EXHIBIT 10.1

 

WARRANT PURCHASE AGREEMENT

 

This WARRANT PURCHASE AGREEMENT (this “Agreement”), is made as of September 19,
2018 (the “Closing Date”), by and between Baupost Group Securities, LLC
(“Seller”) and International Bancshares Corporation (“Purchaser”).

 

WHEREAS, as of the date hereof, Purchaser deems it to be in its best interest to
repurchase from Seller warrants (the “Warrants” and each, a “Warrant”) issued by
Purchaser (in such capacity, the “Warrant Issuer”), on June 12, 2013, pursuant
to a warrant certificate (the “Original Warrant Certificate”, and, as
subsequently reregistered in the name of Boomsail Co., a custodian of Seller,
the “Warrant Certificate”), to purchase up to 1,326,238 shares of common stock,
par value $1.00 per share (the “Common Stock”), of the Warrant Issuer for $24.43
per share.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants,
agreements, representations and warranties contained in this Agreement and
intending to be legally bound, the parties agree as follows:

 

1. Purchase and Sale of the Warrants.

 

(a) Upon the terms and subject to the conditions herein set forth, Seller hereby
agrees to sell, assign, deliver, and transfer to Purchaser, and Purchaser hereby
agrees to purchase from Seller, for an amount in U.S. dollars equal to the
Aggregate Purchase Price (as defined below), the Warrants and the Warrant
Certificate, free and clear of all liens, claims, pledges, charges, restrictions
and encumbrances of any nature whatsoever.

 

(b) Seller shall deliver to Purchaser the Warrant Certificate and an original
Assignment of Warrant, in the form attached as Exhibit A to this Agreement (the
“Assignment”), duly executed by Boomsail Co. and providing for the transfer of
the Warrants to Purchaser, on or before seven business days from the date of
this Agreement, and Seller shall provide Purchaser with the tracking number(s)
used to transfer the Warrant Certificate and the Assignment to
Purchaser.  Purchaser shall confirm with Seller when Purchaser receives the
Warrant Certificate and Assignment.  Upon confirmation of receipt of the Warrant
Certificate and Assignment, Purchaser shall, within one business day, deliver to
Seller an amount equal to the Aggregate Purchase Price by wire transfer in same
day funds to Seller at the following account:

 

State Street Bank and Trust Company
ABA # 011000028
A/C Baupost Group Securities L.L.C.
A/C # 0432-536-1
F/C H6Y8

 

2. Certain Definitions.

 

(a) “Aggregate Purchase Price” means $29,004,825.06.

 

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(b) “Closing Date” has the meaning set forth in the introductory paragraph.

 

3. Conditions to Closing.

 

(a) Purchaser’s receipt of the Warrant Certificate and Assignment, the accuracy
of the representations and warranties set forth in Section 4, and the
performance by Seller of the obligations set forth herein, shall be conditions
precedent to Purchaser’s obligation to purchase and pay for any and all of the
Warrants and to perform its obligations hereunder.

 

(b) The accuracy of the representations and warranties set forth in Section 5,
and the performance by Purchaser of the obligations set forth herein, shall be
conditions precedent to the Seller’s obligation to sell and deliver any or all
of the Warrants to Purchaser and to perform its obligations hereunder.

 

4. Representations, Warranties and Agreements of Seller.  Seller represents and
warrants to and agrees with Purchaser as follows:

 

(a) Seller is a limited liability company, duly organized, validly existing and
in good standing under the laws of the jurisdiction of its organization and has
all requisite company power and authority to own, lease, and operate its
properties and carry on its business;

 

(b) Seller has full right, power and authority to enter into and perform its
obligations under this Agreement and to sell the Warrants to Purchaser, and this
Agreement has been duly authorized, executed and delivered by Seller and no
other action is required to authorize the execution, delivery and performance of
this Agreement and the consummation of such sale by Seller;

 

(c) this Agreement constitutes a valid and binding obligation of Seller,
enforceable against Seller in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws affecting creditors’ rights generally and by
general equitable principles;

 

(d) Seller has and is transferring to Purchaser good and marketable title to the
Warrants and Warrant Certificate free and clear of any and all liens, claims,
pledges, charges, restrictions, equities and encumbrances of any nature
whatsoever; and

 

(e) Seller’s entry into this Agreement and sale of the Warrants to Purchaser do
not and will not violate or conflict with the charter and bylaws (or other
constitutive documents) of Seller or the terms of any material agreement made by
or applicable to Seller or any of its affiliates and do not and will not violate
or conflict with any law, rule, provision, policy or order applicable to Seller.

