Document:

Exhibit 10.3

 

SECURITY AND GUARANTEE AGREEMENT

made by

ANGELL ENERGY, LLC, TWIN CITIES POWER, LLC, SUMMIT ENERGY, LLC

and MICHAEL ANGELL, INDIVIDUALLY

in favor of

TWIN CITIES POWER HOLDINGS, LLC

Dated as of June 1, 2015

 

 

 

    	 

     

    

This SECURITY AGREEMENT, dated as of June
1, 2015, is made by ANGELL ENERGY, LLC (“Angell Energy”), TWIN CITIES POWER, LLC (“TCP”), SUMMIT ENERGY,
LLC (“Summit”) and MICHAEL ANGELL, individually (“MA).” Angell, TCP and Summit are referred to collectively
as the “Grantors” and TCP, Summit and MA are referred to collectively as the “Guarantors”), in favor of
TWIN CITIES POWER HOLDINGS, LLC (“Holdings”)

 

RECITALS

 

In order to induce Holdings to enter into
that certain Equity Interest Purchase Agreement with Angell of even date herewith (the “Purchase Agreement”), whereby
Angell Energy is purchasing TCP and Summit, and to support the Note made by Angell Energy in favor of Holdings in respect of the
Purchase Price, the Grantors have agreed to grant Holdings certain security interests in the assets of TCP and Summit and the Guarantors
have agreed to guarantee payment of the Note (the “Obligations”) as set forth herein.

 

NOW, THEREFORE, in consideration of the
premises and to induce Holdings to enter into the Purchase Agreement, each Grantor and Guarantor hereby agrees with Holdings as
follows:

 

SECTION 1.DEFINED TERMS

 

1.1Definitions.

 

(a)Unless otherwise defined herein,
terms defined in the Purchase Agreement and used herein shall have the meanings given to them in the Purchase Agreement, and the
following terms are used herein as defined in the Minnesota UCC (and if defined in more than one Article of the Minnesota UCC,
shall have the meaning given in Article 8 or 9 thereof): Accounts, Chattel Paper, Commercial Tort Claims, Deposit Accounts, Documents,
Electronic Chattel Paper, Equipment, Fixtures, General Intangibles, Goods, Instruments, Inventory, Money, Negotiable Documents,
Securities Accounts, Securities Entitlements, and Supporting Obligations,.

 

(b)The following terms shall have the
following meanings:

 

“Borrower”: Angell Energy,
LLC.

 

“Collateral”: as defined
in Section 3.

 

“Contracts”: all contracts,
leases and other agreements entered into by any Grantor pursuant to which such Grantor has the right (i) to receive moneys
due and to become due to it thereunder or in connection therewith, (ii) to damages arising thereunder and (iii) to exercise
all remedies thereunder.

 

“Grantor”: as defined
in the preamble to this Agreement.

 

“Guarantor” as defined
in the preamble to this Agreement.

 

“Minnesota UCC”: the
Uniform Commercial Code as from time to time in effect in the State of Minnesota.

 

“Proceeds”: all “proceeds”
as such term is defined in Article 9 of the Minnesota UCC.

 

“Receivable”: any right
to payment for goods sold or leased, , for services rendered, or for trades made, whether or not such right is evidenced by an
Instrument or Chattel Paper and whether or not it has been earned by performance (including all Accounts).

 

“Secured Obligations”:
the Obligations of Angell Energy under the Note.

 

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SECTION 2.GUARANTEE

 

2.1Guarantee.

 

(a)Each of the Guarantors hereby, jointly
and severally, unconditionally and irrevocably, guarantees to Holdings the prompt and complete payment and performance by Angell
Energy when due (whether at the stated maturity, by acceleration or otherwise) of each and all of the Obligations.

 

(b)Each Guarantor shall be liable under
its guarantee set forth in Section 2.1(a), without any limitation as to amount, for all present and future Borrower
Obligations, including specifically all future increases in the outstanding amount of the Loans or Reimbursement Obligations under
the Credit Agreement and other future increases in the Borrower Obligations, whether or not any such increase is committed, contemplated
or provided for by the Loan Documents or other applicable documents governing such Borrower Obligations on the date hereof; provided,
that (i) enforcement of such guarantee against such Guarantor will be limited as necessary to limit the recovery under
such guarantee to the maximum amount which may be recovered without causing such enforcement or recovery to constitute a fraudulent
transfer or fraudulent conveyance under any applicable law, including any applicable federal or state fraudulent transfer or fraudulent
conveyance law (after giving effect, to the fullest extent permitted by law, to the reimbursement and contribution rights set forth
in Section 2.2) and (ii) to the fullest extent permitted by applicable law, the foregoing clause (i) shall
be for the benefit solely of creditors and representatives of creditors of each Guarantor and not for the benefit of such Guarantor
or the holders of any Capital Stock in such Guarantor. For the avoidance of doubt, the application of the provisions of this Section 2.1(b)
or any similar provisions in any other Loan Document: (x) is automatic to the extent applicable, (y) is not an amendment
or modification of this Agreement, any other Loan Document or any other applicable document governing Borrower Obligations and
(z) does not require the consent or approval of any Person.

