Filtering Exhibit


    
      

      

    

    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.”

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

       

      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 Company Warrant or Company
        Convertible Note immediately prior to the Effective Time of the Merger and
        will
        be exercisable for or convertible into a number of shares of Public FAI Common
        Stock equal the number of shares of Company Stock that were issuable upon
        exercise of such Company Warrant or conversion of such Company Convertible
        Note
        immediately prior to the Effective Time of the Merger, (ii) the total
        exercise price for the shares of Public FAI Common Stock issuable upon exercise
        of each such assumed Company Warrant will be equal to the total exercise
        price
        that would have been paid prior to the Effective Time of the Merger if such
        Company Warrant were exercised in full prior to the Effective Time of the
        Merger, and (iii) the conversion price for the shares of Public FAI Common
        Stock
        issuable upon conversion of each such assumed Company Convertible Notes will
        be
        equal to the conversion price that would have been applicable prior to the
        Effective Time of the Merger if such Company Convertible Note were converted
        in
        full prior to the Effective Time of the Merger. Public FAI shall comply with
        the
        terms of all such Company Warrants, Company Convertible Notes and Company
        Plans.
        Public FAI shall take all corporate actions necessary to reserve for issuance
        a
        sufficient number of shares of Public FAI Common Stock for delivery upon
        exercise of all Company Warrants and conversion of all Company Convertible
        Notes
        outstanding at the Effective Time of the Merger on the terms set forth in
        this
        Section 2.03 and all other shares of Public FAI Common Stock issuable under
        the Company Plans.”

       

      3.     Section
        2.03(c) of the Agreement is hereby amended to read in its entirety as
        follows:

       

      “(c)   Adjustment
        to Exchange Ratios.
        The FAI
        Exchange Ratio and the Company Exchange Ratio set forth above in Section
        2.01(b)
        are based on the assumption that the shareholders of FAI will own 8% of the
        outstanding Common Stock of Public FAI as of immediately after the Effective
        Time of the Merger, without taking into consideration the shares of Company
        Stock that may be issued in the USFR Merger. If necessary to maintain this
        percentage ownership immediately after the Effective Time of the Merger,
        the
        Company Exchange Ratio set forth in Section 2.01(b) or the FAI Exchange Ratio
        set forth in Section 2.01(a) shall be proportionately adjusted so as to achieve
        this 8% target for the FAI shareholders in the Merger.”

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      4.    The
        first
        sentence of Section 3.01(c) of the Agreement is hereby amended to read in
        its
        entirety as follows:

       

      “The
        authorized capital stock of the Company consists of 25,000,000 shares of
        Company
        Stock, of which 13,924,041 shares are issued and outstanding, including the
        securities issued in the Company Funding, as described in Schedule 3.01(c)
        of
        the Company Disclosure Schedule.”

       

      5.     Section
        6.03(g) of the Agreement is hereby amended to read in its entirety as
        follows:

       

      “(g)   Cancellation
        of Stock.
        At
        Closing, FAI shall have cancelled 1,662,214 shares of its outstanding restricted
        common stock from the FAI Stockholders as provided in Section 1.08 and provide
        evidence of cancellation of those shares satisfactory to counsel for the
        Company.”

       

      6.     Section
        7.01(c) of the Agreement is hereby amended to read in its entirety as
        follows:

       

      “(c)    by
        either
        FAI or the Company, so long as such party is not in breach hereunder, if
        the
        Merger shall not have been consummated on or before June 1, 2007 (other than
        as
        a result of the failure of the party seeking to terminate this Agreement
        to
        perform its obligations under this Agreement required to be performed at,
        or
        prior to, the Effective Time of the Merger, in which event such party may
        not
        terminate this Agreement pursuant to this provision for a period of ten days
        following such party’s cure of such failure); provided,
        however,
        that if
        either FAI or Company requests an extension of the Closing after this date
        and
        the other party consents in writing, then neither party may terminate this
        Agreement under this provision until the expiration of such extension
        period;”

       

      7.    FAI
        and
        the FAI Stockholders acknowledge that the Company has entered into an agreement
        and plan of merger with USFR pursuant to which, prior to the Effective Time
        of
        the Merger, the Company may issue to the securityholders of USFR, upon the
        consummation of the USFR Merger, shares of Company Stock, Company Warrants
        and
        Company Convertible Notes. FAI and the FAI Stockholders hereby agree, approve
        and consent to the USFR Pledge, the execution of the USFR Merger Agreement
        and
        the consummation of the USFR Merger prior to the Effective Time of the Merger,
        and acknowledge that the consummation of the USFR Merger will not result
        in an
        adjustment to the FAI Exchange Ratio, except as set forth in this
        Amendment.

       

      8.    For
        purposes of Section 6.02 of the Agreement, prior to the Closing Date, the
        Company will deliver to FAI and the FAI Stockholders an updated Company
        Disclosure Schedule reflecting, among other things, the effects of the USFR
        Merger, if consummated prior to the Closing Date.

       

      9.    Except
        as
        and to the extent expressly amended by this Amendment, the Agreement remains
        in
        full force and effect in accordance with its terms.

       

      10.   This
        Amendment may be executed by the parties hereto in separate counterparts,
        each
        of which when so executed and delivered will be an original, but all such
        counterparts will together constitute one and the same instrument.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

         

      

      IN
        WITNESS WHEREOF, the undersigned have caused their duly authorized officers
        to
        execute this Amendment as of the date first above written.

       

      
        	
                FAI
                  STOCKHOLDERS:

              	 	 	
                FILTERING
                  ASSOCIATES, INC.

              
	 	 	 	 
	/s/ Kevin
                Frost	 	 	/s/ David
                Choi
	
                

                Kevin
                  Frost

              	 	 	
                
Name:
                David Choi
Its:
                President


      

      
        	 	 	 	
                 

              
	 	 	 	 
	/s/ Edward
                Wiggins	 	 	 
	
                
Edward
                Wiggins	 	 	
              



        	 	 	 	
                MATINEE
                  MEDIA CORPORATION

              
	 	 	 	 
	 	 	 	/s/ Robert
                Walker
	
              	 	 	
                
Name:
                Robert Walker
Its:
                President


      

       

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