EMPLOYMENT, CONFIDENTIALITY, NON-COMPETITION,
NON-SOLICITATION AND INVENTIONS AGREEMENT
 
This AGREEMENT (the “Agreement”) is made as of April 15, 2008 (the “Effective
Date”), by and between Morlex, Inc., a Colorado corporation with its
headquarters located in 420 Lexington Avenue, Suite 450, New York, New York
10155 (the “Company”) and William Huff (the “Executive”). In consideration of
the mutual covenants contained in this Agreement, and in consideration for
Executive’s participation in the 2008 Omnibus Incentive Compensation Plan, when
and if such plan adopted, the Employer and the Executive agree as follows:
 
1. Employment Capacity; Term.
 
(a) The Company agrees to employ the Executive, and the Executive agrees to
serve the Company, during the Term of Employment (as hereinafter defined), as
Chief Financial Officer of the Company, with such duties consistent with such
capacity as may be assigned to him by the Chief Executive Officer of the Company
(the “CEO”). The Executive shall perform all services to be rendered hereunder
faithfully, devote his full business time and attention to the duties assigned
to him by the CEO and use his best efforts to promote the business interests of
the Company. During the Executive’s employment with the Company, the Executive
shall also serve in such additional capacities as may from time to time be
designated by the CEO, without additional compensation.
 
(b) Employment of the Executive pursuant to the terms of this Agreement shall
continue until the close of business on the first anniversary of the Effective
Date (the “Fixed Term”), and thereafter from day to day until terminated by the
Company or the Executive (the “At-Will Term”), subject to the terms and
conditions hereinafter set forth. As used herein, the “Term of Employment” shall
mean the full term of the Executive’s employment hereunder, including both the
Fixed Term and the At-Will Term.
 
2. Compensation. The Company agrees to compensate the Executive for the services
rendered by him during his employment as follows:
 
(a) The Company shall pay the Executive an annual salary of One Hundred Sixty
Thousand Dollars ($160,000) payable in accordance with the standard payroll
practices of the Company. The Executive’s salary shall be reviewed annually on
the anniversary of this Agreement.
 
(b) The Executive shall be eligible to participate in the Company’s 2008 Omnibus
Incentive Compensation Plan, when and if such plan adopted, provided that the
form, amount and terms of any such Award shall be determined by the Company in
its sole discretion.
 
(c) The Executive shall be permitted to participate in all employee medical,
retirement and insurance benefit plans applicable to senior executives and
officers of the Company, and such other plans as may from time to time be made
available or applicable to the Executive, consistent with the policies of the
Company.
 

--------------------------------------------------------------------------------

 
(d) The Executive shall be permitted to take one (1) week of paid vacation
annually. Accrued vacation not taken in any calendar year may not be carried
forward or be usable in any subsequent calendar year. Paid holidays may be taken
in accordance with the holiday policy and schedule of the Company as from time
to time in effect.
 
(e) The Company shall reimburse the Executive, consistent with the Company’s
expense reimbursement policies and procedures and subject to receipt of
appropriate documentation, for all reasonable and necessary out-of-pocket
travel, business entertainment and other business expenses incurred or expended
by him incident to the performance of his duties hereunder; provided, however,
that, in order to qualify for reimbursement for any expense that exceeds Five
Thousand Dollars ($5,000) in the aggregate, Executive shall obtain the Company’s
approval prior to the incurrence of such expense.
 
3. Termination.
 
(a) For Cause. The Company may terminate the Executive’s employment at any time
for Cause (as defined below). For the purposes of this Agreement, “Cause” shall
mean the occurrence of one or more of the following: (i) habitual drunkenness or
any substance abuse which adversely affects the Executive’s performance of his
or her job responsibilities, (ii) commission of a felony, (iii) dishonesty
relating to the Executive’s employment, (iv) personal misconduct by the
Executive which would cause the Company to violate any state or federal law
relating to sexual harassment, sex or other prohibited discrimination, or any
intentional violation of any written policy of the Company or any successor
entity adopted in respect to any such law, (v) conduct in the performance of the
Executive’s employment which the Executive knows or should reasonably be
expected to know (either as a result of a prior warning by the Company, custom
within the industry or the flagrant nature of the conduct) violates applicable
law or causes the Company to violate applicable law in any material respect,
(vi) failure to follow the lawful instructions of the Board or a responsible
executive to whom the Executive directly or indirectly reports, provided
compliance with such instructions was within the scope of the Executive’s
duties, if such failure continues uncured for a period of fifteen (15) days
after receipt by the Executive of written notice from the Company stating that
continuation of such failure would constitute grounds for termination for Cause,
(vii) gross incompetence, or (viii) violation of any confidentiality or
non-competition provision at any time applicable to the Executive, or any other
material provision of this Agreement.
 
(b) Upon Death or Disability. This Agreement shall automatically terminate upon
the death of the Executive and may be terminated by the Company upon the
Disability of the Executive. For purposes of this Section 3, the Executive shall
be deemed Disabled (and termination of his employment shall be deemed to be due
to such “Disability”) if an independent medical doctor (selected by the
Company’s applicable health or disability insurer) certifies that the Executive
has, for a cumulative period of more than one hundred twenty (120) days during
any 365-day period, been disabled in a manner which seriously interferes with
his or her ability to perform the essential functions of his or her job even
with a reasonable accommodation to the extent required by law. Any refusal by
the Executive to submit to a medical examination for the purpose of certifying
Disability shall be deemed conclusively to constitute evidence of the
Executive’s Disability.
 
- 2 -

--------------------------------------------------------------------------------

 
(c) For Convenience of the Company; Good Reason. Notwithstanding any other
provisions of this Agreement, the Company shall have the right to terminate the
Executive’s employment at the “Company’s Convenience” (i.e., for reasons other
than Cause, death or Disability).
 
(d)  Resignation; Good Reason. Notwithstanding any other provisions of this
Agreement, the Executive shall have the right to resign at any time upon sixty
(60) days’ written notice to the Company (whether or not for Good Reason). For
purposes hereof, resignation by the Executive based on either of the following
shall constitute Resignation for Good Reason: (i) a transfer of the Company’s
offices, or a transfer of the Executive (other than on a temporary basis), to a
location which would increase the Executive’s commute (by the most direct route)
from his permanent residence as of the Closing Date by more than fifty (50)
miles in each direction, in either case without Executive’s consent, provided
such resignation occurs within thirty (30) days following the date of transfer,
or (ii) a material breach by the Company of this Agreement, which breach
continues uncured for a period of forty-five (45) days after receipt by the
Company of written notice thereof from the Executive specifying the breach,
provided such resignation occurs within ten days following the expiration of the
45-day cure period.
 
(e) Effect of Termination on Compensation.
 
i) Termination for Cause; Resignation. In the event Executive’s employment with
the Company is terminated by the Company for Cause or the Executive resigns (for
reasons other than for Good Reason), the Company shall have no further liability
to Executive hereunder, whether for salary, benefits, incentive compensation or
otherwise, other than for salary, benefits and any unused vacation accrued
through the date of termination, as well as reimbursement of expenses properly
incurred through the date of termination. In such events, the Executive may
elect to continue, at his own expense, medical insurance coverage to the extent
mandated under the Consolidated Omnibus Budget Reconciliation Act of 1985
(“COBRA”).
 
ii)  Death or Disability. In the event the Executive’s employment with the
Company terminates as a result of the death of the Executive or is terminated by
the Company as a result of the Disability of the Executive, the Executive shall
be entitled to receive his salary and benefits described in Sections 2(a) and
2(c) accrued and expenses properly incurred through the date of termination and
any accrued incentive compensation which has been earned but remains unpaid from
the year prior to the year of termination, as well as applicable health,
disability or death benefits, if any, offered by the Company at the time
consistent with the policies of the Company, provided that Executive meets the
eligibility requirements of such benefits.
 
