THIS EXHIBIT OMITTED AND FILED SEPARATELY WITH THE SEC PURSUANT TO
RULE 24b-2 OF THE 1934 ACT

      

      
        	
                6.3

              	
                Distributor
      shall promptly notify Supplier of any significant changes in Distributor’s
      sales forecasts and shall furnish Supplier such information related to
      sales, sales forecasts, warranty claims and inventories of Products as may
      be reasonably requested from time to time by
  Supplier.

              

      

      

      
        	
                7.

              	
                SERVICE
      AND REPAIR

              

      

      

      
        	
                7.1

              	
                Distributor
      shall establish and maintain, at its expense, such number of authorized
      service facilities for the service and repair of the Products in the
      Territory (the “Service Center(s)”) as Supplier may reasonably request, it
      being understood that initially there shall be one (1) such Service
      Center.  Distributor shall accept all Products for service,
      returned by any consumer or retailer in the Territory for service whether
      covered by the applicable consumer warranty (“warranty repairs”) or not
      covered by said warranty (“out-of-warranty repairs”).  All costs
      related to out-of-warranty service, including, without limitation, costs
      of all Products and Product parts used in the performance thereof, shall
      be borne by Distributor.  Distributor shall purchase such
      Products and parts from Supplier or from one or more parts distributors
      designated in writing by Supplier and maintain an adequate stock of
      Products, parts and materials as necessary to perform such service in a
      timely manner.

              

      

      

      
        	
                7.2

              	
                Within
      thirty (30) days after the Effective Date, Distributor will furnish
      Supplier with Distributor’s initial price list for all out of warranty
      repairs.  Distributor will give Supplier no less than ninety
      (90) days prior written notice of any change to any such prices.
      Distributor shall submit to Supplier each month, a statement summarizing
      all out of warranty repairs performed in the immediately preceding month
      indicating for each watch repaired the corresponding style number and the
      work performed.  Distributor will use only those parts
      (excluding batteries) for out of warranty service on the Products which
      are supplied directly by or otherwise approved in writing by Supplier as
      original equipment for the
Products.

              

      

       

      

      7.3                 On
or before the fifteenth day of each month, Distributor shall send to the
Supplier (Attn.:  Service Department) a cumulative statement for all
warranty repairs completed by Distributor in the immediately preceding calendar
month.  This statement must be accompanied by a copy of each repair
receipt complete with:

       

      

       

      (a)       Correct
watch style

      
        	
                 
      

              	
                (b)

              	
                Dates
      repair received, completed and returned to customer.
  and

              

      

      
        	
                 
      

              	
                (c)

              	
                Complete
      description of work performed

              

      

      

      
        	
                7.4

              	
                Supplier
      shall offer a range of parts that it determines appropriate in its sole
      discretion.  Supplier shall also establish the cost of such
      parts in its sole discretion.  In no event shall Distributor use
      any parts for warranty repairs except parts furnished by
      Supplier.  Supplier shall supply Distributor at no charge with
      an initial inventory of such parts to be used solely for performing
      warranty repairs as Supplier determines reasonable and necessary and
      thereafter with replenishment parts equivalent to up to one percent (1%)
      of the Net Invoiced Cost of the Products purchased by Distributor in the
      prior contract year.  This allotment of such parts to be used
      for warranty repairs must be used in the year provided.  No
      portion of any such allotment may be carried forward into a subsequent
      contract year.  All shipping charges, including any duty, or
      Customs brokerage fees, for parts shall be paid by
      Supplier.  Supplier shall have the right to furnish such parts
      to Distributor in the form of finished watches in its sole
      discretion.

              

      

       

      

       

      7.5                 Distributor
will issue estimates for repair work within five (5) working days after receipt
of a Product for repair on ninety percent (90%) of the Products submitted to
Distributor for repair.  Working days are defined as all days of the
year except Saturdays and Sundays and legal holidays.  Warranty
repairs will be completed within fifteen (15) working days after receipt of a
Product for repair on ninety percent (90%) of the in-warranty work performed by
Distributor, unless detained because of delays in receiving necessary parts from
the Supplier.  Out of warranty repairs will be completed within twenty
(20) working days after receipt of the customer's written authorization to
proceed with repair of a Product on ninety percent (90%) of the out of warranty
work performed by Distributor.  On the same day any repairs are
completed, the Product repaired or serviced will be returned to the customer via
express mail or such other method as Supplier may reasonably request. Increases
in the postage or other ground delivery rates may require requisite increases in
charges to the customer by the Distributor for shipping.

       

      

      
        	
                8.

              	
                TRADE
      PRACTICES

              

      

      

      
        	
                8.1

              	
                Distributor
      shall sell the Products at competitive levels, at wholesale in accordance
      with generally accepted customs in the trade and shall refrain from using
      selling methods or practices which shall be harmful to the reputation of
      the Products, Supplier or the Trademarks.  Distributor’s right
      to determine the prices of reselling and to employ conditions of trade at
      its exclusive discretion remains unaffected, provided however that
      Distributor shall sell the Products to JC Stores at a price which is not
      greater than eighty percent (80%) of the prevailing wholesale price for
      the same Products in the Territory.

              

      

      

      
        	
                8.2  

              	
                Distributor
      may sell Products only to those specialty shops, department stores and
      retail outlets (including those that sell directly to the consumer) that
      satisfy Supplier’s objective criteria for approved retailer status as set
      forth in Schedule B annexed. The satisfaction of such requirements shall
      be evidenced by written approval to Distributor from Supplier as provided
      in this Section 8.2. Upon execution of this Agreement, and prior to the
      opening of each selling season (and whenever Distributor wishes to sell
      Products to retail customers not previously approved by Supplier),
      Distributor must submit a list of such proposed retail customers (not
      including previously approved retail customers) for Supplier’s written
      approval.  Supplier has the right to withdraw any such approval
      on written notice to Distributor, provided, however, that Supplier will
      not withdraw approval of a retail customer that is then authorized to
      carry and is carrying JC products, unless Supplier is reasonably
      dissatisfied with the display, delivery or inventory model of Products of
      such retail customer.  After such notice, Distributor may not
      accept additional orders for Products from such retail customer, but may
      fill any existing order.  Once each quarter, Distributor shall
      provide Supplier with a list of the  retailers in the Territory
      that purchased Products in the immediately preceding quarter containing
      the addresses of their sales outlets, it being understood that such list
      is of a confidential nature and shall be for the sole use of Supplier and,
      if requested, Licensor, and shall be kept confidential by Supplier and
      shall not be disclosed by Supplier to any person whatsoever, other than
      employees of Supplier and Licensor whose performance of their duties
      require the disclosure of such list to
them.

              

      

      

      
        	
                8.3

              	
                Except
      as expressly permitted by Supplier in writing, Distributor may not (a)
      sell Products directly to the public in retail stores; (b) use Products as
      giveaways, prizes or premiums, except for promotional programs which have
      received the prior written approval of Supplier; or (c) sell Products to
      any Affiliate of Distributor or any of its directors, officers, employees
      or any person having an equity participation in or any other affiliation
      to Distributor, other than to Distributor’s employees or other
      representatives for their personal use, without the prior written approval
      of Supplier. Supplier may, at Distributor’s expense, purchase any Products
      found in the marketplace that Distributor has sold to unapproved customers
      in violation of this Section 8.3 or Section 2.3. Distributor shall include
      and enforce the following on all invoices to its retail customers:
      “Limitations on Sale by Buyer: Seller expressly reserves the right to
      limit the amount of merchandise delivered to only such quantities as are
      necessary to meet the reasonably expected demand at Buyer’s store
      locations. This Merchandise is sold to Buyer for resale to the ultimate
      consumer and/or within the JC selective distribution network and only and
      only from such store locations as have been approved in writing by Seller.
      Buyer shall be expressly prohibited from selling the merchandise purchased
      hereunder to a retailer or other dealer in like merchandise, or to any
      party who Buyer knows, or has reason to know, intends to resell the
      merchandise and is not a member of the JC selective distribution network.
      The merchandise purchased hereunder may not be sold by Buyer from any
      store locations which Seller has advised Buyer do not qualify as an
      acceptable location”.

              

      

      

      
        	
                9.

              	
                PROTECTION
      OF INTERESTS; TRADEMARKS

              

      

      

      
        	
                9.1  

              	
                Distributor
      shall protect and at all times seek to promote Supplier’s best interests
      in the Territory and shall immediately notify Supplier of any fact or
      situation which may be or may be reasonably presumed to become detrimental
      to Supplier or to its good will, copyrights, patents, or to the Trademarks
      or other intellectual property rights of Supplier or
      Licensor.  Distributor shall have the exclusive right to use the
      Trademarks in connection with distribution of the Products in the
      Territory for the term hereof and solely for the limited purpose of and
      only to the extent necessary for performing its obligations hereunder and
      for no other purpose.  Distributor agrees that it shall have no
      rights with respect to the Trademarks in connection with the Products
      except only as expressly and specifically set forth herein and that its
      every use shall inure exclusively to the benefit of Licensor and that
      Distributor shall not, at any time, acquire any rights therein or
      challenge the validity thereof.  Distributor further agrees at
      no time to use any of the Trademarks or other intellectual property rights
      owned by or licensed to Supplier in a manner not authorized by Supplier.
      Distributor shall not apply to register, nor shall Distributor use or
      permit the use of, any name, logo, mark or tradedress which is confusingly
      similar to any of the Trademarks or do any act or thing, or permit any act
      or thing to be done, which may in any way impair, dilute, reduce the value
      of the Trademarks or damage the goodwill relating to the
      Trademarks

              

      

      

      
        	
                9.2  

              	
                If
      requested by Supplier, in writing, the Distributor shall assist and
      cooperate with Supplier, its counsel and agents as so requested, in
      connection with any matters involving any of Supplier’s intellectual
      property rights in the Territory including without limitation, in any
      legal proceedings and any out-of-pocket expenses incurred by the
      Distributor in connection with litigation in which the Distributor
      participates at the request of Supplier shall be reimbursable to the
      Distributor and any recoveries form any such litigation or the settlement
      thereof shall belong exclusively to Supplier; provided, however, that
      Supplier shall have the exclusive right (but not the obligation) to take
      such action against third parties in the respect of the Trademarks and all
      other intellectual property rights of
Supplier.

              

      

      

      
        	
                9.3

              	
                In
      the event that Distributor sells any Products outside the Territory in
      violation of Section 2.3 hereof, then Supplier may, in addition to all
      other rights and remedies available to it, repurchase all or any portion
      of such Products.  Within ten (10) days after receipt of a
      statement from the Supplier listing all such Products purchased, together
      with a list of the model numbers, and setting forth Supplier’s
      out-of-pocket costs incurred in connection with such purchase, Distributor
      shall reimburse Supplier such out-of-pocket
      costs.   Distributor acknowledges that such payment is not
      a penalty but fair compensation to Supplier’s for breach of this Agreement
      and damage to Supplier goodwill and
tradename.

              

      

      

      
        	
                10.

              	
                TERM
      AND TERMINATION

              

      

      

      
        	
                10.1  

              	
                This
      Agreement shall take effect upon the Effective Date and shall, unless
      otherwise earlier terminated as provided herein continue for the duration
      of the JV Agreement. It
      shall be automatically terminated upon the termination or expiration of
      the JV Agreement.

              

      

      

      
        	
                10.2  

              	
                In
      the event (a) this Agreement is assigned to Swico, MGI or to an Affiliate
      of Swico or MGI in accordance with Section 2.6 hereof, or (b) either Swico
      or MGI purchases all of the other’s interest in Distributor under Section
      15.2.2 of the JV Agreement or (c) Swico, its Affiliates or Permitted
      Transferees (as such term is defined in the JV Agreement) otherwise
      acquire control of Distributor, then this Agreement shall continue from
      the date of such assignment, purchase and/or acquisition, as the case may
      be, until the third anniversary of such date at which time this Agreement
      shall expire and neither party shall have any further obligation to the
      other hereunder except as to those obligations which by their express
      terms survive beyond the expiration or termination of this Agreement.
      Following any assignment, purchase or acquisition referred to in Section
      10.1, this Agreement may be terminated by either party hereto upon prior
      written notice to the other party:

              

      

      

       

      
        	
                 
      

              	
                (i)

              	
                in
      the event such other party shall have breached any of the terms and
      conditions hereof and, if remediable shall have failed to remedy such
      breach within sixty  (60 ) days after the notification of the
      breach by the non-breaching party;
or

              

      

      

      (ii)      in
the event that such other party becomes  insolvent,  has an
insolvency proceeding of any
kind  filed  by  or  against  it,  including  bankruptcy  or  reorganization,  liquidates                                                          its  business
or is liquidated, has a receiver appointed for its assets, or makes
an  assignment for the benefit of its creditors.

       

      

      
        	
                10.3  

              	
                In
      addition to any other rights of termination provided hereunder, Supplier
      may terminate this Agreement immediately by notice to Distributor if
      Distributor (i) fails to satisfy the Minimum Turnover Requirement for any
      contract year; or (ii) fails to satisfy the minimum advertising
      expenditures in Section 5.2 in any contract year or (iii) fails to comply
      with the payment terms in Section 3.3 or (iv) breaches any of the
      covenants contained in Article 8 or Article 9 hereof; or (v) transfers or
      attempts to transfer a substantial part of its business to a third party
      or attempts to assign this Agreement to a third party (or relinquishes
      control of any previously approved assignee under Section 13.5) or has its
      business merged or consolidated with a third party without the prior
      written consent of Supplier.

              

      

      

      10.4      Notwithstanding
anything to the contrary contained herein, this Agreement will automatically
expire and be of no further effect in the event the JC License expires or is
terminated for any reason. Upon such expiration or termination, neither party
will have any further obligation hereunder to the other except any obligation or
liability which accrued prior to the date of such expiration or
termination.

       

      

      
        	
                 
      

              	
                11.

              	
                EFFECTS
      OF TERMINATION

              

      

      

      
        	
                 
      

              	
                11.1

              	
                Upon
      the expiration of this Agreement or its termination by Supplier, Supplier
      may, at its sole discretion, reject all or part of any outstanding orders
      received or accepted by Supplier.

              

      

      

      
        	
                 
      

              	
                11.2

              	
                Upon
      expiration or termination of this Agreement for any
  reason:

              

      

      

      
        	
                 
      

              	
                (i)

              	
                Any
      sums due and owing by either party to the other shall become immediately
      due and payable, and such sums shall be paid
  forthwith.

              

      

      

      
        	
                 
      

              	
                (ii)

              	
                Supplier
      may immediately appoint a successor to Distributor in the Territory and
      announce the change of its distributorship to the
  public.

              

      

      

      
        	
                 
      

              	
                (iii)

              	
                Distributor
      shall take a physical inventory of all Products in stock and submit a
      report of such inventory to Supplier.  Supplier shall have the
      right to have a representative present to verify such
      inventory.  Supplier shall be entitled but not obliged to take
      over any portion of the Products remaining in stock from Distributor at
      the price in currency originally paid by Distributor to Supplier, plus the
      cost of shipping and insurance.  Upon notice to Distributor of
      Supplier’s election to buy back any or all such inventory, Distributor
      shall cooperate as requested by Supplier for the packing and shipping of
      such inventory.  Distributor may sell any Products not taken
      over by Supplier for six (6) months after the termination of this
      Agreement or such shorter period as notified by Supplier subject to all
      the provisions hereof, including, without limitation, Article
      8.

              

      

      

      
        	
                 
      

              	
                (iv)

              	
                Distributor
      shall immediately cease all use of the Trademarks; provided, however, that
      Distributor may continue to use the Trademarks solely in connection with
      the sale of the Products pursuant to Section 11.2 (iii) above and in such
      a way as not to impair, dilute, reduce the value of or damage the goodwill
      relating to the Trademarks.

              

      

      

      
        	
                 
      

              	
                (v)

              	
                Any
      advertising must be at the discretion of Supplier and must be approved by
      Supplier.

              

      

      

      
        	
                (vi)  

              	
                Distributor,
      at its expense, will return to Supplier all materials belonging to
      Supplier and all proprietary data or confidential information furnished to
      Distributor by Supplier during the term
hereof.

              

      

      

      11.3    The
rights of termination granted herein are absolute and each party acknowledges
that it has considered and assumed as its own exclusive risk the possibility of
making expenditures of money and time in preparing for the performance of this
Agreement and possible loss or damage on account of the loss of prospective
profits or anticipated sales or on account of expenditures, investments, leases,
property improvements or commitments in connection with the good will or
business of the parties or otherwise resulting from the proper termination
hereof and that it is the express intent and agreement of the parties that
neither party properly terminating this Agreement in accordance with the terms
hereof (the “Terminating Party”) shall be liable to the other for any claim,
cost or damages solely by reason of such termination.  In the event of
such termination or expiration of this Agreement in accordance with the terms
hereof, the Terminating Party shall have no obligation or liability to pay to
the other, and such other party hereby expressly waives, any statutory
termination fee, any other right to compensation provided by law arising solely
as a consequence of such termination, and consequential damages and lost profits
arising solely on account of such termination or expiration.

       

      

      
        	
                12.  

              	
                INDEMNIFICATION

              

      

      

      
        	
                 
      

              	
                Distributor
      hereby agrees to indemnify and hold the Supplier, and its Affiliates
      and/or agents and each of their officers, directors and employees harmless
      from and against any and all liabilities, damages, costs and expenses
      (including reasonable attorneys’ fees) which arise out of or in connection
      with any act or omission related to this Agreement by Distributor, its
      successors, assigns, parents, subsidiaries, Affiliates, agents, and
      contractors, or the officers, directors or employees of any of them.
      Supplier reserves the right, without being required to do so, at its own
      expense and without waiver of any indemnity hereunder, to defend any
      claim, action or lawsuit coming within the purview of this Section
      12.  This section shall survive the termination or expiration of
      this Agreement.

              

      

      

      

      
        	
                 
      

              	
                13.

              	
                GENERAL
      TERMS AND CONDITIONS

              

      

      

      
        	
                 
      

              	
                13.1

              	
                Supplier
      reserves the right to designate in writing from time to time any other
      Affiliate of  Supplier to exercise any of the rights or perform
      any of the obligations of Supplier
hereunder

              

      

      

      
        	
                 
      

              	
                13.2

              	
                Neither
      party shall have the power to represent the other party.  For
      purposes of this Agreement, Distributor is an independent contractor and
      neither the agent nor the representative of Supplier or any of its
      affiliated companies.  Distributor, its employees, contractors
      and Affiliates shall not act or represent themselves as agents or
      representatives of, or as having the right, power or authority, express or
      implied to assume or create any obligation or liability on behalf of
      Supplier or any of its affiliated
companies.

              

      

      

      
        	
                 
      

              	
                13.3

              	
                Neither
      party hereto shall be liable for any delay or failure in fulfilling the
      obligations hereunder (except for the payment of money) when such delay or
      failure is caused by riots, war (declared or not), or hostilities between
      any nations; acts of God, fire, storm, flood or earthquake; strikes, labor
      disputes, shortage or delay of carriers, or shortage of raw materials,
      labor power or other utility services; any governmental restrictions; or
      any other unforeseeable contingencies beyond the control of the
      party.

              

      

      

      
        	
                13.4  

              	
                Any
      notice to be given pursuant to this Agreement shall be written in English
      and shall be deemed duly given when sent by reputable overnight
      international courier including FedEx, UPS or DHL to the respective
      address first set forth above or by facsimile to the respective facsimile
      number set forth below confirmed by letter as aforesaid, or to such other
      address and/or facsimile number as a party hereto may designate by like
      notice.

              

      

      

      
        	
                 
      

              	
                To
      Supplier:

              

      

      
        	 	
                Copy
      to:

              

      

      

      

      
        	
                 
      

              	
                To
      Distributor:

              

      

      
        	
                 
      

              	
                Copy
      to:

              

      

      

      
        	
                 
      

              	
                Supplier’s
      designated Affiliate under Section 13.1 shall be designated by notice to
      Distributor, which notice shall include the address and facsimile number
      of such Affiliate for purposes of giving notice
      hereunder.  Notice to Supplier’s designated Affiliate shall be
      made and deemed duly given in the same manner as for notice to
      Supplier.

              

      

      

      
        	
                13.5  

              	
                In
      view of the fact that this Agreement has been entered into because of the
      confidence that Supplier has in Distributor, it is understood that the
      terms and conditions hereof shall be performed by Distributor only and
      that, except as expressly permitted in Section 2.6 hereof, this Agreement
      may not be assigned, whether by operation of law or otherwise, without the
      prior written approval of Supplier which Supplier may withhold or grant in
      its sole and absolute discretion and any such purported assignment by
      Distributor without such approval by Supplier shall be void and of no
      effect. Following any such assignment, Distributor shall remain obligated
      as a guarantor for all the payment obligations of the approved assignee
      hereunder and any change in control of the approved assignee without the
      approval of Supplier shall constitute a breach of this Section 13.5 and
      shall entitle Supplier to terminate this Agreement as provided under
      Section 10.3

              

      

      

      
        	
                13.6

              	
                The
      captions of this Agreement are inserted solely for ease of reference and
      are not deemed to form a part of or to modify the terms and conditions of
      this Agreement.

              

      

      

      
        	
                   13.7

              	
                This
      Agreement shall be governed exclusively by the law of Hong Kong without
      reference to its conflict of laws rules.  Any dispute,
      controversy or difference which may arise out of, in relation to, or in
      connection with this Agreement shall be finally settled by arbitration in
      Hong Kong in accordance with the under the Rules of Arbitration of the
      International Chamber of Commerce by three (3) Arbitrators appointed in
      accordance with said rules.  Each party hereto shall be bound by
      any arbitration award so rendered and any judgment upon such award may be
      entered as a non-appealable final, foreign judgment in any court having
      jurisdiction thereon.  The language of the proceedings shall be
      English.

              

      

      

      
        	
                 
      

              	
                13.8

              	
                When
      interpreting the terms and conditions of this Agreement, the English
      language shall be applied
exclusively.

              

      

      

      
        	
                13.9  

              	
                This
      Agreement, including the terms and conditions incorporated by reference in
      Section 3.3 hereof, constitutes the entire agreement of the parties with
      respect to the subject matter hereof and prevails over and supersedes all
      prior agreements, whether written or oral, relating to the subject matter
      hereof and may not be altered, waived, modified, or discharged except by
      an express writing referring to this Agreement signed on behalf of the
      parties hereto by their duly authorized representatives. In the event of
      any conflict or inconsistency between this Agreement and the JV Agreement,
      the latter shall control.

              

      

      

      
        	
                13.10

              	
                The
      failure of either party hereto to enforce at any time any of the
      provisions or terms of this Agreement, or any rights in respect thereof,
      or the exercise of or failure to exercise by either party any rights or
      any of its elections herein provided, shall in no way be considered to be
      a waiver of such provisions, terms, rights or elections or in any way to
      affect the validity of this
Agreement.

              

      

      

      
        	
                13.11

              	
                In
      connection with this Agreement, the parties may from time to time exchange
      proprietary data or confidential information.  The parties agree
      to keep in confidence all such proprietary data or confidential
      information received in accordance with this Agreement and to use the same
      only in connection with the performance of this Agreement.  This
      provision shall survive the termination or expiration of this
      Agreement.

              

      

      

      
        	
                13.12

              	
                Should
      any provision of this contract held invalid, incomplete or unenforceable,
      this will not affect the validity of the remaining
      provisions.  Supplier and Distributor undertake to replace the
      invalid incomplete or unenforceable provision by provision which comes
      closest to the commercial goal that the parties intended to achieve on the
      conclusion of this agreement by the invalid, uncompleted and unenforceable
      provision. Notwithstanding anything to the contrary contained herein, in
      the event of any conflict or inconsistency between any term or provision
      of this Agreement and the JC License, the latter shall
      control.

              

      

      

      
        	
                13.13

              	
                Supplier
      shall have the right to injunctive relief to enforce the covenants,
      agreements and obligations of Distributor hereunder in addition to any
      other relief to which Supplier may be entitled at law or in
      equity.

              

      

      

      
        	
                13.14  

              	
                Each
      order deliverable under this Agreement shall be deemed sold under a
      separate contract.  Non-delivery or default by Supplier as to
      any order shall not be deemed a breach of the
  entire

              

      

      Agreement
and shall not relieve Distributor of its obligation to accept and pay for any
prior or subsequent delivery, even though such non-delivery or default
substantially impairs the value of this Agreement to Distributor.

      

      
        	
                13.15

              	
                Distributor
      shall comply with all applicable laws, rules and regulations in the
      Territory, including, without limitation, the provisions of Directive
      2002/96/EC,
      which governs waste electrical and electronic equipment, including all
      related amendments and all laws, rules and regulations in the Territory
      related thereto  Distributor shall provide Supplier with
      evidence of any such compliance upon
request.

              

      

      

      

      

      

      IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in
multiple duplicates by their authorized representatives as of the day and year
first above written.

      

       MGS
DISTRIBUTION
LIMITED                                              SWISSAM
PRODUCTS LIMTED

      

      By:   ________________________                                                                                                                 By:    ____________________________

      
        	
                 
      

              	
                Title:  _______________________                                        Title:   ___________________________

              

      

      
        	
                 
      

              	
                Name:
      _______________________                                       Name:  ___________________________

              

      

      
        
           

        

        
           

          
            

          

        

        
           

          
            -  -

            

          

        

      

      

      

      
        	
                 
      

              	
                SCHEDULE
      A

              

      

      

      

      
        	
                 
      

              	
                DISTRIBUTOR
      DISCOUNT SCHEDULE

              

      

      

      

      Distributor
pricing shall be * of Supplier’s recommended Euro retail price (inclusive of
VAT); provided, however, that if this Agreement is assigned as provided under
Section 2.6, then the pricing to the assignee shall be based on the same
discount off of Supplier’s recommended Euro retail price as generally offered by
Supplier to its other independent distributors of the Products in the European
Union.

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      *CONFIDENTIAL
PORTION OF THIS EXHIBIT OMITTED AND FILED SEPARATELY WITH THE SEC PURSUANT TO
RULE 24b-2 OF THE 1934 ACT

      

      

      
        
           

        

        
           

          
            

          

        

        
           

          
            -  -

            

          

        

      

      
        	
                 
      

              	
                                                                                      SCHEDULE  B

              

      

      

      
        	
                 
      

              	
                                                    OBJECTIVE
      CRITERIA FOR APPROVED RETAILER
STATUS

              

      

      

      

      
        	
                1.  

              	
                EXTERNAL
      ELEMENTS

              

      

      

      
        	
                A.  

              	
                Location/Street

              

      

      

      (i)         Animated
and attractive environment

      (ii)         Centrally
located neighborhood

      (iii)              Shopping
district with fashion and prestige branded shops

      

      

      
        	
                B.  

              	
                Appearance

              

      

      

      (i)              Attractive,
well-maintained, high-quality façade

      (ii)              Clean,
visible and prominent shop sign

      (iii)              Visible
and easily accessed entrance

      

      

      
        	
                C.  

              	
                Shop
      Windows

              

      

      

      (i)              Well
lit, clean and made from good quality materials

      (ii)              Suitable
number and size show windows

      
        	
                (iii)  

              	
                Windows
      provide sufficient space to display a representative selection of JC brand
      products

              

      

      
        	
                (iv)  

              	
                Professionally
      maintained and attractive window
decoration

              

      

      

      

      
        	
                2.  

              	
                INTERNAL
      ELEMENTS

              

      

      

      
        	
                A.  

              	
                General
      Outfitting

              

      

      

      (i)              Clean
and well-maintained walls, floors, ceilings and furnishings

      (ii)              Sufficient
and sophisticated lighting

      (iii)              Equipped
with adequate security devices

      

      

      
        	
                B.  

              	
                Presentation
      Showcases

              

      

      

      (i)              Made
of high-quality materials with adequate lighting

      (ii)              JC
products displayed on official brand POS materials

      (iii)              Clearly
visible and strong brand identification

      
        	
                 
      

              	
                (iv)

              	
                JC
      products are grouped together and displayed separately from other
      brands

              

      

      

      

      
        	
                3.  

              	
                OTHER
      PRODUCTS

              

      

      

      
        	
                A.  

              	
                Premises
      used solely for the retail sale of quality watches, jewelry, fashion
      accessories and/or fashion apparel.

              

      

      

      
        	
                B.  

              	
                 products
      displayed to prevent confusion with any other brands
    products.

              

      

      

      
        	
                C.  

              	
                Retailer
      also sells at least two (2) Swiss watch brands or any three (3) of the
      following fashion/designer/prestige watch brands:  Emporio
      Armani, Diesel, DKNY, Kenneth Cole, Versace, Puma, D&G, CK, Sector,
      Briel, Guess, Lacoste

              

      

      

      

      
        	
                4.  

              	
                PRESENTATION/PROMOTION

              

      

      

      
        	
                A.  

              	
                Visual/Collateral

              

      

      

      
        	
                (i)  

              	
                Brand
      visuals properly presented and changed out seasonally or whenever
      requested by brand

              

      

      

      
        	
                B.  

              	
                Advertising

              

      

      

      
        	
                (i)  

              	
                Dealer’s
      advertising is consistent with the quality requirements of the
      brand

              

      

      
        	
                (ii)  

              	
                Dealer
      agrees to conduct co-op advertising on the basis of an agreed and shared
      budget and media plan

              

      

      

      
        	
                C.  

              	
                Personnel/Customer
      Service

              

      

      

      
        	
                (i)  

              	
                Sales
      staff with good knowledge of JC brand and
  products

              

      

      
        	
                (ii)  

              	
                Available
      for regular training on brand and new
products

              

      

      
        	
                (iii)  

              	
                Well
      dressed, groomed and polite

              

      

      
        	
                (iv)  

              	
                Capacity
      to advise customer on how to operate products
  correctly

              

      

      
        	
                (v)  

              	
                Able
      to carry out simple adjustments (e.g. sizing metal
    bracelets)

              

      

      

      

      
        	
                5.  

              	
                REPORTING

              

      

      

      
        	
                A.  

              	
                Provides
      clear and comprehensive information

              

      

      

      
        	
                B.  

              	
                Provides
      information on sales and stock
situation

              

      

      

      
        	
                C.  

              	
                Provides
      monthly sales reports by SKU

              

      

      

      
        	
                D.  

              	
                Provides
      immediate information on problems with
products

              

      

      

      

      
        	
                6.  

              	
                FINANCES

              

      

      

      
        	
                A.  

              	
                Good
      payment record

              

      

      

      
        	
                B.  

              	
                Creditworthy

              

      

      

      
        	
                C.  

              	
                Sound
      finances

              

      

      

      

      

                                                                    TOMMY
HILFIGER

                                                         DISTRIBUTORSHIP
AGREEMENT

      

      

      

      THIS
AGREEMENT is made and entered into as of May 11, 2007  (the “Effective
Date”) by and between MOVADO WATCH COMPANY, S.A. a corporation duly incorporated
under the laws of Switzerland having its principal office at Bettlachstrasse 8,
CH-2540, Grenchen, Switzerland (hereinafter referred to as “Supplier”) and MGS
DISTRIBUTION LIMITED a corporation incorporated under the laws of England having
its principle office at  c/o Swico, Meadway, Haslemere, Surrey GU27
1NN, England (hereinafter referred to as the “Distributor”).

      

      RECITALS

      

      WHEREAS,
Swico Limited (“Swico”), Movado Group, Inc. (“MGI”) and
Distributor  have entered into a Joint Venture Agreement, dated May
11, 2007 (the “JV Agreement”), pursuant to which Swico and MGI have established
a joint venture relationship relating to the sale, marketing and distribution of
certain watch brands in the United Kingdom.

       

      WHEREAS,
this Agreement is one of the Distribution Agreements as defined in the JV
Agreement.

       

                                      WHEREAS
Supplier is an Affiliate (as defined in the JV Agreement) of MGI and is engaged
in the development, design, manufacture, distribution and sale of the Products
(as hereinafter defined) and Supplier desires to appoint Distributor and
Distributor desires to be appointed, as the exclusive distributor of the
Products in the Territory (as hereinafter defined), in accordance with the terms
and conditions set forth hereinafter;

      

      

      NOW, THEREFORE, in consideration of the
premises and the mutual covenants herein contained, the parties hereto agree as
follows:

      

      1.           DEFINITIONS

      

      
        	
                1.1

              	
                In
      this Agreement, except where the context otherwise requires, the
      capitalized terms listed below shall have the respective meanings assigned
      to them as follows:

              

      

      

      
        	
                 
      

              	
                “Affiliate”

              	 	
                means
      as to either party, a person or entity which controls, is under common
      control with, or is controlled by such
party.

              

      

      

      
        	
                “Corporate
      Accounts”

              	
                means
      premium and incentive accounts and other corporate accounts which have
      been approved in writing by THLI under the THLI License for the purchase
      of Products solely for the use of the employees of such
      accounts.

              

      

      

      
        	
                 
      

              	
                “Products”

              	
                     means
      watches manufactured by or for Supplier and bearing one
      or     more of the
  Trademarks

              

      

      

      
        	
                 
      

              	
                “Territory”

              	
                means
      the United Kingdom.

              

      

      

      
        	
                 
      

              	
                “THLI”

              	
                means
      Tommy Hilfiger Licensing, Inc., a Delaware corporation, including any
      successors and assigns.

              

      

      

      
        	
                 
      

              	
                “THLI
      License”

              	
                means
      the license agreement between Supplier and THLI, as the same may be
      amended from time to time, pursuant to which Supplier has the right to use
      the Trademarks in connection with the manufacture, marketing, advertising,
      sale and distribution of the
Products.

              

      

      

      
        	
                “Tommy
      Hilfiger Stores”

              	
                means
      retail and outlet stores, including flagship stores, owned by or
      affiliated with THLI that bear the name “Tommy Hilfiger” or
      “Hilfiger”.

              

      

      

      
        	
                 
      

              	
                “Trademarks”

              	
                means
      all trademarks licensed to Supplier by THLI under the THLI License and
      used on or in connection with the Products, including, without limitation,
      TOMMY, HILFIGER, TOMMY HILFIGER, Flag Design and Crest
    Design.

              

      

      

      
        	
                 
      

              	 	
                “Travel
      Retail Accounts”        means any
      account whose retail business consists of  in-flight duty free
      retail sales operations.

              

      

      

      

      
        	
                1.3  

              	
                Unless
      otherwise defined herein, each capitalized term used herein shall have the
      meaning as set

              

      

      

      
        	
                 
      

              	
                         forth
      in the THLI License.

              

      

      

      

      
        	
                2.

              	
                APPOINTMENT

              

      

      

      
        	
                2.2  

              	
                Subject
      to the terms and conditions contained herein, for the term of this
      Agreement, Supplier hereby appoints Distributor as the exclusive wholesale
      distributor for marketing, distribution and sales of the Products in the
      Territory (with the exception of sales to Tommy Hilfiger Stores, Corporate
      Accounts and Travel Retail Accounts), and Distributor hereby accepts such
      appointment.  Notwithstanding anything to the contrary contained
      herein, Supplier may permit Distributor to sell to certain Tommy Hilfiger
      Stores and Corporate Accounts on a case by case basis as Supplier may, in
      its sole and absolute discretion, designate in writing from time to
      time.

