VOTING AND LOCK-UP AGREEMENT

 

THIS VOTING AND LOCK-UP AGREEMENT (this “Agreement”) is made and entered into as of July 19, 2011, by and among Quepasa Corporation., a Nevada corporation (“Parent”), Insider Guides, Inc., a Delaware corporation (the “Company”), and the undersigned shareholder (“Shareholder”) of the Company.

 

 

A.            Concurrently with the execution of this Agreement, Parent and the Company have entered into an Agreement and Plan of Merger (the “Merger Agreement”), which provides for the merger (the “Merger”) of the Company with and into a wholly owned subsidiary of Parent.

 

B.             Pursuant to the Merger, all of the issued and outstanding shares of capital stock of the Company will be canceled and converted into the right to receive the consideration set forth in the Merger Agreement, all upon the terms and subject to the conditions set forth in the Merger Agreement.

 

C.            As of the date hereof, Shareholder is the beneficial owner (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of the number of shares of outstanding capital stock of the Company (the “Shares”) and other securities convertible into, or exercisable or exchangeable for, shares of capital stock of the Company, all as set forth on the signature page of this Agreement.

 

D.            As a material inducement to Parent to enter into and to consummate the transactions contemplated by the Merger Agreement, Parent has required that Shareholder agree, and Shareholder is willing to agree, to restrict the transfer or disposition of any of the Shares, or any other shares of capital stock of the Company acquired by Shareholder hereafter and prior to the Expiration Time (as defined in Section 1(a) hereof), and to vote the Shares and any other such shares of capital stock of the Company as set forth in this Agreement.

 

NOW, THEREFORE, the parties hereto hereby agree as follows:

 

1.            Agreement to Retain Shares.

 

(a)           Transfer.  Shareholder agrees that, at all times during the period beginning on the date hereof and ending at the Expiration Time, Shareholder shall not Transfer (as defined below) any of the Shares or any New Shares (as defined in Section 1(b) hereof), or make any agreement regarding any Transfer, in each case without the prior written consent of Parent.  Shareholder agrees that any Transfer in violation of this Agreement shall be void and of no force or effect.

 

 

As used herein, the term “Expiration Time” shall mean the earliest to occur of (i) such date and time as the Merger shall become effective in accordance with the terms and provisions of the Merger Agreement, (ii) the termination of the Merger Agreement in accordance with the terms thereof or (iii) the occurrence of a Material Adverse Amendment.  As used herein (A) the term “Material Adverse Amendment” shall mean an amendment to the Merger Agreement that (i) (1) directly or indirectly decreases the Merger Consideration (as defined in the Merger Agreement), (2) waives, amends or modifies any condition to the obligation of Company to consummate the Merger, (3) waives any breach of representation, warranty, covenant or agreement of Parent or Merger Sub contained in the Merger Agreement, (4) waives, amends or modifies any representation, warranty, covenant or agreement of Parent or Merger Sub so as to reduce the scope thereof, or the obligation thereunder, or (5) materially and adversely affects the Shareholder and (ii) is approved by the Company’s Board of Directors regardless of whether in such vote the Shareholder’s nominee (if any) on the Company’s Board of Directors (or the Shareholder in his capacity as a director) voted against such amendment.  As used herein, the term “Transfer” shall mean, with respect to any security, the direct or indirect assignment, sale, transfer, tender, pledge, hypothecation, or the gift, placement in trust, or the Constructive Sale (as defined below) or other disposition of such security (excluding transfers by testamentary or intestate succession or otherwise by operation of law) or any right, title or interest therein (including, but not limited to, any right or power to vote to which the holder thereof may be entitled, whether such right or power is granted by proxy or otherwise), or the record or beneficial ownership thereof, the offer to make such a sale, transfer, Constructive Sale or other disposition, and each agreement, arrangement or understanding, whether or not in writing, to effect any of the foregoing, excluding any Transfer (A) pursuant to a court order, (B) pursuant to the Merger, or (C) to any affiliate or family member of Shareholder if such transferee, prior to the Transfer, executes a binding agreement with Parent and the Company substantially in the form of this Agreement.  As used herein, the term “Constructive Sale” shall mean, with respect to any security, a short sale with respect to such security, entering into or acquiring an offsetting derivative contract with respect to such security, entering into or acquiring a futures or forward contract to deliver such security or entering into any other hedging or other derivative transaction that has the effect of materially changing the economic benefits and risks of ownership.

 

(b)           New Shares.  Shareholder agrees that any shares of capital stock of the Company that Shareholder purchases or with respect to which Shareholder otherwise acquires beneficial ownership after the date of this Agreement and prior to the Expiration Time, including, without limitation, shares issued or issuable upon the conversion, exercise or exchange, as the case may be, of all securities held by Shareholder which are convertible into, or exercisable or exchangeable for, shares of capital stock of the Company (“New Shares”), shall be subject to the terms and conditions of this Agreement to the same extent as if they constituted Shares as of the date hereof.

 

2.            Agreement to Vote Shares.  Until the Expiration Time, at every meeting of shareholders of the Company called with respect to any of the following, and at every adjournment or postponement thereof, and on every action or approval by written consent of shareholders of the Company with respect to any of the following, Shareholder shall vote, to the extent not voted by the person(s) appointed under the Proxy (as defined in Section 3), the outstanding Shares and any outstanding New Shares (to the extent any such New Shares may be voted):

 

 

(i)             in favor of approval and adoption of the Merger Agreement and in favor of each of the other actions contemplated by the Merger Agreement and the Proxy and any action required in furtherance thereof;

 

(ii)            against approval of any proposal made in opposition to, or in competition with, consummation of the Merger and the transactions contemplated by the Merger Agreement;

 

(iii)           against any action which the Company is prohibited from taking under Section 5.1 or 5.3 of the Merger Agreement; and

 

(iv)           in favor of waiving any notice that may have been or may be required relating to any reorganization of the Company or any subsidiary of the Company, any reclassification or recapitalization of the capital stock of the Company or any subsidiary of the Company, any sale of assets, change of control or acquisition of the Company or any subsidiary of the Company by any other person, or any consolidation or merger of the Company or any subsidiary of the Company with or into any other person..

 

Prior to the Expiration Time, Shareholder shall not enter into any agreement or understanding with any person to vote or give instructions in any manner inconsistent with this Section 2.

 

3.             Irrevocable Proxy.  Concurrently with the execution of this Agreement, Shareholder agrees to deliver to Parent an irrevocable proxy in the form attached hereto as Appendix A (the “Proxy”), which shall be irrevocable to the fullest extent permitted by applicable law, covering the total number of Shares and New Shares.

 

4.             Representations, Warranties and Covenants of Shareholder.  Shareholder represents, warrants and covenants to Parent as follows:

 

(i)            Shareholder is the beneficial owner of the Shares, with full power to vote or direct the voting of the Shares for and on behalf of any and all beneficial owners of the Shares, subject to the terms of the Company’s Amended and Restated Voting Agreement dated July 16, 2008 (the “Voting Agreement”), a copy of which has been made available to Parent.

 

(ii)           As of the date hereof, the Shares are, and at all times up until the Expiration Time the Shares will be, free and clear of any rights of first refusal, co-sale rights, security interests, liens, pledges, claims, options, charges or other encumbrances of any kind or nature, in each case that would impair Shareholder’s ability to fulfill its obligations under Section 2.  Parent acknowledges that the Shares are subject to the terms of the Voting Agreement, the Company’s Amended and Restated Right of First Refusal and Cosale Agreement dated July 16, 2008 (the “ROFR and Cosale Agreement”) and the Company’s Amended and Restated Investor Rights Agreement dated July 16, 2008 (the “Investor Rights Agreement”), copies of which agreements have been made available to Parent.  The execution and delivery of this Agreement by Shareholder do not, and Shareholder’s performance of its obligations under this Agreement will not conflict with or violate the Voting Agreement, the ROFR and Cosale Agreement or the Investor Rights Agreement or any order, decree, judgment or agreement known by the Shareholder to be applicable to such Shareholder or by which Shareholder or any of Shareholder’s properties or Shares is bound.

 

 

(iii)           Shareholder does not beneficially own any shares of capital stock of the Company, or any securities convertible into, or exchangeable or exercisable for, shares of capital stock of the Company, other than as set forth on the signature page hereto.

 

(iv)           Shareholder has full power and authority to make, enter into and carry out the terms of this Agreement, the Proxy and any other related agreements to which Shareholder is a party.

 

(v)           In entering into this Agreement, Shareholder has relied solely on its, his or her own personal judgment and the Parent SEC Reports filed prior to the date hereof, and Shareholder has not relied upon any other statement, representation, or warranty relating to Company or Parent other than such Parent SEC Reports.

 

5.             Additional Documents.  Shareholder hereby covenants and agrees to execute and deliver any additional documents reasonably necessary or desirable to carry out the purpose and intent of this Agreement.

 

6.             Consents and Waivers.  Shareholder hereby gives any consents or waivers that are reasonably required for the consummation of the Merger under the terms of any agreement or instrument to which Shareholder is a party or subject or in respect of any rights Shareholder may have.

 

7.             Termination.  This Agreement and the Proxy delivered in connection herewith shall terminate automatically and shall have no further force or effect as of the Expiration Time; provided, however, that Section 9 shall survive the Effective Time for the period set forth therein and Section 10 shall survive the Effective Time.

 

8.             Company Covenants.  The Company agrees to make a notation on its records and give instructions to its transfer agent(s) to not permit, prior to the Expiration Time, the transfer of any Shares or New Shares, except as permitted pursuant to Section 1(a).

 

9.             Lock-Up.  Shareholder hereby agrees not to sell or otherwise transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale (“Post Merger Sale”), of any Parent securities received pursuant to the terms of the Merger Agreement and held by Shareholder other than pursuant to this Section 9.

 

(a)           During the one (1) month period following the Effective Time (as defined in the Merger Agreement) of the Merger, Shareholder may conduct Post Merger Sales of no more than thirty percent (30%) of any Parent securities received by Shareholder pursuant to the Merger Agreement.

 

(b)           Subject to Section 9(a), during the two (2) month period following the Effective Time (as defined in the Merger Agreement) of the Merger, Shareholder may conduct Post Merger Sales of no more than sixty-five percent (65%) of any Parent securities received by Shareholder pursuant to the Merger Agreement.

 

 

(c)           Notwithstanding the foregoing, Shareholder may consummate a Post Merger Sale at any time and for any amount of Parent securities received pursuant to the terms of the Merger Agreement with any affiliate or family member of Shareholder if such transferee, prior to the Post Merger Sale, agrees to be bound by this Section 9.

 

10.           Prohibited Transactions.  Shareholder understands that the Transaction Share Price (as defined in the Merger Agreement) is a function of the market price of the Parent Common Stock; therefore:

 

(a)           Shareholder represents and warrants that from the 20th trading day preceding June 21, 2011 to the date of this Agreement, Shareholder has not engaged in a Prohibited Transaction.

 

(b)           Shareholder covenants and agrees that from the date hereof to the Expiration Time, Shareholder shall not engage in a Prohibited Transaction.

 

(c)           “Prohibited Transaction” means collectively, (i) any Transfer (without giving effect to the exclusions contained in the definition of such term) of Parent Common Stock, or (ii) the establishment or increase of any “put equivalent position” (as defined in Rule 16a-1(h) promulgated under the Exchange Act) with respect to Parent Common Stock.

 

11.           Miscellaneous.

 

(a)           Directors and Officers.  Notwithstanding any provision of this Agreement to the contrary, Shareholder has entered into this Agreement in its, his or her capacity as a Shareholder of the Company, and nothing in this Agreement shall limit or restrict Shareholder or any affiliate of Shareholder from acting, if applicable, in the Shareholder’s or such affiliate’s capacity as a director or officer of the Company (it being understood that this Agreement shall apply to Shareholder solely in Shareholder’s capacity as a shareholder of the Company) or voting in Shareholder’s sole discretion on any matter other than those matters referred to in Section 2.  Parent covenants that it will not bring, commence, institute, maintain, prosecute, participate in or voluntarily aid any action, claim, suit or cause of action, in law or in equity, in any court or before any governmental entity, which (i) alleges that any action taken (or not taken) by Shareholder or Shareholder’s affiliate solely in Shareholder’s or such affiliate’s capacity as a director or officer of the Company breaches or violates or would breach or violate any provision of this Agreement or the Proxy or (ii) challenges the right of Shareholder to vote or challenges the validity of or seeks to enjoin any vote by Shareholder (or the grant of a proxy with respect thereto) on any matter other than those matters set forth in Section 2.

 

(b)           Waiver; Release.

 

(i)      No waiver by any party hereto of any condition or any breach of any term or provision set forth in this Agreement shall be effective unless in writing and signed by the other party hereto.  The waiver of any breach of any term or provision of this Agreement shall not operate as or be con­strued to be a waiver of any other previous or subsequent breach of any term or provision of this Agreement.  No delay or omission by Parent in exercising any right under this Agreement shall operate as a waiver of that right or any other right under this Agreement.

 

 

(ii)      In the event Parent releases the obligations of any Shareholder stated herein or waives any breach by any Shareholder of any term or condition of this Agreement, each in accordance with Section 11(b)(i) above (in each case, a “Waived Shareholder”), Parent shall promptly provide to each other Shareholder a release or waiver, as appropriate, identical in all respects to such release or waiver previously granted to such Waived Shareholder.

 

(c)           Notices.  All notices and other communications hereunder shall be in writing and shall be deemed duly given (i) on the date of delivery if delivered personally, (ii) on the date of confirmation of receipt (or the first business day following such receipt if the date is not a business day) if sent via facsimile (receipt confirmed), or (iii) on the date of confirmation of receipt (or the first business day following such receipt if the date is not a business day) if delivered by a nationally recognized courier service.  All notices hereunder shall be delivered to the parties at the following addresses or facsimile numbers (or pursuant to such other instructions as may be designated in writing by the party to receive such notice):

 

(d)           Headings.  All captions and section headings used in this Agreement are for convenience only and do not form a part of this Agreement.

 

(e)           Counterparts.  This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party, it being understood that all parties need not sign the same counterpart.

 

(f)            Entire Agreement; Amendment.  This Agreement constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof.  This Agreement may not be changed or modified, except by an agreement in writing specifically referencing this Agreement and executed by each of the parties hereto.

 

(g)           Severability.  In the event that any provision of this Agreement, shall be determined to be invalid, unlawful, void or unenforceable to any extent, the remainder of this Agreement shall not be impaired or otherwise affected and shall continue to be valid and enforceable to the fullest extent permitted by law.

 

(h)           Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of law thereof.

 

(i)            Rules of Construction.  The parties hereto agree that they have been represented by counsel during the negotiation and execution of this Agreement and, therefore, waive the application of any law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document.

 

(j)            Remedies.  The parties acknowledge that Parent will be irreparably harmed and that there will be no adequate remedy at law for a violation of any of the covenants or agreements of Shareholder set forth herein.  Therefore, it is agreed that, in addition to any other remedies that may be available to Parent upon any such violation, Parent shall have the right to enforce such covenants and agreements by specific performance, injunctive relief or by any other means available to Parent at law or in equity.

 

(k)            No Assignment.  Unless otherwise provided for herein, Shareholder may not assign this Agreement.  This Agreement shall inure to the benefit of Parent, Company and their respective successors and assigns.

 

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IN WITNESS WHEREOF, the undersigned have executed this Agreement on the date first above written.

 

 

 

 

 

 

The undersigned shareholder (“Shareholder”) of Insider Guides, Inc., a Delaware corporation (the “Company”), hereby irrevocably (to the fullest extent permitted by law) appoints [   ] of Quepasa Corporation, a Nevada corporation (“Parent”), and each of them, as the sole and exclusive attorneys-in-fact and proxies of the undersigned, with full power of substitution and resubstitution, to vote and exercise all voting and related rights (to the full extent that the undersigned is entitled to do so) with respect to all of the shares of capital stock of the Company that now are or hereafter may be beneficially owned by the undersigned, and any and all other shares or securities of the Company issued or issuable in respect thereof on or after the date hereof (collectively, the “Shares”), in accordance with the terms of this Proxy until the Expiration Time (as defined in that certain Voting and Lockup Agreement, dated of even date herewith, by and among Parent, the Company and Shareholder (the “Voting Agreement”)), subject to the limitations herein and therein.  The Shares beneficially owned by the undersigned shareholder of the Company as of the date of this Proxy are listed on the final page of this Proxy.  Upon the undersigned’s execution of this Proxy, any and all prior proxies given by the undersigned with respect to any Shares for the Specified Matters (as defined below) are hereby revoked and the undersigned hereby agrees not to grant any subsequent proxies with respect to the Shares until after the Expiration Time (as defined in the Voting Agreement).

 

This Proxy is irrevocable (to the fullest extent permitted by applicable law), is coupled with an interest and is granted pursuant to the Voting Agreement, and is granted in consideration of Parent entering into that certain Agreement and Plan of Merger, dated as of July 19, 2011, by and among Parent, the Company and certain other parties (the “Merger Agreement”).  The Merger Agreement provides for the merger of a wholly owned subsidiary of Parent with and into the Company in accordance with its terms (the “Merger”), and Shareholder is receiving a portion of the proceeds of the Merger.

 

The attorneys-in-fact and proxies named above are hereby authorized and empowered by the undersigned, at any time prior to the Expiration Time (as defined in the Voting Agreement), to act as the undersigned’s attorney-in-fact and proxy to vote the Shares, and to exercise all voting, consent and similar rights of the undersigned with respect to the Shares (including, without limitation, the power to execute and deliver written consents), at every annual, special, adjourned or postponed meeting of shareholders of the Company and in every written consent in lieu of such meeting with respect to the following matters (the “Specified Matters”):

 

(i)             in favor of approval and adoption of the Merger Agreement and in favor of each of the other actions contemplated by the Merger Agreement and this Proxy and any action required in furtherance thereof;

 

 

(ii)            against approval of any proposal made in opposition to, or in competition with, consummation of the Merger and the transactions contemplated by the Merger Agreement;

 

(iii)           against any action which the Company is prohibited from taking under Section 5.1 or 5.3 of the Merger Agreement; and

 

(iv)           in favor of waiving any notice that may have been or may be required relating to any reorganization of the Company or any subsidiary of the Company, any reclassification or recapitalization of the capital stock of the Company or any subsidiary of the Company, any sale of assets, change of control or acquisition of the Company or any subsidiary of the Company by any other person, or any consolidation or merger of the Company or any subsidiary of the Company with or into any other person.

 

The attorneys-in-fact and proxies named above may not exercise this Proxy on any other matter except for the Specified Matters as described in clauses (i), (ii), (iii) or (iv) above, and Shareholder may vote the Shares on all other matters.

 

Any obligation of the undersigned hereunder shall be binding upon the successors and assigns of the undersigned.

 

This Proxy shall terminate, and be of no further force and effect, automatically as of the Expiration Time.

 

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This Proxy shall terminate, and be of no further force and effect, automatically upon the Expiration Time (as defined in the Voting Agreement).

 

Dated: July ___, 2011