AGREEMENT AND PLAN OF MERGER

Exhibit 10.1
AGREEMENT
AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF
MERGER is made as of the 17th day of September, 2008

AMONG:

MAC FILMWORKS, INC., a
corporation formed pursuant to the laws of the State of Delaware and having an
office for business located at 0 Xxxxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx
00000

            (“MFI”)

AND:

SAHARA MEDIA ACQUISITIONS,
INC., a corporation formed pursuant to the laws of the State of Delaware
and a wholly owned subsidiary of MFI

(the
"Acquirer")

AND:

SAHARA MEDIA, INC., a
corporation formed pursuant to the laws of the State of Delaware and having an
office for business located at 00 Xxxxxxxx Xxxxxx, 0xx Xxxxx,
Xxx Xxxx, XX 00000

("Sahara")

WHEREAS:

A.              Sahara
is a Delaware corporation and a development-stage multimedia company which plans
to operate an online magazine and social network;

B.              The
Sahara Shareholders own an aggregate of Eighteen Million Two Hundred Fifty
Thousand (18,250,000) Sahara Shares, being 100% of the presently issued and
outstanding Sahara Shares;

C.              MFI
is a reporting company whose common stock is quoted on the OTC Bulletin Board
and which has been engaged in a search for potential merger candidates;
and

D.             
The
respective Boards of Directors of MFI, Sahara and the Acquirer deem it advisable
and in the best interests of MFI, Sahara and the Acquirer that the Acquirer
merge with and into Sahara (the "Merger") pursuant to this Agreement and the
Certificate of Merger, and the applicable provisions of the laws of the State of
Delaware.

NOW THEREFORE, WITNESSETH THAT
in consideration of the premises and the mutual covenants, agreements,
representations and warranties contained herein, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto hereby agree as follows:

ARTICLE
1
DEFINITIONS
AND INTERPRETATION

Definitions

1.1              
In this
Agreement the following terms will have the following
meanings:

            (a)  

            “Acquisition Shares”
      means the 18,250,000 MFI Common Shares, which shares are to be issued and
      delivered to the Sahara Shareholders (subject to the placement of
      5,000,000 shares in escrow pursuant to the Escrow Agreement) at Closing
      pursuant to the terms of the Merger in accordance with Schedule A, annexed
      hereto;

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            (b)  

            “Agreement” means this
      agreement and plan of merger among MFI, the Acquirer, and
      Sahara;

            (c)  

            “DGCL” means the Delaware
      General Corporation Law;

            (d)  

             “Closing” means the
      completion, on the Closing Date, of the transactions contemplated hereby
      in accordance with Article 9
hereof;

            (e)  

            “Closing Date” means the
      day on which all conditions precedent to the completion of the transaction
      as contemplated hereby have been satisfied or
  waived;

            (f)  

            “Commission” means the
      Securities and Exchange Commission;

            (g)  

            “Effective Time” means
      the date of the filing of an appropriate Certificate of Merger in the form
      required by the State of Delaware provided that the Merger shall become
      effective as provided in the DGCL;

            (h)  

            “Exchange Act” means the
      Securities Exchange Act of 1934, as
amended;

            (i)  

            “Merger” means the
      merger, at the Effective Time, of Sahara and the Acquirer pursuant to this
      Agreement;

            (j)  

             “MFI Business” means all
      aspects of any business conducted by MFI and its
    subsidiaries;

            (k)  

             “MFI Common Shares” means
      the shares of common stock in the capital of MFI, it being understood that
      the shareholders and the board of directors of MFI have approved and prior
      to Closing will effect a 30-1 reverse
split;

            (l)  

            “MFI Financial
      Statements” means, collectively, the audited financial statements
      of MFI for the two fiscal years ended December 31, 2007 and 2006, and the
      unaudited financial statements of MFI for the period ending June 30,
      2008;

            (m)  

            “Place of Closing” means
      the offices of Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP, or such other place as
      MFI and Sahara may mutually agree
upon;

            (n)  

            “PPM” means the private
      placement memorandum of MFI (including all exhibits and supplements
      thereto), dated August 11, 2008;

            (o)  

            “Sahara Accounts
      Receivable” means all accounts receivable and other amounts owing
      to Sahara;

            (p)  

            “Sahara Assets” means all
      the property and assets of the Sahara Business of every kind and
      description wherever situated including, without limitation, Sahara
      Inventory, Sahara Material Contracts, Sahara Accounts Receivable, Sahara
      Cash, Sahara Intangible Assets and Sahara Goodwill, and all credit cards,
      charge cards and banking cards issued to
Sahara;

            (q)  

            “Sahara Business” means
      all aspects of the business conducted by Sahara and the Subsidiary (as
      defined herein);

            (r)  

            “Sahara Cash” means all
      cash on hand or on deposit to the credit of Sahara on the Closing Date,
      subject to reduction pursuant to Section 7.1(f)
  below;

            (s)  

            “Sahara Financial
      Statements” means collectively, the audited financial statements of
      Sahara for the fiscal years ending December 31, 2007 and December 31,
      2006, and the unaudited financial statements of Sahara for the period
      ending June 30, 2008, which shall be delivered at Closing, all of which
      will be prepared in accordance with United States generally accepted
      accounting principles and the requirements of Regulation S-X as
      promulgated by the Commission;

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            (t)  

            “Sahara Goodwill” means
      the goodwill of the Sahara Business together with the exclusive right of
      Sahara to represent itself as carrying on the Sahara Business in
      succession of Sahara subject to the terms hereof, and the right to use any
      words indicating that the Sahara Business is so carried on including the
      right to use the name "Sahara Media” or any variation thereof as part of
      the name of or in connection with the Sahara Business or any part thereof
      carried on or to be carried on by Sahara, the right to all corporate,
      operating and trade names associated with the Sahara Business, or any
      variations of such names as part of or in connection with the Sahara
      Business, all telephone listings and telephone advertising contracts, all
      lists of customers, books and records and other information relating to
      the Sahara Business, all necessary licenses and authorizations and any
      other rights used in connection with the Sahara
  Business;

            (u)  

            “Sahara Intangible
      Assets” means all of the intangible assets of Sahara, including,
      without limitation, Sahara Goodwill, all trademarks, logos, copyrights,
      designs, and other intellectual and industrial property of
      Sahara;

            (v)  

            “Sahara Inventory” means
      all inventory and supplies of the Sahara Business as of December 31, 2007
      as increased or decreased in the ordinary course of
    business;

            (w)  

            “Sahara Material
      Contracts” means the burden and benefit of and the right, title and
      interest of Sahara in, to and under all trade and non-trade contracts,
      engagements or commitments, whether written or oral, to which Sahara is
      entitled in connection with the Sahara Business under which Sahara is
      obligated to pay or entitled to receive the sum of Ten Thousand Dollars
      ($10,000) or more annually including, without limitation, any pension
      plans, profit sharing plans, bonus plans, loan agreements, security
      agreements, indemnities and guarantees, any agreements with employees,
      lessees, licensees, managers, accountants, suppliers, agents,
      distributors, officers, directors, attorneys or others which cannot be
      terminated without liability on not more than one month's notice;
      and

            (x)  

            “Sahara Shares” means all
      of the issued and outstanding shares of Sahara's equity
    stock;

            (y)  

            “Sahara Shareholders”
      means all of the holders of the issued and outstanding Sahara
      Shares;

            (z)  

            “Securities Act” means
      the Securities Act of 1933, as
amended;

            (aa)  

            “SEC Reports” means all
      forms, reports and documents filed and required to be filed by MFI with
      the Commission under the Exchange Act on and after January 1, 2006 through
      the date hereof;

            (bb)  

            “Subscription Agreements”
      means the series of subscription agreements between MFI and a group of
      investors, pursuant to the PPM, pursuant to which the investors will
      subscribe for shares of MFI’s common
stock;

            (cc)  

            “Surviving Company” means
      Sahara following the merger with the
Acquirer;

Any other
terms defined within the text of this Agreement will have the meanings so
ascribed to them.

Captions
and Section Numbers
 
1.2              The
headings and section references in this Agreement are for convenience of
reference only and do not form a part of this Agreement and are not intended to
interpret, define or limit the scope, extent or intent of this Agreement or any
provision hereof.

Section
References and Schedules

1.3              Any
reference to a particular “Article”, “section”, “paragraph”, “clause” or other
subdivision is to the particular Article, section, clause or other subdivision
of this Agreement and any reference to a Schedule by letter will mean the
appropriate Schedule attached to this Agreement and by such reference the
appropriate Schedule is incorporated into and made part of this
Agreement.
 
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Severability
of Clauses

1.4              If
any part of this Agreement is declared or held to be invalid for any reason,
such invalidity will not affect the validity of the remainder which will
continue in full force and effect and be construed as if this Agreement had been
executed without the invalid portion, and it is hereby declared the intention of
the parties that this Agreement would have been executed without reference to
any portion which may, for any reason, be hereafter declared or held to be
invalid.

ARTICLE
2
THE
MERGER

The
Merger

2.1              At
Closing, the Acquirer shall be merged with and into Sahara pursuant to this
Agreement and the separate corporate existence of the Acquirer shall cease and
Sahara, as it exists from and after the Closing, shall be the Surviving
Company.