 

(c)The guarantee contained in this Section 2.1
(i) shall remain in full force and effect until all the Obligations and the obligations of each Guarantor under the guarantee
contained in this Section 2.1 have been paid in full.

 

(d)No payment made by Angell Energy
or any of the Guarantors by virtue of any action or proceeding or any set-off or appropriation or application at any time or from
time to time in reduction of or in payment of the Obligations shall be deemed to modify, reduce, release or otherwise affect the
liability of any Guarantor hereunder in respect of any other Obligations then outstanding or thereafter incurred.

 

(e)Notwithstanding anything to the contrary
contained herein, MA’s personal guarantee shall be one of collection only and Holdings may not take any action against MA
unless and until it has exhausted all remedies and collection efforts against the Grantors and TCP and Summit as Guarantors.

 

2.2 Amendments, etc. with respect
to the Obligations. To the fullest extent permitted by applicable law, each Guarantor shall remain obligated hereunder
notwithstanding that, without any reservation of rights against any Guarantor and without notice to or further assent by any
Guarantor, any demand for payment of any of the Obligations made by Holdings may be rescinded by Holdings and any of the
Obligations continued, and the Obligations, or the liability of any other Person upon or for any part thereof, or any
collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in
part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by Holdings, and the
Note may be amended, amended and restated, supplemented, replaced, refinanced, otherwise modified or terminated, in whole or
in part, and any collateral security, guarantee or right of offset at any time held by Holdings for the payment of the
Obligations may be sold, exchanged, waived, surrendered or released.

 

2.3Guarantee Absolute and Unconditional.
To the fullest extent permitted by applicable law, each Guarantor waives any and all notice of the creation, renewal, extension
or accrual of any of the Obligations and notice of or proof of reliance by Holdings upon the guarantee contained in this Section 2
or acceptance of the guarantee contained in this Section 2. The Obligationsshall conclusively be deemed to have been
created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon the guarantee contained in this Section 2.
To the fullest extent permitted by applicable law, each Guarantor waives diligence, presentment, protest, and demand for payment
and notice of default or nonpayment to or upon Angell Energy or any of the Guarantors with respect to the Obligations. Each Guarantor
understands and agrees that the guarantee contained in this Section 2 shall be construed, to the fullest extent permitted
by applicable law, as a continuing, absolute and unconditional guarantee of payment without regard to (a) the validity or
enforceability of the Purchase Agreement, (b) any defense, set-off or counterclaim (other than a defense of payment or performance)
which may at any time be available to or be asserted by Angell Energy against Holdings, or (c) any other circumstance whatsoever
(with or without notice to or knowledge of the Angell Energy or such Guarantor) which constitutes, or might be construed to constitute,
an equitable or legal discharge of Angell Energy for the Obligations or of such Guarantor under the guarantee contained in this
Section 2, in bankruptcy or in any other instance. When making any demand hereunder or otherwise pursuing its rights
and remedies hereunder against any Guarantor, Holdings may, but shall be under no obligation to, make a similar demand on or otherwise
pursue such rights and remedies as it may have against the Angell Energy, any other Guarantor or any other Person or against any
collateral security or guarantee for the Obligations or any right of offset with respect thereto, and any failure by Holdings to
make any such demand, to pursue such other rights or remedies or to collect any payments from Angell Energy, any other Guarantor
or any other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any
release of Angell Energy, any other Guarantor or any other Person or any such collateral security, guarantee or right of offset,
shall not relieve any Guarantor of any obligation or liability hereunder, and shall not impair or affect the rights and remedies,
whether express, implied or available as a matter of law, of Holdings against any Guarantor. For the purposes hereof “demand”
shall include the commencement and continuance of any legal proceedings.

 

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2.3 Payments. Each Guarantor
hereby agrees to pay all amounts due and payable by it under this Section 2 to Holdings without set-off or
counterclaim in Dollars in immediately available funds.

 

SECTION 3.GRANT OF SECURITY INTEREST

 

Each Grantor hereby grants to Holdings,
a security interest in all of the following property now owned or at any time hereafter acquired by such Grantor or in which such
Grantor now has or at any time in the future may acquire any right, title or interest (collectively, the “Collateral”),
as collateral security for the complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise)
of all Secured Obligations:

 

(a)all Accounts;

 

(b)all Chattel Paper;

 

(c)all Contracts;

 

(d)all Deposit Accounts;

 

(e)all Documents;

 

(f)all General Intangibles, including,
without limitation, all Intellectual Property;

 

(g)all Goods, including, without limitation,
all Equipment, Fixtures and Inventory;

 

(h)all Instruments;

 

(i)all Investment Property;

 

(j)all Money;

 

(k)all Capital Stock;

 

(l)all Commercial Tort Claims, including,
without limitation, the Commercial Tort Claims described on Schedule 8 hereto;

 

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(m)all other personal property not otherwise
described above; and

 

(n)all Proceeds of any of the foregoing;

 

SECTION 4.REPRESENTATIONS AND WARRANTIES

 

Each Grantor hereby represents and warrants
to Holdings that:

 

4.1 Title; No Other Liens.
Except for the security interest granted to Holdings, such Grantor owns each item of Collateral material to its business, in
all material respects, granted by it free and clear of any Liens.

