-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JXEOoWhXPxUqL7IJqjNEKLbIbFqF2jkLIu5AX2EIPvgBg1CFi8PcUkpq17dRX6tI U53gxD2f6LFjT9r145Rr8A== 0000950144-01-504974.txt : 20010801 0000950144-01-504974.hdr.sgml : 20010801 ACCESSION NUMBER: 0000950144-01-504974 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 20010731 FILER: COMPANY DATA: COMPANY CONFORMED NAME: IVAX CORP /DE CENTRAL INDEX KEY: 0000772197 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 161003559 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-66310 FILM NUMBER: 1693313 BUSINESS ADDRESS: STREET 1: 4400 BISCAYNE BLVD CITY: MIAMI STATE: FL ZIP: 33137 BUSINESS PHONE: 3055756000 MAIL ADDRESS: STREET 1: 4400 BISCAYNE BOULEVARD CITY: MIAMI STATE: FL ZIP: 33137 FORMER COMPANY: FORMER CONFORMED NAME: INLAND VACUUM INDUSTRIES INC DATE OF NAME CHANGE: 19870611 FORMER COMPANY: FORMER CONFORMED NAME: IVACO INDUSTRIES INC DATE OF NAME CHANGE: 19871213 FORMER COMPANY: FORMER CONFORMED NAME: IVAX CORP DATE OF NAME CHANGE: 19920703 S-3 1 g70686s-3.txt IVAX CORPORATION 1 As filed with the Securities and Exchange Commission on July 31, 2001 Registration No. 333-_____ ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------- FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 --------------- IVAX CORPORATION (Exact Name of Registrant as Specified in Its Charter) FLORIDA 16-1003559 (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification Number) 4400 BISCAYNE BOULEVARD MIAMI, FLORIDA 33137 (305) 575-6000 (Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices) ADRIENNE FAUZ CORNEJO, ESQ. ASSOCIATE GENERAL COUNSEL IVAX CORPORATION 4400 BISCAYNE BOULEVARD MIAMI, FLORIDA 33137 (305) 575-6000 (Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service) Copy to: KARA L. MACCULLOUGH, ESQ. AKERMAN SENTERFITT & EIDSON P.A. ONE SOUTHEAST THIRD AVENUE, 28TH FLOOR MIAMI, FLORIDA 33131 (305) 374-5600 APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to time after the effective date of this registration statement. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ] -------------- CALCULATION OF REGISTRATION FEE
PROPOSED MAXIMUM PROPOSED MAXIMUM TITLE OF EACH CLASS OF SECURITIES OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF TO BE REGISTERED AMOUNT TO BE REGISTERED UNIT(1) PRICE (1) REGISTRATION FEE - -------------------------------------- ------------------------ ------------------- ------------------------ -------------------- 4 1/2% Convertible Senior Subordinated Notes due 2008........................ $725,000,000 100% $725,000,000 $181,250 - -------------------------------------- ------------------------ ------------------- ------------------------ -------------------- Common Stock, par value $.10 per share.............. 18,102,344 (2) -- -- -- (3) - -------------------------------------- ------------------------ ------------------- ------------------------ -------------------- Common Stock Purchase Rights (4)...... 18,102,344 (2) -- -- -- (4) - -------------------------------------- ------------------------ ------------------- ------------------------ --------------------
- ------------- (1) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(i) under the Securities Act. This fee is calculated on the basis of the offering price of the notes alone. (2) Represents the number of shares of common stock and common stock purchase rights issuable upon conversion of the 4 1/2% convertible senior subordinated notes due 2008 registered hereby. The notes are convertible into 24.96875 shares of our common stock, par value $.10 per share, per $1,000 principal amount of notes, as adjusted to reflect the five-for-four stock split paid in common stock on May 18, 2001 in the form of a 25% dividend, and subject to further adjustment in certain circumstances. Pursuant to Rule 416 under the Securities Act, such number of shares shall include an indeterminate number of shares of common stock and common stock purchase rights as may be issuable from time to time upon the conversion of the notes as a result of a stock split, stock dividend, capitalization or similar event and the antidilution provisions thereof. (3) The shares of common stock issuable upon conversion of the notes will be issued for no additional consideration, and therefore no registration fee is required pursuant to Rule 457(i) of the Securities Act. (4) The common stock purchase rights are attached to, and trade and transfer with, the common stock. The common stock purchase rights are only exercisable upon the occurrence of certain prescribed events, none of which has occurred. THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. ================================================================================ 2 The information in this prospectus is not complete and may be changed. The selling security holders may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. SUBJECT TO COMPLETION DATED JULY 31, 2001 PROSPECTUS IVAX CORPORATION $725,000,000 4 1/2% CONVERTIBLE SENIOR SUBORDINATED NOTES DUE 2008 AND 18,102,344 SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THE NOTES This prospectus covers up to $725,000,000 principal amount of our 4 1/2% convertible senior subordinatEd notes due 2008 and 18,102,344 shares of our common stock issuable upon conversion of the notes together with their related common stock purchase rights which may be offered and sold from time to time by the selling security holders named in this prospectus. We will receive no proceeds from the sales of the securities in this offering. On May 4, 2001, we issued and sold $725,000,000 of 4 1/2% convertible senior subordinated notes due 2008 in private placement transactions to qualified institutional buyers (as defined in Rule 144A under the Securities Act), accredited investors (as defined in Rule 501 under the Securities Act) and non-U.S. persons (as defined in Regulation S under the Securities Act). The notes are convertible into 24.96875 shares of our common stock, par value $.10 per share, per $1,000 principal amount of notes, as adjusted to reflect the five-for-four stock split paid in common stock on May 18, 2001 in the form of a 25% dividend, and subject to further adjustment in certain circumstances. This results in an initial conversion price of $40.05 per share. We will pay cash interest on the notes semiannually on May 15 and November 15 of each year, with the first payment to be made on November 15, 2001, at the rate of 4 1/2% per annum. The notes will mature on May 15, 2008. The notes rank pari passu in right of payment with the $250.0 million principal amount of our 5 1/2% convertible senior subordinated notes due 2007 that were issued in May 2000, are subordinated to all other existing and future indebtedness not expressly subordinated or equal in right of payment to the notes and are structurally subordinated to all existing and future indebtedness or liabilities of our subsidiaries. As of March 31, 2001, we had approximately $82.0 million of consolidated indebtedness and other obligations effectively ranking senior to the notes. If we experience a change in control, we must offer to repurchase each holder's notes at 100% of their principal amount, together with accrued interest, if any, to the repurchase date. On or after May 29, 2004, we may at our option redeem the notes at the redemption prices stated in this prospectus, together with accrued and unpaid interest to the date of redemption. The notes are not entitled to any mandatory redemption or sinking fund. The notes trade on The PORTAL Market. Our common stock is traded on the American Stock Exchange under the symbol "IVX." The last reported sale price of the common stock on July 27, 2001 was $37.91 per share. INVESTING IN THESE SECURITIES INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON PAGE 7 OF THIS PROSPECTUS. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The date of this prospectus is __________________, 2001. 3 TABLE OF CONTENTS PAGE ---- Summary............................................................... 1 Risk Factors.......................................................... 7 Disclosure Regarding Forward-Looking Statements....................... 17 Ratio of Earnings to Fixed Charges.................................... 18 Use of Proceeds....................................................... 18 Selling Security Holders.............................................. 19 Plan of Distribution.................................................. 22 Description of Notes.................................................. 24 Description of Capital Stock.......................................... 35 Transfer Agent, Registrar and Trustee................................. 36 Certain United States Federal Income Tax Considerations............... 37 Legal Matters......................................................... 43 Independent Certified Public Accountants.............................. 43 Where You Can Find More Information................................... 43 Information Incorporated by Reference................................. 44 i 4 SUMMARY This summary highlights selected information from this prospectus. In addition to reading this summary, you should carefully review the entire prospectus, especially the "Risk Factors" section of this prospectus beginning on page 7. When used in this prospectus and any prospectus supplement, the terms "IVAX," "we," "our," and "us" refer to IVAX corporation. OUR COMPANY OVERVIEW We are a multinational company engaged in the research, development, manufacture and marketing of pharmaceutical products. We have grown through the development of proprietary and brand-equivalent products and through strategic acquisitions, focused primarily on countries whose pharmaceutical markets are developing, where there is the greatest growth potential. Our full line of brand-equivalent drugs includes the first FDA-approved equivalent to branded Taxol(R), a $1.5 billion oncology drug, and we have marketing applications pending for many other products that are equivalent to important branded drugs. Based on our unique patented inhalers, we have built a strong franchise in the asthma market, and we are expanding that franchise by conducting studies to support marketing applications for respiratory products in the United States and in other markets served by our global marketing network. Our product pipeline also includes novel compounds that we have discovered or licensed from third parties, some of which have already successfully completed Phase II clinical trials and are now undergoing Phase III trials, which is the final step before submission of applications for marketing approval. Our business has grown significantly during the past year. During 2000, we generated net revenues of $793 million, up from $656 million in 1999, and net income of $131 million, up from $71 million in 1999. During the first quarter of 2001, we generated net revenues of $260 million, up from $183 million in the first quarter of 2000, and net income of $60.1 million, up from $20.2 million in the first quarter of 2000. GROWTH STRATEGIES We expect our future growth to come from the following: o DISCOVERING AND DEVELOPING AND/OR ACQUIRING NEW PRODUCTS. In October 1999, we dramatically increased the size and scope of our new product development capability through our acquisition of an independent research company, now known as IVAX Drug Research Laboratories, Ltd. We are committed to the cost-effective development of proprietary pharmaceuticals directed primarily toward indications having relatively large patient populations or for which limited or inadequate treatments are available. We seek to accelerate product development and commercialization by in- licensing compounds, especially after clinical testing has begun, and by developing new dosage forms or new therapeutic indications for existing products. 1 5 o LEVERAGING PROPRIETARY TECHNOLOGY AND DEVELOPMENT STRENGTHS. We intend to continue to leverage our proprietary technology and development strengths, including our patented inhalation technology and our expertise in developing and commercializing respiratory products and experience in the development and commercialization of oncology drugs to develop a significant portfolio of proprietary, high value pharmaceutical products. o PURSUING COMPLEMENTARY, ACCRETIVE OR STRATEGIC ACQUISITIONS. We intend to pursue accretive or strategic business acquisitions or ones that will complement our existing businesses and provide new product and market opportunities, as well as leverage our existing assets. In addition, we will continue to actively pursue strategic product acquisitions and other collaborative arrangements that permit us to leverage our existing infrastructure by adding sales from acquired products while minimizing incremental costs. o STRATEGICALLY EXPANDING SALES AND DISTRIBUTION OF OUR PRODUCTS. We recently completed acquisitions of pharmaceutical companies in Venezuela, Mexico and Chile and continue the expansion of our Latin American operations. Our future plans include (1) acquiring additional manufacturing and distribution capabilities in Europe and Latin America and (2) establishing additional joint ventures and selectively establishing distribution channels for our major products in Asia. PHARMACEUTICAL BUSINESS We have pharmaceutical manufacturing facilities located in Argentina, Chile, China, the Czech Republic, England, Germany, Hungary, Ireland, Mexico, Peru, Puerto Rico, the United States, Uruguay, Venezuela, and the Virgin Islands. Marketing and/or research facilities are located in these same countries, and also in Canada, France, India, Kazakhstan, Latvia, the Netherlands, Poland, Russia, Sweden, Switzerland, the Slovak Republic, Taiwan, and the Ukraine. In other countries, our products are marketed through distributors or joint ventures. Our pharmaceutical business has grown through the development and acquisition of proprietary, brand-equivalent and over-the-counter pharmaceutical products, the licensing of technology and products from third parties, and the acquisition of companies engaged in the pharmaceuticals business in various geographic regions. PROPRIETARY AND BRANDED PRODUCTS We market a number of proprietary and branded products treating a variety of conditions through our subsidiaries throughout the world. These products are marketed by our direct sales force to physicians, pharmacies, hospitals, managed health care organizations and government agencies. These products are sold primarily to wholesalers, retail pharmacies, distributors, hospitals and physicians. We have a strong foundation in the oncology field based on our proprietary anti-cancer drug PAXENE(R) (paclitaxel injection), which is therapeutically equivalent to the Bristol-Myers Squibb product Taxol(R), the largest selling anti-cancer drug in the world. In September 2000, the United States Food and Drug Administration (FDA) approved our Abbreviated New Drug Application (ANDA) for this product, which is marketed in the U.S. as Onxol(TM). 2 6 We also have substantial expertise in the development, manufacture and marketing of respiratory drugs, primarily for asthma, in metered-dose inhaler formulations. Our subsidiary in the United Kingdom is the third largest respiratory company in that market. At the core of our respiratory franchise are advanced delivery systems, which include a patented metered-dose inhaler called Easi-Breathe(R), and a unique new dry powder inhaler, as well as conventional metered-dose inhalers. BRAND-EQUIVALENT PRODUCTS In the United States, we manufacture and market approximately 56 brand-equivalent prescription drugs in capsule or tablet forms in an aggregate of 123 dosage strengths. We also distribute in the United States approximately 282 additional brand-equivalent prescription and over-the-counter drugs and vitamin supplements, in various dosage forms, dosage strengths and package sizes. We are also a leading provider of brand-equivalent pharmaceuticals in the United Kingdom. We market approximately 110 brand-equivalent prescription and over-the-counter drugs, about half of which we manufacture, in various dosage forms and dosage strengths, constituting an aggregate of approximately 229 products. In addition, we manufacture and market various "blow-fill-seal" pharmaceutical products, such as solutions for injection or irrigation, and unit-dose vials for nebulization to treat respiratory disorders. OTHER BUSINESSES NUTRACEUTICALS. We provide contract manufacturing services for the nutritional supplement industry from our encapsulating facility in Miami, Florida. Utilizing herbal extracts manufactured by our Czech Republic subsidiary, we also manufacture a line of high quality herbal nutraceutical products in soft gelatin capsules. VETERINARY PRODUCTS. We formulate, package and distribute to veterinarians various products for companion animals under the "DVM Pharmaceuticals" trade name. Capitalizing on our proprietary research for human pharmaceuticals, DVM Pharmaceuticals is developing proprietary products in the therapeutic areas of asthma, gastrointestinal disorders and skin conditions in horses and companion animals. DIAGNOSTICS. We own approximately 70% of the equity of IVAX Diagnostics, Inc., a publicly traded company whose stock is listed on the American Stock Exchange under the symbol IVD. IVAX Diagnostics, Inc. develops, manufactures and markets proprietary diagnostic reagents, instrumentation and software through its subsidiaries located in the United States and Italy. Its products include Mago(R) instruments and related diagnostic kits, as well as autoimmune reagents and other in vitro diagnostic products for use in research, clinical, and hospital laboratories. 3 7 RECENT DEVELOPMENTS On July 5, 2001 we acquired, through tender offers in the U.S. and Chile, 99.6% of the outstanding shares of Laboratorio Chile S.A., a Chilean pharmaceutical company, for an aggregate consideration of approximately US$394 million. Laboratorio Chile is the largest Chilean pharmaceutical company in revenue terms and is also among the major pharmaceutical companies in Argentina and Peru. Laboratorio Chile manufactures and markets a broad line of more than 900 branded and brand-equivalent products in Chile, Argentina and Peru and reported revenues of over US$173 million in 2000. Laboratorio Chile's main products are to treat respiratory and infectious diseases, but it also has strong franchises with cardiovascular, neurological and gynecologic products. We believe that Laboratorio Chile, as well as our current operations in Argentina, Mexico, Peru, Uruguay and Venezuela, create an excellent platform from which to launch our proprietary and brand-equivalent pharmaceutical products as well as products from other companies which may not be so well represented in Latin America. On July 31, 2001, we commenced simultaneous tender offers in Chile and the United States for the remaining .4% of the outstanding shares, including shares represented by American Depositary Shares, of Laboratorio Chile. On July 25, 2001, we announced our financial results for the second quarter ended June 30, 2001. Income from continuing operations for the second quarter of 2001 was $67.9 million, or $.33 per diluted share, representing an increase of 109% over income from continuing operations of $32.5 million, or $.16 per diluted share, reported in the second quarter of 2000. Net revenues for the second quarter of 2001 increased by 63.3% to $301.8 million as compared to net revenues of $184.8 million in the second quarter of 2000. We have filed Listing Particulars, an application for our common stock to be listed on the London Stock Exchange, with the United Kingdom listing authority. We expect to begin trading on August 1, 2001, under the symbol "IVX.L." PRINCIPAL EXECUTIVE OFFICES Our principal executive offices are located at 4400 Biscayne Boulevard, Miami, Florida 33137, and our telephone number is (305) 575-6000. 4 8 THE NOTES AND COMMON STOCK ISSUABLE UPON CONVERSION OF THE NOTES Issuer...............................................IVAX Corporation. Securities Offered...................................$725,000,000 aggregate principal amount of 4 1/2% convertible senior subordinated notes due 2008. Conversion...........................................The notes are convertible into 24.96875 shares of our common stock, par value $.10 per share, per $1,000 principal amount of notes, as adjusted to reflect the five-for-four stock split paid in common stock on May 18, 2001 in the form of a 25% dividend, and subject to further adjustment in certain circumstances. This rate results in an initial conversion price of $40.05 per share. Issue Date...........................................May 4, 2001. Maturity.............................................May 15, 2008. Interest Payment Dates...............................Interest of 4 1/2% per annum will be paid on May 15 and November 15 of each year commencing on November 15, 2001. Optional Redemption..................................At any time after May 29, 2004, we may, at our option, redeem the notes, in whole or in part, at the redemption prices described herein, together with accrued interest, if any, to the date of redemption. See "Description of Notes - Redemption - Redemption at IVAX' option." Change in Control....................................If we experience a change in control, we must offer to repurchase each holder's notes at 100% of their principal amount, together with accrued interest, if any, to the repurchase date. See "Description of the Notes - Redemption - Repurchase at option of holders upon change in control." Ranking..............................................The notes are: o unsecured; o pari passu in right of payment with the $250.0 million principal amount of our 5 1/2% convertible senior subordinated notes due 2007 that were issued in May 2000; o subordinated to all other existing and future indebtedness not expressly subordinated or equal in right of payment to the notes; and o structurally subordinated to all existing and future indebtedness or liabilities of our subsidiaries.
