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SEPARATION AGREEMENT AND RELEASE OF CLAIMS

THIS AGREEMENT is made and entered into by and between NexCen Brands, Inc. (the
“Company”) and Charles A. Zona (the “Executive”).
 
All capitalized terms used herein unless otherwise defined in this Agreement
shall have the meaning assigned to them in the Employment Agreement.
 
WHEREAS, the Company and Executive entered into an employment agreement made as
of December 11, 2006 (the “Employment Agreement”);
 
WHEREAS, Executive’s employment was terminated by the Company without Cause
effective as of May 30, 2008 (“Termination Date”), and as of such date Executive
ceased to hold any position as an officer of the Company or any affiliate; and
 
WHEREAS, Executive desires to receive separation pay and benefits, and the
Company is willing to provide separation pay and benefits on the condition that
Executive enters into this Agreement.
 
THEREFORE, in consideration of the mutual agreements and promises set forth
within this Agreement, the receipt and sufficiency of which are hereby
acknowledged, the Company and Executive agree as follows:
 

1.
Consideration

 
In consideration of Executive's agreements and promises set forth below, the
Company will provide to Executive the following separation payments pursuant to
the Employment Agreement:
 

 
a.
Base Salary, Accrued Paid Time Off. The Company shall pay to Executive any
unpaid Base Salary through and including the Termination Date. Executive
acknowledges that there is no declared but unpaid Annual Bonus or any other
bonus during the Employment Period that is due and owing to the Executive as of
the Termination Date.

 
The Company shall pay to Executive all accrued but unused paid time during the
Employment Period through and including the Termination Date. The parties
acknowledge and agree that as of Termination Date, Executive has accrued
$29,000.00 of paid time off and has received $24,615.38 of that amount, less
deductions for federal and/or state income tax withholding, FICA and any other
deduction from wages required by law or regulation. The Company shall pay the
remaining $4,384.62 of accrued paid time off, less deductions for federal and/or
state income tax withholding, FICA and any other deduction from wages required
by law or regulation, by including such net amount in the next semi-monthly
installment payment to be made pursuant to subparagraph 1.b. below, following
execution of this Agreement.
 
 
 

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b.
Semi-Monthly Installment Payment. The Company shall pay to Executive payments
totaling One Hundred Fifty Thousand Dollars ($150,000.00) (less deductions for
federal and/or state income tax withholding, FICA and any other deduction from
wages required by law or regulation), which shall be paid in substantially equal
semi-monthly installments over a period of six months, beginning no later than
June 16, 2008, in accordance with the Company’s normal payroll practices.

 

 
c.
Continued Participation in Company’s Group Medical Plan. The Company shall
continue Executive’s participation in the Company’s group medical plan on the
same basis as he previously participated, until the earlier of May 30, 2009 or
the date Executive is provided with health insurance coverage by a successor
employer. Executive shall promptly inform Sue Nam, General Counsel of the
Company, if and when he is provided with health insurance coverage by a
successor employer. After May 30, 2009, Executive may continue to participate
in the Company’s group health plans to the extent permitted under the
Consolidated Omnibus Budget Reconciliation Act (“COBRA”). 

 

 
d.
Reimbursable Expenses. Executive acknowledges and agrees that as of the date of
this agreement, he has received all reimbursable expenses or other entitlements
then due and owing to the Executive.

 

 
e.
Stock Options. The parties hereby agree that (i) Executive vested as of December
11, 2007 in (i) 83,334 shares of his initial Option Grant to purchase a total of
250,000 shares of the Company’s common stock; (ii) Executive vested as of the
Termination Date in all of his additional stock option grant to purchase a total
of 25,000 shares of the Company’s common stock; and (iii) Executive voluntarily
surrendered 166,666 shares of his unvested initial Option Grant. Executive’s
108,334 vested stock options shall be exerciseable as of the Termination Date
and shall remain exercisable by Executive (or his estate, in the event of his
death) until December 31, 2009, following which time any unexercised stock
options shall terminate.

 

 
f.
Other Benefits. Executive shall receive any vested benefits to which Executive
is entitled in accordance with the terms of any of the Company's employee
benefit plans or programs, including without limitation the Company's 401(k)
plan.

 
The terms of Paragraph 1 shall have no force if Executive revokes his acceptance
of this Agreement pursuant to Paragraph 11 (Special Provisions for Age
Discrimination).
 
 
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2.
No Further Payments

 
Except as provided for in Paragraph 1, Executive is not entitled to and will not
receive any further salary, wages, benefits, severance or separation payments
from the Company.
 

3.
General Release

 
Executive on behalf of himself and his heirs, successors and assigns, in
consideration of the performance by the Company of its material obligations
under the Employment Agreement and this Agreement, do hereby release and forever
discharge as of the date hereof the Company, its Subsidiaries, its Affiliates,
each such Person’s respective successors and assigns and each of the foregoing
Persons’ respective present and former directors, officers, partners,
stockholders, members, managers, agents, representatives, employees (and each
such Person’s respective successors and assigns) (collectively, the “Released
Parties”) to the extent provided below.

 
a.
Executive understands that payments or benefits paid or granted to him under
this Agreement represent, in part, consideration for signing this Agreement and
are not salary, wages or benefits to which he was already entitled. Executive
understands and agrees that he will not receive the payments and benefits
specified in Paragraph 1 (other than the payments and benefits in subparagraphs
1.a and 1.f) of this Agreement unless he executes this Agreement and does not
revoke this Agreement within the time period permitted hereafter or breach this
Agreement.

 
b.
Executive knowingly and voluntarily releases and forever discharges the Company
and the other Released Parties from any and all claims, controversies, actions,
causes of action, cross-claims, counter-claims, demands, debts, compensatory
damages, liquidated damages, punitive or exemplary damages, other damages,
claims for costs and attorneys’ fees, or liabilities of any nature whatsoever in
law and in equity, both past and present (through the date of this Agreement),
whether under the laws of the United States or another jurisdiction and whether
known or unknown, suspected or claimed against the Company or any of the
Released Parties which Executive, his spouse, or any of his heirs, executors,
administrators or assigns, have or may have, which arise out of or are connected
with his employment with, or his separation from, the Company (including, but
not limited to, any allegation, claim or violation, arising under: Title VII of
the Civil Rights Act of 1964, as amended; the Civil Rights Act of 1991; the Age
Discrimination in Employment Act of 1967, as amended (including the Older
Workers Benefit Protection Act); the Equal Pay Act of 1963, as amended; the
Americans with Disabilities Act of 1990; the Family and Medical Leave Act of
1993; the Civil Rights Act of 1866, as amended; the Worker Adjustment Retraining
and Notification Act; the Employee Retirement Income Security Act of 1974; any
applicable Executive Order Programs; the Fair Labor Standards Act; or their
state or local counterparts; or under any other federal, state or local civil or
human rights law, or under any other local, state, or federal law, regulation or
ordinance; or under any public policy, contract or tort, or under common law; or
arising under any policies, practices or procedures of the Company or any of the
Released Parties; or any claim for wrongful discharge, breach of contract,
infliction of emotional distress, or defamation; or any claim for costs, fees,
or other expenses, including attorneys’ fees incurred in these matters (all of
the foregoing collectively referred to herein as the “Claims”); provided,
however, that nothing contained in this Agreement shall apply to, or release the
Company from, (i) any obligation of the Company contained in the Employment
Agreement or this Agreement to be performed after the date hereof, (ii) any
vested or accrued benefits pursuant to any employee benefit plan, program or
policy of the Company, (iii) any right Executive has to indemnification by the
Company (under the Employment Agreement or otherwise), and (iv) any claims
Executive may have as a member of a class in connection with any securities
derivative class action against the Company.

 
 
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c.
Executive represents that he has made no assignment or transfer of any right,
claim, demand, cause of action, or other matter covered by paragraph 3.b. above.

 
d.
Executive agrees that this Agreement does not waive or release any rights or
claims that he may have under the Age Discrimination in Employment Act of 1967
which arise after the date he executes this Agreement. Executive acknowledges
and agrees that his separation from employment with the Company in compliance
with the terms of the Employment Agreement and this Agreement shall not serve as
the basis for any claim or action (including, without limitation, any claim
under the Age Discrimination in Employment Act of 1967).

