Exhibit 10.1


 


SEPARATION
AGREEMENT

AND

GENERAL RELEASE OF CLAIMS


 


This
Separation Agreement and General Release of Claims (hereinafter “Agreement”) is entered into by and between Samuel
D. Bernards (hereinafter “Employee”) on the one hand and Purple Innovation, Inc. and its subsidiaries, predecessors,
and affiliates (hereinafter the “Company”) on the other hand. Employee and the Company will collectively be referred
to as the “Parties.”


 


RECITALS


 


A. Purple
Innovation, Inc. is a Delaware company doing business in the State of Utah.


 


B. Employee’s
employment with the Company as Chief Executive Officer will terminate on March 13, 2018 (the “Separation Date’) pursuant
to Employee’s resignation.


 


C. In
exchange for separation pay to which Employee would not otherwise be entitled and other promises by the Company, Employee desires
to settle and compromise any and all possible claims and disputes he has against the Company arising out of their relationship
to date, and to provide for a General Release of any and all such claims.


 


AGREEMENT


 


1. Resignation.
Employee hereby agrees to resign from his position as CEO of the Company and from his position on the Board of Directors,
effective the close of business on Separation Date. Except as provided in this Agreement, all privileges of employment end as
of the Separation Date.


 


2. Separation
Pay/Consideration. If Employee signs this Agreement within twenty-one (21) days of receipt and does not revoke it as set forth
in Section 8, then in exchange for the promises contained in this Agreement, the Company agrees to pay Employee a separation amount
equivalent to six (6) months of his current base salary, less applicable federal and state payroll tax deductions. The payment
will be made in 12 equal monthly installments, with the first payment to be made no later no later than seven (7) business days
after the Effective Date of this Agreement, as defined in Section 8, and will be subject to applicable tax withholdings provided
Employee does not revoke this Agreement and provided he complies with his obligations under this Agreement.


 






     


     


    

 


3. Profit
Interests Units. Employee was granted profits interest units through Purple Team, LLC (“Purple Team”) pursuant
to that certain Profit Interests Award Agreement entered into between Purple Innovation, LLC (“Purple LLC”) (formerly
known as WonderGel, LLC), Purple Team and Employee on December 30, 2016 and that certain Joinder Agreement entered into between
Purple Team and Employee on January 17, 2017 (together, the “Interests Units Agreements”). In connection with the
business combination that closed on February 2, 2018, Purple Team, LLC merged with and into InnoHold LLC (“InnoHold”),
and Employee’s profits interests units were converted into 4,545.49 Class B Common Units of InnoHold. As of the Separation
Date, Employee has 1,609.86 vested Class B Common Units of InnoHold, LLC. Employee shall have the right to exchange his vested
Class B Common Units for shares of Class A Common Stock of the Company pursuant to the terms of that certain Fourth Amended and
Restated Limited Liability Company Agreement of InnoHold LLC, dated February 2, 2018 (the “InnoHold LLC Agreement”).
For so long as Employee holds his vested Class B Common Units, he shall remain a member of and subject to the InnoHold LLC Agreement.


 


4. Acknowledgement.
Employee acknowledges that, prior to Employee’s entry into this Agreement, Employee received all wages and other compensation
due Employee as a result of his employment with Company. Employee acknowledges that but for his entry into this Agreement, he
would not be entitled to the benefit of the payment set forth in Section 1.


