Document:

Unassociated Document

Exhibit
10.4

    SUBSCRIPTION
AGREEMENT

     

    SUBSCRIPTION
AGREEMENT (this “Agreement”) made as of the last date set forth on the signature
page hereof between Mac Filmworks, Inc., a Delaware corporation whose stock is
included for quotation on the Over-the-Counter Bulletin Board (the “Company”),
and the undersigned (the “Subscriber”).

     

    W I T N E
S S E T H:

    WHEREAS,
the Company is conducting a private offering (the “Offering”) consisting of up
to 80 units (the “Units”), with each Unit consisting of 100,000 shares of common
stock, $0.0001 par value per share (the “Common Stock”), and 100,000 warrants to
purchase a share of common stock with an exercise price of $2.50 per share (the
“Warrants”), at a purchase price of $125,000 per Unit; and

     

    WHEREAS,
the Subscriber desires to purchase that number of Units set forth on the
signature page hereof on the terms and conditions hereinafter set
forth.

     

    NOW,
THEREFORE, in consideration of the premises and the mutual representations and
covenants hereinafter set forth, the parties hereto do hereby agree as
follows:

     

    
      	
              I.  

            	
              SUBSCRIPTION FOR UNITS
      AND REPRESENTATIONS BY
SUBSCRIBER

            

    

     

    1.1 Subject
to the terms and conditions hereinafter set forth and in the Confidential
Private Offering Memorandum dated August 11, 2008 (such memorandum, together
with all amendments thereof and supplements and exhibits thereto, the
“Memorandum”), the Subscriber hereby irrevocably subscribes for and agrees to
purchase from the Company such number of Units, and the Company agrees to sell
to the Subscriber as is set forth on the signature page hereof, at a price equal
to $125,000 per Unit.  The purchase price is payable by personal or
business check or money order made payable to “Signature Bank, as Escrow Agent
for Sahara Media, Inc.” contemporaneously with the execution and delivery of
this Agreement by the Subscriber.  Subscribers may also pay the
subscription amount by, wire transfer of immediately payable funds
to:

     

    Signature
Bank

    950 Third Avenue

    New York, NY 10002

    ABA#: 026013576

    A/C#: 1500970525

    

    1.2 The
Subscriber recognizes that the purchase of the Units involves a high degree of
risk including, but not limited to, the following: (a) the Company remains a
development stage business with a limited operating history and requires
substantial funds in addition to the proceeds of the Offering; (b) an investment
in the Company is highly speculative, and only investors who can afford the loss
of their entire investment should consider investing in the Company and the
Units; (c) the Subscriber may not be able to liquidate its investment; (d)
transferability of the Common Stock and the Warrants is extremely limited; (e)
in the event of a disposition, the Subscriber could sustain the loss of its
entire investment; (f) the Company has not paid any dividends since its
inception and does not anticipate paying any dividends; and (g) the Company may
issue additional securities in the future which have rights and preferences that
are senior to those of the Common Stock.  Without limiting the
generality of the representations set forth in Section 1.5 below, the Subscriber
represents that the Subscriber has carefully reviewed the section of the
Memorandum captioned “Risk Factors.”

     

    
      
         

      

      
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    1.3 The
Subscriber represents that the Subscriber is an “accredited investor” as such
term is defined in Rule 501 of Regulation D (“Regulation D”) promulgated under
the Securities Act of 1933, as amended (the “Securities Act”), and that the
Subscriber is able to bear the economic risk of an investment in the Units. The
Subscriber is referred to the section of the Memorandum entitled “Investor
Qualifications” and to the Confidential Prospective Purchaser Questionnaire for
a full explanation of the term “accredited investor”.

     

    1.4 The
Subscriber hereby acknowledges and represents that (a) the Subscriber has
knowledge and experience in business and financial matters, prior investment
experience, or the Subscriber has employed the services of a “purchaser
representative” (as defined in Rule 501 of Regulation D), attorney and/or
accountant to read all of the documents furnished or made available by the
Company both to the Subscriber and to all other prospective investors in the
Units to evaluate the merits and risks of such an investment on the Subscriber’s
behalf; (b) the Subscriber recognizes the highly speculative nature of this
investment; and (c) the Subscriber is able to bear the economic risk that the
Subscriber hereby assumes.

     

    1.5 The
Subscriber hereby acknowledges receipt and careful review of this Agreement, the
Memorandum (which includes the Risk Factors), including all exhibits thereto,
and any documents which may have been made available upon request as reflected
therein (collectively referred to as the “Offering Materials”) and hereby
represents that the Subscriber has been furnished by the Company during the
course of the Offering with all information regarding the Company, the terms and
conditions of the Offering and any additional information that the Subscriber
has requested or desired to know, and has been afforded the opportunity to ask
questions of and receive answers from duly authorized officers or other
representatives of the Company concerning the Company and the terms and
conditions of the Offering.

     

    1.6       
   (a) In
making the decision to invest in the Units the Subscriber has relied solely upon
the information provided by the Company in the Offering Materials.  To
the extent necessary, the Subscriber has retained, at its own expense, and
relied upon appropriate professional advice regarding the investment, tax and
legal merits and consequences of this Agreement and the purchase of the Units
hereunder.  The Subscriber disclaims reliance on any statements made
or information provided by any person or entity in the course of Subscriber’s
consideration of an investment in the Units other than the Offering
Materials.

     

    (b) The
Subscriber represents that (i) the Subscriber was contacted regarding the sale
of the Units by the Company (or an authorized agent or representative thereof)
and (ii) no Units were offered or sold to it by means of any form of general
solicitation or general advertising, and in connection therewith, the Subscriber
did not (A) receive or review any advertisement, article, notice or other
communication published in a newspaper or magazine or similar media or broadcast
over television or radio, whether closed circuit, or generally available; or (B)
attend any seminar meeting or industry investor conference whose attendees were
invited by any general solicitation or general advertising.

     

    
      
         

      

      
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    1.7 The
Subscriber hereby represents that the Subscriber, either by reason of the
Subscriber’s business or financial experience or the business or financial
experience of the Subscriber’s professional advisors (who are unaffiliated with
and not compensated by the Company or any affiliate or selling agent of the
Company, directly or indirectly), has the capacity to protect the Subscriber’s
own interests in connection with the transaction contemplated
hereby.

     

    1.8 The
Subscriber hereby acknowledges that the Offering has not been reviewed by the
U.S. Securities and Exchange Commission (the “SEC”) nor any state regulatory
authority since the Offering is intended to be exempt from the registration
requirements of Section 5 of the Securities Act pursuant to Regulation D
promulgated thereunder.  The Subscriber understands that the Common
Stock, the Warrant Shares (defined below), and the Warrants have not been
registered under the Securities Act or under any state securities or “blue sky”
laws and agrees not to sell, pledge, assign or otherwise transfer or dispose of
the Common Stock, Warrant Shares, or Warrants unless they are registered under
the Securities Act and under any applicable state securities or “blue sky” laws
or unless an exemption from such registration is available.

     

    1.9 The
Subscriber understands that the Common Stock, Warrant Shares and Warrants have
not been registered under the Securities Act by reason of a claimed exemption
under the provisions of the Securities Act that depends, in part, upon the
Subscriber’s investment intention.  In this connection, the Subscriber
hereby represents that the Subscriber is purchasing the Units for the
Subscriber’s own account for investment and not with a view toward the resale or
distribution to others.  The Subscriber, if an entity, further
represents that it was not formed for the purpose of purchasing the
Units.

