ex1014.htm


    Exhibit
10.14

    
 


    Qualex
Inc. and Sequoia Media Group, LC

    Services
Agreement

    


    Date:  September
1, 2007

    


    This
Services Agreement (“Agreement”) is entered into by and between the following
Parties:

    


    Sequoia:               
 Sequoia Media Group, LC (“Sequioa”)

    a Utah limited liability
company

    11781 Lone Peak Parkway, Suite
270

    Draper, Utah 84020

    


    Qualex:                   Qualex
Inc. (“Qualex”)

    a Delaware corporation

    3434 North Duke Street

    Durham,
NC  27704

    


    who agree
to the following:

    


    TERMS AND CONDITIONS

    


    SECTION
1 – INTRODUCTION

    


    Sequoia
provides product authoring technology to its Customers that allows the creation
of goods using user digital media and desires to use Qualex as its preferred
fulfillment source for fulfilling Customer Product orders.

    


    Qualex
provides product fulfillment services for the digital imaging industry and
desires to work with Sequoia to be its preferred fulfillment partner for the
fulfilling Customer Product orders.

    


    This
Agreement relates to and governs only specifically identified customers of
Sequoia for which the Parties agree Qualex will provide fulfillment
services.  This Agreement does not govern customer relationships
Qualex has independent of Sequoia which are governed pursuant to a separate
“Distribution and Production License Agreement.”

    


    SECTION
2 – DEFINITIONS

    


    The
following terms have the defined meanings for purposes of this
Agreement.

    


    2.1           “Agreement”
means this Services Agreement entered into between the Parties.

    


    2.2           “Confidential
Information” means all information, documentation, materials, technology,
intellectual property, and business and marketing plans and data belonging to a
Disclosing Party, or to any third party who disclosed such information to the
Disclosing Party in confidence, and which the Disclosing Party makes available
to the Receiving Party in oral, written, electronic, or other format which is
identified at the time of disclosure as confidential or at any time within 30
days of disclosure, or which the Receiving Party knows, or reasonably should
know, would likely be considered confidential by the Disclosing Party, including
but not limited to information relating or pertaining to the Disclosing Party’s
business, projects, products, customers, trade secrets, business and marketing
plans, financial information, or unpublished know-how, whether patented or
un-patented.

    


    2.3           “Customers”
mean end-users to whom Products are sold by Sequoia directly or through
third-party vendor relationships.

    


    2.4           “Disclosing
Party” means the party as defined in Section 8.1.

    


    2.5           “Effective
Date” means the date all Parties sign this Agreement.

    


    2.6           “Fulfillment
Equipment” means the hardware, software, and assembly equipment necessary to
produce DVDs.

    


    2.7           “Fulfillment
System” means the system used by Qualex including the Fulfillment Equipment and
Qualex facilities to produce Products.

     

    
      
         

      

      
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    2.8           “Indemnified
Party” means the party as defined in Section 7.1.

    


    2.9           “Indemnifying
Party” means the party as defined in Section 7.1.

    


    2.10           “ICS”
means interface control specifications as outlined in Exhibit B.

    


    2.11           “Party”
and “Parties” means the entities who are parties to this Agreement.

    


    2.12           “Products”
means multimedia presentations or print products produced by the Production
Software and provided to Customers on DVD or on or through other acceptable
digital media or the Internet.

    


    2.13           “Production
Software” means Sequoia’s proprietary software including computer programs,
templates, and stock media for producing Products specified in this
Agreement.

    


    2.14           “Receiving
Party” means the party as defined in Section 8.1.

    


    2.15           “Services”
means fulfillment Services provided by Qualex to produce Products for
Customers.

    


    2.16           “Service
Fees” means payment to be made by Sequoia to Qualex for the production of
Products by Qualex for Customers.

    


    2.17           “Term”
means August 1, 2007 through September 30, 2009, subject to extension from
year-to-year upon written notice provided by either party to the other at least
60 days prior to the end of the then current term, and subject to early
termination as provided herein.

    


    SECTION
2 –SERVICES AND DEPLOYMENT

    


    2.1           Services.  The
Parties will jointly collaborate to deploy the necessary hardware, software, and
fulfillment equipment as set forth in the Deployment Plan attached as Exhibit A
to allow Qualex to begin fulfilling Products for and on behalf of
Sequoia.

    


    2.2           Collaboration.  The
Parties will jointly collaborate on the ICS attached as Exhibit B to allow
Sequoia to pass orders to Qualex for fulfillment.  If a revision to or
new version of the ICS is developed, both parties will adjust the implementation
to comply with the revised or new version within 30 days of its
development.