 


5. Release
of All Claims. In consideration of the promises and payment described in Section 1, which Employee would otherwise not be
entitled to except for signing this Agreement, Employee does hereby unconditionally, irrevocably and absolutely release and discharge
the Company and any related holding, parent, sister or subsidiary corporations or entities and all of their respective owners,
directors, officers, employees, agents, volunteers, attorneys, insurers, divisions, successors and assigns (“Releasees”)
from any and all loss, liability, claims, demands, causes of action or suits of any type, whether in law and/or in equity, whether
known or unknown, related directly or indirectly, or in any way connected with any transaction, affairs or occurrences between
them to date, including but not limited to Employee’s employment at the Company, the termination of said employment, and
any other conduct by the Company concerning Employee to date. This Agreement specifically applies, without limitation, to any
and all contract or tort claims, claims for wrongful termination and/or violation of public policy, wage claims, and claims arising
under Title VII of the Civil Rights Act of 1991, the Americans with Disabilities Act, the Age Discrimination in Employment (“ADEA”),
the Equal Pay Act, the Fair Labor Standards Act, the Family and Medical Leave Act, the Utah Antidiscrimination Act, and any and
all federal, state or local statutes, regulations or ordinances, including without limitation those governing the employment relationship
and/or discrimination in employment.


 


This
Agreement does not prohibit Employee from reporting possible violations of federal law or regulation to any governmental agency
or entity, including but not limited to the Department of Justice, the Securities and Exchange Commission (“SEC”),
the Congress, and any agency Inspector General, or making other disclosures that are protected under the whistleblower provisions
of federal law or regulation. Nothing in this Agreement requires Employee to seek prior authorization from the Company to make
any such reports or disclosures and Employee does not need and are not required to notify the Company that he has made any such
reports or disclosures. This Agreement is not intended to and does not restrict Employee from seeking or obtaining an SEC whistleblower
award.


 






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6. No
Claims Filed/Waiver of Right to Sue. Employee represents that Employee has not filed any claim, complaint, charge or lawsuit
against Company or any other Releasee with any governmental agency or any state or federal court. Employee agrees that neither
Employee nor any person, organization or any other entity acting on Employee’s behalf will file, charge, claim, sue, participate
in, join or cause or permit to be filed, charged or claimed, any action, claim, charge, grievance, or demand for damages or other
relief (including injunctive, declaratory, monetary or other) against the Releasees with respect to the Claims which are the subject
of this Agreement. Notwithstanding the foregoing, nothing in this Agreement prohibits Employee from filing a charge with the Equal
Opportunity Employment Commission (“EEOC”) or participating in any investigation or proceeding conducted by the EEOC.
Nothing in this Agreement shall be deemed to preclude Employee from challenging the knowing and voluntary nature of his waiver
of ADEA claims, or from challenging any breach of this Agreement.


 


7. Waiver
of Damages. Employee hereby waives any right to recover damages, costs, attorneys’ fees, and any other relief in any
charge, proceeding or action brought against the Releasees by Employee or by any other party on Employee’s behalf, including
without limitation the Equal Employment Opportunity Commission, or other administrative agency, asserting any claims released
by Employee herein. Notwithstanding the foregoing, Employee does not waive rights, if any, Employee may have to unemployment insurance
benefits or workers’ compensation benefits.


 


8. Older
Workers’ Benefit Protection Act/ADEA Claims.


 


a. This
section of the Agreement addresses Employee’s release of claims arising under the ADEA, the federal law involving discrimination
on the basis of age in employment (age 40 and above). This section is provided, in compliance with federal law, including but
not limited to the ADEA and the Older Workers’ Benefit Protection Act of 1990, to ensure that Employee clearly understands
his rights so that any release of age discrimination claims under federal law (the ADEA) is knowing and voluntary on the part
of Employee.


 


b. Employee
represents, acknowledges and agrees that the Company has advised him, in writing through this subparagraph, to discuss this Agreement
with an attorney, and to the extent, if any, that Employee has desired, Employee has done so; that the Company has given Employee
twenty-one (21) days from receipt of this Agreement to review and consider this Agreement before signing it, and Employee understands
that he may use as much of this twenty-one (21) day period as he wishes prior to signing; that no promise, representation, warranty
or agreements not contained herein have been made by or with anyone to cause him to sign this Agreement; that he has read this
Agreement in its entirety, and fully understands and is aware of its meaning, intent, content and legal effect; and that he is
executing this release voluntarily and free of any duress or coercion.