     

    1.10 The
Subscriber understands that there is a limited trading market for the Common
Stock and that an active market may not develop for the Common
Stock.  The Subscriber understands that even if an active market
develops for the Common Stock, Rule 144 promulgated under the Securities Act
requires for non-affiliates (“Rule 144”), among other conditions, a one-year
holding period commencing as of the date that the Company files “Form 10
information” with the SEC, prior to the resale of securities acquired in a
non-public offering without having to satisfy the registration requirements
under the Securities Act.  The Subscriber understands and hereby
acknowledges that the Company is under no obligation to register any of the
Common Stock, the Warrant Shares, or the Warrants under the Securities Act or
any state securities or “blue sky” laws other than as set forth in Article
V.

     

    1.11 The
Subscriber agrees that if and to the extent required by an underwriter of the
Company’s Common Stock in an initial public offering, the undersigned will
execute a “lock-up” agreement regarding some or all of the undersigned’s Common
Stock thereby agreeing not to sell such securities for a period of time after
completion of the public offering whether or not such securities are included in
the public offering.

     

    1.12 The
Subscriber consents to the placement of a legend on any certificate or other
document evidencing the Common Stock, the Warrant Shares, and the Warrants that
such securities have not been registered under the Securities Act or any state
securities or “blue sky” laws and setting forth or referring to the restrictions
on transferability and sale thereof contained in this Agreement.  The
Subscriber is aware that the Company will make a notation in its appropriate
records with respect to the restrictions on the transferability of such
securities. The legend to be placed on each certificate shall be in form
substantially similar to the following:

     

    
      
         

      

      
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    “THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR ANY STATE SECURITIES OR “BLUE
SKY LAWS,” AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR
HYPOTHECATED ABSENT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR
COMPLIANCE WITH RULE 144 PROMULGATED UNDER SUCH ACT, OR UNLESS THE COMPANY HAS
RECEIVED AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY AND ITS
COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.”

     

    1.13 The
Subscriber understands that the Company will review this Agreement and is hereby
given authority by the Subscriber to call Subscriber’s bank or place of
employment or otherwise review the financial standing of the Subscriber; and it
is further agreed that the Company, at its sole discretion, reserves the
unrestricted right, without further documentation or agreement on the part of
the Subscriber, to reject or limit any subscription, to accept subscriptions for
fractional shares of Common Stock and to close the Offering to the Subscriber at
any time and that the Company will issue stop transfer instructions to its
transfer agent with respect to such Common Stock.

     

    1.14 The
Subscriber hereby represents that the address of the Subscriber furnished by
Subscriber on the signature page hereof is the Subscriber’s principal residence
if Subscriber is an individual or its principal business address if it is a
corporation or other entity.

     

    1.15 The
Subscriber represents that the Subscriber has full power and authority
(corporate, statutory and otherwise) to execute and deliver this Agreement and
to purchase the Units.  This Agreement constitutes the legal, valid
and binding obligation of the Subscriber, enforceable against the Subscriber in
accordance with its terms.

     

    1.16 If the
Subscriber is a corporation, partnership, limited liability company, trust,
employee benefit plan, individual retirement account, Keogh Plan, or other
tax-exempt entity, it is authorized and qualified to invest in the Company and
the person signing this Agreement on behalf of such entity has been duly
authorized by such entity to do so.

     

    1.17 The
Subscriber acknowledges that at such time, if ever, as the Common Stock and the
Warrant Shares are registered (as such term is defined in Article V hereof),
sales of the Common Stock and Warrant Shares will be subject to state securities
laws.

     

    1.18       
 (a) The
Subscriber agrees not to issue any public statement with respect to the
Subscriber’s investment or proposed investment in the Company or the terms of
any agreement or covenant between them and the Company without the Company’s
prior written consent, except such disclosures as may be required under
applicable law or under any applicable order, rule or regulation.

     

    (b) The
Company agrees not to disclose the names, addresses or any other information
about the Subscribers, except as required by law; provided, that the Company may
use the name of the Subscriber for any offering or in any registration statement
filed pursuant to Article V in which the Subscriber’s Common Stock is
included.

     

    
      
         

      

      
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    1.19 The
Subscriber understands that the Units are being offered and sold in reliance on
specific exemptions from the registration requirements of federal and state
securities laws and that the Company and the principals and controlling persons
thereof are relying upon the truth and accuracy of the representations,
warranties, agreements, acknowledgments, and understandings set forth herein in
order to determine the applicability of such exemptions and the undersigned’s
suitability to acquire Units.

     

    1.20 The
Subscriber agrees to hold the Company and its directors, officers, employees,
affiliates, controlling persons and agents and their respective heirs,
representatives, successors and assigns harmless and to indemnify them against
all liabilities, costs and expenses incurred by them as a result of (a) any sale
or distribution of the Common Stock, Warrant Shares, or Warrants by the
Subscriber in violation of the Securities Act or any applicable state securities
or “blue sky” laws; or (b) any false representation or warranty or any breach or
failure by the Subscriber to comply with any covenant made by the Subscriber in
this Agreement or any other document furnished by the Subscriber to any of the
foregoing in connection with this transaction.

     

    
      	
              II.  

            	
              REPRESENTATIONS BY AND
      COVENANTS OF THE COMPANY

            

    

     

    The
Company hereby represents and warrants to the Subscriber that:

     

    2.1 Organization, Good Standing
and Qualification.  The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has full corporate power and authority to conduct its
business.

     

    2.2 Authorization;
Enforceability.  The Company has all corporate right, power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby.  All corporate action on the part of the Company,
its directors and stockholders necessary for the (i) authorization execution,
delivery and performance of this Agreement by the Company; and (ii)
authorization, sale, issuance and delivery of the Common Stock and Warrants
contemplated hereby and the performance of the Company’s obligations hereunder
has been taken.  This Agreement has been duly executed and delivered
by the Company and constitutes a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, subject
to laws of general application relating to bankruptcy, insolvency and the relief
of debtors and rules of law governing specific performance, injunctive relief or
other equitable remedies, and to limitations of public policy.  The
Common Stock and Warrant Shares, when issued and fully paid for in accordance
with the terms of this Agreement, will be validly issued, fully paid and
nonassessable.  The issuance and sale of the Common Stock and Warrant
Shares contemplated hereby will not give rise to any preemptive rights or rights
of first refusal on behalf of any person which have not been waived in
connection with this offering.

     

    
      	
              III.  

            	
              TERMS OF
      SUBSCRIPTION

            

    

     

    3.1 Pending
the sale of the Units, all funds paid hereunder shall be deposited with
Signature Bank.

     

    3.2 Certificates
representing the Common Stock and Warrants purchased by the Subscriber pursuant
to this Agreement will be prepared for delivery to the Subscriber within 15
business days following the Closing (as defined in the Memorandum) at which such
purchase takes place. The Subscriber hereby authorizes and directs the Company
to deliver the certificates representing the Common Stock and Warrants purchased
by the Subscriber pursuant to this Agreement directly to the Subscriber’s
residential or business address indicated on the signature page
hereto.

     

    
      
         

      

      
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              IV.  

            	
              CONDITIONS TO
      OBLIGATIONS OF THE
SUBSCRIBERS

            

    

     

    4.1 The
Subscriber’s obligation to purchase the Units at the Closing at which such
purchase is to be consummated is subject to the fulfillment on or prior to such
Closing of the following conditions, which conditions may be waived at the
option of each Subscriber to the extent permitted by law:

     

    (a) Covenants.  All
covenants, agreements and conditions contained in this Agreement to be performed
by the Company on or prior to the date of such Closing shall have been performed
or complied with in all material respects.

