EXHIBIT 10.11

                      CONTINUING LETTER OF CREDIT AGREEMENT

                                                             Date: June 30, 2004


TO:  HSBC Bank USA
     452 Fifth Avenue
     New York, New York  10018

Gentlemen:

         Unless otherwise agreed in writing, the following Terms and Conditions
shall apply to our application for and your issuance of each letter of credit on
our behalf, including amendments or modifications thereto. Each such letter of
credit shall hereinafter be referred to as the "Credit".

         1.  PREPAYMENT/REIMBURSEMENT. We agree in the case of each Draft,
             whether or not the Credit calls for Deferred Payments, to reimburse
             you at your principal banking office at the above address or at
             such other banking office of yours as you and we may agree upon in
             writing, at once, in United States currency in immediately
             available funds, the amount paid on such Draft, or, if so demanded
             by you, to pay to you at your office in advance, at least in time
             for cover to reach the place of payment at maturity, in United
             States currency in immediately available funds, the amount required
             to pay such Draft.

         2.  (a) COMMISSIONS. We agree to pay you, on demand, (i) your
             commission in connection with the Credit, at your customary rates
             in effect at the time of the Application (or at any special rate on
             which you shall agree with us, in writing), as well as (ii) the
             commission(s) of any correspondent, confirming, paying, accepting
             or negotiating banks at their customary rates in effect at the time
             of their taking any action in connection with the Credit. (b)
             INTEREST. Except as expressly provided for elsewhere in this
             Agreement or otherwise in writing signed or accepted by you, any
             and all amounts due you from us under this Agreement and/or the
             Application, including without limitation our obligations under
             paragraph 1 of this Agreement, shall bear interest, payable on
             demand, from the date due until paid in full at the lesser of the
             maximum rate allowed by law or a rate per year equal to two percent
             (2%) per year above your stated Reference Rate, as reflected on
             your books and records (the "Reference Rate"), which rate shall
             fluctuate from time to time when and as your Reference Rate shall
             change. Your determination of your Reference Rate shall be
             conclusive and final. We recognize and acknowledge that you may
             extend credit to others at rates below your stated Reference Rate.
             (c) FEES, COSTS AND EXPENSES. We agree to pay or reimburse you and
             your correspondents on demand for, and to indemnify and hold
             harmless you and your correspondents from and against, all costs,
             charges, and expenses, including reasonable attorneys' fees and
             expenses incurred by you and your correspondents arising in any
             manner, from, out of, or in connection with (i) the Application,
             (ii) this Agreement, (iii) the Credit, (iv) compliance with
             governmental exchange regulations applicable to the purchase of
             foreign currency, (v) collection of our Liabilities, (vi)
             protection of any of your or your correspondents' rights or
             interests in connection with any of the foregoing, and (vii) any
             litigation in connection with any of the foregoing. The foregoing
             obligation to pay, reimburse and indemnify shall not apply to the
             extent that any such costs, charges or expenses result from your or
             your correspondents' own gross negligence or bad faith. (d)
             PAYMENTS FREE OF TAXES. Any and all payments made to you under this
             Agreement shall be made free and clear of and without deduction for
             any present or future taxes, levies, imposts, deductions, charges,
             or withholdings, and all liabilities with respect thereto, in any
             jurisdiction worldwide, excluding taxes imposed on your net income
             and all income and franchise taxes imposed on you. All such
             non-excluded taxes, levies, imposts, deductions, charges,
             withholdings and liabilities which are imposed with respect to this
             Agreement or any amount payable under it are hereinafter called
             "Taxes". If we shall be required by law to deduct any Taxes from or
             in respect of any sum payable under this Agreement, (i) the sum
             payable shall be increased as may be necessary so that, after
             making all required deductions (including deductions applicable to
             additional sums payable under this subparagraph), you shall receive
             an amount equal to the sum you would have received had no such
             deductions been made, (ii) we shall make such deductions, and (iii)
             we shall pay the full amount deducted to the relevant taxation
             authority or other authority in accordance with applicable law. We
             will indemnify you for the full amount of Taxes



             (including, without limitation, any Taxes imposed by any
             jurisdiction on amounts payable under this subparagraph) paid by
             you and any liability (including penalties, interest and expenses)
             arising therefrom or with respect thereto, whether or not such
             Taxes were correctly or legally asserted. Payment pursuant to this
             indemnification shall be made upon written demand therefor. Within
             30 days after the date of any payment of Taxes we will furnish you
             with evidence thereof. (e) RESERVES, ASSESSMENT CHARGES, CAPITAL
             REQUIREMENTS AND OTHER REGULATORY COSTS. In the event that you are
             required by, or as a result of any action or policy position taken
             by, any regulatory authority, to pay, institute, increase, maintain
             at any particular level or otherwise to incur any reserves,
             assessment charges or capital requirements or other regulatory
             costs in connection with or as a result of this Agreement or the
             Credit, in order for you to be in compliance with any present or
             future applicable law or governmental, regulation, guideline,
             order, interpretation (including but not limited to an
             interpretation by a court or any regulatory authority that any law
             or regulation requires or permits the imposition of such specified
             costs in connection with or as a result of this Agreement or the
             Credit) or request (whether or not having the force of law), we
             agree to pay you on demand and to indemnify and hold you harmless
             from and against all costs and expenses of, or of establishing or
             maintaining, such specified costs, as such costs and expenses shall
             be reasonably determined by you.

