exv10w26






Exhibit 10.26




EMPLOYMENT AGREEMENT




     EMPLOYMENT AGREEMENT (the “Agreement”), dated as of August 1, 2009, between True North Finance
Corporation, a Delaware corporation (“Company”), its successors and assigns, and Christopher E.
Clouser (“Employee”).



WITNESSETH:




     WHEREAS, Company desires to retain Employee and Employee desires to be retained by Company, on
the terms and subject to the conditions hereinafter set forth.



     NOW, THEREFORE, in consideration of the agreements hereinafter set forth, and for good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is hereby
agreed as follows:




	1.	 	Duties and Responsibilities. Company hereby retains Employee and Employee hereby
accepts such position for the term and upon the conditions hereinafter set forth. In such
capacity, Employee’s duties shall include acting as Chairman of the Company’s advisory,
investment and corporate Boards, assisting the Company with networking and fundraising,
identifying and recruiting new Company personnel, tactical planning, participating in digital
and brand marketing and public relations efforts as needed, chairing a nominating committee of
the Board of Directors, and such other business opportunities as are determined from time to
time by the Company. Employee hereby accepts the above position and conditions thereto and
agrees to devote substantial efforts to the performance of his duties hereunder and devote at
least 60% of his working time and attention over the course of this Agreement to such duties
and other activities as he may be assigned by Company from time to time.
	 
	2.	 	Term of Agreement. Company hereby agrees to retain Employee and Employee hereby
agrees to serve Company as an Employee on the terms and subject to the conditions set forth
herein for the period commencing on the effective date of this Agreement and continuing in
effect for four (4) years from the date hereof.
	 
	3.	 	Compensation.






	 	a.	 	Base Compensation. Subject to the provisions of this Agreement and Paragraph
3(d), Company shall agree to pay to Employee during the term of this Agreement base
compensation at a rate of not less than $350,000 per annum (the “Base Compensation”),
payable in equal monthly installments. During the term of this Agreement, Base Compensation
shall be increased by a minimum of $50,000 per annum commencing on the 1st
anniversary date hereof.
	 
	 	b.	 	Additional Compensation. Employee may earn additional incentive compensation
during the term of this Agreement at the discretion of the




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	 	 	 	Company’s Board. Employee will
also be eligible to participate in any benefits program offered to any other similarly
situated employee.
	 
	 	c.	 	Option to Purchase Company Stock. Employee shall be granted non statutory stock
options. A copy of the stock option agreement is attached hereto as
Exhibit A. Employee will also be eligible to be granted stock options which may be granted
to other Board members.
	 
	 	d.	 	Compensation Reduction. To the extent the Company is unable to secure an
additional $250,000,000 in debt or equity financing by the 1st anniversary date
hereof, Employee’s Base Compensation hereunder shall be reduced by 5% for each $10,000,000
the Company is short of $250,000,000 but, no event, shall Employee’s Base Compensation be
reduced by more than 50%. For example, if the Company secures $200,000,000 in financing by
the 1st anniversary date hereof, Employee’s Base Compensation shall be reduced by
25%.






	4.	 	Expenses. Company will reimburse Employee in accordance with its written policies for
all reasonable business-related expenses incurred in the performance of his duties hereunder,
including his expenses for business entertainment, travel and similar items, upon presentation
by Employee to Company of reasonable documented itemized accounts of such expenditures in a
form consistent with Internal Revenue Service regulations.
	 
	5.	 	Confidential Information and Trade Secrets.






	 	a.	 	Definition. The term “Confidential Information and Trade Secrets” means all
information or compilations of information pertaining to Company that is kept and marked as
confidential by the Company includes, without limitation, information whether it is marked
confidential or not that derives independent economic value from not being generally known
to and not being readily ascertainable by proper means by other persons who can obtain
economic value from its disclosure or use, excluding any such information that is (a) known
to the general public, (b) in Employee’s possession prior to the commencement of this
Agreement and (c) known to Employee from sources other than the Company.
	 
	 	b.	 	No Use or Disclosure. Employee acknowledges that during the term of this
Agreement, Employee has been and may in the future be given access to or may become
acquainted with, or develop Confidential Information and Trade Secrets. Employee agrees not
to use or disclose (directly or indirectly) any Confidential Information and Trade Secrets
of Company at any time or in any manner, except as required in the course of performing
duties under this Agreement with Company. It is specifically agreed that Employee may not
use or disclose Employee’s knowledge of Company’s past, present, and potential customer
identities, customer demands, customer specifications, and other customer





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	 	 	 	information to solicit, contract with, or perform work for those customers on behalf
of Employee or another party.
	 