     

    (b) No Legal Order
Pending.  There shall not then be in effect any legal or other
order enjoining or restraining the transactions contemplated by this
Agreement.

     

    (c) No Law Prohibiting or
Restricting Such Sale.  There
shall not be in effect any law, rule or regulation prohibiting or restricting
such sale or requiring any consent or approval of any person, which shall not
have been obtained, to issue the Common Stock or the Warrants (except as
otherwise provided in this Agreement).

     

    
      	
              V.  

            	
              REGISTRATION
      RIGHTS

            

    

     

    5.1 Definitions.  As
used in this Agreement, the following terms shall have the following
meanings.

     

    (a) The term
“Holder” shall mean any person owning or having the right to acquire Registrable
Securities or any permitted transferee of a Holder.

     

    (b) The terms
“register,” “registered” and “registration” refer to a registration effected by
preparing and filing a registration statement or similar document in compliance
with the Securities Act, and the declaration or order of effectiveness of such
registration statement or document.

     

    (c) The term
“Registrable Securities” shall mean: (i) the Common Stock, and (ii) the shares
of common stock underlying the Warrants (the “Warrant Shares”), provided,
however, that securities shall only be treated as Registrable Securities if and
only for so long as they (A) have not been disposed of pursuant to a
registration statement declared effective by the SEC; (B) have not been sold in
a transaction exempt from the registration and prospectus delivery requirements
of the Securities Act so that all transfer restrictions and restrictive legends
with respect thereto are removed upon the consummation of such sale; (C) are
held by a Holder or a permitted transferee of a Holder pursuant to Section 5.8;
and (D) may not be disposed of under Rule 144 under the Securities Act without
restriction.

     

    (d) The term “SEC Guidance” means
(i) any publicly-available written or oral guidance, requirements or notice of
the staff of the SEC, and (ii) the Securities Act.

     

    
      
         

      

      
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    (e) The term “Rule 415” means Rule 415
promulgated by the SEC pursuant to the Securities Act, as such Rule may be
amended or interpreted from time to time, or any similar rule or regulation
hereafter adopted by the SEC having substantially the same purpose and effect as
such Rule.

    

    5.2 Shelf
Registration.  The Company will use its best reasonable efforts
to file a registration statement, within 45 days after the filing of the
Company’s “Form 10 information” with the SEC, covering the resale of all or such
portion of the Registrable Securities as permitted by SEC Guidance, for an
offering to be made on a continuous basis pursuant to Rule 415. The registration
statement filed pursuant to this Section 5.2 shall be on Form S-1, except if the
Company is not then eligible to register for resale the Registrable Securities
on Form S-1, in which case such registration shall be on another appropriate
form. In the event that less than all of the Registrable Securities are included
in the registration statement as a result of SEC Guidance, then the Company will
use its best reasonable efforts to file additional registration statements,
registering the allowable balance pursuant to Rule 415, in a manner permitted by
the SEC, until all of the Registrable Securities have been
registered.

     

    5.3 Registration
Procedures.  Whenever required under this Article V to include
Registrable Securities in a Company registration statement, the Company shall,
as expeditiously as reasonably possible:

     

    (a) Use its
best reasonable efforts to (i) cause such registration statement to become
effective, and (ii) cause such registration statement to remain effective until
the earliest to occur of (A) such date as the sellers of Registrable Securities
(the “Selling Holders”) have completed the distribution described in the
registration statement and (B) such time that all of such Registrable Securities
are no longer, by reason of Rule 144 under the Securities Act, required to be
registered for the sale thereof by such Holders.  The Company will
also use its best reasonable efforts to, during the period that such
registration statement is required to be maintained hereunder, file such
post-effective amendments and supplements thereto as may be required by the
Securities Act and the rules and regulations thereunder or otherwise to ensure
that the registration statement does not contain any untrue statement of
material fact or omit to state a fact required to be stated therein or necessary
to make the statements contained therein, in light of the circumstances under
which they are made, not misleading; provided, however, that if applicable rules
under the Securities Act governing the obligation to file a post-effective
amendment permits, in lieu of filing a post-effective amendment that (i)
includes any prospectus required by Section 10(a)(3) of the Securities Act or
(ii) reflects facts or events representing a material or fundamental change in
the information set forth in the registration statement, the Company may
incorporate by reference information required to be included in (i) and (ii)
above to the extent such information is contained in periodic reports filed
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) in the registration statement.

     

    (b) Prepare
and file with the SEC such amendments and supplements to such registration
statement, and the prospectus used in connection with such registration
statement, as may be necessary to comply with the provisions of the Securities
Act with respect to the disposition of all securities covered by such
registration statement.

     

    (c) Furnish
to the Selling Holders such numbers of copies of a prospectus, including a
preliminary prospectus as amended or supplemented from time to time, in
conformity with the requirements of the Securities Act, and such other documents
as they may reasonably request in order to facilitate the disposition of
Registrable Securities owned by them.

     

    
      
         

      

      
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    (d) Use best
reasonable efforts to register and qualify the securities covered by such
registration statement under such other federal or state securities laws of such
jurisdictions as shall be reasonably requested by the Selling Holders; provided,
however, that the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions, unless the Company is
already subject to service in such jurisdiction and except as may be required by
the Securities Act.

     

    (e) In the
event of any underwritten public offering, enter into and perform its
obligations under an underwriting agreement, in usual and customary form, with
the managing underwriter of such offering.  Each Selling Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.

     

    (f) Notify
each Holder of Registrable Securities covered by such registration statement, at
any time when a prospectus relating thereto is required to be delivered under
the Securities Act, (i) when the registration statement or any post-effective
amendment and supplement thereto has become effective; (ii) of the issuance by
the SEC of any stop order or the initiation of proceedings for that purpose (in
which event the Company shall make every effort to obtain the withdrawal of any
order suspending effectiveness of the registration statement at the earliest
possible time or prevent the entry thereof); (iii) of the receipt by the Company
of any notification with respect to the suspension of the qualification of the
Registrable Securities for sale in any jurisdiction or the initiation of any
proceeding for such purpose; and (iv) of the happening of any event as a result
of which the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then
existing.

     

    (g) Cause all
such Registrable Securities registered hereunder to be listed on each securities
exchange or quotation service on which similar securities issued by the Company
are then listed or quoted.

     

    (h) Provide a
transfer agent for all Registrable Securities registered pursuant hereunder and
CUSIP number for all such Registrable Securities, in each case not later than
the effective date of such registration.

     

    (i) Cooperate
with the Selling Holders and the managing underwriters, if any, to facilitate
the timely preparation and delivery of certificates representing the Registrable
Securities to be sold, which certificates will not bear any restrictive legends;
and enable such Registrable Securities to be in such denominations and
registered in such names as the managing underwriters, if any, shall request at
least two business days prior to any sale of the Registrable Securities to the
underwriters.

     

    (j) Comply
with all applicable rules and regulations of the SEC.

     

    (k) If the
offering is underwritten and at the request of any Selling Holder, use its best
reasonable efforts to furnish on the date that Registrable Securities are
delivered to the underwriters for sale pursuant to such registration: (i)
opinions dated such date of counsel representing the Company for the purposes of
such registration, addressed to the underwriters and the transfer agent for the
Registrable Securities so delivered, respectively, to the effect that such
registration statement has become effective under the Securities Act and such
Registrable Securities are freely tradable, and covering such other matters as
are customarily covered in opinions of issuer’s counsel delivered to
underwriters and transfer agents in underwritten public offerings and (ii) a
letter dated such date from the independent public accountants who have
certified the financial statements of the Company included in the registration
statement or the prospectus, covering such matters as are customarily covered in
accountants’ letters delivered to underwriters in underwritten public
offerings.

