Exhibit 10.1

 

AMENDMENT OF SETTLEMENT AGREEMENT

 

This Amendment of Settlement Agreement (this “Amendment”) dated as of May 20,
2017 (the “Effective Date”) is made by and between by Net Element Inc., a
Delaware corporation (the “Guarantor”) and Maglenta Enterprises Inc., a company
incorporated and existing in the Republic of Seychelles (“Maglenta”) and
Champfremont Holding Ltd., a company incorporated and existing in the Republic
of Seychelles (“Champfremont” together with Maglenta are collectively, the
“Sellers”) (the “Sellers” and Guarantor are, collectively, the “Parties”).

 

WHEREAS, the Sellers entered into that certain Acquisition Agreement, dated as
of May 20, 2015 (the “Acquisition Agreement”), with ТOT Group Russia LLC, a
limited liability company organized and existing under the laws of the Russian
Federation and TOT Group Europe Ltd., a company organized and existing under the
laws of England and Wales (each individually, a “Purchaser” and, collectively,
the "Purchasers"), and certain "Target Companies" (as defined in the Acquisition
Agreement), pursuant to which the Purchasers agreed to purchase from the Sellers
and the Sellers agreed to sell to the Purchasers, subject to certain terms and
conditions, 100% of the issued and outstanding ownership interests of each of
the Target Companies. Capitalized terms not otherwise defined in the body of
this Agreement shall have the meanings ascribed to such terms in the Acquisition
Agreement;

 

WHEREAS, the pursuant to Section 2.8 of the Acquisition Agreement, Purchasers
had an obligation to pay Sellers the Difference with respect to the
Consideration Shares issued for the first Installment; and

 

WHEREAS, pursuant to that certain Guaranty between Sellers and Guarantor
referenced in Section 5.1.4 of the Acquisition Agreement should Purchasers fail
to pay the Difference Guarantor had an obligation to pay same; and

 

WHEREAS, the Purchasers failed to pay the Difference and Guarantor has agreed to
pay the Difference;

 

 

 

 

WHEREAS, on October 21, 2016, the Parties entered into that certain settlement
agreement (the “Agreement”) in connection with the Guarantor’s obligation to
repay the Difference; and

 

WHEREAS, the Parties would like to amend certain terms of the Agreement as more
particularly set forth herein.

 

NOW THEREFORE, based upon the foregoing and in consideration of the mutual
promises contained herein, the Parties agree as follows:

 

1)Section 1 of the Agreement shall be deleted in its entirety and replaced with
the following:

 

“Outstanding Balance. The Parties agree that, on the Effective Date of this
Amendment, the remaining Difference due to Sellers with respect to the
Consideration Shares, is the aggregate amount of One Million Seven Hundred
Ninety Two Thousand Seventy One ($1,792,071) Dollars, (“Outstanding Balance”),
consisting of (i) One Million Seven Hundred Seventy Seven Thousand Two Hundred
Sixty One ($1,777,261) Dollars (“Principal Balance”); and (ii) interest of
Fourteen Thousand Eight Hundred Eleven ($14,811) Dollars (“Interest”). Beginning
on May 20, 2017, Outstanding Balance shall accrue interest at the rate of twelve
(12%) percent per annum until paid in full. Sellers’ counsel, Reznick Law, PLLC
is authorized to receive for and on behalf of the Sellers any and all payments
under this Agreement. The receipt of funds by Sellers’ counsel, Reznick Law,
PLLC shall be a complete discharge to Guarantor, each Purchaser and their
respective affiliates, employees, officers, directors, agents, successors and
assigns, who shall not be obligated to enquire as to the distribution of such
funds.”

 

2)Subsections 2 (a)- (f) of the Agreement shall be deleted in its entirety and
replaced with the following:

 

“Payment by Guarantor.

 

a.       On or before May, 20, 2017, Guarantor shall wire Eight Hundred Thousand
($800,000) Dollars to the trust account of Sellers’ counsel, Reznick Law, PLLC,
(being the account designated by the Sellers) to be released to Sellers as a
partial payment of the Outstanding Balance. Such sum shall be first applied to
pay and past due and accumulated Interest and the remainder shall be applied to
reduce the Principal Balance.

