Exhibit 10.6

 

NET ELEMENT, INC.

 

April __, 2015

 

Net Element, Inc.

3363 NE 163rd Street,

Suite 705,

North Miami Beach, FL 33160

 

Re: Net Element, Inc. - Lock-Up Agreement

 

Dear Sirs:

 

This Lock-Up Agreement is being delivered to you in connection with the
Securities Purchase Agreement (the "Purchase Agreement"), dated as of April __,
2015 (the "Subscription Date") by and among Net Element, Inc. (the "Company")
and the investors party thereto (the "Buyers"), with respect to the issuance of
(i) senior convertible notes of the Company (the "Notes") convertible or
redeemable into shares of common stock, par value $0.0001 per share, of the
Company (the "Common Stock") and (ii) warrants (the "Warrants") which Warrants
will be exercisable to purchase Common Stock. Capitalized terms used herein and
not otherwise defined herein shall have the respective meanings set forth in the
Purchase Agreement.

 

In order to induce the Buyers to enter into the Purchase Agreement, the
undersigned agrees that, commencing on the date hereof and ending on the date
that no Notes are outstanding (the "Lock-Up Period"), the undersigned will not,
and will cause all affiliates (as defined in Rule 144 promulgated under the
Securities Act of 1933, as amended) of the undersigned or any person in privity
with the undersigned or any affiliate of the undersigned not to, (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 or Common Stock Equivalents,
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 or Common Stock Equivalents owned directly by the undersigned
(including holding as a custodian) or with respect to which the undersigned has
beneficial ownership within the rules and regulations of the Securities and
Exchange Commission (collectively, the "Undersigned's Shares"), 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 of the Undersigned's
Shares, whether any such transaction described in clause (i) or (ii) above is to
be settled by delivery of shares of Common Stock or other securities, in cash or
otherwise, (iii) make any demand for or exercise any right or cause to be filed
a registration statement, including any amendments thereto, with respect to the
registration of any shares of Common Stock or Common Stock Equivalents or (iv)
publicly disclose the intention to do any of the foregoing.

 

 

 

 

The foregoing restriction is expressly agreed to preclude the undersigned, and
any affiliate of the undersigned and any person in privity with 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 (i) [up to [       ]1 shares of Common Stock (as adjusted for any stock
dividend, stock split, stock combination, reclassification or similar
transaction occurring after the Subscription Date) solely in order to use the
proceeds of such sale to pay income taxes, (ii)]2 as a bona fide gift or gifts,
provided that the donee or donees thereof agree to be bound in writing by the
restrictions set forth herein or [(iii)]3 [(ii)]4 to any trust for the direct or
indirect benefit of the undersigned or the immediate family of the undersigned,
provided that the trustee of the trust 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. For purposes of this Lock-Up Agreement,
"immediate family" shall mean any relationship by blood, marriage or adoption,
not more remote than first cousin. The undersigned now has, and, except as
contemplated by the immediately preceding sentence, for the duration of this
Lock-Up Agreement 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 (the "Transfer Agent") and registrar against
the transfer of the Undersigned's Shares except in compliance with the foregoing
restrictions.

 

In order to enforce this covenant, the Company shall impose irrevocable
stop-transfer instructions preventing the Transfer Agent from effecting any
actions in violation of this Lock-Up Agreement.

 

The undersigned acknowledges that the execution, delivery and performance of
this Lock-Up Agreement is a material inducement to each Buyer to complete the
transactions contemplated by the Purchase Agreement and that the Company shall
be entitled to specific performance of the undersigned's obligations hereunder.
The undersigned hereby represents that the undersigned has the power and
authority to execute, deliver and perform this Lock-Up Agreement, that the
undersigned has received adequate consideration therefor and that the
undersigned will indirectly benefit from the closing of the transactions
contemplated by the Purchase Agreement.

 

 

1 Insert 130,000 in Lock-Up Agreement of Steven Wolberg.

 

Insert 80,000 in Lock-Up Agreement of Jon New.

 

Insert 556,000 in Lock-Up Agreement of Oleg Frier.

 

2 Insert in Lock-Up Agreements of Steven Wolberg, Jon New and Oleg Frier.

 

3 Insert in Lock-Up Agreements of Steven Wolberg, Jon New and Oleg Frier.

 

4 Insert in other Lock-Up Agreements.

 

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The undersigned understands and agrees that this Lock-Up Agreement is
irrevocable and shall be binding upon the undersigned's heirs, 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. The exchange of copies of this Lock-Up Agreement and of signature
pages by facsimile transmission, pdf or other electronic means shall constitute
effective execution and delivery of this Lock-Up Agreement as to the parties and
may be used in lieu of the original Lock-Up Agreement for all purposes (and such
signatures of the parties transmitted by facsimile, pdf or other electronic
means shall be deemed to be their original signatures for all purposes).

 

This Lock-Up Agreement will be governed by and construed in accordance with the
laws of the State of New York, without giving effect to any choice of law or
conflicting provision or rule (whether of the State of New York, or any other
jurisdiction) that would cause the laws of any jurisdiction other than the State
of New York to be applied. In furtherance of the foregoing, the internal laws of
the State of New York will control the interpretation and construction of this
Lock-Up Agreement, even if under such jurisdiction's choice of law or conflict
of law analysis, the substantive law of some other jurisdiction would ordinarily
apply.

 

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    Very truly yours,                 Exact Name of Stockholder                
Authorized Signature                 Title

 

Agreed to and Acknowledged:

 

NET ELEMENT, INC.

 

By:         Name:     Title:  

 

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