              

      

      

      
        	
                2.2

              	
                Distributor
      shall purchase all Products directly from Supplier, or from one or more
      other sources nominated in writing by Supplier, subject to Distributor’s
      right to purchase Products (a) from other distributors with which Supplier
      has contracted for the distribution of the Products (“Approved
      Distributors”) that are located in Switzerland, the European Union, the
      European Economic Area or any other country with which the European Union
      has concluded a free trade agreement (in the aggregate, the “European
      Area”) and (b) from approved retailers that satisfy the conditions set
      forth in Section 8.2 hereof (“Approved Retailers”) located in the European
      Area (provided that prior to exercising such right Distributor receives
      written confirmation from Supplier that each such other distributor is an
      Approved Distributor and that each such retailer is an Approved Retailer).
      Such Approved Distributors and Approved Retailers, only, are included
      within and comprise the Tommy Hilfiger selective distribution
      network.

              

      

      

      
        	
                 
      

              	
                2.3      Distributor
      shall sell the Products only to Approved Retailers in the Territory and,
      within the European Area, only within the Tommy Hilfiger selective
      distribution network.  Distributor shall refrain, outside the
      Territory and in relation to the Products, from actively soliciting
      orders, establishing any branch or maintaining any distribution depots. In
      no event will Distributor sell or continue selling Products to any
      retailer that does not satisfy the conditions in Section 8.2 of this
      Agreement.

              

      

      

      
        	
                2.4

              	
                Distributor
      shall use its best efforts to advertise, promote, market, distribute and
      sell the Products in the Territory.  Without limiting the
      generality of the foregoing, Distributor shall at all times maintain
      adequate stocks of Products to meet demand for the Products in the
      Territory by those retailers, if any, not being direct shipped by Supplier
      and Distributor will use reasonable efforts to avoid accumulating excess
      inventory not in line with its forecasts.  Distributor shall
      maintain an adequate sales force for the effective distribution and sale
      of the Products in the Territory, including at least one (1) full time,
      dedicated brand manager for the Products, experienced in managing a watch
      distribution business.

              

      

      

      
        	
                2.7  

              	
                During
      the term of this Agreement, Distributor shall not directly or indirectly
      manufacture or distribute any goods, including other watch brands, which,
      in the determination of Supplier, compete with the Products in the
      Territory.  No other brand licensed to MGI or any Affiliate of
      MGI shall be deemed to compete with the
  Products.

              

      

      

      
        	
                2.6

              	
                The
      parties acknowledge that under the Joint Venture Agreement each of Swico
      and MGI, as the only shareholders of Distributor, has the right under
      section 15.2 of the JV Agreement, to dissolve, or to purchase the other’s
      interest in, Distributor. Accordingly, if either Swico or MGI (the
      “Non-breaching Party”) elects under the foregoing provision of the JV
      Agreement to  purchase the other party’s interest in,
      Distributor and (a) written notice from Swico and MGI confirming such
      election has been provided to Supplier and Distributor and (b) the
      Non-breaching Party also notifies Supplier that it wishes this Agreement
      to be assigned, then effective upon the date specified in such notice from
      the Non-breaching Party (or, absent the specification of any date, then as
      soon as reasonably practicable) Supplier shall assign all of Distributor’s
      right, title and interest in and under this Agreement to such
      Non-breaching Party or to any Affiliate of such Non-Breaching Party as
      specified in such notice. Distributor hereby grants Supplier a power of
      attorney for purposes of Supplier executing and delivering on behalf of
      Distributor any and all documents or other instruments necessary to effect
      such assignment.

              

      

      

      
        	
                3.

              	
                ORDERING,
      SHIPMENT AND PRICES

              

      

      

      
        	
                3.2  

              	
                From
      time to time Distributor shall submit purchase orders for the Products to
      Supplier.  All purchase orders shall be subject to acceptance by
      Supplier, which acceptance may, at Supplier’s option, be evidenced by the
      issuance of written confirmations or acknowledgments.  Supplier
      hereby reserves the absolute right to reject the whole or any part of any
      purchase order for any commercially valid reason, including, without
      limitation, Distributor’s credit condition or its accumulation of excess
      or non-current inventory or its failure otherwise to adhere to the terms
      and conditions of this Agreement, notwithstanding that any such rejection
      may prevent Distributor from achieving its Minimum Purchase
      Requirements.  Subject to Sections 3.2 and  11.1, all
      purchase orders shall be irrevocable after acceptance by Supplier;
      provided, however, that Distributor may reschedule or cancel that portion
      of any purchase order pertaining to Products which Supplier fails to
      deliver as confirmed within thirty (30) days after the later of the
      advised delivery date or shipping date..  Distributor will
      provide Supplier with a four (4) month rolling forecast of its anticipated
      order volume monthly by SKU, for the four (4) month
      period.  Supplier will use reasonable efforts to deliver the
      Products ordered in accordance with the forecast within three (3) months
      after acceptance of the purchase order by Supplier and to deliver all
      other Product orders within three (3) to five (5) months after acceptance
      of the purchase order.  As soon as is reasonably practicable
      after acceptance of each purchase order, Supplier shall advise Distributor
      of the shipping dates applicable to such order.  All shipping
      dates so advised are estimates only and Supplier shall not have any
      liability for failure to actually ship by such dates or to deliver by
      Distributor’s requested delivery dates.  Supplier shall notify
      Distributor in the event of any anticipated delay in shipping dates of
      thirty (30) days or more. Each order submitted by Distributor will specify
      a “ship to” address which shall be the address of Distributor’s
      warehouseman or the address for one of Distributor’s
    customers

              

      

      

      
        	
                3.3  

              	
                The
      prices for all Products purchased by Distributor shall be in Euros and
      based on Supplier’s recommended Euro retail price in effect in the
      European Union as of the date of shipment. Such prices are ex-works and
      shall be calculated based on the discount structure as set forth on
      Schedule A annexed hereto. Supplier will provide current price lists for
      the Products to Distributor from time to time and shall have the right to
      modify such prices at any time; provided, however, that no price increase
      shall become effective sooner than sixty (60) days after written notice
      thereof to Distributor.  Supplier will give Distributor prior
      notice of all such price changes.  For all orders shipped before
      the effective date of any price increase, the applicable price shall be
      the price in effect on the date of shipment.  With respect to
      orders for the Products that have been accepted by Supplier but which have
      not been shipped as of the effective date of a price increase, the
      applicable price shall be the price in effect on the date of shipment;
      provided that if the price increase is more than ten percent (10%) of the
      last applicable price, Distributor shall have the right within ten (10)
      days from the effective date of the price increase to cancel all or any
      part of the order for the Products subject to such price increase upon
      notice to Supplier. All prices are ex-works Supplier’s distribution
      facility in Hong Kong.

              

      

      

      3.3                 Unless
otherwise agreed in writing by Distributor and Supplier, all Products shall be
deemed delivered to Distributor when delivered by Supplier or Supplier’s freight
forwarder or distribution center into the possession of a carrier designated by
Supplier.  Distributor shall bear all risk of loss, damage or shortage
pertaining to the Products after delivery to carrier for shipment to the
designated “ship to” address on the corresponding purchase order.  All
costs of delivery, including, without limitation, all costs for freight, import
licenses, customs duties or other duties or imposts, insurance and special
handling shall be paid by Distributor.  All payments are to be made in
Euros in accordance with Supplier’s standard terms of sale, which are
incorporated herein by reference (except to the extent inconsistent with the
terms contained herein) net ninety (90) days after the invoice date. A discount
of two percent (2%) is granted for cash payment in
advance.  .

       

      
 

       

      
        	
                3.4  

              	
                No
      provisions contained in Distributor’s orders which are different from or
      additional to the terms and conditions of this Agreement shall be binding
      on the parties hereto or applicable to the sale of the Products unless
      signed by a duly authorized representative of each of the parties as
      provided by Section 13.9 hereof.  Distributor shall have sole
      responsibility for invoicing its customers and for the collection of all
      amounts due from them for Product shipped to them either by Distributor or
      by Supplier in accordance with the “ship to” designation made on the
      applicable purchase orders. In no event shall non-payment by any such
      customer or any claim or allegation any customer may have against
      Distributor constitute grounds for any off set, deduction, claim or
      defense on the part of Distributor against Supplier or in respect of any
      obligation due to Supplier and Distributor shall pay Supplier all amounts
      due to Supplier in accordance with the terms of this Agreement without off
      set or deduction for any amounts claimed to be due to Distributor by
      Supplier.

              

      

      

       

      

       

      
        	
                5.  

              	
                MINIMUM
      TURNOVER REQUIREMENTS

              

      

      
        	
                4.1

              	
                Each
      contract year for the duration of this Agreement, Distributor will make
      minimum sales of Products in the Territory (“Minimum Turnover
      Requirement”) equal to at least sixty percent (60%) of the amount of
      Product sales as budgeted in the Business Plan annexed to the JV
      Agreement. Sales in excess of the Minimum Turnover Requirement in any
      contract year shall be neither carried over nor credited toward the
      Minimum Turnover Requirement of a subsequent contract year.
      Notwithstanding the foregoing there shall be no Minimum Turnover
      Requirement for the first contract
year.

              

      

       

      

      
        	
                5.

              	
                ADVERTISING
      AND PROMOTION

              

      

      
        	
                5.1

              	
                As
      used herein “advertising” means only the publication in print or broadcast
      media of advertisements approved by Supplier and “promotion” means all
      other forms of Product promotion, other than advertising, approved by
      Supplier including, without limitation, point of sale material, co-op
      advertising, marketing, public relations, special events and the
      like.  All promotions (including, without limitation, the
      methods, media selection, layouts and timing thereof) shall be subject to
      the prior written approval of Supplier.  Distributor shall
      submit all proposed promotion materials for approval at least four (4)
      weeks prior to the first anticipated use thereof and shall not engage in
      any promotion or use any such materials without Supplier’s prior written
      approval. Unless otherwise expressly approved in writing by Supplier,
      Distributor will use only such materials including, without limitation,
      point of sale material, packaging, advertising and ancillary material
      furnished by Supplier.

              

      

      

      
        	
                5.2  

              	
                Distributor
      shall conduct all advertising and promotion of the Products in the
      Territory at its own expense, subject to matching of a portion of such
      expenditures by Supplier as hereinafter provided.  At a minimum,
      Distributor shall expend each contract year for approved advertising and
      promotion an amount equal to * of Distributor’s budgeted sales of Products
      for such contract year.  Distributor’s budgeted sales of
      Products for the first through the fifth contract years are set forth in
      Annex D to the JV Agreement and Distributor’s budgeted sales each contract
      year thereafter shall be as contained in the annual business plan and
      budget as adopted in accordance with the provisions of the JV Agreement at
      or before the beginning of each contract year, or, at such time, if any,
      that the JV Agreement is no longer in effect, then as approved by
      Distributor in good faith consultation with Supplier, and may be adjusted
      in the same manner quarterly. So long as Distributor satisfies its
      advertising and promotion commitment as set forth in this Section 5.2,
      then Supplier will match such expenditures each contract year by an amount
      equal to * of the Net Invoiced Cost of Distributor’s Product purchases in
      such year.

              

      

      *CONFIDENTIAL
PORTION OF THIS EXHIBIT OMITTED AND FILED SEPARATELY WITH THE SEC PURSUANT TO
RULE 24b-2 OF THE 1934 ACT

      (“Supplier’s
Advertising Amount”). For purposes of this Agreement, “Net Invoiced Cost” means
the invoiced price actually paid by Distributor to Supplier net of all
discounts, all costs referred to in Section 3.3 hereof, all credits for returns
and all uncollected amounts. Supplier’s obligation in respect thereof shall be
to spend Supplier’s Advertising Amount on advertising and promotion for the
Products in such contract year provided that within thirty (30) days after the
end of each quarter in such contract year, Distributor shall submit a statement
to Supplier setting out and showing Distributor’s advertising expenditures and
promotion expenditures incurred during such prior quarterly period (supported by
invoices and other documents reasonably acceptable to Supplier, substantiating
the expenditures for Distributor’s approved advertising and promotion); and
provided further that such costs are no less, on a proportionate basis, than the
minimum required expenditures set forth in this Section 5.2.

      

      
        	
                5.3  

              	
                Distributor
      will use only such materials for fixturing at the point of sale as are
      approved by Supplier in writing. Distributor will fixture or cause to be
      re-fixtured at its sole cost and expense each in-store shop or area
      dedicated to the sale of the Products within sixty (60) days after notice
      from Supplier to do so, subject to Section 5.2 hereof, which notice may be
      given by Supplier from time to time as Supplier shall determine in its
      sole and absolute discretion but not more frequently than once every six
      (6) months as to any particular in-store shop or retail location unless
      Supplier is otherwise so required by
THLI.

              

      

      

      
        	
                6.

              	
                REPORTING

              

      

      

      
        	
                6.1

              	
                Quarterly
      (beginning July 31, 2007) and from time to time at the reasonable request
      of Supplier, Distributor shall furnish Supplier with a comprehensive
      written report in reasonable detail regarding (i) the advertising,
      promotions, distribution and sales of the Products for the immediately
      proceeding quarter or such other relevant period as Supplier may
      reasonably request; (ii) Distributor’s market analysis; and (iii) such
      other matters as Supplier shall
request.

              

      

      

      
        	
                6.2

              	
                Distributor
      will consult with Supplier, as Supplier shall reasonably request for
      purposes of determining a marketing plan for distribution of the Products
      in the Territory each year.  Such plan shall be followed by
      Distributor.

              

      

      

      
        	
                6.3

              	
                Distributor
      shall promptly notify Supplier of any significant changes in Distributor’s
      sales forecasts and shall furnish Supplier such information related to
      sales, sales forecasts, warranty claims and inventories of Products as may
      be reasonably requested from time to time by
  Supplier.

              

      

      

      

      
        	
                7.

              	
                SERVICE
      AND REPAIR

              

      

      

      
        	
                7.1

              	
                Distributor
      shall establish and maintain, at its expense, such number of authorized
      service facilities for the service and repair of the Products in the
      Territory (the “Service Center(s)”) as Supplier may reasonably request, it
      being understood that initially there shall be one (1) such Service
      Center.  Distributor shall accept all Products for service,
      returned by any consumer or retailer in the Territory for service whether
      covered by the applicable consumer warranty (“warranty repairs”) or not
      covered by said warranty (“out-of-warranty repairs”).  All costs
      related to out-of-warranty service, including, without limitation, costs
      of all Products and Product parts used in the performance thereof, shall
      be borne by Distributor.  Distributor shall purchase such
      Products and parts from Supplier or from one or more parts distributors
      designated in writing by Supplier and maintain an adequate stock of
      Products, parts and materials as necessary to perform such service in a
      timely manner.

              

      

      

      
        	
                7.2

              	
                Within
      thirty (30) days after the Effective Date, Distributor will furnish
      Supplier with Distributor’s initial price list for all out of warranty
      repairs.  Distributor will give Supplier no less than ninety
      (90) days prior written notice of any change to any such prices.
      Distributor shall submit to Supplier each month, a statement summarizing
      all out of warranty repairs performed in the immediately preceding month
      indicating for each watch repaired the corresponding style number and the
      work performed.  Distributor will use only those parts
      (excluding batteries) for out of warranty service on the Products which
      are supplied directly by or otherwise approved in writing by Supplier as
      original equipment for the
Products.

              

      

       

      

      7.3                 On
or before the fifteenth day of each month, Distributor shall send to the
Supplier (Attn.:  Service Department) a cumulative statement for all
warranty repairs completed by Distributor in the immediately preceding calendar
month.  This statement must be accompanied by a copy of each repair
receipt complete with:

       

      (a)       Correct
watch style

      
        	
                 
      

              	
                (b)

              	
                Dates
      repair received, completed and returned to
  customer.and

              

      

      
        	
                 
      

              	
                (c)

              	
                Complete
      description of work performed

              

      

      

      
        	
                7.4

              	
                Supplier
      shall offer a range of parts that it determines appropriate in its sole
      discretion.  Supplier shall also establish the cost of such
      parts in its sole discretion.  In no event shall Distributor use
      any parts for warranty repairs except parts furnished by
      Supplier.  Supplier shall supply Distributor at no charge with
      an initial inventory of such parts to be used solely for performing
      warranty repairs as Supplier determines to be reasonable and necessary and
      thereafter with replenishment parts equivalent to up to one percent (1%)
      of the Net Invoiced Cost of the Products purchased by Distributor in the
      prior contract year.  This allotment of parts to be used for
      warranty repairs must be used in the year provided.  No portion
      of any such allotment may be carried forward into a subsequent contract
      year.  All shipping charges, including any duty, or Customs
      brokerage fees, for parts shall be paid by Supplier.  Supplier
      shall have the right to furnish such parts to Distributor in the form of
      finished watches in its sole
discretion.

              

      

       

      

       

      7.5                 Distributor
will issue estimates for repair work within five (5) working days after receipt
of a Product for repair on ninety percent (90%) of the Products submitted to
Distributor for repair.  Working days are defined as all days of the
year except Saturdays and Sundays and legal holidays.  Warranty
repairs will be completed within fifteen (15) working days after receipt of a
Product for repair on ninety percent (90%) of the in-warranty work performed by
Distributor, unless detained because of delays in receiving necessary parts from
the Supplier.  Out of warranty repairs will be completed within twenty
(20) working days after receipt of the customer's written authorization to
proceed with repair of a Product on ninety percent (90%) of the out of warranty
work performed by Distributor.  On the same day any repairs are
completed, the Product repaired or serviced will be returned to the customer via
express mail or such other method as Supplier may reasonably request. Increases
in the postage or other ground delivery rates may require requisite increases in
charges to the customer by the Distributor for shipping.

       

      

      
        	
                8.

              	
                TRADE
      PRACTICES

              

      

      

      
        	
                8.1

              	
                Distributor
      shall sell the Products at competitive levels, at wholesale in accordance
      with generally accepted customs in the trade and shall refrain from using
      selling methods or practices which shall be harmful to the reputation of
      the Products, Supplier or the Trademarks.  Distributor’s right
      to determine the prices of reselling and to employ conditions of trade at
      its exclusive discretion remains
unaffected.

              

      

      

      
        	
                8.3  

              	
                Distributor
      may sell Products only to those specialty shops, department stores and
      retail outlets (including those that sell directly to the consumer) that
      satisfy Supplier’s objective criteria for approved retailer status as set
      forth in Schedule B annexed hereto, such satisfaction to be evidenced by
      written approval to Distributor from Supplier as provided in this Section
      8.2. Upon execution of this Agreement, and prior to the opening of each
      selling season (and whenever Distributor wishes to sell Products to retail
      customers not previously approved by Supplier), Distributor must submit a
      list of such proposed retail customers (not including previously approved
      retail customers) for Supplier’s written approval.  Supplier has
      the right to withdraw any such approval on written notice to Distributor,
      provided, however, that Supplier will not withdraw approval of a retail
      customer that is then carrying any products of THLI’s men’s sportswear
      licensee unless Supplier is reasonably dissatisfied with the display,
      delivery or inventory model of Products of such retail
      customer.  After such notice, Distributor may not accept
      additional orders for Products from such retail customer, but may fill any
      existing order.  Once each quarter, Distributor shall provide
      Supplier with a list of the  retailers in the Territory that
      purchased Products in the immediately preceding quarter containing the
      addresses of their sales outlets, it being understood that such list is of
      a confidential nature and shall be for the sole use of Supplier and, if
      requested, THLI, and shall be kept confidential by Supplier and shall not
      be disclosed by Supplier to any person whatsoever, other than employees of
      Supplier and THLI whose performance of their duties require the disclosure
      of such list to them.

              

      

      

      
        	
                8.3

              	
                Except
      as expressly permitted by Supplier in writing, Distributor may not (a)
      sell Products directly to the public in retail stores; (b) use Products as
      giveaways, prizes or premiums, except for promotional programs which have
      received the prior written approval of Supplier; or (c) sell Products to
      any Affiliate of Distributor or any of its directors, officers, employees
      or any person having an equity participation in or any other affiliation
      to Distributor, other than to Distributor’s employees or other
      representatives for their personal use, without the prior written approval
      of Supplier. Supplier may, at Distributor’s expense, purchase any Products
      found in the marketplace that Distributor has sold to unapproved customers
      in violation of this Section 8.3 or Section 2.3. Distributor shall include
      and enforce the following on all invoices to its retail customers:
      “Limitations on Sale by Buyer: Seller expressly reserves the right to
      limit the amount of merchandise delivered to only such quantities as are
      necessary to meet the reasonably expected demand at Buyer’s store
      locations. This Merchandise is sold to Buyer for resale to the ultimate
      consumer and/or within the Tommy Hilfiger selective distribution network
      and only from such store locations as have been approved in writing by
      Seller. Buyer shall be expressly prohibited from selling the merchandise
      purchased hereunder to a retailer or other dealer in like merchandise,
      or  to any party who Buyer knows, or has reason to know, intends
      to resell the merchandise and is not a member of the Tommy Hilfiger
      selective distribution network. The merchandise purchased hereunder may
      not be sold by Buyer from any store locations which Seller has advised
      Buyer do not qualify as an acceptable
location”.

              

      

      

      
        	
                9.

              	
                PROTECTION
      OF INTERESTS; TRADEMARKS

              

      

      

      
        	
                9.3  

              	
                Distributor
      shall protect and at all times seek to promote Supplier’s best interests
      in the Territory and shall immediately notify Supplier of any fact or
      situation which may be or may be reasonably presumed to become detrimental
      to Supplier or to its good will, copyrights, patents, or to the Trademarks
      or other intellectual property rights of Supplier or
      THLI.  Distributor shall have the exclusive right to use the
      Trademarks in connection with distribution of the Products in the
      Territory for the term hereof and solely for the limited purpose of and
      only to the extent necessary for performing its obligations hereunder and
      for no other purpose.  Distributor agrees that it shall have no
      rights with respect to the Trademarks in connection with the Products
      except only as expressly and specifically set forth herein and that its
      every use shall inure exclusively to the benefit of THLI and that
      Distributor shall not, at any time, acquire any rights therein or
      challenge the validity thereof.  Distributor further agrees at
      no time to use any of the Trademarks or other intellectual property rights
      owned by or licensed to Supplier in a manner not authorized by Supplier.
      Distributor shall not apply to register, nor shall Distributor use or
      permit the use of, any name, logo, mark or tradedress which is confusingly
      similar to any of the Trademarks or do any act or thing, or permit any act
      or thing to be done, which may in any way impair, dilute, reduce the value
      of the Trademarks or damage the goodwill relating to the
      Trademarks

              

      

      

      
        	
                9.4  

              	
                If
      requested by Supplier, in writing, the Distributor shall assist and
      cooperate with Supplier, its counsel and agents as so requested, in
      connection with any matters involving any of Supplier’s intellectual
      property rights in the Territory including without limitation, in any
      legal proceedings and any out-of-pocket expenses incurred by the
      Distributor in connection with litigation in which the Distributor
      participates at the request of Supplier shall be reimbursable to the
      Distributor and any recoveries form any such litigation or the settlement
      thereof shall belong exclusively to Supplier; provided, however, that
      Supplier shall have the exclusive right (but not the obligation) to take
      such action against third parties in the respect of the Trademarks and all
      other intellectual property rights of
Supplier.

              

      

      

      
        	
                9.3

              	
                In
      the event that Distributor sells any Products outside the Territory in
      violation of Section 2.3 hereof, then Supplier may, in addition to all
      other rights and remedies available to it, repurchase all or any portion
      of such Products.  Within ten (10) days after receipt of a
      statement from the Supplier listing all such Products purchased, together
      with a list of the model numbers, and setting forth Supplier’s
      out-of-pocket costs incurred in connection with such purchase, Distributor
      shall reimburse Supplier such out-of-pocket
      costs.   Distributor acknowledges that such payment is not
      a penalty but fair compensation to Supplier’s for breach of this Agreement
      and damage to Supplier goodwill and
tradename.

              

      

      

      
        	
                10.

              	
                TERM
      AND TERMINATION

              

      

      

      
        	
                10.3  

              	
                This
      Agreement shall take effect upon the Effective Date and shall, unless
      otherwise earlier terminated as provided herein, continue for the duration
      of the JV Agreement . It
      shall be automatically terminated upon the termination or expiration of
      the JV Agreement.

              

      

      

      
        	
                10.4  

              	
                In
      the event (a) this Agreement is assigned to Swico, MGI or to an Affiliate
      of Swico or MGI in accordance with Section 2.6 hereof, or (b) either Swico
      or MGI purchases all of the other’s interest in Distributor under Section
      15.2.2 of the JV Agreement or (c) Swico, its Affiliates or Permitted
      Transferees (as such term is defined in the JV Agreement) otherwise
      acquire control of Distributor, then this Agreement shall continue from
      the date of such assignment, purchase and/or acquisition, as the case may
      be, until the third anniversary of such date at which time this Agreement
      shall expire and neither party shall have any further obligation to the
      other hereunder except as to those obligations which by their express
      terms survive beyond the expiration or termination of this Agreement.
      Following any assignment, purchase or acquisition referred to in Section
      10.1, this Agreement may be terminated by either party hereto upon prior
      written notice to the other party:

              

      

      
        	
                 
      

              	
                (i)

              	
                in
      the event such other party shall have breached any of the terms and
      conditions hereof and, if remediable shall have failed to remedy such
      breach within sixty  (60 ) days after the notification of the
      breach by the non-breaching party;
or

              

      

      

      (ii)      in
the event that such other party becomes  insolvent,  has an
insolvency proceeding of any
kind  filed  by  or  against  it,  including  bankruptcy  or  reorganization,  liquidates                                                          its  business
or is liquidated, has a receiver appointed for its assets, or makes
an  assignment for the benefit of its creditors.

       

      

      
        	
                10.4  

              	
                In
      addition to any other rights of termination provided hereunder, Supplier
      may terminate this Agreement immediately by notice to Distributor if
      Distributor (i) fails to satisfy the Minimum Turnover Requirement for any
      contract year; or (ii) fails to satisfy the minimum advertising
      expenditures in Section 5.2 in any contract year or (iii) fails to comply
      with the payment terms in Section 3.3 or (iv) breaches any of the
      covenants contained in Article 8 or Article 9 hereof; or (v) transfers or
      attempts to transfer a substantial part of its business to a third party
      or attempts to assign this Agreement to a third party (or relinquishes
      control of any previously approved assignee under Section 13.5) or has its
      business merged or consolidated with a third party without the prior
      written consent of Supplier.

              

      

      

      10.4      Notwithstanding
anything to the contrary contained herein, this Agreement will automatically
expire and be of no further effect in the event the THLI License expires or is
terminated for any reason. Upon such expiration or termination, neither party
will have any further obligation hereunder to the other except any obligation or
liability which accrued prior to the date of such expiration or
termination.

       

      

      
        	
                 
      

              	
                11.

              	
                EFFECTS
      OF TERMINATION

              

      

      

      
        	
                 
      

              	
                11.1

              	
                Upon
      the expiration of this Agreement or its termination by Supplier, Supplier
      may, at its sole discretion, reject all or part of any outstanding orders
      received or accepted by Supplier.

              

      

      

      
        	
                 
      

              	
                11.2

              	
                Upon
      expiration or termination of this Agreement for any
  reason:

              

      

      

      
        	
                 
      

              	
                (i)

              	
                Any
      sums due and owing by either party to the other shall become immediately
      due and payable, and such sums shall be paid
  forthwith.

              

      

      

      
        	
                 
      

              	
                (ii)

              	
                Supplier
      may immediately appoint a successor to Distributor in the Territory and
      announce the change of its distributorship to the
  public.

              

      

      

      
        	
                 
      

              	
                (iii)

              	
                Distributor
      shall take a physical inventory of all Products in stock and submit a
      report of such inventory to Supplier.  Supplier shall have the
      right to have a representative present to verify such
      inventory.  Supplier shall be entitled but not obliged to take
      over any portion of the Products remaining in stock from Distributor at
      the price in currency originally paid by Distributor to Supplier, plus the
      cost of shipping and insurance.  Upon notice to Distributor of
      Supplier’s election to buy back any or all such inventory, Distributor
      shall cooperate as requested by Supplier for the packing and shipping of
      such inventory.  Distributor may sell any Products not taken
      over by Supplier for six (6) months after the termination of this
      Agreement or such shorter period as notified by Supplier subject to all
      the provisions hereof, including, without limitation, Article
      8.

              

      

      

      
        	
                 
      

              	
                (iv)

              	
                Distributor
      shall immediately cease all use of the Trademarks; provided, however, that
      Distributor may continue to use the Trademarks solely in connection with
      the sale of the Products pursuant to Section 11.2(iii) above and in such a
      way as not to impair, dilute, reduce the value of or damage the goodwill
      relating to the Trademarks.

              

      

      

      
        	
                 
      

              	
                (v)

              	
                Any
      advertising must be at the discretion of Supplier and must be approved by
      Supplier.

              

      

      

      
        	
                (vii)  

              	
                Distributor,
      at its expense, will return to Supplier all materials belonging to
      Supplier and all proprietary data or confidential information furnished to
      Distributor by Supplier during the term
hereof.

              

      

      

      11.3      The
rights of termination granted herein are absolute and each party acknowledges
that it has considered and assumed as its own exclusive risk the possibility of
making expenditures of money and time in preparing for the performance of this
Agreement and possible loss or damage on account of the loss of prospective
profits or anticipated sales or on account of expenditures, investments, leases,
property improvements or commitments in connection with the good will or
business of the parties or otherwise resulting from the proper termination
hereof and that it is the express intent and agreement of the parties that
neither party properly terminating this Agreement in accordance with the terms
hereof (the “Terminating Party”) shall be liable to the other for any claim,
cost or damages solely by reason of such termination.  In the event of
such termination or expiration of this Agreement in accordance with the terms
hereof, the Terminating Party shall have no obligation or liability to pay to
the other, and such other party hereby expressly waives, any statutory
termination fee, any other right to compensation provided by law arising solely
as a consequence of such termination, and consequential damages and lost profits
arising solely on account of such termination or expiration.

       

      

      
        	
                13.  

              	
                INDEMNIFICATION

              

      

      

      
        	
                 
      

              	
                Distributor
      hereby agrees to indemnify and hold the Supplier, and its Affiliates
      and/or agents and each of their officers, directors and employees harmless
      from and against any and all liabilities, damages, costs and expenses
      (including reasonable attorneys’ fees) which arise out of or in connection
      with any act or omission related to this Agreement by Distributor, its
      successors, assigns, parents, subsidiaries, Affiliates, agents, and
      contractors, or the officers, directors or employees of any of them.
      Supplier reserves the right, without being required to do so, at its own
      expense and without waiver of any indemnity hereunder, to defend any
      claim, action or lawsuit coming within the purview of this Section
      12.  This section shall survive the termination or expiration of
      this Agreement.

              

      

      

      
        	
                 
      

              	
                13.

              	
                GENERAL
      TERMS AND CONDITIONS

              

      

      

      
        	
                 
      

              	
                13.1

              	
                Supplier
      may, from time to time, designate in writing an Affiliate of Supplier to
      exercise any of the rights or perform any of the obligations of Supplier
      hereunder.

              

      

      

      
        	
                 
      

              	
                13.2

              	
                Neither
      party shall have the power to represent the other party.  For
      purposes of this Agreement, Distributor is an independent contractor and
      neither the agent nor the representative of Supplier or any of its
      affiliated companies.  Distributor, its employees, contractors
      and Affiliates shall not act or represent themselves as agents or
      representatives of, or as having the right, power or authority, express or
      implied to assume or create any obligation or liability on behalf of
      Supplier or any of its affiliated
companies.

              

      

      

      
        	
                 
      

              	
                13.3

              	
                Neither
      party hereto shall be liable for any delay or failure in fulfilling the
      obligations hereunder (except for the payment of money) when such delay or
      failure is caused by riots, war (declared or not), or hostilities between
      any nations; acts of God, fire, storm, flood or earthquake; strikes, labor
      disputes, shortage or delay of carriers, or shortage of raw materials,
      labor power or other utility services; any governmental restrictions; or
      any other unforeseeable contingencies beyond the control of the
      party.

              

      

      

      
        	
                13.5  

              	
                Any
      notice to be given pursuant to this Agreement shall be written in English
      and shall be deemed duly given when sent by reputable overnight
      international courier including FedEx, UPS or DHL to the respective
      address first set forth above or by facsimile to the respective facsimile
      number set forth below confirmed by letter as aforesaid, or to such other
      address and/or facsimile number as a party hereto may designate by like
      notice.

              

      

      

      
        	
                To
      Supplier:

              	
                Fax:  +
      41 32 329 37 78

              

      

      
        	
                 
      

              	
                Attn:
      General Manager – Tommy Hilfiger

              

      

      

      
        	
                   Copy
      to:

              	
                Fax:  +
      1 201 267 8050

              

      

      
        	
                 
      

              	
                                                                              Attn:  Brand
      Manager – Tommy Hilfiger

              

      

      

      
        	
                To
      Distributor:

              	
                Fax:
      _________________

              

      

      

      
        	
                 
      

              	
                Supplier’s
      designated Affiliate under Section 13.1 shall be designated by notice to
      Distributor, which notice shall include the address and facsimile number
      of such Affiliate for purposes of giving notice
      hereunder.  Notice to Supplier’s designated Affiliate shall be
      made and deemed duly given in the same manner as for notice to
      Supplier.

              

      

      

      
        	
                13.6  

              	
                In
      view of the fact that this Agreement has been entered into because of the
      confidence that Supplier has in Distributor, it is understood that the
      terms and conditions hereof shall be performed by Distributor only and
      that, except as expressly permitted in Section 2.6 hereof,  this
      Agreement may not be assigned, whether by operation of law or otherwise,
      without the prior written approval of Supplier which Supplier may withhold
      or grant in its sole and absolute discretion and any such purported
      assignment by Distributor without such approval by Supplier shall be void
      and of no effect. Following any such assignment, Distributor shall remain
      obligated as a guarantor for all the payment obligations of the approved
      assignee hereunder and any change in control of the approved assignee
      without the approval of Supplier shall constitute a breach of this Section
      13.5 and shall entitle Supplier to terminate this Agreement as provided
      under Section 10.3

              

      

      

      
        	
                 
      

              	
                13.6

              	
                The
      captions of this Agreement are inserted solely for ease of reference and
      are not deemed to form a part of or to modify the terms and conditions of
      this Agreement.

              

      

      

      
        	
                 
      

              	
                13.7

              	
                This
      Agreement shall be governed exclusively by the law of Switzerland without
      reference to its conflict of laws rules and to the exclusion of the United
      Nations Convention on Contracts for the International Sale of
      Goods.  Any dispute, controversy or difference which may arise
      out of, in relation to, or in connection with this Agreement shall be
      finally settled by arbitration in Geneva, Switzerland under the Rules of
      Arbitration of the International Chamber of Commerce, Paris by three (3)
      Arbitrators appointed in accordance with said rules.  Each party
      hereto shall be bound by any arbitration award so rendered and any
      judgment upon such award may be entered as a non-appealable final, foreign
      judgment in any court having jurisdiction thereon.  The language
      of the proceedings shall be
English.

              

      

      

      
        	
                 
      

              	
                13.8

              	
                When
      interpreting the terms and conditions of this Agreement, the English
      language shall be applied
exclusively.