 

 

 

 

b.       On each of the one month anniversaries of the Effective Date of this
Amendment the Guarantor shall wire the Sellers Two Hundred Thousand ($200,000)
Dollars, to be applied to reduce the Difference until the principal, and all
interest due thereon, is paid in full.

 

PAY TO: First Republic Bank   111 Pine Street   San Francisco, CA 94111    
CLIENT ACCOUNT NAME: Reznick Law, PLLC     CLIENT ACCOUNT NUMBER:       ABA    
  REFERENCE: Maglenta/ Champfremont

 

c.       Notwithstanding the above payments, on each three month anniversary of
the Effective Date of this Amendment, Guarantor shall pay Sellers all interest
that has accumulated and has not been paid with respect to the Principal
Balance.

 

d.       If any payment, is past due for more than five (5) business days, among
other remedies available to the Sellers in law and equity, the Sellers may
declare the entire unpaid amount of the Principal Balance and accrued but unpaid
interest thereon under this Amendment to be immediately due and payable. The
Sellers may also at the expiration of the said five (5) business day period file
the Confession of Judgement, executed by the Sellers contemporaneously with the
Agreement (“Confession”), with a court of competent jurisdiction. In furtherance
of the provisions of this Section 2.d., Guarantor irrevocably appoints the
Sellers, as its agent and attorney-in-fact (with full power of substitution) to
fill in the blanks in the Confession and to insert the actual undisputed unpaid
amount of Principal Balance and accrued but unpaid interest thereon, and take
all actions necessary or desirable to effectuate the filing of same with a court
of competent jurisdiction and in order to collect on such debt.”

 

 

 

 

3)Exhibit B, attached to the Agreement, showing amounts and timing for payments
assuming timely payment of all amounts due is hereby replaced by Exhibit A,
attached hereto and made a part hereof.

 

4)Except as otherwise set forth herein, all provisions of the Agreement shall
remain in full force and effect.

 

[No Further Text on this Page]

 

 

 

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned have executed and delivered this Agreement
as of the date set forth in the first paragraph hereof.

 

 

 

SELLERS:

 

MAGLENTA ENTERPRISES INC.

 

 

 

By:   /s/ Evaline Sophy Joubert                       

 

Name:   Evaline Sophy Joubert                       

 

Title:   Director                                                 

 

 

 

CHAMPFREMONT HOLDING LTD.

 

 

 

By:   /s/ Nicos Hadjinicolaou                          

 

Name:   Nicos Hadjinicolaou                          

 

Title:   Director                                                

 

 

 

GUARANTOR:

 

NET ELEMENT, INC.

 

 

 

By:    /s/ Oleg Firer                                             

 

Name:     Oleg Firer                                            

 

Title:    CEO                                                        

 

 

 

 

ACCEPTED AND AGREED TO BY PURCHASERS:

 

TOT Group Russia LLC

 

 

 

By:   /s/ Konstantin Leonidovich Zaripov   

 

Name:   Konstantin Leonidovich Zaripov   

 

Title:   General Director                                  

 

 

 

TOT Group Europe Ltd.

 

 

 

By:   /s/ Konstantin Zaripov                                   

 

Name:   Konstantin Zaripov                                   

 

Title:   Managing Director                                       

 

 

 

 

 

 

 

 

 

 

Exhibit A

 

 

calculations of payments by NETE

 

Principal amount            1,792,071 Annual interest rate                 12%
Interest per month                1.00%

 

 

  5/20/2017 6/20/2017 7/20/2017 8/20/2017 9/20/2017 10/20/2017 TOTAL            
    Principal repayment 800,000 200,000 200,000 200,000 200,000 192,071
1,792,071 remaining principal 992,071 992,071 792,071 592,071 392,071 192,071  
interest on remaining principal   9,921 7,921 5,921 3,921 1,921   interest
payments       23,762   5,841 29,604 total payment due 800,000 200,000 200,000
223,762 200,000 197,912 1,821,675