5 9 As of March 31, 2001, we had approximately $82.0 million of consolidated indebtedness and other obligations effectively ranking senior to the notes. The indenture under which the notes were issued will not restrict our or our subsidiaries' ability to incur senior indebtedness or any other indebtedness or liabilities. Use of Proceeds......................................We will receive no proceeds from this offering. The selling security holders will receive the proceeds from this offering. Listing and Trading..................................The notes trade on The PORTAL Market. Our common stock is listed on the American Stock Exchange under the symbol "IVX." Risk Factors.........................................In analyzing an investment in the notes or common stock offered by this prospectus, prospective investors should carefully consider, along with other matters referred to in the prospectus, the information set forth under "Risk Factors."
For a more complete description of the terms of the notes, see "Description of Notes." For a more complete description of the common stock, see "Description of Capital Stock." 6 10 RISK FACTORS You should carefully consider the following risks before making an investment decision. These and other risks could materially and adversely affect our business, operating results or financial condition. You should also refer to the other information contained or incorporated by reference in this prospectus, before making an investment decision. RISKS RELATING TO OUR COMPANY OUR RESEARCH AND DEVELOPMENT EXPENDITURES MAY NOT RESULT IN COMMERCIALLY SUCCESSFUL PRODUCTS. We spent approximately $65.3 million during 2000 and $18.9 million during the first quarter of 2001 on our research and development efforts. This amount represents a significant increase in the amounts we allocated to research and development in prior periods. We may in the future increase the amounts we expend for research and development. As a result, our research and development expenditures may have an adverse impact on our earnings in the short term. Further, we cannot be sure that our research and development expenditures will, in the long term, result in the discovery or development of products which prove to be commercially successful. OUR POTENTIAL ACQUISITIONS MAY REDUCE OUR EARNINGS, BE DIFFICULT FOR US TO COMBINE INTO OUR OPERATIONS OR REQUIRE US TO OBTAIN ADDITIONAL FINANCING. We search for and evaluate acquisitions which will provide new product and market opportunities, benefit from and maximize our existing assets and add critical mass. Acquisitions may expose us to additional risks and may have a material effect on our results of operations. Any acquisitions we make may: o fail to accomplish our strategic objectives; o not be successfully combined with our operations; o not perform as expected; and o expose us to cross border risks. In addition, based on current acquisition prices in the pharmaceutical industry, our acquisitions could initially reduce our per share earnings and add significant intangible assets and related goodwill amortization charges. Our acquisition strategy may require us to obtain additional debt or equity financing, resulting in additional leverage, or increased debt obligations as compared to equity, and dilution of ownership. We may not be able to finance acquisitions on terms satisfactory to us. WE DEPEND ON OUR DEVELOPMENT, MANUFACTURE AND MARKETING OF NEW PRODUCTS FOR OUR FUTURE SUCCESS. Our future success is largely dependent upon our ability to develop, manufacture and market commercially successful new pharmaceutical products and brand-equivalent versions of pharmaceutical products that are no longer subject to patents. Generally, the commercial marketing of pharmaceutical products depends upon: o continually developing and testing products; o proving that new products are safe and effective in clinical trials; o proving that there is no significant difference in the rate and extent to which the active ingredient in the brand-equivalent product becomes available at the site of drug action as compared to the brand name version; and o receiving requisite regulatory approval for all new products. 7 11 Delays in the development, manufacture and marketing of new products will impact our results of operations. Each of the steps in the development, manufacture and marketing of our products, as well as the process taken as a whole, involves significant periods of time and expense. We cannot be sure that: o any of our products presently under development, if and when fully developed and tested, will perform as we expect; o we will obtain necessary regulatory approvals in a timely manner, if at all; or o we can successfully and profitably produce and market any of our products. WE DEPEND ON OUR PATENTS AND PROPRIETARY RIGHTS AND CANNOT BE CERTAIN OF THEIR CONFIDENTIALITY AND PROTECTION. Our success with our proprietary products depends, in large part, on our ability to protect our current and future technologies and products and to defend our intellectual property rights. If we fail to adequately protect our intellectual property, competitors may manufacture and market products similar to ours. We have numerous patents covering our technologies. We have filed, and expect to continue to file, patent applications seeking to protect newly developed technologies and products in various countries, including the United States. The United States Patent and Trademark Office does not publish patent applications or make information about pending applications available to the public until it issues the patent. Since publication of discoveries in the scientific or patent literature tends to follow actual discovery by several months, we cannot be certain that we were the first to file patent applications on our discoveries. We cannot be sure that we will receive patents for any of our patent applications or that any existing or future patents that we receive or license will provide competitive advantages for our products. We also cannot be sure that competitors will not challenge, invalidate or avoid the application of any existing or future patents that we receive or license. In addition, patent rights may not prevent our competitors from developing, using or selling products that are similar or functionally equivalent to our products. We also rely on trade secrets, unpatented proprietary know-how and continuing technological innovation. We use confidentiality agreements with licensees, suppliers, employees and consultants to protect our trade secrets, unpatented proprietary know-how and continuing technological innovation. We cannot assure you that these parties will not breach their agreements with us. We also cannot be certain that we will have adequate remedies for any breach. Disputes may arise concerning the ownership of intellectual property or the applicability of confidentiality agreements. Furthermore, we cannot be sure that our trade secrets and proprietary technology will not otherwise become known or that our competitors will not independently develop our trade secrets and proprietary technology. We also cannot be sure, if we do not receive patents for products arising from research, that we will be able to maintain the confidentiality of information relating to our products. THIRD PARTIES MAY CLAIM THAT WE INFRINGE THEIR PROPRIETARY RIGHTS AND MAY PREVENT US FROM MANUFACTURING AND SELLING SOME OF OUR PRODUCTS. The manufacture, use and sale of new products that are the subject of conflicting patent rights have been the subject of substantial litigation in the pharmaceutical industry. These lawsuits relate to the validity and infringement of patents or proprietary rights of third parties. We may have to defend against charges that we violated patents or proprietary rights of third parties. This is especially true for the sale of the brand-equivalent version of products on which the patent covering the branded product is expiring, an area where 8 12 infringement litigation is prevalent. Our defense against charges that we infringed third party patents or proprietary rights could require us to incur substantial expense and to divert significant effort of our technical and management personnel. If we infringe on the rights of others, we could lose our right to develop or make some products or could be required to pay monetary damages or royalties to license proprietary rights from third parties. Although the parties to patent and intellectual property disputes in the pharmaceutical industry have often settled their disputes through licensing or similar arrangements, the costs associated with these arrangements may be substantial and could include ongoing royalties. Furthermore, we cannot be certain that the necessary licenses would be available to us on terms we believe to be acceptable. As a result, an adverse determination in a judicial or administrative proceeding or failure to obtain necessary licenses could prevent us from manufacturing and selling a number of our products. MARKETING PRACTICES SUCH AS RETURNS, ALLOWANCES AND CHARGE-BACKS AND MARKETING PROGRAMS ADOPTED BY WHOLESALERS MAY REDUCE SALES REVENUES IN SUBSEQUENT PERIODS. Based on industry practice, brand-equivalent manufacturers, including us, have liberal return policies and have been willing to give customers post-sale inventory allowances. Under these arrangements, the manufacturers give customers credits on the manufacturer's brand-equivalent products which the customers hold in inventory after decreases in the market prices of the brand-equivalent products. Like our competitors, we also give credits for charge-backs to wholesale customers that have contracts with us for their sales to hospitals, group purchasing organizations, pharmacies or other retail customers. A charge-back is the difference between the price the wholesale customer pays and the price that the wholesale customer's end-customer pays for a product. Although we establish reserves based on our prior experience and our best estimates of the impact that these policies may have in subsequent periods, we cannot ensure that our reserves are adequate or that actual product returns, inventory allowances and charge-backs will not exceed our estimates. In the second quarter of 1996, based upon price declines at a time of significant inventory levels, these credits were approximately $44 million higher than the average levels that we experienced in prior quarters. Following our announcement of the expected credits prior to the end of the second quarter, the market price of our common stock immediately fell approximately 36%, and a number of persons subsequently filed class action litigation against us based on the decline. That class action litigation was resolved in our favor when the court dismissed it on the merits. THE CONCENTRATION OF OWNERSHIP AMONG OUR EXECUTIVE OFFICERS AND DIRECTORS MAY PERMIT THOSE PERSONS TO INFLUENCE CORPORATE MATTERS AND POLICIES. As of June 30, 2001, our executive officers and directors currently have or share voting control over approximately 21.75% of our issued and outstanding common stock. As a result, these persons may have the ability to significantly influence the election of the members of our board of directors and other corporate decisions. A NUMBER OF INTERNAL AND EXTERNAL FACTORS HAVE CAUSED AND MAY CONTINUE TO CAUSE THE MARKET PRICE OF OUR STOCK TO BE VOLATILE. The market prices for securities of companies engaged in pharmaceutical development, including us, have been volatile. Many factors, including many over which we have no control, may have a significant impact on the market price of our common stock, including without limitation: 9 13 o our or our competitors' announcement of technological innovations or new commercial products; o changes in governmental regulation; o our or our competitors' receipt of regulatory approvals; o our or our competitors' developments relating to patents or proprietary rights; o publicity regarding actual or potential medical results for products that we or our competitors have under development; and o period-to-period changes in financial results. POLITICAL AND ECONOMIC INSTABILITY AND FOREIGN CURRENCY FLUCTUATIONS MAY ADVERSELY AFFECT THE REVENUES OUR FOREIGN OPERATIONS GENERATE. Our foreign operations may be affected by the following factors, among others: o political instability in some countries in which we currently do business or may do business in the future through acquisitions or otherwise; o uncertainty as to the enforceability of, and government control over, commercial rights; o expropriation by foreign governmental entities; and o currency exchange fluctuations and currency restrictions. We sell products in many countries that are susceptible to significant foreign currency risk. We sell many of these products for United States dollars, which eliminates our direct currency risk but increases our credit risk if the local currency devalues significantly and it becomes more difficult for customers to purchase the United States dollars required to pay us. We sell a growing number of products, particularly in Latin America, for local currency, which results in a direct currency risk to us if the local currency devalues significantly. Acquisitions we are currently evaluating or pursuing may increase our foreign currency risk and the other risks identified above. On June 20, 2000, we announced our acquisition of Laboratorios Elmor S.A., a pharmaceutical company based in Venezuela. Venezuela is considered a highly inflationary country. On July 5, 2001, we acquired 99.6% of Laboratorio Chile S.A., a Chilean pharmaceutical company with operations in Chile, Argentina and Peru. Although neither Chile nor Argentina have been classified as highly inflationary countries, each of the countries has experienced strong inflation rates and devaluation of their respective currencies. Any future acquisition of additional operations that we may make may expose us to additional risk. FUTURE INABILITY TO OBTAIN RAW MATERIALS OR PRODUCTS FROM CONTRACT MANUFACTURERS COULD SERIOUSLY AFFECT OUR OPERATIONS. In many instances, we obtain raw materials and other products from single domestic or foreign suppliers. Although to date we have not experienced difficulty in obtaining these raw materials and products, we cannot assure you that supply interruptions will not occur in the future or that we will not have to obtain substitute materials or products, which would require additional regulatory approvals. Further, we cannot assure you that our third party suppliers will continue to supply us. In addition, changes in our raw material suppliers could result in delays in production, higher raw material costs and loss of sales and customers because regulatory authorities must generally approve raw material sources for pharmaceutical products. Any significant interruption of supply could have a material adverse effect on our operations. 10 14 INCREASED INDEBTEDNESS MAY IMPACT OUR FINANCIAL CONDITION AND RESULTS OF OPERATIONS. On March 31, 2001, we would have had approximately $999.8 million of consolidated indebtedness, as adjusted for the sale of $725.0 million of our 4 1/2% convertible senior subordinated notes due 2008. We may incur additional indebtedness in the future. Our level of indebtedness will have several important effects on our future operations, including, without limitation: o we will use a portion of our cash flow from operations for the payment of any principal or interest due on our outstanding indebtedness; o our outstanding indebtedness and leverage will increase the impact of negative changes in general economic and industry conditions, as well as competitive pressures; and o the level of our outstanding debt may affect our ability to obtain additional financing for working capital, capital expenditures or general corporate purposes. General economic conditions, industry cycles and financial, business and other factors affecting our operations, many of which are beyond our control, may affect our future performance. As a result, these and other factors may affect our ability to make principal and interest payments on our indebtedness. We anticipate that approximately $51.4 million of cash flow from operations will be required to discharge our annual obligations on our currently outstanding indebtedness, as adjusted for the sale of $725.0 million of our 4 1/2% convertible senior subordinated notes due 2008. Our business might not continue to generate cash flow at or above current levels. If we cannot generate sufficient cash flow from operations in the future to service our debt, we may, among other things: o seek additional financing in the debt or equity markets; o refinance or restructure all or a portion of our indebtedness; o sell selected assets; or o reduce or delay planned capital expenditures. These measures might not be sufficient to enable us to service our debt. In addition, any financing, refinancing or sale of assets might not be available on economically favorable terms. COMPLIANCE WITH GOVERNMENTAL REGULATION IS CRITICAL TO OUR BUSINESS. Our pharmaceutical and diagnostic operations are subject to extensive regulation by governmental authorities in the United States and other countries with respect to the testing, approval, manufacture, labeling, marketing and sale of pharmaceutical and diagnostic products. We devote significant time, effort and expense to addressing the extensive government regulations applicable to our business. In general, the trend is toward more stringent regulation. On an ongoing basis, the FDA reviews the safety and efficacy of marketed pharmaceutical products and products considered medical devices and monitors labeling, advertising, and other matters related to the promotion of such products. The FDA also regulates the facilities and procedures used to manufacture pharmaceutical and diagnostic products in the United States or for sale in the Untied States. Such facilities must be registered with the FDA and all products made in such facilities must be manufactured in accordance with "good manufacturing practices" established by the FDA. Compliance with good manufacturing practices guidelines requires the dedication of substantial resources and requires significant costs. The FDA periodically inspects our manufacturing facilities and procedures to assure compliance. The FDA may cause a recall or withdraw product approvals if regulatory standards are not maintained. The FDA approval to manufacture a drug is site-specific. In the event an approved manufacturing facility for a particular drug becomes 11 15 inoperable, obtaining the required FDA approval to manufacture such drug at a different manufacturing site could result in production delays, which could adversely affect our business and results of operations. In connection with our activities outside the United States, we are also subject to regulatory requirements governing the testing, approval, manufacture, labeling, marketing and sale of pharmaceutical and diagnostic products, which requirements vary from country to country. Whether or not FDA approval has been obtained for a product, approval of the product by comparable regulatory authorities of foreign countries must be obtained prior to marketing the product in those countries. The approval process may be more or less rigorous from country to country, and the time required for approval may be longer or shorter than that required in the United States. Our inability or delay in receiving or the loss of any approval could have a material adverse effect on our results of operations. WE HAVE ENACTED A SHAREHOLDER RIGHTS PLAN AND CHARTER PROVISIONS THAT MAY HAVE ANTI-TAKEOVER EFFECTS. We have in place a shareholders rights plan under which we issued common stock purchase rights. As a result of the plan, each share of our common stock carries with it one common stock purchase right. Each common stock purchase right entitles the registered holder to purchase from us one-half of a share of our common stock at a price of $15 per one-half of a share, subject to adjustment. The common stock purchase rights are intended to cause substantial dilution to a person or group who attempts to acquire us on terms that our board of directors has not approved. The existence of the common stock purchase rights could make it more difficult for a third party to acquire a majority of our common stock. Other provisions of our articles of incorporation and bylaws may also have the effect of discouraging, delaying or preventing a merger, tender offer or proxy