ASSIGNMENT AND ASSUMPTION, LANDLORD CONSENT

AGREEMENT (this “Agreement”), dated as of September 27, 2011, among Xxxxx Holdings III, LLC, having its principal office c/o The Xxxxx Group, Inc., at 000 Xxxxxxx Xxxxxx, Xxx Xxxx XX 00000 (hereinafter referred to as “Landlord”), IM Ready-Made, LLC, a Delaware corporation, having an address at 000 Xxxxx Xxxxxx, Xxx Xxxx XX 00000 (hereinafter referred to as “Assignor”), and XCel Brands, Inc., a Delaware corporation, having an address at 000 Xxxxx Xxxxxx, Xxx Xxxx XX 00000 (hereinafter referred to as “Assignee”).

W I T N E S S E T H:

WHEREAS, Landlord and Assignor, as tenant, are parties to that certain Agreement of Lease as described in Exhibit “A” annexed hereto, as the same may have been amended (the “Lease”), covering certain premises as described in the Lease and located at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx (the “Building”); and

WHEREAS, Assignor desires to assign to Assignee, effective as of September 27, 2011, all of Assignor’s right, title and interest, as tenant, in and to the Lease; and

WHEREAS, Assignor and Assignee have requested that Landlord consent thereto; and

WHEREAS, Landlord is willing to do so upon the terms and conditions hereinafter stated, and provided that IM Brands, LLC, a Delaware limited liability company, executes and delivers to Landlord that certain guaranty of the Lease in the form annexed hereto as Exhibit “B” (the “Guaranty”).

NOW, THEREFORE, in consideration of One ($1.00) Dollar and other good and valuable consideration, the mutual receipt and sufficiency of which is hereby acknowledged, the undersigned hereby covenant, agree and represent as follows:

1. Assignment and Assumption. Assignor hereby assigns unto Assignee all of Assignor’s right, title and interest in and to the Lease, including, without limitation, the security deposit held thereunder, and Assignee hereby assumes, covenants and agrees to perform and to observe all of the terms, covenants, conditions and agreements set forth in the Lease on the part of the tenant therein to be fulfilled, kept, observed and performed during the term of the Lease and any renewal, extension or modification thereof.

2. Consent to Assignment. Subject to the terms and conditions hereinafter set forth, Landlord hereby consents to the above assignment and assumption of the Lease.

3. Current Personal Guarantor; Release for Increased Security; Letter of Credit. A. Assignor and Assignee have requested that Landlord release Xxxxx Xxxxxxx (“IM”) from his Guaranty (the “IM Guaranty”) given to Landlord, pursuant to which he is personally liable under the terms of the IM Guaranty, and Landlord hereby agrees that provided and so long as Tenant has not be in default of this Lease (or, if in default, has cured such default within the applicable cure period), IM will be released from any and all obligations under the IM Guaranty with respect to all obligations of the Tenant under the Lease first arising and accruing after the date on which Assignee or IM delivers to Landlord a bank check payable to the order of Landlord, in sum sufficient to raise the security then held under the Lease to an amount equal to six (6) months of the then current rate of monthly fixed rent, which sum shall be held as additional security under the Lease in accordance with the same terms and conditions as apply to the existing security under the Lease. In lieu of a bank check as aforesaid, Assignee may deliver a letter of credit in the required amount subject to the terms and conditions below.

