INDEMNIFICATION AGREEMENT
Exhibit 10.2
THIS AGREEMENT, made as of the 17th day
of September , 2008, by and between Sahara Media, Inc., a Delaware corporation
having its offices at 00 Xxxxxxxx Xxxxxx, 0xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000 (“Sahara”), and Xxxx Xxxxxx 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.
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1.2 Compensation.
Sahara shall pay a fee of $400,000 to
JTF upon the execution hereof.
1.3 Procedures.
(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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(b) After
any final judgment or award shall have been rendered by a court, arbitration
board or administrative agency of competent jurisdiction and the expiration of
the time in which to appeal therefrom, or a settlement shall have been
consummated, or Sahara and JTF shall have arrived at a mutually binding
agreement with respect to a Claim hereunder, Sahara shall forward to JTF notice
of any sums due and owing by JTF pursuant to this Agreement with respect to such
matter and JTF shall be required to pay all of the sums so due and owing to
Sahara by wire transfer of immediately available funds within 10 business days
after the date of such notice. The failure of Sahara to give reasonably prompt
notice of any Claim shall not release, waive or otherwise affect JTF’s
obligations with respect thereto except to the extent that JTF can demonstrate
actual loss and prejudice as a result of such failure.
ARTICLE
II
MISCELLANEOUS
PROVISIONS
2.1 Binding Effect;
Benefits. This Agreement shall inure to the benefit of, and
shall be binding upon, the parties hereto and their respective successors and
permitted assigns. Except as otherwise set forth herein, this
Agreement may not be assigned by any party hereto without the prior written
consent of the other party hereto. Except as otherwise set forth
herein, nothing in this Agreement, expressed or implied, is intended to confer
on any person other than the parties hereto or their respective successors and
permitted assigns any rights, remedies, obligations or liabilities under or by
reason of this Agreement.
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2.2. Notices. All
notices and other communications to be given or delivered or permitted under or
by reason of the provisions of this Agreement or in connection with the
transactions contemplated hereby shall be in writing and shall be deemed to be
delivered and received by the intended recipient as follows: (i) if personally
delivered, on the business day of such delivery (as evidenced by the receipt of
the personal delivery service), (ii) if mailed certified or registered mail
return receipt requested, two (2) business days after being mailed, (iii) if
delivered by overnight courier (with all charges having been prepaid), on the
business day of such delivery (as evidenced by the receipt of the overnight
courier service of recognized standing), or (iv) if delivered by facsimile
transmission, on the business day of such delivery if sent by 6:00 p.m. in the
time zone of the recipient, or if sent after that time, on the next succeeding
business day (as evidenced by the printed confirmation of delivery generated by
the sending party’s telecopier machine). If any notice, demand,
consent, request, instruction or other communication cannot be delivered because
of a changed address of which no notice was given (in accordance with this
Section 2.2), or the refusal to accept same, the notice, demand, consent,
request, instruction or other communication shall be deemed received on the
second business day the notice is sent (as evidenced by a sworn affidavit of the
sender). All such notices, demands, consents, requests, instructions
and other communications will be sent to the following addresses or facsimile
numbers as applicable.
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If
to Sahara:
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Sahara
Media, Inc.
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00
Xxxxxxxx Xxxxxx, 0xx
Xxxxx
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Xxx
Xxxx, Xxx Xxxx 00000
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Phone:
000-000-0000
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Fax:
000-000-0000
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With
a copy to:
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Sichenzia
Xxxx Xxxxxxxx Xxxxxxx LLP
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00
Xxxxxxxx, 00xx
Xxxxx
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Xxx
Xxxx, XX 00000
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Phone:
000-000-0000
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Fax:
000-000-0000
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Attention:
Xxxx Xxxx, Esq.
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If
to JTF:
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Xxxx
Xxxxxx Bridge & Opportunity Fund
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0
Xxxxxxxx, Xxxxx 0000
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Xxxxxxx,
Xxxxx 00000
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Attention:
Xxxxxx Jarksey
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| Fax: _______________ | ||
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Phone: _____________ | |
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With
a Copy to:
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Xxxxxx X. Xxxxxxxxx | |
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Xxxxxx & Xxxxxxxxx PC | |
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0 Xxxxxxxx, Xxxxx 0000 | |
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Xxxxxxx, Xxxxx 00000 | |
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Fax: 000 000 0000 | |
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Phone: 000 000 0000 |
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2.3 Entire
Agreement. This Agreement constitutes the entire agreement and
supersedes all prior agreements and understandings, oral and written, between
the parties hereto with respect to the subject matter hereof.
2.4 Headings. The
section and other headings contained in this Agreement are for reference
purposes only and shall not be deemed to be a part of this Agreement or to
affect the meaning or interpretation of this Agreement.
2.5 Counterparts. This
Agreement may be executed in any number of counterparts, each of which, when
executed, shall be deemed to be an original and all of which together shall be
deemed to be one and the same instrument.
2.6 Governing
Law. This Agreement shall be construed as to both validity and
performance and enforced in accordance with and governed by the laws of the
State of New York, without giving effect to the conflicts of law principles
thereof.
2.7 Severability. If
any term or provision of this Agreement shall to any extent be invalid or
unenforceable, the remainder of this Agreement shall not be affected thereby,
and each term and provision of the Agreement shall be valid and enforced to the
fullest extent permitted by law.
2.8 Arbitration. 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.
2.9 Amendments. This
Agreement may not be modified or changed except by an instrument or instruments
in writing executed by the parties hereto.
2.10 Termination
of this Agreement. This Agreement shall terminate and be of no
further force or effect with respect to any Claim delivered to JTF after two
years from the date hereof; provided that any Claim delivered to JTF pursuant to
Section 1 hereof prior to such termination period shall be governed by the terms
of this Agreement, which shall continue to be in full force and effect with
respect to such claims.
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IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed as of the date
first above written.
| Sahara Media, Inc. | |||
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By:
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/s/ Xxxxxxxx Xxxxxxxx XX | |
| Xxxxxxxx Xxxxxxxx XX | |||
| Chief Executive Officer | |||
| Xxxx Xxxxxx Bridge & Opportunity Fund | |||
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By:
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/s/ Xxxxxx X. Xxxxxxx, Xx. | |
| Xxxxxx X. Xxxxxxx, Xx. | |||
| Managing Partner | |||
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