PRIVATE & CONFIDENTIAL

Net Element, Inc., a Delaware corporation or any of its affiliates or assignees. 

The owner(s) of the ownership interests of Paystar and Nexcharge. 

The Company will contribute all of its assets to Newco. All assets contributed shall be free of liens or other encumbrances and at the closing date, Newco shall be free of all liabilities, whether short term or long term, except for those agreed to by the Parties after Due Diligence by NETE referred to below. 

Newco Structure:

It is contemplated that Newco will have 2 classes of shares:

Notwithstanding the ultimate deal structure, the underlying deal terms for the Transaction set forth herein shall apply.

During the first year of operations, the Parties will determine if its in their interests to convert their stock in Newco to stock of Net Element, Inc. and if so, the Parties will work in good faith to seek the necessary approvals from Net Element, Inc.

NETE shall have the irrevocable sole and exclusive option to purchase (“Option”) from the Owners, their 49% Class A Shares ownership interests in Newco (“Remainder Interests”). The Option shall be for 12 months from the closing of the Transaction and the purchase price payable for the Remainder Interests shall be agreed to by the parties at fair market value when Option is considered. 

The Parties agree that in the event of the Closing of the Transaction, the Owners and NETE will pay in equal 50-50 proportions, a broker’s fee to Ed Slominski in the sum of up to $170,000 of consideration. NETE may at its sole and exclusive option pay its share of the brokers fee by issuance to the Slominski of NETE stock. 

We consider Due Diligence as an important process of obtaining the information required to verify information previously provided by the Company and for preparation of the Transaction Documents. Prior to signing definitive Transaction documents, we will require the opportunity to perform detailed due diligence investigation of the Company and its affiliates. Such due diligence shall include, but shall not be limited to: 

Each Party shall be liable for all of its own costs and expenses in relation to this binding letter of intent, the Transaction Documents and all other matters pertaining to the Transaction. 

This binding letter of intent and all disputes or claims arising out of or in connection with the Transactions contemplated hereunder or their subject matter will be governed by the laws of the State of Florida without giving effect to any choice or conflict of law provision or rule (whether of the State of Florida or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than those of the State of Florida. The parties irrevocably agree that they will use good faith and best efforts to resolve any dispute or claim that arises out of or in connection with this Letter of Intent or its subject matter in amicable way and via good will negotiations; provided, however, that, if the parties cannot so settle, then the United States District Court for the Southern District of Florida shall have exclusive jurisdiction to settle any such dispute of claim. 

This binding letter of intent as well as any other documents or agreements to be signed by the Parties shall be subject to the Approval of NETE Board of Directors. 

The parties shall observe Confidentiality to the terms of the proposed Transaction and all further negotiations relating hereto.

The binding letter of intent is strictly confidential and cannot be disclosed by the Parties to any other third parties without NETE’s written permission. The Parties may disclose the contents of this Proposal to its directors or consultants (including, without limitation, attorneys, accountants, financial advisers and members of its Supervisory Board), who need to acknowledge this information for the purposes of the Transaction, assuming that all parties to whom such disclosure is made will maintain the confidentiality of these terms. Additionally, the Parties will treat all information received from each other in connection with the Transaction as confidential. 

Immediately upon signing of this binding letter of intent, the Owners and the Company shall terminate or procure termination of any third party negotiations relating to the sale of any interest in the Company or any subject matter referenced in this Letter of Intent. 

This binding letter of intent remains valid for your review and consideration for seven (7) days from the date of its signing by NETE. Upon signature by you, the Letter of Intent shall constitute a legally binding document between the Parties subject to the terms referenced herein.

These basic terms and conditions are not comprehensive and we expect that additional terms including warranties and representations in line with accepted market practices and satisfactory to the NETE, will be incorporated into a formal Acquisition Agreement and certain other agreements to be negotiated between the Parties hereto.

The binding letter of intent supersedes all previous agreements, arrangements and communication relating to the Transaction. None of the terms hereof may be modified or amended except by a written agreement signed by all parties hereto.