    


    2.3           Fulfillment
Equipment.  Qualex will purchase the Fulfillment Equipment from
Sequoia as set forth in Exhibit C to be able to fulfill DVD’s for Sequoia’s
Customers.  Sequoia will provide technical support for the Fulfillment
Equipment as specified in the service level agreement attached hereto as Exhibit
D.

    


    2.4           Order Transfer
and Fulfillment.  The ICS shall be designed to collect order
information for the Products in the format specified in the ICS and to provide
Qualex with all order information together with the applicable digital files or
digital images.  In addition to any other requirements set forth in
the ICS or this Agreement, all orders transmitted to Qualex for fulfillment will
contain:  (i) the total retail price of the Products specified in the
order; (ii) the customer specified address to which Qualex is to ship the
Products, which address shall be within the fifty states of the United States
and the District of Columbia; and (iii) the specified mode of
shipment.  Qualex will make available to Sequoia order status feedback
in accordance with the ICS.  Sequoia or its Customer shall collect all
amounts due for Products.  Qualex shall have no obligation to collect
any amounts due from the customer.

    


    2.5           New
Products.  If any of the Products or any new products that
Sequoia desires to offer to its Customers require Qualex to develop and
implement new or modified supply relationships, production processes, and
shipment procedures, Qualex shall provide Sequoia with a written proposal for
such work, which proposal shall include: (i) a description of the services,
functions and responsibilities Qualex anticipates performing in connection with
such work; (ii) a description of any additional obligations of Sequoia required
for Qualex to perform such work; (iii) a schedule for commencing and completing
such work; (iv) Qualex’s prospective fees for such work; (v) any new service
levels applicable to such work; and (vi) such other information as requested by
Sequoia.  New Products or initiatives must be mutually agreed to and
documented by an executed amendment to this Agreement.

     

    
      
         

      

      
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    2.6           Inspection
Right.  Sequoia has the right to inspect the Products at
anytime upon reasonable notice to Qualex subject to the documented Product
specification and fulfillment procedures required by this
Agreement.  Sequoia may stop the processing and production of the
Products at any time upon reasonable notice to Qualex for the purposes of
changing the Product specifications, the Product packaging, or the processing
and production steps for the Products at the direction of any Customer, subject
to the payment obligations set forth in Section 2.5 for new Products and
procedures.

    


    SECTION
3 – QUALEX OBLIGATIONS AND RESPONSIBILITIES

    


    The
obligations of Qualex with regard to the this Agreement include the
following:

    


    3.1           Receiving
Orders.  Qualex agrees to receive and accept electronic orders
and images from Sequoia in a format and in a manner specified in the
ICS.  All costs associated with Vendor’s ability to adapt to SMG’s
formatting specifications will be borne by Qualex.  Qualex will
provide fulfillment services only with respect to digital files that have been
provided in compliance with the ICS and shall have no responsibility for digital
files lost in transit.  If an order is rejected due to a failure of
the order to comply with ICS, Qualex will provide Sequoia with notification of
such rejection.  Qualex shall have no responsibility for archiving or
storing digital files transmitted to it by Sequoia and may delete all such
digital files from the Qualex infrastructure upon shipment of the associated
Product(s).

    


    3.2           Security.  Qualex
agrees to abide by Sequoia’s policies and procedures regarding security of
Sequoia’s equipment and software at Qualex facilities.

    


    3.3           Branding and
Identifiers.  Products produced by Qualex for Customers shall
not be branded in any manner with the Qualex or Kodak brand unless expressly
agreed otherwise in writing for specific Customers.  Shipping packages
will have a label displaying the Sequoia or Customer information, including any
the customer name address, and logo as provided by Sequoia with the
order.  Marketing materials or stuffers requiring insertion into
orders produced by Qualex must be provided by Sequoia.  Qualex will
charge a per order fee for the insertion of marketing materials or stuffers as
agreed upon by the parties.  Qualex will not reference any Customer as
a Qualex customer for Sequoia Product Fulfillment without Sequoia’s express
written consent.

    


    3.4           Harmful
Material.  Qualex will not be obligated to process or ship any
version of any image or digital file that Qualex reasonably deems to be harmful,
obscene, illegal or infringing.  If Qualex discovers that a consumer
has submitted a digital video file or an image that Qualex deems to be harmful,
obscene, illegal or infringing, Qualex will inform Sequoia of all orders related
thereto and may notify the appropriate government authorities about such
orders.  Qualex has no responsibility to notify the consumer that the
order will not be processed.

