INDEMNIFICATION
AGREEMENT
THIS AGREEMENT, made as of the 17th day of
September , 2008, by and between Sahara Media, Inc., a Delaware
corporation having its offices at 75 Franklin Street, 2
nd Floor, New York, New York 10013
(“Sahara”), and John Thomas Bridge & Opportunity
Fund (“JTF”).
WHEREAS, Sahara is party to a merger agreement
(the “Merger Agreement”) with Mac Filmworks, Inc., a
Delaware corporation whose stock is included for quotation on the
Over-the-Counter Bulletin Board (“Pubco”), and Sahara
Media Acquisitions, Inc., a Delaware corporation and a subsidiary
of Pubco (“Acquirer”), pursuant to which at Closing (as
defined therein), the Acquirer shall be merged with and into
Sahara, such that Sahara shall become a wholly owned subsidiary of
Pubco (the “Merger”), and all outstanding shares of
common stock of Sahara, $0.00001 par value (“Sahara Common
Stock”), shall be cancelled and extinguished and converted
into the right to receive one share of common stock, par value
$0.003, of Pubco, for one share of Sahara Common Stock;
WHEREAS, pursuant to Section 3.3 of the Merger
Agreement, JTF has agreed to indemnify Sahara for any losses
resulting from breaches of Pubco’s representations,
warranties, and covenants made in the Merger Agreement, on the
terms and conditions of this Agreement;
NOW THEREFORE, intending to be legally bound
hereby, and in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
INDEMNIFICATION
1.1
Indemnification . JTF hereby agrees to indemnify
and hold Sahara harmless from and against any and all
notices, actions, suits, proceedings, claims, demands, assessments,
judgments, costs, penalties and expenses against Sahara arising out
of a breach by Pubco of a representation, warranty or covenant
contained in Sections 3 and 4, respectively, of the Merger
Agreement.. Any such notices, actions, suits,
proceedings, claims, demands, assessments, judgments, costs,
penalties and expenses are hereinafter collectively referred to as
“Losses”. Notwithstanding anything to the contrary
herein, (i) the maximum amount of Losses that JTF shall be liable
for pursuant to this Agreement shall be $400,000 and (ii) JTF shall
have no further liability for any Loss that Sahara identifies as a
Claim(as defined below) delivered to JTF after two years from the
date hereof.
Sahara shall
pay a fee of $400,000 to JTF upon the execution hereof.
(a) In
the event that any legal proceedings shall be instituted or that
any claim or demand (“Claim”) shall be asserted by any
person in respect of which payment may be sought under Section 1.1
hereof, Sahara shall reasonably and promptly cause written notice
of the assertion of any Claim of which it has knowledge which is
covered by this indemnity to be forwarded to JTF. JTF
shall have the right, at its sole option and expense, to be
represented by counsel of its choice, which must be reasonably
satisfactory to Sahara, and to defend against, negotiate, settle or
otherwise deal with any Claim which relates to any Losses
indemnified against hereunder. If JTF elects to defend
against, negotiate, settle or otherwise deal with any Claim which
relates to any Losses indemnified against hereunder, it shall
within ten (10) days (or sooner, if the nature of the Claim so
requires) notify Sahara of its intent to do so. Sahara
shall not be liable for any settlement of any Claim effected
without its prior written consent, provided, however, that such
consent shall not unreasonably be withheld, delayed, or
conditioned. If JTF elects not to defend against,
negotiate, settle or otherwise deal with any Claim which relates to
any Losses indemnified against hereunder, fails to notify Sahara of
its election as herein provided or contests its obligation to
indemnify Sahara for such Losses under this Agreement, Sahara may
defend against, negotiate, settle or otherwise deal with such
Claim. JTF shall not be liable for any settlement of any
Claim effected without its prior written consent, provided,
however, that such consent shall not unreasonably be withheld,
delayed, or conditioned. If Sahara defends any Claim, then JTF
shall promptly reimburse Sahara for the actual expenses of
defending such Claim upon submission of periodic
bills. If JTF shall assume the defense of any Claim,
Sahara may participate, at its own expense, in the defense of such
Claim; provided, however, that Sahara shall be entitled to
participate in any such defense with separate counsel at the
expense of JTF, if, (i) so requested by JTF to participate or (ii)
in the reasonable opinion of counsel to Sahara, a conflict or
potential conflict exists between Sahara and JTF that would make
such separate representation advisable. The parties
hereto agree to cooperate fully with each other in connection with
the defense, negotiation or settlement of any such
Claim.
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