Document:

Exhibit
10.1

    CONFIDENTIAL SETTLEMENT
AGREEMENT

    

    This Confidential Settlement Agreement
(this “Agreement”) is
entered into this 14th day of
December, 2010 by and among Rothschild Trust Holdings, LLC, a Florida limited
liability company (“Rothschild
Trust”) and BP GBL Section 3.4, LLC,
a Florida limited liability company (“BP GBL” and with Rothschild
Trust, collectively the “Rothschild Parties”), first
party and NeoMedia Technologies, Inc., a Delaware corporation (“NeoMedia”), second
party.  The Rothschild Parties and NeoMedia are referred to
herein as the Parties.

    

    RECITALS

    

    WHEREAS, NeoMedia purchased
from Loyaltypoint, Inc. (“Loyaltypoint”) its rights,
title and interest in United States Patents 6,430,554; 6,651,053; 6,675,165 and
6,766,363 and all related foreign and domestic patents and patent applications
(but which did not include United States Patent No. 6,101,534 which was not
owned by Loyaltypoint), including reissues, reexaminations, extensions,
continuations, continuations in part, continuing prosecution applications and
divisions of such patents and applications and provisional patent applications
that were or would be continuations or continuations in part of such patent and
applications, and foreign counterparts to any of the foregoing including but not
limited to utility models (“Loyaltypoint Patents”)
pursuant to the Patent Purchase Agreement dated April 8, 2005 (“Patent Purchase
Agreement”);

    

    WHEREAS, Loyaltypoint retained
the right to a royalty equal to ten (10%) percent of the License Revenue for a
period of ten (10) years from the date of the Agreement as defined in Section
3.3 of the Patent Purchase
Agreement, and a Grant-back License as defined by Section
3.4 of the Patent Purchase
Agreement (collectively, the “Loyaltypoint
Rights”);

    

    WHEREAS, Loyaltypoint
subsequently declared bankruptcy, and Rothschild Trust purchased the
Loyaltypoint
Rights.

    

    WHEREAS, Rothschild Trust
assigned all of its rights and interest in the Loyaltypoint Rights to BP GBL;

    

    WHEREAS, Rothschild Trust
specifically represents that it has not assigned some or any of its
rights and interest in the Loyaltypoint Rights to any
other entity or individual other than to BP GBL;

    

    WHEREAS, Rothschild Trust filed a
complaint against NeoMedia in Miami-Dade County,
Florida (Case No. 08-45049 CA 20), seeking monetary relief for NeoMedia’s alleged failure to
pay royalties under the Loyaltypoint Rights (“Lawsuit”);

    

    WHEREAS, NeoMedia denied, and does
deny, all of the allegations set forth by the Rothschild Trust in the Lawsuit; and

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    WHEREAS, for purposes of
avoiding costly litigation and in order to reach an amicable resolution of the
potential claims and disputes by and among the Parties, the Parties desire to compromise
fully, and finally settle and resolve all disputes among them, including those
relating to the Lawsuit.

    

    NOW, THEREFORE, in
consideration of the promises, the performance of the covenants and agreements
hereinafter contained, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Parties to this Agreement hereby represent,
warrant, consent and agree as follows:

     

    1.           Adoption
of Recitals.  The Parties hereto adopt the above
recitals as being true and correct, and they are incorporated herein as material
parts of this Agreement. 

    

    2.           Settlement
Benefits.

    

    A.           NeoMedia agrees to deliver
shares of its common stock to BP GPL in accordance with the
terms set forth on Exhibit
1 attached hereto and made a part hereof.

    

    B.           Assignment of
Loyaltypoint Rights and Loyaltypoint Patents by Rothschild Trust, BP GBL and
Rothschild to NeoMedia.  Rothschild Trust, BP GBL and
Leigh M. Rothschild, individually (“Rothschild”) hereby assign
to NeoMedia all rights,
title and interest they have in the Loyaltypoint Rights and
the Loyaltypoint Patents
to NeoMedia.  For
clarification purposes, the Parties hereto hereby
acknowledge and agree that neither the Rothschild Parties nor Rothschild are transferring
any rights, title or interest in and to United States Patent No.
6,101,534.

    

    C.           Execution of
Assignment.  In order to record in the United States Patent and
Trademark Office (“USPTO”) the Assignment of the
Loyaltypoint Rights as set forth in Section 2(B) hereof, and to resolve any
issues arising from the recordation of the “Loyaltypoint Sale Document”
(as hereinafter defined) at the USPTO, Rothschild Trust, BP GBL and Rothschild agree to execute
the Assignment attached
hereto as Exhibit
2 to this Agreement.  The
Assignment shall be
fully executed and delivered to NeoMedia’s counsel upon the
full execution of this Agreement.  NeoMedia’s counsel
shall hold the Assignment
in escrow until each party constituting the “Rothschild Group” (as defined on Exhibit
1 attached hereto) receives the “Settlement Shares” (as defined on Exhibit
1 attached hereto) in accordance with Section 2(A) of this Agreement.  The
"Loyaltypoint Sale
Document" means the Bill of Sale between Edwin K. Palmer, Chapter 7
Trustee of the Bankruptcy Estate of Loyaltypoint, Inc., and Rothschild Trust
Holdings, LLC, dated Oct. 2, 2007, and recorded July 17, 2008 at USPTO Reel
021243/Frame 0674.

    

    D.           Stipulation of
Dismissal with Prejudice.  Within five (5)
days after the parties constituting the Rothschild Group receive the
Settlement Shares, NeoMedia shall file with the
Court a Joint Stipulation of Dismissal, with prejudice, of the Lawsuit, with
each Party to bear its
own fees and costs, a copy of which is attached hereto as Exhibit
3.  A signed Joint Stipulation of Dismissal shall be delivered
to NeoMedia’s counsel
upon execution of this Agreement, to hold in escrow until five (5) days after
the parties constituting the Rothschild Group receive the
Settlement
Shares.

     

    
      
         

      

      
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    E.           ICAP Ocean Tomo
LLC.  The Rothschild Parties shall have
sole responsibility to pay all commissions, fees or any other monies owed to
ICAP Ocean Tomo LLP in connection with ICAP Ocean Tomo Auction - Lot 54 - BP GBL
Section 3.4, LLC.  All monies owed ICAP Ocean Tomo LLP must be paid in
full, and the Rothschild
Parties must deliver a full general release from ICAP Ocean Tomo LLC, a
copy of which is attached hereto as Exhibit
4, to NeoMedia’s
counsel upon execution of this Agreement.  NeoMedia’s counsel shall hold
such general release in escrow until five (5) days after the parties
constituting the Rothschild
Group receive the Settlement
Shares.  The Rothschild Parties
specifically agree that NeoMedia will have no
obligation to deliver any Settlement Shares in
accordance with Section 2(A) above until five (5) business days after the Rothschild Parties fulfill
their obligations pursuant to this Section 2(E).

    

    3.           Release by the
Parties.

    

    A.           Rothschild
Parties’ and Rothschild Release to NeoMedia.  Rothschild
Parties, their successors, assigns, agents, officers, shareholders,
members, parents and subsidiaries and Rothschild (collectively “3A Releasors”) unconditionally and
irrevocably release NeoMedia,
its successors, assigns, employees, officers, directors, shareholders,
agents, parents and subsidiaries (collectively “3A Releasees”) from all known or
unknown claims, debts, liabilities, breaches of contract, compensation, claims
for profits, claims for expenses, demands, damages, actions, causes of action,
or suits of any kind or nature whatsoever, if any, that the 3A Releasors presently have,
for any event, occurrence, or omission that has occurred from the beginning of
the world with respect to the Loyaltypoint Rights, as well
as the Loyaltypoint
Patents.  This Release includes, but is not limited to, any
claims that were raised, or could have been raised in the Lawsuit, all rights, claims
and interest in the Loyaltypoint Rights (including
but not limited to (i) the rights in the Grant-back license set forth in section
3.4 of the Patent Purchase
Agreement and (ii) the rights in the royalties set forth in section 3.3
of the Patent Purchase
Agreement), and with respect to the
Loyaltypoint
Rights, all
losses, debts, liabilities, breaches, claims and causes of action based on
breach of contract, accounting, misrepresentation, fraud, property damage,
personal injury, disclosure of trade secrets and proprietary information,
conflicts of interest, tortious interference, breach of fiduciary duties,
demands, costs, loss of services, expenses, compensation, contribution,
attorneys’ fees, and all compensatory, consequential, liquidated, special and
punitive damages.  The Rothschild Parties and Rothschild acknowledge that
NeoMedia has relied on
the representations and promises in this Agreement and this
Release (described herein in Section 3) in agreeing to the Settlement
Benefits (described above in Section 2(A).)

