Document:

Exhibit
10.1

 

EXCHANGE
AGREEMENT

 

This
EXCHANGE AGREEMENT (this “Agreement”), dated as of February 2, 2018, is entered into by and among Purple Innovation,
Inc., a Delaware corporation (the “Corporation”), Purple Innovation, LLC, a Delaware limited liability company
(the “Company”), InnoHold, LLC, a Delaware limited liability company and a Class B Holder (as defined below)
(“InnoHold”) and any other Class B Holders that may from time to time become parties hereto.

 

WHEREAS,
the parties hereto desire to provide for the exchange of Class B Units and Class B Stock for shares of Class A Stock (as such
terms are defined below) on the terms and subject to the conditions set forth herein;

 

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

 

Article
I

DEFINITIONS

 

Section
1.1. Definitions. The following capitalized terms shall have the meanings specified in this Section 1.1. Other terms
are defined in the text of this Agreement, and those terms shall have the meanings respectively ascribed to them therein.

 

“Applicable
Law” means, with respect to any Person, any federal, state or local law (statutory, common or otherwise), constitution,
treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement
enacted, adopted, promulgated or applied by a governmental authority or regulatory agency that is binding upon or applicable to
such Person or its assets, as amended unless expressly specified otherwise.

 

“Board”
means the board of directors of the Corporation.

 

“Business
Day” has the meaning set forth in the LLC Agreement.

 

“Cash
Exchange Payment” means an amount in immediately available funds in U.S. dollars equal to the product of (a) the number
of Class B Paired Securities Exchanged, multiplied by (b) the then-applicable Exchange Rate multiplied by (c) the average of the
daily VWAP of a share of Class A Common Stock for the 10 Trading Days immediately prior to the date of delivery of the relevant
Exchange Notice.

 

“Class
A Stock” has the meaning set forth in the LLC Agreement.

 

“Class
A Unit” has the meaning set forth in the LLC Agreement.

 

“Class
B Paired Security” shall mean one Class B Unit and one share of Class B Stock; for the avoidance of doubt, the combination
of one Class B Unit and one share of Class B Stock shall be considered one Class B Paired Security for purposes of this Agreement,
and no issuance of a share of Class A Stock pursuant to an Exchange shall be permitted hereunder unless each Class B Unit and
share of Class B Stock comprising a Class B Paired Security is transferred, in tandem, to the Corporation.

 

“Class
B Holder” has the meaning set forth in the LLC Agreement.

 

“Class
B Stock” has the meaning set forth in the LLC Agreement.

 

    	 	 	 

     

    

 

“Class
B Unit” has the meaning set forth in the LLC Agreement.

 

“Closing
Price” means the last sale price of the Class A Stock for any applicable trading day.

 

“Code”
means the Internal Revenue Code of 1986, as amended.

 

“Common
Stock” means the Class A Stock and the Class B Stock.

 

“Exchange”
means the exchange of Class B Paired Securities for Class A Stock, on the terms and conditions set forth herein, on any Exchange
Date.

 

“Exchange
Date” means, subject to Section 2.1(a)(ii), the date that is specified by a Class B Holder in its Exchange Notice.

 

“Exchange
Act” means the Securities Exchange Act of 1934, as amended.

 

“Exchange
Rate” means the number of shares of Class A Stock for which one Class B Paired Security may be exchanged. On the date
of this Agreement, the Exchange Rate shall be one (1), subject to adjustment pursuant to Section 2.2.

 

“Fair
Market Value” means the Closing Price of one (1) share of Class A Stock on the Business Day prior to the measurement
date; provided, that if the Class A Stock is listed on any domestic securities exchange, the term “Business Day”
as used in this sentence means any Business Day on which such exchange is open for trading.

 

“Fundamental
Transaction” has the meaning set forth in Section 2.1(b).

 

“LLC
Agreement” means the Second Amended and Restated Limited Liability Company Agreement of the Company, dated as of the
date hereof, as the same may be further amended or restated from time to time.

 

“Lock-Up
Agreement” means that certain Lock-Up Agreement by and among the Corporation, InnoHold and certain other parties thereto
of even date herewith.

 

“Lock-Up
Period” has the meaning set forth in the Lock-Up Agreement.

 

“Member”
has the meaning set forth in the LLC Agreement.

 

“Month”
means, unless the context requires otherwise, a calendar month.

 

“Person”
means and includes any individual and any legal entity, including a corporation, partnership, association, limited liability company,
trust, joint stock company or estate.

 

“Registration
Rights Agreement” means that certain Registration Rights Agreement, dated as of the date hereof, by and among the Corporation
and each other party thereto, as amended from time to time.

 

“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.

 

“Subsidiary”
has the meaning given to such term in the LLC Agreement.

 

“Tax
Receivable Agreement” means that certain Tax Receivable Agreement, dated on or about the date hereof, among the Corporation,
the Company and each other party thereto, as amended from time to time.

 

“Trading
Day” means a day on which the NASDAQ Capital Market or such other principal United States securities exchange on which
the shares of Class A Stock are listed or admitted to trading is open for the transaction of business (unless such trading shall
have been suspended for the entire day), or if the shares of Class A Stock are not listed or admitted to trading on such an exchange,
on the automated quotation system on which the shares of Class A Stock are then authorized for quotation.

 

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“Units”
has the meaning set forth in the LLC Agreement.

 

“VWAP”
means the daily per share volume-weighted average price of the Class A Stock on the principal U.S. securities exchange or automated
or electronic quotation system on which Class A Stock trades, as displayed under the heading Bloomberg PRPL on the Bloomberg page
designated for the Class A Stock (or its equivalent successor if such page is not available) in respect of the period from the
open of trading on such day until the close of trading on such day (or if such volume-weighted average price is unavailable, (a)
the per share volume-weighted average price of such Class A Stock on such day (determined without regard to afterhours trading
or any other trading outside the regular trading session or trading hours), or (b) if such determination is not feasible, the
market price per share of Class A Stock, in either case as determined by a nationally recognized independent investment banking
firm retained in good faith for this purpose by the Company).

 

Article
II

EXCHANGES

 

Section
2.1. Exchange of Class B Paired Securities for Class A Stock.

 

(a) Monthly
Elective Exchanges.

 

(i) Subject
to Section 2.1(c), at any time following the expiration of the Lock-Up Period, and subject to Section 2.1(g) and
the adjustment as provided in this Agreement, each Class B Holder shall be entitled on any Exchange Date to surrender all or a
portion of the Class B Paired Securities held by such Class B Holder to the Company (or, at the option of the Corporation, directly
to the Corporation) in exchange for, at the option of the Corporation (acting by a majority of the disinterested members of the
Board), either (A) the delivery by the Corporation to the exchanging Class B Holder of a number of shares of Class A Stock that
is equal to the product of the number of Class B Paired Securities surrendered multiplied by the Exchange Rate (the “Exchange
Shares”), or (B) a Cash Exchange Payment in accordance with the instructions provided in the Exchange Notice; provided,
however, that Class B Holder may exchange no less than the lesser of (A) the number of Class B Paired Securities held by Class
B Holder and (B) One Thousand (1,000) Class B Paired Securities in any one Exchange.

 

(ii)
A Class B Holder shall exercise its right to exchange Class B Paired Securities pursuant to this Section 2.1(a) by
delivering to the Company, with a contemporaneous copy delivered to the Corporation, in each case during normal business hours
at the principal executive offices of the Company and the Corporation, respectively, (A) a written election of exchange in respect
of the Class B Paired Securities to be exchanged substantially in the form of Exhibit A hereto (an “Exchange
Notice”), at least three Business Days prior to the Exchange Date specified by such Class B Holder in such Exchange
Notice or within such shorter period of time as may be agreed upon by the Corporation and the exchanging Class B Holder, duly
executed by such Class B Holder; (B) any certificates representing such Class B Paired Securities on the Exchange Date, together
with a written assignment and acceptance agreement with respect to such Class B Paired Securities, in a form reasonably acceptable
to the Corporation; and (C) if the Corporation or the Company requires the delivery of the certification contemplated by Section
2.4(b), either (i) such certification or (ii) written notice from such Class B Holder that it is unable to provide such certification
on the Exchange Date.

 

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(iii) Upon
a Class B Holder exercising its right to an Exchange, the Corporation and the Company shall take such actions as may be required
to ensure that such Class B Holder receives the shares of Class A Stock that such exchanging Class B Holder is entitled to
receive in connection with such Exchange pursuant to this Section 2.1(a). Without limiting the foregoing, in the event
of an Exchange, (A) the Corporation shall be deemed to have transferred the Class A Stock to be delivered to the exchanging Class
B Holder to the Company and the Company shall issue to the Corporation a number of Class A Units in the Company equal to the number
of Class B Paired Securities exchanged by the Class B Holder and (B) the Company shall be deemed to have transferred such
Class A Stock to the exchanging Class B Holder in exchange for the Class B Paired Securities surrendered by such Class B Holder
in the Exchange. If an exchanging Class B Holder receives the shares of Class A Stock that it is entitled to receive in connection
with an Exchange pursuant to this Section 2.1(a) directly from the Corporation, the Class B Holder shall have no further
right to receive shares of Class A Stock from the Company in connection with that Exchange, and the Corporation and the Company
shall be deemed to have satisfied their obligations under the first sentence of this Section 2.1(a)(iii). On the Exchange
Date, all rights of the exchanging Class B Holder as a holder of the Class B Paired Securities that are subject to the Exchange
shall cease, and such Class B Holder shall be treated for all purposes as having become the record holder of any shares of Class
A Stock to be received by the exchanging Class B Holder in respect of such Exchange.

 

(b) Effect
of Fundamental Transactions on Exchanges. Subject to Section 2.1(c), below, in the event of any merger, acquisition,
reorganization, consolidation, or liquidation of the Corporation involving a payment or distribution of cash, securities or other
assets to the holders of Class A Stock or any reclassification or other similar transaction as a result of which the shares of
Class A Stock are converted into, among other things, another security or securities (a “Fundamental Transaction”),
the Class B Units and the Class B Stock shall remain outstanding and the exchange provisions of this Agreement shall thereafter
permit the exchange of Class B Paired Securities for the amount of such cash, securities or other assets which a Class B Holder
would have received had he, she or it made an exchange for Class A Stock immediately prior to such Fundamental Transaction, regardless
of whether such exchange would actually have been permitted at such time and taking into account any adjustment as a result of
any division or subdivision (by any split, distribution or dividend, reclassification, reorganization, recapitalization or otherwise)
or combination or consolidation (by reverse split, reclassification, recapitalization or otherwise) of such security, securities
or other property that occurs after the effective time of such merger, acquisition, consolidation, reclassification, reorganization,
recapitalization or other similar transaction. For the avoidance of doubt, if there is any reclassification, reorganization, recapitalization
or other similar transaction in which the Class A Stock is converted or changed into another security, securities or other property,
this Agreement shall continue to be applicable, mutatis mutandis, with respect to such security, securities or other property.

 

(c) Participation
in Fundamental Transactions. Notwithstanding Section 2.1(b), the Corporation and the Company shall use their commercially
reasonable efforts to expeditiously and in good faith provide the Class B Holders with sufficient notice of any proposed
Fundamental Transaction so that any Class B Holder who elects in writing no later than 10 days prior to the proposed date of closing
of such Fundamental Transaction may participate in any Fundamental Transaction involving the Class A Stock, shall not be required
to comply with the requirements of Section 2.1(a) and, to facilitate participation in any such Fundamental Transaction and to
adopt reasonable modifications (following good faith consultation with such electing Class B Holder) to the exchange procedures
set forth in this Agreement so that any exercise required in respect thereof shall be effective only upon, and shall be conditional
upon, the closing of such Fundamental Transaction. Any exchange by a Class B Holder in connection with a Fundamental Transaction
shall not be subject to the timing requirements of Section 2.1(a), including without limitation that the Class B Holder
may elect to make the exchange on a date other than the Exchange Date and shall not be subject to notice requirements of Section
2.1(a)(ii). Failure of any Class B Holder to provide notice under this Section 2.1(c) shall not disqualify such Class
B Holder from participating in any Fundamental Transaction or from rights under Section 2.1(b).

 

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(d) Issuance
of Class A Stock or Cash Exchange Payment. As promptly as practicable following satisfaction of a Class B Holder’s obligations
under Section 2.1(a)(ii), and in any event no later than two (2) Business Days after such obligations are satisfied, the
Corporation or the Company, as applicable, shall (A) deliver or cause to be delivered to such Class B Holder, at the address set
forth on such Class B Holder’s signature page to the LLC Agreement (or at such other address as such party may designate
to the Corporation), the number of shares of Class A Stock deliverable to such Class B Holder upon such Exchange, registered
in the name of the relevant exchanging Class B Holder, subject to the Class B Holder’s execution of any letter of transmittal
or other document required to be executed by the holders of Class A Stock, or (B) wire the Cash Exchange Payment to the bank account
specified by the Class B Holder on the Exchange Notice. To the extent the Class A Stock is settled through the facilities of The
Depository Trust Company, the Corporation or the Company, as applicable, will upon the written instruction of an exchanging Class
B Holder, deliver the shares of Class A Stock deliverable to such exchanging Class B Holder, through the facilities of The Depository
Trust Company, to the account of the participant of The Depository Trust Company designated by such exchanging Class B Holder
in the Exchange Notice. Notwithstanding anything to the contrary in this Agreement, no fractional shares of Class A Stock shall
be issued as a result of any Exchange. In lieu of any fractional share of Class A Stock to which a Class B Holder would otherwise
be entitled in any Exchange, the Company or the Corporation, as applicable, shall pay to such Class B Holder cash equal to such
fraction multiplied by the Fair Market Value as of the Exchange Date.

