Item 1.01 Entry into a Material Definitive Agreement.

On September 14, 2012, OOO TOT Money (which is a subsidiary of Net Element, Inc.) ("TOT Money") entered into Contract No. CPA-86, dated as of September 1, 2012 (the "Agreement"), with MegaFon OJSC ("MegaFon"). MegaFon is the second largest mobile operator in Russia in terms of number of subscribers and revenue. Pursuant to the Agreement, TOT Money is using its mobile commerce payment platform to facilitate payments using SMS (short message services, which is a text messaging service) and MMS (multimedia message services) for MegaFon mobile phone subscribers. The initial term of the Agreement is one year from its date of execution. Thereafter, the term of the Agreement will be automatically extended for additional one-year periods unless either TOT Money or MegaFon requires termination of the Agreement at least 30 days before the then-current expiration date. MegaFon has the right to terminate the Agreement in certain circumstances with at least seven calendar days' prior notice. TOT Money has the right to terminate the Agreement with at least 14 calendar days' prior notice.