Exhibit 10.56


    
      

    


    EXHIBIT
      10.56

    


    LOCK-IN
      AGREEMENT

    


    


    
      	I.	
              This
                Promotional Shares Lock-In Agreement (“Agreement”), which was entered into
                on the
                ______ day
                of ______________, 20___,
                by and between Smart Online, Inc. (“Issuer”),
                whose principal place of business is located
                at 2530 Meridian Parkway, 2nd Floor, Durham, North Carolina
                27713,
                and _______________________(“Security
                Holder”) witnesses that:

            


    

    


    
      	
            	A.	
              The
                Issuer has filed an application with the Securities Administrator
                of the
                Commonwealth of Pennsylvania and the State of
                Massachusetts (“Administrators”)
                to register certain of its Equity Securities
                held by shareholders for sale to public investors who are residents
                of
                those states (“Registration”);

            


    

    


    
      	
            	B.	
              The
                Security Holder is the owner of the shares of common stock or similar
                securities and/or possesses convertible securities, warrants, options
                or
                rights which
                may be converted into, or exercised to purchase shares of common
                stock or
                similar
                securities of Issuer.

            


    

    


    
      	
            	C.	
              As
                a condition to Registration, the Issuer and Security Holder
                (“Signatories”) agree
                to be bound by the terms of this
                Agreement.

            


    

    


    
      	II.	
              THEREFORE,
                the Security Holder agrees not to sell, pledge, hypothecate, assign,
                grant
                any
                option for the sale of, or otherwise transfer or dispose of, whether
                or
                not for consideration,
                directly or indirectly, _________________________(___________)
                PROMOTIONAL
                SHARES (as defined in the North American
                Securities Administrators Association (“NASAA”) Statement of Policy on
                Corporate Securities Definitions) and all certificates representing
                stock
                dividends, stock splits, recapitalizations, and the like, that are
                granted
                to, or received by, the Security Holder
                while such PROMOTIONAL SHARES are subject to this Agreement (“Restricted
                Securities”).

               

              
                Beginning
                  one year from the effective date of the public offering, two and
                  one-half
                  percent
                  (2 1⁄2%) of the Restricted Securities may be released each quarter pro
                  rata
                  among the
                  Security Holders. All remaining Restricted Securities shall be
                  released
                  from this Agreement
                  on the anniversary of the second year from the effective date of
                  the
                  public offering.

              

            


    

    


    


    
      	III.	
              THEREFORE,
                the Signatories agree and will cause the
                following:

            


    

    


    
      	
            	A.	
              In
                the event of a dissolution, liquidation, merger, consolidation,
                reorganization, sale or exchange of the Issuer’s assets or securities
                (including by way of tender offer), or any other transaction or proceeding
                with a person who is not a Promoter,
                which results in the distribution of the Issuer’s assets or securities
                (“Distribution”),
                while this Agreement remains in effect
                that:

            


    


    
      
         

      

      
        1

        
          

        

      

      
         

      

    


    


    


    
      	
            	1.	
              All
                holders
                of the Issuer’s EQUITY SECURITIES will initially share on a pro
                rata, per share basis in the Distribution, in proportion to the amount
                of
                cash or other consideration that they paid per share for their EQUITY
                SECURITIES (provided that the Administrator has accepted the value
                of
                the
                other consideration), until the shareholders who purchased the Issuer’s
                EQUITY
                SECURITIES pursuant to the public offering (“Public Shareholders”) have
                received, or have had irrevocably set aside for them, an amount that
                is
                equal to one hundred percent (100%) of the public offering’s price per
                share times the number of shares of EQUITY SECURITIES that they purchased
                pursuant to the public offering and which they still hold at the
                time of
                the Distribution, adjusted for stock splits, stock dividends
                recapitalizations and the like; and

            


    

    


    
      	
            	2.	
              All
                holders of the Issuer’s EQUITY SECURITIES shall thereafter participate
                on an equal, per share basis times the number of shares of EQUITY
                SECURITIES they hold at the time of the Distribution, adjusted
                for
                stock splits, stock dividends, recapitalizations and the
                like.

            


    

    


    
      	
            	3.	
              The
                Distribution may proceed on lesser terms and conditions than the
                terms
                and conditions stated in paragraphs 1 and 2 above if a majority of
                the
                EQUITY SECURITIES that are not held by Security Holders, officers,
                directors,
                or Promoters of the Issuer, or their associates or affiliates vote,
                or
                consent by consent procedure, to approve the lesser terms and conditions.

            


    

    


    
      	
            	B.	
              In
                the event of a dissolution, liquidation, merger, consolidation,
                reorganization, sale or exchange of the Issuer’s assets or securities
                (including by way of tender offer), or any other transaction or proceeding
                with a person who is a Promoter, which
                results in a Distribution while this Agreement remains in effect,
                the
                Restricted Securities shall remain subject to the terms of this
                Agreement.

