Document:

Exhibit

EXHIBIT 10.7

SHUTTERSTOCK, INC.
 
2012 OMNIBUS EQUITY INCENTIVE PLAN
 
DEFERRED RESTRICTED STOCK UNIT AWARD AGREEMENT
 
Unless otherwise defined herein, the capitalized terms used in this Deferred Restricted Stock Unit Award Agreement (the “Award Agreement”) shall have the meanings ascribed to them in the Shutterstock, Inc. 2012 Omnibus Equity Incentive Plan (the “Plan”).
 
I.                                        NOTICE OF RESTRICTED STOCK UNIT GRANT
 
Participant Name:
 
Address:
 
You have been granted an Award of Restricted Stock Units, subject to the terms and conditions of the Plan and this Award Agreement, as follows:
 
Grant Number
 
Date of Grant
 
Vesting Commencement Date
 
Number of Restricted Stock Units
 
Vesting Schedule
 
In the event Participant ceases to be a Service Provider (or gives or is given notice of such termination) for any or no reason before Participant vests in the Restricted Stock Unit, the Restricted Stock Unit and Participant’s right to acquire any Shares hereunder, or the cash equivalent of all or some portion of such Shares, as determined by the Administrator in its sole discretion, will immediately terminate.
 
By Participant’s signature and the signature of the representative of Shutterstock, Inc. (the “Company”) below, Participant and the Company agree that this Award of Restricted Stock Units is granted under and governed by the terms and conditions of the Plan and this Award Agreement, including the Terms and Conditions of Restricted Stock Unit Grant (and any country-specific addendum thereto), attached hereto as Exhibit A, all of which are made a part of this document.  Participant has reviewed the Plan and this Award Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Award Agreement and fully understands all provisions of the Plan and Award Agreement.  Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions relating to the Plan and Award Agreement.  Participant further agrees to notify the Company upon any change in the Participant’s residence address.
 
 

	
			
	SHUTTERSTOCK, INC.
	 
	 PARTICIPANT

	 
	 
	 

	 
	 
	 

	By:
	 
	Signature

	 
	 
	 

	 
	 
	 

	 
	 
	 Print Name   

	 
	 
	Residence Address:

 
EXHIBIT A
 
TERMS AND CONDITIONS OF DEFERRED RESTRICTED STOCK UNIT GRANT
 
1.                                      Grant.  The Company hereby grants to the individual named in the Notice of Grant attached as Part I of this Award Agreement (the “Participant”) under the Plan an Award of Restricted Stock Units, subject to all of the terms and conditions in this Award Agreement and the Plan, which is incorporated herein by reference.  Subject to Section 18 of the Plan, in the event of a conflict between the terms and conditions of the Plan and the terms and conditions of this Award Agreement, the terms and conditions of the Plan will prevail.
 
2.                                      Company’s Obligation to Pay.
 
(a)                                 Each Restricted Stock Unit represents the right to receive a Share or the cash equivalent thereof, as determined by the Administrator in its sole discretion, following the date on which it vests.  Unless and until the Restricted Stock Units will have vested in the manner set forth in Section 3, Participant will have no right to settlement of any such Restricted Stock Units.  Prior to actual settlement of any vested Restricted Stock Units, such Restricted Stock Unit will represent an unsecured obligation of the Company, payable (if at all) only from the general assets of the Company.  Any Restricted Stock Units that vest in accordance with Sections 3 or 4 will be settled in whole Shares, or the cash equivalent of some or all of such Shares, as determined by the Administrator in its sole discretion, subject to Participant satisfying any applicable tax withholding or other obligations as set forth in Section 7.  Subject to the provisions of Section 4, such vested Restricted Stock Units will be paid in Shares and/or cash, as determined by the Administrator, as soon as practicable (but not more than ninety (90) days) following the earlier of (i) the Participant’s separation from service (in accordance with Section 2(b)) or (ii) certain change in control transactions described in Section 2(c).
 
(b)                                 In the event that the Participant incurs a separation from service (within the meaning of Code Section 409A) for any reason, including, but not limited to, death, Disability, or retirement, the vested Restricted Stock Units will be settled as soon as practicable (but not more than 90 days) following the date of such separation from service, except as provided by Section 4, and in each case subject to Section 7.
 
(c)                                  In the event of a transaction or event that constitutes a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the assets of the Company (as determined in accordance with Section 409A(a)(2)(A)(v) of the U.S. Internal Revenue Code of 1986, as amended and Treasury Regulation Section 1.409A-3(i)(5)), the vested Restricted Stock Units will be settled as soon as practicable (but not more than 90 days) following the date of such transaction or event (subject to Section 7).
 
3.                                      Vesting Schedule.  Except as provided in Section 4, and subject to Section 5, the Restricted Stock Units awarded by this Award Agreement will vest in accordance with the vesting provisions set forth in the Notice of Grant.  Restricted Stock Units scheduled to vest on a certain date or upon the occurrence of a certain condition will not vest in Participant in accordance with any of the provisions of this Award Agreement, unless Participant will have been continuously a Service Provider from the Date of Grant until the date such vesting occurs.  Service Provider status will end on the day that notice of termination is provided (whether by the Company or Parent or Subsidiary for any reason or by Participant upon resignation) and will not be extended by any notice period that may be required contractually or under applicable local law.  Notwithstanding the foregoing, the Administrator (or any delegate) shall have the sole discretion to determine when Participant is no longer providing active service for purposes of Service Provider status and participation in the Plan.
 
4.                                      Administrator Discretion.  The Administrator, in its discretion, may accelerate the vesting, but not the settlement date, of the balance, or some lesser portion of the balance, of the unvested Restricted Stock Units at any time, subject to the terms of the Plan.  If so accelerated, such Restricted Stock Units will be considered as having vested as of the date specified by the Administrator.
 