     

    
      
         

      

      
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    5.4 Furnish
Information.  It shall be a condition precedent to the
obligation of the Company to take any action pursuant to this Article V with
respect to the Registrable Securities of any Selling Holder that such Holder
shall furnish to the Company such information regarding the Holder, the
Registrable Securities held by the Holder, and the intended method of
disposition of such securities as shall be reasonably required by the Company to
effect the registration of such Holder’s Registrable Securities.

     

    5.5 Registration
Expenses.  The Company shall bear and pay all registration
expenses incurred in connection with any registration, filing or qualification
of Registrable Securities with respect to registration pursuant to Section 5.2
for each Holder, but excluding (i) legal expenses of the Holders and (ii)
underwriting discounts and commissions relating to Registrable
Securities.

     

    5.6 Delay of
Registration.  No Holder shall have any right to obtain or seek
an injunction restraining or otherwise delaying any such registration as the
result of any controversy that might arise with respect to the interpretation or
implementation of this Article.

     

    5.7 Indemnification.  In
the event that any Registrable Securities are included in a registration
statement under this Article V:

     

    (a) To the
extent permitted by law, the Company will indemnify and hold harmless each
Holder, any underwriter (as defined in the Securities Act) for such Holder and
each person, if any, who controls such Holder or underwriter within the meaning
of the Securities Act or the Exchange Act, against any losses, claims, damages,
or liabilities (joint or several) to which they may become subject under the
Securities Act, or the Exchange Act, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or are based upon any
of the following statements, omissions or violations (collectively a
“Violation”):  (i) any untrue statement of a material fact contained
in such registration statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto, (ii) the
omission to state therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading, or (iii) any violation
by the Company of the Securities Act, the Exchange Act, or any rule or
regulation promulgated under the Securities Act, or the Exchange Act, and the
Company will pay to each such Holder, underwriter or controlling person, as
incurred, any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability, or
action; provided, however, that the indemnity agreement contained in this
Section 5.7(a) shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability, or action if such settlement is effected without the
consent of the Company (which consent shall not be unreasonably withheld), nor
shall the Company be liable in any such case for any such loss, claim, damage,
liability, or action to the extent that it arises out of or is based upon a
Violation which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration by
any such Holder, underwriter or controlling person.

     

    
      
         

      

      
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    (b) To the
extent permitted by law, each Selling Holder will indemnify and hold harmless
the Company, each of its directors, each of its officers, each person, if any,
who controls the Company within the meaning of the Securities Act, any
underwriter, any other Holder selling securities in such registration statement
and any controlling person of any such underwriter or other Holder, against any
losses, claims, damages, or liabilities (joint or several) to which any of the
foregoing persons may become subject, under the Securities Act, or the Exchange
Act, insofar as such losses, claims, damages, or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation, in each case to
the extent (and only to the extent) that such Violation occurs in reliance upon
and in conformity with written information furnished by such Holder expressly
for use in connection with such registration; and each such Holder will pay, as
incurred, any legal or other expenses reasonably incurred by any person intended
to be indemnified pursuant to this Section 5.7(b), in connection with
investigating or defending any such loss, claim, damage, liability, or action;
provided, however, that the
indemnity agreement contained in this Section 5.7(b) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder, which consent shall
not be unreasonably withheld; provided, further, that, in no
event shall any indemnity under this Section 5.7(b) exceed the greater of the
cash value of the (i) gross proceeds from the Offering received by such Holder
or (ii) such Holder’s investment pursuant to this Agreement as set forth on the
signature page attached hereto.

     

    (c) Promptly
after receipt by an indemnified party under this Section 5.7 of notice of the
commencement of any action (including any governmental action), such indemnified
party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Section 5.7, deliver to the indemnifying party a
written notice of the commencement thereof and the indemnifying party shall have
the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly notified, to assume
the defense thereof with counsel selected by the indemnifying party and approved
by the indemnified party (whose approval shall not be unreasonably withheld);
provided, however, that an indemnified party (together with all other
indemnified parties which may be represented without conflict by one counsel)
shall have the right to retain one separate counsel, with the fees and expenses
to be paid by the indemnifying party, if representation of such indemnified
party by the counsel retained by the indemnifying party would be inappropriate
due to actual or potential differing interests between such indemnified party
and any other party represented by such counsel in such
proceeding.  The failure to deliver written notice to the indemnifying
party within a reasonable time of the commencement of any such action, if
prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
5.7, but the omission so to deliver written notice to the indemnifying party
will not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 5.7.

     

    (d) If the
indemnification provided for in this Section 5.7 is held by a court of competent
jurisdiction to be unavailable to an indemnified party with respect to any loss,
liability, claim, damage, or expense referred to therein, then the indemnifying
party, in lieu of indemnifying such indemnified party hereunder, shall
contribute to the amount paid or payable by such indemnified party as a result
of such loss, liability, claim, damage, or expense in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the one
hand and of the indemnified party on the other in connection with the statements
or omissions that resulted in such loss, liability, claim, damage, or expense as
well as any other relevant equitable considerations.  The relative
fault of the indemnifying party and of the indemnified party shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the alleged omission to state a material fact
relates to information supplied by the indemnifying party or by the indemnified
party and the parties’ relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    (e) Notwithstanding
the foregoing, to the extent that the provisions on indemnification and
contribution contained in an underwriting agreement entered into in connection
with an underwritten public offering are in conflict with the foregoing
provisions, the provisions in such underwriting agreement shall
control.

     

    (f) The
obligations of the Company and Holders under this Section 5.7 shall survive the
completion of the Offering.

     

    5.8 Permitted
Transferees.  The rights to cause the Company to register
Registrable Securities granted to the Holders by the Company under this Article
V may be assigned in full by a Holder in connection with a transfer by such
Holder of its Registrable Securities, to (a) any partner or retired partner of a
Holder that is a partnership, or (b) any family member or trust for the benefit
of any individual Holder, provided that (i) such Holder gives prior written
notice to the Company; (ii) such transferee agrees to comply with the terms and
provisions of this Agreement;  (iii) such transfer is otherwise
in compliance with this Agreement; and (iv) such transfer is otherwise
effected in accordance with applicable securities laws.  Except as
specifically permitted by this Section 5.8, the rights of a Holder with respect
to Registrable Securities as set out herein shall not be transferable to any
other person, and any attempted transfer shall cause all rights of such Holder
therein to be forfeited.

     

    
      	
              VI.  

            	
              MISCELLANEOUS

            

    

     

    6.1 Any
notice or other communication given hereunder shall be deemed sufficient if in
writing and sent by registered or certified mail, return receipt requested, or
delivered by hand against written receipt therefor, addressed as
follows:

     

    if to the
Company, to it at:

     

    75
Franklin Street, 2nd
Floor

    New York,
NY 10013

    Attn:  Philmore
Anderson IV, CEO

    

    With a
copy to:

    

    Sichenzia
Ross Friedman Ference LLP

    61
Broadway

    New York,
NY 10006

    Attn:  Marc
Ross, Esq.

    

    if to the
Subscriber, to the Subscriber’s address indicated on the signature page of this
Agreement.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    Notices
shall be deemed to have been given or delivered on the date of mailing, except
notices of change of address, which shall be deemed to have been given or
delivered when received.