    


    3.5           Service
Levels.  Qualex will comply with the following service level
commitments in addition to the service levels set forth in Exhibit E and any
others set forth in this Agreement or any Exhibit hereto:

    


    (a)           Uptime and
Downtime Reporting

    


    (i)           Qualex
shall maintain a 98.5% uptime for the Qualex Fulfillment System that receives
orders as measured by calendar quarter excluding scheduled
downtime.  Scheduled downtime shall occur between 10 AM and 1 PM, EST,
on Sundays.  In the event that the uptime commitment is not met: (a)
it will not be a grounds for termination except where the uptime is less than
98.5% for more than two consecutive calendar quarters; and (b) Qualex will
investigate the cause of the failure and taken reasonable steps to address the
cause, including if necessary, by adding additional resources or redundant
systems.  The foregoing sets forth the sole remedies for a failure to
meet the uptime commitment set forth in this sub-section.  Downtime
directly related to Fulfillment Equipment supplied by and serviced by Sequoia
shall not be counted against Qualex’s uptime calculation.

    


    (ii)           Qualex
will use commercially reasonable efforts to notify the Sequoia designated
contact within 60 minutes of any known and verified unscheduled downtime of the
Qualex Fulfillment System (apart from scheduled downtime) and will work
continuously and update the status to Sequoia periodically as new information
becomes available until the Qualex Fulfillment System is back
up.  Qualex will notify the Sequoia designated contact within 60
minutes when the Qualex Fulfillment System is restored.

     

    
      
         

      

      
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    (iii)           Components
of the Qualex fulfillment operation, where technically feasible and commercially
reasonable, shall be redundant and fault tolerant for both Qualex’s and the
Sequoia’s operations.

    


    (b)           Network
Operations.  Prior to or within 30 days of the initial
availability of fulfillment by Qualex, the Parties will meet to review operation
plans, including procedures for detecting, reporting, and troubleshooting errors
in the fulfillment system.

    


    (c)           Technical
Support

    


    (i)           Qualex
will provide technical support to Sequoia with respect to order
inquires.  Qualex will designate a customer support manager who shall
be responsible for all co-ordination on consumer orders between Qualex and
Sequoia, and a specific monitored e-mail address for use by
Sequoia.  Qualex technical support will be available during the hours
of 9:00 a.m. to 5:00 p.m. (local time) from Monday to Friday, excluding Qualex’s
company holidays.  This support will be provided through telephone,
e-mail and other appropriate means of communication.

    


    (ii)           Qualex
will make all commercially reasonable efforts to resolve Severity 1 issues, as
this term is defined below, prior to the end of the next business day following
receipt of the request. Qualex will make all commercially reasonable efforts to
resolve Severity 2 issues in a timely manner. Qualex will consider Severity 3
issues as part of its ongoing programming improvements and Service functionality
development.

    


    
      	
              ·  

            	
              Severity
      1: The Qualex Fulfillment System does not allow Sequoia to submit and
      process orders for fulfillment in the manner supported at the level of the
      running production version and feature set immediately prior to the Qualex
      Fulfillment System failure.  No reasonable work around exists
      and the feature is critical to
fulfillment.

            


    

    


    
      	
              ·  

            	
              Severity
      2: The Qualex Fulfillment System allows orders to be submitted and
      processed however other Qualex Fulfillment System features do not function
      in the manner supported at the level of the running production version and
      feature set immediately prior to the Qualex Fulfillment System failure,
      but a reasonable work around exists or the feature is not
      critical;

            


    

    


    
      	
              ·  

            	
              Severity
      3: Enhancement request and requests for information that are requested to
      improve future versions of the
system.

            


    

    


    (iii)           Qualex
shall provide a principal point of contact for the communication of bugs and
errors to Sequoia and for the receipt of bug and error fixes work around and
updates, if any.

    


    3.2           Shipping.  Qualex
will fulfill and ship products to all accounts of Sequoia via Sequoia selected
carrier and method including, but not limited to, UPS, FedEx, DHL, US Mail or
other identified shippers and such carriers applicable methods such as ground,
next day, two day, priority, etc.  All shipping costs will be the
responsibility of Sequoia. Vendor shall meet or exceed the turn around times
outlined in the service level requirements specified in Exhibit E, and shall
report to Sequoia all tracking information and dates of product shipment as
required by Sequoia.

    


    SECTION
4 – SEQUOIA OBLIGATIONS AND RESPONSIBILITIES

    


    The
obligations of Sequoia with regard to this Agreement include the
following:

    


    4.1           Technical
Support.  Sequoia will provide technical support to Qualex’s
with respect to the Production Software and Fulfillment
Equipment.  Qualex’s technical support personnel who receive this
support from Sequoia must be knowledgeable and technically
competent.  This technical support will be available during the hours
of 9:00 a.m. to 5:00 p.m. (Mountain Standard Time) from Monday to Friday,
excluding Sequoia’s company holidays.  This support will be provided
through telephone, e-mail and other appropriate means of
communication.  (See Exhibit D for Sequoia’s service level
agreement.)

     

    
      
         

      

      
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    4.2           Copyright.  All
Products created with the Production Software are and remain the copyrighted
works of Sequoia, with all rights reserved, and the right to reproduce,
duplicate and retain original copyrighted Products belongs exclusively to
Sequoia.  All images supplied by any Customer remain the copyrighted
work of such entity or person and do not become the copyrighted works of any
other party.

    


    4.3           Compliance.  Sequoia
agrees to abide by all federal, state, and local laws and regulations governing
distribution and exporting of the Production Software including, without
limitation, truth in advertising laws, business opportunity statutes, U.S.
Federal Trade Commission, and U.S. Patent and Trademark statutes in its
marketing, distributing, and selling efforts.

    


    4.4           Preferred
Partner.  For the term of this Agreement, Sequoia agrees to
present Qualex as its preferred partner of choice to fulfill Products for
Sequoia’ customers and potential customers, and to exclusively use Qualex for
all fulfillment for each of Sequoia’s Customers where any such Customer does not
specifically require fulfillment not be handled by Qualex.  Sequoia
will maintain the right to fulfill a maximum of 500 Product orders per day at
its sole discretion, and will assist Qualex with orders received by Qualex
beyond Qualex’s ability to fulfill such orders as requested by Qualex whenever
possible.

    


    4.5           Licenses and
Fees.  Sequoia will be solely responsible to pay all third
party royalties, licenses and fees associated with the creation, production and
distribution of the Production Software and Products.

     

    


    SECTION 5 – PAYMENTS

    


    5.1           Service
Fees.  Sequoia will pay Qualex Service Fees according to the
pricing schedules set forth in Exhibit A.  Qualex will invoice Sequoia
at the end of each month for all Services performed during that month and
provide a report outlining the type and number of Products and copies made for
which Service Fees are due.  The payment terms will be net 20 days End
of Month regardless of holidays or weekends.  Payment must be received
in the Qualex lockbox within 30 days after the end of the month in which the
sale of Services occurs.  The current Qualex lockbox address is Qualex
Inc., 1945 Solutions Center, Chicago, IL 60677-1009.  Qualex will
provide Sequoia with at least 30 days written notice prior to the effective date
of any change in the address for payment.  The parties will exchange
necessary payment details upon contract signature.  All payments are
to be made in US dollars.  Payment will not be contingent upon
Sequoia’s receipt of proof of delivery for the Services, and Sequoia will not
make any deductions or setoffs from the amounts billed unless mutually agreed in
writing by both parties.  For the purposes of this agreement,
invoices, monthly statements, and electronically generated acknowledgements for
each order will constitute proof of shipment.

    


    5.2           Price
Changes.  After the first six months of the Agreement Term,
Qualex may increase the prices for product fulfillment at any time upon at least
90 days written notice to Sequoia provided that the increase be made only to the
extent such increases are directly related to increases in Qualex’s costs that
are beyond the reasonable ability of Qualex to control.  Qualex also
agrees to reduce the prices for product fulfillment immediately in the amount of
and to the extent Qualex receives price reductions for raw materials used to
product Products.  Qualex may also increase the pricing for USPS
Shipping and Handling Rates or for Express Shipping and Handling Rates as set
forth in Exhibit F at any time upon 30 days written notice to Sequoia, provided
that the increase be made only to the extent such increases are directly related
to increases in Qualex’s costs that are beyond the reasonable ability of Qualex
to control.

    


    5.4           Returns.  In
the case of Products returned by the consumer to Sequoia due to:  (i)
dissatisfaction in Product quality resulting from a Qualex mistake; or (ii)
other Qualex mistake (wrong order, etc.), Qualex will re-process the Products
without additional cost above the original cost of the Order.  In such
case, Sequoia is still responsible for payment to Qualex of the original
wholesale cost of processing the Order.  In the case
of:  (y) Products returned to Sequoia due to a Sequoia mistake or
consumer mistake; or (z) Products not received by a consumer due to a Sequoia
mistake or consumer mistake, Qualex will re-process the Products for an
additional charge equal to the original wholesale cost of the
Order.  SMG mistakes or consumer mistakes shall include but not be
limited to, consumer dissatisfaction with Products due to unexpected results
from the consumer’s use of Sequoia’s Production Software or rendering
process.

     

    
      
         

      

      
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    SECTION
6 – INTELLECTUAL PROPERTY AND PROTECTION OF LICENSED SOFTWARE

    


    6.1           Property
Ownership.  The Production Software, Fulfillment Equipment
software, copyrights, patent rights and intellectual property used in the
Production Software are and shall be owned by Sequoia.

    


    6.2           Protection of
Production Software.  Sequoia shall deploy source code
reasonably necessary to launch the Production Software.  Qualex shall
not decompile, disassemble or reverse engineer any Production Software or
attempt to discover or reproduce any such source code.  Qualex shall
not modify any Production Software or create any derivative work based on any
Production Software or use any Confidential Information to create, derive or
develop any other products, computer programs or services, except as permitted
by Sequoia in writing.  If Qualex creates any derivative work directly
associated with Sequoia’s intellectual property, then Qualex agrees to assign
and hereby assigns to Sequoia all of its rights to such derivative
work.

    


    6.3           Customer and
Consumer Information.  As between Qualex and Sequoia, Sequoia
will own all Customer and consumer information associated with fulfillment of
orders Sequoia orders.  Qualex will have the right to use such
consumer information only as it relates to the fulfillment and delivery of the
Products and solely for such purpose.  Qualex will not retain any of
the consumer information contained in the orders submitted by Sequoia after the
Orders have been fulfilled and shipped.

    


    SECTION
7 – INDEMNIFICATION, WARRANTIES, DISCLAIMERS AND LIMITATIONS

    


    7.1           Indemnification.  Each
party (“Indemnifying Party”) agrees to indemnify, defend and hold the other
party (“Indemnified Party”) harmless, and such other party’s directors,
officers, employees and agents, and defend any action brought against same with
respect to any claim, demand, cause of action, debt or liability, including
reasonable attorney fees, to the extent that such action is based upon a claim
that: (a) if true, would constitute a breach of any of the Indemnifying Party’s
representations, warranties, or agreements hereunder; (b) arises out of the
Indemnifying Party’s negligence or willful misconduct, or (c) any of the content
of the creative work product that the Indemnifying Party provided or other
material infringes or violates any rights of third parties, including, without
limitations, rights of publicity, rights of privacy, patents, copyrights, trade
secrets and or/licenses.

    


    (a)           Nature of
Indemnification.  The Indemnifying Party shall defend the
Indemnified Party against all claims described above and shall pay for the cost
of such defense, including attorneys’ fees.  The Indemnifying Party
shall pay all monetary judgments, costs and attorneys’ fees awarded to any third
party for such claims.  The Indemnifying Party shall pay any payments
made to settle any such claims, provided the settlement is approved in writing
by the Indemnified Party.

    


    (b)           Indemnification
Requirements.  The Indemnified Party must promptly inform the
Indemnifying Party in writing of any such claims upon receipt of notice of the
claim or allegation of such claim.  The Indemnified Party must give
the Indemnifying Party the right to control the defense and settlement of the
claim and any lawsuit or arbitration based thereon.  The Indemnified
Party must reasonably cooperate with the Indemnifying Party in the defense and
settlement of such claim and such lawsuit or arbitration.  The
Indemnified Party shall have the right at its own cost and expense to
participate in the defense of any such claim through counsel of its own choosing
who shall serve as co-counsel with counsel designated by the Indemnifying
Party.  Such right shall not negate the Indemnifying Party’s right to
control the defense and settlement of the claim; provided, however, the
Indemnifying Party shall not settle any claim without the prior written consent
of the Indemnified Party (which consent shall not be unreasonably withheld or
delayed) if and to the extent the settlement requires the Indemnified Party to
agree to restrictions or obligations other than to cease use, distribution, and
copying or other infringement of intellectual property.

    


    7.2           Disclaimers.
EXCEPT AS EXPRESSLY SET
FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY WARRANTY OR REPRESENTATION TO
THE OTHER PARTY.  ALL IMPLIED WARRANTIES, INCLUDING THOSE OF
NONINFRINGEMENT, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, ARE
DISCLAIMED AND EXCLUDED.

    


    7.3           Limitation on Liability. EXCEPT FOR THE RIGHTS OF INDEMNITY
SET FORTH IN SECTION 7.1 ABOVE, IN NO EVENT SHALL EITHER PARTY’S AGGREGATE
LIABILITY ARISING FROM OR RELATING TO THIS AGREEMENT OR LICENSED SOFTWARE
(REGARDLESS OF THE FORM OF ACTION - E.G. CONTRACT, WARRANTY, TORT, MALPRACTICE,
AND/OR OTHERWISE) EXCEED THE AMOUNT ACTUALLY PAID BY QUALEX TO SEQUOIA UNDER
THIS AGREEMENT.  IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY
CONSEQUENTIAL, SPECIAL, INDIRECT, INCIDENTAL OR PUNITIVE DAMAGES, OR ANY LOSS OF
DATA, SOFTWARE, PROFITS, REVENUE, OR BUSINESS, EVEN IF THE OTHER PARTY HAS BEEN
ADVISED OF THE POSSIBILITY THEREOF.  EACH PARTY SHALL LIMIT CONSUMER
CLAIMS FOR LOSSES AT $100 PER ORDER OR THE ACTUAL COST OF SUCH
ORDER.

     

    
      
         

      

      
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    SECTION
8 – CONFIDENTIAL INFORMATION

    


    8.1           Confidential
Information.  Each Party may, from time to time, disclose or
make available to the other Party (the “Receiving Party”) non-public
confidential and/or proprietary data, information and materials in any format
belonging to the disclosing Party (“Disclosing Party”), or to a Third Party that
disclosed such information to the Disclosing Party in confidence, which the
Receiving Party knows, or reasonably should know, would be considered
confidential by the Disclosing Party. For the avoidance of doubt, (i) Company’s
Confidential Information shall include, but is not limited to, any software,
technology, Intellectual Property, devices, financial data, customer data,
marketing plans, employees, former employees, suppliers and/or clients, and any
and all data, information, and materials related thereto, and (ii) Sequoia’s
Confidential Information includes the Production Software delivered to Company,
and (ii) the Products (excluding photo images).

    


    8.2           Obligation of
Confidentiality.  The Receiving Party shall keep and maintain
in confidence all Confidential Information of the Disclosing
Party.  Without limiting the foregoing, the Receiving Party shall take
all precautions that it employs to protect its own Confidential Information but
in no event use less than reasonable care to prevent the unauthorized disclosure
of any part of the Disclosing Party’s Confidential Information. The Receiving
Party shall (i) not copy or use the Disclosing Party’s Confidential Information,
in whole or in part, except as required to perform pursuant to this Agreement,
(ii) limit the use and circulation of the Disclosing Party’s Confidential
Information within its organization, (iii) disclose such Confidential
Information only to employees that need to know such information to effectively
perform pursuit to this Agreement, (iv) disclose the Disclosing Party’s
Confidential Information to its independent contractors provided that the
Receiving Party has a written agreement in effect with such contractor that
provides for an assignment of inventions and rights in work product and the
protection of the confidential information and proprietary information of the
Receiving Party and any Third Parties in a manner consistent with the
requirements hereof, and only to the extent necessary to perform in accordance
with this Agreement. Each Party shall be responsible to the other Party
hereunder for any unauthorized disclosure or other breach of this Agreement by
its employees, agents or independent contractors.

    


    8.3           Survival.  With
respect to trade secrets and other intellectual property rights, the obligations
set forth in this Section shall commence on the Effective Date and continue for
so long as such trade secrets and intellectual property rights retain their
protected status under applicable law. With respect to all other Confidential
Information, the obligations set forth in this Agreement will commence on the
Effective Date and continue for a period of five years after termination of the
Parties’ relationship.

    


    8.4           Exclusions.  The
obligations set forth herein shall not, however, apply to data, information or
materials that: (i) is generally known and available to the public, except where such knowledge or
availability is the result of unauthorized disclosure by the Receiving Party;
(ii) is already in the Receiving Party's possession without an obligation of
confidentiality prior to disclosure in connection with this Agreement; (iii) is
rightfully disclosed to the Receiving Party without a similar restriction by a
Third Party who has the right to make such disclosure; (iv) is independently
developed by the Receiving Party and not derived from the Confidential
Information; or (v) is required to be disclosed by the Receiving Party by law,
regulation, court order or other legal process.