contest, which could have an adverse effect on the market price of our common stock. RISKS RELATING TO OUR INDUSTRY OUR REVENUES AND PROFITS FROM BRAND-EQUIVALENT PHARMACEUTICALS WILL DECLINE AS WE OR OUR COMPETITORS INTRODUCE ADDITIONAL BRAND-EQUIVALENTS OF THOSE PRODUCTS. Revenues and gross profit derived from brand-equivalent pharmaceutical products tend to follow a pattern based on regulatory and competitive factors unique to the brand-equivalent pharmaceutical industry. As patents for brand name products and the related exclusivity periods established by regulation expire, the first brand-equivalent manufacturer to apply for regulatory approval for a brand-equivalent of a brand name product may be entitled to a 180-day period of marketing exclusivity under the Hatch-Waxman Act. During this exclusivity period, the United States Food and Drug Administration, or FDA, cannot approve any other brand-equivalent. If we are not the first brand-equivalent applicant, our brand-equivalent product will be kept off the market for an additional 180 days after the brand name drug's patents expire. Whether due to the 180-day period of marketing exclusivity or other factors that delay the approval of other brand-equivalent competitors, the first brand-equivalent on the market is usually able to initially achieve relatively high revenues and gross profit. As other brand-equivalent manufacturers receive regulatory approvals on competing products, prices and revenues typically decline. The timing of these declines is unpredictable and can result in a significantly curtailed period of profitability for a brand-equivalent product. The level of revenues and gross profit attributable to brand-equivalent products that we develop and manufacture is dependent, in part, on: o our ability to develop and introduce new brand-equivalent products; o the timing of regulatory approval of brand-equivalent products; o the number and timing of regulatory approvals of competing products; 12 16 o strategies brand name companies adopt to maintain their market share; and o our cost of manufacturing. Brand-equivalent products (but not including branded brand-equivalent products) represented 49%, 56% and 51% of our revenues for the years ended December 31, 2000, 1999 and 1998, respectively. LEGISLATIVE PROPOSALS, REIMBURSEMENT POLICIES OF THIRD PARTIES, COST CONTAINMENT MEASURES AND HEALTH CARE REFORM COULD AFFECT THE MARKETING, PRICING AND DEMAND FOR OUR PRODUCTS. Various legislative proposals, including proposals relating to prescription drug benefits, could materially impact the pricing and sale of our products. Further, reimbursement policies of third parties may affect the marketing of our products. Our ability to market our products will depend in part on reimbursement levels for the cost of the products and related treatment established by health care providers, including government authorities, private health insurers and other organizations, such as health maintenance organizations, or HMOs, and managed care organizations, or MCOs. Insurance companies, HMOs, MCOs, Medicaid and Medicare administrators and others are increasingly challenging the pricing of pharmaceutical products and reviewing their reimbursement practices. In addition, the following factors could significantly influence the purchase of pharmaceutical products, which would result in lower prices and a reduced demand for our products: o the trend toward managed health care in the United States; o the growth of organizations such as HMOs and MCOs; o legislative proposals to reform health care and government insurance programs; and o price controls and non-reimbursement of new and highly priced medicines for which the economic therapeutic rationales are not established. THESE COST CONTAINMENT MEASURES AND HEALTH CARE REFORM PROPOSALS COULD AFFECT OUR ABILITY TO SELL OUR PRODUCTS. The reimbursement status of a newly approved pharmaceutical product may be uncertain. Reimbursement policies may not include some of our products. Even if reimbursement policies of third parties grant reimbursement status for a product, we cannot be sure that these reimbursement policies will remain in effect. Limits on reimbursement could reduce the demand for our products. The unavailability or inadequacy of third party reimbursement for our products would reduce or possibly eliminate demand for our products. We are unable to predict whether governmental authorities will enact additional legislation or regulation which will affect third party coverage and reimbursement that reduces demand for our products. OUR INDUSTRY IS HIGHLY COMPETITIVE WHICH AFFECTS OUR PRODUCT SELECTION, PRICING, GROSS PROFIT AND MARKET SHARE. The pharmaceutical industry is intensely competitive. Most or all of the products that we sell or license will face competition from different chemical or other agents intended to treat the same diseases. Our current and future products will also face competition from traditional forms of drug delivery and from advanced delivery systems others are developing. Our competitors vary depending upon geographic regions, product categories, and within each product category, upon dosage strengths and drug delivery systems. Some of our major competitors are: o 3M o Astra Zeneca 13 17 o Barr Laboratories o Boehringer Ingelheim o Bristol-Myers Squibb o Geneva Pharmaceuticals o Glaxo Wellcome o Eli Lilly o Mylan Pharmaceuticals o Novartis Pharmaceuticals o Schering-Plough o Teva Pharmaceuticals Our competitors may be able to develop products and processes competitive with or superior to our own for many reasons, including that they may have: o significantly greater financial resources; o larger research and development and marketing staffs; or o larger production facilities or extensive experience in preclinical testing and human clinical trials. RISKS RELATED TO THE NOTES INCREASED LEVERAGE MAY HAVE AN IMPACT ON OUR FINANCIAL CONDITION AND RESULTS OF OPERATIONS. At March 31, 2001, we had approximately $274.8 million of consolidated indebtedness and would have had $999.8 million as adjusted for the offering of the 4 1/2% convertible senior subordinated notes due 2008 issued on May 4, 2001. We may incur additional indebtedness in the future. Our level of indebtedness will have several important effects on our future operations, including, without limitation: o a portion of our cash flow from operations will be dedicated to the payment of any interest or amortization required with respect to outstanding indebtedness; o outstanding indebtedness and leverage will increase our vulnerability to adverse changes in general economic and industry conditions, as well as to competitive pressure; and o depending on the levels of our outstanding debt, our ability to obtain additional financing for working capital, capital expenditures, general corporate and other purposes may be limited. Our ability to make payments of principal and interest on our indebtedness depends upon our future performance, which will be subject to general economic conditions, industry cycles and financial, business and other factors affecting our operations, many of which are beyond our control. Our business might not continue to generate cash flow at or above current levels. If we are unable to generate sufficient cash flow from operations in the future to service our debt, we may be required, among other things: o to seek additional financing in the debt or equity markets; o to refinance or restructure all or a portion of our indebtedness, including the notes; o to sell selected assets; or o to reduce or delay planned capital expenditures. Such measures might not be sufficient to enable us to service our debt. In addition, any such financing, refinancing or sale of assets might not be available on economically favorable terms. 14 18 THE NOTES ARE SUBORDINATED TO OUR SENIOR INDEBTEDNESS AND EFFECTIVELY SUBORDINATED TO ALL LIABILITIES OF OUR SUBSIDIARIES. The notes are subordinated in right of payment to all of our existing and future senior indebtedness, and are structurally subordinated to all indebtedness or liabilities, including trade payables, of our subsidiaries and rank pari passu in right of payment with the 5 1/2% convertible senior subordinated notes due 2007 that were issued in May 2000. As of March 31, 2001, we had approximately $82.0 million of consolidated indebtedness and other obligations ranking senior to the notes. The indenture governing the notes does not restrict the incurrence of senior indebtedness or other debt by us or our subsidiaries. By reason of such subordination, in the event of the insolvency, bankruptcy, liquidation, reorganization, dissolution or winding up of our business, our assets will be available to pay the amounts due on the notes only after all senior indebtedness has been paid in full, and, therefore, there may not be sufficient assets remaining to pay amounts due on any or all of the notes then outstanding. See "Description of Notes - Subordination of Notes." OUR DEPENDENCE ON OUR SUBSIDIARIES FOR CASH FLOW MAY NEGATIVELY AFFECT OUR BUSINESS AND OUR ABILITY TO PAY THE PRINCIPAL, INTEREST AND OTHER AMOUNTS DUE ON THE NOTES. Our ability to meet our cash obligations in the future will be dependent upon the ability of our subsidiaries to make cash distributions to us. The ability of our subsidiaries to make these distributions is and will continue to be restricted by, among other limitations, applicable provisions of governing law and contractual provisions. The indenture governing the notes does not limit the ability of our subsidiaries to incur such restrictions in the future. Our right to participate in the assets of any subsidiary (and thus the ability of holders of the notes to benefit indirectly from such assets) is generally subject to the prior claims of creditors, including trade creditors, of that subsidiary except to the extent that we are recognized as a creditor of such subsidiary, in which case our claim would still be subject to any security interest of other creditors of such subsidiary. The notes, therefore, are structurally subordinated to creditors, including trade creditors, of our subsidiaries with respect to the assets of the subsidiaries against which such creditors have a claim. WE MAY NOT HAVE THE ABILITY TO RAISE THE FUNDS NECESSARY TO FINANCE THE CHANGE IN CONTROL OFFER REQUIRED BY THE INDENTURE. If we undergo a change in control (as defined in the indenture), each holder of the notes may require us to repurchase all or a portion of the holder's notes. We cannot assure you that there will be sufficient funds available for any required repurchases of these securities if a change in control occurs. In addition, the terms of any agreements related to borrowing which we may enter from time to time may prohibit or limit or make our repurchase of notes an event of default under those agreements. If we fail to repurchase the notes in that circumstance, we will be in default under the indenture governing the notes. See "Description of Notes -- Repurchase at option of holders upon change in control." 15 19 ABSENCE OF A PUBLIC MARKET FOR THE NOTES COULD CAUSE PURCHASERS OF THE NOTES TO BE UNABLE TO RESELL THEM FOR AN EXTENDED PERIOD OF TIME. Although the notes trade on The PORTAL Market, there is not an established trading market for the notes and we cannot assure you than an active public trading market of the notes will develop, or, if such market develops, how liquid it will be. We have been informed by UBS Warburg LLC, the initial purchaser, that it intends to make a market in the notes. The initial purchaser may cease its market-making at any time without notice. We have no present intention of causing the notes to be listed for trading on any national securities exchange or Nasdaq stock market. If a trading market does not develop or is not maintained, holders of the notes may experience difficulty in reselling, or an inability to sell, the notes. If a market for the notes develops, any such market may be discontinued at any time. If a public trading market develops for the notes, future trading prices of the notes will depend on many factors, including, among other things, the price of our common stock into which the notes are convertible, prevailing interest rates, our operating results and the market for similar securities. Depending on the price of our common stock into which the notes are convertible, prevailing interest rates, the market for similar securities and other factors, including our financial condition, the notes may trade at a discount from their principal amount. 16 20 DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS This prospectus and the documents incorporated by reference into this prospectus contain "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. These statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. Specifically, this prospectus and the documents incorporated into this prospectus by reference contain forward-looking statements regarding: o our intention to generate growth through the introductions of new proprietary drugs, the expanded sale and distribution of our current products, the acquisition of new businesses and products and strategic collaborations; o the ability of our research programs to develop improved forms of drugs, novel compounds and new delivery systems, including the development of improved formulations of paclitaxel and complementary products; o our ability to integrate operations and exploit opportunities among our subsidiaries; o our capacity to become a worldwide leader in the asthma market; o our ability to capitalize on current relationships in the oncology market to market new brand-equivalent biotech drugs and our commercialization of Paxoral(TM) and other oncology products; o our capability to identify, acquire and successfully integrate new acquisitions of companies and products; o anticipated benefits stemming from the acquisition of Laboratorio Chile; o the ability of our new patented oral administration system to provide patients effective doses of paclitaxel with more convenience and reduced side-effects and the applicability of this system to other chemotherapeutic agents; o our ability to develop Easi-Breathe(R) for use with various compounds; o our ability to further develop CFC-free inhalation aerosol products; o our ability to develop a corticosteroid with minimal side effects to treat asthma and inflammatory diseases of the large intestine; o our ability to develop new formulations and obtain marketing authorizations which will enable us to be the first, or among the first, to launch brand-equivalent products; o our ability to further develop and market talampanel, cladribine, human growth hormone, interferon or products to treat cystic fibrosis; o our ability to develop or license proprietary products for indications having large patient populations, or for which limited or inadequate treatments exist; o our capacity to accelerate product development and commercialization by in-licensing products and by developing new dosage forms or new therapeutic indications for existing products; o anticipated trends in the pharmaceutical industry and the effect of technological advances on competition; o our estimates regarding the capacity of our facilities; o our intention to fund 2001 capital expenditures from existing cash and internally generated funds; and o our ability to use Laboratorio Chile and our other foreign subsidiaries to launch our proprietary and brand-equivalent pharmaceutical products in Latin American markets. These forward-looking statements reflect our current views about future events and are subject to risks, uncertainties and assumptions. We wish to caution readers that certain important factors may have affected and could in 17 21 the future affect our actual results and could cause actual results to differ significantly from those expressed in any forward-looking statement. The most important factors that could prevent us from achieving our goals, and cause the assumptions underlying forward-looking statements and the actual results to differ materially from those expressed in or implied by those forward-looking statements include, but are not limited to, the following: o difficulties in product development; o efficacy or safety concerns with respect to marketed products, whether or not scientifically justified, leading to recalls, withdrawals or declining sales; o our ability to identify potential acquisitions and to successfully acquire and integrate such operations or products; o that we may not realize the anticipated benefits of the acquisition of Laboratorio Chile; o that risks will arise from the operation of Laboratorio Chile; o the ability of the company to obtain approval from the FDA to market new pharmaceutical products; o the acceptance of new products by the medical community as effective as alternative forms of treatment for indicated conditions; o the outcome of any pending or future litigation; o the impact of new regulations or court decisions regarding the protection of patents and the exclusivity period for the marketing of branded drugs. You should read carefully the section of this prospectus under the heading "Risk Factors" beginning on page 7. We assume no responsibility for updating forward-looking statements contained in this prospectus, any supplements to this prospectus, and in any documents that we incorporate by reference into this prospectus. RATIO OF EARNINGS TO FIXED CHARGES The following table sets forth our consolidated ratio of earnings to fixed charges for the years ended December 31, 1996, 1997, 1998, 1999 and 2000 and for the three months ended March 31, 2001.
YEAR ENDED DECEMBER 31, ----------------------------------------------- THREE MONTHS ENDED 1996 1997 1998 1999 2000 MARCH 31, 2001 ---- ---- ---- ---- ---- ------------------ Ratio of earnings to fixed charges. . (10.5)x(1) (9.7)x(1) 5.9x 15.3x 11.1x 16.9x
- --------- (1) The dollar amounts of the coverage deficiency for the years ended December 31, 1996 and 1997 were $189.4 million and $160.5 million, respectively. The ratio of earnings to fixed charges was calculated by dividing earnings by total fixed charges. Earnings consist of pretax income plus fixed charges. Fixed charges consist of interest expense on all indebtedness (including amortization of deferred debt issuance costs) and a portion of rent expense (7-8%) estimated by management to be the interest component of such rentals. USE OF PROCEEDS We will receive no proceeds from this offering. The selling security holders will receive the proceeds from this offering. 18 22 SELLING SECURITY HOLDERS We initially issued the notes to the initial purchaser who then sold the notes in transactions exempt from the registration requirements of the Securities Act to "qualified institutional buyers" (as defined in Rule 144A under the Securities Act), to institutional "accredited investors" (as defined in Rule 501 under the Securities Act) in compliance with Regulation D under the Securities Act and to non-U.S. persons outside the U.S. in compliance with Regulation S. The selling security holders (which term includes their transferees, pledgees, donees or their successors) may from time to time offer and sell pursuant to this prospectus or prospectus supplement any or all of the notes and common stock issuable upon conversion of the notes. No offer or sale under this prospectus may be made by a holder of the securities unless that holder is listed in the table in this prospectus or until that holder has notified us and a supplement to this prospectus has been filed or an amendment to this registration statement has become effective. We will supplement or amend this prospectus to include additional selling security holders upon request and upon provision of all required information to us. Information concerning the selling security holders may change from time to time and any changed information will be set forth in supplements to this prospectus if and when necessary. The following table sets forth information about each selling security holder, including the name, the number and percentage of the notes beneficially owned and being offered by the selling security holder and the number and percentage of common stock beneficially owned and being offered by the selling security holder. Unless otherwise indicated below, none of the selling security holders nor any of their affiliates, officers, directors or principal entity holders has held any position or office or has had any material relationship with us within the past three years.