     

    6.2 Except as
otherwise provided herein, this Agreement shall not be changed, modified or
amended except by a writing signed by the parties to be charged, and this
Agreement may not be discharged except by performance in accordance with its
terms or by a writing signed by the party to be charged.

     

    6.3 Subject
to the provisions of Section 5.8, this Agreement shall be binding upon and inure
to the benefit of the parties hereto and to their respective heirs, legal
representatives, successors and assigns.  This Agreement sets forth
the entire agreement and understanding between the parties as to the subject
matter hereof and merges and supersedes all prior discussions, agreements and
understandings of any and every nature among them.

     

    6.4 Upon the
execution and delivery of this Agreement by the Subscriber, this Agreement shall
become a binding obligation of the Subscriber with respect to the purchase of
Units as herein provided, subject, however, to the right hereby reserved by the
Company to enter into the same agreements with other subscribers and to add
and/or delete other persons as subscribers.

     

    6.5 NOTWITHSTANDING
THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY ANY OF THE PARTIES HERETO, THE
PARTIES EXPRESSLY AGREE THAT ALL THE TERMS AND PROVISIONS HEREOF SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO SUCH STATE’S PRINCIPLES OF CONFLICTS OF LAW.  THE
PARTIES HEREBY IRREVOCABLY CONSENT TO THE JURISDICTION OF THE COURTS OF THE
STATE OF NEW YORK AND THE FEDERAL DISTRICT COURTS SITUATED THEREIN AND AGREE TO
SAID VENUE.

     

    6.6 In order
to discourage frivolous claims the parties agree that unless a claimant in any
proceeding arising out of this Agreement succeeds in establishing his claim and
recovering a judgment against another party (regardless of whether such claimant
succeeds against one of the other parties to the action), then the other party
shall be entitled to recover from such claimant all of its/their reasonable
legal costs and expenses relating to such proceeding and/or incurred in
preparation therefor.

     

    6.7 The
holding of any provision of this Agreement to be invalid or unenforceable by a
court of competent jurisdiction shall not affect any other provision of this
Agreement, which shall remain in full force and effect.  If any
provision of this Agreement shall be declared by a court of competent
jurisdiction to be invalid, illegal or incapable of being enforced in whole or
in part, such provision shall be interpreted so as to remain enforceable to the
maximum extent permissible consistent with applicable law and the remaining
conditions and provisions or portions thereof shall nevertheless remain in full
force and effect and enforceable to the extent they are valid, legal and
enforceable, and no provisions shall be deemed dependent upon any other covenant
or provision unless so expressed herein.

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    6.8 It is
agreed that a waiver by either party of a breach of any provision of this
Agreement shall not operate, or be construed, as a waiver of any subsequent
breach by that same party.

     

    6.9 All of
the representations and warranties contained in this Subscription Agreement
shall survive execution and delivery of this Subscription Agreement and the
undersigned’s investment in the Company.

     

    6.10 This
Subscription Agreement shall be governed by, interpreted under, and construed in
accordance with, the internal laws of the State of New York applicable to
agreements made and to be performed within the State of New York without regard
to the principles of conflicts-of-law thereof.

     

    6.11 The
parties agree to execute and deliver all such further documents, agreements and
instruments and take such other and further action as may be necessary or
appropriate to carry out the purposes and intent of this Agreement.

     

    6.12 This
Agreement may be executed in two or more counterparts each of which shall be
deemed an original, but all of which shall together constitute one and the same
instrument.

     

    6.13 Nothing
in this Agreement shall create or be deemed to create any rights in any person
or entity not a party to this Agreement.

     

    

    IN
WITNESS WHEREOF, the undersigned have executed this Subscription Agreement as of
_____________________, 2008.

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    

    SUBSCRIPTION
AGREEMENT COUNTERPART SIGNATURE PAGE

    [COMPANY
OR TRUST]

    

    The
undersigned hereby represents, warrants and covenants that the undersigned is
duly authorized by the prospective investor to take all requisite action on the
part of the prospective investor listed below to enter into this Agreement and,
further, that the prospective investor has all requisite authority to enter into
such Agreement.

     

    The
undersigned represents and warrants that each of the above representations,
agreements or understandings set forth herein applies to the prospective
investor and that the undersigned has authority under the charter, by-laws,
corporate resolutions or trust agreement of such prospective investor to execute
this Agreement.

     

    
      	 	 	 	 
	      
              Name
      of Company (Please type or print)

            	 	 	 

    

     

    
      	      
              By:

            	 	 	 	 

    

    
      	 	      
              Name:

            	 	 	 	 
	 	      
              Title:

            	 	 	 	 

    

     

    
      	
              Number of
      Units

            	 	 	 Amount of
      check enclosed:	 	 
	      
              Subscribed for:
      

            	 	 	$	 	 	 
	 	 	 	 	 	 

    

     

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    SUBSCRIPTION
AGREEMENT COUNTERPART SIGNATURE PAGE

    [PARTNERSHIP]

    

    If the
prospective investor is a PARTNERSHIP, complete the following and enclose a true
copy of the Partnership Agreement of the prospective investor:

     

    The
undersigned hereby represents, warrants and covenants that the undersigned is a
general partner of the prospective investor named below, is duly authorized by
the prospective investor to enter into this Agreement, and that the prospective
investor has all requisite authority to enter into this Agreement and set forth
below are the names of all Partners of the prospective investor.

     

    The
undersigned represents and warrants that each of the above representations,
agreements or undertakings set forth herein applies to the prospective investor
and that the undersigned is authorized by such prospective investor to execute
this Agreement.

    
       

      
        	 	 	 	 
	      
                Name
      of Company (Please type or print)

              	 	 	 

      

       

      
        	      
                By:

              	 	 	 	 

      

      
        	 	      
                Name:

              	 	 	 	 
	 	      
                Title:

              	 	 	 	 

      

       

    

    
      
        	Names of
      Partners: 	 	Signature:	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 

      

    

    (Add
additional sheets if necessary)

    
       

      
        	
                Number of
      Units

              	 	 	 Amount of
      check enclosed:	 	 
	      
                Subscribed for:
      

              	 	 	$	 	 	 
	 	 	 	 	 	 

      

    

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    SUBSCRIPTION
AGREEMENT COUNTERPART SIGNATURE PAGE

    [INDIVIDUAL]

    

    If the
prospective investor is an individual, please execute this Agreement
below.

    
      
         

        
          	 	 	 	 
	      
                  Name
      of Company (Please type or print)

                	 	 	 

        

         

        
          	      
                  By:

                	 	 	 	 

        

        
          	 	      
                  Name:

                	 	 	 	 
	 	 	 	 	 	 
	 	      
                  And
      (if applicable)

                	 	 	 

        

      

    

    
       

      
        	      
                By:

              	 	 	 	 

      

      
        	 	      
                Name:

              	 	 	 	 

      

       

    

    HOW UNITS
WILL BE HELD:

    Individually          ______

    JTWROS               ______

    TBTE                     ______

     

    
      
        
          	
                  Number of
      Units

                	 	 	 Amount of
      check enclosed:	 	 
	      
                  Subscribed for:
      

                	 	 	$	 	 	 
	 	 	 	 	 	 

        

      

    

     

    *If
investment is taken in joint names, both must sign.

    

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    [ACCEPTANCE
PAGE FOR SUBSCRIPTION AGREEMENT]

    

    Agreed to
and accepted as of ____________________, 2008.

     

    
      
        	 	      
                Mac
      Filmworks, Inc.

              	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ 	 
	 	      
                Name:

              	 	 
	 	      
                Title:

              	 	 
	 	 	 	 

      

       

       

       

       

       

    

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    CERTIFICATE
OF SIGNATORY

    

    (To be
completed if Units are

    being
subscribed for by an entity)

    

    

    I,
____________________________, am the ____________________________ of
__________________________________________ (the “Entity”).

    

    I certify
that I am empowered and duly authorized by the Entity to execute and carry out
the terms of the Subscription Agreement and to purchase and hold the Units, and
certify further that the Subscription Agreement has been duly and validly
executed on behalf of the Entity and constitutes a legal and binding obligation
of the Entity.

    

    IN
WITNESS WHEREOF, I have set my hand this ________ day of _________________,
2008

    

    
      
        	 	 	 	 
	
                 

              	
                 

              	 	 
	 	 	(Signature)	 
	 	 	 	 
	 	 	 	 

      

    

     

     

     

     

     

     

     

     

    18Unassociated Document

    Exhibit 10.5

     

    
 

     

    FORM OF
WARRANT

     

    NEITHER
THIS SECURITY NOR ANY SECURITIES WHICH MAY BE ISSUED UPON EXERCISE OF THIS
SECURITY HAVE BEEN REGISTERED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY U.S. STATE OR OTHER JURISDICTION OR ANY
EXCHANGE OR SELF-REGULATORY ORGANIZATION, IN RELIANCE UPON EXEMPTIONS FROM
REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED, AND SUCH OTHER
LAWS AND REQUIREMENTS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD, EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR LISTING OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, SUCH REGISTRATION
AND/OR LISTING REQUIREMENTS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE
TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH WILL BE REASONABLY ACCEPTABLE
TO THE COMPANY.

    .

     

    MAC
FILMWORKS, INC.

     

    COMMON
STOCK WARRANT

     

    No.
__________                                                                                                                         ______,
2008

     

    Mac Filmworks, Inc., a
Delaware corporation whose shares of Common Stock (defined below) are included
for quotation on the NASD Over-the-Counter Bulletin Board (the “Company”), hereby
certifies that ______________________________________, its permissible
transferees, designees, successors and assigns (collectively, the “Holder”), for value
received, is entitled to purchase from the Company at any time commencing on the
effective date (the “Effective Date”),
which shall be the date of the Closing (as defined in that certain Confidential
Private Placement Memorandum of the Company, dated as of August 11, 2008), and
terminating on the 5th
anniversary of such date (the “Termination Date”) up
to _____________ shares (each, a “Share” and
collectively the “Shares”) of the
Company’s common stock, par value $0.0001 per Share (the “Common Stock”), at an
exercise price per Share equal to $2.50 (the “Exercise
Price”).  The number of Shares purchasable hereunder and the
Exercise Price are subject to adjustment as provided in Section 4
hereof.

     

    1.           Method of Exercise;
Payment.

     

    (a)                      Cash
Exercise.  The purchase rights represented by this Warrant may
be exercised, for cash only, by the Holder, in whole or in part, at any time, or
from time to time, by the surrender of this Warrant (with the notice of exercise
form (the "Notice of
Exercise") attached hereto as Exhibit A duly
executed) at the principal office of the Company, and by payment to the Company
of an amount equal to the Exer­cise Price multiplied by the number of the
Shares being purchased, which amount may be paid, at the election of the Holder,
by  wire transfer or certified check payable to the order of the
Company. The person or persons in whose name(s) any certificate(s)
repre­senting Shares shall be issuable upon exercise of this Warrant shall
be deemed to have become the holder(s) of record of, and shall be treated for
all purposes as the record holder(s) of, the Shares represented thereby (and
such Shares shall be deemed to have been issued) immediately prior to the close
of business on the date or dates upon which this Warrant is
exercised.

     

     

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    
 

     (b)           Stock
Certificates.  In the event of any exercise of the rights
represented by this Warrant, as promptly as practicable after this Warrant is
surrendered and delivered to the Company along with all other appropriate
documentation on or after the date of exercise and in any event within ten (10)
days thereafter, the Company at its expense shall issue and deliver to the
person or persons entitled to receive the same a certificate or certificates for
the number of Shares issuable upon such exercise.  In the event this
Warrant is exercised in part, the Company at its expense will execute and
deliver a new Warrant of like tenor exercisable for the number of Shares for
which this Warrant may then be exercised.

    

    (c)           Taxes.  The
issuance of the Shares upon the exercise of this Warrant, and the delivery of
certificates or other instruments representing such Shares, shall be made
without charge to the Holder for any tax or other charge in respect of such
issuance.

    

    2.           Warrant.

     

    
      	
              (a)

            	
              Exchange, Transfer and
      Replacement.  At any time prior to the exercise hereof,
      this Warrant may be exchanged upon presentation and surrender to the
      Company, alone or with other warrants of like tenor of different
      denominations registered in the name of the same Holder, for another
      warrant or warrants of like tenor in the name of such Holder exercisable
      for the aggregate number of Shares as the warrant or warrants
      surrendered.

            

    

     

    
      	
              (b)

            	
              Replacement of
      Warrant.  Upon receipt of evidence reasonably
      satisfactory to the Company of the loss, theft, destruction, or mutilation
      of this Warrant and, in the case of any such loss, theft, or destruction,
      upon delivery of an indemnity agreement reasonably satisfactory in form
      and amount to the Company, or, in the case of any such mutilation, upon
      surrender and cancellation of this Warrant, the Company, at its expense,
      will execute and deliver in lieu thereof, a new Warrant of like
      tenor.

            

    

     

    (c)    Cancellation; Payment of
Expenses.  Upon the surrender of this Warrant in connection
with any transfer, exchange or replacement as provided in this Section 2, this
Warrant shall be promptly canceled by the Company.  The Holder shall
pay all taxes and all other expenses (including legal expenses, if any, incurred
by the Holder or transferees) and charges payable in connection with the
preparation, execution and delivery of Warrants pursuant to this Section
2.

     

     

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    (d)   Warrant
Register.  The Company shall maintain, at its principal
executive offices (or at the offices of the transfer agent for the Warrant or
such other office or agency of the Company as it may designate by notice to the
holder hereof), a register for this Warrant (the “Warrant Register”),
in which the Company shall record the name and address of the person in whose
name this Warrant has been issued, as well as the name and address of each
transferee and each prior owner of this Warrant.

     

    3.           Rights and Obligations of
Holders of this Warrant.  The Holder of this Warrant shall not,
by virtue hereof, be entitled to any rights of a stockholder in the Company,
either at law or in equity; provided, however, that in the
event any certificate representing shares of Common Stock or other securities is
issued to the holder hereof upon exercise of this Warrant, such holder shall,
for all purposes, be deemed to have become the holder of record of such Common
Stock on the date on which this Warrant, together with a duly executed Election
to Purchase, was surrendered and payment of the aggregate Exercise Price was
made, irrespective of the date of delivery of such Common Stock
certificate.

     

    4.           Adjustments.

     

    (a)           Stock Dividends,
Reclassifications, Recapitalizations, Etc.  While this Warrant
is outstanding, in the event the Company:  (i) pays a dividend in
Common Stock or makes a distribution in Common Stock, (ii) subdivides its
outstanding Common Stock into a greater number of shares, (iii) combines
its outstanding Common Stock into a smaller number of shares or
(iv) increases or decreases the number of shares of Common Stock
outstanding by reclassification of its Common Stock (including a
recapitalization in connection with a consolidation or merger in which the
Company is the continuing corporation), then (1) the Exercise Price on the
record date of such division or distribution or the effective date of such
action shall be adjusted by multiplying such Exercise Price by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately before such event and the denominator of which is the number of
shares of Common Stock outstanding immediately after such event, and
(2) the number of shares of Common Stock for which this Warrant may be
exercised immediately before such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the Exercise Price immediately
before such event and the denominator of which is the Exercise Price immediately
after such event.