 

(e) Expenses.
The Corporation, the Company, and each exchanging Class B Holder shall bear its own expenses in connection with the consummation
of any Exchange, whether or not any such Exchange is ultimately consummated, except that the Company shall bear any transfer taxes,
stamp taxes or duties, or other similar taxes as well as any other expenses incurred by the Corporation in connection with, or
arising by reason of, any Exchange; provided, however, that if any shares of Class A Stock are to be delivered in
a name other than that of the Class B Holder that requested the Exchange, then such Class B Holder or the Person in whose name
such shares are to be delivered shall pay to the Company the amount of any transfer taxes, stamp taxes or duties, or other similar
taxes in connection with, or arising by reason of, such Exchange or shall establish to the reasonable satisfaction of the Company
that such tax has been paid or is not payable.

 

(f) Publicly
Traded Partnership. Each of the Corporation and the Company covenants and agrees that neither shall take or cause or permit
to be taken any action that would cause the Units in the Company to not meet the requirements of Treasury Regulation Section 1.7704-1(h)
applicable to partnership interests that are not readily tradable on a secondary market. Notwithstanding anything to the contrary
herein, if the Board, after consultation with its outside legal counsel and tax advisor, shall determine in good faith that, despite
adherence by the Corporation and the Company to the foregoing, additional restrictions must be imposed on Exchanges in order for
the Company not to be treated as a “publicly traded partnership” under Section 7704 of the Code, the Corporation or
the Company, as applicable, may impose such restrictions on Exchanges, as the Corporation or the Company, as applicable, may reasonably
determine to be necessary or advisable.

 

(g) Other
Prohibitions on Exchange. For the avoidance of doubt, and notwithstanding anything to the contrary herein, a Class B Holder
shall not be entitled to exchange Class B Paired Securities to the extent that the Corporation or the Company reasonably determines
in good faith that the Exchange (i) would be prohibited by any Applicable Law (including the unavailability of any requisite registration
statement filed under the Securities Act or any exemption from the registration requirements thereunder) or (ii) would not be
permitted under any other agreement with the Corporation, its subsidiaries, the Company or the Subsidiaries to which such Class
B Holder is a party (including the LLC Agreement). For the avoidance of doubt, no Exchange shall be deemed to be prohibited by
any Applicable Law pertaining to the registration of securities if such securities have been so registered or if any exemption
from such registration requirements is reasonably available, and the parties hereto believe that there is currently no law, regulation,
injunction, order or decree of any nature and acknowledge that there is no agreement of the type referred to in clause (ii) of
the preceding sentence, that would, in either case, restrict the ability of a Class B Holder to exchange Class B Paired Securities.

 

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Section
2.2. Adjustments.

 

(a) The
Exchange Rate shall be adjusted accordingly if there is: (i) any subdivision (by any unit split, unit distribution, reclassification,
reorganization, recapitalization or otherwise) or combination (by reverse unit split, reclassification, reorganization, recapitalization
or otherwise) of the Class B Paired Securities that is not accompanied by an identical subdivision or combination of the Class
A Stock; or (ii) any subdivision (by any stock split, stock dividend or distribution, reclassification, reorganization, recapitalization
or otherwise) or combination (by reverse stock split, reclassification, reorganization, recapitalization or otherwise) of the
Class A Stock that is not accompanied by an identical subdivision or combination of the Class B Paired Securities. For example,
if there is a 2 for 1 stock split of Class A Stock and no corresponding split with respect to the Class B Paired Securities, the
Exchange Rate would be adjusted to be 2. To the extent not fully reflected in an adjustment to the Exchange Rate, if there is
any reclassification, reorganization, recapitalization or other similar transaction in which the Class A Stock are converted or
changed into another security, securities or other property, then upon any subsequent Exchange, an exchanging Class B Holder shall
be entitled to receive the amount of such security, securities or other property that such exchanging Class B Holder would have
received if such Exchange had occurred immediately prior to the effective date of such reclassification, reorganization, recapitalization
or other similar transaction, taking into account any adjustment as a result of any subdivision (by any split, distribution or
dividend, reclassification, reorganization, recapitalization or otherwise) or combination (by reverse split, reclassification,
recapitalization or otherwise) of such security, securities or other property that occurs after the effective time of such reclassification,
reorganization, recapitalization or other similar transaction. For the avoidance of doubt, if there is any reclassification, reorganization,
recapitalization or other similar transaction in which the Class A Stock are converted or changed into another security, securities
or other property, this Section 2.2 shall continue to be applicable, mutatis mutandis, with respect to such security
or other property.

 

(b) Each
time that the Corporation acquires Class B Paired Securities other than in connection with a corresponding issuance by the Corporation
of the same number of shares of Class A Stock (whether as a result of an Exchange or otherwise) or a concurrent recapitalization
of the Company that causes the number of Class A Units held by the Corporation to equal the number of shares of Class A Stock
outstanding immediately following such purchase of Class B Paired Securities (subject, in any such case, to prior applications
of this Section 2.2(b)), the Exchange Rate shall be adjusted immediately following such transaction, without any further
action by the Corporation or any Class B Holder, as follows: the Exchange Rate shall first be set at a ratio, the numerator of
which shall be the number of shares of Class A Stock of the Corporation then-outstanding and the denominator of which shall be
the sum of the number of Class A Units plus Class B Units then-owned by the Corporation, in each case after giving effect to the
transaction that gave rise to such Exchange Rate adjustment and prior to giving effect to any event that has occurred which would
give rise to an adjustment to the Exchange Rate pursuant to Section 2.2(a), and then that ratio shall be adjusted as set
forth in Section 2.2(a) for each event (if any) giving rise to such Section 2.2(a) adjustment assuming that such
event had occurred after the transaction that gave rise to the Exchange Ratio adjustment being made hereby.

 

Section
2.3. Class A Stock to be Issued.

 

(a) Subject
to the terms of the Registration Rights Agreement, the Corporation and the Company covenant and agree to deliver shares of Class
A Stock that have been registered under the Securities Act with respect to any Exchange to the extent that a registration statement
is effective and available for such shares. In the event that any Exchange in accordance with this Agreement is to be effected
at a time when any such registration has not become effective or otherwise is unavailable, the Corporation shall use its commercially
reasonable efforts to promptly facilitate such Exchange pursuant to any reasonably available exemption from such registration
requirements. The Corporation shall list the Class A Stock required to be delivered upon Exchange prior to such delivery on each
national securities exchange or inter-dealer quotation system on which the outstanding Class A Stock may be listed or traded at
the time of such delivery. Nothing contained herein shall be construed to preclude the Corporation or the Company from satisfying
their obligations in respect of the exchange of the Class B Paired Securities by delivery of Class A Stock which are unregistered
under the Securities Act or held in the treasury of the Corporation or the Company or any of their subsidiaries. The Corporation
shall not be required to comply with this Section 2.3(a) in an Exchange in connection with a Fundamental Transaction.

 

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(b) The
Corporation reserves the right to cause certificates evidencing such Class A Stock to be imprinted with legends as to restrictions
on transfer that it may deem necessary or appropriate, including legends as to applicable U.S. federal or state securities laws
or other legal or contractual restrictions, and may require any Class B Holder to which Class A Stock are to be issued to
agree in writing (i) that such shares of Class A Stock will not be transferred except in compliance with such restrictions and
(ii) to such other matters as the Corporation may deem reasonably necessary or appropriate in light of applicable law and existing
agreements.

 

(c) The
Corporation shall at all times reserve and keep available out of its authorized but unissued Class A Stock, solely for the purpose
of issuance upon an Exchange, such number of shares of Class A Stock as shall be deliverable upon any such Exchange; provided
that nothing contained herein shall be construed to preclude the Corporation from satisfying its obligations in respect of
any such Exchange by delivery of purchased shares of Class A Stock (which may or may not be held in the treasury of the Corporation
or any subsidiary thereof).

 

(d) Prior
to the date of this Agreement, the Corporation has taken all such steps as may be required to cause to qualify for exemption under
Rule 16b-3(d) or (e), as applicable, under the Exchange Act, and be exempt for purposes of Section 16(b) under the Exchange Act,
any acquisitions or dispositions of equity securities of the Corporation (including derivative securities with respect thereto)
and any securities which may be deemed to be equity securities or derivative securities of the Corporation for such purposes that
result from the transactions contemplated by this Agreement, by each director or officer of the Corporation who may reasonably
be expected to be subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to the Corporation upon
the registration of any class of equity security of the Corporation pursuant to Section 12 of the Exchange Act (with the authorizing
resolutions specifying the name of each such officer or director whose acquisition or disposition of securities is to be exempted
and the number of securities that may be acquired and disposed of by each such Person pursuant to this Agreement).

 

(e) The
Corporation covenants that all Class A Stock issued upon an Exchange will, upon issuance, be validly issued, fully paid and non-assessable
and not subject to any preemptive right of stockholders of the Corporation or to any right of first refusal or other right in
favor of any Person.

 

Section
2.4. Withholding; Certification of Non-Foreign Status.

 

(a) If
the Corporation or the Company shall be required to withhold any amounts by reason of any federal, state, local or foreign tax
rules or regulations in respect of any Exchange, the Corporation or the Company, as the case may be, shall be entitled to take
such action as it deems appropriate in order to ensure compliance with such withholding requirements, including at its option
withholding shares of Class A Stock with a Fair Market Value equal to the minimum amount of any taxes which the Corporation or
the Company, as the case may be, may be required to withhold with respect to such Exchange, or requiring as a condition of any
Exchange that the exchanging Unit holder tender to the Company an amount equal to the minimum amount of any taxes which the Corporation
or the Company, as the case may be, may be required to withhold with respect to such Exchange. To the extent that amounts are
(or property is) so withheld by the Company or Corporation and paid over to the appropriate taxing authority, such withheld amounts
(or property) shall be treated for all purposes of this Agreement as having been paid (or delivered) to the applicable Class B
Holder. The parties anticipate that, on the basis of current law, no federal income tax withholding would be required with respect
to an Exchange by any Class B Holder who is a “United States person” within the meaning of Section 7701(a)(30) of
the Code and who has properly certified that such holder is not subject to federal backup withholding.

 

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(b) Notwithstanding
anything to the contrary herein, each of the Corporation and the Company may, in the reasonable exercise of its discretion, require
as a condition to the effectiveness of an Exchange that an exchanging Class B Holder deliver to the Corporation or the Company,
as the case may be, a certification of non-foreign status in accordance with Treasury Regulation Section 1.1445-2(b) or to provide
any other applicable withholding certificate. In the event the Corporation or the Company has required delivery of such certification
but an exchanging Class B Holder is unable to comply, the Corporation or the Company, as the case may be, shall nevertheless deliver
or cause to be delivered to the exchanging Class B Holder the Class A Stock in accordance with Section 2.1, but subject
to withholding as provided in Section 2.4(a).

 

Section
2.5. Distributions. No Exchange shall impair the right of the Class B Holder effecting an Exchange pursuant to this Agreement
to receive any distributions payable on the Class B Units so exchanged in respect of a record date that occurs prior to the Exchange
Date for such Exchange. No adjustments in respect of distributions on any Class B Unit will be made on the Exchange of any Class
B Paired Securities, and if the Exchange Date with respect to a Class B Unit occurs after the record date for the payment of a
distribution on Class B Units but before the date of the payment, then the registered Class B Holder of the Class B Unit at the
close of business on the record date will be entitled to receive the distribution payable on the Class B Unit on the payment date
notwithstanding the Exchange of the Class B Units, and, for the avoidance of doubt, no Class B Holder effecting an Exchange pursuant
to this Agreement shall have the right to receive any distributions (including tax distributions) on any exchanged Class B
Unit with a record date that occurs from and after any Exchange Date. No Class B Holder effecting an Exchange pursuant to this
Agreement shall be entitled to receive, in respect of a single record date, both (i) distributions on the Class B Units exchanged
by such Class B Holder and (ii) any dividends payable on shares of Class A Stock received by such Class B Holder in such Exchange.

 

Article
III

REPRESENTATIONS AND WARRANTIES

 

Section
3.1. Representations and Warranties of the Class B Holders. Each Class B Holder, severally and not jointly, represents
and warrants that, as of the date hereof and as of each Exchange Date upon which a Member is issued Class A Stock, (i) if it is
not a natural person, that it is duly incorporated or formed and, the extent such concept exists in its jurisdiction of organization,
is in good standing under the laws of such jurisdiction, (ii) it has all requisite legal capacity and authority to enter into
and perform this Agreement and to consummate the transactions contemplated hereby, (iii) if it is not a natural person, the execution
and delivery of this Agreement by it of the transactions contemplated hereby have been duly authorized by all necessary corporate
or other entity action on the part of such Class B Holder, (iv) this Agreement constitutes a legal, valid and binding obligation
of such Class B Holder enforceable against it in accordance with its terms, except as enforcement may be limited by equitable
principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’
rights generally, (v) the execution, delivery and performance of this Agreement by such Class B Holder and the consummation by
such Class B Holder of the transactions contemplated hereby will not (A) if it is not a natural person, result in a violation
of the certificate of incorporation, bylaws, trust agreement or other organizational documents of such Class B Holder or (B) conflict
with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which
such Class B Holder is a party, or (C) result in a violation of any law, rule, regulation, order, judgment or decree applicable
such Class B Holder, except with respect to clauses (B) or (C) for any conflicts, defaults, accelerations, terminations, cancellations
or violations, that would not in any material respect result in the unenforceability against such Class B Holder of this Agreement,
(vi) it is acquiring the Class A Stock issued in accordance with this Agreement for its own account with the present intention
of holding such Class A Stock for purposes of investment, and that it has no intention of selling Class A Stock in a public distribution
in violation of any federal or state securities laws, (vii) it is a sophisticated party for purposes of applicable federal and
state securities laws and regulations or has employed the services of an adequate purchaser representative for purposes of applicable
federal and state securities laws and regulations, (viii) such Class B Holder has knowledge and experience in financial and
business matters such that such Class B Holder is capable of evaluating the merits and risks of an investment in the Corporation,
(ix) it is able to bear the economic risks of an investment in the Class A Stock and could afford a complete loss of such investment
and (x) if the Class B Holder is a partnership, “S corporation”, “grantor trust” or other flow-through
entity, the interest of such Class B Holder in the Company does not represent “substantially all” of the value of
its assets, and it was not a “principal purpose” of such Class B Holder to avoid the “100 partner” limitation
applicable under section 7704 of the Code.