PRINCIPAL AMOUNT OF NOTES NUMBER OF SHARES OF BENEFICIALLY PERCENTAGE COMMON STOCK PERCENTAGE OF OWNED AND OF NOTES BENEFICIALLY OWNED COMMON STOCK NAME AND RELATIONSHIP, IF ANY OFFERED HEREBY OUTSTANDING AND OFFERED HEREBY(1) OUTSTANDING (2) - ----------------------------- -------------- ----------- ------------------ ----------- Absolute Return Fund, Ltd. $ 821,000 .11% 20,499 .01% Alexandra Global Investment Fund I Ltd. $ 2,000,000 .28% 49,938 .02% Allstate Insurance Company $ 3,200,000 .44% 79,900 .04% Allstate Life Insurance Company $ 750,000 .10% 18,727 .009% Argent Classic Convertible Arbitrage Fund (Bermuda) Ltd. $13,000,000 1.79% 324,594 .16% Argent Convertible Arbitrage Fund Ltd. $ 2,500,000 .34% 62,422 .03% Argent LowLev Convertible Arbitrage Fund LLC $ 500,000 .07% 12,484 .006% Bear Stearns & Co. Inc. $ 5,500,000 .76% 137,328 .07% Black Diamond Capital I, Ltd. $ 1,500,000 .21% 37,453 .02% Black Diamond Offshore Ltd. $ 3,397,000 .47% 84,819 .04% BNP CooperNeff Convertible Strategies Fund, L.P. $ 652,000 .09% 16,280 .008% BNP Paribas Equity Strategies, SNC $ 3,348,000 .46% 83,595 .04% Calamos(R) Market Neutral Fund- Calamos(R) Investment Trust $ 3,200,000 .44% 79,900 .04% Chrysler Corporation Master Retirement Trust $ 6,110,000 .84% 152,559 .08% CFFX, LLC $ 3,000,000 .41% 74,906 .04% Consulting Group Capital Markets Funds $ 380,000 .05% 9,488 .005% Deam Convertible Arbitrage Fund $ 2,500,000 .34% 62,422 .03%
19 23
PRINCIPAL AMOUNT OF NOTES NUMBER OF SHARES OF BENEFICIALLY PERCENTAGE COMMON STOCK PERCENTAGE OF OWNED AND OF NOTES BENEFICIALLY OWNED COMMON STOCK NAME AND RELATIONSHIP, IF ANY OFFERED HEREBY OUTSTANDING AND OFFERED HEREBY(1) OUTSTANDING (2) - ----------------------------- -------------- ----------- ------------------ ----------- Delta Air Lines Master Trust $ 1,530,000 .21% 38,202 .02% Delta Pilots D&S Trust $ 790,000 .11% 19,725 .01% Double Black Diamond Offshore LDC $15,743,000 2.17% 393,083 .20% First Union National Bank $40,000,000 5.52% 998,750 .50% Grace Brothers, Ltd. $ 2,000,000 .28% 49,938 .02% Jersey (IMA) Ltd. $ 2,100,000 .29% 52,434 .03% JMG Capital Partners, L.P. $ 3,000,000 .41% 74,906 .04% Lancer Securities Cayman Ltd. $ 750,000 .10% 18,727 .01% Lexington (IMA) Limited $ 584,000 .08% 14,582 .01% LibertyView Global Volatility Fund, L.P. $ 1,300,000 .18% 32,459 .02% LibertyView Fund LLC $ 600,000 .08% 14,981 .01% LibertyView Funds, L.P. $ 6,000,000 .83% 149,813 .07% Lipper Convertibles, L.P. $25,000,000 3.45% 624,219 .31% Lipper Convertibles, L.P. (Class B) $ 1,000,000 .14% 24,969 .01% Lipper Convertibles Series II, L.P. $ 2,000,000 .28% 49,938 .02% Lipper Offshore Convertibles, L.P. $ 5,000,000 .69% 124,844 .06% Lipper Offshore Convertibles, L.P. #2 $ 1,000,000 .14% 24,969 .01% Merrill Lynch, Pierce, Fenner & Smith, Inc. $ 1,385,000 .19% 34,582 .02% Motion Picture Industry Health Plan--Active Member Fund $ 560,000 .08% 13,983 .01% Motion Picture Industry Health Plan--Retiree Member Fund $ 240,000 .03% 5,993 .003% Northern Income Equity Fund $ 1,000,000 .14% 24,969 .01% OCM Convertible Limited Partnership $ 225,000 .03% 5,618 .003% OCM Convertible Trust $ 3,780,000 .52% 94,382 .05% OZ Master Fund, Ltd. $ 8,095,000 1.12% 202,122 .10% Palladin Securities LLC $ 750,000 .10% 18,727 .01% Paloma Securities LLC $21,000,000 2.90% 524,344 .26% Partner Reinsurance Company Ltd. $ 945,000 .13% 23,595 .01% SG Cowen Securities Inc. $13,500,000 1.86% 337,078 .17% State Employees' Retirement Fund of the State of Delaware $ 2,425,000 .33% 60,549 .03% State of Connecticut Combined Investment Funds $ 5,210,000 .72% 130,087 .06% The Northwestern Mutual Life Insurance Company $ 4,000,000 .55% 99,875 .05% The Northwestern Mutual Life Insurance Company for its Group Annuity Separate Account $ 250,000 .03% 6,242 .003% TQA Master Fund, Ltd. $ 90,000 .01% 2,247 .001% TQA Master Plus Fund, Ltd. $ 3,410,000 .47% 85,143 .04% Vanguard Convertible Securities Fund, Inc. $ 6,685,000 .92% 166,916 .08% White River Securities L.L.C $ 5,500,000 .76% 137,328 .07% Worldwide Transactions Ltd. $ 860,000 .12% 21,473 .01%
- ----------- (1) Assumes conversion of all of the holder's notes into 24.96875 shares of our common stock, par value $.10 per share, per $1,000 principal amount of notes, as adjusted to reflect the five-for-four stock split paid in common stock on May 18, 2001 in the form of a 25% dividend. This conversion rate, however, will be subject to further adjustment as described under "Description of Notes--Conversion." As a result, the number of shares of common stock issuable upon conversion of the notes may increase or decrease in the future. (2) Calculated based on Rule 13d-3(d)(i) of the Exchange Act using 200,374,106 shares of common stock outstanding as of July 25, 2001. In calculating the percentage of common stock outstanding for each selling security holder, we treated as outstanding the number of shares of common stock issuable upon conversion of all of the particular selling security holder's notes. 20 24 We prepared this table based on the information supplied to us by the selling security holders named in the table and we have not sought to verify such information. The selling security holders listed in the above table may have sold or transferred, in transactions exempt from the registration requirements of the Securities Act, some or all of their notes since the date on which the information in the above table was provided to us. Information about the selling security holders may change over time. Because the selling security holders may offer all or some of the notes or the shares of common stock issuable upon conversion of the notes from time to time, we cannot estimate the amount of the notes or shares of common stock that will be held by the selling security holders upon the termination of any particular offering by a selling security holder. See "Plan of Distribution." 21 25 PLAN OF DISTRIBUTION On May 4, 2001, we issued and sold $725,000,000 of 4 1/2% convertible senior subordinated notes due 2008 IN private placement transactions to qualified institutional buyers (as defined in Rule 144A under the Securities Act), to institutional "accredited investors" (as defined in Rule 501 under the Securities Act) in compliance with Regulation D under the Securities Act and to non-U.S. persons outside the U.S. in compliance with Regulation S. We will not receive any of the proceeds from this offering. The selling security holders will receive the proceeds from this offering. The selling security holders and their successors, which term includes their transferees, pledgees or donees or their successors may from time to time sell the notes and the common stock covered by this prospectus directly to purchasers or offer the notes and common stock through underwriters, broker-dealers or agents, who may receive compensation in the form of underwriting discounts, concessions or commissions from the selling security holders and/or the purchasers of securities for whom they may act as agent, which discounts, concessions or commissions as to any particular underwriter, broker-dealer or agent may be in excess of those customary in the types of transactions involved. The notes and the common stock may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of sale, at prices related to such prevailing market prices, at varying prices determined at the time of sale, or at negotiated prices. The notes and the common stock may be sold by one or more of, or a combination of, the following: o a block trade in which the broker-dealer so engaged will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction; o purchases by a broker-dealer as principal and resale by such broker-dealer for its account pursuant to this prospectus; o an exchange distribution in accordance with the rules of such exchange; o ordinary brokerage transactions and transactions in which the broker solicits purchasers; and o in privately negotiated transactions. In connection with the sale of the notes and common stock, the selling security holders may enter into hedging transactions with broker-dealers or other financial institutions which may in turn engage in short sales of the securities and deliver these securities to close out such short positions, or loan or pledge the securities to broker-dealers that in turn may sell these securities. The aggregate proceeds to the selling security holders from the sale of the securities offered by them hereby will be the purchase price of such securities less discounts and commissions, if any. The selling security holder reserves the right to accept and, together with its agent from time to time, to reject, in whole or in part, any proposed purchase of securities to be made directly or through agents. Our notes are traded on The PORTAL Market. Our common stock is listed for trading on the American Stock Exchange. In order to comply with the securities laws of some states, if applicable, the securities may be sold in such jurisdictions only through registered or licensed brokers or dealers. In addition, in some states the securities may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from registration or qualification requirements is available and is complied with. The selling security holders and any underwriters, broker-dealers or agents that participate in the sale of the securities, may be "underwriters" 22 26 within the meaning of Section 2(11) of the Securities Act. Any discounts, commissions, concessions or profit they earn on any resale of the securities may be underwriting discounts and commissions under the Securities Act. If any selling security holder is an "underwriter" within the meaning of Section 2(11) of the Securities Act it will be subject to the prospectus delivery requirements of the Securities Act. The selling security holders have acknowledged that they understand their obligations to comply with the provisions of the Exchange Act and the rules thereunder relating to stock manipulation, particularly Regulation M, and have agreed that they will not engage in any transaction in violation of such provision. In addition, any securities covered by this prospectus which qualify for sale pursuant to Rule 144 of the Securities Act may be sold under Rule 144 rather than pursuant to this prospectus. The selling security holder may not sell any security described herein and may not transfer, devise or gift such securities by other means not described in this prospectus. At the time of a particular offering of securities by a selling security holder, a supplement to this prospectus, if required, will be circulated setting forth the aggregate amount and type of securities being offered and the terms of the offering, including the name or names of any underwriters, broker-dealers or agents, any discounts, commissions and other terms constituting compensation from the selling security holders and any discounts, commissions or concessions allowed or reallowed or paid to broker-dealers. 23 27 DESCRIPTION OF NOTES On May 4, 2001, we issued and sold $725,000,000 of 4 1/2% convertible senior subordinated notes due 2008 in private placement transactions to qualified institutional buyers (as defined in Rule 144A under the Securities Act), accredited investors (as defined in Rule 501 under the Securities Act) and non-U.S. persons (as defined in Regulation S under the Securities Act). The notes were issued under the Indenture dated as of May 4, 2001 between us and U.S. Bank Trust National Association as trustee (the "Indenture"). The following statements are subject to the detailed provisions of the Indenture and are qualified in their entirety by reference to the Indenture. The Indenture is by its terms subject to and governed by the Trust Indenture Act of 1939. Copies of the Indenture are available for review at the corporate office of the trustee and may also be obtained from us upon request. Particular provisions of the Indenture which are referred to in this prospectus are incorporated by reference as a part of the statements made, and the statements are qualified in their entirety by the reference. For purposes of this summary, the terms "IVAX", "we", "us", "our" and "company" refer only to IVAX Corporation and not to any of our subsidiaries. References to "interest" shall be deemed to include "liquidated damages" unless the context otherwise requires. GENERAL The notes represent our unsecured general obligations, subordinate in right of payment to certain of our other obligations as described below under "Subordination of Notes", and convertible into common stock as described below under "Conversion." The notes rank pari passu with our $250.0 million principal amount of 5 1/2% convertible senior subordinated notes due 2007. We will pay interest on the notes semiannually on May 15 and November 15 of each year, with the first payment to be made on November 15, 2001, at the rate of 4 1/2% per annum, to the persons who are registered holders of notes at the close of business on the preceding May 1st and November 1st, respectively. Interest payments on the notes are subject to exceptions in the case of notes redeemed or repurchased upon a change in control between a record date and the next succeeding interest payment date. Unless previously redeemed, repurchased or converted, the notes will mature on May 15, 2008. We may pay principal, premium, if any, and interest by check and may mail an interest check to a holder's registered address. Holders must surrender notes to the paying agent to collect principal payments. We issued the notes without coupons in denominations of $1,000 and whole multiples of $1,000. A holder may transfer, exchange or convert notes in accordance with the Indenture. We will not impose any service charge for any transfer, exchange or conversion of the notes, except for any tax or other governmental charges that may be imposed in connection with any transfers, exchanges or conversion. The registrar for the notes need not transfer or exchange any notes selected for redemption. The registered holder of a note may be treated as its owner for all purposes. Initially, the trustee will act as registrar, paying agent and conversion agent. We may appoint an additional, or change any, paying agent, registrar or conversion agent without notice. We may act in any such capacity. The Indenture does not contain any financial covenants or any restrictions on the payment of dividends or on the repurchase of our securities. The Indenture does not require us to maintain any sinking fund or other reserves for repayment of the notes. CONVERSION Holders of notes will be entitled at any time after the original issuance of the notes and before the close of business on the date of maturity 24 28 of the notes, subject to prior redemption or repurchase, to convert the notes, or portions thereof (if the portions are $1,000 or whole multiples thereof) into 24.96875 shares of common stock per $1,000 of principal amount of notes. This rate results in a conversion price of approximately $40.05 per share. Except as described below, the number of shares into which a note is convertible will not be adjusted for dividends on any common stock issued on conversion. We will not issue fractional shares of common stock upon conversion of notes and instead will deliver a check in lieu of the fractional share based upon the market value of the common stock on the last trading day prior to the conversion date. In the case of notes called for redemption, conversion rights will expire at the close of business on the date five business days prior to the redemption date, and in the event any holder exercises its repurchase right (as defined below), such holder's conversion right will terminate upon IVAX' receipt of the written notice of exercise of the repurchase right. In the case of notes called for redemption on a redemption date between a record date and the opening of business on the next succeeding interest payment date, no cash interest will be payable on any notes converted during such period. See "Description of Notes - Redemption - Repurchase at option of holders upon change in control." We are not obligated to pay interest on a note that is converted, unless the conversion takes place between a record date for the payment of interest and the next succeeding interest payment date, in which case we will pay interest on the interest payment date to the registered holder of the note on the record date. Accordingly, if a note is converted between a record date and the next succeeding interest payment date, the note must be accompanied by funds equal to the interest payable to the registered holder on the interest payment date on the principal amount being converted, unless the note has been called for redemption on a redemption date between the record date and the interest payment date. A note converted on an interest payment date need not be accompanied by any payment, and the interest on the principal amount of that note will be paid on the interest payment date to the registered holder of that note on the immediately preceding record date. The number of shares issuable on conversion is subject to adjustment as set forth in the Indenture in certain events, including: o the payment of dividends or distributions on the common stock in shares of capital stock; o subdivisions or combinations of the common stock into a greater or smaller number of shares; o a reclassification of the common stock resulting in an issuance of any shares of our capital stock; o the distribution of rights or warrants to all holders of common stock entitling them for a period of sixty days or less to purchase common stock at less than the market price at that time; and o the distribution to all holders of common stock of assets or debt securities or any rights or warrants to purchase assets or debt securities, which assets, debt securities, rights or warrants have an aggregate fair market value on the date such distribution is declared that exceeds the "permitted dividend amount." The "permitted dividend amount" equals: o 10% of our market capitalization (the product of the current market price of the common stock and the number of shares of common stock outstanding as of any particular date) minus 25 29 o the aggregate value of all dividends or distributions made to holders of common stock within the 12 months preceding such distribution (excluding any distributions or dividends referred to in the first four bullet points in the preceding paragraph), except that with respect to any distribution not paid out of our retained earnings, the permitted dividend amount shall be zero, unless the dividend is paid out of consolidated net income or in the form of common stock. The terms of the notes do not require any adjustment for rights to purchase common stock pursuant to any plans we have for reinvestment of dividends or interest, or for a change in the par value of the common stock. To the extent that notes become convertible into cash, no adjustment will be required thereafter as to cash. No adjustment in the number of shares issuable on conversion will be made unless such adjustment would require a change of at least 1% in the conversion rate; however, any adjustment that would otherwise be required to be made shall be carried forward and taken into account in any subsequent adjustment. We reserve the right to make such increases in the conversion rate in addition to those required in the foregoing provisions as we in our discretion shall determine to be advisable in order that stock-related distributions hereafter made by us to our stockholders shall not be taxable or for any other appropriate reason. Except as stated above, the number of shares issuable on conversion will not be adjusted for the issuance of common stock or any securities convertible into or exchangeable for common stock, or carrying the right to purchase any of the foregoing. If we reclassify the common stock or merge into, or transfer or lease substantially all of our assets to, another corporation, the holders of the notes then outstanding will be entitled thereafter to convert their notes into the kind and amount of shares of capital stock, other securities, cash or other assets which they would have owned immediately after such event had such notes been converted immediately before the effective date of the transaction. Adjustments in the number of shares issuable upon conversion may in certain circumstances result in constructive distributions that could be taxable as dividends under the Internal Revenue Code of 1986, as amended, to holders of notes or to holders of common stock issued upon conversion thereof. See "Certain United States Federal Income Tax Considerations -- United States Holders - --Dividends on the Common Stock." REDEMPTION The notes are not redeemable prior to May 29, 2004. No "sinking fund" is provided for the notes, which means that the Indenture does not require us to redeem the notes prior to their stated maturity. REDEMPTION AT IVAX' OPTION The notes will be redeemable at our option, in whole or in part, at any time on or after May 29, 2004 on any date not less than 30 nor more than 60 days after the mailing of a redemption notice to each holder of notes to be redeemed at its address appearing in the security register. The redemption price for the notes, expressed as a percentage of principal amount, is as follows: PERIOD BEGINNING REDEMPTION PRICE ---------------- ---------------- May 29, 2004......................102.571% May 16, 2005......................101.929% May 16, 2006......................101.286% May 16, 2007......................100.643% We will also pay accrued interest to the redemption date. 26 30 REPURCHASE AT OPTION OF HOLDERS UPON CHANGE IN CONTROL Upon any change in control (as defined below) with respect to IVAX, each holder of the notes shall have the right, at the holder's option, to require us to repurchase all of such holder's notes or a portion thereof (in a minimum amount of $1,000 or any integral multiple thereof), on the date that is 45 days after the date of the notice from us (as described in the next paragraph) at a repurchase price equal to 100% of the principal amount of such holder's notes tendered for repurchase, plus accrued interest to the repurchase date. Within 30 days after the occurrence of a change in control, we will be obligated to mail to all holders of record of the notes a notice of the occurrence of such change in control and the repurchase right arising as a result thereof. We will deliver a copy of the notice to the trustee and will cause a copy of the notice to be published in The New York Times and The Wall Street Journal or another newspaper of national circulation. To exercise the repurchase right, a holder of notes must, on or before the 30th day after the date of the notice, deliver an irrevocable written notice to us (or an agent designated by us for such purpose) and the trustee of the holder's exercise of its repurchase right, together with the notes with respect to which the repurchase right is being exercised, duly endorsed for transfer. A "change in control" of IVAX means: o the acquisition by any person, entity or "group", within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (excluding, for this purpose, IVAX and its subsidiaries, any employee benefit plan of IVAX or its subsidiaries which acquires beneficial ownership of voting securities of IVAX and any current affiliate of IVAX whose beneficial ownership does not in the future exceed 45% of common stock), of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of shares of common stock sufficient to elect a majority of directors; o persons who, as of the date of the Indenture, constitute the Board of Directors (the "incumbent board") cease for any reason to constitute at least a majority of the Board of Directors, provided that any person becoming a director subsequent to the date hereof whose election, or nomination for election by our stockholders, was approved by a vote of at least a majority of the directors then comprising the incumbent board shall be considered as though such person were a member of the incumbent board; o approval by our stockholders of a reorganization, merger or consolidation, in each case, with respect to which persons who were our stockholders immediately prior to such reorganization, merger or consolidation do not, immediately thereafter, beneficially own shares sufficient to elect a majority of directors of the reorganized, merged or consolidated company; or o a liquidation or dissolution of IVAX (other than pursuant to the United States Bankruptcy Code) or the conveyance, transfer or leasing of all or substantially all of our assets to any person. No quantitative or other established meaning has been given to the phrase "all or substantially all" (which appears in the definition of change in control) by courts which have interpreted this phrase in various contexts. In interpreting this phrase, courts make a subjective determination as to the portion of assets conveyed, considering such factors as the value of assets conveyed and the proportion of an entity's income derived from the assets conveyed. To the extent the meaning of such phrase is uncertain, it may be uncertain whether a change in control has occurred (and, accordingly, whether the holders of notes have the right to require us to repurchase their notes). 