B. The letter of credit shall be a clean, irrevocable and unconditional letter of credit issued by and drawn upon a commercial bank reasonably satisfactory to Landlord having retail offices within New York County, with a tangible net worth of not less than $25,000,000,000 (the “Issuing Bank”). The letter of credit shall have a term of not less than one (1) year, be in form and content satisfactory to Landlord and for the account of Landlord in the required amount. Without limiting the foregoing, (a) the letter of credit shall at all times be presentable for immediate payment within the City and County of New York, (b) the costs chargeable by the Issuing Bank for transfer of the letter of credit to any transferee of Landlord shall be for the account of Assignee (hereinafter in this subparagraph B. referred to as “Tenant”'), and (c) in no event shall the letter of credit expire prior to the date which is thirty (30) days following the date on which the Lease expires, subject to the Issuing Bank's right to issue a "Non-Renewal Notice" (as hereinafter defined) which shall give rise to Landlord's right to draw down the letter of credit as hereinafter provided. The Issuing Bank shall pay to Landlord or its duly authorized representative the face amount of the letter of credit upon presentation of the letter of credit and a certificate as specified below. Said letter of credit shall expressly provide that it shall be deemed automatically renewed without amendment, for consecutive periods of one (1) year each thereafter during the term of the Lease, until the Issuing Bank sends written notice (the "Non-Renewal Notice") to Tenant by certified mail, return receipt requested, not less than sixty (60) days next preceding the expiration date of the existing letter of credit that it elects not to have such letter of credit renewed. Additionally, the letter of credit shall provide that Landlord shall have the right, exercisable after receipt of the Non-Renewal Notice, by sight draft on the Issuing Bank, to receive the monies represented by the existing letter of credit and, in such event, Landlord will hold said proceeds as a cash security deposit until a substitute letter of credit complying with the terms hereof is provided. The letter of credit shall provide that it will be honored by the Issuing Bank upon the delivery of Landlord's sight draft and a statement signed by Landlord indicating that Landlord is entitled to draw down on the letter of credit, without inquiry by the Issuing Bank as to such statement's accuracy and regardless of whether Tenant disputes the contents of such statements. If as a result of application of all or any part of the security deposit, the amount secured by the letter of credit shall be less than the required amount, Tenant shall provide Landlord, within ten (10) days after demand, an amendment to the letter of credit or additional letter(s) of credit and/or cash in an amount equal to such deficiency. In the event Tenant is in default and the Lease is terminated, or in the event Tenant seeks protection under applicable bankruptcy laws, Landlord shall have the right to draw down and retain for the proceeds of the letter of credit on account of its damages. In the event of a sale of the land and the building or a leasing of the building or any portion thereof of which the demised premises form a part, Landlord shall transfer the letter of credit or cash security, as the case may be, to the vendee or lessee, and Landlord shall thereupon be released by Tenant from all liability for the return thereof, provided that such transferee acknowledges in writing its receipt of said security. Tenant shall cooperate in causing the letter of credit to be transferred to the vendee or lessee, including, but not limited to, such instruments as may be required by the Issuing Bank. It is agreed that the provisions hereof shall apply to every transfer or assignment made of the letter of credit or cash security to a new owner or underlying lessor as aforesaid. Tenant covenants that it will not assign or encumber, or attempt to assign or encumber, the letter of credit or monies deposited hereunder as security, and that neither Landlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbrance.

4. No Default. Assignor and Assignee jointly and severally represent and warrant that (i) all obligations under the Lease to be performed by Landlord have been fully performed and satisfied, (ii) no circumstance or event exists which with the giving of notice or the passage of time, or both, would constitute a default by Landlord under the Lease, (iii) no claim of offset, counterclaim or deduction to any rent or other sum due or to become due thereunder exists, and (iv) the Lease is a valid and subsisting obligation binding and enforceable against Assignee, as tenant, in accordance with its terms, as modified hereby. Assignor and Assignee jointly and severally represent and warrant that Assignee has acquired and will continue to own all or substantially all of the assets of Assignor, including, but not limited to, all of the right, title and interest in and to any intellectual property utilized in connection therewith. This Agreement shall not release Assignor from any liability under the Lease for the term thereof as the original tenant thereunder.

5. Ratification. Except as hereinabove set forth, all of the terms, covenants and conditions of the Lease shall remain in full force and effect as heretofore written, and the Lease is hereby ratified and confirmed in every respect.

6. Broker. Assignor and Assignee jointly and severally represent and warrant to Landlord that they have had no dealings or communications in connection with this transaction or the negotiation hereof with any broker, agent, finder or like person, and each hereby jointly and severally covenants and agrees to hold harmless, defend and indemnify Landlord and its agents from and against any and all demands, claims, actions, proceedings, judgments, costs, expenses and/or liabilities, including, without limitation, reasonable attorneys’ fee and court costs, suffered or incurred by Landlord and/or its agents, for any compensation, commissions, fees and/or charges claimed by anyone in connection with or arising from this transaction.

7. Governing Law; Paragraph Headings; No Recording. This Agreement shall be governed by the laws of the State of New York. The headings of each paragraph are for convenience only and the provisions of this Agreement are to be construed without reference thereto. This Agreement may not be recorded.

8. Entire Agreement; Modification; Counterparts. This Agreement contains the entire understanding among the parties, and any other prior understandings or agreements of any kind, oral or written, regarding the subject matter hereof are hereby merged in this Agreement. This Agreement cannot be modified except by a writing executed by the party to be charged. This Agreement may be executed in any number of counterparts, and each such counterpart shall be deemed to be an original, and all such counterparts together shall constitute one and the same instrument.

9. Binding Nature. This Agreement, and the terms, covenants, conditions and provisions hereof, including the Landlord’s consent herein, shall not be binding upon the Landlord unless and until (a) Landlord shall have received: (i) four (4) original counterparts of this Agreement duly executed by Assignor and Assignee, (ii) four (4) original counterparts of the Guaranty duly executed by the Guarantor, and (iii) Assignee’s or Assignor’s check in the amount of $$3,000.00 payable to the order of Levy Xxxx Xxxxxxxxxx & Xxxxx LLP for Landlord’s attorneys’ fees, and (b) Landlord shall have delivered to Assignee (and/or its counsel), a fully executed counterpart of this Agreement. If the check fails collection, Landlord, at its option may declare this Agreement null and void, and/or declare a default by under the Lease. Once delivered as aforesaid, this Agreement shall be binding upon the parties and their respective successors and permitted assigns.

[Balance of Page Intentionally Left Blank; Signature Page Follows]

IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as of the day and year set forth above.

Assignor:	IM Ready-Made, LLC

	By:	/s/ Xxxxxx Xxxxxxx
	Name:	Xxxxxx Xxxxxxx
	Title:

Assignee:	Xcel Brands, Inc.

	By:	/s/ Xxxxxx X’Xxxxx
	Name:	Xxxxxx X’Xxxxx
	Title:	Chairman and CEO

Landlord:	Xxxxx Holdings III, LLC

	By:	/s/ Xxxxxx Xxxxxxxx
	Name:	Xxxxxx Xxxxxxxx
	Title:

ACKNOWLEDGMENT FOR ASSIGNOR

STATE OF NEW YORK )

ss.

COUNTY OF NEW YORK )

On the ____ day of September, 2011, before me the undersigned, personally appeared ____________________ personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within agreement and acknowledged to me that he/she/their signature(s) on the instrument, the individual(s), or person upon behalf of which the individual(s) acted, executed the instrument.

Xxxxxxxx Xxxxx Xxxxxxx

Notary

ACKNOWLEDGMENT FOR ASSIGNEE

STATE OF NEW YORK )

ss.

COUNTY OF NEW YORK )

_______________________________

Notary

ACKNOWLEDGMENT FOR ASSIGNOR

STATE OF NEW YORK )

ss.

COUNTY OF NEW YORK )

_______________________________

Notary

ACKNOWLEDGMENT FOR ASSIGNEE

STATE OF NEW YORK )

ss.

COUNTY OF NEW YORK )

On the 27th day of September, 2011, before me the undersigned, personally appeared XXXXXX X’XXXXX personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within agreement and acknowledged to me that he/she/their signature(s) on the instrument, the individual(s), or person upon behalf of which the individual(s) acted, executed the instrument.

Xxxx Xxx Xxxx

Notary

EXHIBIT “A”

(Lease)

GUARANTY

GUARANTY made as of the 29th day of September, 2011, by IM Brands, LLC, a Delaware limited liability company ("Guarantor"), having its principal offices at 000 Xxxxx Xxxxxx, Xxx Xxxx XX.

W I T N E S S E T H

WHEREAS, Guarantor desires to have Xxxxx Holdings III, LLC ("Landlord") execute that certain Assignment and Assumption with Consent (the “Consent Agreement”) relating to the assignment by IM Ready-Made, LLC (“Assignor”) to Xcel Brands, Inc., a Delaware corporation (“Assignee” and “Tenant” for purposes of this Guaranty) and Assignee’s assumption of that certain lease dated as of August 30, 2005, (the "Lease"), between Owner and Assignor, as tenant, covering certain premises (the "Premises") as described in the Lease and located in the building known as 000 Xxxxx Xxxxxx, Xxx Xxxx XX; and

WHEREAS, Owner is unwilling to execute the Consent Agreement without the guaranty of Guarantor upon the terms and conditions hereof; and

WHEREAS, Guarantor has determined that the assignment and assumption of the Lease is in the best interests of the Guarantor, and is willing to give this Guaranty as an inducement for such approval.

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration received and to induce Owner to give such approval, Guarantor does hereby covenant, agree, represent and warrant as follows:

ARTICLE I

REPRESENTATIONS AND WARRANTIES

The Guarantor hereby represents and warrants: (i) that the execution, delivery and performance hereof, the performance of the agreements herein contained, nor the consummation of the transactions herein contemplated, will violate any other agreement to which the Guarantor is subject; (ii) this Guaranty constitutes a valid and binding obligation of the Guarantor enforceable against the Guarantor in accordance with its terms, and (iii) all approvals and consents, if any, required to be obtained to authorize the issuance of this Guaranty have been duly and validly issued and obtained.

ARTICLE II

AGREEMENT TO GUARANTEE

Section 2.1. Obligations Guaranteed. Guarantor hereby irrevocably and unconditionally guarantees to Owner the full and prompt payment when due of all rent, additional rent and other charges, costs, expenses and damages arising under the Lease and the prompt performance, compliance and observance of all of the other terms, covenants, conditions and agreements set forth in the Lease on the part of the Assignor (as prior tenant and not released under the Lease by the Consent Agreement) and Assignee, as Tenant thereunder, to be fulfilled, kept, observed and performed, or in any other agreement between Owner and Tenant, or among Owner, Tenant and Assignor; as well as the full and lien-free completion of all of Assignor’s and Tenant's alterations and improvements to the Premises; as well as the prompt payment of all reasonable attorneys' fees and court costs suffered or incurred by Owner arising out of default by Tenant under the Lease or in connection with the enforcement of this Guaranty and collection of the amounts due hereunder (all of the foregoing being collectively referred to as the "Liabilities"). Any payments required to be made by Guarantor shall be paid upon demand in the lawful money of the United States of America. Guarantor further agrees that this Guaranty constitutes an absolute, unconditional, present and continuing guarantee of payment and not of collection, and waives any right to require that any resort be had by Owner to:

(i)

Owner's rights against any other person including Tenant, or any other guarantor; or

(ii)

any other right or remedy available to Owner by contract, applicable law or otherwise

It is the intent of this Guaranty that Owner shall have resort to Guarantor without resorting to any remedy and without demand to it.

Section 2.2. Obligations Unconditional. The obligations of the Guarantor under this Guaranty shall be joint and several, absolute and unconditional, and shall remain in full force and effect so long as Tenant remains liable with respect to all or any portion of the Lease. An assignment of the Lease or any subletting thereunder shall not release or relieve the undersigned from its liability hereunder. Owner, may, from time to time, without notice to the undersigned: (a) retain or obtain the primary or secondary liability of any party or parties now or hereafter liable, in addition to the undersigned, with respect to any of the Liabilities, (b) release, waive or compromise any liability of any other party or parties primarily or secondarily liable on any of the Liabilities, (c) release or impair any security interest or lien, if any, in all or any property securing any of the Liabilities or any obligation hereunder and permit any substitution or exchange for any such property, and (d) resort to the undersigned for payment of any of the Liabilities, whether or not Owner shall have resorted to any property securing any of the Liabilities or any obligation hereunder or shall have proceeded against any of the undersigned or against Tenant or any other party primarily or secondarily liable on any of the Liabilities. No such action or failure to act by Owner shall affect Guarantor's liability hereunder in any manner whatsoever. Any amount received by Owner or Owner from whatsoever source and applied by it toward the payment of the Liabilities shall be applied in such order of application as Owner may from time to time elect.

The undersigned hereby expressly waives: (a) notice of the acceptance of this Guaranty, (b) notice of the existence, creation, amount, modification, amendment, alteration or extension of the Lease or all or any of the Liabilities, whether or not such notice is required to be given to Tenant under the terms of the Lease, (c) presentment, demand, notice of dishonor, protest, and all other notices whatsoever, (d) any benefit of valuation, appraisement, homestead or other exemption law, now or hereafter in effect in any jurisdiction in which enforcement of this Guaranty is sought, and (e) all diligence in collection, perfection or protection of or realization upon the Liabilities or any thereof, any obligation hereunder, or any security for any of the foregoing.

No delay on the part of Owner in the exercise of any right or remedy shall operate as a waiver thereof, and no final or partial exercise by Owner of any right or remedy shall preclude other or further exercises thereof or the exercises of any other right or remedy.

The validity of this Guaranty and the obligations of the undersigned hereunder shall not be terminated, affected or impaired by reason of any action which any party may take or fail to take against Tenant or by reason of any waiver of, or failure to enforce, any of the rights or remedies reserved to Owner in the Lease, or otherwise, or by reason of the bankruptcy or insolvency of Tenant and whether or not the term of said Lease shall terminate by reason of said bankruptcy or insolvency.

