Exhibit 99.7
NOTE PURCHASE AGREEMENT
THIS NOTE PURCHASE AGREEMENT (this "Agreement") is made as of January
25, 2008, by and between QUEPASA CORPORATION, a Nevada corporation (the
"Company"), and MEXICANS & AMERICANS TRADING TOGETHER, INC., a Delaware
corporation (the "Investor").
WHEREAS, the Company desires to raise additional capital, and the
Investor is willing to provide debt capital upon the terms and subject to the
conditions set forth herein; and
WHEREAS, in connection with the foregoing, the Company and the
Investor will amend: (i) the existing Series 1 Warrant to purchase 1,000,000
shares of Common Stock at an exercise price of $12.50 per share (subject to
adjustment), by executing an amendment in the form attached hereto as Exhibit A
(the "Series 1 Warrant Amendment"), (ii) the existing Series 2 Warrant to
purchase 1,000,000 shares of Common Stock at an exercise price of $15.00 per
share (subject to adjustment), by executing an amendment in the form attached
hereto as Exhibit B (the "Series 2 Warrant Amendment" and, together with the
Series 1 Warrant Amendment, the "Warrant Amendments"), and (iii) terminate the
Amended and Restated Support Agreement, signed November 20, 2006 but made
effective as of October 16, 2006 by and between the Company and Investor.
NOW, THEREFORE, in consideration of the mutual covenants contained in
this Agreement and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and the Investor agree as
follows:
ARTICLE I.
PURCHASE AND SALE; CLOSING
1.1 Purchase and Sale of Note; Amendment of Warrants; Termination of
Support Agreements. Effective as of the Closing:
(a) The Company hereby sells to the Investor, and the Investor hereby
purchases from the Company, a subordinated promissory note of the Company in the
form of Exhibit C hereto (the "Note" and together with this Agreement and the
Warrant Amendments, the "Transaction Documents") for a price of $5,000,000 (the
"Purchase Price").
(b) The Company and the Investor shall each execute and deliver the
Warrant Amendments.
(c) The Amended and Restated Support Agreement, signed November 20,
2006 but made effective as of October 16, 2006 by and between the Company and
the Investor shall be terminated and shall be null and void (except for Section
7 thereof, which shall survive in accordance with its terms), with no further
liability of any party thereto, whether in tort, contract or otherwise (except
for any liability related to Section 7 thereof, which shall survive in
accordance with its terms). Each of the Company and the Investor hereby releases
and forever discharges the other party hereto and its subsidiaries,
representatives and affiliates with respect to any and all claims, rights,
suits, debts, dues, sums of money, liabilities, accounts, covenants,
contracts, controversies, agreements, promises, damages, judgments, claims and
demands, of every nature whatsoever, whether in law or at equity, whether known
or unknown, from the beginning of time to the date hereof, which such party had,
now has or may have against the such Person arising out of, based upon, or
related to, the Amended and Restated Support Agreement terminated hereby (except
for Section 7 thereof, which shall survive in accordance with its terms).
1.2 Closing. The closing of the purchase and sale of the Note, the
execution and delivery of the Warrant Amendments and the termination of the
Amended and Restated Support Agreement (the "Closing") shall occur at the
offices of Xxxxxxx Xxxx & Xxxxxxxxx LLP, at 10:00 a.m. (New York time) within
one business day of the satisfaction of the conditions to closing set forth in
Article III hereof (except for such conditions which by their nature may only be
satisfied on the Closing Date) (the date upon which the Closing occurs, the
"Closing Date").
(a) At the Closing, the Company shall deliver or cause to be delivered
to the Investor the following:
(i) the Note registered in the name of the Investor;
(ii) the Series 1 Warrant Amendment;
(iii) the Series 2 Warrant Amendment; and
(iv) the certificate required by Section 3.1(c).
(b) At the Closing, the Investor shall deliver or cause to be
delivered to the Company the following:
(i) the Purchase Price, by wire transfer of immediately available
funds, to an account designated by the Company to the Investor in writing;
(ii) the Series 1 Warrant Amendment;
(iii) the Series 2 Warrant Amendment; and
(iv) the certificate required by Section 3.2(b), if applicable.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of the Company. The Company hereby makes
the following representations and warranties to the Investor (and any permitted
assignees) as of the date hereof (all references to the Company in this Section
2.1, except for paragraphs (a) and (b), shall mean the Company and its
subsidiaries):
(a) Organization. The Company is duly organized, validly existing and
in good standing under the laws of the State of Nevada, with the requisite power
and authority to own and use its properties and assets and to carry on its
business as currently conducted.
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(b) Authorization; Enforcement. The Company has the requisite
corporate power and authority to enter into and to consummate the transactions
contemplated by the Transaction Documents and otherwise to conduct its business
as currently conducted or proposed to be conducted, and to carry out its
obligations thereunder. The execution and delivery of each of the Transaction
Documents by the Company and the consummation by it of the transactions
contemplated thereby have been duly authorized by all necessary action on the
part of the Company and no further action is required by the Company in
connection therewith. This Agreement has been, and as of the Closing Date each
of the Transaction Documents will be, duly executed and delivered by the Company
and as of the date hereof this Agreement constitutes and as of the Closing Date
each of the Transaction Documents will constitute a valid and binding obligation
of the Company enforceable against it in accordance with its terms, except (i)
as limited by applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors' rights
generally and (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies (collectively (i) and
(ii), the "Enforceability Exceptions").
(c) No Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated thereby do not and will not (i) conflict with or
violate any provision of the Company's certificate or articles of incorporation,
bylaws or other organizational or charter documents, (ii) conflict with, or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation (with or without notice, lapse of time
or both) of, any agreement, credit facility, debt or other instrument or other
understanding to which the Company is a party or by which any property or asset
of the Company is bound or affected, or (iii) result in a violation of any law,
rule, regulation, order, judgment, injunction, decree or other restriction of
any court or governmental authority (collectively, "Legal Requirements") to
which the Company is subject (including federal and state securities laws and
regulations), or by which any property or asset of the Company is bound or
affected.
(d) No Consents. No consent, approval, authorization or order of, or
any filing by the Company or declaration with, any court or governmental agency
or body or other person or entity (collectively, a "Person") is required in
connection with the execution and delivery by the Company of the Transaction
Documents and the consummation by the Company of the transactions contemplated
thereby, except (i) the filing by the Company with the Securities and Exchange
Commission (the "Commission") of one or more prospectus supplements to the
prospectus forming a part of the Company's effective registration statement on
Form SB-2, as amended, filed on January 30, 2007, (ii) the filing by the Company
with the Commission of a current report on Form 8-K under the Securities
Exchange Act of 1934, as amended ("Exchange Act"), and (iii) those consents,
approvals, authorizations, orders, filings, or declarations that have been made
or obtained prior to the date of this Agreement.
(e) Capitalization. The number of shares and type of all authorized,
issued and outstanding capital stock of the Company, and all shares of Common
Stock reserved for issuance under the Company's option and incentive plans,
warrants and preferred stock is set forth on Schedule 2.1(e) hereto. Except for
the warrants and stock options listed on Schedule 2.1(e), which schedule lists
the number of shares issuable upon the exercise of such warrants and
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stock options and the exercise price and the expiration date of such warrants
and stock options, on the Closing Date there will be no shares of Common Stock
or any other equity security of the Company issuable upon conversion or exchange
of any security of the Company convertible into or exchangeable for shares of
capital stock of the Company, nor will there be any rights, options or warrants
outstanding or other agreements to acquire shares of Common Stock nor will the
Company be contractually obligated to purchase, redeem or otherwise acquire any
of its outstanding shares. There are no anti-dilution or price adjustment
provisions contained in any security issued by the Company, or in any agreement
to which the Company is a party and which provides rights to security holders,
that will be triggered by the transactions contemplated by this Agreement.
(f) SEC Reports. Except as set forth on Schedule 2.1(f), the Company
has filed all reports required to be filed by it under the Exchange Act,
including pursuant to Section 13(a) or Section 15(d) thereof, and the rules and
regulations of the Commission promulgated thereunder, since January 1, 2006 (the
foregoing reports and any materials incorporated therein by reference being
collectively referred to herein as the "SEC Reports") on a timely basis, or has
received a valid extension of such time of filing and has filed any such SEC
Reports prior to the expiration of any such extension. Except as set forth on
Schedule 2.1(f), as of their respective dates (except as expressly corrected in
a subsequent SEC Report filed prior to the date of this Agreement), the SEC
Reports complied in all material respects with the requirements of the
Securities Act of 1933, as amended (the "Securities Act"), and the Exchange Act
and the rules and regulations of the Commission promulgated thereunder, and none
of the SEC Reports, when filed (except as expressly corrected in a subsequent
SEC Report filed prior to the date of this Agreement), contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(g) Financial Statements. Except as set forth on Schedule 2.1(g), the
financial statements filed with the Commission as a part of the SEC Reports
present fairly, in all material respects, the financial position of the Company
and its subsidiaries on a consolidated basis as of and at the dates indicated
and the results of their consolidated operations and cash flows for the periods
specified therein, subject, in the case of interim financial statements, to
normal year-end adjustments which are not expected to be material in amount, and
except as expressly corrected in a subsequent SEC Report filed prior to the date
of this Agreement. Except as set forth on Schedule 2.1(g), such financial
statements have been prepared in conformity with generally accepted accounting
principles as applied in the United States and in effect as of the date of the
applicable financial statements and supporting schedules, as applicable, applied
on a consistent basis throughout the periods involved, except as may be
expressly stated in the related notes thereto, and comply in all material
respects with the Securities Act, the Exchange Act and the applicable rules and
regulations of the Commission thereunder.
(h) Absence of Undisclosed Liabilities. Except as reflected in the
Company's balance sheet as of September 30, 2007 included in the SEC Reports,
the Company does not have any debt or material obligation or liability (whether
accrued, absolute, contingent, liquidated, threatened, or otherwise, whether due
or to become due), except: (i) taxes not yet due and payable, (ii) current
liabilities incurred and obligations under agreements entered into, in the
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ordinary course of business consistent with past practice (none of which are
delinquent), and (iii) contingent liabilities specifically referenced in the
notes to such balance sheet.
(i) Investment Company. The Company is not, and is not an affiliate
of, an "investment company" within the meaning of the Investment Company Act of
1940, as amended.
2.2 Representations and Warranties of the Investor. The Investor hereby
makes the following representations and warranties to the Company as of the date
hereof.
(a) Organization. The Investor is duly organized, validly existing and
in good standing under the laws of the jurisdiction of its organization with the
requisite power and authority to own and use its properties and assets and to
carry on its business as currently conducted.
(b) Authorization; Enforcement. The Investor has the requisite power
and authority to enter into and to consummate the transactions contemplated by
the Transaction Documents and otherwise to carry out its obligations thereunder.
The execution and delivery by the Investor of each of the Transaction Documents
to which it is a party and the performance by the Investor of the transactions
contemplated thereby have been duly authorized by all necessary action on the
part of the Investor. This Agreement has been, and as of the Closing Date each
of the Transaction Documents will be duly executed and delivered by Investor and
as of the date hereof this Agreement constitutes and as of the Closing Date each
of the Transaction Documents will constitute a valid and binding obligation of
the Investor, enforceable against it in accordance with its terms, except for
any Enforceability Exceptions.
(c) No Conflicts. The execution, delivery and performance of the
Transaction Documents by the Investor and the consummation by the Investor of
the transactions contemplated thereby do not and will not (i) conflict with or
violate any provision of the Investor's certificate or articles of
incorporation, bylaws or other organizational or charter documents, (ii)
conflict with, or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any agreement, credit facility, debt or other
instrument or other understanding to which the Investor is a party or by which
any property or asset of the Investor is bound or affected, or (iii) result in a
violation of any Legal Requirements to which the Investor is subject (including
federal and state securities laws and regulations), or by which any property or
asset of the Investor is bound or affected.
(d) Investment Intent. The Investor understands that the Note has not
been registered under the Securities Act, or any applicable state securities
law. The Investor is acquiring the Note for investment purposes only and not
with a view to or for distributing or reselling such Note or any part thereof,
has no present intention of distributing the Note and has no arrangement,
agreement, or understanding (directly or indirectly) with any other Person
regarding the distribution of the Note (provided, however, that this
representation and warranty shall not in any way limit the Investor's right to
sell the Note in compliance with applicable federal and state securities laws).
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(e) Investor Status. At the time the Investor was offered the Note it
was, and at the date hereof it is, an "accredited investor," as such term is
defined under the Securities Act. The Investor is not a registered broker-dealer
under Section 15 of the Exchange Act.
