CIT COMMERCIAL SERVICES     T: 212 382-7000
                      1211 Avenue of the Americas
                      New York, NY 10036


[CIT LOGO OMITTED]
                                                                   June 30, 2006



Movie Star, Inc.
1115 Broadway
New York , New York 10010

                     ACCOUNTS RECEIVABLE FINANCING AGREEMENT
                     ---------------------------------------

Ladies and Gentlemen:

In consideration of our extending loans and other financial accommodations to
you on one or more occasions, in our sole discretion in each instance, the
following shall constitute the accounts receivable financing agreement (the
"Agreement") between us.

                                 I. DEFINITIONS

1.1      All terms used herein and defined in the Uniform Commercial Code shall
         have the meanings given therein unless otherwise defined herein.

1.2      "Accounts" shall mean and include all of your accounts created by or
         arising from your sales of goods or rendition of services (including,
         without limitation, all accounts arising from sales made or services
         rendered under any of your tradenames or styles, or through any of your
         divisions), instruments, documents, chattel paper (including electronic
         chattel paper), general intangibles (including, without limitation, all
         federal, state and local income tax refunds, payment intangibles and
         all other rights to payment), and all forms of obligations owing to
         you, whether secured or unsecured, all whether now existing or
         hereafter created or arising, and whether or not specifically assigned
         to us hereunder.

1.3      "Collateral" shall mean and include: (a) Accounts; (b) all of your
         present and future monies, securities and other property now or
         hereafter held or received by or in transit to us from or for your
         account, whether for safekeeping, pledge, custody, transmission,
         collection or otherwise; (c) all of your present and future deposits,
         balances, sums and credits in our possession or control, and all of
         your present and future claims against us; (d) all of your present and
         future liens, security interests, rights, remedies, title and interest
         in, to and in respect of all present and future Accounts and other
         Collateral, including, without limitation: (i) rights and remedies
         under or relating to guaranties, contracts of suretyship, letters of
         credit, credit insurance, supporting obligations, letter of credit
         rights or other types of credit enhancements, (ii) rights of stoppage
         in transit, rescission, replevin, repossession, reclamation and other
         rights and remedies of an unpaid vendor, lienor or secured party, (iii)
         goods described in invoices, documents, contracts or instruments with
         respect to, or






         otherwise representing or evidencing Accounts or other Collateral,
         including, without limitation, returned, repossessed and reclaimed
         goods, and (iv) deposits by and property of Customers or other persons
         securing the Obligations of Customers; (e) all of your right, title
         and interest in, to and in respect of any and all other personal
         property in or upon which you have granted or may hereafter grant a
         security interest or lien to us in this Agreement or otherwise; (f)
         all of your books of account of every kind or nature, purchase and
         sale agreements, invoices, ledger cards, computer programs, bills of
         lading and other shipping evidence, statements, correspondence,
         memoranda, credit files and other data (written, electronic or
         otherwise) relating to the Collateral or any Customer, together with
         the file cabinets or containers in which the foregoing are stored
         ("Records"); (g) all of your present and future patents, trademarks,
         and copyrights whether or not registered in the United States
         Copyright or Patent Offices, the goodwill of the business in
         connection with which such patents, trademarks, and copyrights are or
         may be used, and any royalties and other fees which are or may become
         due for the use of any such patents, trademarks, or copyrights; and
         (h) all proceeds and products of the foregoing, in any form,
         including, without limitation, insurance proceeds and any claims
         against third parties for loss or damage to or destruction of any or
         all of the foregoing.

1.4      "Contract Year" shall mean the twelve successive month period beginning
         as of the last day of the month in which we execute this Agreement and
         as of each anniversary of such date.

1.5      "Customer" shall mean and include the account debtor with respect to
         any of the Accounts and/or the prospective purchaser or user of goods,
         services or both with respect to any contract or contract right, and/or
         any party who enters into or proposes to enter into any contract or
         other arrangement with you, pursuant to which you are to deliver any
         personal property or perform any services.

1.6      "Eligible Accounts" shall mean such Accounts arising in the ordinary
         course of your business and which we, in our sole discretion, deem to
         be Eligible Accounts based on such considerations as we may from time
         to time deem appropriate, including that it is evidenced by an invoice
         or other documentation satisfactory to us. An Account shall not be
         deemed eligible in any event unless such Account is subject to our
         first priority perfected security interest and is not subject to any
         other lien or security interest. In addition, no Account shall be an
         Eligible Account if:

         (a)      it arises out of a sale made by you to your affiliate or to a
                  person controlled by you or your affiliate; or

         (b)      it is due more than ninety (90) days from the original invoice
                  date or unpaid more than sixty (60) days from the due date; or

         (c)      more than 50% of the Accounts owed by such Customer are not
                  deemed to be Eligible Accounts hereunder; or

         (d)      any representation, warranty or covenant contained in this
                  Agreement with respect to such Account has, in our sole
                  discretion, been breached; or

         (e)      the Customer is also your creditor or supplier (unless prior
                  to our acceptance, a no-offset letter has been received by and
                  is, in our sole discretion, acceptable to us); or


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         (f)      the Customer shall (a) apply for, suffer, or consent to the
                  appointment of, or the taking of possession by, a receiver,
                  custodian, trustee or liquidator of itself or of all or a
                  substantial part of its property or call a meeting of its
                  creditors, (b) admit in writing its inability, or be generally
                  unable, to pay its debts as they become due, (c) cease or
                  materially decrease operation of its present business, (d)
                  make a general assignment for the benefit of creditors, (e)
                  commence a voluntary case under any State or Federal
                  bankruptcy or insolvency law (as now or hereafter in effect),
                  (f) be adjudicated a bankrupt or insolvent, (g) file a
                  petition seeking to take advantage of any other law providing
                  for the relief of debtors, (h) acquiesce to, or fail to have
                  dismissed, any petition which is filed against it in an
                  involuntary case under any such bankruptcy or insolvency law,
                  or (i) take any action for the purpose of effecting any of the
                  foregoing; or

         (g)      it arises out of a sale made by you to a Customer outside the
                  United States, unless the payment thereof is assured by a
                  letter of credit, guaranty or acceptance on terms acceptable
                  to us in our sole discretion or the sale is otherwise
                  acceptable to us in our sole discretion; or

         (h)      it arises out of a sale made by you to a Customer on a
                  bill-and-hold, guaranteed sale, sale-and-return, sale on
                  approval, consignment or any other repurchase or return basis
                  or is evidenced by chattel paper; or

         (i)      we, in our sole discretion, determine that collection of such
                  Account is insecure or that payment of such Account may not be
                  made by reason of the Customer's financial inability to pay;
                  or

         (j)      the Customer is the United States of America, any state, any
                  other governmental entity, or any department, agency or
                  instrumentality of any of them, unless you assign to us, in a
                  manner acceptable to us, your right to payment of such Account
                  pursuant to the Assignment of Claims Act of 1940, as amended,
                  or any other applicable statute, rule, regulation or the like;
                  or

         (k)      the goods giving rise to such Account have not been shipped
                  and delivered to and accepted by the Customer or the services
                  giving rise to such Account have not been completely performed
                  by you and accepted by the Customer or the Account otherwise
                  does not represent a final sale or performance; or

         (l)      the Customer has disputed liability with respect to the
                  Account, or the Customer has made any claim with respect to
                  any other Account due from such Customer to you (provided that
                  we in our sole discretion may only exclude the disputed
                  Account), or the Account otherwise is or may become subject to
                  any set-off or recoupment by the Customer, or the Account is
                  contingent in any respect or for any reason; or

         (m)      you have allowed or made any agreement with any Customer for
                  any deduction therefrom, except for discounts or allowances
                  made in the ordinary course of business for prompt payment,
                  all of which discounts or allowances are reflected in the
                  calculation of the face value of each respective invoice
                  related thereto.

1.7      "Inventory Security Agreement" shall mean that certain Inventory
         Security Agreement, dated as of the date hereof, as amended, between
         you and us, as the same may hereafter be amended, modified,
         supplemented or restated from time to time).


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1.8      "JPMorgan Rate" shall mean the per annum rate of interest publicly
         announced by JPMorgan Chase Bank, National Association in New York, New
         York, from time to time as its prime rate. (The prime rate is not
         intended to be the lowest rate of interest charged by JPMorgan Chase
         Bank, National Association to its borrowers.)

1.9      "Letter of Credit" shall mean any letter of credit issued on your
         behalf as applicant with respect to which we were asked to join you in
         the application for such letter of credit or any letter of credit
         issued by us or any of our affiliates for your account, as more fully
         described in the Letter of Credit Agreement.

1.10     "Letter of Credit Agreement" shall mean that certain Letter of Credit
         Agreement, dated as of the date hereof, as amended, between you and us,
         as the same may hereafter be amended, modified, supplemented or
         restated from time to time.

1.11     "Net Amount of Eligible Accounts" shall mean and include the gross
         amount of Eligible Accounts less (a) returns, discounts, claims,
         credits and allowances of any nature at any time issued, owing,

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