Execution Version


 


AMENDED AND RESTATED EMPLOYMENT AGREEMENT


 


THIS AMENDED AND RESTATED
EMPLOYMENT AGREEMENT (this “Agreement”) is made as of February __, 2012 by and between XCel Brands, Inc. a Delaware
corporation (the “Company”), and Marisa Gardini (the “Executive”), each a “Party” and collectively
the “Parties.” This Agreement amends and restates that certain employment agreement dated as of May 19, 2011, by and
between the Company and the Executive. Unless otherwise indicated, capitalized terms used herein are defined in Section 2.1 of
this Agreement.


 


WHEREAS, the Company
has determined that it is in the best interests of the Company and its shareholders to enter into an employment agreement with
the Executive and the Executive is willing to serve as an employee of the Company.


 


NOW, THEREFORE, in
consideration of the mutual covenants and agreements set forth herein, as defined below, it is agreed by and between the Executive
and the Company as follows:


 


ARTICLE I


EMPLOYMENT TERMS


 


1.1           Employment.  The
Company will employ the Executive, and the Executive accepts employment with the Company, upon the terms and conditions set forth
in this Agreement for the period beginning on the Effective Date and ending as provided in Section 1.4(a) hereof (the “Employment
Period”).


 


1.2           Position
and Duties.


 


(a)           Generally.  The
Executive shall serve as the SVP Strategic Planning of the Company and, in such capacity shall be responsible for the strategic
planning functions of the Business and shall perform such duties as are customarily performed by an officer with similar title
and responsibilities of a company of a similar size and shall have such power and authority as shall reasonably be required to
enable her to perform her duties hereunder; provided , however, that in exercising such power and authority and performing such
duties, she shall at all times be subject to the authority, control and direction of the Chairman and CEO of the Company.


 


(b)           Duties
and Responsibilities.  The Executive shall report to the Chairman and CEO of the Company and shall devote her full business
time and attention to the business and affairs of the Company and its Subsidiaries.  The Executive shall perform her
duties and responsibilities in a diligent, trustworthy, businesslike and efficient manner.  The Executive shall not engage
in any other business activities that conflict with the Executive’s duties, responsibilities and obligations hereunder, except
for the engagement referred to in Section 7.14 of the Purchase Agreement.  During the Employment Period, the Executive
shall promptly bring to the Company all investment or business opportunities related to the Business, of which the Executive becomes
aware.


 


(c)           Principal
Office.  The principal place of performance by the Executive of her duties hereunder shall be at the Company’s
principal executive offices in Manhattan, New York, although the Executive may be required to travel, upon reasonable advance notice,
outside of the area where the Company’s principal executive offices are located in connection with the business of the Company.  All
required travel shall be in accordance with the Company’s travel policy.


 


1.3           Compensation.


 


(a)           Base
Salary.  The Executive’s base salary shall be $250,000, $250,000 and $500,000 per annum, respectively, in the first
three successive 12 month periods following the Effective Date (respectively, the “Base Salary”).  The Base
Salary will be payable to the Executive by the Company in regular installments in accordance with the Company’s general payroll
practices.  The Executive shall receive such increases (but not decreases) in her Base Salary as the Board of Directors
of the Company (the “Board”), or the compensation committee of the Board, may approve in its sole discretion from time
to time.  The Executive’s Base Salary will be reviewed for potential upward adjustment on the third anniversary
of this Agreement and each anniversary thereafter during the Term.


 



    	 



    	 



    

 


(b)           Bonus.  The
Executive shall have the right to participate in all employee bonus plans offered to other executives and senior management and,
such other bonus payments as the Board, or the compensation committee of the Board, may approve in its sole discretion.  Such
bonus payments, if any, shall be paid at the same time paid to other recipients but in no event later than sixty (60) days after
the end of the applicable calendar year or fiscal period.  All bonuses payable under this Section 1.3(b) shall be, collectively,
referred to herein as “Bonus.”


 


(c)           Withholding.  All
payments made under this Agreement (including Base Salary, Bonus payments, and other amounts) shall be subject to withholding for
income taxes, payroll taxes and other legally required deductions.


 


(d)           Expenses.  The
Company will reimburse the Executive for all reasonable expenses incurred by her in the course of performing her duties under this
Agreement that are consistent with the Company’s policies in effect at that time with respect to travel, entertainment and
other business expenses, subject to the Company’s requirements with respect to reporting and documentation of such expenses.
Subject to this Section 1.3(d), all expense reimbursement payments for documented expenses shall be made in accordance with the
Company expense reimbursement policy.  In addition, the Company shall reimburse the Executive for $25,000 of undocumented
expenses each calendar year (pro-rated for any partial calendar year during the Employment Period), without regard to whether such
expenses would be reimbursable under the Company’s expense reimbursement policy.  All expense reimbursement payments
pursuant to this Section 1.3(d) shall be made within thirty (30) days after the date that the Executive notifies the Company of
such expense; provided, however, that the Executive shall notify the Company of such expenses no later than six (6) months after
the end of the calendar year in which such expenses were incurred.


 


(e)           Vacation;
Holiday Pay and Sick Leave.  The Executive shall be entitled to four (4) weeks’ paid vacation in each calendar
year, which if and to the extent not taken during any year may be carried forward to any subsequent year.  Executive
shall receive holiday pay and paid sick leave as provided to other executive employees of the Company.


 


 


(f)           Additional
Benefits.  During the Employment Period, the Executive shall be entitled to participate (for herself and, as applicable,
her dependents) in the group medical, life, 401(k) and other insurance programs, equity and equity-based incentive plans, employee
benefit plans and perquisites which may be adopted by the Board, or the compensation committee of the Board, from time to time,
for participation by the Company’s senior management or executives, as well as dental, life and disability insurance coverage,
with payment of, or reimbursement for, such insurance premiums by the Company, subject to, in all cases, the terms and conditions
established by the Board with respect to such plans (collectively, the “Benefits”); provided , however , that the Board,
in its reasonable discretion, may revise the terms of any Benefits so long as such revision does not have a disproportionately
negative impact on the Executive vis-à-vis other Company employees to the extent applicable.


 


(g)           Indemnification.  The
Executive shall be entitled to indemnification by the Company in the same circumstances and to the same extent as the other executive
officers and directors of the Company, which indemnification shall in no event be less favorable to the Executive than the fullest
scope of indemnification permitted by applicable Delaware law (or any such greater scope of indemnification provided by agreement
or by the terms of the Company’s Certificate of Incorporation or By-Laws to any executive officer or director of the Company).