Notwithstanding anything in the Plan or this Award Agreement to the contrary, if at the time of the Participant’s termination as a Service Provider (provided that such termination is a “separation from service” within the meaning of Section 409A, as determined by the Company), other than due to death, and if (x) Participant is a “specified employee” within the meaning of Section 409A at the time of such termination as a Service Provider and (y) the payment of such accelerated Restricted Stock Units will result in the imposition of additional tax under Section 409A if paid to Participant on or within the six (6) month period following Participant’s termination as a Service Provider, then the settlement of such accelerated Restricted Stock Units will not occur until the date six (6) months and one (1) day following the date of Participant’s termination as a Service Provider, unless the Participant dies following his or her termination as a Service Provider, in which case, the Restricted Stock Units will be settled in Shares and/or cash as soon as practicable following his or her death.  It is the intent of this Award Agreement to comply with the requirements of Section 409A so that none of the Restricted Stock Units provided under this Award Agreement or Shares and/or cash issuable thereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply.  For purposes of this Award Agreement, “Section 409A” means Section 409A of the Code, and any proposed, temporary or final Treasury Regulations and Internal Revenue Service guidance thereunder, as each may be amended from time to time.
 
5.                                      Forfeiture upon Termination of Status as a Service Provider.  Notwithstanding any contrary provision of this Award Agreement, the balance of the Restricted Stock Units that have not vested as of the time notice is provided (whether by Participant or the Company or Parent or Subsidiary) of Participant’s termination as a Service Provider for any or no reason and Participant’s right to acquire any Shares and/or cash hereunder will immediately terminate.
 
6.                                      Death of Participant.  Any distribution or delivery to be made to Participant under this Award Agreement will, if Participant is then deceased, be made to Participant’s designated beneficiary, or if no beneficiary survives Participant, the administrator or executor of Participant’s estate.  Any such transferee must furnish the Company with (a) written notice of his or her status as transferee, and (b) evidence satisfactory to the Company to establish the validity of the transfer and compliance with any laws or regulations pertaining to said transfer.
 
7.                                      Withholding of Taxes.  Regardless of any action the Company or Participant’s employer (the “Employer”) takes with respect to any or all applicable national, local, or other tax or social contribution, withholding, required deductions, or other payments, if any, that arise upon the grant, vesting or settlement of the Restricted Stock Units or the holding or subsequent sale of Shares, and the receipt of dividends, if any (“Tax-Related Items”), Participant acknowledges and agrees that the ultimate liability for all Tax-Related Items legally due by Participant is and remains Participant’s responsibility and may exceed the amount actually withheld by the Company or the Employer.  Participant further acknowledges that the Company and the Employer (a) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Restricted Stock Units, including grant, vesting or settlement, the subsequent sale of Shares acquired under the Plan, and the receipt of dividends, if any; and (b) does not commit to and is under no obligation to structure the terms of the Restricted Stock Units or any aspect of the Restricted Stock Units to reduce or eliminate Participant’s liability for Tax-Related Items, or achieve any particular tax result.  Further, if Participant has become subject to tax in more than one jurisdiction between the date of grant and the date of any relevant taxable event, Participant acknowledges that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction. Notwithstanding any contrary provision of this Award Agreement, no certificate representing the Shares will be issued and no cash will be paid to Participant, unless and until satisfactory arrangements (as determined by the Administrator) will have been made by Participant with respect to the payment of any Tax-Related Items which the Company determines must be withheld with respect to the Restricted Stock Units.
 
The Participant acknowledges and agrees that the Company or an affiliate of the Company has the right to deduct from payments of any kind otherwise due to the Participant any national, state, local or other taxes of any kind required by law to be withheld for Tax-Related Items relating to the vesting or settlement of the Restricted Stock Units. At such time as the Participant is not aware of any material nonpublic information about the Company or the Shares, the Participant shall execute the instructions set forth in Schedule A attached hereto (the “Automatic Sale Instructions”) as the means of satisfying the Tax-Related Items that the Company is required to withhold.  If 

the Participant does not execute the Automatic Sale Instructions prior to an applicable vesting or settlement date, then the Participant agrees that if under applicable law the Participant will owe taxes at such time on the portion of the Award then vested the Company shall be entitled to immediate payment, in cash or check, from the Participant of the amount of any tax required to be withheld by the Company.  If Participant fails to make satisfactory arrangements for the payment of any required Tax-Related Items hereunder, Participant will permanently forfeit such Restricted Stock Units and any right to receive Shares and/or cash thereunder and the Restricted Stock Units will be returned to the Company at no cost to the Company.
 
8.                                      Rights as Stockholder.  Neither Participant nor any person claiming under or through Participant will have any of the rights or privileges of a stockholder of the Company in respect of any Shares deliverable hereunder unless and until, and only to the extent that, certificates representing Shares will have been issued, recorded on the records of the Company or its transfer agents or registrars, and delivered to Participant.  After such issuance, recordation and delivery, Participant will have all the rights of a stockholder of the Company with respect to voting such Shares and receipt of dividends and distributions on such Shares.
 
9.                                      No Guarantee of Continued Service or Grants.  PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE VESTING OF THE RESTRICTED STOCK UNITS PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING PARTICIPANT) AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS AWARD OF RESTRICTED STOCK UNITS OR ACQUIRING SHARES OR CASH HEREUNDER.  PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT THIS AWARD AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND WILL NOT INTERFERE IN ANY WAY WITH PARTICIPANT’S RIGHT OR THE RIGHT OF THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING PARTICIPANT) TO TERMINATE PARTICIPANT’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.
 
Participant also acknowledges and agrees that: (a) the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time; (b) the grant of Restricted Stock Units is voluntary and occasional and does not create any contractual or other right to receive future grants of Restricted Stock Units, or benefits in lieu of Restricted Stock Units even if Restricted Stock Units have been granted repeatedly in the past; (c) all decisions with respect to future awards of Restricted Stock Units, if any, will be at the sole discretion of the Company; (d) Participant’s participation in the Plan is voluntary; (e) the Restricted Stock Units and the Shares and/or cash subject to the Restricted Stock Units are extraordinary items that do not constitute regular compensation for services rendered to the Company or the Employer, and that are outside the scope of Participant’s employment contract, if any; (f) the Restricted Stock Units and the Shares and/or cash subject to the Restricted Stock Units are not intended to replace any pension rights or compensation; (g) the Restricted Stock Units and the Shares and/or cash subject to the Restricted Stock Units are not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, or end of service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services for the Company or the Employer; and (h) in accepting this Award of Restricted Stock Units, Participant will be bound by any clawback policy that the Company may adopt in the future.
 
10.                               Address for Notices.  Any notice to be given to the Company under the terms of this Award Agreement will be addressed to the Company, in care of its General Counsel at Shutterstock, Inc., 350 Fifth Avenue, 21st Floor, New York, NY 10118 or at such other address as the Company may hereafter designate in writing.
 
11.                               Grant is Not Transferable.  Except to the limited extent provided in Section 6, this grant and the rights and privileges conferred hereby will not be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and will not be subject to sale under execution, attachment or similar 

process.  Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of this grant, or any right or privilege conferred hereby, or upon any attempted sale under any execution, attachment or similar process, this grant and the rights and privileges conferred hereby immediately will become null and void.
 
12.                               Binding Agreement.  Subject to the limitation on the transferability of this grant contained herein, this Award Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.
 
13.                               Additional Conditions to Issuance of Stock.  If at any time the Company will determine, in its discretion, that the listing, registration or qualification of any Shares issuable hereunder upon any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory authority is necessary or desirable as a condition to the issuance of Shares to Participant (or his or her estate), such issuance will not occur unless and until such listing, registration, qualification, consent or approval will have been effected or obtained free of any conditions not acceptable to the Company.  Where the Company determines that the delivery of the payment of any Shares will violate federal securities laws or other applicable laws, the Company will defer delivery until the earliest date at which the Company reasonably anticipates that the delivery of Shares will no longer cause such violation.  The Company will make all reasonable efforts to meet the requirements of any such state or federal law or securities exchange and to obtain any such consent or approval of any such governmental authority.  The Company shall not be obligated to issue any Shares pursuant to the Restricted Stock Units at any time if the issuance of Shares violates or is not in compliance with any laws, rules or regulations of the United States or any state or country.
 
Furthermore, the Company reserves the right to impose other requirements on Participant’s participation in the Plan, on the Restricted Stock Units and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable in order to comply with local law or facilitate the administration of the Plan, and to require Participant to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.  Furthermore, Participant understands that the laws of the country in which he or she is resident at the time of grant, vesting or settlement of the Restricted Stock Units or the holding or disposition of Shares (including any rules or regulations governing securities, foreign exchange, tax, labor or other matters) may restrict or prevent the issuance of Shares or may subject Participant to additional procedural or regulatory requirements he or she is solely responsible for and will have to independently fulfill in relation to the Restricted Stock Units or the Shares.  Notwithstanding any provision herein, the Restricted Stock Units and any Shares and/or cash shall be subject to any special terms and conditions or disclosures as set forth in any addendum for Participant’s country (the “Country-Specific Addendum,” which forms part this Award Agreement).
 
14.                               Plan Governs.  This Award Agreement is subject to all terms and provisions of the Plan.  In the event of a conflict between one or more provisions of this Award Agreement and one or more provisions of the Plan, the provisions of the Plan will govern.  Capitalized terms used and not defined in this Award Agreement will have the meaning set forth in the Plan.
 
15.                               Administrator Authority.  The Administrator will have the power to interpret the Plan and this Award Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules (including, but not limited to, the determination of whether or not any Restricted Stock Units have vested).  All actions taken and all interpretations and determinations made by the Administrator in good faith will be final and binding upon Participant, the Company and all other interested persons.  No member of the Administrator will be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or this Award Agreement.
 
16.                               Electronic Delivery and Language.  The Company may, in its sole discretion, decide to deliver any documents related to Restricted Stock Units awarded under the Plan or future Restricted Stock Units that may be awarded under the Plan by electronic means or request Participant’s consent to participate in the Plan by electronic means.  Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through any on-line or electronic system established and maintained by the Company or another third party designated by the Company.  If Participant has received this Award Agreement, including appendices, or any other 

document related to the Plan translated into a language other than English, and the meaning of the translated version is different than the English version, the English version will control.
 
17.                               Captions.  Captions provided herein are for convenience only and are not to serve as a basis for interpretation or construction of this Award Agreement.
 
18.                               Agreement Severable.  In the event that any provision in this Award Agreement will be held invalid or unenforceable, such provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of this Award Agreement.
 
19.                               Modifications to the Agreement.  This Award Agreement constitutes the entire understanding of the parties on the subjects covered.  Participant expressly warrants that he or she is not accepting this Award Agreement in reliance on any promises, representations, or inducements other than those contained herein.  Modifications to this Award Agreement may be made in the manner, and to the extent, set forth in the Plan.
 
20.                               Data Privacy.  Participant hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of Participant’s personal data as described in this Award Agreement by and among, as applicable, the Company and its affiliates for the exclusive purpose of implementing, administering and managing Participant’s participation in the Plan.  Participant understands that the Company and its affiliates may hold certain personal information about Participant, including, but not limited to, Participant’s name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company or any affiliate, details of all Restricted Stock Units or any other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in Participant’s favor, for the exclusive purpose of implementing, administering and managing the Plan (“Personal Data”).  Participant understands that Personal Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in the United States, Participant’s country (if different than the United States), or elsewhere, and that the recipient’s country may have different data privacy laws and protections than Participant’s country.
 