         3.  DEFINITIONS. As used in this Agreement: (a) "Bank Affiliate" shall
             include any person, firm or entity acting as nominee or agent for
             you, and any corporation which is directly or indirectly owned or
             controlled by, or under common control with you; (b) "Deferred
             Payment" shall mean an arrangement provided for in the Credit
             pursuant to which the Beneficiary shall have the right or
             obligation to present Documents for examination by you in advance
             of presenting a Drafts or Draft drawn under the Credit; (c)
             "Documents" shall mean any and all certificates, documents and
             statements accompanying or relating to the Credit and/or to Drafts
             drawn under the Credit, but shall not mean Drafts; (d) "Draft"
             shall mean a written request, order or demand for the payment of
             money, whether or not negotiable; (e) "Liabilities" shall include
             any and all of the obligations and liabilities under or with
             reference to the Credit, the Application, this Agreement, any other
             letter of credit issued by you and any and all other of our debts
             to, or held or to be held by, you in any jurisdiction worldwide,
             for your own account or as agent for another or others, whether
             created directly or acquired by assignment or otherwise; (f)
             "Party" shall include (i) us, (ii) any guarantor, surety or
             accommodation party with respect to, or any party that provides any
             collateral as security for, or any party that provides a comfort
             letter, letter of awareness, letter of intent or similar document
             with respect to any of the Liabilities, and (iii) if any Party is a
             partnership, any general partner of such Party; (g) "Property"
             shall mean any and all goods, merchandise, securities, funds,
             chosen in action, and any and all other forms of property whether
             real, personal or mixed, tangible or intangible, and any right or
             interest therein; (h) "UCC" shall mean the New York Uniform
             Commercial Code, as in effect from time to time; and (i) "UCP"
             shall mean the Uniform Customs and Practice for Documentary Credits
             adopted by the Congress of the International Chamber of Commerce
             ("ICC"), 1993 revision, ICC Publication No. 500 as amended or
             substituted for and as in effect from time to time.

         4.  ACCEPTABLE DOCUMENTS UNDER THE CREDIT; ADMINISTRATIVE AGREEMENTS.
             (a) SUBSTANTIAL COMPLIANCE. Except as expressly provided otherwise
             on the Application, we authorize you to accept as complying with
             the Credit any Drafts and/or Documents which are in substantial but
             not strict compliance with the Credit without affecting or
             relieving us of any of our Liabilities under this Agreement.
             Nevertheless, you may in your discretion, refuse to accept any or
             all such Drafts and/or Documents unless they are in strict
             compliance with the Credit. (b) APPLICANT'S INSTRUCTIONS. In
             administering the Credit, you and your correspondents may act in
             reliance upon any oral, telephonic, telegraphic, facsimile,
             electronic or written request, agreement, notice, consent, waiver
             or other communication believed in good faith to have been
             authorized by us, whether or not actually given or signed by an
             authorized person. (c) APPLICABLE STANDARDS. Except as otherwise
             expressly provided, you and/or your correspondents may, to the
             extent that you or they deem appropriate: (i) consider applicable
             to the Credit and any or all transactions thereunder any laws,
             regulations, customs, or usages, foreign or domestic, deemed
             appropriate and not inconsistent with the UCP; (ii) accept as
             "bills of lading" documents acknowledging receipt of property, for
             transportation by or on behalf of carriers, and, as "steamer bills
             of lading," such documents of carriers whether or not the entire
             transportation is by water; (iii) accept bills of lading not marked
             "notify the account party named in the Credit" or not indicating
             the letter of credit number notwithstanding anything herein
             specified to the contrary. (d) INSURANCE. We will cause the
             property covered by the Credit to be adequately insured in amounts,
             against risks and by companies satisfactory to you, assign the
             policies or certificates thereof to you or make loss payable to
             you, at your option, and furnish you upon request evidence of

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             compliance with the foregoing. If you at any time deem such
             insurance inadequate for any reason, you may procure such insurance
             as you deem necessary, at our expense. (e) COMPLIANCE WITH
             REGULATIONS. We shall procure promptly necessary import, export or
             shipping licenses for the property covered by the Credit, comply
             with all governmental regulations, foreign or domestic (including
             exchange regulations) with regard thereto or the financing thereof,
             and furnish to you, at your request, certificates evidencing the
             foregoing, and on demand, pay to you, any amount(s) you may be
             required to expend in respect thereto. (f) RELEASE OF PROPERTY OR
             DOCUMENTS - TRUST RECEIPTS. if you deliver to us or upon our order
             any of the property, documents or instruments relative to the
             Credit, or held by you as security hereunder, prior to payment in
             full of all of our obligations secured thereby, we will deliver to
             you trust receipts therefor, or other security agreements and
             statements of trust receipt financing, or other financing
             statements, complying with applicable law and in such form as you
             may request, and pay all necessary filing fees, it being understood
             that any such delivery is made in reliance upon this Agreement and
             that your rights specified herein shall be in addition to your
             rights under any such applicable law, trust receipt or security
             agreement. (g) STEAMSHIP GUARANTY, ETC. (i) In case we ask you,
             orally or by written request, at any time prior to your receipt of
             documents relative to the Credit, to issue your Steamship Guaranty,
             Delivery Order or Air Release to the carrier company or its agent
             to enable us to receive the property covered by the Credit, we
             hereby indemnify and hold you harmless from all consequences of the
             delivery of said Guaranty, Delivery Order or Air Release and agree
             to pay you on demand any and all claims, losses and/or expenses
             that may arise under or in respect of said Guaranty, Delivery Order
             or Air Release. You also may at any time pay, compromise or adjust
             any such claim and we agree to pay you on demand any amount
             required or expended by you for such purpose. We will immediately
             upon receipt of the original bill(s) of lading arrange for the
             prompt release or return to you of any guaranty or release issued
             by you in connection with the Credit.

         5.  MODIFICATIONS, EXTENSIONS AND INCREASES. Any agreement to modify
             the Credit shall require the Beneficiary's consent. In your
             discretion, the Beneficiary's consent need not be in writing and
             may be indicated by the Beneficiary's acquiescence in modifications
             communicated to and received by the Beneficiary.

         6.  DIVISION OF RESPONSIBILITIES. (a) APPLICANT'S RESPONSIBILITIES. In
             the event you are compelled by any binding judgment, decree, order
             or award to make any payment under the Credit or to honor any
             Drafts or Documents as complying with the Credit, our obligations
             arising under this Agreement to reimburse you shall continue to
             apply or, if previously expired, shall be immediately restored,
             upon the rendering of any such judgment, decree, order or award,
             regardless of whether or not such judgment, decree, order or award
             shall be rendered, or any payment pursuant thereto shall be made,
             after the expiration of the Credit. (b) NON-RESPONSIBILITY OF
             BANKS. Subject to paragraph 7 of this Agreement, neither you nor
             your correspondents shall be liable for any of the following: (i)
             LACK OF CONTROL. Any matter or event beyond your or your
             correspondents' reasonable control; (ii) DOCUMENTS. The
             truthfulness or accuracy of any statement contained in any
             Document, or the validity, sufficiency, or genuineness of Documents
             or Drafts, even if such Documents or Drafts should in fact prove to
             be in any or all respects invalid, insufficient, fraudulent or
             forged; (iii) PARTIES ISSUING DOCUMENTS. The solvency or
             responsibility of any party issuing any Document; (iv) ARRIVAL OF
             DOCUMENTS. Any delay in arrival or failure to arrive of any
             Documents relating to the Credit; (v) NOTICES. Any delay in giving
             or failure to give any notice; (vi) LOCAL LAWS. Any laws, acts,
             decrees, customs or regulations, legal or illegal, of any
             government or governmental agency or of any authority actually in
             control, of or which may be effective in, places of negotiation
             and/or payment of the Credit or otherwise relating to the Credit,
             Documents, or Drafts under the Credit; (vii) WAR. Any declared or
             undeclared war or any military, guerrilla or terrorist operation;
             (viii) COMPLIANCE WITH CREDIT TERMS. Failure of any Draft or
             Document to bear any reference or adequate reference to the Credit;
             failure of Documents to accompany any Draft at negotiation; or
             failure of any person to note the amount of any Draft on the
             reverse of the Credit or to surrender or take up the Credit or to
             send or forward Documents apart from Drafts as required by the
             terms of the Credit; it is agreed that each of the provisions
             referred to in this subparagraph 6(b)(viii), if appearing as a
             requirement in the Credit itself, may be waived by you; (ix)
             COMMUNICATIONS. Errors, omissions, mutilations, losses, failures,
             defaults, interruptions or delays in transmission, delivery,
             receipt, or recording of any messages, by mail, telex, cable,
             telegraph, wireless, facsimile, SWIFT, or otherwise, whether or not
             arising out of the use of codes; (x) CORRESPONDENTS. Any act,
             error, neglect, default, insolvency or failure in business of any
             of your correspondents, or of correspondents of your correspondents
             except that any such correspondent shall be liable, if at all,
             solely for its own bad faith or gross negligence, or if and solely
             to the extent required by law and not disclaimable, for its own
             negligence; (xi) INVALID INSTRUCTIONS. Any consequence resulting
             from the


                                       3


             fact that any instructions, oral or written, given to you
             purporting to be by us or on our behalf and believed by you in good
             faith and in the exercise of ordinary care to be valid, which
             pertain to the opening of the Credit, payments against Documents
             despite discrepancies, any modification of the Credit or any other
             action to be taken or omitted in connection with the Credit were,
             wholly or in part, unauthorized, fraudulent or otherwise invalid;
             (xii) UNIFORM CUSTOMS AND PRACTICE. Any matter as to which banks
             assume no liability or responsibility pursuant to the UCP; (xiii)
             TRANSLATIONS. Any consequence resulting from errors in or
             inadequacy of any translation of or in connection with: (A) the
             Application, if not entirely written in English, (B) the Credit, if
             the Credit is requested to be written in any language other than
             English, or (C) any Document or Draft not entirely written in
             English; or (xiv) GOOD FAITH. Without limiting the foregoing, any
             act or omission of you or your correspondents in good faith except,
             respectively, solely for your or your correspondent's own gross
             negligence or bad faith or, if and solely to the extent required by
             law and not disclaimable, for your or its own negligence. In any
             event, neither you nor any correspondent shall have any liability
             for any special, consequential or punitive damages. (c) PAYMENTS BY
             CORRESPONDENTS; FAILURE TO RECEIVE TRANSMITTED DOCUMENTS. If the
             Credit provides that payment is to be made by your correspondent,
             neither you nor such correspondent shall be responsible for your
             failure to receive any of the Documents specified in the Credit or
             for any delay in connection with them. Our obligation to make
             reimbursement shall not be affected by any such failure or delay.
             (d) DELIVERY OF DOCUMENTS. (i) if the Credit calls for sight Drafts
             without providing for Deferred Payments, Documents presented under
             the Credit shall be released by you to us or at our instruction
             promptly after you pay the respective Draft, once we shall have
             complied with paragraph 1; (ii) if the Credit calls for Deferred
             Payments, Documents presented under the Credit in advance of Drafts
             shall be released by you to us or at our instruction promptly after
             you examine the Documents, provided they conform to the terms and
             conditions of the Credit, but such release shall not affect or
             reduce our obligations under paragraph 1.