Effect
of the Merger

2.2              The
Merger shall have the effect provided therefore by the DGCL. Without limiting
the generality of the foregoing, and subject thereto, at Closing (i) all the
rights, privileges, immunities, powers and franchises, of a public as well as of
a private nature, and all property, real, personal and mixed, and all debts due
on whatever account, including without limitation subscriptions to shares, and
all other choices in action, and all and every other interest of or belonging to
or due to Sahara or the Acquirer, as a group, subject to the terms hereof, shall
be taken and deemed to be transferred to, and vested in, the Surviving Company
without further act or deed; and all property, rights and privileges,
immunities, powers and franchises and all and every other interest shall be
thereafter as effectually the property of the Surviving Company, as they were of
Sahara and the Acquirer, as a group, and (ii) all debts, liabilities, duties and
obligations of Sahara and the Acquirer, as a group, subject to the terms hereof,
shall become the debts, liabilities and duties of the Surviving Company and the
Surviving Company shall thenceforth be responsible and liable for all debts,
liabilities, duties and obligations of Sahara and the Acquirer, as a group, and
neither the rights of creditors nor any liens upon the property of Sahara or the
Acquirer, as a group, shall be impaired by the Merger, and may be enforced
against the Surviving Company.

Articles
of Incorporation; Bylaws; Directors and Officers

2.3              The
Articles of Incorporation of the Surviving Company from and after the Closing
shall be the Articles of Incorporation of Sahara as in effect immediately prior
to the Closing until thereafter amended in accordance with the provisions
therein and as provided by the applicable provisions of the DGCL.  The
Bylaws of the Surviving Company from and after the Closing shall be the Bylaws
of Sahara as in effect immediately prior to the Closing, continuing until
thereafter amended in accordance with their terms, the Articles of Incorporation
of the Surviving Company and as provided by the DGCL.  The directors
and officers of the Surviving Company from and after the Closing shall be the
directors and officers of Sahara immediately prior to the Closing.
 
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Conversion
of Securities

2.4              At
the Effective Time, by virtue of the Merger and without any action on the part
of the Acquirer or Sahara, the shares of capital stock of each of Sahara and the
Acquirer shall be converted as follows:

            (a)  

            Capital Stock of the
      Acquirer. Each issued and outstanding share of the Acquirer's
      capital stock shall continue to be issued and outstanding and shall be
      converted into one share of validly issued, fully paid, and non-assessable
      common stock of the Surviving Company. Each stock certificate of the
      Acquirer evidencing ownership of any such shares shall continue to
      evidence ownership of such shares of capital stock of the Surviving
      Company.

            (b)  

            Conversion of Sahara
      Shares. Each Sahara Share that is issued and outstanding at the
      Effective Time, set forth on Schedule A, shall automatically be cancelled
      and extinguished and converted, without any action on the part of the
      holder thereof, into the right to receive one (1) Acquisition Share for
      each Sahara Share (subject to the placement of an aggregate 5,000,000
      shares in escrow pursuant to the Escrow Agreement). All such Sahara
      Shares, when so converted, shall no longer be outstanding and shall
      automatically be cancelled and retired and shall cease to exist, and each
      holder of a certificate representing any such shares shall cease to have
      any rights with respect thereto, except the right to receive the
      Acquisition Shares paid in consideration therefor upon the surrender of
      such certificate in accordance with this
  Agreement.

ARTICLE
3
REPRESENTATIONS
AND WARRANTIES
OF
MFI

Representations
and Warranties

3.1              MFI
and the Acquirer jointly and severally represent and warrant in all material
respects to Sahara, with the intent that Sahara will rely thereon in entering
into this Agreement and in approving and completing the transactions
contemplated hereby, that:

MFI
- Corporate Status and Capacity

            (a)  

            Incorporation.
      MFI is a corporation duly incorporated and validly existing under the laws
      of the State of Delaware, and is in good standing with the office of the
      Secretary of State for the State of Delaware. Mac Filmworks, Inc., a Texas
      corporation (“Subsidiary”), is a corporation duly incorporated and validly
      existing under the laws of the State of
Texas;

            (b)  

            Carrying on
      Business. MFI and its subsidiaries, including the Subsidiary
      currently do not carry on any material business activity in any
      jurisdiction. The nature of the MFI Business does not require MFI and its
      subsidiaries to register or otherwise be qualified to carry on business in
      any jurisdiction other than the respective states of their organization,
      where MFI and its subsidiaries  are each dully qualified and
      authorized to do business;

            (c)  

            Corporate
      Capacity. MFI has the corporate power, capacity and authority to
      own its assets and to enter into and complete this Agreement. None of
      MFI’s subsidiaries, including the Subsidiary has any assets or
      liabilities;

            (d)  

            Reporting Status;
      Listing. MFI’s common stock is registered under Section 12(g) of
      the Exchange Act and MFI is required to file current reports with the
      Commission pursuant to Section 13(a) of the Exchange Act. The MFI Common
      Shares are quoted on the OTC Bulletin Board under the symbol “MFWO”. None
      of MFI’s subsidiaries, including the Subsidiary has common stock that is
      registered under Section 12(g) of the Exchange Act and none of MFI’s
      subsidiaries is required to file current reports with Commission pursuant
      to Section 13(a) or 15(d) of the Exchange
Act;

5

            (e)  

            SEC Reports.
      MFI has filed all SEC Reports with the Commission under the Exchange Act.
      The SEC Reports, at the time filed, complied as to form in all material
      respects with the requirements of the Exchange Act. None of the SEC
      Reports, including without limitation any financial statements or
      schedules included therein, contains any untrue statements of a material
      fact or omits to state a material fact necessary in order to make the
      statements made, in light of the circumstances under which they were made,
      not misleading;

Acquirer
- Corporate Status and Capacity

            (f)  

            Incorporation.
      The Acquirer is a corporation duly incorporated and validly existing under
      the laws of the State of Delaware, and is in good standing with the office
      of the Secretary of State for the State of
  Delaware;

            (g)  

            Carrying on
      Business. Other than corporate formation and organization, the
      Acquirer has not carried on business activities to
  date;

            (h)  

            Corporate
      Capacity. The Acquirer has the corporate power, capacity and
      authority to enter into and complete this
  Agreement;

MFI
- Capitalization

            (i)  

            Authorized
      Capital. The authorized capital of MFI consists of 50,000,000
      shares of common stock, $0.003 par value, and 10,000,000 shares of
      preferred stock, $0.0001 par value, of which  24,540,000 MFI
      Common Shares are presently issued and outstanding (which shares of common
      stock outstanding will be 818,000 subsequent to the 30-1 reverse split to
      be effected prior to Closing), and MFI has not created or authorized any
      series of preferred stock and has no obligation or understanding to do
      so.  The authorized capital of the Subsidiary consists of
      10,000,000 shares of Class A common stock $.001 par value and 10,000,000
      shares of preferred, of which only 4,747,680 shares of Class A common
      stock is issued and outstanding all of which is owned by MFI free of any
      liens or encumbrances;

            (j)  

            No Option.
      Except as provided in, contemplated by, or set forth in this Agreement,
      the SEC Reports, the purchase agreement entered into between Sahara and
      Xxxx Xxxxxx Bridge & Opportunity Fund dated on or about June 30, 2008,
      the PPM or the Subscription Agreements, no person, firm or corporation has
      any agreement or option or any right capable of becoming an agreement or
      option for the acquisition of any common or preferred shares of MFI or for
      the purchase, subscription or issuance of any of the unissued shares in
      the capital of MFI;

Acquirer
- Capitalization

            (k)  

            Authorized
      Capital. The authorized capital of the Acquirer consists of 300
      shares of common stock, of which 300 shares of common stock are presently
      issued and outstanding and which are owned by
  MFI;

            (l)  

            No Option. No
      person, firm or corporation has any agreement or option or any right
      capable of becoming an agreement or option for the acquisition of any
      common or preferred shares in Acquirer or for the purchase, subscription
      or issuance of any of the unissued shares in the capital of
      Acquirer;

MFI
- Records and Financial Statements

            (m)  

            Charter
      Documents. The charter documents of MFI, the Subsidiary and the
      Acquirer are as set forth as exhibits to the officers certificate to be
      delivered at Closing pursuant to Section 9.3
  hereof;

            (n)  

            Corporate Minute
      Books.  MFI and its subsidiaries, including the
      Subsidiary are not in violation or breach of, or in default with respect
      to, any term of their respective Certificates of Incorporation (or other
      charter documents) or by-laws;

6

            (o)  

            MFI Financial
      Statements. The MFI Financial Statements present fairly, in all
      material respects, the assets and liabilities (whether accrued, absolute,
      contingent or otherwise) of MFI, including the assets and liabilities, if
      any of MFI’s subsidiaries, as of the respective dates thereof, and the
      results of operations and changes in financial position of MFI during the
      period covered thereby, in all material respects and have been prepared in
      accordance with generally accepted accounting principles consistently
      applied throughout the periods
indicated;