     

    B.           NeoMedia’s
Release to the Rothschild Parties and Rothschild.  NeoMedia, its
successors, assigns, agents, officers, shareholders, members, parents,
subsidiaries and otherwise related individuals and entities (collectively “3B Releasors”) unconditionally and
irrevocably release the Rothschild Parties, their
successors, assigns, agents, employees, shareholders, members, managers,
parents, subsidiaries, officers and directors, as well as Rothschild (collectively “3B Releasees”) from all known
or unknown claims, debts, liabilities, breaches of contract, compensation,
claims for profits, claims for expenses, demands, damages, actions, causes of
action, or suits of any kind or nature whatsoever, if any, that 3B Releasors presently have or
could have, for any event, occurrence, or omission that has occurred from the
beginning of the world with respect to the Loyaltypoint Rights, as well as the
Loyaltypoint Patents. This Release includes,
but is not limited to, any claims that were raised, or could have been raised in
the Lawsuit, and all losses, debts,
liabilities, breaches, claims and causes of action based on breach of contract,
accounting, misrepresentation, fraud, property damage, personal injury,
disclosure of trade secrets and proprietary information, conflicts of interest,
tortious interference, breach of fiduciary duties, demands, costs, loss of
services, expenses, compensation, contribution, attorneys’ fees, and all
compensatory, consequential, liquidated, special and punitive damages.  NeoMedia
acknowledges that the Rothschild Parties and Rothschild relied on the
representations and promises in this Agreement and this
Release (described herein in Section 3) in agreeing to the
Settlement Benefits (described above in Section 2(B) and (C).)

     

    
      
         

      

      
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    4.           Representations,
Warranties and Indemnification – Rothschild Trust, BP GBL and
Rothschild.  Rothschild Trust, BP GBL and Rothschild represent and
warrant that BP GBL
holds its rights and interest in the Loyaltypoint Rights totally
free and clear, unencumbered by claims, licenses, options, rights or other
interests of other parties.  Rothschild Trust and Rothschild represent and
warrant that they have no right and/or interest in the Loyaltypoint Rights, other
than pursuant to Rothschild
Trust’s interest in BP
GBL.  Rothschild Trust and BP GBL have the full, right,
power and authority to enter into this Agreement and assign the Loyaltypoint
Rights.  Rothschild Trust, BP GBL
and Rothschild
agree to indemnify NeoMedia to the full extent
permitted by law for any breach of this provision.

     

    5.           Covenant
Not to Sue.

     

    A.           Rothschild Parties, their
successors, assigns, agents, officers, shareholders, members, parents and
subsidiaries and Rothschild (collectively “5A Releasors”) agree that they will not
commence any lawsuits, arbitrations or other proceedings or actions against
NeoMedia, its
successors, assigns, employees, officers, directors, shareholders, agents,
parents and subsidiaries (collectively “5A Releasees”) regarding any
claims with respect to the Loyaltypoint Rights and the
Loyaltypoint Patents,
save and except for any future breach or violation by NeoMedia of this Agreement.  5A Releasors
further represent that they have no suits, claims, charges, complaints or
demands of any kind whatsoever currently pending against 5A Releasees with any local,
state, or federal court or any governmental, administrative, investigative,
civil rights or other agency or board other than the Lawsuit described in this
Agreement.  5A Releasors covenant and
agree never, individually or with any person or in any way, directly or
indirectly, to commence, participate in, aid in any way, prosecute or cause or
permit to be commenced or prosecuted against 5A Releasees any action or
other proceeding based upon any claim, demand, cause of action, obligation,
damage, or liability with respect to the Loyaltypoint Rights and the
Loyaltypoint Patents,
that occurred or arose at any time prior to and including the date of 5A Releasors’ execution of
this Agreement.  5A Releasors
represent and agree that they have not and will not make or file or cause to be
made or filed any other claim, charge, allegation, or complaint, whether formal,
informal, or anonymous with respect to the Loyaltypoint Rights and the
Loyaltypoint Patents,
with any governmental agency, department or division, whether federal, state, or
local, relating to 5A
Releasees, excepting claims, charges, allegations or complaints which
arise from future breaches or violations by the 5A Releasees of the terms and
conditions of this Agreement or other obligations
of the 5A Releasees that
are not the subject matter of the Release stated above in Section 3A of this
Agreement.  5A Releasors further agree
that if any person, organization or other entity should bring a claim against
5A Releasees involving
any matter with respect to the Loyaltypoint Rights and Loyaltypoint Patents, 5A Releasors shall not join
in, or benefit from, any such action.

     

    
      
         

      

      
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    B.           NeoMedia, its successors,
assigns, agents, officers, shareholders, members, parents and subsidiaries
(collectively “5B
Releasors”) agree that they will not
commence any lawsuits, arbitrations or other proceedings or actions against the
Rothschild Parties,
their successors, assigns, employees, shareholders, members, managers, parents,
subsidiaries, officers and directors and Rothschild (collectively “5B Releasees”) regarding any
claims with respect to the Loyaltypoint Rights and the
Loyaltypoint Patents,
save and except for any future breach or violation by the Rothschild Parties and Rothschild of this Agreement.  5B
Releasors further represent that they have no suits, claims, charges,
complaints or demands of any kind whatsoever currently pending against 5B Releasees with any local,
state, or federal court or any governmental, administrative, investigative,
civil rights or other agency or board other than the Lawsuit described in this
Agreement.  5B Releasors covenant and
agree never, individually or with any person or in any way, directly or
indirectly, to commence, participate in, aid in any way, prosecute or cause or
permit to be commenced or prosecuted against 5B Releasees any action or
other proceeding based upon any claim, demand, cause of action, obligation,
damage, or liability with respect to the Loyaltypoint Rights and the
Loyaltypoint Patents,
that occurred or arose at any time prior to and including the date of 5B Releasors’ execution of this
Agreement.  5B Releasors
represent and agree that they have not and will not make or file or cause to be
made or filed any other claim, charge, allegation, or complaint, whether formal,
informal, or anonymous with respect to the Loyaltypoint Rights and the
Loyaltypoint Patents,
with any governmental agency, department or division, whether federal, state, or
local, relating to 5B
Releasees, excepting claims, charges, allegations or complaints which
arise from future breaches or violations by the 5B Releasees of the terms and
conditions of this Agreement or other obligations
of the 5B Releasees that
are not the subject matter of the Release stated above in Section 3B of
this
Agreement.  5B
Releasors further agree that if any person, organization or other entity
should bring a claim against 5B
Releasees involving any matter with respect to the Loyaltypoint Rights and the
Loyaltypoint Patents,
5B Releasors shall not
join in, or benefit from, any such action.

     

    6.           Acknowledgement
of Consideration.  The Parties hereto each
acknowledge and agree that the Settlement Benefits (Section 2 above),
Releases (Section 3) and the Covenants Not To Sue (Section 5 above) set
forth in this Agreement
are being exchanged for the benefit of each of the Parties executing this Agreement, and that, but for
the agreements made hereunder, they have no entitlement to the consideration
exchanged pursuant to this Agreement.

    

    7.           Knowing
and Voluntary Waiver.  The Parties hereto each
acknowledge and agree that the waiver of the Parties’ claims provided in
this Agreement is knowing and voluntary and that this waiver is a part of this
Agreement, which has
been written in a manner calculated to be, and which is, understood by each of
the Parties.

    

    8.           Non-Admission.  Nothing in this
Agreement, including the
above Settlement Benefits, are to be construed as an admission of wrongdoing or
of any liability by any of the Parties.  The
execution of this Agreement shall not be deemed,
construed or interpreted, in any way, to be an admission by any Party regarding liability,
damages or the validity of any claim or defense, which any Party has asserted or may
assert.  If this Agreement is not fully and
finally consummated by its valid and binding execution date, then no statements
contained herein shall be used for any purpose whatsoever against any of the
Parties.

     

    
      
         

      

      
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    9.            
Cooperation.  The
Parties agree to execute
and deliver any and all documents that may be necessary to effectuate the terms
agreed to herein.

    

    10.           Plain
Meaning and Headers.  This Agreement shall be interpreted
in accordance with the plain meaning of its terms and not for or against the
drafter’s rights hereunder.  The headers describing the contents of
the provisions are simply for identification purposes and shall not be construed
as a substantive part of the provision.

    

    11.           Agreement
the Product of Negotiation.  This
Agreement is the product
of negotiation between the Parties.  In the
event of a dispute concerning the interpretation of this Agreement or of any of its
terms or provisions, the Agreement shall be deemed to
have been drafted jointly by the Parties, and shall not be more
strictly construed against any of the Parties.

    

    12.           Waiver.  No waiver of a
breach of any provision of this Agreement shall constitute a
waiver of a breach of any other provision of this Agreement or of a prior or
subsequent breach of the same provision.  No extension of time of
performance of an act or obligation under this Agreement shall constitute an
extension of time of performance of any other act or obligation.

    

    13.           No
Assignment; Authority.  The Parties represent and warrant
that no person other than the signatories hereto had or has any interest in the
matters referred to in this Agreement, that the Parties have the sole right
and exclusive authority to execute this Agreement, and that the Parties have not sold,
assigned, transferred, conveyed, or otherwise disposed of any claim, demand or
legal right that is the subject of this Agreement.  NeoMedia represents and
warrants that Michael Zima has been duly authorized to execute this Agreement on behalf of NeoMedia and that no consent,
authorization, approval or order is required to be obtained by NeoMedia for the
execution, delivery and performance of this Agreement by NeoMedia, except as has
been obtained prior to the execution hereof.  The Rothschild Parties hereby
represent and warrant that Rothschild has been duly
authorized to execute this Agreement on behalf of the Rothschild Parties and that no
consent, authorization, approval or order is required to be obtained by the
Rothschild Parties for
the execution, delivery and performance of this Agreement by the Rothschild Parties, except as
has been obtained prior to the execution hereof.

    

    14.           Governing
Law and Jurisdiction.  This Agreement shall be deemed to be
made and entered into in the State of Florida, and shall in all respects be
interpreted, enforced and governed under the laws of Florida, without giving
effect to the conflict of laws principles of Florida law.  For
purposes of enforcing this Agreement, the Parties expressly consent to
the exclusive jurisdiction and venue of any court of competent jurisdiction
located in Miami-Dade County, Florida, and they expressly waive any claims or
defenses of forum non
conveniens to jurisdiction and venue in Miami-Dade County,
Florida.  THE
PARTIES EXPRESSLY WAIVE ANY AND
ALL RIGHTS TO A JURY TRIAL.

     

    
      
         

      

      
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    15.           Opportunity
to Consult with Counsel.  The Parties hereby represent and
acknowledge that they have been provided with the opportunity to discuss and
review the terms of this Agreement with their
respective attorneys before signing it and that they are freely and voluntarily
signing this document in exchange for the benefits provided
herein.  The Parties further represent and
acknowledge that they have been provided a reasonable period of time within
which to review the terms of this Agreement.

    

    16.           Entire
Agreement.  This Agreement is the entire
agreement between the Parties relating to the subject matter of this Agreement, and fully
supersedes any and all prior agreements and understandings, both written and
oral, between the Parties.  The Parties acknowledge that no
one has made any representations or promises to them, other than those contained
in or referred to in this Agreement, and that they are
not relying on any representations or promises not set forth herein in executing
this Agreement.

    

    17.           Modification
or Amendment.  No amendment,
change or modification of this Agreement, or waiver of any provision of this
Agreement, shall be
valid unless it is in writing, signed by each of the Parties or by his or its
respective successors and/or assigns.  The Parties agree not to make any
claim at any time or place that this Agreement has been orally
modified in any respect whatsoever.

    

    18.           Severability.  Should any
provision of this Agreement be declared or
determined by any court of competent jurisdiction to be illegal or invalid, the
validity of the remaining parts, terms or provisions shall not be affected
thereby and said illegal or invalid part, term or provision shall be deemed not
to be a part of this Agreement and all other valid
provisions shall survive and continue to bind the Parties.

    

    19.           Counterparts. This Agreement may be
executed in two or more counterparts, each of which shall be deemed an original,
and together which shall constitute one and the same agreement.  This
Agreement and any amendment hereto may be signed by electronic signature, such
as facsimile transmission or electronic mail by PDF format, and any such
electronic signature shall be deemed to be an original for all
purposes.  The Parties agree to execute two (2) originals of this
Agreement.

    

    20.           Execution
of Agreement.  The Parties to this Agreement each acknowledge and
agree that in deciding to execute this Agreement:  (a) the
Parties relied entirely
on their own judgment and that of any legal counsel; (b) no facts,
evidence, event or transaction currently unknown to the Parties, but which may
hereinafter become known, shall affect in any way or manner the final,
unconditional nature of this Agreement; (c) the
execution of this Agreement is a completely
knowing and voluntary act; (d) the Parties understand the terms
of this Agreement; (e) the
Parties have been
advised to consult with legal counsel and have been provided with time to
consult with legal counsel prior to the execution of this Agreement; (f) all
promises made to the Parties in connection with
this Agreement or as
inducement to sign same expressly are set forth in full in the other paragraphs
of this Agreement.

     

    
      
         

      

      
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    21.           Prevailing
Party. In
the event that it shall be necessary for any Party to this Agreement to institute legal
action to enforce any of the terms and conditions or provisions contained
herein, or for any breach thereof, the prevailing party shall be entitled to
reimbursement of their costs and reasonable attorney’s fees.

     

    22.           Notices. All documents or
instruments to be sent, provided or delivered under this Agreement shall be sent to the
following addresses:

    

    
      	
               
      

            	
              A.

            	
              Rothschild
      Parties.

            

    

    Rothschild
Trust Holdings, LLC

    1108 Kane
Concourse, Suite 310

    Bay
Harbor Islands, FL 33154

    Attn.:  Jay
Howard Linn

    

    With a
copy to:

    

    Feingold
Schechter P.A.

    3858-S
Sheridan Street

    Hollywood,
FL 33021

    Attn.:  Robert
A. Feingold, Esq.

    (P)
954.967.2575

    (F)
954.967.2576

    

    
      	
               
      

            	
              B.

            	
              NeoMedia.

            

    

    NeoMedia
Technologies, Inc.

    Two
Concourse Parkway, Suite 500

    Atlanta,
Georgia 30328

    Attn.  Michael
W. Zima, CFO

    

    With a
copy to:

    

    K&L
Gates LLP

    Wachovia
Financial Center – Suite 3900

    200 South
Biscayne Boulevard

    Miami,
Florida 33131

    Attn.:  Jonathan
Morton, Esq.

    (P)
305.539.3357

    (F)
305.358.7095

    

    23.           Confidentiality.

     

    A.           Except
as provided in subsection (B) of this Section 23, the Parties agree that the terms
and conditions of this Agreement are and shall remain
confidential.

    
      
         

      

      
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    B.           Nothing
in subsection (A) of this Section 23 shall prohibit any Party from disclosing terms
and conditions of this Agreement: (i) to the extent
that the such party is legally compelled (by oral questions, interrogatories,
request for information or documents, subpoena, civil investigative demand or
similar process) to disclose any of the terms hereof (the “Confidential Information”);
(ii) to its respective attorneys, auditors, lending institutions, or other
agents or representatives that the disclosing Party in good faith believes
should have access to such Confidential Information;
and/or (iii) NeoMedia
disclosing certain aspects of this Agreement on NeoMedia securities filings,
to the extent required by the United States Securities and Exchange Commission;
provided that, in connection with any such disclosure, (a) a disclosing party
shall only disclose such Confidential Information as is
required to be disclosed in connection with the foregoing, (b) a disclosing
party shall provide the other party with prompt and advance written notice of
any such intended disclosure so that such other party has a reasonable
opportunity to limit such disclosure, or (if applicable, and to the extent
reasonable practicable) seek a protective order or other appropriate remedy to
prevent such disclosure and (c) a disclosing party shall use its reasonable
efforts to seek confidential treatment (consistent with the terms hereof) by the
third party to whom such disclosure is made.  The Parties acknowledge that money
damages would not be a sufficient remedy for any breach of the provisions of
this Section 23 and that the non-breaching party shall be entitled to equitable
relief, without proof of damages or the posting of a bond, to enjoin a breach or
threatened breach of this Section 23.  Such equitable relief shall be
in addition to, and not in lieu of, such other and further relief as the injured
party may be entitled to.

    

    C.           The
obligation not to disclose Confidential Information shall
not apply to any part of such Confidential Information that
(i) is or becomes generally known to the public other than by acts of a party in
contravention of this Agreement; (ii) is disclosed
to a party by a third party, unless such Confidential Information was
obtained by such third party directly or indirectly from a party on a
confidential basis which is known or made known to such party; (iii) prior to
disclosure under this Agreement, was already in the
possession of the disclosing party, unless such Confidential Information was
obtained directly or indirectly from the other party on a confidential basis; or
(iv) is independently acquired or developed by a disclosing party other than by
acts of a party in contravention of this Agreement.

    IN WITNESS WHEREOF, each of
the Parties having so agreed to the terms stated herein, have set their
hands the date and year below so written.

     

    
      
         

      

      
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                ROTHSCHILD
      TRUST HOLDINGS, LLC

              	 
      	
                NEOMEDIA
      TECHNOLOGIES, INC.

              
	
                By:

              	
                /s/ Leigh M.
      Rothschild

              	 
      	
                By:

              	
                /s/ Michael W.
      Zima

              
	
                Name:

              	
                Leigh
      M. Rothschild

              	 
      	
                Name:

              	
                Michael
      W. Zima

              
	
                Title:

              	
                Managing
      Member

              	 
      	
                Title:

              	
                CFO
      and Secretary

              
	
                Date:

              	
                December
      14, 2010

              	 
      	
                Date:

              	
                December
      13, 2010

              

      

    

     

    BP
GBL SECTION 3.4, LLC

    
      	
              By: 

            	
              /s/ Leigh M.
      Rothschild

            
	
              Name:

            	Leigh
      M. Rothschild
	
              Title:

            	
              Manager

            
	
              Date:

            	December
      14, 2010

    

                                                      

    AGREED
AND ACCEPTED TO WITH RESPECT

    TO
HIS RIGHTS AND OBLIGATIONS UNDER

    SECTIONS
2(A), 2(B), 2(C), 3, 4, 5 and EXHIBIT 1

    

    /s/ Leigh M.
Rothschild

    Leigh
M. Rothschild

    

    AGREED
AND ACCEPTED TO, SOLELY

    IN
ITS CAPACITY AS ESCROW AGENT

    THIS
14th
DAY OF DECEMBER, 2010

    

    K&L
GATES, LLP

    

    
      	
              By:

            	
              /s/ Jonathan
      Morton

            

    

    
      	
              Name: 

            	
              Jonathan
      Morton

            

    

    
      	
              Title: 

            	
              Partner

            

    

    

    AGREED
AND ACCEPTED TO WITH

    RESPECT
TO THEIR RESPECTIVE

    RIGHTS
AND OBLIGATIONS AS A

    MEMBER
OF THE ROTHSCHILD GROUP

    UNDER
SECTIONS 2A, 2B, 2C, 2D, 2E, 23

    AND
EXHIBIT 1 OF THIS AGREEMENT

    THIS
14th
DAY OF DECEMBER, 2010

    

    /s/ Leigh M.
Rothschild

    Leigh
M. Rothschild

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    ICAP
Ocean Tomo LLC

    

    
      	
              By: 

            	
               /s/ David
      Schmidt

            

    

    
      	
              Name: 

            	
              David
      Schmidt

            

    

    
      	
              Title: 

            	
              Director
      of Research

            

    

    
      	
              Address:

            	
              200
      W. Madison, 37th
      Floor

              Chicago,
      Il  60606

            

    

    (P):
312-327-8001

    (F):
312-327-4401

    

    Feingold
Schechter P.A.

    

    
      	
              By: 

            	
              /s/ Robert A
      Feingold

            

    

    
      	
              Name: 

            	
              Robert
      A. Feingold

            

    

    
      	
              Title: 

            	
              President

            

    

     

    
 

    
      
         

      

      
        11Unassociated Document

    

    

    EXHIBIT
10.27

    

    Membership Interest Purchase
Agreement

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    MEMBERSHIP
INTEREST

     

    PURCHASE
AGREEMENT

     

    BETWEEN

     

    NET
ELEMENT, INC.

     

    AND

     

    ENERFUND,
LLC, MZ CAPITAL, LLC,

     

    DMITRY
KOZKO, JAMES CAAN,

     

    SCOTT
CAAN, MARK RYDELL, ROBERT DUVALL,

     

    SCOTT
WALTERS, CARL PAOLI AND STACEY LINDSEY

     

    DATED
AS OF DECEMBER 14, 2010

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    This
MEMBERSHIP INTEREST PURCHASE
AGREEMENT (the “Agreement”) is made and entered into as of the 14th day of
December, 2010, by and among NET ELEMENT, INC., a corporation organized and
existing under the laws of Delaware (the “Purchaser” or “NET Element”), and
ENERFUND, LLC (“Enerfund”), MZ CAPITAL, LLC (“MZ Capital”), DMITRY KOZKO
(“Kozko”), JAMES CAAN (“James Caan”), Scott Caan (“Scott Caan”), MARK RYDELL
(“Rydell”), ROBERT DUVALL (“Duvall”), SCOTT WALTERS (“Walters”), STACEY LINDSEY
(“Lindsey”) and CARL PAOLI (“Paoli”) (collectively, Enerfund, MZ Capital, and
Kozko are the “Principal Sellers” and the Principal Sellers and James Caan,
Scott Caan, Rydell, Duvall, Walters, Lindsey and Paoli are the
“Sellers”).  The Sellers and Net Element are referred to collectively
as the “Parties”.

     

    RECITALS

    

    WHEREAS, the Sellers owns all
units of Openfilm, LLC, a limited liability company organized pursuant to the
laws of the State of Florida, having its place of business at 1450 South Miami
Avenue, Miami Florida, 33130 (“Openfilm”);

     

    WHEREAS, Openfilm has
developed technologies related to the operation of it’s online business (www.openfilm.com) and owns all of the
right, title and interest in all of the intellectual property rights related to
such technologies; and

     

    WHEREAS, Enerfund and its
affiliates have funded substantially all of the development of Openfilm to date,
including funding that was converted into 1,000,000 units of Series A Preferred
Membership Interest (the “Preferred Interest”); and

     

    WHEREAS, the Purchaser, a
company registered with the Securities and Exchange Commission pursuant to the
Securities Act of 1933, desires to purchase 100% of the Sellers’ membership
interests in Openfilm (the “Interests”), and the Sellers desire to sell 100% of
their membership interests in Openfilm to the Purchaser pursuant to the terms of
this Agreement.

     

    AGREEMENT

    

    NOW, THEREFORE, in
consideration of the recitals and of the premises and mutual covenants set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree
that:

     

    ARTICLE
I

    PURCHASE OF
INTERESTS

     

    1.1.         Purchase and Sale of
Interests.  Upon the terms and subject to the conditions of
this Agreement, as of the Effective Date (the “Closing Date”), the Purchaser
shall purchase the Interest for the Purchase Price (as defined below) (the
“Interest Purchase”).

     

    1.2.         Purchase
Price.  In consideration for the sale of the Interests and in
reliance on the representations and warranties, covenants and agreements of the
Sellers contained herein and the documents contemplated hereby, and subject to
the conditions contained herein, the Purchaser shall purchase the Interests from
the Sellers for One Hundred and Seven Million Two Hundred Thirty-Eight Thousand
Four Hundred and Twenty One (107,238,421) shares of Net Element stock which
shall be distributed to the Sellers in a one for one exchange of the units of
membership interest held by each such Seller on Schedule I hereto.

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    1.3.         Closing.

     

    (a)           The
sale and purchase of the Interests and the Domains shall occur simultaneously
with the signing and effective delivery of this Agreement.

     

    (b)           Prior
to the Closing, parties have delivered to each other the documents required to
be delivered pursuant to Article V of this Agreement.

     

    ARTICLE
II

    OTHER
COVENANTS

     

    2.1.         Disclosure
Schedules.  Prior to the Closing Date, the Sellers shall
deliver to Net Element disclosure schedules (the “Disclosure Schedules”) signed
by the Sellers stating that the Disclosure Schedules were delivered pursuant to
this Agreement and are the Disclosure Schedules referred to in this
Agreement.  The Disclosure Schedules will be deemed to constitute an
integral part of this Agreement and to modify, as specified, the
representations, warranties, covenants or agreements of the Sellers contained in
this Agreement.

     

    2.2.         Officer Position and
Employment Agreement.  As of the Closing Date, James Caan shall
be elected as a Director of Net Element to begin his term January 1,
2011.

     

    2.3.         Public
Announcements.  Following the Closing, the Sellers shall not
issue or cause the publication of any press release or other public announcement
with respect to this Agreement or the transactions contemplated hereby without
the prior consent of the Purchaser; provided, however, that: nothing herein will
prohibit either party from issuing or causing publication of any such press
release or public announcement to the extent that such party’s counsel
reasonably determines such action to be required by law, or the regulations of
any government agency or the principal exchange, in which case the party making
such determination will, to the greatest extent practicable in light of the
circumstances, use best efforts to allow the other party reasonable time to
comment on such release or announcement in advance of its issuance.

     

    2.4.         Preferred
Interest.  Enerfund hereby releases all, right, title and
interest to the Preferred Interest in Openfilm, including without limitation the
ownership of 1,000,000 shares of Preferred Interest previously listed on
Schedule A to the Openfilm Operating Agreement.

     

    ARTICLE
III

    REPRESENTATIONS
AND WARRANTIES OF THE SELLERS

     

    The
Principal Sellers represent and warrant to the Purchaser that the
representations and warranties made by it in this Article III are correct and
complete as of the date of this Agreement and will be correct and complete as of
the Closing (as though made then and as though the Closing were substituted for
the date of this Agreement throughout this Article II), except as set forth in
the Disclosure Schedules delivered by the Sellers to the Purchaser prior to the
Closing. The Sellers besides the Principal Sellers only represent and warrant
that they have due authority pursuant to Section 3.1 and proper title pursuant
to Section 3.8 hereto.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    3.1.         Authority. Enerfund
and MZ Capital are business entities with the requisite capacity, power and
authority and Kozko, James Caan, Scott Caan, Rydell, Duvall, Walters, Lindsey,
and Paoli are individuals with the requisite capacity, power and
authority:  (a) to own and use the properties owned and used by it and (b)
to execute and deliver this Agreement and to consummate the transactions
contemplated hereby.

     

    3.2.         Due
Formation.  Openfilm is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Florida, and Openfilm has the corporate power and authority and all necessary
governmental approvals to own its properties and assets and to carry on its
business as it is now being conducted and are duly qualified to do business and
is in good standing in each of the jurisdictions in which the ownership of its
properties or the conduct of its business requires such qualification, except
for jurisdictions in which the failure to be so qualified would not,
individually or in the aggregate, have a Material Adverse
Effect.  Openfilm has delivered or will deliver to Net Element copies
of the certificates of registration and charter or other organizational
documents of Openfilm (the “Organizational Documents”).  Such
Organizational Documents are in all material respects complete and correct and
in full force and effect, are the only documents governing the operation and
authority of Openfilm, and Openfilm is not in violation of any of the provisions
of the Organizational Documents.  Except as provided in Schedule 3.2
hereto, there are no other Persons in which Openfilm owns, of record or
beneficially, any direct or indirect equity or similar interest or any right
(contingent or otherwise) to acquire the same.

     

    3.3.         Capitalization.   The
Sellers owns 100% of the issued and outstanding interests in Openfilm, and there
are no other interests, or options, warrants, calls, preemptive rights,
subscriptions or other rights, to acquire interests, in Openfilm and there are
no outstanding contractual obligations of Openfilm to repurchase, redeem or
otherwise acquire any membership interests of Openfilm or to provide funds to
make any investment (in the form of a loan, capital contribution or otherwise)
in any other Person. All the outstanding units of membership interest of
Openfilm are duly authorized validly issued, fully paid and non-assessable and
free of preemptive rights.

     

    3.4.         No Violation or
Conflict.  The execution and delivery of the Transaction
Agreements do not, and the consummation of the transactions contemplated hereby
and thereby and compliance with the provisions hereof and thereof will not,
conflict with, result in any violation of, or breach or default (with or without
notice or lapse of time, or both) under, or give to others a right of
termination, cancellation or acceleration of any obligation or the loss of a
material benefit under, or result in the creation of any lien, security
interest, charge or encumbrance upon any of the properties or assets of Openfilm
under, any provision of (i) the Organizational Documents, (ii) any loan or
credit agreement, note, bond, mortgage, lease, indenture or other contract,
agreement, instrument, permit, concession, franchise or license applicable to
Openfilm, or (iii) any judgment, order, decree, statute, law, ordinance, rule,
or regulation applicable to the Sellers or Openfilm or any of its respective
properties or assets.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

    3.5.         No Undisclosed
Liabilities. Openfilm have no liabilities or obligations of any nature
other than for incidental current expenses incurred in the normal course of
business such as salaries, equipment, maintenance, etc., whether or not accrued,
contingent or otherwise, and there is no existing condition, situation or set of
circumstances that could be expected to result in such a liability or
obligation.

     

    3.6.         No Violation of
Law.  To the Knowledge of the Sellers, the businesses of
Openfilm are not being conducted in violation of any applicable
Law.

     

    3.7.         Litigation;
Proceedings. (a) there are no actions, suits, claims (including worker’s
compensation claims), litigation or other governmental or judicial proceedings
or investigations or arbitrations against Openfilm or any of its properties,
assets or business, or any of Openfilm’s current or former directors or officers
or any other Person whom Openfilm has agreed to indemnify; (b) as of the date
hereof, there are no actions, suits or proceedings pending or threatened,
against the Sellers or Openfilm relating to the transactions contemplated by the
Transaction Agreements; and (c) there are no outstanding orders, judgments,
injunctions, awards or decrees of any governmental entity against the Sellers or
Openfilm, any of its properties, assets or businesses, or any of Openfilm’s
current or former directors or officers or any other Person whom Openfilm has
agreed to indemnify.

     

    3.8.         Title to
Assets.  The Sellers and Openfilm own and have valid title to
its other tangible assets and properties which they purport to own, free and
clear of any and all Liens, except for Permitted Liens.

     

    3.9.         Financial
Statements.  As of the date the Sellers deliver the Disclosure
Schedules, the Sellers will have delivered to Net Element the following
financial statements for Openfilm: balance sheet and incomes statement as of
December 31, 2009 (audited) and December 31, 2008 audited) (collectively, the
“Financial Statements”).  The Financial Statements have been prepared
in accordance with accounting principles consistently applied throughout the
periods covered thereby and present fairly in all material respects, as of their
respective dates, the financial condition and results of operations of
Openfilm.

     

    3.10.       Taxes.   Other
than as disclosed on Schedule 3.10 hereto, Openfilm has filed all income tax
returns (the “Tax Returns”) that it is required to file, and has paid all income
taxes (the “Taxes”) shown thereon as owing.  The most recent financial
statements contained in the Financial Statements reflect an adequate reserve for
all Taxes payable by Openfilm for all taxable periods and portions thereof
accrued through the date of such financial statements, except to the extent that
any failures to reflect such reserves would not reasonably be expected to have a
Material Adverse Effect.  There is no pending dispute with any taxing
authority relating to any Tax Returns of Openfilm and there is no tax audit of
any Tax Return pending or currently in process.  There are no liens
for Taxes upon any of the assets of Openfilm, except Liens for current Taxes not
yet due and payable.

     

    3.11.       Employees. Schedule
3.11 sets forth the names and titles of all current employees of
Openfilm.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    

    3.12.       Brokers, Finders or
Financial Advisors.    Neither the Seller, nor
Openfilm, has employed any investment banker, broker, finder or intermediary
(for the avoidance of doubt, expressly excluding attorneys or accountants) in
connection with the transactions contemplated hereby who might be entitled to
any fee or any commission in connection with or upon consummation of the
transactions contemplated hereby.

     

    ARTICLE
IV

    REPRESENTATIONS
AND WARRANTIES OF THE PURCHASER

     

    The
Purchaser represents and warrants to the Sellers that the representations and
warranties made by it in this Article IV are correct and complete as of the date
of this Agreement and will be correct and complete as of the Closing (as though
made then and as though the Closing were substituted for the date of this
Agreement throughout this Article IV).

     

    4.1.         Organization and
Qualifications.  The Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation, with the requisite corporate power and authority to own and use
its properties and assets and to carry on its business as currently
conducted.  The Purchaser is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction in which the nature of
its business conducted or property owned by each makes such qualification
necessary, except where the failure to be so qualified or in good standing, as
the case may be, would not reasonably be expected to have a Material Adverse
Effect.

     

    4.2.         Authorization.  The
Purchaser has the requisite corporate power and authority to enter into and to
consummate the transactions contemplated by this Agreement and otherwise to
carry out its obligations hereunder.  The execution and delivery of this
Agreement by the Purchaser and the consummation by it of the transactions
contemplated hereby have been duly authorized by all necessary action on the
part of the Purchaser, and no further action is required by the Purchaser. 
This Agreement has been duly executed by the Purchaser and this Agreement
constitutes a valid and binding agreement of the Purchaser enforceable against
the Purchaser in accordance with its terms, subject, however, as to enforcement,
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors’ rights
and to general principles of equity, regardless of whether such enforceability
is considered in equity or at law.  The Purchaser is not in violation of
any of the provisions of its Certificate or Articles of Incorporation, bylaws or
other organizational documents.

     

    4.3.         Brokers, Finders or
Financial Advisors.  No broker, investment broker, financial
advisor or other person is entitled to any broker’s, finder’s, financial
advisor’s or other similar fee or commission from the Purchaser in connection
with the transactions contemplated by this Agreement.

     

    ARTICLE
V

    DELIVERABLES

     

    5.1.         Certificates and Documents
of the Sellers. The Sellers shall have delivered at or prior to the
Closing the following:

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    

    (i)           A
copy of Openfilm’s Certificate of Formation, with all amendments to date,
certified by the Secretary of State, together with a copy of the Operating
Agreement of Openfilm, certified by its secretary within three (3) business days
of the Effective Date;

     

    (ii)           possession
of all originals and copies of agreements, instruments, documents, deeds, books,
records, files and other data and information within the possession of the
Sellers or any Affiliate of the Sellers pertaining to Openfilm (collectively,
the “Records”); provided, however, that the Sellers may retain (1) copies of any
tax returns and copies of Records relating thereto; (2) copies of any Records
that the Sellers are reasonably likely to need for complying with requirements
of law; and (3) copies of any Records that in the reasonable opinion of the
Sellers will be required in connection with the performance of his obligations
herein;

     

    (iii)          resolutions
of Openfilm or the Sellers, or both as the requisite circumstance and Law
requires, authorizing and approving all matters in connection with this
Agreement and the transactions contemplated herein, certified by a duly
authorized officer of Openfilm within three (3) days of the Effective
Date;

     

    (iv)          the
stock book, stock ledger, minute books and corporate seal of
Openfilm;

     

    (v)           such
other documents relating to the transactions contemplated in this Agreement as
the Purchaser may reasonably request.

     

    5.2.         Certificates and Documents
of the Purchaser.  The Purchaser shall have delivered at or
prior to the Closing the following (with the exception of the stock certificates
representing the Purchase Price which shall be delivered as soon as possible
thereafter):

     

    (i)           
resolutions of the Board of Directors of the Purchaser, authorizing and
approving all matters in connection with this Agreement and the transactions
contemplated herein, certified by the secretary of the Purchaser as of the
Closing Date;

     

    (ii)           such
other documents relating to the transactions contemplated in this Agreement as
the Sellers may reasonably request; and

     

    (iii)           Stock
certificates representing the Purchase Price for each of the Sellers in the
amounts set forth on Schedule I hereto.

     

    5.3.         Intervening
Litigation.  If, prior to the Closing Date any preliminary or
permanent injunction or other Order issued by a court of competent jurisdiction
or by any other Governmental Entity shall restrain or prohibit this Agreement or
the consummation of the transactions contemplated herein for a period of fifteen
(15) days or longer, the Closing shall be adjourned at the option of either
party for a period of thirty (30) days.  If at the end of such thirty
(30) day period such injunction or Order shall not have been favorably resolved,
either party may, by written notice thereof to the other, terminate this
Agreement, without liability or further obligation hereunder.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    

    ARTICLE
VI

    OTHER
AGREEMENTS

     

    6.1.         Confidentiality.    Each
of the parties hereto shall, and shall cause their respective principals,
officers, directors, shareholders, employees, agents, counsel, auditors, and
other personnel and authorized representatives to, hold in strict confidence,
and not divulge or disclose, any confidential information of any kind concerning
(i) the other parties and their respective principals, officers, directors,
shareholders, employees, agents, counsel, auditors and other personnel and
authorized representatives; (ii) the business or operations of any party to this
Agreement; or (iii) this Agreement, the transactions contemplated hereby, or any
negotiations or discussions between or among the parties hereto in connection
with any of the foregoing, except to the extent that such information is a
matter of public knowledge or is required to be disclosed by law or judicial or
administrative process as may be required by applicable law or as otherwise
contemplated herein. Notwithstanding anything contained herein to the contrary,
the confidentiality obligations of the parties hereto contained in this Section
6.1 shall survive the Closing.

     

    6.2.         Expenses.   Except
as otherwise expressly provided herein, each party hereto will pay its own
expenses incurred in connection with the negotiation of this Agreement, the
performance of their respective obligations hereunder and the consummation of
the transactions contemplated hereby, whether or not consummated.

     

    ARTICLE
VII

    SURVIVAL
AND INDEMNIFICATION

     

    7.1.         Survival of Representations
and Warranties.  The representations and warranties contained
in Articles III and IV hereof shall survive the Effective Date for a period of
twelve (12) months, after which all such representations and warranties shall
terminate and be of no further force or effect.

     

    7.2.         Indemnification by the
Seller.  For a period of twelve (12) months after the Effective
Date, the Principal Sellers shall indemnify and hold harmless the Purchaser and
its respective officers, directors, employees, agents, and shareholders
(collectively, the “Purchaser Indemnified Parties”) against any Losses incurred
or paid by any Purchaser Indemnified Party, as a result of (i) any breach or
failure of any of the representations and warranties of the Principal Sellers
contained in this Agreement or (ii) any breach of, or failure to perform, any
agreement or covenant of the Sellers contained in this Agreement; provided that
(i) the Principal Sellers shall not be liable under this Section 8.2(a) unless
the aggregate amount of Losses attributable to the events or facts (including a
series of related events or facts) that resulted in such breach of
representation, warranty covenant or agreement is $10,000 or more; and (ii) the
Principal Sellers’ maximum liability under this Section 8.2(a) shall not exceed
the value of the Purchase Price on the date of the Closing.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    

    7.3.         Indemnification by the
Purchaser.  For a period of twelve (12) months after the
Effective Date, the Purchaser shall indemnify and hold harmless the Sellers
against any Losses incurred or paid by the Sellers, as a result of (i) any
breach or failure of any of the representations and warranties of the Purchaser
contained in this Agreement or (ii) any breach of, or failure to perform, any
agreement or covenant of the Purchaser contained in this Agreement.

     

    7.4.         Procedure.  Promptly
(but in no event more than 15 days) after receipt by a Purchaser Indemnified
Party or the Sellers (an “Indemnified Party”), as the case may require, of
notice of the commencement of any action, such Indemnified Party shall, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 7.4, notify in writing the indemnifying party of the commencement
thereof.  In case any such action is brought against any Indemnified Party,
and such Indemnified Party notifies the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate in and, to the
extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, subject to the provisions hereof, with
counsel reasonably satisfactory to such Indemnified Party.  Following
notification to the Indemnified Party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such Indemnified Party
under this Section 7.4 for any legal or other expenses subsequently incurred by
such Indemnified Party in connection with the defense therewith, other than
reasonable costs of investigation.  The Indemnified Party shall have the
right to employ separate counsel in any such action and to participate in the
defense thereof, but the fees and expenses of such counsel shall not be at the
expense of the indemnifying party if the indemnifying party has assumed the
defense of the action, within a reasonable time after notice of commencement of
the action, with counsel reasonably satisfactory to the Indemnified Party; provided however, that the
indemnifying party shall be required to pay for Indemnified Party’s counsel, if
such Indemnified Party shall have reasonably concluded, on reliance of the
written opinion of counsel experienced in such matters, that there may be
defenses available to it or him which are different from or additional to those
available to the indemnifying party (in which case indemnifying parties shall
not have the right to direct the defense of action).  No settlement of any
action against an Indemnified Party shall be made without the consent of the
Indemnified Party, which shall not be unreasonably withheld.  In the event
that any Indemnified Party should have a direct claim against any indemnifying
party hereunder that does not involve any third-party claim or claims asserted
against the Indemnified Party, the Indemnified Party shall transmit to the
indemnifying party a written notice describing in reasonable detail the nature
of the claim, an estimate of the amount of damages attributable to such claim to
the extent feasible (which estimate shall not be conclusive of the final amount
of such claim) and the basis of the Indemnified Party’s request for
indemnification under this Article VII.  The parties agree that the sole
and exclusive remedy which any party hereto shall have against any other party
hereto under this Agreement shall be the right to proceed for compensation or
indemnification in the manner and only to the extent provided in this Article
VII.

     

    ARTICLE
VIII

    MISCELLANEOUS

     

    8.1.         Arbitration. 
Any controversy or claim arising out of or relating to this Agreement that
cannot be resolved and which is the result of a breach or termination of
this Agreement shall be resolved, as follows:

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    

    (a)           The
dispute or controversy will be settled finally and exclusively by binding
arbitration in accordance with and through the Commercial Arbitration Rules
(“Rules”) of the American Arbitration Association (“AAA”) in effect on the date
of this Agreement. 

     

    (b)           The
place of the arbitration shall be Miami, Florida, United States of America. Each
party hereby irrevocably agrees that service of process, summons, notices or
other communications related to the arbitration procedure shall be deemed served
and accepted by the other party if given in the same manner as provided under
the notice provisions of this Agreement. Witnesses residing outside of the State
of Florida may testify telephonically.

     

    (c)           The
language to be used in the arbitration shall be English.

     

    (d)           The
arbitration shall be conducted by one arbitrator.  Upon request, the AAA
will produce a list of 10 potential arbitrators familiar with international
commercial legal issues.  The parties will attempt to agree on one
arbitrator. Failing to agree, the AAA shall appoint an arbitrator pursuant to
the Rules.

     

    (e)           Judgment
upon the written award rendered by the arbitrator may be entered in any court or
record of competent jurisdiction in any country, or application may be made to
such court of judicial acceptance of the award and an order of enforcement, as
the law of such jurisdiction may require or allow.

     

    (f)           The
cost of the arbitration proceedings shall be determined under the respective
rules for cost of arbitration of the AAA in effect at the time of the request
for arbitrations.   All expenses of the arbitration, including
reasonable attorney’s fees, shall be borne by the losing party to the
arbitration or, as the case may be, shall be prorated to properly reflect any
partial prevailing or losing of the parties to the arbitration, as determined by
the arbitrators in the written award.

     

    (g)           The
panel of arbitrators specifically shall have the power to grant equitable relief
upon request of either party.

     

    8.2.         Entire
Agreement.  This Agreement, together with the Exhibits and
Schedules hereto, contain the entire understanding of the parties with respect
to the subject matter hereof and supersedes all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into this Agreement and the Exhibits and Schedules
hereto.

     

    8.3.         Notices.  All
notices, requests, consents and other communications hereunder shall be in
writing and shall be deemed effectively given: (a) upon personal delivery to the
party to be notified, (b) when sent by confirmed facsimile if sent during normal
business hours of the recipient; if not, then on the next business day, (c)
three business days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or (d) two business days after
deposit with recognized overnight courier, specifying next day delivery, with
written verification of receipt.  The address for all notices, requests,
consents and other communications hereunder to the parties to this Agreement
shall be delivered or sent to the following:

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    If to the
Sellers:

     

    Dmitry
Kozko

    1450
South Miami Avenue

    Miami,
Florida 33130

    Email:
dkozko@openfilm.com

    

    If to the
Purchaser: 

    

    Net
Element, Inc.

    1450
South Miami Avenue

    Miami, FL
33130

    Attn:  Mike
Zoi, President

    Email:
mzoi@netelement.com

    

    With a
copy to:

    

    Curtis
Wolfe

    1450
South Miami Avenue

    Miami, FL
33130

    Email:
cwolfe@netelement.com

    

    Or such
other address as may be designated in writing hereafter, in the same manner, by
such Person.

    

    8.4.         Amendments;
Waivers.  No provision of this Agreement may be amended except
by a written instrument signed by the Purchaser and the Sellers.   No
provision of this Agreement may be waived except in a written instrument
signed by the party against whom enforcement of any such waiver is sought. 
No waiver of any default with respect to any provision, condition or requirement
of this Agreement shall be deemed to be a continuing waiver in the future or a
waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of either party to exercise any right hereunder in any manner
impair the exercise of any such right accruing to it thereafter.

     

    8.5.         Headings.  The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof.

     

    8.6.         Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and permitted assigns.  Neither
this Agreement nor any rights or obligations hereunder may be assigned without
the prior written consent of the other party. 

     

    8.7.         No Third-Party
Beneficiaries.  This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    

    8.8.         Governing Law; Consent to
Jurisdiction.  This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Florida without regard to the principles of conflicts of law
thereof. 

     

    8.9.         Execution.  This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other parties, it being understood that all parties need not sign the same
counterpart.  In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile signature page were an original
thereof.

     

    8.10.       Severability.  In
case any one or more of the provisions of this Agreement shall be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Agreement shall not in any way be affected or
impaired thereby and the parties will attempt to agree upon a valid and
enforceable provision which shall be a reasonable substitute therefor, and upon
so agreeing, shall incorporate such substitute provision in this
Agreement.

     

    8.11.       Interpretation.  The
Section headings in this Agreement are for convenience of reference only and
shall not be deemed to alter or affect the meaning or interpretation of any
provision hereof.  The language used in this Agreement will be deemed to be
the language chosen by the parties hereto to express their mutual intent, and no
rule of strict construction will be applied against any party hereto.  The
disclosure of any matter in any portion of the Disclosure Schedules hereto shall
be deemed to be a disclosure for all purposes of this Agreement to which such
matter could reasonably be likely to be pertinent, but shall expressly not be
deemed to constitute an admission by the Sellers or the Purchaser, as the case
may be, or to otherwise imply, that any such matter is material for the purposes
of this Agreement.

     

    ARTICLE
IX

    DEFINITIONS

     

    9.1.         When
used in this Agreement, and in addition to the other terms defined herein, the
following terms shall have the meanings specified:

     

    (a)           Affiliate.  “Affiliate”
shall mean, in relation to any party hereto, any entity directly or indirectly
controlling, controlled by or under common control with such party.

     

    (b)           Agreement.  “Agreement”
shall mean this Membership Interest Purchase Agreement, together with the
Exhibits attached hereto and the Disclosure Schedule, as the same may be amended
from time to time in accordance with the terms hereof.

     

    (c)           Control.  “Control”
(including the terms “controlling,” “controlled by,” and “under common control
with”), as used with respect to any Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such Person, through the ownership of voting securities or by
contract.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    

    (d)          Change of
Control.  “Change of Control” shall mean (i) the merger or
consolidation of the Purchaser with or into any other corporation or entity, or
the merger or consolidation of any other corporation or entity into or with the
Purchaser, which results in the Purchaser or those persons who are shareholders
of the Purchaser as of the date hereof holding less than fifty percent (50%) in
voting power of the outstanding capital stock of the surviving corporation; (ii)
any sale or transfer in a single transaction or series of related transactions
of all or substantially all of the Company’s assets as of the transaction date
(or the date of the first transaction in a series of related transactions);
(iii) a third Person or Persons (who is or are not the Sellers or shareholders
of the Purchaser as of the date hereof) becomes the beneficial owner (as such
term is in the Securities Exchange Act of 1934, as amended) of shares of the
Purchaser having more than fifty percent (50%) of the voting power of the
outstanding capital stock of the Purchaser; or (iv) any transaction or series of
related transactions in which a third Person or Persons (who is or are not the
Sellers or shareholders of the Purchaser as of the date hereof), appoints or
elects a majority of the Board of Directors of the Company.

     

    (e)           Disclosure
Schedule.  “Disclosure Schedule” shall mean the Disclosure
Schedule delivered by the Sellers to Purchaser pursuant to Section 2.2 of this
Agreement.

     

    (f)           Effective
Date.  “Effective Date” shall mean the date on which the
parties hereto have signed and delivered this Agreement.

     

    (g)          Governmental
Entity.  “Governmental Entity” shall mean any federal, state,
local or foreign court, arbitral tribunal, administrative agency or commission
or other governmental or regulatory authority or administrative
agency.

     

    (h)          Indebtedness.  “Indebtedness”
shall mean all liabilities or obligations of Openfilm, whether primary or
secondary or absolute or contingent, in excess of $10,000 as to any single item:
(a) for borrowed money; or (b) evidenced by notes, bonds, debentures or similar
instruments; or (c) secured by Liens on any assets of Openfilm.

     

    (i)           Knowledge.  “Knowledge”
shall mean actual knowledge without independent investigation of Dmitry Kozko or
any officer or manager of the respective company who should, based on his or her
responsibilities, reasonably be expected to have such knowledge.

     

    (j)           Law.  “Law”
shall mean any foreign, federal, state or local governmental law, rule,
regulation or requirement, including any rules, regulations and orders
promulgated thereunder and any orders, decrees, consents or judgments of any
governmental regulatory agencies and courts having the force of law, other than
any Environmental Laws.

     

    (k)          Lien.  “Lien”
shall mean, with respect to any asset (real, personal or mixed): (a) any
mortgage, pledge, lien, easement, lease, title defect or imperfection or any
other form of security interest, whether imposed by Law or by contract; and (b)
the interest of a vendor or lessor under any conditional sale agreement,
financing lease or other title retention agreement relating to such
asset.

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    

    (l)           Loss.  “Loss”
shall mean any and all damages (including incidental and consequential damages),
assessments, fines, penalties, deficiencies, losses, judgments, amounts paid in
settlement or diminution in value, costs and expenses (including, without
limitation, interest, court costs, reasonable fees and expenses of attorneys,
accountants and other experts or other reasonable expenses incurred in
investigating, preparing, defending against or prosecuting any litigation or
claim, action, suit, proceeding or demand).

     

    (m)         Material Adverse
Effect.  “Material Adverse Effect” shall mean a material
adverse effect on the business, condition (financial or otherwise), results of
operations, assets, liabilities, prospects, liquidity or properties of Openfilm
or Net Element as applicable, each taken as a whole.

     

    (n)          Permitted
Liens.  “Permitted Liens” shall mean those of the Existing
Liens that do not materially detract from the value of the property or assets of
Openfilm taken as a whole subject thereto and do not materially impair the
business or operations of Openfilm.

     

    (o)          Person.  “Person”
shall mean a natural person, corporation, limited liability company,
association, joint stock company, trust, partnership, governmental entity,
agency or branch or department thereof, or any other legal entity.

     

    (p)          Subsidiary.  “Subsidiary”
shall mean any corporation, at least a majority of the outstanding capital stock
of which (or any class or classes, however designated, having ordinary voting
power for the election of at least a majority of the board of directors of such
corporation) shall at the time be owned by the relevant Person directly or
through one or more corporations which are themselves Subsidiaries.

     

    (q)          “Transaction
Agreements” shall mean this Agreement, the Employment Agreement, and any
other agreements contemplated in this Agreement.

     

    [Signatures
appear on next page]

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    IN WITNESS WHEREOF, the
parties hereto have caused this Membership Interest Purchase Agreement to be
duly executed by their respective authorized signatories as of the Effective
Date.

     

    
      
        
          	
                  PURCHASER:

                
	 
      
	
                  NET
      ELEMENT, INC.

                
	 
      
	
                  By:

                	/s/
      Mike
      Zoi
	
                  Name: 

                	
                  Mike
      Zoi

                
	
                  Title:

                	
                  Chief
      Executive Officer

                

        

      

    

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        	
                                                                SELLERS:

                                                              	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                                                                ENERFUND,
      LLC

                                                              	 
      	
                                                                MZ
      CAPITAL, LLC

                                                              
	 
      	 
      	 
      	 
      	 
      
	
                                                                By:

                                                              	/s/
      Mike
      Zoi	 
      	
                                                                By:

                                                              	/s/
      Mike
      Zoi
	
                                                                Name:

                                                              	
                                                                Mike
      Zoi

                                                              	 
      	
                                                                Name:

                                                              	
                                                                Mike
      Zoi

                                                              
	
                                                                Title:

                                                              	
                                                                Managing
      Member

                                                              	 
      	
                                                                Title:

                                                              	
                                                                Managing
      Member

                                                              
	 
      	 
      	 
      	 
      	 
      
	 
      /s/ Dmitry
      Kozko	 
      	 
      
	
                                                                Name:  

                                                              	
                                                                Dmitry
      Kozko

                                                              	 
      	
                                                                Name:  

                                                              	
                                                                James
      Caan

                                                              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                                                Name:

                                                              	
                                                                Mark
      Rydell

                                                              	 
      	
                                                                Name:

                                                              	
                                                                Scott
      Caan

                                                              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
	
                                                                Name:

                                                              	
                                                                Stacey
      Lindsey

                                                              	 
      	
                                                                Name:

                                                              	
                                                                Robert
      Duvall

                                                              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
	
                                                                Name:

                                                              	
                                                                Scott
      Walters

                                                              	 
      	
                                                                Name:

                                                              	
                                                                Cari
      Paoli

                                                              

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    Messrs.
J. Caan, Rydell, S. Caan, Duvall, Walters, and Paoli and Ms. Lindsey sign this
Membership Interest Purchase Agreement solely to confirm their representation of
due title to their interest in Openfilm (3.8) and capacity (3.1) and acknowledge
the exchange of their interest and incur no other obligations
hereunder.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Schedule
I

     

    Openfilm
Membership Interests

     

    
      
        
          
            
              
                
                  
                    
                      
                        	
                                Member

                              	 	
                                Units

                              	 	 	
                                Percentage

                              	 
	
                                Common

                              	 	 	 	 	 	 
	
                                Enerfund,
      LLC

                              	 	 	45,937,500	 	 	 	42.84	%
	
                                MZ
      Capital

                              	 	 	29,062,500	 	 	 	27.10	%
	
                                Dmitry
      Kozko

                              	 	 	24,950,000	 	 	 	23.27	%
	
                                James
      Caan

                              	 	 	5,568,421	 	 	 	5.19	%
	
                                Scott
      Caan

                              	 	 	600,000	 	 	 	0.56	%
	
                                Mark
      Rydell

                              	 	 	460,000	 	 	 	0.43	%
	
                                Robert
      Duval

                              	 	 	460,000	 	 	 	0.43	%
	
                                Stacey
      Lindsey

                              	 	 	100,000	 	 	 	0.09	%
	
                                Scott
      Walters

                              	 	 	50,000	 	 	 	0.05	%
	
                                Carl
      Paoli

                              	 	 	50,000	 	 	 	0.05	%
	
                                Total:

                              	 	 	107,238,421	 	 	 	 	 
	 
      	 	 	 	 	 	 	 	 
	
                                Series
      A Preferred

                              	 	 	 	 	 	 	 	 
	
                                Enerfund,
      LLC

                              	 	 	1,000,000	 	 	 	100.00	%
	
                                Total:

                              	 	 	1,000,000

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00182-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00182-of-00352.parquet"}]]