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Exhibit 4.1
Exhibit 4.1 Warrant to Purchase up to 1,326,238 shares
of Common Stock
WARRANT TO PURCHASE COMMON STOCK
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD
OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT
RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
SUCH ACT OR SUCH LAWS. THIS INSTRUMENT IS ISSUED SUBJECT TO
THE RESTRICTIONS ON TRANSFER AND OTHER PROVISIONS OF A SECURITIES
PURCHASE AGREEMENT BETWEEN THE ISSUER OF THESE SECURITIES AND THE
INVESTOR REFERRED TO THEREIN, A COPY OF WHICH IS ON FILE WITH THE
ISSUER. THE SECURITIES REPRESENTED BY THIS INSTRUMENT MAY NOT
BE SOLD OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH SAID
AGREEMENT. ANY SALE OR OTHER TRANSFER NOT IN COMPLIANCE WITH
SAID AGREEMENT WILL BE VOID.
WARRANT
to purchase
1,326,238
Shares of Common Stock
of International Bancshares
Corporation
Issue Date: December 23, 2008
1.
Definitions . Unless the context otherwise requires, when
used herein the following terms shall have the meanings
indicated.
" Affiliate " has the meaning ascribed to it in the
Purchase Agreement.
" Appraisal Procedure " means a procedure whereby two
independent appraisers, one chosen by the Company and one by the
Original Warrantholder, shall mutually agree upon the
determinations then the subject of appraisal. Each party
shall deliver a notice to the other appointing its appraiser within
15 days after the Appraisal Procedure is invoked. If within
30 days after appointment of the two appraisers they are unable to
agree upon the amount in question, a third independent appraiser
shall be chosen within 10 days thereafter by the mutual consent of
such first two appraisers. The decision of the third
appraiser so appointed and chosen shall be given within 30 days
after the selection of such third appraiser. If three
appraisers shall be appointed and the determination of one
appraiser is disparate from the middle determination by more than
twice the amount by which the other determination is disparate from
the middle determination, then the determination of such appraiser
shall be excluded, the remaining two determinations shall be
averaged and such average shall be binding and conclusive upon
the
Company and the Original Warrantholder; otherwise, the average
of all three determinations shall be binding upon the Company and
the Original Warrantholder. The costs of conducting any
Appraisal Procedure shall be borne by the Company.
" Board of Directors " means the board of directors of
the Company, including any duly authorized committee thereof.
" Business Combination " means a merger, consolidation,
statutory share exchange or similar transaction that requires the
approval of the Company’s stockholders.
" business day " means any day except Saturday, Sunday
and any day on which banking institutions in the State of New York
generally are authorized or required by law or other governmental
actions to close.
" Capital Stock " means (A) with respect to any
Person that is a corporation or company, any and all shares,
interests, participations or other equivalents (however designated)
of capital or capital stock of such Person and (B) with
respect to any Person that is not a corporation or company, any and
all partnership or other equity interests of such Person.
" Charter " means, with respect to any Person, its
certificate or articles of incorporation, articles of association,
or similar organizational document.
" Common Stock " has the meaning ascribed to it in the
Purchase Agreement.
" Company " means the Person whose name, corporate or
other organizational form and jurisdiction of organization is set
forth in Item 1 of Schedule A hereto.
" conversion " has the meaning set forth in
Section 13(B).
" convertible securities " has the meaning set forth in
Section 13(B).
"CPP" has the meaning ascribed to it in the Purchase
Agreement.
"Exchange Act" means the Securities Exchange Act of 1934,
as amended, or any successor statute, and the rules and
regulations promulgated thereunder.
"Exercise Price" means the amount set forth in Item 2 of
Schedule A hereto.
"Expiration Time" has the meaning set forth in
Section 3.
"Fair Market Value" means, with respect to any security
or other property, the fair market value of such security or other
property as determined by the Board of Directors, acting in good
faith or, with respect to Section 14, as determined by the
Original Warrantholder acting in good faith. For so long as the
Original Warrantholder holds this Warrant or any portion thereof,
it may object in writing to the Board of Director’s
calculation of fair market value within 10 days of receipt of
written notice thereof. If the Original Warrantholder and the
Company are unable to agree on fair market value during the 10-day
period following the delivery of the Original Warrantholder’s
objection, the Appraisal Procedure may be invoked by either party
to
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determine Fair Market Value by delivering written notification
thereof not later than the 30 th day after
delivery of the Original Warrantholder’s objection.
" Governmental Entities " has the meaning ascribed to it
in the Purchase Agreement.
"Initial Number" has the meaning set forth in
Section 13(B).
"Issue Date" means the date set forth in Item 3 of
Schedule A hereto.
" Market Price " means, with respect to a particular
security, on any given day, the last reported sale price regular
way or, in case no such reported sale takes place on such day, the
average of the last closing bid and ask prices regular way, in
either case on the principal national securities exchange on which
the applicable securities are listed or admitted to trading, or if
not listed or admitted to trading on any national securities
exchange, the average of the closing bid and ask prices as
furnished by two members of the Financial Industry Regulatory
Authority, Inc. selected from time to time by the Company for
that purpose. "Market Price" shall be determined without
reference to after hours or extended hours trading. If such
security is not listed and traded in a manner that the quotations
referred to above are available for the period required hereunder,
the Market Price per share of Common Stock shall be deemed to be
(i) in the event that any portion of the Warrant is held by
the Original Warrantholder, the fair market value per share of such
security as determined in good faith by the Original Warrantholder
or (ii) in all other circumstances, the fair market value per
share of such security as determined in good faith by the Board of
Directors in reliance on an opinion of a nationally recognized
independent investment banking corporation retained by the Company
for this purpose and certified in a resolution to the
Warrantholder. For the purposes of determining the Market
Price of the Common Stock on the "trading day" preceding, on or
following the occurrence of an event, (i) that trading day
shall be deemed to commence immediately after the regular scheduled
closing time of trading on the New York Stock Exchange or, if
trading is closed at an earlier time, such earlier time and
(ii) that trading day shall end at the next regular scheduled
closing time, or if trading is closed at an earlier time, such
earlier time (for the avoidance of doubt, and as an example, if the
Market Price is to be determined as of the last trading day
preceding a specified event and the closing time of trading on a
particular day is 4:00 p.m. and the specified event occurs at
5:00 p.m. on that day, the Market Price would be determined by
reference to such 4:00 p.m. closing price).
"Ordinary Cash Dividends" means a regular quarterly cash
dividend on shares of Common Stock out of surplus or net profits
legally available therefor (determined in accordance with generally
accepted accounting principles in effect from time to time),
provided that Ordinary Cash Dividends shall not include any
cash dividends paid subsequent to the Issue Date to the extent the
aggregate per share dividends paid on the outstanding Common Stock
in any quarter exceed the amount set forth in Item 4 of Schedule A
hereto, as adjusted for any stock split, stock dividend, reverse
stock split, reclassification or similar transaction.
" Original Warrantholder " means the United States
Department of the Treasury. Any actions specified to be taken
by the Original Warrantholder hereunder may only be taken by such
Person and not by any other Warrantholder.
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"Permitted Transactions" has the meaning set forth in
Section 13(B).
" Person " has the meaning given to it in
Section 3(a)(9) of the Exchange Act and as used in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act.
" Per Share Fair Market Value " has the meaning set forth
in Section 13(C).
"Preferred Shares " means the perpetual preferred stock
issued to the Original Warrantholder on the Issue Date pursuant to
the Purchase Agreement.
" Pro Rata Repurchases " means any purchase of shares of
Common Stock by the Company or any Affiliate thereof pursuant to
(A) any tender offer or exchange offer subject to
Section 13(e) or 14(e) of the Exchange Act or
Regulation 14E promulgated thereunder or (B) any other offer
available to substantially all holders of Common Stock, in the case
of both (A) or (B), whether for cash, shares of Capital Stock
of the Company, other securities of the Company, evidences of
indebtedness of the Company or any other Person or any other
property (including, without limitation, shares of Capital Stock,
other securities or evidences of indebtedness of a subsidiary), or
any combination thereof, effected while this Warrant is
outstanding. The " Effective Date " of a Pro Rata
Repurchase shall mean the date of acceptance of shares for purchase
or exchange by the Company under any tender or exchange offer which
is a Pro Rata Repurchase or the date of purchase with respect to
any Pro Rata Repurchase that is not a tender or exchange offer.
" Purchase Agreement " means the Securities Purchase
Agreement — Standard Terms incorporated into the Letter
Agreement, dated as of the date set forth in Item 5 of Schedule A
hereto, as amended from time to time, between the Company and the
United States Department of the Treasury (the " Letter
Agreement "), including all annexes and schedules thereto.
" Qualified Equity Offering " has the meaning ascribed to
it in the Purchase Agreement.
" Regulatory Approvals " with respect to the
Warrantholder, means, to the extent applicable and required to
permit the Warrantholder to exercise this Warrant for shares of
Common Stock and to own such Common Stock without the Warrantholder
being in violation of applicable law, rule or regulation, the
receipt of any necessary approvals and authorizations of, filings
and registrations with, notifications to, or expiration or
termination of any applicable waiting period under, the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
and the rules and regulations thereunder.
" SEC " means the U.S. Securities and Exchange
Commission.
" Securities Act " means the Securities Act of 1933, as
amended, or any successor statute, and the rules and
regulations promulgated thereunder.
" Shares " has the meaning set forth in
Section 2.
"trading day" means (A) if the shares of Common
Stock are not traded on any national or regional securities
exchange or association or over-the-counter market, a
business day or (B) if the shares of Common Stock are traded
on any national or regional securities exchange or
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association or over-the-counter market, a business day on which
such relevant exchange or quotation system is scheduled to be open
for business and on which the shares of Common Stock (i) are
not suspended from trading on any national or regional securities
exchange or association or over-the-counter market for any period
or periods aggregating one half hour or longer; and (ii) have
traded at least once on the national or regional securities
exchange or association or over-the-counter market that is the
primary market for the trading of the shares of Common Stock.
" U.S. GAAP " means United States generally accepted
accounting principles.
" Warrantholder " has the meaning set forth in
Section 2.
" Warrant " means this Warrant, issued pursuant to the
Purchase Agreement.
2.
Number of Shares; Exercise Price . This certifies that, for
value received, the United States Department of the Treasury or its
permitted assigns (the " Warrantholder ") is entitled, upon
the terms and subject to the conditions hereinafter set forth, to
acquire from the Company, in whole or in part, after the receipt of
all applicable Regulatory Approvals, if any, up to an aggregate of
the number of fully paid and nonassessable shares of Common Stock
set forth in Item 6 of Schedule A hereto, at a purchase price per
share of Common Stock equal to the Exercise Price. The number
of shares of Common Stock (the " Shares ") and the Exercise
Price are subject to adjustment as provided herein, and all
references to "Common Stock," "Shares" and "Exercise Price" herein
shall be deemed to include any such adjustment or series of
adjustments.
3.
Exercise of Warrant; Term . Subject to Section 2, to
the extent permitted by applicable laws and regulations, the right
to purchase the Shares represented by this Warrant is exercisable,
in whole or in part by the Warrantholder, at any time or from time
to time after the execution and delivery of this Warrant by the
Company on the date hereof, but in no event later than
5:00 p.m., New York City time on the tenth anniversary of the
Issue Date (the " Expiration Time "), by (A) the
surrender of this Warrant and Notice of Exercise annexed hereto,
duly completed and executed on behalf of the Warrantholder, at the
principal executive office of the Company located at the address
set forth in Item 7 of Schedule A hereto (or such other office or
agency of the Company in the United States as it may designate by
notice in writing to the Warrantholder at the address of the
Warrantholder appearing on the books of the Company), and
(B) payment of the Exercise Price for the Shares thereby
purchased:
(i)
by having the Company withhold, from the shares of Common Stock
that would otherwise be delivered to the Warrantholder upon such
exercise, shares of Common stock issuable upon exercise of the
Warrant equal in value to the aggregate Exercise Price as to which
this Warrant is so exercised based on the Market Price of the
Common Stock on the trading day on which this Warrant is exercised
and the Notice of Exercise is delivered to the Company pursuant to
this Section 3, or
(ii)
with the consent of both the Company and the Warrantholder, by
tendering in cash, by certified or cashier’s check payable to
the order of the Company, or by wire transfer of immediately
available funds to an account designated by the Company.
