Document:

Exhibit 10.5

    Return
      to 10Q

    Exhibit
      10.5

    
 

    I.C.
      ISAACS & COMPANY, INC. 

    AMENDED
      AND RESTATED OMNIBUS STOCK PLAN

    NONSTATUTORY
      STOCK OPTION GRANT AGREEMENT

     

    AGREEMENT
      dated the 3rd day of May, 2007 from I.C. ISAACS & COMPANY, INC., a Delaware
      corporation (the “Company”), to Gregg A. Holst, an employee and a director of
      the Company (“Optionee”). Capitalized terms used without being defined herein
      shall have the meanings ascribed to them by the I.C. Isaacs & Company, Inc.
      Amended and Restated Omnibus Stock Plan, as the same may be amended from time
      to
      time hereafter (the “Plan”).

     

    WHEREAS,
      in order to implement the purposes of the Plan, the Company has granted the
      Optionee an opportunity to purchase shares of its $.0001 par value Common Stock
      (the “Common Stock”), as hereinafter provided; and

     

    WHEREAS,
      on May 3, 2007 (the “Grant Date”) the Compensation Committee of the Board of
      Directors of the Company, acting pursuant to the Plan, granted to the Optionee
      the option evidenced hereby at the exercise price in effect under the Plan
      for
      the Grant Date;

     

    NOW,
      THEREFORE, in consideration of the premises, mutual covenants and agreements
      herein, the Company and Optionee agree as follows:

     

    ARTICLE
      1

    GRANT
      OF OPTION

     

    Section
      1.1 Grant of Option.
      The
      Company has granted to Optionee, pursuant to the provisions of the Plan, a
      non-qualified stock option to purchase from the Company, at a price equal to
      the
      fair market value of the shares on the date of grant, which is $1.40 per share
      (the “Exercise Price”), up to 25,000 shares of Common Stock, subject to the
      provisions of this Option (this “Option”). This Option shall expire at 5:00 p.m.
      Eastern Time on May 3, 2017 (the “Expiration Date”), unless fully exercised or
      terminated earlier pursuant to this Option. The period between the Vesting
      Date
      (as defined below) and the Expiration Date is hereinafter referred to as the
      “Option Term.”

     

    ARTICLE
      2

    VESTING

     

    Section
      2.1 Vesting Schedule.
      Unless
      this Option has earlier terminated pursuant to the provisions of this Agreement,
      the Optionee’s right to purchase Common Stock pursuant to this Option shall vest
      with respect to a number of shares of Common Stock as close as possible to
      1/3
      of the total number of shares subject to this Option are vested on May 3, 2007,
      1/3 will vest on May 3, 2008, and the remaining 1/3 will vest on May 3, 2009,
      provided that Optionee shall be an active employee of our consultant to the
      Company or one of its subsidiaries on each of such dates

     

    Section
      2.2 Acceleration of Vesting.
      Unless
      this Option has earlier terminated pursuant to the provisions of this Option,
      vesting of this Option granted to Optionee hereunder shall be accelerated so
      that the unvested portion of this Option shall become 100% vested in Optionee
      upon the earliest to occur of: (i) Optionee’s termination of employment with the
      Company or its subsidiaries due to Disability, as defined in Article 4
      hereunder; (ii) termination of Optionee’s employment with the Company or its
      subsidiaries as a result of Optionee’s death; (iii) termination of Optionee’s
      employment with the Company or its subsidiaries by the Company without “Cause”
(as defined in Optionee’s employment agreement with the Company, dated December
      19, 2005); or (iv) a Change of Control that occurs while Optionee is employed
      by
      the Company or its subsidiaries (each of the foregoing events, a “Triggering
      Event”). For purposes of this Option, the term “Change of Control” shall mean
      (i) the sale of all or substantially all of the assets of the Company, (ii)
      the
      sale of more than 50% of the outstanding capital stock of the Company in a
      non-public sale, (iii) the dissolution or liquidation of the Company, or (iv)
      any merger, share exchange, consolidation or other reorganization or business
      combination of the Company if immediately after such transaction either (A)
      persons who were members of the Board of Directors of the Company immediately
      prior to such transaction do not constitute at least a majority of the Board
      of
      Directors of the surviving entity, or (B) persons who hold a majority of the
      voting capital stock of the surviving entity are not persons who held voting
      capital stock of the Company immediately prior to such transaction. In the
      event
      that the vesting of the Option is accelerated pursuant to this Section 2.2,
      the
“Vesting Date” shall be the date that the Triggering Event occurs.

     

    ARTICLE
      3

    EXERCISE
      OF OPTION

     

    Section
      3.1 Exercisability of Option.
      Unless
      this Option has earlier terminated pursuant to the provisions of Article IV
      hereof, this Option may be exercised at any time, and from time to time during
      the Option Term, with respect to the number of shares subject to the Option
      in
      which Optionee is then vested.

     

    Section
      3.2 Manner of Exercise.
      This
      Option may be exercised, in whole or in part, by delivering written notice
      to
      the Company’s Secretary in such form as the Administrator may require from time
      to time; provided, however, that this Option may not be exercised at any one
      time as to fewer than ten shares (or such lesser number of shares as to which
      this Option is then exercisable). Such notice shall specify the number of shares
      of Common Stock subject to this Option as to which this Option is being
      exercised, and shall be accompanied by full payment of the Exercise Price for
      such shares in accordance with this Section 3.2. The exercise shall be effective
      upon receipt by the Company’s Secretary of such written notice accompanied by
      the required payment. Payment of the Exercise Price shall be made (a) in cash
      (or via certified or cashier’s check, or money order); (b) by a broker-assisted
      cashless exercise in accordance with Regulation T of the Board of Governors
      of
      the Federal Reserve System and the provisions of the next paragraph; or (c)
      by
      any combination of the foregoing. In the Administrator’s sole and absolute
      discretion, the Administrator may authorize payment of the Exercise Price to
      be
      made, in whole or in part, by such other means as the Administrator may
      prescribe. This Option may be exercised only in multiples of whole shares and
      no
      fractional shares shall be issued.

     

    If
      the
      Common Stock is publicly traded on a national exchange, payment of the exercise
      price may be made, in whole or in part, subject to such limitations as the
      Administrator may determine, by delivery of a properly executed exercise notice,
      together with irrevocable instructions: (i) to a brokerage firm approved by
      the
      Company to deliver promptly to the Company the aggregate amount of sale or
      loan
      proceeds to pay the exercise price and any withholding tax obligations that
      may
      arise in connection with the exercise, and (ii) to the Company to deliver such
      purchased shares directly to such brokerage firm.

     

    Section
      3.3 Issuance of Shares and Payment of Cash upon Exercise.
      Upon
      exercise of this Option, in whole or in part, in accordance with the terms
      hereof and upon payment of the Exercise Price for the shares of Common Stock
      as
      to which this Option is exercised, the Company shall issue to Optionee, the
      brokerage firm specified in the Optionee’s delivery instructions pursuant to a
      broker-assisted cashless exercise, or such other person exercising this Option,
      as the case may be, the number of shares of Common Stock so paid for, in the
      form of fully paid and nonassessable Common Stock and, as soon as practicable
      thereafter, shall either deliver certificates therefore or instruct its transfer
      agent to issue such shares in book entry form on the books of the transfer
      agent. Unless such shares are registered or an exemption from registration
      is
      available under applicable federal and state law, if the shares of Common Stock
      issued hereunder are in certificated form, the stock certificates for any such
      shares shall, bear a legend restricting transferability of such shares, and
      if
      the shares are in book entry form, they shall be subject to electronic coding
      or
      stop order restricting transferability of such shares. 

     

    Section
      3.4 Legal Compliance.
      The
      Company shall not be obligated to cause to be issued any shares of Common Stock
      pursuant hereto unless and until the Company is advised by its counsel that
      the
      issuance and delivery of such certificates is in compliance with all applicable
      laws, regulations of governmental authority and the requirements of any
      securities exchange on which shares of Common Stock are traded.  The
      Administrator may require, as a condition of the issuance and delivery of
      certificates evidencing shares of Common Stock pursuant to the terms hereof,
      that the recipient of such shares make such covenants, agreements and
      representations, and that such certificates bear such legends, as the
      Administrator, in its sole discretion, deems necessary or
      desirable.  

     

    ARTICLE
      4

    TERMINATION
      OF OPTION

     

    Section
      4.1 Termination, In General.
      This
      Option shall terminate and be of no force or effect after the Expiration Date,
      unless terminated prior to such time as provided below. 

     

    Section
      4.2 Termination of Employment for Cause.
      In the
      event that the Optionee’s employment with the Company is terminated for Cause,
      this Option shall terminate on the commencement of business of the effective
      date of such termination of employment with respect to all shares of Common
      Stock not purchased hereunder prior to such Termination Date.

     

    The
      good
      faith determination by the Administrator of whether the Optionee’s employment
      was terminated by the Company or one of its subsidiaries for Cause shall be
      final and binding for all purposes hereunder.

     

    Section
      4.3 Upon Optionee’s Death.
      Unless
      this Option has earlier terminated for Cause or due to the Optionee’s Disability
      or the Company’s termination of Optionee’s employment without Cause, upon
      Optionee’s death, Optionee’s executor, personal representative, or the person(s)
      to whom this Option shall have been transferred by will or the laws of descent
      and distribution, as the case may be, may exercise all or any part of the
      outstanding Option, provided such exercise occurs within one year after the
      date
      of Optionee’s death, but not later than the Expiration Date of this Option.
      Unless sooner terminated, this Option shall terminate upon the expiration of
      such one year period.

     

    Section
      4.4 Termination of Employment by Reason of Disability.
      Unless
      this Option has earlier terminated for Cause or due to the Optionee’s death or
      the Company’s termination of Optionee’s employment without Cause, in the event
      that Optionee ceases, by reason of Disability, to be an employee of the Company
      or any of the Company’s subsidiaries, any unexercised portion of this Option may
      be exercised in whole or in part at any time within one year after the date
      of
      Optionee’s termination of employment due to Disability, but not later than the
      Expiration Date of this Option. Unless sooner terminated, this Option shall
      terminate upon the expiration of such one year period. For purposes of this
      Option, Disability shall mean the inability to engage in any substantial gainful
      activity by reason of any medically determinable physical or mental impairment
      which can be expected to result in death or which has lasted or can be expected
      to last for a continuous period of not less than 12 months. The Administrator
      may require such proof of Disability as the Administrator in its sole discretion
      deems appropriate and the Administrator’s determination as to whether Optionee
      is Disabled shall be final and binding on all parties concerned.

     

    Section
      4.5 Termination of Employment.
      In the
      event that the Optionee’s employment with the Company is terminated other than
      for cause or due to the Optionee’s death or Disability, any unexercised portion
      of this Option that was vested as of the date of termination of employment
      may
      be exercised in whole or in part at any time within the one year period
      following the Optionee’s termination of employment, but not later than the
      Expiration Date of this Option. In the event that Optionee dies during the
      one
      year period, any unexercised portion of this Option that was vested as of the
      date of death may be exercised in whole or in part at any time within one year
      after the date of death, but not later than the Expiration Date of this Option.
      Unless sooner terminated, this Option shall terminate upon the expiration of
      such one year or one-year period. 

     

    Section
      4.6 Leave of Absence.
      For
      purposes of this Option, the Optionee’s employment with the Company or any of
      the Company’s subsidiaries shall not be deemed to terminate if the Optionee
      takes any military leave, sick leave, or other bona fide leave of absence
      approved by the Administrator of 90 days or less. In the event of a leave in
      excess of 90 days, the Optionee’s employment shall be deemed to terminate on the
      91st day of the leave unless the Optionee’s right to re-employment with the
      Company or Affiliate remains guaranteed by statute or contract.

     

    Section
      4.7 Termination of Employment, Definition.
      References on this Agreement to the Optionee’s termination of employment from
      the Company shall mean the termination of the Optionee’s employment with the
      Company, provided, however, that (i) a transfer of Optionee’s employment
      relationship from the Company to a subsidiary or vice versa or from one
      subsidiary to another subsidiary shall not constitute a termination of
      employment, and (ii) an employee who terminates such relationship with the
      Company but continues in a consulting relationship with the Company shall not
      incur a termination of employment until such individual terminates the last
      of
      such relationships with the Company.

     

    ARTICLE
      5

    ADJUSTMENTS;
      BUSINESS COMBINATIONS

     

    Section
      5.1 Adjustments for Events Affecting Common Stock.
      In the
      event of changes in the Common Stock of the Company by reason of any stock
      dividend, split-up, recapitalization, merger, consolidation, business
      combination or exchange of shares and the like, the Administrator shall make
      appropriate adjustments to the number, kind and price of shares covered by
      this
      Option, and shall, in its discretion and without the consent of the Optionee,
      make any other adjustments in this Option, including but not limited to reducing
      the number of shares subject to this Option or providing or mandating
      alternative settlement methods such as settlement of this Option in cash or
      in
      shares of Common Stock or other securities of the Company or of any other
      entity, or in any other matters which relate to this Option as the Administrator
      shall, in its sole discretion, determine to be necessary or appropriate in
      order
      to prevent the dilution or enlargement of rights under this Option.

     

    Section
      5.2 Modifications or Adjustments for Unusual Events.
      Notwithstanding anything in the Plan or this Option to the contrary and without
      the consent of the Optionee, the Administrator, in its sole discretion, may
      make
      (a) in order to facilitate any business combination that is authorized by the
      Board, any modifications to this Option, including but not limited to
      cancellation, forfeiture, surrender or other termination of this Option in
      whole
      or in part regardless of the vested status of this Option; and/or (b) any
      adjustments in the terms and conditions of, and the criteria included in, this
      Option in recognition of unusual or nonrecurring events affecting the Company,
      or the financial statements of the Company or any subsidiary of the Company,
      or
      of changes in applicable laws, regulations, or accounting principles, whenever
      the Administrator determines that such adjustments are appropriate in order
      to
      prevent dilution or enlargement of the benefits or potential benefits intended
      to be made available under this Option or the Plan.

     

    Section
      5.3 Binding Nature of Adjustments.
      Modifications or adjustments under this Article 5 will be made by the
      Administrator, whose determination as to what adjustments, if any, will be
      made
      and the extent thereof will be final, binding and conclusive. No fractional
      shares will be issued pursuant to this Option on account of any such
      modifications or adjustments.

     

    ARTICLE
      6

    MISCELLANEOUS

     

    Section
      6.1 Non-Guarantee of Employment.
      Nothing
      in the Plan or this Option shall alter the employment status of Optionee, nor
      be
      construed as a contract of employment between the Company or any of the
      Company’s subsidiaries, and Optionee, or as a contractual right of Optionee to
      continue in the employ of the Company or any of its subsidiaries, or as a
      limitation of the right of the Company, or any of the Company’s subsidiaries to
      discharge Optionee at any time with or without cause or notice.

     

    Section
      6.2 No Rights of Stockholder.
      Optionee shall not have any of the rights of a stockholder with respect to
      the
      shares of Common Stock that may be issued upon the exercise of this Option
      until
      such shares of Common Stock have been issued to Optionee upon the due exercise
      of this Option. No adjustment shall be made for dividends or distributions
      or
      other rights for which the record date is prior to the date such shares are
      issued, whether by means of a stock certificate or certificates or in book
      entry
      form.

     

    Section
      6.3 Non-Qualified Nature of Option.
      This
      Option is intended to be an agreement concerning a stock option arrangement
      which does not qualify under section 422 of the Internal Revenue Code, and
      this
      Option shall be so construed. Optionee acknowledges that, upon exercise of
      this
      Option, Optionee will recognize taxable income in an amount equal to the excess
      of the then Fair Market Value of the shares over the Exercise Price and must
      comply with the provisions of Section 6.6 of this Option with respect to any
      tax
      withholding obligations that arise as a result of such exercise.

     

    Section
      6.4 Confidential Information.
      In
      consideration of the granting of this Option, Optionee agrees and covenants
      that, except as specifically authorized by the Company, the Optionee will keep
      confidential any trade secrets or confidential or proprietary information of
      the
      Company or any Affiliate which are now or which hereafter may become known
      to
      Optionee as a result of Optionee’s employment by the Company, the Company or any
      of the Company’s subsidiaries, and shall not at any time, directly or
      indirectly, disclose any such information to any person, firm, corporation
      or
      other entity, or use the same in any way other than in connection with the
      business of the Company or any Affiliate, at all times during and after
      Optionee’s employment.

     

    Section
      6.5 The Company’s Rights.
      The
      existence of this Option shall not affect in any way the right or power of
      the
      Company or its stockholders to make or authorize any or all adjustments,
      recapitalizations, reorganizations or other changes in the Company’s capital
      structure or its business, or any merger or consolidation of the Company, or
      any
      issue of bonds, debentures, preferred or other stocks with preference ahead
      of
      or convertible into, or otherwise affecting the Common Stock or the rights
      thereof, or the dissolution or liquidation of the Company, or any sale or
      transfer of all or any part of the Company’s assets or business, or any other
      corporate act or proceeding, whether of a similar character or
      otherwise.

     

    Section
      6.6 Withholding of Taxes.
      The
      Company or any of the Company’s subsidiaries shall have the right to deduct from
      any compensation or any other payment of any kind (including withholding the
      issuance of shares of Common Stock) due Optionee the amount of any foreign,
      federal, state or local taxes required by law to be withheld as the result
      of
      the exercise of this Option or the lapsing of any restriction with respect
      to
      any shares of Common Stock acquired on exercise of this Option; provided,
      however, that the value of the shares of Stock withheld may not exceed the
      statutory minimum withholding amount required by law. In lieu of such deduction,
      the Administrator may require Optionee to make a cash payment to the Company
      or
      an Affiliate equal to the amount required to be withheld. If Optionee does
      not
      make such payment when requested, the Company may refuse to issue any shares
      of
      Common Stock under the Plan until arrangements satisfactory to the Administrator
      for such payment have been made.

     

    Section
      6.7 Optionee.
      Whenever the word “Optionee” is used in any provision of this Option under
      circumstances where the provision should logically be construed to apply to
      the
      estate, personal representative or beneficiary to whom this Option may be
      transferred by will or by the laws of descent and distribution, the word
“Optionee” shall be deemed to include such person.

     

    Section
      6.8 Nontransferability of Option.
      This
      Option shall be nontransferable otherwise than by will or the laws of descent
      and distribution and during the lifetime of Optionee, this Option may be
      exercised only by Optionee or, during the period Optionee is under a legal
      disability, by Optionee’s guardian or legal representative. Except as provided
      above, this Option may not be assigned, transferred, pledged, hypothecated
      or
      disposed of in any way (whether by operation of law or otherwise) and shall
      not
      be subject to execution, attachment or similar process.

     

    Section
      6.9 Notices.
      All
      notices and other communications made or given pursuant to this Option shall
      be
      in writing and shall be sufficiently made or given if hand delivered or mailed
      by certified mail, addressed to Optionee at the address contained in the records
      of the Company, or addressed to the Administrator, care of the Company for
      the
      attention of its Corporate Secretary at its principal office or, if the
      receiving party consents in advance, transmitted and received via telecopy
      or
      via such other electronic transmission mechanism as may be available to the
      parties.

     

    Section
      6.10 Entire Agreement.
      This
      Option contains the entire agreement between the parties with respect to the
      subject matter contained herein. Any oral or written agreements,
      representations, warranties, written inducements, or other communications made
      prior to the execution of this Option shall be void and ineffective for all
      purposes.

     

    Section
      6.11 Amendments.
      This
      Option may not be modified, except as provided in the Plan or in a written
      document signed by each of the parties hereto.

     

    Section
      6.12 Conformity with Plan.
      Except
      for the provisions of this Option that are contrary to the provisions of the
      Plan, (a) this Option is intended to conform in all respects with, and is
      subject to all applicable provisions of, the Plan, which is incorporated herein
      by reference; and (b) any inconsistencies between this Option and the Plan
      shall
      be resolved in accordance with the terms of this Option. In the event of any
      ambiguity in this Option or any matters as to which this Option is silent,
      the
      Plan shall govern. A copy of the Plan is available upon request to the
      Administrator.

     

    Section
      6.13 Governing Law.
      This
      Option shall be governed by and construed in accordance with the laws of the
      State of Delaware, other than the conflict of laws principles
      thereof.

     

    Section
      6.14 Headings.
      The
      headings in this Option are for reference purposes only and shall not affect
      the
      meaning or interpretation of this Option.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Company has caused this Option to be executed by its duly
      authorized officer as of the date first above written.

     

    I.C.
      ISAACS & COMPANY, INC.

     

    By:
      /s/ Robert S. Stec

    Name:
      Robert S. Stec

    Title:
      Chief Executive Officer

    

    The
      undersigned hereby acknowledges that he/she has carefully read this Agreement
      and the Plan and agrees to be bound by all of the provisions set forth in such
      documents.

     

    OPTIONEE

     

    /s/
      Gregg A. Holst

    Name: Gregg
      A.
      Holst

    Title: Chief
      Financial Officer

    Date: 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    CORPORATE
      SECRETARY

    I.C.
      ISAACS & COMPANY, INC.

    3840
      BANK
      STREET

    BALTIMORE,
      MARYLAND 21224

     

    Gentlemen:

     

    I
      hereby
      elect to exercise the Option made to me on May 3, 2007 by I.C. ISAACS &
COMPANY, INC. (the “Company”), pursuant to an Agreement dated May 3, 2007
      concerning the grant subject to all the terms and provisions of the Nonstatutory
      Stock Option Grant Agreement previously executed by me, and the I.C. ISAACS
      & COMPANY, INC. AMENDED AND RESTATED OMNIBUS STOCK PLAN. Pursuant to this
      election, I wish to purchase ____________ shares of Common Stock of the Company
      at a price of $[ ] per share.

     

    Enclosed
      is payment for such shares in the amount of $_____________ in the form
      of:

     

    £ Cash
        £ Certified
      or Cashier’s Check   £ Money
      Order 

     

    £ Irrevocable
      Broker-Assisted Cashless Exercise Instructions

     

    I
      understand that my election will be effective the date this election notice,
      together with the cash, check or other payment of the purchase price, is
      received by the Company as indicated below.

     

    My
      address of record is:

     

    _________________________________

     

    _________________________________

     

    _________________________________

     

    And
      my
      Social Security Number is: __________________

     

    Date:
      ________________________   ___________________________________

    [Optionee]

     

    Received
      by I.C. ISAACS & COMPANY, INC. on ___________________________

     

    By:
      _______________________________

    Title:
      ______________________________Exhibit 10.6

Return
    to 10Q
    Exhibit
      10.6

     

    

     

    SEPARATION
      AGREEMENT AND GENERAL RELEASE

     

    This
      Separation Agreement and General Release (this “Agreement”) is made and entered
      into by and between Jesse de la Rama and I.C. Isaacs & Company
      LP.

     

    DEFINITIONS

     

    As
      used
      throughout this Agreement:

     

    1. “Executive”
      refers to Jesse de la Rama, his heirs, executors, administrators, agents,
      successors, assigns and dependents.

     

    2. “Isaacs”
      refers to I.C. Isaacs & Company LP, together with its respective past and
      present parents, subsidiaries, and affiliates, and its respective past and
      present officers, directors, agents, employees, successors and assigns, in
      both
      their individual and corporate capacities.

     

    3. “Employment
      Agreement” refers to the Employment Agreement, made as of the 1st
      day of
      March 2004, by and between I.C. Isaacs & Company LP and Executive, as
      amended by an Amendment, dated as of August 1, 2005.

     

    RECITALS

     

    WHEREAS,
      Executive had been employed as Executive Vice President and Chief Operating
      Officer of Isaacs;

     

    WHEREAS,
      pursuant to this Agreement, Executive has resigned as Executive Vice President
      and Chief Operating Officer, effective as of May 9, 2007 (the “Termination
      Date”); and 

     

    WHEREAS,
      the parties hereto desire to settle any and all potential disputes relating
      to
      Executive’s employment and the termination thereof;

     

    NOW,
      THEREFORE, in consideration of the mutual covenants and agreements hereinafter
      set forth, and intending to be and being legally bound hereby, the parties
      agree
      as follows:

     

    AGREEMENT

     

    1.  Effective
      as of May 9, 2007, Executive has: (a) resigned his employment with Isaacs as
      Executive Vice President and Chief Operating Officer, and (b) resigned any
      and
      all positions he has, whether as a director, officer, or otherwise, with any
      affiliate of Isaacs or otherwise by reason of his employment with Isaacs. Isaacs
      hereby accepts such resignations. The parties hereto hereby acknowledge and
      agree that the termination of Executive’s employment pursuant to this Agreement
      shall be considered a termination of Executive’s employment without “Cause”
pursuant to Section 10 of the Employment Agreement, provided that the provision
      of Section 10 of the Employment Agreement requiring that payments by the Company
      to Executive in the event of a termination of employment without “Cause” be
      reduced by any compensation paid to Executive during the period he receives
      such
      payments shall not apply.

     

    2.  Executive
      represents that he does not have any claim, action or proceeding pending against
      Isaacs, or which arises out of his employment by Isaacs or the termination
      thereof.

     

    3.  (i)
      In
      full and complete consideration for Executive’s promises, covenants and
      agreements set forth herein, Isaacs will continue to pay Executive’s base salary
      at the rate of two hundred seventy-five thousand dollars ($275,000) per annum,
      less all applicable deductions and withholdings, until such time following
      the
      Termination Date that such payments equal two hundred twenty-five thousand
      dollars ($225,000). Isaacs will also pay Executive for any unused vacation
      accrued to the Termination Date and for any accrued but unpaid expenses through
      the Termination Date that are required to be reimbursed in accordance with
      Section 8 of the Employment Agreement. In addition, Isaacs agrees to continue
      providing Executive with medical and/or dental insurance coverage under the
      medical and dental plans generally made available by Isaacs to its employees
      for
      a period of ten months after the Termination Date without charge (the “Benefit
      Period”). After the Benefit Period, if Executive timely elects to continue
      medical and/or dental insurance coverage pursuant to COBRA under such medical
      and dental plans, Executive shall be responsible for paying the required COBRA
      premium for the remainder of the term of his continuation coverage. For the
      avoidance of doubt, nothing in this Agreement is intended to affect any benefits
      to which Executive is entitled as of the Termination Date under the terms of
      the
      Isaacs 401(k) plan.

     

    (ii) The
      parties hereby acknowledge and agree, notwithstanding the ambiguity created
      by
      certain conflicting provisions of the Employment Agreement and the I.C. Isaacs
      & Company, Inc. Amended and Restated Omnibus Stock Plan Nonstatutory Stock
      Option Grant Agreement between Isaacs and Executive, effective December 6,
      2004
      (“2004 Option Agreement”) and the I.C. Isaacs & Company, Inc. Amended and
      Restated Omnibus Stock Plan Nonstatutory Stock Option Grant Agreement between
      Isaacs and Executive, dated August 1, 2005 (“2005 Option Agreement”), that the
      following terms apply to the respective stock option grants: 

     

    
      	·  	
              The
                grant of an option pursuant to the 2004 Option Agreement with respect
                to
                25,000 shares shall remain exercisable with respect to 25,000 shares
                until
                February 28, 2009. 

            

    

    
      	·  	
              The
                grant of an option pursuant to the 2005 Option Agreement with respect
                to
                75,000 shares shall remain exercisable with respect to 50,000 shares
                until
                February 28, 2009, and the option grant with respect to the remaining
                25,000 shares shall expire as of the date
                hereof.

            

    

    

    4.  
      (i)
      Executive shall not be entitled to any payment or continued payment under
      Section 3 of this Agreement if Executive is in willful material breach of any
      covenant contained in this Agreement, and such breach, if susceptible to cure,
      is not substantially cured within 15 days after written notice of such breach
      is
      provided to Executive.

     

    (ii)
      Executive shall not be entitled to any payment or continued payment under
      Section 3 of this Agreement if Executive contends in any proceeding that this
      Agreement was invalid or unenforceable in whole or in part.

     

    5.  The
      parties hereto agree that the provisions of this Section 5 shall supersede
      the
      provisions of Section 11 of the Employment Agreement.

     

    (i) Executive
      acknowledges that during the course of his past employment with Isaacs, he
      has
      had access to proprietary information and confidential records of Isaacs, and
      has made use of proprietary information and confidential records of Isaacs.
      Executive agrees that he shall not, directly or indirectly, use for his own
      purpose or for the benefit of any person or entity other than Isaacs, nor
      otherwise disclose, any proprietary information to any individual or entity,
      unless such disclosure has been authorized in writing by Isaacs or is otherwise
      required by law. Executive acknowledges and understands that the term
“proprietary information” includes, but is not limited to: (a) the software
      products, programs, applications, and processes utilized by Isaacs; (b) the
      name and/or address of any licensor, customer, vendor or distributor of Isaacs
      or any information concerning the transactions or relations of any licensor,
      customer, vendor or distributor of Isaacs or any of its or their partners,
      principals, directors, officers or agents; (c) any information concerning any
      product, technology, or procedure employed by Isaacs but not generally known
      to
      its or their customers, vendors or competitors, or under development by or
      being
      tested by Isaacs but not at the time offered generally to customers, vendors
      or
      distributors; (d) any information concerning the structure or content of the
      proprietary databases of any of Isaacs; (e) any information relating to the
      computer software, computer systems, pricing or marketing methods, sales
      margins, cost of goods, cost of material, capital structure, operating results,
      borrowing arrangements or business plans of Isaacs; (f) customer lists and
      contact information; (g) any information which is generally regarded as
      confidential or proprietary in any line of business engaged in by Isaacs; (h)
      product information and future development plans; (i) any business plans,
      budgets, advertising or marketing plans; (j) any information contained in any
      of
      the written or oral policies and procedures or manuals of Isaacs; (k) any
      information belonging to customers, vendors or distributors of Isaacs or any
      other person or entity which Isaacs has agreed to hold in confidence; (l) any
      inventions, innovations or improvements covered by this Agreement; and (m)
      all
      written, graphic and other material relating to any of the foregoing. Executive
      acknowledges and understands that information that is not novel or copyrighted
      or patented may nonetheless be proprietary information. The term “proprietary
      information” shall not include information (i) generally available to and known
      by the public or information that is or becomes available to Executive on a
      non-confidential basis from a source other than Isaacs or its directors,
      officers, employees, partners, principals or agents (other than as a result
      of a
      breach of any obligation of confidentiality) or (ii) that is within
      Executive’s general business or industry knowledge, know-how or expertise
      (collectively, “know-how”), provided such know-how is of a generic nature not
      specifically pertaining to Isaacs.

     

    (ii)  Executive
      shall not at any time, except as required by law, directly or indirectly
      publish, make known or in any fashion disclose any confidential records to,
      or
      permit any inspection or copying of confidential records by, any individual
      or
      entity other than in the course of such individual’s or entity’s employment or
      retention by Isaacs. Executive shall deliver promptly to Isaacs all property
      and
      records of Isaacs, including, without limitation, all confidential records.
      For
      purposes hereof, “confidential records” means all correspondence, reports,
      memoranda, files, manuals, books, lists, financial, operating or marketing
      records, magnetic, optical, or electronic or other media or equipment of any
      kind which may be in Executive’s possession or under his control or accessible
      to him which contain any proprietary information. Executive agrees that all
      property and records of Isaacs (including, without limitation, all confidential
      records) shall be and remain the sole property of Isaacs.

     

    (iii)  All
      inventions, innovations or improvements (including policies, procedures,
      products, improvements, software, ideas and discoveries, whether patent,
      copyright, trademark, service mark, or otherwise) conceived or made by
      Executive, either alone or jointly with others, in the course of his employment
      by Isaacs, belong to Isaacs. Executive will promptly disclose in writing such
      inventions, innovations or improvements to Isaacs and, at Isaacs’ expense, will
      perform all actions reasonably requested by Isaacs to establish and confirm
      such
      ownership by Isaacs, including, but not limited to, cooperating with and
      assisting Isaacs in obtaining patents, copyrights, trademarks, or service marks
      for Isaacs in the United States and in foreign countries.

     

    (iv)  Executive
      acknowledges the highly competitive nature of Isaacs’ business and that his
      position, services, and access to and use of confidential records and
      proprietary information renders him special and unique. Therefore, Executive
      agrees that, during a period of ninety (90) days after the Termination Date,
      Executive shall not, directly or indirectly, without the express prior written
      authorization of Isaacs, (a) enter the employ of, or render any services to,
      any
      direct competitor of Isaacs in the urban market (“Competitive Business”) or (b)
      engage in any Competitive Business on Executive’s own account or become
      interested in or affiliated with any such Competitive Business, directly or
      indirectly, as an individual, partner, shareholder, director, officer, member,
      manager, principal, agent, employee, trustee, consultant, or in any other
      relationship or capacity.

     

    (v)  Executive
      agrees that, for a period of one (1) year after the Termination Date, Executive
      shall not, directly or indirectly, without the express prior written
      authorization of Isaacs, (a) solicit or recruit any employee who was employed
      by
      Isaacs as of the Termination Date to leave his or her employment with Isaacs,
      (b) solicit any Person who is or was a licensor of, customer of, or a vendor
      or
      supplier or contractor to, Isaacs within the 12-month period immediately
      preceding the Termination Date, where the purpose or effect of such solicitation
      is to conduct a Competitive Business, or (c) advise or encourage any Person
      who
      is or was an employee, licensor, customer, vendor or supplier of or to Isaacs
      within the 12-month period immediately preceding the Termination Date to
      terminate his, her or its relationship with Isaacs or to reduce the amount
      of
      business customarily done with Isaacs.

     

    (vi)  Executive
      acknowledges and agrees that, by virtue of his position, his services, and
      access to and use of confidential records and proprietary information, any
      violation by him of any of the undertakings contained in this Section 5 would
      cause Isaacs immediate, substantial and irreparable injury for which it has
      no
      adequate remedy at law. Executive agrees and consents to the entry of an
      injunction or other equitable relief by a court of competent jurisdiction
      restraining any violation or threatened violation of any undertaking contained
      in this Section 5. Executive waives posting by Isaacs of any bond otherwise
      necessary to secure such injunction or other equitable relief. Rights and
      remedies provided for in this Agreement are cumulative and shall be in addition
      to rights and remedies otherwise available to Isaacs under any other agreement
      or applicable law.

     

    6.  Except
      as
      necessary to enforce the terms of this Agreement, and in exchange for and in
      consideration of the promises, covenants and agreements set forth herein,
      Executive hereby releases Isaacs to the maximum extent permitted by law from
      any
      and all manner of claims, demands, causes of action, obligations, damages,
      or
      liabilities whatsoever of every kind and nature, at law or in equity, known
      or
      unknown, and whether or not discoverable, which he has or may have for any
      period prior to and arising up to his execution of this Agreement, including,
      but not limited to, any claim of defamation, wrongful discharge, breach of
      contract, any claim for additional compensation, any claims arising out of
      or
      related to Executive’s employment by Isaacs and the termination thereof, any
      claims arising under or related to any employment agreement, whether oral or
      written, between Executive and Isaacs, claims for unpaid wages or commissions
      or
      bonuses, severance pay, and claims of discrimination under the Age
      Discrimination in Employment Act of 1967, as amended, the Americans with
      Disabilities Act, Title VII of the Civil Rights Act of 1964, as amended, and
      all
      other federal, state and local laws, including but not limited to any claim
      for
      attorneys’ fees or costs. Except as necessary to enforce the terms of this
      Separation Agreement and General Release and for any claims, demands, causes
      of
      action, obligations, damages, or liabilities whatsoever of every kind and nature
      arising from Executive’s intentional misconduct or gross negligence, and in
      exchange for and in consideration of the promises, covenants and agreements
      set
      forth herein, Isaacs hereby releases Executive to the maximum extent permitted
      by law from any and all manner of claims, demands, causes of action,
      obligations, damages, or liabilities whatsoever of every kind and nature, at
      law
      or in equity, known or unknown, and whether or not discoverable, which it has
      or
      may have for any period prior to and arising up to the Termination Date,
      including but not limited to any claim for attorneys’ fees or
      costs.

     

    7.  The
      parties agree that it is a material condition of this Agreement that Executive
      maintain strictly confidential, and shall take all reasonable steps to prevent
      the disclosure to any person or entity, the existence and terms of this
      Agreement and all disputes and disagreements between Executive and Isaacs
      arising out of Executive’s employment by Isaacs and the termination thereof.
      This provision does not prohibit Executive from providing this information
      to an
      attorney or accountant for purposes of obtaining legal or tax advice or as
      otherwise required by law, or to members of his immediate family. To the extent
      Executive makes any disclosure to any attorney, accountant, or family member
      as
      permitted pursuant to this Section, he shall instruct such person not to make
      any further disclosure except in accordance with this Section.

     

    8.  The
      parties agree that it is a material condition of this Agreement that Executive
      shall not make or publish any statement (in verbal, written, electronic or
      any
      other form), or instigate, assist or participate in the making or publication
      of
      any statement (in verbal, written, electronic or any other form), which would
      libel, slander or disparage (whether or not such disparagement legally
      constitutes libel or slander) or expose to hatred, contempt or ridicule (i)
      Isaacs; (ii) any of its products, services, affairs, or operations; or
      (iii) any of its past or present directors, officers, employees, agents, or
      licensors. By way of example only, such prohibition shall include,
      but not be limited to, a negative or derogatory statement made in, or in
      connection with, any article or book, on a website or via the internet.
 Isaacs
      agrees that it will not make any official or internal announcements or issue
      any
      press releases which contain any negative or derogatory statements about
      Executive that are intended to disparage Executive and that it will advise
      the
      members of its Board of Directors and its executive officers that they
      should not make or publish any statement (in verbal, written, electronic or
      any
      other form), or instigate, assist or participate in the making or publication
      of
      any statement (in verbal, written, electronic or any other form), which would
      libel, slander or disparage Executive (whether or not such disparagement legally
      constitutes libel or slander) or him expose to hatred, contempt or
      ridicule.

     

    9.  Executive
      shall reasonably cooperate with Isaacs in connection with any and all actions,
      governmental inquiries or other legal proceedings in which Executive’s
      assistance may be requested by Isaacs. Such cooperation shall include, among
      other things, making documents relating to Isaacs in Executive’s custody or
      control available to Isaacs or its counsel, making Executive reasonably
      available for interviews by Isaacs or its counsel, and being reasonably
      available to appear as a witness at deposition, trial or otherwise. In addition,
      Executive shall reasonably cooperate with Isaacs, as requested by Isaacs, to
      effect a transition of his responsibilities and to ensure that Isaacs is aware
      of all matters being handled by him. Any reasonable vouchered out-of-pocket
      expenses incurred by Executive in fulfilling his obligations under this Section
      9 shall be promptly reimbursed by Isaacs. Isaacs will provide Executive with
      reasonable compensation for time spent by Executive after the Benefit Period
      as
      a witness at deposition, trial or otherwise pursuant to this Section
      9.

     

    10.  Notwithstanding
      anything to the contrary contained in this Agreement, neither Executive nor
      Isaacs shall be prohibited or restricted in connection with any communications
      with any regulatory or self-regulatory organization or any law enforcement
      authority or pursuant to court order or lawful subpoena or other legal process,
      or from making any other disclosure required by law. In the event that Isaacs
      determines to issue a press release the primary purpose of which is to announce
      the resignation of Executive as contemplated by this Agreement, Isaacs will
      provide Executive with a copy of the proposed press release in advance of its
      publication and agrees to consider any comments to the proposed press release
      provided by Executive.

     

    11.  Except
      as
      expressly provided in this Agreement, Executive shall not be entitled to any
      money or other consideration from Isaacs. Executive acknowledges he is receiving
      under this Agreement consideration in addition to anything of value to which
      he
      already is entitled.

     

    12.  In
      executing this Agreement, neither Isaacs nor Executive admits any liability
      or
      wrongdoing, and the considerations exchanged herein do not constitute an
      admission of any liability, error, contract violation, or violation of any
      federal, state or local law or regulation.

     

    13.  This
      Agreement shall be binding upon and inure to the benefit of the parties hereto
      and their respective successors and permitted assigns.

     

    14.  The
      unenforceability or invalidity of any provision or provisions of this Agreement
      shall not render any other provision or provisions hereof unenforceable or
      invalid.

     

    15.  This
      Agreement constitutes the entire agreement between the parties, supersedes
      all
      existing agreements, whether written or oral, regarding Executive’s employment
      by Isaacs and any payments to be made by Isaacs or benefits that Isaacs is
      to
      make available to Executive in connection with the termination of his employment
      by Isaacs pursuant to the Employment Agreement and the other matters set forth
      herein, and cannot be altered except in a writing signed by the parties. The
      parties acknowledge that they entered into this Agreement voluntarily, that
      they
      fully understand all of its provisions, and that no representations were made
      to
      induce execution of this Agreement which are not expressly contained
      herein.

     

    16.  This
      Agreement shall be deemed to have been made in the State of New York, and shall
      be interpreted and construed and enforced in accordance with the laws of the
      State of New York without regard to principles of conflicts of law or where
      the
      parties are located at the time a dispute arises. Any dispute arising out of
      or
      relating to this Agreement shall be commenced in any state or federal court
      sitting in the County of New York in the State of New York, and Executive and
      Isaacs consent to the jurisdiction of such courts for such
      purposes.

     

    17.  Executive
      is advised to consult with the attorneys of his choice prior to executing this
      Agreement. Executive acknowledges that he has had the opportunity to consult
      with counsel and has had an adequate opportunity to review this Agreement before
      its execution.

     

    18.  Executive
      acknowledges that he has been afforded an opportunity to take at least
      twenty-one (21) days to consider this Agreement and has been and hereby is
      advised to consult with the attorneys of his choice prior to executing this
      Agreement. Executive further acknowledges that he will have a period of seven
      (7) calendar days following his execution of this Agreement in which to revoke
      his consent, and that the Agreement will not become effective or enforceable
      until the revocation period has expired. A revocation will become effective
      only
      if Executive furnishes Isaacs with a written notice to I.C. Isaacs & Co.,
      Inc., 475 10th
      Avenue,
      9th
      Floor,
      New York, New York 10018, Attn: Gregg A. Holst, Chief Financial
      Officer, such
      that
      it is actually received within such seven (7) day period. Isaacs will have
      no obligation to make the payments set forth herein unless and until this
      Agreement becomes effective.

     

    [signature
      page follows]

     

    IN
      WITNESS WHEREOF, the parties have executed this Separation Agreement and General
      Release on the dates indicated below.

     

    

    

    /s/Jesse
      de la Rama     

    Jesse
      de
      la Rama     Date:
      May
      11, 2007

    

    

    I.C.
      Isaacs & Company, LP

    

    

    By:
      /s/Gregg
      A. Holst     

    Name:
      Gregg A. Holst    Date:
      May
      11, 2007

    Title:
      Chief Financial Officer

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