Section 2.3 Waiver of Subrogation. If and so long as Tenant may be in default of any of the obligations under the Lease, and until Owner, without payment or contribution, is relieved of all responsibilities with respect to the Lease and the Liabilities guaranteed hereby, any and all rights and claims of the Guarantor against Tenant or any of its property in connection with claims arising out of any payment made by the Guarantor pursuant to this Guaranty, including but not limited to claims pursuant to rights of subrogation, are hereby waived.

Section 2.4 Preferences, etc. If after receipt of any payment of, or proceeds applied to the payment of, all or any part of the Liabilities guaranteed hereby, Owner is for any reason compelled to surrender such payment or proceeds to any person, because such payment or application of proceeds is invalidated, declared fraudulent, set aside, determined to be void or voidable as a preference, impermissible set-off, or a diversion of trust funds, or for any other reason, then the obligations guaranteed hereby or part thereof intended to be satisfied shall be revived and continue and this Guaranty shall continue in full force as if such payment or proceeds had not been received by Owner and the Guarantor shall be liable to pay to Owner, and hereby does indemnify Owner and hold it harmless for, the amount of such payment or proceeds surrendered. The provisions of this paragraph shall survive the termination of this Guaranty.

ARTICLE III

NOTICE OF SERVICE OF PROCESS PLEADINGS AND OTHER PAPERS

Section 3.1. Service of Process and Notice. All notices to be given to Guarantor hereunder, including, but not limited to, process, pleadings or other papers, shall be deemed sufficiently served for all purposes on the third (3) business day after the same are mailed to Guarantor at the address first set forth above. Notices to Owner shall be sent in the same manner to the address for Guarantor set forth above.

Section 3.2. Consent of Jurisdiction. The Guarantor irrevocably and unconditionally:

(a) agrees that any suit, action or other legal proceeding arising out of this Guaranty may be brought by Owner in the Supreme Court of the State of New York or the United States District Court (Southern District of New York), each as exists in the County of New York, and that such courts shall have in personam jurisdiction of the Guarantor in any such suit, action or other legal proceeding;

(b) consents to the jurisdiction of each such court in any such suit, action or other legal proceeding; and

(c) waives any objection which it may have to the laying of venue of any such suit, action or proceeding in any of such courts.

Guarantor further agrees that it shall not bring any suit, action or other legal proceeding against or otherwise involving the Lease and/or this Guaranty in any court or venue other than the aforesaid courts.

ARTICLE IV

MISCELLANEOUS

Section 4.1 Remedies Not Exclusive. No remedy herein conferred upon or reserved to Owner is intended to be exclusive of any other available remedy given under this Guaranty or hereafter existing at law or in equity. No delay or failure to exercise any right or power accruing upon any default, omission or failure of performance hereunder shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In the event any provision contained in this Guaranty should be breached by the Guarantor and thereafter duly waived by Owner, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other breach hereunder. No waiver, amendment, release or modification of the Guaranty shall be established by conduct, custom, or course of dealing, but solely by an instrument in writing duly executed by Owner and Guarantor.

Section 4.2 Severability. The invalidity or unenforceability of any one or more phrases, sentences, clauses or sections of this Guaranty shall not affect the validity or enforceability of the remaining portions of this Guaranty, or any part thereof.

Section 4.3 Applicable Law. This Guaranty shall be governed by and construed in accordance with the laws of the State of New York without regard to conflicts of laws principles.

Section 4.4 Successors and Assigns. This Guaranty shall be binding upon, and be enforceable against the Guarantor and its successor and assigns, and shall inure to the benefit of Owner and its successors and assigns.

Section 4.5 Entire Agreement. This Guaranty sets forth the entire agreement of Guarantor and Owner and supersedes any and all other understandings (whether oral or written) between them.

IN WITNESS WHEREOF, the Guarantor has executed this Guaranty as of the date first above written.

	IM Brands, LLC

	By:	/s/ Xxxxxx X’Xxxxx

	Print Name:	XXXXXX X’XXXXX
	Print Title:	Chairman and CEO

ACKNOWLEDGMENT

STATE OF NEW YORK )

: ss.:

COUNTY OF NEW YORK )

On the 27th day of September, 2011, before me, the undersigned, personally appeared XXXXXX X’XXXXX, personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument, and acknowledged to me that he executed the same in his capacity, and that by his signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument.

Xxxx Xxx Xxxx

Notary Public

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ASSIGNMENT AND ASSUMPTION, LANDLORD CONSENT

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