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 Robert W. D’Loren (the “Executive”) each a
“Party” and collectively the “Parties.” This Agreement amends and restates that certain employment
agreement dated as of September 22, 2011, by and between the Company and the Executive.  Unless otherwise indicated,
capitalized terms used herein are defined in Section 2.1.


 


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, 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 Chief Executive Officer of the Company and, in such capacity shall be responsible for the general
management of the business, affairs and operations of the Company, shall perform such duties as are customarily performed by a
Chief Executive Officer of a company of a similar size and shall have such power and authority as shall reasonably be required
to enable him to perform his duties hereunder; provided, however, that in exercising such power and authority and performing such
duties, he shall at all times be subject to the authority, control and direction of the Board of Directors of the Company (the
“Board”).  The Company agrees that it will use its reasonable best efforts to cause the Executive
to be nominated to and continue to be named Chairman of the Board of Directors during the Term, it being acknowledged and agreed
that the Nominating Committee (or any successor committee of the Board, or, in the absence of any such committee, the Board) shall
retain the ability to apply reasonable and uniform standards consistent with past practices and corporate governance principles
to consider the Executive for nomination to the Board and appointment as Chairman of the Board during the Term. Without limitation
on any of the foregoing, the Executive shall have senior management authority and responsibility with respect to the management
and operations of the Company and its business, including implementation of the business strategy of the Company consistent with
strategy and policies approved by the Board.  


 


(b)          Duties
and Responsibilities.  The Executive shall report to the Board and shall devote a substantial portion of his time to
the business and affairs of the Company and its Subsidiaries.  The Executive shall perform his duties and responsibilities
in a diligent, trustworthy, businesslike and efficient manner and shall use his best efforts during the Employment Period to protect,
encourage and promote the best interests of the Company and its stockholders.  The Executive shall not engage in any
other business activities that could reasonably be expected to conflict with the Executive’s duties, responsibilities and
obligations hereunder.  During the Employment Period, the Executive shall promptly bring to the Company or its Subsidiaries,
as applicable, all investment or business opportunities relating to the Business of which the Executive becomes aware.


 


(c)          Principal
Office.  The principal place of performance by the Executive of his duties hereunder shall be the Company’s principal
executive offices in the New York Metropolitan area, although the Executive may be required to travel outside of the area where
the Company’s principal executive offices are located in connection with the business of the Company.


 



    	 



    	 



    






 





1.3          Compensation.







 


(a)          Base
Salary.  The Executive’s base salary shall be (i) $240,000.00 per year  (the “First Year Base
Salary”) for the one year period commencing on the Effective Date and ending on the first anniversary of the Effective
Date;  (ii) $530,000 per year (the “Second Year Base Salary”) for the one year period commencing on
the first anniversary of the Effective Date and ending on the second anniversary of the Effective Date; and (iii) $580,000 per
year (the “Third Year Base Salary”) for the one year period commencing on the second anniversary of the Effective
Date and ending on the third anniversary of the Effective Date.  ”Base Salary” means the First Year
Base Salary, the Second Year Base Salary or the Third Year Base Salary, whichever is in effect at the time of the determination.  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 his Base Salary as the Board, or
the compensation committee of the Board, may approve in its sole discretion from time to time.  Following the initial
three years, the Base Salary shall be reviewed at least annually.


 


(b)          Cash
Bonuses. Executive shall be eligible for annual cash bonuses (“Cash Bonus”) of up to $450,000 for each completed
calendar year (subject to Section 1.4 hereof) of the Company during the Term in accordance with this Section 1.3(b).  The
Cash Bonus shall be the percentage of five percent (5%) of the licensing income in excess of $8,000,000 earned and received by
the Company in a calendar year as set forth in the chart below.  The Cash Bonus shall be determined as earned based on
the level of the Company’s Adjusted EBITDA (as defined below) achieved for such year against the target level of Adjusted
EBITDA (“Target Adjusted EBITDA”) established for such year by the Compensation Committee of the Board (the
“Compensation Committee”), in its sole discretion, but with prior consultation with the Executive, as follows:


 


	Annual Level of  
Target Adjusted EBITDA 
Achieved for each fiscal year ending 
December 31, 2011 and thereafter	 	Percentage of 5% of 
the licensing income earned by
the Company in  
excess of $8 million	 
	0%-49%	 	 	0	%
	50%-69%	 	 	60	%
	70%-89%	 	 	80	%
	90%-100%	 	 	100	%



 


There shall be no interpolation between
each target level. The Cash Bonus shall be awarded to the Executive on the date that is the earlier of (i) the 90th
day following the end of the fiscal year to which the Cash Bonus relates and (ii) the first business day following the date the
Company’s annual report on Form 10-K for the fiscal year to which the Cash Bonus relates is filed with the Securities and
Exchange Commission. Notwithstanding the foregoing, all payments of Cash Bonuses shall be made on a date that allows such payments
to comply with the requirements of Section 409A of the Code.  Executive shall be eligible to receive a pro rata portion
of the Cash Bonus if Executive’s employment is less than a full year or ceases prior to the end of the calendar year for
which a Cash Bonus has not yet been paid.


 


“Adjusted EBITDA”
shall mean for any period, for the Company and its subsidiaries on a consolidated basis (without duplication), an amount equal
to (a) consolidated net income (as determined in accordance with generally accepted accounting principles of the United States
of America as in effect from time to time) (“Consolidated Net Income”) for such period, minus, (b) to the extent included
in calculating Consolidated Net Income, the sum of, without duplication, (i) income tax credits for such period, and (ii) gain
from extraordinary or non-recurring items for such period (including, without limitation, non-cash items related to purchase accounting),
plus (c) the following to the extent deducted in calculating such Consolidated Net Income, (i) interest expense and other finance
costs (whether cash or non-cash) for such period (ii) the provision for federal, state, local and foreign income taxes for such
period, (iii) the amount of depreciation and amortization expense for such period, (iv) the transaction fees, costs and expenses
incurred in connection with the acquisition of Isaac Mizrahi and any other subsequent brand acquisition in such period, (v) all
other extraordinary or non-recurring non-cash charges (including, without limitation, non-cash items related to purchase accounting),
and (vi) non-cash stock or equity compensation in such period.


 


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


 



    	 



    	 



    

  


(d)          Automobile
Allowance.  The Company will furnish the Executive with an automobile appropriate for his level of position and shall
pay to the Executive (in addition to monthly lease or other payments) all of the related expenses for gasoline, insurance, maintenance,
repairs or any other costs associated with the Executive’s automobile.


 


(e)          Expenses.  The
Company will reimburse the Executive for all reasonable expenses incurred by him in the course of performing his 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(e), 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 $50,000 annually for any 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(e) 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.


 


(f)           Vacation;
Holiday Pay and Sick Leave.  The Executive shall be entitled to five (5) weeks’ paid vacation in each calendar
year, which if 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.  Upon cessation of Executive’s
employment for any reason, Executive shall receive pay for all accrued and unused vacation, calculated at his base salary rate
in effect at the time of the cessation of his employment, provided that the amount of vacation that Executive shall be entitled
to accrue during the Term shall be in accordance with Company policy.


 


(g)          Additional
Benefits.  During the Employment Period, the Executive shall be entitled to participate (for himself and, as applicable,
his dependents) in the group medical, life, 401(k) and other insurance programs, 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.


 


(h)          Life
and Disability Insurance.  The Company shall, in accordance with the Company’s policies, reimburse or pay on behalf
of the Executive for up to $15,000 and $10,000 per year for Life and Disability Insurance premiums; respectively; with such reimbursements
made in the calendar year in which the expense is incurred.


 


(i)           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).  The Executive shall also be named as an additional insured under the directors’ and officers’
liability insurance policy maintained by the Company and shall be entitled to the same level of coverage provided thereby to the
other executive officers and directors of the Company.