 

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Section
3.2. Representations and Warranties of the Corporation and the Company. Each of the Corporation and the Company, severally
and not jointly, represents and warrants that, as of the date hereof (i) it is, and as of the date of an applicable Exchange it
will be, duly incorporated or formed and, to the extent such concept exists in its jurisdiction of organization, in good standing
under the laws of such jurisdiction, (ii) it has, and as of the date of an applicable Exchange it will have, all requisite legal
capacity and authority to enter into and perform this Agreement and to consummate the transactions contemplated hereby, (iii)
the execution and delivery of this Agreement by it and consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate or other entity action on the part of such party, (iv) this Agreement constitutes, and as of the date
of an applicable Exchange it will constitute, a legal, valid and binding obligation of such party enforceable against it in accordance
with its terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium,
or similar laws relating to or limiting creditors’ rights generally, and (v) the execution, delivery and performance of
this Agreement by such party and the consummation by such party of the transactions contemplated hereby will not (A) result in
a violation of the certificate of incorporation, bylaws, trust agreement or other organizational documents of such party or (B)
conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument
to which such party is a party, or (C) result in a violation of any law, rule, regulation, order, judgment or decree applicable
to such party, except with respect to clauses (B) or (C) for any conflicts, defaults, accelerations, terminations, cancellations
or violations, that would not in any material respect result in the unenforceability against such party of this Agreement.

 

Article
IV

MISCELLANEOUS PROVISIONS

 

Section
4.1. Additional Class B Holders. To the extent a Class B Holder validly transfers any or all of such holder’s Class
B Paired Securities to another Person in a transaction in accordance with, and not in contravention of, the LLC Agreement or the
Registration Rights Agreement, then such transferee (each, a “Permitted Transferee”) shall have the right to
execute and deliver a joinder to this Agreement in a form provided by the Corporation, whereupon such Permitted Transferee shall
become a Class B Holder hereunder. If the Company issues any Class B Units following the date hereof, in accordance with,
and not in contravention of, the LLC Agreement, then any recipient of such Class B Units shall have the right to execute and deliver
a joinder to this Agreement in a form provided by the Corporation, and thereby become a Class B Holder hereunder. If the Company
issues any other Units (as defined in the LLC Agreement) in the future, then the Corporation shall have the right to permit the
holder of such Units to execute and deliver a joinder to this Agreement in a form provided by the Corporation, whereupon such
holder shall become a Class B Holder hereunder, but solely with respect to such holder’s Units which constitute Class B
Units hereunder, if any. Except as set forth in this Section 4.1, a Class B Holder may not assign or transfer any of its
rights or obligations under this Agreement.

 

    	 	9	 

     

    

 

Section
4.2. Notifications. Any notice, demand, consent, election, offer, approval, request, or other communication (collectively,
a “notice”) required or permitted under this Agreement must be in writing and either delivered personally,
sent by certified or registered mail, postage prepaid, return receipt requested or sent by recognized overnight delivery service,
electronic mail (e-mail) or by facsimile transmittal. Any notice sent by confirmed e-mail or facsimile must be sent simultaneously
by another method described in the prior sentence. A notice must be addressed:

 

		(a)	If
                                         to the Corporation or the Company at:

 

Purple
Innovation, Inc.

123
E. 200 N.

Alpine,
UT 84004

Attn:Casey
McGarvey

Email:casey@onpurple.com

 

with
a copy (which copy shall not constitute notice) to:

Dorsey
& Whitney LLP

111
S. Main St., Suite 2100

Salt
Lake City, UT 84111

Attn:Nolan
S. Taylor

E-mail:
taylor.nolan@dorsey.com

Fax:(801)
933-7373

Tel:(801)
933-7366

 

(b) If
to any Class B Holder, to the address and other contact information set forth in the records of the Company from time to time.

 

All
such notices and communications shall be deemed to have been delivered and received (i) on the date personally delivered, (ii)
one (1) Business Day after being sent by a reputable overnight delivery service, (iii) five (5) Business Days after being sent,
if sent by registered or certified mail, and (iv) on the date delivered by facsimile or email with receipt of transmission confirmed
during business hours on a Business Day (or one (1) Business Day after the date of delivery if delivered after business hours).

 

Section
4.3. Complete Agreement. This Agreement and the agreements referred to herein constitute the entire agreement and understanding
among the parties with respect to the subject matter hereof and thereof, and supersedes all prior agreements or arrangements (written
and oral), including any prior representation, statement, condition or warranty between the parties relating to the subject matter
hereof and thereof.

 

Section
4.4. Applicable Law; Venue; Waiver of Jury Trial.

 

(a) This
Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof. Each of the parties hereto irrevocably consents
to the exclusive jurisdiction and venue of any court within the State of Delaware in connection with any matter based upon or
arising out of this Agreement or the matters contemplated herein, agrees that process may be served upon them in any manner authorized
by the laws of the State of Delaware for such persons and waives and covenants not to assert or plead any objection which they
might otherwise have to such jurisdiction, venue and such process.

 

    	 	10	 

     

    

 

(b) EACH
PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED
AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF
THE AGREEMENTS DELIVERED IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY HERETO
CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH SUCH PARTY UNDERSTANDS
AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) EACH SUCH PARTY
HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION
4.4.

 

Section
4.5. References to this Agreement; Headings. Unless otherwise indicated, “Articles,” “Sections,”
“Subsections”, “Clauses”, “Exhibits” and “Schedules” mean and refer to designated
Articles, Sections, Subsections, Clauses, Exhibits and Schedules of this Agreement. Words such as “herein,” “hereby,”
“hereinafter,” “hereof,” “hereto,” and “hereunder” refer to this Agreement as
a whole, unless the context indicates otherwise. All headings in this Agreement are for convenience of reference only and are
not intended to define or limit the scope or intent of this Agreement. All exhibits and schedules referred to herein, and as the
same may be amended from time to time, are by this reference made a part hereof as though fully set forth herein.

 

Section
4.6. Binding Provisions. This Agreement is binding upon, and inures to the benefit of, the parties hereto and their respective
personal and legal representatives, heirs, executors, successors and permitted assigns.

 

Section
4.7. Construction. Common nouns and pronouns and any variations thereof shall be deemed to refer to masculine, feminine,
or neuter, singular or plural, as the identity of the Person, Persons or other reference in the context requires. Every covenant,
term and provision of this Agreement shall be construed simply according to its fair meaning and not strictly for or against any
party hereto. Any reference to any statute, law, or regulation, form or schedule shall include any amendments, modifications,
or replacements thereof. Any reference to any agreement, contract or schedule, unless otherwise stated, shall include any amendments,
modifications, or replacements thereof. Whenever used herein, “or” shall include both the conjunctive and disjunctive
unless the context requires otherwise, “any” shall mean “one or more,” and “including” shall
mean “including without limitation.” Except to the extent otherwise expressly provided herein, all references to any
Class B Holder shall be deemed to refer solely to such Person in its capacity as such Class B Holder and not in any other capacity.

 

Section
4.8. Severability. It is expressly understood and agreed that if any provision of this Agreement or the application of
any such provision to any party or circumstance shall be determined by any court of competent jurisdiction to be invalid or unenforceable
to any extent, the remainder of this Agreement, or the application of such provision to any party or circumstance other than those
to which it is so determined to be invalid or unenforceable, shall not be affected thereby, and each provision hereof shall be
enforced to the fullest extent permitted by law so long as the economic or legal substance of the matters contemplated by this
Agreement is not affected in any manner materially adverse to any party. If the final judgment of a court of competent jurisdiction
declares or finds that any term or provision hereof is invalid or unenforceable, the parties hereto agree that the court making
the determination of invalidity or unenforceability shall have the power to reduce the scope, duration or area of the term or
provision, or to delete specific words or phrases, and to replace any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term
or provision, and this Agreement shall be enforceable as so modified. If such court of competent jurisdiction does not so replace
an invalid or unenforceable term or provision, the parties hereto will negotiate in good faith to modify this Agreement so as
to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the matters contemplated
hereby are fulfilled to the fullest extent possible.

 

    	 	11	 

     

    

 

Section
4.9. Counterparts. This Agreement and any amendments may be executed simultaneously in two or more counterparts and delivered
via facsimile or .pdf, each of which shall be deemed an original and all of which, when taken together, shall constitute one and
the same document. The signature of any party to any counterpart shall be deemed a signature to, and may be appended to, any other
counterpart.

 

Section
4.10. No Third Party Beneficiaries. This Agreement is not intended to, and does not, provide or create any rights or benefits
of any Person other than the parties hereto and their successors and permitted assigns.

 

Section
4.11. Mutual Drafting. The parties hereto are sophisticated and have been represented by attorneys throughout the transactions
contemplated hereby who have carefully negotiated the provisions hereof. As a consequence, the parties do not intend that the
presumptions of laws or rules relating to the interpretation of contracts against the drafter of any particular clause should
be applied to this Agreement or any agreement or instrument executed in connection herewith, and therefore waive their effects.

 

Section
4.12. Rights and Remedies Cumulative. The rights and remedies provided by this Agreement are cumulative and the use of
any one right or remedy by any party shall not preclude or waive the right to use any or all other remedies. Such rights and remedies
are given in addition to any other rights the parties may have by law, statute, ordinance or otherwise. No failure by any party
to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right
or remedy consequent upon a breach thereof shall constitute a waiver of any such breach or any other covenant, duty, agreement
or condition.

 

Section
4.13. Amendment. The provisions of this Agreement may be amended only by the affirmative vote or written consent of each
of (a) the Corporation, (b) the Company and (c) InnoHold; provided that, without the consent of any Person, a Person who
becomes a Class B Holder after the date hereof pursuant to Section 4.1 shall execute and deliver a joinder to this Agreement
to become a party to this Agreement.

 

Section
4.14. Tax Treatment. This Agreement shall be treated as part of the partnership agreement of the Company as described in
Section 761(c) of the Code and Sections 1.704-1(b)(2)(ii)(h) and 1.761-1(c) of the Treasury Regulations promulgated thereunder.
Notwithstanding anything to the contrary in this Agreement, for federal, state and local tax purposes, the Corporation, the Company
and the Class B Holders shall report each Exchange consummated pursuant to this Agreement, whether directly to the Corporation
or to the Company, as a taxable transfer of an interest in the Company to the Corporation pursuant to Section 1001 of the Code
that is eligible to give rise to a Basis Adjustment (as such term is defined in the Tax Receivable Agreement) and none of the
Corporation, the Company or any Class B Holder shall take a contrary position on any tax return or otherwise unless otherwise
required pursuant to a determination within the meaning of Section 1313 of the Code.

 

Section
4.15. Further Action. Each party hereto shall execute, deliver, acknowledge and file such other documents and take such
further actions as may be reasonably requested from time to time by the other party hereto to give effect to and carry out the
transactions contemplated herein.

 

Section
4.16. Specific Performance. The parties hereto recognize that irreparable injury will result from a breach of any provision
of this Agreement and that money damages will be inadequate to fully remedy the injury. Accordingly, in the event of a breach
or threatened breach of one or more of the provisions of this Agreement, any party which may be injured (in addition to any other
remedies which may be available to that party) shall be entitled (without the need to post any bond, surety, or other security)
to one or more preliminary or permanent orders (a) restraining and enjoining any act which would constitute a breach or (b) compelling
the performance of any obligation which, if not performed, would constitute a breach. Each party hereto further agrees that, in
the event of any action for an injunction or other equitable remedy in respect of such breach or enforcement of specific performance,
it will not assert the defense that a remedy at law would be adequate.

 

Section
4.17. Independent Nature of Class B Holders’ Rights and Obligations. The obligations of each Class B Holder
hereunder are several and not joint with the obligations of any other Class B Holder, and no Class B Holder shall be responsible
in any way for the performance of the obligations of any other Class B Holder hereunder. The decision of each Class B Holder to
enter into to this Agreement has been made by such Class B Holder independently of any other Class B Holder. Nothing contained
herein, and no action taken by any Class B Holder pursuant hereto, shall be deemed to constitute the Class B Holders as a partnership,
an association, a joint venture or any other kind of entity, or create a presumption that the Class B Holders are in any way acting
in concert or as a group with respect to such obligations or the transactions contemplated hereby and the Corporation acknowledges
that the Class B Holders are not acting in concert or as a group, and the Corporation will not assert any such claim, with respect
to such obligations or the transactions contemplated hereby.

 

[Signature
pages follow]

 

    	 	12	 

     

    

 

IN
WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered, all as of the date first set forth
above.

 

	 	PURPLE INNOVATION, INC.
	 	 	 
	 	By:	/s/
Samuel D. Bernards
	 	Name:	Samuel D. Bernards
	 	Title:	Chief Executive Officer
	 	 
	 	PURPLE INNOVATION, LLC.
	 	 	 
	 	By:	/s/
Samuel D. Bernards
	 	Name:	Samuel D. Bernards
	 	Title:	Chief Executive Officer
	 	 	 
	 	INNOHOLD, LLC
	 	 
	 	By:	/s/ Terry V. Pearce 
	 	Name:	Terry V. Pearce
	 	Title:	Manager

 

[Signature
Page to Exchange Agreement]

 

    	 	13	 

     

    

 

The
undersigned does herby agree to the terms and conditions of the Exchange Agreement, dated as of February 2, 2018, and is bound
by all terms and conditions thereof as of the date set forth below.

 

	 	CLASS
B HOLDERS:
	 	 
	 	 
	 	Name:
	 	Date:

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature
Page of Holders Receiving Class B Units Subsequent to February 2, 2018]

 

    	 	14	 

     

    

 

Exhibit
A

 

FORM
OF ELECTION OF EXCHANGE

 

Purple
Innovation, Inc.

123
E. 200 N.

Alpine,
UT 84004

 

Reference
is hereby made to the Exchange Agreement, dated as of February 2, 2018 (the “Exchange Agreement”), among Purple
Innovation, Inc., a Delaware corporation, Purple Innovation, LLC, a Delaware limited liability company, InnoHold, LLC, a Delaware
limited liability company, and such other holders of Class B Units that may from time to time become parties thereto. Capitalized
terms used but not defined herein shall have the meanings given to them in the Exchange Agreement.

 

As
of the date set forth below, the undersigned Class B Holder hereby transfers to the Corporation or the Company, as applicable,
the number of Class B Paired Securities set forth below in Exchange for shares of Class A Stock to be issued in its name
as set forth below and/or a Cash Exchange Payment to the bank account set forth below, in accordance with the Exchange Agreement.

 

	Legal
Name of Class B Holder:
	 	 
	 	 	 
	Address:	 	 
	 	 	 
	Number
    of Class B Paired Securities to be Exchanged:	 	 
	 	 	 
	Bank
    Account for Cash Exchange Payment and Instructions	 	 

 

 

The
undersigned hereby represents and warrants that (i) the undersigned has full legal capacity to execute and deliver this Election
of Exchange and to perform the undersigned’s obligations hereunder; (ii) this Election of Exchange has been duly executed
and delivered by the undersigned and is the legal, valid and binding obligation of the undersigned enforceable against it in accordance
with the terms thereof or hereof, as the case may be, subject to applicable bankruptcy, insolvency and similar laws affecting
creditors’ rights generally and the availability of equitable remedies; (iii) the Class B Paired Securities subject to this
Election of Exchange are being transferred to the Company free and clear of any pledge, lien, security interest, encumbrance,
equities or claim; and (iv) no consent, approval, authorization, order, registration or qualification of any third party
or with any court or governmental agency or body having jurisdiction over the undersigned or the Class B Paired Securities subject
to this Election of Exchange is required to be obtained by the undersigned for the transfer of such Class B Paired Securities
to the Company.

 

The
undersigned hereby irrevocably constitutes and appoints any officer of the Corporation as the attorney of the undersigned, with
full power of substitution and resubstitution in the premises, to do any and all things and to take any and all actions that may
be necessary to transfer to the Corporation or the Company, as applicable, the Class B Paired Securities subject to this Election
of Exchange and to deliver to the undersigned the shares of Class A Stock to be delivered in Exchange therefor.

 

IN
WITNESS WHEREOF the undersigned, by authority duly given, has caused this Election of Exchange to be executed and delivered by
the undersigned or by its duly authorized attorney.

 

	 

        
	      
	 	Name:	     
	 	Date:Exhibit 10.2

 

TAX RECEIVABLE AGREEMENT

 

THIS Tax Receivable Agreement (“TRA”)
is made and entered into as of February 2, 2018 (the “Effective Date”) by and among Purple Innovation, Inc.,
a Delaware corporation (“Parent”), InnoHold, LLC, a Delaware limited liability company (“InnoHold”),
Purple Innovation, LLC, a Delaware limited liability company (the “Company”), and those direct or indirect equity
owners of the Company listed on Schedule 1 (together with InnoHold, the “Class B Unitholders”).

 

RECITALS

 

1. Prior
to the Effective Date of this TRA and the Closing Arrangements, defined below, and immediately prior to the merger of Purple Team,
LLC, a Delaware limited liability company (“Purple Team”), into Innohold, the equity in the Company was owned
solely by InnoHold and Purple Team.

 

2. Also
prior to the Effective Date of this TRA, (i) PRPL Acquisition, LLC, a Delaware limited liability company and a wholly owned subsidiary
of Parent, will have merged with and into the Company (the “Merger”) in accordance with the Agreement and Plan
of Merger dated November 2, 2017 (as may be amended from time to time, the “Merger Agreement”), and the parties
thereto will have received the consideration as set forth in the Merger Agreement and (ii) pursuant to the Merger Agreement, Innohold
will have received (among other things) (a) a cash distribution, (b) rights under an agreement relating to the exchange of Class
B Units of the Company and Class B Stock of Parent into Class A Stock of Parent dated as of the date hereof (the “Exchange
Agreement”) and (c) the rights under this TRA. Steps (i) – (ii) are defined as the “Closing
Arrangements.”

 

3. At
the Effective Date, after the completion of the Merger and the Closing Arrangements, Parent and the Class B Unitholders will hold
all the Units of the Company outstanding at such time, and will be parties to the Second Amended and Restated Operating Agreement
of the Company (the “LLC Agreement”).

 

4. The
parties intend to treat the Merger and the Closing Arrangements as integrated transactions, such that the Surviving Entity, as
defined in the Merger Agreement, is a continuation of the Company for United States federal income tax purposes, and Parent is
treated as having acquired by purchasing Units of the Company as contemplated by the Merger Agreement, for the consideration set
forth in the Merger Agreement and in the Closing Arrangements.

 

5. Pursuant
to the Exchange Agreement, the Class B Unitholders or their permitted assignees may exchange its Class B Units for Class A Stock
of Parent and, as a result of which, the Applicable Class B Unitholder(s) will receive the right to certain payments under this
TRA.

 

6. The
Company and each of its direct and (to the extent owned through a chain of pass-through entities as determined for U.S. federal
income tax purposes) indirect subsidiaries (if any) which are treated as partnerships for United States federal income tax purposes
(the Company, such subsidiaries, and any direct or (to the extent owned through a chain of pass-through entities) indirect subsidiary
that is disregarded as an entity separate from its owner, together, the “Company Group”), have, or will have,
in effect an election under Section 754 of the United States Internal Revenue Code of 1986, as amended (the “Code”),
for each Taxable Year (as such term is defined below) in which an Exchange (as such term is defined below) occurs, which election
is intended to result in an adjustment to the tax basis of the assets owned by the Company Group (solely with respect to Parent)
at the time of an Exchange (such time, the “Exchange Date”).

 

     

     

    

 

7. The
income, gain, loss, deduction and other Tax (as such term is defined below) items of Parent or any Parent Consolidated Group may
be affected by (i) the Basis Adjustments (as such term is defined below) and (ii) the Imputed Interest (as such term is defined
below).

 

8. The
parties to this Agreement desire to make certain arrangements with respect to the effect of the Basis Adjustments and Imputed Interest
on the liability for Taxes of Parent and certain other matters.

 

NOW, THEREFORE, in consideration of the foregoing
and the respective covenants and agreements set forth herein, the parties agree as follows:

 

Article
1

DEFINITIONS

 

Section 1.1.Definitions.

 

As used in this TRA, the terms set forth
in this Article 1 shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms
of the terms defined).

 

“Affiliate” means, with
respect to any Person, any other Person that directly or indirectly, through one or more intermediaries, Controls, is Controlled
by, or is under common Control with, such first Person.

 

“Amended Schedule” is
defined in Section 2.4(b).

 

“Applicable Class B Unitholder(s)”
means, from time to time, any Class B Unitholder(s) who exercise their Exchange Rights and who, as a result, are entitled to the
payments contemplated by this TRA.

 

“Basis Adjustment” means
the adjustment to the tax basis of a Reference Asset, whether as reported on a Tax Return or as a result of a Determination, under
sections 732, 743(b) or 1012 of the Code, as applicable, and the Treasury Regulations promulgated thereunder, and any other applicable,
similar or successor provisions of the Code (both in situations where, as a result of one or more Exchanges, Company becomes an
entity that is disregarded as separate from its owner for tax purposes and in situations where, following an Exchange, Company
remains in existence as an entity for United States federal income tax purposes) and, in each case, comparable sections of foreign,
state and local income and franchise tax laws, arising by reason of the Closing Arrangements, the Exchange Agreement (or any Exchange
thereunder) and all payments under this TRA, and that arise solely with respect to Class B Units held by the Class B Unitholders.
For purposes of calculating the Basis Adjustment with respect to any Applicable Class B Unitholder(s), the transferee’s share
of partnership property will be determined in accordance with section 743(b) and regulations promulgated thereunder. The amount
of any Basis Adjustment resulting from an Exchange of one or more Class B Units shall be determined without regard to any Pre-Exchange
Transfer of such Class B Units and as if any such Pre-Exchange Transfer had not occurred.

 

“Beneficial Owner” of
a security means a Person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise,
has or shares: (i) voting power, which includes the power to vote, or to direct the voting of, such security and/or (ii) investment
power, which includes the power to dispose of, or to direct the disposition of, such security. The terms “Beneficially Own”
and “Beneficial Ownership” shall have correlative meanings.

 

“Board” means the Board
of Directors of Parent.

 

“Business Day” has the
meaning set forth in the LLC Agreement.

 

    2

     

    

 

“Change of Control” means
the occurrence of any of the following events after the date hereof:

 

(i) there
is consummated, in accordance with Parent’s certificate of incorporation and applicable law, the sale, lease or transfer,
in one or a series of related transactions, of all or substantially all of Parent’s assets (determined on a consolidated
basis), including a sale of all Class A Units held by Parent, to any Person or “group” (as such term is used in Section
13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or any successor provisions
thereto);

 

(ii) any
Person or any group of Persons acting together which would constitute a “group” for purposes of Section 13(d)(3) of
the Exchange Act, or any successor provisions thereto, is or becomes the beneficial owner, directly or indirectly, of securities
of Parent representing more than fifty percent (50%) of the combined voting power of the Parent’s then outstanding voting
securities;

 

(iii) there
is consummated a merger, reorganization, consolidation or similar form of business transaction involving Parent and any other corporation
or other entity, and, immediately after the consummation of such transaction, either (x) the Board immediately prior to the merger
or consolidation does not constitute at least a majority of the board of directors of the Person surviving the merger or, if the
surviving Person is a Subsidiary, the ultimate parent thereof, or (y) the voting securities immediately prior to such merger or
consolidation do not continue to represent or are not converted into more than fifty percent (50%) of the combined voting power
of then outstanding voting securities of the Person resulting from such merger or consolidation or, if the surviving Person is
a Subsidiary, the ultimate parent thereof; or

 

(iv) the
stockholders of Parent and the Board approve a plan of complete liquidation or dissolution of Parent.

 

Notwithstanding the foregoing, except with
respect to clause (iii)(x) above, a “Change of Control” shall not be deemed to have occurred by virtue of the consummation
of any transaction or series of integrated transactions immediately following which (A) the record holders of the shares of stock
of Parent immediately prior to such transaction or series of transactions continue to have substantially the same proportionate
ownership in, and own substantially all of the shares or other equity of, an entity which owns all or substantially all of the
assets of Parent immediately following such transaction or series of transactions or (B) Parent is the surviving entity and its
Class A Stock continues to be registered under Section 12(b) or 12(g) of the Exchange Act and continues to be publicly traded.

 

“Change of Control Termination Date”
means the date of a Change of Control Termination Notice for purposes of determining the Change of Control Termination Payment.

 

“Change of Control Termination Effective
Date” is defined in Section 4.2.

 

“Change of Control Termination Notice”
is defined in Section 4.2.

 

“Change of Control Termination Payment”
is defined in Section 4.3(b).

 

“Change of Control Termination Schedule”
is defined in Section 4.1(b).

 

“Class A Stock” has the
meaning set forth in the LLC Agreement.

 

“Class A Units” has the
meaning set forth in the LLC Agreement.

 

“Class B Stock” has the
meaning set forth in the LLC Agreement.

 

“Class B Unitholder” is
defined in the Recitals.

 

“Class B Units” has the
meaning set forth in the LLC Agreement.

 

“Closing Date” means the
date on which the Merger, as defined in the Merger Agreement, is effective.

 

    3

     

    

 

“Code” is defined in the
Recitals.

 

“Company” is defined in
the Recitals.

 

“Company Group” is defined
in the Recitals.

 

“Control” means the possession,
direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership
of voting securities, by contract or otherwise.

 

“Cumulative Net Realized Tax Benefit”
for a Taxable Year means, with respect to each Applicable Class B Unitholder, the cumulative amount of Realized Tax Benefits for
all Taxable Years of Parent, up to and including such Taxable Year, net of the cumulative amount of Realized Tax Detriments for
the same period. The Realized Tax Benefit and Realized Tax Detriment with respect to each Applicable Class B Unitholder for each
Taxable Year shall be determined based on the most recent Tax Benefit Schedule or Amended Schedule, if any, in existence at the
time of such determination, or, if applicable, the Early Termination Schedule, Change of Control Termination Schedule, or amendments
thereto.

 

“Default Rate” means LIBOR
plus 500 basis points.

 

“Determination” shall
have the meaning ascribed to such term in section 13l3(a) of the Code or similar provision of foreign, state and local tax law,
as applicable, or any other event (including the execution of IRS Form 870-AD) that finally and conclusively establishes the
amount of any liability for Tax. A Determination shall include the expiration of all periods of limitations relating to the assessment
of Tax for a Taxable Year.

 

“Early Termination Date”
means the date of an Early Termination Notice for purposes of determining the Early Termination Payment.

 

“Early Termination Effective Date”
is defined in Section 4.2.

 

“Early Termination Notice”
is defined in Section 4.2.

 

“Early Termination Payment”
is defined in Section 4.3(b).

 

“Early Termination Rate”
means LIBOR plus 100 basis points.

 

“Early Termination Schedule”
is defined in Section 4.2.