         7.  INDEMNITY. In addition to our obligations under other provisions of
             this Agreement, we hereby agree to indemnify and hold you harmless
             from and against any and all costs, expenses (including reasonable
             attorneys' fees and expenses), losses, claims, obligations and
             liabilities arising in any manner from, out of, or in connection
             with, the Application, this Agreement or the Credit, and your
             issuing the Credit or acting thereunder or hereunder, or in
             connection with any action, suit or proceeding seeking to enjoin or
             restrain you from acting pursuant to the Credit, the Application or
             this Agreement, including but not limited to all obligations and
             responsibilities imposed by foreign law and usages and any and all
             claims resulting from the endorsement and/or Transfer to us or at
             our request of any Documents and/or your acting in accordance with
             our instructions, unless caused by your gross negligence or bad
             faith or, if and solely to the extent required by law and not
             disclaimable, for your negligence. We hereby similarly indemnify
             and hold harmless each and every correspondent acting in connection
             with the Credit, except with respect to any such correspondent's
             gross negligence or bad faith or, if and solely to the extent
             required by law and not disclaimable, negligence.

         8.  GOVERNMENTAL COMPLIANCE. (a) COMPLIANCE. We agree: (i) to comply
             with all applicable foreign and United States governmental laws,
             rules, regulations, orders and other requirements, including
             without limitation those arising under or relating to international
             agreements, relating to the transactions in connection with the
             Credit, and (ii) to furnish such documentation and certificates
             regarding compliance with governmental requirements as you may at
             any time require; (b) IMPORT AND EXPORT RESTRICTIONS, ETC. Without
             limiting the foregoing, we warrant and represent that every
             transaction in connection with the Credit will be in compliance
             with, and will not be prohibited under, any applicable governmental
             law, rule, regulation, licensing requirement or order regarding
             foreign asset controls, export controls, import controls,
             antiboycott requirements, foreign funds controls and foreign
             sanctions.

         9.  RULES GOVERNING CREDIT. The Credit applied for by the Application
             shall be subject to and interpreted in accordance with the UCP as
             in effect on the date the Credit shall be issued and, if and to the
             extent so provided by you in your discretion in the Credit and to
             the extent not inconsistent with the UCP, to the internal law
             (excluding conflict of laws rules) of the State of New York
             including without limitation Article 5 of the UCC.

         10. WARRANTIES AND REPRESENTATIONS. We warrant and represent to you:
             (a) If we purport to be a partnership or corporation, that we have
             been duly formed under applicable law and are in good standing in
             the jurisdiction where we have been organized. (b) That we are
             authorized to do business in each jurisdiction where we are doing
             business. (c) That the Application and this Agreement have

                                       4


             been and are duly authorized and validly executed in accordance
             with applicable law and all governing documents and agreements. (d)
             That the Application and this Agreement are our legal, valid and
             binding obligations and are enforceable against us in accordance
             with their terms. (e) That no authorization, consent or approval of
             any governmental or regulatory authority is or will be required or,
             if required, that each such authorization, consent or approval has
             been duly acquired, in connection with all matters relating to the
             Application, this Agreement and the Credit. (f) That no document
             executed or thing done in connection with the Application, this
             Agreement or the Credit is or shall be in conflict with or
             constitute a default under any agreement, instrument or applicable
             law to which we are a party or by which we are bound. (g) That
             there is no action, suit or proceeding pending or, to our
             knowledge, threatened against us which could have a material
             adverse affect on our financial condition or business, except as
             disclosed in writing to you.

         11. SUPPLYING INFORMATION. We agree to furnish to you, promptly upon
             your request therefor, copies of our financial statements (audited
             and/or unaudited), as well as all documents and forms filed with
             the United States Securities and Exchange Commission, and such
             other information respecting our business or properties or our
             condition or operations, financial or otherwise, as you may from
             time to time reasonably request.

         12. SECURITY INTEREST; SET-OFF. You shall have a continuing lien and
             right of set-off on, and are hereby granted a first priority
             security interest in, all of our deposits (general and special) and
             credits at any time maintained with you or any Bank Affiliate, and
             may apply all or part of the same to any Liabilities, at any time
             or times, without prior notice. As security for the prompt and
             unconditional payment of any and all Liabilities, you shall have a
             continuing lien on, and are hereby granted a first priority
             security interest in, all of our property and the proceeds thereof
             now or hereafter held or received by or for you or any Bank
             Affiliate for any purpose, whether or not for the express purpose
             of serving as collateral security for the Liabilities, and in: (i)
             all documents or instruments accompanying or relative to drafts
             under the Credit and all property shipped, stored or otherwise
             disposed of in connection with the Credit or in any way relating
             thereto and all proceeds of the foregoing; and (ii) all our rights
             and causes of action against all parties arising from or in
             connection with the contract of sale or purchase of the property
             covered by the Credit, or any guarantees, agreements or other
             undertakings (including those in effect between us and any other
             account party or the beneficiary named in the Credit), credits,
             policies of insurance or other assurances in connection therewith.
             We agree at any time or from time to time, upon your demand, to
             furnish you with additional security to your satisfaction. We
             further agree to execute such financing statements and other
             writings as shall be necessary to perfect and maintain your
             security interest in the aforesaid property and to pay all costs of
             filing financing, continuation and termination statements with
             respect to such security interest, and where the applicable law
             permits, we hereby authorize you to file any such financing
             statements without our signature. You may at any time or times
             transfer into your or your nominee's name all or any part of such
             security, before or after maturity of any of the Liabilities and
             without any notice to us or any other person. Whenever you deem it
             necessary for your or our protection, or after an Event of Default
             specified in paragraph 13, or other default, you shall thereupon
             have, in addition to all other rights and remedies under applicable
             law, the rights and remedies of a secured party under the Uniform
             Commercial Code of New York. Any notice of disposition of property
             shall be deemed reasonable if mailed at least five days before such
             disposition to our last address on your records. If the Liabilities
             are secured by a security agreement and/or other security documents
             which we have separately delivered to you (whether or not such
             documents make specific reference to this Agreement), reference to
             such documents is made for a description of the collateral provided
             thereby and of your and our rights therein. Your rights and
             remedies provided for hereunder (including but not limited to the
             right to accelerate Liabilities and to realize on any security for
             Liabilities) are cumulative with your rights and remedies available
             under any other instrument or agreement or under applicable law. We
             will do all such other acts and things and will execute and deliver
             all such other instruments and documents, including further
             security agreements, pledges, endorsements, assignments, and
             notices as you may reasonably deem necessary or advisable from time
             to time in order to perfect and preserve the liens in the
             collateral as contemplated by this Agreement. You, acting through
             your officers, employees and authorized agents, are hereby
             irrevocably appointed our attorney-in-fact to do, at our expense,
             all acts and things which you may reasonably deem necessary or
             advisable to preserve, perfect, continue to perfect and/or maintain
             such liens in the collateral and your priority therein, including
             the signing of financing, continuation or other similar statements
             and notices on our behalf. We hereby authorize you to sign and file
             financing statements with respect to the collateral referred to
             above without our signature. We shall pay all filing fees for
             financing statements with respect to such collateral.