- 3 -

--------------------------------------------------------------------------------

 
iii)  Company’s Convenience; Resignation for Good Reason. In the event the
Executive’s employment with the Company is terminated by the Company at the
Company’s Convenience, or by the Executive for Good Reason, the Executive shall
be entitled to continue to receive the compensation described in Section 2(a)
payable monthly in arrears, and, to the extent permitted by the terms of the
applicable group insurance policies, the benefits described in Section 2(c), and
accrued vacation through the date of termination or resignation, all at the
times and in the manner provided in such sections (and at the levels in effect
at the date of termination), or compensation and benefits that, in the
aggregate, are comparable to those described in Sections 2(a) and 2(c), for the
Severance Period. To the extent the Executive is not eligible for continued
participation in the Company’s group medical insurance program, the Company
shall reimburse the Executive, on an after-tax basis, for a portion of his COBRA
premiums during the Severance Period equal to the excess of what he would have
paid as an employee and the amount payable under COBRA. As used herein, the term
“Severance Period” shall mean the period beginning on the date of termination of
Executive’s employment with the Company and expiring on the earlier of (i) three
(3) months following the date of termination or (ii) the last day of the Fixed
Term.
 
Notwithstanding the above, Executive shall use reasonable efforts to seek
(without any obligation to accept) other employment, and at such time following
termination at the Company’s Convenience or Resignation by the Executive for
Good Reason as the Executive may obtain other employment (whether or not
comparable), the Company’s obligations to (x) continue to provide medical,
retirement, insurance or other benefits under Section 2(c), or to make payments
in lieu thereof, shall cease, and (y) continue to pay salary and other cash
compensation (if any) provided in Section 2(a) shall be reduced
dollar-for-dollar by the amount of cash compensation Executive is entitled to
receive from his new employer. For the purposes of the preceding sentence, the
term “cash compensation” shall include all deferred compensation and the present
value of all stock bonuses, stock options and similar equity based compensation.
 
As a condition to receiving the severance benefits described in this Section
3(e)(iii), the Executive shall be required to execute and deliver to the Company
the written confirmation described in Section 4(b)(ii) and a general release of
all claims (including without limitation all claims for breach of contract, for
employment discrimination under Title VII of the Civil Rights Act of 1964, as
amended, and claims under the Americans with Disabilities Act of 1990, the Equal
Pay Act of 1963, the Age Discrimination in Employment Act of 1967, the Older
Workers Benefit Protection Act of 1990, the Civil Rights Act of 1866, the Family
and Medical Leave Act of 1993, the Civil Rights Act of 1991, the Executive
Retirement Income Security Act of 1974 and any equivalent state, local and
municipal laws, rules and regulations) he may have against the Company, its
Affiliates, and the officers, directors, shareholders (and related entities) and
agents of the Company and its Affiliates, in each case in such form as may be
reasonably requested by the Company. Upon the occurrence of any material breach
of this Agreement (it being understood that, without limitation, any breach of
Sections 4, 5 or 6 shall be deemed material), the Company shall have no further
liability to pay severance benefits hereunder and may, in addition to exercising
any other remedies it may have hereunder or under law, immediately discontinue
payment of remaining unpaid severance benefits. As used in this Agreement, an
“Affiliate” of the Company shall mean any corporation, partnership, limited
liability company or other entity which, directly or indirectly, controls, is
under common control with or is controlled by the Company at any time. For the
purposes of this definition, “control,” as used with respect to any entity,
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a person or entity,
whether through the ownership of voting securities or voting interests, by
contract or otherwise.