 

“Effective Date” is defined
in the opening paragraph.

 

“Exchange” means (i) the
steps in the Closing Arrangements that result in the acquisition of Class A Units in the Company by Parent and (ii) any exchange
of Class B Units and Class B Stock into Class A Stock pursuant to the Exchange Agreement.

 

“Exchange Agreement” is
defined in the Recitals.

 

“Exchange Basis Schedule”
is defined in Section 2.2.

 

“Exchange Date” is defined
in the Recitals.

 

“Expert” is defined in
Section 7.9.

 

“Hypothetical Tax Liability”
means, for purposes of determining a payment hereunder by Parent to the Applicable Class B Unitholder(s) in respect of a
Taxable Year, the amount that would constitute the liability for Taxes of Parent using the same methods, elections, conventions
and similar practices as are used on the relevant Parent Return, if there were excluded, in making such determination, (1) any
aggregate increase or decrease in Tax liability for the Taxable Year attributable to Basis Adjustments arising as a result of the
Exchanges by the Applicable Class B Unitholder(s), including by reason of any payments under this TRA to any Applicable Class B
Unitholder(s) (other than payments of Imputed Interest) and (2) any deductions attributable to Imputed Interest with respect to
payment obligations under this TRA to such Applicable Class B Unitholder(s) for the Taxable Year. For the avoidance of doubt, Hypothetical
Tax Liability shall be determined without taking into account the carryover or carryback of any Tax item (or portions thereof)
that is attributable to such Basis Adjustment or Imputed Interest.

 

    4

     

    

 

“Imputed Interest” shall
mean any interest imputed under sections 483, 1272 or 1274 of the Code and any similar provision of state and local tax law, as
applicable, with respect to Parent’s payment obligations under this TRA.

 

“InnoHold” is defined
in the Recitals.

 

“IRS” means the United
States Internal Revenue Service.

 

“LIBOR” means during any
period, an interest rate per annum equal to the one-year LIBOR reported, on the date two (2) days prior to the first day of such
period, on the Telerate Page 3750 (or if such screen shall cease to be publicly available, as reported on Reuters Screen page “LIBOR01”
or by any other publicly available source of such market rate) for London interbank offered rates for United States dollar deposits
for such period.

 

“LLC Agreement” is defined
in the Recitals.

 

“Market Value” means the
Closing Price (as defined in the Exchange Agreement) of one (1) share of Class A Stock on the Business Day prior to the measurement
date; provided, that if the Class A Stock is listed on any domestic securities exchange, the term “Business Day”
as used in this sentence means Business Days on which such exchange is open for trading.

 

“Material Objection Notice”
has the meaning set forth in Section 4.2.

 

“Merger” is defined in
the Recitals.

 

“Merger Agreement” is
defined in the Recitals.

 

“Net Tax Benefit” is defined
in Section 3.l(b).

 

“Non-Stepped Up Tax Basis”
means, with respect to any Reference Asset at any time, the tax basis that such asset would have had at such time if no Basis Adjustments
had been made.

 

“Objection Notice” has
the meaning set forth in Section 2.4(a).

 

“OTC Bulletin Board” means
the Financial Industry Regulatory Authority OTC Bulletin Board electronic inter-dealer quotation system.

 

“Parent” is defined in
the opening paragraph.

 

“Parent Consolidated Group”
means any group of entities that are part of the United States federal income tax consolidated group of which Parent is the common
parent.

 

“Parent Return” means
the United States federal, and/or foreign, and/or state and/or local Tax Return, as applicable, of Parent filed with respect to
Taxes for any Taxable Year, and includes consolidated returns in which Parent is the common parent.

 

“Participation Percentage”
means, with respect to a Class B Unitholder, the percentage set forth on Exhibit B next to such Class B Unitholder’s name.

 

“Person” means and includes
any individual, bank, savings association, corporation, partnership (limited, general, exempted or otherwise), limited liability
company, limited company, company, exempted company, unit trust, joint-stock company, trust, estate or unincorporated organization.

 

    5

     

    

 

“Pre-Exchange Transfer”
means any transfer (including upon the death of an Applicable Class B Unitholder) in respect of one or more Class B Units (i) that
occurs after the Closing Arrangements and prior to an Exchange of such Class B Units and (ii) to which sections 743(b) or 734(b)
of the Code applies.

 

“Qualified Tax Advisor”
means any law or accounting firm that is internationally recognized as being expert in Tax matters and that is reasonably acceptable
to Parent and the Applicable Class B Unitholder(s).

 

“Realized Tax Benefit”
means, for purposes of determining a payment hereunder by Parent to an Applicable Class B Unitholder in respect of a Taxable Year,
the excess, if any, of (a) the Hypothetical Tax Liability determined with reference to such Applicable Class B Unitholder in respect
of the Taxable Year over (b) the “actual” liability for Taxes of Parent using the same methods, elections, conventions
and similar practices used on the relevant Parent Return, such “actual” liability to be computed with the adjustments
described in this TRA (including, for the avoidance of doubt, the application of the Valuation Assumptions when provided for in
this Agreement). If all or a portion of the actual tax liability of Parent for the Taxable Year arises as a result of an audit
by a Taxing Authority of any Taxable Year, such liability shall not be included in determining the Realized Tax Benefit unless
and until there has been a Determination.

 

“Realized Tax Detriment”
means, for purposes of determining a payment hereunder by Parent to an Applicable Class B Unitholder, the excess, if any, of (a)
the “actual” liability for Taxes of Parent using the same methods, elections, conventions and similar practices used
on the relevant Parent Return, such “actual” liability to be computed with the adjustments described in this TRA (including,
for the avoidance of doubt, the application of the Valuation Assumptions when provided for in this TRA) over (b) the Hypothetical
Tax Liability determined with reference to such Applicable Class B Unitholder in respect of the Taxable Year. If all or a portion
of the actual tax liability of Parent for the Taxable Year arises as a result of an audit by a Taxing Authority of any Taxable
Year, such liability shall not be included in determining the Realized Tax Benefit unless and until there has been a Determination.

 

“Reconciliation Dispute”
has the meaning set forth in Section 7.9.

 

“Reconciliation Procedures”
has the meaning set forth in Section 2.4(a).

 

“Reference Asset” means
an asset that is held by any member of a Company Group at the time of the Closing Arrangements or an Exchange, as relevant. A Reference
Asset also includes any asset that is “substituted basis property” under section 7701(a)(42) of the Code with respect
to a Reference Asset.

 

“Schedule” means any of
the following: (a) an Exchange Basis Schedule, (b) a Tax Benefit Schedule, (c) the Early Termination Schedule or (d) the Change
of Control Termination Schedule.

 

“Senior Obligations” is
defined in Section 5.1.

 

“Subsidiaries” means,
with respect to any Person, another Person in which such first Person owns, directly or indirectly, an amount of voting securities,
other voting ownership or voting partnership interests which is sufficient to elect at least a majority of the board of directors
or other governing body (or if there are no such voting interests, 50% or more of the equity interests of such Person).

 

“Tax Benefit Payment”
is defined in Section 3.1(b).

 

“Tax Benefit Schedule”
is defined in Section 2.3(a).

 

“Tax Return” means any
return, declaration, report or similar statement required to be filed with respect to Taxes (including any attached schedules),
including, without limitation, any information return, claim for refund, amended return and declaration of estimated Tax.

 

    6

     

    

 

“Taxable Year” means a
taxable year of Parent as defined in Section 441(b) of the Code or comparable section of foreign, state or local tax law, as applicable
(and, therefore, for the avoidance of doubt, may include a period of less than twelve (12) months for which a Tax Return is made),
ending on or after the Effective Date

 

“Taxes” means any and
all taxes, assessments or similar charges that are based on or measured with respect to any income or profits, or that are imposed
in lieu of or are in the nature of an income tax, including any franchise taxes based on income, imposed by any federal, foreign,
state or local Taxing Authority, and any interest related to such Tax.

 

“Taxing Authority” shall
mean any domestic, federal, national, foreign, state, county or municipal or other local government, any subdivision, agency, commission
or authority thereof, or any quasi-governmental body exercising any taxing authority or any other authority exercising Tax regulatory
authority.

 

“TRA” is defined in the
Recitals.

 

“Treasury Regulations”
means the final and temporary regulations under the Code promulgated from time to time (including corresponding provisions and
succeeding provisions) as in effect for the relevant taxable period.

 

“Units” means the Class
A Units and the Class B Units, collectively.

 

“Valuation Assumptions”
shall mean, subject to Section 4.1(b), as of an Early Termination Date or Change of Control Termination Date, the assumptions that:

 

(a) in
each Taxable Year ending on or after such Early Termination Date, Parent will have taxable income sufficient to fully utilize the
deductions arising from the Basis Adjustments and the Imputed Interest during such Taxable Year (including, for the avoidance of
doubt, Basis Adjustments and Imputed Interest that would result from future Tax Benefit Payments that would be paid in accordance
with the Valuation Assumptions) in which such deductions would become available;

 

(b) All
Taxes are paid on the due date for payment of such Taxes, excluding any available extensions;

 

(c) the
U.S. federal income tax rates and state and local income tax rates that will be in effect for each such Taxable Year will be those
specified for each such Taxable Year by the Code and other Law as in effect on the Early Termination Date (but taking into account
for the applicable Taxable Years adjustments to the tax rates that have been enacted as of the Early Termination Date with a delayed
effective date);

 

(d) any
loss carryovers generated by any Basis Adjustment or Imputed Interest and available as of the date of the Early Termination Schedule
will be utilized by Parent on a pro rata basis from the date of such schedule through the scheduled expiration date of such loss
carryovers;

 

(e) any
non-amortizable assets will be disposed of on the fifteenth anniversary of the applicable Basis Adjustment; provided, that in the
event of a Change of Control, such non-amortizable assets shall be deemed disposed of at the time of sale of the relevant asset
(if earlier than such fifteenth anniversary); and

 

(f) if,
as of the Early Termination Date, there are Class B Units that have not been Exchanged, then each such Class B Unit shall be deemed
to be Exchanged for the Market Value of the Class A Stock payable in respect thereof under the Exchange Agreement and the amount
of cash that would be transferred under this TRA to the Class B Unitholder(s) that is attributable to such Class B Units that have
not been exchanged under this TRA, determined as if the deemed Exchange occurred on the Early Termination Date. For the avoidance
of doubt, the term “Exchange” as used in herein shall include any Exchange deemed to have occurred under this subsection.

 

    7

     

    

 

Section 1.2.Other Definitional and
Interpretative Provisions. The words ‘‘hereof, “herein” and “hereunder” and words of like
import used in this TRA shall refer to this TRA as a whole and not to any particular provision of this TRA. References to Articles,
Sections, Exhibits and Schedules are to Articles, Sections, Exhibits and Schedules of this TRA unless otherwise specified. All
Exhibits and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this TRA as if set forth
in full herein. Any capitalized terms used in any Exhibit or Schedule but not otherwise defined therein, shall have the meaning
as defined in this TRA. Any singular term in this TRA shall be deemed to include the plural, and any plural term the singular.
Whenever the words “include”, “includes” or “including” are used in this TRA, they shall be
deemed to be followed by the words “without limitation”, whether or not they are in fact followed by those words or
words of like import. “Writing”, “written” and comparable terms refer to printing, typing and other means
of reproducing words (including electronic media) in a visible form. References to any agreement or contract are to that agreement
or contract as amended, modified or supplemented from time to time in accordance with the terms thereof. References to any Person
include the successors and permitted assigns of that Person. References from or through any date mean, unless otherwise specified,
from and including or through and including, respectively.

 

Article
2

DETERMINATION OF CERTAIN REALIZED TAX BENEFITS

 

Section 2.1.Basis Adjustment.
The parties hereto acknowledge that an Exchange constitutes a transfer of an interest in Company giving rise to a Basis Adjustment.
For the avoidance of doubt, payments made under this TRA shall not be treated as resulting in a Basis Adjustment to the extent
such payments are treated as Imputed Interest.

 

Section 2.2.Basis Schedule. Within
45 calendar days after the filing of the United States federal income tax return of Parent for each Taxable Year in which any Exchange
has been effected, Parent shall deliver to the Applicable Class B Unitholder(s) a schedule (the “Exchange Basis Schedule”)
that shows, in reasonable detail necessary to perform the calculations required by this TRA, including with respect to each Applicable
Class B Unitholder, for purposes of Taxes, (i) the Non-Stepped Up Tax Basis of the Reference Assets as of the Exchange Date, (ii)
the Basis Adjustments with respect to the Reference Assets as a result of any Exchanges effected in the Closing Arrangements, any
other Exchanges effected in such Taxable Year and Exchanges effected in prior Taxable Years, calculated in the aggregate and identified
separately based on whether the Basis Adjustment arises by virtue of an Exchange effected in the Closing Arrangements, the current
Taxable Year or prior Taxable Years, (iii) the period (or periods) over which the Reference Assets are amortizable and/or depreciable
and (iv) the period (or periods) over which each Basis Adjustment is amortizable and or depreciable, identified separately based
on whether the Basis Adjustment arises by virtue of an Exchange effected in the Closing Arrangements, the current Taxable Year
or prior Taxable Years. The Exchange Basis Schedule will become final as provided in Section 2.4(a) and may be amended as provided
in Section 2.4(b) (subject to the procedures set forth in Section 2.4(b)).

 

Section 2.3.Tax Benefit Schedule.

 

(a) Tax
Benefit Schedule. Within 60 calendar days after the filing of the United States federal income tax return of Parent for any
Taxable Year in which there is a Realized Tax Benefit or Realized Tax Detriment, Parent shall provide to the Applicable Class B
Unitholder(s) a schedule showing, in reasonable detail and, at the request of the Applicable Class B Unitholder(s), with respect
to each separate Exchange by such Applicable Class B Unitholder(s), the calculation of the Realized Tax Benefit or Realized Tax
Detriment with respect to an Exchange effected in the Closing Arrangements, for any Exchange effected in a prior Taxable Year and
for any Exchange effected for such Taxable Year with respect to such Applicable Class B Unitholder(s) (each a “Tax Benefit
Schedule”). The Tax Benefit Schedule will become final as provided in Section 2.4(a) and may be amended as provided in
Section 2.4(b) (subject to the procedures set forth in Section 2.4(b)).

 

    8

     

    

 

(b) Applicable
Principles. Subject to Sections 3.3 and 3.4, the Realized Tax Benefit or Realized Tax Detriment for each Taxable Year is intended
to measure the decrease or increase in the actual cash liability for Taxes of Parent (on a consolidated basis, as relevant) for
such Taxable Year attributable to the Basis Adjustments and Imputed Interest, determined using a “with and without”
methodology. In preparing the Tax Returns upon which the Realized Tax Benefit or Detriment are prepared, and in calculating the
Hypothetical Tax Liability, Parent will not take any positions that are not more likely than not to be sustained if challenged
by a Tax authority. For the avoidance of doubt, the actual liability for Taxes will take into account the deduction of the portion
of each Tax Benefit Payment that must be accounted for as interest under the Code based upon the characterization of Tax Benefit
Payments as additional consideration payable by Parent for the Class B Units acquired in an Exchange, and any tax items of Parent
or any member of the consolidated tax return of Parent that are deductible in a year after the Closing Date. Carryovers or carrybacks
of any Tax item attributable to the Basis Adjustment and Imputed Interest shall be considered to be subject to the rules of Code
and the Treasury Regulation or the appropriate provisions of foreign, state and local income and franchise tax law, as applicable,
governing the use, limitation, and expiration of carryovers or carrybacks of the relevant-type. If a carryover or carryback of
any Tax item includes a portion that is attributable to the Basis Adjustment or Imputed Interest and another portion that is not,
such portions shall be considered to be used in accordance with the “with and without” methodology, recognizing that
the Hypothetical Tax Liability for the year would not include any such carryover or carryback, but such amount would be taken into
account in calculating the Realized Tax Benefit for the year, if it is actually utilized in such year. For the avoidance of doubt,
if there is a carryover or carryback of any Tax item that is not attributable to the Basis Adjustment or Imputed Interest, it will
be utilized in the calculation of the Hypothetical Tax Liability and the Realized Tax Benefit and Realized Tax Detriments for the
year to which it is carried, to the extent possible. The parties agree that (1) all Tax Benefit Payments (other than amounts accounted
for as interest under the Code) will (A) be treated as subsequent upward purchase price adjustments that give rise to further Basis
Adjustments to Reference Assets for Parent and (B) have the effect of creating additional Basis Adjustments to Reference Assets
for Parent in the year of payment, and (2) as a result, such additional Basis Adjustments will be incorporated into the current
year calculation and into future year calculations, as appropriate. The parties further agree that all Tax Benefit Payments shall
be shared among the Class B Unitholders in proportion to their Participation Percentages.

 

Section 2.4.Procedures, Amendments.

 

(a) Procedure.
Every time Parent delivers to the Applicable Class B Unitholder(s) an applicable Schedule under this TRA, including any Amended
Schedule delivered pursuant to Section 2.4(b), but excluding any Early Termination Schedule, Change of Control Termination Schedule,
amended Early Termination Schedule or amended Change of Control Termination Schedule, Parent shall also (i) deliver to the Applicable
Class B Unitholder(s) schedules and work papers, as reasonably determined by Parent or reasonably requested by the Applicable Class
B Unitholder(s), providing reasonable detail regarding the preparation of the Schedule and (ii) allow the Applicable Class B Unitholder(s)
reasonable access at no cost to the appropriate representatives at Parent, as determined by Parent or requested by the Applicable
Class B Unitholder(s) in connection with a review of such Schedule. An applicable Schedule or amendment thereto shall become final
and binding on Parent and an Applicable Class B Unitholder 30 calendar days from the first date on which the Applicable Class
B Unitholder(s) received the applicable Schedule or amendment thereto unless the Applicable Class B Unitholder(s) (i) within 30
calendar days after receiving an applicable Schedule or amendment thereto, provides Parent with notice of a material objection
to such Schedule (“Objection Notice”) made in good faith or (ii) provides a written waiver of such right of
any Objection Notice within the period described in clause (i) above, in which case such Schedule or amendment thereto becomes
binding on the date the waiver is received by Parent. If the parties, for any reason, are unable to successfully resolve the issues
raised in the Objection Notice within 30 calendar days after receipt by Parent of an Objection Notice, Parent and the Applicable
Class B Unitholder(s) shall employ the reconciliation procedures as described in Section 7.9 (the “Reconciliation Procedures”).

 

    9

     

    

 

(b) Amended
Schedule. The applicable Schedule for any Taxable Year shall be amended from time to time by Parent (i) in connection with
a Determination affecting such Schedule, (ii) to correct inaccuracies in the Schedule identified as a result of the receipt of
additional factual information relating to any Taxable Year after the date the Schedule was provided to the Applicable Class B
Unitholder(s), (iii) to comply with the Expert’s determination under the Reconciliation Procedures, (iv) to reflect a change
in the Realized Tax Benefit or Realized Tax Detriment for such Taxable Year attributable to a carryback or carryforward of a loss
or other Tax item to such Taxable Year, (v) to reflect a change in the Realized Tax Benefit or Realized Tax Detriment for such
Taxable Year attributable to an amended Tax Return filed for such Taxable Year or (vi) to adjust an Exchange Basis Schedule to
take into account payments made pursuant to this TRA (any such Schedule an “Amended Schedule”). For the avoidance
of doubt, no Applicable Class B Unitholder shall have any obligation to make any payment to Parent, or to reimburse Parent, for
amounts previously paid pursuant to this TRA.

 

Article
3

TAX BENEFIT PAYMENTS

 

Section 3.1.Payments.

 

(a) Payments.
Within five Business Days after a Tax Benefit Schedule or Amended Schedule delivered to Class B Unitholders becomes final in accordance
with Section 2.4, Parent shall pay to each Applicable Class B Unitholder for the applicable Taxable Year the Tax Benefit Payment
with respect to such Applicable Class B Unitholder for such Taxable Year, as determined pursuant to Section 3.l(b). Each such Tax
Benefit Payment shall be made by wire transfer of immediately available funds to the bank account previously designated by the
Applicable Class B Unitholder to Parent or as otherwise agreed by Parent and the Applicable Class B Unitholder. For the avoidance
of doubt, no Tax Benefit Payment shall be made in respect of estimated tax payments, including, without limitation, United States
federal estimated income tax payments.

 

(b) A
“Tax Benefit Payment” for a Taxable Year means, with respect to each Applicable Class B Unitholder, an amount,
not less than zero, equal to the sum of the Applicable Class B Unitholder’s Net Tax Benefit. Subject to Sections 3.3 and
3.4, the “Net Tax Benefit” with respect to each Class B Unitholder for a Taxable Year shall be an amount equal
to the excess, if any, of 80% of the Cumulative Net Realized Tax Benefit with respect to such Class B Unitholder for such
Taxable Year over the total amount of payments previously made to such Class B Unitholder under this Section 3.1 (excluding payments
attributable to Imputed Interest).

 

Section 3.2.No Duplicative Payments
and Principles. It is intended that the provisions of this TRA will not result in duplicative payment of any amount required
under this TRA. It is also intended that the provisions of this TRA provide that 80% of the Cumulative Net Realized Tax Benefit
with respect each Class B Unitholder will be paid to such Class B Unitholder. The provisions of this TRA shall be construed in
the appropriate manner to ensure such intentions are realized.

 

Section 3.3.Insufficient Taxable Income
or Insufficient Funds. Notwithstanding anything in Section 3.1(a) or (b) to the contrary, and subject to Section 3.4 hereof,
to the extent that the aggregate tax benefit of Parent’s deduction with respect to the Basis Adjustments or Imputed Interest
under this TRA is limited in a particular Taxable Year because Parent does not have sufficient taxable income, or to the extent
that Parent lacks sufficient funds to satisfy its obligations to make all Tax Benefit Payments due with respect to a particular
Taxable Year, the limitation on the tax benefit for Parent, or the payments under this TRA that may be made, as the case may be,
shall be taken into account or made for each Person entitled to receive a payment pursuant to Section 3.1(a) on a first-in first-out
basis by calculating and paying out Net Tax Benefits in the following order of priority: (i) first Net Tax Benefits during such
Taxable Year (whether by virtue of current year deductions or carryovers of net operating losses arising in prior years from Basis
Adjustments) arising from Exchanges effected in the Closing Arrangements (pro rata among the members who Exchanged units in the
Closing Arrangements), and then (ii) Net Tax Benefits during such Taxable Year (whether by virtue of current year deductions or
carryovers of net operating losses arising in prior years from Basis Adjustments) arising from Exchanges following the Exchanges
effected in the Closing Arrangements on a first-in first-out basis, with the Net Tax Benefits arising from Exchanges effected in
an earlier Taxable Year calculated and paid out prior to Net Tax Benefits arising from Exchanges effected in later Taxable Years
(pro rata among members who Exchange in a Taxable Year (but after the Closing Arrangements), without regard to when the Exchange
occurred in the Taxable Year).

 

    10

     

    

 

Article
4

TERMINATION

 

Section 4.1.Termination and Breach
of TRA.

 

(a) Parent
may terminate this TRA with respect to all amounts payable to the Class B Unitholders under this TRA at any time by paying to them
the Early Termination Payments in cash; provided, however, that this TRA shall only terminate under this Section
4.l(a) effective upon the receipt of the Early Termination Payments by the all Class B Unitholders; and provided, further,
that Parent may withdraw any notice to execute its termination rights under this Section 4.1(a) prior to the time at which all
or any portion of any Early Termination Payment has been paid. Upon payment in full of the Early Termination Payments by Parent,
Parent shall not have any further payment obligations under this TRA, other than for any (i) Tax Benefit Payments due and payable
but unpaid as of the Early Termination Notice; and (ii) Tax Benefit Payments due for the Taxable Year ending with or including
the date of the Early Termination Notice (except to the extent that the amount described in clause (ii) is included in Early Termination
Payments). If an Exchange occurs after Parent has made all Tax Benefit Payments to the Class B Unitholders in full as specified
above, Parent shall have no obligations under this TRA with respect to such Exchange. For purposes of this Section 4.1, a Class
B Unitholder includes a person who was a Class B Unitholder prior to the receipt of notice from Parent pursuant to this Section
4.1(a) and who exchanged Class B Units and Class B Stock for Parent Class A Stock prior to such notice pursuant to the Exchange
Agreement.

 

(b) Upon
the occurrence of a Change of Control, Parent shall be obligated to terminate this TRA effective as of the Change of Control Termination
Date by paying to the Class B Unitholders the Change of Control Termination Payments, substituting “Change of Control Termination
Date” for “Early Termination Date” each time Early Termination Date appears in the definition of Valuation Assumptions
and substituting “Change of Control Termination Schedule” for “Early Termination Schedule” each time Early
Termination Schedule appears in the definition of Valuation Assumptions, and following the procedures set forth in Sections 4.2
and 4.3, as applicable to a Change of Control; provided, however, that this TRA shall only terminate under this Section
4.1(b) effective upon the receipt of all of the Change of Control Termination Payments by the Class B Unitholders. Upon payment
in full of the Change of Control Termination Payments by Parent, Parent shall have no further payment obligations under this TRA,
other than for any (i) Tax Benefit Payments due and payable but unpaid as of the Change of Control Termination Notice; and (ii)
Tax Benefit Payments due for the Taxable Year ending with or including the date of the Change of Control Termination Notice (except
to the extent that the amount described in clause (ii) is included in Change of Control Termination Payments). If an Exchange occurs
after Parent has made all Tax Benefit Payments to the Class B Unitholders in full as specified above, Parent shall have no obligations
under this TRA with respect to such Exchange. For purposes of a Change of Control Termination Payment, a Class B Unitholder includes
a person who was a Class B Unitholder immediately prior to the Change of Control who exchanged Class B Units and Class B
Stock for Parent Class A Stock immediately prior to the Change of Control pursuant to the Exchange Agreement.

 

    11

     

    

 

(c) In
the event that Parent breaches any of its material obligations under this TRA, whether as a result of failure to make any payment
within 90 days of when due, failure to honor any other material obligation required hereunder or by operation of law as a result
of the rejection in a case commenced under the Bankruptcy Code or otherwise, then all obligations hereunder shall be accelerated
and such obligations shall be calculated as if an Early Termination Notice had been delivered on the date of such breach and shall
include, but shall not be limited to: (i) Early Termination Payments calculated as if an Early Termination Notice had been delivered
on the date of the breach; (ii) any Tax Benefit Payments due and payable but unpaid as of the date of the breach; and (iii) any
Tax Benefit Payments due for the Taxable Year ending with or including the date of the breach. Notwithstanding the foregoing, in
the event that Parent breaches this TRA, the Class B Unitholders shall be entitled to elect to receive the amounts set forth in
clauses (i), (ii), (iii) and (iv) above or to seek specific performance of the terms hereof. The parties agree that the failure
to make any payment due pursuant to this TRA within 90 days after the date such payment is due shall be deemed to be a breach of
a material obligation under this TRA for all purposes hereof.