27 31 The occurrence of a change in control might, under the terms of the indebtedness incurred by us from time to time, permit the lenders to require prepayment of some or all amounts outstanding under our debt agreements. See "Capitalization." In the event of a change in control, any repurchase of the notes could, absent waiver or payment in full of any amounts outstanding under such indebtedness or credit facilities, be prevented. See "--Subordination of Notes." Our failure to repurchase the notes when required would result in an event of default with respect to the notes whether or not such repurchase is permitted by the lenders. The right to require us to repurchase notes could delay or deter a change in control of IVAX, even if such change in control were supported by the Board of Directors. If a change in control occurs, there can be no assurance that we would have sufficient funds or financing to repay any senior indebtedness then required to be repaid or to repurchase any or all notes then required to be repurchased under the Indenture. If an offer is made to repurchase notes as a result of a change in control, we intend to comply with all tender offer rules, including but not limited to Section 13(e) and 14(e) under the Exchange Act and Rules 13e-1 and 14e-1 thereunder, to the extent applicable to such offer. SUBORDINATION OF NOTES Upon any distribution to our creditors in a liquidation or dissolution of IVAX or in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to IVAX or its property, the payment of all amounts due on the notes (other than cash payments due upon conversion in lieu of fractional shares) will be subordinated, to the extent provided in the Indenture, in right of payment to the prior payment in full of all senior indebtedness and all indebtedness of our subsidiaries. We will not pay, directly or indirectly, any amount due on the notes (including any repurchase price pursuant to the exercise of the repurchase right), or acquire any of the notes, in the following circumstances: o if any default in payment of principal, premium, if any, or interest on senior indebtedness (as defined below) exists, unless and until the default has been cured or waived or has ceased to exist; o if any default, other than a default in payment of principal, premium, if any, or interest, has occurred with respect to senior indebtedness, and that default permits the holders of the senior indebtedness to accelerate its maturity, until the expiration of the "payment blockage period" described below unless and until the default has been cured or waived or has ceased to exist; or o if the maturity of senior indebtedness has been accelerated, until the senior indebtedness has been paid or the acceleration has been cured or waived. A "payment blockage period" is a period of 183 days that begins on the date that we receive a written notice from any holder of senior indebtedness or a holder's representative, or from a trustee under an indenture under which senior indebtedness has been issued, that an event of default with respect to and as defined under any senior indebtedness (other than default in payment of the principal of, or premium, if any, or interest on any senior indebtedness) which event of default permits the holders of senior indebtedness to accelerate its maturity has occurred and is continuing. However, if the maturity of such senior indebtedness is accelerated, no payment may be made on the notes until such senior indebtedness that has matured has been paid or such acceleration has been cured or waived. Senior indebtedness is defined in the Indenture as all indebtedness (as defined below) of IVAX outstanding at any time except indebtedness that by its terms is subordinate in right of payment to the notes or indebtedness that is 28 32 not otherwise senior in right of payment to the notes. Senior indebtedness does not include indebtedness of IVAX to any of its subsidiaries. Indebtedness is defined with respect to any person as the principal of, and premium, if any, and interest on (a) all indebtedness of such person for borrowed money (including all indebtedness evidenced by notes, bonds, debentures or other securities sold by such person for money), (b) all obligations incurred by such person in the acquisition (whether by way of purchase, merger, consolidation or otherwise and whether by such person or another person) of any business, real property or other assets (except inventory and related items acquired in the ordinary course of the conduct of the acquiror's usual business), (c) guarantees by such person of indebtedness described in clause (a) or (b) of another person, (d) all renewals, extensions, refundings, deferrals, restructurings, amendments and modifications of any indebtedness, obligation or guarantee, (e) all reimbursement obligations of such person with respect to letters of credit, bankers' acceptances or similar facilities issued for the account of such person, (f) all capital lease obligations of such person and (g) all net obligations of such person under interest rate swap, currency exchange or similar agreements of such person. By reason of the subordination provisions described above, in the event of insolvency, funds which would otherwise be payable to note holders will be paid to the holders of senior indebtedness to the extent necessary to pay senior indebtedness in full. As a result of these payments, our general creditors may recover less, ratably, than holders of senior indebtedness and such general creditors may recover more, ratably, than holders of notes or other subordinated indebtedness of IVAX. There are no restrictions in the Indenture upon the creation of additional senior indebtedness by us, or on the creation of any indebtedness by us or any of our subsidiaries. As of March 31, 2001 we had approximately $82.0 million of consolidated indebtedness and other obligations effectively ranking senior to the notes. PROHIBITION ON LAYERING The Indenture will provide that we will not incur, create, issue, guarantee or otherwise become liable for any indebtedness that is both (a) subordinate or junior in right of payment to any senior indebtedness and (b) senior in any respect in right of payment to the notes. MERGER OR CONSOLIDATION The Indenture does not permit us to consolidate with, or merge into, or transfer or lease all or substantially all of our assets to, another person unless such other person is a corporation, limited liability company or other entity organized under the laws of the United States, any State thereof or the District of Columbia and such person assumes by supplemental indenture all of our obligations under the notes and the Indenture, and immediately after giving effect to the transaction, no default shall exist. RULE 144A INFORMATION REQUIREMENT We have agreed to furnish to the holders or beneficial holders of the notes and prospective purchasers of the notes designated by the holders of the notes, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act at any time while (1) the notes or the common stock issuable upon conversion of the notes are restricted securities within the meaning of the Securities Act and (2) we are not subject to the informational requirements of the Exchange Act. 29 33 DEFAULTS AND REMEDIES An event of default includes the occurrence of any of the following: o default for 30 days in payment of interest or liquidated damages on the notes; o default in payment of principal at maturity, upon redemption or exercise of a repurchase right or otherwise; o our failure for 60 days after notice to us to comply with any of our other agreements in the Indenture or the notes; and o certain events of bankruptcy or insolvency. If an event of default occurs and is continuing, the trustee or the holders of at least 25% in principal amount of the notes may declare all the notes to be due and payable immediately, except for defaults due to certain events of bankruptcy or insolvency, in which case if an event of default occurs and is continuing, the aggregate principal amount on the date of notice of acceleration shall automatically become immediately due and payable. The trustee may require indemnity satisfactory to it before it enforces the Indenture or the notes. Subject to certain limitations, holders of a majority in principal amount of the notes may direct the trustee in its exercise of any trust power. The trustee may withhold notice of any default (except a default in payment of amounts due) if it determines that withholding notice is in the interests of the holders of the notes. We are required to file with the trustee annually an officers' statement as to the absence of defaults in fulfilling any of our obligations under the Indenture. MODIFICATIONS OF THE INDENTURE We and the trustee may amend the Indenture without notice to any note holder but with the written consent of the holders of a majority in principal amount of the outstanding notes. However, without the consent of each note holder affected, an amendment may not: o reduce the amount of notes whose holders must consent to an amendment; o reduce the rate or change the time for payment of interest on any note; o reduce the principal of or change the fixed maturity of any note (including, without limitation, the optional redemption provisions); o make any note payable in money other than that stated in the note; o change the provisions of the Indenture regarding the right of a majority of the note holders to waive defaults under the Indenture or impair the right of any note holder to institute suit for the enforcement of any payment of principal and interest on the notes on and after their respective due dates; or o make any change that adversely affects the rights to convert any note or to require us to repurchase any note upon a change in control. SATISFACTION AND DISCHARGE OF INDENTURE The Indenture will be discharged and canceled upon the satisfaction of certain conditions, including the payment of all the notes or the deposit with the trustee, within not more than six months prior to the maturity of the notes or within one year of redemption of all of the notes, of funds sufficient for such payment or redemption. 30 34 REPORTS TO TRUSTEE We will regularly furnish to the trustee copies of our annual report to stockholders, containing audited financial statements, and any other financial reports which we furnish to our stockholders. LISTING The notes trade on The PORTAL Market. The common stock is listed on the American Stock Exchange under the symbol "IVX." BOOK ENTRY The notes were issued in the form of a global security issued in reliance on Rule 144A, a global security issued in reliance on Regulation S and a global security issued to institutional "accredited investors" (as defined in Rule 501 under the Securities Act). Upon the issuance of a global security, the depository or its nominee will credit the accounts of persons holding through it with the respective principal amounts of the notes represented by such global security. Such accounts will be designated by the initial purchaser with respect to notes placed by the initial purchaser for us. Ownership of beneficial interests in a global security will be limited to persons that have accounts with the depository ("participants") or persons that may hold interests through participants. Ownership of beneficial interests by participants in a global security will be shown on, and the transfer of that ownership interest will be effected only through, records maintained by the depository for such global security. Ownership of beneficial interests in such global security by persons that hold through participants will be shown on, and the transfer of that ownership interest through such participant will be effected only through, records maintained by such participant. The foregoing may impair the ability to transfer beneficial interests in a global security. Payment of all amounts due on notes represented by any such global security will be made to the depository or its nominee, as the case may be, as the sole holder of the notes represented thereby for all purposes under the Indenture. None of IVAX, the trustee, any agent of IVAX or the trustee or the initial purchaser will have any responsibility or liability for any aspect of the depository's records relating to or payments made on account of beneficial ownership interests in global security representing any notes or for maintaining, supervising or reviewing any of the depository's records relating to such beneficial ownership interests. We have been advised by the depository that, upon receipt of any payment on any global security, the depository will immediately credit, on its book-entry registration and transfer system, the accounts of participants with payments in amounts proportionate to their respective beneficial interests in the principal amount of such global security as shown on the records of the depository. Payments by participants to owners of beneficial interests in a global security held through such participants will be governed by standing instructions and customary practices as is now the case with securities held for customer accounts registered in "street name", and will be the sole responsibility of such participants. A global security may not be transferred except as a whole by the depository for such global security to a nominee of such depository or by a nominee of such depository to such depository or another nominee of such depository or by such depository or any such nominee to a successor of such depository or a nominee of such successor. If the depository is at any time unwilling or unable to continue as depository and a successor depository is not appointed by us or the depository within 90 days, we will issue notes in definitive form in exchange for the global security. In either instance, an owner of a beneficial interest in the global security will be entitled to have 31 35 notes equal in principal amount to such beneficial interest registered in its name and will be entitled to physical delivery of such notes in definitive form. Notes so issued in definitive form will be issued in denominations of $1,000 and integral multiples thereof and will be issued in registered form only, without coupons. Amounts due on the notes will be payable, and the notes may be presented for registration of transfer or exchange, at the offices of the trustee. So long as the depository for a global security, or its nominee, is the registered owner of such global security, such depository or such nominee, as the case may be, will be considered the sole holder of the notes represented by such global security for the purposes of receiving payment on the notes, receiving notices and for all other purposes under the Indenture and the notes. Beneficial interests in notes will be evidenced only by, and transfers thereof will be effected only through, records maintained by the depository and its participants. Cede & Co. has been appointed as the nominee of the depository. Except as provided above, owners of beneficial interests in a global security will not be entitled to and will not be considered the holders thereof for any purposes under the Indenture. Accordingly any such person owning a beneficial interest in such a global security must rely on the procedures of the depository, and, if any such person is not a participant, on the procedures of the participant through which such person owns its interest, to exercise any rights of a holder under the Indenture. The Indenture provides that the depository may grant proxies and otherwise authorize participants to give or to take any request, demand, authorization, direction, notice, consent, waiver or other action which a holder is entitled to give or take under the Indenture. We understand that under existing industry practices, in the event that we request any action of holders or that an owner of a beneficial interest in such a global security desires to give or take any action which a holder is entitled to give or take under the Indenture, the depository would authorize the participants holding the relevant beneficial interest to give or take such action and such participants would authorize beneficial owners owning through such participants to give or take such action or would otherwise act upon the instructions of beneficial owners owning through them. The Depository Trust Company ("DTC") has been appointed as the initial depository. DTC has advised us that it is a limited-purpose trust company organized under the laws of the State of New York, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered under the Exchange Act. DTC was created to hold the securities of its participants and to facilitate the clearance and settlement of securities transactions among its participants in such securities through electronic book-entry changes in accounts of the participants, thereby eliminating the need for physical movement of securities certificates. DTC's participants include securities brokers and dealers (including the initial purchaser), banks, trust companies, clearing corporations and certain other organizations, some of whom (and/or their representatives) own the depository. Access to DTC's book-entry system is also available to others, such as banks, brokers, dealers and trust companies, that clear through or maintain a custodial relationship with a participant, either directly or indirectly. Beneficial interests in any global security may be exchanged for beneficial interests in any other global security only in connection with a transfer of such interest. Such transfers are subject to compliance with customary certification requirements which are set forth in the Indenture. Any beneficial interest in one of the global securities that is exchanged for an interest in any other global security will cease to be an interest in such global security and will become an interest in such other global security. Accordingly, such interest will thereafter be subject to all transfer restrictions and other procedures applicable to beneficial interests in such other global security for as long as it remains such an interest. Any exchange of a beneficial interest in one global security for a beneficial interest in any other global security will be effected by DTC by means of an instruction originated by the trustee through its Deposit/Withdraw at Custodian ("DWAC") system. Accordingly, in connection with any such exchange, appropriate 32 36 adjustments will be made in the records of the registrar to reflect a decrease in the principal amount of such global security and a corresponding increase in the principal amount of such other global security. PAYMENTS OF PRINCIPAL AND INTEREST The Indenture will require that payments in respect of the notes held of record by DTC or its nominee (including notes evidenced by the global securities) be made in same day funds. Payments in respect of the notes held of record by holders other than DTC may, at our option, be made by check and mailed to such holders of record as shown on the register for the notes. REGISTRATION RIGHTS; LIQUIDATED DAMAGES We and the initial purchaser entered into a Registration Rights Agreement dated May 4, 2001. Pursuant to the Registration Rights Agreement, we agreed with the initial purchaser of the notes to file a shelf registration statement, of which this prospectus is a part, covering the resales of the notes and the common stock issuable upon the conversion of the notes in accordance with Rule 415 under the Securities Act. Subject to certain rights to suspend use of the shelf registration statement, we will use our best efforts to cause a shelf registration statement to be declared effective and to keep the shelf registration statement effective until the earliest of (i) two years from the effective date of the shelf registration statement, (ii) the date on which the notes or underlying shares of common stock have been effectively registered under the Securities Act and disposed of, whether or not in accordance with the shelf registration statement, and (iii) the date which is two years after the later of the date of original issue of the notes and the last date that we or any of our affiliates was the owner of such notes (or any predecessor thereto) or such shorter period of time as permitted by Rule 144(k) under the Securities Act or any successor provision thereunder. There can be no assurance that we will be able to maintain an effective and current registration statement as required. The absence of such a registration statement may limit a holder's ability to sell the securities offered hereby or adversely affect the price at which the securities can be sold. We have agreed to pay predetermined liquidated damages as described herein to holders of the notes and the holders of common stock issued upon conversion of the notes, who have timely provided the required selling shareholder information to us if the shelf registration statement is not declared effective by October 31, 2001 (180 days from of the date on which the notes were originally issued) or the shelf registration statement ceases to be effective (without being succeeded immediately by an additional registration statement filed and declared effective) or usable for the sale of the notes or the common stock underlying the notes for a period of time (including any period of time where offers or sales are prohibited) which shall exceed 60 days in the aggregate in any 12-month period. The liquidated damages shall accrue at a rate of 0.25% per year per $1,000 principal amount of the notes and, if applicable, on an equivalent basis per share of common stock (subject to adjustment in the event of stock splits, stock recombinations, stock dividends and the like) for each 90-day period until the shelf registration statement is declared effective or again becomes effective or usable, as the case may be, up to a maximum amount of liquidated damages of 0.75% per year per $1,000 principal amount of the notes and, if applicable, on an equivalent basis per share of common stock (subject to adjustment as set forth above). The foregoing summary does not purport to be complete and is subject to, and is qualified in its entirety by references to, the provisions of the registration rights agreement. Copies of the Registration Rights Agreement are available from us or the initial purchaser upon request. 