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NETE > SEC Filings for NETE > Form 8-K on 10-Sep-2013All Recent SEC Filings

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Form 8-K for NET ELEMENT INTERNATIONAL, INC.


10-Sep-2013

Entry into a Material Definitive Agreement, Unregistered Sale of


Item 1.01 Entry into a Material Definitive Agreement.

On September 4, 2013, Net Element International, Inc. (the "Company") entered into a letter agreement, dated as of August 28, 2013 (the "Exchange Agreement"), with Oleg Firer, Steven Wolberg, Georgia Notes 18 LLC and Vladimir Sadovskiy, pursuant to which the Company has agreed, subject to approval of the Company's shareholders, to issue such number of shares of common stock of the Company equal to 10% of the Company's issued and outstanding common stock as of the date of issuance of such shares in exchange for the Company's acquisition of the outstanding 10% minority interest in the Company's 90%-owned subsidiary, TOT Group, Inc. ("TOT Group"). Mr. Firer is Chief Executive Officer and a director of the Company and Mr. Wolberg is Chief Legal Officer and Secretary of the Company.

Pursuant to the Exchange Agreement, the Company will purchase (i) from Oleg Firer 45,000 shares of common stock of TOT Group, representing 4.5% of TOT Group's outstanding shares of common stock, in exchange for the issuance to Mr. Firer of such number of shares of common stock of the Company equal to 4.5% of the Company's issued and outstanding common stock as of the date of issuance of such shares, (ii) from Steven Wolberg 20,000 shares of common stock of TOT Group, representing 2% of TOT Group's outstanding shares of common stock, in exchange for the issuance to Mr. Wolberg of such number of shares of common stock of the Company equal to 2% of the Company's issued and outstanding common stock as of the date of issuance of such shares, (iii) from Georgia Notes 18 LLC 30,000 shares of common stock of TOT Group, representing 3% of TOT Group's outstanding shares of common stock, in exchange for the issuance to Georgia Notes 18 LLC of such number of shares of common stock of the Company equal to 3% of the Company's issued and outstanding common stock as of the date of issuance of such shares and (iv) from Vladimir Sadovskiy 5,000 shares of common stock of TOT Group, representing 0.5% of TOT Group's outstanding shares of common stock, in exchange for the issuance to Mr. Sadovskiy of such number of shares of common stock of the Company equal to 0.5% of the Company's issued and outstanding common stock as of the date of issuance of such shares.

Mike Zoi, the Company's majority stockholder and a director of the Company, and Kenges Rakishev, a significant stockholder of the Company and Chairman of the Company's Board of Directors, have agreed to cause their respective controlled entities that hold shares of common stock of the Company to vote in favor of the issuance of 10% of the Company's issued and outstanding common stock as of the date of issuance of such shares pursuant to the Exchange Agreement.

The shares of common stock of the Company issuable pursuant to the Exchange Agreement will be issued pursuant to the exemption from registration requirements provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act"), and comparable exemptions under applicable state securities laws. No advertising or general solicitation was employed in issuing such shares of common stock. The issuances will be made to a limited number of persons, all of whom have a substantive preexisting relationship with the Company, its directors or its executive officers, and transfers of such shares will be restricted by the Company in accordance with the requirements of the Securities Act.



Item 3.02 Unregistered Sales of Equity Securities.

The disclosures contained under Item 1.01 above are incorporated herein by this reference.



Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.      Description
10.1             Letter Agreement, dated August 28, 2013, among Net Element
                 International, Inc., Oleg Firer, Steven Wolberg, Vladimir
                 Sadovskiy, Georgia Notes 18, LLC, Kenges Rakishev and Mike Zoi

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