 
- 4 -

--------------------------------------------------------------------------------

 
4. Confidentiality.
 
(a) The Executive recognizes and acknowledges that certain information possessed
by the Company and its Affiliates constitutes valuable, special, and unique
proprietary information and trade secrets. Accordingly, the Executive agrees
that he or she shall not, during the term of his or her employment with the
Company or at any time thereafter, divulge, use, furnish, disclose or make
available to any person, whether or not a competitor of the Company, any
confidential or proprietary information concerning the assets, business, or
affairs of the Company, of any of its Affiliates, or of its suppliers,
customers, licensees or licensors (collectively, “Confidential Information”)
including, without limitation, financial information concerning the Company or
its Affiliates, information regarding trade secrets and information (whether or
not constituting trade secrets) concerning sources of supply, costs, pricing
practices, telemarketing sales techniques, sales training techniques, formulas,
business plans, marketing plans, strategies, forecasts, unpublished financial
data, budgets, projections, customer and supplier identifiers, peculiar likes
and fancies, customer characteristics (product preferences, contact person,
pricing, when to make sales call, purchase patterns, etc.), agreements,
inventions, improvements, research or development, test results, product
specifications, know-how, manufacturing and technical processes, product
designs, source codes and production applications, or any other confidential
information which gives the Company or its Affiliates an opportunity to claim a
competitive advantage or has economic value. The foregoing shall not be
applicable to any information which is required to be disclosed by law, provided
that the Executive provides prompt notice to the Company of such disclosure
request and assists the Company in preventing such disclosure.
 
(b) Upon the resignation or termination of the Executive's employment, for any
reason, whether voluntary or involuntary and whether by the Company or the
Executive, or at any time the Company may request, the Executive shall
(i) surrender to the Company all documents and data of any kind (including data
in machine-readable form) or any reproductions (in whole or in part) of any
items relating to the Confidential Information and shall not make or retain any
copy or extract of any of the foregoing, and (ii) will confirm in writing that
to his or her knowledge, after inquiry, no Confidential Information exists on
any computers, computer storage devices or other electronic media that were at
any time within the Executive’s control (other than those which remain at, or
have been returned to, the Company).
 
5. Non-Competition, Non-Solicitation and Non-Association.
 
(a) In consideration of this Agreement and all the recitals and provisions
contained herein, and in view of the Executive’s participation in and access to
the unique and valuable information of the current and proposed business
activities of the Company and its Affiliates in all aspects, the Executive
covenants and agrees that, during the term of the Executive’s employment with
the Company and thereafter during the Restrictive Period (as defined below), the
Executive shall not, directly or indirectly:
 
i) except in the ordinary course performance of his duties as an employee of the
Company, induce or attempt to induce or encourage others to induce or attempt to
induce, any person who is an employee of, consultant to or agent of the Company
or any Affiliate of the Company as of the date of termination of Executive’s
employment, to (A) terminate such person’s employment with such employer (in the
case of an employee) or cease providing its services to the Company or its
Affiliates (in the case of a consultant or sales or other commercial
representative), provided that nothing herein shall prevent general
solicitations through advertising or similar means which are not specifically
directed at employees of, consultants to or agents of the Company or its
Affiliates; or (B) engage in any of the activities hereby prohibited with
respect to the Executive under subparagraphs (ii) and (iii) below;
 
- 5 -

--------------------------------------------------------------------------------

 
ii) in any Competitive Area, directly or indirectly engage in, or make any
financial investment in any Person (other than the Company) which engages in,
the design, development, production, marketing or sales of products and services
related to the internet-focused data and direct marketing business (including,
without limitation, internet sales and advertising, lead generation, and
publication of online financial newsletters); provided that this Section
5(a)(ii) shall not prohibit Executive from acquiring, solely as an investment,
marketable securities of a publicly traded entity constituting less than two
percent (2%) of the capital stock of such entity. For purposes of this Section
5(a)(ii), “Competitive Area” shall mean the States and Territories of the United
States and Canada.
 
iii) divert, solicit or attempt to divert, or assist or encourage any person in
diverting, soliciting or attempting to divert, to or for any competitor of the
Company, any customer or supplier of the Company.
 
(b) As used in this Section 5, “Restrictive Period” shall mean six (6) months.
 
6. Rights in Company Property; Inventions.
 
(a) The Executive hereby recognizes the Company’s proprietary rights in the
tangible and intangible property of the Company and its Affiliates and
acknowledges that notwithstanding the relationship of employment, the Executive
has not obtained or acquired and will not hereafter obtain or acquire through
such employment any personal property rights in any of the property of the
Company and its Affiliates, including but not limited to, any writing,
communications, manuals, documents, instruments, contracts, agreements, files,
literature, data, technical information, know-how, secrets, formulas, products,
methods, procedures, processes, devices, apparatuses, trademarks, trade names,
trade styles, service marks, logos, copyrights, works of authorship, patents, or
other matters which are the property of the Company and its Affiliates.
 
(b) The Executive agrees that any and all discoveries, inventions, works of
authorship improvements and innovations (including all data and records
pertaining thereto), whether or not patentable, or copyrightable, or reduced to
writing (collectively, “Inventions”), which during his or her employment by the
Company, the Executive conceived or made, or conceives or makes, either alone or
in conjunction with others, which are related to the business of the Company and
its Affiliates, are and shall be the sole and exclusive property of the Company
and its Affiliates, except for those inventions and discoveries conceived by the
Executive prior to commencement of his or her employment with the Company or its
predecessor which are disclosed on Schedule A of this Agreement. The Executive
shall promptly disclose all Inventions to the Company conceived during the
period of his or her employment. At the request of the Company and at anytime
during or after the Executive’s employment with the Company, the Executive shall
execute any assignments or other documents the Company and its Affiliates may
deem necessary to protect or perfect its rights in the Inventions, and shall
assist the Company, at the Company’s expense, in obtaining, defending and
enforcing the Company’s and its Affiliates’ rights therein. The Executive hereby
appoints the Company as his or her attorney-in-fact to execute on his or her
behalf any assignments or other documents deemed necessary by the Company to
protect or perfect its rights to any Inventions.
 
- 6 -

--------------------------------------------------------------------------------

 
7. Enforcement; Modification.
 
(a) The Executive further acknowledges and agrees that any breach or threatened
breach by the Executive of any provision of Section 4, 5 or 6 due to his unique
services provided to the Company as further detailed above will result in
irreparable injury to the Company (or its Affiliates), that monetary damages
will be an inadequate remedy for such breach and that, accordingly, in addition
to any other remedy that the Company may have, the Company shall be entitled to
injunctive relief in the event of any breach hereof without posting bond or
other security. In the event the Company brings an action to obtain such relief,
the prevailing party in such action shall be entitled to recover its attorney’s
fees and other expenses incurred in said action, and the court in which said
action is brought shall award such expenses to the prevailing party as part of
the costs of such action.
 
(b) It is expressly agreed that if any restrictions set forth in Section 4, 5 or
6 are found by any Court having jurisdiction to be unreasonable because they are
too broad in any respect, then and in each such case, the remaining restrictions
herein contained shall nevertheless remain effective, and this Agreement, or any
portion thereof, shall be considered to be amended so as to be considered
reasonable and enforceable by such Court, and the Court shall specifically have
the right to restrict the business, geographical or temporal scope of such
restrictions to any portion of the business or geographic areas or time period
described above to the extent the Court deems such restriction to be necessary
to cause the covenants to be enforceable, and in such event, the covenants shall
be enforced to the extent so permitted.
 
8. General.
 
(a) Notices. All notices and other communications hereunder shall be in writing
or by written telecommunication, and shall be deemed to have been duly given if
delivered personally or if mailed by certified or registered mail, or if sent by
confirmed written telecommunication, to the relevant address set forth below, or
to such other address as the recipient of such notice or communication shall
have specified to the other party hereto in accordance with this Section 8(a):
 
If to the Company:
 
420 Lexington Avenue, Suite 450
New York, New York 10155
Facsimile: (212) 581-5198
Attention: Richard Berman

 
- 7 -

--------------------------------------------------------------------------------

 
with a copy to:
 
Nixon Peabody LLP
437 Madison Avenue
New York, New York 10022
Attention: Jane Greyf, Esq.
Telephone: (212) 940-3155
Facsimile: (866) 516-0358
 
If to the Executive:
 
At the address shown below his signature below.

 
(b) Successors and Assigns. This Agreement shall be binding upon the Executive
and inure to the benefit of the Company and its successors and assigns,
including without limitation any corporation to which substantially all of the
assets or the business of the Company are sold or transferred.
 
(c) Severability. If any provision of this Agreement is or becomes invalid,
illegal or unenforceable in any respect under any law, the validity, legality
and enforceability of the remaining provisions hereof shall not in any way be
affected or impaired.
 
(d) Waivers. No delay or omission by either party hereto in exercising any
right, power or privilege hereunder shall impair such right, power or privilege,
nor shall any single or partial exercise of any such right, power or privilege
preclude any further exercise thereof or the exercise of any other right, power
or privilege.
 
(e) Counterparts. This Agreement may be executed in multiple counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument. A facsimile or telecopied signature shall be deemed
an original for all purposes.
 
(f) Governing Law.  This Agreement and the performance hereof shall be construed
and governed in accordance with the laws of the State of California.
 
(g) Waiver of Jury Trial. THE PARTIES TO THIS AGREEMENT FURTHER AGREE THAT TO
THE FULLEST EXTENT ALLOWED BY LAW, EACH PARTY EXPRESSLY WAIVES ANY AND ALL
RIGHTS IT MAY HAVE TO A TRIAL BY A JURY IN CONNECTION WITH ANY CONTROVERSY,
CLAIM OR DISPUTE (A “CONTROVERSY”) BETWEEN THE PARTIES ARISING FROM OR RELATING
TO THIS AGREEMENT OR ANY ACTUAL OR ALLEGED BREACH THEREOF. EACH PARTY HERETO
ACKNOWLEDGES THAT THIS WAIVER IS VOLUNTARILY MADE BY IT AND THAT IT IS INFORMED
AS TO AND UNDERSTANDS THE CONSEQUENCES THEREOF AND THAT EACH PARTY EXPECTS, IN
THE EVENT OF SUCH CONTROVERSY, THAT THE OTHER PARTY WILL SEEK TO ENFORCE THIS
WAIVER.
 
- 8 -

--------------------------------------------------------------------------------

 
(h) Consent to Jurisdiction. Each of the Company and the Executive agrees to
submit to the non-exclusive jurisdiction of the courts in and of the State of
California, and consents that service of process with respect to any action or
proceeding relating to this Agreement may be made by registered mail to it at
its address set forth herein.
 
(i) Entire Agreement. This Agreement contains the entire agreement between the
parties concerning the subject matter hereof and as of the Closing Date
supercedes any prior employment, severance, confidentiality or invention
assignment agreement between the parties hereto, provided however, that the
Company reserves and shall retain all rights and remedies it may have against
the Executive with respect to any breach on or before the Closing Date of any
prior confidentiality and invention assignment agreements.
 
[Remainder of Page Intentionally Left Blank]
 
- 9 -

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties have duly executed this Agreement to be
effective as of the date first above written.
 
MORLEX, INC.
   
By:
/s/ Richard J. Berman
 
Name: Richard J. Berman
 
Title: Chief Executive Officer
   
/s/ William Huff
William Huff
     Address:  
 
 

 

--------------------------------------------------------------------------------

 
Schedule A

Inventions Conceived By Executive
Prior to Employment with the Company
 
The following inventions are excluded from the provisions of Section 6 of the
Agreement:
 
None.
 

--------------------------------------------------------------------------------