EXECUTION VERSION

 

LEAK-OUT AND LOCKUP AGREEMENT

 

THIS LEAK-OUT AND LOCKUP AGREEMENT (the “Agreement”) is made and entered into as
of July 1, 2013, between Mimvi, Inc., a Nevada corporation (the “Company”), and
Qayed Shareef (the “Shareholder”). For all purposes of this Agreement,
“Shareholder” includes any affiliate, controlling person of Shareholder, agent,
representative, or other person with whom Shareholder is acting in concert.

 

WHEREAS, the Company and the Shareholder have agreed to enter into this
Agreement to restrict the public sale, assignment, transfer, conveyance,
hypothecation, or alienation of the common stock represented by Certificate
Number 2088, representing 27,918,900 shares of the Company’s common stock (the
“Lock-Up Shares”), all on the terms set forth below.

 

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

 

1.          Except as otherwise expressly provided herein, the Shareholder
agrees that he will not sell, assign, pledge, hypothecate, encumber, or transfer
any of the Lock-Up Shares or any interest therein, until the 20-month
anniversary of this Agreement (“Lock-Up Period”), provided that the Shareholder
may transfer Lock-Up Shares (i) by gift, will, intestacy or other estate
planning purposes provided that the transferee executes an agreement stating
that the transferee is receiving and holding the securities subject to the
provisions of this Agreement; or (ii) to the Company pursuant to the Put
Agreement between the Shareholder and the Company of even date herewith or
pursuant to the settlement of any claim or dispute between the Company and the
Shareholder. The Shareholder shall immediately deliver certificate representing
all of the Lock-Up Shares to V Stock Transfer, LLC (the “Transfer Agent”) and
the Transfer Agent shall hold the Lock-Up Shares, subject to the monthly release
schedule set forth below, during the Lock-Up Period. The Company and the
Shareholder agree to execute any documents reasonably required by the Transfer
Agent in connection with this Agreement.

 

(a)          Following receipt of the certificates representing the Lock-Up
Shares, the Transfer Agent shall immediately deliver back to the Shareholder
1,000,000 shares of the Lock-Up Shares and, on the 1st of each month thereafter
(beginning July 1, 2013), shall deliver an additional 1,000,000 shares of the
Lock-Up shares until all Lock-Up Shares have been delivered to the Shareholder
(the “Leak-Out Shares”). The Leak-Out Shares, once released by the Transfer
Agent in compliance with this Agreement, shall not be subject to any
restrictions imposed by this Agreement.

 

(b)          The Leak-Out Shares shall be delivered to the Shareholder in such
manner as the Shareholder and the Transfer Agent may mutually determine, whether
in paper certificate, DWAC (Deposit/Withdrawal at Custodian), DRS (Direct
Registration System) or other acceptable form of delivery, subject to compliance
with all applicable securities laws and regulations.

 

(c)          The Shareholder agrees that he will not engage in any short selling
(as defined under Rule 200 of Regulation SHO under the Securities Exchange Act
of 1934, as amended) of the Lock-Up Shares or the Leak-Out Shares during the
Lock-Up Period.

 

 

 

 

2.          Notwithstanding anything to the contrary set forth herein, the
Company may, in its sole discretion and in good faith, at any time and from time
to time, waive any of the conditions or restrictions contained herein to
increase the liquidity of the common stock or if such waiver would otherwise be
in the best interests of the development of the trading market for the common
stock. At the time of any such waiver, the Shareholder’s common stock can be
publicly sold in accordance with the Securities Act of 1933, as amended or Rule
144 promulgated thereunder by the Securities and Exchange Commission or
otherwise.

 

3.          In the event of: (a) an acquisition after the date hereof by an
individual or legal entity or “group” (as described in Rule 13d-5(b)(l)
promulgated under the Exchange Act) of effective control (whether through legal
or beneficial ownership of capital stock of the Company, by contract or
otherwise) of in excess of 50% of the voting securities of the Company or (b)
the merger or consolidation by the Company into or with any other person, or the
merger or consolidation by any other person into or with the Company and, after
giving effect to such transaction, the stockholders of the Company immediately
prior to such transaction own less than 50% of the aggregate voting power of the
Company or the successor entity of such transaction, or (c) the sale or transfer
by the Company all or substantially all of its assets to another person and the
stockholders of the Company immediately prior to such transaction own less than
50% of the aggregate voting power of the acquiring entity immediately after the
transaction, then this Agreement shall terminate as of the closing of such event
and the common stock restricted pursuant hereto shall be released from such
restrictions.

 

4.          Except as otherwise provided in this Agreement or any other
agreements between the parties, the Shareholder shall be entitled to his
respective beneficial rights of ownership of the common stock, including the
right to vote the common stock for any and all purposes and the right to receive
dividends and distributions thereon.

 

5.          The number of Lock-Up Shares and Leak-Out Shares shall be
appropriately adjusted should the Company make a stock dividend, undergo a
forward split or a reverse split of its outstanding shares of common stock, or
otherwise reclassify its shares of common stock.

 

6.          This Agreement may be executed in any number of counterparts with
the same force and effect as if all parties had executed the same document.

 

7.          All notices and communications provided for herein shall be in
writing and shall be deemed to be given or made on the date of delivery, if
delivered in person, by an internationally recognized overnight delivery
service, or by facsimile, to the party entitled to receive the same, if to the
Shareholder at the address or facsimile number on the signature page and if to
the Company at the address or facsimile number set forth on the signature page,
or at such other address or facsimile number as shall be designated by any party
hereto in written notice to the other party hereto delivered pursuant to this
subsection.

 

8.          The resale restrictions on the Lock-Up Shares shall be in addition
to all other restrictions on transfer imposed by applicable United States and
state securities laws, rules and regulations.

 

9.          If the Company or the Shareholder fail to fully adhere to the terms
and conditions of this Agreement, then such party shall be liable to every other
party for any damages suffered by any party by reason of any such breach of the
terms and conditions hereof. The Shareholder agrees that in the event of a
breach of any of the terms and conditions of this Agreement by the Shareholder,
that in addition to all other remedies that may be available in law or in equity
to the non-defaulting parties, a preliminary and permanent injunction, without
bond or surety, and an order of a court requiring such defaulting Shareholder to
cease and desist from violating the terms and conditions of this Agreement and
specifically requiring such Shareholder to perform his obligations hereunder is
fair and reasonable by reason of the inability of the parties to this Agreement
to presently determine the type, extent or amount of damages that the Company or
the non-defaulting Shareholder may suffer as a result of any breach or
continuation thereof.

 

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10.         This Agreement sets forth the entire understanding of the parties
hereto with respect to the subject matter hereof, and may not be amended except
by a written instrument executed by the parties hereto.

 

11.         This Agreement shall be governed by and construed in accordance with
the laws of the State of California applicable to contracts entered into and to
be performed wholly within said State; and the Company and the Shareholder agree
that any action based upon this Agreement may be brought in the United States
and state courts of California only, and each submits himself/itself to the
jurisdiction of such courts for all purposes hereunder.

 

12.         In the event of default hereunder, the non-defaulting parties shall
be entitled to recover reasonable attorney’s fees incurred in the enforcement of
this Agreement.

 

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IN WITNESS WHEREOF, the undersigned have duly executed and delivered this
Agreement as of the day and year first above written.

 

  SHAREHOLDER       By /s/ Qayed Shareef   Qayed Shareef       Mimvi, Inc.      
By /s/ Kevin Conner     Kevin Conner, Chief Financial Officer

 

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