Amendment to Financing Agreement between Movie Star, Inc. and Rosenthal & Rosenthal, Inc. (December 26, 2002)

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Summary

Movie Star, Inc. and Rosenthal & Rosenthal, Inc. have agreed to amend their existing Financing Agreement, originally dated April 24, 1996. The amendment adds a new event of default related to insurance policies on the lives of Melvin Knigin or Saul Pomerantz if the insurer contests the policy or a claim. However, if this specific default occurs, Movie Star, Inc. can cure it by maintaining at least $2,500,000 in excess availability with the lender. All other terms of the original agreement remain unchanged.

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EX-10.5.12 4 moviestar10q_ex10510.txt LETTER AGREEMENT EXHIBIT 10.5.12 December 26, 2002 MOVIE STAR, INC. 1115 Broadway New York, NY 10010 Re: FINANCING AGREEMENT It is mutually agreed that the Financing Agreement entered into between us dated April 24, 1996, as amended or supplemented (the "Financing Agreement") is amended effective December 26, 2002 as follows: 1. The following shall be added to Section 8.1, after subsection (f) thereof, as a new subsection: "(g) the issuer of any insurance policy on the life of Melvin Knigin or Saul Pomerantz which insurance policy has been assigned to Lender, contests (i) any portion of such policy or (ii) any claim made under such policy." 2. The following shall be added as a new sentence between the second and third sentences of Section 8.1: "Notwithstanding the foregoing, a Default arising solely by reason of subsection (g) of this Section 8.1 can be cured by Borrower creating and maintaining with Lender minimum of $2,500,000 of excess availability under the formulae for availability pursuant to Section 2.1 hereof." Except as hereinafter specifically set forth the Financing Agreement, shall continue unmodified. ROSENTHAL & ROSENTHAL, INC. BY: /s/ Jerry Sandak ------------------------ JERRY SANDAK Senior Executive Vice President THE FOREGOING IS ACKNOWLEDGED: MOVIE STAR, INC. By: /s/ Thomas Rende -------------------- THOMAS RENDE Chief Financial Officer