            (p)  

            MFI Accounts Payable
      and Liabilities. There are no material liabilities, contingent or
      otherwise, of MFI or its subsidiaries, including the Subsidiary which are
      not reflected in the MFI Financial Statements except those incurred in the
      ordinary course of business since the date of the MFI Financial
      Statements, and neither MFI nor its subsidiaries have guaranteed or agreed
      to guarantee any debt, liability or other obligation of any person, firm
      or corporation;

            (q)  

            MFI Accounts
      Receivable. There are no accounts receivable of MFI or any of MFI’s
      subsidiaries, including the
Subsidiary;

            (r)  

            No Debt.
      Neither MFI nor its subsidiaries, including the Subsidiary are, on the
      date hereof and on Closing will be, materially indebted to any, person or
      entity or other third party, including any  affiliate, director
      or officer of MFI except for accounts payable to Xxxxxx & Xxxxxxxxx PC
      in an amount not to exceed $60,000 which amount will be paid off at
      Closing as described in Section 9.4
hereof;

            (s)  

            No Related Party Debt
      to MFI. No director or officer or affiliate of MFI or its
      subsidiaries, including the Subsidiary is now indebted to or under any
      financial obligation to MFI or its subsidiaries on any account whatsoever,
      except for advances on account of travel and other expenses not exceeding
      One Thousand Dollars ($1,000) in
total;

            (t)  

            No Dividends.
      No dividends or other distributions on any shares in the capital of MFI or
      the Subsidiary have been made, declared or authorized since the date of
      the MFI Financial Statements;

            (u)  

            No Payments. No
      payments of any kind have been made or authorized since the date of the
      MFI Financial Statements to or on behalf of officers, directors,
      shareholders or employees of MFI or its subsidiaries or under any
      management agreements with MFI or its subsidiaries, except payments made
      in the ordinary course of business and at the regular rates of salary or
      other remuneration payable to them;

            (v)  

            No Pension
      Plans. There are no pension, profit sharing, group insurance or
      similar plans or other deferred compensation plans affecting MFI or its
      subsidiaries;

            (w)  

            No Adverse
      Events. Since June 30, 2008,

            (i)  

            there
      has not been any material adverse change in the properties, results of
      operations, financial position or condition (financial or otherwise) of
      MFI, its subsidiaries, its assets or liabilities or any damage, loss or
      other change in circumstances materially affecting MFI, the MFI Business
      or MFI’s right to carry on the MFI Business, other than non-material
      changes in the ordinary course of business or as contemplated pursuant to
      this Agreement,

            (ii)  

            there
      has not been any damage, destruction, loss or other event (whether or not
      covered by insurance) materially and adversely affecting MFI, its
      subsidiaries, or the MFI Business,

7

            (iii)  

            there
      has not been any material increase in the compensation payable or to
      become payable by MFI to any of MFI’s officers, employees or agents or any
      bonus, payment or arrangement made to or with any of
  them,

            (iv)  

            the
      MFI Business has been and continues to be carried on in the ordinary
      course,

            (v)  

            MFI
      has not waived or surrendered any right of material
  value,

            (vi)  

            Neither
      MFI nor its subsidiaries, including the Subsidiary  have
      discharged, satisfied or paid any lien or encumbrance or obligation or
      liability other than current liabilities in the ordinary course of
      business; and

            (vii)  

            no
      capital expenditures in excess of Thirty Thousand Dollars ($30,000) have
      been authorized or made by MFI.

MFI
- Income Tax Matters

            (x)  

            Tax Returns. As
      of the Closing Date, tax returns for 2007, 2006, 2005 and 2004 and reports
      of MFI and its subsidiaries, including the Subsidiary, required by law to
      be filed have been filed and are true, complete and correct, and any taxes
      payable in accordance with any return filed by MFI and its subsidiaries,
      including the Subsidiary or in accordance with any notice of assessment or
      reassessment issued by any taxing authority have been so paid and no
      amounts are owed to any taxing authority as of the Closing Date. Without
      limiting the generality of the foregoing, MFI hereby repreents that no
      amounts are owed to any taxing authorities by MFI and/or its subsidiaries,
      including the Subsidiary, for the period commencing on the
      formation(incorporation) of MFI though the Closing
  Date;

            (y)  

            Current Taxes.
      At December 31, 2007, deferred tax assets consisted of a NOL carry forward
      of $488,000, less a valuation allowance of $488,000, with zero net taxes
      owed. MFI had a net operating loss carry forward of approximately $1.28
      million at December 31, 2007. Adequate provisions have been made for taxes
      payable for the current period for which tax returns are not yet required
      to be filed and there are no agreements, waivers, or other arrangements
      providing for an extension of time with respect to the filing of any tax
      return by, or payment of, any tax, governmental charge or deficiency by
      MFI or its subsidiaries.  There are no contingent tax
      liabilities or any grounds which would prompt a reassessment including
      aggressive treatment of income and expenses in filing earlier tax returns
      for MFI or its subsidiaries including the
  Subsidiary;

MFI
- Applicable Laws and Legal Matters

            (z)  

            Licenses. MFI
      and its subsidiaries hold all licenses and permits as may be requisite for
      carrying on the MFI Business in the manner in which it has heretofore been
      carried on, which licenses and permits have been maintained and continue
      to be in good standing except where the failure to obtain or maintain such
      licenses or permits would not have a material adverse effect on the MFI
      Business;

            (aa)  

            Applicable
      Laws. Neither MFI nor its subsidiaries have been charged with or
      received notice of breach of any laws, ordinances, statutes, regulations,
      by-laws, orders or decrees to which they are subject or which apply to
      them the violation of which would have a material adverse effect on the
      MFI Business, and to MFI’s knowledge, neither MFI nor its subsidiaries are
      in breach of any laws, ordinances, statutes, regulations, bylaws, orders
      or decrees the contravention of which would result in a material adverse
      impact on the MFI Business;

            (bb)  

            Pending or Threatened
      Litigation. There is no litigation or administrative or
      governmental proceeding pending or threatened against or relating to MFI,
      its subsidiaries, or the MFI Business nor does MFI have any knowledge of
      any act or omission of MFI or its subsidiaries that would form any
      material basis for any such action or
  proceeding;

8

            (cc)  

            No Bankruptcy.
      Neither MFI nor its subsidiaries have made any voluntary assignment or
      proposal under applicable laws relating to insolvency and bankruptcy and
      no bankruptcy petition has been filed or presented against MFI or its
      subsidiaries and no order has been made or a resolution passed for the
      winding-up, dissolution or liquidation of MFI or its
      subsidiaries;

            (dd)  

            Labor Matters.
      Neither MFI nor its subsidiaries are party to any collective agreement
      relating to the MFI Business with any labor union or other association of
      employees and no part of the MFI Business has been certified as a unit
      appropriate for collective bargaining or, to the knowledge of MFI, has
      made any attempt in that regard;

            (ee)  

            Finder's Fees.
      Neither MFI nor its subsidiaries are party to any agreement which provides
      for the payment of finder's fees, brokerage fees, commissions or other
      fees or amounts which are or may become payable to any third party in
      connection with the execution and delivery of this Agreement and the
      transactions contemplated herein, except as set forth in Section 9.4
      hereof;

Execution
and Performance of Agreement

            (ff)  

            Authorization and
      Enforceability. The execution and delivery of this Agreement, and
      the completion of the transactions contemplated hereby, have been duly and
      validly authorized by all necessary corporate action on the part of MFI,
      the Subsidiary and the Acquirer;

            (gg)  

            No Violation or
      Breach. The execution and performance of this Agreement will
      not:

            (i)  

            violate
      the charter documents of MFI, the Subsidiary or the Acquirer or result in
      any breach of, or default under, any loan agreement, mortgage, deed of
      trust, or any other agreement to which MFI or its subsidiaries are
      party,

            (ii)  

            give
      any person any right to terminate or cancel any agreement or any right or
      rights enjoyed by MFI or its
subsidiaries,

            (iii)  

            result
      in any alteration of MFI’s or its subsidiaries’ obligations under any
      agreement to which MFI or its subsidiaries are
  party,

            (iv)  

            result
      in the creation or imposition of any lien, encumbrance or restriction of
      any nature whatsoever in favor of a third party upon or against the assets
      of MFI,

            (v)  

            result
      in the imposition of any tax liability to MFI or its subsidiaries relating
      to the assets of MFI, or

            (vi)  

            violate
      any court order or decree to which either MFI or its subsidiaries is
      subject;

The
MFI Business

            (hh)  

            Maintenance of
      Business. Since the date of the MFI Financial Statements, MFI and
      its subsidiaries have not entered into any material agreement or
      commitment except in the ordinary course and except as provided in,
      contemplated by, or set forth in this Agreement, the PPM, the Subscription
      Agreements or in the SEC Reports;

            (ii)  

            Subsidiaries.
      Except for the Acquirer and the Subsidiary, MFI does not own any
      subsidiaries and does not otherwise own, directly or indirectly, any
      shares or interest in any other corporation, partnership, joint venture or
      firm.  References in this Agreement to any subsidiaries of the
      MFI shall include the Acquirer, the Subsidiary and any other subsidiary
      that MFI may have but has not disclosed in this
  Agreement;

9

MFI
- Acquisition Shares

            (jj)  

            Acquisition
      Shares. The Acquisition Shares when delivered to the holders of
      Sahara Shares pursuant to the Merger shall be validly issued and
      outstanding as fully paid and non-assessable shares and the Acquisition
      Shares shall be transferable upon the books of MFI, in all cases subject
      to the provisions and restrictions of all applicable securities laws;
      and

            (kk)  

            Securities Law
      Compliance.  Except as set forth in the SEC Reports, MFI
      has not issued any shares of its common stock (or securities convertible
      into or exercisable for shares of common stock).  Neither MFI
      nor any person acting on its behalf has taken or will take any action
      (including, without limitation, any offering of any securities of MFI
      under circumstances which would require the integration of such offering
      with the offering of the Acquisition Shares issued to the Sahara
      Shareholders) which subject the issuance or sale of such shares to the
      Sahara Shareholders to the registration requirements of Section 5 of the
      Securities Act.