     

     (b)           Combination:
Liquidation.  While this Warrant is outstanding, (i) In
the event of a Combination (as defined below), each Holder shall have the right
to receive upon exercise of the Warrant the kind and amount of shares of capital
stock or other securities or property which such Holder would have been entitled
to receive upon or as a result of such Combination had such Warrant been
exercised immediately prior to such event (subject to further adjustment in
accordance with the terms hereof).  Unless paragraph (ii) is
applicable to a Combination, the Company shall provide that the surviving or
acquiring Person (the “Successor Company”)
in such Combination will assume by written instrument the obligations under this
Section 4
and the obligations to deliver to the Holder such shares of stock, securities or
assets as, in accordance with the foregoing provisions, the Holder may be
entitled to acquire. “Combination” means an
event in which the Company consolidates with, mergers with or into, or sells all
or substantially all of its assets to another Person, where “Person” means any
individual, corporation, partnership, joint venture, limited liability company,
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof or any other entity;
(ii)  In the event of (x) a Combination where consideration to the
holders of Common Stock in exchange for their shares is payable solely in cash
or (y) the dissolution, liquidation or winding-up of the Company, the Holders
shall be entitled to receive, upon surrender of their Warrant, distributions on
an equal basis with the holders of Common Stock or other securities issuable
upon exercise of the Warrant, as if the Warrant had been exercised immediately
prior to such event, less the Exercise Price.  In case of any
Combination described in this Section 4, the
surviving or acquiring Person and, in the event of any dissolution, liquidation
or winding-up of the Company, the Company, shall deposit promptly with an agent
or trustee for the benefit of the Holders of the funds, if any, necessary to pay
to the Holders the amounts to which they are entitled as described
above.  After such funds and the surrendered Warrant are received, the
Company is required to deliver a check in such amount as is appropriate (or, in
the case or consideration other than cash, such other consideration as is
appropriate) to such Person or Persons as it may be directed in writing by the
Holders surrendering such Warrant.

     

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

     (c)
Notice of
Adjustment.  Whenever the Exercise Price or the number of
shares of Common Stock and other property, if any, issuable upon exercise of the
Warrant is adjusted, as herein provided, the Company shall deliver to the
holders of the Warrant in accordance with Section 10 a
certificate of the Company’s Chief Financial Officer setting forth, in
reasonable detail, the event requiring the adjustment and the method by which
such adjustment was calculated (including a description of the basis on which
(i) the Board of Directors determined the fair value of any evidences of
indebtedness, other securities or property or warrants, options or other
subscription or purchase rights and (ii) the Current Market Value of the Common
Stock was determined, if either of such determinations were required), and
specifying the Exercise Price and number of shares of Common Stock issuable upon
exercise of  Warrant after giving effect to such
adjustment.

     

    (d)  Notice of Certain
Transactions.  While this Warrant is outstanding, in the event
that the Company shall propose (a) to pay any dividend payable in
securities of any class to the holders of its Common Stock or to make any other
non-cash dividend or distribution to the holders of its Common Stock,
(b) to offer the holders of its Common Stock rights to subscribe for or to
purchase any securities convertible into shares of Common Stock or shares of
stock of any class or any other securities, rights or options, (c) to
effect any capital reorganization, reclassification, consolidation or merger
affecting the class of Common Stock, as a whole, or (d) to effect the
voluntary or involuntary dissolution, liquidation or winding-up of the Company,
the Company shall, within the time limits specified below, send to each Holder a
notice of such proposed action or offer.  Such notice shall be mailed
to the Holders at their addresses as they appear in the Warrant Register (as
defined in Section 2(d)),
which shall specify the record date for the purposes of such dividend,
distribution or rights, or the date such issuance or event is to take place and
the date of participation therein by the holders of Common Stock, if any such
date is to be fixed, and shall briefly indicate the effect of such action on the
Common Stock and on the number and kind of any other shares of stock and on
other property, if any, and the number of shares of Common Stock and other
property, if any, issuable upon exercise of each Warrant and the Exercise Price
after giving effect to any adjustment pursuant to Section 4 which
will be required as a result of such action.  Such notice shall be
given as promptly as possible and (x) in the case of any action covered by
clause (a) or (b) above, at least ten (10) days prior to the record date for
determining holders of the Common Stock for purposes of such action or (y) in
the case of any other such action, at least twenty (20) days prior to the date
of the taking of such proposed action or the date of participation therein by
the holders of Common Stock, whichever shall be the earlier.

     

    (e)  Current Market
Value.  “Current Market Value”
per share of Common Stock or any other security at any date means (i) if the
security is not registered under the Securities Exchange Act of 1934 and/or
traded on a national securities exchange, quotation system or bulletin board, as
amended (the “Exchange
Act”), (a) the value of the security, determined in good faith by the
Board of Directors of the Company and certified in a board resolution, based on
the most recently completed arm’s-length transaction between the Company and a
Person other than an affiliate of the Company or between any two such Persons
and the closing of which occurs on such date or shall have occurred within the
six-month period preceding such date, or (b) if no such transaction shall have
occurred within the six-month period, the value of the security as determined by
an independent financial expert or an agreed upon financial valuation model or
(ii) if the security is registered under the Exchange Act and/or traded on a
national securities exchange, quotation system or bulletin board, the average of
the daily closing bid prices (or  the equivalent in an
over-the-counter market) for each day on which the Common Stock is traded for
any period on the principal securities exchange or other securities market on
which the common Stock is being traded (each, a “Trading Day”) during
the period commencing thirty (30) days before such date and ending on the date
one day prior to such date.

     

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

     

    5.           Registration
Rights.  The Holder is entitled to the benefit of such
registration rights in respect of the Shares as are set forth in the
Subscription Agreement dated as of ____, 2008 by and between the Company and the
Holder.

     

    6.           Fractional
Shares.  In lieu of issuance of a fractional share upon any
exercise hereunder, the Company will issue an additional whole share in lieu of
that fractional share, calculated on the basis of the Exercise
Price.

     

    7.           Legends.  Prior
to issuance of the shares of Common Stock underlying this Warrant, all such
certificates representing such shares shall bear a restrictive legend to the
effect that the Shares represented by such certificate have not been registered
under the 1933 Act, and that the Shares may not be sold or transferred in the
absence of such registration or an exemption therefrom, such legend to be
substantially in the form of the bold-face language appearing at the top of Page
1 of this Warrant.

     

    8.           Disposition of Warrants or
Shares.  The Holder of this Warrant, each transferee hereof and
any holder and transferee of any Shares, by his or its acceptance thereof,
agrees that no public distribution of Warrants or Shares will be made in
violation of the provisions of the 1933 Act.  Furthermore, it shall be
a condition to the transfer of this Warrant that any transferee thereof deliver
to the Company his or its written agreement to accept and be bound by all of the
terms and conditions contained in this Warrant.

     

    9.           Merger or
Consolidation.  The Company will not merge or consolidate with
or into any other corporation, or sell or otherwise transfer its property,
assets and business substantially as an entirety to another corporation, unless
the corporation resulting from such merger or consolidation (if not the
Company), or such transferee corporation, as the case may be, shall expressly
assume, by supplemental agreement reasonably satisfactory in form and substance
to the Holder, the due and punctual performance and observance of each and every
covenant and condition of this Warrant to be performed and observed by the
Company.