 


(h)          D&O
Insurance.  The Company shall acquire and maintain Directors’ and Officers’ insurance for the Company’s
directors and officers (including the Executive), with coverage in amounts reasonably sufficient to protect the Company’s
directors and officers, but in all events with coverage in amounts no less than such amounts customarily maintained by similarly
situated companies.  Upon a Change of Control, the Company shall purchase, or cause to be purchased, a tail policy for
a period of one year in an amount reasonably sufficient to protect the Company’s former directors and officers, but in all
events with coverage in amounts no less than such amounts obtained by similarly situated companies in similar events.


 


(i)           Other
Benefits.  During the Employment Period, the Company shall: (i) reimburse Executive for up to Three Thousand Dollars
($3,000) per year for Executive to acquire and maintain a life insurance policy on the Executive; and (ii) allow the Executive
to participate in the Company’s disability insurance policy on the Executive (the “Disability Policy”), which
shall name the Executive as loss payee.


 



    	 



    	 



    

 


1.4           Term
and Termination.


 


(a)           Duration.  This
Agreement shall be effective upon the Closing (as defined in the Purchase Agreement).  The Employment Period shall commence
on the Effective Date and the initial term shall terminate three (3) years from the Effective Date (the “Initial Term”),
unless earlier terminated by the Company or the Executive as set forth in this Section 1.4.  After the Initial
Term, the Company shall have the option to renew this Agreement for two successive one-year periods (each a “Renewal Period”)
on the same terms and conditions as those in effect during the third year of the Initial Term.  The Initial Term plus
any Renewal Period exercised by the Company is referred to herein as the “Term “.  Thereafter, the Term shall
renew automatically for one-year periods, unless either party gives the other party written notice of its intention not to renew
the Agreement no later than 30 days prior to the expiration of the then current Term.  The Employment Period shall be
terminated prior to the then-applicable expiration of the Term upon the first to occur of (i) termination of the Executive’s
employment by the Company for Cause, (ii) termination of the Executive’s employment by the Company without Cause, (iii) the
Executive’s resignation with Good Reason, (iv) the Executive’s resignation other than for Good Reason, or (v) the Executive’s
death or Disability.  The Executive shall not terminate the Employment Period, with or without Good Reason, unless she
gives the Company written notice that she intends to terminate the Employment Period at least 90 days prior to the Executive’s
proposed Termination Date.  As a condition to Executive receiving any payments or benefits under Section 1.4(b)(2) and
(3) or Section 1.4(c) (except amounts payable pursuant to Section 1.4(b)(1) ), the Executive shall execute and deliver to the Company
the General Release of claims related solely to Executive’s employment with the Company within 60 days after the Termination
Date in the form attached hereto as Exhibit A .  If the Executive does not execute and deliver the General Release within
that time period then the amounts otherwise payable pursuant to Section 1.4(b)(2) shall be forfeited.  The first payment
under this Section 1.4 shall include any amounts payable under this Section 1.4 for periods prior to execution of such General
Release.


 


(b)           Severance
Upon Termination Without Cause, Upon Resignation by the Executive For Good Reason or Failure to Renew Term .  If the
Employment Period is terminated by the Company without Cause or if the Executive resigns for Good Reason, or if the Company fails
to renew the Term (in which case termination of the Executive’s employment shall be effective at the expiration of the then-current
Term), then the Executive will be entitled to receive (1) any unpaid Base Salary through and including the date of termination
or resignation and any other amounts, including any amounts due for Bonus, or other entitlements then due and owing to the Executive
as of the Termination Date; (2) an amount equal to the Executive’s Base Salary (at the rate that would have been effect pursuant
to Section 1.3(a) had such employment not been terminated) for the longer of (x) six (6) months from the Termination Date, or (y)
the remainder of the then-current Term, but in no event exceeding eighteen (18) months (as the case may be, the “Severance
Period”), payable in substantially equal installments over the Severance Period in accordance with the Company’s normal
payroll practices; provided , however , that prior to the date that is six months and one day after the Termination Date, no payments
would be made that exceed the lesser of two times: (i) the sum of (A) the Executive’s Base Salary   (at the rate
in effect on the date of termination), (B) the Bonus paid to Executive  pursuant to Section 1.3(b) in the prior calendar year,
and (C) any other taxable compensation paid to the Executive in the prior calendar year, or (ii) the maximum amount that may be
taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in which the Executive has a
termination of employment; and any amount in excess of the applicable limits shall be paid on the date that is six months and one
day after the Termination Date;   and any amount in excess of the applicable limits shall be paid on the date that
is six months and one day after the Termination Date; and (3) continue to participate in the Company’s group medical plan
on the same basis as she previously participated or , if such participation would violate the provisions of Section 409A of the
Code or applicable nondiscrimination regulations under the Patient Protection and Affordable Care Act (PPACA), receive reimbursement
for, COBRA premiums (or, if COBRA coverage is not available, reimbursement of premiums paid for other medical insurance in an amount
not to exceed the COBRA premium) for the Severance Period; provided that if the Executive is provided with health insurance coverage
by a successor employer, any such coverage by the Company under subclause (3) shall cease (each of (1), (2) and (3) referred to
as the “Severance Payment”).  The Executive also shall be entitled to receive payment for (i) all reimbursable
expenses or other entitlements then due and owing to the Executive as of the Termination Date under Section 1.3(d) (other than
non-accountable expenses which shall be reimbursed pursuant to clause (ii) below), which payments shall be made in accordance with
the Company expense reimbursement policy; provided , however , in no event shall any expense reimbursements by the Company be made
later than the last day of the calendar year after the calendar year in which the expense was incurred, and (ii) all non-accountable
expenses incurred prior to the Termination Date that are reimbursable under Section 1.3(d) , which payments shall be made in accordance
with the terms of Section 1.3(d) .  If the Executive breaches her obligations under Section 1.6 , 1.7 , 1.8 or 1.9 of
this Agreement, the Company’s obligation to make any Severance Payments and provide any Benefits shall cease as of the date
of such breach; provided, that if the Executive cures such breach within 10 days of receiving written notice from the Company of
such breach (which notice the Company shall provide promptly to the Executive after learning of such breach), the Company shall
promptly pay all Severance Payments not made during such period of dispute and resume making Severance Payments and providing Benefits
promptly following such cure.


 



    	 



    	 



    

 


 


(c)           Severance
upon a Change of Control.  Anything contained herein to the contrary notwithstanding, in the event the Executive’s
employment hereunder is terminated within six (6) months following a Change of Control by the Company without Cause or by the Executive
with Good Reason, the Executive shall be entitled to receive the Severance Payment as described in sub-section (b) above; provided
, however , that, that in lieu of the calculation contained in Section 1.4(b)(2) , Executive shall be entitled to receive a lump
sum amount within 60 days after the Termination Date equal to two times the sum of (i) the Executive’s Base Salary (at the
average rate that would have been effect pursuant to Section 1.3(a) during the two years following the Termination Date) and (ii)
the Bonus paid or due to the Executive pursuant to Section 1.3(b) in the year prior to such Change of Control, if any; provided
, however , that prior to the date that is six months and one day after the Termination Date, no payment would be made that exceeds
the lesser of two times: (i) the sum of (A) the Executive’s Base Salary   (at the rate in effect on the date
of termination), (B) the Bonus paid to Executive  pursuant to Section 1.3(b) in the prior calendar year, and (C) any other
taxable compensation paid to the Executive in the prior calendar year, or (ii) the maximum amount that may be taken into account
under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in which the Executive has a termination of employment,
and any amount in excess of such limits shall be paid on the date that is six months and one day after the Termination Date; and
further provided , however , that if such lump sum severance payment, either alone or together with other payments or benefits,
either cash or non-cash, that the Executive has the right to receive from the Company, including, but not limited to, accelerated
vesting or payment of any deferred compensation, options, stock appreciation rights or any benefits payable to the Executive under
any plan for the benefit of employees, would constitute an “excess parachute payment” (as defined in Section 280G of
the Code), then such lump sum severance payment or other benefit shall be reduced to the largest amount that will not result in
receipt by the Executive of an “excess parachute payment.” The determination of the amount of the payment described
in this subsection shall be made by the Company’s independent auditors at the sole expense of the Company.  For
purposes of clarification the value of any options described above will be determined by the Company’s independent auditors
using a Black-Scholes valuation methodology.  


 


(d)           Death
and Disability.  In the event of the Company terminates this Agreement due to the death of the Executive, the Company
shall pay the Executive her Base Salary through the date of termination, at the rate then in effect, and all expenses or accrued
Benefits arising prior to such termination which are payable to the Executive pursuant to this Agreement through the date of termination.  Any
other rights and benefits the Executive may have under employee benefit plans and programs of the Company generally in the event
of the Executive’s Disability shall be determined in accordance with the terms of such plans and programs. In the event of
Executive’s death, any rights and benefits that the Executive’s estate or any other person may have under employee
benefit plans and programs of the Company generally in the event of the Executive’s death shall be determined in accordance
with the terms of such plans and programs.


 


(e)           Salary
and Other Payments Through Termination.  If the Executive’s employment with the Company is terminated during the
Term (i) by the Company for Cause or (ii) by the Executive other than for Good Reason, the Executive will be entitled to receive
her Base Salary through the Termination Date, but will not be entitled to receive any Severance Payments or Benefits after the
Termination Date.  The Executive shall also be entitled to receive payment for (i) all reimbursable expenses or other
entitlements then due and owing to the Executive as of the Termination Date under Section 1.3(d) (other than non-accountable expenses
which shall be reimbursed pursuant to clause (ii) below), which payments shall be made in accordance with the Company expense reimbursement
policy; provided , however , in no event shall any expense reimbursements by the Company be made later than the last day of the
calendar year after the calendar year in which the expense was incurred, and (ii) all non-accountable expenses incurred prior to
the Termination Date that are reimbursable under Section 1.3(d) , which payments shall be made in accordance with the terms of
Section 1.3(d) .


 



    	 



    	 



    

 


(f)           Other
Rights.  Except as set forth in this Section 1.4, all of the Executive’s rights to receive Base Salary, Benefits
and annual bonuses hereunder (if any) which accrue or become payable after the termination of the Employment Period shall cease
upon such termination.


 


(g)           Continuing
Benefits. Notwithstanding Section 1.4(f), termination pursuant to this Section 1.4 shall not modify or affect in any way whatsoever
any vested right of the Executive to benefits payable under any retirement or pension plan or under any other employee benefit
plan of the Company, and all such benefits shall continue, in accordance with, and subject to, the terms and conditions of such
plans, to be payable in full to, or on account of, the Executive after such termination.


 


(h)           No
Duty of Mitigation.  The Executive shall not be required to mitigate the amount of any payment provided for in this Article
I by seeking other employment or otherwise,  nor shall the amount of any payment or benefit provided for under Article
I be reduced by any compensation earned by Executive after the Termination Date.


 


(i)           Acceleration
of Vesting.  If the Company shall terminate the Executive’s employment without Cause or the Executive terminates
her employment with Good Reason, then notwithstanding the vesting and exercisability schedule in any stock option or other grant
agreement between the Company and the Executive, all unvested stock options, shares of restricted stock and other equity awards
granted by the Company to the Executive pursuant to any such agreement shall immediately vest, and all such stock options shall
become exercisable and shall remain exercisable for the remaining term of the applicable option.  In the event of conflict
between any stock option or other grant agreement between the Company and the Executive and this Agreement, the stock option or
other grant agreement shall control.


 


1.5           Confidential
Information.


 


(a)           The
Executive shall not disclose or, directly or indirectly, use at any time, during the Employment Period or thereafter, any Confidential
Information (as defined below) of which the Executive is or becomes aware, whether or not such information is developed by her,
alone or with others, except to the extent that (i) such disclosure or use is required by the Executive’s performance of
the duties assigned to the Executive by the Board of Directors, (ii) the Executive is required by subpoena or similar process to
disclose or discuss any Confidential Information, provided, that in such case, the Executive shall promptly inform the Company
in writing of such event, shall reasonably cooperate with the Company in attempting to obtain a protective order or to otherwise
limit or restrict such disclosure to the greatest extent possible, and shall disclose only that portion of the Confidential Information
as is strictly required, or (iii) such Confidential Information is or becomes generally known to and available for use by the public,
other than as a result of any action or inaction directly or indirectly by the Executive.  At the Company’s expense,
the Executive shall take all reasonable steps to safeguard Confidential Information in her possession and to protect it against
disclosure, misuse, espionage, loss and theft.  The Executive acknowledges that the Confidential Information obtained
by her during the course of her employment with the Company is the sole and exclusive property of the Company and its Subsidiaries,
as applicable.


 


(b)           The
Executive understands that the Company and its Subsidiaries will receive from third parties confidential or proprietary information
(“Third Party Information”) subject to a duty on the part of the Company and its Subsidiaries to maintain the confidentiality
of such information and to use it only for certain limited purposes.  During the Employment Period and in the period
specified in such confidentiality agreements, and without in any way limiting the provisions of Section 1.5(a) above, the Executive
will hold Third Party Information in confidence, consistent with the obligations applicable to Confidential Information of the
Company generally, and will not disclose to anyone (other than personnel and agents of the Company or its Subsidiaries who need
to know such information in connection with their work for the Company or its Subsidiaries) or use, except in connection with her
work for the Company or its Subsidiaries, Third Party Information unless expressly authorized by the Board in writing.


 



    	 



    	 



    

 


(c)           As
used in this Agreement, the term “Confidential Information” means information that is not generally known to the public
and that is related in any way to the actual or anticipated business of the Company, its Subsidiaries, its Affiliates or any of
their respective predecessors in interest, including but not limited to (i) business development, growth and other strategic business
plans, (ii) properties available for acquisition, financing development or sale, (iii) accounting and business methods, (iv) services
or products and the marketing of such services and products, (v) fees, costs and pricing structures, (vi) designs, (vii) analysis,
(viii) drawings, photographs and reports, (ix) computer software, including operating systems, applications and program listings,
(x) flow charts, manuals and documentation, (xi) data bases, (xii) inventions, devices, new developments, methods and processes,
whether patentable or unpatentable and whether or not reduced to practice, (xiii) copyrightable works, (xiv) all technology and
trade secrets, (xv) confidential terms of material agreements and customer relationships, and (xvi) all similar and related information
in whatever form or medium.  Confidential Information shall not include any information that has become generally available
to the public prior to the date the Executive proposes to disclose or use such information or general know-how of the Executive.


 


1.6           Inventions
and Patents.  Executive acknowledges that all discoveries, concepts, ideas, inventions, innovations, improvements, developments,
products, methods, processes, techniques, programs, designs, analyses, drawings, reports, patents, copyrightable works and mask
works (whether or not including any Confidential Information) and all issuances, registrations or applications related thereto,
all other proprietary information or intellectual property and all similar or related information (whether or not patentable) conceived,
developed, contributed to, made, or reduced to practice by Executive (either alone or with others) while employed by Company or
any of its Subsidiaries or Affiliates or using the materials, facilities or resources of the Company or any of its Subsidiaries
or Affiliates (collectively, “Company Works”) is the sole and exclusive property of the Company and its Subsidiaries.
Executive hereby assigns all right, title and interest in and to all Company Works to the Company and its Subsidiaries and waives
any moral rights she may have therein, without further obligation or consideration.  Any copyrightable work prepared
in whole or in part by the Executive during the Employment Period will be deemed “a work made for hire” under Section
201(b) of the 1976 Copyright Act, and the Company and its Subsidiaries shall own all of the rights comprised in the copyright therein.  The
Executive shall promptly and fully disclose in writing all Company Works to the Company and shall cooperate with the Company and
its Subsidiaries to protect, maintain and enforce the Company’s and its Subsidiaries’ interests in and rights to such
Company Works (including, without limitation, providing reasonable assistance in securing patent protection and copyright registrations
and executing all affidavits, assignments, powers-of-attorney and other documents as reasonably requested by the Company, whether
such requests occur prior to or after termination of the Executive’s employment with the Company).


 


1.7           Delivery
of Materials Upon Termination of Employment.  As requested by the Company from time to time and in any event upon the
termination of the Executive’s employment with the Company, the Executive shall promptly deliver to the Company, or at the
Company’s election destroy, all copies and embodiments, in whatever form or medium, of all Confidential Information, Company
Works and other property and assets of the Company and its Subsidiaries in the Executive’s possession or within her control
(including, but not limited to, office keys, access cards, written records, notes, photographs, manuals, notebooks, documentation,
program listings, flow charts, magnetic media, disks, diskettes, tapes, computers and handheld devices (including all software,
files and documents thereon) and any other materials containing any Confidential Information or Company Works) irrespective of
the location or form of such material and, if requested by the Company, shall provide the Company with written confirmation that
all such materials have been delivered to the Company or destroyed, as applicable.


 


1.8           Non-Compete
and Non-Solicitation Covenants.


 


(a)           The
Executive acknowledges and agrees that the Executive’s services to the Company and its Subsidiaries are unique in nature
and that the Company and its Subsidiaries would be irreparably damaged if the Executive violated her obligations under this Section
1.8 .  The Executive further acknowledges that, in the course of her employment with the Company, she will become familiar
with the Company’s and its Subsidiaries’ trade secrets and with other Confidential Information.  During the
Non-compete Period, she shall not, directly or indirectly, whether for herself or for any other Person, permit her name to be used
by or participate in any business or enterprise (including, without limitation, any division, group or franchise of a larger organization)
that engages or proposes to engage in the Business in the Restricted Territories, other than the Company and its Subsidiaries or
except as otherwise directed or authorized by the Board.  For purposes of this Agreement, the term “participate
in” shall include, without limitation, having any direct or indirect interest in any Person, whether as a sole proprietor,
owner, stockholder, partner, member, joint venturer, creditor or otherwise, or rendering any direct or indirect service or assistance
to any Person (whether as a director, officer, supervisor, employee, agent, consultant or otherwise).  Nothing herein
will prohibit the Executive from (i) mere passive ownership of not more than three percent (3%) of the outstanding stock of any
class of a publicly held corporation whose stock is traded on a national securities exchange or in the over-the-counter market,
and (ii) engaging in such business as contemplated by Section 7.14 of the Purchase Agreement.  As used herein, the phrase
“mere passive ownership” shall include voting or otherwise granting any consents or approvals required to be obtained
from such Person as an owner of stock or other ownership interests in any entity pursuant to the charter or other organizational
documents of such entity, but shall not include, without limitation, any involvement in the day-to-day operations of such entity.


 



    	 



    	 



    

 


 


(b)           During
the Nonsolicitation Period, the Executive will not directly, or indirectly through another Person, solicit, induce or attempt to
induce any customer, supplier, licensee, or other business relation of the Company or any of its Subsidiaries to cease doing business
with the Company or any of its Subsidiaries, or solicit, induce or attempt to induce any person who is, or was during the then-most
recent 12-month period, a corporate officer, general manager or other employee of the Company or any of its Subsidiaries to terminate
such employee’s employment with the Company or any of its Subsidiaries, or hire any such person unless such person’s
employment was terminated by the Company or any of its Subsidiaries, or in any way interfere with the relationship between any
such customer, supplier, licensee, employee or business relation and the Company or any of its Subsidiaries.  The Executive
acknowledges and agrees that the Company and its Subsidiaries would be irreparably damaged if the Executive were to breach any
of the provisions contained in this Section 1.8(b) .


 


(c)           Executive
acknowledges that this Agreement, and specifically, this Section 1.8, does not preclude Executive from earning a livelihood, nor
does it unreasonably impose limitations on Executive’s ability to earn a living.  In addition, Executive agrees
and acknowledges that the potential harm to the Company of its non-enforcement outweighs any harm to Executive of its enforcement
by injunction or otherwise.


 


1.9           Enforcement.  If,
at the time of enforcement of Section 1.5, 1.6, 1.7, 1.8 or 1.10, a court holds that the restrictions stated herein are unreasonable
under circumstances then existing, the Parties agree that, to the extent permitted by applicable law, the maximum period, scope
or geographical area reasonable under such circumstances will be substituted for the period, scope or area.  Because
the Executive’s services are unique and because the Executive has access to Confidential Information and Company Works, the
Parties agree that money damages would be an inadequate remedy for any breach of Section 1.5 , 1.6 , 1.7 , 1.8 or 1.10 .  Therefore,
in the event of a breach or threatened breach of Section 1.5 , 1.6 , 1.7 , 1.8 or 1.10 , the Company or any of its Subsidiaries
or any of their respective successors or assigns may, in addition to other rights and remedies existing in their favor, apply to
any court of competent jurisdiction for specific performance and/or injunctive or other relief in order to enforce, or prevent
any violations of, the provisions hereof (without posting a bond or other security).  The Parties hereby acknowledge
and agree that (a) performance of the services of the Executive hereunder may occur in jurisdictions other than the jurisdiction
whose law the Parties have agreed shall govern the construction, validity and interpretation of this Agreement, (b) the law of
the  State of New York shall govern construction, validity and interpretation of this Agreement to the fullest extent
possible, and (c) Section 1.5 , 1.6 , 1.7 , 1.8 or 1.10 shall restrict the Executive only to the extent permitted by applicable
law.


  


1.10           Survival.  Sections
1.4, 1.5, 1.6, 1.7, 1.8 and 1.10 will survive and continue in full force in accordance with their terms notwithstanding any termination
of the Employment Period.


 


ARTICLE II


DEFINED TERMS


 


2.1           Definitions.
All capitalized terms used but not defined herein shall have the meanings given to such terms in the Purchase Agreement.  For
purposes of this Agreement, the following terms will have the following meanings:


 


“Business”
means the business of acquiring and licensing consumer brands worldwide.


 



    	 



    	 



    

 


“Cause”
means with respect to the Executive, the occurrence of one or more of the following:  (i) conviction of, or entry of
a plea of guilty or nolo contendere to, a felony involving moral turpitude, misappropriation of Company property, embezzlement
of Company funds, violation of the securities laws or material dishonesty with respect to the Company; (ii) persistent and repeated
refusal to comply with no less than three written lawful directives of the Chairman and CEO or Board with respect to an item that
the Chairman and CEO or Board deems material to the business prospects and/or operations of the Company, other than such directives
requiring the Executive in her reasonable judgment after consultation with counsel, to act in a manner inconsistent with her fiduciary
obligations or those inconsistent with the Executive’s position as SVP Strategic Planning; (iii) reporting to work under
the influence of alcohol or illegal drugs, or the use of illegal drugs (whether or not at the workplace), or (iv) any willful breach
of Section 1.6 , 1.7 , 1.8 or 1.9 of this Agreement.  Notwithstanding the foregoing, termination by the Company for Cause
(other than pursuant to clause (i) above) shall not be effective until and unless (i) Executive fails to cure such alleged act
or circumstance within 30 days of receipt of notice thereof, to the satisfaction of the Board in the exercise of its reasonable
judgment (or, if within such 30-day period the Executive commences and proceeds to take all reasonable actions to effect such cure,
within such reasonable additional time period (no longer than 60 days) as may be necessary), and (ii) notice of intention to terminate
for Cause has been given by the Company within forty-five (45) days after the Board learns of the act, failure or event constituting
“Cause,” and (iii) the Board has voted (at a meeting of the Board duly called and held as to which termination of Executive
is an agenda item) by a vote of at least a two-thirds of the members of the Board (other than Executive) to terminate Executive
for Cause after Executive has been given notice of the particular acts or circumstances which are the basis for the termination
for Cause and has been afforded an opportunity to appear with counsel and present her positions at such meeting and to present
her case thereat, and (iv) the Board has given notice of termination to Executive within five (5) days after such meeting voting
in favor of termination.


 


 ”Change
of Control” means the occurrence of any of the following (i) a merger or consolidation to which the Company is a party (other
than one in which the stockholders of the Company prior to the event own a majority of the voting power of the surviving or resulting
corporation) (ii) a sale, lease, transfer, exclusive license or other disposition of all or substantially all of the assets of
the Company, or (iii) a sale or transfer by the Company’s stockholders of voting control, in a single transaction or a series
of transactions.


 


 ”Code”
means the Internal Revenue Code of 1986 and the Treasury regulations thereunder, each as amended from time to time.


 


“Disability”
shall have the meaning set forth in a policy or policies of long term disability insurance, if any, the Company obtains for the
benefit of itself and/or its employees.  If there is no definition of “disability” applicable under any such
policy or policies, if any, then the Executive shall be considered disabled due to mental or physical impairment or disability
despite reasonable accommodations by the Company and its Subsidiaries, to perform his customary or other comparable duties with
the Company or its Subsidiaries immediately prior to such disability for a period of at least 120 consecutive days or for at least
180 non-consecutive days in any 12 month period.


 


“Effective Date”
means the Closing Date (as defined in the Purchase Agreement).


 


“Fiscal Year”
means the fiscal year of the Company and its Subsidiaries.


  


“Good Reason”
means the occurrence, without the Executive’s written consent, of one or more of the following events:  (i) the
Company reduces the amount of Executive’s Base Salary, (ii) the Company requires that the Executive relocate her principal
place of employment to a site that is more than 15 miles from the Company’s offices in the New York area, or if the Company
changes the location of its headquarters with the consent of Executive to a location that is more than 15 miles from such location,
(iii) the Company materially reduces the Executive’s responsibilities or removes the Executive from the position of President
– Isaac Mizrahi Brand other than pursuant to a termination of her employment for Cause, or upon the Executive’s death
or Disability, (iv) the failure or unreasonable delay of the Company to provide the Executive any of the payments contemplated
hereby, or (v) the Company otherwise materially breaches the terms of this Agreement; provided that no such event shall constitute
Good Reason hereunder unless (a) the Executive shall have given written notice to the Company of the Executive’s intent to
resign for Good Reason within 30 days after the Executive becomes aware of the occurrence of any such event, which notice shall
describe in reasonable detail the event or events constitution the basis for the Executive’s intention to resign for Good
Reason and (b) such event or occurrence, if a breach susceptible to cure, shall not have been cured or otherwise shall not have
been resolved to the Executive’s reasonable satisfaction, in each case within 30 days of the Company’s receipt of such
notice; provided , however , except in the case of a failure to make a timely payment that is caused by a third party payroll service
provider, in which case the Company shall have ten (10) Business Days to cure, as to any breach by the Company of its obligation
to make any payment to Executive when due, the Executive shall have no notice obligation and the Company shall have no right to
cure.  In such case the Executive’s resignation shall become effective on the 31st day after the Company’s
receipt of the aforementioned notice.


 



    	 



    	 



    

 


“Non-compete
Period” means the Employment Period and 12 months thereafter; provided that, in the event, but only in the event, the Executive’s
employment hereunder is terminated by the Company without Cause or by the Executive with Good Reason, “Non-Compete Period”
shall mean the Employment Period.


 


“Nonsolicitation
Period” means the Employment Period and 12 months thereafter.


 


“Person”
means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust,
a joint venture, an unincorporated organization, or the United States of America any other nation, any state or other political
subdivision thereof, or any entity exercising executive, legislative, judicial, regulatory or administrative functions of government.


 


“Purchase Agreement”
means the Asset Purchase Agreement, dated May 19, 2011, by and among the Company, IM Ready-Made, LLC and certain other parties
thereto.


 


“Restricted
Territories” means the United States and the rest of the world.


 


“Subsidiary”
means, with respect to any Person, any corporation, limited liability company, partnership, association, or business entity of
which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence
of any contingency) to vote in the election of directors, managers, or trustees thereof is at the time owned or controlled, directly
or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (ii) if a limited
liability company, partnership, association, or other business entity (other than a corporation), a majority of  partnership
or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by that Person or one or
more Subsidiaries of that Person or a combination thereof.  For purposes hereof, a Person or Persons shall be deemed
to have a majority ownership interest in a limited liability company, partnership, association, or other business entity (other
than a corporation) if such Person or Persons shall be allocated a majority of limited liability company, partnership, association,
or other business entity gains or losses or shall be or control any managing director or general partner of such limited liability
company, partnership, association, or other business entity.  For purposes hereof, references to a “Subsidiary”
of any Person shall be given effect only at such times that such Person has one or more Subsidiaries, and, unless otherwise indicated,
the term “Subsidiary” refers to a Subsidiary of the Company.


 


“Termination
Date” means the effective date of the Executive’s termination of employment with the Company.


       


2.2         Other
Definitional Provisions.


 


(a)           Section
references contained in this Agreement are references to sections in this Agreement, unless otherwise specified.  Each
defined term used in this Agreement has a comparable meaning when used in its plural or singular form.  Each gender-specific
term used in this Agreement has a comparable meaning whether used in a masculine, feminine or gender-neutral form.


 


(b)           Whenever
the term “including” (whether or not that term is followed by the phrase “but not limited to” or “without
limitation” or words of similar effect) is used in this Agreement in connection with a listing of items within a particular
classification, that listing will be interpreted to be illustrative only and will not be interpreted as a limitation on, or an
exclusive listing of, the items within that classification.


 



    	 



    	 



    

 


ARTICLE III


MISCELLANEOUS TERMS


 


3.1           Defense
of Claims.  The Executive agrees that, during the Employment Period, and for a period of six months after termination
of the Executive’s employment, upon request by the Company, the Executive shall reasonably cooperate with the Company in
connection with any matters the Executive worked on during her employment with the Company and any related transitional matters.  In
addition, during the Employment Period and thereafter, the Executive agrees to reasonably cooperate with the Company in the defense
of any claims or actions that may be made by or against the Company that affect the Executive’s prior areas of responsibility
or involve matters about which the Executive has knowledge, except if the Executive’s reasonable interests are adverse to
the Company in such claim or action and provided that after the Employment Period such level of cooperation shall be reasonable
and shall take due account of the Executive’s work and personal commitments. The Company agrees to promptly reimburse the
Executive for all of the Executive’s reasonable travel and other direct expenses incurred, or to be reasonably incurred,
to comply with the Executive’s obligations under this Section 3.1 .


 


3.2           Nondisparagement.  The
Executive agrees to refrain from making any false or disparaging statements, in public or private, which is reasonably likely to
materially impair the reputation, goodwill or commercial interest of the Company.  The Company agrees to refrain from
making any false or disparaging statements, in public or private, which is reasonably likely to materially impair the reputation,
goodwill or commercial interest of the Executive.   Notwithstanding anything to the contrary contained herein, nothing in
this Agreement shall prohibit or restrict either party from, truthfully and in good faith: (i) making any disclosure of information
required by law; (ii) providing information to, or testifying or otherwise assisting in any investigation or proceeding brought
by, any federal regulatory or law enforcement agency or legislative body, any self-regulatory organization, or the Company’s
or the Executive’s designated legal, compliance or human resources officers; or (iii) filing, testifying, participating in
or otherwise assisting in a proceeding relating to an alleged violation of any federal, state or municipal law relating to fraud,
or any rule or regulation of the Securities and Exchange Commission or any self-regulatory organization.


 


3.3           Source
of Payments. All payments provided under this Agreement, other than payments made pursuant to a plan which provides otherwise and
except as otherwise provided herein, shall be paid in cash from the general funds of the Company, and no special or separate fund
shall be established, and no other segregation of assets shall be made, to assure payment. The Executive shall have no right, title
or interest whatsoever in or to any investments which the Company or its Subsidiaries may make to aid the Company in meeting its
obligations hereunder. To the extent that any person acquires a right to receive payments from the Company hereunder, such right
shall be no greater than the right of an unsecured creditor of the Company.


 


3.4           Notices.
Any notice provided for in this Agreement must be in writing and must be either personally delivered, mailed by first class mail
(postage prepaid and return receipt requested), sent by reputable overnight courier service (charges prepaid) or sent by facsimile
(with receipt confirmed) to the recipient at the address or facsimile number indicated below:


 


 


	 	To the Company:
	 	 
	 	XCel Brands, Inc.
	 	475 Tenth Avenue, 4th Floor
	 	New York, New York 10018
	 	 
	 	With a copy (which shall not constitute notice) to:
	 	 
	 	Blank Rome
	 	The Chrysler Building
	 	405 Lexington Avenue
	 	New York, NY 10174-0208
	 	Attn:  Robert Mittman, Esquire
	 	Facsimile: (212) 885-5557
	 	 
	 	To the Executive:
	 	 
	 	Marisa Gardini
	 	c/o XCel Brands, Inc.
	 	475 Tenth Avenue, 4th Floor
	 	New York, New York 10018


 



    	 



    	 



    

 


	 	With a copy (which shall not constitute notice) to:
	 	 
	 	Robinson & Cole LLP
	 	885 Third Avenue, 28th Floor
	 	New York, NY  10022
	 	Attention:  Eric J. Dale, Esq.
	 	Facsimile: 212-451-2999


 


or such other address or to the attention
of such other Person as the recipient Party will have specified by prior written notice to the sending Party.  Any notice
under this Agreement will be deemed to have been given when so delivered or sent or, if mailed, five days after deposit in the
U.S. mail.


 


3.5           
Severability.  Subject to the express provisions of Section 1.10 relating to certain specified changes, whenever possible,
each provision of this Agreement will 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 will not affect any other provision or any other jurisdiction,
but this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision
had never been contained herein.


 


3.6           Complete
Agreement.  This Agreement embodies the complete agreement and understanding among the Parties with regard to the subject
matter hereof and supersedes and preempts any prior understandings, agreements or representations by or among the Parties, written
or oral, which may have related to the subject matter hereof in any way.  To the extent that this Agreement provides
greater benefits to the Executive than available under the Company’s employee handbook or other corporate policies, then
this Agreement shall prevail.


 


3.7           Counterparts.  This
Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute
one and the same agreement.


 


3.8           Assignment.  Without
the Executive’s consent, the Company may not assign its rights and obligations under this Agreement except (i) to a “Successor”
(as defined below) or (ii) to an entity that is formed and controlled by the Company or any of its Subsidiaries, provided that
in the case of (ii) the Company shall remain liable for all of its obligations hereunder.  This Agreement is personal
to the Executive, and the Executive shall not have the right to assign the Executive’s interest in this Agreement, any rights
under this Agreement or any duties imposed under this Agreement, nor shall the Executive have the right to pledge, hypothecate,
transfer, assign or otherwise encumber the Executive’s right to receive any form of compensation hereunder without the prior
written consent of the Board.  As used in this Section 3.8 , “Successor” shall include any Person that at
any time, whether by purchase, merger or otherwise, directly or indirectly acquires all or substantially all of the assets of,
or ownership interests in, the Company and its Subsidiaries.


 


3.9          
  Successors and Assigns.  This Agreement is intended to bind and inure to the benefit of and be enforceable
by the Company, the Executive, and their respective heirs, successors and permitted assigns.


 


3.10           Choice
of Law.  This Agreement and the performance of the parties hereunder shall be governed by the internal laws (and not
the law of conflicts) of the State of New York. Any claim or controversy arising out of or in connection with this Agreement, or
the breach thereof, shall be adjudicated exclusively by the Supreme Court, New York County, State of New York, or by a federal
court sitting in Manhattan in New York City, State of New York. The parties hereto agree to the personal jurisdiction of such courts
and agree to accept process by regular mail in connection with any such dispute.


 


3.11           Waiver
of Jury Trial.  AS A SPECIFICALLY BARGAINED FOR INDUCEMENT FOR EACH OF THE PARTIES HERETO TO ENTER INTO THIS AGREEMENT
(AFTER HAVING THE OPPORTUNITY TO CONSULT WITH COUNSEL), EACH PARTY HERETO EXPRESSLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY LAWSUIT
OR PROCEEDING RELATING TO OR ARISING IN ANY WAY FROM THIS AGREEMENT OR THE MATTERS CONTEMPLATED HEREBY.


 



    	 



    	 



    

 


3.12           Legal
Fees and Court Costs.  In the event that any action, suit or other proceeding in law or in equity is brought to enforce
the provisions of this Agreement, and such action results in the award of a judgment for money damages or in the granting of any
injunction in favor of the Company, all expenses (including reasonable attorneys’ fees) of the Company in such action, suit
or other proceeding shall be paid by the Executive. In the event that any action, suit or other proceeding in law or in equity
is brought to enforce the provisions of this Agreement, and such action results in the award of a judgment for money damages or
in the granting of any injunction in favor of the Executive, all expenses (including reasonable attorneys’ fees and travel
expenses) of the Executive in such action, suit or other proceeding shall be paid by the Company.


 


3.13           Remedies.  Subject
to the provisions of Section 3.1, each Party will be entitled to enforce its rights under this Agreement specifically, to recover
damages and costs caused by any breach of any provision of this Agreement and to exercise all other rights existing in its favor.  Nothing
herein shall prohibit any arbitrator or judicial authority from awarding attorneys’ fees or costs to a prevailing Party in
any arbitration or other proceeding to the extent that such arbitrator or authority may lawfully do so.


 


3.14           Amendment
and Waiver.  The provisions of this Agreement may be amended or waived only with the prior written consent of the Company
and the Executive, and no course of conduct or failure or delay in enforcing the provisions of this Agreement will affect the validity,
binding effect or enforceability of this Agreement.


 


3.15           Third
Party Beneficiaries.  This Agreement will not confer any rights or remedies upon any Person other than the Parties and
their respective successors and permitted assigns and other than, in the event of the Executive’s death, her estate, to which
all of Executive’s rights and remedies set forth herein shall accrue.


  


3.16           The
Executive’s Representations.  The Executive hereby represents and warrants to the Company that (a) the execution,
delivery and performance of this Agreement by the Executive do not and shall not conflict with, breach, violate or cause a default
under any contract, agreement, instrument, order, judgment or decree to which the Executive is a party or by which she is bound,
(b) the Executive is not a party to or bound by any employment agreement, noncompete agreement or confidentiality agreement with
any other Person (or other agreement with any other person containing a restriction on the Executive’s right to do business
or obligating her to do business with any other Person on a priority or preferential basis), (c) upon the execution and delivery
of this Agreement by the Company, this Agreement shall be the valid and binding obligation of the Executive, enforceable in accordance
with its terms and (d) upon the execution and delivery of this Agreement by the Company, Executive shall not be in violation of
clause (i) set forth in the definition of Cause and shall not be disabled.


 


3.17           Amendment
to Comply with Section 409A of the Code.  To the extent that this Agreement or any part thereof is deemed to be a nonqualified
deferred compensation plan subject to Section 409A of the Code and the Treasury Regulations (including proposed regulations) and
guidance promulgated thereunder, (a) the provisions of this Agreement shall be interpreted in a manner to the maximum extent possible
to comply in good faith with Code Section 409A and (b) the parties hereto agree to amend this Agreement for purposes of complying
with Code Section 409A promptly upon issuance of any Treasury regulations or guidance thereunder, provided , that any such amendment
shall not materially change the present value of the benefits payable to the Executive hereunder or otherwise materially adversely
affect the Executive, the Company, or any affiliate of the Company, without the consent of such party.


 


[SIGNATURE PAGE FOLLOWS]


 



    	 



    	 



    

 


IN WITNESS WHEREOF,
the Parties have executed this Employment Agreement as of the date first written above.


    


	XCEL BRANDS, INC.
	 	 
	By:	/s/ Robert W. D’Loren
	Name:	Robert W. D’Loren
	Title:	Chairman and CEO



 


	/s/ Marisa Gardini
	Marisa Gardini



 


[Signature Page to Employment Agreement]


   



    	 



    	 



    

 


EXHIBIT A


FORM OF RELEASE


 


I, Marisa Gardini,
on behalf of myself and my heirs, successors and assigns, in consideration of the performance by XCel Brands, Inc., a Delaware
Corporation (together with its Subsidiaries, the “Company”), of its material obligations under the Employment Agreement,
dated as of May 19, 2011 (the “Agreement”), do hereby release and forever discharge as of the date hereof the Company,
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.


 


1.           I
understand that any payments or benefits paid or granted to me under Section 1.4(b) of the Agreement represent, in part, consideration
for signing this General Release and are not salary, wages or benefits to which I was already entitled.  I understand
and agree that I will not receive the payments and benefits specified in Section 1.4(b) of the Agreement unless I execute this
General Release and do not revoke this General Release within the time period permitted hereafter or breach this General Release.
This General Release shall be deemed rescinded in the event that the Company does not make such payments and make available such
benefits in accordance with Section 1.4(b) of the Agreement.


 


2.           I
knowingly and voluntarily release and forever discharge 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 whatsoever in law and in equity, both
past and present (through the date of this General Release), 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 I, my spouse, or any
of my heirs, executors, administrators or assigns, have or may have, solely to the extent that such 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 arise out of or are connected with my employment
with, or my 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 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 General Release shall apply to, or release the Company from, (i) any obligation of the Company
contained in the Agreement to be performed after the date hereof and amounts claimed under the Agreement pursuant to a good faith
and pending dispute as of the date hereof, (ii) any vested or accrued benefits pursuant to any employee benefit plan, program or
policy of the Company, (iii) any rights to indemnification from the Company under the Company’s Certificate of Incorporation,
Bylaws, any indemnification agreement and/or applicable law; and (iv) any right to insurance proceeds related to my position as
an officer and/or director of the Company or any of its Affiliates; (v) any rights as a stockholder of the Company of any Affiliates
of, or successor to, the Company; (vi) any rights under the Asset Purchase Agreement dated May 19, 2011, by and among the Company,
IM Ready-Made, LLC and certain other parties thereto (as amended, the “Purchase Agreement”) and any Related Agreement
(as defined in the Purchase Agreement).


 


3.           I
represent that I have made no assignment or transfer of any right, claim, demand, cause of action, or other matter covered by paragraph
2 above.


 


4.           I
agree that this General Release does not waive or release any rights or claims that I may have under the Age Discrimination in
Employment Act of 1967 which arise after the date I execute this General Release.  I acknowledge and agree that my separation
from employment with the Company in compliance with the terms of the 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).


 



    	 



    	 



    

 


5.           In
signing this General Release, I acknowledge and intend that it shall be effective as a bar to each and every one of the Claims
hereinabove mentioned or implied. I expressly consent 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. I acknowledge and agree that this waiver
is an essential and material term of this General Release and that without such waiver the Company would not have agreed to the
terms of the Agreement.  I covenant that I 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.  I further agree that in the event I should bring a Claim
seeking damages against the Company, or in the event I should seek to recover against the Company in any Claim brought by a governmental
agency on my behalf, this General Release shall serve as a complete defense to such Claims. I further agree that I am not aware
of any pending charge or complaint of the type described in paragraph 2 as of the execution of this General Release.


 


6.           I
agree that neither this General Release, nor the furnishing of the consideration for this General Release, shall be deemed or construed
at any time to be an admission by the Company, any Released Party or myself of any improper or unlawful conduct. 


 


7.           I
agree that this General Release is confidential and agree not to disclose any information regarding the terms of this General Release,
except to my immediate family and any tax, legal or other counsel I have consulted regarding the meaning or effect hereof or as
required by law, and I will instruct each of the foregoing not to disclose the same to anyone.


 


8.           Any
non-disclosure provision in this General Release does not prohibit or restrict me (or my attorney) from responding to any inquiry
about this General Release 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.


 


9.           Without
limitation of any provision of the Agreement, I hereby expressly re-affirm my obligations under Sections 1.5 , 1.6 , 1.8 , 1.10
and 3.1 .


 


10.           Whenever
possible, each provision of this General Release shall be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this General Release 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 General Release shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal
or unenforceable provision had never been contained herein.


 


“Affiliate”
means, with respect to any Person, any Person that controls, is controlled by or is under common control with such Person or an
Affiliate of such Person.


 


“Person”
means an individual, a partnership, a limited liability company, a corporation, an association, a joint stock company, a trust,
a joint venture, an unincorporated organization, investment fund, any other business entity and a governmental entity or any department,
agency or political subdivision thereof.


 


“Subsidiary”
means, with respect to any Person, any corporation, limited liability company, partnership, association, or business entity of
which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence
of any contingency) to vote in the election of directors, managers, or trustees thereof is at the time owned or controlled, directly
or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (ii) if a limited
liability company, partnership, association, or other business entity (other than a corporation), a majority of  partnership
or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by that Person or one or
more Subsidiaries of that Person or a combination thereof.  For purposes hereof, a Person or Persons shall be deemed
to have a majority ownership interest in a limited liability company, partnership, association, or other business entity (other
than a corporation) if such Person or Persons shall be allocated a majority of limited liability company, partnership, association,
or other business entity gains or losses or shall be or control any managing director or general partner of such limited liability
company, partnership, association, or other business entity.


 



    	 



    	 



    

 


BY SIGNING THIS GENERAL
RELEASE, I REPRESENT AND AGREE THAT:


 


(a)           I
HAVE READ IT CAREFULLY; 


 


(b)           I
UNDERSTAND ALL OF ITS TERMS AND KNOW THAT I AM 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)           I
VOLUNTARILY CONSENT TO EVERYTHING IN IT;


 


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


 


(e)           I
HAVE HAD AT LEAST 21 DAYS FROM THE DATE OF MY RECEIPT OF THIS RELEASE SUBSTANTIALLY IN ITS FINAL FORM ON _______________ __, _____
TO CONSIDER IT AND THE CHANGES MADE SINCE THE _______________ __, _____ VERSION OF THIS RELEASE ARE NOT MATERIAL AND WILL NOT RESTART
THE REQUIRED 21-DAY PERIOD;


 


(f)           THE
CHANGES TO THE AGREEMENT SINCE _______________ ___, _____ EITHER ARE NOT MATERIAL OR WERE MADE AT MY REQUEST.


 


(g)           I
UNDERSTAND THAT I HAVE SEVEN DAYS AFTER THE EXECUTION OF THIS RELEASE TO REVOKE IT AND THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE
OR ENFORCEABLE UNTIL THE EIGHTH DAY FOLLOWING EXECUTION OF THE AGREEMENT;


 


(h)           I
HAVE SIGNED THIS GENERAL RELEASE KNOWINGLY AND VOLUNTARILY AND WITH THE ADVICE OF ANY COUNSEL RETAINED TO ADVISE ME WITH RESPECT
TO IT; AND


 


(i)           I
AGREE THAT THE PROVISIONS OF THIS GENERAL RELEASE MAY NOT BE AMENDED, WAIVED, CHANGED OR MODIFIED EXCEPT BY AN INSTRUMENT IN WRITING
SIGNED BY AN AUTHORIZED REPRESENTATIVE OF THE COMPANY AND BY ME.


 


	DATE: ___________ __, ______	 
	 	Marisa Gardini


Acknowledged and agreed as of the date first written above:


 


XCel Brands, Inc.


 


	By:	 
	 	Name:	Robert W. D’Loren
	 	Title:	Chairman and CEO