              

      

      

      
        	
                13.10  

              	
                This
      Agreement, including the terms and conditions incorporated by reference in
      Section 3.3 hereof, constitutes the entire agreement of the parties with
      respect to the subject matter hereof and prevails over and supersedes all
      prior agreements, whether written or oral, relating to the subject matter
      hereof and may not be altered, waived, modified, or discharged except by
      an express writing referring to this Agreement signed on behalf of the
      parties hereto by their duly authorized representatives. In the event of
      any conflict or inconsistency between this Agreement and the JV Agreement,
      the latter shall control.

              

      

      

      
        	
                13.10

              	
                The
      failure of either party hereto to enforce at any time any of the
      provisions or terms of this Agreement, or any rights in respect thereof,
      or the exercise of or failure to exercise by either party any rights or
      any of its elections herein provided, shall in no way be considered to be
      a waiver of such provisions, terms, rights or elections or in any way to
      affect the validity of this
Agreement.

              

      

      

      
        	
                13.11

              	
                In
      connection with this Agreement, the parties may from time to time exchange
      proprietary data or confidential information.  The parties agree
      to keep in confidence all such proprietary data or confidential
      information received in accordance with this Agreement and to use the same
      only in connection with the performance of this Agreement.  This
      provision shall survive the termination or expiration of this
      Agreement.

              

      

      

      
        	
                13.12

              	
                Should
      any provision of this contract held invalid, incomplete or unenforceable,
      this will not affect the validity of the remaining
      provisions.  Supplier and Distributor undertake to replace the
      invalid incomplete or unenforceable provision by provision which comes
      closest to the commercial goal that the parties intended to achieve on the
      conclusion of this agreement by the invalid, uncompleted and unenforceable
      provision. Notwithstanding anything to the contrary contained herein, in
      the event of any conflict or inconsistency between any term or provision
      of this Agreement and the THLI License, the latter shall
      control.

              

      

      

      
        	
                13.13

              	
                Supplier
      shall have the right to injunctive relief to enforce the covenants,
      agreements and obligations of Distributor hereunder in addition to any
      other relief to which Supplier may be entitled at law or in
      equity.

              

      

      

      
        	
                13.15  

              	
                Each
      order deliverable under this Agreement shall be deemed sold under a
      separate contract.  Non-delivery or default by Supplier as to
      any order shall not be deemed a breach of the
  entire

              

      

      Agreement
and shall not relieve Distributor of its obligation to accept and pay for any
prior or subsequent delivery, even though such non-delivery or default
substantially impairs the value of this Agreement to Distributor.

      

      
        	
                13.15

              	
                Distributor
      shall comply with all applicable laws, rules and regulations in the
      Territory, including, without limitation, the provisions of Directive
      2002/96/EC,
      which governs waste electrical and electronic equipment, including all
      related amendments and all laws, rules and regulations in the Territory
      related thereto. Distributor shall provide Supplier with evidence of any
      such compliance upon request.

              

      

      

      

      IN WITNESS WHEREOF, the parties hereto
have caused this Agreement to be executed in multiple duplicates by their
authorized representatives at Bienne, Switzerland as of the day and year first
above written.

      

      

       MGS
DISTRIBUTION
LIMITED                                               MOVADO
WATCH COMPANY, S.A.

      By:   ________________________                                                                                                                 By:    ____________________________

      
        	
                 
      

              	
                Title:  _______________________                                        Title:   ___________________________

              

      

      
        	
                 
      

              	
                Name:
      _______________________                                       Name:  ___________________________

              

      

      

      

      

      

      

      

      

      

      
        	
                 
      

              	
                SCHEDULE
      A

              

      

      

      

      
        	
                 
      

              	
                DISTRIBUTOR
      DISCOUNT SCHEDULE

              

      

      

      

      

      Distributor
pricing shall be * of Supplier’s recommended Euro retail price (inclusive of
VAT); provided, however, that if this Agreement is assigned as provided under
Section 2.6, then the pricing to the assignee shall be based on the same
discount off of Supplier’s recommended Euro retail price as generally offered by
Supplier to its other independent distributors of the Products in the European
Union.

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      *
CONFIDENTIAL PORTION OF THIS EXHIBIT OMITTED AND FILED SEPARATELY WITH THE SEC
PURSUANT TO RULE 24b-2 OF THE 1934 ACT.

      

      
        
           

        

        
           

          
            

          

        

        
           

          
            -  -

            

          

        

      

      
        	
                 
      

              	
                                                                                        SCHEDULE  B

              

      

      

      
        	
                 
      

              	
                                                    OBJECTIVE
      CRITERIA FOR APPROVED RETAILER
STATUS

              

      

      

      

      
        	
                7.  

              	
                EXTERNAL
      ELEMENTS

              

      

      

      
        	
                A.  

              	
                Location/Street

              

      

      

      (i)         Animated
and attractive environment

      (ii)         Centrally
located neighborhood

      (iii)              Shopping
district with fashion and prestige branded shops

      

      

      
        	
                B.  

              	
                Appearance

              

      

      

      (i)              Attractive,
well-maintained, high-quality façade

      (ii)              Clean,
visible and prominent shop sign

      (iii)              Visible
and easily accessed entrance

      

      

      
        	
                C.  

              	
                Shop
      Windows

              

      

      

      (i)              Well
lit, clean and made from good quality materials

      (ii)              Suitable
number and size show windows

      
        	
                (v)  

              	
                Windows
      provide sufficient space to display a representative selection of TH brand
      products

              

      

      
        	
                (vi)  

              	
                Professionally
      maintained and attractive window
decoration

              

      

      

      

      
        	
                8.  

              	
                INTERNAL
      ELEMENTS

              

      

      

      
        	
                A.  

              	
                General
      Outfitting

              

      

      

      (i)              Clean
and well-maintained walls, floors, ceilings and furnishings

      (ii)              Sufficient
and sophisticated lighting

      (iii)              Equipped
with adequate security devices

      

      

      
        	
                B.  

              	
                Presentation
      Showcases

              

      

      

      (i)              Made
of high-quality materials with adequate lighting

      (ii)              TH
products displayed on official brand POS materials

      (iii)              Clearly
visible and strong brand identification

      
        	
                 
      

              	
                (iv)

              	
                TH
      products are grouped together and displayed separately from other
      brands

              

      

      

      

      
        	
                9.  

              	
                OTHER
      PRODUCTS

              

      

      

      
        	
                A.  

              	
                Premises
      used solely for the retail sale of quality watches, jewelry, fashion
      accessories and/or fashion apparel.

              

      

      

      
        	
                B.  

              	
                TH
      products displayed to prevent confusion with any other brands
      products.

              

      

      

      
        	
                C.  

              	
                Retailer
      also sells at least two (2) Swiss watch brands or any three (3) of the
      following fashion/designer/prestige watch brands:  Emporio
      Armani, Diesel, DKNY, Kenneth Cole, Versace, Puma, D&G, CK, Sector,
      Briel, Guess, Lacoste

              

      

      

      

      
        	
                10.  

              	
                PRESENTATION/PROMOTION

              

      

      

      
        	
                A.  

              	
                Visual/Collateral

              

      

      

      
        	
                (i)  

              	
                Brand
      visuals properly presented and changed out seasonally or whenever
      requested by brand

              

      

      

      
        	
                B.  

              	
                Advertising

              

      

      

      
        	
                (i)  

              	
                Dealer’s
      advertising is consistent with the quality requirements of the
      brand

              

      

      
        	
                (ii)  

              	
                Dealer
      agrees to conduct co-op advertising on the basis of an agreed and shared
      budget and media plan

              

      

      

      
        	
                C.  

              	
                Personnel/Customer
      Service

              

      

      

      
        	
                (i)  

              	
                Sales
      staff with good knowledge of TH brand and
  products

              

      

      
        	
                (ii)  

              	
                Available
      for regular training on brand and new
products

              

      

      
        	
                (iii)  

              	
                Well
      dressed, groomed and polite

              

      

      
        	
                (iv)  

              	
                Capacity
      to advise customer on how to operate products
  correctly

              

      

      
        	
                (v)  

              	
                Able
      to carry out simple adjustments (e.g. sizing metal
    bracelets)

              

      

      

      

      
        	
                11.  

              	
                REPORTING

              

      

      

      
        	
                A.  

              	
                Provides
      clear and comprehensive information

              

      

      

      
        	
                B.  

              	
                Provides
      information on sales and stock
situation

              

      

      

      
        	
                C.  

              	
                Provides
      monthly sales reports by sku

              

      

      

      
        	
                D.  

              	
                Provides
      immediate information on problems with
products

              

      

      

      

      
        	
                12.  

              	
                FINANCES

              

      

      

      
        	
                A.  

              	
                Good
      payment record

              

      

      

      
        	
                B.  

              	
                Creditworthy

              

      

      

      
        	
                C.  

              	
                Sound
      finances

              

      

      

      

      

      LACOSTE WATCHES EXCLUSIVE
DISTRIBUTION AGREEMENT

      

      Made and
entered into as of May 1, 2007 (the “Effective Date”)

      

      By and
between:

      

      MGI Luxury Group S.A., a Swiss
corporation organized and existing under the laws of Switzerland whose
registered office is located at 35 rue de Nidau, CH-2501, Bienne
(Switzerland)

      

      hereinafter
referred to as the "Master
Licensee",

      

      and:

      

      MGS DISTRIBUTION LIMITED an
English corporation
organized and existing under the laws of England whose registered office and
principal place of business is located at c/o Swico, Meadway,
Haslemere, Surrey GU27 1NN, England

      

      hereinafter
referred to as the "Distributor".

      

      

      WITNESSETH:

      

      WHEREAS,
the Master Licensee
entered into a license agreement dated March 27, 2006 (the "Master Agreement") with Lacoste S.A., Sporloisirs S.A., and
Lacoste
Alligator S.A. (hereinafter together referred to as the "Licensor"); and

       

      

      WHEREAS,
pursuant to the terms of the Master Agreement, the Master Licensee has been
granted the exclusive right and license to use the Licensed Trademarks (as
hereinafter defined) world-wide in relation with the creation, development,
manufacture, distribution, marketing, merchandising, advertising, promotion and
sale of Lacoste Watches
(as hereinafter defined); and

       

      

      WHEREAS,
the Master Licensee has
also been granted the exclusive right to use the Licensor’s marketing,
merchandising, promotion and advertising Know-How (as hereinafter
defined) for the distribution and advertising of the Lacoste Watches, in the Territory (as hereinafter
defined); and

       

      

      WHEREAS, the Master Licensee is entitled
to sub-license its distribution rights  to distributors, provided that
(i) a written distribution agreement is signed with the selected distributor
approved by the Licensor
which agreement shall include, in addition to the rights and obligations which
the Master Licensee
wishes to sub-license, all obligations it would otherwise have had to fulfill
with respect to the rights sub-licensed to the selected distributor and (ii) a
Supplemental Agreement
is entered into between the Licensor, the Master Licensee and the said
distributor defining the Licensed Trademarks such
distributor is authorized to use in the concerned country as well as all its
duties and obligations regarding the protection of the said Licensed Trademarks;
and

      

      WHEREAS,
SWICO LIMIED, an English
corporation (“SWICO”),
MOVADO GROUP, INC., a
New York corporation (“MGI”) and Distributor have entered into
a Joint Venture Agreement, dated May 1, 2007 (the “JV Agreement”) pursuant to
which SWICO and MGI have established a joint venture
relationship relating to the sale, marketing and distribution of certain watch
brands in the United Kingdom; and

      

      WHEREAS, this
Agreement is one of the Distribution Agreements as defined in the JV Agreement;
and

       

      

      WHEREAS,
the Master Licensee is
an Affiliate (as defined in the JV Agreement) of MGI and has decided to appoint
Distributor as its
distributor for the
distribution, sale, marketing, merchandising, advertising and promotion of the
Lacoste Watches in the
Territory upon the terms
and conditions hereinafter contained; and

      

      WHEREAS,
the Licensor has created
and developed over a period of many years a well known and distinctive line of
articles of sports and leisure apparel for men, women, and children (hereinafter
referred to as the "Lacoste
Apparel Products") as well as other lines of products such as toiletries,
sunglasses and frames for optical glasses, leisure and sports bags, leathergoods
products, shoes, terry towels, bath towels, bath robes, household linen,
umbrellas, belts and other products Licensor may develop in the future
(hereinafter referred to as the "Other Lacoste Products"), it
being specified that Other
Lacoste Products do not include either Lacoste Apparel Products or
Lacoste Watches;
and

      

      WHEREAS,
the Licensor has also
contributed to the creation and the development of a line of watches and
time-keeping devices (the "Lacoste Watches", as such term
is hereinafter defined). And whereas the Licensor is actively
researching and developing other new products; and

      

      WHEREAS,
the Lacoste Apparel
Products, the Other
Lacoste Products, as well as the Lacoste Watches, which are
characterized by an emblem consisting of the pictorial representation of an
alligator or a crocodile (the "Crocodile" as such term is
hereinafter defined), are renowned and sold world-wide under the trade names of
"La Chemise Lacoste", "Chemise Lacoste" or "Lacoste", the word "Lacoste"
recalling the name of René Lacoste the famous tennis champion who invented the
original shirt, and the Crocodile recalling his
nickname on the tennis courts; and

      

      WHEREAS,
in order to protect its rights the Licensor has registered
numerous trademarks among which the Licensed Trademarks throughout
the world and more specifically in the Territory; and

      

      WHEREAS,
through the development of the different lines of the Lacoste Apparel Products,
Other Lacoste Products
and Lacoste Watches, the
Licensor has acquired
significant "Marketing and
Merchandising Know-How" and "Advertising and Promotion
Know-How" (as such terms are hereinafter defined); and

      

      WHEREAS,
in order to guarantee the authenticity of its creations and to ensure the
homogeneity of their distribution at an international level, the Licensor has implemented
selective distribution systems wherever and whenever practicable, so as to allow
all its licensees and distributors to select and approve their retailers on the
basis of objective criteria both with respect to quality and sales techniques;
and

      

      WHEREAS,
the selective distribution systems implemented by the Licensor in connection with
the Lacoste Apparel Products
consist of the "Approved
Apparel Retailers"
Selective Distribution System (as such term is hereinafter defined) and
of the "Lacoste Boutiques and
Lacoste Corners"
Selective Distribution System (as such term is hereinafter defined);
and

      

      WHEREAS,
the selective distribution systems implemented by the Licensor in connection with
each of the Other Lacoste
Products incorporate, in addition to approved retailers, and for certain
categories of Other Lacoste
Products, a certain number of shops and special locations in shops
dedicated to the sale of such Other Lacoste Products;
and

      

      WHEREAS,
the selective distribution system implemented by the Licensor in connection with
the Lacoste Watches
incorporates, Approved
Watches Retailers (as such term is hereinafter defined); and

      

      WHEREAS,
the Distributor warrants
and represents that it operates in the Territory a sales organisation
with a network set up to deal with the distribution of the Lacoste Watches;
and

      

      WHEREAS,
the Distributor is
prepared to fulfil all obligations and make the necessary investments in order
to carry out such Lacoste
Watches Selective Distribution System (as such term is hereinafter
defined) policy as specified by the Master Licensee and the Licensor; and

      

      WHEREAS
the Distributor thus
desires to be granted the right to distribute and sell in the Territory under the Licensed Trademarks, the Lacoste Watches and to use the
Know-How in connection
with such distribution; and

      

      WHEREAS,
contemporaneously with the execution hereof the Licensor and the Distributor and the Master Licensee, as provided
for by the Master
Agreement, are entering into a Supplemental Agreement;
and

      

      NOW, THEREFORE, IN CONSIDERATION OF
THE MUTUAL COVENANTS HEREIN CONTAINED, THE PARTIES AGREE AS
FOLLOWS:

      

      

      ARTICLE 1 -
DEFINITIONS

       

      

      
        	
                1.1

              	
                "Agreement" shall mean
      the present distribution agreement including all the schedules attached
      hereto, as well as its future amendments and
  restatements.

              

      

      

      
        	
                1.2

              	
                "Devanlay" shall mean the
      worldwide exclusive licensee of the Licensor for Lacoste Apparel
      Products.

              

      

      

      
        	
                1.3

              	
                "Lacoste Apparel Products
      Distributor" shall mean those parties in certain countries to which
      the distribution of the Lacoste Apparel Products
      in such countries has been granted by Devanlay.

              

      

      

      
        	
                1.4

              	
                "Crocodile" shall mean
      the pictorial representation of an alligator or crocodile depicted in
      Schedule I.

              

      

      

      
        	
                1.5

              	
                "Lacoste Trademarks
      Image" shall mean the presently existing identification in the
      principal markets where the Lacoste Apparel
      Products, the Other Lacoste Products
      and the Lacoste
      Watches are distributed, between the Lacoste Trademarks and
      good taste, authenticity, quality, functionality, modernity, elegance,
      high end sports and leisure, however at competitive quality/price ratios.
      The Lacoste Trademarks
      Image shall be judged in relation to all of the elements making up
      the perception by the consumer of the Lacoste Watches as to
      their style, quality, price, marketing and merchandising, advertising and
      promotion.

              

      

      

      
        	
                1.6

              	
                "Licensed Trademarks"
      shall mean those trademarks listed in Schedule II.

              

      

      

      
        	
                1.7

              	
                "Lacoste Watches" shall
      mean watches for men, women and children as listed in Schedule IV bearing any Licensed Trademark
      manufactured and marketed by the Master Licensee itself
      and/or under its control and responsibility and distributed by the Master
      Licensee.

              

      

      

      
        	
                1.8

              	
                "Lacoste Trademarks"
      shall mean any or all trademarks relating to the name "Lacoste" and/or the
      Crocodile owned by
      the Licensor
      depicted in Schedule I as listed
      in Schedule III.

              

      

      

      
        	
                1.9

              	
                "Territory" shall mean
      the United Kingdom.

              

      

      

      
        	
                1.10

              	
                "Supplemental Agreement"
      shall mean the agreement entered into by and between the Licensor, the Master License and the
      Distributor in
      execution of the terms of Article 2 of the Master
      Agreement.

              

      

      

      
        	
                1.11

              	
                "Models" shall mean any
      and all creations specific to the Lacoste Watches, or part
      thereof, each of which shall be assigned a specific stock keeping unit
      (“SKU”) number or other identifier by Master Licensee.

              

      

      

      
        	
                1.12

              	
                "Know-How" shall mean the
      Watches Know-How,
      Licensor’s Marketing and Merchandising
      Know-How and Promotion and Advertising
      Know-How for the distribution and advertising of the Lacoste Watches and the
      Licensed
      Trademarks.

              

      

      

      
        	
                1.13

              	
                "Marketing and Merchandising
      Know-how" shall mean all accumulated expertise, which is
      implemented world-wide by the Licensor, concerning the
      distribution of the Lacoste Apparel
      Products, the Other Lacoste Products
      and the Lacoste
      Watches according to the Lacoste Trademarks Image
      including the level of quality and the techniques of such distribution
      (i.e., the
      selection, training, supervision, etc. of the retailers), all of which
      know-how is regularly updated and improved as a result of the Licensor's research, and
      which know-how is owned by or originated from the Licensor and is made
      available to the Master
      Licensee and to other Licensor's licensees
      through the Licensor and which the
      Licensor is not
      otherwise obliged to hold in
confidence.

              

      

      

      
        	
                1.14

              	
                "Promotion and Advertising
      Know-how" shall mean all accumulated expertise which is implemented
      world-wide by the Licensor in maintaining
      a high quality promotion and advertising policy for the Lacoste Trademarks
      Image, the Lacoste
      Apparel Products, the Other Lacoste Products
      and the Lacoste
      Watches through selected and controlled channels, all of which
      know-how is regularly updated and improved as a result of the Licensor's research, and
      which know-how is owned by or originated from the Licensor and is made
      available to the Master
      Licensee and to other Licensor's licensees
      through the Licensor and which the
      Licensor is not
      otherwise obliged to hold in
confidence.

              

      

      

      
        	
                1.15

              	
                "Watches Know-how" shall
      mean all accumulated world-wide expertise of the Master Licensee
      concerning the creation, development, manufacture, distribution,
      marketing, merchandising, advertising, promotion and sale of watches and
      time-keeping devices at a high quality level and according to selected and
      controlled techniques and fixtures designed to facilitate the distribution
      of watches (including, but not limited to, the design of display materials
      and showcases), which know-how is regularly updated and improved by the
      Master Licensee
      and is owned by or originated from the Master Licensee and is
      made available to the Licensor and to other Licensor's licensees
      through the Licensor and which
      the Master
      Licensee is not otherwise obliged to hold in
      confidence.

              

      

      

      
        	
                1.16

              	
                "Approved Watches
      Retailers" shall mean selected retailers (the categories of which
      are listed in Schedule V.a) which have
      entered with the Distributor, whenever possible, into the Lacoste Watches
      Approved Retailer Contract, annexed hereto as Schedule VIII, as the form of the same may be modified by
      Master Licensee
      from time to time, defining the conditions to be fulfilled and applied for
      the sale of the Lacoste
      Watches through the Lacoste Watches Selective
      Distribution System.

              

      

      

      
        	
                1.17

              	
                "Lacoste Corners" shall
      mean the locations in certain shops of high standing which are devoted
      exclusively to the sale of the Lacoste Apparel Products
      and, subject to the provisions of Article 11.2 hereinafter, of certain Lacoste Watches and/or
      Other Lacoste
      Products, using various fittings, displays, appliances, original
      furniture and equipment specially designed or approved by the Licensor and are
      authorized to use the name "Lacoste" and the Crocodile as signboards
      and as service marks for retail
services.

              

      

      

      
        	
                1.18

              	
                "Lacoste Boutiques" shall
      mean the stand alone shops belonging to independent retailers or to Devanlay or to the Lacoste Apparel Products
      Distributor and devoted exclusively to the sale of the Lacoste Apparel Products
      and, subject to the provisions of Article 11.2 hereinafter, of
      certain Lacoste
      Watches and/or Other Lacoste Products,
      using various fittings, displays, appliances, original furniture and
      equipment specially designed or approved by the Licensor, and are
      authorized to use the name "Lacoste" and the Crocodile as signboards
      and as service marks for retail services. Among the Lacoste Boutiques shall
      be included, if the economic conditions of the markets in question so
      permit, certain Lacoste
      Boutiques known as "global stores", of a
      sufficient size to be organized for the sale on a large scale not only of
      the Lacoste Apparel
      Products but also, subject to the provisions of Article 11.2 hereinafter, of certain Lacoste Watches and/or
      Other Lacoste
      Products.

              

      

      

      
        	
                1.19

              	
                "Commercial Surface"
      shall mean the total surface of a Lacoste Boutique or a
      Lacoste Corner,
      excluding the stock premises.

              

      

      

      
        	
                1.20

              	
                "Sales Surface" shall
      mean, within the Commercial Surface of
      each Lacoste
      Boutique or Lacoste Corner, that
      surface of the floor used for the presentation and the sale of products on
      the furniture (fixed to the walls or free-standing) or displays, excluding
      any area used for customers traffic in the point of sale and excluding the
      shop-windows.

              

      

      

      
        	
                1.21

              	
                "Presentation Surface"
      shall mean, within the Sales Surface of each
      Lacoste Boutique
      or Lacoste Corner,
      the total surface actually dedicated to the presentation and the sale of
      products on the furniture (fixed to the walls or free-standing) or
      displays, determined according to the rules specified in Schedule VI.

              

      

      

      
        	
                1.22

              	
                "Lacoste Watches Selective
      Distribution System" shall mean the group of Approved Watches
      Retailers organized by the Master Licensee in
      accordance with the specific guidelines of the Licensor to sell the
      Lacoste Watches
      while respecting the specific criteria in the area of client service,
      merchandising, presentation, advertising, promotion and respect of the
      Lacoste Trademarks
      Image.

              

      

      

      
        	
                1.23

              	
                ""Lacoste Boutiques and Lacoste
      Corners" Selective Distribution System" shall mean the group of
      Lacoste Boutiques
      and Lacoste
      Corners organized by Devanlay in accordance
      with the specific guidelines of the Licensor and which
      comply with specific criteria with respect to client service,
      merchandising, presentation, advertising, promotion and respect of the
      Lacoste Trademarks
      Image. The "Lacoste Boutiques and Lacoste
      Corners" Selective Distribution System is distinct from the Lacoste Watches Selective
      Distribution System and from the "Approved Apparel Retailers"
      Selective Distribution System (as hereinafter defined) as well as
      from each of the selective distribution systems existing for each of the
      Other Lacoste
      Products.

              

      

      

      
        	
                1.24

              	
                "Approved Apparel Retailers"
      Selective Distribution System" shall mean the group of approved
      retailers which has been organised by Devanlay in accordance
      with the specific guidelines of the Licensor with the
      purpose of selling the Lacoste Apparel Products
      and which comply with specific criteria with respect to client service,
      merchandising, presentation, advertising, promotion and respect of the
      Lacoste Trademarks
      Image.

              

      

      

      
        	
                1.25

              	
                "Net Sales" shall mean
      the actual invoiced price for sales in the Territory of all Lacoste Watches (whether
      sold at regular prices or at reduced prices, such as end-of-season prices)
      by the Distributor
      to Approved Watches
      Retailers and to members of the "Lacoste Boutiques and Lacoste Corners" Selective
      Distribution System, less returns, rebates, bad debts, trade
      discounts, shipping charges, insurance, and such sales taxes as are
      imposed on the Distributor by any
      governmental authority.

              

      

      

      With
regard to direct sales by the Distributor to consumers
through its own retail outlets (should it operate any), Net Sales, for each reference
of the Lacoste Watches
shall be calculated on the basis of the unit volume of such reference of
the Lacoste Watches sold
through such outlets multiplied by the appropriate arms length, average
wholesale prices of such products charged by the Distributor to its Approved Watches Retailers,
or to the members of the
"Lacoste Boutiques and Lacoste Corners" Selective Distribution System,
less returns, rebates, bad debts, trade discounts,
shipping charges, shipping insurance and such sales taxes as are imposed on the
Distributor by any
governmental authority.

      

      
        	
                1.26

              	
                "Sales to Distributor"
      shall mean the actual invoiced price in the Territory of all Lacoste Watches (whether
      made at regular prices or at reduced prices, such as end-of-season prices)
      sold by the Master
      Licensee to Distributor to be resold
      to Approved Watches
      Retailers and members of the "Lacoste Boutiques and Lacoste
      Corners" Selective Distribution System, less returns, rebates, bad
      debts, trade discounts, shipping charges, shipping insurance and such
      sales taxes as are imposed on the Master Licensee by any
      governmental authority.

              

      

      

      
        	
                1.27

              	
                "Points of Sale" shall
      mean the points of sales of the retailers listed in Schedule V.

              

      

      

      
        	
                1.28

              	
                "Seconds" shall mean
      damaged and/or defective Lacoste
      Watches.

              

      

      

      

      ARTICLE 2 - RIGHTS
GRANTED

       

      

      
        	
                2.1

              	
                Subject
      to the terms and conditions contained herein, the Master Licensee hereby
      grants to the Distributor and the
      Distributor hereby
      accepts the right to use, within the limits of the Supplemental Agreement, the Licensed Trademarks, the Models
      and the Know-How
      in connection with the distribution, marketing, merchandising,
      advertising, promotion and sale of the Lacoste Watches listed
      in Schedule IV in the Territory under the
      conditions provided for hereunder.

              

      

      

      
        	
                2.2

              	
                No
      other rights or licenses are granted by the Master Licensee to the
      Distributor,
      expressly or by implication, except as herein
  provided.

              

      

      

      
        	
                2.3

              	
                For
      the duration of this Agreement, the Master Licensee shall
      not appoint any other distributor for the Lacoste Watches in the
      Territory nor
      shall it directly supply the Lacoste Watches to
      customers within the Territory.

              

      

      

      
        	
                2.4

              	
                The
      Distributor shall
      not sub-license any of the rights granted to it hereunder or contract with
      any third party for the performance of any of Distributor’s obligations
      hereunder, without the prior written agreement of the Master Licensee,
      which Master
      Licensee shall have the right to withhold in its sole and absolute
      discretion.

              

      

      

      
        	
                2.5

              	
                The
      Master Licensee
      makes no express or implied warranties to Distributor except as
      explicitly set forth in this Agreement.

              

      

      

      

      ARTICLE 3 -
DURATION

       

      

      
        	
                3.1

              	
                This
      Agreement shall
      come into effect as of the Effective Date and shall, unless otherwise
      earlier terminated as provided herein, continue for the duration of the JV
      Agreement and automatically expire upon the expiration or termination of
      the JV
      Agreement.

              

      

      

      

      

      
        	
                 
      

              	
                3.2  In
      the event (a) this Agreement is assigned to SWICO, MGI or to an Affiliate
      of Swico or MGI in accordance with
      Article 18.2 hereof, or (b) either Swico or MGI purchases all of the
      other’s interest in Distributor under Section 15.2.2 of the JV Agreement or (c)
      Swico, its
      Affiliates or Permitted Transferees (as such term is defined in the JV Agreement) otherwise
      acquire control of Distributor, then this
      Agreement shall continue from the date of such assignment, purchase and/or
      acquisition, as the case may be, until the third anniversary of such date
      at which time this Agreement shall expire and neither party shall have any
      further obligation to the other hereunder except as to those obligations
      which by their express terms survive beyond the expiration or termination
      of this Agreement. 

              

      

      

      
        	
                3.3

              	
                In
      any event when either the Master Agreement or the
      JV Agreement
      expires or terminates this Agreement shall
      automatically terminate with no compensation payable to the Distributor.

              

      

      

      

      ARTICLE 4 -
TERRITORY

      

      The
rights hereby granted shall be strictly limited to the Territory.

       

      

      

      ARTICLE 5 - GENERAL BUSINESS
POLICY

       

      

      
        	
                5.1

              	
                The
      Distributor shall
      use its best efforts to establish a well managed and successful long term
      business as distributor of the Lacoste Watches and, to
      the extent possible given the market and legal conditions prevailing in
      the Territory,
      shall use the Know-How in order to
      promote the image, sales and distribution of the Lacoste Watches in the
      Territory, in
      conformity with such policies as are prescribed and co-ordinated
      world-wide by the Licensor for the Licensed Trademarks and
      the Lacoste Trademark
      Image.

              

      

      

      
        	
                5.2

              	
                The
      Distributor shall
      co-operate closely with the Master Licensee and with
      the Licensor’s
      other licensees or distributors for the Lacoste Apparel Products
      and Other Lacoste
      Products, so as to give an uniform and homogeneous image of the
      Licensed
      Trademarks and of all the families of products bearing the Licensed Trademarks both
      in the Territory
      and worldwide and shall keep the Master Licensee informed
      of its direct contacts with said licensees or
  distributors.

              

      

      

      

      ARTICLE 6 - SALES AND UNFAIR
COMPETITION

       

      

       

      
        	
                6.1

              	
                The
      Distributor shall
      not advertise and/or create branches or warehouses outside the Territory nor shall it
      sell actively the Lacoste
      Watches for delivery outside the Territory or to third
      parties whom it is aware may subsequently resell Lacoste Watches outside
      the Territory and
      undertakes to take all reasonable steps to prevent any third party to whom
      it has sold the Lacoste
      Watches from so doing; provided, however, that, considering the
      specific regulation prevailing in the European Union (EU) the Distributor may resell
      the Lacoste
      Watches to other Lacoste Watches
      distributors that are under contract with Master Licensee or to
      members of the Lacoste
      Watches Selective Distribution System located in any member country
      of the EU, whether or not within the Territory (other than
      Lacoste Boutiques
      and/or to Lacoste
      Corners as the Lacoste Boutiques and
      the Lacoste
      Corners constitute a selective distribution system which is
      distinct from the Lacoste
      Watches Selective Distribution System) but only in accordance with
      the following terms and conditions:

              

      

      
        	
                -  

              	
                it
      shall take all necessary measures to ensure that the Lacoste Watches thus
      delivered remain in the Lacoste Watches Selective
      Distribution System within the
EU,

              

      

       

      
        	
                -  

              	
                it
      shall in particular ensure and see to it that, in the event its Approved Watches
      Retailers sell to other retailers,
      such retailers are members of the Lacoste Watches Selective
      Distribution System in the
EU.

              

      

       

      

      The Master Licensee shall be
entitled, in any year, to request from the Distributor or its Approved Watches Retailers
copies of the invoices related to such re-sales in order to ascertain that such
have been made to a member of the Lacoste Watches Selective
Distribution System in the EU.

       

      

      As far as
is permitted by law the Master
Licensee shall use all reasonable endeavours to ensure that its other
distributors comply with the same restrictions.

       

      

      
        	
                6.2

              	
                The
      Distributor shall
      not either directly or indirectly distribute or sell on its own account or
      on the account of any third party any products having any characteristics
      unique to the Lacoste
      Watches or likely to create confusion with Lacoste Watches in the
      mind of the public such undertaking to remain in full force and effect for
      one year after the termination or non renewal of this Agreement.

              

      

      

      
        	
                6.3

              	
                The
      Distributor shall
      never manufacture, distribute or sell directly or indirectly any product
      bearing a name, trademark or emblem similar to the Licensed Trademarks, or
      likely to be confused with the Licensed Trademarks.
      This prohibition is permanent.

              

      

      

      
        	
                6.4

              	
                During
      the term of this Agreement Distributor shall notify
      Master Licensee in
      advance in the event it intends to become, directly or indirectly, a
      distributor, agent or sales representative in the Territory of or for
      (“represent”) any other watch brand with products priced at retail within
      a range of Euro 150 to Euro 800. Within thirty (30) days after receipt of
      any such notice, if there is reasonable basis for Master Licensee to
      conclude that Distributor’s
      representation of such other brand will be inconsistent or incompatible
      with any of Distributor’s
      obligations hereunder, then Master Licensee shall
      have the right to terminate this Agreement upon one hundred eighty (180)
      days prior notice to Distributor.
      Notwithstanding the foregoing, Distributor shall have
      the right to nullify such termination notice from Master Licensee if,
      within thirty (30) days after such notice, Distributor notifies
      Master Licensee
      that it will not, and so long as it does not, at any time thereafter for
      the duration of this Agreement represent such
      brand in the Territory.
    

              

      

      

      
        	
                6.5

              	
                In
      order to preserve the identity and the specific characteristics of each of
      the selective distribution systems described in the Agreement, the Distributor shall
      respect the integrity of the Lacoste Watches Selective
      Distribution System and the "Lacoste Boutiques and Lacoste
      Corners" Selective Distribution System and "Approved Apparel Retailers" Selective
      Distribution System not only with regard to third parties but also
      between these systems so that:

              

      

      

      
        	
                 
      

              	
                6.5.1

              	
                sales
      of Lacoste Watches
      to final consumers be made in proportions commensurate with private use by
      such consumers;

              

      

      
        

      

      
        	
                 
      

              	
                6.5.2

              	
                until
      they are sold to final consumers, through the Lacoste Watches Selective
      Distribution System or the "Lacoste Boutiques and Lacoste
      Corners" Selective Distribution System Lacoste Watches remain
      at all times within the custody of a member of either of these
      systems.

              

      

      

      
        	
                 
      

              	
                6.6

              	
                The
      Distributor shall
      take all appropriate measures so that all members of the Lacoste Watches Selective
      Distribution System with whom Distributor has any
      dealings, similarly adhere to the commitments
      mentioned in Article 6.5
      above.

