Exhibit 10.36
 
 
DEBT CANCELLATION AND WARRANT EXERCISE AGREEMENT

March 5, 2013

This DEBT CANCELLATION AND WARRANT EXERCISE AGREEMENT is delivered on March 7,
2013, but made as of the date set forth above (this “Agreement”) by and among
MeetMe, Inc., a Delaware corporation formerly known as Quepasa Corporation (the
“Company”), Altos Hornos de México S.A.B. de C.V., a public variable capital
company (sociedad anonima bursatil de capital variable) organized under the laws
of the United Mexican States (“AHMSA”) and Mexicans & Americans Trading
Together, Inc., a Delaware corporation (“MATT”).

RECITALS

WHEREAS, on January 25, 2008, the Company issued to MATT a Subordinated
Promissory Note in the aggregate principal amount of US$5,000,000 (the “Note”);
 
WHEREAS, MATT holds (i) a Common Stock Purchase Warrant (Series 1) issued as of
October 17, 2006, as amended January 25, 2008, to purchase 1,000,000 shares of
common stock, par value US$.001 per share (the “Common Stock”) of the Company
(the “Series 1 Warrant”), and (ii) a Common Stock Purchase Warrant (Series 2)
issued as of October 17, 2006, as amended January 25, 2007, to purchase
1,000,000 shares of Common Stock of the Company (the “Series 2 Warrant” and
together with the Series 1 Warrant, the “Warrants”).
 
WHEREAS, on or prior to the date hereof, the Company rendered services to AHMSA
and its affiliates (the “Historical Services”) for which AHMSA currently owes
the Company US$6,025,898 (six million twenty-five thousand eight hundred
ninety-eight United States dollars), including pursuant to invoice numbers
201203501, 201203502, 201204275, 201205160, and 201206157 (the “AHMSA
Payables”); and
 
WHEREAS, MATT is a wholly-owned subsidiary of AHMSA; and
 
WHEREAS, the parties have agreed that:  (i) AHMSA will satisfy the AHMSA
Payables, and all related amounts claimed by the Company, through a reduction in
the Company’s obligations under the Note, (ii) MATT will exercise a portion of
the Warrants such that the balance due on the Note will be satisfied through the
offset of the exercise price, and (iii) as additional consideration to the
Company and in order to provide the Company with additional liquidity, AHMSA
will cause MATT to exercise a portion of the remaining Warrants, in each case,
on the terms and subject to the conditions set forth herein.
 
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto, each intending to be
legally bound hereby, agree as follows:
 
 
 

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TERMS AND CONDITIONS
 
1.
Company Confirmation of Warrants.  The Company represents and warrants that the
exercise price of the Warrants as of the date of this Agreement is US$2.75 and
no “Adjustment Event” (as such term is defined in Section 8.1 of the Warrants)
has occurred.

 
2.
Confirmation of the Note Amount.  The parties acknowledge that prior to giving
effect to the transactions contemplated by this Agreement, the Note has an
aggregate principal amount of US$5,000,000, and as of the date hereof, there is
accrued and unpaid interest thereon of US$1,254,178.  The Company acknowledges
that it is validly indebted to MATT in such amounts.

 
3.
Confirmation of the AHMSA Payables Currently Due.  The parties acknowledge that
prior to giving effect to the transactions contemplated by this Agreement, the
aggregate amount owed by AHMSA and its affiliates to the Company is
US$6,025,898.  In addition, the Company has claimed interest on such amount of
US$222,376.

 
4.
Extinguishment of AHMSA Payable And Reduction of Note.  The parties hereto agree
that in full satisfaction of the AHMSA Payables, the interest on the AHMSA
Payables claimed by the Company, and all amounts that are presently due or that
could become due with respect to the Historical Services, the principal and
accrued interest of the Note will be offset and reduced by an amount equal to
US$6,248,274.  As a result of such offset, the remaining principal amount of the
Note is US$5,904.

 
5.
Initial Exercise of Warrants; Cancellation of Note.

 
 
(a)
MATT hereby partially exercises the Series 1 Warrant for 2,147 Warrant Shares
(as defined in the Warrants), in the manner set forth in the Series 1 Warrant
and tenders the Note (as reduced pursuant to Section 4) as payment in full of
the exercise price therefor.  The Company agrees to accept the offset of the
balance due under the Note, after giving affect to payments pursuant to Section
3 of this Agreement, as payment in full of the exercise price for the Warrant
Shares under this Section 5 and shall deliver a new Series 1 Warrant for the
remaining shares.

 
 
(b)
After the completion of the transactions contemplated by Section 5(a) of this
Agreement, the Note shall be cancelled, deemed fully satisfied, and of no
further force or effect, without further action by either the Company or MATT.

 
6.
Subsequent Exercise of Warrants.

 
 
(a)
On or prior to the last Business Day of March 2013 (the “Initial Exercise
Date”), MATT shall either (i) exercise the Warrants for a number of Warrant
Shares with an aggregate exercise price of US$200,000 based on the then
effective exercise price of the Warrants, or (ii) elect in writing to forfeit a
portion of the Warrants corresponding to a number of Warrant Shares with an
aggregate exercise price of US$200,000 based on the then effective exercise
price of the Warrants.  For purposes of this Agreement, the term “Business Day”
means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on
which banking institutions in New York, New York are authorized or obligated by
applicable law, regulation or executive order to close.

 
 
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(b)
On or prior to the last Business Day of each month commencing April 2013 and
ending January 2014 (each a “Subsequent Exercise Date” and together with the
Initial Exercise Date, the “Exercise Dates”), MATT either (i) exercise the
Warrants for a number of Warrant Shares with an aggregate exercise price of
US$180,000 based on the then effective exercise price of the Warrants, or (ii)
elect in writing to forfeit a portion of the Warrants corresponding to a number
of Warrant Shares with an aggregate exercise price of US$180,000 based on the
then effective exercise price of the Warrants.

 
 
(c)
MATT’s obligation to exercise Warrants on any Exercise Date shall be discharged
to the extent that the sum of (i) the aggregate exercise price paid upon
exercise of Warrants prior to such Exercise Date (excluding amounts paid
pursuant to Section 5), and (ii) the aggregate exercise price of all Warrants
forfeited prior to such Exercise Date is greater than the cumulative amount of
exercise price required to be paid or forfeited pursuant to the terms of this
Agreement.  MATT’s obligations under this Section 6 shall be discharged at such
time as the sum of the aggregate exercise price paid for Warrants (excluding
amounts paid pursuant to Section 5) and the aggregate exercise price of Warrants
forfeited is at least US$2,000,000.

 
 
(d)
If MATT fails to either exercise Warrants or elect in writing to forfeit
Warrants on any Exercise Date and such failure continues for ten Business Days
following written notice (which may be delivered by email, regular mail or
overnight courier) from the Company delivered to:

 
Mexicans & Americans Trading Together, Inc.
5150 N. Loop 1604 West
San Antonio, Texas 78249
Attention:  Andres Gonzalez-Saravia Coss, Esq.
Email:  agonzalez@gan.com.mx

with a concurrent copy (which shall not constitute notice) to:

Willkie Farr & Gallagher LLP
787 Seventh Avenue
New York, New York  10019
United States
Attention:  Maurice M. Lefkort, Esq.
email:  mlefkort@willkie.com
 
 
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then MATT shall be deemed to have elected to forfeit the applicable portion of
the Warrants as of such Exercise Date and the applicable portion of the Warrants
shall be cancelled automatically without further action with respect thereto.
 
 
(e)
All Warrant Shares shall be exercised (i) first, from any remaining shares
pursuant to the Series 1 Warrant and (ii) second, from any remaining shares
pursuant to the Series 2 Warrant.  After the issuance of Warrant Shares to MATT
on each Exercise Date, the Company shall deliver to MATT a new Series 1 Warrant
or Series 2 Warrant, as applicable, for any remaining shares.

 
7.
Representations and Warranties of MATT and AHMSA. Each of AHMSA and MATT hereby
represent and warrant to the Company that:  (a) it has all requisite corporate
power and authority to execute and deliver this Agreement and to carry out the
provisions of this Agreement; (b) all corporate action on its part necessary for
the authorization, execution and delivery of this Agreement and the performance
of its obligations hereunder has been taken; (c) this Agreement has been duly
and validly executed and delivered by it; (d) assuming this Agreement has been
duly authorized, executed and delivered by the other parties hereto, this
Agreement constitutes its legal, valid and binding obligation, enforceable 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; and (e) neither this Agreement nor the consummation of
the transactions contemplated hereby conflicts with, results in a violation or
breach of, or constitutes a default (or an event which with the giving of notice
or the lapse of time or both would constitute a default) under (i) its
organization documents, (ii) any contract to which it is a party, or (iii) any
order, writ, judgment, injunction, award, decree, law, statute, rule or
regulation applicable to it.

 
8.
Representations and Warranties of the Company.  The Company hereby represents
and warrants to MATT and AHMSA that:  (a) it has all requisite corporate power
and authority to execute and deliver this Agreement and to carry out the
provisions of this Agreement; (b) all corporate action on its part necessary for
the authorization, execution and delivery of this Agreement and the performance
of its obligations hereunder has been taken, including that a majority of its
Board of Directors not affiliated with MATT or AHMSA has (i) determined that the
terms of this Agreement are fair to the Company, and (ii) approved the
execution, delivery and performance of this Agreement; (c) this Agreement has
been duly and validly executed and delivered by it; (d) assuming this Agreement
has been duly authorized, executed and delivered by the other parties hereto,
this Agreement constitutes its legal, valid and binding obligation, enforceable
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; (e) neither this Agreement nor the consummation of the
transactions contemplated hereby conflicts with, results in a violation or
breach of, or constitutes a default (or an event which with the giving of notice
or the lapse of time or both would constitute a default) under (i) its
organization documents, (ii) any contract to which it is a party, or (iii) any
order, writ, judgment, injunction, award, decree, law, statute, rule or
regulation applicable to it; (f) it shall issue in the name of, and deliver to
MATT, a certificate or certificates for the Warrant Shares in accordance with
the terms of the Warrants; and (g) it has full capacity, power and authority to
issue the Warrant Shares and that the Warrant Shares, when issued in accordance
with this Agreement, will be fully paid and non-assessable.

 
 
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9.
Miscellaneous.

 
 
(a)
Upon request, each party shall execute and deliver any additional documents
deemed reasonably necessary or desirable by the other party to effectuate terms
and conditions set forth herein.

 
 
(b)
All of the terms and provisions of this Agreement shall be binding upon and
inure to the benefit of and be enforceable by the successors and assigns of the
parties.

 
 
(c)
This Agreement and the Warrants set forth the entire understanding of the
parties hereto with respect to the subject matter hereof.  Any and all previous
agreements and understandings between or among the parties regarding the subject
matter hereof, whether written or oral, are superseded by this Agreement.

 
 
(d)
This Agreement shall not be amended or modified except by written instrument
duly executed by each of the parties hereto.

 
 
(e)
This Agreement may be executed in counterparts, each of which when executed and
delivered shall be deemed an original and all of which counterparts taken
together shall constitute but one and the same instrument.

 
 
(f)
This Agreement shall be governed by the internal laws (and not the law of
conflicts) of the State of Delaware.  Each party hereto agrees that that any
disputes arising from this Agreement shall be settled solely and exclusively in
the federal courts of Delaware to the extent such courts have subject matter
jurisdiction, and failing such subject matter jurisdiction in the Chancery Court
of the State of Delaware, and each party consents to the sole and exclusive
jurisdiction thereof.

 
[Remainder of Page Intentionally Left Blank]

 
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IN WITNESS WHEREOF, the undersigned parties hereto have executed this Debt
Cancellation and Warrant Exercise Agreement on the date first written above.
 
 

Mexicans & Americans Trading Together, Inc.       MeetMe, Inc.                
By:
 
    By:
 
   
 
     
 
  Name:       Name:                   Title:       Title:    

 
 
Altos Hornos de México, S.A.B. de C.V.
 
 

By:                           Name:                           Title:            

 
 
 
 
 
 
 
 
 

[Signature Page to Debt Cancellation and Warrant Exercise Agreement]