 

Section 4.2.Termination Notice.
If Parent chooses to exercise its right of early termination under Section 4.1 above, or within thirty days of a Change of
Control (as the case may be), Parent shall deliver to each of the Class B Unitholders notice of such intention to exercise such
right or of such occurrence (“Early Termination Notice” or “Change of Control Termination Notice,”
as applicable) and a schedule (the “Early Termination Schedule” or “Change of Control Termination Schedule,”
as applicable) specifying Parent’s intention to exercise such right, or the presence of such occurrence, and showing in reasonable
detail the calculation of the Early Termination Payments or the Change of Control Termination Payments, as applicable, for the
Class B Unitholders. Parent shall, along with such notice and schedule, (i) deliver to the Class B Unitholders schedules and work
papers, as reasonably determined by Parent or reasonably requested by the Class B Unitholders providing reasonable detail regarding
the preparation of the Schedule and (ii) allow the Class B Unitholders reasonable access, at no cost, to the appropriate representatives
at Parent, as reasonably determined by Parent or reasonably requested by the Class B Unitholders, in connection with a review of
such schedule. The Early Termination Schedule or Change of Control Termination Schedule, as applicable, shall become final and
binding on Parent and the Class B Unitholders 30 calendar days from the first date on which the Class B Unitholders received such
schedule or amendment thereto unless the Class B Unitholders (i), within 30 calendar days after receiving such schedule, provide
Parent with notice of a material objection to such schedule made in good faith (“Material Objection Notice”)
or (ii) provide a written waiver of such right of a Material Objection Notice within the period described in clause (i) above,
in which case such schedule becomes binding on the date the waiver is received by Parent (the “Early Termination Effective
Date” or “Change of Control Termination Effective Date”). If for any reason the parties are unable
to successfully resolve the issues raised in such notice within 30 calendar days after receipt by Parent of the Material Objection
Notice, Parent and the Class B Unitholders shall engage in the Reconciliation Procedures.

 

Section 4.3.Payment upon Termination.

 

(a) Within
three Business Days after the Early Termination Effective Date, Parent shall pay to each Class B Unitholder an amount equal to
the Early Termination Payment with respect to such Class B Unitholder. On the Change of Control Termination Effective Date, Parent
shall pay to each Class B Unitholder an amount equal to the Change of Control Termination Payment with respect to such Class B
Unitholder. Such payments shall be made by wire transfer of immediately available funds to a bank account or accounts designated
by each Class B Unitholder or as otherwise agreed by Parent and each such Class B Unitholder.

 

    12

     

    

 

(b) “Early
Termination Payment” for a Class B Unitholder shall equal the present value, discounted at the Early Termination Rate
as of the Early Termination Effective Date, of all Tax Benefit Payments that would be required to be paid by Parent to such Class
B Unitholder hereunder beginning from the Early Termination Date and assuming that the Valuation Assumptions are applied. “Change
of Control Termination Payment” for a Class B Unitholder shall equal the present value, discounted at the Early Termination
Rate as of the Change of Control Termination Effective Date, of all Tax Benefit Payments that would be required to be paid by Parent
to such Class B Unitholder hereunder beginning as of the Change of Control Termination Date and assuming that the Valuation Assumptions
are applied, as amended by Section 4.l(b). The present value determinations pursuant to this Section 4.3(b) shall be made assuming
the Parent filed its U. S. federal income tax returns on the original due date (without extension).

 

Section 4.4.Scheduled Termination.
No Tax Benefit Payment shall accrue, or shall become due or payable with respect to any Exchange after the 40th anniversary
(the “Scheduled Termination Date”) of the effective date of such Exchange. For avoidance of doubt, this TRA
shall continue to be in effect in periods after the Scheduled Termination Date with respect to Tax Benefit Payments that arise
on or before such date, or any adjustment thereto, and shall terminate upon such time as when all Tax Benefit Payments due and
payable hereunder have been paid and the Determinations have been made with respect to all such payments.

 

Article
5

SUBORDINATION AND LATE PAYMENTS

 

Section 5.1.Subordination. Notwithstanding
any other provision to the contrary, any payment required to be made by Parent under this TRA shall rank subordinate and junior
in right of payment to any principal, interest or other amounts due and payable in respect of any obligations in respect of indebtedness
for borrowed money of Parent and its Subsidiaries from unrelated lenders (“Senior Obligations”) and shall rank
pari passu with all current or future unsecured obligations of Parent that are not Senior Obligations. For the avoidance of doubt,
the fact that a payment is subordinated pursuant to this Section 5.1 and thus cannot be made, does not mean that a failure to make
a payment in a timely manner under Section 4.1(c) is not a material breach of this Agreement.

 

Section 5.2.Late Payments by Parent.
The amount of all or any portion of any payment not made by Parent when due under the terms of this TRA shall be payable together
with any interest thereon, computed at the Default Rate and commencing from the date on which such payment was due. For avoidance
of doubt, this Section 5.2 shall not limit or restrict in any way the rights of the Class B Unitholders hereunder, including, without
limitation, their rights under Section 4.1(c) hereof.

 

Article
6

NO DISPUTES; CONSISTENCY; COOPERATION

 

Section 6.1.Election to be Filed.
As the sole managing member of Company, Parent shall cause Company and each Company Group member that is treated as a partnership
for United States federal income tax purposes to file an election under Section 754 of the Code (a “754 Election”)
commencing no later than with its first Taxable Year which includes an Exchange, unless such entity already has a 754 Election
in effect, and shall not cause any such entity to revoke such election until this TRA is no longer in effect for any Class B Unitholder.
If Company acquires an interest in an entity that is treated as a partnership for United States federal income tax purposes, either
directly or indirectly through one or more entities treated as a partnership or disregarded entity for United States federal income
tax purposes, Parent shall use its best efforts to cause such entity to file a 754 Election effective for each such entity’s
Taxable Year in which such acquisition occurs, unless such entity already has a 754 Election in effect, and shall not cause such
entity to revoke such election until this TRA is no longer in effect.

 

    13

     

    

 

Section 6.2.Participation in Parent’s
and Company’s Tax Matters.

 

(a) Except
as otherwise provided herein, Parent shall have full responsibility for, and sole discretion over, all Tax matters concerning Parent.
Notwithstanding the foregoing. Parent shall notify the Class B Unitholders of, and keep the Class B Unitholders reasonably
informed with respect to, the portion of any audit of Parent by a Taxing Authority the outcome of which is reasonably expected
to materially affect the rights and obligations of such Class B Unitholders under this TRA, and shall provide to the Class B Unitholders
reasonable opportunity to provide information and other input to Parent and its advisors concerning the conduct of any such portion
of such audit; provided, however, that Parent shall not be required to take any action that is inconsistent with
any provision of the LLC Agreement.

 

(b) The
rights and responsibilities of Parent and InnoHold with respect to Tax matters concerning the Company and its Subsidiaries shall
be as set forth in the LLC Agreement or, as applicable, the Merger Agreement.

 

Section 6.3.Consistency. Parent,
InnoHold and the Class B Unitholders agree to report and cause to be reported for all purposes, including federal, foreign, state
and local Tax purposes and financial reporting purposes, all Tax-related items (including, without limitation, the Basis Adjustments
and each Tax Benefit Payment) in a manner consistent with that specified by Parent in any Schedule required to be provided by or
on behalf of Parent under this TRA, provided Parent prepares and finalizes each such Schedule in accordance with the terms hereof,
unless otherwise required by a Determination.

 

Section 6.4.Cooperation. Each
applicable Applicable Class B Unitholder shall (a) furnish to Parent in a timely manner such information, documents and other materials
as Parent may reasonably request for purposes of making any determination or computation necessary or appropriate under this TRA,
preparing any Tax Return or contesting or defending any audit, examination or controversy with any Taxing Authority, (b) make itself
available to Parent and its representatives to provide explanations of documents and materials and such other information as Parent
or its representatives may reasonably request in connection with any of the matters described in clause (a) above, and (c) reasonably
cooperate in connection with any such matter, and Parent shall reimburse any such Applicable Class B Unitholder for any reasonable
third-party costs and expenses incurred pursuant to this Section 6.4.

 

Article
7

MISCELLANEOUS

 

Section 7.1.Notices. Any notice,
demand, consent, election, offer, approval, request or other communication (collectively, a “notice”) required
or permitted under this TRA must be in writing and either delivered personally, sent by certified or registered mail, postage prepaid,
return receipt requested or sent by recognized overnight delivery service, electronic mail (e-mail) or by facsimile transmittal.
Any notice sent by confirmed e-mail or facsimile must be sent simultaneously by another method described in the prior sentence.
A notice must be addressed:

 

To the Company or Parent:

 

Purple Innovation, Inc. 

123 E. 200 N. 

Alpine, UT 84004 

Attn:Casey McGarvey 

Email:casey@onpurple.com

 

    14

     

    

 

with a copy (which copy shall not constitute notice) to:

 

Dorsey & Whitney LLP 

111 S. Main St., Suite 2100 

Salt Lake City, UT 84111 

Attn: Nolan S. Taylor 

E-mail: taylor.nolan@dorsey.com 

Fax:     (801) 933-7373

Tel:     (801) 933-7366

 

To InnoHold:

 

InnoHold, LLC 

123 E. 200 N. 

Alpine, UT 84004 

Attn:  Casey McGarvey 

Email: casey@onpurple.com

 

with a copy (which copy shall not constitute notice) to:

 

Dorsey & Whitney LLP 

111 South Main Street, Suite
2100 

Salt Lake City, UT 84111 

Attention: Nolan Taylor, Esq. 

Tel: 801-933-7366 

Fax: 801-933-7373 

Email: taylor.nolan@dorsey.com

 

A notice delivered personally will be deemed
given only when accepted or refused by the Person to whom it is delivered. A notice that is sent by mail will be deemed given:
(i) three Business Days after such notice is mailed to an address within the United States of America or (ii) seven Business Days
after such notice is mailed to an address outside of the United States of America. A notice sent by recognized overnight delivery
service will be deemed given when received or refused. A notice sent by e-mail or facsimile shall be deemed given upon receipt
of a confirmation of such transmission, unless such receipt occurs after normal business hours, in which case such notice shall
be deemed given as of the next Business Day. Any party may designate, by written notice to all of the others, substitute addresses
or addressees for notices; thereafter, notices are to be directed to those substitute addresses or addressees.

 

Section 7.2.Counterparts. This
TRA and any amendments may be executed simultaneously in two or more counterparts and delivered via facsimile or .pdf, each of
which shall be deemed an original and all of which, when taken together, shall constitute one and the same document. The signature
of any party to any counterpart shall be deemed a signature to, and may be appended to, any other counterpart.

 

Section 7.3.Entire TRA; No Third Party
Beneficiaries. This TRA, together with the LLC Agreement and the Exchange Agreement, constitute the entire agreement and understanding
among the parties with respect to the subject matter hereof and thereof, and supersedes all prior agreements or arrangements (written
and oral), including any prior representation, statement, condition or warranty between the parties relating to the subject matter
hereof and thereof. This TRA is not intended to, and does not, provide or create any rights or benefits of any Person other than
the parties hereto and their successors and permitted assigns.

 

Section 7.4.Governing Law. The
parties hereto hereby agree that all questions concerning the construction, validity and interpretation of this TRA and the performance
of the obligations imposed by this TRA shall be governed by the internal laws of the State of Delaware without giving effect to
any choice of law or conflict of law provision or rule, notwithstanding that public policy in Delaware or any other forum jurisdiction
might indicate that the laws of that or any other jurisdiction should otherwise apply based on contacts with such state or otherwise.

 

    15

     

    

 

Section 7.5.Severability. It is
expressly understood and agreed that if any provision of this TRA or the application of any such provision to any party or circumstance
shall be determined by any court of competent jurisdiction to be invalid or unenforceable to any extent, the remainder of this
TRA, or the application of such provision to any party or circumstance other than those to which it is so determined to be invalid
or unenforceable, shall not be affected thereby, and each provision hereof shall be enforced to the fullest extent permitted by
law so long as the economic or legal substance of the matters contemplated by this TRA is not affected in any manner materially
adverse to any party. If the final judgment of a court of competent jurisdiction declares or finds that any term or provision hereof
is invalid or unenforceable, the parties hereto agree that the court making the determination of invalidity or unenforceability
shall have the power to reduce the scope, duration or area of the term or provision, or to delete specific words or phrases, and
to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes
closest to expressing the intention of the invalid or unenforceable term or provision, and this TRA shall be enforceable as so
modified. If such court of competent jurisdiction does not so replace an invalid or unenforceable term or provision, the parties
hereto will negotiate in good faith to modify this TRA so as to effect the original intent of the parties as closely as possible
in an acceptable manner to the end that the matters contemplated hereby are fulfilled to the fullest extent possible.

 

Section 7.6.Successors, Assignment,
Amendments and Waivers.

 

(a) Neither
InnoHold nor any Class B Unitholder may assign any of its rights under this TRA to any person without the prior written consent
of Parent, which consent shall not be unreasonably withheld; provided, however, that (i) to the extent Class B Units allocable
to any Class B Unitholder are transferred by InnoHold or such Class B Unitholder in accordance with the terms of the LLC Agreement,
the relevant Class B Unitholder shall have the option to assign to the transferee of such Class B Units the transferring Class
B Unitholder’s rights under this TRA with respect to such transferred Class B Units, as long as such transferee has executed
and delivered, or, in connection with such transfer, executes and delivers, a joinder to this TRA, in form and substance substantially
similar to Exhibit A to this TRA, agreeing to become a Class B Unitholder for all purposes of this TRA, and (ii) once an Exchange
has occurred, any and all payments that may become payable to an Applicable Class B Unitholder pursuant to this TRA with respect
to the Exchanged Class B Units may be assigned to any Person or Persons as long as any such Person has executed and delivered,
or, in connection with such assignment, executes and delivers, a joinder to this TRA, in form and substance substantially similar
to Exhibit A to this TRA, and acknowledging specifically the terms of Section 7.6(b). For the avoidance of doubt, if aa Class B
Unitholder transfers Class B Units but does not assign to the transferee of such Class B Units such Class B Unitholder’s
rights under this TRA with respect to such transferred Class B Units, such Class B Unitholder shall continue to be entitled to
receive the Tax Benefit Payments arising in respect of a subsequent Exchange of such Class B Units.

 

(b) No
provision of this TRA may be amended unless such amendment is approved in writing by Parent and the Class B Unitholders. No provision
of this TRA may be waived unless such waiver is in writing and signed by the party against whom the waiver is to be effective.

 

(c) All
of the terms and provisions of this TRA shall be binding upon, shall inure to the benefit of and shall be enforceable by the parties
hereto and their respective successors, assigns, heirs, executors, administrators and legal representatives. Parent shall require
and cause any direct or indirect successor (whether by purchase, merger, consolidation or otherwise) to all or substantially all
of the business or assets of Parent, by written agreement, expressly to assume and agree to perform this TRA in the same manner
and to the same extent that Parent would be required to perform if no such succession had taken place.

 

    16

     

    

 

Section 7.7.Titles and Subtitles.
The titles of the sections and subsections are for convenience of reference only and are not to be considered in construing this
TRA.

 

Section 7.8.Resolution of Disputes.

 

(a) Each
of the parties hereto submits to the exclusive jurisdiction of the Court of Chancery in the State of Delaware in any action or
proceeding arising out of or relating to this TRA and agrees that all claims in respect of the action or proceeding may be heard
and determined in any such court. Each party hereto also agrees not to bring any action or proceeding arising out of or relating
to this TRA in any other court. Each of the parties hereto waives any defense of inconvenient forum to the maintenance of any action
or proceeding so brought and waives any bond, surety or other security that might be required of any other party hereto with respect
thereto. The parties hereto each agree that final judgment in any such suit, action or proceeding brought in such a court shall
be conclusive and binding on it and may be enforced in any court to the jurisdiction of which it is subject by a suit upon such
judgment.

 

(b) EACH
PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED
AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE
AGREEMENTS DELIVERED IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY HERETO CERTIFIES
AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH SUCH PARTY UNDERSTANDS AND
HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY AND (D) EACH SUCH PARTY HAS BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.8.

 

Section 7.9.Reconciliation. In
the event that Parent and the Class B Unitholders are unable to resolve a disagreement with respect to the matters governed by
Section 2.4, or Section 4.2, within the relevant period designated in this TRA (“Reconciliation Dispute”), the
Reconciliation Dispute shall be submitted for determination to a nationally recognized expert (the “Expert”)
in the particular area of disagreement mutually acceptable to both parties. The Expert shall be a partner or principal in a nationally
recognized accounting or law firm, and unless Parent and the Class B Unitholders agree otherwise, the Expert shall not, and the
firm that employs the Expert shall not, have any material relationship with Parent or the Class B Unitholders (or the affected
Class B Unitholders) or other actual or potential conflict of interest. If the parties are unable to agree on an Expert within
15 days of receipt by the respondent(s) of written notice of a Reconciliation Dispute, the Expert shall be appointed by the Qualified
Tax Advisor. The Expert shall resolve any matter relating to an Exchange Basis Schedule, or an amendment thereto, the Early Termination
Schedule, or an amendment thereto, the Change of Control Termination Schedule, or an amendment thereto or Section 3.l(c), within
30 calendar days and shall resolve any matter relating to a Tax Benefit Schedule or an amendment thereto within 15 calendar days
or as soon thereafter as is reasonably practicable, in each case after the matter has been submitted to the Expert for resolution.
Notwithstanding the preceding sentence, if the matter is not resolved before any payment that is the subject of a disagreement
would be due (in the absence of such disagreement) or any Tax Return reflecting the subject of a disagreement is due, the undisputed
amount shall be paid on the date prescribed by this TRA and such Tax Return may be filed as prepared by Parent, subject to adjustment
or amendment upon resolution. Parent and the Class B Unitholders shall bear their own costs and expenses relating to the engagement
of such Expert, amending any Tax Return and the proceeding unless the Class B Unitholders have a prevailing position that is more
than 10% of the payment at issue, in which case Parent shall reimburse the Class B Unitholders for any reasonable out-of-pocket
costs and expenses in such proceeding. Any dispute as to whether a dispute is a Reconciliation Dispute within the meaning of this
Section 7.9 shall be decided by the Expert. The Expert shall finally determine any Reconciliation Dispute and the determinations
of the Expert pursuant to this Section 7.9 shall be binding on Parent and the Class B Unitholders who are parties to such
Dispute and may be entered and enforced in any court having jurisdiction.

 

    17

     

    

 

Section 7.10.Withholding. Parent
shall be entitled to deduct and withhold from any payment payable pursuant to this Agreement such amounts as Parent is required
to deduct and withhold with respect to the making of such payment under the Code or any provision of state, local or foreign Tax
law. To the extent that amounts are so withheld and paid over to the appropriate Taxing Authority by Parent, such withheld amounts
shall be treated for all purposes as having been paid to InnoHold and/or the Class B Unitholders (as the case may be). The parties
anticipate that, on the basis of current law, no federal income tax withholding would be required with respect to payments contemplated
by this TRA to InnoHold or any Class B Unitholder who is a “United States person” within the meaning of Section 770l(a)(30)
of the Code and who properly certifies that such holder is not subject to federal backup withholding.

 

Section 7.11.Admission of Parent into
a Consolidated Group and Transfers of Corporate Assets.

 

(a) If
Parent is or becomes the common parent of a Parent Consolidated Group that files a consolidated income tax return pursuant to Section
1501 et seq. of Code, the provisions of this TRA will be applied with respect to the Parent Consolidated Group as a whole and the
Tax Benefit Payments, Early Termination Payments, Change of Control Termination Payments and other applicable items shall be computed
with reference to the consolidated taxable income of the Parent Consolidated Group as a whole. Similar provisions apply to any
state or local consolidated group of which Parent is a member.

 

(b) If
Parent transfers one or more assets to a corporation (or a Person classified as a corporation for United States federal income
tax purposes) with which it does not file a consolidated tax return pursuant to Section 1501 of the Code, then, for purposes of
calculating the amount of any Tax Benefit Payment, Early Termination Payment or Change of Control Termination Payment due hereunder,
Parent shall be treated as having disposed of such asset in a fully taxable transaction on the date of such transfer. The consideration
deemed to be received by Parent shall be equal to the fair market value of the transferred asset. For purposes of this Section
7.11, a transfer of a partnership or limited liability company interest shall be treated as a transfer of the transferring partner’s
or member’s share of each of the assets and liabilities of that partnership or limited liability company.

 

Section 7.12.Confidentiality.

 

(a) Innohold
and the Class B Unitholders or their respective assignee(s) acknowledges and agrees that the information of Parent and of its Affiliates
is confidential and, except (i) in the course of performing any duties as necessary for Parent and its Affiliates, (ii) as required
by law or legal process, (iii) to enforce the terms of this TRA, or (iv) such disclosure is related to the performance of obligations
under this Agreement, the Merger Agreement, the Related Agreements and the consummation of the transactions contemplated thereunder,
such person shall keep and retain in the strictest confidence and not disclose to any Person any confidential matters, acquired
pursuant to this TRA, of Parent and its Affiliates and successors, concerning the Company and its Affiliates and successors, learned
by Innohold and the Class B Unitholders or their respective assignee(s) heretofore or hereafter. This Section 7.12(a) shall not
apply to (i) any information that has been made publicly available by Parent or any of its Affiliates, becomes public knowledge
(except as a result of an act of Innohold, the Class B Unitholders or their respective assignee(s) in violation of this TRA) or
is generally known to the business community, (ii) the disclosure of information to the extent necessary for Innohold to prepare
and file its Tax returns, to respond to any inquiries regarding the same from any Taxing authority or to prosecute or defend any
action, proceeding or audit by any Taxing authority with respect to such returns, and (iii) any information that was independently
developed by Innohold, the Class B Unitholders or their respective assignee(s), provided that such independent development can
reasonably be proven by Innohold, the Class B Unitholders or their respective assignee(s).

 

(b) If
Innohold, the Class B Unitholders or their respective assignee(s) commit a breach, or threaten to commit a breach, of any of the
provisions of Section 7.12(a), Parent shall have the right and remedy to have the provisions of Section 7.12(a) specifically enforced
by injunctive relief or otherwise by any court of competent jurisdiction without the need to post any bond or other security, it
being acknowledged and agreed that any such breach or threatened breach shall cause irreparable injury to Parent or any of its
Subsidiaries and the accounts and funds managed by Parent and that money damages alone shall not provide an adequate remedy to
such Persons. Such rights and remedies shall be in addition to, and not in lieu of, any other rights and remedies available at
law or in equity.

 

[Signature page follows]

 

    18

     

    

 

IN WITNESS WHEREOF, Parent, InnoHold, the
Company and the Class B Unitholders have duly executed this TRA as of the date first written above.

 

	 	PURPLE INNOVATION, INC.
	 	 	 
	 	By: 	/s/ Samuel D. Bernards
	 	Name: 	Samuel D. Bernards
	 	Title: 	Chief Executive Officer
	 	 	 
	 	INNOHOLD, LLC
	 	 	 
	 	By: 	/s/ Terry V. Pearce 
	 	Name: 	Terry V. Pearce
	 	Title: 	Manager
	 	 	 
	 	PURPLE INNOVATION, LLC
	 	 	 
	 	By: 	/s/ Samuel D. Bernards
	 	Name: 	Samuel D. Bernards
	 	Title: 	Chief Executive Officer
	 	 	 
	 	CLASS B UNITHOLDERS: 
	 	 
	 	/s/ Tony M. Pearce
	 	Tony M. Pearce
	 	 
	 	/s/ Carrie Pearce
	 	Carrie Pearce
	 	 
	 	/s/ Terry V. Pearce
	 	Terry V. Pearce
	 	 
	 	/s/ Gae Pearce
	 	Gae Pearce

 

    19

     

    

 

	 	CLASS B UNITHOLDERS:
	 	 
	 	PT1
	 	 
	 	By: 	/s/ Tomi Hill
	 	Name: 	Tomi Hill
	 	Title: 	Trustee
	 	 	 
	 	By: 	/s/ Amy Stone
	 	Name: 	Amy Stone
	 	Title: 	Trustee
	 	 	 
	 	By: 	/s/ Nicholas Pearce
	 	Name: 	Nicholas Pearce
	 	Title: 	Trustee
	 	 	 
	 	PT2	 
	 	 	 
	 	By: 	/s/ Tomi Hill
	 	Name: 	Tomi Hill
	 	Title: 	Trustee
	 	 	 
	 	By: 	/s/ Amy Stone
	 	Name: 	Amy Stone
	 	Title: 	Trustee
	 	 	 
	 	By: 	/s/ Nicholas Pearce
	 	Name: 	Nicholas Pearce
	 	Title: 	Trustee
	 	 	 
	 	PT3	 
	 	 	 
	 	By: 	/s/ Tomi Hill
	 	Name: 	Tomi Hill
	 	Title: 	Trustee
	 	 	 
	 	By: 	/s/ Amy Stone
	 	Name: 	Amy Stone
	 	Title: 	Trustee
	 	 	 
	 	By: 	/s/ Nicholas Pearce
	 	Name: 	Nicholas Pearce
	 	Title: 	Trustee

 

    20

     

    

 

	 	CLASS B UNITHOLDERS:
	 	 	 
	 	PT4	 
	 	 	 
	 	By: 	/s/ Tomi Hill
	 	Name: 	Tomi Hill
	 	Title: 	Trustee
	 	 	 
	 	By: 	/s/ Amy Stone
	 	Name: 	Amy Stone
	 	Title: 	Trustee
	 	 	 
	 	By: 	/s/ Nicholas Pearce
	 	Name: 	Nicholas Pearce
	 	Title: 	Trustee
	 	 	 
	 	TLA Trust 1
	 	 	 
	 	By: 	/s/ Rebecca Taylor
	 	Name: 	Rebecca Taylor
	 	Title: 	Trustee
	 	 	 
	 	By: 	/s/ Tiffany Peay
	 	Name: 	Tiffany Peay
	 	Title: 	Trustee
	 	 	 
	 	TLA Trust 1
	 	 	 
	 	By: 	/s/ Rebecca Taylor
	 	Name: 	Rebecca Taylor
	 	Title: 	Trustee
	 	 	 
	 	By: 	/s/ Tiffany Peay
	 	Name: 	Tiffany Peay
	 	Title: 	Trustee

 

Signature Page to Tax Receivable Agreement

 

    21

     

    

 

Exhibit A

 

Form of Joinder Agreement

 

[________________] does hereby agree
to the terms and conditions of the Tax Receivable Agreement, dated as of February 2, 2018 (the “TRA”), a copy
of which is attached hereto, and upon execution of this joinder, for all purposes thereunder, shall be and hereby is a Class B
Unitholder, as defined in the TRA, and is bound by all terms and conditions thereof as of the date set forth below.

 

	 	[Name of Assignee, if Entity]
	 	 	 
	 	By:	           
	 	Name: 	 
	 	Title: 	 

 

Date: ________________________

 

    22

     

    

 

Exhibit B

 

Participation Percentages

 

	Class B Unitholder	 	Participation Percentage
	 	 	 
	Tony M. Pearce	 	*
	 	 	 
	Carrie Pearce	 	*
	 	 	 
	PT1	 	*
	 	 	 
	PT2	 	*
	 	 	 
	PT3	 	*
	 	 	 
	PT4	 	*
	 	 	 
	Terry V. Pearce	 	*
	 	 	 
	Gae Pearce	 	*
	 	 	 
	TLA Trust 1	 	*
	 	 	 
	TLA Trust 2	 	*

 

* Each Class B Unitholder’s Participation
Percentage shall be equal to such Class B Unitholder’s share of payments received under this TRA as determined under the
Fourth Amended and Restated Limited Liability Company Agreement of InnoHold, LLC.

 

 

23

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