Document:

Exhibit 10.3

 

NEITHER THIS SECURITY NOR THE SECURITIES
AS TO WHICH THIS SECURITY MAY BE EXERCISED HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION
OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH
EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE
OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

 

COMMON STOCK PURCHASE WARRANT

 

UBID HOLDINGS, INC.

 

Warrant Shares: 7,000,000

Date of Issuance: July 22, 2019 (“Issuance
Date”)

 

This COMMON
STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received (in connection with the issuance of
the $277,500.00 convertible promissory note to the Holder (as defined below) of even date) (the “Note”), Auctus Fund,
LLC, a Delaware limited liability company (including any permitted and registered assigns, the “Holder”), is
entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or
after the date of issuance hereof, to purchase from uBid Holdings, Inc., a Delaware corporation (the “Company”),
up to 7,000,000 shares of Common Stock (as defined below) (the “Warrant Shares”) (whereby such number may be
adjusted from time to time pursuant to the terms and conditions of this Warrant) at the Exercise Price per share then in effect.
This Warrant is issued by the Company as of the date hereof in connection with that certain securities purchase agreement dated
July 22, 2019, by and among the Company and the Holder (the “Purchase Agreement”).

 

Capitalized terms
used in this Warrant shall have the meanings set forth in the Purchase Agreement unless otherwise defined in the body of this Warrant
or in Section 12 below. For purposes of this Warrant, the term “Exercise Price” shall mean $0.06, subject to
adjustment as provided herein (including but not limited to cashless exercise), and the term “Exercise Period”
shall mean the period commencing on the Issuance Date and ending on 5:00 p.m. eastern standard time on the three-year anniversary
thereof.

 

		1.	EXERCISE OF WARRANT.

 

(a)       Mechanics
of Exercise. Subject to the terms and conditions hereof, the rights represented by this Warrant may be exercised in
whole or in part at any time or times during the Exercise Period by delivery of a written notice, in the form attached hereto
as Exhibit A (the “Exercise Notice”), of the Holder’s election to exercise this Warrant. The
Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder. Partial exercises of
this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the
effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number
of Warrant Shares purchased. On or before the second Trading Day (the “Warrant Share Delivery Date”)
following the date on which the Holder sent the Exercise Notice to the Company or the Company’s transfer agent, and
upon receipt by the Company of payment to the Company of an amount equal to the applicable Exercise Price multiplied by the
number of Warrant Shares as to which all or a portion of this Warrant is being exercised (the “Aggregate Exercise
Price” and together with the Exercise Notice, the “Exercise Delivery Documents”) in cash or by
wire transfer of immediately available funds (or by cashless exercise, in which case there shall be no Aggregate Exercise
Price provided), the Company shall (or direct its transfer agent to) issue and dispatch by overnight courier to the address
as specified in the Exercise Notice, a certificate, registered in the Company’s share register in the name of the
Holder or its designee, for the number of shares of Common Stock to which the Holder is entitled pursuant to such exercise
(or deliver such shares of Common Stock in electronic format if requested by the Holder). Upon delivery of the Exercise
Delivery Documents, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant
Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the
certificates evidencing such Warrant Shares. If this Warrant is submitted in connection with any exercise and the number of
Warrant Shares represented by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired
upon an exercise, then the Company shall as soon as practicable and in no event later than three Business Days after any
exercise and at its own expense, issue a new Warrant (in accordance with Section 6) representing the right to purchase the
number of Warrant Shares purchasable immediately prior to such exercise under this Warrant, less the number of Warrant Shares
with respect to which this Warrant is exercised.

 

     

     

    

 

If the Company
fails to cause its transfer agent to transmit to the Holder the respective shares of Common Stock by the respective Warrant Share
Delivery Date, then the Holder will have the right to rescind such exercise in Holder’s sole discretion, and such failure
shall be deemed an event of default under the Note.

 

If (i) the Market
Price of one share of Common Stock is greater than the Exercise Price and (ii) there is no effective non-stale registration statement
of the Company covering the Holder’s immediate resale of the Warrant Shares at prevailing market prices without any limitations,
the Holder may elect to receive Warrant Shares pursuant to a cashless exercise, in lieu of a cash exercise, equal to the value
of this Warrant determined in the manner described below (or of any portion thereof remaining unexercised) by surrender of this
Warrant and a Notice of Exercise, in which event the Company shall issue to Holder a number of Common Stock computed using the
following formula:

 

X =   Y (A-B)

        A

 

		Where 	X =	the number of Shares to be issued to Holder.

 

		Y =	the number of Warrant Shares that the Holder elects to purchase under this Warrant (at the date of such calculation).

 

		A =	the Market Price
(at the date of such calculation).

 

		B =	Exercise Price
(as adjusted to the date of such calculation).

 

(b)       No
Fractional Shares. No fractional shares shall be issued upon the exercise of this Warrant as a consequence of any adjustment
pursuant hereto. All Warrant Shares (including fractions) issuable upon exercise of this Warrant may be aggregated for purposes
of determining whether the exercise would result in the issuance of any fractional share. If, after aggregation, the exercise would
result in the issuance of a fractional share, the Company shall, in lieu of issuance of any fractional share, pay the Holder otherwise
entitled to such fraction a sum in cash equal to the product resulting from multiplying the then-current fair market value of a
Warrant Share by such fraction.

 

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(c)       Holder’s
Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right
to exercise any portion of this Warrant, to the extent that after giving effect to issuance of Warrant Shares upon exercise
as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other
persons acting as a group together with the Holder or any of the Holder’s Affiliates), would beneficially own in excess
of the Beneficial Ownership Limitation, as defined below. For purposes of the foregoing sentence, the number of shares of
Common Stock beneficially owned by the Holder and its Affiliates shall include the number of shares of Common Stock issuable
upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares
of Common Stock which would be issuable upon (i) exercise of the remaining, non-exercised portion of this Warrant
beneficially owned by the Holder or any of its Affiliates and (ii) exercise or conversion of the unexercised or non-converted
portion of any other securities of the Company (including without limitation any other Common Stock Equivalents) subject to a
limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of
its Affiliates. Except as set forth in the preceding sentence, for purposes of this paragraph (d), beneficial ownership shall
be calculated in accordance with Section 13(d) of the Exchange Act, it being acknowledged by the Holder that the Company is
not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder
is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation
contained in this paragraph applies, the determination of whether this Warrant is exercisable (in relation to other
securities owned by the Holder together with any affiliates) and of which portion of this Warrant is exercisable shall be in
the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s
determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any
Affiliates) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation,
and the Company shall have no obligation to verify or confirm the accuracy of such determination.

 

For purposes
of this paragraph, in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding
shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission,
as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or
its transfer agent setting forth the number of shares of Common Stock outstanding. Upon the request of a Holder, the Company shall
within two Trading Days confirm to the Holder the number of shares of Common Stock then outstanding. In any case, the number of
outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company,
including this Warrant, by the Holder or its affiliates since the date as of which such number of outstanding shares of Common
Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common
Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant.
The limitations contained in this paragraph shall apply to a successor Holder of this Warrant.

