Logo of Hayden Communications Inc. [logo.jpg]

 
FINANCIAL COMMUNICATIONS AND STRATEGIC
CONSULTING AGREEMENT FOR
MORLEX, INC.

April 11, 2008
Mr. Jason J. Kulpe
2275 Rio Bonita Way
Suite 210
San Diego, CA 92108

I.
CONTEXT AND SCOPE OF PROPOSAL

After reviewing information on the company, and meeting with the company’s
management team to gain a more thorough understanding of the company and its
business, Hayden Communications is pleased to submit the following proposal.

Based on our preliminary observations and due diligence, there are a number of
key points that we believe should be incorporated into the corporate
communications and outreach strategy to help facilitate the Company’s ability to
building an informed audience of both professional and high net worth investors,
which will help improve liquidity and further diversify the shareholder base
prior to and post the merger transaction of Ad Authority Group, Inc. into
Morlex, Inc, the public company. These include:

* Packaging the story to provide comprehensive information on the Company’s
unique position in the online advertising business, including the 1) strength of
its lead generation model and opportunity to leverage Superfly’s technology and
opportunity to drive content sites including Rightside, 2) experience of its
management team, 3) its competitive advantages including a lower cost per lead
generated, 4) extensive base of domains and 5) new product development
capabilities, 6) growth in the overall domestic market for online advertising
and lead spend, 7) International growth opportunities, and 8) the fragmented
market which is creating future acquisition opportunities.
 
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* Targeting institutional investors who focus on the media and online
advertising market segments.
* Expand the investor audience through introductions, road shows, conference
calls and regular follow-ups to key institutions, brokers and analysts who have
an interest and purchase micro/small-cap stocks.

With 12 years of operating experience as a full service Investor Relations firm,
Hayden Communications, Inc. has developed a thorough understanding of the public
micro-cap marketplace, and how to articulate a client’s core competencies and
growth objectives in a clear, concise and consistent manner. We are very pleased
to have this opportunity to present this proposal which we feel best suits the
Company at this particular time.

Objective: 

To provide the ongoing market visibility and corporate positioning necessary to
create a well educated and informed audience about Morlex’s business. The
rewards of achieving this goal are 1) improved corporate visibility through
investment research and sponsorship and business media coverage, 2) increased
interest which leads to liquidity and diversification of the shareholder base,
and 3) and a market capitalization, which is consistent with comparable public
companies operating in the online media and advertising sector, 4) the ability
to achieve a listing on a major stock exchange and 5) the ability to raise
capital or utilize its currency (stock) in the future under the most favorable
terms for acquisitions or for working capital. Our efforts, in combination with
the Company’s growth rate, ROI, profit margins, and management’s ability to
execute on a go forward basis should lead to a market multiple consistent with
the Company’s financial progress and sector status.
 

II.
SCOPE OF SERVICES/PROGRAMS/ACTIVITIES

Hayden Communications, Inc. (HC) will develop, implement, and maintain an
ongoing stock market support system for “Morlex” with the general objective of
expanding awareness in “Morlex” among stockbrokers, analysts, micro-cap
portfolio/fund managers, market makers, and the appropriate financial & trade
publications.

1.
PROFESSIONAL INVESTMENT COMMUNITY AWARENESS

 
A.
Introductions to professionals at select firms, with a focus on members of the
Financial Community in various geographic regions in the United State. The
targeted group of professionals, which would be drawn from our proprietary
database of contacts will be a subset of the following:

 
1.
Over 15,000 Equity Brokers

 
2.
Over 750 Analysts (700 Buy-Side and 50 Sell Side), both generalists and industry
specialists.

 
3.
Over 3,000 Micro-Cap Portfolio/Hedge Fund Managers

 
4.
Over 100 Market Makers (both retail and wholesale)

 
5.
Financial, Trade and Industry Publications

 
B.
Introductions to an expanded group of fund managers and analysts (buy and sell
side) beyond our current database through the utilization of both Big Dough
subscription service and other on-line tools such as StreetWise, etc.