33 37 GOVERNING LAW The Indenture and, except as may otherwise be required by mandatory provisions of law, notes will be governed by and construed in accordance with the laws of the State of New York, without giving effect to such state's conflicts of laws principles. 34 38 DESCRIPTION OF CAPITAL STOCK DESCRIPTION OF COMMON STOCK We have the authority to issue 437,500,000 shares of common stock, par value $0.10 per share. The holders of common stock are entitled to one vote per share on all matters submitted to a vote of the shareholders. The holders of common stock have equal, ratable rights to dividends from funds legally available therefor, when, as and if declared by the Board of Directors, and are entitled to share ratably in all of the assets available for distribution to holders of common stock upon the liquidation, dissolution or winding-up of our affairs. Holders of common stock do not have preemptive, subscription or conversion rights. There are no redemption or sinking fund provisions in our Articles of Incorporation. The outstanding shares of common stock are fully paid and nonassessable. Our Articles of Incorporation do not provide for cumulative voting by shareholders. Our Common Stock is listed on the American Stock Exchange under the trading symbol "IVX." DESCRIPTION OF COMMON STOCK PURCHASE RIGHTS On December 19, 1997, our Board of Directors declared a dividend of one common stock Purchase Right (the "Right(s)") for each outstanding share of common stock. The dividend was payable as of December 29, 1997 to shareholders of record on that date. Each Right entitles the registered holder to purchase from us one-half (1/2) of a share of common stock at a price of $15 (post-split) per one-half (1/2) of a share (the "Exercise Price"), subject to certain adjustments. The description and terms of the Rights are set forth in that certain Rights Agreement (the "Rights Agreement") between us and the rights agent named therein. The Rights are not exercisable and are not certificated until the Distribution Date (as defined below). Until that time the Rights will automatically trade with the common stock. The Rights will expire at the close of business on December 18, 2007, unless earlier redeemed by us. The number of shares of common stock issuable upon exercise of the Rights is subject to certain adjustments from time to time in the event of a stock dividend on, or a subdivision or combination of, the common stock. The Exercise Price for the Rights is subject to adjustment in the event of extraordinary distributions of cash or other property to holders of common stock. Until a Right is exercised, the holder of a Right will have no rights as a shareholder, including, without limitation, the right to vote or to receive dividends. DISTRIBUTION DATE Unless earlier redeemed by our Board of Directors, the Rights become exercisable upon the close of business on the Distribution Date which is the earlier of (i) the tenth day following a public announcement that a person or group of affiliated or associated persons, with certain exceptions, has acquired beneficial ownership of 15% or more of our outstanding voting stock (an "Acquiring Person") and (ii) the tenth business day (or such later date as may be determined by our Board of Directors) after the date of the commencement or announcement of a person's or group's intention to commence a tender or exchange offer the consummation of which would result in the ownership of 15% or more of our outstanding voting stock. EFFECT OF TRIGGERING EVENT Unless the Rights are earlier redeemed, in the event that, after the time that a person becomes an Acquiring Person, we were to be acquired in a merger or other business combination (in which any shares of common stock are changed into or exchanged for other securities or assets) or more than 50% of our subsidiaries' (taken as a whole) assets or earning power were to be sold or transferred in one or a series of related transactions, the Rights Agreement provides that proper provision will be made so that each holder of record of a Right will from and after such date have the right to receive, upon payment of 35 39 the Exercise Price, that number of shares of common stock of the acquiring company having a market value at the time of such transaction equal to two times the Exercise Price. In addition, unless the Rights are earlier redeemed, if a person or group (with certain exceptions) becomes the beneficial owner of 15% or more of our voting stock, the Rights Agreement provides that proper provision will be made so that each holder of record of a Right, other than the Acquiring Person (whose Rights will thereupon become null and void), will thereafter have the right to receive, upon payment of the Exercise Price, that number of shares of common stock having a market value at the time of the transaction equal to two times the Exercise Price. The Rights Agreement also grants our Board of Directors the option, after any person or group acquires beneficial ownership of 15% or more of the voting stock but before there has been a 50% acquisition, to exchange one share of common stock for each then valid Right (which would exclude Rights held by the Acquiring Person that have become void). REDEMPTION At any time on or prior to the close of business on the tenth day after the time that a person has become an Acquiring Person (or such later date as a majority of our Board of Directors may determine), we may redeem the Rights in whole, but not in part, at a price of $.01 per Right (the "Redemption Price"). Immediately upon the effective time of the action of our Board of Directors authorizing redemption of the Rights, the right to exercise the Rights will terminate and the only right of the holders of the Rights will be to receive the Redemption Price. AMENDMENT For as long as the Rights are then redeemable, we may, except with respect to the Redemption Price or date of expiration of the Rights, amend the Rights in any manner, including an amendment to extend the time period in which the Rights may be redeemed. At any time when the Rights are not then redeemable, we may amend the Rights in any manner that does not materially adversely affect the interests of holders of the Rights as such. CERTAIN EFFECTS OF THE RIGHTS The Rights have certain anti-takeover effects. The Rights will cause substantial dilution to a person or group who attempts to acquire us on terms not approved by our Board of Directors. The Rights should not interfere with any merger or other business combination approved by our Board of Directors because we may redeem them at $.01 per Right at any time until the close of business on the tenth day (or such later date as described above) after a person or group has obtained beneficial ownership of 15% or more of our voting stock. TRANSFER AGENT, REGISTRAR AND TRUSTEE The transfer agent and trustee for the notes is U.S. Bank Trust National Association at 180 East Fifth Street, St. Paul, Minnesota 55101. The transfer agent and registrar for the common stock is ChaseMellon Shareholder Services, LLC, 85 Challenger Road, Overpeck Centre, Ridgefield Park, New Jersey 07660. 36 40 CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS The following is a summary of certain material United States federal income and estate tax considerations relating to the purchase, ownership and disposition of the notes and of common stock into which notes may be converted, but does not purport to be a complete analysis of all the potential tax considerations relating thereto. This summary is based on the provisions of the Internal Revenue Code of 1986, as amended (the "Code"), the applicable Treasury Regulations promulgated thereunder ("Regulations"), judicial authority and current administrative rulings and practice, all of which are subject to change, possibly on a retroactive basis. This summary deals only with holders that purchase notes at their original issuance at their issue price. This summary also deals only with holders that will hold notes and common stock into which notes may be converted as "capital assets" (within the meaning of Section 1221 of the Code). This summary does not purport to deal with all aspects of United States federal income or estate taxation that might be relevant to particular holders in light of their personal investment circumstances or status, nor does it address tax considerations applicable to investors that may be subject to special tax rules, such as certain financial institutions, tax-exempt organizations, S Corporations, insurance companies, broker-dealers, dealers or traders in securities or currencies, expatriates subject to Code Section 877 and taxpayers subject to the alternative minimum tax, and also does not discuss notes held as part of a hedge, straddle, "synthetic security" or other integrated investment composed of a note and one or more other investments, or situations in which the functional currency of the holder is not the United States dollar. Moreover, the effect of any applicable state, local or foreign tax laws is not discussed. We have not sought any ruling from the Internal Revenue Service (the "Service") with respect to the statements made and the conclusions reached in the following summary, and there can be no assurance that the Service will agree with such statements and conclusions. THE FOLLOWING DISCUSSION IS FOR GENERAL INFORMATION ONLY. INVESTORS CONSIDERING THE PURCHASE OF NOTES SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE APPLICATION OF THE UNITED STATES FEDERAL INCOME AND ESTATE TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES ARISING UNDER THE LAWS OF ANY STATE, LOCAL OR FOREIGN TAXING JURISDICTION OR UNDER ANY APPLICABLE TAX TREATY. The term "United States Holder" means a holder of a note that is, for United States federal income tax purposes, (A) a citizen or resident of the United States, (B) a corporation created or organized under the laws of the United States or of any political subdivision thereof, (C) an estate, the income of which is subject to United States federal income taxation regardless of source, or (D) a trust, if (x) a court within the United States is able to exercise primary jurisdiction over its administration and one or more United States persons have the authority to control all of its substantial decisions, or (y), in the case of a trust that was treated as a domestic trust under the law in effect before 1997, a valid election is in place under applicable Regulations to treat such trust as a domestic trust. The term "Non-United States Holder" means a holder of a note that is neither a United States Holder nor a partnership for United States federal income tax purposes. A partnership for United States federal income tax purposes is not subject to the income tax on income derived from holding the notes. A partner of the partnership may be subject to tax on such income pursuant to rules similar to the rules for United States Holders or Non-United States Holders depending on whether (i) the partnership is a United States or a non-United States partnership, (ii) the partner is a United States or a non-United States person, and (iii) the partnership is or is not engaged in a United States trade or business to which income or gain from the notes is effectively connected. 37 41 UNITED STATES HOLDERS PAYMENT OF INTEREST The semiannual interest payments on the notes will be qualified stated interest. Consequently, a United States Holder of a note generally will be required to include such interest in ordinary income when it is received or when it accrues, depending upon such holder's method of accounting for United States federal income tax purposes. The notes will not be issued with original issue discount, and, accordingly issues relating to original issue discount are not summarized in this document. SALE, EXCHANGE OR REDEMPTION OF THE NOTES Upon the sale, exchange or redemption of a note, a United States Holder generally will recognize capital gain or loss equal to the difference between (i) the amount of cash proceeds and the fair market value of any property received on the sale, exchange or redemption (except to the extent such amount is attributable to accrued and unpaid interest, which is treated as interest subject to the rules discussed above under "Payment of Interest") and (ii) such holder's adjusted tax basis in the note. A United States Holder's adjusted tax basis in a note generally will equal the cost of the note to such holder. Such capital gain or loss will be long-term capital gain or loss if the United States Holder's holding period in the note is more than one year at the time of sale, exchange or redemption. CONVERSION OF THE NOTES A United States Holder generally will not recognize any income, gain or loss upon conversion of a note into common stock, except with respect to cash received in lieu of a fractional share of common stock. Such holder's tax basis in the common stock received on conversion of a note will be the same as such holder's adjusted tax basis in the note at the time of conversion (reduced by any basis allocable to a fractional share interest), and the holding period for the common stock received on conversion will generally include the holding period of the note converted. Cash received in lieu of a fractional share of common stock upon conversion should be treated as a payment in exchange for the fractional share of common stock. Accordingly, the receipt of cash in lieu of a fractional share of common stock generally should result in capital gain or loss measured by the difference between the cash received for the fractional share and the United States Holder's adjusted tax basis in the fractional share. DIVIDENDS ON THE COMMON STOCK The amount of any distribution by us in respect of the common stock (including any liquidated damages in respect of common stock as described above under "Description of Notes - Registration Rights; Liquidated Damages") will be equal to the amount of cash and the fair market value, on the date of distribution, of any property distributed. Generally, distributions will be treated as a dividend, subject to a tax as ordinary income, to the extent of our current or accumulated earnings and profits, then as a tax-free return of capital to the extent of the holder's tax basis in the common stock, and thereafter as capital gain from the sale or exchange of such stock, long-term or short-term depending on whether the holder's holding period exceeds one year. In general, a dividend distribution to a corporate United States Holder will qualify for the 70% dividends received deduction if the holder owns less than 20% of the voting power and value of our stock (other than any non-voting, non-convertible, non-participating preferred stock). A corporate United States Holder that owns 20% or more of the voting power and value of our stock (other than any non-voting, non-convertible, non-participating preferred stock) 38 42 generally will qualify for an 80% dividends received deduction. The dividends received deduction is subject, however, to certain holding period, taxable income and other limitations. If at any time (i) we make a distribution of cash or property to our stockholders or purchase common stock and such distribution or purchase would be taxable to such stockholders as a dividend for United States federal income tax purposes (e.g., distributions of evidences of indebtedness or assets of ours, but generally not stock dividends or rights to subscribe for common stock) and, pursuant to the antidilution provisions of the Indenture, the conversion price of the notes is decreased, or (ii) the conversion price of the notes is decreased at our discretion, such decrease in conversion price may be deemed to be the payment of a taxable dividend to United States Holders of notes (pursuant to Section 305 of the Code) to the extent of our current or accumulated earnings and profits. Such holders of notes could therefore have taxable income as a result of an event pursuant to which they received no cash or property. SALE OF COMMON STOCK Upon the sale or exchange of common stock, a United States Holder generally will recognize capital gain or loss equal to the difference between (i) the amount of cash and the fair market value of any property received upon the sale or exchange and (ii) such holder's adjusted tax basis in the common stock. Such capital gain or loss will be long-term if the United States Holder's holding period in the common stock is more than one year at the time of the sale or exchange. A United States Holder's basis and holding period in common stock received upon conversion of a note are determined as discussed above under "United States Holders - Conversion of the Notes." INFORMATION REPORTING AND BACKUP WITHHOLDING TAX In general, information reporting requirements will apply: o to payments of principal and interest made on a note; o to payments of the proceeds of a sale or exchange of a note before maturity, o to payments of dividends on common stock (including the payment of liquidated damages under the Registration Rights Agreement); and o to payments of the proceeds of a sale or exchange of common stock that are made to a non-corporate United States Holder. A "backup withholding" tax of 31% will apply to such payments if the holder fails to provide a correct taxpayer identification number or otherwise comply with applicable requirements of the backup withholding rules. The backup withholding tax is not an additional tax. Any amounts withheld under the backup withholding rules from a payment to a United States Holder will be allowed as a credit against the holder's U.S. federal income tax liability and may entitle such holder to a refund of such withheld amounts, provided the required information is furnished to the Service. NON-UNITED STATES HOLDERS PAYMENT OF INTEREST Generally, interest income of a Non-United States Holder that is not effectively connected with a United States trade or business is subject to a withholding tax at a 30% rate (or, if applicable, a lower treaty rate). However, interest paid on a note by us or any paying agent to a Non-United States Holder 39 43 will qualify for the "portfolio interest exemption" and therefore, subject to the discussion of backup withholding below, will not be subject to United States federal income tax or withholding tax, provided that such interest income is not effectively connected with a United States trade or business of the Non-United States Holder and provided that the Non-United States Holder (i) does not actually or constructively own (pursuant to the conversion feature of the notes or otherwise) 10% or more of the combined voting power of all classes of our stock entitled to vote, (ii) is not a controlled foreign corporation related to us actually or constructively through stock ownership, (iii) is not a bank which acquired the notes in consideration for an extension of credit made pursuant to a loan agreement entered into in the ordinary course of business and (iv) the beneficial owner of the notes certifies to us or our agent, under penalties of perjury, that it is not a United States Holder and provides its name and address on United States Treasury Form W-8BEN (or a suitable substitute form) or a securities clearing organization, bank or other financial institution that holds customers' securities in the ordinary course of its trade or business (a "financial institution") and certifies under penalties of perjury that such a Form W-8BEN (or suitable substitute form) has been received from the beneficial owner by it or by a financial institution between it and the beneficial owner and furnishes the payor with a copy thereof. If the foregoing exceptions do not apply, payments on the notes may be subject to gross withholding at the rate of 30%. This rate may be reduced if the Non-United States Holder is a resident of a country with which the United States has a tax treaty which provides for reduced withholding taxes. Except to the extent that an applicable treaty otherwise provides, a Non-United States Holder generally will be taxed in the same manner as a United States Holder with respect to interest if the interest income is effectively connected with a United States trade or business of the Non-United States Holder. Effectively connected interest received by a corporate Non-United States Holder may also, under certain circumstances, be subject to an additional "branch profits tax" at a 30% rate (or, if applicable, a lower treaty rate). Even though such effectively connected interest is subject to income tax, and may be subject to the branch profits tax, it is not subject to withholding tax if the holder delivers a properly executed Internal Revenue Service Form W-8ECI to the payor. SALE, EXCHANGE OR REDEMPTION OF THE NOTES Subject to the discussion below under "FIRPTA Treatment of Non-United States Holders," a Non-United States Holder of a note will generally not be subject to United States federal income tax or withholding tax on any gain realized on the sale, exchange or redemption of the note (including the receipt of cash in lieu of fractional shares upon conversion of a note into common stock but not including any amount representing interest) unless (i) the gain is effectively connected with a United States trade or business of the Non-United States Holder or (ii) in the case of a Non-United States Holder who is an individual, such holder is present in the United States for a period or periods aggregating 183 days or more during the taxable year of the disposition and certain other requirements are met. CONVERSION OF THE NOTES In general, no United States federal income tax or withholding tax will be imposed upon the conversion of a note into common stock by a Non-United States Holder except with respect to the receipt of cash in lieu of fractional shares by Non-United States Holders upon conversion of a note where either of the conditions described above under "Non-United States Holders - Sale, Exchange or Redemption of the Notes" is satisfied. SALE OR EXCHANGE OF COMMON STOCK Subject to the discussion below under "Non-United States Holders - FIRPTA Treatment of Non-United States Holders," a Non-United States Holder generally will not be subject to United States federal income tax or withholding 40 44 tax on the sale or exchange of common stock unless either of the conditions described above under "Non-United States Holders - Sale, Exchange or Redemption of the Notes" is satisfied. FIRPTA TREATMENT OF NON-UNITED STATES HOLDERS Under the Foreign Investment in Real Property Tax Act of 1980, as amended ("FIRPTA"), foreign persons generally are subject to United States federal income tax on capital gain realized on the disposition of any interest (other than solely as a creditor) in a corporation that is a United States real property holding corporation (a "USRPHC"). For this purpose, a foreign person is defined as any holder who is a foreign corporation (other than certain foreign corporations that elect to be treated as domestic corporations), a non-resident alien individual, a non-resident fiduciary of a foreign estate or trust, or a foreign partnership. Under FIRPTA, a corporation is a USRPHC if the fair market value of the United States real property interests held by the corporation is 50% or more of the aggregate fair market value of certain assets of the corporation. We do not currently believe that we are a USRPHC. If we are not a USRPHC, a Non-United States Holder will not be subject to United States federal income tax imposed by FIRPTA on a sale or other disposition of the notes or shares of common stock. If we are a USRPHC, a Non-United States Holder generally will not be subject to FIRPTA withholding on proceeds from a sale or other disposition of notes or common stock by reason of our USRPHC status unless the holder's interest in the notes or common stock exceeds the relevant threshold described below. Assuming the common stock is regularly traded, a Non-United States Holder will not be subject to FIRPTA withholding on a sale or other disposition of common stock unless such holder owns, actually or constructively, common stock with a fair market value in excess of 5% of the fair market value of all the common stock outstanding at any time during the shorter of the five-year period preceding such disposition or the holder's holding period. In the case of a sale or other disposition of notes, the relevant ownership threshold depends upon whether the notes are regularly traded. If the notes are not regularly traded, a Non-United States Holder will be subject to FIRPTA withholding only if on the date the holder acquired such notes they had a fair market value greater than 5% of the aggregate value of the outstanding common stock. If the notes are publicly traded, a holder will be subject to FIRPTA withholding only if such holder owned more than 5% of the total fair market value of all the notes outstanding at any time during the shorter of the five-year period preceding such disposition or the holder's holding period for such notes. We believe that the common stock will be treated as regularly traded. DIVIDENDS Distributions by us with respect to the common stock that are treated as dividends paid (or deemed paid), as described above under "United States Holders - Dividends on the Common Stock" to a Non-United States Holder (excluding dividends that are effectively connected with the conduct of a trade or business in the United States by such holder which are taxable as described below) will be subject to United States federal withholding tax at a 30% rate (or lower rate provided under any applicable income tax treaty). Except to the extent that an applicable tax treaty otherwise provides, a Non-United States Holder will be taxed in the same manner as a United States Holder on dividends paid (or deemed paid) that are effectively connected with the conduct of a trade or business in the United States by the Non-United States Holder. If such Non-United States Holder is a foreign corporation, it may also be subject to a United States branch profits tax on such effectively connected income at a 30% rate or such lower rate as may be specified by an applicable income tax treaty. 