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         13. CHARGE TO DEPOSIT ACCOUNT. Each amount which may become due and
             payable to you under this Agreement may, in your discretion and if
             not otherwise paid, be charged by you to any account of ours with
             you, without prior notice to us, either against any available funds
             then in such account, or creating an overdraft. The amount of any
             overdraft shall bear interest, payable on demand, in accordance
             with subparagraph 2(b) of this Agreement.

         14. EVENTS OF DEFAULT. Each of the following shall be an Event of
             Default hereunder: (a) NONPAYMENT. The nonpayment when due of any
             part of the Liabilities. (b) BANKRUPTCY; ADVERSE PROCEEDINGS. (i)
             The commencement of any proceeding by or against any Party under
             the United States Bankruptcy Code (or any successor statute); (ii)
             the commencement of any proceeding by or against any Party under
             any other bankruptcy law or under any reorganization, insolvency,
             arrangement, adjustment, composition, relief, receivership,
             liquidation, dissolution or moratorium law; (iii) the appointment
             of, or the commencement of any proceeding seeking the appointment
             of, a trustee, receiver or similar official for any Party or for
             any Property of any Party; (iv) the making by any Party of an
             assignment for the benefit of creditors; (v) any action taken by
             any Party to authorize any of the actions set forth in any of
             clauses (i)-(iv) of this subparagraph 13(b); (vi) the issuance of
             any warrant, process, order of attachment, garnishment or other
             lien or levy and/or the filing of a lien as a result thereof
             against any material portion of any property of any Party; or (vii)
             the commencement of any proceeding under, or the use of any of the
             provisions of, any law relating to the enforcement of judgments of
             any jurisdiction by any judgment creditor against any material
             portion of any property of any Party or the issuance of any
             injunction against any Party provided that any of the foregoing
             shall not be discharged within thirty (30) days. (c) NONCOMPLIANCE.
             (i) Any default with respect to any contract or agreement with you;
             (ii) the appearing at any time that any representation, warranty,
             statement or information given or hereafter given to you by or on
             behalf of any Party was materially incorrect or incomplete when
             given; (iii) the failure of any Party to furnish to you, promptly
             when required or when requested by you, copies of its financial
             statements in such form, and such other information respecting its
             business, properties, condition or operations, financial or
             otherwise, as you may reasonably request; (iv) the validity,
             binding effect or enforceability of any Party's obligations under
             any contract or agreement with you (including but not limited to
             any of the Liabilities) being challenged or questioned, whether or
             not by the institution of proceedings; (v) the failure of any Party
             at all times to keep security with you in an amount in relation to
             the Liabilities satisfactory to you or to insure in your favor and
             to your satisfaction any of its property. (d) ADVERSE CHANGES. (i)
             The occurrence of a material adverse change in any Party's
             financial condition; (ii) any Party's death or incompetence (if a
             natural person) or dissolution or liquidation (if a corporation,
             partnership or other entity); (iii) any material default by any
             Party with respect to any material contract or agreement other than
             with you; (iv) any default by any Party pursuant to which any
             person, firm or entity shall have the power to effect an
             acceleration with respect to any indebtedness or other obligation
             of such Party; (v) any acceleration or demand of payment with
             respect to any indebtedness or other obligation of any Party; (vi)
             any Party's insolvency however evidenced; (vii) your deeming
             yourself insecure; (viii) the suspension of business of any Party;
             (ix) any Party's material failure to pay any tax when due; (x) the
             expulsion of any Party from any exchange or any loss, nonrenewal or
             invalidity of any Party's material license, permit, franchise,
             patent, copyright, trademark or the like. (e) BUSINESS STRUCTURE
             CHANGES. (i) The condemnation, seizure, appropriation or taking of
             possession of any material part of the property of, or the
             assumption of control over the management of, any Party by, or on
             order of, any court or governmental authority; (ii) any change in
             control of any Party; (iii) any merger or consolidation involving
             any Party; (iv) any Party's sale or other transfer of substantially
             all of its assets; (v) any bulk sale by any Party; (vi) any change
             in the nature or structure of any Party's business. (f) EXCHANGE
             CONTROLS. (i) Any Party's failure to obtain any exchange control
             permit deemed by you to be necessary or appropriate; (ii) if any
             exchange control permit shall have been issued, the failure to
             obtain the renewal of such exchange control permit at least 30 days
             prior to its expiration date.

         15. CONSEQUENCES OF DEFAULT. If any Event of Default shall occur, then:
             (a) Any or all of the Liabilities (including, without limitation,
             all Liabilities under this Agreement or in connection with the
             Credit, whether or not then matured or otherwise payable, including
             but not limited to obligations to make reimbursement to you for
             presented Drafts or to pay you in advance for Drafts which are not
             yet presented or due or which may be issued under the Credit,
             whether or not then issued) shall, with respect to the Event of
             Default in subparagraph (b)(i), automatically, and with respect to
             all other Events of Default, at your option, become at once due and
             payable without notice, presentment, demand for payment, protest or
             notice of dishonor, which are hereby expressly waived; (b) Any such

                                       6


             amounts on account of Liabilities for payment in advance for Drafts
             which are not yet presented or due or which may be issued, under
             the Credit whether or not then issued which we shall pay to you in
             advance, shall be for application to drawings under the Credit to
             the maximum amount which may then or thereafter be drawn and to our
             other obligations under this Agreement. Twenty (20) business days
             after (i) the expiration of the Credit, and (ii) any reasonable
             additional time determined by you to be appropriate for you to
             receive and to take all necessary or appropriate action (including
             but not limited to making payment or reimbursement) in connection
             with Documents and Drafts presented (either at your counters or at
             other than your counters) prior to the expiration of the Credit,
             you shall repay to us any such amount (after deducting all amounts
             paid or applied, and/or a reasonable reserve for amounts
             anticipated by you to be or become payable, in accordance with this
             Agreement) as shall then remain on hand; and (c) You shall have all
             rights and remedies available to you under applicable law,
             including but not limited to the UCC.

         16. NUMBER OF PARTIES. ONE APPLICANT. If this Agreement is signed by
             one individual, the terms "we," "our," and "us" shall be read
             throughout as "I," "my," and "me", as the case may be. (b) JOINT
             AND SEVERAL LIABILITY. If this Agreement is signed by two or more
             parties, it shall be the joint and several agreement of such
             parties and they shall be jointly and severally liable.

         17. TRANSFERS, SUCCESSORS AND ASSIGNS. (a) CONTINUING OBLIGATIONS. The
             Liabilities shall bind us, our heirs, executors, administrators,
             successors and permitted assigns and shall continue after the
             expiration or cancellation of the Credit and until all of the
             Liabilities shall have been paid, satisfied and performed in full.
             (b) TRANSFERS BY BANK; WAIVER OF DEFENSES. (i) All rights, benefits
             and privileges hereby conferred on you shall be and hereby are
             extended to and conferred upon and may be enforced by your
             successors and assigns. Without limiting your rights hereunder, you
             may transfer the Credit and whether or not in connection therewith,
             you may transfer all or part of your rights and obligations under
             (A) this Agreement (B) any collateral, mortgage, lien or security
             interest, however denominated, securing this Agreement, (C) any
             guaranty of, any subordination to, and any other of your rights
             against any third party(ies) in connection with this Agreement,
             and/or (D) any document or instrument evidencing or relating to the
             foregoing. (ii) in connection with any such transfer transaction,
             (A) we authorize you to disclose any information you may have or
             acquire about us to any prospective or actual transferee and (B)
             the provisions of paragraph 11 (Security Interest; Set-off) shall
             apply to any of our accounts with and claims against any
             transferee, to the extent of any transfer. (iii) We hereby waive
             all defenses (except such defenses as may be asserted against a
             holder in due course of a negotiable instrument) which we may have
             or acquire against any transferee who takes this Agreement, or any
             complete or partial interest in it, for value, in good faith and
             without notice that any of our obligations hereunder are overdue or
             have been dishonored or of any defense against or claim to it on
             the part of any person. (c) NO TRANSFERS BY APPLICANT. Without your
             express written permission, we shall have no right to assign any of
             our rights or delegate any of our obligations and any such
             purported assignment or delegation shall be void. (d) PARTNERSHIP
             APPLICANTS. The obligations of this Agreement shall continue in
             force and shall apply, notwithstanding any change in the membership
             of any partnership executing this Agreement, whether arising from
             the death or retirement of one or more partners or the admission of
             one or more new partners.

         18. PARTIAL UNENFORCEABILITY. Any provision of this Agreement which is
             prohibited, unenforceable or not authorized in any jurisdiction
             shall, as to such jurisdiction, be ineffective to the extent of
             such prohibition, unenforceability or non-authorization, without
             invalidating the remaining provisions hereof in that or any other
             jurisdiction and without affecting the validity, enforceability or
             legality of such provision in any other jurisdiction.

         19. SUBMISSION TO JURISDICTION; APPLICABLE LAW. This Agreement and all
             rights, obligations and liabilities arising hereunder shall be
             construed according to the internal laws of the State of New York,
             without giving effect to conflict of laws principles. (a)
             SUBMISSION. We hereby submit to the non-exclusive jurisdiction of
             the federal and state courts sitting in the County of New York,
             State of New York, with respect to any dispute arising from, out
             of, or in connection with the Application, the Credit, this
             Agreement or any Document. (b) SOVEREIGN IMMUNITY WAIVER. In
             connection with any action, suit or proceeding we hereby
             irrevocably waive any sovereign immunity we may have or hereafter
             acquire, including but not limited to immunity from jurisdiction of
             any court, from any legal process (whether through service, notice
             or otherwise) from attachment prior to judgment, from attachment in
             aid of execution, from execution or otherwise, with respect to
             ourselves or our Property. (c) SERVICE OF PROCESS. Service may be
             made on us by mailing a copy of the legal process to us at the
             Applicant's

                                       7


             address appearing on the Application (unless your department
             handling the transaction shall have received notice of change of
             address, in which case such legal process shall be mailed to us at
             such changed address). (d) NEW YORK LAW. This Agreement and all
             rights, obligations and liabilities arising hereunder shall be
             construed according to the internal laws of the State of New York,
             without giving effect to conflict of laws principles.