(f) Experience of the Investor. The Investor, either alone or together
with its representatives, has such knowledge, sophistication and experience in
business and financial matters as to be capable of evaluating the merits and
risks of the prospective investment in the Note and has evaluated the merits and
risks of such investment. The Investor is able to bear the economic risk of an
investment in the Note and is able to afford a complete loss of such investment.
(g) No General Solicitation. The Investor is not purchasing the Note
as a result of any advertisement, article, notice or other communication
published in any newspaper, magazine or similar media or broadcast over
television or radio or presented at any seminar or through any other general
solicitation or general advertisement.
(h) Access to Information. The Investor acknowledges that it has
reviewed the SEC Reports and has been afforded (i) the opportunity to ask such
questions as it has deemed necessary of, and to receive answers from,
representatives of the Company concerning the terms and conditions of the
offering of the Note and the merits and risks of investing therein; (ii) access
to information about the Company and its financial condition, results of
operations, business, properties, management and prospects sufficient to enable
it to evaluate its investment; and (iii) the opportunity to obtain such
additional information that the Company possesses or can acquire without
unreasonable effort or expense that is necessary to make an informed investment
decision with respect to the investment.
ARTICLE III.
CLOSING CONDITIONS
3.1 Conditions to Investor's Obligations. The obligation of the Investor to
consummate the transactions contemplated by this Agreement is subject to the
satisfaction (unless waived in writing by the Investor) of each of the following
conditions on or prior to the Closing Date:
(a) No law, rule, regulation or order shall have been adopted or
issued by a governmental authority (including a court of competent
jurisdiction), having the effect of making any of the transactions
contemplated by this Agreement illegal or otherwise prohibiting the
consummation of any of the transactions contemplated by this Agreement.
(b) The Company shall have received, before or concurrently with the
Closing of the transactions contemplated by this Agreement, not less than
$2 million in additional debt capital upon terms and subject to conditions
no less favorable to the Company than those set forth herein, excluding for
purposes of such determination Section 1.1(c) hereof. The terms and
conditions set forth in the documents attached hereto as Exhibit D are
deemed to meet this condition. This Section 3.1(b) shall in no way serve to
limit the terms of or the Investor's rights under the Transaction
Documents. As provided in the
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Note, the Company agrees that such additional new indebtedness will include
terms designating such indebtedness as pari passu debt and that (except for
accepting the surrender of all or a portion of such $2 million additional
indebtedness in payment of all or a portion of the exercise price of
warrants to acquire common stock in the Company) Company shall not make any
payments on such $2 million additional new indebtedness unless and until
the Company pays a ratable payment on the Note.
(c) The Company shall have executed and delivered a certificate to the
effect that the condition set forth in Section 3.1(b) above shall have been
satisfied and if the Closing Date is other than the date of this Agreement,
that the representations and warranties of the Company are true and correct
as of the Closing Date.
3.2 Conditions to the Company's Obligations. The obligation of the Company
to consummate the transactions contemplated by this Agreement is subject to the
satisfaction (unless waived in writing by the Company) of each of the following
conditions on or prior to the Closing Date:
(a) No law, rule, regulation or order shall have been adopted or
issued by a governmental authority (including a court of competent
jurisdiction), having the effect of making any of the transactions
contemplated by this Agreement illegal or otherwise prohibiting the
consummation of any of the transactions contemplated by this Agreement.
(b) If the Closing Date is other than the date of this Agreement, the
Investor shall have executed and delivered a certificate to the effect that
that the representations and warranties of the Investor are true and
correct as of the Closing Date.
ARTICLE IV.
MISCELLANEOUS
4.1 Filing of Prospectus Supplement. The Company shall prepare and file
with the Commission as soon as practicable, but in no event later than 30 days
after the date of closing of the Warrant Amendments and the purchase and sale of
the Note pursuant to this Agreement, a prospectus supplement to the prospectus
forming a part of the Company's effective registration statement on Form SB-2,
as amended, filed on January 30, 2007, which registration statement, together
with all exhibits and materials incorporated by reference or deemed to be
incorporated by reference therein, registers the resale from time to time by the
Investor of the shares of Common Stock issuable upon exercise of the Series 1
Warrant and Series 2 Warrant. Such prospectus supplement shall disclose the
material terms of the transactions contemplated by this Agreement to the extent
required by the rules and regulations promulgated by the Commission under the
Securities Act of 1933, as amended, and in form and substance reasonably
satisfactory to Investor.
4.2 Fees and Expenses. At Closing, the Company shall reimburse Investor for
the fees and expenses of its counsel, not to exceed $17,500. Except as otherwise
set forth in this Agreement or any other agreement between the parties, each
party shall pay the fees and expenses of its advisers, counsel, accountants and
other experts, if any, and all other expenses
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incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement. The Company and the Investor
acknowledge that each has been represented by its own separate legal counsel in
its review and negotiation of the Transaction Documents.
4.3 Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of Nevada, without giving
effect to conflict of laws or any other rules or principles which may require
the application of the laws of any other jurisdiction.
4.4 Entire Agreement. This Agreement, together with the exhibits and
schedules hereto, the Notes, and the Warrant Amendments, contain the entire
understanding of the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, oral or written, with respect
to such matters, which the parties acknowledge have been merged into such
documents, exhibits and schedules.
4.5 Binding Effect. All of the terms, provisions and conditions hereof
shall be binding upon and shall inure to the benefit of and be enforceable by
the parties hereto, and their respective heirs, personal representatives,
successors and assigns.
4.6 Headings; Construction. The headings contained herein are for the
purposes of convenience only, and will not be deemed to constitute a part of
this Agreement or to affect the meaning or interpretation of this Agreement in
any way. Unless the context clearly states otherwise, the use of the singular or
plural in this Agreement shall include the other and the use of any gender shall
include all others. The parties have participated jointly in the negotiation and
drafting of this Agreement. If any ambiguity or question of intent or
interpretation arises, no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any of the provisions of
this Agreement. All references herein to Sections shall refer to this Agreement
unless the context clearly otherwise requires.
4.7 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given upon (a) transmitter's confirmation of receipt
of a facsimile transmission, if during normal business hours of a business day,
otherwise on the next business day, (b) confirmed delivery by a standard
overnight carrier or when delivered by hand or (c) the expiration of five (5)
business days (or seven (7) business days where the addressee is not in the
United States) after the day when mailed by certified or registered mail,
postage prepaid, to the addresses set forth in on the signature pages hereto or
to such other address as any party may, from time to time, designate in a
written notice given in a like manner.
4.8 Severability of Provisions. If a court in any proceeding holds any
provision of this Agreement or its application to any Person or circumstance
invalid, illegal or unenforceable, the remainder of this Agreement, or the
application of such provision to persons or circumstances other than those to
which it was held to be invalid, illegal or unenforceable, shall not be
affected, and shall be valid, legal and enforceable to the fullest extent
permitted by law, but only if and to the extent such enforcement would not
materially and adversely frustrate the parties' essential objectives as
expressed in this Agreement. Furthermore, in lieu of any such invalid or
unenforceable term or provision, the parties intend that the court add to this
Agreement
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a provision as similar in terms to such invalid or unenforceable provision as
may be valid and enforceable, so as to effect the original intent of the parties
to the greatest extent possible.
4.9 Third Party Beneficiaries. This Agreement does not create, and will not
be construed as creating, any rights enforceable by any Person not a party to
this Agreement.
4.10 Amendment. This Agreement may be amended, modified, superseded, or
canceled only by a written instrument signed by all of the parties hereto and
any of the terms, provisions and conditions hereof may be waived, only by a
written instrument signed by the waiving party.
4.11 Counterparts; Facsimile Signatures. This Agreement may be executed in
any number of counterparts and each such counterpart shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument. Facsimile signatures on this Agreement shall be
deemed to be original signatures for all purposes.
4.12 Survival. The representations, warranties, covenants and agreements
contained herein shall survive the purchase and sale of the Note.
[Signatures on following page]
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IN WITNESS WHEREOF, the parties hereto have caused this Note Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
QUEPASA CORPORATION
0000 X. Xxxxxxxx Xxxx, Xxxxx X
Xxxxxxxxxx, XX 00000
Fax:
Attn:
By:
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Name:
Title:
MEXICANS & AMERICANS TRADING TOGETHER, INC.
0000 XX 00 Xxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
Fax:
Attn:
By:
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Name:
Title:
