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Significant Contracts

12 Months Ended

Dec. 31, 2021

5. Significant Contracts

Qurate Agreements

Through its wholly owned subsidiaries, the Company has direct-to-retail license agreements with Qurate Retail Group (“Qurate”), pursuant to which the Company designs, and Qurate sources and sells, various products under the IsaacMizrahiLIVE brand, the LOGO by Lori Goldstein brand, the Judith Ripka brand, the H by Halston brand, and the Longaberger brand. These agreements include, respectively, the IM Qurate Agreement, the LOGO Qurate Agreement, the Ripka Qurate Agreement, the H Qurate Agreement, and the Longaberger Qurate Agreement (collectively, the “Qurate Agreements”). Qurate owns the rights to all designs produced under the Qurate Agreements, and the Qurate Agreements include the sale of products across various categories through Qurate’s television media (including QVC and HSN) and related internet sites.

Pursuant to the agreements, the Company has granted to Qurate and its affiliates the exclusive, worldwide right to promote the Company’s branded products, and the right to use and publish the related trademarks, service marks, copyrights, designs, logos, and other intellectual property rights owned, used, licensed, and/or developed by the Company, for varying terms as set forth below. The Qurate Agreements include automatic renewal periods as detailed below unless terminated by either party.


	Current Term		Automatic	Xcel Commenced	QVC Product
Agreement	Expiry		Renewal	Brand with QVC	Launch
IM Qurate Agreement	September 30, 2022		one-year period	September 2011	2010
LOGO Qurate Agreement	November 1, 2022		one-year period	April 2021	2009
Ripka Qurate Agreement	March 31, 2022	*	one-year period	April 2014	1999
H Qurate Agreement	December 31, 2022		three-year period	January 2015	2015
Longaberger Qurate Agreement	October 31, 2023		two-year period	November 2019	2019

* On March 31, 2022, the Ripka Qurate Agreement was automatically renewed for a one-year period, and the new term expiry is March 31, 2023.

In connection with the foregoing and during the same periods, Qurate and its subsidiaries have the exclusive, worldwide right to use the names, likenesses, images, voices, and performances of the Company’s spokespersons to promote the respective products. Under the IM Qurate Agreement, IM Brands has also granted to Qurate and its affiliates, during the

same period, exclusive, worldwide rights to promote third-party vendor co-branded products that, in addition to bearing and being marketed in connection with the trademarks and logos of such third-party vendors, also bear or are marketed in connection with the IsaacMizrahiLIVE trademark and related logo.

Under the Qurate Agreements, Qurate is obligated to make payments to the Company on a quarterly basis, based primarily upon a percentage of the net retail sales of the specified branded products. Net retail sales are defined as the aggregate amount of all revenue generated through the sale of the specified branded products by Qurate and its subsidiaries under the Qurate Agreements, net of customer returns, and excluding freight, shipping and handling charges, and sales, use, or other taxes.

Also, under the Qurate Agreements, except for the Longaberger Qurate Agreement, the Company will pay for a period of time a royalty participation fee to Qurate on revenue earned from the sale, license, consignment, or any other form of distribution of any products, bearing, marketed in connection with, or otherwise associated with the specified trademarks and brands. Such royalty participation fees are recorded as a reduction to net licensing revenue.

Net licensing revenue from Qurate totaled $18.8 million and $17.6 million for the Current Year and Prior Year, respectively, representing approximately 50% and 60% of the Company’s total net revenue, respectively. As of December 31, 2021 and 2020, the Company had receivables from Qurate of $3.5 million and $4.5 million, representing approximately 46% and 50% of the Company’s accounts receivable, respectively. The December 31, 2021 and 2020 Qurate receivables did not include any earned revenue accrued but not yet billed as of the respective balance sheet dates.