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Exhibit 10.1
FIRST AMENDMENT TO
AGREEMENT AND PLAN OF MERGER
THIS FIRST AMENDMENT TO AGREEMENT AND PLAN OF
MERGER (the "Amendment") is entered into as of December 18, 2006,
by and among FILTERING ASSOCIATES, INC., ("FAI"), a Nevada
corporation, and Kevin Frost and Edward Wiggins, individual
stockholders of FAI (the "FAI Stockholders"), on the one hand, and
MATINEE MEDIA CORPORATION, a Texas corporation (the "Company"), on
the other hand.
BACKGROUND
A.
FAI, the FAI Stockholders and the Company entered
into an Agreement and Plan of Merger (the "Agreement") on April 13,
2006. All capitalized terms used herein have the same meanings
given to them in the Agreement.
B.
On October 5, 2006, the Company executed a
non-binding letter of intent with US Farm & Ranch Supply
Company, Inc. (d/b/a USFR Media Group) ("USFR"), regarding a merger
of USFR with and into the Company (the "USFR Merger").
C.
On November 10, 2006, USFR borrowed $28.0 million
for the purchase of KTBU Television, Conroe, Texas and, in
connection with that loan, the Company executed a security
agreement for the benefit of the USFR lenders, pursuant to which
the Company pledged all of its interests in the option agreements
under which the Company has the exclusive right to purchase 24 FM
radio permits, subject to prior FCC approval (the "USFR
Pledge").
D.
The Company and USFR have executed, or expect to
execute, an agreement and plan of merger (the "USFR Merger
Agreement"), pursuant to which, upon the closing of the USFR
Merger, the shareholders of USFR (including the holders of options,
warrants or convertible securities of USFR) will receive shares of
Company Stock (or options, warrants or convertible securities of
the Company with terms similar to those of the securities of USFR
held by such holders) representing 55% of the shares of Company
Stock that will be outstanding, on a fully diluted basis (including
shares of FAI to be outstanding immediately prior to the Effective
Time of the Merger). The Company expects that the USFR Merger will
be consummated prior to the Effective Time of the
Merger.
E.
Each of FAI, the FAI Stockholders and the Company
desires to amend the Agreement by entering into this
Amendment.
NOW, THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1.
Section 1.08 of the Agreement is hereby amended to
read in its entirety as follows:
"1.08 Stock Cancellation.
On or before the Closing, FAI shall cause to
be cancelled 1,662,214 shares of its outstanding Common Stock held
by certain of its stockholders who hold restricted Common Stock and
it shall transfer to such stockholders its existing business and
related assets and liabilities in consideration of the cancellation
of their FAI Common Stock. After the cancellation of these shares,
the total outstanding shares of FAI as of immediately prior to the
Effective Time of the Merger shall not exceed 1,210,786 shares of
Common Stock."
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2.
Section 2.03(a) of the Agreement is hereby amended
to read in its entirety as follows:
"(a) Assumption of
Company Derivatives. At the Effective Time of
the Merger, each outstanding warrant or option to purchase Company
Stock (each a "Company Warrant") shall by virtue of the Merger be
assumed by Public FAI and each employee stock incentive plan of the
Company under which any Company Warrant may be granted (the
"Company Plans") shall by virtue of the Merger be assumed by Public
FAI, and each outstanding promissory note convertible into Company
Stock (each a "Company Convertible Note") shall by virtue of the
Merger be assumed by Public FAI. Each Company Warrant and Company
Convertible Note so assumed by Public FAI will (i) continue to
have, and be subject to, the same terms and conditions of such
Compa
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