Document:

Exhibit 10.11

 

	PERSONAL AND CONFIDENTIAL	PRIVATE PLACEMENT ENGAGEMENT LETTER

 

December 22, 2014

 

The Board of Directors

Xcel Brands, Inc.

475 10th Avenue, 4th Floor

New York, NY 10018

 

Attention: Robert. W. D’Loren

Chairman and Chief Executive

 

Ladies and Gentlemen:

 

This agreement (“Agreement”) confirms the mutually
agreed terms between Xcel Brands, Inc. (the “Company”) and Young America Capital, LLC (“Agent”) to act
as sole placement agent to the Company for a proposed private placement to “qualified institutional buyers” as such
term is defined in Rule 144A under the Securities Act of 1933 ( the 1933 Act), as amended and a limited number of institutional
“accredited investors, as such term is defined in Regulation D under the 1933 Act ( the “Placement”) of the Company’s
common stock ( the “Securities”).

 

		1.	Placement Agent Services

Under this Agreement, Agent
will provide the following financial advisory and investment banking services as it may deem necessary and appropriate for the
Placement:

 

		a.	review the Company’s business, including its operations and historical and projected financial
condition;

 

		b.	assist the Company in drafting, preparing and distributing a management presentation and other
related documents (the “Offering Materials”) that describe the Company, the Securities and the Placement terms;

 

		c.	assist the Company in identifying and contacting prospective purchasers of the Securities;

 

		d.	advise the Company regarding the strategy and tactics of negotiations with prospective purchasers
of the Securities and, if requested by the Company, participate in such negotiations;

 

		e.	advise the Company about the timing and structure of the Placement; and

 

		f.	render other periodic financial advisory and investment banking services agreed to by Agent and
the Company

 

It is expressly understood and
acknowledged that Agent’s engagement under this Agreement does not constitute any commitment, express or implied, on Agent’s
part or any of its affiliates to purchase or place the Securities or to provide any type of financing and that the Placement will
be made by Agent on a “best efforts” basis. It is further understood that Agent’s services hereunder shall be
subject to, among other things, satisfactory completion of due diligence by Agent, market conditions, the absence of adverse changes
to the Company’s business or financial condition, approval of Agent’s internal committee and any other conditions that
Agent may deem appropriate for placements of such nature.

 

Young America Capital, LLC

141 East Boston Post Road

Mamaroneck, NY 10543(914) (914)
777-0100

 

    	 

    	 

    

 

PRIVATE PLACEMENT ENGAGEMENT LETTER

 

		2.	Fees

The Company agrees to pay Agent
as compensation for its services under this Agreement the following fees:

 

a.       Retainer
Fee. No retainer fee.

 

b.       Placement
Fee. A placement fee payable at the closing of the Placement equal to cash in an amount equal to 7.0% of the gross proceeds
of the Securities sold in the Placement; provided, however, that no Placement Fee shall be paid with respect to securities sold
to [Hilco] and any of its affiliates of funds managed by any of them, or partners, members, officers and directors of the foregoing,
in excess of $3,000,000.

 

		3.	Term 

This engagement term will continue until
January 15, 2015, unless extended by the Company or sooner terminated by either party, at any time, with or without cause and without
liability or continuing obligation to the other party. The terminating party agrees to provide the other party with at least 30
days’ prior written notice of such termination. The provisions of Sections 1 and 2 shall terminate upon termination of this
Agreement but the other provisions hereof will remain operative in accordance with their terms regardless of any consummation of
Financing and any termination of this Agreement.

 

		4.	Expense Reimbursement

In addition to the fees described in Section 2 above, the Company
agrees to pay Agent’s reasonable out-of-pocket expenses incurred in connection with the Placement whether or not the Placement
is completed. This includes, without limitations, expenses related to travel, external database and communications services, overtime
expense and courier services.

 

		5.	Disclosure

The Company agrees that any information or advice rendered by
Agent or its representatives under this Agreement remains solely for the Company's confidential use. The Company will not permit
any third party, unless required by applicable law, regulation or legal process, to disclose, reproduce, disseminate, quote or
refer to this information or advice without Agent’s prior written consent.

 

		6.	No Third Party Beneficiaries

The Company acknowledges and agrees that
Agent has been retained to act as non-exclusive placement agent to the Company, and not as an advisor to or agent of any other
person, and that the Company’s engagement of Agent is not intended to confer rights upon any person not a party to this Agreement
(including shareholders, employees or creditors of the Company) as against Agent or its affiliates, or their respective directors,
officers, employees or agents.

 

		7.	Independent Contractor

The Company and Agent
acknowledge and agree that Agent is acting as an independent contractor under this Agreement. Agent is not acting as a fiduciary
and therefore this Agreement does not present any fiduciary duties to either party.

 

		8.	Information

The Company acknowledges that
Agent will be using information provided by others, including, without limitation, information provided by or on behalf of the
Company, and that Agent does not assume responsibility for and may rely, without independent verification, on the accuracy and
completeness of any such information.

 

Young America Capital, LLC

141 East Boston Post Road

Mamaroneck, NY 10543

(914) 777-0100

 

    	 

    	 

    

 

PRIVATE PLACEMENT ENGAGEMENT LETTER

 

The Company hereby warrants
that the Offering Materials, and any other information relating to the Company or the Placement, will not contain any untrue statement
of a material fact or omit to state any material fact necessary to make the statements contained therein, in the light of circumstances
under which they were made, not misleading. The Company agrees to provide Agent with (i) prompt notice of any material development
affecting the Company or the occurrence of any event or other change known to the Company that could result in the Offering Materials
containing an untrue statement of a material fact or omitting to state any material fact necessary to make the statements contained
therein, in the light of the circumstances under which they were made, not misleading, (ii) copies of any financial reports as
soon as reasonably practicable and (iii) such other information concerning the business and financial condition of the Company
as Agent may from time to time reasonably request. Agent will have the right to approve the Offering Materials and other written
communications furnished by or on behalf of the Company in connection with the Placement. The Company will comply with Securities
and Exchange Commission Regulation FD.

 

		9.	Compliance with Law

The Company has not taken, and
will not take, any action, directly or indirectly, that may cause the Placement to fail to be entitled to exemption from registration
under the U.S. federal securities laws, or applicable state securities or “blue sky” laws. The Company shall be responsible
for any costs and expenses associated with filings, applications or registrations with any governmental or regulatory body, including,
without limitation, those associated with any sales pursuant to Regulation D under the 1933 Act and “blue sky” laws.

