------------------------------------- OMB APPROVAL ------------------------------------- OMB Number: 3235-0060 Expires: April 30, 2009 Estimated average burden hours per response............38.0 ------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): June 30, 2006 ------------- MOVIE STAR, INC. ---------------- (Exact Name of Registrant as Specified in Charter) New York 1-5893 13-5651322 -------------------------------- --------------------- ---------------------- (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) 1115 Broadway, New York, New York 10010 ---------------------------------------------------------- ----------------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (212) 684-3400 -------------- Not Applicable -------------- (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT Credit Agreement ---------------- On June 30, 2006, Movie Star, Inc. ("Company") obtained a new line of credit which matures on June 30, 2008 and is subject to annual renewals thereafter. Under the terms of this line of credit, the Company may borrow up to $30,000,000 in the aggregate, including revolving loans and outstanding letters of credit. Availability under the line of credit is subject to the Company's compliance with agreed upon financial formulas. Direct borrowings under this line bear interest at the prime rate less 0.75% per annum. The line of credit is secured by substantially all of the Company's assets. Director Compensation --------------------- On June 30, 2006, the Company entered into a letter agreement with two independent directors of the Company who comprise an ad hoc committee recently established by the Board of Directors. Pursuant to the agreement, each committee member will receive a fee of $7,500 per month commencing with the month ended June 30, 2006 for a period of up to four months. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS (d) Exhibits 10.19 Accounts Receivable Financing Agreement dated June 30, 2006 between The CIT Group/Commercial Services, Inc. and the Company 10.20 Inventory Security Agreement dated June 30, 2006 between The CIT Group/Commercial Services, Inc. and the Company 10.21 Letter of Credit Agreement dated June 30, 2006 between The CIT Group/Commercial Services, Inc. and the Company 10.22 Letter Agreement dated June 30, 2006 by and between the Company and each of Joel Simon and Michael Salberg 2 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: July 5, 2006 MOVIE STAR, INC. By: /s/ Thomas Rende ------------------------------- Thomas Rende Chief Financial Officer and Principal Accounting Officer 3