Material Agreement Form 8 K

ITEM 1.01 Entry into a Material Definitive Agreement.

On June 27, 2024, the Board of Directors (the "Board") of Purple Innovation, Inc. (the "Company") entered into a rights agreement and declared a dividend of one preferred share purchase right (a "Right") for each outstanding share of Class A common stock, par value $0.0001 per share ("Class A Common Stock"), and Class B common stock, par value $0.0001 per share (together with the Class A Common Stock, the "Common Stock"), to stockholders of record at the close of business on July 26, 2024 (the "Record Date"). Each Right entitles its holder, subject to the terms of the NOL Rights Plan (as defined below), to purchase from the Company one one-thousandth of a share of Series C Junior Participating Preferred Stock, par value $0.0001 per share ("Preferred Stock"), of the Company at an exercise price of $2.75 per Right, subject to adjustment. Each one one-thousandth of a share of Preferred Stock will constitute the economic equivalent of one share of Common Stock. The description and terms of the Rights are set forth in a stockholder rights agreement, dated as of June 27, 2024 (the "NOL Rights Plan"), between the Company and Pacific Stock Transfer Company, as rights agent (and any successor rights agent, the "Rights Agent").

The Board approved the NOL Rights Plan in an effort to protect stockholder value by attempting to protect the Company's ability to use its estimated $238 million of net operating losses ("NOLs") to reduce potential future federal income tax obligations from becoming substantially limited by future ownership of Common Stock.

The Rights. The Rights will attach to any shares of Common Stock that are outstanding on the Record Date and that become outstanding after the Record Date and prior to the earlier of the Distribution Time (as defined below) and the Expiration Time (as defined below), and in certain other circumstances described in the NOL Rights Plan.

Until the Distribution Time, the Rights will be associated the with Common Stock and will be evidenced by Common Stock certificates or, in the case of uncertificated shares of Common Stock, the book-entry account that evidences record ownership of such shares, which will contain a notation incorporating the NOL Rights Plan by reference, and the Rights will be transferable with and only with the underlying shares of Common Stock.

Until the Distribution Time, the surrender for transfer of any shares of Common Stock will also constitute the transfer of the Rights associated with those shares. As soon as practicable after the Distribution Time, separate rights certificates will be mailed to holders of record of Common Stock as of the Distribution Time. From and after the Distribution Time, the separate rights certificates alone will represent the Rights.

The Rights are not exercisable until the Distribution Time. Until a Right is exercised, its holder will have no rights as a stockholder of the Company, including the right to vote or to receive dividends.

Separation and Distribution of Rights; Exercisability. Subject to certain exceptions, the Rights become exercisable and will trade separately from Common Stock only upon the "Distribution Time," which occurs upon the earlier of:

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the close of business on the tenth (10th) day after the "Stock Acquisition Date" (which is defined as (a) the first date of public announcement that any person or group has become an "Acquiring Person," which is defined as a person or group that, together with its affiliates and associates, beneficially owns the Specified Percentage (as defined below) or more of the outstanding shares of Common Stock (with certain exceptions, including those described below) or (b) such other date, as determined by the Board, on which a person or group has become an Acquiring Person) or

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the close of business on the tenth (10th) business day (or such later date as may be determined by the Board prior to such time as any person or group becomes an Acquiring Person) after the commencement of a tender offer or exchange offer that, if consummated, would result in a person or group becoming an Acquiring Person.

"Specified Percentage" shall mean 4.9% when referring to the beneficial ownership of any Person.

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