Exhibit 10.7

 

FORM OF INTELLECTUAL PROPERTY SECURITY AGREEMENT

 

This Intellectual Property Security Agreement (“Agreement”) is entered into as
of [__________], by and between (i) COLISEUM CAPITAL PARTNERS, L.P. (“CCP”),
BLACKWELL PARTNERS LLC – SERIES A (“Blackwell”) and COLISEUM CO-INVEST DEBT
FUND, L.P. (“CCDF” and, together with CCP and Blackwell, collectively “Coliseum”
or “Lender”) and DELAWARE TRUST COMPANY as collateral agent on behalf of Lender
(in such capacity, the “Collateral Agent”), and (ii) PURPLE INNOVATION, INC., a
Delaware corporation, (“Parent Grantor”) and (iii) PURPLE INNOVATION, LLC, a
Delaware limited liability company (“Borrower Grantor” and, together with Parent
Grantor, the “Grantors” and each, a “Grantor”).

 

RECITALS

 

A. Parent Grantor has executed and delivered a certain Guaranty, dated as of the
date hereof, of the obligations and liabilities of Borrower Grantor to Lender
(as may be amended, restated or otherwise modified from time to time, the
“Guaranty”). Lender has agreed to lend money to Borrower Grantor, pursuant to
that certain Amended and Restated Credit Agreement by and between Borrower
Grantor and Lender, dated as of the date hereof (as may be amended, restated, or
otherwise modified from time to time, the “Credit Agreement”), but only upon the
condition that Parent Grantor shall grant to Lender a security interest in its
Intellectual Property constituting Collateral (collectively, the “Intellectual
Property Collateral”) to secure the obligations of Parent Grantor to Lender.

 

B. Borrower Grantor has executed and delivered the Credit Agreement, but only
upon the condition that Borrower Grantor shall grant to Lender a security
interest in its Intellectual Property Collateral to secure the obligations of
Borrower Grantor to Lender.

 

C. Pursuant to the terms of the Credit Agreement, each Grantor has granted to
the Collateral Agent, on behalf of Lender, a security interest in all of such
Grantor’s right, title and interest, whether presently existing or hereafter
acquired, in, to and under all of the Collateral. Capitalized terms used but not
otherwise defined herein shall have the meanings given them under the Credit
Agreement.

 

NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby
acknowledged, and intending to be legally bound, as collateral security for the
prompt and complete payment when due of the Obligations, each Grantor hereby
represents, warrants, covenants and agrees as follows:

 

AGREEMENT

 

1. Grant of Security Interest. To secure the Obligations, each Grantor grants
and pledges to the Collateral Agent, on behalf of Lender, a security interest in
all of such Grantor’s right, title and interest in, to and under the
Intellectual Property Collateral, including, without limitation, the following:

 

(a) Any and all copyright rights, copyright applications, copyright
registrations and like protections in each work of authorship and derivative
work thereof, whether published or unpublished and whether or not the same also
constitutes a trade secret, now or hereafter existing, created, acquired or
held, including without limitation those set forth on Exhibit A attached hereto
(collectively, the “Copyrights”);

 

 

 

 

(b) Any and all trade secrets, and any and all intellectual property rights in
computer software and computer software products now or hereafter existing,
created, acquired or held;

 

(c) Any and all design rights that may be available to such Grantor now or
hereafter existing, created, acquired or held;

 

(d) All patents, patent applications and like protections including, without
limitation, improvements, divisions, continuations, renewals, reissues,
extensions and continuations-in-part of the same, including without limitation
the patents and patent applications set forth on Exhibit B attached hereto
(collectively, the “Patents”);

 

(e) Any trademark and service mark rights, whether registered or not,
applications to register and registrations of the same and like protections, and
the entire goodwill of the business of such Grantor connected with and
symbolized by such trademarks, including without limitation those set forth on
Exhibit C attached hereto (collectively, the “Trademarks”);

 

(f) All mask works or similar rights available for the protection of
semiconductor chips, now owned or hereafter acquired, including, without
limitation those set forth on Exhibit D attached hereto (collectively, the “Mask
Works”);

 

(g) Any and all claims for damages by way of past, present and future
infringements of any of the rights included above, with the right, but not the
obligation, to sue for and collect such damages for said use or infringement of
the intellectual property rights identified above;

 

(h) All licenses or other rights to use any of the Copyrights, Patents,
Trademarks, or Mask Works and all license fees and royalties arising from such
use to the extent permitted by such license or rights;

 

(i) All amendments, renewals and extensions of any of the Copyrights,
Trademarks, Patents, or Mask Works; and

 

(j) All proceeds and products of the foregoing, including without limitation all
payments under insurance or any indemnity or warranty payable in respect of any
of the foregoing.

 

Notwithstanding the foregoing, the Intellectual Property Collateral does not
include (a) U.S. intent-to-use trademark application or “intent-to-use” service
mark application before the filing of a “Statement of Use” or an “Amendment to
Allege Use” with respect thereto with the United States Patent and Trademark
Office, to the extent that and during the period in which the grant of a
security interest therein would impair the validity or enforceability of, or
render void or voidable or result in the cancellation of any of any Grantor’s
right, title, or interest therein of any such trademark or service mark
application under applicable federal law and (b) rights held under a permit,
license or contract that are not assignable by their terms without the consent
of the licensor, issuer or contract counterparty thereof (but only to the extent
such restriction on assignment is enforceable under Applicable Law, and upon the
termination of such restriction, such rights shall immediately become Collateral
without any action by Borrower, Lender or the Collateral Agent, on behalf of
Lender).

 

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2. Recordation. Each Grantor authorizes the Commissioner for Patents, the
Commissioner for Trademarks and the Register of Copyrights and any other
government officials to record and register this Agreement upon request by
Lender, or Collateral Agent, on behalf of Lender.

 

3. Loan Documents. This Agreement has been entered into pursuant to and in
conjunction with the Credit Agreement, which is hereby incorporated by
reference. The provisions of the Credit Agreement shall supersede and control
over any conflicting or inconsistent provision herein. The rights and remedies
of Lender, or Collateral Agent on behalf of Lender, with respect to the
Intellectual Property Collateral are as provided by the Credit Agreement and
related documents, and nothing in this Agreement shall be deemed to limit such
rights and remedies.

 

4. Execution in Counterparts. This Agreement may be executed in counterparts
(and by different parties hereto in different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. Delivery of an executed counterpart of a signature page to this
Agreement by facsimile or in electronic (i.e., “pdf” or “tif” format) shall be
effective as delivery of a manually executed counterpart of this Agreement.

 

5. Successors and Assigns. This Agreement will be binding on and shall inure to
the benefit of the parties hereto and their respective successors and assigns.

 

6. Governing Law. This Agreement and any claim, controversy, dispute or cause of
action (whether in contract or tort or otherwise) based upon, arising out of or
relating to this Agreement and the transactions contemplated hereby and thereby
shall be governed by, and construed in accordance with, the laws of the United
States and the State of New York, without giving effect to any choice or
conflict of law provision or rule (whether of the State of New York or any other
jurisdiction).

 

[Signature page follows]

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
by its officers thereunto duly authorized as of the first date written above.

 

  GRANTORS:       PURPLE INNOVATION, INC.       By:     Name:   Title:      
PURPLE INNOVATION, LLC       By:                                        Name:  
Title:

 

[Signature Page to Intellectual Property Security Agreement]

 

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  LENDER:       COLISEUM CAPITAL PARTNERS, L.P.   By: Coliseum Capital, LLC, its
general partner       By:                                        Name:   Title:
      BLACKWELL PARTNERS LLC – SERIES A   By: Coliseum Capital Management, LLC,
its attorney-in-fact       By:     Name:   Title:       COLISEUM CO-INVEST DEBT
FUND, L.P.   By: Coliseum Capital, LLC, its general partner       By:     Name:
  Title:       COLLATERAL AGENT:       DELAWARE TRUST COMPANY       By:    
Name:   Title:

 

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