W-NET, INC.

 

December 10, 2014

 

DigiPath, Inc.

6450 Cameron Street, Suite 113

Las Vegas, NV 89014

 

Re: DigiPath, Inc. - Lock-Up Agreement

 

Dear Sirs:

 

This Lock-Up Agreement is being delivered to you in connection with that certain
Consulting, Confidentiality and Proprietary Rights Agreement (the “Agreement”),
dated as of the date hereof, by and between DigiPath, Inc. (the “Company”) and
W-Net, Inc. (“Consultant”).

 

In order to induce the Company to enter into the Agreement, the undersigned
agrees that, during the term of the Agreement, and thereafter until the earlier
of (i) ninety (90) days following expiration or termination of the Agreement or
(ii) the filing by the Company of an Annual Report on Form 10-K or a Quarterly
Report on Form 10-Q with the Securities and Exchange Commission following
expiration or termination of the Agreement (the “Lock-Up Period”), the
undersigned (and its affiliates) will not (i) sell, offer to sell, contract or
agree to sell, hypothecate, pledge, grant any option to purchase, make any short
sale or otherwise dispose of or agree to dispose of, directly or indirectly, any
shares of Common Stock of the Company (“Common Stock”), or establish or increase
a put equivalent position or liquidate or decrease a call equivalent position
within the meaning of Section 16 of the Securities and Exchange Act of 1934, as
amended and the rules and regulations of the Securities and Exchange Commission
promulgated thereunder with respect to any shares of Common Stock owned directly
by the undersigned and its affiliates (including holding as a custodian) or with
respect to which the undersigned (or its affiliates) has beneficial ownership
within the rules and regulations of the Securities and Exchange Commission, or
(ii) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of any shares of
Common Stock, owned directly by the undersigned and its affiliates (including
holding as a custodian) or with respect to which the undersigned (or its
affiliates) has beneficial ownership within the rules and regulations of the
Securities and Exchange Commission, whether any such transaction is to be
settled by delivery of such securities, in cash or otherwise (collectively, the
“Undersigned’s Shares”).

 

The foregoing restriction is expressly agreed to preclude the undersigned or any
affiliate of the undersigned from engaging in any hedging or other transaction
which is designed to or which reasonably could be expected to lead to or result
in a sale or disposition of the Undersigned’s Shares even if the Undersigned’s
Shares would be disposed of by someone other than the undersigned. Such
prohibited hedging or other transactions would include, without limitation, any
short sale or any purchase, sale or grant of any right (including, without
limitation, any put or call option) with respect to any of the Undersigned’s
Shares or with respect to any security that includes, relates to, or derives any
significant part of its value from the Undersigned’s Shares.

 

 

 

 

Notwithstanding the foregoing, the undersigned may transfer the Undersigned’s
Shares to any affiliate of the undersigned, provided that such affiliate agrees
to be bound in writing by the restrictions set forth herein, and provided
further that any such transfer shall not involve a disposition for value. The
undersigned now has, and, except as contemplated by the foregoing sentence, for
the duration of the Lock-Up Period will have, good and marketable title to the
Undersigned’s Shares, free and clear of all liens, encumbrances, and claims
whatsoever. The undersigned also agrees and consents to the entry of stop
transfer instructions with the Company’s transfer agent and registrar against
the transfer of the Undersigned’s Shares except in compliance with the foregoing
restrictions.

 

The undersigned understands and agrees that this Lock-Up Agreement is
irrevocable and shall be binding upon the undersigned’s legal representatives,
successors, and assigns.

 

This Lock-Up Agreement may be executed in two counterparts, each of which shall
be deemed an original but both of which shall be considered one and the same
instrument.

 

This Lock-Up Agreement will be governed by and construed in accordance with the
laws of the State of California, without giving effect to any choice of law or
conflicting provision or rule (whether of the State of California, or any other
jurisdiction) that would cause the laws of any jurisdiction other than the State
of California to be applied.

 

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  Very truly yours,         W-NET FUND I LP   By: W-Net Fund GP I, LLC        
By: /s/ David Weiner   Name: David Weiner   Title: Manager

 

Agreed to and Acknowledged:

 

DIGIPATH, INC.

 

By: /s/ Todd Denkin   Name: Todd Denkin   Title: CEO