 


(j)           Stock
Options. In the event that the Company elects from time to time during the Employment Period to award to its senior management
or executives, generally, options to purchase shares of the Company’s stock pursuant to any stock option plan or similar
program, the Executive shall be entitled to participate in any such stock option plan or similar program on a basis consistent
with the participation of other senior management or executives of the Company.


 



    	 



    	 



    

  


(k)         
Warrant. On the Closing Date, the Executive shall receive a warrant (the “Warrant Grant”) a warrant to
purchase 239,250 shares of Company’s common stock (the “Warrant”), each with an exercise price per share
equal to the price per share of common stock (without allocating any value to any warrants, if any, sold with the common stock)
sold in the private placement anticipated to close on or about the same day as the Closing Date.  The warrant vests and
becomes exercisable on the Closing Date and has a ten-year term.  The shares of the Company’s Common Stock underlying
the Warrant shall have customary piggy back registration and cashless exercise rights.  


   





1.4          Term and Termination.







 


(a)          Duration.  The
Employment Period shall commence on the Effective Date and the initial term shall terminate three (3) years from the Effective
Date (the “Term”), unless earlier terminated by the Company or the Executive as set forth in this Section 1.4
..  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 90 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 he gives the Company written notice that he 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) or Section 1.4(c) , the Executive shall execute and deliver to the Company the General Release
in the form attached hereto as Exhibit A .


 


(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 Termination Date and
any other amounts, including any unpaid Cash Bonuses 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 in effect on the date the Executive’s employment
is terminated) for the greater of the remainder of the Term or a two-year period following the Executive’s termination of
employment as described in this Section 1.4(b) plus two times the average annual Cash Bonuses paid in the immediate preceding 12
months, payable in  a lump sum on the date that is six months following the Executive’s “separation from
service” (within the meaning of Section 409A of the Code) occurring in connection with such termination and (3) continue
to participate in the Company’s group medical plan on the same basis as he previously participated or receive payment of,
or 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 an eighteen month period following the Executive’s termination
of employment; provided that if the Executive is provided with health insurance coverage by a successor employer, any such
coverage by the Company shall cease (each of (1), (2) and (3) referred to as the “Severance Payment”).  The
Executive also shall be entitled to receive payment for all reimbursable expenses or other entitlements then due and owing to the
Executive as of the Termination Date including payments in full for any amounts due and owing under Section 1.3(d) . If
the Executive breaches his 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 twelve (12) 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)(2)
above multiplied by two (2) minus $100; 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.  If within twelve (12) months after the occurrence
of a Change of Control, the Company shall terminate the Executive’s employment without Cause or the Executive terminates
his 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 lesser of 180 days after the effective Termination Date of the Executive’s
employment or the remaining term of the applicable option.


 


(d)          Death
and Disability.  In the event of the death or Disability of the Executive, the Company shall pay the Executive his Base
Salary through the Termination Date, 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 Termination Date.  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
his Base Salary at the rate then in effect through the Termination Date, but will not be entitled to receive any Severance Payments
or Benefits after the Termination Date.  The Executive shall be entitled to receive payment for all reimbursable expenses
or other entitlements then due and owing to the Executive as of the Termination Date.  


 


(f)           Other
Rights.  Except as set forth in this Section 1.4 and Section 1.3, all of the Executive’s rights to receive Base
Salary at the rate then in effect, Benefits and the Cash 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.





 


1.5          Intentionally
Omitted.


 






    	 



    	 



    
   


1.6          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 him,
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, (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 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 appropriate steps to safeguard Confidential Information and to protect it against disclosure, misuse, espionage,
loss and theft.  The Executive acknowledges that the Confidential Information obtained by him during the course of his
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 1.6(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
his 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 also expressly excludes Executive’s
general know-how and business contacts to the extent that the use of such information does not violate or breach the terms of Section
1.9 .


 


1.7          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 any of their respective predecessors in interest (including prior to the date of this
Agreement) or using the materials, facilities or resources of the Company or any of its Subsidiaries or Affiliates or any of their
respective predecessors in interest (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 he may have therein, without further obligation or consideration.  Any
copyrightable work prepared in whole or in part by the Executive 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). 


 



    	 



    	 



    

  


1.8          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 his 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.


 


1.9          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 were to provide similar services to any
Person competing with the Company and its Subsidiaries or engaged in the Business.  The Executive further acknowledges
that, in the course of his employment with the Company, he will become familiar with the Company’s and its’ Subsidiaries’
trade secrets and with other Confidential Information.  During the Noncompete Period, he shall not, directly or indirectly,
whether for himself or for any other Person, permit his 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 mere passive
ownership of not more than five percent (5%) 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.  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, 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 1.9(b)
..  


 


(c)          Executive
acknowledges that this Agreement, and specifically, this Section 1.9, 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.


 



    	 



    	 



    

 


1.10        Enforcement.  If,
at the time of enforcement of Section 1.6, 1.7, 1.8, 1.9 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 Noncompete 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 1.6 , 1.7 , 1.8 , 1.9 or 1.10 .  Therefore,
in the event of a breach or threatened breach of Section 1.6 , 1.7 , 1.8 , 1.9 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 1.6 , 1.7 , 1.8 , 1.9 or 1.10 shall restrict the Executive only to the extent permitted by applicable
law.


 


1.11        Survival.  Sections
1.6, 1.7, 1.8 and 1.9 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.
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 a felony involving
moral turpitude, misappropriation of Company property, embezzlement of Company funds, violation of the securities laws or dishonesty,
(ii) persistent and repeated refusal to comply with no less than three written directives of the Board with respect to an item
that the Board deems material to the business prospects and/or operations of the Company, (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 sixty (60) 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 two-thirds of the members of the Board (other than Executive if Executive is a Board member) 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 his positions at such meeting and to present
his case thereat, and (iv) the Board has given notice of termination to Executive within five 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.


 


“Closing Date”
means September 29, 2011.


 


“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 September 16, 2011.


 


“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 or Cash Bonuses, (ii) the Company requires that the Executive relocate
his principal place of employment to a site that is more than 50 miles from the Company’s offices in the New York area or
if the Company changes the location of its headquarters without the consent of Executive to a location that is more than 50 miles
from such location, (iii) the Company materially reduces the Executive’s responsibilities or removes the Executive from the
position of Chief Executive Officer other than pursuant to a termination of his employment for Cause, or upon the Executive’s
death or Disability or (iv) 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 constitute 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.  In such case the Executive’s resignation shall become effective on the 61st day after
the Company’s receipt of the aforementioned notice.


 


“Merger Agreement”
means the Merger Agreement entered into by and among NetFabric Holdings, Inc., the Company and a subsidiary of NetFabric Holdings,
Inc. formed for the purpose of acquiring the Company.


 


“Noncompete
Period” means the Employment Period and one year 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, “Noncompete
Period” shall mean the Employment Period and 6 months thereafter.


 


“Nonsolicitation
Period” means the Employment Period and one year 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.


 


“Restricted
Territories” means (i) the United States and its territories and possessions and (ii) any foreign country in which the
Company engages in business as of the Termination Date.


 


“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 or manager or managing member
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 his 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 (i) making, directly or indirectly, any derogatory comments concerning the Company or its
Subsidiaries or any current or former officers, directors, employees or shareholders thereof or (ii) taking any other action with
respect to the Company or its Subsidiaries which is reasonably expected to result, or does result in, damage to the business or
reputation of the Company, its Subsidiaries or any of its current or former officers, directors, employees or shareholders.  The
Company agrees to refrain from (i) making, directly or indirectly, any derogatory comments concerning the Executive or (ii) taking
any other action with respect to the Executive which is reasonably expected to result, or does result in, damage to the reputation
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:


 


Robert W. D’Loren


c/o XCel Brands, Inc.


475 Tenth Avenue, 4th
Floor


New York, New York
10018


 


With copies to:


 


James F. O’Brien,
Esq.


500 North Broadway,
Suite 105


Jericho, NY 11753


Telephone: (516) 822-9000


Telecopy:   (516)
822-1050


Attention: James F.
O’Brien, Esq.


 


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.


 


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 or fewer obligations of the Executive than available or set forth 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.  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 Sections 3.8 and 3.9 , “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.  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.  Subject to Section 3.12 ,
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, his 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 he 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 him 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.  With
regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by
Code Section 409A, (i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another
benefit, (ii) the amount of expenses eligible for reimbursement, or in-kind benefits, provided during any taxable year shall not
affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year, and (iii) such payments
shall be made on or before the last day of the Executive’s taxable year following the taxable year in which the expense was
incurred.


 


[END OF PAGE]


[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/ James F Haran
	 	 	Name:  James F. Haran
	 	 	Title:    CFO
	 	 	 
	 	 	/s/ Robert W. D’Loren
	 	 	Robert W. D’Loren
	 	 	 


 



    	 



    	 



    

  


EXHIBIT A


FORM OF RELEASE


 


I, Robert W. D’Loren,
on behalf of myself and my heirs, successors and assigns, in consideration of and subject to the performance by XCel Brands, Inc.
a Delaware Corporation (together with its Subsidiaries, the “Company”), of its material obligations under the Employment
Agreement (the “Employment Agreement”) dated as of the Effective Date (as defined in the Employment Agreement)
and Sections 3, 4, 7, 8, 10 and 12 below, do hereby release and forever discharge as of the date hereof the Company and its Subsidiaries,
all present and former directors, officers, agents, representatives, employees, successors and assigns of the Company and its Subsidiaries,
and all direct or indirect owners of each of foregoing (collectively, the “Released Parties”) to the extent
provided below.


 


1.           I
understand that certain of the payments or benefits paid or granted to me under Section 1.4(b) and Section 1.4(c) of the Employment
Agreement represent, in part, consideration for signing this Mutual 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) or
Section 1.4(c) of the Employment Agreement (other than for any other unpaid compensation, benefits and expenses to which I am entitled
thereunder for employment prior to termination) unless I execute this Mutual General Release and do not revoke this Mutual General
Release within the time period permitted hereafter or breach this Mutual General Release.


 


2.           Except
as provided in paragraph 6 below, and except for compensation and benefits and equity ownership in the Company I am entitled to
under the terms of the Employment Agreement, I knowingly and voluntarily release and forever discharge the Released Parties from
any and all claims, controversies, actions, causes of action, cross-claims, counter-claims, demands, debts, compensatory damages,
liquidated damages, punitive or exemplary damages, other damages, claims for costs and attorneys’ fees, or liabilities of
any nature whatsoever in law and in equity, both past and present (through the date of this Mutual General Release) and whether
known or unknown, suspected, or claimed against the Released Parties which I, my spouse, or any of my heirs, executors, administrators
or assigns, may have, which 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) (except as provided in paragraph 6 below); 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, 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”).  


 


3.           This
Release is mutual, and the Company hereby expressly releases Robert W. D’Loren, his successors, assigns, heirs, executors
and administrators (“D’Loren Parties”) from all claims and to the same extent as described in the preceding Section
2 .


 


4.           The
Parties represent and acknowledge that they have not assigned or transferred or purported to assign or transfer, to any person
or entity, any right, claim, demand, cause of action, or other matter mentioned or implied by this Mutual General Release.