    


    8.5           Other
Disclosures.  The Receiving Party may, without breach of this
Agreement, disclose Confidential Information to the government as a result of an
order entered by a court of competent jurisdiction or in response to a lawful
subpoena or request for information from a party to litigation or by an agency
of the United States or any U.S. state government. However, the Receiving Party
shall make no disclosure pursuant to this provision without giving prior written
notice to the Disclosing Party of the governmental requirement or court order so
that the Disclosing Party has a reasonable opportunity to obtain a protective
order from a court of law.

    


    8.6           Non-Disclosure
Agreement.  The Parties agree that any Non-Disclosure Agreement
between them prior to the date of this Agreement will remain in full force and
effect, but shall only cover disclosures of Confidential Information made prior
to the Effective Date. This Section 8 shall cover any disclosures of
Confidential Information made on or subsequent to the Effective
Date.

     

    
      
         

      

      
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    SECTION
9 – SPECIAL PROVISIONS

    


    9.2           Source Code. Sequoia has no
obligation to provide to Qualex any source code or any programming
documentation, confidential technical information, or proprietary software
materials, tools, or utilities.  However, if and to the extent any of
the foregoing are provided to Qualex, they shall be deemed Confidential
Information and shall not be disclosed, distributed or licensed by Qualex,
Clients, Customers, or others.

    


    9.3           Trademarks.  Nothing
in this Agreement grants to either Party the right to use any trademark or
service mark or commercial symbol or logo of the other Party except as expressly
provided in this Agreement.

    


    9.4           Export Act.  Sequoia
hereby warrants and certifies that no part of the Production Software or any
related data, item or product will be made available or exported by Sequoia or
its Customers to any country in contravention of any applicable law or
regulation of the United States, including the Export Administration Act of 1979
and regulations relating thereto.  This Agreement and the licenses
under this Agreement are subject to all applicable United States laws and
regulations.

    


    SECTION
10 – TERM AND TERMINATION

    


    10.1           Term of
Agreement.  The initial Term of this Agreement shall be from
August 1, 2007 through September 30, 2009, subject to extension from
year-to-year upon written notice provided by either party to the other at least
60 days prior to the end of the then current term, and subject to early
termination as provided herein.  This Agreement is also subject to
termination at any time in accordance with Section 10.2 and 10.3
below.

    


    10.2           Breach.  If
a Party materially breaches this Agreement and fails to cure such breach within
30 days of written notice of such breach, then the other Party may terminate
this Agreement.   Notwithstanding the forgoing, each party agrees
to work in good faith to affect a cure for any potential breach.  The
right to terminate shall be in addition to, and shall in no way limit, the other
remedies, damages and relief to which the other Party may be
entitled.  The other Party is not required to terminate this Agreement
for such uncured breach and is still entitled to its remedies, damages and other
relief for the breach. In the event Qualex does not meet the implementation
requirements set forth herein and Sequoia terminates this Agreement, Sequoia
shall grant a limited license to Qualex to continue to use the then currently
deployed Production Software which has been installed on any point of
distribution upon the same terms and conditions as set forth in this
Agreement.

    


    10.3           Effect of
Termination.  Upon termination of this Agreement for any
reason, Sequoia shall have no further obligation to use Qualex for Product
fulfillment, and Qualex shall have no further obligations under this Agreement
to continue to fulfill Products for Sequoia other than for orders received by
Qualex before the termination date.

    


    SECTION
11 – GENERAL PROVISIONS

    


    11.1           Governing Law.  This
Agreement shall be governed by and enforced in accordance with the laws of the
State of Utah.

    


    11.2           Entire Agreement.  This
Agreement and the Exhibits hereto and a separate “Distribution and Production
License Agreement” between the parties represent; (i) the entire agreement
between the Parties relating to the parties relationship, (ii) supersedes all
prior agreements, understandings, letters, representations and warranties
relating to the subject matter of this Agreement, whether written or oral, and
(iii) may only be amended by a writing signed by duly authorized representatives
of both Parties.

    


    11.3           Assignment.
In the absence of the other Party’s advance written consent, neither Party shall
have the right or the power to assign or transfer this Agreement by assignment,
merger, or otherwise to any third party except a third party who acquires
substantially all of the business assets of such assigning Party and who assumes
all of the rights and obligations under this Agreement.

    


    11.4           Points of
Contact.  For convenience only, and not as a material term of
this Agreement, Sequoia and Qualex will each maintain an identified primary
contact.  The contact is intended to facilitate the communications
between the parties and to make such communications more efficient and
effective.  The Parties will keep each other informed as to the
contact and his or her telephone numbers, e-mail addresses, and other relevant
contact information.

     

    
      
         

      

      
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    11.5           Notices.  All
notices and consents permitted or required under this Agreement must be in
writing and shall be delivered in person, by first class, priority or express
mail, by registered or certified mail, or by commercial courier (e.g., Federal
Express or U.P.S.) to the other Party at the address set forth at the beginning
of this Agreement or such substitute business address as either Party may
specify by written notice for itself.  All notices shall be effective
upon receipt.

    


    11.6           Headings.  Section
and paragraph headings used herein are for convenience only and shall not be
used to broaden or limit this Agreement.

    


    11.7           Severability.  If
any provision in this Agreement is invalid or unenforceable, such provision
shall be construed, limited, or if necessary, severed to the extent necessary to
eliminate such invalidity or unenforceability, and all other provisions of this
Agreement shall remain in effect.

    


    11.7           Dispute
Resolution.  In the event of any dispute (each, a “Dispute”)
between the Parties in connection with the performance of this Agreement, the
responsible Primary Contact representing each Party will negotiate in good faith
to attempt to resolve such Dispute. If such Primary Contacts do not resolve the
Dispute within 30 days from the commencement of such discussions, then senior
executives designated by each Party will meet and attempt in good faith to reach
resolution. Such senior executives shall have at least 60 days from the
expiration of the previous 30 day period to resolve the Dispute. The Parties
must complete the foregoing dispute resolution process before serving written
notice on the other Party alleging a material breach of this Agreement in
accordance with Section 10.2, provided however; the Parties acknowledge and
agree that not every Dispute will rise to the level of a material
breach.

    


    11.8           Jurisdiction and
Forum Selection.  Any controversy, claim or dispute among the
parties hereto arising out of or related to this Agreement or the breach hereto,
which cannot be settled amicably by the parties, shall be submitted for
mediation in the State of Utah.  In the event mediation is
unsuccessful, the parties consent to the exclusive jurisdiction of an
appropriate court within Salt Lake County, State of Utah, to hear and decide any
controversy, claim, or dispute hereunder.  The prevailing party in any
legal action shall be entitled to recover its reasonable attorney’s fees and
costs, as determined by the trial court.

    


    11.9           Relationship.  Neither
Party is the partner, joint venturer, agent or representative of the other
Party.  Each Party is an independent contractor.  There is
no employment relationship between the Parties.  Neither Party has the
authority to make any representations or warranties or incur any obligations or
liabilities on behalf of the other Party.  Neither Party shall make
any representation to a third party inconsistent with this Section.

    


    11.10           Construction.  This
Agreement represents the wording selected by the Parties to define their
agreement and no rule of strict construction shall apply against either
Party.  Whenever the context reasonably permits, the singular shall
include the plural, the plural shall include the singular, and the whole shall
include any part thereof.

    


    11.11           Waiver.  Any
waiver of, or promise not to enforce, any right under this Agreement shall not
be enforceable unless evidenced by a writing signed by the Party making said
waiver or promise.

    


    11.12           Successors.  This
Agreement shall be binding upon and inure to the benefit of the Parties and
their respective permitted successors and assigns.

    


    11.13           Execution.  This
Agreement may be executed in any number of duplicate counterparts, each of which
shall be deemed an original, but all of which taken together shall constitute
one and the same instrument.  The persons signing below represent that
they are duly authorized to execute this Agreement for and on behalf of the
Party for whom they are signing.

    


    11.14           Terms.  Terms
identified by initial capital letters throughout the Agreement, shall have the
specific meanings set forth in Section 2 –  DEFINITIONS of this
Agreement

     

    
      
         

      

      
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    IN
WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their
duly authorized representatives.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      	      
                                              SEQUOIA
      MEDIA GROUP, LLC

                                            	 	      
                                              QUALEX
      INC

                                            	 
	 	 	 	 	 	 
	By: 	
                                              /s/Edward B. Paulsen  

                                            	 	By:	
                                              /s/
      Mark J. DeSimone 

                                            	 
	 	
                                               

                                            	 	 	
                                               

                                            	 
	Name:	
                                              Edward
      B. Paulsen

                                            	 	Name:	
                                              Mark
      J. DeSimone

                                            	 
	 	 	 	 	 	 
	Title:	Chief
      Operating Officer    	 	Title: 	President 	 
	 	 	 	 	 	 
	Date:
      	10/08/07  	 	Date: 	10/9/07 	 


                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

     

     

     

     

     

     

     

     

     

     

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