41 45 Even though such effectively connected dividends are subject to income tax, and may be subject to the branch profits tax, they will not be subject to United States withholding if the holder delivers a properly executed Service Form W-8ECI to the payor. Under current Regulations, dividends paid to an address in a foreign country are presumed to be paid to a resident of that country (unless the payor has knowledge to the contrary) for purposes of the withholding discussed above and, under the current interpretation of the Regulations, for purposes of determining the applicability of a tax treaty rate. A Non-United States Holder of common stock who wishes to claim the benefit of an applicable treaty rate would be required to satisfy applicable certification and other requirements. In addition, in the case of common stock held by a foreign partnership, the certification requirement would generally be applied to the partners of the partnership (unless the partnership agrees to become a "withholding foreign partnership") and the partnership would be required to provide certain information, including a United States taxpayer identification number. These Regulations also provide look-through rules for tiered partnerships. DEATH OF A NON-UNITED STATES HOLDER A note held by an individual who is a Non-United States Holder at the time of his or her death will not be includable in the decedent's gross estate for United States estate tax purposes, provided that such holder or beneficial owner did not at the time of death directly or indirectly, actually or constructively, own 10% or more of the combined voting power of all classes of our stock entitled to vote, and provided that, at the time of death, payments with respect to such notes would not have been effectively connected with the conduct by such Non-United States Holder of a trade or business within the United States. Common Stock actually or beneficially held (other than through a foreign corporation) by a Non-United States Holder at the time of his or her death (or previously transferred subject to certain retained rights or powers) will be subject to United States federal estate tax unless otherwise provided by an applicable estate tax treaty. INFORMATION REPORTING AND BACKUP WITHHOLDING TAX In general, backup withholding and information reporting will not apply to payments made by us or our paying agents, in their capacities as such, to a Non-United States Holder if the holder has provided the required certification that it is not a United States person as described above, provided that neither we nor our paying agent has actual knowledge that the holder is a United States person. Payments of the proceeds from a disposition by a Non-United States Holder of a note or common stock made to or through a foreign office of a broker will generally not be subject to information reporting or backup withholding. However, information reporting will apply to those payments, if the broker is: o a United States person; o a controlled foreign corporation for United States federal income tax purposes; o a foreign person 50% or more of whose gross income from all sources is effectively connected with a United States trade or business for a specified three-year period; or o a foreign partnership, if at any time during its tax year, one or more of its partners are United States persons, as defined in Regulations, who in the aggregate hold more than 50% of the income or capital interest in the partnership or if, at any time during its tax year, the foreign partnership is engaged in a United States trade or business; 42 46 unless (1) such broker has documentary evidence in its records that the beneficial owner is not a United States person and certain other conditions are met or (2) the beneficial owner otherwise establishes an exemption. Payments of the proceeds from a disposition by a Non-United States Holder of a note or common stock made to or through the United States office of a broker is subject to information reporting and backup withholding unless the statement that the payee is not a United States person described above has been received (and the payor does not have actual knowledge that the beneficial owner is a United States person) or the holder or beneficial owner otherwise establishes an exemption from information reporting and backup withholding. LEGAL MATTERS Akerman, Senterfitt & Eidson, P.A., Miami, Florida will pass upon the validity of the notes and the validity of the common stock being issuable upon conversion of the notes. INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS Our consolidated balance sheets as of December 31, 1999 and 2000 and the related consolidated statements of operations, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2000 incorporated by reference in this prospectus have been audited by Arthur Andersen LLP, independent certified public accountants, as stated in their report which is also incorporated by reference in this prospectus. Reference is made to said report, which includes an explanatory paragraph with respect to the change in method of accounting for up-front licensing fees to comply with the Securities and Exchange Commission Staff Accounting Bulletin No. 101, Revenue Recognition in Financial Statements. WHERE YOU CAN FIND MORE INFORMATION We file annual, quarterly and current reports, proxy statements and other information with the SEC. You can inspect, read and copy these reports, proxy statements and other information at the public reference facilities the SEC maintains at: o Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549; o Suite 1400, 500 West Madison Street, Chicago, Illinois 60661-2511; and o Suite 1300, 7 World Trade Center, New York, New York 10048. You can also obtain copies of these materials from the public reference facilities of the SEC at prescribed rates. You can obtain information on the operation of the public reference facilities by calling the SEC at 1-800-SEC-0330. The SEC also maintains a web site (http://www.sec.gov) that makes available reports, proxy statements and other information regarding issuers that file electronically with it. In addition, you can inspect the reports, proxy statements and other information we file at the offices of the American Stock Exchange, Inc., 86 Trinity Place, New York, New York 10006. We have filed with the Commission a registration statement on Form S-3 under the Securities Act of 1933, as amended, to register with the Commission the securities described herein. This prospectus, which is a part of the registration statement, does not contain all of the information set forth in the registration statement. For further information about us and our securities, you should refer to the registration statement. 43 47 INFORMATION INCORPORATED BY REFERENCE The Commission allows us to provide information about our business and other important information to you by "incorporating by reference" the information we file with the Commission, which means that we can disclose the information to you by referring in this prospectus to the documents we file with the Commission. Under the Commission's regulations, any statement contained in a document incorporated by reference in this prospectus is automatically updated and superseded by any information contained in this prospectus, or in any subsequently filed document of the types described below. We incorporate into this prospectus by reference the following documents filed by us with the Commission, each of which should be considered an important part of this prospectus:
SEC FILING (FILE NO. 001-09623) PERIOD COVERED OR DATE OF FILING - ------------------------------- -------------------------------- Annual Report on Form 10-K ...................................... Year ended December 31, 2000 Quarterly Report on Form 10-Q.................................... Quarter ended March 31, 2001 Current Reports on Form 8-K...................................... February 23, 2001, April 30, 2001 and May 25, 2001 and July 20, 2001 Description of our common stock contained in Registration Statement on Form 8-B and any amendment or report filed for the purpose of updating such description............................. July 28, 1993 Description of our common stock purchase rights contained in a Current Report on Form 8-K....................................... December 31, 1997 All subsequent documents filed by us under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act of 1934.......................... After the date of this prospectus
You may request a copy of each of our filings at no cost, by writing or telephoning us at the following address or telephone number: IVAX Corporation 4400 Biscayne Boulevard Miami, Florida 33137 Attention: Corporate Secretary Phone: (305) 575-6000 Exhibits to a document will not be provided unless they are specifically incorporated by reference in that document. You should rely only on the information contained in this prospectus or any supplement. We have not authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information in this prospectus or any supplement is accurate as of any date other than the date on the front of those documents. Our business, financial condition, results of operations and prospects may have changed since that date. The information in this prospectus or any supplement may not contain all of the information that may be important to you. You should read the entire prospectus or any supplement, as well as the documents incorporated by reference in the prospectus or any supplement, before making an investment decision. 44 48 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION The following table sets forth the fees and expenses in connection with the issuance and distribution of the securities being registered hereunder, other than underwriting discounts and commissions. All such fees and expenses shall be borne by the Company. All amounts shown are estimated except for the Commission Registration Fee. Commission Registration Fee $ 181,250 Legal Fees and Expenses * Accounting Fees and Expenses $ 10,000 Printing, Engraving and Mailing Expenses * ---------- Total $ * ========== - -------- * To be filed by amendment. ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS Section 607.0831 of the Florida Business Corporation Act (the "Florida Act") provides that a director is not personally liable for monetary damages to the corporation or any person for any statement, vote, decision or failure to act regarding corporate management or policy, by a director, unless: (a) the director breached or failed to perform his duties as a director; and (b) the director's breach of, or failure to perform, those duties constitutes: (i) a violation of criminal law unless the director had reasonable cause to believe his conduct was lawful or had no reasonable cause to believe his conduct was unlawful; (ii) a transaction from which the director derived an improper personal benefit, either directly or indirectly; (iii) a circumstance under which the director is liable for an improper distribution; (iv) in a proceeding by, or in the right of the corporation to procure a judgment in its favor or by or in the right of a shareholder, conscious disregard for the best interest of the corporation, or willful misconduct; or (v) in a proceeding by or in the right of someone other than the corporation or a shareholder, recklessness or an act or omission which was committed in bad faith or with malicious purpose or in a manner exhibiting wanton or willful disregard of human rights, safety or property. Section 607.0850 of the Florida Act provides that a corporation shall have the power to indemnify any person who was or is a party to any proceeding (other than an action by, or in the right of, the corporation), by reason of the fact that he is or was a director, officer or employee or agent of the corporation, against liability incurred in connection with such proceeding if he acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interest of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. Section 607.0850 also provides that a corporation shall have the power to indemnify any person, who was or is a party to any proceeding by, or in the right of, the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the corporation, against expenses and amounts paid in settlement not exceeding, in the judgment of the board of directors, the estimated expense of litigating the proceeding to conclusion, actually and reasonably incurred in connection with the defense or settlement of such proceeding, including any appeal thereof. Section 607.0850 further provides that such indemnification shall be authorized if such person acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the corporation, except that no indemnification shall be made under this provision in respect of II-1 49 any claim, issue, or matter as to which such person shall have been adjudged to be liable unless, and only to the extent that, the court in which such proceeding was brought, or any other court of competent jurisdiction, shall determine upon application that, despite the adjudication of liability, but in view of all circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which court shall deem proper. Section 607.0850 further provides that to the extent that a director, officer, employee or agent has been successful on the merits or otherwise in defense of any of the foregoing proceedings, or in defense of any claim, issue or matter therein, he shall be indemnified against expenses actually and reasonably incurred by him in connection therewith. Under Section 607.0850, any indemnification under the foregoing provisions, unless pursuant to a determination by a court, shall be made by the corporation only as authorized in the specific case upon a determination that the indemnification of the director, officer, employee or agent is proper under the circumstances because he has met the applicable standard of conduct. Notwithstanding the failure of a corporation to provide such indemnification, and despite any contrary determination by the corporation in a specific case, a director, officer, employee or agent of the corporation who is or was a party to a proceeding may apply for indemnification to the appropriate court and such court may order indemnification if it determines that such person is entitled to indemnification under the applicable standard. Section 607.0850 also provides that a corporation shall have the power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation against any liability asserted against him and incurred by him in any such capacity or arising out of his status as such, whether or not the corporation would have the power to indemnify him against such liability under the provisions of Section 607.0850. The registrant's bylaws provide that it shall indemnify its officers and directors and former officers and directors to the full extent permitted by law. The registrant has entered into indemnification agreements with each of its officers and directors. The indemnification agreements generally provide that the registrant will pay certain amounts incurred by an officer or director in connection with any civil or criminal action or proceeding and specifically including actions by or in the name of the registrant (derivative suits) where the individual's involvement is by reason of the fact that he was or is an officer or director. Under the indemnification agreements, an officer or director will not receive indemnification if such person is found not to have acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the registrant. The agreements provide a number of procedures and presumptions used to determined the officer's or director's right to indemnification and include a requirement that in order to receive an advance of expenses, the officer or director must submit an undertaking to repay any expenses advanced on his behalf that are later determined he was not entitled to receive. The registrant's directors and officers are covered by insurance policies indemnifying them against certain liabilities, including liabilities under the federal securities laws (other than liability under Section 16(b) of the Exchange Act), which might be incurred by them in such capacities. II-2 50 ITEM 16. EXHIBITS EXHIBIT NUMBER DESCRIPTION - ------ ----------- 1.1 Purchase Agreement, dated May 1, 2001, between IVAX Corporation and UBS Warburg LLC, as the Initial Purchaser, with respect to the $725,000,000 4 1/2% Convertible Senior Subordinated Notes due 2008.(1) 4.5 Indenture, dated as of May 4, 2001, between IVAX Corporation and U.S. Bank Trust National Association, as Trustee, with respect to the $725,000,000 4 1/2% Convertible Senior Subordinated Notes due 2008. (1) 4.6 Form of 4 1/2% Convertible Senior Subordinated Notes due 2008. (1) 5.1 Opinion of Akerman, Senterfitt & Eidson, P.A. (1) 10.28 Registration Rights Agreement, dated May 4, 2001, between IVAX Corporation and UBS Warburg LLC, as the Initial Purchaser, with respect to the $725,000,000 4 1/2% Convertible Senior Subordinated Notes due 2008. (1) 12.2 Statement Regarding Computation of Ratio of Earnings to Fixed Charges. (1) 23.1 Consent of Arthur Andersen LLP. (2) 23.2 Consent of Akerman, Senterfitt & Eidson, P.A. (included in Exhibit 5.1). 24.1 Power of Attorney of certain directors and officers of IVAX (set forth on the signature page of this registration statement). 25.1 Statement of Eligibility of Trustee. (1) 99.1 Annual Report on Form 20-F for the year ended December 31, 2000 for Laboratorio Chile S.A. (3) - -------------- (1) Filed herewith. (2) To be filed by amendment. (3) Incorporated by reference to the Annual Report on Form 20-F for the year ended December 31, 2000 filed by Laboratorio Chile S.A. with the Commission on June 22, 2001. ITEM 17. UNDERTAKINGS (a) The registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation II-3 51 from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. (d) The undersigned registrant hereby undertakes to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of 310 of the Trust Indenture Act in accordance with the rules and regulations prescribed by the Commission under Section 305(b)(2) of the Trust Indenture Act. II-4 52 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Miami, State of Florida on July 31, 2001. IVAX CORPORATION By: /s/ PHILLIP FROST, M.D. ---------------------------------------------- Phillip Frost, M.D. Chairman of the Board and Chief Executive Officer POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints each of Thomas E. Beier and Thomas E. McClary, or either of them, each acting alone, his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for such person and in his or her name, place and stead, in any and all capacities, in connection with the registrant's registration statement on Form S-3 under the Securities Act of 1933, including to sign the registration statement in the name and on behalf of the registrant or on behalf of the undersigned as a director or officer of the registrant, and any and all amendments or supplements to the registration statement, including any and all stickers and post-effective amendments or supplements to the registration statement and to sign any and all additional registration statements relating to the same offerings of securities as those that are covered by the registration statement that are filed pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission and any applicable securities exchange or securities self-regulatory body, granting unto said attorneys-in-fact and agents, each acting alone, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitutes or substitute, may lawfully do or cause to be done by virtue hereof. ----------- II-5 53 Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE - --------- ----- ---- /s/ PHILLIP FROST, M.D. Director, Chairman of the Board and Chief Executive July 31, 2001 - ----------------------- Officer (Principal Executive Officer) Phillip Frost, M.D. /s/ NEIL FLANZRAICH Director, Vice Chairman and President July 31, 2001 - ----------------------- Neil Flanzraich /s/ JANE HSIAO, PH.D. Director, Vice Chairman- Technical Affairs and Chief July 31, 2001 - ----------------------- Technical Officer Jane Hsiao, Ph.D. /s/ ISAAC KAYE Director and Deputy Chief Executive Officer July 31, 2001 - ----------------------- Isaac Kaye /s/ THOMAS E. BEIER Senior Vice President - Finance and Chief July 31, 2001 - ----------------------- Financial Officer (Principal Financial Officer) Thomas E. Beier /s/ THOMAS E. MCCLARY Vice President- Accounting July 31, 2001 - ----------------------- (Principal Accounting Officer) Thomas E. McClary /s/ MARK ANDREWS Director July 31, 2001 - ----------------------- Mark Andrews /s/ ERNST BIEKERT, PH.D Director July 31, 2001 - ----------------------- /s/ Ernst Biekert, Ph.D /s/ CHARLES M. FERNANDEZ Director July 31, 2001 - ----------------------- Charles M. Fernandez /s/ JACK FISHMAN, PH.D. Director July 31, 2001 - ----------------------- Jack Fishman, Ph.D.
