UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):   September 15, 2011

Quepasa Corporation
 (Exact name of registrant as specified in its charter)
 
Nevada
 
001-33105
 
86-0879433
(State or other Jurisdiction of Incorporation)
 
(Commission File Number)
 
(IRS Employer Identification No.)
 
324 Datura Street, Ste. 114
West Palm Beach, FL
 
 
33401
(Address of principal executive offices)
 
(Zip Code)

Registrant’s telephone number, including area code: (561) 366-1249

________________________________________________
(Former name or former address if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

x Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 
 
 

Item 1.01 
Entry into a Material Definitive Agreement.

On September 15, 2011, Quepasa Corporation (the “Company”) and Insider Guides, Inc. d/b/a myYearbook (“myYearbook”) amended the Agreement and Plan of Merger dated July 19, 2011 (the “Amendment”).  The key provisions of the Amendment were:

 
·
The portion of the merger consideration which was to be paid to myYearbook security holders in shares of the Company’s common stock was amended from a variable number of shares having an aggregate value of approximately $82 million to a fixed amount of 17 million shares of common stock.

 
·
Previously, the Merger Agreement contained a closing condition that the closing price of the Company’s common stock the day three days prior to the closing of the merger not be less than $5.00 and a closing condition that the Transaction Share Price (as defined in the Merger Agreement) not be less than $5.00.  Both closing conditions were eliminated by the Amendment.  There are no longer any minimum stock price requirements.  

 
·
The resale restrictions on the shares of the Company’s common stock issued to myYearbook security holders was extended from a period of two months to five months following the closing of the merger.   Of the shares of the Company’s common stock issued to the myYearbook security holders, 16.67% will have no resale restrictions and may be immediately sold following the closing of the merger.  Each security holder may sell up to an additional 16.67% each month thereafter.  After five months following the closing of the merger, the resale restrictions lapse entirely and each security holder may sell all of the shares of the Company’s common stock held by such security holder.

 
·
The Amendment provides that no information or events known by the Company or myYearbook as of September 15, 2011, including information or events reflected for or reserved on the financial results through August 31, 2011, will be considered when determining if a material adverse effect, which would permit the other party to elect not to close the merger, has occurred.  In addition, any change in the financial condition of either party, and/or web traffic metrics will no longer be considered a material adverse effect.

 
·
The Merger Agreement originally provided that if the total number of dissenting shares exceeded five percent of the total number of the outstanding shares of the myYearbook stock, the merger would not close.  This condition was amended such that it is now a condition which only permits the Company to decide not to close the merger.

The foregoing description of the Amendment is not a complete description of all of the parties’ rights and obligations and is qualified in its entirety by reference to the Amendment, which is filed as Exhibit 2.1 hereto and is incorporated herein by reference.

Item 9.01 
Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.
 
2.1 
Description
 
Amendment No. 1 to the Agreement and Plan of Merger among Quepasa Corporation, IG Acquisition Company and Insider Guides, Inc.
 
 
 
 
 
Additional Information

This communication does not constitute an offer to sell or the solicitation of an offer to buy Quepasa’s securities or the solicitation of any shareholder vote or approval. This communication is being made in respect of the proposed transaction involving Quepasa and Insider Guides. In connection with the proposed transaction, Quepasa has filed with the SEC a registration statement on Form S-4 that includes a proxy statement and prospectus of Quepasa. Before making any voting or investment decision, investors and shareholders are urged to read carefully the proxy statement and prospectus regarding the proposed transaction and any other relevant documents filed by Quepasa with the SEC because they contain important information about the proposed transaction. You may obtain copies of all documents filed with the SEC regarding this transaction, free of charge, at the SEC’s website (www.sec.gov), by accessing Quepasa’s website at www.quepasacorp.com under the heading “Investors” and then under the link “SEC Filings” and from Quepasa by directing a request to Quepasa at Quepasa Corporation, 324 Datura Street, Suite 114, West Palm Beach, FL 33401, Attention: Investor Relations.
 
Quepasa and its directors and executive officers and certain other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. You can find information about Quepasa’s directors and executive officers in its definitive proxy statement filed with the SEC on April 14, 2011. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement and prospectus and other relevant materials filed with the SEC. You can obtain free copies of these documents from Quepasa using the contact information above.

 
 
 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
QUEPASA CORPORATION
 
       
Date:  September 21, 2011
By:
/s/ Michael Matte  
  Name:   Michael Matte  
  Title:   Chief Financial Officer  
       
 
 
 
Exhibit 2.1
AMENDMENT NO. 1
TO
AGREEMENT AND PLAN OF MERGER

This AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER (this “ Amendment ”) is dated as of September 14, 2011, by and among Quepasa Corporation, a Nevada corporation (“ Parent ”), IG Acquisition Company, a Delaware corporation and wholly-owned subsidiary of Parent (“ Merger Sub ”), and Insider Guides, Inc., a Delaware corporation (“ Company ”).  Terms used but not otherwise defined herein shall have the respective meanings ascribed to them in the Merger Agreement (as defined below).

WHEREAS, Parent, Merger Sub  and the Company are parties to that certain Agreement and Plan of Merger, dated as of July 19, 2011 (the “ Merger Agreement ”);

WHEREAS, pursuant to Section 9.1 of the Merger Agreement, the Merger Agreement may be amended only by written agreement of Parent, Merger Sub and Company at any time prior to the Effective Time;

WHEREAS, the Effective Time has not yet occurred;

WHEREAS, Parent, Merger Sub and Company wish to eliminate uncertainty with respect to the consummation of the Closing; and

WHEREAS, Parent, Merger Sub and the Company wish to amend the terms of the Merger Agreement as set forth below;

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1.            Amendments to Merger Agreement .

(a)           The following new definitions shall be added to Section 2.1 of the Merger Agreement immediately following the definition of “Subsidiary” and immediately preceding the definition of “Total Participating Consideration” to read as follows:

“ Total Merger Consideration ” shall mean the sum of (A) the Cash Consideration plus (B) (i) the Transaction Share Price multiplied by (ii) the Total Parent Common Stock Issued in Merger.”

“ Total Parent Common Stock Issued in Merger ” shall mean 17,000,000 shares of Parent Common Stock.”
 
 
 
 

(b)           The following definitions shall replace their respective counterparts in Section 2.1 of the Merger Agreement:

“ Cash Percentage ” means the percentage equal to 100% multiplied by a fraction, the numerator of which is the Cash Consideration and the denominator of which is (A) the Total Merger Consideration minus (B) the product of the aggregate number of shares of Parent Common Stock issued to the holders of Company Options pursuant to Section 2.4(a) multiplied by the Transaction Share Price.”

“ Total Participating Consideration ” means (A) the Total Merger Consideration less (B) the Total Preferred Liquidation Preference.”

“ Transaction Share Price ” shall be equal to the average closing price of a share of Parent Common Stock during the twenty (20) trading days ending with the trading day immediately prior to the Effective Time.”

(c)            Section 2.2(g) of the Merger Agreement shall be deleted and replaced in its entirety with the following:

“(g)           The shares of Parent Common Stock included in the Merger Consideration will be subject to restrictions on transfer for a period of five (5) months following the Effective Time, as follows:  (i) during the one (1) month period following the Effective Time, no more than 16.67% of the shares of Parent Common Stock received by each Company shareholder as Merger Consideration may be transferred; (ii) subject to the foregoing clause (i), during the two (2) month period following the Effective Time, no more than 33.33% of the shares of Parent Common Stock received by each Company shareholder as Merger Consideration may be transferred; (iii) subject to the foregoing clauses (i) and (ii), during the three (3) month period following the Effective Time, no more than 50% of the shares of Parent Common Stock received by each Company shareholder as Merger Consideration may be transferred; (iv) subject to the foregoing clauses (i)-(iii), during the four (4) month period following the Effective Time, no more than 66.67% of the shares of Parent Common Stock received by each Company shareholder as Merger Consideration may be transferred; and (v) subject to the foregoing clauses (i)-(iv), during the five (5) month period following the Effective Time, no more than 83.33% of the shares of Parent Common Stock received by each Company shareholder as Merger Consideration may be transferred.  Notwithstanding the foregoing, Parent Common Stock may be transferred at any time to any Affiliate or family member of a Company shareholder if such transferee agrees to be bound by the foregoing restrictions prior to such transfer.  The restrictions on transfer contemplated by this Section 2.2(g) will be set forth in the Company Voting Agreements and Letters of Transmittal.”

(d)           There shall be added to Section 2.2 of the Merger Agreement a new paragraph (h), which shall read as follows:
 
 
 
 

“(h)           For the avoidance of doubt, in no event shall there be issued as Merger Consideration hereunder an aggregate number of shares of Parent Common Stock in excess of (or, except to the extent of cash paid in lieu of fractional shares, less than) the Total Parent Common Stock Issued in Merger”.

(e)            Section 6.7 of the Merger Agreement shall be deleted and replaced in its entirety with the following:

“ 6.7            [Intentionally Omitted]”

(f)            Section 6.8 of the Merger Agreement shall be deleted and replaced in its entirety with the following:

“ 6.8            [Intentionally Omitted]”

(g)            Section 6.9 of the Merger Agreement is hereby redesignated as Section 7.2(e) and shall only be a condition to the obligation of Parent and Merger Sub.


2.             Confirmation .        Each Party has been provided with the other Party’s financial results through August 31, 2011.  Each Party hereby confirms that, (i)  to the best of its knowledge, as of the date hereof, neither it nor any of the other Parties has breached, in any material respect, any of its representations, warranties or covenants made in the Merger Agreement (and/or any known breaches are hereby waived); (ii) if the Closing were to have been scheduled to occur on the date hereof, the conditions set forth in Section 7.1(d) and Section 7.2(d) of the Merger Agreement would have been deemed to be fulfilled, (iii) no information or events known by the other Party on the date of this Amendment or reflected for or reserved on such August 31, 2011 financial results shall be considered when determining satisfaction of the conditions set forth in Section 7.1(d) and Section 7.2(d) of the Merger Agreement and (iv) each Party hereby waives any conditions to Closing it may have that might not be met by reason of the other Party's financial performance and/or web traffic metrics through the Closing Date.

3.             Miscellaneous .

(a)           Except as expressly set forth herein, the Merger Agreement shall remain in full force and effect.

(b)           This Amendment shall be governed by and construed in accordance with the laws of the State of Delaware without reference to principles of conflicts of laws.

(c)           This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but both of which when taken together shall constitute one and the same instrument.

[SIGNATURE PAGE FOLLOWS]
 
 
 
 

IN WITNESS WHEREOF, Quepasa Corporation, IG Acquisition Company and Insider Guides, Inc. have caused this Amendment to be signed by their respective duly authorized officers as of the date first above written.

 
QUEPASA CORPORATION
 
By:
 
 
Name:
 
 
Title:
 


 
IG ACQUISITION COMPANY
 
By:
 
 
Name:
 
 
Title:
 
 
 
 
INSIDER GUIDES, INC.
 
By:
 
 
Name:
 
 
Title: