Exhibit
10.3


GUARANTY


 


THIS GUARANTY is given as of April 16, 2013, by Twin Cities
Power Holdings, LLC, a Minnesota limited liability company, whose principal business office is located at 16233 Kenyon Avenue,
Suite 210, Lakeville, MN 55044 (“Guarantor”), to PJM Settlement, Inc (“PJM Settlement”), a Pennsylvania
Non-Profit Corporation, on behalf of itself and as agent for PJM Interconnection, L.L.C. (“PJM”), a Delaware limited
liability company, whose principal business office is located at 955 Jefferson Avenue, Valley Forge Corporate Center, Norristown,
Pennsylvania, 19403-2497.


 


RECITALS


 


WHEREAS, Twin Cities Power, LLC, whose principal business office
is located at 16233 Kenyon Avenue, Suite 210, Lakeville, MN 55044, will conduct business beginning as of the date of this Guaranty
with PJM pursuant to which Twin Cities Power, LLC may from time to time enter into power and/or related purchase and sale transactions
in the PJM Control Area; and


WHEREAS, pursuant to the PJM Open Access Transmission Tariff,
PJM Operating Agreement and/or the PJM Reliability Assurance Agreement among Load Serving Entities in the PJM Control Area, (the
“Agreements”), PJM Settlement and PJM is authorized to require Transmission Customers and PJM Members to provide and
maintain in effect appropriate creditworthiness arrangements; and


 


WHEREAS, PJM will accept Twin Cities Power, LLC as a member
or transmission customer only if payments, penalties, and other amounts owed by Twin Cities Power, LLC to PJM Settlement in connection
with the Agreements will be guaranteed by Guarantor;


 


WHEREAS, Guarantor will directly or indirectly benefit from
Twin Cities Power, LLC becoming a member or transmission customer of PJM and deems it to be in Guarantor’s best interest
to provide this guarantee to PJM Settlement; and


 


WHEREAS, Guarantor is willing to guarantee payments, penalties,
and other amounts owed by Twin Cities Power, LLC to PJM Settlement under the terms set forth below.


 


NOW THEREFORE, in consideration of the above premises and the
mutual promises and covenants contained below (which the Guarantor acknowledges constitute adequate consideration for its obligations
hereunder) the Guarantor, intending to be legally bound, agrees as follows:


 





	 	(1) 	Obligations of Guarantor.  Guarantor unconditionally guarantees to PJM Settlement the prompt and complete payment of all amounts owed to PJM Settlement by Summit Energy, LLC in regard to the Agreements (or any successor agreements).    If all or any part of such amounts is not paid by Summit Energy, LLC when due, Guarantor shall, upon the demand of PJM Settlement, immediately pay such amount.  This is a primary, absolute obligation of Guarantor enforceable by PJM Settlement, its successors and assigns, or any of its members on its behalf, regardless of Summit Energy, LLC’s ability or willingness to pay.



 






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	 	(2)    	Duration.  This Guaranty shall continue in force until the entire indebtedness covered by this Guaranty is repaid in full to PJM Settlement and the Agreement is terminated.  PJM Settlement shall not be bound or obligated to exhaust its recourse against Summit Energy, LLC or other persons or take any other action before being entitled to demand performance by Guarantor hereunder.  This Guaranty shall continue to be effective even in the event of the insolvency, bankruptcy or reorganization of Summit Energy, LLC.  This Guaranty will also survive and be binding upon Guarantor following any merger, reorganization, consolidation or other change in Summit Energy, LLC's or Guarantor’s structure, personnel, business or affairs.
	 	(3)    	Remedies of PJM Settlement.  The rights and remedies of PJM Settlement under this Guaranty are cumulative and concurrent and shall not be exclusive of any other rights or remedies that PJM Settlement may have against Summit Energy, LLC or Guarantor.  No set-off, counterclaim, reduction or diminution of an obligation or any defense of any kind or nature that Guarantor has or may have against Summit Energy, LLC or PJM Settlement shall affect, modify or impair the obligations of Guarantor under this Guaranty.
	 	(4)    	Waivers.  Guarantor acknowledges that PJM Settlement will rely upon this Guaranty in accepting Summit Energy, LLC as a member or transmission customer under the Agreements.  Guarantor accordingly waives any claim or defense based upon lack of consideration.  Guarantor also irrecoverably waives presentment, demand, protest or other notice of any kind, including, without limitation, notice of acceptance of this Guaranty and notice of any claim or demand upon Summit Energy, LLC or Guarantor.  Without notice to Guarantor, PJM Settlement may extend the time for performance under any agreement with Summit Energy, LLC or modify, supplement or amend any agreement, and otherwise agree in any manner with Summit Energy, LLC without affecting Guarantor’s unconditional obligation under this Guaranty.
	 	(5)    	Effect of Bankruptcy.  In the event that, pursuant to any insolvency, bankruptcy, reorganization, receivership or other debtor relief law or any judgment, order or decision thereunder, PJM Settlement must rescind or restore any payment, or any part thereof, received by PJM Settlement, any prior release or discharge from the terms of this Agreement shall be with out effect, and this Agreement will remain in effect.
	 	(6)    	Miscellaneous.  This
Guaranty is for the benefit of PJM Settlement, its successors and assigns, and its members; and is binding upon Guarantor, its
successors and assigns, except that Guarantor may not assign or transfer any of its obligations under this Guaranty, whether by
operation of law or otherwise, without the prior written consent of PJM Settlement.  Guarantor will reimburse PJM Settlement
for any expenses incurred by PJM Settlement in enforcing this Guaranty, including reasonable legal fees.  If any provision
of this Guaranty is found by a court of competent jurisdiction to be prohibited or unenforceable, this Guaranty shall be ineffective
only to the extent of such prohibition or unenforceability and such shall not invalidate the balance of the Guaranty.  Guarantor
represents and warrants to PJM Settlement that the execution, delivery and performance of this Guaranty by Guarantor have been
duly authorized by all requisite corporate action of Guarantor.  Any Correspondence to the beneficiary should be sent
to the following address:







 






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PJM Settlement, Inc.


955 Jefferson Ave


Valley Forge Corporate
Center


Norristown, Pa 19403-2497


Attn: Treasurer


 


 


IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be
executed on its behalf by its duly authorized Officer as of the date shown above.


 


 


___,


 


 


	/s/Timothy Krieger	 
	(Signature)	 
	 	 
	Timothy Krieger	 
	(Printed Name)	 
	 	 
	CEO	 
	(Title)	 



 






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