         20. YOUR RIGHT TO ARBITRATION. (a) WE AGREE THAT ANY ACTION, DISPUTE,
             PROCEEDING, CLAIM OR CONTROVERSY BETWEEN OR AMONG YOU AND US
             WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE ("DISPUTE" OR
             "DISPUTES") SHALL, AT YOUR ELECTION, WHICH ELECTION MAY BE MADE AT
             ANY TIME PRIOR TO THE COMMENCEMENT OF A JUDICIAL PROCEEDING BY YOU,
             OR IN THE EVENT OF A JUDICIAL PROCEEDING INSTITUTED BY US AT ANY
             TIME PRIOR TO THE LAST DAY TO ANSWER AND/OR RESPOND TO A SUMMONS
             AND/OR COMPLAINT MADE BY YOU, BE RESOLVED BY ARBITRATION IN NEW
             YORK, NEW YORK IN ACCORDANCE WITH THE PROVISIONS OF THIS PARAGRAPH
             21 AND SHALL, AT YOUR ELECTION, INCLUDE ALL DISPUTES ARISING OUT OF
             OR IN CONNECTION WITH (I) THIS AGREEMENT OR ANY RELATED AGREEMENTS
             OR INSTRUMENTS, (II) ALL PAST, PRESENT AND FUTURE AGREEMENTS
             INVOLVING THE PARTIES, (III) THE CREDIT OR ANY OTHER TRANSACTION
             CONTEMPLATED HEREBY AND ALL PAST AND FUTURE TRANSACTIONS INVOLVING
             THE PARTIES, AND (IV) ANY ASPECT OF THE PAST, PRESENT OR FUTURE
             RELATIONSHIP OF THE PARTIES. You may elect to require arbitration
             of any Dispute with us without thereby being required to arbitrate
             all Disputes between you and us. Any such Dispute shall be resolved
             by binding arbitration in accordance with Title 9 of the U.S. Code
             and the Commercial Arbitration Rules of the American Arbitration
             Association ("AAA"). In the event of any inconsistency between such
             Rules and these arbitration provisions, these provisions shall
             supersede such Rules. All statutes of limitations which would
             otherwise be applicable shall apply to any arbitration proceeding
             under this subparagraph 21(a). In any arbitration proceeding
             subject to these provisions, the arbitration panel (the
             "arbitrator") is specifically empowered to decide (by documents
             only, or with a hearing, at the arbitrator's sole discretion)
             pre-hearing motions which are substantially similar to pre-hearing
             motions to dismiss and motions for summary adjudication. In any
             such arbitration proceeding, the arbitrator shall not have the
             power or authority to award punitive damages to any party. Judgment
             upon the award rendered may be entered in any court having
             jurisdiction. Whenever an arbitration is required, the parties
             shall select an arbitrator in the manner provided in subparagraph
             21(d). (b) No provision of, nor the exercise of any rights under,
             subparagraph 21(a) shall limit the right of any party (i) to
             foreclose against any real or personal property collateral through
             judicial foreclosure, by the exercise of a power of sale under a
             deed of trust, mortgage or other security agreement or instrument,
             pursuant to applicable provisions of the Uniform Commercial Code,
             or otherwise pursuant to applicable law, (ii) to exercise self help
             remedies including but not limited to setoff and repossession, or
             (iii) to request and obtain from a court having jurisdiction
             before, during or after the pendency of any arbitration,
             provisional or ancillary remedies and relief including but not
             limited to injunctive or mandatory relief or the appointment of a
             receiver. The institution and maintenance of an action or judicial
             proceeding for, or pursuit of, provisional or ancillary remedies or
             exercise of self help remedies shall not constitute a waiver of
             your right, even if you are the plaintiff, to submit the Dispute to
             arbitration if you would otherwise have such right. (c) You may
             require arbitration of any Dispute(s) concerning the lawfulness,
             unconscionableness, propriety, or reasonableness of any exercise by
             you of your right to take or dispose of any collateral or your
             exercise of any other right in connection with collateral
             including, without limitation, judicial foreclosure, exercising a
             power of sale under a deed of trust or mortgage, obtaining or
             executing a writ of attachment, taking or disposing of property
             with or without judicial process pursuant to Article 9 of the
             Uniform Commercial Code or otherwise as permitted by applicable
             law, notwithstanding any such exercise by you. (d) Whenever an
             arbitration is required under subparagraph 21(a), the arbitrator
             shall be selected, except as otherwise herein provided, in
             accordance with the Commercial Arbitration Rules of the AAA. A
             single arbitrator shall decide any claim of $100,000 or less and he
             or she shall be an attorney with at least five years' experience.
             Where the claim of any party exceeds $100,000, the Dispute shall be
             decided by a majority vote of three arbitrators, at least two of
             whom shall be attorneys (at least one of whom shall have not less
             than five years' experience representing commercial banks). The
             arbitrator shall have the power to award recovery of all costs and
             fees (including attorneys' fees, administrative fees, arbitrator's
             fees, and court costs) to the prevailing party. In the event of any
             Dispute governed by this paragraph 21, each of the parties shall,
             subject to the award of the arbitrator, pay an equal share of the
             arbitrator's fees.

                                       8


         21. NOTICES. Any notice to you shall be deemed effective only if sent
             to and when received at your department conducting the transaction
             or transactions in question relating to the Credit, the Application
             or this Agreement. Any notice to or demand on any of us shall be
             binding on all of us and shall be deemed effective when first
             delivered by hand or when sent to the Applicant named on the
             Application by mail, telegraph, telex, facsimile, SWIFT, cable,
             radio, telephone or otherwise to the Applicant's address or
             telephone number appearing on the Application or to such other
             address as we shall have notified you. Each of us hereby
             irrevocably designates the Applicant as agent to receive notice
             hereunder on his or its behalf.