            


    

    


    
      	
            	C.	
              Restricted
                Securities may be transferred by will, the laws of descent and
                distribution, the operation of law, or by order of any court of competent
                jurisdiction
                and proper venue.

            


    

    


    
      	
            	D.	
              Restricted
                Securities of a deceased Security Holder may be hypothecated to pay
                the
                expenses of the deceased Security Holder’s estate. The hypothecated
                Restricted
                Securities shall remain subject to the terms of this Agreement. Restricted
                Securities may not be pledged to secure any other
                debt.

            


    

    


    
      	
            	E.	
              Restricted
                Securities may be transferred by gift to the Security Holder’s family
                members,
                provided that the Restricted Securities shall remain subject to the
                terms
                of
                this Agreement.

            


    


    
      
         

      

      
        2

        
          

        

      

      
         

      

    


    


    
      	
            	F.	
              With
                the exception of paragraph A.3 above, the Restricted Securities shall
                have
                the
                same voting rights as similar EQUITY SECURITIES not subject to the
                Agreement.

            


    

    


    
      	
            	G.	
              A
                notice shall be placed on the face of each stock certificate of the
                Restricted Securities
                covered by the terms of the Agreement stating that the transfer of
                the
                stock
                evidenced by the certificate is restricted in accordance with the
                conditions set
                forth on the reverse side of the certificate;
                and

            


    

    


    
      	
            	H.	
              A
                typed
                legend shall be placed on the reverse side of each stock certificate
                of
                the Restricted
                Securities representing stock covered by the Agreement which states
                that
                the sale or transfer of the shares evidenced by the certificate is
                subject
                to certain
                restrictions until July 31, 2009
                pursuant to an agreement between the Security Holder (whether beneficial
                or of record) and the Issuer, which agreement is on file with the
                Issuer
                and
                the stock transfer agent from which a copy is available upon request
                and
                without
                charge.

            


    

    


    
      	
            	I.	
              The
                term of this Agreement shall begin on the date that the Registration
                is
                declared
                effective by the Administrators (“Effective Date”) and shall terminate:
                

            


    

    


    
      	
            	1.	
              On
                the anniversary of the second year from the effective date of the
                public
                offering; or

            


    

    


    
      
        
          	
                	2.	
                  On
                    the date the Registration has been terminated if no securities
                    were sold
                    pursuant
                    thereto; or

                


        

      

    

    


    
      
        
          	
                	3.	
                  If
                    the Registration has been terminated, the date that checks representing
                    all
                    of the gross proceeds that were derived therefrom and addressed
                    to the
                    public
                    investors have been placed in the U.S. Postal Service with first
                    class
                    postage affixed; or

                


        

      

    

    


    
      
        
          	
                	4.	
                  On
                    the date the securities subject to this Agreement become “Covered
                    Securities,”
                    as defined under the National Securities Markets Improvement
                    Act of 1996; or

                


        

      

    

    


    
      
        
          	
                	5.	
                  Thirty
                    (30) days after any of the Restricted Securities no longer are
                    PROMOTIONAL
                    SHARES.

                


        

      

    

    


    
      	J.	
              This
                Agreement to be modified only with the written approval of the
                Administrators.

            


    

    


    
      	
            	IV.	
              THEREFORE,
                the Issuer will cause the
                following:

            


    

    


    
      	
            	A.	
              A
                manually signed copy of the Agreement signed by the Signatories to
                be
                filed with
                the Administrators prior to the Effective
                Date;

            


    


    
      
         

      

      
        3

        
          

        

      

      
         

      

    


    


    


    
      	
            	B.	
              Copies
                of the Agreement and a statement of the per share offering price
                to be provided to the Issuer’s stock transfer
                agent;

            


    

    


    
      	
            	C.	
              Appropriate
                stock transfer orders to be placed with the Issuer’s stock transfer
                agent
                against the sale or transfer of the shares covered by the Agreement
                prior
                to its
                expiration, except as may otherwise be provided in this
                Agreement;

            


    

    


    
      	
            	D.	
              The
                above stock restriction legends to be placed on the periodic statement
                sent to the registered owner if the securities subject to this Agreement
                are uncertificated securities.

            


    

    


    Pursuant
      to the requirements of this Agreement, the Signatories have entered into this
      Agreement,
      which may be written in multiple counterparts and each of which shall be
      considered an
      original. The Signatories have signed the Agreement in the capacities, and
      on
      the dates, indicated.

    


    IN
      WITNESS WHEREOF, the Signatories have executed this Agreement. 

    


    SMART
      ONLINE, Inc.

    


    


    By:    
      _____________________________

    Its:
      _____________________________

    


    


    


    


    ____________________________

        
      Signature

    


    


    
      ____________________________

    

        
      Printed Name of Security Holder

    


    


    
      ____________________________

    

        
      Title, if applicable

     

     

     

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