	 	 	 	Employee shall also take all steps necessary to ensure that it, its employees, and
any other party working on its behalf, shall abide by the requirements of this
paragraph of the Agreement.
	 
	 	c.	 	Restrictions on Documents and Equipment. All Confidential Information and Trade
Secrets, documents, property, and equipment relating to the business of Company, whether
prepared by Employee or otherwise coming into Employee’s possession, are the exclusive
property of Company, and must not be removed from its premises except as required in the
course of Employee’s performing its duties hereunder. All such Confidential Information and
Trade Secrets, documents,
property, and equipment must be returned to Company upon termination of this Agreement.
	 
	 	d.	 	No Use or Disclosure from Others. Employee agrees that Employee has not brought
and will not bring with Employee to Company or use in the performance of Employee’s
responsibilities at Company any materials or documents of a former employer or other third
party that are not generally available to the public, unless Employee or Company has
obtained written authorization from the former employer or third party for their possession
and use.






	6.	 	Covenants Not to Compete or Solicit.






	 	a.	 	No Solicitation of Customers, Suppliers, Vendors. During the term of this
Agreement and for a period of one (1) year after its termination for any reason, Employee
agrees not to in any manner, whether directly or indirectly, solicit, contact, or initiate
communications with customers, prospective customers, suppliers, or vendors of Company, or
request, advise, or entice any such individual to cease doing business with Company, except
in the performance of Employee’s duties under this Agreement. Notwithstanding the
foregoing, Employee shall be permitted to solicit or contact such customers, suppliers or
vendors of the Company with whom Employee had a pre-existing relationship with prior to the
date of this Agreement, or whom Employee became acquainted with during the term of this
Agreement other than as a result of Employee’s relationship with the Company; further
provided, that Employee shall in no event be permitted to entice any such individual to
cease doing business with the Company.
	 
	 	b.	 	No Hiring of Other Employees. During the term of this Agreement and for a period
of one (1) year after its termination for any reason, Employee agrees not to employ, retain,
or attempt to employ or retain (whether as an employee, Employee or otherwise), on
Employee’s behalf or on behalf of others, any of Company’s other employees, Employees, or
independent contractors, or




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	 	 	 	request, advise, or entice any such individual to leave the employment of or
association with Company.






	7.	 	Termination.






	 	a.	 	Termination With Cause.






	 	i.	 	With Cause. Either Employee or Company may terminate this Agreement
immediately for Cause upon written notice to the other party, stating the grounds
therefore. For purposes of this Paragraph, “Cause” shall mean:






	 	(a)	 	Employee’s or Company’s breach of a material term of this Agreement,
which is not cured by Employee or Company within the thirty (30) day period
prior to the proposed date of termination; or
	 
	 	(b)	 	Employee’s diversion of corporate opportunity, self-dealing, theft or
embezzlement of Company assets, or intentional violations of law, as
determined by the Board of Directors.






	 	b.	 	Termination Upon Death or Disability. This Agreement shall be terminated
immediately upon Employee’s death or disability. For purposes of this Agreement,
“disability” shall be defined as Employee’s inability to provide services for Company for a
period in excess of one hundred-twenty (120) days.
	 
	 	c.	 	Cooperation Upon Termination. Following notice of termination of this Agreement
by either party, Employee shall fully cooperate with Company in all matters relating to the
winding up of Employee’s pending work on behalf of Company and the orderly transfer of such
pending work to such other individuals as may be designated by Company.
	 
	 	d.	 	Return of Materials Upon Termination. Upon termination of this Agreement,
Employee shall return all Company property in its possession and/or control.