         22. CHANGES, CAPTIONS. This Agreement and the Application may not be
             changed or terminated orally. Except as provided in subparagraph
             4(c), this Agreement and the Application may not be supplemented by
             any oral agreement whatsoever. The captions in this Agreement are
             inserted for reference only and shall not modify the text of any
             provision or be considered parts of this Agreement.

         23. JURY TRIAL WAIVER; OTHER WAIVERS. (a) YOU AND EACH OF US HEREBY
             WAIVE TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING, IN RESPECT
             OF OR ARISING OUT OF THIS AGREEMENT, THE CREDIT, OR ANY RELATED
             DOCUMENTS OR INSTRUMENTS AND EACH OF US ALSO WAIVES THE RIGHT TO
             INTERPOSE ANY SETOFF OR COUNTERCLAIM OF ANY NATURE OR DESCRIPTION,
             ANY OBJECTION BASED ON FORUM NON CONVENIENS OR VENUE, AND ANY CLAIM
             FOR CONSEQUENTIAL, PUNITIVE OR SPECIAL DAMAGES. (b) No provision
             hereof and no right or remedy of yours may be waived by any future
             action or course of dealing. You shall not be deemed to have waived
             any of your rights hereunder, unless you or your authorized agent
             shall have signed an express waiver in writing. No such waiver,
             unless expressly stated otherwise therein, shall be effective as to
             any transaction which occurs subsequent to the date of such waiver,
             nor as to any continuance of a breach after such waiver. (c)
             Neither your failure nor any delay to exercise any right in
             connection with this Agreement shall operate as a waiver thereof or
             preclude any other or further exercise thereof, nor shall any
             single or partial waiver of any such right preclude any other or
             further exercise thereof, or the exercise of any other right, which
             is hereby waived.

         The opening of the Credit shall be subject to the foregoing Application
and the terms and conditions of this Agreement.

                                            AGREED TO:

                                            Applicant's Name: Movie Star, Inc.


                                            (Signature) By: /s/ Thomas Rende
                                            Print Name: Thomas Rende
                                            Print Title: Chief Financial Officer

                                            Applicant's Taxpayer Identification/
                                            Social Security Number:  13-2643042




                                       9


                                  HSBC BANK USA
                        APPLICATION FOR LETTER OF CREDIT


                                          ================ =====================
                                          Date             For Bank Use Only L/C
                                          ================ =====================

We request that HSBC Bank USA issue an CONTINUING LETTER OF CREDIT AGREEMENT
with the following terms and conditions and transmit it by:

    MAIL      AIRMAIL         FULL TEXT TELEX/SWIFT
---      ----             ----

     AIRMAIL WITH PRELIMINARY TELEX/SWIFT* ADVICE
-----

*  SWIFT:  SOCIETY FOR WORLDWIDE INTERBANK FINANCIAL TELECOMMUNICATIONS.




==============================================================================================================
FOR ACCOUNT OF (APPLICANT)                                  IN FAVOR OF (BENEFICIARY)
(Full Name, Address, & Account No.)                         (Full Name & Address)


-------------------

-------------------

-------------------

--------------------------------------------------------------------------------------------------------------

TOTAL MAXIMUM AMOUNT (in U.S. dollars only)                 ADVISING BANK (if left blank, you may choose bank)



--------------------------------------------------------------------------------------------------------------
AMOUNT:                                  EXPIRATION DATE:                      PLACE OF EXPIRATION:

==============================================================================================================




AVAILABLE BY DRAFT(S) [ ] AT SIGHT DRAWN ON YOU, OR [ ] ON DEFERRED BASIS ___
                      DAYS AFTER DOCUMENTS ARE PRESENTED FOR EXAMINATION, IN
                      EITHER CASE DRAWN ON YOU, AND UNLESS OTHERWISE INSTRUCTED
                      FOR ___% OF THE INVOICE VALUE (USUANCE)

ACCOMPANIED BY THE FOLLOWING DOCUMENTS, AS CHECKED (in triplicate, unless
otherwise indicated): CHECK REQUIRED DOCUMENTS:


[ ] Commercial Invoice                 [ ] Packing List
[ ] Customs Invoice                    [ ] Certificate of Origin
[ ] Marine & War Insurance Policy and/or Certificate
[ ] Other Documents


[ ] Truck B/L Consigned To:
                           -------------------------------------
[ ] Air Way Bill Consigned to:
                               ---------------------------------
[ ] ON BOARD Original Ocean Bill of Lading (if more than one original has
    been issued, all are required) issued to order of:

    HSBC Bank USA, N.Y. DATED NOT LATER THAN                marked: NOTIFY
                                             ---------------              ----------

    Showing: [ ] Freight Prepaid   [ ] Freight Collect

COVERING: Merchandise described in the invoice as: (Mention commodity only in
          generic terms omitting details as to grade, quality, etc.)


Check one: [ ] FAS  [ ] FOB  [ ] C&F [ ] CIF  [ ]C&I  [ ] OTHER

Shipment from:                                                                         Discount charges, if any, for
To:        [ ] Partial Shipments Prohibited  [ ] Transhipments Prohibited account of: [ ] Applicant  [ ] Beneficiary

[ ] OTHER INSTRUCTIONS:

------------------------------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------------

[ ] SEE ATTACHMENT, WHICH IS AN INTEGRAL PART OF THIS APPLICATION

ALL BANKING CHARGES OUTSIDE THE USA ARE FOR:

[ ]  OUR ACCOUNT BENEFICIARY'S ACCOUNT

NOTE: PARTIAL DRAWINGS (PERMITTED, UNLESS OTHERWISE INDICATED BELOW):

[ ]  PARTIAL DRAWINGS NOT TO BE PERMITTED


                                           --------------------------
                                           BY:
                                              --------------------------------
                                              TITLE: