Exhibit 10.3


 


GUARANTY


 


THIS GUARANTY (this
“Guaranty”), made as of this 20th day of March, 2015, by Net Element Inc., a Delaware corporation (the “Guarantor”),
to Maglenta Enterprises Inc., a company incorporated and existing in the Cayman Islands, Champfremont Holding Ltd., a company incorporated
and existing in the Republic of Seychelles (each individually, a “Seller” and, collectively, the “Sellers”).


 


RECITALS:


 


WHEREAS, the
Sellers have entered into that certain Acquisition Agreement, dated as of May 20, 2015 (the “Acquisition Agreement”),
with ТOT Group Russia LLC, a limited liability company organized and existing under the laws of the Russian Federation and
TOT Group Europe Ltd., a company organized and existing under the laws of England and Wales (each individually, a
“Purchaser” and, collectively, the "Purchasers"), and certain "Target Companies"
(as defined in the Acquisition Agreement), pursuant to which the Purchasers agreed to purchase from the Sellers and the Sellers
agreed to sell to the Purchasers, subject to certain terms and conditions, 100% of the issued and outstanding ownership interests
of each of the Target Companies. Capitalized terms not otherwise defined in the body of this Guaranty shall have the meanings ascribed
to such terms in the Acquisition Agreement.


 


WHEREAS, the
parties to the Acquisition Agreement agreed that the Guarantor will guaranty certain payment obligations of the Purchasers as set
forth herein.


 


NOW, THEREFORE,
the Guarantor and the Purchasers agree as follows:


 


1.           If
the Purchasers default on the Payment Obligations (as defined below) under the Acquisition Agreement by failing to pay the Payment
Obligations that became due on their due date and fail to cure such default within ten (10) Business Days after the delivery of
a written notice of the Sellers to any of the Purchasers (the “Cure
Period”), then the Seller may deliver a written notice to the Guarantor with a request
(a “Sellers’ Request”) to pay, on behalf of the Purchasers, such due
and unpaid Payment Obligations. Each Seller’s request shall provide a description and quantification of the due and unpaid
Payment Obligation. “Payment Obligations” shall mean the following Purchasers’
obligations under the Acquisition Agreement: (a) payment when due of the first Installment (as defined in the Acquisition Agreement);
(b) payment if and when due of the Deferred Consideration (as defined in the Acquisition Agreement); (c) payment of the Difference
(as defined in the Acquisition Agreement) if and when due under the terms and conditions of Section 2.8 of the Acquisition Agreement
(Value Guaranteed Floor of Consideration Shares); and (d) return, subject to the terms and conditions set forth in such Section
2.9 (Options), of the Interests actually received by the Purchasers from the Sellers prior to either the Sellers’ Option
Notice and/or the Purchasers’ Option Notice (each as defined in the Acquisition Agreement).


 




    	 



    	 



    

 


2.           The
Guarantor shall direct their counsel to provided Opinions and remove restrictive legend in the manner stipulated by Section 2.1.6(c)
of the Acquisition Agreement. If the Seller(s) has performed all reasonable actions and provided the Guarantor with all documents
necessary for issuance of the Opinion/removal of restrictive legends as stipulated by Section 2.1.6(c) of the Acquisition Agreement,
and the Guarantor has not procured (i) delivery of Rule 144 Opinion to the Guarantor’s transfer agent (with a copy to the
applicable Seller(s)), and (ii) removal of the restrictive legends from the Consideration Shares sold or being sold by the Seller(s),
as applicable (the “Default Shares”),
within twenty (20) Business Days from the last day of the applicable Delivery Term, then, subject to all terms and conditions set
forth in Section 2.1.6(d) and 2.1.6(e) of the Acquisition Agreement, such Seller(s) may, by written notice, require the Guarantor
to repurchase (whether  through cancelation, redemption, another exemption or any other means) the Default Shares from the
Seller(s) at the Default Option Price.


 


3.           Upon
receipt of the Sellers’ Request, Guarantor hereby unconditionally and irrevocably guarantees to the Sellers payment of the
undisputed Payment Obligations that became due and are not paid (the “Guaranteed
Obligations”). Notwithstanding anything to the contrary contained herein, the Acquisition
Agreement or any other agreements or documents, the aggregate liability and obligations of the Guarantor hereunder shall not exceed,
and the Guaranteed Obligations shall be limited to, the amount of the Purchase Price (as defined in the Acquisition Agreement).
Except for the first Installment, each payment to be made by the Purchasers or on their behalf under the Acquisition Agreement
or this Guaranty, and accordingly the Guaranteed Obligations, shall be subject to deductions, withholdings, counterclaims or set-offs
with respect to the Purchase Price adjustments set forth in Section 2.1.4(c) of the Acquisition Agreement and Damages under Section
6.3 of the Acquisition Agreement. If any of the Sellers or any Affiliate of the Sellers will receive any payments that constitute
the Guaranteed Obligations after any such obligations were paid by the Guarantor, each Seller shall, and shall cause its Affiliates,
to promptly, but in any event not later than ten (10) Business Days, return such payments to the Guarantor. If any of the Sellers
or any Affiliate of the Sellers will receive any payments that constitute the Guaranteed Obligations prior to any such obligations
are paid by the Guarantor, such payments shall reduce the Guaranteed Obligations. 


 


4.           The
Guarantor warrants, represents and agrees as follows:


 


(a)          The
Guarantor is in good standing in the State of Delaware and was duly organized and registered under applicable law.


 


(b)          The
Guarantor has the right, power and authority, and has taken all action necessary, to execute, deliver and exercise its rights and
perform its obligations in relation to this Guaranty.


 


(c)          The
Guarantor’s obligations under this Guaranty are enforceable against it in accordance with their respective terms.


 


(d)          Neither
the Guarantor nor any of its respective directors or creditors has presented any application for initiating of bankruptcy proceedings
against the Guarantor.


 


(e)          No
order has been made or application presented, resolution passed or meeting convened for the purpose of its winding-up or whereby
its assets are to be distributed to creditors or shareholders or its other contributories.


 




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(f)          No
receiver (including an administrative receiver), liquidator, trustee, administrator, supervisor, nominee, custodian, or similar
official has been appointed in respect of the whole or any part of the business or assets of it nor has any step been taken for
or with a view to the appointment of such a person nor has any event taken place or is likely to take place as a consequence of
which such an appointment might be made.


 


The representations and
warranties set out in this Section ‎4 are made by the Guarantor on the date of this Guaranty.


 


5.           The
liability of the Guarantor shall not be discharged or impaired by any amendment, variation or assignment of the Acquisition Agreement
or any partial invalidity or any waiver of its terms, whether or not the Guarantor has given its prior written consent to such
amendment, variation or assignment. 


 


6.           The
Guarantor will, within 15 Business Days upon presentation of the relevant documents, pay all reasonable documented legal costs
properly incurred by any of the Sellers in connection with the enforcement of this Guaranty if the Guarantor fails to pay the undisputed
Guaranteed Obligation subject to the terms hereof.


 


7.           The
Guarantor may not dispute Guaranteed Obligation if on the date of the Seller’s Request such obligation is:


 


(a)          due
and not paid by the Purchasers within the Cure Period and


 


(b)          based
upon the final and binding Purchase Price Statement, Undisputed Claim or Resolved Claim.


 


For the avoidance of
doubt, the Guarantor hereby irrevocably waives, to the fullest extent permitted by law, all objections which it may now or hereafter
have with respect to the Payment Obligations meeting the criteria set forth in Section 7(a) and 7(b) above.


 


8.           All
monetary payments to be made hereunder by Guarantor shall be made in lawful money of the United States of America at the time of
payment. All payments by the Guarantor under this Guaranty will be made in full, subject, however, to the deductions, withholdings,
counterclaims or set-offs as set forth in Section 2.1.4(c) of the Acquisition Agreement and Damages under Section 6.3 of the Acquisition
Agreement. No partial payment by the Guarantor (whether under a court order or otherwise) will discharge the obligation of the
Guarantor to the Sellers unless and until Sellers have received payment in full under the due and payable Guaranteed Obligation.


 


9.           All
documents, notices, requests, demands and other communications that are required or permitted to be delivered or given under this
Guaranty shall be in writing and shall be deemed to have been duly delivered or given upon (i) the delivery thereof, if delivered
personally or sent by facsimile, e-mail or (ii) the mailing thereof if sent by registered or certified mail, return receipt requested,
postage prepaid or by overnight courier, such as FedEx or DHL:


 


If to the Guarantor, to:


 


Net Element, Inc.


3363 NE 163rd Street, Suite 705


 




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North Miami Beach, Florida 33160


Attention: Chief Legal Officer


E-mail: swolberg@netelement.com


 


If to Purchasers, to:


 


ТOT Group Russia LLC


office 01, 54th Floor


Federation Tower West


12, Presnenskaya emb. 


Moscow, 123100, Russia


Telephone: +7 495 286 72 00


E-mail: kzaripov@netelement.com


Attention: Konstantin Zaripov, General Director


 


And


 


TOT Group Europe Ltd.


Acre House


11-15 William Road


London, England


NW1 3ER


Telephone: +44 7789 658193


E-mail: kzaripov@netelement.com


Attention: Konstantin Zaripov, Company Director


 


With a copy to:


 


Net Element, Inc.


3363 NE 163rd Street, Suite 705


North Miami Beach, Florida 33160


Attention: Chief Legal Officer


E-mail: swolberg@netelement.com


 


And if to the Sellers, to:


Sellers’ Representative


Althaus Legal LLC


12 B. Savvinsky, building 12, 119435, Moscow, Russia


Telephone: +7 (499) 678-2298


Attention: Rostislav Shatenok, Andrey Tsaruk


E-mail: rshatenok@althausgroup.ru 


 


Any notice sent by courier shall be, for information purposes
only, duplicated by facsimile or email (immediately prior to posting).


 




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A notice or other communication delivered by hand or by courier
service shall be deemed to have been given when delivered, provided that where a notice sent by courier is duplicated by fax or
email, then such notice shall be deemed to be sent by courier only.


 


10.         The
headings of sections and paragraphs in this Guaranty are for convenience of reference only and shall not be construed in any way
to limit or define the content, scope or intent of the provisions hereof. As used in this Guaranty, the singular shall include
the plural, and masculine, feminine and neuter pronouns shall be fully interchangeable, where the context so requires. Whenever
the words “including”, “include or includes” are used in this Guaranty, they should be interpreted in a
non-exclusive manner as though the words “, without limitation,” immediately followed the same. Wherever possible,
each provision of this Guaranty shall be interpreted in such manner as to be effective and valid under applicable law. If any provision
of this Guaranty is prohibited or unenforceable under applicable law, such provision shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions hereof.


 


11.         This
Guaranty shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles
of conflicts of law thereof. Each party hereby irrevocably submits to the jurisdiction of the courts of the State of New York,
sitting in New York County, and the courts of the United States for the Southern District of New York. Each party irrevocably waives,
to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such
suit, action or proceeding brought in any such court, any claim that any such suit, action or proceeding brought in such a court
has been brought in an inconvenient forum and the right to object, with respect to any such suit, action or proceeding brought
in any such court, that such court does not have jurisdiction over such party. 


 


12.         If
any term or provision of this Guaranty is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the
remainder of the terms and provisions set forth herein shall remain in full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use their best efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term or provision.


 


13.         None
of the parties to this Guaranty shall, nor purport to, assign, transfer, charge or otherwise deal with all or any of its rights
and/or obligations under this Guaranty nor grant, declare, create or dispose of any right or interest in it.


 


14.         This
Guaranty constitutes the entire agreement between the Guarantor and the Sellers pertaining to the subject matter contained herein,
and may not be altered, amended, or modified, nor may any provision hereof be waived or noncompliance therewith consented to, except
by means of a writing executed by the Guarantor as to which such consent or waiver is applicable and by the Sellers. Any such alteration,
amendment, modification, waiver, or consent shall be effective only to the extent specified therein and for the specific purpose
for which it is given. No course of dealing and no delay or waiver of any right or default under this Guaranty shall be deemed
a waiver of any other similar or dissimilar right or default or otherwise prejudice the rights and remedies hereunder. Any
single or partial exercise of any right, power or remedy provided by this Guaranty shall not preclude any other or further exercise
of the right, power or remedy or any other right, power or remedy. 


 




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15.         This
Guaranty is a continuing guaranty and is to remain in full force and effect in relation to the Guarantor until all the due and
payable Guaranteed Obligations shall have been fully paid regardless of any intermediate partial payment or partial discharge.


 


16.         The
rights, powers and remedies provided by this Guaranty are cumulative and (subject as otherwise provided in this Guaranty) are not
exclusive of any rights, powers or remedies provided by law or otherwise.


 


17.         This
Guaranty may be executed in counterparts, each of which shall be an original, but all of which together shall constitute one and
the same agreement. The exchange of copies of this Guaranty and of signature pages by facsimile transmission, pdf or other electronic
means shall constitute effective execution and delivery of this Guaranty as to the parties and may be used in lieu of the original
Guaranty for all purposes (and such signatures of the parties transmitted by facsimile, pdf or other electronic means shall be
deemed to be their original signatures for all purposes).


 


(Signatures are on
the following pages)


 




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IN WITNESS WHEREOF, the undersigned
has executed and delivered this Guaranty as of the date set forth in the first paragraph hereof.


 


SELLERS:


 


	MAGLENTA ENTERPRISES INC.	 	CHAMPFREMONT HOLDING LTD
	 	 	 	 	 
	By:	/s/ Evaline Sophie Joubert	 	By:	/s/ Nicos Hadjinicolaou
	Name:	Evaline Sophie Joubert	 	Name:	Nicos Hadjinicolaou
	Title:	Director	 	Title:	Director


 


GUARANTOR:


 


	NET ELEMENT, INC.	 
	 	 	 
	By:	/s/ Oleg Firer	 
	Name:	Oleg Firer	 
	Title:	CEO	 


 




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