 

		10.	Closing Matters

The Company will cause to be
furnished to Agent and the purchasers of the Securities, on the closing date of the Placement, copies of such documents, letters,
certificates as Agent or the purchasers may reasonably request in form and substance reasonably satisfactory to Agent and its counsel
and the purchasers and their counsel.

 

		11.	Confidentiality

Agent agrees that, except as
otherwise required by law, regulation or legal process, Agent shall keep confidential all material non-public information provided
to it by the Company, and shall not disclose such information to any third party without the Company’s consent, other than
to such of its employees and advisors as Agent determines have a need to know.

 

		12.	Agent Affiliates

At Agent’s discretion,
any right set forth herein may be exercised, and any services to be provided by Agent may be provided, by an affiliate of Agent.
The Company hereby agrees that Agent and/or any affiliate or employee of Agent will have the right, but not the obligation, to
purchase Securities for its own account and that any such purchase will not constitute a conflict of interest for purposes of Agent’s
engagement hereunder.

 

		13.	Indemnification

Because we will be acting on
your behalf, you will indemnify us and related persons according to the indemnification and contribution provisions in Annex A,
the terms of which are incorporated herein in their entirety. Your obligations in Annex A will remain operative regardless of any
termination or completion of our services hereunder.

 

Young America Capital, LLC

141 East Boston Post Road

Mamaroneck, NY 10543

(914) 777-0100

 

    	 

    	 

    

 

PRIVATE PLACEMENT ENGAGEMENT LETTER

 

		14.	Amendments and Successors

 This Agreement may not be waived, amended, modified or
assigned, in any way, in whole or in part, including by operation of law, without the prior written consent of the Company and
Agent. The provisions of this Agreement shall inure to the benefit of and be binding upon the successors and assigns of the Company
and Agent.

 

		16.	Entire Agreement

This Agreement, together with
Annex A, contains the entire agreement and understanding of the parties hereto with respect to the subject matter hereto
and supersedes all prior or contemporaneous agreements or understandings with respect to such subject matter.

 

		17.	No Brokers

The Company acknowledges and
agrees that there are no brokers, agents, representatives or other parties that have an interest in compensation paid or payable
to Agent hereunder.

 

		18.	Termination & Expiration

Upon termination or expiration,
this Agreement shall have no further force or effect, except that the provisions concerning the Company’s obligations to
Agent, the Company’s obligation to pay Agent fees and expenses as described in this Agreement and as described in the provided
Annex A, the status of Agent as an independent contractor, the rights of Agent under paragraph 12 hereof, the limitation on to
whom Agent shall owe any duties, governing law, choice of forum, successors and assigns, and waiver of the right to trial by jury
shall survive any such termination or expiration of this Agreement.

 

		19.	Governing Law and Jurisdiction

The laws of the State of New
York will govern this Agreement and all controversies arising from or related to performance under this Agreement. To the full
extent lawful, the Company and Agent hereby consent irrevocably to personal jurisdiction, service and venue (a) in connection with
any claim arising out of this Agreement in the courts of the State of New York and in the federal courts in the State of New York
and (b) solely for the purpose of allowing any person to enforce its reimbursement, indemnification or contribution rights hereunder,
in any court in which any action is brought in respect of which any such right is asserted. THE COMPANY AND AGENT EACH HEREBY AGREES
TO WAIVE ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY CLAIM, COUNTERCLAIM OR ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE ENGAGEMENT HEREUNDER.

 

		20.	Miscellaneous

Your Board of Directors and
senior management may take into consideration our advice as well as on the advice of their legal, tax and other business advisors
and other factors which they consider appropriate as a basis for any decision. Accordingly, as an independent contractor we will
not assume the responsibilities of a fiduciary to you or your stockholders in connection with the performance of our services.

 

If any Agent fees or expenses
payable to Agent pursuant to this Agreement are not fully paid when due, the Company agrees to pay all costs of collection or other
enforcement of Agent’s rights hereunder, including but not limited to attorneys’ fees and expenses, whether collected
or enforced by suit or otherwise.

 

We do not provide accounting,
tax or legal advice, and you are authorized (subject to applicable law) to disclose any and all aspects of any potential transactions
that are necessary to support any U.S. federal income tax benefits expected to be claimed with respect to such transactions, without
us imposing any limitation of any kind.

 

Young America Capital, LLC

141 East Boston Post Road

Mamaroneck, NY 10543

(914) 777-0100

 

    	 

    	 

    

 

PRIVATE PLACEMENT ENGAGEMENT LETTER

 

This Agreement will be binding
upon and inure to the benefit of you, Agent, each Indemnified Person (as defined in Annex A) and our respective successors
and assigns, and nothing herein is intended to confer upon any person, other than you, us, each Indemnified Person and our respective
successors and assigns, any rights, remedies, obligations or liabilities.

 

Any waiver of any right or obligation
hereunder must be in writing signed by the party against whom such waiver is sought to be enforced. Any amendment hereto must be
in writing signed by you and us.

 

Neither party may assign this
Agreement without the prior written consent of the other party. If any provision of this Agreement shall be determined to be invalid
or unenforceable in any respect, such determination shall not affect such provision in any other respect or any other provision
of this Agreement, which shall remain in full force and effect.

 

This Agreement may be executed
in counterparts by each party’s duly authorized representative, each of which shall be deemed an original but all of which
shall constitute one and the same instrument. Either party’s execution and delivery of this Agreement may be evidenced by
either physical delivery or facsimile communication of such executed Agreement or executed counterpart to the other party.

 

[Signature Page Follows]

 

Young America Capital, LLC

141 East Boston Post Road

Mamaroneck, NY 10543

(914) 777-0100

 

    	 

    	 

    

 

PRIVATE PLACEMENT ENGAGEMENT LETTER

 

Please confirm that the foregoing is in
accordance with your understanding and is accepted by you by executing and delivering to us this letter, which shall then become
a binding agreement.

 

Very truly yours,

 

Young America Capital, LLC

 

	 	/s/ Peter Formanek
	By:	 
	 	Peter Formanek, Managing Partner

 

ACCEPTED AND AGREED:

 

Xcel
Brands, Inc.