 

5. Representations and Warranties of Purchaser; Covenants of Purchaser.
Purchaser represents and warrants to and agrees with Seller as follows:

 

(a) Purchaser is a corporation, duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization and has all
requisite corporate power and authority to own, lease, and operate its
properties and carry on its business;

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(b) Purchaser has the full right, power and authority to enter into and perform
its obligations under this Agreement and to acquire the Warrants, and this
Agreement has been duly authorized, executed and delivered by Purchaser and no
other action is required to authorize the execution, delivery and performance of
this Agreement and the consummation of such acquisition by Purchaser;

 

(c) this Agreement constitutes the valid and binding obligation of Purchaser,
enforceable against it in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws affecting creditors’ rights generally and by
general equitable principles; and

 

(d) Purchaser’s entry into this Agreement and repurchase of the Warrants do not
and will not violate or conflict with the charter and bylaws (or other
constitutive documents) of Purchaser or the terms of any material agreement made
by or applicable to Purchaser or any of its affiliates and do not and will not
violate or conflict with any law, rule, provision, policy or order applicable to
Purchaser.

 

6. Indemnification.  Seller hereby indemnifies Purchaser and each of its agents
and affiliates and their respective successors and assignees (each a “Purchaser
Indemnified Person”) against and agrees to hold each of them harmless from any
and all damage, loss, liability and expense (including reasonable expenses of
investigation and reasonable attorneys’ fees and expenses in connection with any
action, suit or proceeding whether involving a third-party claim or a claim
solely between the parties hereto, and any incidental, indirect or consequential
damages, losses, liabilities or expenses, and any lost profits or diminution in
value) (“Damages”) incurred or suffered by any Purchaser Indemnified Person to
the extent such Damages arise out of (i) any material misrepresentation or
material breach of warranty or material breach of covenant or agreement made or
to be performed by Seller pursuant to this Agreement, and (ii) any breach of
Section 8 of the Warrant Certificate in connection with this Agreement or the
performance by the parties of their obligations hereunder.

 

Purchaser hereby indemnifies Seller and each of its agents and affiliates and
their respective successors and assignees (each a “Seller Indemnified Person”)
against and agrees to hold each of them harmless from any and all Damages
incurred or suffered by any Seller Indemnified Person to the extent such Damages
arise out of any material misrepresentation or material breach of warranty or
material breach of covenant or agreement made or to be performed by Purchaser
pursuant to this Agreement.

7. Submission to Jurisdiction; Service of Process; Governing Law.

 

(a) The parties to this Agreement hereby irrevocably submit to the jurisdiction
of any Federal or State court located in The County of New York, New York over
any suit, action or proceeding arising out of or relating to this
Agreement.  The parties hereby irrevocably waive, to the fullest extent
permitted by applicable law, any objection which they may now or hereafter have
to the laying of venue of any such suit, action or proceeding brought in such
court.

 

(b) Service of process may be made in any manner permitted by law.

 

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(c) This Agreement and the transactions described herein shall be governed by
and construed in accordance with the laws of the State of New York, without
regard to choice-of-law provisions.

 

8. Notice.  All notices, requests, demands and other communications required or
permitted under this Agreement shall be sent via e-mail to the e-mail addresses
of all the contacts listed for such party in this Section 8 and shall be deemed
to have been given when sent and no acknowledgement from the intended recipient
shall be required; provided that if such notice, request, demand or other
communication is not sent via e-mail during the normal business hours of the
recipient, such notice or communication shall be deemed to have been sent at the
opening of business on the immediately following business day for the recipient.

 

If to Seller:

 

c/o The Baupost Group, L.L.C.
10 Saint James Avenue, Suite 1700
Boston, MA 02116
Attention: Legal Department
Email: Legal@baupost.com

 

With a copy to:

 

Ropes & Gray LLP
Prudential Tower
800 Boylston Street
Boston, MA 02199-3600
Attention: Jeffrey R. Katz, Esq.
Facsimile: (617) 235-0617
E mail:jeffrey.katz@ropesgray.com

 

If to Purchaser:

 

International Bancshares Corporation
1200 San Bernardo Avenue
Laredo, Texas  78040
Attention:  Dennis E. Nixon
Telephone: (956-722-7611
Email:  dnixon@iboc.com

 

With a copy to:

 

Dykema Cox Smith
112 E. Pecan St.
Suite 1800
San Antonio, Texas  78205
Attention:  Jeffrey C. Gifford
Telephone: (210) 554-5560
Email:  jgifford@dykema.com

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9. Miscellaneous.

