Exhibit 10.1


 


LetTER
Agreement


 


VIA
EMAIL


 


Star Equities, LLC


3363 NE 163rd St., Suite 705


North Miami Beach, FL 33160


 


Steven Wolberg


3363 NE 163rd St., Suite 705


North Miami Beach FL 33160


 


William Healy


16W281 83rd Street, Suite B 

Burr Ridge, IL 60527


 


Kenges Rakishev


c/o SAT & Company 

241 Mukanova Street 

Almaty Kazakhstan 050008


 


Vladimir Sadovskiy


3363 NE 163 Street, Suite 705


North Miami Beach, FL 33160


 


David Rozinov


210 Central Park South


23A


New York, NY 10019


 


Re: Equity Investment
for Funding of Net Element


 


This letter agreement is dated as of September
11, 2015 (the "Effective Date"). The parties hereby agree as follows:


 


		1.	In order to meet Net Element, Inc.’s, a Delaware corporation ("NETE"), current
working capital requirements of up to $2,500,000, Star Equities, LLC, Steven Wolberg, William Healy, Kenges Rakishev, Vladimir
Sadovskiy, David Rozinov and such other additional investors that become party hereto and execute this letter agreement (each,
an “Investor” and, collectively, the “Investors”) have agreed to purchase, and NETE has agreed
to issue to the Investors, on or as soon as practically possible after the Effective Date:



 


		(i)	such number of restricted (i.e., issued in reliance on an applicable exemption from registration
under the Securities Act of 1933, as amended (the “Securities Act”), and any disposition of such shares to be
subject to Rule 144 of the Securities Act) shares of common stock of NETE (“Common Stock”), as set forth on
Exhibit A hereto next to the name of each Investor, at the per share purchase price equal to the closing trading price of
Common Stock on July 29, 2015, the date when the Investors committed to the transactions contemplated in this Letter Agreement
subject to the approval of the Board of Directors of NETE or a committee thereof; and



 




    


     


    

 


		(ii)	such number of options to purchase restricted shares of Common Stock as set forth on Exhibit
A hereto next to the name of each Investor (collectively, the “Restricted Options”). Each Restricted Option
shall expire on the fifth (5th) annual anniversary of the Effective Date and shall be exercisable (prior to its expiration)
into one (1) Restricted Share at the exercise price equal 110% of the closing trading price per one (1) share of Common Stock reported
on The NASDAQ Capital Market on the Effective Date.



 


		2.	The consideration for such restricted shares of Common Stock (the restricted shares of Common Stock
to be issued to the Investors are collectively referred to herein as the “Restricted Shares”) and the Restricted
Options issued to the Investors hereunder shall be Investor’s funding to NETE the purchase price set forth on Exhibit
A hereto next to the name of each Investor. Subject to the limitation set forth in the last sentence of this Section 2, the
aggregate amount of the investments hereunder by all Investors shall be up to $2,500,000 (with a minimum aggregate investment by
all Investors to be at least $1,000,000). Notwithstanding anything to the contrary contained in this letter agreement or any other
documents, at no time shall NETE issue shares of Common Stock if such transaction would result in the issuance of more than 19.9%
of the amount of issued and outstanding common stock of NETE unless (i) Net Element, Inc.’s stockholders shall have approved
the issuance of shares of common stock in excess of 20%, or (ii) NASDAQ has provided a waiver of Listing Rule 5635(d).



 


		3.	The Investors understand and acknowledge that the issuance of the Restricted Shares hereunder shall
be unregistered in reliance on the applicable exemption under the federal securities laws, and any dispositions of the Restricted
Shares shall be subject to Rule 144 under the Securities Act. In connection with the issuance of the Restricted Shares and as a
condition to the issuance of the Restricted Shares, each Investor hereby provides to NETE the representations and warranties set
forth in Exhibit B hereto.



 


		4.	All notices, requests, demands, and other communications required or permitted hereunder shall
be in writing and shall be deemed to have been duly given (i) when delivered by verifiable facsimile or electronic mail transmission,
unless such delivery is made on a day that is not a business day, in which case such delivery will be deemed to be made on the
next succeeding business day or (ii) on the next business day after timely delivery to a reputable overnight courier, to the parties
at the addresses set forth on the first page hereto.



 


		5.	This letter agreement constitutes the entire agreement among the parties hereto pertaining to the
subject matter hereof and supersedes all prior agreements and understandings pertaining thereto. This letter agreement may not
be amended or modified in any respect, except by the written agreement of the parties hereto. No party hereto may, without the
prior written consent of the other party hereto, assign or otherwise transfer, in whole or in part, any of its rights and obligations
under this letter agreement. Except as expressly provided for herein, nothing in this letter agreement shall confer any rights
upon any person that is not a party hereto or the successor or permitted assignee of a party to this letter agreement.



 




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		6.	This letter agreement shall be governed by, and shall be construed, interpreted and enforced in
accordance with the laws of the State of Florida without regard to its choice of law provisions that would require the application
of the law of another jurisdiction.



 


		7.	This letter agreement may be executed and delivered (including by facsimile or electronic mail
transmission) in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed
and delivered shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. Copies
of executed counterparts transmitted by telecopy or other electronic transmission service shall be considered original executed
counterparts.



 


[Signatures are on next page.]


 




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Please indicate your consent to the terms
of this letter agreement by signing and dating this letter agreement and returning it to the undersigned.


 


	 	NET ELEMENT, INC.
	 	 	 
	 	By:	/s/ Oleg Firer
	 	Name:	Oleg Firer
	 	Title:	Chief Executive Officer


 


AGREED AND ACCEPTED BY:


 


INVESTORS:


 


STAR EQUITIES, LLC


 


	By:	/s/ Oleg Firer	 
	Name:	Oleg Firer	 
	Title:	Managing Member	 


 


	/s/ Steven Wolberg	 
	STEVEN WOLBERG	 
	 	 
	/s/ William Healy	 
	WILLIAM HEALY	 
	 	 
	/s/ Kenges Rakishev	 
	KENGES RAKISHEV	 
	 	 
	/s/ Vladimir Sadovskiy	 
	VLADIMIR SADOVSKIY	 
	 	 
	/s/ David Rozinov	 
	DAVID ROZINOV	 


 




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ADDITIONAL INVESTORS SIGNATURE PAGE(S):


 


_______________________________


Name: _____________________


Amount of Investment in Dollars: ________________________


Amount of Restricted Shares corresponding to the above investment:
_____________________


Amount of Restricted Options corresponding to the above investment:
____________________


 




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Exhibit
A


 


	Investor	 	Number
    of 
restricted 
shares	 	 	Purchase
    
price per 
each 
restricted 
share	 	 	Number
    of 
restricted 
OPTIONS	 	 	Aggregate
    
Purchase price to 
be funded to nete 
by investor	 
	Star Equities, LLC	 	 	2,142,857	 	 	$	0.14	 	 	 	2,142,857	 	 	$	300,000	 
	Steven Wolberg	 	 	357,143	 	 	$	0.14	 	 	 	357,143	 	 	$	50,000	 
	William Healy	 	 	714,286	 	 	$	0.14	 	 	 	714,286	 	 	$	100,000	 
	Kenges Rakishev	 	 	7,142,857	 	 	$	0.14	 	 	 	7,142,857	 	 	$	1,000,000	 
	Vladimir Sadovskiy	 	 	285,714	 	 	$	0.14	 	 	 	285,714	 	 	$	40,000	 
	David Rozinov	 	 	714,286	 	 	$	0.14	 	 	 	714,286	 	 	$	100,000	 
	TOTAL:	 	 	11,357,143

Restricted Shares	 	 	 	 	 	 	 	11,357,143

Restricted Options	 	 	$	1,590,000	 



 




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EXHIBIT B


 


Investors’ Representations and
Warranties


 


As a condition to the issuance of the Restricted
Shares and the Restricted Options (collectively, the “Restricted Securities”) to each Investor, such Investor
hereby represents and warrants to NETE as follows:


 


Investor acknowledges that the issuance
and transfer to it of the Restricted Securities has not been reviewed by the United States Securities and Exchange Commission or
any state securities regulatory authority because such transaction is intended to be exempt from the registration requirements
of the Securities Act and applicable state securities laws. Investor understands that each of NETE is relying upon the truth and
accuracy of, and Investor’s compliance with, the representations, warranties, acknowledgments and understandings of Investor
set forth in this letter agreement in order to determine the availability of such exemptions and the eligibility of Investor to
acquire the Restricted Securities.


 


Investor represents that the Restricted
Securities are being acquired by Investor for its own account, for investment purposes only and not with a view to or for distribution
or resale to others in contravention of the registration requirements of the Securities Act or applicable state securities laws.
Investor agrees that it will not sell or otherwise transfer any of the Restricted Securities unless such transfer or resale is
registered under the Securities Act and applicable state securities laws or unless exemptions from such registration requirements
are available.


 


Investor has such knowledge and experience
in financial and business matters that it is capable of evaluating the merits and risks of Investor’s investment in NETE
through Investor’s acquisition of the Restricted Securities. Investor is able to bear the economic risk of its investment
in NETE through Investor’s acquisition of the Restricted Securities for an indefinite period of time. At the present time,
Investor can afford a complete loss of such investment and has no need for liquidity in such investment.


 


Investor recognizes that its acquisition
of the Restricted Securities involves a high degree of risk in that: (a) an investment in NETE is highly speculative and only Investor
who can afford the loss of their entire investment should consider investing in NETE and securities of NETE; (b) transferability
of the Restricted Securities is limited; (c) NETE has experienced recurring losses and it must raise substantial additional capital
in order to continue operating its business; (d) subsequent equity financings will dilute the ownership and voting interests of
Investor and equity securities issued by NETE to other persons or entities may have rights, preferences or privileges senior to
the rights of Investor; (e) any debt financing that may be obtained by NETE must be repaid regardless of whether NETE generates
revenues or cash flows from operations and may be secured by substantially all of NETE’s assets; (f) there is absolutely
no assurance that any type of financing on terms acceptable to NETE will be available to NETE or otherwise obtained by NETE; and
(g) if NETE is unable to obtain additional financing or is unable to obtain additional financing on terms acceptable to it, then
NETE may be unable to implement its business plans or take advantage of business opportunities, which could have a material adverse
effect on NETE’s business prospects, financial condition and results of operations and may ultimately require NETE to suspend
or cease operations.


 




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Investor acknowledges that he has prior
investment experience and that he recognizes and fully understands the highly speculative nature of Investor’s investment
in NETE pursuant to its acquisition of the Restricted Securities. Investor acknowledges that he, either alone or together with
its professional advisors, has the capacity to protect its own interests in connection with this transaction.


 


Investor acknowledges that it has carefully
reviewed the this letter agreement and NETE’s filings with the United States Securities and Exchange Commission, which are
available on the Internet at www.sec.gov, all of which documents and filings Investor acknowledges have been made available to
it. Investor has been given the opportunity to ask questions of, and receive answers from, NETE concerning this letter agreement,
the issuance to it of the Restricted Securities, and NETE’s business, operations, financial condition and prospects, and
Investor has been given the opportunity to obtain such additional information, to the extent NETE possesses such information or
can acquire it without unreasonable effort or expense, necessary to verify the accuracy of same as Investor reasonably desires
in order to evaluate its investment in NETE pursuant its acquisition of the Restricted Securities. Investor fully understands all
of such documents and filings and has had the opportunity to discuss any questions regarding any of such documents or filings with
its legal counsel and tax, investment and other advisors. Notwithstanding the foregoing, Investor acknowledges and agrees that
the only information upon which it has relied upon in executing this letter agreement is the information set forth in this letter
agreement and NETE’s filings with the United States Securities and Exchange Commission. Investor acknowledges that it has
received no representations or warranties from NETE, its employees, agents or attorneys in making this investment decision. Investor
acknowledges that it does not desire to receive any further information from NETE or any other person or entity in order to make
a fully informed decision of whether or not to execute this letter agreement and accept the Restricted Securities.


 


Investor acknowledges that the issuance
to it of the Restricted Securities may involve tax consequences to Investor. Investor acknowledges and understands that Investor
must retain its own professional advisors to evaluate the tax and other consequences of Investor’s receipt of the Restricted
Securities.


 


Investor understands and acknowledges that
NETE is under no obligation to register the resale of the Restricted Securities under the Securities Act or any state securities
laws. Investor agrees that NETE may, if it desires, permit the transfer of the Restricted Securities out of Investor’s name
only when Investor’s request for transfer is accompanied by an opinion of counsel reasonably satisfactory to NETE that the
proposed transfer satisfies an applicable exemption from registration requirements under the Securities Act and applicable state
securities laws.


 


Investor understands that the certificate(s)
representing the Restricted Securities shall bear a restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of the Restricted Securities):


 




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THE SECURITIES REPRESENTED BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR (B) AN OPINION OF COUNSEL,
IN A REASONABLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS, OR (II)
UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.


 


The legend set forth above will be removed,
and NETE will issue a certificate without such legend to the holder of the Restricted Securities upon which it is stamped, only
if (a) such Restricted Securities are being sold pursuant to an effective registration statement under the Securities Act, (b)
such holder delivers to NETE an opinion of counsel, in a reasonably acceptable form to NETE, that the disposition of the Restricted
Securities is being made pursuant to an exemption from federal and state registration requirements, or (c) such holder provides
NETE with reasonable assurance that a disposition of the Restricted Securities may be made pursuant to Rule 144 under the Securities
Act without any restriction as to the number of shares acquired as of a particular date that can then be immediately sold.


 


Investor acknowledges that he has a preexisting
personal or business relationship with NETE or one or more of its officers, directors or controlling persons.


 


Investor represents and warrants that he
was not induced to invest in NETE (pursuant to the issuance to it of the Restricted Securities) by any form of general solicitation
or general advertising, including, but not limited to, the following: (a) any advertisement, article, notice or other communication
published in any newspaper, magazine or similar media (including via the Internet) or broadcast over the news or radio; and (b)
any seminar or meeting whose attendees were invited by any general solicitation or advertising.


 


Each Investor’s current address is
set forth on page 1 of the letter agreement.


 




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