SEVERANCE AGREEMENT AND RELEASE

Exhibit 10.5

SEVERANCE AGREEMENT AND RELEASE

This Severance Agreement and Release (the “Agreement”) is made this 19th day of April 2006 between Hiten Patel (the “Employee”) and The Children’s Place Services Company, LLC, its parent and its direct and indirect affiliated corporations and other entities (collectively, the “Company”).

1.             Termination of Employment . The parties agree that the Employee’s employment with the Company shall terminate effective April 15, 2006 (the “Separation Date”).

2.             Separation Payment . (a) In consideration for entering into this Agreement, the Company shall pay to the Employee the sum of One Hundred Eighty Thousand Dollars ($180,000), less legally required payroll deductions (the “Separation Payment”), which sum shall be paid to Employee with the Company’s regular payroll practices in thirteen (13) equal bi-weekly installments commencing the first payperiod following execution of this Agreement.

(b)           The Company also shall pay to the Employee the sum of Twenty Seven Thousand Six Hundred Ninety-Two Dollars ($27,692.00), less legally required payroll deductions, for Employee’s accrued but unused vacation and personal day as of the Separation Date, within fourteen (14) days of full execution of this Agreement.

(c)           The Company also agrees that the Transfer Restrictions under The Children’s Place Retail Stores, Inc. Transfer Restriction Agreement dated January 27, 2006 (the “Transfer Restriction Agreement”) shall lapse with respect to the Option Shares upon execution of this Agreement. Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Transfer Restriction Agreement.

(d) The Company represents and warrants that the consideration paid to the Employee under this Agreement exceeds the amount the Employee would ordinarily be entitled to upon termination of the Employee’s employment.

3.             Other Benefits . Any and all other employment benefits received by the Employee shall terminate effective as of the Separation Date.

4.             Return of Company Property . The Employee agrees to return to the Company all keys, locks, documents, records, materials, and other information of any type whatsoever that is the property of the Company.

5.             Removal from Company Positions and Indemnification . The Company agrees that as of the Separation Date the Employee shall be removed from all positions held on behalf of the Company, its parents, subsidiaries and affiliated companies and any other related entities including, but not limited to, officer, director, agent, representative, trustee, administrator, fiduciary and signatory. In addition, with respect to all acts or omissions of Employee which occurred prior to the Separation Date, the Company agrees to continue to indemnify the Employee to the same extent that the Employee was

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indemnified prior to the Separation Date and that the Employee shall retain the benefit of all directors and officer liability insurance and coverage maintained by Employer, in accordance with the terms of such policy.

6.             Consultation with Counsel and Voluntariness of Agreement . (a) The Employee acknowledges that the Company has advised the Employee in writing to consult with an attorney prior to executing this Agreement. The Employee further acknowledges that, to the extent desired, the Employee has consulted with the Employee’s own attorney in reviewing this Agreement, that the Employee has carefully read and fully understands all the provisions of this Agreement, and that the Employee is voluntarily entering into this Agreement.

(b)           The Employee further acknowledges that the Employee has had a period of at least twenty-one (21) days in which to consider the terms of this Agreement.

(c)           The Employee acknowledges that the Employee has been informed in writing that the Employee has seven (7) calendar days following the execution of this Agreement to revoke it, and that such revocation must be in writing, hand delivered or sent via overnight mail and actually received by the Company within such period. It is specifically understood that this Agreement shall not be effective or enforceable until the seven-day revocation period has expired.

7.             Confidentiality of Agreement . The Employee agrees not to disclose the terms and conditions of this Agreement to any person or entity, except (a) to comply with this Agreement; (b) to the Employee’s legal, financial or tax advisors, spouse, and to the Internal Revenue Service or any similar state or local taxation authority; or (c) as otherwise required by law. The Employee agrees that the Employee will not publicly or privately disparage the Company or any of the Company’s products, services, affiliates, or current or former officers, directors, trustees, employees, agents, administrators, representatives or fiduciaries.

8.             Confidential and Proprietary Information; Work Product . (a) The Employee acknowledges that the Employee may possess certain confidential information, property or trade secrets of the Company (“Confidential Information”) which would damage the Company if disclosed or used by the Employee. Accordingly, the Employee acknowledges a continuing duty of confidentiality to the Company and agrees that the Employee will not use or disclose Confidential Information to any person or entity or use the Confidential Information in any way. Confidential information shall include, but shall not be limited to, the following: (i) documentation or data contained in any files or any other records the Company may maintain; ii) statements regarding any matters made by any employees, officers, agents, representatives or attorneys of the Company at any meeting attended by the Employee or which the Employee may have heard or obtained knowledge of which may result in any detriment to the Company; (iii) actions taken or contemplated by the Company with respect to any of its operations, assets or employees; (iv) policies, practices, programs or plans contemplated, initiated or effectuated by the Company; and (v) any other information, records or data of a private nature to the

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Company. Confidential Information shall not include information which is then in the public domain (so long as the Employee did not, directly or indirectly, cause or permit such information to enter the public domain). Notwithstanding the foregoing, nothing contained in this Paragraph 8 shall prevent Employee from disclosing Confidential Information if compelled to do so by legal process; provided, that Employee immediately notifies Employer if disclosure of Confidential Information is required by court order or other legal process to allow Employer sufficient time to obtain a protective order or otherwise obtain the fullest protection permitted by applicable law. In addition, notwithstanding the foregoing, nothing contained in this Section 8 shall serve as a restraint or limitation upon the Employee from exercising the Employee’s general knowledge and expertise in the Employee’s field or from earning a livelihood in said field.

(b)           Employee agrees that all copy