 

4.2Perfected First Priority Liens.

 

(a)The security interests granted pursuant
to this Agreement upon completion of the filings and other actions specified on Schedule 4 (which, in the case of all filings
and other documents referred to on such Schedule, have been delivered to Holdings in completed and, where required, duly executed
form), will constitute valid perfected security interests in all of the Collateral, enforceable in accordance with the terms hereof
(except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings
in equity or at law)) against all creditors of such Grantor. Each Grantor consents to the grant by each other Grantor of the security
interests granted hereby y.

 

4.3 Jurisdiction of Organization;
Chief Executive Office. On the date hereof, such Grantor’s exact legal name, jurisdiction of organization,
organizational identification number from the jurisdiction of organization (if any), and the location of such Grantor’s
chief executive office or sole place of business or principal residence, as the case may be, are specified on Schedule
3. On the date hereof, such Grantor is organized solely under the law of the jurisdiction so specified and has not filed
any certificates of domestication, transfer or continuance in any other jurisdiction. Except as otherwise indicated on Schedule
3, the jurisdiction of such Grantor’s organization or formation is required to maintain a public record showing the
Grantor to have been organized or formed.

 

SECTION 5.COVENANTS

 

Each Grantor covenants and agrees with the
Secured Parties that, from and after the date of this Agreement until the Collateral is released pursuant to Section 8.15(a):

 

5.1 Payment of Obligations.
Such Grantor will pay and discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case
may be, all taxes and other assessments and governmental charges or levies imposed upon such Grantor’s Collateral or in
respect of income or profits therefrom, as well as all claims of any kind (including claims for labor, materials and
supplies) against or with respect to such Grantor’s Collateral, except in each case, as could not reasonably be
expected to result in a Material Adverse Effect.

 

5.2Maintenance of Perfected Security
Interest; Further Documentation.

 

(a)Such Grantor shall maintain the security
interest created by this Agreement in such Grantor’s Collateral as a security interest having at least the perfection and
priority described in Section 4.3 and shall defend such security interest against the claims and demands of all Persons
whomsoever.

 

(b)Such Grantor shall give to Holdings,
upon reasonable prior notice access during normal business hours to all of its books, correspondence and records.

 

(c)At any time and from time to time,
upon the written request of Holdings, and at the sole expense of such Grantor, such Grantor will promptly and duly execute and
deliver, and have recorded, such further instruments and documents, and take such further actions necessary or as Holdings may
reasonably request consistent with this Agreement for the purpose of creating, perfecting, ensuring the priority of, protecting
or enforcing Holdings’ security interest in the Collateral or otherwise conferring or preserving the full benefits of this
Agreement and of the interests, rights and powers herein granted.

 

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5.3 Changes in Locations, Name,
etc. Such Grantor will not, except upon not less than ten (10) days’ prior written notice to Holdings (or such
shorter amount of time reasonably acceptable to Holdings) and delivery to Holdings of (a) all additional financing
statements and other documents (executed where appropriate) reasonably requested by Holdings to maintain the validity,
perfection and priority of the security interests provided for herein:

 

(i)change its jurisdiction of organization
or the location of its chief executive office from that referred to in Section 4.4; or

 

(ii)change its (x) name or (y) identity
or corporate structure to such an extent that any financing statement filed by Holdings in connection with this Agreement would
become misleading.

 

5.4 Notices. Such Grantor will
advise Holdings promptly, in reasonable detail, of:

 

(a)any Lien (other than security interests
created hereby) on any of the Collateral which would adversely affect the ability of Holdings to exercise any of its remedies hereunder;
and

 

(b)the occurrence of any other event
which could reasonably be expected to have a material adverse effect on the aggregate value of the Collateral or on the security
interests created hereby.

 

5.5Deposit Accounts. No Grantor
shall grant control of any Deposit Account to any person. Notwithstanding the foregoing, Holdings acknowledges that a Grantor which
has made a deposit in a trading account of a wholesale electricity market, such as PJM or MISO, may not be able to prevent the
administrator of such market from exercising control over such deposit accounts.

 

5.6 Receivables. Upon the
occurrence and during the continuance of an Event of Default and the receipt of notice from Holdings pursuant to this Section 5.5,
except in the ordinary course of business, such Grantor will not (i) grant any extension of the time of payment of any
Receivable, (ii) compromise or settle any Receivable for less than the full amount thereof, (iii) release, wholly
or partially, any Person liable for the payment of any Receivable, (iv) allow any credit or discount whatsoever on any
Receivable or (v) amend, supplement or modify any Receivable in any manner that would materially and adversely affect
the value thereof.

 

5.7 Limitation on Liens on
Collateral. Such Grantor shall not create, incur or permit to exist, will defend the Collateral against, and will take
such other action as is necessary to remove, any Lien or claim on or to the Collateral, and will defend the right, title and
interest of Holdings in and to any of the Collateral against the claims and demands of all Persons whomsoever.

 

5.8 Limitations on Dispositions of
Collateral. Such Grantor shall not sell, transfer, lease or otherwise dispose of any of the Collateral, or attempt, offer
or contract to do so.

 

SECTION 6.REMEDIAL PROVISIONS

 

(a)At any time after the occurrence
and during the continuance of an Event of Default, Holdings may (and each Grantor at the request of Holdings shall) notify obligors
on the Receivables and parties to the Contracts that the Receivables and the Contracts have been assigned to Holdings and that
payments in respect thereof shall be made directly to Holdings.

 

(b)Anything herein to the contrary notwithstanding,
each Grantor shall remain liable under each of such Grantor’s Receivables and Contracts to observe and perform in all material
respects the conditions and obligations to be observed and performed by it thereunder, in accordance with the terms of any written
agreement giving rise thereto. Holdings shall not have any obligation or liability under any Receivable (or any agreement giving
rise thereto) or Contract by reason of or arising out of this Agreement or the receipt by Holdings of any payment relating thereto,
nor shall Holdings be obligated in any manner to perform any of the obligations of any Grantor under or pursuant to any Receivable
(or any agreement giving rise thereto) or Contract, to make any payment, to make any inquiry as to the nature or the sufficiency
of any payment received by it or as to the sufficiency of any performance by any party thereunder, to present or file any claim,
to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to it or to
which it may be entitled at any time or times.

 

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6.2 Proceeds to be Turned Over to
Holdings. In addition to the rights of Holdings specified in Section 6.1 with respect to payments of
Receivables, if an Event of Default shall occur and be continuing and Holdings has instructed any Grantor to do so, all
Proceeds received by such Grantor consisting of cash, checks and other near-cash items shall be held by such Grantor in trust
for Holdings, segregated from other funds of such Grantor, and shall, forthwith upon receipt by such Grantor, be turned over
to Holdings substantially in the form received by such Grantor (duly indorsed by such Grantor to Holdings, if required).

 

6.3 Application of Proceeds. At
such intervals as may be agreed upon by the Borrower and Holdings, or, if and whenever any Event of Default has occurred and
is continuing, Holdings shall apply all or any part of Proceeds constituting Collateral, whether or not held in any
Collateral Account and any proceeds of the guarantee set forth in Section 2, in payment of the Obligations in the
following order (it being understood that any application of such Proceeds constituting Collateral by Holdings towards the
payment of the Obligations shall be made in the following order): first, to unpaid and unreimbursed costs, expenses
and fees of Holdings, second, to Holdings, for application by it toward payment of all amounts then due and owing and
remaining unpaid in respect of the Obligations. Any balance of such Proceeds remaining after the Obligations have been paid
in full shall be paid over to the Borrower or to whomsoever may be lawfully entitled to receive the same

 

6.4 Code and Other Remedies. If
an Event of Default shall occur and be continuing, Holdings may exercise, in addition to all other rights and remedies
granted to it in this Agreement, all rights and remedies of a secured party under the Minnesota UCC or any other applicable
law or in equity. Without limiting the generality of the foregoing, to the fullest extent permitted by applicable law
Holdings, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except
any notice required by this Agreement or required by law referred to below) to or upon any Grantor or any other Person (all
and each of which demands, defenses, advertisements and notices are hereby waived), may in such circumstances forthwith
collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may forthwith sell, lease, assign,
give option or options to purchase, or otherwise dispose of and deliver the Collateral or any part thereof (or contract to do
any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker’s board or
office of Holdings or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem
best, for cash or on credit or for future delivery without assumption of any credit risk. Holdings shall have the right upon
any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase the
whole or any part of the Collateral so sold, free of any right or equity of redemption in any Grantor, which right or equity
is hereby waived and released. Each Grantor further agrees, at Holding’s request, to assemble the Collateral and make
it available to Holdings at places which Holdings shall reasonably select, whether at such Grantor’s premises
or elsewhere. Holdings shall apply the net proceeds of any action taken by it pursuant to this Section 6.4, after
deducting all reasonable costs and expenses incurred in connection therewith or incidental to the care or safekeeping of any
of the Collateral or in any way relating to the Collateral, including reasonable attorneys’ fees and disbursements, to
the payment in whole or in part of the Obligations, in such order as set forth in Section 6.3, and only after
such application and after the payment by Holdings of any other amount required by any provision of law, including Article 9
of the Minnesota UCC, need Holdings account for the surplus, if any, to any Grantor. To the extent permitted by applicable
law, each Grantor waives all claims, damages and demands it may acquire against Holdings arising out of the exercise of any
rights hereunder other than any such claims, damages and demands that may arise from the gross negligence or willful
misconduct of Holdings. If any notice of a proposed sale or other disposition of Collateral is required by law, such notice
shall be deemed reasonable and proper if given at least 10 days before such sale or other disposition.

 

6.5 Deficiency. Each Grantor
shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Collateral are insufficient to
pay its Obligations and the fees and disbursements of any attorneys employed by Holdings to collect such deficiency.

 

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SECTION 7.ATTORNEY-IN-FACT

 

7.1Holding’s Appointment as
Attorney-in-Fact, etc.

 

(a)Each Grantor hereby irrevocably constitutes
and appoints Holdings and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact
with full irrevocable power and authority in the place and stead of such Grantor and in the name of such Grantor or in its own
name, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate actions and to execute any and
all documents and instruments which may be necessary or reasonably desirable to accomplish the purposes of this Agreement, and,
without limiting the generality of the foregoing, each Grantor hereby gives Holdings the power and right, on behalf of such Grantor,
without notice to or assent by such Grantor, to do any or all of the following:

 

(i)in the name of such Grantor or its
own name, or otherwise, take possession of and indorse and collect any checks, drafts, notes, acceptances or other instruments
for the payment of moneys due under any Receivable or contract of such Grantor or with respect to any other Collateral of such
Grantor and file any claim or take any other action or proceeding in any court of law or equity or otherwise deemed appropriate
by Holdings for the purpose of collecting any and all such moneys due under any Receivable or contract of such Grantor or with
respect to any other Collateral of such Grantor whenever payable;

 

(ii)pay or discharge taxes and Liens
levied or placed on or threatened against the Collateral, effect any repairs or any insurance called for by the terms of this Agreement
and pay all or any part of the premiums therefor and the costs thereof;

 

(iii)execute, in connection with any
sale provided for in Section 6.4, any endorsements, assignments or other instruments of conveyance or transfer with
respect to the Collateral; and

 

(iv)(A) direct any party liable for
any payment under any of the Collateral to make payment of any and all moneys due or to become due thereunder directly to Holdings
or Holdings shall direct; (B) ask or demand for, collect, and receive payment of and receipt for, any and all moneys, claims
and other amounts due or to become due at any time in respect of or arising out of any Collateral of such Grantor; (C) sign
and indorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts, drafts against debtors, assignments,
verifications, notices and other documents in connection with any of the Collateral of such Grantor; (D) commence and prosecute
any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Collateral or any portion
thereof and to enforce any other right in respect of any Collateral of such Grantor; (E) defend any suit, action or proceeding
brought against such Grantor with respect to any Collateral; (F) settle, compromise or adjust any such suit, action or proceeding
and, in connection therewith, give such discharges or releases as the Holdings may deem appropriate; (G)  and generally, sell,
transfer, pledge and make any agreement with respect to or otherwise deal with any of the Collateral of such Grantor as fully and
completely as though Holdings were the absolute owner thereof for all purposes, and do, at Holdings’ option and such Grantor’s
expense, at any time, or from time to time, all acts and things which Holdings deems necessary to protect, preserve or realize
upon the Collateral of such Grantor Holdings’ security interests therein and to effect the intent of this Agreement, all
as fully and effectively as such Grantor might do.

 

Holdings agrees that it will not exercise any rights under the
power of attorney provided for in this Section 7.1(a) unless an Event of Default has occurred and is continuing.

 

(b)Each Grantor hereby ratifies all
that said attorneys shall lawfully do or cause to be done by virtue hereof. All powers, authorizations and agencies contained in
this Agreement are coupled with an interest and are irrevocable as to each Grantor until this Agreement is terminated and all security
interests created hereby with respect to the Collateral of such Grantor are released.

 

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7.2 Duty of Holdings.
Holdings’ sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its
possession, under Section 9-207 of the Minnesota UCC or otherwise, shall be to deal with it in the same manner as
Holdings deals with similar property for its own account. Neither Holdings nor any of its respective officers, directors,
employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in
doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any Grantor or
any other Person or to take any other action whatsoever with regard to the Collateral or any part thereof. The powers
conferred on Holdings hereunder are solely to protect Holdings’ interests in the Collateral and shall not impose any
duty upon Holdings to exercise any such powers. Holdings shall be accountable only for amounts that it actually receives as a
result of the exercise of such powers, and neither Holdings nor any of its officers, directors, employees or agents shall be
responsible to any Grantor for any act or failure to act hereunder, except, in the case of Holdings only in respect of its
own gross negligence or willful misconduct, to the extent required by applicable law.

 

7.3 Financing Statements. Each
Grantor hereby authorizes the filing of any financing statements or continuation statements, and amendments to financing
statements, or any similar document in any jurisdictions and with any filing offices as Holdings may reasonably determine, in
its sole discretion, are necessary or advisable to perfect or otherwise protect the security interest granted to Holdings
herein.

 

SECTION 8.MISCELLANEOUS

 

8.1 Amendments in Writing. None
of the terms or provisions of this Agreement may be waived, amended, supplemented or otherwise modified except by a writing
executed by the parties hereto.

 

8.2 Notices. All notices,
requests and demands to or upon Holdings or any Grantor hereunder shall be in writing, delivered by a recognized overnight
delivery service, U.S. mail, or email; provided that any such notice, request or demand to or upon any Grantor shall
be addressed to such Grantor at its notice address set forth on Schedule 1 or to such other address as such Grantor may
notify Holdings in writing; provided further that notices to Holdings shall be addressed as follows, or to such other address
as may be hereafter notified Holdings:

 

Twin Cities Power Holdings, LLC

16233 Kenyon Avenue – Suite 210

Lakeville, MN 55044

Attention: Chief Operating Officer

Telephone: 952-241-3010

Email: ksperbeck@twincitiespower.com

 

8.3 No Waiver by Course of Conduct;
Cumulative Remedies. No Party shall by any act (except by a written instrument pursuant to Section 8.1),
delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any
Default or Event of Default. No failure to exercise, nor any delay in exercising, on the part of Holdings, any right, power
or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A
waiver by Holdings of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or
remedy which Holdings would otherwise have on any future occasion. The rights and remedies herein provided are cumulative,
may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law.

 

8.4Enforcement Expenses; Indemnification.

 

(a)Each Grantor agrees to pay, or reimburse
Holdings for, all its documented costs and expenses incurred in connection with collecting against such Grantor under the guarantee
contained in Section 2 or otherwise enforcing or preserving any rights under this Agreement, including the reasonable
and invoiced fees and disbursements of counsel to Holdings.

 

(b)Each Grantor agrees to pay, and to
save Holdings harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp,
excise, sales or other similar taxes which may be payable or determined to be payable with respect to any of the Collateral or
in connection with any of the transactions contemplated by this Agreement.

 

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(c)Each Grantor agrees to pay, and to
save Holdings harmless from, any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and
administration of this Agreement.

 

(d)The agreements in this Section shall
survive repayment of the Obligations.

 

8.5 Successors and Assigns.
This Agreement shall be binding upon the successors and assigns of each Grantor and shall inure to the benefit of the
Holdings and its successors and assigns; provided that no Grantor may assign, transfer or delegate any of its rights
or obligations under this Agreement without the prior written consent of Holdings and, unless so consented to, each such
assignment, transfer or delegation by any Grantor shall be void.

 

8.6 Counterparts. This
Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature
page of this Agreement by facsimile transmission or electronic transmission (in PDF format) shall be effective as delivery of
a manually executed counterpart hereof. A set of the copies of this Agreement signed by all the parties shall be lodged with
the Borrower and Holdings.

 

8.7 Severability. Any provision
of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other
jurisdiction.

 

8.8 Section Headings. The
Section headings used in this Agreement are for convenience of reference only and are not to affect the construction hereof
or be taken into consideration in the interpretation hereof.

 

8.9 GOVERNING LAW. THIS
AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF MINNESOTA.

 

8.10 Submission To Jurisdiction;
Waivers. Each of the parties hereto hereby irrevocably and unconditionally:

 

(a)submits for itself and its property
in any legal action or proceeding relating to this Agreement or for recognition and enforcement of any judgment in respect thereof,
to the exclusive general jurisdiction of the Courts of the State of Minnesota, the courts of the United States of America for the
District of Minnesota, and appellate courts from any thereof;

 

(b)consents that any such action or
proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action
or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead
or claim the same;

 

(c)agrees that service of process in
any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar
form of mail), postage prepaid, to the address referred to on Schedule I hereof or at such other address of which the other
parties hereto shall have been notified pursuant thereto;

 

(d)agrees that nothing herein shall
affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other
jurisdiction; and

 

(e)waives, to the maximum extent not
prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section any
special, exemplary, punitive or consequential damages.

 

    	9

     

    

 

8.11 Acknowledgements. Each
Grantor hereby acknowledges that:

 

(a)it has been advised by counsel in
the negotiation, execution and delivery of this Agreement; and

 

(b)no joint venture is created hereby
or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among the Secured Parties
or among the Grantors and the Secured Parties.

 

8.12 Releases.

 

(a)At such time as the Obligations (other
than Unasserted Contingent Obligations and obligations) have been paid in full, the Collateral shall automatically be released
from the Liens created hereby, and this Agreement and all obligations (other than those expressly stated to survive such termination)
of Holdings and each Grantor hereunder shall automatically terminate, all without delivery of any instrument or performance of
any act by any party, and all rights to the Collateral shall automatically revert to the Grantors. At the request and sole expense
of any Grantor following any such termination, Holdings shall deliver to such Grantor any Collateral held by Holdings hereunder,
execute and deliver to such Grantor such documents (in form and substance reasonably satisfactory to Holdings) and take such further
actions as such Grantor may reasonably request to evidence such termination.

 

8.13 WAIVER OF JURY TRIAL.
EACH GRANTOR AND EACH GUARANTOR, BY ACCEPTANCE OF THE BENEFITS HEREOF, AND HOLDINGS, HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

    	10

     

    

 

IN WITNESS WHEREOF, each of the undersigned
has caused this Guarantee and Collateral Agreement to be duly executed and delivered as of the date first above written.

 

	 	ANGELL ENERGY, LLC, as Borrower and Grantor
	 	 
	 	By: /s/ Michael C. Angell
	 	Name: Michael C. Angell
	 	Title: CEO
	 	 
	 	 
	 	TWIN CITIES POWER, LLC, as Grantor and Guarantor
	 	 
	 	 
	 	By: /s/ Michael C. Angel
	 	Name: Michael C. Angel
	 	Title: CEO
	 	 
	 	 
	 	SUMMIT ENERGY, LLC, as Grantor and Guarantor
	 	 
	 	 
	 	By: /s/ Michael C. Angel
	 	Name:  Michael C. Angel
	 	Title: CEO
	 	 
	 	 
	 	/s/ Michael C. Angel
	 	Michael Angell, as Guarantor
	 	 
	 	 
	 	TWIN CITIES POWER HOLDINGS, LLC
	 	 
	 	 
	 	By: /s/ Timothy S. Krieger
	 	Name: Timothy S. Krieger
	 	Title: CEO

 

 

[Signature page to Guarantee and Collateral Agreement]

    	11

     

    

 

Schedule 1

NOTICE ADDRESS FOR EACH GRANTOR

[to come]

 

 

 

    	S-1-1

     

    

 

Schedule 3

EXACT LEGAL NAME; LOCATION OF JURISDICTION
OF ORGANIZATION;

CHIEF EXECUTIVE OFFICE

 

[to come]

 

	
        

        

        Exact Legal Name

        of Grantor
	
        

        

        Jurisdiction of

        Organization
	
        

        Organizational

        Identification

        Number
	
        Location

        of Chief

        Executive

        Office

	Angell Energy, LLC	Texas	 	
        5613 Ridgepass Lane

        McKinney, TX 75071-6221

         

	Twin Cities Power, LLC	Minnesota	 	
        Suite #210

        16233 Kenyon Avenue

        Lakeville MN 55044-4737

         

	Summit Energy, LLC	Minnesota	 	
        Suite #210

        16233 Kenyon Avenue

        Lakeville MN 55044-4737

         

 

 

 

 

 

S-3-1Exhibit 10.4

 

ADMINISTRATIVE SERVICES AGREEMENT

 

THIS ADMINISTRATIVE
SERVICES AGREEMENT (this "Agreement") is made and entered into as of June 1, 2015 (the “Effective Date”)
by and between ANGELL ENERGY, LLC, a Texas Limited Liability Company ("ANGELL") and APOLLO ENERGY SERVICES, LLC, a Minnesota
limited liability company ("APOLLO").

 

RECITALS:

 

A.ANGELL desires APOLLO to provide certain
management, operation and administrative services to it.

 

B.The parties desire to set forth in writing
their agreement pursuant to which APOLLO will provide such services to ANGELL and ANGELL will compensate APOLLO therefor.

 

AGREEMENTS:

 

In consideration of the foregoing premises
and the mutual covenants and agreements contained herein, the parties hereto agree as follows:

 

		1.	Term. The term of this Agreement shall commence as of the Effective Date, shall continue
for a period of five (5) years, and shall be automatically renewed thereafter, on all the same terms and conditions, for successive
terms of one (1) year each unless one party notifies the other that this Agreement will not be so renewed no later than thirty
(30) days prior to the expiration of the original or any renewal term of this Agreement (the "Term").

 

		2.	Management, Operational and Administrative Services. During the Term, APOLLO shall provide
management, operational and administrative services as required by ANGELL and other services incident thereto, including, but not
limited to, the following (collectively, the "Services"):

 

		a.	Management Services:

 

		(i)	Human resource management including assistance with hiring, training, locating temporary employment,
providing employment-related forms, etc.;

 

		(ii)	Management information and information technology services;

 

		(iii)	Provision of standardized documentation and manuals;

 

		(iv)	If requested, assistance with the preparation of financial statements;

 

		(viii)	Coordination of and advice with respect to marketing plans and initiatives;

 

		(ix)	Coordination of legal and accounting services;

    	1

     

    

 

 

		(x)	Coordination and development of purchase, sale, bidding and pricing standards;

 

		(xi)	Consultation on establishment of risk management policies;

 

		(xii)	Consultation on compliance with governmental regulations, including without limitation, those of
the U.S. Federal Energy Regulatory Commission, including annual compliance training; and;

 

		(xiv)	Such other services as ANGELL shall reasonably request or are appropriate to be provided.

 

		b.	Administrative and Operational Services:

 

		(i)	Personnel of APOLLO as needed, to carry out the Services: and

 

		(ii)	Advice and consultation with respect to insurance. Notwithstanding the foregoing, ANGELL shall
be responsible for the purchase of and submission and prosecution of all claims with respect to all workers' compensation, general
liability, automobile liability, excess/umbrella, property, casualty, errors and omissions and other insurance with respect to
ANGELL and its assets and business, and shall pay all premiums owing with respect thereto.

 

c.Start Up Services:

 

		(i)	APOLLO shall provide all services reasonably necessary or appropriate for ANGELL to commence an
electricity wholesale trading operation, including qualifying for trading in markets administered by Regional Transmission Organizations,
Independent System Operators and other market exchanges, as requested by ANGELL. APOLLO shall not be responsible for, or have any
control over, any of ANGELL's trading or business activities, which shall be solely the responsibility of ANGELL. Without limiting
the generality of the foregoing, APOLLO shall not provide any direction or advice with respect to trading strategies, techniques
or individual trades and ANGELL shall be solely responsible for trading gains and losses and compliance with all laws, regulations
and policies of FERC, trading markets, and all governmental authorities.

 

		(ii)	APOLLO shall provide advice and consultation to ANGELL with respect to trader compensation plans.

 

		(iii)	Pursuant to a Software License Agreement to be entered into between the parties, APOLLO shall sublicense
to ANGELL the right to use APOLLO’s proprietary DataliveTM trading system and shall provide training on the use of Datalive.

 

    	2

     

    

 

		3.	Compensation. In consideration of the Services provided by APOLLO, ANGELL shall pay to APOLLO:

 

		(a)	A management fee equal to $75,000 per month for the first six months this Agreement is in effect.
At the conclusion of such six month period, the parties will agree on an appropriate fee for the services being provided for the
balance of the term or such shorter period as they shall agree upon.

 

		(b)	ANGELL shall reimburse APOLLO for all out-of-pocket expenses incurred by APOLLO and its personnel
in performing the Services for ANGELL to the extent not otherwise included above. Such reimbursements shall be due and payable
immediately upon a receipt from APOLLO of an invoice therefor.

 

		(c)	ANGELL shall compensate APOLLO for special projects undertaken by APOLLO for the benefit of ANGELL
in such amounts as to which the parties may from time to time agree.

 

		4.	Employee Benefits. APOLLO shall be responsible for the payment of all salaries, benefits,
and withholding and other taxes for its employees who perform services for ANGELL pursuant to this Agreement.

 

		5.	Indemnification.

 

		(a)	By APOLLO: APOLLO shall indemnify and hold ANGELL, and its respective members, managers,
governors, officers, employees and agents ("indemnitees") harmless from any and all claims, damages, injuries, losses,
expenses, liabilities, actions or causes of action (including, reasonable attorneys’ fees incident to any of the foregoing),
resulting from or arising out of any breach by APOLLO of the provisions of this Agreement based upon APOLLO's gross negligence
or intentional misconduct.

 

		(b)	By ANGELL: ANGELL shall indemnify and hold APOLLO, and its members, governors, officers,
employees and agents ("indemnitees") harmless from any and all claims, damages, injuries, losses, expenses, liabilities,
actions or causes of action (including, reasonable attorneys’ fees incident to any of the foregoing), resulting from or arising
out of (i) any breach by ANGELL of the provisions of this Agreement’ (ii) any damages, losses, claims and penalties resulting
from ANGELL's or its traders violation or alleged violation of any law, regulation, or policy of FERC, any trading market, and
any other governmental authority; (iii) any trading loss or damage caused by any trader; and (iv) any third-party claims resulting
from the operations, actions, or failures to act of ANGELL.

 

		(c)	Limitation. Notwithstanding anything to the contrary in this Agreement, there will be no
liability or payments for consequential, special, indirect or incidental, exemplary or special damages, or costs or expenses, whether
or not relating to claims for indemnification and APOLLO’s obligations hereunder shall not exceed the amounts received by
it under this Agreement.

    	3

     

    

 

		(d)	Independent Contractor. In performing the Services hereunder, APOLLO and its employees shall
operate as and have the status of independent contractors. This Agreement shall not create a partnership, joint venture, or employer-employee
relationship between APOLLO and ANGELL.

 

		6.	Miscellaneous.

 

		(a)	Governing Law. This Agreement shall be governed by the laws of the State of Minnesota, without
regard to conflict of law rules.

 

		(b)	Non-waiver. The failure of any party at any time or times to require performance of any
provision hereof shall in no manner affect the right at a later time to enforce the same. No waiver by any party of any term, covenant
or condition or of any breach of any term, covenant or condition under this Agreement, whether by conduct or otherwise, shall be
deemed to be or construed as a further or continuing waiver of any such condition or breach or a waiver of any other condition
or of any breach of any other term, covenant or condition of this Agreement.

 

		(c)	Severability. If any provision or term of this Agreement is held by a court of competent
jurisdiction to be contrary to law, unenforceable, or invalid in any situation, the remaining provisions and terms of this Agreement
shall remain in full force and the validity or enforceability of the offending term or provision shall not be affected in any other
situation or in any other jurisdiction.

 

		(d)	Counterparts. This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original and all of which together shall constitute one and the same

 

		(e)	Entire Agreement and Amendment. This Agreement sets forth the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes all prior agreements between them with respect thereto.
This Agreement may be amended only by a writing executed by all parties to this Agreement.

 

IN WITNESS WHEREOF,
the undersigned have caused this Agreement to be executed as of the day and year first above written.

 

	ANGELL ENERGY, LLC	APOLLO ENERGY SERVICES, LLC
	 	 
	 	 
	By: _/s/ Michael C. Angell___________	By: _/s/ Timothy S. Krieger_________ 
	Michael C. Angell	Timothy S. Krieger
	Its: President/CEO	Its: President/CEO

 

 

 

    	4

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