	8.	 	Alternative Dispute Resolution. In the event of any dispute under this Agreement,
Company and Employee agree to attempt to resolve the dispute by negotiation. In the event of a
dispute under this Agreement, prior to pursuing any remedy otherwise available to a party,
such party shall notify the other party of the dispute setting forth in reasonable detail the
issues involved. For a period of sixty (60) days after such notice is given, the parties agree
in good faith to attempt to resolve the dispute through negotiation. Such efforts shall
include one meeting in person between Employee and a representative of Company having full
authority to resolve the dispute. This provision shall not prohibit a party from seeking
immediate injunctive relief.
	 
	9.	 	Mediation. Prior to either party commencing or serving a complaint or otherwise
commencing a legal action regarding the terms hereof, the parties agree to select a




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	 	 	mutually agreeable, neutral third party to help them mediate, for at least ninety (90) days,
any dispute that arises under the terms of this Agreement. This provision shall not prohibit
a party from seeking immediate injunctive relief.
	 
	10.	 	Indemnification.






	 	a.	 	The Company shall defend the Employee, and hold it harmless against, any and all demands,
claims, debts, actions, assessments, judgments, settlements, sanctions, obligations and
other liabilities (whether absolute, accrued, contingent, fixed or otherwise, known or
unknown, due or to become due or otherwise), monetary damages, fines, fees, penalties,
interest obligations, deficiencies, losses and expenses (including, without limitation,
amounts paid in settlement, interest, court costs, costs of investigators, reasonable fees
and expenses of attorneys, accountants, financial advisors and other experts, and other
expenses of litigation) arising out of or relating in any way to the services provided by
Employee to the Company under this Agreement (collectively referred to as the “Damages”),
provided that the Employee was acting within the scope of their duties and were not guilty
of intentional misconduct, willful neglect of the duties of the Employee’s position
hereunder, or bad faith.
	 
	 	b.	 	Employee shall give prompt written notification to the Company of the commencement of any
action, suit or proceeding relating to a claim for which indemnification pursuant to this
Paragraph may be sought; provided, however, that no delay on the part of either Employee or
Company in making the required notification shall relieve the other party from any liability
or obligation under this Paragraph unless such notification delay shall have materially
prejudiced that party. Within thirty (30) days after delivery of such notification, the
notified party will, upon written notice thereof, assume control of the defense of such
action, suit or proceeding with counsel reasonably satisfactory to the requesting party, and
the notified party will acknowledge in writing to the requesting party that the notified
party shall indemnify the requesting party with respect to all elements of such action, suit
or proceeding and any damages, fines, costs or other liabilities that may be assessed
against the requesting party in connection with such action, suit or proceeding. If the
notified party does not so assume control of such defense due to conflicts of interest, the
requesting party shall control such defense. The party not controlling such defense may
participate therein; provided, that if the notified party assumes control of such defense
and the requesting party is advised by counsel in writing that the notified party and the
requesting party may have conflicting interests or different defenses available with respect
to such action, suit or proceeding, the reasonable fees and expenses of counsel to the
requesting party shall be considered Damages for purposes of this Agreement. The party
controlling such defense shall keep the other party advised of the status of such action,
suit or proceeding and the defense thereof and shall consider in good faith recommendations
made by the




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	 		 	other party with respect thereto. The requesting party shall not agree to any
settlement of such action, suit or proceeding without the prior written consent of
the notified party which shall not be unreasonably withheld (it being understood
that it is reasonable to withhold such consent if, among other things, the
settlement or the entry of a judgment (A) lacks a complete release of the notified
party for all liability with respect thereto, or (B) imposes any liability or
obligation on the notified party). The notified party shall not agree to any
settlement or the entry of a judgment in any action, suit or proceeding without the
prior written consent of the requesting party, which shall not be unreasonably
withheld (it being understood that it is reasonable to withhold such consent if,
among other things, the settlement or the entry of a judgment (A) lacks a complete
release of the requesting party for all liability with respect thereto, or (B)
imposes any liability or obligation on the requesting party).






	11.	 	Notices. All notices hereunder shall be sent by registered or certified mail to the
following addresses:





	 	 	 	 	 
	 

	 	If to Company:
	 	True North Finance Corporation
	 

	 	 	 	4999 France Avenue South, Suite 248
	 

	 	 	 	Minneapolis, MN 55410
	 

	 	 	 	Attn: Scott Carlson
	 
	 	 	 	 
	 

	 	If to Employee:
	 	Christopher E. Clouser
	 

	 	 	 	11119 Wightman Drive
	 

	 	 	 	Wellington, FL 33414







		 	or to such other address as either party may designate in writing to the other party.
	 
	12.	 	General. This Agreement shall inure to the benefit of and be binding upon the
successors, assigns, heirs, executors and administrator of the parties hereto.
	 
	13.	 	Governing Law and Venue. The provisions of this Agreement shall be governed by the laws
of the State of Minnesota and all disputes concerning this Agreement are to be adjudicated in
federal or state court in Minnesota.
	 
	14.	 	Invalidity. If the scope of any of the provisions of this Agreement shall be broader
than those permitted by law, then such provisions shall be enforceable to the extent permitted by
law, and the invalidity of any provisions of this Agreement shall not affect the validity of any
other provisions contained herein.
	 
	15.	 	Entire Agreement. This Agreement contains the entire agreement between the parties and
may be changed only by an agreement in writing signed by all parties.





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	16.	 	Assignment. The rights and benefits of Employee hereunder are personal and no such
right or benefit shall be subject to voluntary or involuntary alienation, assignment or
transfer.
	 
	17.	 	Remedies. If any arbitration, litigation, or other legal proceeding occurs between
the
parties relating to this Agreement, each party shall be responsible for their own costs
and expenses, including attorney’s fees, incurred by such party.
	 
	18.	 	Counterparts. This Agreement may be executed simultaneously in counterparts, each of
which shall be deemed an original (including executed copies sent via facsimile) and all
of which together shall constitute one and the same instrument.





     IN WITNESS WHEREOF, the parties have executed this Agreement the day and year first above
written.



“COMPANY”




True North Finance Corporation




	 	 	 	 	 
	By:

	 	/s/ Todd A. Duckson
 

Its: President
	 	 






“EMPLOYEE”




	 	 	 
	CHRISTOPHER E. CLOUSER
	 	 
	 
	 	 
	/s/ Christopher E. Clouser

	 	 
	 
	 	 





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EXHIBIT A

NONQUALIFIED STOCK OPTION AGREEMENT




     THIS AGREEMENT is dated effective as of the grant date set forth on Exhibit A-1 attached
hereto, between True North Finance Corporation, a Minnesota corporation (the “Corporation”), its
successors and assigns, and the party listed on Exhibit A-1 (“Grantee”).



     WHEREAS, the Corporation desires to grant and the Grantee desires to accept the Nonqualified
Stock Options to purchase Common Stock of the Corporation (as defined below);



     NOW THEREFORE, in consideration of the premises and of the covenants and agreements set forth
below, it is mutually agreed as follows:




	1.	 	Grant of Options. The Corporation hereby grants to Grantee an Option to purchase
from the Corporation all or any part of an aggregate amount of the shares of the Common Stock
of the Corporation (the “Common Stock”), at the Option price and on other terms, as set forth
in Exhibit A-1 attached hereto and made a part hereof. The date of this Agreement is the
effective date of the grant. This Option is not intended to qualify as an Incentive Stock
Option as described in Section 422 of the Internal Revenue Code of 1986 and is referred to as
a Nonqualified Stock Option.
	 
	2.	 	Exercise Period. This Option shall vest and become exercisable in accordance with the
schedule attached hereto as Exhibit A-1 and made a part hereof. All vested Options must be
exercised on or before a date five (5) years from the date of the grant. Vesting shall
continue in accordance with Exhibit A-1 unless accelarated or terminated as described in more
detail below.
	 
	3.	 	Exercise of Option. The vested portion of this Option may be exercised only by
written notice of intent to the Corporation at its office at 4999 France Avenue South North
Sixth Street, Minneapolis, Minnesota 55410. Such notice shall state the number of shares of
Common Stock in respect of which the Option is being exercised and shall be accompanied by
payment for such Common Stock in cash, certified or cashier’s check or by personal check. A
form of Notice of Exercise is attached hereto.
	 
	4.	 	Withholding. In the event that the Grantee elects to exercise this Option or any part
thereof, and if the Corporation shall be required to withhold any amounts by reasons of any
federal, state or local tax laws, rules or regulations in respect of the issuance of shares to
the Grantee pursuant to the Option, the Corporation shall be entitled to deduct and withhold
such amounts from any payments to be made to the Grantee. In any event, the Grantee shall make
available to the Corporation, promptly when requested by the Corporation, sufficient funds to
meet the requirements of such withholding; and the Corporation shall be entitled to take and
authorize such steps as it may deem advisable in order to have such funds available to the
Corporation out of any funds or property due or to become to the Grantee.




 









 






	5.	 	No Shareholder Rights. Grantee shall have no rights as a stockholder with respect to
any shares of Common Stock subject to this Option prior to the date of issuance of a
certificate or certificates for such shares.
	 
	6.	 	Investment Representation. Notice of the exercise of this Option shall include a
representation that any of the Option shares purchased shall be acquired as an
investment and not with a view to, or for sale in connection with, any public distribution.
	 
	7.	 	Compliance with Law and Regulations. The Grantee acknowledges that this Option may
not be exercised until the Corporation has taken all actions then required to comply with all
applicable federal and state laws, rules and regulations and any exchange on which the Common
Stock may then be listed. The certificates representing the shares purchased upon the exercise
of this Option may bear a legend in substantially the following form:
	 
	 	 	These shares have not been registered either under any applicable federal law and rules and
resale will not be permitted under state law unless the shares are first registered under
the Minnesota Securities Law. Further, no sale, offer to sell, or transfer of these shares
shall be made unless a registration statement under the federal Securities Act of 1933, as
amended, with respect to such shares is then in effect or an exemption from the registration
requirements of such Act is then in fact applicable to such shares.
	 
	8.	 	Binding Agreement. This Agreement shall be binding upon and inure to the benefit of
the legal representatives, executors, administrators, successors and assigns of each party to
this Agreement.
	 
	9.	 	Non-Transferability. This Option shall not be transferable otherwise than by will or
the laws of descent and distribution and this Option may be exercised, during the lifetime of
Grantee, only by Grantee. Any attempt to assign, transfer, pledge or otherwise dispose of this
Option contrary to the provisions of this paragraph or any attachment or similar process upon
this Option shall be null and void and without effect.
	 
	10.	 	Termination of Relationship. If the Employment Agreement between Grantee and the
Corporation is terminated without cause or with cause by Grantee (as those terms are defined in the
parties Consulting Agreement), all further vesting shall cease immediately as of the date of the
termination and Grantee shall have ninety (90) days from the date of the termination of the
relationship to exercise any unexercised but vested options. Any unexercised but vested options
that are not exercised within this time period shall be cancelled.
	 
	11.	 	Termination of Relationship for Cause. If the Employment Agreement between Grantee and
the Corporation is terminated for cause (as that term is defined in the parties Employment
Agreement), all further vesting shall cease immediately as of the date of




 









 






	 	 	termination and any unexercised but vested options as of the date of the termiation shall
be cancelled.
	 
	12.	 	Vesting Upon Change of Control. If a Change of Control occurs (as defined below),
all
unvested options shall immediately vest and Grantee shall have one hundred-eighty
(180) days to exercise any of those vested options. Any unexercised but vested options
that are not exercised within this time period shall be cancelled.
	 
	13.	 	Complete Agreement. This Agreement sets forth the entire understanding of the parties
hereto and shall not be amended, changed or terminated except by an instrument in
writing signed by the parties to this Agreement.
	 