              

      

      

      

      

       

      

       

      ARTICLE 7 - ORDERS AND
SHIPMENTS

       

      

      
        	
                7.1

              	
                From
      time to time, Distributor shall submit
      purchase orders for Lacoste Watches to Master
      Licensee.  All purchase orders shall be subject to
      acceptance by Master
      Licensee, which acceptance may, at Master Licensee’s
      option, be evidenced by the issuance of written confirmations or
      acknowledgments. Master
      Licensee hereby reserves the absolute right to reject the whole or
      any part of any purchase order for any commercially valid reason,
      including, without limitation, Distributor’s credit
      condition or its accumulation of excess or non-current inventory or its
      failure otherwise to adhere to the terms and conditions of this Agreement,
      notwithstanding that any such rejection may prevent Distributor from
      achieving its Minimum
      Turnover Requirements. All purchase orders shall be irrevocable
      after acceptance by Master Licensee;
      provided, however, that Distributor may
      reschedule or cancel that portion of any purchase order pertaining to
      Lacoste Watches
      which Master
      Licensee fails to deliver within thirty (30) days after the later
      of the advised delivery date or shipping date.  Distributor will provide
      Master Licensee
      with a four (4) month rolling forecast of its anticipated order volume
      monthly by SKU, for the four (4) month period. Master Licensee will use
      reasonable efforts to deliver Lacoste Watches ordered
      in accordance with the forecast within three (3) months after acceptance
      of the purchase order by Master Licensee and to
      deliver all other Lacoste
      Watch orders within three (3) to five (5) months after acceptance
      of the purchase order. As soon as is reasonably practicable after
      acceptance of each purchase order, Master Licensee shall
      advise Distributor
      of the shipping dates applicable to such order.  All shipping
      dates so advised are estimates only and Master Licensee shall
      not have any liability for failure to actually ship by such dates or to
      deliver by Distributor’s requested
      delivery dates. Master
      Licensee shall notify Distributor in event of
      any anticipated delay in shipping dates of thirty (30) days or more. Each
      order submitted by Distributor will specify
      a “ship to” address which shall be the address of Distributor’s
      warehouseman or the address for one of Distributor’s
      customers.

              

      

      

      
        	
                7.2

              	
                The Distributor shall place
      all orders for Lacoste
      Watches with the Master Licensee
      exclusively; provided that notwithstanding the foregoing, the Distributor may order
      the Lacoste
      Watches from another member of the Lacoste Watches Selective
      Distribution System resident in the
EU.

              

      

      

      All
orders shall be subject to acceptance by the Master Licensee. They shall
be governed exclusively by the terms and conditions of this Agreement and the Master Licensee's General
Conditions of Distribution attached hereto as Schedule VII.

      

      

      
        	
                7.3

              	
                Unless
      otherwise agreed in writing by Distributor and Master Licensee, Lacoste Watches shall be
      deemed delivered to Distributor when
      delivered by Master
      Licensee or Master
      Licensee’s freight forwarder or distribution center into the
      possession of a carrier designated by Master
      Licensee.  Distributor shall bear
      all risk of loss, damage or shortage pertaining to Lacoste Watches after
      delivery to carrier for shipment to the designated “ship to” address on
      the corresponding purchase order. All costs of delivery, including,
      without limitation, all costs for freight, import licenses, customs duties
      or other duties or imposts, insurance and special handling shall be paid
      by Distributor.

              

      

      

      

      ARTICLE 8 -
PAYMENT

       

      
        	
                8.1

              	
                The
      purchase prices for all Lacoste Watches
      purchased by Distributor shall be in
      Euros and based on Master
      Licensee’s suggested retail price in effect in the Territory as of the date
      of shipment. Such prices shall be calculated based on the discount
      structure as set forth on Schedule VIII
      attached hereto. Master
      Licensee will provide current price lists for the Watches to Distributor from time to
      time and shall have the right to modify such prices at any time; provided,
      however, that no price increase shall become effective sooner than sixty
      (60) days after written notice thereof to Distributor. Master Licensee will
      give Distributor
      prior notice of all such price changes.  For all orders shipped
      before the effective date of any price increase, the applicable price
      shall be the price in effect on the date of shipment. With respect to
      orders for Lacoste
      Watches that have been accepted by Master Licensee but
      which have not been shipped as of the effective date of a price increase,
      the applicable price shall be the price in effect on the date of shipment;
      provided that if the price increase is more than ten percent (10%) of the
      last applicable price, Distributor shall have
      the right within ten (10) days from the effective date of the price
      increase to cancel all or any part of the order for Lacoste Watches subject
      to such price increase upon notice to Master Licensee. All
      prices are ex-works Master Licensee’s
      affiliate’s Hong Kong distribution facility or such other distribution
      facility as Master
      Licensee shall designate.

              

      

      

      
        	
                 
      

              	
                8.2The
      invoices shall be sent directly by the Master Licensee to
      the Distributor.
      All payments shall be made in Euros in accordance with Master Licensee’s
      standard terms of sale (to the extent not inconsistent with the terms
      contained herein) net ninety (90) days after the invoice date. A discount
      of two percent (2%) is granted for cash payment in
  advance.

              

      

      

      
        	
                8.3

              	
                Distributor shall have
      sole responsibility for invoicing its customers and for the collection of
      all amounts due from them for Lacoste Watches sold to
      them by Distributor. In no event
      shall non-payment by any such customer or any claim or allegation any
      customer may have against Distributor constitute
      grounds for any off set, deduction, claim or defence on the part of Distributor against
      Master Licensee or
      in respect of any obligation due to Master Licensee and
      Distributor shall
      pay Master
      Licensee all amounts due to Master Licensee in
      accordance with the terms of this Agreement without off
      set or deduction for any amounts claimed to be due to Distributor by Master
      Licensee.

              

      

      
        	
                 
      

              	 

      

      

      ARTICLE 9 - QUALITY, WARRANTY AND
AFTER SALE
SERVICE

       

      

      
        	
                9.1

              	
                The
      Master Licensee
      shall take all reasonable steps to ensure that the Lacoste Watches
      delivered pursuant to this Agreement satisfy all
      applicable quality requirements.

              

      

      

      
        	
                9.2

              	
                Lacoste Watches
      delivered by the Master
      Licensee to the Distributor shall be
      covered by the Master
      Licensee's International Warranty as the same may be modified by
      Master Licensee
      from time to time.

              

      

      

      
        	
                9.3

              	
                The Distributor shall establish and
      maintain at its own cost such number of authorized service
      facilities for the service and repair of Lacoste Watches in the
      Territory (the
      “Service center(s)”) as Master Licensee may
      reasonably request, it being understood that initially there shall be one
      (1) such Service Center. Distributor shall accept
      all Lacoste Watches
      for service returned by any consumer or retailer whether covered by
      the applicable consumer warranty (“warranty repairs”) or not covered by
      said warranty (“out-of-warranty repairs”). Distributor shall
      purchase from Master
      Licensee and maintain an adequate stock of Lacoste Watches and
      component parts and materials and employ at each Service Center such
      number of qualified service technicians necessary to perform such service
      in a timely manner.  All shipping charges, including any duty,
      or Customs brokerage fees, for such parts shall be paid by Distributor. Master Licensee shall
      have the right to furnish parts to Distributor in the form
      of finished watches.  Within sixty (60) days after the end of
      each contract year, provided Distributor has complied
      with all its obligations hereunder, Master Licensee will
      issue a credit to Distributor equal to one
      percent (1%) of the Sales
      to Distributor in such prior contract year; provided that Master Licensee will
      review this amount annually in light of the actual average incidence of
      warranty repairs.

              

      

      

      
        	
                9.4

              	
                Within
      thirty (30) days after the Effective Date, Distributor will furnish
      Master Licensee
      with Distributor’s
      initial price list for all out of warranty repairs. All such prices will
      be competitive as compared to prices charged for similar services
      performed for other watch brands that compete with Lacoste Watches in the
      Territory. Distributor will give
      Master Licensee no
      less than ninety (90) days prior written notice of any change to any such
      prices. Distributor shall submit
      to Master Licensee
      quarterly, a statement summarizing all out of warranty repairs and all
      warranty repairs performed in the immediately preceding quarter indicating
      for each watch repaired: the corresponding style number, the work
      performed and customer's name and address.  Distributor will use
      only those parts (excluding batteries) for service on Lacoste Watches which
      are supplied directly by or otherwise approved in writing by Master Licensee as
      original equipment for Lacoste Watches.

              

      

      

      
        	
                9.5

              	
                Distributor will issue
      estimates for repair work within five (5) working days after receipt of a
      Lacoste Watch for
      repair on ninety percent (90%) of Lacoste Watches
      submitted to Distributor for repair.
      Working days are defined as all days of the year except Saturdays and
      Sundays and legal holidays. Warranty repairs will be completed within
      fifteen (15) working days after receipt of a Lacoste Watch for repair
      on ninety percent (90%) of the in-warranty work performed by Distributor, unless
      detained because of delays in receiving necessary parts from the Master Licensee. Out of
      warranty repairs will be completed within twenty (20) working days after
      receipt of the customer's written authorization to proceed with repair of
      a Lacoste Watch on
      ninety percent (90%) of the out of warranty work performed by Distributor. On the same
      day any repairs are completed, the Lacoste Watch repaired
      or serviced will be returned to the customer via express mail or such
      other method as Master
      Licensee may reasonably request. Increases in the postage or other
      ground delivery rates may require requisite increases in charges to the
      customer by the Distributor for
      shipping

              

      

      

      

      

      

      ARTICLE 10 - MARKETING AND
MERCHANDISING

       

      

      
        	
                10.1

              	
                Obligations
      of the Master
      Licensee

              

      

      

      
        	
                 
      

              	
                The Master Licensee shall
      share appropriate Know
      How pertaining to the Lacoste Watches with
      Distributor and
      maintain regular contacts among their respective personnel. To this
      effect, the Master
      Licensee shall from time to
time:

              

      

      

      
        	
                 
      

              	
                10.1.1

              	
                give
      the Distributor
      access to certain market surveys, statistics, reports and information it
      may have (which it is not obliged to third parties to hold in confidence)
      regarding the market position of the Lacoste Watches in the
      Territory among
      competitors, retail customers and consumers;
and

              

      

      

      
        	
                 
      

              	
                10.1.2

              	
                at
      the Distributor’s
      request, provide reasonable assistance to the Distributor in training
      a reasonable number of the Distributor’s staff in
      the marketing, merchandising, promotion and advertising of the Lacoste Watches;
      and

              

      

      

      
        	
                 
      

              	
                10.1.3

              	
                advise
      the Distributor of
      its requirements with regard to marketing and merchandising, including for
      example specifications concerning the presentation of the Lacoste Watches in the
      shop-windows or inside shops and the point-of-sale materials, that the
      Distributor shall
      implement within the Territory;
      and

              

      

      

      
        	
                10.2

              	
                Obligations
      of the Distributor

              

      

      

      The Distributor shall take all
necessary measures to promote the distribution and sale of the Lacoste Watches within the
Territory by conforming
to such policies as are prescribed and co-ordinated world-wide by the Licensor for the Licensed Trademarks and by
using the Know-How
provided through the Master
Licensee together with its own resources. To this effect, the Distributor
shall:

      

      
        	
                 
      

              	
                10.2.1

              	
                make
      such investments as are reasonably required to create and/or maintain the
      organisation necessary for the distribution, marketing and merchandising,
      promotion and advertising of the Lacoste Watches. This
      organization shall operate in a manner so as to avoid any risk of
      confusion to the retail trade or consumers with other brands offered by
      the Master Licensee or by Distributor. Such organisation shall include at
      least one (1)  full time watch division manager to supervise and
      manage a dedicated sales manager and sales executive for Lacoste Watches,
      experienced in managing a watch distribution business and one (1) full
      time marketing manager working on the advertising and promotion of Lacoste Watches;
      and

              

      

      

      
        	
                 
      

              	
                10.2.2

              	
                consult
      with the Master
      Licensee at least three (3) months before the beginning of the sale
      of each season’s collection with respect to the Distributor’s marketing
      and merchandising policy. At Master Licensee’s
      request, the Distributor shall
      participate in the coordination meetings organised by the Licensor and/or Master Licensee. This
      consultation shall be done with the purpose of reaching an agreement on
      the objectives and the means to achieve the best possible sales results
      within the Territory as well as the
      best possible co-ordination with the marketing and merchandising policy of
      the Lacoste Apparel
      Products and Other
      Lacoste Products; and

              

      

      

      
        	
                 
      

              	
                10.2.3

              	
                provide
      the Master
      Licensee three (3) months after the start of the sales of each
      collection of Lacoste
      Watches  a collection report which shall include the
      comments of the Distributor detailed by
      Model (SKU) within each such collection. The Distributor shall in
      particular comment on the market receptivity to the collection. Such
      report shall also include any requests for future
    collections.

              

      

      

      
        	
                 
      

              	
                10.2.4

              	
                provide
      the Master
      Licensee once a year, at the beginning of the month of October,
      with its estimated Net
      Sales figures in the Territory in units and
      in turnover for the following three (3) calendar years, for each of the
      lines of Lacoste
      Watches, by category of products (as defined in Schedule IV attached hereto); and shall update these
      estimates for the first year of this three year period, a first time six
      (6) months later (in April), and a second time twelve (12) months later
      (in October); and

              

      

      

      
        	
                 
      

              	
                10.2.5

              	
                provide
      the Master
      Licensee quarterly, beginning with the second quarter after the
      Effective Date with a report listing each Approved Watches
      Retailer and each Lacoste Boutique and
      Lacoste Corner to
      which Distributor
      sold any Lacoste Watches
      in the previous quarter and detailing for each by SKU the
      quantities and the Net
      Sales, of the Lacoste Watches sold
      during the preceding quarterly period);
and

              

      

      

      
        	
                 
      

              	
                10.2.6

              	
                in
      general :

              

      

      

      
        	
                 
      

              	
                a)

              	
                give
      the Master
      Licensee complete access to any and all market surveys, reports and
      information it may have (which it is not obliged to third parties to hold
      in confidence) regarding the market position of the Lacoste Watches among
      competitors, retail customers and consumers in the Territory;
      and

              

      

      

      
        	
                 
      

              	
                b)

              	
                use
      reasonable efforts to reply to any request from the Master Licensee
      concerning additional details or statistics based on sales including,
      without limitation, monthly sell-through data for certain accounts;
      and

              

      

      

      
        	
                 
      

              	
                c)

              	
                in
      the interests of both parties, enable the Master Licensee’s
      personnel to carry out their role of assistance to and consultation with
      the Distributor
      and supply them with such help and information as may be reasonably
      available for the completion of their role and, in particular, provide all
      available information and necessary surveys for the analysis of the retail
      outlets sales activity so as to permit the Master Licensee to
      better define the conditions and the trends of the market;
    and

              

      

      

      
        	
                 
      

              	
                d)

              	
                shall
      ensure that the Approved
      Watches Retailers implement and conform to the marketing and
      merchandising policy defined by the Licensor according to
      the provisions of Article 10.2.2 above;
      and

              

      

      

      
        	
                 
      

              	
                e)

              	
                shall
      ensure that the Approved
      Watches Retailers conform to the specifications concerning the
      fittings, the decoration and architecture of the points-of-sale and use
      the furniture and other elements, developed by the Licensor, in connection
      with the sale of the Lacoste
      Watches.

              

      

      

      

      ARTICLE 11 - DISTRIBUTION AND
SALE

       

      

      The Distributor shall carry out
the distribution of the Lacoste
Watches in the Territory exclusively
through :

      

      
        	
                a)

              	
                the
      members of the Lacoste
      Watches Selective Distribution System, through Approved Watches
      Retailers selected in the Territory and to which,
      whenever possible, it shall be contractually linked;
  and

              

      

      

      
        	
                b)

              	
                the
      members of the "Lacoste
      Boutiques and Lacoste Corners" Selective Distribution System,
      subject to the terms and conditions set forth in Article 11.2
hereinafter.

              

      

      

      
        	
                11.1

              	
                Approved
      Watches Retailers

              

      

      

      So as to
provide the consumer with the best service, to ensure the homogeneity of the
high quality of the distribution of the Lacoste Watches throughout the
Territory and to
guarantee their authenticity, the Distributor shall select Approved Watches Retailers on
the basis of the following objective criteria as regards both quality and
techniques, and shall use reasonable commercial efforts to enter into with them,
whenever possible, an agreement in the form of Lacoste Watches Approved Retailer
Contract as the same may be modified from time to time, the current
version of which is annexed hereto as Schedule IX.

      

      
        	
                 
      

              	
                11.1.1

              	
                Conditions of
      Approval

              

      

      

      The Distributor shall select as
Approved Watches
Retailers exclusively those which meet the standards of performance as
set forth in the Lacoste Watches General Conditions of Distribution, as the same
may be modified from time to time, the current version of which is annexed
hereto as Schedule VII for the following
criteria :

      

      
        	
                 
      

              	
                a)

              	
                the
      location and environment of the point-of-sale (type and category of the
      building, location in the town in question, type of shops in the
      neighborhood, sales area of the shop, quality of the frontage, length of
      the shop window); and

              

      

      

      
        	
                 
      

              	
                b)

              	
                its
      fittings (quality of the shop sign, window-dressing, quality of the
      furnishings and lighting); and

              

      

      

      
        	
                 
      

              	
                c)

              	
                the
      type, brand and nature of the products sold in the outlet;
    and

              

      

      

      
        	
                 
      

              	
                d)

              	
                the
      qualification of the personnel; and

              

      

      

      
        	
                 
      

              	
                e)

              	
                the
      financial capabilities and solvency
guarantees.

              

      

      

      
        	
                 
      

              	
                11.1.2

              	
                Approval of the
      Approved
      Watches Retailers

              

      

      

      
        	
                 
      

              	
                The
      Master Licensee
      reserves the right to verify that every point of sale selected by the
      Distributor as an
      Approved Watches
      Retailer conforms to the objective criteria set forth in
      Article 11.1.1 hereinabove. Distributor shall submit
      or cause to be submitted to the Master Licensee a copy
      of the completed application for every potential point of sale for
      approval and will follow the application procedures for each such proposed
      point of sale as set forth in the Lacoste Watches General Conditions of
      Distribution. The Master
      Licensee shall have one-hundred-twenty (120) days to approve in
      writing a potential point of sale based upon the objective criteria set
      forth under Article 11.1.1 hereinabove
      and the Master
      Licensee shall not unreasonably withhold, delay or condition its
      approval, and shall be deemed to have given its approval if Master Licensee does not
      notify Distributor
      that it disapproves of such proposed point of sale with one-hundred-twenty
      (120) days of receipt of the completed
  application.

              

      

      

      
        	
                 
      

              	
                11.1.3

              	
                Duties of the
      Approved
      Watches Retailers

              

      

      

      Whether
or not the Distributor
succeeds in entering into the Lacoste Watches Approved Retailer
Contract with each Approved Watches Retailer, the
Distributor shall ensure
that each Approved Watches
Retailer adheres to the following at all times :

      

      
        	
                 
      

              	
                a)

              	
                the
      standing of the point-of-sale and its environment remain at all times
      compatible with the Lacoste Trademarks
      Image, as established and coordinated by the Licensor;
      and

              

      

      

      
        	
                 
      

              	
                b)

              	
                the
      sales area in the store is always sufficient to permit the presentation of
      the Lacoste
      Watches in a sufficient shopping space without disproportion with
      the other brands offered for sale and allowing to distinguish them;
      and

              

      

      

      
        	
                 
      

              	
                c)

              	
                each
      point-of-sale always contains an adequate range of the Lacoste Watches;
      and

              

      

      

      
        	
                 
      

              	
                d)

              	
                the
      sales personnel of each point-of-sale is always well qualified and trained
      in presenting and selling the Lacoste Watches;
      and

              

      

      

      
        	
                 
      

              	
                e)

              	
                INTENTIONALLY
      DELETED

              

      

      

      
        	
                 
      

              	
                f)

              	
                no
      misleading advertising is made; and

              

      

      

      
        	
                 
      

              	
                g)

              	
                the
      counters, posters, demonstration and other advertising material are
      displayed in a prominent position in each store and set up with the Distributor's approval;
      and

              

      

      

      
        	
                 
      

              	
                h)

              	
                a
      notice stating "Approved
      Watches Lacoste Retailer" is displayed in a prominent position in
      the window or near the
      Lacoste Watches display
area.

              

      

      

      
        	
                 
      

              	
                11.1.4

              	
                The
      Distributor shall
      ensure that all elements bearing or representing the Licensed Trademarks
      (such as awnings, pennants, etc.) used by the Approved Watches
      Retailers on the façade, in the window or inside their shops are
      exclusively those supplied by the Distributor or,
      exceptionally those which have received the prior and express written
      approval of the Distributor.

              

      

      

      In this
respect, a specific provision shall be included in the written confirmations
issued to the Approved Watches
Retailers.

      

      The Distributor shall inform the
Master Licensee of any
new kind of material that the Approved Watches Retailers
would like to use.

      

       

      
        	
                11.2

              	
                Special
      provisions applicable to the members of the "Lacoste Boutiques and Lacoste
      Corners" Selective Distribution
System

              

      

      

      Nothing
contained in the Agreement and in particular
this Article 11.2 and Articles 1.17 and 1.18 shall be
construed as meaning that Lacoste Watches shall be
offered for sale in each and every Lacoste Boutiques and Lacoste Corner fulfilling the
requirements of Article 11.2.1
hereunder.

      

      
        	
                 
      

              	
                11.2.1

              	
                Presentation Surface of
      the Lacoste Watches
      and/or of the Other Lacoste Products
      in the Lacoste
      Boutiques and Lacoste
      Corners

              

      

      

      
        	
                 
      

              	
                a)

              	
                So
      as to make sure that at the same time the Lacoste Boutiques and
      Lacoste Corners
      remain principally devoted to the sale of Lacoste Apparel Products
      and only on a subordinate basis of the Lacoste Watches and/or
      of the Other Lacoste
      Products and to allow the development of the Lacoste Watches together
      with the Other Lacoste
      Products, the Lacoste Boutiques with a
      Commercial Surface
      exceeding 50m2 and the Lacoste Corners with a
      Commercial Surface
      exceeding 40m2 shall be authorised to sell the Lacoste Watches and all
      the categories of the Other Lacoste Products
      that they wish to sell. Devanlay shall reserve
      for the Lacoste
      Watches together with the Other Lacoste Products
      in each of these Lacoste
      Boutiques and in each of these Lacoste Corners at least
      ten percent (10%) and at most twenty percent (20%) of the Presentation Surface of
      such Lacoste
      Boutique or Lacoste
      Corner.

              

      

      

      For the
Lacoste Boutiques with a
Commercial Surface
exceeding 150m2, the Presentation Surface reserved
for the Lacoste Watches
together with the Other Lacoste
Products shall be at least fifteen percent (15%) but at most twenty
percent (20%) of the Presentation Surface of such
Lacoste
Boutique.

      

      Devanlay or the relevant Lacoste Apparel Products Distributor shall decide with
the owner of each Lacoste
Boutique and of each Lacoste Corner, within the
limits fixed above, the percentage of the Presentation Surface reserved
for the Lacoste Watches
and for the Other Lacoste
Products.

      

       

      Devanlay, or the relevant
Lacoste Apparel Products
Distributor, shall decide with the owner of each Lacoste Boutique and of each
Lacoste Corner the
manner in which the space reserved for the Lacoste Watches and for the
Other Lacoste Products
shall be allocated.

      

      The owner
of each Lacoste Boutique
and of each Lacoste
Corner shall comply scrupulously and in all respects with the
instructions of Devanlay, or of the relevant
Lacoste Apparel Products
Distributor, concerning the merchandising of the
Lacoste Watches and of
the Other Lacoste Products
in the Lacoste Boutiques and in
the Lacoste
Corners.

      

      Within
this framework, the owners of the Lacoste Boutiques and of the
Lacoste Corners are free
to decide if they want to present Lacoste Watches in their
points of sale and
to choose the categories of Other Lacoste Products which
they wish to present in their points of sale.

      

      
        	
                 
      

              	
                b)

              	
                Provided
      that they have been authorised beforehand and in writing by Devanlay, the Lacoste Boutiques with a
      Commercial Surface
      smaller than or equal to 50m2 and the Lacoste Corners with a Commercial Surface
      smaller than or equal to 40m2 may sell certain Lacoste Watches and/or
      Other Lacoste
      Products in the same conditions. Given the size of these points of
      sale, the parties agree that no reservation of a minimum Presentation Surface
      shall apply to them.

              

      

      

       

      
        	
                 
      

              	
                11.2.2

              	
                Selection
      of the collections of the Lacoste Watches for the
      "Lacoste Boutiques and
      Lacoste Corners" Selective Distribution
  System

              

      

      

      The
presence of the Lacoste
Watches together with the Other Lacoste Products
alongside the Lacoste
Apparel Products in the Lacoste Boutiques and in the
Lacoste Corners is
desirable in the interest of the Lacoste Trademarks Image and
of the development of the "lifestyle" image of the Lacoste brand. The purpose is
to define for each Lacoste Boutique and for each Lacoste Corner a well-balanced
solution, preserving both the Lacoste Trademarks Image and
the interests of the Lacoste
Apparel Products,
the Other Lacoste
Products and the Lacoste
Watches.

      

      
        	
                 
      

              	
                a)

              	
                The
      collections of the Lacoste Watches for the
      "Lacoste Boutiques and
      Lacoste Corners" Selective Distribution System shall be selected in
      the Territory
      among the collections approved by the Licensor, by mutual
      agreement between the Distributor and the
      Lacoste Apparel Products
      Distributor in such country.

              

      

      

      The
selection of the collections of the Lacoste Watches means the
determination, for the Territory, on the one hand, of
the product ranges (choice of models among those existing) of the Lacoste Watches collections,
among which the owner of the point of sale shall be free to choose when placing
his orders and, on the other hand, of the total number of references/color of
Lacoste Watches and of
Other Lacoste Products
which may be commercialised during a season in each category of point of sale
according to its size and its lay-out. The determination of the product ranges
shall be such as to offer the owners of the points of sale the opportunity to
exercise their choice among collections having, for the Lacoste Watches and for each
category of Other Lacoste
Products, a reasonable representativeness.

      

      
        	
                 
      

              	
                b)

              	
                Subject
      to the terms of paragraph (a) hereinabove, such selection shall be made
      taking into account:

              

      

      
        	
                -  

              	
                the
      availability of the collections of the Lacoste Watches in such
      country, and

              

      

      
        	
                -  

              	
                the
      commercial interest that the Lacoste Watches may
      offer to the Lacoste
      Boutiques and the Lacoste Corners,
      and

              

      

      
        	
                -  

              	
                the
      purchasing behaviour and habits of such country,
  and

              

      

      
        	
                -  

              	
                the
      periodicity appropriate to the Lacoste
      Watches.

              

      

      

      
        	
                 
      

              	
                c)

              	
                The
      collections of the Lacoste Watches chosen
      for the "Lacoste
      Boutiques and Lacoste Corners" Selective
      Distribution System within the Territory shall be
      updated with the appropriate periodicity (season, year) following the
      rules specified in paragraphs a) and b).

              

      

      

      
        	
                 
      

              	
                d)

              	
                In
      the event of a disagreement between the Distributor and a Lacoste Apparel Products
      Distributor about the selection of collections of Lacoste Watches for the
      "Lacoste Boutiques and
      Lacoste Corners" Selective Distribution System in the Territory, the Distributor shall notify
      the Master
      Licensee who will then notify the Licensor. The Licensor and Devanlay shall make
      their best efforts to find together a well-balanced solution which
      preserves together the Lacoste Trademarks
      Image, the development of the "lifestyle" image of the Lacoste
      brand and the interests of the Lacoste Apparel Products
      and of the Lacoste
      Watches. The final decision shall rest with Devanlay.

              

      

      

      
        	
                 
      

              	
                e)

              	
                Once
      the ranges of the Lacoste
      Watches and of the Other Lacoste Products
      and the total number of references/color of the Lacoste Watches and/or
      of the Other Lacoste
      Products have been selected, the owners of the Lacoste Boutiques and of
      the Lacoste
      Corners will be free to decide, within this framework, the
      quantities of Lacoste
      Watches and/or of Other Lacoste Products to be
      ordered.

              

      

      

      
        	
                 
      

              	
                11.2.3

              	
                Supply
      of the "Lacoste Boutiques
      and Lacoste Corners" Selective Distribution System by the Distributors of the
      Lacoste
      Watches

              

      

      

      
        	
                 
      

              	
                a)

              	
                The
      Distributor shall
      present the collections directly to the Lacoste Boutiques and to
      the Lacoste
      Corners, which shall place their orders and repeat orders directly
      with them according to their specificities (size, location, customers).
      The Distributor
      shall transmit electronically to the Lacoste Apparel Products
      Distributor a copy of each order placed by the Lacoste Boutiques and
      the Lacoste Corners located in the
      Territory. These
      orders shall be sent to the Lacoste Apparel Products Distributor
      upon receipt by the Distributor, and shall
      specify the anticipated delivery dates. Upon receipt of the copies of the
      orders and within 10 days at most, the Lacoste Apparel Products Distributor may
      contact the Distributor if, after
      examining the orders, it appears that the selection of the collection for
      a specific point of sale does not comply with the terms of Article 11.2.2 hereinabove. In such an event, the Lacoste Apparel Products
      Distributor shall
      have the right to request the Distributor not to
      accept these orders insofar as they do not conform with the pre-agreed
      terms relating to the selection of ranges of Lacoste Watches set
      forth in Article 11.2.2 hereinabove. The
      Distributor
      undertakes to act in accordance with the request of the Lacoste Apparel Products
      Distributor. In the absence of reaction from the Lacoste Apparel Products
      Distributor within 10 days following the receipt of the copies of
      the orders for the beginning of the season, such orders may be implemented
      as such. Notwithstanding the foregoing, repeat orders may be delivered by
      the Distributor as
      soon as they are received.

              

      

      

      
        	
                 
      

              	
                b)

              	
                The
      Lacoste Boutiques
      and the Lacoste
      Corners shall be supplied and invoiced directly by the Distributor.

              

      

      

      
        	
                 
      

              	
                c)

              	
                The
      Distributor shall
      send each six months to the Lacoste Apparel Products
      Distributor a detailed recapitulative statement of the invoices of
      Lacoste Watches
      sent to each Lacoste
      Boutiques and Lacoste Corner. Copies
      of these statements shall be sent simultaneously to the Licensor, to Devanlay and to the
      Master
      Licensee.

              

      

      

      
        	
                 
      

              	
                d)

              	
                In
      the event of a violation by a Lacoste Boutique or a
      Lacoste Corner of
      the limits of the Presentation Surface
      established for the Lacoste Watches together
      with the Other Lacoste
      Products in the point of sale or of the selection of the
      collections of the Lacoste Watches and of
      the Other Lacoste
      Products intended to be commercialised in this point of sale, or of
      the maximum number of references/colour of Lacoste Watches and/or
      of Other Lacoste
      Products which may be commercialised in such Lacoste Boutique or
      Lacoste Corner, or
      in the event that the purchasing turnover of Lacoste Apparel Products
      during six months is less than eighty percent (80%) of the total
      purchasing turnover of the relevant Lacoste Boutique or
      Lacoste Corner
      during the same period, Devanlay, or the Lacoste Apparel Products
      Distributor concerned, shall be entitled on a first instance to
      issue a warning to the relevant Lacoste Boutique or
      Lacoste Corner
      and, if any of these occurrences should be repeated, to forbid such point
      of sale to commercialize Lacoste Watches and
      Other Lacoste
      Products during at least one
season.

              

      

      

      The Licensor and the Master Licensee shall be
informed of such measures taken by Devanlay. The Master License will inform
the Distributor of any
such measures taken by Devanlay. The Distributor undertakes to
comply with these measures by suspending all orders and deliveries to such point
of sale.

      

      
        	
                 
      

              	
                11.2.4

              	
                Selective
      Distribution Systems

              

      

      

      
        	
                 
      

              	
                a)

              	
                The
      Distributor
      acknowledges that the Lacoste Boutiques and
      the Lacoste
      Corners are Points
      of Sale with specific characteristics resulting inter alia from the
      fact that all the products sold in these premises bear the Lacoste Trademarks, as
      well as from the fact that these points of sale are principally devoted to
      the sale of Lacoste
      Apparel Products and only on a subordinate basis of Lacoste Watches together
      with Other Lacoste
      Products, contrary to the members of the "Approved Apparel Retailers"
      Selective Distribution System who can sell products of different
      brands and who are devoted to the sale of the Lacoste Apparel
      Products, unless they are selected as approved retailers for Lacoste Watches and/or
      Other Lacoste
      Products.

              

      

      

      Therefore,
the Lacoste Boutiques
and the Lacoste Corners
constitute together the "Lacoste Boutiques and Lacoste
Corners" Selective Distribution System organized by Devanlay which is distinct
from the "Approved Apparel
Retailers" Selective Distribution System comprising the approved
retailers for the Lacoste
Apparel Products.

      

      The "Lacoste Boutiques and Lacoste
Corners" Selective Distribution System is also distinct from the Lacoste Watches Selective
Distribution System organised by the Master Licensee.

      

      
        	
                 
      

              	
                b)

              	
                The
      Distributor
      therefore undertakes to take all appropriate measures to ensure the
      integrity of the Lacoste
      Watches Selective Distribution System, the "Lacoste Boutiques and Lacoste
      Corners" Selective Distribution System and the "Approved Apparel Retailers"
      Selective Distribution System in its Territory.

              

      

      

      
        	
                 
      

              	
                11.2.5

              	
                Assistance
      of Devanlay and/or
      of the Lacoste Apparel
      Products Distributor to the "Lacoste Boutiques and Lacoste
      Corners" Selective Distribution System in connection with the Lacoste Watches and/or
      the Other Lacoste
      Products

              

      

      

      In
connection with the Lacoste
Watches and/or the Other
Lacoste Products that will be offered in the "Lacoste Boutiques and Lacoste Corners" Selective
Distribution System under the terms of this Article 11.2, Devanlay and/or the Lacoste Apparel Products
Distributor have agreed that:

      

      
        	
                 
      

              	
                a)

              	
                in
      the field of merchandising, they
shall :

              

      

      
        	
                -  

              	
                ensure
      the coherence of the merchandising for the Lacoste Apparel
      Products, the Lacoste Watches and/or
      the Other Lacoste
      Products, and

              

      

       

      
        	
                -  

              	
                present
      in a suitable fashion the Lacoste Watches
      following the rules contained in the merchandising guide (called the
      "Green Book") and its seasonal editions developed by Devanlay, which shall be
      updated by the Licensor and Devanlay and approved by
      the Licensor,
      and

              

      

       

      
        	
                -  

              	
                present
      completely, in particular in the shop-windows, the lines of Lacoste Apparel
      Products, Lacoste
      Watches together with Other Lacoste Products,
      so as to express fully the Lacoste "way-of-life",
  and

              

      

       

      
        	
                -  

              	
                use
      their best efforts to include the Lacoste Watches together
      with the Other Lacoste
      Products in their local or national advertising and promotion
      campaigns.

              

      

       

      

      
        	
                 
      

              	
                b)

              	
                in
      the field of reporting, they
shall :

              

      

      

      
        	
                -  

              	
                do
      their best efforts to ensure that the Lacoste Boutiques
      progressively put in place IT systems allowing a detailed reporting of
      their sales of Lacoste
      Apparel Products, Lacoste Watches and
      Other Lacoste
      Products, and

              

      

       

      
        	
                -  

              	
                for
      those Lacoste
      Boutiques who have not yet put in place, and as long as they have
      not done so, continue providing the Licensor and the Master Licensee with
      reports similar to those available as of March 1st,
      2004, and

              

      

       

      
        	
                -  

              	
                supply
      the Lacoste
      Boutiques with such elements as may be necessary for the IT
      treatment and the reporting of their sales of Lacoste Watches, subject
      to having received the basic data about the Lacoste Watches
      necessary to the operation of such a system from the Licensor, who shall have
      obtained it himself from the Master Licensee, and

              

      

       

      
        	
                -  

              	
                prepare
      and submit to the Licensor and to the
      Master Licensee,
      for the Lacoste
      Boutiques which have put in place the necessary IT systems and have
      received the necessary basic data about the Lacoste
      Watches:

              

      

       

      
        	
                (i)  

              	
                on
      a monthly basis and under the same conditions and terms as for the sales
      of the Lacoste Apparel
      Products by the Lacoste Boutiques, the
      information relating to the sales of the Lacoste Watches in each
      Lacoste Boutique.
      This information shall include for each Lacoste Boutique the
      detail of the sales to the consumer of the Lacoste Watches,
      and

              

      

       

      
        	
                (ii)  

              	
                on
      a semi-annual basis the information relating to the sales by reference of
      the Lacoste
      Watches in each of the Lacoste
      Boutiques.

              

      

       

      

      
        	
                 
      

              	
                11.2.6

              	
                Contribution
      of the Distributor

              

      

      

      
        	
                 
      

              	
                a)

              	
                In
      consideration of the merchandising and reporting services and of the
      reservation of the Presentation Surfaces
      made for the Lacoste
      Watches by the Lacoste Apparel Products
      Distributors, the Distributor shall
      pay, each six
      months, to the Lacoste
      Apparel Products Distributor, a contribution representing a fixed
      percentage of five percent (5%) of the purchases of the Lacoste Watches made by
      the "Lacoste Boutiques
      and Lacoste Corners" Selective Distribution System in the Territory during such
      six (6) month period.

              

      

      

      In view
of the importance of the Lacoste Boutiques having a
Commercial Surface
larger than 400m2 due to their role as showcases on prime locations and due to
their high operations cost, the Distributor shall pay to Devanlay, or, if the
distribution of the Lacoste
Apparel Products in the Territory has been granted to
a Lacoste Apparel Products
Distributor, to such Lacoste Apparel Products
Distributor, a contribution representing a fixed percentage of ten
percent (10%), instead of the five percent (5%) mentioned hereinabove, of the
purchases of the Lacoste
Watches by the Lacoste
Boutiques in the Territory having a Commercial Surface larger than 400m2
during such six (6) month period.

      

      
        	
                 
      

              	
                b)

              	
                The
      amount of the contribution by the Distributor under
      Article 11.2.6a) shall be determined on the basis of its Net Sales to the Lacoste Boutiques and
      the Lacoste
      Corners.

              

      

      

      
        	
                 
      

              	
                c)

              	
                These
      amounts shall be calculated on 30 June and 31 December of each year and
      the corresponding contribution shall be paid no later than 31 August and
      28 February of each year, by the Distributor.

              

      

      

      
        	
                 
      

              	
                d)

              	
                If
      the contribution due by the Distributor has not been
      fully paid at the dates specified in Article 11.2.6c)
      hereinabove to the Lacoste Apparel Products
      Distributors, the Licensor and the Master Licensee shall
      have the right, thirty (30) days after a notice given by registered mail
      with certified receipt which will not have been followed by complete
      payment of all and any due and unpaid contributions, to instruct forthwith
      the Distributor to
      stop any further deliveries of the Lacoste Watches to the
      members of the "Lacoste
      Boutiques and Lacoste Corners" Selective Distribution System and
      the Distributor
      agrees to forthwith comply with such
  instructions.

              

      

      

      
        	
                 
      

              	
                11.2.7

              	
                Furniture
      and sales equipment used for the Lacoste
      Watches

              

      

      

      The
furniture and other sales equipment used for the Lacoste Watches in the "Lacoste Boutiques and Lacoste Corners" Selective
Distribution System shall exclusively be those developed by the Licensor in cooperation with
Devanlay and/or the Master Licensee.

      

      Devanlay and the Lacoste Apparel Products
Distributor shall be the sole entities responsible for the lay-out of the
Lacoste Boutiques and
the Lacoste Corners,
subject to the terms of this Article 11.2.

      

      
        	
                 
      

              	
                11.2.8

              	
                End-of-season
      goods

              

      

      

      The rules
applied by the Lacoste
Boutiques and the Lacoste Corners for the sale
of end-of-season goods shall be those applicable to the Lacoste Apparel Products, but,
to the extent possible, shall also have to follow those applicable to the Lacoste Watches.

      

      
        	
                 
      

              	
                11.2.9

              	
                Specific
      agreements:

              

      

      

      In the
event that specific agreements, departing from the provisions set forth
hereinabove in paragraphs 11.2.1 to 11.2.8 are concluded either
between Devanlay and the
Master Licensee, or
between the Distributor
and the Lacoste Apparel
Products Distributor in the Territory, the terms of such
specific agreements shall prevail over the provisions set forth hereinabove in
paragraphs 11.2.1 to 11.2.8. The Distributor shall promptly
inform the Master
Licensee of any such specific agreement.

      

      
        	
                11.2.10

              	
                Breach
      of the obligations of the Distributor under the
      provisions set forth in paragraphs 11.2.1 to
      11.2.9:

              

      

      

      The Distributor acknowledges that
in the event of a breach in the Territory by the Distributor of its obligations
under the provisions set forth hereinabove in paragraphs 11.2.1 to 11.2.9, the
Licensor has undertaken
towards Devanlay and the
Lacoste Apparel Products
Distributor to use its best efforts to obtain from the Distributor that it remedies
such breach. The Distributor further
acknowledges that in the event such efforts remain unsuccessful, the Licensor has agreed that Devanlay and the Lacoste Apparel Products
Distributors shall no longer be bound by any of their commitments
concerning the presence or the sale of the Lacoste Watches in the "Lacoste Boutiques and Lacoste
Corners" Selective Distribution System within the Territory, which the Distributor
accepts.

      

      

      
        	
                11.3

              	
                Mail
      Order – Internet

              

      

      

      The Licensor is desirous to
protect in the Territory
the Lacoste Trademarks
Image, the Models, the Lacoste Watches as well as the
Lacoste Apparel Products
and the Other Lacoste
Products sold under the Licensed Trademarks. The Licensor also desires to
protect the consumer from the counterfeiting of the above and desires to offer
the consumer an appropriate environment and a high quality service. For all
these reasons, the Lacoste
Watches must be exclusively sold through the Lacoste Watches Selective
Distribution System and the "Lacoste Boutiques and Lacoste
Corners" Selective Distribution System.

      

      In
consequence, the advertising and/or the sale of the Lacoste Watches on the
Internet and by Mail Order are authorized provided that the following conditions
are met :

      

      
        	
                 
      

              	
                11.3.1

              	
                the
      advertising and/or the sale of the Lacoste Watches on the
      Internet or by Mail Order may only be made by Approved Watches
      Retailers and members of the "Lacoste Boutiques and Lacoste
      Corners" Selective Distribution System;
  and

              

      

      

      
        	
                 
      

              	
                11.3.2

              	
                the
      web site or the Mail Order catalogues on which the Lacoste Watches shall be
      advertised and/or sold shall be submitted to Master Licensee for
      Master Licensee's
      written approval. Such approval shall be granted if the following
      conditions are met :

              

      

      

      
        	
                 
      

              	
                a)

              	
                the
      name, the environment, the presentation and the general standing of the
      web site or the Mail Order catalogues as well as (for any such web site)
      the way it functions shall be compatible with the Lacoste Trademarks
      Image; and

              

      

      

      
        	
                 
      

              	
                b)

              	
                the
      web site or the Mail Order catalogues shall offer to consumers a high
      quality service for the Lacoste Watches;
      and

              

      

      

      
        	
                 
      

              	
                c)

              	
                the
      manner in which the Models and the Licensed Trademarks are
      presented on the web site or in the Mail Order catalogues in connection
      with the advertising and/or the sale of the Lacoste Watches shall be
      submitted to Master
      Licensee for Master Licensee 's
      written approval. The Approved Watches
      Retailers and the members of the "Lacoste Boutiques and Lacoste
      Corners" Selective Distribution System may not include or use any
      of the Licensed
      Trademarks in the workings (as they exist as of this day or in the
      future) of the web, and in particular no Licensed Trademark may
      be included or used in a domain name, an URL address or an e-mail
      address.

              

      

      

      
        	
                11.4

              	
                The
      Distributor shall
      be free to fix its wholesale price to the members of the Lacoste Watches Selective
      Distribution System and the "Lacoste Boutiques and Lacoste
      Corners" Selective Distribution System so as to facilitate the
      diffusion of the Lacoste
      Watches and the development of sales within the Territory. The Distributor shall keep
      the Master
      Licensee informed on a regular basis of its pricing policy. More
      specifically, the
      Distributor shall inform the Master Licensee of any
      modification in its price structure as soon as practicable after such
      modification.

              

      

      

      Reduction
of price points by the Distributor for the Lacoste Watches if not justified by
normal business reasons, such as technical ones or currency exchange
fluctuations, may not be implemented if such a move risks to have significant
negative consequences on the Lacoste Trademarks Image.

      

      

      ARTICLE 12 - END-OF-SEASON
GOODS 

       

      

      
        	
                12.1

              	
                Seconds and end-of
      season close-outs of Lacoste Watches (Lacoste Watches no
      longer included in the collection of the Lacoste Watches) may be
      sold with the Licensed
      Trademarks by the Distributor exclusively
      through the normal channels of distribution for the Lacoste
      Watches.

              

      

      

      
        	
                12.2

              	
                Damaged
      or defective Lacoste
      Watches may in no circumstances be sold in any manner whatsoever,
      and shall be destroyed at their expense by the Distributor.

              

      

      

      

      ARTICLE 13 - PROMOTION AND
ADVERTISING

       

      

      The Distributor shall implement
within the Territory an
advertising and promotion policy for the sale of the Lacoste Watches in a manner
compatible with the prestige of the Licensed Trademarks, of the
Lacoste Trademarks Image
and of the name "Lacoste" so as to achieve a satisfactory development of sales;
such policy shall follow as closely as possible the Licensor’s Promotion and Advertising
Know-How provided to the
Distributor by the Master Licensee including the
advertising policy defined by the Licensor at an international
level.

       

      

      
        	
                13.1

              	
                As used herein “advertising”
      means only the publication in print or broadcast media of advertisements
      approved by Master Licensee and “promotion” means all other forms of
      promotion, other than advertising, for Lacoste
      Watches approved by Master Licensee
      including, without limitation, point of sale material, co-op advertising,
      marketing, public relations, special events and the like. All advertising
      and promotions (including, without limitation, the methods, selection,
      layouts, venue and timing thereof) shall be subject to the prior written
      approval of Master
      Licensee. Distributor shall submit
      all proposed advertising and promotion materials for approval at least
      four (4) weeks prior to the first anticipated use thereof and shall not
      engage in any advertising or promotion or use any such materials without
      Master Licensee’s
      prior written approval. Unless otherwise expressly approved in writing by
      Master Licensee,
      Distributor will
      use only such materials including, without limitation, point of sale
      material, packaging, advertising and ancillary material furnished or
      approved by Master
      Licensee.

              

      

      

      13.2                                                      Distributor shall conduct all
advertising and promotion of Lacoste Watches in the Territory at its own expense
and Master Licensee will
contribute towards the advertising and/or the promotion of such watches in the
Territory as hereinafter
provided. At a minimum, Distributor shall expend each
contract year for approved advertising and promotion an amount equal to (a) * of
Distributor’s budgeted
Net Sales of Lacoste Watches for such
contract year plus (b) * of Master Licensee’s sales to
Distributor in such
year. So long as Distributor satisfies its
obligation in respect of advertising and promotion set forth in this
Article 13.2 each contract year, then Master Licensee will reimburse
Distributor an amount
equal to * of Master
Licensee’s Sales to
Distributor in such year, such reimbursement amount hereinafter referred
to as Master Licensee’s “A/P
Amount”. Distributor’s budgeted Net Sales of Lacoste Watches for the first
through the fifth contract years are set forth in Annex D to the JV Agreement and Distributor’s budgeted Net Sales each contract year
thereafter shall be as contained in the annual business plan and budget as
adopted in accordance with the provisions of the JV Agreement at or before the
beginning of each contract year, or, at such time, if any, that the JV Agreement is no longer in
effect, then as approved by Distributor in good faith
consultation with Master
Licensee, and may be adjusted in the same manner quarterly. Within thirty
(30) days after the end of each such period, Distributor shall submit a
statement

      

      

      

      *CONFIDENTIAL
PORTION OF THIS EXHIBIT OMITTED AND FILED SEPARATELY WITH THE SEC PURSUANT TO
RULE 24b-2 OF THE 1934 ACT

      

      

      

      

      

      
        	
                 
      

              	
                      to
      Master Licensee
      setting out and showing Distributor’s
      advertising and promotion expenditures incurred during such period
      (supported by invoices and other documents reasonably acceptable to Master Licensee,
      substantiating the expenditures for Distributor’s approved
      advertising and promotion)and, within thirty (30) days after its receipt
      of such statement accompanied by such substantiation, Master Licensee shall
      pay the appropriate A/P
      Amount to Distributor. Such
      statement shall be itemized as set forth in Schedule X. Distributor acknowledges
      that Master Licensee’s
      A/P Amount represents only a portion of Master Licensee’s total
      spending each year in respect of advertising and promotion of Lacoste Watches in the
      Territory in as
      much as Master
      Licensee also contributes directly to Licensor under the terms
      of the Master
      Agreement to support Licensor’s spending on
      advertising and promotion. In the event Distributor’s actual
      Net Sales for
      Lacoste Watches in
      any contract year (other than the final contract year of this Agreement) exceed the
      total budgeted sales for such year on which its promotion expenditures for
      such year were based, then Distributor shall spend
      an amount equal to * of such excess in the following contract
      year.

              

      

      

      
        	
                13.3

              	
                In
      addition to its other obligations under this Article 13, Distributor
      shall:

              

      

      

      
        	
                 
      

              	
                13.3.1

              	
                ensure
      that not only the Lacoste
      Trademarks Image but also the personal reputation of
      Mr René LACOSTE and his family are
  safeguarded.

              

      

      

      
        	
                 
      

              	
                13.3.2

              	
                keep
      the Master
      Licensee informed, as soon as executed, of all its advertisements
      and promotions and provide the Master Licensee with
      copies of the same.

              

      

      

      
        	
                 
      

              	
                13.3.3take all necessary
      steps to ensure that the Approved Watches
      Retailers, should they themselves elect to advertise and promote
      the sale of Lacoste
      Watches use only advertising and promotional material that has been
      approved by Master
      Licensee for use by Distributor.

              

      

      

      
        	
                 
      

              	
                13.3.4only use in its
      advertising and promotional campaigns for Lacoste Watches,
      products or accessories bearing the Licensed Trademarks in
      so far as such products or accessories exist and are
      available.

              

      

      

      

      

      

      *CONFIDENTIAL
PORTION OF THIS EXHIBIT OMITTED AND FILED SEPARATELY WITH THE SEC PURSUANT TO
RULE 24b-2 OF THE 1934 ACT

      

      

      
        	
                 
      

              	
                13.3.5

              	
                permit
      the Master
      Licensee’s other distributors and the Licensor’s other
      licensees and distributors to use free of charge and subject to copyright
      laws to the corresponding artistic property rights, such advertising
      material.

              

      

      

      
        	
                13.4

              	
                Distributor shall ensure
      that the advertising and promotional programmes that are to be executed
      locally by the Approved
      Watches Retailers are submitted to the Distributor for its
      prior written approval. The Distributor undertakes
      to give notice to the Master Licensee of their
      contents (with the exception of the price) should the Master Licensee so
      request or in the event that there exists a doubt about their conformity
      with the applicable requirements set forth
  herein.

              

      

      

      
        	
                13.5

              	
                The
      Master Licensee
      shall supply the Distributor from time to
      time, at cost price, with whatever advertising material used by the Licensor or the Master Licensee that
      the Distributor
      may wish to purchase (which is permitted for use) within the Territory.

              

      

      

      

      

       

      

       

      ARTICLE 14 - MINIMUM NET SALES
REQUIREMENTS

       

      

      The Distributor is committed to
develop the sales of Lacoste
Watches within the Territory.

      

      The Distributor undertakes to make
minimum Net Sales of
Lacoste Watches in the
Territory each contract
year for the duration of this Agreement(“Minimum Sales Requirements”)
equal to at least sixty percent (60%) of the amount of sales of Lacoste Watches as budgeted in
the Business Plan annexed to the JV Agreement. Sales in excess
of the Minimum Sales
Requirement in any contract year shall be neither carried over nor
credited toward the Minimum
Sales Requirement of a subsequent contract year.  For purposes
of this Agreement, the
first contract year shall be from the Effective Date until January
31, 2008 and each contract year thereafter shall be the 12 month period ending
each subsequent January 31. Notwithstanding the foregoing, there shall be no
Minimum Sales Requirement for the first contract year.

       

      

       

      ARTICLE 15 -
TERMINATION

       

      

      The Agreement may be terminated at
any time:

       

      

      
        	
                15.1

              	
                By
      either of the parties:

              

      

      

      
        	
                 
      

              	
                15.1.1

              	
                in
      the event that the other party fails to fulfil any of its obligations,
      upon sixty (60) days prior notice to the defaulting party if, before the
      end of such notice period, such failure has not been remedied, or the
      defaulting party has refused to remedy the said failure, if it can be
      remedied, or has failed or refused to pay reasonable compensation should
      it not be possible to remedy the failure and this without prejudice of any
      compensation or damages whatsoever;
or

              

      

      

      
        	
                 
      

              	
                15.1.2

              	
                This
      Agreement may be
      terminated at any time by either of the parties, immediately upon notice,
      in the event that the other shall be in violation of any substantial
      agreement with any material creditor, or (1) be dissolved; (2) apply for
      or consent to the appointment of a receiver, trustee or liquidator for its
      properties or assets; (3) admit in writing its inability to pay its debts
      as they are or become due; (4) make a general assignment for the benefit
      of creditors; (5) file a voluntary petition or be the subject of an
      involuntary petition in bankruptcy or an answer seeking re-organization in
      arrangement with creditors, or take advantage of any bankruptcy,
      reorganization, insolvency or re-adjustment of debt law or statute, or
      file an answer admitting the material allegations of a petition filed
      against it in any proceedings under such a law or statute, or take any
      action for the purposes of effecting any of the foregoing; or (6) have any
      order, judgment or decree entered against it without the application,
      approval or consent of the party concerned, by any court of competent
      jurisdiction approving a petition seeking reorganization of its properties
      or assets or the appointment of a receiver, trustee or liquidator for
      it.

              

      

      

      

      
        	
                15.2

              	
                By
      the Master
      Licensee

              

      

      

      
        	
                 
      

              	
                15.2.1

              	
                Within
      fifteen (15) days of the sending of a registered letter, with notification
      of receipt, without giving rise to any damages or compensation whatsoever,
      in the event of a change in control of the Distributor, except as
      expressly permitted under Article 18.2 hereof, or if an individual or
      company directly or indirectly in competition with the activities of the
      Licensor or the
      Master Licensee,
      including a licensee, a sub-licensee, a distributor, a sub-distributor, an
      agent or a customer of the Licensor or the Master Licensee should
      become a shareholder, even a minority shareholder of the Distributor. The Distributor then
      undertakes to inform of the occurrence of any of the events hereabove
      described within eight (8) days
thereof.

              

      

      

      
        	
                 
      

              	
                15.2.2

              	
                The
      Master Licensee
      nevertheless, shall be entitled to postpone its right to terminate this
      Agreement to
      assess the compatibility of such change with the Licensor and its own
      commercial conceptions and
interests.

              

      

      

      
        	
                 
      

              	
                15.2.3

              	
                If
      within three months following the receipt of the Distributor’s notice of
      the occurrence of such events, the Master Licensee has not
      implemented its right to terminate this Agreement, it shall
      continue in force until its normal expiry date subject to the execution of
      the other provisions contained in this Article 15.

              

      

      

      
        	
                 
      

              	
                15.2.4

              	
                Within thirty
      (30) days following formal notice in the event of the Distributor’s failure to
      settle the invoices from the Master Licensee within
      the period of time stipulated, without prejudice to any proceedings for
      forced collection which could be initiated by the Master Licensee and
      notwithstanding the provisions of Article 15.1.1

              

      

      

      
        	
                 
      

              	
                15.2.5

              	
                Immediately
      and without advance notice and without prejudice to damages, in the event
      that any Minimum Sales
      Requirement set forth in Article 14 above should not be
  reached.

              

      

      

      
        	
                 
      

              	
                15.2.6

              	
                Immediately
      and without notice in the event that the Distributor fails to
      fulfil its obligations with regard to the Lacoste Watches Selective
      Distribution System, notwithstanding Article 15.1.1
above.

              

      

      

      
        	
                 
      

              	
                15.2.7

              	
                Immediately
      and without notice in the event of expiry, termination or non-renewal of
      the Master
      Agreement and/or of the Supplemental Agreement.

              

      

      

      

       

      ARTICLE 16 - PROVISIONS AT THE EXPIRY
OF THIS AGREEMENT

       

      

      
        	
                16.1

              	
                Upon
      expiry or termination of this Agreement for whatever
      reason:

              

      

      

      
        	
                 
      

              	
                16.1.1

              	
                all
      rights and licenses granted to the Distributor pursuant to
      this Agreement
      shall terminate and revert to the Master Licensee;
      and

              

      

      

      
        	
                 
      

              	
                16.1.2

              	
                subject
      to the provisions of Article 16.1.6
      hereunder, the Distributor shall
      immediately cease to trade as a Lacoste distributor, shall cease to use
      the Know-how, the
      Licensed
      Trademarks, and the Models and shall not
      assist any third party to do so, and any outlet store owned by the Distributor shall
      terminate its sales and activities in connection with the Lacoste Watches
      within ninety (90) days of the date of termination or expiry;
      and

              

      

      

      
        	
                 
      

              	
                16.1.3

              	
                the
      Distributor shall
      immediately cease using all documents and items bearing or representing
      the Licensed
      Trademarks (catalogues, technical documents, etc.);
    and

              

      

      

      
        	
                 
      

              	
                16.1.4

              	
                the
      Distributor shall
      cancel at its own expense all government clearances it may have obtained
      with the appropriate governmental authorities;
  and

              

      

      

      
        	
                 
      

              	
                16.1.5

              	
                the
      Distributor shall
      deliver immediately, at its cost, to the Master Licensee or to
      any third party designated by the Master Licensee, all
      remaining advertising and promotional and display material, and in general
      all documents and items bearing or representing the Licensed Trademarks
      (catalogues, technical documents, etc);
and

              

      

      

      
        	
                 
      

              	
                16.1.6

              	
                the Master Licensee shall
      have the right, at its sole discretion,
to:

              

      

      

      
        	
                 
      

              	
                a)

              	
                repurchase
      or have any third party it may wish to appoint repurchase, all or part of
      the stock of Lacoste
      Watches which the Distributor may have on
      hand at the date of termination or expiry or non renewal at the price
      invoiced by the Master
      Licensee to the Distributor minus
      rebates taking into consideration their age, state and
      condition.

              

      

      

      
        	
                 
      

              	
                b)

              	
                If
      the Master
      Licensee does not exercise its purchase option as aforesaid, the
      Distributor shall
      be free to sell on a non exclusive basis the products remaining in
      inventory within the Territory during a
      period of six (6) months after the expiry or termination date hereof. This
      Agreement shall
      govern the said sales during said period. Such sales will be exclusively
      made to the Approved
      Watches Retailers or to Lacoste Boutiques and
      Lacoste Corners in
      quantities not exceeding those normally sold to said Approved Watches
      Retailers or to Lacoste Boutiques or
      Lacoste Corners
      during the previous year.

              

      

      

      In this
case the Distributor
shall strictly comply with all of its obligations hereunder during such six
month period, in particular those obligations relating to the compliance with
the image and reputation of the Lacoste Watches, the Lacoste Trademarks and the
Lacoste name. The Distributor shall refrain from
any action that could harm such image and reputation.

      

      In such
an event, the price invoiced to Approved Watches Retailers or
to Lacoste Boutiques and
Lacoste Corners during
such period shall not be more than fifteen percent (15%) lower than those in
force on the date of the sending of the letter advising the other party of the
termination or non-renewal of this Agreement.

      

      At the
end of such six-month period, the Distributor may only continue
to sell for an additional six (6) months period any remaining stock after having
removed all markings or references to the Licensed Trademarks or to the
name of the Licensor and
after having eliminated and destroyed all packaging and labels bearing the name
of the Licensor or the
Licensed
Trademarks.

      

      At the
end of this additional period the remaining stock shall have to be
destroyed.

      

      The
provisions of Article 16.1.6 shall not apply
to display materials which shall instead be governed by Article 16.1.5.

      

      
        	
                16.2

              	
                Furthermore
      it is hereby agreed that the termination, expiry or non-renewal shall
      automatically entail at the Licensor's sole
      option choice
      either:

              

      

      

      
        	
                 
      

              	
                16.2.1

              	
                the
      immediate termination of the commercial agreements which may have been
      entered into between the Distributor and the
      Approved Watches
      Retailers,

              

      

      

      
        	
                 
      

              	
                16.2.2

              	
                or
      the assignment of such commercial agreements to a new Lacoste distributor
      designated by the Master
      Licensee.

              

      

      

      The Master Licensee shall not be
liable to the Distributor for any claim said
Approved Watches
Retailers might raise against the Distributor due to such
termination and/or assignment.

      

      
        	
                16.3

              	
                The
      Distributor, given
      the specific conditions prevailing in the profession, shall not object in
      any way whatsoever, during the period of notice preceding the termination
      or non-renewal of this Agreement, to any visits
      to its clients and taking of orders for the following season that may be
      carried out by the new distributor for Lacoste Watches chosen
      by the Master
      Licensee.

              

      

      

      
        	
                16.4

              	
                The
      Distributor
      acknowledges and agrees that it is entering into this Agreement on the express
      understanding that its receipt from sales of Lacoste Watches under
      this Agreement are
      intended to be sufficient to compensate it fully for all risks, costs and
      expenses incurred in connection with this Agreement, including,
      i.e., all costs and expenses incurred by the Distributor for its
      sales, marketing, merchandising, advertising and promotion efforts with
      respect to the Lacoste
      Watches.

              

      

      

      
        	
                16.5

              	
                Accordingly,
      upon the end, the termination or the non-renewal in whole or in part of
      this Agreement and
      regardless of its duration, for whatever reason, the Distributor shall have
      no right to any further payment, indemnity or compensation for loss of
      goodwill or for any risks, costs or expenses incurred or developed by the
      Distributor during
      the term of this Agreement.

              

      

      

      

      ARTICLE 17 - FORCE
MAJEURE

       

      

      No party
shall be liable to the other for any delay in or failure to render any
performance when such delay or failure is caused by governmental regulations,
fire, strike, lockout, war, riot, flood, accident, epidemic, delays in
manufacture or transportation or any other cause, whether of like or different
nature, beyond the reasonably control of such a party, provided that the
foregoing shall not excuse or delay any party's payment obligations or affect a
party's right to terminate.

      

      In the
event that a cause beyond the reasonable control of the parties (including but
not limited to Acts of God, casualty, war whether formally declared or not,
civil disturbances, strikes, labour disputes, delays in transportation or
supplies, interruption of facilities or requirements of Governments or
agencies thereof, or any other reason of force majeure) should prevent the
performance of an obligation of this Agreement, such obligation
shall be suspended during the existence of said event.

      

      However,
should such event continue to exist for more than three months, both or either
of the parties may demand the termination of the Agreement which shall then
occur 15 days after the sending of a notice hereunder requesting the termination
without giving right to damages or compensation of any nature
whatsoever.

      

      

      

       

      ARTICLE 18 -
ASSIGNMENT

       

      

      
        	
                18.1

              	
                This
      Agreement shall be
      binding upon and inure to the benefit of the parties hereto and their
      respective successors and assigns.

              

      

      

      
        	
                18.2  

              	
                It is expressly
      understood and agreed that this Agreement
      or any
      interest therein shall not be in part or as a whole directly or indirectly
      sold, assigned, pledged or otherwise encumbered by the Distributor without the written
      consent of the Master
      Licensee and any such
      purported assignment, sale, pledge or encumbrance shall be void ab initio
      and of no effect. Notwithstanding the foregoing, the parties
      acknowledge that under the JV Agreement each of
      SWICO and MGI, as the only
      shareholders of Distributor, has the
      right under section 15.2 of the JV Agreement, to
      dissolve, or to purchase the other’s interest in, Distributor.
      Accordingly, if either SWICO or MGI (the “Non-breaching
      Party”) elects under the foregoing provision of the JV Agreement
      to  purchase the other party’s interest in, Distributor and (a)
      written notice from SWICO and MGI confirming such
      election has been provided to Master Licensee and
      Distributor and
      (b) the Non-breaching Party also notifies Master Licenseee that it
      wishes this Agreement to be assigned, then effective upon the date
      specified in such notice from the Non-breaching Party (or, absent the
      specification of any date, then as soon as reasonably practicable) Master Licensee shall
      assign all of Distributor’s right,
      title and interest in and under this Agreement to such Non-breaching Party
      or to any Affiliate of such Non-Breaching Party as specified in such
      notice. Distributor hereby grants Master Licensee a power
      of attorney for purposes of Master Licensee
      executing and delivering on behalf of Distributor any and all
      documents or other instruments necessary to effect such
      assignment.

              

      

      

      

      
        	
                18.3

              	
                The
      Distributor shall
      not delegate or sub-contract, whether in whole or in part, any of its
      duties arising out of or under this Agreement without the
      prior written consent of the Master Licensee which
      Master Licensee
      has the right to withhold in its sole and absolute
    discretion.

              

      

      

      

      ARTICLE 19 -
INSURANCE

       

      

      
        	
                19.1

              	
                The
      Distributor shall
      indemnify the Master
      Licensee and the Licensor and hold the
      Master Licensee
      and the Licensor
      harmless from any liability, loss or expense, including reasonable
      attorney's fees, with respect to the Distributor's breach of
      this Agreement or
      any claim asserted by any other person or entity against the Distributor, the Master Licensee, and/or
      the Licensor that
      arises out of the performance or non-performance by Distributor of its
      obligations under this Agreement.

              

      

      

      
        	
                19.2

              	
                The
      Distributor shall
      defend the Master
      Licensee and the Licensor against all
      claims, actions, suits or proceedings and shall indemnify and hold
      the Master
      Licensee and the
      Licensor harmless from any and all resulting losses, liabilities,
      costs (including any and all related legal fees and expenses incurred by
      the Master
      Licensee and the Licensor) and damages
      (including punitive damages) arising out of or in any way connected with
      its Lacoste
      Watches retail activity. Such indemnification shall include, but
      not be limited to, losses, liabilities, costs and/or
    damages

              

      

      

      

      ARTICLE 20 - CAPACITY OF THE
PARTIES

       

      

      
        	
                20.1

              	
                It
      is expressly agreed that, within the scope of this Agreement, the Distributor shall
      purchase and resell the merchandise for its own account and shall act as
      an independent trader both with respect to the Master Licensee and to
      the customers. Consequently, under no circumstances shall the Distributor make the
      Master Licensee
      liable vis a vis third parties and it shall take all the necessary steps
      to guarantee the Master
      Licensee against the financial consequences of any claims that
      could be made against the
      Master Licensee by such third parties as a result of commercial
      operations carried out by the Distributor.

              

      

      

      
        	
                20.2

              	
                Nothing
      in this Agreement
      shall be construed to render either party liable for any debts or
      obligations of the other party and the parties shall in no way be
      considered agents or representatives of each other. Neither party shall
      have the authority to act for or bind the
other.

              

      

      

      

      ARTICLE 21 -
CONFIDENTIALITY

       

      

      
        	
                21.1

              	
                the Master Licensee and the
      Distributor
      recognise that all information or proprietary information (including all
      Know-How) so far
      received or to be received in the future from the other, which is related,
      directly or indirectly, to the conduct of affairs governed by this Agreement (a) shall
      remain the exclusive property of the party from which it will have
      originated, (b) shall be kept and maintained as confidential, (c) shall
      not be used for any purpose outside the scope of this Agreement, (d) shall be
      disclosed only to those employees or agents as may be reasonably deemed
      necessary to carry out the purpose of this Agreement, and (e) shall
      not be disclosed to third parties without prior written approval of the
      other. Information which is in its entirety already in the public realm or
      was received from third parties who are not under any obligation to limit
      disclosure of such information or which is required to be disclosed by law
      or any regulation body shall not be governed by this Article 21.1.

              

      

      

      
        	
                21.2

              	
                However,
      the Master
      Licensee may disclose to its other distributors anywhere in the
      world any confidential or proprietary information it may have received
      from the Distributor, and use
      such information in connection with the agreements it has with such other
      distributors.

              

      

      

      
        	
                21.3

              	
                The
      Distributor
      undertakes to obtain from all third parties which it may hire such as
      advertising agencies, and market research firms, a commitment to keep
      strictly confidential any technical, commercial, financial or marketing
      information they may have obtained from the Distributor or from the
      Master Licensee,
      either in connection with the services to be performed by them or
      otherwise, and a commitment not to re-use the creations or studies
      commissioned by the Distributor for the
      benefit of third parties without the prior written approval of the Master
      Licensee.

              

      

      

      
        	
                21.4

              	
                The
      prohibitions contained in this Article 21
      shall permanently remain in full force and
  effect.

              

      

      

      

      ARTICLE 22 - LEGAL AND ETHICAL
REQUIREMENT

       

      

      
        	
                22.1

              	
                The
      Distributor shall
      at its own expense ensure that all local and national laws, rules,
      regulations and other requirements and codes of practice applicable in the
      Territory and all
      policies and ethical and other standards from time to time specified by
      the Master
      Licensee in respect of the treatment of any persons involved in the
      sale of any Lacoste
      Watches or otherwise in respect of any human rights or other issues
      are complied with in relation to all activities of the Distributor and/or its
      authorised Suppliers under this
      Agreement.

              

      

      

      
        	
                22.2

              	
                The
      Distributor shall
      observe at all times (a) all local and national laws, rules, regulations
      and other requirements and codes of conduct applicable in the Territory; (b) the
      relevant provisions of any applicable and enforceable treaty, law or
      regulation in relation to the protection of human rights and in particular
      childhood, salaries, duration and condition of workmanship, (c) the
      relevant provisions of any applicable and enforceable treaty, law or
      regulation in relation to the protection of the environment, and shall
      take all necessary measures to immediately bring to an end any violation
      of such provisions.”

              

      

      

      
        	
                22.3

              	
                The
      Distributor shall
      indemnify the Master
      Licensee and its assignees and successors for any claims, known or
      unknown, liabilities, demands, damages, cases of action, costs expenses,
      dues, covenants, suits, indemnities and judgements which any third party
      shall make.

              

      

      

      

      ARTICLE 23 - AMENDMENT AND
CANCELLATION OF THE AGREEMENT

       

      

      This
Agreement cannot be
amended or cancelled either orally or tacitly.

      

      No
amendment, change or modification of this Agreement shall be deemed as
valid, unless it is based on a written document mentioning the intention of the
parties to amend it, duly signed and empowered by an authorised representative
of each party.

      

      ARTICLE 24 -
MISCELLANEOUS

       

      

      
        	
                24.1

              	
                The
      Distributor shall,
      at its own expense, in the Territory and the Master Licensee shall,
      at its own expense, in Switzerland, execute any documents required to
      comply with the laws and requirements of the respective countries with
      respect to declaring, recording or otherwise rendering this Agreement
      effective.

              

      

      

      
        	
                24.2

              	
                Any
      notice served by one party upon the other shall be in writing in the
      English language and shall be delivered personally (including by courier)
      or be sent by facsimile. Such notice or document shall be deemed to have
      been received in the case of personal delivery when delivered or, if sent
      by facsimile, on the day following that on which the facsimile was sent,
      provided that the party serving such notice shall send a copy by
      registered airmail within two (2) days after sending the facsimile
      notice.

              

      

      

      Such
notice shall be addressed as follows (or at such other place designated in
writing by the relevant party);

      

       

      
        	
                 
      

              	
                24.2.1

              	
                If
      to the Master
      Licensee:

              

      

      Tel:                        (41)
(32) 329-3400

      Fax:                        (41)
(32) 329-3401

      Attn:
Lacoste Watches Brand Manager

       

      

      
        	
                 
      

              	
                Copy
      to:

              

      

      
        	
                 
      

              	
                Attn:
      Legal Department

              

      

      
        	
                 
      

              	
                Movado
      Group, Inc.

              

      

      
        	
                 
      

              	
                650
      From Road

              

      

      
        	
                 
      

              	
                Paramus,
      New Jersey 07652

              

      

      
        	
                 
      

              	
                USA

              

      

      
        	
                 
      

              	
                Tel:  (201)
      267-8105

              

      

      
        	
                 
      

              	
                Fax:  (201)
      267-8050

              

      

      

      

      
        	
                 
      

              	
                24.2.2

              	
                If
      to the Distributor

              

      

      MGS
Distribution Limited

      Tel:                        

      Fax:

      Attn:

       

      

      Any
change of address must be notified in writing to the other party.

      

      
        	
                24.3

              	
                No
      rights of either party arising out of this Agreement, or any
      provision hereof, shall be waived except in writing. Failure by either
      party to exercise or enforce, in any one or more instances, any of the
      terms or conditions of this Agreement shall not
      constitute or be deemed a waiver of that party’s right thereafter to
      enforce the terms and conditions of this Agreement.

              

      

      

      
        	
                24.4

              	
                This
      Agreement and the
      Schedules hereto constitute the entire understanding of the parties with
      respect to the subject matter hereof, and the rights, obligations, and
      interests of any party as they may pertain herein may not otherwise be
      changed, modified or amended except by the written Agreement of the party
      to be charged.

              

      

      

      
        	
                24.5

              	
                If
      at any time any party hereto shall deem or be advised that any further
      assignments, licenses, assurances in law or other acts or instruments,
      including lawful oaths, are necessary or desirable to vest in it the
      rights provided for herein, the parties hereto agree to do all acts and
      execute all documents as may reasonably be necessary or proper for that
      purpose or otherwise to carry out the intent of this Agreement.

              

      

      

      
        	
                24.6

              	
                The
      rights and obligations of the parties hereto under this Agreement shall be
      subject to all applicable laws, orders, regulations, directions,
      restrictions and limitations of competent authorities having jurisdiction
      on the parties hereto.

              

      

      

      
        	
                24.7

              	
                In
      the event, however, that any such law, order, regulation, direction,
      restriction or limitation, or construction thereof, shall substantially
      alter the relationship between the parties under this Agreement or the
      advantages derived from such relationship, or shall prevent the
      performance of any provision of this Agreement, either party
      may request the other party hereto to modify this Agreement, and if within
      ninety (90) days subsequent to the making of such request, the parties
      hereto are unable to agree upon a mutually satisfactory modification
      hereof, such party may terminate this Agreement by giving
      thirty (30) days notice not later than thirty (30) days following the end
      of such ninety (90) days period.

              

      

      

      
        	
                24.8

              	
                Notwithstanding,
      anything contained herein to the contrary no third party other than a
      party hereto and the Licensor is intended to
      or shall have any legal or equitable right remedy or claim under this
      Agreement or any
      part thereof, as against any party to this Agreement, it being
      understood that the provisions of this Agreement are for the
      sole benefit of the parties hereto and Licensor and no other
      party shall be or be deemed a third party beneficiary of this Agreement (the foregoing
      is without prejudice to the rights of any nominee of the Master Licensee in
      respect of orders placed on it by the Distributor in
      accordance with the terms hereof).

              

      

      

      
        	
                24.9

              	
                This
      Agreement may be
      executed in one or more counterparts, each of which shall be deemed to be
      an original, but all of which together shall constitute one and the same
      instrument.

              

      

      

      
        	
                24.10

              	
                Paragraphs
      headings of this Agreement are for
      convenience only and shall not be construed as a part of this Agreement or as a
      limitation on the scope of any terms or provisions of this Agreement.

              

      

      

      
        	
                 
      

              	
                24.11When
      interpreting the terms and conditions of this Agreement, the English
      language shall be applied
exclusively.

              

      

      

      

      ARTICLE 25 - GOVERNING LAW –
JURISDICTION

       

      

      
        	
                25.1

              	
                This
      Agreement is
      governed and construed in accordance with Swiss Law without reference to
      its conflict of law principles. The Vienna Convention on the
      International Sales of Goods of April 11, 1980 shall not apply to this
      Agreement.

              

      

      

      
        	
                25.2

              	
                All
      disputes arising out or in connection with this Agreement which cannot
      be amicably settled by consultation, shall be finally settled by
      arbitration in Geneva, Switzerland under the rules of the International
      Chamber of Commerce by one arbitrator appointed in accordance with said
      rules. Each party hereto shall be bound by any arbitration award so
      rendered and any judgment upon such award may be entered as a
      non-appealable, final foreign judgment in any court having jurisdiction
      thereon.

              

      

      

      The
proceedings and shall be carried out in the English language.

      

       

      IN
WITNESS WHEREOF, the parties hereto have caused this Distribution Agreement to be
executed by their duly authorised officers as of the Effective
Date.

      

      

      

      
        	
                MGI
      LUXURY GROUP S.A.

              	
                MGS
      DISTRIBUTION LIMITED

              

      

      

      

      

      _______________________                                                                                                ___________________________

      Name:                                                                           Name:

      Title                                                                           Title:

      

      

       

      

       

      S/agreement/distrib/Lacoste_STANDARD(011207).doc

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      SCHEDULE I

      

      

      

      

      The
Crocodile

      

      

      [Missing Graphic Reference]

      

      

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

       

      
        	
                20.  

              	
                SCHEDULE
      II

              

      

       

       

      
        	
                21.  

              	 

      

       

       

      
        	
                22.  

              	 

      

       

      

      

       

      
        	
                23.  

              	
                THE
      LICENSED TRADEMARKS

              

      

       

      

      

      

      

      

      [Missing Graphic Reference]

      

      

      

      

      

      

      

      

      

      

      

      

      

      [Missing Graphic Reference]

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      SCHEDULE III

      

      

      

      

      The
Lacoste
Trademarks

      

      

      [Missing Graphic Reference]

      

      

      

      [Missing Graphic Reference]

      

      

      [Missing Graphic Reference]

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      SCHEDULE IV

       

      

       

      

       

      

       

      The
Lacoste Watches

       

      

       

      Watches
for men, women, children

      

      Time-keeping
devices

      

      Cases for
watches and time-keeping devices

      

      Bracelets,
straps and components for watches

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      SCHEDULE V

      

      

      

      

      Points-of-sale

      

      V.a - Approved Watches
Retailers

      Specialized
Watch Shops

      Specialized
Watch Corners of Department Stores

      Sport
Shops

      Sport
Corners of Department Stores

      Duty-free
Shops

      Other
retailers fulfilling the requirements of the Lacoste Watches Selective
Distribution System

      

      V.b - Members of the "Lacoste Boutiques and
Lacoste

      Corners"
Selective Distribution System

      

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Schedule VI

      

      

      

      Rules
for the calculation of the Presentation surfaces

      

      METHODOLOGY

      

      The Presentation surface
represents, within the Sales
surface, the total surface effectively used for the presentation and the
sale of products on the furniture (fixed to the walls or free-standing) or
displays, excluding the cash counter, the shop windows, the fitting rooms, the
areas used for customers traffic, the security issues.

      

      The Presentation surface is
calculated by adding the surfaces of each part of the furniture (as an example:
surface of a shelf of a piece of furniture fixed to the walls, free-standing
furniture in whole or in part, etc.) divided by the set number of elements
("ratio") that can be placed atop of one another allowing the presentation or
the sale of the Lacoste products within the Lacoste Boutique or the Lacoste Corner.

      

      The
attached schedules list the main pieces of furniture, according to the different
generations of the Lacoste furniture (1999, 2000 and 2002), including the
furniture specific to the Other
Lacoste Products and the Lacoste Watches. This schedule
gives the values in sq. m. of each piece of furniture and therefore allows the
calculation of the total Presentation
surface.

      

      Any new
piece of furniture, or any new generation of furniture, shall be included in a
supplementary schedule established under the same principles.

      

      Therefore,
in a Lacoste Boutique or
in a Lacoste Corner, a
simple counting of the elements according to this schedule shall allow all
interested persons to calculate:

      
        	
                -  

              	
                the
      total Presentation
      surface

              

      

      
        	
                -  

              	
                the
      Presentation
      surface of the Lacoste Apparel
      Products

              

      

      
        	
                -  

              	
                the
      Presentation
      surface of the Lacoste Watches and of
      the Other Lacoste
      Products

              

      

      
        	
                -  

              	
                the
      percentage of the Presentation surface of
      the Lacoste
      Watches and of the Other Lacoste Products /
      the total Presentation surface.

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      [Missing Graphic Reference]

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        [Missing Graphic Reference]

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Schedule VII

       

      

       

      

       

      Lacoste
Watches General Conditions of Distribution

      

      I/ The Lacoste Group (designating jointly
Lacoste S.A., Sporloisirs S.A., Lacoste Alligator S.A.),
wants to: (i) preserve the image of Lacoste trademarks worldwide, the models and
Lacoste products sold under Lacoste trademarks (hereinafter referred to as the
"Lacoste Trademarks");
(ii) prevent counterfeiting of the Lacoste Trademarks in the
interest of consumers; and (iii)offer to its consumers an adequate setting and
good quality service for Lacoste watches (hereinafter referred to as the "Lacoste Watches") (together
with all other goods sold under the Lacoste Trademarks,
hereinafter to as "Lacoste
Products"). For these reasons, the Lacoste Group has decided that Lacoste Watches, as with the
Lacoste products, shall
be sold worldwide through a selective distribution system. The Lacoste Group has
also appointed MGI Luxury Group S.A. as its exclusive worldwide licensee
for the creation, development, manufacture, distribution, marketing,
merchandising, advertising, promotion and sale of Lacoste Watches (hereinafter
referred to as the "Licensee"). The Lacoste Group
and Licensee require
that Lacoste Watches be
distributed only through selected retailers. In order to become an approved
Lacoste Watches retailer (hereinafter referred to as the "Approved Retailer") within the
Lacoste selective distribution network set up for the Lacoste Watches, a retailer
shall meet the standards of performance as detailed below for Lacoste watches
selection criteria (hereinafter referred to as the "Selection
Criteria").

      

      The trade
name of the point of sale or of the department store, or of the space in which
the point of sale or the watches department or the point of sale is located,
must always reflect the prestige of the Lacoste brand. Consequently, the shop
sign must be compatible with the principles which govern the distribution of the
Lacoste Watches, which
are luxury and high quality products. Thus, the Lacoste brand shall not be sold
by retail outlets under trade names whose image is associated with an absence of
or limited customer service, prestige or sophisticated in-store design. No
signage at the point of sale may include terms or logos which reasonably might
depreciate the image of the Lacoste brand or the Lacoste Watches.

      

      
        	
                a)  

              	
                The
      location and environment of the point of sale (type and category of the
      building, location in the town in question, type of shops in the
      neighbourhood) shall remain at all times compatible with Lacoste brand
      image. The sale area shall be sufficient to permit the presentation of the
      Lacoste Watches in
      a sufficient shopping space without disproportion with the other brands
      offered for sale and allowing to distinguish them. The frontage shall be
      made of materials of good quality, well maintained and
      attractive.

              

      

      

      
        	
                b)  

              	
                The
      shop sign shall be well maintained and attractive. The window dressing
      shall be of good quality and sophisticated. The lighting shall be
      sufficient and sophisticated.

              

      

      

      
        	
                c)  

              	
                The
      type, brand and nature of the products sold in the outlet shall be
      compatible with Lacoste brand
image.

              

      

      

      
        	
                d)  

              	
                The
      sale personnel shall be well
qualified.

              

      

      

      
        	
                e)  

              	
                The
      financial capabilities and solvency guarantees shall be
    good.

              

      

      

      

      
        	
                 
      

              	
                II/
      Application procedure to open an
account

              

      

       

      

      
        	
                a)  

              	
                Any application
      (hereinafter referred to as the "Application") to open an
      account to become an approved retailer for the sale of Lacoste
      Watches  shall be made in writing to the authorized
      wholesale distributor of Lacoste Watches in the
      country where the prospective point of sale is located (hereinafter
      referred to as the "Distributor"). The Distributor shall
      promptly send the completed Application to Licensee.

              

      

      

      
        	
                b)  

              	
                Within
      a maximum delay of four months as from the receipt of the Application, the Licensee shall evaluate
      the point of sale in order to determine if the point of sale, subject to
      the Application,
      and its sales personnel satisfy the Selection
      Criteria.

              

      

      

      
        	
                c)  

              	
                Following
      this evaluation :

              

      

      

      
        	
                (i)  

              	
                if
      the point of sale and staff do not satisfy the Selection Criteria, the
      Licensee shall
      notify the Distributor
      which shall so inform the applicant in writing and shall list in
      writing the elements which do not satisfy the Selection Criteria.
      Consequently, the Distributor shall turn
      down the Application;

              

      

      

      
        	
                (ii)  

              	
                if
      the point of sale and staff satisfy the Selection Criteria, the
      Licensee shall
      notify the Distributor
      which shall so inform the applicant in writing and provide the
      applicant (which shall then be deemed an Approved Retailer) with
      a Lacoste Watches Approved Retailer
contract.

              

      

      

      

      
        	
                 
      

              	
                III/
      Satisfaction of Selection Criteria

              

      

       

      

      The Distributor shall check,
through an evaluation, that the Approved Retailer and its
sales personnel continue to satisfy the Selection Criteria. If as a
result of such evaluation the Approved Retailer and its sale
personnel continue to satisfy the Selection Criteria, the Distributor shall inform the
Approved Retailer and
Licensee in
writing.

      

      If as a
result of such evaluation, the Approved Retailer or its sales
personnel no longer appear to satisfy the Selection Criteria, the Distributor shall notify Licensee in writing which
shall review such evaluation and, after consultation with Distributor, determine whether
the Approved Retailer
continues to satisfy the Selection Criteria. If, after
such review, Licensee
determines that the Approved
Retailer no longer satisfies the Selection Criteria, it shall
so notify Distributor
which:

      

      
        	
                -  

              	
                shall
      inform the Approved
      Retailer in writing and shall list the elements which do not
      satisfy the Selection
      Criteria;

              

      

      
        	
                -  

              	
                shall
      also ask the Approved
      Retailer to take the appropriate measures so that the Selection Criteria be
      satisfied, within a delay of six (6) months as from the date of receipt of
      the above mentioned letter.

              

      

      

      At the
end of the of six month delay, a new evaluation shall be carried out by the
Distributor and
forwarded to Licensee
for review, and after this new evaluation and review:

      

      
        	
                (i)  

              	
                either
      Licensee shall
      determine that the Selection Criteria are
      satisfied and so inform the Distributor which shall inform the
      Approved Retailer
      in writing accordingly;

              

      

      

      
        	
                (ii)  

              	
                or
      Licensee shall
      determine that the Selection Criteria are
      still not satisfied and so inform the Distributor which shall inform the
      Approved Retailer
      in writing and shall list the elements which still do not satisfy the
      Selection
      Criteria. In such a case the Distributor shall, upon
      instruction from Licensee, terminate the
      Lacoste watches approved retailer contract signed with the Approved Retailer
      (hereinafter referred to as the "Contract") within the
      conditions set out in article 6.1.1 of the Lacoste watches approved
      retailer contract. Nevertheless, if the Approved Retailer has
      started repairs or demonstrates that it decided to do so, the Distributor may then
      grant another delay of six (6) months. At the end of this delay, a new
      evaluation shall be carried out within the same conditions as the one
      described above in (i) and in the first two sentences of
    (ii).

              

      

      

      

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Schedule VIII

       

      

       

      

       

      

       

      

       

      Distributor Discount
Schedule

       

      

      

      Distributor
pricing shall be * of Supplier’s recommended Euro retail price (inclusive of
VAT); provided, however, that if this Agreement is assigned as provided under
Article 18.2, then the pricing to the assignee shall be based on the same
discount off of Supplier’s recommended Euro retail price as generally offered by
Supplier to its other independent distributors of the Products in the European
Union.

      

       

      

      *CONFIDENTIAL
PORTION OF THIS EXHIBIT OMITTED AND FILED SEPARATELY WITH THE SEC PURSUANT TO
RULE 24b-2 OF THE 1934 ACT

      
        
           

        

        
           

          
            

          

        

        
           

          
            -  -

          

        

      

      SCHEDULE IX

      

      

      

      

      Lacoste
Watches Approved Retailer Contract

      

      Between:

      

      (name of the company) having
its registered office at _______________________,
duly represented by Mr ______________________,
which is the exclusive distributor of Lacoste Watches (hereinafter referred to
as the "Lacoste
Watches") in (country concerned) (hereinafter referred to as the "Territory"),

      

      hereinafter
referred to as the "Distributor",

      

      And:

      

      (name of the company) having
its registered office at _______________________,
duly represented by Mr ______________________,
which runs a point of sale situated at (full address) under the trade name _______________________
(hereinafter referred to as "the Point of Sale"),

      

      hereinafter
referred to as the "Approved
Retailer".

      

      

      WITNESSETH:

      

      WHEREAS,
MGI Luxury Group SA (hereinafter referred to as the "Licensee") is the exclusive
worldwide licensee of the Lacoste Group for the Lacoste Watches and Licensee has appointed Distributor as the exclusive
distributor of the Lacoste
Watches in the Territory under the terms of a
distributorship agreement between Licensee and Distributor (hereinafter
referred to as the "Distribution
Agreement").

      

      WHEREAS,
for the reasons stated in the general conditions of distribution of the Distributor (hereinafter
referred to as the "General
Conditions of Distribution") annexed to the present contract (Schedule
.....) the Lacoste
Watches are distributed through a selective distribution system, that is
the Lacoste Watches are
distributed at the points of sale which satisfy the selection criteria
(hereinafter referred to as the "Selection Criteria") defined
by the companies Lacoste S.A., Lacoste Alligator S.A. and
Sporloisirs S.A. (hereinafter collectively referred to as the "Lacoste Group"), which are
detailed in the General
Conditions of Distribution.

       

      

      WHEREAS,
the Distributor has
visited and evaluated the Point
of Sale.

      

      WHEREAS,
further to such evaluation it appears that the Point of Sale and the sales
staff employed by the Approved Retailer at the Point of Sale satisfy the Selection
Criteria.

      

      WHEREAS,
consequently, the Distributor may enter into
this contract with the Approved
Retailer for the distribution of the Lacoste Watches at the
aforementioned Point of
Sale.

      

      

      THE
PARTIES HEREBY AGREE AS FOLLOWS:

      

      ARTICLE 1 - RIGHTS
GRANTED

      

      The Distributor hereby grants, and
the Approved Retailer
hereby accepts for the duration of the present contract (hereinafter referred to
as the "Contract"), the
non exclusive right to sell the Lacoste Watches at the Point of Sale in accordance
with the terms and conditions set forth herein.

      

      The Contract, its Annexes and the
General Conditions of
Distribution in force determine the rights and obligations of the two
parties.

      

      

      ARTICLE 2 - MATERIAL
CONDITIONS OF CONTRACT

      

      The
execution and existence of the Contract are subject to the
Distributor certifying
that the Point of Sale
of the Approved Retailer
and the sales staff of the Point of Sale satisfy the
Selection Criteria.

       

      

      

      ARTICLE 3 – OBLIGATIONS OF
THE APPROVED RETAILER

      

      
        	
                 
      

              	
                3.1The
      Approved Retailer
      undertakes, for the duration of the Contract, that the Point of Sale and the
      sales staff of the Point
      of Sale satisfy the Selection
      Criteria.

              

      

      

      
        	
                 
      

              	
                3.2Fittings
      and Management of the Point of
      Sale

              

      

      

      
        	
                 
      

              	
                3.2.1The
      sales area of the Point
      of Sale shall always permit the presentation of the Lacoste Watches in a
      sufficient area. 

              

      

      

      The Approved Retailer shall
display the Lacoste
Watches separately from other brands sold at the Point of Sale. The counters,
posters and other POS material, which shall be supplied to it by the Distributor, shall be well
positioned. 

      

      The Approved Retailer shall affix
prominently on the window of the Point of Sale or display
inside the Point of
Sale, a sign or sticker which shall be furnished by the Distributor confirming its
quality as Approved
Retailer for Lacoste
Watches. 

      

      
        	
                 
      

              	
                3.2.2All
      items bearing any trademark owned by the Lacoste Group (“Lacoste Trademarks”)
      used by the Approved
      Retailer on its shop front (such as awning, sign, etc...) in the shop
      window or inside the Point of Sale shall be
      exclusively those supplied by the Distributor or
      exceptionally those which have received the prior and express written
      approval of the Distributor.

              

      

      

       

      
        	
                 
      

              	
                3.3Supplies

              

      

      

      The Approved Retailer shall
purchase the Lacoste
Watches from the
Distributor in
accordance with the terms and conditions contained herein and in the General Conditions of
Distribution. Nevertheless, within the European Economic Area (i.e.
European Union + Iceland, Liechtenstein, and Norway) the Approved Retailer is also
entitled to buy the Lacoste
Watches from and sell the Lacoste Watches to (i) any
authorized exclusive distributor appointed by and under contract with Licensee
for the distribution of the Lacoste Watches and (ii) any other
approved retailer approved by and under contract with Licensee or a Lacoste watch distributor for the retail sale of
the Lacoste Watches located in any of the
countries which are part of the European Economic Area, except to or from
Lacoste boutiques ("Lacoste
Boutiques") and Lacoste corners ("Lacoste Corners") which are
principally devoted to the sale of Lacoste apparel products and only on a
subordinate basis other Lacoste products including Lacoste Watches. Because of
their strong specificity, the Lacoste Boutiques and the
Lacoste Corners
constitute a selective distribution system which is distinct from the selective
distribution system organised for the Lacoste Watches. The Approved Retailer shall ensure
before any resale that the buyer is an approved retailer of Lacoste Watches. The Approved Retailer shall keep
for a minimum period of twelve (12) months as from the date of purchase and/or
sale of the Lacoste
Watches, a copy of the invoices corresponding to these purchases and
sales permitted under this Article 3.3. The Distributor shall be entitled
to inspect and copy these invoices if it reasonably determines that the Approved Retailer may have
purchased or sold Lacoste
Watches outside the selective distribution system set up for the Lacoste Watches within the
European Economic Area.

      

      
        	
                 
      

              	
                3.4Sales

              

      

      

      
        	
                 
      

              	
                3.4.1The
      price at which the Lacoste Watches will be
      sold by the Distributor to the Approved Retailer and
      other sales conditions applicable to the Lacoste Watches will be the one
      applicable in the Territory at the date
      the order is received. 

              

      

      

      
        	
                 
      

              	
                3.4.2The
      Approved Retailer
      shall continuously offer for sale an appropriate assortment of the Lacoste
      Watches.

              

      

      

      
        	
                 
      

              	
                3.4.3In
      addition, the Approved
      Retailer shall ensure that the Lacoste Watches are only
      sold in their original presentation and shall respect the recommendations
      made by the Distributor concerning
      the merchandising of the Lacoste
      Watches.

              

      

      

      
        	
                 
      

              	
                3.4.4The
      Approved Retailer
      shall not sell at its Point of Sale other
      products in immediate proximity to the Lacoste Watches likely
      to damage or devalue the image of the Lacoste Trademarks
      and/or the Lacoste
      Watches.

              

      

      

      
        	
                 
      

              	
                3.4.5Subject
      to Article 3.3, the Approved Retailer
      undertakes not to sell the Lacoste Watches other
      than at the Point of
      Sale at the address stated at the very beginning of this Contract exclusively to
      the ultimate consumer. 

              

      

      

      
        	
                 
      

              	
                3.4.6The
      Approved Retailer
      shall not sell Lacoste
      Watches by mail order or by internet, unless the Approved Retailer has
      received a prior written authorisation from the Distributor confirming
      that the selection objective criteria set up for these kind of sale are
      satisfied.

              

      

      

      
        	
                 
      

              	
                3.4.7The
      Approved Retailer
      shall be free to fix its resale prices according to the laws and
      regulations in force. The breakdown of the recommended prices that may be
      communicated to the Approved Retailer by the
      Distributor are
      only indicative.

              

      

      

      
        	
                 
      

              	
                3.5Advertising
      and promotional activities of the Approved
      Retailer

              

      

      

      Should
the Approved Retailer
wish to carry out advertising and promotional activities of any sort itself, it
shall obtain the prior written approval of the Distributor on the content and
means of such activities with the exception of price.

      

      In any
event, the Approved
Retailer shall in such advertising and promotional
activities:

      
        	
                -  

              	
                use
      exclusively the visual designs, lettering, emblems and logos approved by
      the Distributor;

              

      

      
        	
                -  

              	
                ensure
      that the standing and image of the Lacoste trademarks but also personal
      reputation of Mr. René Lacoste and his family are
    protected.

              

      

      

      

      ARTICLE 4 - PROTECTION OF
LACOSTE INTELLECTUAL PROPERTY RIGHTS

      

      The Approved Retailer acknowledges
that the Lacoste
Trademarks and models of the Lacoste Watches are the
exclusive property of the Lacoste Group and undertakes
to strictly respect the intellectual property rights of the latter.

      

      Consequently,
it expressly undertakes not to use the Lacoste Trademarks other than
solely for purposes of performing its obligations under this Contract. Under no
circumstances shall the Approved Retailer use the
Lacoste trademarks as a business name, company name, shop sign or any other use
or print them on the commercial documents of its business.

      

      In
addition, the Approved
Retailer undertakes to immediately notify the Distributor of any act by a
third party of which it may have knowledge and which is likely to constitute a
counterfeit or an imitation of the Lacoste trademarks or models of the Lacoste Watches.

      

      

      ARTICLE 5 -
DURATION

      

      The Contract shall came into force
on ________________ and
shall end on (one year after)_______________ ,
unless sooner terminated in accordance with the conditions set out in the
present Contract or by
mutual consent of parties. It shall be automatically renewed for successive
renewal periods of one (1) year each unless either party notifies the other at
the latest three (3) months before the expiration of the initial period or of
any subsequent renewal period(s).

      

      

      

      

      ARTICLE 6 -
TERMINATION

      

      
        	
                 
      

              	
                6.1Without
      prejudice of what is elsewhere provided in the Contract, the Distributor shall be
      entitled to terminate the Contract at any time
      without having to pay indemnity of any nature to the Approved
      Retailer:

              

      

      

      
        	
                 
      

              	
                6.1.1If
      the Point of Sale
      no longer satisfies the Selection Criteria, in
      which event the Contract shall end six
      (6) months after notice thereof by the Distributor to the Approved
      Retailer.

              

      

      

      
        	
                 
      

              	
                6.1.2In
      the event that the Approved Retailer fails
      to comply with any of its other obligations thirty (30) days after notice
      thereof by Distributor and no remedy of the breach having been effected.
      This delay of thirty (30) days is reduced to fifteen (15) in case of
      payment default.

              

      

      

      
        	
                 
      

              	
                6.1.3Without
      notice, in case of termination or non-renewal of (a) the master licence
      agreement between Licensee and Lacoste Group, or (b) of
      the Distribution
      Agreement, regardless of
cause.

              

      

      

      
        	
                 
      

              	
                6.1.4Without
      having to give prior notice should (a) the legal form of the Approved Retailer be
      modified, (b) the business or part of the business be sold, (c) the
      business be leaded, hired, purchased, contributed to another business or
      Approved Retailer,
      pledged or subject to a management contract, (d) the Approved Retailer be
      dissolved, (e) the business be discontinued or the Point of Sale of the
      Approved Retailer
      be closed during a period greater than two (2) months;
  or

              

      

      

      
        	
                 
      

              	
                6.1.5Without
      prior notice, in the event of the Approved Retailer’s
      voluntary or compulsory liquidation, bankruptcy, legal settlement or
      placement of a receiving order or in any equivalent
    situation.

              

      

      

      The Approved Retailer shall inform
the Distributor if one
of the events covered by Articles 6.1.4 and 6.1.5 occur as soon as the event
occurs, the Distributor
being the sole party to decide on its continuance of the Contract.

      

      
        	
                 
      

              	
                6.1.6Notwithstanding
      anything to the contrary contained herein, with full and immediate
      effect:

              

      

      
        	
                -  

              	
                in
      the event the Approved
      Retailer fails to comply with Articles 3.2.2 or 3.4.5 of the Contract;
    

              

      

      
        	
                -  

              	
                within
      the European economic Area (i.e. European Union + Iceland, Liechtenstein,
      and Norway), if the Approved Retailer either
      purchases or resells Lacoste Watches outside
      from the selective distribution set up for Lacoste
      Watches;

              

      

      
        	
                -  

              	
                if
      the Approved
      Retailer is involved in the manufacturing and/or sale of
      counterfeits.

              

      

      

      
        	
                 
      

              	
                6.2In
      the case of termination or non-renewal, for whatever reason, of the Distribution Agreement
      this Contract
      shall likewise terminate within the same time limits, and the Approved Retailer shall
      be informed within a reasonable period. The Lacoste Group may
      nevertheless decide at its sole option to assign the Contract to the new
      Lacoste exclusive distributor in charge of the distribution of Lacoste Watches in the
      Territory.

              

      

      

      

      ARTICLE 7 - SITUATION OF THE
PARTIES IN THE EVENT OF TERMINATION OR NON-RENEWAL OF THE CONTRACT

      

      In the
event of non-renewal or termination of this Contract, the Distributor shall have the
right, at its own discretion:

      

      
        	
                -  

              	
                to
      repurchase or to have a third party it may appoint repurchase immediately,
      all or part of the stock of Lacoste Watches of the
      Approved Retailer
      at the price paid by the Approved Retailer after
      deduction of depreciation of the Lacoste Watches,
      and/or,

              

      

      
        	
                -  

              	
                to
      grant the Approved
      Retailer a period of up to three (3) months to sell such stock. At
      the end of the said period of three months the Approved Retailer shall
      not be entitled to resell the stock, except with the approval of the Distributor.

              

      

      

      The Approved Retailer shall return
to the Distributor all
elements bearing the Lacoste trademarks, if need be, furniture and the sticker
"Approved Lacoste Watches Retailer" including, without limitation, all POS
material. Nevertheless, it may retain the furniture provided that all references
to Lacoste and to Lacoste trademarks are removed.

      

      In
addition, the termination or the non-renewal of the Contract shall entail the
immediate cancellation of all pending orders.

      

      It is
expressly agreed between the parties that under no circumstances whatsoever will
the end, termination or non-renewal of the Contract provide the Approved Retailer with the
benefit of any right of indemnity of whatever nature, regardless of the cause of
or reason for the end, non-renewal or termination, the revenue that the Approved Retailer derived from
the sales of the Lacoste
Watches during the application of the Contract having fully defrayed
all risks, costs and expenses incurred by the Approved Retailer during its
performance throughout the duration of the Contract.

      

      ARTICLE 8 -
LIABILITY

      

      Approved Retailer shall, at
its own cost and expense, keep and maintain in full force and effect for the
duration of this Contract, a policy of
commercial general liability insurance insuring Approved Retailer’s activities
with respect to the Point of
Sale against loss, damage or liability for personal injury or death or
loss or damage to property with limits not less than those customarily
maintained by similar retail operations in the Territory. Approved Retailer shall inform
Distributor of the terms
of said insurance upon request from time to time. Approved Retailer hereby
releases Distributor,
Licensee, the Lacoste Group and each of
their respective affiliates from liability, and waives all right of recovery
against each of them, for any injury, loss or damage, whether due to negligence
or any other cause, if such injury, loss or damage is caused by any of the
perils which are covered by the foregoing insurance policy or are required to be
covered by such insurance pursuant to this Contract.

      ARTICLE 9 - APPLICABLE LAW /
JURISDICTION

      

      The Contract is governed by the
law of the Territory.

      

      The Court
of (to be completed) shall have the exclusive jurisdiction on any litigation
resulting from the interpretation or execution of this Contract.

      

      

      ARTICLE 10 –
NOTICES

      

      Any
notices required in accordance with any of the provisions hereof shall be in
writing and delivered or mailed by registered mail, or by an internationally
recognized overnight courier service (e.g., Federal Express), to the address of
the parties set forth on the first page hereof.

      

      

      ARTICLE 11 – GENERAL TERMS
AND CONDITIONS

      

      
        	
                 
      

              	
                11.1Neither
      party hereto shall be liable for any delay or failure in fulfilling the
      obligations hereunder (except for the payment of money) when such delay or
      failure is caused by riots, war (declared or not), or hostilities between
      any nations; acts of God, fire, storm, flood or earthquake; strikes, labor
      disputes, shortage or delay of carriers, or shortage of raw materials,
      labor power or other utility services; any governmental restrictions; or
      any other unforeseeable contingencies beyond the control of the
      party.

              

      

      

      
        	
                 
      

              	
                11.2In
      view of the fact that this Contract has been
      entered into because of the confidence that Distributor has in Approved Retailer, it is
      understood that the terms and conditions hereof shall be performed by
      Approved Retailer
      from the Point of
      Sale only and that this Agreement may not be assigned, whether by
      operation of law or otherwise, without the prior written approval of Distributor which Distributor may withhold
      or grant in its sole and absolute discretion and any such purported
      assignment by Approved
      Retailer without such approval by Distributor shall be
      void and of no effect. 

              

      

      

      
        	
                 
      

              	
                11.3When
      interpreting the terms and conditions of this Contract, the English
      language shall be applied
exclusively.

              

      

      

      
        	
                 
      

              	
                11.4This
      Contract,
      including the terms and conditions incorporated by reference, constitutes
      the entire agreement of the parties with respect to the subject matter
      hereof and prevails over and supersedes all prior agreements, whether
      written or oral, relating to the subject matter hereof and may not be
      altered, waived, modified, or discharged except by an express writing
      referring to this Contract signed on
      behalf of the parties hereto by their duly authorized
      representatives.

              

      

      

      
        	
                 
      

              	
                11.5The
      failure of either party hereto to enforce at any time any of the
      provisions or terms of this Contract, or any rights
      in respect thereof, or the exercise of or failure to exercise by either
      party any rights or any of its elections herein provided, shall in no way
      be considered to be a waiver of such provisions, terms, rights or
      elections or in any way to affect the validity of this Contract.

              

      

      

      
        	
                 
      

              	
                11.6Should
      any provision of this Contract held invalid,
      incomplete or unenforceable, this will not affect the validity of the
      remaining provisions. The parties shall replace the invalid incomplete or
      unenforceable provision by provision which comes closest to the commercial
      goal that the parties intended to achieve on the conclusion of this
      agreement by the invalid, uncompleted and unenforceable provision.
      Notwithstanding anything to the contrary contained herein, in the event of
      any conflict or inconsistency between any term or provision of this Contract and the Distribution Agreement,
      the latter shall control.

              

      

      

      

      Executed
in two original copies at _________________ on
_________________

      

      

      

      DISTRIBUTORAPPROVED
RETAILER

      

      

      

      ______________________                                                                                                ______________________

      Name:                                                                                                Name:

      Title:                                                                           Title:

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      SCHEDULE
X

      

      

      

      

      Promotion
and advertising

      

      X.a - Promotion

      

      Gift of
products to and financial agreements with champions

      

      Event
sponsorship

      

      X.b - Advertising

      

      Press

      

      Television

      

      Cinema

      

      Billboards

      

      Miscellaneous
(internet, radio, direct marketing, cooperative advertising, etc.)

      

      Rights
purchases and agency fees

      

      Advertising
material (PLV, catalogues, etc.)

      

      X.c - Press & public
relations

      

      Gift of
products to VIP's

      

      Press
relations

      

      Public
relations

      

      Product
placement

      

       

      
        
          
            012200-0075-02839-NY02.2382231.11

          

           

        

        
           

          
            

          

        

        
           

        

      

      SCHEDULE XI

      

      

      

      

      Approved
Watches Retailers as of the date hereof

      

      (For each
of these Approved Watches
Retailers the approved points of sale should be listed)

      

      
        
          
            012200-0075-02839-NY02.2382231.11

          

           

        

        
           

          
            

          

        

        
           

        

      

      INDEX
OF CONTENTS

      

       

      ARTICLE
1 -
DEFINITIONS                                                     

      ARTICLE
2 - RIGHTS
GRANTED                                                              

      ARTICLE
3 -
DURATION                                                   

      ARTICLE
4 -
TERRITORY                                                   

      ARTICLE
5 - GENERAL BUSINESS
POLICY                                                                             

      ARTICLE
6 - SALES AND UNFAIR
COMPETITION                                                                                                         

      ARTICLE
7 - ORDERS AND
SHIPMENTS                                                                                    

      ARTICLE
8 -
PAYMENT                                                      

      ARTICLE
9 - QUALITY, WARRANTY AND AFTER SALE
SERVICE                                                                                                                                

      ARTICLE
10 - MARKETING AND
MERCHANDISING                                                                                                           

      ARTICLE
11 - DISTRIBUTION AND
SALE                                                                                  

      ARTICLE
12 - END-OF-SEASON
GOODS                                                                                 

      ARTICLE
13 - PROMOTION AND
ADVERTISING                                                                                            

      ARTICLE
14 - MINIMUM PURCHASE
REQUIREMENTS                                                                                                                 

      ARTICLE
15 -
TERMINATION                                                             

      ARTICLE
16 - PROVISIONS AT THE EXPIRY OF THIS
AGREEMENT                                                                                                                                       

      ARTICLE
17 - FORCE
MAJEURE                                                          

      ARTICLE
18 -
ASSIGNMENT                                                              

      ARTICLE
19 -
INSURANCE                                                     

      ARTICLE
20 - CAPACITY OF THE
PARTIES                                                                                

      ARTICLE
21 -
CONFIDENTIALITY                                                                          

      ARTICLE
22 - LEGAL AND ETHICAL
REQUIREMENT                                                                                                           

      ARTICLE
23 - AMENDMENT AND CANCELLATION OF THE AGREEMENT

      ARTICLE
24 -
MISCELLANEOUS                                                                         

      ARTICLE
25 - GOVERNING LAW –
JURISDICTION                                                                                                         

      

      

                                                                                HUGO
BOSS

      DISTRIBUTORSHIP
AGREEMENT

      

      

      THIS
AGREEMENT is made and entered into as of May 11, 2007 (the “Effective Date”) by
and between MGI LUXURY GROUP S.A. a corporation duly incorporated under the laws
of Switzerland having its principal office at 35 Rue de Nidau, Bienne, CH-2501
Switzerland (hereinafter referred to as “Supplier”) and MGS DISTRIBUTION LIMITED
a corporation incorporated under the laws of England having its principle office
at c/o Swico, Meadway, Haslemere, Surrey GU27 1NN, England (hereinafter referred
to as the “Distributor”).

      

      RECITALS

      

      WHEREAS,
Swico Limited (“Swico”),  Movado Group, Inc. (“MGI”) and
Distributor  have entered into a Joint Venture Agreement, dated May 1,
2007 (the “JV Agreement”), pursuant to which Swico and MGI have established a
joint venture relationship relating to the sale, marketing and distribution of
certain watch brands in the United Kingdom.

       

      WHEREAS,
this Agreement is one of the Distribution Agreements as defined in the JV
Agreement.

       

                                      WHEREAS
Supplier is an Affiliate (as defined in the JV Agreement) of MGI and is engaged
in the development, design, manufacture, distribution and sale of the Products
(as hereinafter defined) and Supplier desires to appoint Distributor and
Distributor desires to be appointed, as the exclusive distributor of the
Products in the Territory (as hereinafter defined), in accordance with the terms
and conditions set forth hereinafter;

      

      NOW,
THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the parties hereto agree as follows:

      

      1.           DEFINITIONS

      

      
        	
                1.1

              	
                In
      this Agreement, except where the context otherwise requires, the
      capitalized terms listed below shall have the respective meanings assigned
      to them as follows:

              

      

      

      
        	
                               “Affiliate”

              	
                means
      as to either party, a person or entity which controls, is under common
      control with, or is controlled by such
party.

              

      

      

      
        	
                 
      

              	
                “HB”

              	
                means  Hugo
      Boss Trademark Management GmbH & Co.,
a

              

      

      
        	
                 
      

              	 	
                German
      corporation, including any successors and
  assigns.

              

      

      

      

      

      
        	
                                “HB
      License”

              	
                means
      the license agreement between Supplier and HB, as the same may be amended
      from time to time, pursuant to which Supplier has the right to use the
      Trademarks in connection with the manufacture, marketing, advertising,
      sale and distribution of the
Products.

              

      

      

      
        	
                 
      

              	
                 “Products”

              	
                means
      watches manufactured by or for Supplier and bearing
  one

              

      

      
        	
                 
      

              	
                                                                                       or
      more of the Trademarks.

              

      

      

      
        	
                 
      

              	
                “Territory”

              	
                means
      the United Kingdom.

              

      

      

      
        	
                 
      

              	
                “Trademarks”

              	
                means
      all trademarks licensed to Supplier by HB under the
  HB

              

      

      License
and used on or in connection with the Products, including, without limitation,
HUGO, BOSS, HUGO BOSS and derivatives and combinations thereof.

      

      
        	
                “Travel
      Retail Accounts”

              	
                means
      accounts whose retail business consists of  in-flight duty free
      retail sales operations.

              

      

      

      
        	
                1.2

              	
                Unless
      otherwise defined herein, each capitalized term used herein shall have the
      meaning as set forth in the HB
License.

              

      

      

      
        	
                2.

              	
                APPOINTMENT

              

      

      

      
        	
                2.3  

              	
                Subject
      to the terms and conditions contained herein, for the term of this
      Agreement Supplier hereby appoints Distributor as the exclusive wholesale
      distributor for marketing, distribution and sales of the Products in the
      Territory (with the exception of sales to Travel Retail Accounts which
      shall be serviced exclusively by Supplier), and Distributor hereby accepts
      such appointment.  Notwithstanding the foregoing, Supplier may
      permit Distributor to sell to certain Travel Retail Accounts on a case by
      case basis as Supplier may, in its sole and absolute discretion, designate
      in writing from time to time.

              

      

      

      
        	
                2.2

              	
                Distributor
      shall purchase all Products directly from Supplier, or from one or more
      other sources nominated in writing by Supplier, subject to Distributor’s
      right to purchase Products (a) from other distributors with which Supplier
      has contracted for the distribution of the Products (“Approved
      Distributors”) that are located in Switzerland, the European Union, the
      European Economic Area or any other country with which the European Union
      has concluded a free trade agreement (in the aggregate, the “European
      Area”) and (b) from approved retailers that satisfy the conditions set
      forth in Section 8.2 hereof (“Approved Retailers”) located in the European
      Area (provided that prior to exercising such right Distributor receives
      written confirmation from Supplier that each such other distributor is an
      Approved Distributor and that each such retailer is an Approved Retailer).
      Such Approved Distributors and Approved Retailers, only, are included
      within and comprise the HB selective distribution
  network.

              

      

      

      
        	
                 
      

              	
                2.3    Distributor
      shall sell the Products only to Approved Retailers in the Territory and,
      within the European Area, only within the HB selective distribution
      network.  Distributor shall refrain, outside the Territory and
      in relation to the Products, from actively soliciting orders, establishing
      any branch or maintaining any distribution depots.  In no event
      will Distributor sell or continue selling Products to any retailer that
      does not satisfy the conditions in Section 8.2 of this
      Agreement.

              

      

      

      
        	
                2.4

              	
                Distributor
      shall use reasonable commercial efforts to advertise, promote, market,
      distribute and sell the Products in the Territory.  Without
      limiting the generality of the foregoing, Distributor shall at all times
      maintain adequate stocks of Products to meet demand for the Products in
      the Territory by those retailers, if any, not being direct shipped by
      Supplier and Distributor will use reasonable efforts to avoid accumulating
      excess inventory not in line with its forecasts. Distributor shall
      maintain an adequate sales force for the effective distribution and sale
      of the Products in the Territory including at least one (1) full time
      watch division manager to supervise/manage a dedicated sales manager and
      sales executive for the Products, experienced in managing a watch
      distribution business and one (1) full time marketing manager working on
      the advertising and promotion of the
Products.

              

      

      

      
        	
                2.8  

              	
                During
      the term of this Agreement Distributor shall not directly or indirectly
      distribute any other watch brands which, in the determination of Supplier,
      compete with the Products in the Territory.  No other brand
      licensed to MGI or any Affiliate of MGI shall be deemed to compete with
      the Products.

              

      

      

      
        	
                2.9  

              	
                The
      parties acknowledge that under the Joint Venture Agreement each of Swico
      and MGI, as the only shareholders of Distributor, has the right under
      section 15.2 of the JV Agreement, to dissolve, or to purchase the other’s
      interest in, Distributor. Accordingly, if either Swico or MGI (the
      “Non-breaching Party”) elects under the foregoing provision of the JV
      Agreement to  purchase the other party’s interest in,
      Distributor and (a) written notice from Swico and MGI confirming such
      election has been provided to Supplier and Distributor and (b) the
      Non-breaching Party also notifies Supplier that it wishes this Agreement
      to be assigned, then effective upon the date specified in such notice from
      the Non-breaching Party (or, absent the specification of any date, then as
      soon as reasonably practicable) Supplier shall assign all of Distributor’s
      right, title and interest in and under this Agreement to such
      Non-breaching Party or to any Affiliate of such Non-Breaching Party as
      specified in such notice. Distributor hereby grants Supplier a power of
      attorney for purposes of Supplier executing and delivering on behalf of
      Distributor any and all documents or other instruments necessary to effect
      such assignment.

              

      

      3.           ORDERING,
SHIPMENT AND PRICES

      

      
        	
                3.3  

              	
                From
      time to time Distributor shall submit purchase orders for the Products to
      Supplier.  All purchase orders shall be subject to acceptance by
      Supplier, which acceptance may, at Supplier’s option, be evidenced by the
      issuance of written confirmations or acknowledgments. Supplier hereby
      reserves the absolute right to reject the whole or any part of any
      purchase order for any commercially valid reason, including, without
      limitation, Distributor’s credit condition or its accumulation of excess
      or non-current inventory or its failure otherwise to adhere to the terms
      and conditions of this Agreement, notwithstanding that any such rejection
      may prevent Distributor from achieving its Minimum Purchase Requirements.
      Subject to Sections 3.2 and 11.1, all purchase orders shall be irrevocable
      after acceptance by Supplier; provided, however, that Distributor may
      reschedule or cancel that portion of any purchase order pertaining to
      Products which Supplier fails to deliver as confirmed within thirty (30)
      days after the later of the advised delivery date or shipping date.
      Distributor will provide Supplier with a four (4) month rolling forecast
      of its anticipated order volume monthly by SKU, for the four (4) month
      period.  Supplier will use reasonable efforts to deliver the
      Products ordered in accordance with the forecast within three (3) months
      after acceptance of the purchase order by Supplier and to deliver all
      other Product orders within three (3) to five (5) months after acceptance
      of the purchase order.  As soon as is reasonably practicable
      after acceptance of each purchase order, Supplier shall advise Distributor
      of the shipping dates applicable to such order.  All shipping
      dates so advised are estimates only and Supplier shall not have any
      liability for failure to actually ship by such dates or to deliver by
      Distributor’s requested delivery dates.  Supplier shall notify
      Distributor in the event of any anticipated delay in shipping dates of
      thirty (30) days or more. Each order submitted by Distributor will specify
      a “ship to” address which shall be Distributor’s address or the address
      for one of Distributor’s customers.

              

      

      

      
        	
                3.4  

              	
                The
      purchase prices for all Products purchased by Distributor shall be in
      Euros and based on Supplier’s recommended retail price in effect in the
      European Union as of the date of shipment. Such prices shall be calculated
      based on the discount structure as set forth on Schedule A annexed hereto.
      Supplier will provide current price lists for the Products to Distributor
      from time to time and shall have the right to modify such prices at any
      time; provided, however, that no price increase shall become effective
      sooner than sixty (60) days after written notice thereof to
      Distributor.  Supplier will give Distributor prior notice of all
      such price changes. For all orders shipped before the effective date of
      any price increase, the applicable price shall be the price in effect on
      the date of shipment.  With respect to orders for the Products
      that have been accepted by Supplier but which have not been shipped as of
      the effective date of a price increase, the applicable price shall be the
      price in effect on the date of shipment; provided that if the price
      increase is more than ten percent (10%) of the last applicable price,
      Distributor shall have the right within ten (10) days from the effective
      date of the price increase to cancel all or any part of the order for the
      Products subject to such price increase upon notice to Supplier. All
      prices are ex-works Supplier’s distribution
  facility.

              

      

      

      3.3                 Unless
otherwise agreed in writing by Distributor and Supplier, all Products shall be
deemed delivered to Distributor when delivered by Supplier or Supplier’s freight
forwarder or distribution center into the possession of a carrier designated by
Supplier.  Distributor shall bear all risk of loss, damage or shortage
pertaining to the Products after delivery to carrier for shipment to the
designated “ship to” address on the corresponding purchase order.  All
costs of delivery, including, without limitation, all costs for freight, import
licenses, customs duties or other duties or imposts, insurance and special
handling shall be paid by Distributor. All payments are to be made in Euros in
accordance with Supplier’s standard terms of sale which are incorporated herein
by reference (except to the extent inconsistent with any of the express terms
contained herein) net ninety (90) days after invoice date.  A discount
of two percent (2%) is granted for cash payment in advance.

       

      

       

      3.4                 No
provisions contained in Distributor’s orders which are different from or
additional to the terms and conditions of this Agreement shall be binding on the
parties hereto or applicable to the sale of the Products unless signed by a duly
authorized representative of each of the parties as provided by Section 13.9
hereof.    Distributor shall have sole responsibility for
invoicing its customers and for the collection of all amounts due from them for
Product shipped to them either by Distributor or by Supplier in accordance with
the “ship to” designation made on the applicable purchase orders. In no event
shall non-payment by any such customer or any claim or allegation any customer
may have against Distributor constitute grounds for any off set, deduction,
claim or defense on the part of Distributor against Supplier or in respect of
any obligation due to Supplier and Distributor shall pay Supplier all amounts
due to Supplier in accordance with the terms of this Agreement without off set
or deduction for any amounts claimed to be due to Distributor by
Supplier.

       

      

      
        	
                6.  

              	
                MINIMUM
      TURNOVER REQUIREMENTS

              

      

      

       

      
        	
                4.1  

              	
                Each
      contract year for the duration of this Agreement, Distributor will make
      minimum sales of Products in the Territory (“Minimum Turnover
      Requirement”) equal to at least sixty percent (60%) of the amount of
      Product sales as budgeted in the Business Plan annexed to the JV
      Agreement.

              

      

      

       

      
        	
                 
      

              	
                4.2          Sales
      in excess of the Minimum Turnover Requirement in any contract year shall
      be neither carried over nor credited toward the Minimum Turnover
      Requirement of a subsequent contract
year.

              

      

      
        	
                5.

              	
                ADVERTISING
      AND PROMOTION

              

      

      

      
        	
                5.1

              	
                As
      used herein “advertising” means only the publication in print or broadcast
      media of advertisements approved by Supplier and “promotion” means all
      other forms of Product promotion, other than advertising, approved by
      Supplier including, without limitation, point of sale material, co-op
      advertising, marketing, public relations, special events and the like. In
      no event may Distributor create, place, or in any manner whatsoever
      conduct any advertising for the Products, for which, as between the
      parties hereto, Supplier has sole responsibility. All promotions
      (including, without limitation, the methods, selection, layouts, venue and
      timing thereof) shall be subject to the prior written approval of
      Supplier.  Distributor shall submit all proposed promotion
      materials for approval at least four (4) weeks prior to the first
      anticipated use thereof and shall not engage in any promotion or use any
      such materials without Supplier’s prior written approval. Unless otherwise
      expressly approved in writing by Supplier, Distributor will use only such
      materials including, without limitation, point of sale material,
      packaging, advertising and ancillary material furnished or approved by
      Supplier.

              

      

      

      
        	
                 
      

              	
                5.2      Distributor
      shall conduct all promotion of the Products in the Territory at its own
      expense, and Supplier will contribute towards the advertising and the
      promotion of the Products in the Territory as hereinafter provided. At a
      minimum, Distributor shall expend, for approved promotion, an amount equal
      to (a)  *  of Distributor’s budgeted sales of Products
      for such contract year; plus (b) that portion of Supplier’s A/P Amount
      (defined below) allocated by Supplier to promotion. Distributor’s budgeted
      sales of Products for the first through the fifth contract years are set
      forth in Annex D to the JV Agreement and Distributor’s budgeted sales each
      contract year thereafter shall be as contained in the annual business plan
      and budget as adopted in accordance with the provisions of the JV
      Agreement at or before the beginning of each contract year, or, at such
      time, if any, that the JV Agreement is no longer in effect, then as
      approved by Distributor in good faith consultation with Supplier, and may
      be adjusted in the same manner quarterly. So long as Distributor satisfies
      its obligation in respect of promotion set forth in this section 5.2 each
      contract year, then Supplier will spend  - on advertising and/or
      promotion for the Products  - an amount equal to * of the Net
      Invoiced Cost of Distributor’s Product purchases in such year (“Supplier’s
      A/P Amount”), of which, an amount equal to at
      least  *  of the Net Invoiced Cost of Distributor’s
      Product purchases in

              

      

      *CONFIDENTIAL
PORTION OF THIS EXHIBIT OMITTED AND FILED SEPARATELY WITH THE SEC PURSUANT TO
RULE 24b-2 OF THE 1934 ACT

      

      
        	
                 
      

              	
                                such
      year will be spent by Supplier for media advertising of the Products in
      the Territory (“Media Component of Supplier’s A/P Amount”). Distributor
      acknowledges that the way the Media Component of Supplier’s A/P Amount,
      will be spent by Supplier is that Supplier will pay such amount directly
      to HB or its Affiliates under the HB License; Supplier will not pay such
      amount as a reimbursement to Distributor. For purposes of this Agreement,
      “Net Invoiced Cost” means the invoiced price actually paid by Distributor
      to Supplier net of all discounts, all costs referred to in Section 3.3
      hereof, all credits for returns and all uncollected amounts. Any portion
      of Supplier’s A/P Amount allocated by Supplier to promotion shall be
      credited to Distributor’s account semi-annually, provided that within
      thirty (30) days after the end of each such period, Distributor submits a
      statement to Supplier setting out and showing Distributor’s promotion
      expenditures incurred during such period (supported by invoices and other
      documents reasonably acceptable to Supplier, substantiating the
      expenditures for Distributor’s approved promotion); and provided further
      that such costs are no less, on a proportionate basis, than the minimum
      required expenditures set forth in this Section 5.2. In the event
      Distributor’s actual Product sales for any contract year (other than the
      final contract year of this Agreement) exceed the total budgeted sales for
      such year on which its promotion expenditures for such year were based,
      then Distributor shall spend an amount equal to six percent (6.0%) of such
      excess in each contract year
thereafter.

              

      

      

      5.3       Distributor
will use only such materials for fixturing at the point of sale as are approved
by Supplier in writing.

       

      

       

      
        	
                6.

              	
                MARKETING

              

      

      

      
        	
                6.1

              	
                Quarterly
      (beginning with the quarter ending July 31, 2007 and from time to time at
      the reasonable request of Supplier, Distributor shall furnish Supplier
      with a comprehensive written report in reasonable detail regarding (i) the
      advertising, promotions, distribution and sales of the Products for the
      immediately proceeding quarter or such other relevant period as Supplier
      may reasonably request; (ii) Distributor’s market analysis; and (iii) such
      other matters as Supplier shall
request.

              

      

      

      
        	
                6.2

              	
                Distributor
      will consult with Supplier, as Supplier shall reasonably request for
      purposes of determining a marketing plan for distribution of the Products
      in the Territory each year.  Such plan shall be followed by
      Distributor.

              

      

      

      
        	
                6.3

              	
                Distributor
      shall promptly notify Supplier of any significant changes in Distributor’s
      sales forecasts and shall furnish Supplier such information related to
      sales, sales forecasts, warranty claims and inventories of Products as may
      be reasonably requested from time to time by
  Supplier.

              

      

      

      7.           SERVICE
AND REPAIR

      

      
        	
                7.1

              	
                Distributor
      shall establish and maintain, at its expense, such number of authorized
      service facilities for the service and repair of the Products in the
      Territory (the “Service Center(s)”) as Supplier may reasonably request, it
      being understood that initially there shall be one (1) such Service
      Center.  Distributor shall accept all Products for service,
      returned by any consumer or retailer in the Territory for service whether
      covered by the applicable consumer warranty (“warranty repairs”) or not
      covered by said warranty (“out-of-warranty repairs”). Distributor shall
      purchase from Supplier, or from one or more parts distributors designated
      in writing by Supplier, and maintain an adequate stock of component parts
      and materials and employ at each Service Center such number of qualified
      service technicians necessary to perform such service in a timely manner.
      All shipping charges, including any duty, or Customs brokerage fees, for
      such parts shall be paid by Distributor.  Supplier shall have
      the right to furnish parts to Distributor in the form of finished watches.
      Within sixty (60) days after the end of each contract year, provided
      Distributor has complied with all its obligations hereunder, Supplier will
      issue a credit to Distributor equal to one percent (1%) of the Net
      Invoiced Cost of the Products purchased by Distributor in such prior
      contract year; provided that Supplier will review this amount annually in
      light of the actual average incidence of warranty
  repairs.

              

      

      

      
        	
                7.2  

              	
                Within
      thirty (30) days after the Effective Date, Distributor will furnish
      Supplier with Distributor’s initial price list for all out of warranty
      repairs. Distributor will give Supplier no less than ninety (90) days
      prior written notice of any change to any such
      prices.  Distributor shall submit to Supplier quarterly, a
      statement summarizing all out of warranty repairs and all warranty repairs
      performed in the immediately preceding quarter indicating for each watch
      repaired the:

              

      

      

      
        	
                (b)  

              	
                Correct
      style number;

              

      

      
        	
                (c)  

              	
                Complete
      description of work performed; and

              

      

      (c)           Dates
repair received, completed and returned to customer.

      

      
        	
                7.3  

              	
                Distributor
      will use only those parts (excluding batteries) for service on the
      Products which are supplied directly by or otherwise approved in writing
      by Supplier as original equipment for the
  Products.

              

      

      

      7.4                 Distributor
will issue estimates for repair work within five (5) working days after receipt
of a Product for repair on ninety percent (90%) of the Products submitted to
Distributor for repair.  Working days are defined as all days of the
year except Saturdays and Sundays and legal holidays.  Warranty
repairs will be completed within fifteen (15) working days after receipt of a
Product for repair on ninety percent (90%) of the in-warranty work performed by
Distributor, unless detained because of delays in receiving necessary parts from
the Supplier.  Out of warranty repairs will be completed within twenty
(20) working days after receipt of the customer's written authorization to
proceed with repair of a Product on ninety percent (90%) of the out of warranty
work performed by Distributor.  On the same day any repairs are
completed, the Product repaired or serviced will be returned to the customer via
express mail or such other method as Supplier may reasonably request. Increases
in the postage or other ground delivery rates may require requisite increases in
charges to the customer by the Distributor for shipping.

       

      

      
        	
                8.

              	
                TRADE
      PRACTICES

              

      

      

      
        	
                8.1

              	
                Distributor
      shall sell the Products at competitive levels, at wholesale in accordance
      with generally accepted customs in the trade and shall refrain from using
      selling methods or practices which shall be harmful to the reputation of
      the Products, Supplier or the Trademarks.  Distributor’s right
      to determine the prices of reselling and to employ conditions of trade at
      its exclusive discretion remains
unaffected.

              

      

      

      
        	
                8.4  

              	
                Distributor
      may sell Products only to those specialty shops, department stores and
      retail
      outlets               (including
      those that sell directly to the consumer) that satisfy Supplier’s
      objective criteria for approved retailer status as set forth on Schedule B
      annexed hereto, such satisfaction to be evidenced by written approval to
      Distributor from Supplier as provided in this Section 8.2. Upon execution
      of this Agreement, and prior to the opening of each selling season (and
      whenever Distributor wishes to sell Products to retail customers not
      previously approved by Supplier), Distributor must submit a list of such
      proposed retail customers (not including previously approved retail
      customers) for Supplier’s written approval. Supplier has the right to
      withdraw any such approval on written notice to Distributor, provided,
      however, that Supplier will not withdraw approval of a retail customer
      that is then authorized to carry and carrying any HB products unless
      Supplier is reasonably dissatisfied with the display, delivery or
      inventory model of Products of such retail customer. After such notice,
      Distributor may not accept additional orders for Products from such retail
      customer, but may fill any existing order. Once each quarter, Distributor
      shall provide Supplier with a list of the retailers in the Territory that
      purchased Products in the immediately preceding quarter containing the
      addresses of their sales outlets, it being understood that such list is of
      a confidential nature and shall be for the sole use of Supplier and, if
      requested, HB and shall be kept confidential by Supplier and shall not be
      disclosed by Supplier to any person whatsoever, other than employees of
      Supplier and HB whose performance of their duties require the disclosure
      of such list to them.

              

      

      

      
        	
                8.5  

              	
                Except
      as expressly permitted by Supplier in writing, Distributor may not (a)
      sell Products directly to the public in retail stores; (b) use Products as
      giveaways, prizes or premiums, except for promotional programs which have
      received the prior written approval of Supplier; or (c) sell Products to
      any Affiliate of Distributor or any of its directors, officers, employees
      or any person having an equity participation in or any other affiliation
      to Distributor, other than to Distributor’s employees or other
      representatives for their personal use, without the prior written approval
      of Supplier. Supplier may, at Distributor’s expense, purchase any Products
      found in the marketplace that Distributor has sold to unapproved customers
      in violation of this Section 8.3 or Section 2.3.  Distributor
      shall include and enforce the following on all invoices to its retail
      customers: “Limitations on Sale by Buyer: Seller expressly reserves the
      right to limit the amount of merchandise delivered to only such quantities
      as are necessary to meet the reasonably expected demand at Buyer’s store
      locations. This Merchandise is sold to Buyer for resale to the ultimate
      consumer and/or within the HB selective distribution network and only from
      such store locations as have been approved in writing by
      Seller.  Buyer shall be expressly prohibited from selling the
      merchandise purchased hereunder to a retailer or other dealer in like
      merchandise, or to any party who Buyer knows, or has reason to know,
      intends to resell the merchandise and is not a member of the HB selective
      distribution network . The merchandise purchased hereunder may not be sold
      by Buyer from any store locations which Seller has advised Buyer do not
      qualify as an acceptable location”.

              

      

      

      
        	
                9.

              	
                PROTECTION
      OF INTERESTS; TRADEMARKS

              

      

      

      
        	
                9.5  

              	
                Distributor
      shall protect and at all times seek to promote Supplier’s best interests
      in the Territory and shall immediately notify Supplier of any fact or
      situation which may be or may be reasonably presumed to become detrimental
      to Supplier or to its good will, copyrights, patents, or to the Trademarks
      or other intellectual property rights of Supplier or
      HB.  Distributor shall have the exclusive right to use the
      Trademarks in connection with distribution of the Products in the
      Territory for the term hereof and solely for the limited purpose of and
      only to the extent necessary for performing its obligations hereunder and
      for no other purpose.  Distributor agrees that it shall have no
      rights with respect to the Trademarks in connection with the Products
      except only as expressly and specifically set forth herein and that its
      every use shall inure exclusively to the benefit of HB and that
      Distributor shall not, at any time, acquire any rights therein or
      challenge the validity thereof.  Distributor further agrees at
      no time to use any of the Trademarks or other intellectual property rights
      owned by or licensed to Supplier in a manner not authorized by Supplier.
      Distributor shall not apply to register, nor shall Distributor use or
      permit the use of, any name, logo, mark or tradedress which is confusingly
      similar to any of the Trademarks or do any act or thing, or permit any act
      or thing to be done, which may in any way impair, dilute, reduce the value
      of the Trademarks or damage the goodwill relating to the
      Trademarks

              

      

      

      
        	
                9.6  

              	
                If
      requested by Supplier, in writing, the Distributor shall assist and
      cooperate with Supplier, its counsel and agents as so requested, in
      connection with any matters involving any of Supplier’s intellectual
      property rights in the Territory including without limitation, in any
      legal proceedings and any out-of-pocket expenses incurred by the
      Distributor in connection with litigation in which the Distributor
      participates at the request of Supplier shall be reimbursable to the
      Distributor and any recoveries from any such litigation or the settlement
      thereof shall belong exclusively to Supplier; provided, however, that
      Supplier shall have the exclusive right (but not the obligation) to take
      such action against third parties in the respect of the Trademarks and all
      other intellectual property rights of
Supplier.

              

      

      

      
        	
                9.3

              	
                In
      the event that Distributor sells any Products outside the Territory in
      violation of Section 2.3 hereof, then Supplier may, at its sole option, in
      addition to all other rights and remedies available to it, repurchase all
      or any portion of such Products.  Within ten (10) days after
      receipt of a statement from the Supplier listing all such Products
      purchased, together with a list of the model numbers, and setting forth
      Supplier’s out-of-pocket costs incurred in connection with such purchase,
      Distributor shall reimburse Supplier such out-of-pocket
      costs   Distributor acknowledges that such payment is not a
      penalty but fair compensation to Supplier’s for breach of this Agreement
      and damage to Supplier goodwill and
tradename.

              

      

      

      
        	
                10.

              	
                TERM
      AND TERMINATION

              

      

      

      10.1This
Agreement shall take effect upon the Effective Date and shall, unless otherwise
earlier terminated as provided herein, continue for the duration of the JV Agreement . It shall be
automatically terminated upon the termination or expiration of the JV
Agreement.

      
        	
                 
      

              	
                10.2In
      the event (a) this Agreement is assigned to Swico, MGI or to an Affiliate
      of Swico or MGI in accordance with Section 2.6 hereof, or (b) either Swico
      or MGI purchases all of the other’s interest in Distributor under Section
      15.2.2 of the JV Agreement or (c) Swico, its Affiliates or Permitted
      Transferees (as such term is defined in the JV Agreement) otherwise
      acquire control of Distributor, then this Agreement shall continue from
      the date of such assignment, purchase and/or acquisition, as the case may
      be, until the third anniversary of such date at which time this Agreement
      shall expire and neither party shall have any further obligation to the
      other hereunder except as to those obligations which by their express
      terms survive beyond the expiration or termination of this Agreement.
      Following any assignment, purchase or acquisition referred to in Section
      10.1, this Agreement may be terminated by either party hereto upon prior
      written notice to the other party:

              

      

       

      
        	
                 
      

              	
                (i)

              	
                in
      the event such other party shall have breached any of the terms and
      conditions hereof and, if remediable shall have failed to remedy such
      breach within sixty  (60 ) days after the notification of the
      breach by the non-breaching party;
or

              

      

      

      (ii)      in
the event that such other party becomes  insolvent,  has an
insolvency proceeding of any
kind  filed  by  or  against  it,  including  bankruptcy  or  reorganization,  liquidates                                                          its  business
or is liquidated, has a receiver appointed for its assets, or makes
an  assignment for the benefit of its creditors.

       

      

      
        	
                10.5  

              	
                In
      addition to any other rights of termination provided hereunder, Supplier
      may terminate this Agreement immediately by notice to Distributor if
      Distributor (i) fails to satisfy the Minimum Turnover Requirement for any
      contract year; (ii) fails to satisfy its minimum promotion expenditures in
      Section 5.2 in any contract year; (iii) fails to comply with the payment
      terms in Section 3.3; (iv) breaches any of the covenants contained in
      Article 8 or Article 9 hereof or (v) transfers or attempts to transfer a
      substantial part of its business to a third party or attempts to assign
      this Agreement to a third party (or relinquishes control of any previously
      approved assignee under Section 13.5) or has its business merged or
      consolidated with a third party without the prior written consent of
      Supplier.

              

      

      

      10.4     Notwithstanding
anything to the contrary contained herein, this Agreement will automatically
expire and be of no further effect in the event the HB License expires or is
terminated for any reason. Upon such expiration or termination, neither party
will have any further obligation hereunder to the other except any obligation or
liability which accrued prior to the date of such expiration or
termination.

       

      

      
        	
                 
      

              	
                11.

              	
                EFFECTS
      OF TERMINATION

              

      

      

      
        	
                 
      

              	
                11.1

              	
                Upon
      the expiration of this Agreement or its termination by Supplier, Supplier
      may, at its sole discretion, reject all or part of any outstanding orders
      received or accepted by Supplier.

              

      

      

      
        	
                 
      

              	
                11.2

              	
                Upon
      expiration or termination of this Agreement for any
  reason:

              

      

      

      
        	
                 
      

              	
                (i)

              	
                Any
      sums due and owing by either party to the other shall become immediately
      due and payable, and such sums shall be paid
  forthwith.

              

      

      

      
        	
                 
      

              	
                (ii)

              	
                Supplier
      may immediately appoint a successor to Distributor in the Territory and
      announce the change of its distributorship to the
  public.

              

      

      

      
        	
                 
      

              	
                (iii)

              	
                Distributor
      shall take a physical inventory of all Products in stock and submit a
      report of such inventory to Supplier.  Supplier shall have the
      right to have a representative present to verify such
      inventory.  Supplier shall be entitled but not obligated to take
      over any portion or all Products remaining in stock from Distributor at
      the price in currency originally paid by Distributor to Supplier, plus the
      cost of shipping and insurance. Upon notice to Distributor of Supplier’s
      election to buy back any or all such inventory, Distributor shall
      cooperate as requested by Supplier for the packing and shipping of such
      inventory.  Distributor may sell any Products not taken over by
      Supplier for six (6) months after the termination of this Agreement or
      such shorter period as notified by Supplier subject to all the provisions
      hereof, including, without limitation, Article
  8.

              

      

      

      
        	
                 
      

              	
                (iv)

              	
                Distributor
      shall immediately cease all use of the Trademarks; provided, however, that
      Distributor may continue to use the Trademarks solely in connection with
      the sale of the Products pursuant to Section 11.2(iii) above and in such a
      way as not to impair, dilute, reduce the value of or damage the goodwill
      relating to the Trademarks.

              

      

      

      
        	
                 
      

              	
                (v)

              	
                Any
      advertising or promotion must be at the discretion of Supplier and must be
      approved by Supplier.

              

      

      

      
        	
                (viii)  

              	
                Distributor,
      at its expense, will return to Supplier all materials belonging to
      Supplier and all proprietary data or confidential information furnished to
      Distributor by Supplier during the term
hereof.

              

      

      

      
        	
                11.3  

              	
                The
      rights of termination granted herein are absolute and each party
      acknowledges that it has considered and assumed as its own exclusive risk
      the possibility of making expenditures of money and time in preparing for
      the performance of this Agreement and possible loss or damage on account
      of the loss of prospective profits or anticipated sales or on account of
      expenditures, investments, leases, property improvements or commitments in
      connection with the good will or business of the parties or otherwise
      resulting from the proper termination hereof and that it is the express
      intent and agreement of the parties that neither party properly
      terminating this Agreement in accordance with the terms hereof (the
      “terminating party”) shall be liable to the other for any claim, cost or
      damages solely by reason of such termination.  In the event of
      such termination or expiration of this Agreement in accordance with the
      terms hereof, the terminating party shall have no obligation or liability
      to pay to the other, and such other party hereby expressly waives, any
      statutory termination fee, any other right to compensation provided by law
      arising solely as a consequence of such termination, and consequential
      damages and lost profits arising solely on account of such termination or
      expiration.

              

      

      

      
        	
                14.  

              	
                INDEMNIFICATION

              

      

      

      Distributor
hereby agrees to indemnify, defend and hold the Supplier, and its Affiliates
and/or agents and each of their officers, directors and employees harmless from
and against any and all liabilities, damages, costs and expenses (including
reasonable attorneys’ fees) which arise out of or in connection with any act or
omission by Distributor, its Affiliates, successors, assigns, parents,
subsidiaries, agents, and contractors, or the officers, directors or employees
of any of them. Supplier reserves the right, without being required to do so, at
its own expense and without waiver of any indemnity hereunder, to defend any
claim, action or lawsuit coming within the purview of this Section
12.  This section shall survive the termination or expiration of this
Agreement.

      

      
        	
                 
      

              	
                13.

              	
                GENERAL
      TERMS AND CONDITIONS

              

      

      

      
        	
                 
      

              	
                13.1

              	
                Supplier
      may, from time to time, designate in writing an Affiliate of Supplier to
      exercise any of the rights or perform any of the obligations of Supplier
      hereunder.

              

      

      

      
        	
                 
      

              	
                13.2

              	
                Neither
      party shall have the power to represent the other party.  For
      purposes of this Agreement, Distributor is an independent contractor and
      neither the agent nor the representative of Supplier or any of its
      affiliated companies.  Distributor, its employees, contractors
      and Affiliates shall not act or represent themselves as agents or
      representatives of, or as having the right, power or authority, express or
      implied to assume or create any obligation or liability on behalf of
      Supplier or any of its affiliated
companies.

              

      

      

      
        	
                 
      

              	
                13.3

              	
                Neither
      party hereto shall be liable for any delay or failure in fulfilling the
      obligations hereunder (except for the payment of money) when such delay or
      failure is caused by riots, war (declared or not), or hostilities between
      any nations; acts of God, fire, storm, flood or earthquake; strikes, labor
      disputes, shortage or delay of carriers, or shortage of raw materials,
      labor power or other utility services; any governmental restrictions; or
      any other unforeseeable contingencies beyond the control of the
      party.

              

      

      

      
        	
                13.6  

              	
                Any
      notice to be given pursuant to this Agreement shall be written in English
      and shall be deemed duly given when sent by reputable overnight
      international courier including FedEx, UPS or DHL to the respective
      address first set forth above or by facsimile to the respective facsimile
      number set forth below confirmed by letter as aforesaid, or to such other
      address and/or facsimile number as a party hereto may designate by like
      notice.

              

      

      

      
        	
                To
      Supplier:

              	
                Fax:  (
      41 ) 32  9 123 101

              

      

      
        	
                 
      

              	
                Attn:
      Mr. Xavier Gauderlot, General Manager – Hugo Boss
  Watches

              

      

      

      
        	
                To
      Distributor:

              	
                Fax:

              

      

      
        	
                 
      

              	
                               Attn.:

              

      

      

      
        	
                 
      

              	
                Supplier’s
      designated Affiliate under Section 13.1 shall be designated by notice to
      Distributor, which notice shall include the address and facsimile number
      of such Affiliate for purposes of giving notice
      hereunder.  Notice to Supplier’s designated Affiliate shall be
      made and deemed duly given in the same manner as for notice to
      Supplier.

              

      

      

      
        	
                13.7  

              	
                In
      view of the fact that this Agreement has been entered into because of the
      confidence that Supplier has in Distributor, it is understood that the
      terms and conditions hereof shall be performed by Distributor only and
      that, except as expressly permitted in Section 2.6 hereof,  this
      Agreement may not be assigned, whether by operation of law or otherwise,
      without the prior written approval of Supplier which Supplier may withhold
      or grant in its sole and absolute discretion and any such purported
      assignment by Distributor without such approval by Supplier shall be void
      and of no effect. Following any such assignment, Distributor shall remain
      obligated as a guarantor for all the payment obligations of the approved
      assignee hereunder and any change in control of the approved assignee
      without the approval of Supplier shall constitute a breach of this Section
      13.5 and shall entitle Supplier to terminate the Agreement as provided
      under Section 10.3.

              

      

      

      
        	
                 
      

              	
                13.6

              	
                The
      captions of this Agreement are inserted solely for ease of reference and
      are not deemed to form a part of or to modify the terms and conditions of
      this Agreement.

              

      

      

      
        	
                 
      

              	
                13.7

              	
                This
      Agreement shall be governed exclusively by the law of Switzerland without
      reference to its conflict of laws rules and to the exclusion of the United
      Nations Convention on Contracts for the International Sale of
      Goods.  Any dispute, controversy or difference which may arise
      out of, in relation to, or in connection with this Agreement shall be
      finally settled by arbitration in Geneva, Switzerland under the Rules of
      Arbitration of the International Chamber of Commerce by three (3)
      Arbitrators appointed in accordance with said rules.  Each party
      hereto shall be bound by any arbitration award so rendered and any
      judgment upon such award may be entered as a non-appealable final, foreign
      judgment in any court having jurisdiction thereon.  The language
      of the proceedings shall be
English.

              

      

      

      
        	
                 
      

              	
                13.8

              	
                When
      interpreting the terms and conditions of this Agreement, the English
      language shall be applied
exclusively.

              

      

      

      
        	
                13.11  

              	
                This
      Agreement, including the terms and conditions incorporated by reference in
      Section 3.3 hereof, constitutes the entire agreement of the parties with
      respect to the subject matter hereof and prevails over and supersedes all
      prior agreements, whether written or oral, relating to the subject matter
      hereof and may not be altered, waived, modified, or discharged except by
      an express writing referring to this Agreement signed on behalf of the
      parties hereto by their duly authorized representatives. In the event of
      any conflict or inconsistency between this Agreement and the JV Agreement,
      the latter shall control.

              

      

      

      
        	
                13.10

              	
                The
      failure of either party hereto to enforce at any time any of the
      provisions or terms of this Agreement, or any rights in respect thereof,
      or the exercise of or failure to exercise by either party any rights or
      any of its elections herein provided, shall in no way be considered to be
      a waiver of such provisions, terms, rights or elections or in any way to
      affect the validity of this
Agreement.

              

      

      

      
        	
                13.11

              	
                In
      connection with this Agreement, the parties may from time to time exchange
      proprietary data or confidential information.  The parties agree
      to keep in confidence all such proprietary data or confidential
      information received in accordance with this Agreement and to use the same
      only in connection with the performance of this Agreement.  This
      provision shall survive the termination or expiration of this
      Agreement.

              

      

      

      
        	
                13.12

              	
                Should
      any provision of this contract held invalid, incomplete or unenforceable,
      this will not affect the validity of the remaining
      provisions.  Supplier and Distributor undertake to replace the
      invalid incomplete or unenforceable provision by provision which comes
      closest to the commercial goal that the parties intended to achieve on the
      conclusion of this agreement by the invalid, uncompleted and unenforceable
      provision. Notwithstanding anything to the contrary contained herein, in
      the event of any conflict or inconsistency between any term or provision
      of this Agreement and the HB License, the latter shall
      control.

              

      

      

      
        	
                13.13

              	
                Supplier
      shall have the right to injunctive relief to enforce the covenants,
      agreements and obligations of Distributor hereunder in addition to any
      other relief to which Supplier may be entitled at law or in
      equity.

              

      

      

      
        	
                13.16  

              	
                Each
      order deliverable under this Agreement shall be deemed sold under a
      separate contract.  Non-delivery or default by Supplier as to
      any order shall not be deemed a breach of the
  entire

              

      

      Agreement
and shall not relieve Distributor of its obligation to accept and pay for any
prior or

      subsequent
delivery, even though such non-delivery or default substantially impairs the
value of this Agreement to Distributor.

      

      
        	
                13.15

              	
                Distributor
      shall comply with all applicable laws, rules and regulations in the
      Territory, including, without limitation, the provisions of Directive
      2002/96/EC,
      which governs waste electrical and electronic equipment, including all
      related amendments and all laws, rules and regulations in the Territory
      related thereto.  Distributor shall provide Supplier with
      evidence of any such compliance upon
request.

              

      

      

      IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in
multiple duplicates by their authorized representatives at Bienne, Switzerland
as of the day and year first above written.

      

      

      MGS
DISTRIBUTION
LIMITED                                                                           MGI
LUXURY GROUP S.A.

      

      By____________________________                                                                                By:
______________________________

      
        	
                Title:
      __________________________

              	
                Title:
      _____________________________

              

      

      
        	
                Name:
      _________________________

              	
                Name:
      ____________________________

              

      

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      

      
        	
                 
      

              	
                SCHEDULE
      A

              

      

      

      

      
        	
                 
      

              	
                DISTRIBUTOR
      DISCOUNT SCHEDULE

              

      

      

      

      

      

      

      Distributor
pricing shall be *  of Supplier’s recommended Euro retail price
(inclusive of VAT); provided, however, that if this Agreement is assigned as
provided under Section 2.6, then the pricing to the assignee shall be based on
the same discount off of Supplier’s recommended Euro retail price as generally
offered by Supplier to its other independent distributors of the Products in the
European Union.

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      *CONFIDENTIAL
PORTION OF THIS EXHIBIT OMITTED AND FILED SEPARATELY WITH THE SEC PURSUANT TO
RULE 24b-2 OF THE 1934 ACT

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      
        	
                 
      

              	
                                                                                         SCHEDULE
      B

              

      

      

      
        	
                 
      

              	
                                                   OBJECTIVE
      CRITERIA FOR APPROVED RETAILER
STATUS

              

      

      

      

      
        	
                13.  

              	
                EXTERNAL
      ELEMENTS

              

      

      

      
        	
                A.  

              	
                Location/Street

              

      

      

      (i)         Animated
and attractive environment

      (ii)         Centrally
located neighborhood

      (iii)              Shopping
district with fashion and prestige branded shops

      

      

      
        	
                B.  

              	
                Appearance

              

      

      

      (i)              Attractive,
well-maintained, high-quality façade

      (ii)              Clean,
visible and prominent shop sign

      (iii)              Visible
and easily accessed entrance

      

      

      
        	
                C.  

              	
                Shop
      Windows

              

      

      

      (i)              Well
lit, clean and made from good quality materials

      (ii)              Suitable
number and size show windows

      
        	
                (iii)  

              	
                Windows
      provide sufficient space to display a representative selection of HB brand
      products

              

      

      
        	
                (iv)  

              	
                Professionally
      maintained and attractive window
decoration

              

      

      

      

      
        	
                14.  

              	
                INTERNAL
      ELEMENTS

              

      

      

      
        	
                A.  

              	
                General
      Outfitting

              

      

      

      (i)              Clean
and well-maintained walls, floors, ceilings and furnishings

      (ii)              Sufficient
and sophisticated lighting

      (iii)              Equipped
with adequate security devices

      

      

      
        	
                B.  

              	
                Presentation
      Showcases

              

      

      

      (i)              Made
of high-quality materials with adequate lighting

      (ii)              HB
products displayed on official brand POS materials

      (iii)              Clearly
visible and strong brand identification

      
        	
                 
      

              	
                (iv)

              	
                HB
      products are grouped together and displayed separately from other
      brands

              

      

      

      

      
        	
                15.  

              	
                OTHER
      PRODUCTS

              

      

      

      
        	
                A.  

              	
                Premises
      used solely for the retail sale of quality watches, jewelry, fashion
      accessories and/or fashion apparel.

              

      

      

      
        	
                B.  

              	
                HB
      products displayed to prevent confusion with any other brands
      products.

              

      

      

      
        	
                C.  

              	
                Retailer
      also sells at least two (2) Swiss watch brands or any three (3) of the
      following fashion/designer/prestige watch brands:  Emporio
      Armani, Diesel, DKNY, Kenneth Cole, Versace, Puma, D&G, CK, Sector,
      Briel, Guess, Lacoste

              

      

      

      

      
        	
                16.  

              	
                PRESENTATION/PROMOTION

              

      

      

      
        	
                A.  

              	
                Visual/Collateral

              

      

      

      
        	
                (i)  

              	
                Brand
      visuals properly presented and changed out seasonally or whenever
      requested by brand

              

      

      

      
        	
                B.  

              	
                Advertising

              

      

      

      
        	
                (i)  

              	
                Dealer’s
      advertising is consistent with the quality requirements of the
      brand

              

      

      
        	
                (ii)  

              	
                Dealer
      agrees to conduct co-op advertising on the basis of an agreed and shared
      budget and media plan

              

      

      

      
        	
                C.  

              	
                Personnel/Customer
      Service

              

      

      

      
        	
                (i)  

              	
                Sales
      staff with good knowledge of HB brand and
  products

              

      

      
        	
                (ii)  

              	
                Available
      for regular training on brand and new
products

              

      

      
        	
                (iii)  

              	
                Well
      dressed, groomed and polite

              

      

      
        	
                (iv)  

              	
                Capacity
      to advise customer on how to operate products
  correctly

              

      

      
        	
                (v)  

              	
                Able
      to carry out simple adjustments (e.g. sizing metal
    bracelets)

              

      

      

      

      
        	
                17.  

              	
                REPORTING

              

      

      

      
        	
                A.  

              	
                Provides
      clear and comprehensive information

              

      

      

      
        	
                B.  

              	
                Provides
      information on sales and stock
situation

              

      

      

      
        	
                C.  

              	
                Provides
      monthly sales reports by sku

              

      

      

      
        	
                D.  

              	
                Provides
      immediate information on problems with
products

              

      

      

      

      
        	
                18.  

              	
                FINANCES

              

      

      

      
        	
                A.  

              	
                Good
      payment record

              

      

      

      
        	
                B.  

              	
                Creditworthy

              

      

      

      
        	
                C.  

              	
                Sound
      finances

              

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      ANNEX
A

      

      

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      

      

      

      [ SEAL
]

      

      

      CERTIFICATE
OF INCORPORATION

      

      ON
CHANGE OF NAME

      

      

      Company
No.                                           6183896

      

      

      

      The
Registrar of Companies for England and Wales hereby certifies that

      

      COVERMAT
LIMITED

      

      having by
special resolution changed its name, is now incorporated under the name
of

      

      MGS
DISTRIBUTION LIMITED

      

      Given at
Companies House, Cardiff, the 9th May
2007

      

      

      [
Official Seal of the Registrar of Companies ]

      

      

      

      [ Seal –
Companies House for the record ]

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      THE
COMPANIES ACTS 1985 TO 1989

      

      PRIVATE
COMPANY LIMITED BY SHARES

      

      MEMORANDUM
OF ASSOCIATION

      

      - OF
–

      

      COVERMAT
LIMITED

      

      1.           The
name of the Company is COVERMAT LIMITED.

      

      2.           The
registered office of the Company will be situated in England and
Wales.

      

      3.           The
objects for which the Company is established are:-

      

      (A)           To
carry on business as a general commercial company.

      

      (B)           To
carry on any other business which may in the opinion of the Board of Directors
be advantageously carried on by the Company.

      

      (C)           To
purchase, sell, exchange, improve, mortgage, charge, rent, let on lease, hire,
surrender, license, accept surrender of, and otherwise acquire and deal with any
freehold, leasehold or other property, chattels and effects; and to erect, pull
down, repair, alter, develop, or otherwise deal with any building or buildings
and adapt the same for the purposes of the Company’s business.

      

      (D)           To
purchase of otherwise acquire all or any part of the business or assets of any
person, firm or company, carrying on or formed to carry on any business which
this Company is authorized to carry on or possessed of property suitable to the
purposes of this Company, and to pay cash or to issue any chares, stocks,
debentures, or debenture stock of this Company as the consideration for such
purchase or acquisition and to undertake any liabilities or obligations relating
to the business or property so purchased or acquired.

      

      (E)           To
apply for, purchase, or otherwise acquire any patents, licenses or concessions
which may be capable of being dealt with by the Company, or be deemed to
benefits the Company and to grant rights thereout.

      

      (F)           To
sell, let, license, develop or otherwise deal with the undertaking, or all or
any part of the property or assets of the Company, upon such terms as the
Company may approve, with power to accept shares, debentures or securities of,
or interests in, any other company.

      

      (G)           To
invest and deal with the moneys of the Company not immediately required for the
purposes of the Company in or upon such securities and subject to such
conditions as may seem expedient.

      

      (H)           To
lend money to such persons, upon such terms and with or without security and
subject to such conditions as may seem desirable.

      

      (I)           To
give any form of financial assistance that may lawfully be given in connection
with the acquisition of shares in the Company of any other company.

      

      (J)           To
guarantee the payment of any debentures, debenture stock, bonds, mortgages,
charges, obligations, interest, dividends, securities, moneys or shares or the
performance of contracts or engagements of any other company or person
(including but without prejudice to the generality of the foregoing) the holding
company of the Company or any company which is a subsidiary of such holding
company within, in each case, the meaning of Section 736 and Section 736(a) of
the Companies Act 1985 (the “Act”) as amended by the Companies Act 1989, and to
give indemnities and guarantees of all kinds and to enter into partnership or
any joint purse arrangement with any person, persons, firm or
company.

      

      (K)           To
borrow or raise money in such manner as the Company shall think fit, and in
particular by the issue of debentures or debenture stock, charged upon all or
any of the Company’s property, both present and future, including its uncalled
capital, and to re-issue any debentures at any time paid off.

      

      (L)           To
draw, make, accept, endorse, discount, execute, and issue promissory notes,
bills of exchange, debentures, warrants and other negotiable
documents.

      

      (M)           To
purchase, subscribe for, or otherwise acquire and hold shares, stocks or other
interests in, or obligations of, any other company or corporation.

      

      (N)           To
remunerate any person or company for services rendered or to be rendered in
placing or assisting to place any of the shares in the Company’s capital or any
debentures, debenture stock or other securities of the Company or in or about
the formation or promotion of the Company or the conduct of its
business.

      

      (O)           To
pay out of the funds of the Company all costs and expenses of or incidental to
the formation and registration of the Company and the issue of its capital and
debentures including brokerage and commission.

      

      (P)           To
promote, or aid in the promotion of, any company or companies for the purpose of
acquiring all or any of the property, rights, and liabilities of this Company,
or for any other purpose which may seem directly or indirectly calculated to
advance the interests of this Company.

      

      (Q)           To
establish and support and aid in the establishment and support of funds or
trusts calculated to benefit employees or ex-employees of the Company (including
any Director holding a salaried office or employment in the Company) or the
dependants or connections of such persons and to grant pensions and allowances
to any such persons.

      

      (R)           To
establish and implement any employee shares scheme within the meaning of section
743 of the Companies Act 1985and any share option scheme.  To grant
share options and rights to Directors Employees and Members and others in
connection with any share option scheme which shall entitle the holders of any
such option and rights to acquire and subscribe for shares and securities of the
Company in accordance with the terms of any such grant.

      

      (S)           To
remunerate the Directors of the Company in any manner the Company may think fit
and to pay or provide pensions for, or make payments to, or for the benefit of,
Directors and ex-Directors of the Company or their dependants or
connections.

      

      (T)           To
distribute any property of the Company in specie among the Members.

      

      (U)           To
do all such other things as are incidental or conducive to the attainment of the
above objects or any of them.

      

      It is
declared that the foregoing sub-clauses shall be construed independently of each
other and none of the objects therein mentioned shall be deemed to be merely
subsidiary to the objects contained in any other sub-clause.

      

      4.           The
liability of the Members is limited.

      

      5.           The
Share Capital of the Company is £1,000 divided into 1,000 shares of £1 each with
power to increase or to divide the shares in the capital for the time being,
into different classes having such rights, privileges and advantages as to
voting and otherwise as the Articles of Association may from time to time
prescribe.

      

      The
subscriber to this Memorandum of Association wishes to be formed into a Company
pursuant to this Memorandum; and agrees to take the number of Shares shown
opposite the subscriber’s name

      
        

      

      

      NAME AND
ADDRESS OF SUBSCRIBER

      Number of
shares taken by the subscriber

      
        

      

      

      

      

      

      

      

      

      7Side
Nominees Limited ONE

      14/18
City Road

      Cardiff

      CF24
3DL

      

      

      

      
        

      

      

      DATED 26
March 2007

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      THE
COMPANIES ACTS 1985 TO 1989

      

      PRIVATE
COMPANY LIMITED BY SHARES

      

      MEMORANDUM
OF ASSOCIATION

      

      - OF
–

      

      COVERMAT
LIMITED

      

      PRELIMINARY

      

      1.           (a)
The Regulations contained in Table A in the Schedule to the Companies (Tables A
to F) Regulations 1985 as amended by the Companies (Tables A to F) (Amendment)
Regulations 1985 and The Companies Act 1985 (Electronic Communications) Order
2000 (such Table being hereinafter called “Table A”) shall apply to the Company
save in so far as they are excluded or varied hereby and such Regulations (save
as so excluded or varied) and the Articles hereinafter contained shall be the
regulations of the Company.

      

      (b) Any
reference in these Articles to “the Act” shall mean the Companies Act 1985 as
amended or extended by any other enactment or any statutory re-enactment
thereof.

      

      PRIVATE
COMPANY

      

      2.           The
Company is a private company within the meaning of the Companies Act
1985.

      

      ALLOTMENT OF
SHARES

      

      3.           The
Directors of the Company are generally authorized for the purposes of Section 80
of the Act to allot, grant options over or otherwise deal with or dispose of the
original shares in the capital of the Company at the date of the incorporation
to such persons at such times and on such conditions as they think fit, subject
to the provisions of that Section and Article 4 hereof and provided that no
shares shall be issued at a discount.  In accordance with Section 91
of the Act Sections 89(1) and 90(1) to 90(6) of the Act shall not apply to the
Company.  The Directors are generally authorized to exercise the power
of the Company to allot shares of the Company which shall be created under any
employee shares or share option scheme or arrangement.

      

      4.           The
general authority conferred on the Directors by regulation 3 of these Articles
shall extent to all relevant securities (as defined by Section 80 of the Act) in
the capital of the Company at the date of its incorporation during the period of
five years from the date upon which the Company was incorporated but the
Directors may, after the authority has expired, allot any shares in pursuance of
an offer or agreement so to do made by the Company before the authority
expired.  The authority may be renewed varied or revoked by the
Company in General Meeting.

      

      SHARES

      

      5.           The
Company shall have a first and paramount lien on all shares, whether fully paid
or not, standing registered in the name of any person indebted or under
liability to the Company, whether he shall be the sole registered holder thereof
or shall be one of two or more joint holders, for all moneys presently payable
by him or his estate to the Company.  Regulation 8 in Table A shall be
modified accordingly.

      

      6.           The
liability of any Member in default in respect of a call shall be increased by
the addition at the end of the first sentence of Regulation 18 in Table A of the
words “and all expense that may have incurred by the Company by reason of such
non-payment.”

      

      7.           Regulation
3 in Table A shall not apply to the Company and subject to the provisions of
chapter VII of Part V of the Act the Company may:-

      

      (a) with
the sanction of an Ordinary Resolution issue shares which are to be redeemed or
are liable to be redeemed at the option of the Company or the
shareholder.

      

      (b)
purchase its own shares (including any redeemable shares).

      

      (c) make
a payment in respect of the redemption or purchase, under Sections 159, 160, or
162 of the Act and the relevant power (a) or (b) above, of any of its own shares
otherwise than out of distributable profits of the Company or the proceeds of a
fresh issue of shares to the extent permitted by Sections 170, 171, and 172 of
the Act.

      

      TRANSFER OF
SHARES

      

      8.           (a)
Subject to clause 8(b) below the Directors may, in their absolute discretion and
without assigning reason therefore, decline to register the transfer of a share,
whether or not it is a fully paid share, and Regulation 24 in Table A shall not
apply to the Company.

      

      (b)
Regulation 8(a) of these Articles shall not apply to any transfer to a person
who is already a Member of the Company.

      

      9.           In
these Articles of Association the reference to the transfer of or transferring
shares shall include any transfer, assignment, disposition or proposed or
purported transfer, assignment or disposition:

      

      of any
share or shares of the Company; or

      of any
interest of any kind in any share or shares of the Company; or

      of any
right to receive or subscribe for any share or shares of the
Company.

      

      Members
shall not transfer nor create nor dispose of any interest in or over any of the
shares being transferred except by a transfer of the entire legal and beneficial
interest in the shares.  Any transfer shall be to a transferee as
permitted by the Articles and not otherwise.

      

      Subject
to Regulation 8 of these Articles, a Subscriber to the Memorandum of Association
of the Company my freely transfer his share to any person firm or
company.

      

      10.           A
Member ( other than a Subscriber to the Memorandum of Association of the
Company) who desires to transfer shares to a person who is not ready a Member of
the Company shall give notice of such intention to the Directors of the company
giving particulars of the shares in question.  Any such notice shall
be irrevocable except with the approval of the Directors.  The
Directors as agents for the member giving such notice may dispose of such shares
or any of them to Members of the Company at a price to be agreed between the
transferor and the Directors, or failing agreement, at a price fixed by the
Auditors of the Company as the fair value thereof.  The costs of any
valuation of the transfer shares shall be shared equally by the transferor and
the Company unless the Company in general meeting shall decide
otherwise.  The Directors shall offer the shares in question to all
the members (other than the member who wishes to transfer the
shares).  The shares offered to the individual members shall be in
proportion or (at the discretion of the Directors) as nearly as may be in
proportion to the numbers of shares then held by the members.  Subject
to clause 8 (a) above and the following exception if within twenty-eight days
from the date of the said notice the Directors are unable to find a Member of
Members willing to purchase all such shares, the transferor may dispose of so
many of such shares shall remain undisposed of in any manner he may think fit
within three months from the date of the said notice.  But any such
disposal shall be at the same price or more than the price for the shares which
shall have been offered in accordance with this clause to the existing
members.  The exception referred to above is that if all the offered
shares shall not be agreed to be acquired the said Member shall not be under any
obligation to complete a transfer of any of the shares.

      

      11.           The
instrument of transfer of any share shall be executed by or on behalf of the
transferor who shall be deemed to remain a holder of the share until the name of
the transferee is entered in the register of members in respect
thereof.

      

      GENERAL MEETINGS AND
RESOLUTIONS

      

      12.           Every
notice convening a General Meeting shall comply with the provisions of Section
372 of the Act as to giving information to Members in regard to their right to
appoint proxies; and notices of and other communications relating to any General
Meeting which any Member is entitled to receive shall be sent to the Directors
and to the Auditor for the time being of the Company.

      

      13.           Regulation
40 in Table A shall be read and construed as if the words, “unless the Company
has only one Member in which case one Member present in person or by proxy shall
be a quorum” were added at the end.

      

      14.           Regulation
41 in Table A shall be read and construed as if the words, “ and if at the
adjourned Meeting a quorum is not present within half an hour from the time
appointed for the Meeting, the Meeting shall be dissolved” were added at the
end.

      

      15.           In
addition to the requirements of Regulation 100 of Table A, the Directors shall
also insert in the minute book of the Company a memorandum of all decisions
taken by a sole Member when the Company has only one Member which may have been
taken by the Company in General Meeting and which have effect as if agreed in
General Meeting.

      

      DIRECTORS

      

      16.           (a)
The first Director or Directors of the Company shall be the person or persons
named as the first Director of Directors of the Company in the statement
delivered under Section 10 of the Act.

      

      (b) The number of the directors shall
be determined by Ordinary Resolution of the Company but unless and until so
fixed there shall be no maximum number of Directors and the minimum number of
Directors shall be one.  In the event of the minimum number of
Directors fixed by or pursuant to these Articles or Table A being one, a sole
Director shall have the authority to exercise all the powers and discretions
conferred by Table A or these Articles and expressed to be vested in the
Directors generally and Regulation 89 in Table A shall be modified
accordingly.

      

      (c) A Director shall not require any
share qualification but shall nevertheless be entitled to attend and speak at
any General Meeting of the Company or at any separate class meeting of the
holders of any class of shares of the Company.

      

      (d) Regulation 64 in Table A shall not
apply to the Company.

      

      ALTERNATE
DIRECTORS

      

      17.           (a)
An alternate Director shall not be entitled as such to receive any remuneration
from the Company except only such part (if any) of the remuneration otherwise
payable to his appointor as such appointor may by notice to the Company from
time to time direct, but shall otherwise be subject to the provisions of these
Articles with respect to Directors.  An alternate Director shall
during his appointment be an Officer of the Company and shall not be deemed to
be an agent of his appointor.  Regulation 66 in Table A shall be
modified accordingly.

      

      (b) A Director or any other person may
act as an alternate Director to represent more than one Director and an
alternate Director shall be entitled at meetings of the Directors, or any
committee of the Directors, to one vote for every Director whom he represents in
addition to his own vote (if any) as a Director.

      

      BORROWING
POWERS

      

      18.           The
Directors may exercise all the powers of the Company to borrow money without
limit as to the amount and upon such terms and in such manner as they think fit,
and to grant any mortgage, charge or standard security over its undertaking,
property and uncalled capital, or any part thereof, and, subject (in the case of
any security convertible into shares) to Sections 80 and 380 of the Act to issue
debentures, debenture stock, and other securities whether outright or as
security for any debt, liability or obligation of the Company or of any third
party.

      

      PROCEEDINGS OF
DIRECTORS

      

      19.           Subject
to the provisions of Section 317 of the Act, Regulation 94 in Table A shall not
apply to the Company and a Director may vote as a Director in regard to any
contract or arrangement in which he is interested or upon any matter arising
thereout, and if he shall so vote his vote shall be counted and he shall be
reckoned in estimating a quorum present at any meeting when any such contract or
arrangement is under consideration.

      

      20.           It
shall not be necessary for Directors to sign their names in any book which may
be kept for the purpose of recording attendance at meeting.

      

      21.           (a)
Subject to the following proviso the power of the Directors to regulate their
proceedings shall include (if duly approved by the Directors) participation in
meetings by conference telephone or any kind of communication or electronic
communication (as defined in the Electronic Communications Act 2000) – Provided
:-

      

      
        	
                1)  

              	
                that
      proper and reasonable notice of the meeting and of the proposal to
      conduct  it in accordance with this Clause shall have been given
      to all persons who are entitled to attend meetings of Directors;
      and

              

      

      

      
        	
                2)  

              	
                that
      written minutes of and the transcripts of all resolutions of the Directors
      at all meetings of Directors which shall be conducted in accordance with
      this Clause shall be certified in writing by all the participating
      Directors by electronic communication or otherwise to be
      correct.  The reference to “resolutions” in this sub-clause b)
      means any proposed resolution which to be valid requires proper
      certification in accordance with this
Clause.

              

      

      

      (b) The
date of any resolution passed at any meeting which may be held in accordance
with the preceding Clause shall be when the transcript of the resolution shall
be certified by the last Director to do so.

      

      DISQUALIFICATION OF
DIRECTORS

      22.           The
office of a Director shall be vacated if he becomes incapable by reason of
illness or injury of managing and administering his property and affairs and
Regulation 81 of Table A shall be modified accordingly.

      

      ROTATION OF
DIRECTORS

      

      23.           The
Directors shall not be required to retire by rotation nor shall the Directors or
any of them be required to retire from office at the first annual general
meeting and Table A shall be modified accordingly.

      

      THE SEAL

      

      24.           If
the Company has a seal it shall be used only with the authority of the Directors
or of a committee of the Directors.  The Directors may determine who
shall sign any instrument to which the seal is affixed and unless otherwise so
determined it shall be signed by a Director and by the Secretary or by a second
Director.  The obligation under Regulation 6 of Table A relating to
the sealing of share certificates shall apply only if the Company has a
seal.  Regulation 101 in Table A shall not apply to the
Company.

      

      INDEMNITY

      

      25.           (a)
Regulation 118 in Table A shall not apply to the Company.  Every
Director and other officer of the Company shall be indemnified out of the assets
of the Company against all losses or liabilities which he may sustain or incur
in or about the execution and discharge of the duties of his office or otherwise
in relation thereto, including any liability incurred by him in defending any
proceedings, whether civil or criminal, in which judgment is given in his favour
or in which he is acquitted or in connection with any application under Sections
144 or 727 of the Act in which relief is granted to him by the court, and no
Director or other officer shall be liable for any loss, damage or misfortune
which may happen to or be incurred by the Company in the execution of the duties
of his office or in relation thereto.  But this Article shall only
have effect in so far as its provisions are not avoided by Sections 309A and
309B of the Act.

      

      (b) The Directors shall have power to
purchase and maintain at the expense of the Company an insurance policy for any
Director (including an alternate Director), Officer or Auditor of the Company
against any such liability as is referred to in Section 309A(5) of the
Act.

      

      

      

      

      

      

      

      

      

      

      ANNEX
B

      

      

      

      

      

      

      

      

      ANNEX
C

      

      

      

      

      

      

      

      

      

      

      

      

      ANNEX
D

      

      

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      

      

      

      

      MGS
DISTRIBUTION LIMITED

      

      

      BUDGET
FOR YEAR 2007 TO 2011

      

      VERSION
6 (revised May 07)

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      ** THE
REMAINING, CONFIDENTIAL PORTION OF THIS EXHIBIT OMITTED AND FILED SEPARATELY
WITH THE SEC PURSUANT TO RULE 24b-2 OF THE 1934 ACT

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