 

 
e.
In signing this Agreement, Executive acknowledges and intends that the Agreement
shall be effective as a bar to each and every one of the Claims hereinabove
mentioned or implied. Executive expressly consents that this General Release
shall be given full force and effect according to each and all of its express
terms and provisions, including those relating to unknown and unsuspected Claims
(notwithstanding any state statute that expressly limits the effectiveness of a
general release of unknown, unsuspected and unanticipated Claims), if any, as
well as those relating to any other Claims hereinabove mentioned or implied.
Executive acknowledges and agrees that this waiver is an essential and material
term of this Agreement and that without such waiver the Company would not have
agreed to the terms of the Agreement. Executive covenants that he shall not
directly or indirectly, commence, maintain or prosecute or sue any of the
Released Persons either affirmatively or by way of cross-complaint, indemnity
claim, defense or counterclaim or in any other manner or at all on any Claim
covered by this General Release. Executive further agrees that in the event he
should bring a Claim seeking damages against the Company, or in the event he
should seek to recover against the Company in any Claim brought by a
governmental agency on his behalf, this Agreement shall serve as a complete
defense to such Claims. Executive further agree that he is not aware of any
pending charge or complaint of the type described in paragraph 3.b. as of the
execution of this Agreement.

 
 
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4.
No Admission of Liability.

 
Executive agrees that neither this Agreement, nor the furnishing of the
consideration for this Agreement, shall be deemed or construed at any time to be
an admission by the Company, any Released Party or Executive of any improper or
unlawful conduct.
 

5.
Confidentiality.

 
Executive agrees that this Agreement is confidential and agree not to disclose
any information regarding the terms of this Agreement, except to his immediate
family and any tax, legal or other counsel he has consulted regarding the
meaning or effect hereof or as required by law, and Executive will instruct each
of the foregoing not to disclose the same to anyone.

Any non-disclosure provision in this Agreement does not prohibit or restrict
Executive (or his attorney) from responding to any inquiry about this Agreement
or its underlying facts and circumstances by the Securities and Exchange
Commission, the National Association of Securities Dealers, Inc. or any other
self-regulatory organization or governmental entity.

6.
Affirmation of Employment Agreement.

 
Except as otherwise provided in this Agreement, the parties hereby expressly
re-affirm the Employment Agreement, including but not limited to the Executive’s
obligations under Sections 1.5, 1.6, 1.7, 1.8, 1.9 1.10 and 3.1 of the
Employment Agreement and the Company’s obligations under Section 1.3(g) of the
Employment Agreement. Notwithstanding anything to the contrary in the Employment
Agreement, the parties agree that (i) for purposes of Sections 1.8 and 2.1 of
the Employment Agreement, the definition of “Business” shall be limited to the
licensing- businesses of Iconix and Cherokee only; (ii) Section 1.8(a) of the
Employment Agreement shall not preclude Executive from participating in or
otherwise being employed by or providing services to any Person that purchases
the Company’s licensing business or other successor to the Company; (iii) in the
event Executive participates in or otherwise is employed by or provides services
to any Person that purchases the Company’s licensing business or is a successor
to the Company, Section 1.5 of the Employment Agreement shall not preclude
Executive from using or disclosing any Confidential Information or Third Party
Information to the extent such disclosure or use is consistent with Executive’s
service with such purchaser or other successor; and (iv) Section 1.3(g) of the
Employment Agreement shall survive and continue in full force in accordance with
its terms as though Executive continued to be an executive officer of the
Company, notwithstanding Executive’s termination of employment with, and service
as an officer of, the Company on the Termination Date.

7.
Validity.

 
Whenever possible, each provision of this Agreement shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Agreement is held to be invalid, illegal or unenforceable in any respect
under any applicable law or rule in any jurisdiction, such invalidity,
illegality or unenforceability shall not affect any other provision or any other
jurisdiction, but this Agreement shall be reformed, construed and enforced in
such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.
 
 
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8.
Successors and Assigns

 
This Agreement shall inure to and be binding upon the parties hereto and to
their respective heirs, legal representatives, successors, and assigns.
 

9.
Governing Law

 
This Agreement shall be construed in accordance with the laws of the state of
New York and any applicable federal laws.
 

10.
Special Notification

 
Because this Agreement includes a waiver and release of claims arising under the
Age Discrimination in Employment Act, federal law provides that Executive may
have twenty-one (21) days from receipt of the Agreement to review and consider
this Agreement before executing it. Federal law also provides that the Employer
must advise Executive to consult with an attorney before signing this Agreement.
Executive understands that it is Executive’s decision whether or not to consult
an attorney.
 
Pursuant to federal law, Executive is further advised that the release and
covenant not to sue contained herein do not apply to claims that arise after the
execution of this Agreement. Executive further understands and agrees that
Executive is receiving additional consideration that Executive would not be
entitled to receive under the Employment Agreement, any Company policy, practice
or plan of if Executive did not execute this Agreement which includes the waiver
and release of claims under the Age Discrimination in Employment Act.
 
Executive represents and warrants that he has had ample opportunity to consider
this Agreement and has had an opportunity to consult an attorney before
executing this Agreement.
 

11.
Revocation of Agreement

 
Federal law also provides that, because this Agreement waives and releases
claims arising under the Age Discrimination in Employment Act, that Executive
may revoke this Agreement within seven (7) days after Executive executes it. For
this revocation to be effective, written notice must be received by Sue Nam,
General Counsel, no later than the close of business on the seventh day after
Executive has executed this Agreement. If Executive revokes the Agreement, it
will not be effective or enforceable, and Executive will not receive the
payments described in Paragraph 1 (other than the payments and benefits in
subparagraphs 1.a and 1.f).
 
 
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12.
Acknowledgement.

 
BY SIGNING THIS AGREEMENT, EXECUTIVE REPRESENTS AND AGREES THAT:

(a) EXECUTIVE HAS READ IT CAREFULLY;

(b) EXECUTIVE UNDERSTANDS ALL OF ITS TERMS AND KNOWS THAT HE IS GIVING UP
IMPORTANT RIGHTS, INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER THE AGE
DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, TITLE VII OF THE CIVIL
RIGHTS ACT OF 1964, AS AMENDED; THE EQUAL PAY ACT OF 1963, THE AMERICANS WITH
DISABILITIES ACT OF 1990; AND THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED;

(c) EXECUTIVE VOLUNTARILY CONSENTS TO EVERYTHING IN THE AGREEMENT;

(d) EXECUTIVE HAS BEEN ADVISED TO CONSULT WITH AN ATTORNEY (VIA THIS AGREEMENT)
BEFORE EXECUTING IT AND EXECUTIVE HAS DONE SO OR, AFTER CAREFUL READING AND
CONSIDERATION, EXECUTIVE HAS CHOSEN NOT TO DO SO OF HIS OWN VOLITION;

(e) EXECUTIVE HAS HAD AT LEAST 21 DAYS FROM THE DATE OF HIS RECEIPT OF THE
LANGUAGE OF THE GENERAL RELEASE SUBSTANTIALLY IN ITS FINAL FORM ON DECEMBER 11,
2006 TO CONSIDER IT; AND THE CHANGES MADE SINCE THE DECEMBER 11, 2006 VERSION OF
THE GENERAL RELEASE ARE NOT MATERIAL AND WILL NOT RESTART THE REQUIRED 21-DAY
PERIOD;

(f) THE CHANGES TO THE LANGUAGE OF THE GENERAL RELEASE SINCE DECEMBER 11, 2006
EITHER ARE NOT MATERIAL OR WERE MADE AT HIS REQUEST.

(g) EXECUTIVE HAS SIGNED THIS AGREEMENT KNOWINGLY AND VOLUNTARILY AND WITH THE
ADVICE OF ANY COUNSEL RETAINED TO ADVISE HIM WITH RESPECT TO IT; AND

(h) EXECUTIVE AGREES THAT THE PROVISIONS OF THIS AGREEMENT MAY NOT BE AMENDED,
WAIVED, CHANGED OR MODIFIED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY AN
AUTHORIZED REPRESENTATIVE OF THE COMPANY AND BY EXECUTIVE.
 

 
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
indicated below.
 
 
/s/ Charles A. Zona                                                    
 
CHARLES A. ZONA
Date: June 20, 2008
 
 
 
NEXCEN BRANDS, INC.
 
 
By: /s/ Kenneth J. Hall                                                
Name: Kenneth J. Hall
Title: Chief Financial Officer
Date: June 26, 2008
 
 
 
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