     

    10.           Notices.  Except
as otherwise specified herein to the contrary, all notices, requests, demands
and other communications required or desired to be given hereunder shall only be
effective if given in writing by certified or registered U.S. mail with return
receipt requested and postage prepaid; by private overnight delivery service
(e.g. Federal Express); by facsimile transmission (if no original documents or
instruments must accompany the notice); or by personal delivery.  Any
such notice shall be deemed to have been given (a) on the business day
immediately following the mailing thereof, if mailed by certified or registered
U.S. mail as specified above; (b) on the business day immediately following
deposit with a private overnight delivery service if sent by said service; (c)
upon receipt of confirmation of transmission if sent by facsimile transmission;
or (d) upon personal delivery of the notice.  All such notices shall
be sent to the following addresses (or to such other address or addresses as a
party may have advised the other in the manner provided in this Section 10):

     

    
      	
              if
      to the Company:

            	
              Mac
      Filmworks, Inc.

            
	 	75
      Franklin Street, 2nd
      Floor
	 	New
      York, NY 10013
	 	Attention:
      Philmore Anderson IV, CEO
	 	Facsimile:
      212-226-7451
	 	 
	 	 
	with
      copy to:  	Sichenzia
      Ross Friedman Ference LLP
	 	61
      Broadway, 32nd
      Floor
	 	New
      York, NY 10006
	 	Attention:  Marc
      Ross, Esq
	 	Facsimile:
      (212) 930-9725

    

     

     

     

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

     

    
      	 	 
	 if
      to the Holder:  	____________________
	 	____________________
	 	____________________
	 	____________________
	 	 
	 with
      a copy to:	____________________
	 	____________________
	 	____________________
	 	____________________
	 	Facsimile:
      ____________

    

    
    

     

     

    Notwithstanding
the time of effectiveness of notices set forth in this Section, an Election to
Purchase shall not be deemed effectively given until it has been duly completed
and submitted to the Company together with this original Warrant and payment of
the Exercise Price in a manner set forth in this Section.

     

      11.                      Limitation on
Exercise. Notwithstanding anything to the contrary contained herein, the
number of shares of Common Stock that may be acquired by the Holder upon
any exercise of this Warrant (or otherwise in respect hereof)
shall be limited to the extent necessary to insure that, following such exercise
(or other issuance), the total number of shares of Common Stock then
beneficially owned by such Holder and its affiliates and any other persons whose
beneficial ownership of Common Stock would be aggregated with the Holder’s for
purposes of Section 13(d) of the Exchange Act, does not exceed 4.99%
of the total number of issued and outstanding shares of Common
Stock (including for such purpose the shares of Common Stock issuable upon such
exercise). For such purposes, beneficial ownership shall be determined in
accordance with Section 13(d) of the Exchange Act and the
rules and regulations promulgated thereunder. Each delivery of an Exercise
Notice hereunder will constitute a representation by the Holder that it has
evaluated the limitation set forth in this paragraph and determined that
issuance of the full number of Warrant Shares requested in such
Exercise Notice is permitted under this paragraph. This provision shall not
restrict the number of shares of Common Stock which a Holder may receive or
beneficially own in order to determine the amount of securities or other
consideration that such Holder may receive in the event of a merger or
other business combination or reclassification involving the Company. This restriction may not be waived without the consent of the
Holder.

    

    12.           Governing
Law.  This Warrant shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed in the State of New York.

     

    13.           Successors and
Assigns.  This Warrant shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and
assigns.

     

    14.           Headings.  The
headings of various sections of this Warrant have been inserted for reference
only and shall not affect the meaning or construction of any of the provisions
hereof.

     

     

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

     

     

    15.           Severability. If any
provision of this Warrant is held to be unenforceable under applicable law, such
provision shall be excluded from this Warrant, and the balance hereof shall be
interpreted as if such provision were so excluded.

     

    16.           Modification and
Waiver.  This Warrant and any provision hereof may be amended,
waived, discharged or terminated only by an instrument in writing signed by the
Company and the Holder.

     

    17.           Specific
Enforcement.  The Company and the Holder acknowledge and agree
that irreparable damage would occur in the event that any of the provisions of
this Warrant were not performed in accordance with their specific terms or were
otherwise breached.  It is accordingly agreed that the parties shall
be entitled to an injunction or injunctions to prevent or cure breaches of the
provisions of this Warrant and to enforce specifically the terms and provisions
hereof, this being in addition to any other remedy to which either of them may
be entitled by law or equity.

     

    18.           Assignment.  Subject  to
prior written approval by the Company, this Warrant may be transferred or
assigned, in whole or in part, at any time and from time to time by the then
Holder by submitting this Warrant to the Company together with a duly executed
Assignment in substantially the form and substance of the Form of Assignment
which accompanies this Warrant, as Exhibit B
hereto, and, upon the Company’s receipt hereof, and in any event, within five
(5) business days thereafter, the Company shall issue a warrant to the Holder to
evidence that portion of this Warrant, if any as shall not have been so
transferred or assigned.

     

    

     

    (signature
page immediately follows)

     

     

     

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

     

     

     

    IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed,
manually or by facsimile, by one of its officers thereunto duly
authorized.

     

    
      	
               

               

               

              Date:
      ___, 2008

            	
              Mac
      Filmworks, Inc.

               

               

              By:____________________________________

              Name:

              Title:

            

    

     

     

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

     

    EXHIBIT
A

     

    TO

     

    WARRANT
CERTIFICATE

     

    ELECTION
TO PURCHASE

     

    To Be
Executed by the Holder

     

    in Order
to Exercise the Warrant

     

    The
undersigned Holder hereby elects to purchase _______  Shares pursuant
to the attached Warrant, and requests that certificates for securities be issued
in the name of:

     

    __________________________________________________________

     

    (Please
type or print name and address)

     

    __________________________________________________________

     

    __________________________________________________________

     

    __________________________________________________________

     

    (Social
Security or Tax Identification Number)

     

    and
delivered

    to:_________________________________________________________________

     

    ___________________________________________________________________.

     

    (Please
type or print name and address if different from above)

     

    If such
number of Shares being purchased hereby shall not be all the Shares that may be
purchased pursuant to the attached Warrant, a new Warrant for the balance of
such Shares shall be registered in the name of, and delivered to, the Holder at
the address set forth below.

     

    In full
payment of the purchase price with respect to the Shares purchased and transfer
taxes, if any, the undersigned hereby tenders payment of $__________ by check,
money order or wire transfer payable in United States currency to the order of
[_________]

     

    
      	 
      	
              HOLDER:

               

               

              By:_____________________________________

              Name:

              Title:

              Address:

            
	
              Dated:

            	 
      

    

     

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

     

     

    EXHIBIT
B

     

    TO

     

    WARRANT

     

    FORM OF
ASSIGNMENT

     

    (To be
signed only on transfer of Warrant)

     

    For value
received, the undersigned hereby sells, assigns, and transfers unto
_____________ the right represented by the within Warrant to purchase ______
shares of Common Stock of [________], a Delaware corporation, to which the
within Warrant relates, and appoints ____________________ Attorney to transfer
such right on the books of [_________], a Delaware corporation, with full power
of substitution of premises.

     

    
      	
              Dated:

            	
              By:_______________________________

              Name:

              Title:

              (signature
      must conform to name

              of
      holder as specified on the factof the Warrant)

            
	 
      	
              Address:

            

    

    

     

    Signed in
the presence of :

     

    Dated:

     

    

     

     

    10

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