Non-Merger
and Survival

3.2              The
representations and warranties of MFI and the Acquirer contained herein are true
and correct as of the date of this Agreement and will be true at and as of
Closing in all material respects as though such representations and warranties
were made as of such time.  Notwithstanding the completion of the
transactions contemplated hereby, the waiver of any condition contained herein
(unless such waiver expressly releases a party from any such representation or
warranty) or any investigation made by the Sahara Shareholders, the
representations and warranties of MFI shall survive the Closing for a period of
two (2) years.

Indemnity

3.3              The
Xxxx Xxxxxx Bridge and Opportunity Fund (“JTO”) shall, pursuant to the terms,
conditions and limitations of that certain Indemnification Agreement between
Sahara and JTO defend, indemnify and save harmless Sahara from and against any
and all claims, demands, actions, suits, proceedings, assessments, judgments,
damages, costs, losses and expenses, including any payment made in good faith in
settlement of any claim (subject to the right of the JTO to defend any such
claim), resulting from the breach by MFI of any representation, covenant or
warranty made under this Agreement or from any misrepresentation in or omission
from any certificate or other instrument furnished or to be furnished by MFI
and/or the Acquirer to Sahara hereunder; notwithstanding the foregoing, the
extent of JTO’s liability regarding any claims arising from the failure to file
tax returns for prior periods shall be limited to the amount described in
Section 4.1(f).

ARTICLE
4
COVENANTS
OF MFI

Covenants

4.1              MFI
covenants and agrees with Sahara that MFI will:

            (a)  

            Conduct of
      Business. Until the Closing, conduct its business diligently and in
      the ordinary course consistent with the manner in which it generally has
      been operated up to the date of execution of this
    Agreement;

            (b)  

            Access. Until
      the Closing, give the Sahara Shareholders and their representatives full
      access to all of the properties, books, contracts, commitments and records
      of Sahara, and furnish to the Sahara Shareholders and their
      representatives all such information as they may reasonably
      request;

            (c)  

            Procure
      Consents. Until the Closing, take all reasonable steps required to
      obtain, prior to Closing, any and all third party consents required to
      permit the Merger;

10

              (d)  

                    Public
      Information.  Make and keep public information available,
      as those terms are understood and defined in Rule 144 (defined below);
      and

            (e)  

            SEC
      Filings.  File with the Commission in a timely manner,
      all reports and other documents required of MFI under either the
      Securities Act or the Exchange Act.

            (f)  

            Tax Returns.
      MFI shall on and after the Closing Date be responsible for any taxes owed
      or penalties thereon pertaining to the failure of MFI and its subsidiaries
      to file tax returns with the appropriate jurisdictions, but MFI shall not
      be liable for expenses incurred in filing any such tax returns other than
      for the years set forth in Section
3.1(x).

Authorization

4.2             
MFI hereby agrees to authorize and direct any and all federal, state, municipal,
foreign and international governments and regulatory authorities having
jurisdiction respecting MFI and its subsidiaries to release any and all
information in their possession respecting MFI and its subsidiaries to Sahara.
MFI shall promptly execute and deliver to Sahara any and all consents to the
release of information and specific authorizations which Sahara reasonably
requires to gain access to any and all such information.

Reports
Under the Exchange Act

4.3             
With a view to making available to the Sahara Shareholders the benefits of Rule
144 promulgated under the Securities Act or any other similar rule or regulation
of the Commission that may at any time permit the Sahara Shareholders to sell
securities of MFI to the public without registration and without imposing
restrictions arising under the federal securities laws on the purchases thereof
(“Rule 144”), and provided that the applicable holding period imposed by Rule
144 has been met, MFI agrees to furnish to each Sahara Shareholder, so long as
such Sahara Shareholder owns MFI Common Shares, promptly upon request, (i) a
written statement by MFI that it has complied with the reporting requirements of
Rule 144, the Securities Act and the Exchange Act, (ii) a copy of the most
recent annual or quarterly report of MFI and such other reports and documents so
filed by MFI, and (iii) such other information as may be reasonably requested to
permit the Sahara Shareholders to sell such securities pursuant to Rule 144
without registration.

Survival

4.4             
The
covenants set forth in this Article shall survive the Closing for the benefit of
the Sahara Shareholders.

ARTICLE
5
REPRESENTATIONS
AND WARRANTIES OF
SAHARA

Representations
and Warranties

5.1              Sahara
represents and warrants in all material respects to MFI, with the intent that it
will rely thereon in entering into this Agreement and in approving and
completing the transactions contemplated hereby, that:

Sahara
- Corporate Status and Capacity

            (a)  

            Incorporation.
      Sahara is a corporation duly incorporated and validly existing under the
      laws of the State of Delaware, and is in good standing with the office of
      the Secretary of State for the State of
  Delaware;

            (b)  

            Carrying on
      Business. Sahara carries on business primarily in the State of New
      York and does not carry on any material business activity in any other
      jurisdiction. The nature of the Sahara Business does not require Sahara to
      register or otherwise be qualified to carry on business in any other
      jurisdiction;

11

            (c)  

            Corporate
      Capacity. Sahara has the corporate power, capacity and authority to
      own the Sahara Assets and to carry on the Sahara Business and Sahara has
      the corporate power, capacity and authority to enter into and complete
      this Agreement;

Sahara
- Capitalization

            (d)  

            Authorized
      Capital. The authorized capital of Sahara consists of 50,000,000
      shares of common stock, $0.00001 par value per
  share;

            (e)  

            Ownership of Sahara
      Shares. The issued and outstanding share capital of Sahara will on
      Closing consist of 18,250,000 common shares (being the Sahara Shares),
      which shares on Closing shall be validly issued and outstanding as fully
      paid and non-assessable shares. The Sahara Shareholders will be at Closing
      the registered and beneficial owner of the Sahara Shares. The Sahara
      Shares owned by the Sahara Shareholders will on Closing be free and clear
      of any and all liens, charges, pledges, encumbrances, restrictions on
      transfer and adverse claims whatsoever not created by or through MFI
      and/or the Acquirer;

            (f)  

            No
      Restrictions. There are no restrictions on the transfer, sale or
      other disposition of Sahara Shares contained in the charter documents of
      Sahara or under any agreement;

Sahara
- Records and Financial Statements

            (g)  

            Charter
      Documents. The charter documents of Sahara have not been altered
      since its incorporation date, except as filed in the record books of
      Sahara, and Sahara is not in violation or breach of, or in default with
      respect to, any term of its Articles of Incorporation (or other charter
      documents) or by-laws;

            (h)  

            Sahara Financial
      Statements. The Sahara Financial Statements present fairly, in all
      material respects, the assets and liabilities (whether accrued, absolute,
      contingent or otherwise) of Sahara as of the respective dates thereof, and
      the results of operations and changes in financial position of Sahara
      during the periods covered thereby, and will be prepared in accordance
      with generally accepted accounting principles consistently applied
      throughout the periods indicated;

            (i)  

            Sahara Accounts
      Payable and Liabilities. There are no material liabilities,
      contingent or otherwise, of Sahara which are not reflected in the Sahara
      Financial Statements except those incurred in the ordinary course of
      business since the date of the Sahara Financial
  Statements;

            (j)  

            No Dividends.
      No dividends or other distributions on any shares in the capital of Sahara
      have been made, declared or authorized since the date of the Sahara
      Financial Statements;

Sahara
- Income Tax Matters

            (k)  

            Tax Returns.
      All tax returns and reports of Sahara required by law to be filed have
      been filed and to the best of Sahara’s knowledge and belief are true,
      complete and correct, and any taxes payable in accordance with any return
      filed by Sahara or in accordance with any notice of assessment or
      reassessment issued by any taxing authority have been so
    paid;

            (l)  

            Current Taxes.
      Adequate provisions have been made for taxes payable for the current
      period for which tax returns are not yet required to be filed and there
      are no agreements, waivers, or other arrangements providing for an
      extension of time with respect to the filing of any tax return by, or
      payment of, any tax, governmental charge or deficiency by Sahara. Sahara
      is not aware of any contingent tax liabilities or any grounds which would
      prompt a reassessment including aggressive treatment of income and
      expenses in filing earlier tax
returns;