 


c. The
Parties acknowledge that for a period of seven (7) days following the execution of this Agreement, Employee may revoke the ADEA
release portion of the Agreement. If revocation occurs, the Agreement shall not become effective or enforceable. If revocation
does not occur, the Agreement shall become effective and enforceable upon the eighth (8th) day after it has been signed
by Employee (the “Effective Date”).


 






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d. This
Agreement and its release of ADEA claims do not waive rights or claims under ADEA that may arise after the date the Agreement
is executed.


 


e. If
Employee exercises his right to revoke the ADEA release portion of the Agreement, the Company may, at its option, either nullify
this Agreement in its entirety, or keep it in effect in all respects other than as to that portion of his release of claims that
Employee has revoked (except that Employee’s employment will end on the Separation Date). Employee agrees and understands
that if the Company chooses to nullify this Agreement in its entirety, the Company will have no further obligations under this
Agreement.


 


9. Benefits:
Regardless of whether Employee signs this Agreement, Employee will be covered under his current medical, dental and vision
coverage until (11:59 p.m. on the last day of the month following the Separation Date) the end of March 2018. All other employee
benefits will cease immediately. If Employee is enrolled in the Flexible Spending Account(s), and unless Employee is qualified
for and elects continuing coverage under COBRA, he will have 90 days after his termination date to claim qualified reimbursements,
and his ability to use his annual Flex election will end at midnight of his termination date. If Employee is eligible for continuing
medical, dental, vision and flexible health FSA, coverage under COBRA, the Company will provide him with notice of such rights,
and Employee may elect such continuing coverage, at his expense, in accordance with the requirements stated in the notice and
under applicable law.


 


10. Company
Property: Regardless of whether Employee signs this Agreement, all Company property (including property prepared or
obtained by Employee or the Company in the course of or incident to Employee’s employment) including, but not limited to,
laptops, Company credit cards, access cards, documents and records, badges, tangible proprietary information, books, reports,
contracts, lists, computer disks (or other computer-generated or electronic files or data), and all copies thereof, must be turned
in to Casey McGarvey within one (1) calendar day from the Separation Date.


 


11. Confidentiality
of Agreement. Employee agrees that all matters relative to this Agreement shall remain confidential. Employee agrees that
Employee shall not disclose any information concerning this Agreement to any person who is not a party hereto, other than Employee’s
attorneys, tax advisors, or spouse. The Parties acknowledge that Employee may disclose this Agreement and its terms pursuant to
court order, agency directive, or in accordance with law. Employee also agrees to immediately notify the Company of any requests
or demands to disclose any information concerning this Agreement before any such disclosure is made pursuant to court order, agency
directive, or in accordance with law. Employee agrees to advise all persons to whom he discloses this Agreement or its terms,
of his obligation of confidentiality, and, with respect to Employee’s attorneys, tax advisors, and spouse, to extract from
them a promise to be bound by this section.


 






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12. Non-Disparagement.
As a material condition of this Agreement, Employee agrees not to disparage in any way, orally or in writing, any of the Releasees
to any person or entity.


 


13. Cooperation.
Prior to the Separation Date and thereafter, upon reasonable request, Employee agrees to give reasonable assistance and
cooperation willingly in any matter relating to his expertise or experience as an employee or officer of the Company, as the Company
may reasonably request, including but not limited to one or both of (1) providing information concerning, or assistance with,
transitioning of Employee’s duties, investigations, claims, litigations, matters or projects in which Employee was involved
or as to which Employee potentially has knowledge by virtue of his employment with the Company and (2) Employee’s attendance
and truthful testimony where deemed appropriate by the Company, with respect to any investigation or the Company’s defense
or prosecution of any existing or future claims or litigations relating to matters in which Employee was involved or as to which
Employee potentially has knowledge by virtue of his employment with the Company. Employee agrees to comply with any and all litigation
holds provided to him by the Company and to produce all documents related to such litigation holds as requested by the Company.
To the extent permitted by law, the Company will reimburse Employee’s reasonable expenses incurred in connection with any
travel that may be required to fulfill his obligation under this paragraph.