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If the Warrantholder does not exercise this Warrant in its
entirety, the Warrantholder will be entitled to receive from the
Company within a reasonable time, and in any event not exceeding
three business days, a new warrant in substantially identical form
for the purchase of that number of Shares equal to the difference
between the number of Shares subject to this Warrant and the number
of Shares as to which this Warrant is so exercised.
Notwithstanding anything in this Warrant to the contrary, the
Warrantholder hereby acknowledges and agrees that its exercise of
this Warrant for Shares is subject to the condition that the
Warrantholder will have first received any applicable Regulatory
Approvals.
4.
Issuance of Shares; Authorization; Listing . Certificates
for Shares issued upon exercise of this Warrant will be issued in
such name or names as the Warrantholder may designate and will be
delivered to such named Person or Persons within a reasonable time,
not to exceed three business days after the date on which this
Warrant has been duly exercised in accordance with the terms of
this Warrant. The Company hereby represents and warrants that
any Shares issued upon the exercise of this Warrant in accordance
with the provisions of Section 3 will be duly and validly
authorized and issued, fully paid and nonassessable and free from
all taxes, liens and charges (other than liens or charges created
by the Warrantholder, income and franchise taxes incurred in
connection with the exercise of the Warrant or taxes in respect of
any transfer occurring contemporaneously therewith). The Company
agrees that the Shares so issued will be deemed to have been issued
to the Warrantholder as of the close of business on the date on
which this Warrant and payment of the Exercise Price are delivered
to the Company in accordance with the terms of this Warrant,
notwithstanding that the stock transfer books of the Company may
then be closed or certificates representing such Shares may not be
actually delivered on such date. The Company will at all
times reserve and keep available, out of its authorized but
unissued Common Stock, solely for the purpose of providing for the
exercise of this Warrant, the aggregate number of shares of Common
Stock then issuable upon exercise of this Warrant at any
time. The Company will (A) procure, at its sole expense,
the listing of the Shares issuable upon exercise of this Warrant at
any time, subject to issuance or notice of issuance, on all
principal stock exchanges on which the Common Stock is then listed
or traded and (B) maintain such listings of such Shares at all
times after issuance. The Company will use reasonable best
efforts to ensure that the Shares may be issued without violation
of any applicable law or regulation or of any requirement of any
securities exchange on which the Shares are listed or traded.
5.
No Fractional Shares or Scrip . No fractional Shares or
scrip representing fractional Shares shall be issued upon any
exercise of this Warrant. In lieu of any fractional Share to
which the Warrantholder would otherwise be entitled, the
Warrantholder shall be entitled to receive a cash payment equal to
the Market Price of the Common Stock on the last trading day
preceding the date of exercise less the pro-rated Exercise Price
for such fractional share.
6.
No Rights as Stockholders; Transfer Books . This Warrant
does not entitle the Warrantholder to any voting rights or other
rights as a stockholder of the Company prior to the date of
exercise hereof. The Company will at no time close its transfer
books against transfer of this Warrant in any manner which
interferes with the timely exercise of this Warrant.
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7.
Charges, Taxes and Expenses . Issuance of certificates for
Shares to the Warrantholder upon the exercise of this Warrant shall
be made without charge to the Warrantholder for any issue or
transfer tax or other incidental expense in respect of the issuance
of such certificates, all of which taxes and expenses shall be paid
by the Company.
8.
Transfer/Assignment .
(A)
Subject to compliance with clause (B) of this Section 8,
this Warrant and all rights hereunder are transferable, in whole or
in part, upon the books of the Company by the registered holder
hereof in person or by duly authorized attorney, and a new warrant
shall be made and delivered by the Company, of t
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