 

	 	/s/ Robert W D’Loren
	By:	 
	 	Robert W. D’Loren
	 	Chairman and Chief Executive Officer

 

Young America Capital, LLC

141 East Boston Post Road

Mamaroneck, NY 10543

(914) 777-0100

 

    	 

    	 

    

 

Annex A

 

The Company will indemnify and hold harmless
Agent, its affiliates, the directors, officers, employees and agents of Agent and affiliates, and each other person
or entity, if any, controlling Agent or any of its affiliates within the meaning of Section 15 of the Securities Act of
1933 or Section 20 of the Securities Exchange Act of 1933 (each, an “Indemnified Person”), from and against any losses,
claims, damages, liabilities or expenses (including actions, claims or proceedings in respect thereof (collectively, “Proceedings”)
brought by or against any person, including stockholders of the Company, and the cost of any investigation and preparation therefore
and defense thereof) (collectively, “Losses”) arising out of or in connection with (i) advice or services rendered
or to be rendered by any Indemnified Person pursuant to the letter agreement to which this Annex A is appended, (ii) the
transaction(s) contemplated by the letter agreement or (iii) any Indemnified Person’s actions or inactions in connection
with any such advice, services or transaction(s); provided, however, that the Company will not be obligated to indemnify for any
Losses of any Indemnified Person that are determined by a court of competent jurisdiction in a final judgment not subject to appeal
to have resulted solely from the willful misconduct or gross negligence of such Indemnified Person. The Company also agrees that
no Indemnified Person shall have any liability (whether direct or indirect, in contract or tort or otherwise) to the Company in
connection with (i) advice or services rendered or to be rendered by any Indemnified Person pursuant to the letter agreement, (ii)
the transaction(s) contemplated by the letter agreement or (iii) any Indemnified Person’s actions or inactions in connection
with any such advice, services or transaction(s), except to the extent such liabilities are determined by a court of competent
jurisdiction in a final judgment not subject to appeal to have resulted solely from the willful misconduct or gross negligence
of such Indemnified Person. The Company agrees that in no event will any Indemnified Person be liable or obligated in any manner
for any damages (including, but not limited to actual, consequential, exemplary or punitive damages or lost profits) in excess
of fees actually received by Agent from the Company pursuant to the section of the letter agreement captioned “Section 2.
Fees,” and the Company agrees not to seek or claim any such damages or profits in any circumstance.

 

The Company also agrees to reimburse each
Indemnified Person, periodically upon request, for all expenses (including fees and expenses of one counsel to the Indemnified
Persons) as they are incurred by such Indemnified Person in connection with investigating, preparing for or defending any Proceeding
(or enforcing the letter agreement or any related engagement or commitment agreement), whether or not in connection with pending
or threatened litigation in which any Indemnified Person is a party.

 

If for any reason the foregoing indemnification
is unavailable to any Indemnified Person or insufficient to hold it harmless, then the Company shall contribute to the amount paid
or payable by such Indemnified Person as a result of such Losses in such proportion as is appropriate to reflect the relative economic
interests of the Company, its affiliates and its stockholders on the one hand and the Indemnified Person on the other in the matters
contemplated by the letter agreement as well as the relative fault of the Company, its affiliates or its stockholders, on the one
hand, and such Indemnified Person, on the other; provided, however, that in no event shall the Indemnified Persons as a whole be
required to contribute an amount greater than the amount of all fees actually received by Agent from the Company pursuant to the
section of this letter agreement captioned “Section 2. Fees.”

 

The Company will not, without Agent’s
prior written consent, settle, compromise, consent to the entry of any judgment in or otherwise seek to terminate any action, claim,
suit or proceeding in respect of which indemnification may be sought hereunder (whether or not any Indemnified Person is a party
thereto) unless such settlement, compromise, consent or termination includes a release of each Indemnified Person from any liabilities
arising out of such action, claim, suit, or proceeding. The Company will not permit any such settlement, compromise, consent or
termination to include a statement as to, or an admission of, fault, culpability or a failure to act by or on behalf of an Indemnified
Person, without such Indemnified Person’s prior written consent. No Indemnified Person seeking indemnification, reimbursement
or contribute under this agreement will, without the Company’s prior written consent, settle, compromise, consent to the
entry of any judgment in or otherwise seek to terminate any action, claim, suit or proceeding referred to herein.

 

    	Annex A - 1

    	 

    

 

The Company’s reimbursement, indemnity
and contribution obligations hereunder shall be in addition to any liability that it may otherwise have, and shall inure to the
benefit of any successors, assigns, heirs and representatives of each Indemnified Person. Solely for the purpose of enforcing the
letter agreement, the Company hereby consents to personal jurisdiction and venue in any court in which any Proceeding is brought.
The provisions of this Annex A shall survive any termination of the letter agreement, the consummation of any transaction(s)
contemplated thereby or the other completion of Agent’s services with respect thereto.

 

If any Indemnified Person appears as a
witness, is deposed or otherwise is involved in any action relating to or arising from the Placement or Agent’s engagement
hereunder or in a situation where such appearance, involvement or assistance results from Agent’s engagement hereunder, the
Company will reimburse such Indemnified Person for all expenses (including fees and expenses of counsel) incurred by it by reason
of it or any of its personnel being involved in any such action.

 

The Company waives any right to a trial
by jury with respect to any claim or action arising out of this Agreement or the actions of Agent, and consents to personal jurisdiction,
service of process and venue in any court in which any claim covered by the provisions of this Annex A may be brought against
an Indemnified Person.

 

If any term, provision, covenant or restriction
herein is held by a court of competent jurisdiction to be invalid, void or unenforceable or against public policy, the remainder
of the terms, provisions and restrictions contained herein shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.

 

    	Annex A - 2Exhibit 10.12

 

SECURITY AGREEMENT

 

SECURITY AGREEMENT,
dated as of December 22, 2014 between H LICENSING, LLC, a Delaware limited liability company (the “Borrower”)
with its principal office located at 475 Tenth Avenue, New York, New York 10018, and Bank Hapoalim B.M., an Israeli banking corporation
licensed to do business in the State of New York (the “Bank”) with its New York office located at 1177 Avenue
of the Americas, New York, NY 10036.

 

WHEREAS, the Borrower
will enter into credit facilities with the Bank, evidenced by the various loan documents (each, as amended and in effect from time
to time, a “Loan Document” and together, as amended and in effect from time to time, the “Loan Documents”),
including an additional separate and distinct credit facility with the Bank dated as of this date (as evidenced by such documents
dated as of this date as may be amended and in effect from time to time, the “Credit Agreements”, which shall
also be deemed to be “Loan Documents”), with the Bank pursuant to which the Bank, subject to the terms and conditions
contained therein, is to make loans or otherwise to extend credit to the Borrower; and

 

WHEREAS, it is a condition
precedent to the Bank’s making credit available to the Borrower under the Credit Agreements and to make any loans or otherwise
extend credit to the Borrower under the Loan Documents, that the Borrower execute and deliver to the Bank a security agreement
in substantially the form hereof; and

 

WHEREAS, the Borrower
wishes to grant security interests in favor of the Bank as herein provided;

 

NOW, THEREFORE, in
consideration of the promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:

 

1.           Definitions.
All capitalized terms used herein without definitions shall have the respective meanings provided therefor in the Loan Documents.
The term “State”, as used herein, means the State of New York. All terms defined in the Uniform Commercial Code
of the State and used herein shall have the same definitions herein as specified therein. However, if a term is defined in Article
9 of the Uniform Commercial Code of the State differently than in another Article of the Uniform Commercial Code of the State,
the term has the meaning specified in Article 9. The term “JR Licensing Guaranty” as used herein, means the
guaranty of the obligations of JR Licensing, LLC to the Bank executed by Borrower in favor of the Bank. The term “IM Brands
Guaranty” as used herein, means the guaranty of the obligations of IM Brands, LLC to the Bank executed by Borrower in
favor of the Bank. The term “Obligations”, as used herein, means all of the indebtedness, obligations and liabilities
of the Borrower to the Bank, individually or collectively, whether direct or indirect, joint or several, absolute or contingent,
due or to become due, now existing or hereafter arising under or in respect of the JR Licensing Guaranty, the IM Brands Guaranty,
the Loan Documents, any promissory notes or other instruments or agreements executed and delivered pursuant thereto or in connection
therewith, or this Agreement. The term “Loan Document(s)”, as used herein, includes the Credit Agreements, promissory
notes or other instruments, letter of credit applications and agreements, this Agreement, and any other agreement between the Borrower
and the Bank, relating to a credit facility or facilities extended by the Bank to the Borrower. The term “Event of Default”,
as used herein, means the failure of the Borrower to pay or to perform any of the Obligations, or any of the other terms or conditions,
as and when due to be paid or performed under the terms of any Loan Document, or a default as set forth in any Loan Document.

 

    	 

    	 

    

 

2.           Grant
of Security Interest. The Borrower hereby grants to the Bank, to secure the payment and performance in full of all of the
Obligations, a security interest in and so pledges and assigns to the Bank the following properties, assets and rights of the Borrower,
wherever located, whether now owned or hereafter acquired or arising, and all proceeds and products thereof (all of the same being
hereinafter called the “Collateral”): all personal and fixture property of every kind and nature including without
limitation all goods (including inventory, equipment and any accessions thereto), instruments (including promissory notes), documents,
accounts (including health-care insurance receivables), chattel paper (whether tangible or electronic), deposit accounts, letter-of-credit
rights (whether or not the letter of credit is evidenced by a writing), commercial tort claims, securities and all other investment
property, supporting obligations, any other contract rights or rights to the payment of money, insurance claims and proceeds, tort
claims and all general intangibles (including all payment intangibles). The Bank acknowledges that the attachment of its security
interest in any commercial tort claim as original collateral is subject to the Borrower’s compliance with Section 4.7.

 

3.           Authorization
to File Financing Statements. The Borrower hereby irrevocably authorizes the Bank at any time and from time to time to
file in any Uniform Commercial Code jurisdiction any initial financing statements and amendments thereto that (a) indicate the
Collateral (i) as all assets of the Borrower or words of similar effect, regardless of whether any particular asset comprised in
the Collateral falls within the scope of Article 9 of the Uniform Commercial Code of the State or such jurisdiction, or (ii) as
being of an equal or lesser scope or with greater detail, and (b) contain any other information required by part 5 of Article 9
of the Uniform Commercial code of the State for the sufficiency or filing office acceptance of any financing statement or amendment,
including whether the Borrower is an organization, the type of organization and any organization identification number issued to
the Borrower. The Borrower agrees to furnish any such information to the Bank promptly upon request. The Borrower also ratifies
its authorization for the Bank to have filed in any Uniform Commercial Code jurisdiction any like initial financing statements
or amendments thereto if filed prior to the date hereof.

 

4.           Other
Actions. Further to insure the attachment, perfection and first priority of, and the ability of the Bank to enforce, the
Bank’s security interest in the Collateral, the Borrower agrees, in each case at the Borrower’s own expense, to take
the following actions with respect to the following Collateral:

 

4.1           Promissory
Notes and Tangible Chattel Paper. If the Borrower shall at any time hold or acquire any promissory notes or tangible chattel
paper, the Borrower shall promptly notify the Bank thereof, and, upon the Bank’s request and option, endorse, assign and
deliver the same to the Bank, accompanied by such instruments of transfer or assignment duly executed in blank as the Bank may
from time to time specify.

 

    	2

    	 

    

 

4.2           Deposit
Accounts. For each deposit account that the Borrower at any time opens or maintains, the Borrower shall, at the Bank’s
request and option, pursuant to an agreement in form and substance satisfactory to the Bank, either (a) cause the depository bank
to agree to comply at any time with instructions from the Bank to such depository bank directing the disposition of funds from
time to time credited to such deposit account, without further consent of the Borrower, or (b) arrange for the Bank to become the
customer of the depositary bank with respect to the deposit account, with the Borrower being permitted, only with the consent of
the Bank, to exercise rights to withdraw funds from such deposit account. The Bank agrees with the Borrower that the Bank shall
not give any such instructions or withhold any withdrawal rights from the Borrower unless an Event of Default has occurred and
is continuing or, after giving effect to any withdrawal not otherwise permitted by the Loan Documents, would occur. The provisions
of this paragraph shall not apply to (i) deposit accounts for which the Bank is the Depositary and (ii) deposit accounts specially
and exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of the Borrower’s
salaried employees.

 

4.3           Investment
Property. If the Borrower shall at any time hold or acquire any certificated securities, the Borrower shall forthwith endorse,
assign and deliver the same to the Bank, accompanied by such instruments of transfer or assignment duly executed in blank as the
Bank may from time to time specify. If any securities now or hereafter acquired by the Borrower are uncertificated and are issued
to the Borrower or its nominee directly by the issuer thereof, the Borrower shall immediately notify the Bank thereof and, at the
Bank’s request and option, pursuant to an agreement in form and substance satisfactory to the Bank, either (a) cause the
issuer to agree to comply with instructions from the Bank as to such securities, without further consent of the Borrower or such
nominee, or (b) arrange for the Bank to become the registered owner of the securities. If any securities, whether certificated
or uncertificated, or other investment property now or hereafter acquired by the Borrower are held by the Borrower or its nominee
through a securities intermediary or commodity intermediary, the Borrower shall immediately notify the Bank thereof and, at the
Bank’s request and option, pursuant to an agreement in form and substance satisfactory to the Bank, either (i) cause such
securities intermediary or (as the case may be) commodity intermediary to agree to comply with entitlement orders or other instructions
from the Bank to such securities intermediary as to such securities or other investment property, or (as the case may be) commodity
intermediary to agree to comply with entitlement orders or other instructions from the Bank to such securities intermediary as
to such securities or other investment property, or (as the case may be) to apply any value distributed on account of any commodity
contract as directed by the Bank to such commodity intermediary, in each case without further consent of the Borrower or such nominee,
or (ii) in the case of financial assets or other investment property held, with the Borrower being permitted, only with the consent
of the Bank, to exercise rights to withdraw or otherwise deal with such investment property. The Bank agrees with the Borrower
that the Bank shall not give any such entitlement orders or instructions or directions to any such issuer, securities intermediary
or commodity intermediary, and shall not withhold its consent to the exercise of any withdrawal or dealing rights by the Borrower,
unless an Event of Default has occurred and is continuing, or, after giving effect to any such investment and withdrawal rights
not otherwise permitted by the Loan Documents, would occur. The provisions of this paragraph shall not apply to any financial assets
credited to a securities account for which the Bank is the securities intermediary.

 

    	3

    	 

    

 

4.4           Collateral
in the Possession of a Bailee. If any Collateral having a value of $100,000 is at any time in the possession of a bailee,
the Borrower shall promptly notify the Bank thereof and, if requested by the Bank, shall promptly obtain an acknowledgment from
the bailee, in form and substance satisfactory to the Bank, that the bailee holds such Collateral for the benefit of the Bank and
shall act upon the instructions of the Bank, without the further consent of the Borrower. The Bank agrees with the Borrower that
the Bank shall not give any such instructions unless an Event of Default has occurred and is continuing or would occur after taking
into account any action by the Borrower with respect to the bailee.

 

4.5           Electronic
Chattel Paper and Transferable Records. If the Borrower at any time holds or acquires an interest in any electronic chattel
paper or any “transferable record,” as that term is defined in Section 201 of the federal Electronic Signatures in
Global and National Commerce Act, or in Section 16 of the Uniform Electronic Transactions Act as in effect in any relevant jurisdiction,
the Borrower shall promptly notify the Bank thereof and, at the request of the Bank, shall take such action as the Bank may reasonably
request to vest in the Bank control, under Section 9-105 of the Uniform Commercial Code, of such electronic chattel paper or control
under Section 201 of the federal Electronic Signatures in Global and National Commerce Act or, as the case may be, Section 16 of
the Uniform Electronic Transactions Act, as so in effect in such jurisdiction, of such transferable record. The Bank agrees with
the Borrower that the Bank will arrange, pursuant to procedures satisfactory to the Bank and so long as such procedures will not
result in the Bank’s loss of control, for the Borrower to make alterations to the electronic chattel paper or transferable
record permitted under UCC Section 9-105 or, as the case may be, Section 201 of the Federal Electronic Signatures in Global and
National Commerce Act or Section 16 of the Uniform Electronic Transactions Act for a party in control to make without loss of control,
unless an Event of Default has occurred and is continuing or would occur after taking into account any action by the Borrower with
respect to such electronic chattel paper or transferable record.

 

4.6           Letter-of-Credit
Rights. If the Borrower is at any time a beneficiary under a letter of credit now or hereafter issued in favor of the Borrower,
the Borrower shall promptly notify the Bank thereof and, at the request and option of the Bank, the Borrower shall, pursuant to
an agreement in form and substance satisfactory to the Bank, either (i) arrange for the issuer and any confirmer of such letter
of credit to consent to an assignment to the Bank of the proceeds of any drawing under the letter of credit, or (ii) arrange for
the Bank to become the transferee beneficiary of the letter of credit, with the Bank agreeing, in each case, that the proceeds
of the letter of credit are to be applied as provided in the Loan Documents.

 

4.7           Commercial
Tort Claims. If the Borrower shall at any time hold or acquire a commercial tort claim, the Borrower shall immediately
notify the Bank in a writing signed by the Borrower of the brief details thereof and grant to the Bank in such writing a security
interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance
satisfactory to the Bank.

 

    	4

    	 

    

 

4.8           Other
Actions as to any and all Collateral. The Borrower further agrees to take any other action reasonably requested by the
Bank to insure the attachment, perfection and first priority of, and the ability of the Bank to enforce, the Bank’s security
interest in any and all of the Collateral including, without limitation, (a) executing, delivering and, where appropriate, filing
financing statements and amendments relating thereto under the Uniform Commercial Code, to the extent, if any, that the Borrower’s
signature thereon is required therefor, (b) causing the Bank’s name to be noted as secured party on any certificate of title
for a titled good if such notation is a condition to attachment, perfection or priority of, or ability of the Bank to enforce,
the Bank’s security interest in such Collateral, (c) complying with any provision of any statute, regulation or treaty of
the United States as to any Collateral if compliance with such provision is a condition to attachment, perfection or priority of,
or ability of the Bank to enforce, the Bank’s security interest in such Collateral, (d) obtaining governmental and other
third party consents and approvals, including without limitation any consent of any licensor, lessor or other person obligated
on Collateral, (e) obtaining waivers from mortgagees and landlords in form and substance satisfactory to the Bank and (f) taking
all actions required by any earlier versions of the Uniform Commercial Code or by other law, as applicable in any relevant Uniform
Commercial Code jurisdiction, or by other law as applicable in any foreign jurisdiction.

 

5.           [Reserved].

 

6.           Representations
and Warranties Concerning Borrower’s Legal Status. The Borrower has previously delivered to the Bank a certificate
signed by the Borrower entitled “Perfection Certificate” (the “Perfection Certificate”). The Borrower
represents and warrants to the Bank as follows: (a) the Borrower’s exact legal name is that indicated on the Perfection Certificate
and on the signature page hereof, (b) the Borrower is an organization of the type and organized in the jurisdiction set forth in
the Perfection Certificate, (c) the Perfection Certificate accurately sets forth the Borrower’s organizational identification
number or accurately states that the Borrower has none, (d) the Perfection Certificate accurately sets forth the Borrower’s
place of business or, if more than one, its chief executive office as well as the Borrower’s mailing address if different
and (e) all other information set forth on the Perfection Certificate pertaining to the Borrower is accurate and complete.

 

7.           Covenants
Concerning Borrower’s Legal Status. The Borrower covenants with the Bank as follows: (a) without providing at least
30 days prior written notice to the Bank, the Borrower will not change its name, its place of business or, if more than one, chief
executive office, or its mailing address or organizational identification number if it has one, (b) if the Borrower does not have
an organizational identification number and later obtains one, the Borrower shall forthwith notify the Bank of such organizational
identification number, and (c) the company will not change its type of organization, jurisdiction of organization or other legal
structure.

 

8.           Representations
and Warranties Concerning Collateral, Etc. The Borrower further represents and warrants to the Bank as follows: (a) the
Borrower is the owner of or has other rights in or power to transfer the Collateral, free from any adverse lien, security interest
or other encumbrance, except for the security interest created by this Agreement, (b) none of the Collateral constitutes, or is
the proceeds of, “farm products” as defined in Section 9-102(a)(34) of the Uniform Commercial Code of the State, (c)
none of the account debtors or other persons obligated on any of the Collateral is a governmental authority subject to the Federal
Assignment of Claims Act or like federal, state or local statute or rule in respect of such Collateral, (d) the Borrower holds
no commercial tort claims, and (e) the Borrower has at all times operated its business in compliance with all applicable provisions
of the federal Fair Labor Standards Act, as amended, and with all applicable provisions of federal, state and local statutes and
ordinances dealing with the control, shipment, storage or disposal of hazardous materials or substances and (f) all other information
set forth on the Perfection Certificate pertaining to the Collateral is accurate and complete.

 

    	5

    	 

    

 

9.           Covenants
Concerning Collateral, Etc. The Borrower further covenants with the Bank as follows: (a) the Collateral, to the extent
not delivered to the Bank pursuant to Section 4, will be kept at those locations listed on the Perfection Certificate and the Borrower
will not remove the Collateral from such locations without providing at least 30 days prior written notice to the Bank, (b) except
for the security interest herein granted and liens permitted by a Credit Agreement, the Borrower shall be the owner of or have
other rights in the Collateral free from any lien, security interest or other encumbrance, and the Borrower shall defend the same
against all interests therein adverse to the Bank, (c) the Borrower shall not pledge, mortgage or create, or suffer to exist a
security interest in the Collateral in favor of any person other than the Bank, (d) the Borrower will keep the Collateral in good
order and repair and will not use the same in violation of law or any policy of insurance thereon, (e) the Borrower will permit
the Bank, or its designee, to inspect the Collateral at any reasonable time, wherever located, (f) the Borrower will pay promptly
when due all taxes, assessments, governmental charges and levies upon the Collateral or incurred in connection with the use or
operation of such Collateral or incurred in connection with this Agreement, (g) the Borrower will continue to operate, its business
in compliance with all applicable provisions of the federal Fair Labor Standards Act as amended, and with all applicable provisions
of federal, state and local statutes and ordinances dealing with the control, shipment, storage or disposal of hazardous materials
or substances, and (h) the Borrower will not sell or otherwise dispose, or offer to sell or otherwise dispose, of the Collateral
or any interest therein except for the sale of inventory in the ordinary course of business. In the event of any inconsistency
between the covenants made in the Intellectual Property Security Agreement, dated as of the date hereof, between the Borrower and
the Bank (as amended, restated, supplemented or otherwise modified from time to time, the “IP Security Agreement”),
with respect to the Borrower’s Copyrights, Trademarks and Licenses (as such terms are defined in the IP Security Agreement),
and those covenants made in this Security Agreement with respect to that portion of the Collateral consisting of such Copyrights,
Trademarks and Licenses, the covenants set forth in the IP Security Agreement shall prevail with respect to such inconsistency.

 

10.         Insurance.

 

10.1         Maintenance
of Insurance. The Borrower will maintain, with financially sound and reputable insurers, insurance with respect to its
properties and business against such casualties and contingencies as shall be in accordance with general practices of businesses
engaged in similar activities in similar geographic areas. Such insurance shall be in such minimum amounts that the Borrower will
not be deemed a co-insurer under applicable insurance laws, regulations and policies and otherwise shall be in such amounts, contain
such terms to be in such forms and be for such periods as may be reasonably satisfactory to the Bank. In addition, all such insurance
shall be payable to the Bank as lender’s loss payee under a “standard” or “New York” lender’s
loss payee clause. Without limiting the foregoing, the Borrower will (i) keep all of its physical property insured with casualty
or physical hazard insurance on an “all risks” basis, with electronic data processing coverage, with a full replacement
cost endorsement and an “agreed amount” clause in an amount equal to 100% of the full replacement cost of such property,
(ii) maintain all such workers’ compensation or similar insurance as may be required by law and (iii) maintain, in amounts
and with deductibles equal to those generally maintained by business engaged in similar activities in similar geographic areas,
general public liability insurance against claims of bodily injury, death or property damage occurring, on, in or about the properties
of the Borrower; business interruption insurance; and product liability insurance.

 

    	6

    	 

    

 

10.2         Insurance
Proceeds. The proceeds of any casualty insurance in respect of any casualty loss of any of the Collateral shall, subject
to the rights, if any, of other parties with a prior interest in the property covered thereby, (i) so long as no Default or Event
of Default has occurred and is continuing and to the extent that the amount of such proceeds is less than $25,000.00, be disbursed
to the Borrower for direct application by the Borrower solely to the repair or replacement of the Borrower’s property so
damaged or destroyed and (ii) in all other circumstances, be held by the Bank as cash collateral, upon such terms and conditions
as the Bank may reasonably prescribe, for direct application by the Borrower solely to the repair or replacement of the Borrower’s
property so damaged or destroyed, or upon the Borrower’s prior written consent, the Bank may apply all or any part of such
proceeds to the Obligations with the Commitment (if not then terminated) being reduced by the amount so applied to the Obligations.

 

10.3         Notice
of Cancellation, etc. All policies of insurance shall provide for at least 30 days prior written cancellation notice to
the Bank. In the event of failure by the Borrower to provide and maintain insurance as herein provided, the Bank may, at its option
and upon prior written notice to the Borrower, provide such insurance and charge the amount thereof to the Borrower. The Borrower
shall furnish the Bank with certificates of insurance and policies evidencing compliance with the foregoing insurance provision.

 

11.         Collateral
Protection Expenses; Preservation of Collateral.

 

11.1         Expenses
Incurred by Bank. In its discretion and upon prior written notice to the Borrower, the Bank may discharge taxes and other
encumbrances at any time levied or placed on any of the Collateral, make repairs thereto and pay any necessary filing fees or,
if the debtor fails to do so, insurance premiums. The Borrower agrees to reimburse the Bank on demand for any and all expenditures
so made. The Bank shall have no obligation to the Borrower to make any such expenditures, nor shall the making thereof relieve
the Borrower of any default.

 

11.2         Bank’s
Obligations and Duties. Anything herein to the contrary notwithstanding, the Borrower shall remain liable under each contract
or agreement comprised in the Collateral to be observed or performed by the Borrower thereunder. The Bank shall not have any obligation
or liability under any such contract or agreement by reason of or arising out of this Agreement or the receipt by the Bank of any
payment relating to any of the Collateral, nor shall the Bank be obligated in any manner to perform any of the obligations of the
Borrower under or pursuant to any such contract or agreement, to make inquiry as to the nature or sufficiency of any payment received
by the Bank in respect of the Collateral or as to the sufficiency of any performance by any party under any such contract or agreement,
to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may
have been assigned to the Bank or to which the Bank may be entitled at any time or times. The Bank’s sole duty with respect
to the custody, safe keeping and physical preservation of the Collateral in its possession, under Section 9-207 of the Uniform
Commercial Code of the State or otherwise, shall be to deal with such Collateral in the same manner as the Bank deals with similar
property for its own account.

 

    	7

    	 

    

 

12.         Securities
and Deposits. The Bank may at any time following and during the continuance of an Event of Default, at its option, transfer
to itself or any nominee any securities constituting Collateral, receive any income thereon and hold such income as additional
Collateral or apply it to the Obligations. Whether or not any Obligations are due, the Bank may following and during the continuance
of an Event of Default demand, sue for, collect, or make any settlement or compromise which it deems desirable with respect to
the Collateral. Regardless of the adequacy of Collateral or any other security for the Obligations, any deposits or other sums
at any time credited by or due from the Bank to the Borrower may at any time be applied to or set off against any of the Obligations.

 

13.         Notification
to Account Debtors and Other Persons Obligated on Collateral. If an Event of Default shall have occurred and be continuing,
the Borrower shall, at the request of the Bank, notify account debtors and other persons obligated on any of the Collateral of
the security interest of the Bank in any account, chattel paper, general intangible, instrument or other Collateral and that payment
thereof is to be made directly to the Bank or to any financial institution designated by the Bank as the Bank’s agent therefor,
and the Bank may itself, if an Event of Default shall have occurred and be continuing, upon prior written notice to the Borrower,
so notify account debtors and other persons obligated on Collateral. After the making of such a request or the giving of any such
notification, the Borrower shall hold any proceeds of collection of accounts, chattel paper, general intangibles, instruments and
other Collateral received by the Borrower as trustee for the Bank without commingling the same with other funds of the Borrower
and shall turn the same over to the Bank in the identical form received, together with any necessary endorsements or assignments.
The Bank shall apply the proceeds of collection of accounts, chattel paper, general intangibles, instruments and other Collateral
received by the Bank to the Obligations, such proceeds to be immediately entered after final payment in cash or other immediately
available funds of the items giving rise to them.

 

14.         Power
of Attorney.

 

14.1         Appointment
and Powers of Bank. The Borrower hereby irrevocably constitutes and appoints the Bank and any officer or agent thereof,
with full power of substitution, as its true and lawful attorneys-in-fact with full irrevocable power and authority in the place
and stead of the Borrower or in the Bank’s own name, for the purpose of carrying out the terms of this Agreement, to take
any and all appropriate action and to execute any and all documents and instruments that may be necessary or desirable to accomplish
the purposes of this Agreement and, without limiting the generality of the foregoing, hereby gives said attorneys the power and
right, on behalf of the Borrower, without notice to or assent by the Borrower, to do the following: upon the occurrence and during
the continuance of an Event of Default, generally to sell, transfer, pledge make any agreement with respect to or otherwise deal
with any of the Collateral in such manner as is consistent with the Uniform Commercial Code of the State and as fully and completely
as though the Bank were the absolute owner thereof for all purposes, and to do at the Borrower’s expense, at any time, or
from time to time, all acts and things which the Bank deems necessary to protect, preserve or realize upon the Collateral and the
Bank’s security interest therein, in order to effect the intent of this Agreement, all as fully and effectively as the Borrower
might do, including, without limitation, (i) the filing and prosecuting of registration and transfer applications with the appropriate
federal or local agencies or authorities with respect to trademarks, copyrights and patentable inventions and processes, (ii) upon
written notice to the Borrower, the exercise of voting rights with respect to voting securities, which rights may be exercised,
if the Bank so elects, with a view to causing the liquidation in a commercially reasonable manner of assets of the issuer of any
such securities and (iii) the execution, delivery and recording, in connection with any sale or other disposition of any Collateral,
of the endorsements, assignments or other instruments of conveyance or transfer with respect to such Collateral.

 

    	8

    	 

    

 

14.2         Ratification
by Borrower. To the extent permitted by law, the Borrower hereby ratifies all that said attorneys shall lawfully do or
cause to be done by virtue hereof. This power of attorney is a power coupled with an interest and shall be irrevocable.

 

14.3         No
Duty on Bank. The power conferred on the Bank hereunder are solely to protect its interests in the Collateral and shall
not impose any duty upon it to exercise any such powers. The Bank shall be accountable only for the amounts that it actually receives
as a result of the exercise of such powers and neither it nor any of its officers, directors, employees or agents shall be responsible
to the Borrower for any act or failure to act, except for the Bank’s own gross negligence or willful misconduct.

 

15.         Remedies.
If an Event of Default shall have occurred and be continuing, the Bank may, without notice to or demand upon the Borrower, declare
this Agreement to be in default, and the Bank shall thereafter have in any jurisdiction in which enforcement hereof is sought,
in addition to all other rights and remedies, the rights and remedies of a secured party under the Uniform Commercial of the State
or of any jurisdiction in which Collateral is located, including, without limitation, the right to take possession of the Collateral,
and for that purpose the Bank may, so far as the Borrower can give authority therefor, enter upon any premises on which the Collateral
may be situated and remove the same therefrom. The Bank may in its discretion require the Borrower to assemble all or any part
of the Collateral at such location or locations within the jurisdiction(s) of the Borrower’s principal office(s) or at such
other locations as the Bank may reasonably designate. Unless the Collateral is perishable or threatens to decline speedily in value
or is of a type customarily sold on a recognized market, the Bank shall give to the Borrower at least ten (10) Business Days prior
written notice of the time and place of any public sale of Collateral or of the time after which any private sale or any other
intended disposition is to be made. The Borrower hereby acknowledges that ten (10) Business Days prior written notice of such sale
or sales shall be reasonable notice. In addition, the Borrower waives any and all rights that is may have to a judicial hearing
in advance of the enforcement of any of the Bank’s rights hereunder, including without limitation, its right following an
Event of Default to take immediate possession of the Collateral and to exercise its rights with respect thereto.

 

16.         [Reserved].