 

(a) This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective heirs, personal representatives, successors
and assigns.  This Agreement and the rights and obligations hereunder shall not
be assignable without written consent of the other party.

 

(b) If any part of this Agreement is held to be unenforceable or invalid under,
or in conflict with, the applicable law of any jurisdiction, the unenforceable,
invalid or conflicting part shall, to the extent permitted by applicable law, be
narrowed or replaced, to the extent possible, with a judicial construction in
such jurisdiction that effects the intent of the parties regarding this
Agreement and such unenforceable, invalid or conflicting part.  To the extent
permitted by applicable law, notwithstanding the unenforceability, invalidity or
conflict with applicable law or any part of this Agreement, the remaining parts
shall be valid, enforceable and binding on the parties.

 

(c) This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original as against any party whose signature appears
thereon, and all of which shall together constitute one and the same
instrument.  This Agreement shall become binding when one or more counterparts
hereof, individually or taken together, shall bear the signatures of all of the
parties reflected hereon as the signatories.

 

(d) This Agreement contains the entire understanding among the parties hereto
with respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements and understandings, inducements or conditions,
express or implied, oral or written, except as herein contained.  This Agreement
may not be modified or amended other than by an agreement in writing.

 

(e) This Agreement may be terminated by (i) written agreement of the parties,
(ii) Seller in the event of a breach in any material respect of any
representation or warranty of Purchaser; or (iii) Purchaser in the event of a
breach in any material respect of any representation or warranty of Seller, or
failure of the Seller to deliver or cause to be delivered the Warrant
Certificate and Assignment pursuant to Section 1(b).  Following such
termination, each party shall be released and discharged by the other party from
and agrees not to make any claim against the other party with respect to any
obligations or liabilities of either party arising out of and to be performed in
connection with this Agreement either prior to or after the termination date.

 

(f) This Agreement is intended for the benefit of the parties hereto and their
respective permitted successors and assigns, and is not for the benefit of, nor
may any provision hereof be enforced by, any other person.

 

(g) Each of the parties hereto shall, and shall cause their respective
affiliates to, execute and deliver such additional documents, instruments,
conveyances, and assurances and take such further actions as may be reasonably
required to carry out the provisions hereof and give effect to the transactions
contemplated hereby, including, if necessary, Seller providing an original
assignment of the Warrant, in form and substance reasonably satisfactory to

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Purchaser, duly executed by the holder of the Warrant Certificate and evidencing
the transfer of the Warrants to Seller prior to Seller’s transfer of the
Warrants to Purchaser.

 

[Signature pages follow]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.

 

SELLER:

 

Baupost Group Securities, LLC

 

 

 

 

 

By:

/s/ James F. Mooney III

 

 

Name:

James F. Mooney III

 

 

Title:

Partner

 

 

 

PURCHASER:

 

INTERNATIONAL BANCSHARES CORPORATION

 

 

 

 

 

By:

/s/ Judith I. Wawroski

 

 

Name:

Judith I. Wawroski

 

 

Title:

Chief Accounting Officer

 

 

 

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Exhibit A

Assignment of Warrants

 

FOR VALUE RECEIVED, pursuant to the Warrant Purchase Agreement, dated September
19, 2018 (the “Agreement”) by and between Baupost Group Securities, LLC and
International Bancshares Corporation (the “Company”), the undersigned hereby
sells, assigns and transfers unto the Company the right represented by the
Warrant Certificate to purchase up to 1,326,238 shares of common stock, par
value $1.00 per share, of the Company and appoints Eliza V. Gonzalez attorney to
transfer said right on the Company’s books with full power of substitution in
the premises.  Each capitalized term used but not defined in this Assignment of
Warrants has the meaning given to it in the Agreement.

 

Dated: _________, 2018

 

 

 

 

Boomsail Co.

 

 

 

By:

 

Name:

 

Title:

 

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