 


14. Entire
Agreement. The Parties further declare and represent that no promise, inducement or agreement not herein expressed has been
made to them, and that this Agreement contains the full and entire agreement between and among the Parties concerning the subject
matter herein, and that the terms of this Agreement are contractual and not a mere recital. Notwithstanding the foregoing, the
Parties acknowledge and agree that the Proprietary Information, Invention Assignment, and Non-Competition Agreement signed by
Employee on February 13 2017 will remain in full force and effect following the execution of this Agreement.


 


15. Knowing
Agreement. Employee has read the foregoing Agreement, knows its contents and fully understands it. Employee further acknowledges
that he has been given the opportunity to consult with his own independent legal counsel with respect to the matters referenced
in this Agreement. Employee acknowledges that he has fully discussed this Agreement with his attorney or has voluntarily chosen
to sign this Agreement without consulting an attorney, fully understanding the consequences of this Agreement.


 


16. Applicable
Law and Venue. The validity, interpretation and performance of this Agreement shall be construed and interpreted according
to the substantive laws of the State of Utah. Any cause of action arising under this Agreement shall be brought in the courts
located in Salt Lake County, Utah and both parties agree to submit to the jurisdiction of those courts.


 


17. Attorneys’
Fees. The Parties also expressly agree that, should any action or proceeding be commenced for breach of this Agreement, the
prevailing party shall be awarded reasonable attorneys’ fees on such proceedings. The Parties further agree that, in the
event Employee commences any sort of legal proceeding or action in any court or before any tribunal alleging a claim or cause
of action that is released, waived, or barred under the release provisions of Sections 3, 4 or 5 of this Agreement, the Company
shall be awarded its attorneys’ fees and costs in defending against such action or proceeding upon dismissal or judgment
of the barred claim or cause of action.


 






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18. Complete
Defense. This Agreement may be pleaded as a full and complete defense against any action, suit or proceeding which may be
prosecuted, instituted or attempted by either party in breach thereof.


 


19. Severability.
If any provision of this Agreement, or part thereof, is held invalid, void or voidable as against public policy or otherwise,
the invalidity shall not affect other provisions, or parts thereof, which may be given effect without the invalid provision or
part. To this extent, the provisions, and parts thereof, of this Agreement are declared to be severable.


 


20. No
Admission of Liability. It is understood that this Agreement is not an admission of any liability by any person, firm, association
or corporation but is in compromise of a disputed claim.


 


21. Authority
to Sign. Each individual signing this Agreement directly and expressly warrants that she or he has been given and has received
and accepted authority to sign and execute the documents on behalf of the party for whom it is indicated she or he has signed,
and further has been expressly given and received and accepted authority to enter into a binding agreement or enter into a binding
agreement on behalf of such party with respect to the matters contained herein and as stated herein.


 


22. No
Assignment of Claims. Employee represents and warrants that he has not previously assigned or transferred, or attempted to
assign or transfer, to any third party, any of the Claims waived and released herein


 


23. Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs,
legal representatives, successors and assigns.


 


24. Counterparts.
This Agreement may be signed in counterparts. A facsimile signature shall have the same force and effect as an original signature.


 


25. Notices.
Employee should provide the required notices and shall return the executed Agreement, and if applicable his revocation of the
Agreement, to the following representative of Purple:


 


Casey
McGarvey


Purple
Innovations, Inc.


123
E 200 N


Alpine,
UT 84004


801-756-260
x258 (office)


casey@purple.com


 






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IN
WITNESS WHEREOF, the undersigned have executed this Agreement on the dates shown below.


 





	Dated:  March 13, 2018	/s/ Samuel D. Bernards
	 	Samuel D. Bernards
	 	 
	Dated:  March 13, 2018	/s/ Terry V. Pearce
	 	Terry V. Pearce, for the Company




 


 


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