<SEC-DOCUMENT>0001144204-16-076654.txt : 20160122
<SEC-HEADER>0001144204-16-076654.hdr.sgml : 20160122
<ACCEPTANCE-DATETIME>20160122161154
ACCESSION NUMBER:		0001144204-16-076654
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20160121
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Unregistered Sales of Equity Securities
ITEM INFORMATION:		Material Modifications to Rights of Security Holders
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20160122
DATE AS OF CHANGE:		20160122

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			Net Element, Inc.
		CENTRAL INDEX KEY:			0001499961
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374]
		IRS NUMBER:				901025599
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-34887
		FILM NUMBER:		161356352

	BUSINESS ADDRESS:	
		STREET 1:		3363 NE 163RD STREET
		STREET 2:		SUITE 705
		CITY:			NORTH MIAMI BEACH
		STATE:			FL
		ZIP:			33160
		BUSINESS PHONE:		(305) 507-8808

	MAIL ADDRESS:	
		STREET 1:		3363 NE 163RD STREET
		STREET 2:		SUITE 705
		CITY:			NORTH MIAMI BEACH
		STATE:			FL
		ZIP:			33160

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	Net Element International, Inc.
		DATE OF NAME CHANGE:	20121002

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	Cazador Acquisition Corp Ltd.
		DATE OF NAME CHANGE:	20100825
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>v429513_8k.htm
<DESCRIPTION>8-K
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>UNITED STATES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>SECURITIES AND EXCHANGE COMMISSION<BR>
WASHINGTON, DC 20549</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-size: 18pt"><B>FORM</B></FONT><B><FONT STYLE="font-size: 10pt">
</FONT><FONT STYLE="font-size: 18pt">8-K</FONT></B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>CURRENT REPORT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Date of report (Date of earliest event
reported) January 21, 2016</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>&nbsp;&nbsp;</B></P>

<P STYLE="font: 18pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Net Element, Inc.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>(Exact Name of Registrant as Specified
in Charter)</B></P>

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        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; border-bottom: Black 1pt solid; margin-bottom: 0pt; text-align: center"><B>Delaware</B></P></TD>
    <TD STYLE="width: 1%; padding: 0; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 32%; padding: 0; text-align: center">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; border-bottom: Black 1pt solid; margin-bottom: 0pt; text-align: center"><B>001-34887</B></P></TD>
    <TD STYLE="width: 1%; padding: 0; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 33%; padding: 0; text-align: center">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; border-bottom: Black 1pt solid; margin-bottom: 0pt; text-align: center"><B>90-1025599</B></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(State or Other Jurisdiction</B></FONT><BR>
<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>of Incorporation)</B></FONT></TD>
    <TD STYLE="padding: 0; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="padding: 0; font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(Commission File</B></FONT><BR>
<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Number)</B></FONT></TD>
    <TD STYLE="padding: 0; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="padding: 0; text-align: center">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>(IRS Employer<BR>
        Identification No.)</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>&nbsp;</B></P></TD></TR>
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        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt; border-bottom: Black 1pt solid"><B>3363 NE 163rd Street, Suite
        705, North Miami Beach, FL &nbsp;&nbsp;&nbsp;&nbsp;33160 </B></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></TD></TR>
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    <TD COLSPAN="5" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Address of Principal Executive Offices)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Zip Code)</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></TD></TR>
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    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD></TR>
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        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; border-bottom: Black 1pt solid; margin-bottom: 0pt; text-align: center"><B>(305)
        507-8808</B></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD></TR>
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    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(Registrant&rsquo;s telephone number, including area code)</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD></TR>
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    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></TD></TR>
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    <TD COLSPAN="5" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; border-bottom: Black 1pt solid; margin-bottom: 0pt; text-align: center"><B>Not Applicable</B></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></TD></TR>
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    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>(Former Name or Former Address, if Changed Since Last Report)</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
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        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Check the appropriate box below if the
        Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;</FONT><FONT STYLE="font-family: Wingdings"><FONT STYLE="font-family: Wingdings">&#168;</FONT></FONT><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;Written
        communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&#9;<FONT STYLE="font-family: Wingdings"><FONT STYLE="font-family: Wingdings">&#168;</FONT></FONT>&#9;Soliciting
        material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;</FONT><FONT STYLE="font-family: Wingdings"><FONT STYLE="font-family: Wingdings">&#168;</FONT></FONT><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;Pre-commencement
        communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;</FONT><FONT STYLE="font-family: Wingdings"><FONT STYLE="font-family: Wingdings">&#168;</FONT></FONT><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9;Pre-commencement
        communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P></TD>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

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<TD STYLE="width: 0in"></TD><TD STYLE="width: 1in; text-align: left"><B>Item 1.01</B></TD><TD STYLE="text-align: justify"><B>Entry into a Material Definitive Agreement.</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On January 21, 2016,
Net Element, Inc. (the &ldquo;<U>Company</U>&rdquo;) entered into a Second Additional Letter Agreement (the &ldquo;<U>Second Additional
Agreement</U>&rdquo;) with Kenges Rakishev, an accredited investor (the &ldquo;<U>Investor</U>&rdquo;). The Second Additional Agreement
further modified the terms of the Letter Agreement, dated September 11, 2015, as modified by that certain Additional Letter Agreement
dated October 7, 2015, with certain accredited investors listed on the signature pages attached to that Letter Agreement (collectively,
the &ldquo;<U>Original Agreement</U>&rdquo;). Mr. Rakishev is a director of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Second Additional
Agreement provided for the second and final round of $910,000 equity financing to the Company contemplated by the Original Agreement
in consideration for the issuance by the Company to the Investor of (i) 4,664,275 restricted shares of the Company&rsquo;s common
stock (the &ldquo;<U>Restricted Shares</U>&rdquo;) based on $0.1951 per share, equal to the closing trading price of the Company
Common Stock reported on The NASDAQ Capital Market on January 20, 2016, the trading date immediately preceding the date when the
Investor and the Company committed to the transactions contemplated in the Second Additional Agreement; and (ii) options to purchase
4,664,275 restricted shares of the Company&rsquo;s common stock on the terms set forth in the Investor&rsquo;s Form of Option to
Purchase Shares of Restricted Common Stock (the &ldquo;<U>Restricted Options</U>&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company intends
to use the proceeds from the sale of the Restricted Shares and the Restricted Options for general working capital purposes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">However, such issuance
of Restricted Shares and the Restricted Options is subject to the Company&rsquo;s stockholders approval within 120 days from the
date of Second Additional Agreement (the &ldquo;<U>Stockholders Approval</U>&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Each Restricted Option
will expire on the fifth (5<SUP>th</SUP>) annual anniversary of the date of the Second Additional Agreement and shall be exercisable
(prior to its expiration) into one (1) Restricted Share at the exercise price equal to $0.2146 (which is 110% of the closing trading
price of the Company Common Stock reported on The NASDAQ Capital Market on January 20, 2016, the trading date immediately preceding
the date when the Investor and the Company committed to the transactions contemplated in the Second Additional Agreement). The
Investor may elect to exercise his Restricted Options through a cashless exercise, in which case the Investor would receive upon
such exercise the &ldquo;net number&rdquo; of shares of Company common stock determined according to the formula set forth in the
Restricted Option.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In the event that the
Stockholders Approval is not obtained within 120 days from the date Second Additional Agreement, the Investor and the Company agreed
that at the Investor&rsquo;s election, (i) the purchase price for the Restricted Shares and the Restricted Options shall be automatically
amended to be equal to the product of (x) 4,664,275 and (y) the sum of $0.1951 and $0.125, in which case the Investor will have
paid to the Company the difference between such price and the previously paid purchase price for the Restricted Shares and the
Restricted Options, (ii) the number of Restricted Shares and the Restricted Options issuable to the Investor will be adjusted to
be equal to the quotient determined by dividing (I) $910,000 by (II) $0.3201, or (iii) the Restricted Options will not be issued
and the Investor will be issued the number of Restricted Shares calculated on the basis of $0.1951 per share purchase price.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Restricted Shares
and the Restricted Options, including the shares of common stock issuable, subject to compliance with Rule 144 under the Securities
Act of 1933, as amended (the &quot;<U>1933 Act</U>&quot;)), upon exercise of the Restricted Options, were issued to the Investor
in reliance upon the exemption from securities registration afforded by Section 4(a)(2) of the 1933 Act. All of the Restricted
Shares and Restricted Options (including the shares of common stock issuable, subject to compliance with Rule 144 under the 1933
Act, upon exercise of the Restricted Options) will be restricted securities within the meaning of Rule 144 under the 1933 Act and,
accordingly, each of the stock certificates of the Company to be issued evidencing such securities will contain a standard Rule
144 restrictive securities legend.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Second Additional
Agreement provides that under no circumstances may the aggregate number shares of Company common stock issued to the Investor under
the Agreement at any time exceed 19.99% of the total number of shares of Company common stock issued and outstanding or of the
voting power unless the Company has obtained either (i) its stockholders' approval of the issuance of more than such number of
shares of Common Stock pursuant to NASDAQ Marketplace Rule 5635 or (ii) a waiver from The NASDAQ Stock Market of the Company&rsquo;s
compliance with Rule 5635.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The foregoing is only
a brief description of the terms of the Second Additional Agreement, the Restricted Shares and the Restricted Options, does not
purport to be a complete description of the rights and obligations of the parties thereunder, and is qualified in its entirety
by reference to the Second Additional Agreement and the Form of Option to Kenges Rakishev to Purchase Shares of Restricted Common
Stock which are filed as Exhibits 10.1 and 4.1, respectively, to this Current Report on Form 8-K and incorporated by reference
herein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; color: red">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 1in; text-align: left"><B>Item 3.02</B></TD><TD STYLE="text-align: justify"><B>Unregistered Sales of Equity Securities</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The disclosures in
Item 1.01 of this Current Report are incorporated herein by reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 1in; text-align: left"><B>Item 3.03</B></TD><TD STYLE="text-align: justify"><B>Material Modification to Rights of Security Holders</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The information set
forth in Item 1.01 of this Current Report is incorporated herein by reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 1in; text-align: left"><B>Item 9.01</B></TD><TD STYLE="text-align: justify"><B>Financial Statements and Exhibits</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 5%"></TD><TD STYLE="width: 8%; text-align: left">(d)</TD><TD STYLE="text-align: justify; width: 87%">Exhibits</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 5%; padding: 0; text-align: justify; text-indent: 0">&nbsp;</TD>
    <TD STYLE="width: 10%; padding: 0; text-decoration: underline; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif"><U>Exhibit No.</U></FONT></TD>
    <TD STYLE="width: 85%; padding: 0; text-decoration: underline; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif"><U>Description</U></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-align: justify; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-align: justify; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-align: justify; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-align: justify; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">4.1</FONT></TD>
    <TD STYLE="padding: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">Form of Option to Kenges Rakishev to Purchase Shares of Restricted Common Stock</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-align: justify; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-align: justify; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-align: justify; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-align: justify; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">10.1</FONT></TD>
    <TD STYLE="padding: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">Second Additional Letter Agreement, dated as of January 21, 2016, between the Company and Kenges Rakishev</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-align: justify; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-align: justify; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-align: justify; text-indent: 0">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">SIGNATURES</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 36.7pt">Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 36.7pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Dated: January 21, 2016</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3.25in"></P>

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<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">NET ELEMENT, INC.</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0; width: 50%">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0; width: 5%">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0; width: 35%">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0; width: 10%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">By: </FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">/s/&nbsp;&nbsp;Jonathan New</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">Name:&nbsp;&nbsp;</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">Jonathan New</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">Title:&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0"><P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">Chief
Financial Officer&nbsp;</FONT></P></TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>EXHIBIT INDEX</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 9%; padding-top: 0; padding-right: 0; border-bottom: Black 1pt solid; padding-left: 0; text-decoration: underline; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif"><U STYLE="text-decoration: none">Exhibit No.</U></FONT></TD>
    <TD STYLE="width: 9%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 82%; padding-top: 0; padding-right: 0; border-bottom: Black 1pt solid; padding-left: 0; text-decoration: underline; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif"><U STYLE="text-decoration: none">Description</U></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-align: justify; text-indent: 0">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding: 0; text-align: justify; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">4.1</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">Form of Option to Kenges Rakishev to Purchase Shares of Restricted Common Stock</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-align: justify; text-indent: 0">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding: 0; text-align: justify; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">10.1</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">Second Additional Letter Agreement, dated as of January 21, 2016, between the Company and Kenges Rakishev</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-align: justify; text-indent: 0">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding: 0; text-align: justify; text-indent: 0">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.1
<SEQUENCE>2
<FILENAME>v429513_ex4-1.htm
<DESCRIPTION>EXHIBIT 4.1
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
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<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin: 0; text-align: right"><B>Exhibit 4.1</B></P>

<P STYLE="margin: 0"><B>&nbsp;</B></P>

<P STYLE="margin: 0"></P>

<P STYLE="font: small-caps bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><U>EXHIBIT A</U></P>

<P STYLE="font: small-caps bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: small-caps bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">FORM OF OPTION</P>

<P STYLE="font: small-caps bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: small-caps bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">THIS OPTION AND THE UNDERLYING
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE &ldquo;ACT&rdquo;). THEY MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO SUCH SECURITIES UNDER THE
ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE
144 UNDER THE ACT.</P>

<P STYLE="font: small-caps bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NET ELEMENT, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>OPTION TO PURCHASE SHARES OF RESTRICTED
COMMON STOCK</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>&#9;__________, 2016</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-variant: small-caps"><B>V</B></FONT><B>oid
After __________, 2021</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This Certifies That,
for value received, <FONT STYLE="font-size: 10pt; font-variant: small-caps"><B>Kenges Rakishev</B></FONT><FONT STYLE="font-size: 10pt">
(the &ldquo;<B><I>Investor</I></B>&rdquo;), with its principal office located across from such party&rsquo;s name on the first
page of the Purchase Agreement (as defined below) or its assigns (the &ldquo;<B><I>Holder</I></B>&rdquo;), is entitled to subscribe
for and purchase from <FONT STYLE="font-variant: small-caps"><B>Net Element, Inc.</B></FONT>, a Delaware corporation (the &ldquo;<B><I>Company</I></B>&rdquo;),
with its principal office at </FONT>3363 NE 163 Street, Suite 705, North Miami Beach, FL 33160, <FONT STYLE="font-size: 10pt">those
Exercise Shares (as defined below) at the Exercise Price (as defined below).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This option to purchase
shares of restricted common stock of the Company is issued as part of a series of similar options (collectively, the &ldquo;<B><I>Options</I></B>&rdquo;)
issued pursuant to the terms of that certain Letter Agreement, dated as of September 11, 2015, by and among the Company, the Investor
and certain other parties thereto, as modified by that certain Additional Letter Agreement dated as of October 7, 2015 and that
certain Second Additional Letter Agreement dated as of January 8, 2016 (as so modified, the &ldquo;<B><I>Purchase Agreement</I></B>&rdquo;).
Pursuant to the Purchase Agreement, the Company is selling to Investor certain restricted shares of the Company&rsquo;s common
stock and this option to purchase shares of restricted common stock of the Company (this &ldquo;<B><I>Option</I></B>&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-transform: uppercase"><B>1.&#9;</B></FONT><B><FONT STYLE="font-variant: small-caps">Definitions.</FONT></B><FONT STYLE="font-variant: small-caps">
</FONT>As used herein, the following terms shall have the following respective meanings:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><B>(a)&#9;</B><FONT STYLE="font-size: 10pt">&ldquo;<B><I>Exercise
Period</I></B>&rdquo; shall mean the period commencing on the date hereof and ending on <B>__________, 2021</B>.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><B>(b)&#9;</B><FONT STYLE="font-size: 10pt">&ldquo;<B><I>Exercise
Price</I></B>&rdquo; shall mean [</FONT>110% of the closing trading price per one (1) share of <FONT STYLE="font-size: 10pt">the
Company&rsquo;s common stock (&ldquo;<B><I>Common Stock</I></B>&rdquo;) </FONT>reported on The NASDAQ Capital Market on _____________,
s<FONT STYLE="font-size: 10pt">ubject to adjustment pursuant to Section 5 below.]</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><B>(c)&#9;</B><FONT STYLE="font-size: 10pt">&ldquo;<B><I>Exercise
Shares</I></B>&rdquo; shall mean _____________<FONT STYLE="font-variant: small-caps"> </FONT>shares of the Common Stock (which
shall be equal to the number of shares set forth opposite Investor&rsquo;s name on Exhibit A to the Purchase Agreement under the
column &ldquo;Number of Restricted Options&rdquo;).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-transform: uppercase"><B>2.&#9;</B></FONT><B><FONT STYLE="font-variant: small-caps">Exercise
of Option. </FONT></B>The rights represented by this Option may be exercised in whole or in part at any time during the Exercise
Period, by delivery of the following to the Company at its address set forth above (or at such other address as it may designate
by notice in writing to the Holder):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><B>(a)&#9;</B><FONT STYLE="font-size: 10pt">An
executed Notice of Exercise in the form attached hereto;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><B>(b)&#9;</B><FONT STYLE="font-size: 10pt">Payment
of the Exercise Price either (i) in cash or by check, or (ii) by cancellation of indebtedness; and</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><B>(c)&#9;</B><FONT STYLE="font-size: 10pt">This
Option.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Upon the exercise of the rights represented
by this Option, a certificate or certificates for the Exercise Shares so purchased, registered in the name of the Holder or persons
affiliated with the Holder, if the Holder so designates, shall be issued and delivered to the Holder within a reasonable time after
the rights represented by this Option shall have been so exercised. In the event that this Option is being exercised for less than
all of the then-current number of Exercise Shares purchasable hereunder, the Company shall, concurrently with the issuance by the
Company of the number of Exercise Shares for which this Option is then being exercised, issue a new Option of like tenor exercisable
for the remaining number of Exercise Shares purchasable hereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The person in whose name any certificate
or certificates for Exercise Shares are to be issued upon exercise of this Option shall be deemed to have become the holder of
record of such shares on the date on which this Option was surrendered and payment of the Exercise Price was made, irrespective
of the date of delivery of such certificate or certificates, except that, if the date of such surrender and payment is a date when
the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the
close of business on the next succeeding date on which the stock transfer books are open.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>2.1&#9;Net Exercise</B>.
Notwithstanding any provisions herein to the contrary, if the fair market value of one Exercise Share is greater than the Exercise
Price (at the date of calculation as set forth below), in lieu of exercising this Option by payment of cash, the Holder may elect
to receive shares equal to the value (as determined below) of this Option (or the portion thereof being canceled) by surrender
of this Option at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the
Company shall issue to the Holder a number of Exercise Shares computed using the following formula:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-align: justify">X = <U>Y * (A-B)</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left; margin-left: 1.95in">A</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 93%; border-collapse: collapse; margin-left: 0.5in">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 8%; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">Where</FONT></TD>
    <TD STYLE="width: 8%; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">X =</FONT></TD>
    <TD STYLE="width: 84%; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">the number of Exercise Shares to be issued to the Holder</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Y =</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">the number of Exercise Shares purchasable under this Option or, if only a portion of this Option is being exercised, the portion of this Option being canceled (at the date of such calculation)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">A =</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">the fair market value of one Exercise Share (at the date of such calculation)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">B =</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Exercise Price (as adjusted to the date of such calculation)</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-transform: uppercase"><B>3.&#9;</B></FONT><B><FONT STYLE="font-variant: small-caps">Covenants
of the Company.</FONT></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><B>3.1&#9;<FONT STYLE="font-size: 10pt">Covenants
as to Exercise Shares.</FONT></B><FONT STYLE="font-size: 10pt"> The Company covenants and agrees that all Exercise Shares that
may be issued upon the exercise of the rights represented by this Option will, upon issuance, be validly issued and outstanding,
fully paid and nonassessable, and free from all taxes, liens and charges with respect to the issuance thereof. The Company further
covenants and agrees that the Company will at all times during the Exercise Period, have authorized and reserved, free from preemptive
rights, a sufficient number of Exercise Shares to provide for the exercise of the rights represented by this Option. If at any
time during the Exercise Period the number of authorized but unissued Exercise Shares shall not be sufficient to permit exercise
of this Option, the Company will take such corporate action as may, in the opinion of its counsel, be necessary to increase its
authorized but unissued Exercise Shares to such number of shares as shall be sufficient for such purposes.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-transform: uppercase"><B>4.&#9;</B></FONT><B><FONT STYLE="font-variant: small-caps">Representations
of Holder.</FONT></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><B>4.1&#9;<FONT STYLE="font-size: 10pt">Acquisition
of Option for Personal Account.</FONT></B><FONT STYLE="font-size: 10pt"> The Holder represents and warrants that Holder is acquiring
this Option and the Exercise Shares solely for Holder&rsquo;s account for investment and not with a view to or for sale or distribution
of said Option or Exercise Shares or any part thereof. The Holder also represents that the entire legal and beneficial interests
of this Option and Exercise Shares the Holder is acquiring is being acquired for, and will be held for, Holder&rsquo;s account
only.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><B>4.2&#9;<FONT STYLE="font-size: 10pt">Securities
Are Not Registered.</FONT></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><B>(a)&#9;</B><FONT STYLE="font-size: 10pt">The
Holder understands that this Option and the Exercise Shares have not been registered under the Act on the basis of an applicable
exemption from such registration. The Holder realizes that the basis for the exemption may not be present if, notwithstanding Holder&rsquo;s
representations, the Holder has a present intention of acquiring the securities for a fixed or determinable period in the future,
selling (in connection with a distribution or otherwise), granting any participation in, or otherwise distributing the securities.
The Holder has no such present intention.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><B>(b)&#9;</B><FONT STYLE="font-size: 10pt">The
Holder recognizes that this Option and the Exercise Shares must be held indefinitely unless they are subsequently registered under
the Act or an exemption from such registration is available. The Holder recognizes that the Company has no obligation to register
this Option or the Exercise Shares of the Company, or to comply with any exemption from such registration.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><B>(c)&#9;</B><FONT STYLE="font-size: 10pt">The
Holder is aware that neither this Option nor the Exercise Shares may be sold pursuant to Rule 144 adopted under the Act unless
certain conditions are met, including, among other things, the existence of a public market for the shares, the availability of
certain current public information about the Company, the resale following the requirements of Rule 144. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><B>4.3&#9;<FONT STYLE="font-size: 10pt">Economic
Risk and Protection of Interest.</FONT></B><FONT STYLE="font-size: 10pt"> </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><B>(a)&#9;</B><FONT STYLE="font-size: 10pt">The
Holder has substantial experience in evaluating and investing in private placement transactions of securities in companies similar
to the Company so that Holder is capable of evaluating the merits and risks of Holder&rsquo;s investment in the Company and has
the capacity to protect Holder&rsquo;s own interests. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><B>(b)&#9;</B><FONT STYLE="font-size: 10pt">The
Holder represents that by reason of Holder&rsquo;s, or of Holder&rsquo;s management&rsquo;s, business or financial experience,
the Holder has the capacity to protect Holder&rsquo;s own interests in connection with the transactions contemplated herein. Further,
the Holder is aware of no publication of any advertisement in connection with the transactions contemplated herein.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><B>4.4&#9;<FONT STYLE="font-size: 10pt">Accredited
Investor.</FONT></B><FONT STYLE="font-size: 10pt"> The Holder represents that Holder is an &ldquo;<B><I>accredited investor</I></B>&rdquo;
within the meaning of Regulation D under the Act.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><B>4.5&#9;<FONT STYLE="font-size: 10pt">Corporate
Information.</FONT></B><FONT STYLE="font-size: 10pt"> The Holder has had the full and complete opportunity to discuss the Company&rsquo;s
business, management and financial affairs with directors, officers and management of the Company and has had the full and complete
opportunity to review the Company&rsquo;s operations and facilities. The Holder has also had the opportunity to ask questions of
and receive answers from, the Company and its management regarding the terms and conditions herein.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><B>4.6&#9;<FONT STYLE="font-size: 10pt">Residence.</FONT></B><FONT STYLE="font-size: 10pt">
If the Holder is an individual, then the Holder resides in the state or province identified in the address of the Holder set forth
below; if the Holder is a partnership, corporation, limited liability Company or other entity, then the office or offices of the
Holder in which Holder&rsquo;s investment decision was made is located at the address or addresses of the Holder set forth herein.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><B>4.7&#9;<FONT STYLE="font-size: 10pt">Disposition
of Option and Exercise Shares.</FONT></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><B>(a)&#9;</B><FONT STYLE="font-size: 10pt">The
Holder further agrees not to make any disposition of all or any part of this Option or Exercise Shares in any event unless and
until:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 2in"><B>(i)&#9;</B><FONT STYLE="font-size: 10pt">The
Company shall have received a letter secured by the Holder from the Securities and Exchange Commission stating that no action will
be recommended to the Commission with respect to the proposed disposition;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 2in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 2in"><B>(ii)&#9;</B><FONT STYLE="font-size: 10pt">There
is then in effect a registration statement under the Act covering such proposed disposition and such disposition is made in accordance
with said registration statement; or</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 2in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 2in"><B>(iii)&#9;</B><FONT STYLE="font-size: 10pt">The
Holder shall have notified the Company of the proposed disposition and shall have furnished the Company with a detailed statement
of the circumstances surrounding the proposed disposition, and if requested by the Company or its transfer agent, the Holder shall
have furnished the Company and/or its transfer agent with an opinion of counsel for the Holder to the effect that such disposition
will not require registration of such Option or Exercise Shares under the Act or any applicable state securities laws.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 2in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><B>(b)&#9;</B><FONT STYLE="font-size: 10pt">The
Holder understands and agrees that all certificates evidencing the shares to be issued to the Holder may bear the following legend:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: justify">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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-transform: uppercase"><B>5.&#9;</B></FONT><B><FONT STYLE="font-variant: small-caps">Adjustment
of Exercise Price and Number of Exercise Shares. </FONT></B>In the event of changes in the series of equity securities of the Company
comprising the Exercise Shares by reason of stock dividends, splits, recapitalizations, reclassifications, combinations, conversions
or exchanges of shares, separations, reorganizations, liquidations, or the like, the number and class of Exercise Shares available
under this Option in the aggregate and the Exercise Price shall be correspondingly adjusted to give the Holder of this Option,
on exercise for the same aggregate Exercise Price, the total number, class, and kind of shares as the Holder would have owned had
this Option been exercised prior to the event and had the Holder continued to hold such shares until after the event requiring
adjustment. The form of this Option need not be changed because of any adjustment in the number of Exercise Shares subject to this
Option.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-transform: uppercase"><B>6.&#9;</B></FONT><B><FONT STYLE="font-variant: small-caps">Fractional
Shares. </FONT></B>No fractional shares shall be issued upon the exercise of this Option as a consequence of any adjustment pursuant
hereto. All Exercise Shares (including fractions) issuable upon exercise of this Option may be aggregated for purposes of determining
whether the exercise would result in the issuance of any fractional share. If, after aggregation, the exercise would result in
the issuance of a fractional share, the Company shall, in lieu of issuance of any fractional share, pay the Holder otherwise entitled
to such fraction a sum in cash equal to the product resulting from multiplying the then current fair market value of an Exercise
Share by such fraction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-transform: uppercase"><B>7.&#9;</B></FONT><B><FONT STYLE="font-variant: small-caps">Transfer
of Option and Exercise Shares. </FONT></B>Subject to applicable laws and the restriction on transfer set forth on the first page
of this Option, this Option and all rights hereunder are transferable, by the Holder in person or by its duly authorized attorney,
upon delivery of this Option and the form of assignment attached hereto to any transferee designated by Holder. The transferee
shall sign an investment letter in form and substance satisfactory to the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-transform: uppercase"><B>8.&#9;</B></FONT><B><FONT STYLE="font-variant: small-caps">No
Stockholder Rights. </FONT></B>This Option in and of itself shall not entitle the Holder to any voting rights or other rights as
a stockholder of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-transform: uppercase"><B>9.&#9;</B></FONT><B><FONT STYLE="font-variant: small-caps">Lost,
Stolen, Mutilated or Destroyed Option. </FONT></B>If this Option is lost, stolen, mutilated or destroyed, the Company may, on such
terms as to indemnity or otherwise as it may reasonably impose (which shall, in the case of a mutilated Option, include the surrender
thereof), issue a new Option of like denomination and tenor as the Option so lost, stolen, mutilated or destroyed. Any such new
Option shall constitute an original contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated
or destroyed Option shall be at any time enforceable by anyone.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-transform: uppercase"><B>10.&#9;</B></FONT><B><FONT STYLE="font-variant: small-caps">Notices,
etc. </FONT></B>All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (a)&nbsp;upon
personal delivery to the party to be notified, (b)&nbsp;when sent by confirmed facsimile or electronic mail if sent during normal
business hours of the recipient, if not, then on the next business day, (c)&nbsp;five (5) days after having been sent by registered
or certified mail, return receipt requested, postage prepaid, or (d)&nbsp;one (1) day after deposit with a nationally recognized
overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the
Company at the address listed on the signature page and to Holder at Holder&rsquo;s address listed in the first paragraph hereto,
or at such other address as the Company or Holder may designate by ten (10) days advance written notice to the other parties hereto.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-transform: uppercase"><B>11.&#9;</B></FONT><B><FONT STYLE="font-variant: small-caps">Acceptance.
</FONT></B>Receipt of this Option by the Holder shall constitute acceptance of and agreement to all of the terms and conditions
contained herein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-transform: uppercase"><B>12.&#9;</B></FONT><B><FONT STYLE="font-variant: small-caps">Governing
Law. </FONT></B>This Option and all rights, obligations and liabilities hereunder shall be governed by and construed under the
laws of the State of Delaware in all respects as such laws are applied to agreements among Delaware residents entered into and
performed entirely within Delaware. THE COMPANY AND THE HOLDER HEREBY WAIVE THEIR RIGHT TO A TRIAL BY JURY WITH RESPECT TO DISPUTES
ARISING UNDER THIS OPTION AND CONSENT TO A BENCH TRIAL WITH THE APPROPRIATE JUDGE ACTING AS THE FINDER OF FACT.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">[SIGNATURE PAGE FOLLOWS]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>


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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-variant: small-caps"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-variant: small-caps"><B>In Witness Whereof</B></FONT>,
the Company has caused this Option to Purchase Common Stock to be executed by its duly authorized officer as of the date first
set forth above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; font-weight: bold; text-indent: 0">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding: 0; font-weight: bold; text-indent: 0"><FONT STYLE="font-size: 10pt; font-variant: small-caps"><B>Net Element, Inc.</B></FONT></TD>
    <TD STYLE="padding: 0; font-weight: bold; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; font-weight: bold; text-indent: 0">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding: 0; font-weight: bold; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; font-weight: bold; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; font-weight: bold; text-indent: 0">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding: 0; font-weight: bold; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; font-weight: bold; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0; width: 50%">&nbsp;</TD>
    <TD STYLE="padding: 0; text-decoration: none; text-indent: 0; width: 5%"><FONT STYLE="font-size: 10pt; text-decoration: none">By:</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0; width: 35%; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0; width: 10%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-size: 10pt">Name:</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-size: 10pt">Title:</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>NOTICE OF EXERCISE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-variant: small-caps"><B>TO: Net Element, Inc.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>(1)</B>&#9;<FONT STYLE="font-family: Wingdings">&uml;</FONT>&#9;The
undersigned hereby elects to purchase ________ shares of the <B>Common Stock </B>of <B>Net Element, Inc.</B> (the &ldquo;<B><I>Company</I></B>&rdquo;)
pursuant to the terms of the attached Option, and tenders herewith payment of the exercise price in full, together with all applicable
transfer taxes, if any.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in"><FONT STYLE="font-family: Wingdings">&uml;</FONT>&#9;The
undersigned hereby elects to purchase ________ shares of the <B>Common Stock</B> of <B>Net Element, Inc. </B>(the &ldquo;<B><I>Company</I></B>&rdquo;)
pursuant to the terms of the net exercise provisions set forth in Section&nbsp;2.1 of the attached Option, and shall tender payment
of all applicable transfer taxes, if any.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>(2)</B>&#9;Please issue a certificate or certificates representing
said shares of <B>Common Stock</B> in the name of the undersigned or in such other name as is specified below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Name)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Address)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>(3)</B>&#9;The undersigned
represents that (i) the aforesaid shares of <B>Common Stock</B> are being acquired for the account of the undersigned for investment
and not with a view to, or for resale in connection with, the distribution thereof and that the undersigned has no present intention
of distributing or reselling such shares; (ii) the undersigned is aware of the Company&rsquo;s business affairs and financial condition
and has acquired sufficient information about the Company to reach an informed and knowledgeable decision regarding its investment
in the Company; (iii) the undersigned is experienced in making investments of this type and has such knowledge and background in
financial and business matters that the undersigned is capable of evaluating the merits and risks of this investment and protecting
the undersigned&rsquo;s own interests; (iv) the undersigned understands that the shares of <B>Common Stock</B> issuable upon exercise
of the Option have not been registered under the Securities Act of 1933, as amended (the &ldquo;<B><I>Securities Act</I></B>&rdquo;),
by reason of a specific exemption from the registration provisions of the Securities Act, which exemption depends upon, among other
things, the bona fide nature of the investment intent as expressed herein, and, because such securities have not been registered
under the Securities Act, they must be held indefinitely unless subsequently registered under the Securities Act or an exemption
from such registration is available; (v) the undersigned is aware that the aforesaid shares of <B>Common Stock</B> may not be sold
pursuant to Rule 144 adopted under the Securities Act unless certain conditions set forth in Rule 144 are met; (vi) the undersigned
is an &ldquo;accredited investor&rdquo; within the meaning of Regulation D under the Securities Act; and (vii) the undersigned
agrees not to make any disposition of all or any part of the aforesaid shares of <B>Common Stock</B> unless and until there is
then in effect a registration statement under the Securities Act covering such proposed disposition and such disposition is made
in accordance with said registration statement, or the undersigned has provided the Company and its transfer agent with an opinion
of counsel stating that such registration is not required.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0; border-bottom: Black 1pt solid; width: 35%"><FONT STYLE="font-size: 10pt"></FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0; width: 15%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0; width: 35%; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0; width: 15%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-size: 10pt">(Date)</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-size: 10pt">(Signature)</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-size: 10pt">(Print name)</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>ASSIGNMENT FORM</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.5in; text-align: justify">(To assign the foregoing Option, execute
this form and supply required information. Do not use this form to purchase shares.)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-variant: small-caps"><B>For Value Received</B></FONT>,
the foregoing Option and all rights evidenced thereby are hereby assigned to</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 5%; padding: 0; text-decoration: none; text-indent: 0"><FONT STYLE="font-size: 10pt; text-decoration: none">Name:&nbsp;&nbsp;</FONT></TD>
    <TD STYLE="width: 95%; padding: 0; text-indent: 0; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-align: center; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-align: center"><FONT STYLE="font-size: 10pt">(Please Print)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-decoration: none; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-decoration: none; text-indent: 0"><FONT STYLE="font-size: 10pt; text-decoration: none">Address:&nbsp;&nbsp;</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-align: center; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-align: center"><FONT STYLE="font-size: 10pt">(Please Print)</FONT></TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 9%; padding: 0; text-indent: 0"><FONT STYLE="font-size: 10pt">Dated:&nbsp;&nbsp;__________, </FONT></TD>
    <TD STYLE="width: 30%; padding: 0; text-indent: 0"><FONT STYLE="font-size: 10pt">20__</FONT></TD>
    <TD STYLE="width: 61%; padding: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-size: 10pt">Holder&rsquo;s</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-decoration: none; text-indent: 0"><FONT STYLE="font-size: 10pt">Signature:&nbsp;&nbsp;</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-size: 10pt">Holder&rsquo;s</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-decoration: none; text-indent: 0"><FONT STYLE="font-size: 10pt">Address:&nbsp;&nbsp;</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE</B>: The signature to this Assignment Form must correspond
with the name as it appears on the face of the Option, without alteration or enlargement or any change whatever. Officers of corporations
and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing
Option.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>



<P STYLE="margin: 0"><B>&nbsp;</B></P>

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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>3
<FILENAME>v429513_ex10-1.htm
<DESCRIPTION>EXHIBIT 10.1
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin: 0; text-align: right"><B>Exhibit 10.1</B></P>

<P STYLE="margin: 0"><B>&nbsp;</B></P>

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="text-transform: uppercase"><B>Second
additional LetTER Agreement</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1in; text-indent: -1in"><FONT STYLE="text-transform: uppercase">VIA
EMAIL</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1in; text-indent: -1in"><FONT STYLE="text-transform: uppercase">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Kenges Rakishev</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">c/o SAT &amp; Company&nbsp;<BR>
241 Mukanova Street&nbsp;<BR>
Almaty Kazakhstan 050008</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">Re:</TD><TD STYLE="text-align: justify">Letter Agreement, dated as of September 11, 2015, Regarding Equity Investment for Funding of Net
Element, as modified by that certain Additional Letter Agreement dated October 7, 2015 (collectively, the &ldquo;<U>Original Letter
Agreement</U>&rdquo;)</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This second additional
letter agreement is dated as of January 21, 2016<B> </B>(the &ldquo;<U>Additional Funding Effective Date</U>&rdquo;). The undersigned
intend that (a) the terms of this second additional letter agreement will modify and supplement the terms and provisions of the
Original Letter Agreement. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms
in the Original Letter Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Whereas,</B> in
the initial funding pursuant to the Original Letter Agreement, the aggregate amount of <FONT STYLE="text-transform: uppercase">$1,590,000</FONT>
was funded and, upon the approval of the issuance of the Restricted Shares and the Restricted Options by the Company&rsquo;s shareholders&rsquo;,
<FONT STYLE="text-transform: uppercase">11,357,143 </FONT>of the Restricted Shares and <FONT STYLE="text-transform: uppercase">11,357,143
</FONT>of the Restricted Options were issued to the accredited investors that funded such <FONT STYLE="text-transform: uppercase">$1,590,000</FONT>
to the Company pursuant to the Original Letter Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Whereas,</B> the
Original Letter Agreement contemplated the funding to Net Element, Inc., a Delaware corporation (the &ldquo;<U>Company</U>&rdquo;),
of up to $2,500,000 by the accredited investors in consideration for the issuance to such funding investors of restricted shares
of common stock of the Company (&ldquo;<U>Common Stock</U>&rdquo;) and options to purchase restricted shares of Common Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Whereas,</B> the
Special Committee consisting of three (3) independent and disinterested directors established and appointed by the Board of Directors
of the Company previously authorized the funding the Company of up to $2,500,000 in the aggregate and the issuance to such funding
investors of the appropriate number of restricted shares of Common Stock and options to purchase restricted shares of Common Stock
as consideration for such aggregate funding under the Original Letter Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Whereas,</B> $910,000
remains unfunded under the Original Letter Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Whereas,</B> Kenges
Rakishev desires to fund such remaining $910,000 to the Company in order to meet the Company&rsquo;s current working capital requirements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Now, Therefore,</B>
the parties hereby agree as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">1.&#9;On the Additional Funding Effective
Date, Kenges Rakishev shall fund such remaining $910,000 to the Company. In consideration for such funding, the Company agrees
to issue to Kenges Rakishev, upon and subject to obtaining the Company&rsquo;s shareholders approval for such issuance for purposes
of the Nasdaq Listing Rules (the &ldquo;<U>Stockholders Approval</U>&rdquo;) within 120 days from the date hereof:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">(i) such
number of restricted (i.e., issued in reliance on an applicable exemption from registration under the Securities Act, and any disposition
of such shares to be subject to Rule 144 of the Securities Act) shares of common stock of the Company (&ldquo;<U>Common Stock</U>&rdquo;)
as shall equal $910,000 <U>divided</U> by $0.1951 (the closing consolidated bid price per one (1) share of Common Stock reported
on The NASDAQ Capital Market on the trading date immediately preceding the Additional Funding Effective Date (the Additional Funding
Effective Date being the date when the Company entered into a binding agreement to issue the securities)) (collectively, the &ldquo;<U>Consideration
Shares</U>&rdquo;); and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">(ii) such
number of options to purchase restricted shares of Common Stock as will equal the number of the Consideration Shares (each, an
&ldquo;<U>Option</U>&rdquo;). Each Option shall expire on the fifth (5<SUP>th</SUP>) annual anniversary of such Option&rsquo;s
issuance date and shall be exercisable (prior to its expiration) into one (1) restricted share of Common Stock at the exercise
price equal to $0.2146 (which is 110% of the closing consolidated bid price per one (1) share of Common Stock reported on The NASDAQ
Capital Market on the date immediately preceding the Additional Funding Effective Date). The form of option agreement with respect
to the Options is attached hereto as <U>Exhibit A</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">2.&#9;In the event that the Stockholders
Approval is not obtained within 120 days from the date hereof, then at Kenges Rakishev&rsquo;s election, either (i) the purchase
price for the Consideration Shares and the Options shall be hereby automatically amended to be equal to the product of (x) the
number of Consideration Shares calculated pursuant to paragraph (1)(i) above and (y) the sum of (A) $0.1951 and (B) $0.125, in
which case Kenges Rakishev shall have paid to the Company the difference between the previously paid purchase price for the Consideration
Shares and Options and the purchase price for the Consideration Shares and Options calculated as set forth in this clause (i) of
this paragraph 2, (ii) the number of Consideration Shares and Options issuable to Kenges Rakishev shall be adjusted to be equal
to, in each case, the quotient determined by dividing (I) $910,000 by (II) $0.3201, or (iii) the Options shall not be issued and
Kenges Rakishev shall be issued the number of Consideration Shares calculated in accordance with paragraph (1)(i) above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">3.&#9;Notwithstanding anything to the contrary
contained in this second additional letter agreement or any other documents, at no time shall the Company 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
unless (i) the Company&rsquo;s shareholders shall have approved the issuance of shares of common stock in excess of&nbsp;20%, or
(ii)&nbsp;the Nasdaq has provided a waiver of Listing Rule 5635.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">4.&#9;This second additional 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 second additional 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 second additional letter agreement.
Except as expressly provided for herein, nothing in this second additional 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 second additional letter agreement. This second
additional 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. This second additional 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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><I>[Signatures are on next page.]</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><I></I></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Please indicate your consent to the terms
of this second additional letter agreement by signing and dating this second letter agreement and returning it to the undersigned.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; font-weight: bold; text-align: justify; text-indent: 0">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding: 0; font-weight: bold; text-align: justify; text-indent: 0"><FONT STYLE="text-transform: uppercase"><B>NET ELEMENT, INC.</B></FONT></TD>
    <TD STYLE="padding: 0; font-weight: bold; text-align: justify; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-align: justify; text-indent: 0; width: 50%">&nbsp;</TD>
    <TD STYLE="padding: 0; text-align: justify; text-indent: 0; width: 5%">&nbsp;</TD>
    <TD STYLE="padding: 0; text-align: justify; text-indent: 0; width: 35%">&nbsp;</TD>
    <TD STYLE="padding: 0; text-align: justify; text-indent: 0; width: 10%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">By:</TD>
    <TD STYLE="padding: 0; text-indent: 0; border-bottom: Black 1pt solid">/s/ Oleg Firer</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">Name:</TD>
    <TD STYLE="padding: 0; text-indent: 0">Oleg Firer</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-align: left; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-align: left; text-indent: 0">Title:</TD>
    <TD STYLE="padding: 0; text-align: left; text-indent: 0">Chief Executive Officer</TD>
    <TD STYLE="padding: 0; text-align: left; text-indent: 0">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 3.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 3.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 30%; padding: 0; font-weight: bold; text-indent: 0"><B>AGREED AND ACCEPTED BY:</B></TD>
    <TD STYLE="width: 70%; padding: 0; font-weight: bold; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; font-weight: bold; text-align: justify; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; font-weight: bold; text-align: justify; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-align: justify; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-align: justify; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-align: justify; text-indent: 0; border-bottom: Black 1pt solid">/s/&nbsp;&nbsp;Kenges Rakishev</TD>
    <TD STYLE="padding: 0; text-align: justify; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-align: justify; text-indent: 0">KENGES RAKISHEV</TD>
    <TD STYLE="padding: 0; text-align: justify; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Exhibit A</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Form of Option</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">[Attached hereto]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>



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<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0">&nbsp;</P>

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