	14.	 	Counterparts and Governing Law. This Agreement may be executed in counterparts,
and its validity, construction and performance, shall be governed by the laws of the
state of Minnesota.
	 
	15.	 	Certain Definitions. For purposes of this Agreement, a “Change in Control” of the
Corporation shall mean any of the following:






	 	(i)	 	a change in control of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether or not the
Company is then subject to such reporting requirement; or
	 
	 	(ii)	 	a merger or consolidation to which the Corporation is a party if, following the
effective date of such merger or consolidation, the individuals and entities who were
shareholders of the Corporation prior to the effective date of such merger or
consolidation have beneficial ownership (as defined in Rule 13d-3 under the Exchange
Act) of less than fifty percent (50%) of the combined voting power of the surviving
corporation following the effective date of such merger or consolidation.





        
IN WITNESS WHEREOF, the parties have executed this Agreement effective the date first above
written.



	 	 	 	 	 	 	 
	 	 	TRUE NORTH FINACE CORPORATION  
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Todd A. Duckson	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Todd A. Duckson, President	 	 
	 
	 	 	 	 	 	 
	 	 	GRANTEE
	 
	 	 	 	 	 	 
	 	 	[Grantee’s signature is set forth on Exhibit
A-1 attached hereto and made a part hereof.]






 









 








EXHIBIT A-1

OPTION TERMS




	 	 	 
	Name of Grantee:

	 	Christopher E. Clouser
	 
	 	 
	Date of Grant:

	 	August 1, 2009
	 
	 	 
	Number of Shares Granted:

	 	10,000,000 Series B Common Shares
(10% of total issued and outstanding
Series B Common Shares of the
Corporation as of the date of this
Non-Qualified Stock Option Agreement)
	 
	 	 
	Exercise Price:

	 	The exercise price per share shall be
equal to one cent ($0.01) per share.
	 
	 	 
	Type of Option
	 	 
	(Qualified or Non-Qualified):

	 	Non-Qualified
	 
	 	 
	Vesting:

	 	One half of the Options shall vest
immediately and the other half upon
the Company receiving $200,000,000 in
new debt or equity financing but in
no event later than the term of the
Employment Agreement.






	 	 	 	 	 	 	 	 	 	 	 
	TRUE NORTH FINANCE	 	 	 	Accepted and agreed to by	 	 
	CORPORATION	 	 	 	the undersigned Grantee)	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Todd A. Duckson
	 	 	 	By:
	 	/s/ Christopher E. Clouser	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Todd A. Duckson, President	 	 	 	Christopher E. Clouser	 	 






[Please execute two copies of this Exhibit A-1

and return one copy to the Corporation.]




 









 





EXHIBIT A-1

OPTION TERMS




	 	 	 
	Name of Grantee:

	 	Christopher E. Clouser
	 
	 	 
	Date of Grant:

	 	August 1, 2009
	 
	 	 
	Number of Shares Granted:

	 	10,000,000 Series B Common Shares
(10% of total issued and outstanding
Series B Common Shares of the
Corporation as of the date of this
Non-Qualified Stock Option Agreement)
	 
	 	 
	Exercise Price:

	 	The exercise price per share shall be
equal to one cent ($0.01) per share.
	 
	 	 
	Type of Option
	 	 
	(Qualified or Non-Qualified):

	 	Non-Qualified
	 
	 	 
	Vesting:

	 	One half of the Options shall vest
immediately and the other half upon
the Company receiving $200,000,000 in
new debt or equity financing but in
no event later than the term of the
Employment Agreement.






	 	 	 	 	 	 	 	 	 	 	 
	TRUE NORTH FINANCE	 	 	 	Accepted and agreed to by	 	 
	CORPORATION	 	 	 	the undersigned Grantee	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Todd A. Duckson
	 	 	 	By:
	 	 /s/ Christopher E. Clouser	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Todd A. Duckson, President	 	 	 	Christopher E. Clouser	 	 






[Please execute two copies of this Exhibit A-1

and return one copy to the Corporation.]