For Participants located in the European Union, the following paragraph applies:  Participant understands that he or she may request a list with the names and addresses of any potential recipients of the Personal Data by contacting Participant’s local human resources representative.  Participant authorizes the recipients to receive, possess, use, retain and transfer the Personal Data, in electronic or other form, for the purposes of implementing, administering and managing Participant’s participation in the Plan, including any requisite transfer of such Personal Data as may be required to a broker or other third party with whom Participant may elect to deposit any Shares received.  Participant understands that Personal Data will be held only as long as is necessary to implement, administer and manage Participant’s participation in the Plan.  Participant understands that he or she may, at any time, view Personal Data, request additional information about the storage and processing of Personal Data, require any necessary amendments to Personal Data or refuse or withdraw the consents herein, without cost, by contacting in writing Participant’s local human resources representative.  Participant understands that refusal or withdrawal of consent may affect Participant’s ability to participate in the Plan or to realize benefits from the Plan.  For more information on the consequences of Participant’s refusal to consent or withdrawal of consent, Participant understands that he or she may contact his or her local human resources representative.
 
21                                  Foreign Exchange Fluctuations and Restrictions.  Participant understands and agrees that the future value of the underlying Shares is unknown and cannot be predicted with certainty and may decrease.  Participant also understands that neither the Company, nor any affiliate is responsible for any foreign exchange fluctuation between local currency and the United States Dollar or the selection by the Company or any affiliate in its sole discretion of an applicable foreign currency exchange rate that may affect the value of the Restricted Stock Units or Shares received (or the calculation of income or Tax-Related Items thereunder).  Participant understands and agrees that any cross-border remittance made to transfer proceeds received upon the sale of Shares must be 

made through a locally authorized financial institution or registered foreign exchange agency and may require the Participant to provide such entity with certain information regarding the transaction.
 
22.                               Amendment, Suspension or Termination of the Plan.  By accepting this Award, Participant expressly warrants that he or she has received an Award of Restricted Stock Units under the Plan, and has received, read and understood a description of the Plan.  Participant understands that the Plan is discretionary in nature and may be amended, suspended or terminated by the Company at any time.
 
23.                               Unsecured Creditor.  This grant of Restricted Stock Units represents an unfunded and unsecured promise to pay on behalf of the Company, which means that Participant is a general, unsecured creditor of the Company with respect to the Restricted Stock Units and the Restricted Stock Units are subject to the claims of the Company’s creditors.  If the Company’s assets are insufficient to pay all of its creditors, the Participant may not receive all or part of the Restricted Stock Units.
 
24.                               Governing Law.  This Award Agreement will be governed by the laws of the State of New York, without giving effect to the conflict of law principles thereof.  For purposes of litigating any dispute that arises under this Award of Restricted Stock Units or this Award Agreement, the parties hereby submit to and consent to the jurisdiction of the State of New York, and agree that such litigation will be conducted in the courts of the County of New York, New York, or the federal courts for the United States for the Southern District of New York, and no other courts.
 

Schedule A

Automatic Sale Instructions

The undersigned hereby consents and agrees that any taxes due on a vesting date or settlement date as a result of the vesting or settlement of Restricted Stock Units on such date shall be paid through an automatic sale of shares as follows:

(a)    On such date as the Company has a withholding obligation with respect to the Award of Restricted Stock Units, the Company shall arrange for the sale of, such number of Shares issuable with respect to the Restricted Stock Units that are vested pursuant to Section 3 or 4 as is sufficient to generate net proceeds sufficient to satisfy the Company’s minimum statutory withholding obligations with respect to the income recognized by the Participant upon the settlement of the Restricted Stock Units (based on minimum statutory withholding rates for all tax purposes, including payroll and social security taxes, that are applicable to such income), and the Company shall retain such net proceeds in satisfaction of such tax withholding obligations.

(b)    The Participant hereby appoints the [TITLE(S)] of the Company[, and either of them acting alone and with full power of substitution,] to serve as his or her attorneys in fact to sell the Participant’s Shares in accordance with this Schedule A.  The Participant agrees to execute and deliver such documents, instruments and certificates as may reasonably be required in connection with the sale of the Shares pursuant to this Schedule A.

(c)    The Participant represents to the Company that, as of the date hereof, he or she is not aware of any material nonpublic information about the Company or the Shares.  The Participant and the Company have structured this Agreement, including this Schedule A, to constitute a “binding contract” relating to the sale of Common Stock, consistent with the affirmative defense to liability under Section 10(b) of the Securities Exchange Act of 1934 under Rule 10b5-1(c) promulgated under such Act.

The Company shall not deliver any Shares to the Participant, or otherwise settle the Award of Restricted Stock Units, until it is satisfied that all required withholdings have been made. 

_______________________________

Participant Name:  ________________

Date:  __________________________Exhibit
10.7

 

BUSINESS
CONSULTING AGREEMENT

 

This
Consulting Agreement (the “Agreement”), effective as of June 20, 2012 (the “Effective Date”) is entered
into by and between InnerScope Advertising Agency, Inc. (herein referred to as the “Company”) and MD Capital Advisors,
INC, a Nevada Corporation (herein referred to as “Consultant”) or its successors, designees or assignees.

 

RECITALS

 

WHEREAS,
Company, which is currently privately held, anticipates becoming a publicly-held corporation; and

 

WHEREAS,
Company desires to engage the services of Consultant to advise the Company regarding the raising of capital, reverse merging into
a public vehicle or S-1 registration, investor presentations and other assistance with the Company's current and proposed activities,
and to consult with management concerning such Company activities;

 

NOW
THEREFORE, in consideration of the promises and the mutual covenants and agreements hereinafter set forth, the parties hereto
covenant and agree as follows:

 

1.Term
of Consultancy. Company hereby agrees to retain Consultant to act in an advisory and consulting capacity to the Company and
Consultant hereby agrees to provide services to the Company commencing upon June 20, 2012 and ending on February 20, 2014.

 

2.Duties
of Consultant. Consultant agrees that it will generally provide the following specified advisory and consulting services through
Consultant’s officers, employees, consultants and other professionals during the term specified in Section 1 of this Agreement:

 

		(a)	Advise,
                                         consult and assist the Company in developing and implementing appropriate business plans
                                         and investor presentations and introducing the Company to financial professionals that
                                         will assist with investment, investment relations and investment banking. Specific investment
                                         activities shall be conducted with appropriately licensed individuals or companies that
                                         have the required licenses and under other agreements directly with those investment
                                         professionals;

 

		(b)	Assist
                                         in facilitating the merger of the Company into a public vehicle or S-1 registration (the
                                         “Transaction”). The Company recognizes that Consultant is not representing
                                         the Company as the Company’s investment banker in any Transaction but is advising
                                         Company management and the Company’s board of directors. Consultant will assist
                                         and advise the Company in completing a Transaction, including the introduction of pre-audit
                                         and audit resources; 

 

		(c)	With
                                         the cooperation and support of the Company including its management and board, assist
                                         in developing Company to support the Company in it sales and business development efforts.
                                         

  

		(d)	Under
                                         the Company's direction and approval, within normal business hours unless an emergency,
                                         participate in meetings, in person or by telephone, with bankers, investors, brokers,
                                         analysts, auditors and other investment professionals to communicate with them regarding
                                         the Company's plans, goals and activities, and assist the Company in preparing for press
                                         conferences and other forums involving the media, investment professionals and the general
                                         investing community. Third party resources will be utilized to support these services;
                                         

 

		(e)	At
                                         the Company's request, and under the Company’s direction and approval, review business
                                         plans, strategies, mission statements, revenue models, budgets, proposed transactions
                                         and other plans for the purpose of advising the Company.

 

Notwithstanding
anything to the contrary contained herein, Consultant agrees and acknowledges that: (i) this Agreement does not obligate the Company
or its principals to enter into or consummate any transaction contemplated hereby and such decision remains solely the decision
of the Company and (ii) this Agreement and the services contemplated hereby relate only to a corporate structure utilizing the
public capital markets and in no event will Consultant be entitled to any fees whatsoever if the Company raises capital through
any other means.

 

3.Duties
of Company. The Parties hereto recognize that the success of Consultant’s services to be provided pursuant to this Agreement
relies heavily on the cooperation of the Company’s management and the Company’s board of directors and closing of
the Transaction based upon terms agreeable to the Company and its board. In this regard, the Company and Consultant agree that
the Company will use its best efforts to provide all the information and materials necessary to close a Transaction including
access to accounting information, financial projections, customers, vendors, third party manufacturers, pre-audit services, shareholders
and full audit services. The Company will use commercially reasonable efforts to communicate known material issues as early as
possible to Consultant and to dedicate the necessary resources, funds and personnel necessary to close the Transaction.

 

4.Allocation
of Time and Energies. Consultant hereby promises to perform and discharge faithfully the targeted responsibilities which may
be assigned to Consultant from time to time by the officers and duly authorized representatives of the Company in connection with
the activities covered under this Agreement, so long as such activities are in compliance with all applicable laws, including,
but not limited to, securities laws, rules and regulations. Consultant and staff shall diligently and thoroughly provide the advisory
and consulting services required hereunder. Although no specific hours-per-day requirement is required of Consultant pursuant
to this Agreement, Consultant and the Company agree that Consultant will perform the duties set forth herein above in a diligent
and professional manner. The parties acknowledge and agree that a disproportionately large amount of the effort to be expended
and the costs to be incurred by Consultant are expected to occur within or shortly after the first two months of the effectiveness
of this Agreement. The Company will use commercially reasonable efforts to maintain compliance with all laws, rules and regulations,
including, but not limited to, all applicable securities rules and regulations governing the filings required by public corporations.

 

5.Remuneration.
As compensation for services described in this Agreement, the Company shall compensate Consultant by issuing Company common
stock as follows:

5.1
For undertaking this engagement and for other good and valuable consideration, the Company agrees to issue and/or transfer to
Consultant an initial issuance of stock equivalent of 4.9% of the shares issued of the public vehicle upon the Close of the Transaction.
The shares will be in the form of the common stock of the public entity (“Common Stock”) to be delivered to Consultant
within ten (10) business days of the Close of the Transaction. This initial payment shall, when issued and delivered to Consultant,
be fully paid and non-assessable. The Company understands and agrees that Consultant has foregone significant opportunities to
accept this engagement and that the Company derives substantial benefit from the execution of this Agreement. The restricted shares
of Common Stock issued as an initial payment, therefore, constitute payment for Consultant’s agreement to consult with the
Company and are nonrefundable, non-apportionable, and non-ratable retainer; such shares of common stock are not a prepayment for
future services but are payment for the services provided up to the Close of the Transaction.

For
purposes of Section 5.1, the term “Close of the Transaction” refers to the following:

		i)	in
                                         the case of a reverse merger the Close of the Transaction occurs when the Articles of
                                         Merger are filed with the appropriate Secretary of State

		ii)	in
                                         the case of an acquisition the Close of the Transaction occurs when the Acquisition Agreement
                                         is fully executed.

		iii)	in
                                         the case of filing of an S-1 registration statement, the Close of the Transaction occurs
                                         when the S-1 is declared effective by the Securities and Exchange Commission (SEC).

 

In
addition, the Company agrees to retain the Consultant under a separate consulting agreement and provide additional compensation
for consulting services post-closing. Compensation under the going-forward consulting agreement will be determined based on the
Company’s needs for ongoing consulting services related to marketing, sales, operations, IT, SEC filings, regulatory support,
management support, or other consulting services for the Company not related to services defined in section 2 of this Agreement.
For the purposes of this Agreement Consultant agrees to perform each and all of the described duties in this Section 5.1 and for
the compensation stated herein.

5.2The
compensation shares issued pursuant to this Agreement shall be issued in the name of Consultant, Tax ID # to be provided prior
to the issuance of shares.

5.3
With each transfer of shares of Common Stock to be issued pursuant to this Agreement (the “Shares”), Company shall
use commercially reasonable efforts to cause to be issued a certificate representing the Common Stock in Consultant’s name
or name(s) designated by Consultant and, if required by applicable law, the Company will provide or cause to provide a written
opinion of counsel for the Company stating that said shares are validly issued, fully paid and non-assessable and that the issuance
and transfer of the Shares to Consultant has been duly authorized. Company shall use commercially reasonable efforts to ensure
that all Shares and share equivalents issued to Consultant pursuant to this Agreement shall be, at the time of issuance, validly
issued, fully paid and non-assessable and that the issuance and any issuance or transfer of such shares to Consultant shall have
been duly authorized by the Company’s board of directors.

5.4
Consultant acknowledges that the shares of Common Stock (the “144 Securities”) will not have been registered under
the Securities Act of 1933 (the “Securities Act”), and accordingly may be “restricted securities” within
the meaning of Rule 144 of the Act. As such, the 144 Securities may not be resold or transferred unless the Company has received
an opinion of counsel  reasonably satisfactory to the Company that such resale or transfer
is exempt from the registration requirements of that Act. The Company agrees to take any and all action (s) necessary to clear
the subject securities of restriction upon presentation of any Rule 144(d) application by Consultant or its broker, including,
but not limited to: (1) Authorizing the transfer agent to remove the restrictive legend on the subject securities; (2) Expediting,
at the Company’s cost, either the acquisition of a legal opinion from Company’s counsel authorizing the removal of
the restrictive legend, or accepting a third party legal opinion  acknowledging same;
and (3) Cooperating and communicating with Consultant and its broker in order to use Company’s best efforts to clear the
subject securities of restriction as soon as possible after presentation of a Rule 144(d) application by Consultant (or its broker)
to either the Company and/or the Company’s transfer agent. Further, the Company agrees to not unreasonably withhold or delay
approval of any application filed by Consultant under Rule 144(d) of the Act to clear the subject securities of restriction .

 

		(a)	The
                                         Company acknowledges and agrees that Consultant will suffer irreparable harm and anticipated
                                         and actual damages in the event that the Company unreasonably withholds or delays any
                                         Rule 144(d) application by Consultant to either the Company or a transfer agent. The
                                         Company agrees that money damages could not compensate Consultant for its irreparable
                                         harm.

 

		(b)	The
                                         Company therefore agrees that the Company shall have a period of ten (10) calendar days
                                         from the date Consultant’s Rule 144(d) application is tendered to either the Company
                                         or its transfer agent by either Consultant and/or its broker, to take any and all necessary
                                         action to clear the subject securities of restriction, consistent with the covenants
                                         in Section 5.4 above. The Company and Consultant agree that this ten (10) day period
                                         is reasonable and consistent with industry standards concerning the handling and processing
                                         of restricted securities under Rule 144 by publicly traded companies. The Company also
                                         acknowledges that Consultant’s ability to clear the subject securities of restriction,
                                         by virtue of the Company’s best efforts, cooperation, covenants and representations
                                         in this regard is a material part of this Agreement and is a reasonable and material
                                         expectation of Consultant in entering into this Agreement. Should events occur that require
                                         further expense of time beyond this ten (10) day time period, the Company and Consultant
                                         shall reasonably agree in a writing signed by each to an extension for a specific amount
                                         of time. In no event shall an extension be agreed to unless the Company comports with
                                         its “best efforts” obligations, as set out above, and communicates with Consultant
                                         bona fide and reasonable attempts at meeting the Company’s obligations to clear
                                         the subject restricted securities, as described herein. Any written extension herein
                                         may be executed in counterparts by the principals of the Company and Consultant, and
                                         facsimile signatures may be tendered in lieu of originals. It is agreed that the separate
                                         signature of each principal on any agreement to extend time shall be deemed a complete
                                         original.

 

		(c)	Should
                                         the Company fail to successfully take any and all actions necessary to clear the subject
                                         securities of restriction within the ten (10) day time period after Consultant or its
                                         broker’s presentation of a Rule 144(d) application, or seek to extend time as provided
                                         for above in sub-section (b), and in light of the irreparable harm that Consultant will
                                         suffer in the event of any intentional and/or unintentional delay in Consultant’s
                                         Rule 144(d) application, Company herein irrevocably consents and agrees that Consultant
                                         shall be entitled to injunctive relief in order to immediately enforce Consultant’s
                                         right to removal of the restrictive legend on the Common Stock. Company agrees that Consultant
                                         shall be entitled to immediately seek the injunctive relief contemplated and described
                                         herein in the Superior Court of California, County of Orange. Each of the Company and
                                         Consultant agree that Consultant’s access to injunctive relief, and the Company’s
                                         consent to Consultant’s ability to obtain such injunctive relief, shall not otherwise
                                         amend, supersede or modify the parties’ agreement to submit any other disputes
                                         to mediation and arbitration as provided herein. Consultant requires the Company and
                                         Transfer Agent to accept an opinion of counsel chosen by Consultant in lieu of an opinion
                                         of Company’s counsel if they are holding up the process beyond 10 day time period
                                         based on Rule 144(d) application.

 

5.5In
connection with the acquisition of Securities hereunder, Consultant represents and warrants to the Company as follows:

 

		(a)	Consultant
                                         acknowledges that Consultant has been afforded the opportunity to ask questions of and
                                         receive answers from duly authorized officers or other representatives of the Company
                                         concerning an investment in the Securities, and any additional information which Consultant
                                         has requested.

 

		(b)	Consultant’s
                                         investment in restricted securities is reasonable in relation to Consultant’s net
                                         worth, which is in excess of ten (10) times Consultant’s cost basis in the Shares .
                                         Consultant has had experience in investments in restricted and publicly traded securities,
                                         and Consultant has had experience in investments in speculative securities and other
                                         investments which involve the risk of loss of investment. Consultant acknowledges that
                                         an investment in the Securities is speculative and involves the risk of loss. Consultant
                                         has the requisite knowledge to assess the relative merits and risks of this investment
                                         without the necessity of relying upon other advisors, and Consultant can afford the risk
                                         of loss of his entire investment in the Securities. 

 

		(c)	Consultant
                                         is acquiring the Securities for Consultant’s own account for long-term investment
                                         and not with a view toward resale or distribution thereof except in accordance with applicable
                                         securities laws. 

  

6.Non-Assignability
of Services. Consultant’s services under this contract are offered to Company only and may be assigned by Company to
any entity with which Company merges or which acquires the Company or substantially all of its assets with the written consent
of Consultant. In the event of such merger or acquisition, all compensation to Consultant provided for herein shall remain non
cancellable and due and payable, and any compensation received by Consultant may be retained in the entirety by Consultant, all
without any reduction or pro-rating and shall be considered and remain fully paid and non-assessable. Notwithstanding the non-Assignability
of Consultant’s services, Company shall assure that in the event of any merger, acquisition, or similar change of form of
entity, that its successor entity shall agree to complete all obligations to Consultant, including the provision and transfer
of all compensation herein, and the preservation of the value thereof consistent with the rights granted to Consultant by the
Company herein, and to Shareholders.

 

Consultant
may work with 3rd party service providers including financial advisers, auditors, bankers, investment relations companies,
IT companies, sales and marketing organizations, and others as determined necessary and approved in writing by Company. Consultant
shall have no right to bind Company to any agreements whatsoever, including agreements with 3rd party service providers
and Company shall not be liable to compensate any such providers unless Company agrees to do so, in writing, prior to work beginning.

 

7.
Indemnification. The Company warrants and represents that all oral communications, written documents or materials furnished
to Consultant by the Company with respect to financial affairs, operations, product capability, profitability and strategic planning
of the Company are accurate and Consultant may rely upon the accuracy thereof without independent investigation. The Company will
protect, indemnify and hold harmless Consultant against any claims or litigation including any damages, liability, cost and reasonable
attorney's fees as incurred with respect thereto resulting from Consultant's performance of its obligations under this Agreement,
communication or dissemination of any said information, documents or materials excluding any such claims or litigation resulting
from Consultant's communication or dissemination of information not provided or authorized by the Company. The Company agrees
and acknowledges that they and their employees, advisors, board and consultants and therefore the parties’ duties and obligations
under this Agreement will be performed and governed by applicable state and federal law, including without limitation the federal
securities laws. The Consultant warrants and represents that all oral communications, written documents or materials furnished
to Company by the Consultant with respect to strategic planning regarding the S-1 process and the viability of the representations
of consultant concerning the legality of the S-1 process as applied to the anticipated Company transaction, and the value thereof,
are accurate and Company may rely on such representations without independent investigation. The Consultant will protect, indemnify
and hold harmless Company against any claims or litigation including any damages, liability, cost and reasonable attorney's fees
as incurred with respect thereto resulting from Consultant's performance of its obligations under this Agreement, communication
or dissemination of any said information, documents or materials excluding any such claims or litigation resulting from Consultant's
communication or dissemination of information not provided or authorized by the Company. The Consultant agrees and acknowledges
that they and their employees, advisors, board and consultants and therefore the parties’ duties and obligations under this
Agreement will be performed and governed by applicable state and federal law, including without limitation the federal securities
laws.

 

8.Representations
and Warranties. The Company represents and warrants that any information furnished to Consultant will contain no untrue statement
of any material fact nor omit any material facts, which would make the information misleading. The Company further warrants that
if the circumstances relating to information or documents furnished to Consultant change at any time, the Company will inform
Consultant promptly of the changes and immediately deliver to Consultant documents or information necessary to ensure the continued
accuracy and completeness of all information and documents. Consultant represents to the Company that it will not, to the best
of Consultant’s knowledge and belief, make any untrue statement of material fact. Consultant further represents and warrants
to the Company that, to the best of Consultant’s knowledge and belief, all actions taken by it, on behalf of the Company,
in connection with its’ advisory services will be conducted in compliance with all applicable state and federal laws. Further,
Consultant shall comply with any procedures that might be reasonably imposed by the Company or its legal counsel to ensure compliance
with such laws. Both the Company and Consultant agree and acknowledge that they and their employees, advisors and consultants
and therefore the parties’ duties and obligations under this Agreement will be performed and governed by applicable state
and federal law, including without limitation the federal securities laws. All parties expressly understand, agree and acknowledge
that Consultant's performance of its duties hereunder cannot and therefore will in no way be measured by the price of the Company's
common stock, nor the trading volume of the Company's common stock. It is also understood that the Company is entering into this
Agreement with Consultant and not any individual member of Consultant, and, as such, Consultant will not be deemed to have breached
this Agreement if any member, officer or director of Consultant leaves the firm or dies or becomes physically unable to perform
any meaningful activities during the term of the Agreement, provided the Consultant otherwise performs its obligations under this
Agreement. Consultant represents that it is not required to maintain any licenses and registrations under federal or any state
regulations necessary to perform the services set forth herein. Consultant acknowledges that, to the best of its knowledge, the
performance of the services set forth under this Agreement will not violate any rule or provision of any regulatory agency having
jurisdiction over Consultant. Consultant acknowledges that, to the best of its knowledge, Consultant and its officers and directors
are not the subject of any investigation, claim, decree or judgment involving any violation of the SEC or securities laws. Consultant
further acknowledges that it is not a Securities Broker Dealer or a registered investment advisor. Company acknowledges that,
to the best of its knowledge, that it has not violated any rule or provision of any regulatory agency having jurisdiction over
the Company. Company acknowledges that, to the best of its knowledge, Company is not the subject of any investigation, claim,
decree or judgment involving any violation of the SEC or securities laws. Company acknowledges that all products including current
and future patents, trademarks, and registered trademarks are all owned by the Company and that all products meet State and Federal
compliance standards and do not infringe on any existing patents, trademarks, or registered trademarks.

 

9.Status
as Independent Contractor. Consultant's engagement pursuant to this Agreement shall be as independent contractor, and not
as an employee, officer or other agent of the Company. Neither party to this Agreement shall represent or hold itself out to be
the employer or employee of the other. Consultant further acknowledges the consideration provided hereinabove is a gross amount
of consideration and that the Company will not withhold from such consideration any amounts as to income taxes, social security
payments or any other payroll taxes. All such income taxes and other such payment shall be made or provided for by Consultant
and the Company shall have no responsibility or duties regarding such matters. Neither the Company nor the Consultant possesses
the authority to bind each other in any agreements without the express written consent of the entity to be bound.

 

10.Attorney's
Fee. If any legal action or any arbitration or other proceeding is brought for the enforcement or interpretation of this Agreement,
or because of an alleged dispute, breach, default or misrepresentation in connection with or related to this Agreement, the successful
or prevailing party shall be entitled to recover reasonable attorneys' fees and other costs in connection with that action or
proceeding, in addition to any other relief to which it or they may be entitled.

 

11.Waiver.
The waiver by either party of a breach of any provision of this Agreement by the other party shall not operate or be construed
as a waiver of any subsequent breach by such other party.

 

12.Notices.
All notices, requests, and other communications hereunder shall be deemed to be duly given if sent by U.S. mail, postage prepaid,
addressed to the other party at the address as set forth herein below:

 

To
the Company (name, address & email):

InnerScope Advertising Agency, Inc.

Mark
L. Moore

2281
Lava Ridge Court, Suite 130

Roseville,
CA 95601

markmoore@hearingmed.com

To
Consultant:

MD
Capital Advisors, INC

Michael
Chermak

555
N. El Camino Real

Suite
A133

San
Clemente, CA 92672

mdchermak@yahoo.com

 

 

 

It
is understood that either party may change the address to which notices for it shall be addressed by providing notice of such
change to the other party in the manner set forth in this paragraph.

 

13.
Term and Termination of Agreement.

 

		a.	This
                                         Agreement shall remain in full force and effect for a term of twelve (18) months from
                                         the Effective Date. During the terms of this Agreement the indemnity provisions set forth
                                         paragraph in 7, shall survive any termination of this Agreement.

 

		b.	After
                                         the original term of this Agreement is expired, this Agreement may be extended upon either
                                         party giving the other party 30 days written notice, which written notice shall be sent
                                         by certified mail return receipt; provided that if the other party objects to the party
                                         requesting the extension, the extension shall be null and void. Any extension of this
                                         Agreement shall be effective on the 30th day after said written notice has
                                         been mailed or delivered, whichever is earlier. 

 

		c.	Notwithstanding
                                         anything to the contrary, if either party materially breaches this Agreement, the non-breaching
                                         party may, at its election, immediately terminate this Agreement thereby relieving the
                                         non-breaching party of any obligation hereunder. Alternatively, the non-breaching party
                                         may proceed with performance without waiving any rights under this Agreement. 

 

		d.	In
                                         the event of a dispute arising between parties the dispute shall be submitted to mediation
                                         before the Judicial Arbitration and Mediation Services ("JAMS") in Orange County,
                                         California if brought by Company, and Placer County, California if brought by Consultant.
                                         The parties shall bear the costs of mediation equally. In the event that either party
                                         refuses to participate in mediation said party shall be prohibited from recovering attorney
                                         fees notwithstanding anything to the contrary in this Agreement. 

 

		e.	If
                                         mediation should fail to resolve the dispute between the parties, the matter shall be
                                         submitted to JAMS in Orange County, California, California if brought by Company, and
                                         Placer County, California if brought by Consultant, for binding arbitration. The costs
                                         of arbitration shall be equally shared by the parties until the dispute is either settled
                                         or adjudicated, at which time the arbitration shall award said fees and costs to the
                                         prevailing party.

 

14.Choice
of Law, Jurisdiction. This Agreement shall be governed by, construed and enforced in accordance with the laws of the State
of California. .

 

15.
Non-Circumvention. The Company agrees that the Company shall not directly or indirectly solicit, hire, recruit, or engage
any of Consultant’s employees or any individuals, entities, business contacts, investment contacts, or service providers
referred to the Company by Consultant unless Consultant agrees, in writing, to allow such activity. Notwithstanding the foregoing,
the Company can directly hire any service providers referred to Company by Consultant, without Consultant’s written approval,
as long as the services provided relate directly to the services provided by Consultant. The provisions of this Section 15 shall
not only apply during the term of this Agreement but shall also continue for one (1) year after the termination of this Agreement.

 

17.Complete
Agreement. This Agreement and the Mutual Non-Disclosure Agreement dated June 20_, 2012 contains the entire agreements of the
parties relating to the subject matter hereof. Neither Agreement nor its terms may be changed orally but only by an agreement
in writing signed by both Parties against whom enforcement of any waiver, change, modification, extension or discharge is sought.

 

 

This
nine (9) page agreement has been duly signed by the Parties hereto:

 

AGREED
TO:

 

“Company”

Date:
6/20/12                         By:     s/s/
Matthew Moore           

Name:        Matthew Moore                                                        

 

Title:           President                                                                   

 

 

 

“Consultant”

Date:
6/20/12                  
     By:       s/s/ Michael Chermak       

 

 

Name:
Michael Chermak, Director

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