 
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C.
Introductions to High Net-Worth accredited investors who build positions in
micro-cap companies and are familiar with other quality companies, which HC
currently and previously represented.

 
D.
Broker conference calls/meetings arranged by HC in select cities (and at
compatible times) with top management at “Morlex” on a Quarterly basis. The
following cities encompass locations we typically travel to for Road Shows - New
York, Boston, Dallas, Houston, Denver, Atlanta, Phoenix/Scottsdale, Milwaukee,
Cleveland, Chicago, Minneapolis, Southern Florida, Southern California, and San
Francisco. HC will seed markets prior to effectuating road shows and will only
incorporate areas of significant interest. Other interested parties can be
introduced via conference calls.

 
E.
Road Show assistance.

 
F.
All interested parties will be continually updated of Client’s progress via
phone conversations and through our fax/e-mail list for news releases.

 
G.
Featuring “Morlex” in future editions of the HC Newsletter which is distributed
to over 7,500 professional and high-net worth investors on a quarterly basis.
Each feature includes a summary of each respective client’s operating activities
along with insightful industry commentary to help investors embrace the
investment opportunity and thesis. HC does not provide specific investment
recommendations or advice but rather the facts by utilizing public information
for its publication.

 
H.
HC will screen all investment firms for upcoming financial conferences, which
would be appropriate for “Morlex”. HC will work through the proper channels with
the goal of receiving invitations for management to present at those relevant
conferences.

2.
SHAREHOLDER COMMUNICATIONS  

 
A.
Understand the financials and all operating metrics of the company in detail,
facilitating interactions with new and current investors and articulating the
necessary information to assist professionals in completing their due diligence.
This activity enables management to focus on executing its business plan.

 
B.
Handle investor requests for timely information via the telephone and e-mail. HC
will have a knowledgeable associate available during market hours to field and
respond to all investor inquiries and update the shareholder database
accordingly. This helps shareholder retention by showing that the Company is
shareholder friendly and proactive in its communication efforts.

 
C.
Contact shareholders on a quarterly basis and gather perception feedback on
their views of how the business is evolving and management’s execution relative
to expectations. Open dialogue, expand and update database and keep key
investors informed once material developments are reported

 
D.
Host Quarterly Conference Calls to accompany the earnings release. HC will
assist with scripting these calls and monitoring the continuity to ensure a
smooth roll-out for investors. These will be especially important as these will
represent some of the first interactions between the Company and a broader
investor audience.

3.
MEDIA RELATIONS

  
Financial Newsletter and Business Publication campaign. HC will work through our
media contacts, which include financial newsletters to solicit “Buy
Recommendations” for “Morlex”. These publications maintain a paid subscription
base of investors focused mainly on micro cap stocks and do not solicit
compensation for coverage. A “Buy Recommendation” can produce a great deal of
new investor interest and lends third party support and opinion. Additionally,
we will make introductions to appropriate editors at business publications where
we have relationships including Business Week, Fortune, Investors Business
Daily, Wall Street Journal, among others.
 
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4.
THE FINANCIAL PRESS

 
A.
HC will assist senior management to draft and complete press releases on all
material events as deemed by the Company. Management and corporate counsel will
approve all releases before they are sent to the wire.

 
B.
HC will disseminate news releases electronically to our established database of
financial professionals including: special situation analysts, brokers, fund
managers, individual investors, money managers, and current or prospective
individual shareholders who are already invested or have expressed an interest
in “Morlex”.

4.
PUBLIC MARKET INSIGHT is utilized to assist senior management in understanding
the dynamics and life cycle of the financial markets and most importantly how
“Morlex” is impacted directly and indirectly by different variables, including
both macro and micro-economic events. The Team at HC leverages its collective
expertise gained through representing over 200 public companies, in addition to
industry experience gained through working on the “buy” and “sell-side” to help
our clients understand expectations, valuations, perceptions, and investment
methodologies utilized by investment professionals. This consulting aspect is
extremely valuable for management to optimize key opportunities and to avoid
pitfalls, which can carry long term significant implications while providing
crisis management. We will also take a key role in introducing and interviewing,
if applicable, board members, consultants and other market professionals which
will collectively help the company execute its growth plan.

A.
Major Exchange Listing – Assist Company with meeting the necessary requirements
to achieve a listing on a major exchange, either AMEX or Nasdaq. 

III.
AGENDA

Paramount to our collective efforts, HC will educate senior management on the
importance of establishing conservative expectations and how various corporate
actions may be perceived and impact the public market. HC has the capability to
help assess acquisition candidates, discuss the financial impacts, in addition
to the longer term implications.

TIMELINE

FIRST 30 DAYS

A
Spend significant time with management to understand the Company’s business
plan, financial forecasts, capital expenditure needs and cash flow projections,
in addition to acquisition and expansion plans. Visit and tour company
facilities during next 2 months.

C.
Create a two-page Corporate Profile, which clearly articulates “Morlex” current
business and financial position, as well as its strategy for future growth. This
is an important marketing piece for investors to quickly learn about the
company.

 
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D.
Create and/or Update Investor PowerPoint presentation utilizing our preferred
format. HC will utilize proprietary research, feedback from conversations and
meetings to incorporate and improve the Investor PowerPoint and message
delivery. PRESENTATION UPDATED AT LEAST 1X PER QUARTERLY

E.
Assist and provide input for all corporate press releases including both
creation and ongoing revisions. We will assist by providing additional fact
finding and other market research which will help the context and delivery of
the message. THIS WILL BE AN ONGOING INITIATIVE AND OBJECTIVE

F.
Create a formal investor package and update accordingly to augment electronic
investor kits typically distributed. HC will mail these directly upon investor
request. Generally this will include two page corporate profile, PowerPoint and
recent quarterly/annual and press releases.

G.
Present “Morlex” as a new client feature while including in future editions of
the HC Client Newsletter. Include on www.haydenir.com website.

.
MONTH 2

A.
Provide suggestions for the corporate website, including IR Section – assist
with layout in concert with web designer.

B.
Formalize Press Release calendar for coming 3 months. Create, edit and release
accordingly.

C.
Discuss goals for obtaining any additional independent board members (if
necessary) while being attentive to what qualities the optimal candidate would
posses.

D.
Begin making introductions to investment professionals while seeding and
confirming meetings for Road Shows. Practice and refine presentation with
management team.

E.
Target brokers, micro-cap fund managers, Buy and Sell Side Analysts, and very
high net worth investors which follow companies with a similar profile to
“Morlex”.

F.
Initiate formal Road Show during months 2-3. A detailed description of each
contact will be provided prior to the meeting. During the meetings and/or
conference calls a member of HC will be available to facilitate the
correspondence and assist with due diligence. Management will be provided with a
summary of feedback including HC’s suggestions for improvements on both the
context and delivery of the company’s story.

MONTH 3

 
A. 
Make additional introductions for investment professionals on behalf of the
Company. Follow-up and spend time to assist with due diligence efforts and
convert introductions to potential new shareholders. Schedule conference calls
if necessary and establish a que’ for next road show.

B.
Formalize and continually update the database to ensure that all press releases
are faxed and/or e-mailed to all interested professionals. This includes the
input of notes to keep track of all investor correspondence and reminder calls
to all investor prior to earnings conference calls. (ongoing).

C.
Update and conduct perception study with current and future shareholders to
better understand current and future expectations. This information will be
utilized in upcoming conference calls to ensure the company is proactive and
prudent in setting the correct bar for investors to measure performance.

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MONTH 4

 
A.
Target brokerage firms who hold conferences which would be applicable for
“Morlex”. Establish a goal of having management present in at least 2-3
conferences during the twelve month period. These would be non-paid for and have
high institutional attendance. We will also seek to have the Company be included
in “sell-side” sponsored investor tours in the U.S.

 
B.
Target newsletter editors and publishers for a “Buy Recommendation”. Focus on
Business Publications for appropriate stories on “Morlex” products, competitive
advantage and value proposition to investors.

MONTH 5

 
A.
Begin to Plan out and book next Road Show Agenda targeting different cities than
previously visited.

MONTHS 6 - 12

 
A.
Continue with agenda based items to ensure continuity of Investor Relations
Plan.

 
B.
Book formal Road Shows each quarter, preferably just after earnings are released
and try to tie these with participation in conferences.

 
C.
Support the company as it goes through the formal Nasdaq/AMEX review process.

 
Provide progress reports to senior management when appropriate. Evaluate
achievements after the first 180 days and make changes where necessary. Many of
the above items will occur simultaneously but certain items will have
chronological priority over others. As “Morlex” grows, we will recommend changes
to the Agenda that compliment this growth. As the company continues to execute
its strategic plan by winning new customers and expanding its base of business
we will target an expanded universe of institutional investors. At each stage of
growth, the appropriate approach to the market will be incorporated into the
agenda for optimal results.

Assuming that management’s efforts are leading ultimately to success and greater
profitability, the end results of this financial communication and awareness
campaign should be:

*
An increase in the number of financial professionals (including brokers,
institutions and analysts) and individual investors well educated and
knowledgeable about “Morlex”: including senior management, the company’s
products, as well as the current financial condition and growth opportunities.

*
An increase in the number of articles printed in both trade and financial
publications.

*
An increase in the liquidity of the common stock.

*
An increase in “Morlex” market capitalization coupled with a broader, more
diverse shareholder base.

*
Suitable and better access to the capital markets, which will facilitate future
acquisitions and working capital needs.

IV.
CONTRACTUAL RELATIONSHIP

In performing services under this proposal, HC shall operate as, and have the
status of, an independent contractor. HC agrees that all information disclosed
to it about the Client’s products, processes and services are the sole property
of the Client and it will not assert any rights of any confidential or
proprietary information or material, nor will it directly or indirectly, except
as required in the conduct of its duties.
 
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V.
TERM

This agreement shall remain in effect for a period commencing on the signature
date and expires twelve months (365 days) from signing date. In the event that
HC commits any material breach or violation of the provisions of this Agreement,
then, the Client has the right to terminate this agreement any time during the
contractual period and/or any extension periods after the initial contractual
period. In addition, the Client has the right to terminate after the initial six
month period if HC is unable to fulfill its obligations detailed in the formal
agreement.

VI.
COMPENSATION

Regarding compensation, it is our intention to propose parameters that are
mutually acceptable to both parties in order to accomplish our collective
mission. Based on a commitment of resources necessary to perform successfully on
behalf of “Morlex” for a period of 12 months, Hayden Communications, Inc.
proposes the following compensation terms:
 
Cash and Equity

 
A.
$11,000 per month for the contractual period.

 
B.
Equity: 150,000 shares of restricted 144 common stock. The certificate is to be
sent to Hayden Communications, Inc. (HC) within 30 days of the formal contract
signing.

Expenses: Only expenses that would ordinarily be incurred by the Client will be
billed back on a monthly basis. Applicable reimbursements would include:
creation, printing and postage for investor packages, fees for news wire
services, and fees for fax-broadcasting news releases. Any packages requiring
additional photocopying/printing will be billed back to the Client at cost (with
no mark-up). Any extraordinary items, such as broker lunch presentations, air
travel, hotel, ground transportation or media campaigns, etc. shall be paid by
the Client, only with Client authorization prior to incurring any expenses.

Assuming HC schedules at least four organized, formal Road Shows during 2008,
creates and print out formal investor packages, participate in at least 2
financial conference and the Company issues at least 12 press releases to the
wire, we would suggest budgeting a total of approximately $35,000-45,000 in hard
costs for Investor Relations during the next twelve months. Actual costs could
be less but we want to create a reasonable expectation for budgeting purposes.

VII.
PRIOR RESTRICTION 

HC represents to the Company that it is not subject to, or bound by, any
agreement which sets forth or contains any provision, the existence or
enforcement of which would in any way restrict or hinder HC from performing the
services on behalf of the Company that HC is herein agreeing to perform.

VIII.
ASSIGNMENT 

This Agreement is personal to HC and may not be assigned in any way by HC
without the prior written consent of the Company. Subject to the foregoing, the
rights and obligations under this Agreement shall inure to the benefit of, and
shall be binding upon, the heirs, legatees, successors and permitted assigns of
HC, and upon the successors and assigns of the Company.
 
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IX.
CONFIDENTIALITY 

Except as required by law or court order, HC will keep confidential any trade
secrets or confidential or proprietary information of the Company which are now
known to HC or which hereinafter may become known to HC and HC shall not at any
time directly or indirectly disclose or permit to be disclosed any such
information to any person, firm, or corporation or other entity, or use the same
in any way other than in connection with the business of the Company and in any
case only with prior written permission of BluePhoenix. For purposes of this
Agreement, “trade secrets or confidential or proprietary information” includes
information unique to or about the Company including but not limited to its
business and is not known or generally available to the public.
 

X.
DEFAULT

10.1 Except for a claim or controversy arising under Section 6 of this
Agreement, any claim or controversy arising under any of the provisions of this
Agreement shall, at the election of either party hereto, be determined by
arbitration in New York City in accordance with the rules of the American
Arbitration Association. The decision of the Arbitrator shall be binding and
conclusive upon the parties. Each party shall pay its own costs and expenses in
any such arbitration. The parties shall share the costs of filing fee for the
arbitration and the fees of the arbitrators equally.

10.2 In the event that HC commits any material breach of any provision of this
Agreement, as determined by the Company in good faith, the Company may, by
injunctive action, compel HC to comply with, or restrain HC from violating, such
provision, and, in addition, and not in the alternative, the Company shall be
entitled to declare HC in default hereunder and to terminate this Agreement and
any further payments hereunder.

10.3 Since HC must at all times rely upon the accuracy and completeness of
information supplied to it by the Company’s officers, directors, agents, and
employees, the Company agrees to indemnify, hold harmless, and defend HC, its
officers, agents, and employees at the Company’s expense, against any proceeding
or suit which may arise out of and/or be due to any material misrepresentation
in such information supplied by the Company to HC (or any material omission by
the Company that caused such supplied information to be materially misleading).

XI.
SEVERABILITY AND REFORMATION 

If any provision of this Agreement is held to be illegal, invalid, or
unenforceable under present or future law, such provision shall be fully
severable, and this Agreement shall be construed and enforced as if such
illegal, invalid or unenforceable provision were never a part hereof, and the
remaining provisions shall remain in full force and shall not be affected by the
illegal, invalid, or unenforceable provision, or by its severance; but in any
such event this Agreement shall be construed to give effect to the severed
provision to the extent legally permissible.
 
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XII.
NOTICES

 
Any notices required by this Agreement shall (i) be made in writing and
delivered to the party to whom it is addressed by hand delivery, by certified
mail, return receipt requested, with adequate postage prepaid, or by courier
delivery service (including major overnight delivery companies such as Federal
Express and Airborne), (ii) be deemed given when received, and (iii) in the case
of the Company, be mailed to its principal office in California at 2275 Rio
Bonito Way, Suite 210, San Diego CA 92018 and in the case of HC, be mailed to
Hayden Communications, Inc., One E. Camelback, Suite 400, AZ 85012.

XIII.
MISCELLANEOUS

13.1 This Agreement may not be amended, except by a written instrument signed
and delivered by each of the parties hereto.

13.2 This Agreement constitutes the entire understanding between the parties
hereto with respect to the subject matter hereof, and all other agreements
relating to the subject matter hereof are hereby superseded.

13.3 This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York.

In Witness Whereof, the parties have executed this Consulting Agreement as of
the day and year first above written.
 
AGREED:

Hayden Communications, Inc.
 
Morlex, Inc.
         
By:
/s/ Brett Maas
 
By:
/s/ Jason J. Kulpa
 
Brett Maas, Partner
   
Jason Kulpa, CEO

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