 



    	 



    	 



    

 


5.           I
represent, warrant and covenant to each of the Released Parties that at no time prior to or contemporaneous with my execution of
this Mutual General Release have I (i) knowingly engaged in any wrongful conduct against, on behalf of or as the representative
or agent of the Company; (ii) breached any provision of the Employment Agreement; or (iii) violated any state, federal, local or
other law, including any securities laws or regulations, including the regulations of FINRA, or any exchange, inter-dealer quotation
system or the Over-the-Counter Bulletin Board or other trading venue on which the Company’s securities are traded.  Each
Party represents, warrants and covenants to each of the other Parties that at no time prior to or contemporaneous with his or its
execution of this Mutual General Release has any Party filed or caused or knowingly permitted the filing or maintenance, in any
state, federal or foreign court, or before any local, state, federal or foreign administrative agency or other tribunal, any charge,
claim or action of any kind, nature and character whatsoever (“Claim”), known or unknown, suspected or unsuspected,
that is pending on the date hereof against the other Parties which is based in whole or in part on any matter referred to in Sections
2 and 3 above; and, subject to each Party’s performance under this Mutual General Release, to the maximum extent permitted
by law each Party shall be prohibited from filing or maintaining, or causing or knowingly permitting the filing or maintaining,
of any such Claim in any such forum.


 


6.           I
agree that this Mutual 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 Mutual General Release. I acknowledge and agree that my separation
from employment with the Company in compliance with the terms of the Employment 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).


 


7.           In
signing this Mutual General Release, the Parties acknowledge and intend that it shall be effective as a bar to each and every one
of the Claims hereinabove mentioned or implied.  The Parties expressly consent that this Mutual 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.  The
Parties acknowledge and agree that this waiver is an essential and material term of this Mutual General Release and that without
such waiver the Parties would not have agreed to the terms of the Employment Agreement.  The Parties further agree that
in the event a claim is brought in violation of this Mutual General Release, this Mutual 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.


 


8.           The
Parties agree that neither this Mutual General Release, nor the furnishing of the consideration for this Mutual General Release,
shall be deemed or construed at any time to be an admission by any Released Party or the Executive of any improper or unlawful
conduct.


 


9.           I
agree that I will forfeit all cash amounts payable by the Company pursuant to the Employment Agreement that would not have otherwise
been paid but for my signing this Mutual General Release if I challenge the validity of this Mutual General Release.


 


10.        The
Parties agree that this Mutual General Release is confidential and agree not to disclose any information regarding the terms of
this Mutual General Release to any third party, except any tax, legal or other counsel consulted regarding the meaning or effect
hereof or as required by law and except that the Company may disclose this Mutual General Release to its affiliates and their representatives.  The
Executive may also disclose information contained herein to his immediate family.  The Parties will instruct each of
the foregoing not to disclose the same to anyone.


 


11.        Any
non-disclosure provision in this Mutual General Release does not prohibit or restrict me (or my attorney) or the Company or its
attorney from responding to any inquiry about this Mutual General Release or its underlying facts and circumstances by any governmental
entity.


 


12.        The
Parties specifically acknowledge their continuing obligations to one another under the Employment Agreement, including without
limitation under Section 1.6, Section 1.7, Section 1.8, Section 1.9 and Section 3.1 of the Employment Agreement.  


 


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


 



    	 



    	 



    

 


14.        Capitalized
terms used but not defined herein shall have the meaning given such terms in the Employment Agreement.


 


BY SIGNING THIS MUTUAL 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 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 (7) DAYS AFTER THE EXECUTION OF THIS RELEASE TO REVOKE IT AND THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE
OR ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS EXPIRED;


g.           I
HAVE SIGNED THIS MUTUAL GENERAL RELEASE KNOWINGLY AND VOLUNTARILY AND WITH THE ADVICE OF ANY COUNSEL RETAINED TO ADVISE ME WITH
RESPECT TO IT; AND


h.          
I AGREE THAT THE PROVISIONS OF THIS MUTUAL 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: ___________ __, ______	 
	 	Robert D’Loren


 


Acknowledged and agreed as of the date
first written above:


 


	XCel Brands, Inc.
	 	 	 
	By:	 	 
	 	Name: James Haran	 
	 	Title:  CFO