 

    	9

    	 

    

 

17.         No
Waiver by Bank, etc. The Bank shall not be deemed to have waived any of its rights upon or under the Obligations or the
Collateral unless such waiver shall be in writing and signed by the Bank. No delay or omission on the part of the Bank in exercising
any right shall operate as a waiver of such right or any other right. A waiver on any one occasion shall not be construed as a
bar to or waiver of any right on any future occasion. All rights and remedies of the Bank with respect to the Obligations or the
Collateral, whether evidenced hereby or by any other instrument or papers, shall be cumulative and may be exercised singularly,
alternatively, successively or concurrently at such time or at such times as the Bank deems expedient.

 

18.         Suretyship
Waivers by Borrower. The Borrower waives demand, notice, protest, notice of acceptance of this Agreement, notice of loans
made, credit extended, Collateral received or delivered or other action taken in reliance hereon and all other demands and notices
of any description. With respect to both the Obligations and the Collateral, the Borrower assents to any extension or postponement
of the time of payment or any other indulgence, to any substitution, exchange or release of or failure to perfect any security
interest in any Collateral, to the addition or release of any party or person primarily or secondarily liable, to the acceptance
of partial payment thereon and the settlement, compromising or adjusting of any thereof, all in such manner and at such time or
times as the Bank may deem advisable. The Bank shall have no duty as to the collection or protection of the Collateral or any income
thereon, nor as to the preservation of rights against prior parties, nor as to the preservation of any rights pertaining thereto
beyond the safe custody thereof as set forth in Section 11.2. The Borrower further waives any and all other suretyship defenses.

 

19.         Marshalling.
The Bank shall not be required to marshal any present or future collateral security (including but not limited to this Agreement
and the Collateral) for, or other assurances of payment of, the Obligations or any of them or to resort to such collateral security
or other assurances of payment in any particular order, and all of its rights hereunder and in respect of such collateral security
and other assurances of payment shall be cumulative and in addition to all other rights, however existing or arising. To the extent
that it lawfully may, the Borrower hereby agrees that it will not invoke any law relating to the marshalling of collateral which
might cause delay in or impede the enforcement of the Bank’s rights under this Agreement or under any other instrument creating
or evidencing any of the Obligations or under which any of the Obligations is outstanding or by which any of the Obligations is
secured or payment thereof is otherwise assured, and, to the extent that it lawfully may, the Borrower hereby irrevocably waives
the benefits of all such laws.

 

20.         Proceeds
of Dispositions; Expenses. The Borrower shall pay to the Bank on demand any and all expenses, including reasonable attorneys’
fees and disbursements, incurred or paid by the Bank in protecting, preserving or enforcing the Bank’s rights under or in
respect of any of the Obligations or any of the Collateral. After deducing all of said expenses, the residue of any proceeds of
collection or sale of the Obligations or Collateral shall, to the extent actually received in cash, be applied to the payment of
the Obligations in such order or preference as the Bank may determine, proper allowance and provision being made for any Obligations
not then due. Upon the final payment and satisfaction in full of all of the Obligations and after making any payments required
by Sections 9-608(a)(1)(C) or 9-615(a)(3) of the Uniform Commercial Code of the State, any excess shall be returned to the Borrower,
and the Borrower shall remain liable for any deficiency in the payment of the Obligations.

 

    	10

    	 

    

 

21.         Overdue
Amounts. Until paid, all amounts due and payable by the Borrower hereunder shall be a debt secured by the Collateral and
shall bear, whether before or after judgment, interest at the rate of interest for overdue principal set forth in the Loan Documents.

 

22.         Governing
Law; Consent to Jurisdiction. THIS AGREEMENT IS INTENDED TO TAKE EFFECT AS A SEALED INSTRUMENT AND SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. The Borrower agrees that any suit for the enforcement of this
Agreement may be brought in the courts of the State of New York sitting in New York County, or any federal court sitting therein,
and consents to the non-exclusive jurisdiction of such courts and to service of process in any such suit being made upon the Borrower,
by mail, at the address specified in the initial paragraph of this Agreement, or at any address specified for the Borrower in any
Loan Document. The Borrower hereby waives any objection that it may now or hereafter have to the venue of any such suit or any
such court or that such suit is brought in an inconvenient court.

 

23.         Waiver
of Jury Trial. THE BORROWER WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE
IN CONNECTION WITH THIS AGREEMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE PERFORMANCE OF ANY SUCH RIGHTS OR OBLIGATIONS. The
Borrower (i) certifies that neither the Bank nor any representative, agent or attorney of the Bank has represented expressly or
otherwise, that the Bank would not, in the event of litigation, seek to enforce the foregoing waiver and (ii) acknowledges that,
in entering into the Credit Agreement and the other Loan Documents to which the Bank is a party, the Bank is relying upon, among
other things, the waiver and certification contained in this Section 23.

 

24.         Miscellaneous.
The headings of each section of this Agreement are for convenience only and shall not define or limit the provisions thereof. This
Agreement and all rights and obligations hereunder shall be binding upon the Borrower and its respective successors and assigns,
and shall inure to the benefit of the Bank and its successors and assigns. If any term of this Agreement shall be held to be invalid,
illegal or unenforceable, the validity of all other terms hereof shall in no way be affected thereby, and this Agreement shall
be construed and not be enforceable as if such invalid, illegal or unenforceable terms had not been included herein. The Borrower
acknowledges receipt of a copy of this Agreement.

 

[Remainder of this page
intentionally left blank]

 

    	11

    	 

    

 

IN WITNESS WHEREOF,
intending to be legally bound, the Borrower has caused this Agreement to be duly executed as of the date first above written.

 

	 	H LICENSING, LLC
	 	 	 
	 	 	By:	Xcel Brands, Inc., Its Manager
	 	 	 
	 	 	 	By:	   /s/ James Haran
	 	 	 	 	Name: James Haran
	 	 	 	 	Title: CFO
	 	 	 
	 	BANK HAPOALIM B.M.
	 	 	 
	 	By:	Authorized Signatory
	 	 	Name:
	 	 	Title:
	 	 	 
	 	By:	Authorized Signatory
	 	 	Name:
	 	 	Title:

 

SIGNATURE PAGE TO

SECURITY AGREEMENT

 

    	 

    	 

    

 

CERTIFICATE OF ACKNOWLEDGMENT

 

	STATE OF _______________	)
	 	) ss.
	COUNTY OF _______________	)

 

Before me, the undersigned,
a Notary Public in and for the county aforesaid on this ___ day of December, 2014, personally appeared ___________________ to me
known personally, and who, being by me duly sworn, deposes and says that (s)he is the ________________ of Xcel Brands, Inc., the
Manager of H Licensing, LLC, and that said instrument was signed on behalf of said entity and acknowledged said instrument to be
the free act and deed of said limited liability company.

 

	 	 
	 	Notary Public
	 	My commission expires:

 

NOTARY PAGE TO

SECURITY AGREEMENT

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