12

Sahara
- Applicable Laws and Legal Matters

            (m)  

            Licenses.
      Sahara holds all licenses and permits as may be requisite for carrying on
      the Sahara Business in the manner in which it has heretofore been carried
      on, which licenses and permits have been maintained and continue to be in
      good standing except where the failure to obtain or maintain such licenses
      or permits would not have a material adverse effect on the Sahara
      Business;

            (n)  

            Applicable
      Laws. Sahara has not been charged with or received notice of breach
      of any laws, ordinances, statutes, regulations, by-laws, orders or decrees
      to which it is subject or which applies to it the violation of which would
      have a material adverse effect on the Sahara Business, and, to Sahara’s
      knowledge and belief, Sahara is not in breach of any laws, ordinances,
      statutes, regulations, by-laws, orders or decrees the contravention of
      which would result in a material adverse impact on the Sahara
      Business;

            (o)  

            Pending or Threatened
      Litigation. There is no material litigation or administrative or
      governmental proceeding pending or threatened against or relating to
      Sahara, the Sahara Business, or any of the Sahara Assets, nor does Sahara
      have any knowledge of any deliberate act or omission of Sahara that would
      form any material basis for any such action or
  proceeding;

            (p)  

            No Bankruptcy.
      Sahara has not made any voluntary assignment or proposal under applicable
      laws relating to insolvency and bankruptcy and no bankruptcy petition has
      been filed or presented against Sahara and no order has been made or a
      resolution passed for the winding-up, dissolution or liquidation of
      Sahara;

            (q)  

            Labor Matters.
      Sahara is not a party to any collective agreement relating to the Sahara
      Business with any labor union or other association of employees and no
      part of the Sahara Business has been certified as a unit appropriate for
      collective bargaining or, to the knowledge of Sahara, has made any attempt
      in that regard and Sahara has no reason to believe that any current
      employees will leave Sahara's employ as a result of this
      Merger;

Execution
and Performance of Agreement

            (r)  

            Authorization and
      Enforceability. The execution and delivery of this Agreement, and
      the completion of the transactions contemplated hereby, have been duly and
      validly authorized by all necessary corporate action on the part of Sahara
      and the Sahara Shareholders;

            (s)  

            No Violation or
      Breach. The execution and performance of this Agreement will
      not

            (i)  

            violate
      the charter documents of Sahara or result in any breach of, or default
      under, any loan agreement, mortgage, deed of trust, or any other agreement
      to which Sahara is a party,

            (ii)  

            except
      as provided in, contemplated by, or set forth in the PPM or the
      Subscription Agreements, give any person any right to terminate or cancel
      any agreement including, without limitation, Sahara Material Contracts, or
      any right or rights enjoyed by
Sahara,

            (iii)  

            except
      as provided in, contemplated by, or set forth in the PPM or the
      Subscription Agreements, result in any material alteration of Sahara's
      obligations under any agreement to which Sahara is a party including,
      without limitation, the Sahara Material
  Contracts,

            (iv)  

            result
      in the creation or imposition of any lien, encumbrance or restriction of
      any nature whatsoever in favor of a third party upon or against the Sahara
      Assets,

13

            (v)  

            result
      in the imposition of any tax liability to Sahara relating to Sahara Assets
      or the Sahara Shares, or

            (vi)  

            violate
      any court order or decree to which Sahara is
  subject;

Sahara
Assets - Ownership and Condition

            (t)  

            No Option.
      Except as provided in, contemplated by, or set forth in the PPM or the
      Subscription Agreements, no person, firm or corporation has any agreement
      or option or a right capable of becoming an agreement for the purchase of
      any of the Sahara Assets;

            (u)  

            Sahara Material
      Contracts. Except as provided in, contemplated by, or set forth in
      the PPM or the Subscription Agreements, the Sahara Material Contracts
      constitute all of the material contracts of
  Sahara;

            (v)  

            No Default.
      There has not been any default in any material obligation of Sahara or any
      other party to be performed under any of the Sahara Material Contracts,
      each of which is in good standing and in full force and effect and
      unamended, and Sahara is not aware of any default in the obligations of
      any other party to any of the Sahara Material
  Contracts;

Sahara
Assets - Sahara Goodwill and Other Assets

            (w)  

            Sahara
      does not have any knowledge of any infringement by Sahara of any patent,
      trademark, copyright or trade
secret;

The
Business of Sahara

            (x)  

            Maintenance of
      Business. Since the date of the Sahara Financial Statements, the
      Sahara Business has been carried on in the ordinary course, and Sahara has
      not entered into any material agreement or commitment except in the
      ordinary course or as provided in, contemplated by, or set forth in the
      PPM or the Subscription Agreements;
and

            (y)  

            Subsidiaries.
      Sahara does not have any subsidiaries and does not otherwise own, directly
      or indirectly, any shares or interest in any other corporation,
      partnership, joint venture or firm.

Non-Merger
and Survival

5.2              The
representations and warranties of Sahara contained herein will be true at and as
of Closing in all material respects as though such representations and
warranties were made as of such time.  Notwithstanding the completion
of the transactions contemplated hereby, the waiver of any condition contained
herein (unless such waiver expressly releases a party from any such
representation or warranty) or any investigation made by MFI, the
representations and warranties of Sahara shall survive the Closing for a period
of two (2) years.

Indemnity

5.3              Sahara
agrees to indemnify and save harmless MFI from and against any and all claims,
demands, actions, suits, proceedings, assessments, judgments, damages, costs,
losses and expenses, including any payment made in good faith in settlement of
any claim (subject to the right of Sahara to defend any such claim), resulting
from the breach by Sahara of any representation or warranty of Sahara made under
this Agreement or from any misrepresentation in or omission from any certificate
or other instrument furnished or to be furnished by Sahara to MFI
hereunder.  Legal fees and other costs of defending and prosecuting
this action shall be borne by Sahara.

14

ARTICLE
6
COVENANTS
OF SAHARA

Covenants

6.1              Sahara
covenants and agrees with MFI that it will:

            (a)  

            Conduct of
      Business. Until the Closing, conduct the Sahara Business diligently
      and in the ordinary course consistent with the manner in which the Sahara
      Business generally has been operated up to the date of execution of this
      Agreement;

            (b)  

            Preservation of
      Business.  Until the Closing, use their best efforts to
      preserve the Sahara Business and the Sahara
  Assets;

            (c)  

            Procure
      Consents. Until the Closing, take all reasonable steps required to
      obtain, prior to Closing, any and all third party consents required to
      permit the Merger and to preserve and maintain the Sahara Assets,
      including the Sahara Material Contracts;
and

            (d)  

            Reporting and Internal
      Controls. From and after the Effective Time, forthwith take all
      required actions to implement internal controls on the business of the
      Surviving Company to ensure that the Surviving Company complies with
      Section 13(b)(2) of the Exchange
Act.

Authorization

6.2              Sahara
hereby agrees to authorize and direct any and all federal, state, municipal,
foreign and international governments and regulatory authorities having
jurisdiction respecting Sahara to release any and all information in their
possession respecting Sahara to MFI.  Sahara shall promptly execute
and deliver to MFI any and all consents to the release of information and
specific authorizations which MFI reasonably require to gain access to any and
all such information.

Survival

6.3              The
covenants set forth in this Article shall survive the Closing for the benefit of
MFI.

ARTICLE
7
CONDITIONS
PRECEDENT

Conditions
Precedent in favor of MFI

7.1              MFI’s
obligations to carry out the transactions contemplated hereby are subject to the
fulfillment (or waiver by MFI) of each of the following conditions precedent on
or before the Closing:

            (a)  

            all
      documents or copies of documents, securities issuances and wire transfers
      required to be executed and delivered to MFI as set forth in Article 9
      hereof will have been so executed and
delivered;

            (b)  

            all
      of the terms, covenants and conditions of this Agreement to be complied
      with or performed by Sahara at or prior to the Closing will have been
      complied with or performed;

            (c)  

            title
      to the Sahara Shares held by the Sahara Shareholders will be free and
      clear of all mortgages, liens, charges, pledges, security interests,
      encumbrances or other claims whatsoever not created by or through MFI
      and/or the Acquirer;

            (d)  

            the
      Certificate of Merger shall be executed by Sahara in form acceptable for
      filing with the Delaware Secretary of
State;

15

              (e)  

                    the
      Sahara Shareholders shall have entered into an escrow agreement,
      reasonably acceptable to MFI, pursuant to which 5,000,000 Acquisition
      Shares shall be held in escrow (the “Escrow
      Agreement”);

            (f)  

            subject
      to Article 8 hereof, there will not have
  occurred:

            (i)  

            any
      material adverse change in the financial position or condition of Sahara,
      its liabilities or the Sahara Assets or any damage, loss or other change
      in circumstances materially and adversely affecting the Sahara Business or
      the Sahara Assets or Sahara's right to carry on the Sahara Business, other
      than changes in the ordinary course of business, none of which has been
      materially adverse, or

            (ii)  

            any
      damage, destruction, loss or other event, including changes to any laws or
      statutes applicable to Sahara or the Sahara Business (whether or not
      covered by insurance) materially and adversely affecting Sahara, the
      Sahara Business or the Sahara
Assets;

                (g)  

                      the
      transactions contemplated hereby shall have been approved by all other
      regulatory authorities having jurisdiction over the subject matter hereof,
      if any; and

              (h)  

                    all
      representations and warranties of Sahara contained herein shall be true
      and correct as of the Closing
Date.

            (i)  

            Sahara
      and Marathon Advisors shall have entered into a consulting
      agreement;

            (j)  

            the
      completion of the sale of Units (as defined in the PPM) for an aggregate
      purchase price of at least $5,000,000 pursuant to the PPM and the
      Subscription Agreements, contemporaneously  with the Merger
      contemplated by this Agreement;

            (k)  

            Sahara
      shall have no liabilities and shall have more than $60,000 in assets as of
      June 30, 2008;

            (l)  

            MFI
      shall have delivered the 500,000 shares of MFI common stock and a
      five-year warrant to purchase 500,000 shares of common stock at an
      exercise price of $1.50 per share to Xxxx Xxxxxx Bridge & Opportunity
      Fund as required pursuant to the purchase agreement between Sahara and
      Xxxx Xxxxxx Bridge & Opportunity Fund, and 3,000,000 shares to Xxxx
      Xxxxxx Financial as a finders fee;

            (m)  

            A
      disbursement of funds letter shall have been executed by Sahara that
      reflects a wire transfer to Xxxxxx & Xxxxxxxxx PC in an amount not to
      exceed $60,000, a wire transfer to Xxxx Xxxxxx Bridge & Opportunity
      Fund in the amount of $500,000 plus accrued interest  as payment
      in full for a note owed by Sahara,  a wire transfer to Xxxx
      Xxxxxx Financial in the amount of $200,000 as a finders fee, and a wire
      transfer in the amount of $400,000 to Xxxx Xxxxxx Bridge & Opportunity
      Fund as payment of the indemnification
fee.

            (n)  

            Evidence
      that a $10 million life insurance policy has been obtained on the life of
      Xx. Xxxxxxxx.

            (o)  

            A
      signed escrow agreement shall be delivered with respect to 5,000,000
      Acquisition Shares (the “Escrow
Agreement”).

            (p)  

            MFI
      shall have delivered a five-year warrant to purchase 1,000,000 shares of
      common stock at an exercise price of $1.30 to Xxxx Xxxxxx
      Financial.

            (q)  

            MFI
      shall have delivered a five-year warrant to purchase 500,000 shares of
      common stock at an exercise price of $1.50 to Aubry Consulting Group,
      Inc.

            (r)  

            MFI
      shall have delivered a five-year warrant to purchase 300,000 shares of
      common stock at an exercise price of $1.10 to Marathon
      Advisors.

16

Waiver
by MFI

7.2              The
conditions precedent set out in the preceding section are inserted for the
exclusive benefit of MFI and any such condition may be waived in whole or in
part by MFI at or prior to Closing by delivering to Sahara a written waiver to
that effect signed by MFI. In the event that the conditions precedent set out in
the preceding section are not satisfied on or before the Closing, MFI shall be
released from all obligations under this Agreement.

Conditions
Precedent in Favor of Sahara

7.3              The
obligations of Sahara to carry out the transactions contemplated hereby are
subject to the fulfillment of each of the following conditions precedent on or
before the Closing:

            (a)  

            all
      documents or copies of documents required to be executed and delivered to
      Sahara or the Sahara Shareholders hereunder will have been so executed and
      delivered;

            (b)  

            the
      completion of the sale of Units (as defined in the PPM) for an aggregate
      purchase price of at least $5,000,000 pursuant to the PPM and the
      Subscription Agreements, contemporaneously  with the Merger
      contemplated by this Agreement;

            (c)  

            all
      directors and officers of MFI shall have tendered their resignations in a
      form reasonably acceptable to Sahara, and the Sahara’s Shareholders’
      nominees shall have been appointed to MFI’s board of directors in a form
      reasonably acceptable to Sahara;

            (d)  

            Sahara
      shall be in receipt of the Sahara Financial
  Statements;

            (e)  

            Sahara
      shall have no liabilities and shall have more than $60,000 in assets as of
      June 30, 2008;

            (f)  

            MFI
      shall have no assets and MFI’s total liabilities shall not exceed $60,000,
      which shall consist solely of accounts payable for legal fees incurred in
      connection with the transactions contemplated by this Agreement to be paid
      at Closing;

            (g)  

            MFI
      and Xxxx Xxxxxx Bridge & Opportunity Fund shall have entered into an
      indemnitee agreement in a form reasonable acceptable to
      Sahara;

            (h)  

            the
      completion by MFI of a 30-to-1 reverse split of MFI’s common stock, such
      that MFI’s common stock issued and outstanding shall be reduced to
      approximately 818,000 shares;

            (i)  

            Sahara
      and Marathon Advisors shall have entered into a consulting
      agreement;

            (j)  

            all
      of the terms, covenants and conditions of this Agreement to be complied
      with or performed by MFI or the Acquirer at or prior to the Closing shall
      have been complied with or
performed;

            (k)  

            Sahara
      shall have completed its review and inspection of the books and records of
      MFI and its subsidiaries and shall be reasonably satisfied with same in
      all material respects;

            (l)  

            MFI
      will have delivered the Acquisition Shares to be issued pursuant to the
      terms of the Merger to the Sahara Shareholders at the Closing and the
      Acquisition Shares will be registered on the books of MFI in the name of
      the Sahara Shareholders at the Effective
Time;

17

            (m)  

            title
      to the Acquisition Shares will be free and clear of all mortgages, liens,
      charges, pledges, security interests, encumbrances or other claims
      whatsoever;

            (n)  

            the
      Certificate of Merger shall be executed by the Acquirer in form acceptable
      for filing with the Delaware Secretary of
State;

            (o)  

            subject
      to Article 8 hereof, there will not have
  occurred

            (i)  

            any
      material adverse change in the financial position or condition of MFI, its
      subsidiaries, their assets or liabilities or any damage, loss or other
      change in circumstances materially and adversely affecting MFI or the MFI
      Business or MFI’s right to carry on the MFI Business, other than changes
      in the ordinary course of business, none of which has been materially
      adverse, or

            (ii)  

            any
      damage, destruction, loss or other event, including changes to any laws or
      statutes applicable to MFI or the MFI Business (whether or not covered by
      insurance) materially and adversely affecting MFI, its subsidiaries or its
      assets;

            (s)  

            the
      transactions contemplated hereby shall have been approved by all other
      regulatory authorities having jurisdiction over the subject matter hereof,
      if any; and

            (t)  

            all
      representations and warranties of MFI and the Acquirer contained herein
      shall be true and correct as of the Closing
  Date.

            (u)  

            The
      note payable by Sahara to Xxxx Xxxxxx Bridge & Opportunity Fund in the
      principal amount of $500,000 shall be marked “cancelled and paid in
      full.”

            (v)  

            MFI
      shall prepare appropriate tax returns for MFI and any of its subsidiaries
      as contemplated in Section 3.1(x) and shall submit such return to Sahara
      for its review and comment; MFI shall incorporate any reasonable comments
      of Sahara into such tax returns and after MFI shall file such returns with
      the appropriate jurisdiction. MFI shall pay and be responsible for all
      filing fees, penalties and payments related to such tax
      returns.

            (w)  

            An
      opinion of counsel to MFI reasonably acceptable to Sahara shall be
      delivered.

Waiver
by Sahara

7.4              The
conditions precedent set out in the preceding section are inserted for the
exclusive benefit of Sahara and any such condition may be waived in whole or in
part by Sahara at or prior to the Closing by delivering to MFI a written waiver
to that effect signed by Sahara. In the event that the conditions precedent set
out in the preceding section are not satisfied on or before the Closing Sahara
shall be released from all obligations under this Agreement.

Nature
of Conditions Precedent

7.5              The
conditions precedent set forth in this Article are conditions of completion of
the transactions contemplated by this Agreement and are not conditions precedent
to the existence of a binding agreement. Each party acknowledges receipt of the
sum of $1.00 and other good and valuable consideration as separate and distinct
consideration for agreeing to the conditions precedent in favor of the other
party or parties set forth in this Article.
 
18

Confidentiality

7.6              Notwithstanding
any provision herein to the contrary, the parties hereto agree that the
existence and terms of this Agreement are confidential and that if this
Agreement is terminated pursuant to the preceding section the parties agree to
return to one another any and all financial, technical and business documents
delivered to the other party or parties in connection with the negotiation and
execution of this Agreement and shall keep the terms of this Agreement and all
information and documents received from Sahara and MFI and the contents thereof
confidential and not utilize nor reveal or release same, provided, however, that
MFI may be required to issue news releases regarding the execution and
consummation of this Agreement and file a Current Report on Form 8-K with the
Commission respecting the proposed Merger contemplated hereby together with such
other documents as are required to maintain the currency of MFI’s filings with
the Commission.

ARTICLE
8
RISK

Material
Change in the Business of Sahara

8.1              If
any material loss or damage to the Sahara Business occurs prior to Closing and
such loss or damage, in MFI's reasonable opinion, cannot be substantially
repaired or replaced within sixty (60) days, MFI shall, within two (2) days
following any such loss or damage, by notice in writing to Sahara, at its
option, either:

            (a)  

            terminate
      this Agreement, in which case no party will be under any further
      obligation to any other party; or

            (b)  

            elect
      to complete the Merger and the other transactions contemplated hereby, in
      which case the proceeds and the rights to receive the proceeds of all
      insurance covering such loss or damage will, as a condition precedent to
      MFI's obligations to carry out the transactions contemplated hereby, be
      vested in Sahara or otherwise adequately secured to the satisfaction of
      MFI on or before the Closing Date.

Material
Change in the MFI Business

8.2              If
any material loss or damage to the MFI Business occurs prior to Closing and such
loss or damage, in Sahara's reasonable opinion, cannot be substantially repaired
or replaced within sixty (60) days, Sahara shall, within two (2) days following
any such loss or damage, by notice in writing to MFI, at its option,
either:

            (a)  

            terminate
      this Agreement, in which case no party will be under any further
      obligation to any other party; or

            (b)  

            elect
      to complete the Merger and the other transactions contemplated hereby, in
      which case the proceeds and the rights to receive the proceeds of all
      insurance covering such loss or damage will, as a condition precedent to
      Sahara's obligations to carry out the transactions contemplated hereby, be
      vested in MFI or otherwise adequately secured to the satisfaction of
      Sahara on or before the Closing
Date.

ARTICLE
9
CLOSING

Closing

9.1              The
Merger and the other transactions contemplated by this Agreement will be closed
on or before September 30, 2008, in accordance with the closing procedure set
out in this Article.

Documents
to be Delivered by Sahara

9.2              On
or before the Closing, Sahara will deliver or cause to be delivered to
MFI:

            (a)  

            all
      reasonable consents or approvals required to be obtained by Sahara for the
      purposes of completing the Merger and preserving and maintaining the
      interests of Sahara under any and all Sahara Material Contracts and in
      relation to Sahara Assets;

19

            (b)  

            an
      officers certificate containing articles, bylaws, and certified copies of
      such resolutions of the shareholders and directors of Sahara as are
      required to be passed to authorize the execution, delivery and
      implementation of this Agreement;

            (c)  

            an
      acknowledgement from Sahara of the satisfaction of the conditions
      precedent set forth in section 7.3
hereof;

            (d)  

            such
      other documents as MFI may reasonably require to give effect to the terms
      and intention of this Agreement.

Documents
to be Delivered by MFI

9.3              On
or before the Closing, MFI and the Acquirer shall deliver or cause to be
delivered to Sahara:

            (a)  

            share
      certificates representing the Acquisition Shares duly registered in the
      names of the Sahara Shareholders;

            (b)  

            an
      officers certificate containing articles, bylaws, and certified copies of
      such resolutions of the directors of MFI and the Acquirer as are required
      to be passed to authorize the execution, delivery and implementation of
      this Agreement;

            (c)  

            a
      certified copy of a resolution of the directors of MFI dated as of the
      Closing Date appointing the nominees of the Sahara Shareholders to the
      board of directors of MFI;

            (d)  

            resignations
      of each of the officers and directors of MFI in a form reasonably
      acceptable to Sahara;

            (e)  

            an
      acknowledgement from MFI of the satisfaction of the conditions precedent
      set forth in section 7.1 hereof;

            (f)  

            an
      opinion of counsel to MFI reasonably acceptable to
  Sahara;

            (g)  

            such
      other documents as Sahara may reasonably require to give effect to the
      terms and intention of this
Agreement.

            (h)  

            proof
      of the filing of all tax returns referred to in Section 3.1(x) in the
      appropriate jurisdictions for MFI and any of its
    subsidiaries.

Other
Documents and Wires to be Delivered by MFI and Sahara
 
            9.4  

            On
      or before the Closing, the following shall be
  delivered:

            (a)  

            Wire
      transfers shall be made pursuant to the disbursement letter in the amounts
      and to the parties as set forth in Section 7.1(m);
  and

            (b)  

            Securities
      representing the MFI shares and MFI warrant shall be delivered in the
      amounts and to the parties as set forth in Section
  7.1(l).

20

ARTICLE
10
POST-CLOSING
MATTERS

General

10.1              Forthwith
after the Closing, MFI and Sahara agree to use all their best efforts
to:

            (a)  

            file
      the Certificate of Merger with the Secretary of State of
      Delaware;

            (b)  

            issue
      a news release reasonably acceptable to each party reporting the
      Closing;

            (c)  

            file
      a Form 8-K with the Securities and Exchange Commission disclosing the
      terms of this Agreement which includes audited financial statements of
      Sahara as well as pro forma financial information of Sahara and MFI as
      required by Regulation S-X as promulgated by the Commission (all at no
      cost to the Sahara Shareholders);
and

            (d)  

            RESERVED.

            (e)  

            Complete
      the funding of at least $5,000,000 under the PPM and the Subscription
      Agreements.

            (f)  

            Complete
      the issuance of 100,000 shares of common stock of MFI to Marathon
      Advisors, within 10 business days after the
  Closing.

ARTICLE
11
GENERAL
PROVISIONS

Arbitration

11.1             The
parties hereto shall attempt to resolve any dispute, controversy, difference or
claim arising out of or relating to this Agreement by negotiation in good
faith.  If such good negotiation fails to resolve such dispute,
controversy, difference or claim within thirty (30) days after any party
delivers to any other party a notice of its intent to submit such matter to
arbitration, then any party to such dispute, controversy, difference or claim
may submit such matter to arbitration.

Any action or proceeding seeking to enforce any provision of, or based upon any
right arising out of, this Agreement shall be settled by binding arbitration by
a panel of three (3) arbitrators in accordance with the Commercial Arbitration
Rules of the American Arbitration Association and governed by the laws of the
State of Delaware (without regard to the choice-of-law rules or principles of
that jurisdiction).  Judgment upon the award may be entered in any
court located in the State of New York, and all the parties hereto hereby
expressly waive any objections or defense based upon lack of personal
jurisdiction.

Each of the plaintiff and defendant party to the arbitration shall select one
(1) arbitrator (or where multiple plaintiffs and/or defendants exist, one (1)
arbitrator shall be chosen collectively by such parties comprising the
plaintiffs and one (1) arbitrator shall be chosen collectively by those parties
comprising the defendants) and then the two (2) arbitrators shall mutually agree
upon the third arbitrator.  Where no agreement can be reached on the
selection of either a third arbitrator or an arbitrator to be named by either a
group of plaintiffs or a group of defendants, any implicated party may apply to
a judge of the courts of the State of New York, to name an
arbitrator.    Process in any such action or proceeding may
be served on any party anywhere in the world.
 
21

Indemnification
Provisions

11.2           
Notice to Indemnifying Party.  If any party (the "Indemnitee")
receives notice of any claim or the commencement of any action or proceeding
with respect to which the other party (or parties) is obligated to provide
indemnification (the "Indemnifying Party") pursuant to Sections 3.3 or 5.3
hereof, the Indemnitee shall give the Indemnifying Party written notice thereof
within a reasonable period of time following the Indemnitee’s receipt of such
notice.  Such notice shall describe the claim in reasonable detail and
shall indicate the amount (estimated if necessary) of the losses that have been
or may be sustained by the Indemnitee.  The Indemnifying Party may,
subject to the other provisions of this Section 11.2, compromise or defend, at
such Indemnifying Party's own expense and by such Indemnifying Party's own
counsel, any such matter involving the asserted liability of the Indemnitee in
respect of a third-party claim.  If the Indemnifying Party elects to
compromise or defend such asserted liability, it shall within thirty (30) days
(or sooner, if the nature of the asserted liability so requires) notify the
Indemnitee of its intent to do so, and the Indemnitee, shall reasonably
cooperate, at the request and reasonable expense of the Indemnifying Party, in
the compromise of, or defense against, such asserted liability.  The
Indemnifying Party will not be released from any obligation to indemnify the
Indemnitee hereunder with respect to a claim without the prior written consent
of the Indemnitee, unless the Indemnifying Party delivers to the Indemnitee a
duly executed agreement settling or compromising such claim with no monetary
liability to or injunctive relief against the Indemnitee and a complete release
of the Indemnitee with respect thereto.  The Indemnifying Party shall
have the right to conduct and control the defense of any third-party claim made
for which it has been provided notice hereunder.  All costs and fees
incurred with respect to any such claim will be borne by the Indemnifying
Party.  The Indemnitee will have the right to participate, but not
control, at its own expense, the defense or settlement of any such claim;
provided, that if the Indemnitee and the Indemnifying Party shall have
conflicting claims or defenses, the Indemnifying Party shall not have control of
such conflicting claims or defenses and the Indemnitee shall be entitled to
appoint a separate counsel for such claims and defenses at the cost and expense
of the Indemnifying Party.   If the Indemnifying Party chooses to
defend any claim, the Indemnitee shall make available to the Indemnifying Party
any books, records or other documents within its control that are reasonably
required for such defense.  The provisions of this Section shall be
subject to that certain Indemnification Agreement between Sahara and
JTO.

Notice

11.3             Any
notice required or permitted to be given by any party will be deemed to be given
when in writing and delivered to the address for notice of the intended
recipient by personal delivery, prepaid  certified or registered mail,
or Facsimile. Any notice delivered by mail shall be deemed to have been received
on the fourth business day after and excluding the date of mailing, except in
the event of a disruption in regular postal service in which event such notice
shall be deemed to be delivered on the actual date of receipt. Any notice
delivered personally or by Facsimile shall be deemed to have been received on
the actual date of delivery.

Addresses
for Service

11.4              The
address for service of notice of each of the parties hereto is as
follows:

            (a)  

            MFI
      or the Acquirer:

Mac
Filmworks, Inc.
0
Xxxxxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxx 00000
Attn:  Xxxxxx
Xxxxxxxx, Chief Executive Officer
Phone:  (000)
000-0000

With a
copy to:

Xxxxxx X.
Xxxxxxxxx
Xxxxxx
& Xxxxxxxxx PC
0
Xxxxxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxx 00000
Fax: 000
000 0000

            (b)  

            Sahara:

Sahara
Media, Inc.
00
Xxxxxxxx Xxxxxx, 0xx
Xxxxx
Xxx Xxxx,
XX 00000
Attn:  Xxxxxxxx
Xxxxxxxx XX, Chief Executive Officer
Phone:
000-000-0000
Facsimile:
000-000-0000

With a
copy to:

Sichenzia
Xxxx Xxxxxxxx Xxxxxxx LLP
00
Xxxxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attn:  Xxxx
Xxxx, Esq.
Phone:  (000)
000-0000
Telecopier:  (000)
000-0000

22

Change
of Address

11.5              Any
party may, by notice to the other parties change its address for notice to some
other address in North America and will so change its address for notice
whenever the existing address or notice ceases to be adequate for delivery by
hand. A post office box may not be used as an address for service.

Further
Assurances

11.6              Each
of the parties will execute and deliver such further and other documents and do
and perform such further and other acts as any other party may reasonably
require to carry out and give effect to the terms and intention of this
Agreement.

Time
of the Essence

11.7              Time
is expressly declared to be the essence of this Agreement.

Entire
Agreement

11.8              The
provisions contained herein constitute the entire agreement among Sahara, the
Acquirer and MFI respecting the subject matter hereof and supersede all previous
communications, representations and agreements, whether verbal or written, among
Sahara, the Acquirer and MFI with respect to the subject matter
hereof.

Enurement

11.9              This
Agreement will enure to the benefit of and be binding upon the parties hereto
and their respective heirs, executors, administrators, successors and permitted
assigns.
 
23

Assignment

11.10              This
Agreement is not assignable without the prior written consent of the parties
hereto.

Expenses

11.11              
Each party agrees to pay, without right of reimbursement from any other party
and regardless of whether or not the transaction is consummated, the costs
incurred by it in connection with this transaction, including legal fees and
other costs incidental to the negotiation of the terms of the transaction and
the preparation of related documentation; notwithstanding anything to the
contrary herein, legal fees owed to Xxxxxx & Xxxxxxxxx PC (some of which
relate to the transaction set forth in this Agreement) will be paid at Closing
as set forth in Section 9.4 hereof.

Counterparts

11.12              This
Agreement may be executed in counterparts, each of which when executed by any
party will be deemed to be an original and all of which counterparts will
together constitute one and the same Agreement. Delivery of executed copies of
this Agreement by Facsimile will constitute proper delivery, provided that
originally executed counterparts are delivered to the parties within a
reasonable time thereafter.

Applicable
Law

11.13               This
Agreement is subject to the laws of the State of Delaware.

Termination

11.14                This
Agreement may only be terminated at any time prior to the Closing
Date:

(a)           upon mutual
written consent authorized by the Board of Directors of MFI and Sahara;
or

(b)           by either
MFI or Sahara if the Closing shall not have been consummated by the close of
business on September 30, 2008.
 
[Remainder
of page intentionally left blank.]

24

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

              MAC
      FILMWORKS, INC.
               
              By:
      
              /s/ Xxxxxx
      Xxxxxxxx
               
              Xxxxxx
      Xxxxxxxx
               
              Chief
      Executive Officer
               
              SAHARA
      MEDIA ACQUSITIONS, INC.
               
              By:
      
              /s/ Xxxxxx
      Xxxxxxxx
               
              Xxxxxx
      Xxxxxxxx
               
              President
               
              SAHARA
      MEDIA, INC.
               
              By:
      
              /s/ Xxxxxxxx
      Xxxxxxxx
               
              Xxxxxxxx
      Xxxxxxxx
               
              Chief
      Executive Officer
               
In
consideration of the execution by Sahara Media, Inc. (“Sahara”) of the certain
Indemnification Agreement by and between Sahara and the Xxxx Xxxxxx Bridge &
Opportunity Fund,  the Xxxx Xxxxxx Bridge & Opportunity Fund
hereby agrees to be bound to the terms and conditions of Section 3.3 (Indemnity)
of this Agreement:
 
              XXXX
      XXXXXX BRIDGE & OPPORTUNITY FUND:
               
              By:
      
              /s/ Xxxxxx
      X. Xxxxxxx, Xx.
               
              Xxxxxx
      X. Xxxxxxx, Xx.
               
              Managing
      Partner
               
25

Schedule
A

            Sahara
      Shareholder

            Sahara
      Shares

            Acquisition
      Shares

            BPA
      Associates, Inc.

            1,425,000

            1,425,000

            Xxxxx
      Xxxxxx

            200,000

            200,000

            Xxxx
      Xxxxxxxxx

            100,000

            100,000

            Xxxxxxxx
      Xxxxxxxx III

            452,000

            452,000

            Xxxxxxxx
      Xxxxxxxx XX

            100,000

            100,000

            Arrow
      Capital

            187,500

            187,500

            Xxxxxxx
      Xxxxx

            210,000

            210,000

            Xxxx
      Xxxxx

            480,000

            480,000

            Xxxx
      Xxx Xxxxxxx

            200,000

            200,000

            Xxxxx
      Xxxxxxxxx

            724,000

            724,000

            Xxxx
      Xxxxxxxx

            31,000

            31,000

            Xxxxxx
      Xxxxxxxx

            120,000

            120,000

            Xxxxxx
      Xxxxxxxx

            19,610

            19,610

            Xxxxxx
      Xxxxxx

            5,500

            5,500

            Xxxxx
      Xxxxxxxxx

            140,000

            140,000

            Xxxxx
      Xxxxxxx

            27,000

            27,000

            Xxxxx
      Xxxxxx

            15,000

            15,000

            SE,
      LLC

            13,763,390

            13,763,390

            Xxxxxx
      Xxxxxxx

            50,000

            50,000

            Totals

            18,250,000

            18,250,000

26
Document Metadata

Table of Contents

AGREEMENT AND PLAN OF MERGER

Document Metadata

	MAC FILMWORKS, INC.

	By:	/s/ Xxxxxx Xxxxxxxx
		Xxxxxx Xxxxxxxx
		Chief Executive Officer
	SAHARA MEDIA ACQUSITIONS, INC.

	By:	/s/ Xxxxxx Xxxxxxxx
		Xxxxxx Xxxxxxxx
		President
	SAHARA MEDIA, INC.

	By:	/s/ Xxxxxxxx Xxxxxxxx
		Xxxxxxxx Xxxxxxxx
		Chief Executive Officer
	XXXX XXXXXX BRIDGE & OPPORTUNITY FUND:

	By:	/s/ Xxxxxx X. Xxxxxxx, Xx.
		Xxxxxx X. Xxxxxxx, Xx.
		Managing Partner
Sahara Shareholder	Sahara Shares	Acquisition Shares
BPA Associates, Inc.	1,425,000	1,425,000
Xxxxx Xxxxxx	200,000	200,000
Xxxx Xxxxxxxxx	100,000	100,000
Xxxxxxxx Xxxxxxxx III	452,000	452,000
Xxxxxxxx Xxxxxxxx XX	100,000	100,000
Arrow Capital	187,500	187,500
Xxxxxxx Xxxxx	210,000	210,000
Xxxx Xxxxx	480,000	480,000
Xxxx Xxx Xxxxxxx	200,000	200,000
Xxxxx Xxxxxxxxx	724,000	724,000
Xxxx Xxxxxxxx	31,000	31,000
Xxxxxx Xxxxxxxx	120,000	120,000
Xxxxxx Xxxxxxxx	19,610	19,610
Xxxxxx Xxxxxx	5,500	5,500
Xxxxx Xxxxxxxxx	140,000	140,000
Xxxxx Xxxxxxx	27,000	27,000
Xxxxx Xxxxxx	15,000	15,000
SE, LLC	13,763,390	13,763,390
Xxxxxx Xxxxxxx	50,000	50,000

Totals	18,250,000	18,250,000