 

2.             ADJUSTMENTS.
The Exercise Price and the number of Warrant Shares shall be adjusted from time to time as follows:

 

(a)       Distribution
of Assets. If the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its
assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including without limitation any distribution
of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement
or other similar transaction, but not including a reverse split with respect to the Common Stock) (a “Distribution”),
at any time after the issuance of this Warrant, then, in each such case:

 

(i)       any
Exercise Price in effect immediately prior to the close of business on the record date fixed for the determination of holders of
shares of Common Stock entitled to receive the Distribution shall be reduced, effective as of the close of business on such record
date, to a price determined by multiplying such Exercise Price by a fraction (i) the numerator of which shall be the Closing Sale
Price of the shares of Common Stock on the Trading Day immediately preceding such record date minus the value of the Distribution
(as determined in good faith by the Company’s Board of Directors) applicable to one share of Common Stock, and (ii) the denominator
of which shall be the Closing Sale Price of the shares of Common Stock on the Trading Day immediately preceding such record date;
and

 

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(ii)       the
number of Warrant Shares shall be increased to a number of shares equal to the number of shares of Common Stock obtainable
immediately prior to the close of business on the record date fixed for the determination of holders of shares of Common
Stock entitled to receive the Distribution multiplied by the reciprocal of the fraction set forth in the immediately
preceding clause (i); provided, however, that in the event that the Distribution is of shares of common stock of a company
(other than the Company) whose common stock is traded on a national securities exchange or a national automated quotation
system (“Other Shares of Common Stock”), then the Holder may elect to receive a warrant to purchase Other
Shares of Common Stock in lieu of an increase in the number of Warrant Shares, the terms of which shall be identical to those
of this Warrant, except that such warrant shall be exercisable into the number of shares of Other Shares of Common Stock that
would have been payable to the Holder pursuant to the Distribution had the Holder exercised this Warrant immediately prior to
such record date and with an aggregate exercise price equal to the product of the amount by which the exercise price of this
Warrant was decreased with respect to the Distribution pursuant to the terms of the immediately preceding clause (i) and the
number of Warrant Shares calculated in accordance with the first part of this clause (ii).

 

(iii)       For
the avoidance of doubt, no adjustment shall occur when shares of outstanding Common Stock are merged proportionally across all
stockholders to form a smaller number of outstanding shares of Common Stock.

 

(b)       Anti-Dilution
Adjustments to Exercise Price. If the Company or any Subsidiary thereof, as applicable, at any time while this Warrant is outstanding,
shall sell or grant any option to purchase, or sell or grant any right to reprice, or otherwise dispose of or issue (or announce
any offer, sale, grant or any option to purchase or other disposition) any Common Stock or securities entitling any person or entity
to acquire shares of Common Stock (upon conversion, exercise or otherwise) (including but not limited to under the Note), at an
effective price per share less than the then Exercise Price (such lower price, the “Base Share Price” and such
issuances collectively, a “Dilutive Issuance”) (if the holder of the Common Stock or Common Stock Equivalents
so issued shall at any time, whether by operation of purchase price adjustments, elimination of an applicable floor price for any
reason in the future (including but not limited to the passage of time or satisfaction of certain condition(s)), reset provisions,
floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which are issued
in connection with such issuance, be entitled or potentially entitled to receive shares of Common Stock at an effective price per
share which is less than the Exercise Price at any time while such Common Stock or Common Stock Equivalents are in existence, such
issuance shall be deemed to have occurred for less than the Exercise Price on such date of the Dilutive Issuance (regardless of
whether the Common Stock or Common Stock Equivalents are (i) subsequently redeemed or retired by the Company after the date of
the Dilutive Issuance or (ii) actually converted or exercised at such Base Share Price), then the Exercise Price shall be reduced
at the option of the Holder and only reduced to equal the Base Share Price, and the number of Warrant Shares issuable hereunder
shall be increased such that the aggregate Exercise Price payable hereunder, after taking into account the decrease in the Exercise
Price, shall be equal to the aggregate Exercise Price prior to such adjustment (for the avoidance of doubt, the aggregate Exercise
Price prior to such adjustment is calculated as follows: the total number of Warrant Shares multiplied by the initial Exercise
Price in effect as of the Issuance Date). Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents
are issued, regardless of whether the Common Stock or Common Stock Equivalents are (i) subsequently redeemed or retired by the
Company after the date of the Dilutive Issuance or (ii) actually converted or exercised at such Base Share Price by the holder
thereof (for the avoidance of doubt, the Holder may utilize the Base Share Price even if the Company did not actually issue shares
of its common stock at the Base Share Price under the respective Common stock Equivalents). The Company shall notify the Holder
in writing, no later than the Trading Day following the issuance of any Common Stock or Common Stock Equivalents subject to this
Section 2(b), indicating therein the applicable issuance price, or applicable reset price, exchange price, conversion price and
other pricing terms (such notice the “Dilutive Issuance Notice”). For purposes of clarification, whether or
not the Company provides a Dilutive Issuance Notice pursuant to this Section 2(b), upon the occurrence of any Dilutive Issuance,
after the date of such Dilutive Issuance the Holder is entitled to receive a number of Warrant Shares based upon the Base Share
Price regardless of whether the Holder accurately refers to the Base Share Price in the Notice of Exercise.

 

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3.             FUNDAMENTAL
TRANSACTIONS. If, at any time while this Warrant is outstanding, (i) the Company effects any merger of the Company with
or into another entity and the Company is not the surviving entity (such surviving entity, the “Successor
Entity”), (ii) the Company effects any sale of all or substantially all of its assets in one or a series of related
transactions, (iii) any tender offer or exchange offer (whether by the Company or by another individual or entity, and
approved by the Company) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their
shares of Common Stock for other securities, cash or property and the holders of at least 50% of the Common Stock accept such
offer, or (iv) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to
which the Common Stock is effectively converted into or exchanged for other securities, cash or property (other than as a
result of a subdivision or combination of shares of Common Stock) (in any such case, a “Fundamental
Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive the
number of shares of Common Stock of the Successor Entity or of the Company and any additional consideration (the
“Alternate Consideration”) receivable upon or as a result of such reorganization, reclassification,
merger, consolidation or disposition of assets by a holder of the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such event (disregarding any limitation on exercise contained herein solely for the purpose
of such determination). For purposes of any such exercise, the determination of the Exercise Price shall be
appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in
respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price
among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the
Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be
received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it
receives upon any exercise of this Warrant following such Fundamental Transaction. To the extent necessary to effectuate the
foregoing provisions, any Successor Entity in such Fundamental Transaction shall issue to the Holder a new warrant consistent
with the foregoing provisions and evidencing the Holder’s right to exercise such warrant into Alternate
Consideration.

 

4.             NON-CIRCUMVENTION.
The Company covenants and agrees that it will not, by amendment of its certificate of incorporation, bylaws or through any reorganization,
transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all times in good
faith carry out all the provisions of this Warrant and take all action as may be required to protect the rights of the Holder.
Without limiting the generality of the foregoing, the Company (i) shall not increase the par value of any shares of Common Stock
receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii) shall take all such actions as may be
necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable shares of Common
Stock upon the exercise of this Warrant, and (iii) shall, for so long as this Warrant is outstanding, have authorized and reserved,
free from preemptive rights, ten times the number of shares of Common Stock that is actually issuable upon full exercise of the
Warrant (based on the Exercise Price in effect from time to time, and without regard to any limitations on exercise).

 

5.            WARRANT HOLDER NOT DEEMED A
STOCKHOLDER.Except as otherwise specifically provided herein, this Warrant, in and of itself, shall not entitle the Holder
to any voting rights or other rights as a stockholder of the Company. In addition, nothing contained in this Warrant shall be construed
as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder
of the Company, whether such liabilities are asserted by the Company or by creditors of the Company.

 

		6.	REISSUANCE.

 

(a)       Lost,
Stolen or Mutilated Warrant. If this Warrant is lost, stolen, mutilated or destroyed, the Company will, on such terms as to
indemnity or otherwise as it may reasonably impose (which shall, in the case of a mutilated Warrant, include the surrender thereof),
issue a new Warrant of like denomination and tenor as this Warrant so lost, stolen, mutilated or destroyed.

 

(b)       Issuance
of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant
shall be of like tenor with this Warrant, and shall have an issuance date, as indicated on the face of such new Warrant which is
the same as the Issuance Date.

 

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		7.	TRANSFER.

 

(a)Notice of
Transfer.The Holder agrees to give written notice to the Company before transferring this Warrant or transferring any
Warrant Shares of such Holder’s intention to do so, describing briefly the manner of any proposed transfer. Promptly
upon receiving such written notice, the Company shall present copies thereof to the Company’s counsel. If the proposed
transfer may be effected without registration or qualification (under any federal or state securities laws), the Company, as
promptly as practicable, shall notify the Holder thereof, whereupon the Holder shall be entitled to transfer this Warrant or
to dispose of Warrant Shares received upon the previous exercise of this Warrant, all in accordance with the terms of the
notice delivered by the Holder to the Company; provided, however, that an appropriate legend may be endorsed on this Warrant
or the certificates for such Warrant Shares respecting restrictions upon transfer thereof necessary or advisable in the
opinion of counsel and satisfactory to the Company to prevent further transfers which would be in violation of Section 5 of
the Securities Act and applicable state securities laws; and provided further that the prospective transferee or purchaser
shall execute the Assignment of Warrant attached hereto as Exhibit B and such other documents and make such
representations, warranties, and agreements as may be required solely to comply with the exemptions relied upon by the
Company for the transfer or disposition of the Warrant or Warrant Shares.

 

(b)       If
the proposed transfer or disposition of this Warrant or such Warrant Shares described in the written notice given pursuant to this
Section 7 may not be effected without registration or qualification of this Warrant or such Warrant Shares, the Holder will limit
its activities in respect to such transfer or disposition as are permitted by law.

 

(c)       Any
transferee of all or a portion of this Warrant shall succeed to the rights and benefits of the initial Holder of this
Warrant under Sections 4.1 and 4.3 (subject, however, to the limitations set forth in Section 4.2), 4.4 and 4.5 of the
Purchase Agreement (registration rights, expenses, and indemnity).

 

8.             NOTICES.
Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance
with the notice provisions contained in the Purchase Agreement. The Company shall provide the Holder with prompt written notice
(i) immediately upon any adjustment of the Exercise Price, setting forth in reasonable detail, the calculation of such adjustment
and (ii) at least 20 days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend
or distribution upon the shares of Common Stock, (B) with respect to any grants, issuances or sales of any stock or other securities
directly or indirectly convertible into or exercisable or exchangeable for shares of Common Stock or other property, pro rata to
the holders of shares of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution
or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction with such
notice being provided to the Holder.

 

9.            AMENDMENT
AND WAIVER. The terms of this Warrant may be amended or waived (either generally or in a particular instance and either retroactively
or prospectively) only with the written consent of the Company and the Holder.

 

10.           GOVERNING
LAW. This Warrant shall be governed by and construed in accordance with the laws of the State of Nevada without regard
to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions
contemplated by this Warrant shall be brought only in the state courts of Massachusetts or in the federal courts located in
the Commonwealth of Massachusetts. The parties to this Warrant hereby irrevocably waive any objection to jurisdiction and
venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based
upon forum non conveniens. THE BORROWER HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR
ANY TRANSACTION CONTEMPLATED HEREBY. The prevailing party shall be entitled to recover from the other party its
reasonable attorney's fees and costs. In the event that any provision of this Warrant or any other agreement delivered in
connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be
deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or
rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or
enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and
consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction
Document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such
party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to
serve process in any other manner permitted by law.

 

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11.           ACCEPTANCE.
Receipt of this Warrant by the Holder shall constitute acceptance of and agreement to all of the terms and conditions contained
herein.

 

12.           CERTAIN DEFINITIONS.For
purposes of this Warrant, the following terms shall have the following meanings:

 

(a)       “Nasdaq”
means www.Nasdaq.com.

 

(b)       “Closing
Sale Price” means, for any security as of any date, (i) the last closing trade price for such security on the Principal
Market, as reported by Nasdaq, or, if the Principal Market begins to operate on an extended hours basis and does not designate
the closing trade price, then the last trade price of such security prior to 4:00 p.m., New York time, as reported by Nasdaq, or
(ii) if the foregoing does not apply, the last trade price of such security in the over-the-counter market for such security as
reported by Nasdaq, or (iii) if no last trade price is reported for such security by Nasdaq, the average of the bid and ask prices
of any market makers for such security as reported by the OTC Markets. If the Closing Sale Price cannot be calculated for a security
on a particular date on any of the foregoing bases, the Closing Sale Price of such security on such date shall be the fair market
value as mutually determined by the Company and the Holder. All such determinations to be appropriately adjusted for any stock
dividend, stock split, stock combination or other similar transaction during the applicable calculation period.

 

(c)       “Common
Stock” means the Company’s common stock, and any other class of securities into which such securities may hereafter
be reclassified or changed.

 

(d)       “Common
Stock Equivalents” means any securities of the Company that would entitle the holder thereof to acquire at any time Common
Stock, including without limitation any debt, preferred stock, rights, options, warrants or other instrument that is at any time
convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

 

(e)       “Dilutive
Issuance” is any issuance of Common Stock or Common Stock Equivalents described in Section 2(b) above; provided, however,
that a Dilutive Issuance shall not include any Exempt Issuance.

 

(f)       “Exempt
Issuance” means the issuance of (i) shares of Common Stock or options to employees, officers, or directors of the Company
pursuant to any stock or option plan duly adopted by a majority of the non-employee members of the Board of Directors of the Company
or a majority of the members of a committee of non-employee directors established for such purpose, and (ii) shares of Common
Stock issued pursuant to real property leasing arrangement from a bank approved by the Board of Directors of the Company.

 

(g)       “Principal
Market” means the primary national securities exchange on which the Common Stock is then traded.

 

(h)       “Market
Price” means the highest traded price of the Common Stock during the one hundred fifty Trading Days prior to the date
of the respective Exercise Notice.

 

(i)       “Trading
Day” means (i) any day on which the Common Stock is listed or quoted and traded on its Principal Market, (ii) if the
Common Stock is not then listed or quoted and traded on any national securities exchange, then a day on which trading occurs on
any over-the-counter markets, or (iii) if trading does not occur on the over-the-counter markets, any Business Day.

 

* * * * * *
*

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IN WITNESS WHEREOF, the Company has
caused this Warrant to be duly executed as of the Issuance Date set forth above.

 

	 	UBID HOLDINGS, INC.
	 	 
	 	/s/
    Ketan Thakker
	 	Name: Ketan Thakker
	 	Title: Chief Executive Officer

 

     

     

    

 

EXHIBIT A

 

EXERCISE NOTICE

 

(To be executed by the registered
holder to exercise this Common Stock Purchase Warrant)

 

The
Undersigned holder hereby exercises the right to purchase  _________________ of the shares of Common Stock
(“Warrant Shares”) of uBid Holdings, Inc., a Delaware corporation (the “Company”), evidenced by the
attached copy of the Common Stock Purchase Warrant (the “Warrant”). Capitalized terms used herein and not
otherwise defined shall have the respective meanings set forth in the Warrant.

 

		1.	Form of Exercise Price. The Holder intends that
payment of the Exercise Price shall be made as (check one):

 

	 	 ̈	a cash exercise with respect to _____________ Warrant Shares; or
	 	 ̈	by cashless exercise pursuant to the Warrant.

  

		2.	Payment of Exercise
Price. If cash exercise is selected above, the holder shall pay the applicable Aggregate Exercise Price in the sum of $______________
to the Company in accordance with the terms of the Warrant.

 

		3.	Delivery of Warrant Shares. The Company shall deliver
to the holder_____________ Warrant Shares in accordance with the terms of the Warrant.

 

	Date:  	 	 	 

 

	 	 
	 	(Print Name of Registered Holder)
	 	 
	 	By:  	 
	 	Name:	 
	 	Title:	 

 

     

     

    

 

EXHIBIT B

 

ASSIGNMENT OF WARRANT

 

(To be signed only upon authorized
transfer of the Warrant)

 

For Value
Received, the undersigned hereby sells, assigns, and transfers
unto_____________ the right to purchase______________ shares of common stock of uBid Holdings, Inc., to which
the within Common Stock Purchase Warrant relates and appoints _________________, as attorney-in-fact, to transfer said right on the books of
uBid Holdings, Inc. with full power of substitution and re-substitution in the premises. By accepting such transfer, the
transferee has agreed to be bound in all respects by the terms and conditions of the within Warrant.

 

	Dated:  	 	 	 

 

	 	 
	 	(Signature) *
	 	 
	 	 
	 	(Name)
	 	 
	 	 
	 	(Address)
	 	 
	 	 
	 	(Social Security or Tax Identification No.)

 

* The signature on this Assignment
of Warrant must correspond to the name as written upon the face of the Common Stock Purchase Warrant in every particular without
alteration or enlargement or any change whatsoever. When signing on behalf of a corporation, partnership, trust or other entity,
please indicate your position(s) and title(s) with such entity.Exhibit

SHUTTERSTOCK, INC. 
Empire State Building 
350 Fifth Avenue, 21st Floor 
New York, NY 10118
Steven Ciardiello
XXXXXXXXX
XXXXXXXXX

Re:            EMPLOYMENT AGREEMENT
Dear Steve:
This Employment Agreement (the “Agreement”) between you (referred to hereinafter as the “Executive”) and Shutterstock, Inc., a Delaware corporation, including all direct and indirect subsidiaries and affiliated entities (collectively, the “Company”) sets forth the terms and conditions that shall govern the period of your employment with the Company (referred to hereinafter as “Employment” or the “Employment Period”). This Agreement supersedes the Offer Letter between you and the Company, dated November 15, 2016 (the “Offer Letter”). 
1.Duties and Scope of Employment.
(a)    At-Will Employment.  Executive commenced full-time Employment with the Company effective as of November 14, 2016 (the “Effective Start Date”) and the terms of such Employment were governed by the Offer Letter through the effective date of this Agreement and will be governed by this Agreement following the effective date of this Agreement, which shall be the latest date that this Agreement is fully signed by the parties. Executive’s Employment with the Company is for no specified period and constitutes “at will” employment. As a result, Executive is free to terminate Employment at any time, with or without advance notice, and for any reason or for no reason. Similarly, the Company is free to terminate Executive’s Employment at any time, with or without advance notice, and with or without Cause (as defined below).  Furthermore, although terms and conditions of Executive’s Employment with the Company may change over time, nothing shall change the at-will nature of Executive’s Employment.
(b)    Position and Responsibilities.  During the Employment Period, the Company agrees to employ Executive in the position of Chief Accounting Officer. Executive will report to the Chief Executive Officer, or to such other person as the Company subsequently may determine (your “Supervisor”), and Executive will be working out of the Company’s office in New York City, New York. Executive will perform the duties and responsibilities and authority customarily performed and held by an employee in Executive’s position or as otherwise may be assigned or delegated to Executive by Executive’s Supervisor, including but not limited to duties and responsibilities of an interim Chief Financial Officer. 
(c)    Obligations to the Company.  During the Employment Period, Executive shall perform Executive’s duties faithfully and to the best of Executive’s ability and will devote 

19548162.2

Executive’s full business efforts and time to the Company. Notwithstanding the foregoing, Executive will be permitted to (a) with the prior written approval of Executive’s Supervisor (which approval shall not be unreasonably withheld), act or serve as a director, trustee, or committee member of any non-profit, civic, or charitable organization, as long as such activities are disclosed in writing to the Company’s General Counsel in accordance with the Company’s policies and rules, with a copy of such notice to the Board of Directors, (b) purchase or own less than five percent (5%) of the publicly traded securities of any corporation; provided that, such ownership represents a passive investment and that the Executive is not a controlling person of, or a member of a group that controls, such corporation; and (c) deliver lectures, fulfill speaking engagements, teach at educational institution or manage personal investments; provided that such activities do not individually or in the aggregate interfere with the performance of Executive’s duties under this Agreement or create a potential business or fiduciary conflict. Executive may serve on the board of directors of unaffiliated companies that are not competitive with the business of the Company to the extent such service or participation does not interfere with Executive’s employment or duties under this Agreement and that Executive has advised Executive’s Supervisor and the Board at least thirty (30) days prior to commencing service, and the Executive’s Supervisor and the Board have consented (which consent shall not be unreasonably withheld) to, such additional corporate board service. Executive shall comply with the Company’s policies and rules, as they may be in effect from time to time during Executive’s Employment.
(d)    Confidentiality.  All information learned or developed by the Executive during the course of the Executive’s employment by the Company or any subsidiary thereof will be deemed “Confidential Information” under the terms of this Agreement. The Executive will not disclose to any person at any time or use in any way, except as directed by the Company, either during or after the employment of the Executive by the Company, any Confidential Information. The foregoing restrictions shall not apply to information which is or becomes part of the public domain though no act or failure to act by the Executive. In addition to the foregoing, in the process of the Executive’s employment with the Company, or thereafter, under no condition is the Executive to use or disclose to the Company, or incorporate or use in any of Executive’s work for the Company, any confidential information imparted to the Executive or with which Executive may have come into contact while in the employ of Executive’s former employer(s). 
(i)    Pursuant to 18 U.S.C. § 1833(b), Executive acknowledges that Executive will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret if he/she (i) makes such disclosure in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney and such disclosure is made solely for the purpose of reporting or investigating a suspected violation of law; or (ii) such disclosure was made in a complaint or other document filed in a lawsuit or other proceeding if such filing is made under seal. Executive understands that if Executive files a lawsuit for retaliation by the Company for reporting a suspected violation of law, Executive may disclose the trade secret to Executive’s attorney and use the trade secret information in the court proceeding if Executive (x) files any document containing the trade secret under seal, and (y) does not disclose the trade secret, except pursuant to court order. Nothing in this Agreement, or any other agreement that Executive has with the Company, is intended to conflict with 18 U.S.C. § 1833(b) or create liability for disclosures of trade secrets that are expressly allowed by such section. Further, nothing in this 

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Agreement or any other agreement that Executive has with the Company shall prohibit or restrict Executive from making any voluntary disclosure of information or documents concerning possible violations of law to any governmental agency or legislative body, or any self-regulatory organization, in each case, without advance notice to the Company.
2.Cash and Incentive Compensation.
(a)    Base Salary. The Company shall pay Executive, as compensation for Executive’s services, a base salary at a gross annual rate of $375,000, less all required tax withholdings and other applicable deductions, in accordance with the Company’s standard payroll procedures. Executive’s Base Salary will be subject to review and adjustments by the Compensation Committee of the Board (the “Committee”), in its sole discretion, upon recommendation of Executive’s Supervisor and in connection with the Company’s normal performance review process.  The annual compensation specified in this subsection (a), together with any modifications to such compensation made from time to time, is referred to in this Agreement as the “Base Salary.” 
(b)    Cash Incentive Bonus. Executive will be eligible to earn an annual cash incentive bonus (the “Cash Bonus”), less all required tax withholdings and other applicable deductions, each calendar year during the Employment Period based upon the achievement of objective or subjective criteria (collectively, the “Performance Goals”) established by the Company in connection with the Company’s annual short term incentive compensation plan and approved by the Company’s Board of Directors (the “Board”), any Compensation Committee of the Board (the “Committee”), or a delegate of either the Board or the Committee (the “Delegate”), as applicable in its sole discretion. The initial target amount for any such Cash Bonus will be 50% of Executive’s Base Salary (the “Target Bonus Percentage”). Executive’s Target Bonus Percentage for any subsequent year may be adjusted, as determined in the sole discretion of the Board, the Committee or the Delegate, as applicable. Executive shall not earn a Cash Bonus unless Executive is employed by the Company on the date when such Cash Bonus is actually paid by the Company. 
(c)    Guaranteed Bonus. In addition to any Cash Bonus payable for the fiscal year ending December 31, 2019, in light of Executive’s services to the Company as Interim Chief Financial Officer, Executive shall be guaranteed a one-time bonus payment of $200,000, less all required tax withholdings and other applicable deductions (the “Guaranteed Bonus”), to be paid on or around March 15, 2020. Executive shall not earn the Guaranteed Bonus unless Executive is employed by the Company on the date when such Guaranteed Bonus is actually paid by the Company.
3.Recoupment. The incentive compensation payable to Executive pursuant to this Agreement shall be subject to reduction, cancellation, forfeiture or recoupment as and to the extent required by the applicable provisions of any law (including without limitation Section 10D of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder), government regulation or stock exchange listing requirement, or clawback policy or provision implemented by the Company pursuant to such law, regulation or listing requirement from time to time.
4.Employee Benefits.  During the Employment Period, Executive shall be eligible to participate in the employee benefit plans maintained by the Company and generally available to 

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similarly situated employees of the Company, subject in each case to the generally applicable terms and conditions of the plan in question and to the determinations of any person or committee administering such employee benefit plan. The Company reserves the right to cancel or change the employee benefit plans and programs it offers to its employees at any time.
5.Business Expenses. The Company will reimburse Executive for necessary and reasonable business expenses incurred in connection with Executive’s duties hereunder. In order to receive any such reimbursement, the Executive must comply with generally applicable policies, practices and procedures of the Company with respect to reimbursement for, and submission of expense reports, receipts or similar documentation of, such expenses.
6.Rights Upon Termination. Except as expressly provided in Section 7, upon the termination of Executive’s Employment for any reason, Executive shall only be entitled to (i) the benefits accrued or earned in accordance with any applicable Company-provided plans, policies, and arrangements for the period immediately preceding the effective date of the termination of Employment and (ii) such other compensation or benefits from the Company as may be required by law (collectively, the “Accrued Benefits”).
7.Termination Benefits.
(a)    Termination without Cause not in Connection with a Change in Control. If the Company terminates Executive’s employment with the Company for a reason other than for Cause, Executive becoming Disabled or Executive’s death at any time other than during the twelve (12)-month period immediately following a Change in Control, then, subject to Section 8, Executive will receive the following severance benefits from the Company:
(i)    Accrued Compensation. The Company will pay Executive all Accrued Benefits.
(ii)    Severance Payment. Commencing on the sixtieth day after the date of the Executive’s termination of employment, the Company shall continue to pay the Executive the Executive’s Base Salary, at the rate in effect immediately prior to such termination of employment, for the Severance Period, less all required tax withholdings and other applicable deductions, which will be paid in accordance with the Company’s regular payroll procedures; provided, however, that any such salary otherwise payable during the 60-day period immediately following the date of such termination of employment shall be paid to the Executive sixty days following such termination of employment.
(iii)    Continued Employee Benefits. If Executive elects continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) for Executive and Executive’s eligible dependents, within the time period prescribed pursuant to COBRA, the Company will reimburse Executive for the COBRA premiums for such coverage (at the coverage levels in effect immediately prior to Executive’s termination or resignation) until the earlier of (A) the end of the Severance Period, or (B) the date upon which Executive and/or Executive’s eligible dependents become covered under similar plans.  COBRA reimbursements will be made by the Company to Executive consistent with the Company’s normal 

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expense reimbursement policy and will be taxable to the extent required to avoid adverse consequences to Executive or the Company under either Code Section 105(h) or the Patient Protection and Affordable Care Act of 2010.
(iv)    Equity. If the Executive’s termination date is at least twelve (12) months following the Effective Start Date, fifty percent (50%) of Executive’s unvested and outstanding equity awards that would have become vested had Executive remained in the employ of the Company for the twelve (12)-month period following Executive’s termination of employment shall immediately vest and become exercisable as of the date of Executive’s termination.  
(v)    Pro-Rated Bonus Payment. Executive will receive a pro-rated annual bonus for the fiscal year in which Executive terminates employment equal to (x) the annual bonus that Executive would have received based on actual performance for such fiscal year and in connection with the Company’s annual short term incentive compensation plan if Executive had remained in the employ of the Company for the entire fiscal year, if any, multiplied by (y) a fraction, the numerator of which is the number of days Executive was in the employ of the Company during the fiscal year including the Termination Date and the denominator of which is 365 (the “Pro-Rated Bonus”). The Pro-Rated Bonus, if any, shall be paid at the same time annual bonuses are paid by the Company to other executives of the Company for the fiscal year in which Executive terminated employment, but no later than March 15th of the calendar year following the calendar year in which Executive terminated employment.
(vi)    Guaranteed Bonus Payment. To the extent Executive is terminated pursuant to this Section 7(a) on or prior to March 15, 2020, Executive shall receive a lump-sum payment in an amount equal to the Guaranteed Bonus, less all required tax withholdings and other applicable deductions, which will be paid sixty days following such termination of employment.
(b)    Termination without Cause or Resignation for Good Reason in Connection with a Change in Control. If at the same time of, or during the twelve (12)-month period immediately following a Change in Control, (x) the Company terminates Executive’s employment with the Company for a reason other than for Cause, Executive becoming Disabled or Executive’s death, or (y) Executive resigns for Good Reason, then, subject to Section 8, Executive will receive the following severance benefits from the Company in lieu of the benefits described in Section 7(a) above:
(i)    Accrued Compensation. The Company will pay Executive all Accrued Benefits.
(ii)    Severance Payment. Executive will receive a lump sum severance payment equal to six (6) months’ of Executive’s Base Salary, at the rate in effect immediately prior to such termination of employment, less all required tax withholdings and other applicable deductions, which will be paid sixty days following such termination of employment.
(iii)    Continued Employee Benefits. If Executive elects continuation coverage pursuant to COBRA for Executive and Executive’s eligible dependents, within the time 

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period prescribed pursuant to COBRA, the Company will reimburse Executive for the COBRA premiums for such coverage (at the coverage levels in effect immediately prior to Executive’s termination or resignation) until the earlier of (A) a period of six (6) months from the last date of employment of Executive with the Company, or (B) the date upon which Executive and/or Executive’s eligible dependents become covered under similar plans.  COBRA reimbursements will be made by the Company to Executive consistent with the Company’s normal expense reimbursement policy and will be taxable to the extent required to avoid adverse consequences to Executive or the Company under either Code Section 105(h) or the Patient Protection and Affordable Care Act of 2010.
(iv)    Equity. 50% of Executive’s unvested and outstanding equity awards that would have become vested had Executive remained in the employ of the Company for the twelve (12) month period following Executive’s termination of employment shall immediately vest and become exercisable as of the date of Executive’s termination. 
(v)    Target Bonus Payment. Executive will receive a lump sum severance payment equal to one hundred percent (100%) of Executive’s full target bonus amount for the fiscal year in effect at the date of such termination of employment (or, if greater, as in effect for the fiscal year in which the Change in Control occurs), less all required tax withholdings and other applicable deductions.
(c)    Disability; Death; Voluntary Resignation; Termination for Cause. If Executive’s employment with the Company is terminated due to (i) Executive becoming Disabled or Executive’s death, (ii) Executive’s voluntary resignation (other than for Good Reason at the time of or during the twelve (12) month period immediately following a Change of Control), or (iii) the Company’s termination of Executive’s employment with the Company for Cause, then Executive or Executive’s estate (as the case may be) will receive the Accrued Benefits, but will not be entitled to any other compensation or benefits from the Company except to the extent required by law (for example, COBRA). All Accrued Benefits shall in all cases be paid within thirty (30) days of Executive’s termination of employment (or such earlier date as required by applicable law) pursuant to this Section 7(c). 
(d)    Exclusive Remedy. In the event of a termination of Executive’s employment with the Company, the provisions of this Section 7 are intended to be and are exclusive and in lieu of any other rights or remedies to which Executive or the Company may otherwise be entitled, whether at law, tort or contract, in equity, or under this Agreement (other than the payment of accrued but unpaid wages, as required by law, and any unreimbursed reimbursable expenses). Executive will be entitled to no other severance, benefits, compensation or other payments or rights upon a termination of employment, including, without limitation, any severance payments and/or benefits provided in the Employment Agreement, other than those benefits expressly set forth in Section 7 of this Agreement or pursuant to written equity award agreements with the Company. 
(e)    No Duty to Mitigate. Executive will not be required to mitigate the amount of any payment contemplated by this Agreement, nor will any earnings that Executive may receive from any other source reduce any such payment.

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8.Conditions to Receipt of Severance.
(a)    Release of Claims Agreement. The receipt of any severance payments or benefits pursuant to Section 7 of this Agreement, other than, for the avoidance of doubt, the Accrued Benefits, is subject to Executive signing and not revoking a separation agreement and release of claims in a form acceptable to the Company (the “Release”), which must become effective no later than the sixtieth (60th) day following Executive’s termination of employment (the “Release Deadline”), and if not, Executive will forfeit any right to severance payments or benefits under this Agreement. To become effective, the Release must be executed by Executive and any revocation periods (as required by statute, regulation, or otherwise) must have expired without Executive having revoked the Release. In addition, in no event will severance payments or benefits be paid or provided until the Release actually becomes effective. If the termination of employment occurs at a time during the calendar year where the Release Deadline could occur in the calendar year following the calendar year in which Executive’s termination of employment occurs, then any severance payments or benefits under this Agreement that would be considered Deferred Payments (as defined in Section 8(c)(i)) will be paid on the first payroll date to occur during the calendar year following the calendar year in which such termination occurs, or such later time as required by (i) the payment schedule applicable to each payment or benefit as set forth in Section 7, (ii) the date the Release becomes effective, or (iii) Section 8(c)(ii); provided that the first payment shall include all amounts that would have been paid to Executive if payment had commenced on the date of Executive’s termination of employment.
(b)    Non-Disclosure Agreement. As a condition to employment and to Executive’s receipt of any payments or benefits under Section 7 will be subject to Executive’s continued compliance with the requirements set for in the Non-Disclosure Agreement (as defined in Section 11(a) below).
(c)    Section 409A.  
(i)    Notwithstanding anything to the contrary in this Agreement, no severance pay or benefits to be paid or provided to Executive, if any, pursuant to this Agreement that, when considered together with any other severance payments or separation benefits, are considered deferred compensation not exempt under Section 409A (together, the “Deferred Payments”) will be paid or otherwise provided until Executive has a “separation from service” within the meaning of Section 409A. For purposes of this Agreement, any reference to “termination of employment,” “termination” or any similar term shall be construed to mean a “separation from service” within the meaning of Section 409A. Similarly, no severance payable to Executive, if any, pursuant to this Agreement that otherwise would be exempt from Section 409A pursuant to Treasury Regulation Section 1.409A-1(b)(9) will be payable until Executive has a “separation from service” within the meaning of Section 409A.
(ii)    Notwithstanding anything to the contrary in this Agreement, if Executive is a “specified employee” within the meaning of Section 409A at the time of Executive’s termination of employment (other than due to death), then the Deferred Payments, if any, that are payable within the first six (6) months following Executive’s separation from service, will become payable on the first payroll date that occurs on or after the date six (6) months and one (1) day 

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following the date of Executive’s separation from service. All subsequent Deferred Payments, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit. Notwithstanding anything herein to the contrary, if Executive dies following Executive’s separation from service, but prior to the six (6) month anniversary of the separation from service, then any payments delayed in accordance with this paragraph will be payable in a lump sum as soon as administratively practicable after the date of Executive’s death and all other Deferred Payments will be payable in accordance with the payment schedule applicable to each payment or benefit. Each payment, installment and benefit payable under this Agreement is intended to constitute a separate payment for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations.
(iii)    Without limitation, any amount paid under this Agreement that satisfies the requirements of the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations is not intended to constitute Deferred Payments for purposes of clause (i) above.
(iv)    Without limitation, any amount paid under this Agreement that qualifies as a payment made as a result of an involuntary separation from service pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that does not exceed the Section 409A Limit is not intended to constitute Deferred Payments for purposes of clause (i) above. Any payment intended to qualify under this exemption must be made within the allowable time period specified in Section 1.409A-1(b)(9)(iii) of the Treasury Regulations.
(v)    To the extent that reimbursements or in-kind benefits under this Agreement constitute non-exempt “nonqualified deferred compensation” for purposes of Section 409A, (1) all reimbursements hereunder shall be made on or prior to the last day of the calendar year following the calendar year in which the expense was incurred by Executive, (2) any right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, and (3) the amount of expenses eligible for reimbursement or in-kind benefits provided in any calendar year shall not in any way affect the expenses eligible for reimbursement or in-kind benefits to be provided, in any other calendar year.
(vi)    The payments and benefits provided under Sections 7(a) and 7(b) are intended to be exempt from or comply with the requirements of Section 409A so that none of the severance payments and benefits to be provided hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities or ambiguous terms herein will be interpreted to be exempt or so comply. The Company and Executive agree to work together in good faith to consider amendments to this Agreement and to take such reasonable actions that are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to Executive under Section 409A.
9.Cooperation. Following the Employment Period, regardless of the reason for the termination of Executive’s Employment, the Executive shall give the Executive’s assistance and cooperation willingly, upon reasonable advance notice, in any matter relating to the Executive’s position with the Company, or the Executive’s expertise or experience as the Company may reasonably request, including but not limited to the Executive’s assistance in transitioning the Executive’s duties and responsibilities, the Executive’s provision of information regarding any 

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Company matters relevant to the Executive’s role, and the Executive’s attendance and truthful testimony where deemed appropriate by the Company, with respect to any investigation or the Company’s defense or prosecution of any existing or future claims or litigations or other proceedings relating to matters in which the Executive was involved or potentially had knowledge by virtue of the Executive’s employment with the Company. When making a request for assistance and/or cooperation in accordance with this Section 9, the Company shall make reasonable efforts to give due consideration to the Executive’s other business or personal commitments and to not materially interfere with the Executive’s services to a subsequent employer. 
10.Definition of Terms. The following terms referred to in this Agreement will have the following meanings:
(a)    Cause. “Cause” means:
(i)    Executive’s gross negligence or willful misconduct in the performance of his or her duties and responsibilities to the Company or Executive’s violation of any written Company policy; 
(ii)    Executive’s commission of any act of fraud, theft, embezzlement, financial dishonesty or any other willful misconduct that has caused or is reasonably expected to result in injury to the Company; 
(iii)    Executive’s conviction of, or pleading guilty or nolo contendre to, any felony or a lesser crime involving dishonesty or moral turpitude;
(iv)    Executive’s alcohol abuse or other substance abuse;
(v)    Executive’s unauthorized use or disclosure of any proprietary information or trade secrets (other than as explicitly set forth in this Agreement) of the Company or any other party to whom Executive owes an obligation of nondisclosure as a result of his or her relationship with the Company; or
(vi)    Executive’s material breach of any of his or her obligations under any written agreement or covenant with the Company.
(b)    Change in Control. “Change in Control” shall have the meaning ascribed to such term in the Company’s Amended and Restated 2012 Omnibus Equity Incentive Plan, provided that any such event constitutes a “change in control event” under Treasury Regulation Section 1.409A-3(i)(5)(i).
(c)    Code. “Code” means the Internal Revenue Code of 1986, as amended.
(d)    Disability. “Disability” or “Disabled” means that Executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted, or can be expected to last, for a continuous period of not less than one (1) year.

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(e)    Good Reason. “Good Reason” means the occurrence, without Executive’s consent, of one or more of the following:
(i)    A material reduction in Executive’s duties, authorities or responsibilities, relative to Executive’s duties, authorities or responsibilities in effect immediately prior to such reduction; provided, however, that not being named (A) permanent Chief Financial Officer of the Company following the period during which Executive serves as interim Chief Financial Officer or (B) Chief Accounting Officer of the acquiring corporation following a Change in Control of the Company will not constitute Good Reason;
(ii)    A material reduction in Executive’s base compensation (except where there is a reduction applicable to all similarly situated executive officers generally); provided, that a reduction of less than ten percent (10%) will not be considered a material reduction in base compensation;
(iii)    A material change in the geographic location of Executive’s primary work facility or location; provided, that a relocation of less than thirty-five (35) miles from Executive’s then-present work location will not be considered a material change in geographic location; or
(iv)    A material breach by the Company of a material provision of this Agreement;
in each case, only if Executive provides notice to the Company of the existence of the applicable condition described in Section 10(e), specifically identifying the acts or omissions, within thirty (30) days of the Executive’s knowledge of the initial existence of the condition, the Company fails to remedy the condition within thirty (30) days thereafter, and within the (30) day period immediately following such failure to remedy, you elect to terminate your Employment.
(f)    Section 409A. “Section 409A” means Code Section 409A, and the final regulations and any guidance promulgated thereunder or any state law equivalent.
(g)    Section 409A Limit. “Section 409A Limit” will mean two (2) times the lesser of: (i) Executive’s annualized compensation based upon the annual rate of pay paid to Executive during Executive’s taxable year preceding Executive’s taxable year of his or her separation from service as determined under Treasury Regulation Section 1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance issued with respect thereto; or (ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Internal Revenue Code for the year in which Executive’s separation from service occurred.
(h)    Severance Period. “Severance Period” shall mean six (6) months.
11.Pre-Employment Conditions.
(a)    Non-Disclosure Agreement. Executive’s acceptance of this offer and Employment with the Company is contingent upon the execution, and delivery to an officer of the 

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Company, of the Company’s non-disclosure agreement (the “Non-Disclosure Agreement”), prior to or on Executive’s Effective Start Date. 
(b)    Right to Work. For purposes of federal immigration law, you will be required, if you have not already, to provide to the Company documentary evidence of your identity and eligibility for employment in the United States. Such documentation must be provided to us within three (3) business days of the Effective Start Date, or our Employment relationship with you may be terminated.
(c)    Verification of Information. This Agreement is also contingent upon the successful verification of the information you provided to the Company during your application process, as well as a general background check performed by the Company to confirm your suitability for Employment.  By accepting this Agreement, you warrant that all information provided by you is true and correct to the best of your knowledge, you agree to execute any and all documentation necessary for the Company to conduct a background check and you expressly release the Company from any claim or cause of action arising out of the Company’s verification of such information.
12.Arbitration.
(a)    Arbitration. In consideration of your Employment with the Company, its promise to arbitrate all employment-related disputes, and your receipt of any compensation, pay raises and other benefits paid to you by the Company, at present and in the future, you agree that any and all controversies, claims, or disputes with anyone (including the Company and any employee, officer, director, shareholder or benefit plan of the Company in their capacity as such or otherwise) arising out of, relating to, or resulting from your Employment with the Company or termination thereof, including any breach of this Agreement, will be subject to binding arbitration.
(b)    Dispute Resolution. Disputes that Executive agrees to arbitrate, and thereby agrees to waive any right to a jury trial, include any statutory claims under local, state, or federal law, including, but not limited to, claims under Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act of 1990, the Age Discrimination in Employment Act of 1967, the Older Workers Benefit Protection Act, the Sarbanes Oxley Act, the Worker Adjustment and Retraining Notification Act, the New York State Human Rights Law, New York Equal Rights Law, New York Whistleblower Protection Law, New York Family Leave Law, New York Equal Pay Law, the New York City Human Rights Law, claims of harassment, discrimination, and wrongful termination, and any statutory or common law claims. Executive further understands that this agreement to arbitrate also applies to any disputes that the Company may have with Executive.
(c)    Procedure. Executive agrees that any arbitration will be administered by Judicial Arbitration & Mediation Services, Inc. (“JAMS”), pursuant to its Employment Arbitration Rules & Procedures (the “JAMS Rules”). The arbitrator shall have the power to determine the scope of any necessary discovery and to decide any motions brought by any party to the arbitration, including motions for summary judgment and/or adjudication, motions to dismiss and demurrers, prior to any arbitration hearing. The arbitrator shall have the power to award any remedies available under applicable law, and the arbitrator shall award attorneys’ fees and costs to the prevailing party, 

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except as prohibited by law. The Company will pay for any administrative or hearing fees charged by the administrator or JAMS, and all arbitrator’s fees, except that Executive shall pay any filing fees associated with any arbitration that Executive initiates, but only so much of the filing fee as Executive would have instead paid had Executive filed a complaint in a court of law. Executive agrees that the arbitrator shall apply substantive New York law to any dispute or claim, without reference to the rules of conflict of law. The decision of the arbitrator shall be in writing. Any arbitration under this Agreement shall be conducted in New York County, New York.
(d)    Remedy. Except as provided by the Act, arbitration shall be the sole, exclusive, and final remedy for any dispute between you and the Company. Accordingly, except as provided by the Act and this Agreement, neither you nor the Company will be permitted to pursue court action regarding claims that are subject to arbitration. Notwithstanding, the arbitrator will not have the authority to disregard or refuse to enforce any lawful Company policy, and the arbitrator will not order or require the Company to adopt a policy not otherwise required by law that the Company has not adopted.
(e)    Administrative Relief. You are not prohibited from pursuing an administrative claim with a local, state, or federal administrative body or government agency that is authorized to enforce or administer laws related to employment, including, but not limited to, the Department of Fair Employment and Housing, the Equal Employment Opportunity Commission, the National Labor Relations Board, or the Workers’ Compensation Board.  However, you may not pursue court action regarding any such claim, except as permitted by law.
(f)    Voluntary Nature of Agreement. You acknowledge and agree that you are executing this Agreement voluntarily and without any duress or undue influence by the Company or anyone else. You further acknowledge and agree that you have carefully read this Agreement and that you have asked any questions needed for you to understand the terms, consequences and binding effect of this Agreement and fully understand it, including that YOU ARE WAIVING YOUR RIGHT TO A JURY TRIAL. Finally, you agree that you have been provided an opportunity to seek the advice of an attorney of your choice before signing this Agreement.
13.Successors.
(a)    Company’s Successors. This Agreement shall be binding upon any successor (whether direct or indirect and whether by purchase, lease, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company’s business and/or assets.  For all purposes under this Agreement, the term “Company” shall include any successor to the Company’s business or assets that become bound by this Agreement.
(b)    Your Successors. This Agreement and all of Executive’s rights hereunder shall inure to the benefit of, and be enforceable by, Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

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14.Miscellaneous Provisions.
(a)    Indemnification. The Company shall indemnify Executive to the maximum extent permitted by applicable law and the Company’s Certificate of Incorporation and Bylaws with respect to Executive’s service and Executive shall also be covered under a directors and officers liability insurance policy paid for by the Company to the extent that the Company maintains such a liability insurance policy now or in the future.
(b)    Headings. All captions and section headings used in this Agreement are for convenient reference only and do not form a part of this Agreement.
(c)    Notice.  
(i)    General. Notices and all other communications contemplated by this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid. In Executive’s case, mailed notices shall be addressed to Executive at the home address that Executive most recently communicated to the Company in writing. In the case of the Company, mailed notices shall be addressed to its corporate headquarters, and all notices shall be directed to the attention of its Secretary. 
(ii)    Notice of Termination. Any termination by the Company for Cause or by Executive for Good Reason will be communicated by a notice of termination to the other party hereto given in accordance with Section 14(c)(i) of this Agreement. Such notice will indicate the specific termination provision in this Agreement relied upon and will set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination under the provision so indicated. The failure by Executive or the Company to include in the notice any fact or circumstance which contributes to a showing of Good Reason or Cause, as applicable, will not waive any right of Executive or the Company, as applicable, hereunder or preclude Executive or the Company, as applicable, from asserting such fact or circumstance in enforcing his or her or its rights hereunder, as applicable.
(d)    Modifications and Waivers. No provision of this Agreement shall be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by Executive and by an authorized officer of the Company (other than Executive). No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time.
(e)    Whole Agreement. No other agreements, representations or understandings (whether oral or written and whether express or implied) that are not expressly set forth in this Agreement have been made or entered into by either party with respect to the subject matter hereof. This Agreement and the Non-Disclosure Agreement contain the entire understanding of the parties with respect to the subject matter hereof.

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(f)    Withholding Taxes. All payments made under this Agreement shall be subject to reduction to reflect taxes or other charges required to be withheld by law.
(g)    Choice of Law. This Agreement shall be interpreted in accordance with the laws of the State of New York without giving effect to provisions governing the choice of law. 
(h)    Severability. If any provision of this Agreement becomes or is deemed invalid, illegal or unenforceable in any applicable jurisdiction by reason of the scope, extent or duration of its coverage, then such provision shall be deemed amended to the minimum extent necessary to conform to applicable law so as to be valid and enforceable or, if such provision cannot be so amended without materially altering the intention of the parties, then such provision shall be stricken and the remainder of this Agreement shall continue in full force and effect.  If any provision of this Agreement is rendered illegal by any present or future statute, law, ordinance or regulation (collectively, the “Law”) then that provision shall be curtailed or limited only to the minimum extent necessary to bring the provision into compliance with the Law.  All the other terms and provisions of this Agreement shall continue in full force and effect without impairment or limitation.
(i)    No Assignment. This Agreement and all of your rights and obligations hereunder are personal to you and may not be transferred or assigned by you at any time. The Company may assign its rights under this Agreement to any entity that assumes the Company’s obligations hereunder in connection with any sale or transfer to such entity of all or a substantial portion of the Company’s assets.
(j)    Acknowledgment. You acknowledge that you have had the opportunity to discuss this matter with and obtain advice from your personal attorney, have had sufficient time to, and have carefully read and fully understand all the provisions of this Agreement, and are knowingly and voluntarily entering into this Agreement.
(k)    Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

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After you have had an opportunity to review this Agreement, please feel free to contact me if you have any questions or comments. To indicate your acceptance of this Agreement, please sign and date this letter in the space provided below and return it to the Company.  
Very truly yours,
SHUTTERSTOCK, INC.
By: /s/ Lisa Nadler    
(Signature)
Name: Lisa Nadler    
Title: Chief Human Resources Officer    
ACCEPTED AND AGREED:
STEVEN CIARDIELLO
/s/ Steven Ciardiello     
(Signature)
August 5, 2019     
Date

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