II-6 54 EXHIBIT INDEX EXHIBIT NUMBER DESCRIPTION - ------ ----------- 1.1 Purchase Agreement, dated May 1, 2001, between IVAX Corporation and UBS Warburg LLC, as the Initial Purchaser, with respect to the $725,000,000 4 1/2% Convertible Senior Subordinated Notes due 2008. 4.5 Indenture, dated as of May 4, 2001, between IVAX Corporation and U.S. Bank Trust National Association, as Trustee, with respect to the $725,000,000 4 1/2% Convertible Senior Subordinated Notes due 2008. 4.6 Form of 4 1/2% Convertible Senior Subordinated Notes due 2008. 5.1 Opinion of Akerman, Senterfitt & Eidson, P.A. 10.28 Registration Rights Agreement, dated May 4, 2001, between IVAX Corporation and UBS Warburg LLC, as the Initial Purchaser, with respect to the $725,000,000 4 1/2% Convertible Senior Subordinated Notes due 2008. 12.2 Statement Regarding Computation of Ratio of Earnings to Fixed Charges. 25.1 Statement of Eligibility of Trustee. EX-1.1 3 g70686ex1-1.txt PURCHASE AGREEMENT 1 EXHIBIT 1.1 $575,000,000 Principal Amount IVAX CORPORATION 4 1/2% Convertible Senior Subordinated Notes due 2008 PURCHASE AGREEMENT May 1, 2001 2 PURCHASE AGREEMENT May 1, 2001 UBS WARBURG LLC as Initial Purchaser 299 Park Avenue New York, New York 10171 Dear Sirs: IVAX Corporation, a Florida corporation, (the "COMPANY"), proposes to issue and sell to the initial purchaser named in SCHEDULE A hereto (the "INITIAL PURCHASER") $575,000,000 aggregate principal amount of its 4 1/2% Convertible Senior Subordinated Notes due 2008 (the "FIRM NOTES"). In addition, solely for the purpose of covering over-allotments, the Company proposes to grant to the Initial Purchaser the option to purchase from the Company up to an additional $150,000,000 aggregate principal amount of the Company's 4 1/2% Convertible Senior Subordinated Notes due 2008 (the "ADDITIONAL NOTES"). The Firm Notes and the Additional Notes are hereinafter collectively sometimes referred to as the "NOTES". The Notes are to be issued pursuant to an indenture (the "INDENTURE") to be dated as of May 4, 2001, between the Company and U.S. Bank Trust Company, National Association, as trustee (the "TRUSTEE"). Copies of the Indenture, in substantially final form, have been delivered to the Initial Purchaser. The Notes will be convertible in accordance with their terms and the terms of the Indenture into shares of the Common Stock of the Company, par value $.10 per share (the "SHARES"). The Company and the Initial Purchaser agree as follows: 1. SALE AND PURCHASE: Upon the basis of the warranties and representations and subject to the other terms and conditions herein set forth, the Company agrees to sell to the Initial Purchaser, and the Initial Purchaser agrees to purchase from the Company, the aggregate initial principal amount of Firm Notes set forth opposite the name of the Initial Purchaser in Schedule A hereto at a purchase price of 97.4% of the initial principal amount thereof. In addition, the Company hereby grants to the Initial Purchaser the one-time option to purchase, and upon the basis of the representations and warranties and subject to the other terms and conditions herein set forth, the Initial Purchaser shall have the one-time right to purchase from the Company, all or a portion of the Additional Notes as may be necessary to cover overallotments made in connection with the offering of the Firm Notes, at a purchase price of 97.4% of the initial principal amount thereof, plus accrued interest, if any, from the time of purchase (as hereinafter defined) to the additional time of purchase (as hereinafter defined). This option may be exercised by the Initial Purchaser at any time (but not more than once) on or before the thirtieth day following the date hereof, by 3 written notice to the Company. Such notice shall set forth the aggregate initial principal amount of Additional Notes as to which the option is being exercised, and the date and time when the Additional Notes are to be delivered (such date and time being herein referred to as the "ADDITIONAL TIME OF PURCHASE"); PROVIDED, HOWEVER, that the additional time of purchase shall (i) not be earlier than the time of purchase nor (ii) earlier than the second business day(1) after the date on which the option shall have been exercised nor later than the tenth business day after the date on which the option shall have been exercised. 2. PAYMENT AND DELIVERY: Payment of the purchase price for the Firm Notes shall be made to the Company by Federal (same day) funds, against delivery of the certificates for the Firm Notes to you through the facilities of the Depository Trust Company ("DTC") in the form of a global certificate or certificates, registered in the name of Cede & Co., the nominee of DTC ("CEDE & CO."), at the offices of Willkie Farr & Gallagher in New York, NY, or at such other place as may be agreed upon by the parties hereto, for the account of the Initial Purchaser. Such payment and delivery shall be made at 10:00 A.M., eastern daylight time, on May 4, 2001 (unless another time shall be agreed to by you and the Company). The time at which such payment and delivery are actually made is hereinafter sometimes called the "TIME OF PURCHASE". Global certificates for the Firm Notes shall be delivered to the Trustee in such form and in such names and in such denominations as the Trustee shall specify. For the purpose of expediting the checking of the global certificates for the Firm Notes by you, the Company agrees to make the global certificates available to you for such purpose at least one full business day preceding the time of purchase. Payment of the purchase price for the Additional Notes shall be made at the additional time of purchase in the same manner and at the same office as the payment for the Firm Notes. Certificates for the Additional Notes shall be delivered to you through the facilities of DTC in the form of a global certificate or certificates registered in the name of Cede & Co. For the purpose of expediting the checking of the global certificates for the Additional Notes by you, the Company agrees to make such global certificates available to you for such purpose at least one full business day preceding the additional time of purchase. 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY: The Company represents and warrants to the Initial Purchaser that: (a) The Company has prepared an offering memorandum, dated May 1, 2001 (together with any amendments thereof or supplements thereto prior to the time of purchase, the "OFFERING MEMORANDUM"), in connection with the offering of the Notes. Any reference to the Offering Memorandum shall be deemed to refer to and include the Company's Annual Report on Form 10-K for the year ended December 31, 2000, other filed documents incorporated by reference therein and all documents subsequently filed with the United States Securities and Exchange Commission (the "COMMISSION") pursuant to Section 13(a), 13(c) or 15(d) of the United States Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), on or prior to the date of the Offering Memorandum, and any reference to the Offering Memorandum, as amended or supplemented, as of any specified date, shall be deemed to include (i) - ------------ (1) As used herein "business day" shall mean a day on which the American Stock Exchange is open for trading. -2- 4 any documents filed with the Commission pursuant to Section 13(a), 13(c) or 15(d) of the Exchange Act after the date of the Offering Memorandum and prior to such specified date and (ii) any Additional Issuer Information (as defined in Section 5(e) hereof) furnished by the Company prior to the completion of the distribution of the Notes, and all documents filed under the Exchange Act and so deemed to be included in the Offering Memorandum or any amendment or supplement thereto are hereinafter called the "EXCHANGE ACT REPORTS." The Exchange Act Reports, when they were or are filed with the Commission, conformed or will conform in all material respects with the requirements of the Exchange Act and the rules and regulations of the Commission thereunder. Neither the Offering Memorandum nor the Exchange Act Reports, in each case as amended or supplemented, does or will, as of its respective date, contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; PROVIDED, HOWEVER, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by the Initial Purchaser expressly for use therein; (b) As of December 31, 2000, the Company had an authorized capitalization as set forth under the column heading entitled "Actual" in the section of the Offering Memorandum entitled "Capitalization" and, as adjusted to give effect to the offering of the Firm Notes and the application of the net proceeds therefrom as described in the "Use of Proceeds" section of the Offering Memorandum, the Company would, as of December 31, 2000, have had an authorized capitalization as set forth under the column heading entitled "As Adjusted" in the section of the Offering Memorandum entitled "Capitalization"; all of the issued and outstanding shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable; the Company has been duly incorporated and is validly existing as a corporation under the laws of the State of Florida whose status is active, with all requisite corporate power and authority to own its properties and conduct its business as described in the Offering Memorandum, to execute and deliver this Agreement, the Registration Rights Agreement (as defined) and the Indenture and to issue and sell the Notes and to issue Shares upon conversion of the Notes in accordance with their terms and the terms of the Indenture; (c) The Company and each of its subsidiaries (the "SUBSIDIARIES") are duly qualified or licensed to do business as foreign corporations and are in good standing in each jurisdiction in which the nature of their respective businesses requires such qualification and in which the failure, individually or in the aggregate, to be so licensed or qualified would have a material adverse effect on the operations, business or condition of the Company and its Subsidiaries, taken as a whole (a "MATERIAL ADVERSE EFFECT"); and the Company and each of its Subsidiaries are in compliance in all respects with the laws, orders, rules, regulations and directives issued or administered by such jurisdictions, except where the failure to be in compliance would not have a Material Adverse Effect; (d) Neither the Company nor any of its Subsidiaries is in breach of, or in default under (nor has any event occurred which with notice, lapse of time, or both would constitute a breach of, or default by the Company or any of its Subsidiaries or, to the knowledge of the Company, affiliates under), its respective charter or by-laws or in the performance or observance of any obligation, agreement, covenant or condition contained in any indenture, mortgage, deed of trust, bank loan or credit agreement or other agreement or instrument to which the Company or any of its Subsidiaries is a party or by which any of them is bound, except, in each case, where such breach or default would not have a Material Adverse Effect and, assuming the accuracy of the -3- 5 Initial Purchaser's representations and warranties set forth herein, the execution, delivery and performance of this Agreement, the Registration Rights Agreement and the Indenture and the issuance of the Notes and consummation of the transactions contemplated hereby and thereby including the issuance of the Shares upon conversion of the Notes, will not conflict with, or result in any breach of or constitute a default under (nor constitute any event which with notice, lapse of time, or both would constitute a breach of, or default by the Company or any of its Subsidiaries or, to the knowledge of the Company, affiliates under), any provisions of the charter or by-laws of the Company or any of its Subsidiaries or under any provision of any license, indenture, mortgage, deed of trust, bank loan or credit agreement or other agreement or instrument to which the Company or any of its Subsidiaries is a party or by which any of them or their respective properties may be bound or affected, or under any federal, state, local or foreign law, regulation or rule or, to the knowledge of the Company, any decree, judgment or order applicable to the Company or any of its Subsidiaries, except in each case where such breach or default would not have a Material Adverse Effect; (e) The Indenture has been duly authorized by the Company and when executed and delivered by the Company and the other parties thereto will be a legal, valid and binding agreement of the Company enforceable in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' rights generally and general principles of equity; (f) The Registration Rights Agreement substantially in the form as attached hereto as EXHIBIT A between the Company and the Initial Purchaser (the "REGISTRATION RIGHTS AGREEMENT") has been duly authorized by the Company and when executed and delivered by the Company and the other parties thereto will be a legal, valid and binding agreement of the Company enforceable in accordance with its terms, except (a) as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' rights generally and general principles of equity and (b) the rights to indemnity and contribution may be limited by applicable law; (g) The Notes have been duly authorized by the Company for issuance and sale to the Initial Purchaser and when executed and delivered by the Company and duly authenticated in accordance with the terms of the Indenture and delivered to and paid for by the Initial Purchaser in accordance with the terms hereof will constitute legal, valid and binding obligations of the Company enforceable in accordance with their terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' rights generally and general principles of equity; the Shares initially issuable upon conversion of the Notes have been duly authorized and validly reserved for issuance upon conversion of the Notes and upon conversion of the Notes in accordance with their terms and the terms of the Indenture will be issued free of statutory and contractual preemptive rights and are sufficient in number to meet the current conversion requirements, and such Shares, when so issued upon such conversion in accordance with the terms of the Indenture, will be duly and validly issued and fully paid and nonassessable; (h) This Agreement has been duly authorized, executed and delivered by the Company and upon due and valid execution by the other parties hereto will be a legal, valid and binding agreement of the Company enforceable in accordance with its terms except (a) as the -4- 6 enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' rights generally and general principles of equity and (b) the rights to indemnity and contribution may be limited by applicable law; (i) The terms of the Notes, the Registration Rights Agreement, the Indenture and the capital stock of the Company, including the Shares, conform in all material respects to the description thereof contained in the Offering Memorandum; (j) Assuming the accuracy of the Initial Purchaser's representations and warranties set forth herein, no approval, authorization, consent or order of or filing with any national, state or local governmental or regulatory commission, board, body, authority or agency is required in connection with the issuance and sale by the Company of the Notes and the Shares as contemplated hereby other than (i) as may be required (A) under the securities or blue sky laws of the various jurisdictions in which the Notes and the Shares are being offered by the Initial Purchaser, (B) with respect to the Notes, under the applicable listing criteria of the National Association of Securities Dealers, Inc. (the "NASD") for its PORTAL trading market ("PORTAL") and (C) with respect to the Shares, under the applicable listing criteria of the American Stock Exchange ("AMEX") and (ii) as have been made or obtained on or prior to the time of purchase or additional time of purchase, as the case may be, (or, if not required to be made or obtained on or prior to the time of purchase or additional time of purchase, as the case may be, that will be made or obtained when required); (k) Arthur Andersen LLP, whose reports on the consolidated financial statements of the Company and its Subsidiaries are included in the Offering Memorandum, are independent public accountants with respect to the Company as required by the Securities Act of 1933, as amended (the "ACT"), and the applicable published rules and regulations thereunder; (l) Each of the Company and its Subsidiaries has all necessary licenses, authorizations, consents and approvals (collectively, "CONSENTS") and has made all necessary filings required under any federal, state, local or foreign law, regulation or rule ("FILINGS") and has obtained all necessary Consents from other persons, in order to conduct its respective business, except where the failure to have any such Consent or to have made any such Filing would not have a Material Adverse Effect; neither the Company nor any of its Subsidiaries is in violation of, or in default under, any such license, authorization, consent or approval or any federal, state, local or foreign law, regulation or rule or, to the knowledge of the Company, any decree, order or judgment applicable to the Company or any of its Subsidiaries which violation or default would have a Material Adverse Effect; (m) Except as described or incorporated by reference in the Offering Memorandum, there are no actions, suits or proceedings pending or, to the knowledge of the Company, threatened against the Company or any of its Subsidiaries or any of their respective properties, at law or in equity, or before or by any federal, state, local or foreign governmental or regulatory commission, board, body, authority or agency which would result in a judgment, decree or order having a Material Adverse Effect; (n) The Company and each Subsidiary have filed on a timely basis all necessary federal, state and foreign income, franchise and other tax returns (other than returns being contested in good faith) and have paid all taxes shown thereon as due (other than those -5- 7 being contested in good faith or which are currently payable without penalty or interest), and the Company has no knowledge of any tax deficiency which has been or might be asserted against the Company or any Subsidiary which would have a Material Adverse Effect; all material tax liabilities are adequately provided for within the financial statements of the Company in accordance with generally accepted accounting principles ("GAAP"); (o) The Company and its Subsidiaries maintain insurance (including self-insurance as disclosed or incorporated by reference in the Offering Memorandum) of the types and in the amounts reasonably believed to be adequate for their business and consistent with insurance coverage maintained by similar companies in similar businesses, all of which insurance is in full force and effect; (p) Neither the Company nor its Subsidiaries are involved in any labor dispute or disturbance nor, to the knowledge of the Company, is any such dispute or disturbance threatened except, in each case, for disputes or disturbances which would not, individually or in the aggregate, have a Material Adverse Effect; (q) Except as described or incorporated by reference in the Offering Memorandum, the Company and each Subsidiary owns or possess such licenses or other rights to use all patents, patent applications, trademarks, trademark applications, service marks, service mark applications, trade names, copyrights, manufacturing processes, formulae, trade secrets, know-how, franchises, and other material intangible property and assets (collectively, "INTELLECTUAL PROPERTY") necessary to the conduct of their businesses as conducted and as proposed to be conducted as described or incorporated by reference in the Offering Memorandum, except where the failure to do so would not have a Material Adverse Effect; the Company has no knowledge that it or any Subsidiary lacks or will be unable to obtain any rights or licenses to use any of the Intellectual Property necessary to conduct the business now conducted or proposed to be conducted by it as described or incorporated by reference in the Offering Memorandum, except as described in the Offering Memorandum or incorporated by reference in the Offering Memorandum and except where the failure to have or obtain such rights or licenses would not have a Material Adverse Effect; the Offering Memorandum fairly and accurately describes the Company's rights with respect to the Intellectual Property; the Company has not received any written notice of infringement or of conflict with rights or claims of others with respect to any Intellectual Property which infringement or conflict would have a Material Adverse Effect; the Company is not aware of any patents of others which are infringed by the Company's potential products or processes referred to or incorporated by reference in the Offering Memorandum in such a manner as would have a Material Adverse Effect, except as described in the Offering Memorandum or incorporated by reference into the Offering Memorandum; (r) The audited financial statements and related notes thereto of the Company incorporated by reference in the Offering Memorandum present fairly in all material respects the consolidated financial position of the Company and its Subsidiaries as of the dates indicated and the results of operations and cash flows of the Company and its Subsidiaries for the periods specified; such financial statements have been prepared in conformity with GAAP applied on a consistent basis during the periods involved; -6- 8 (s) Subsequent to the respective dates as of which information is given in the Offering Memorandum, and except as may be otherwise stated or incorporated by reference in the Offering Memorandum, there has not been (A) any material and unfavorable change, financial or otherwise, in the business, properties, prospects, regulatory environment, results of operations or condition (financial or otherwise) of the Company and its Subsidiaries taken as a whole, (B) any transaction entered into by the Company or any of its Subsidiaries, which is material to the Company and its Subsidiaries taken as a whole, or (C) any obligation, contingent or otherwise, directly or indirectly, incurred by the Company or any of its Subsidiaries which is material to the Company and its Subsidiaries taken as a whole; (t) When the Notes are issued and delivered pursuant to this Agreement, the Notes will not be of the same class (within the meaning of Rule 144A under the Act) as securities of the Company which are listed on a national securities exchange registered under Section 6 of the Exchange Act or quoted in a U.S. automated inter-dealer quotation system; (u) None of the transactions contemplated by this Agreement (including, without limitation, the use of the proceeds from the sale of the Notes) will violate or result in a violation of Section 7 of the Exchange Act, or any regulation promulgated thereunder, including, without limitation, Regulations T, U, and X of the Board of Governors of the Federal Reserve System; (v) Prior to the date hereof, neither the Company nor, to the Company's knowledge, any of its affiliates has taken any action which is designed to or which has constituted or which might have been reasonably expected to constitute or result in stabilization or manipulation of the price of any security of the Company in connection with the offering of the Notes, except as permitted by this Agreement; (w) Subject to compliance by the Initial Purchaser with the representations and agreements contained in Section 4, neither the Company nor any person acting on its behalf (other than the Initial Purchaser, as to whom the Company makes no representations) has offered or sold the Notes by means of any general solicitation or general advertising within the meaning of Rule 502(c) under the Act or, with respect to Notes sold outside the United States to non-U.S. persons (as defined in Rule 902 under the Act), by means of any directed selling efforts within the meaning of Rule 902 under the Act, and the Company, and, to the Company's knowledge, any affiliate of the Company and any person acting on its or their behalf (other than the Initial Purchaser as to whom the Company makes no representations) have complied with and will implement the "offering restriction" within the meaning of such Rule 902; (x) Within the preceding six months, neither the Company nor any other person acting on behalf of the Company (other than the Initial Purchaser as to whom the Company makes no representations) has offered or sold to any person any Notes or any securities of the same or a similar class as the Notes, other than Notes offered or sold to the Initial Purchaser hereunder; and (y) The Company is not and, after giving effect to the offering and sale of the Notes and the application of the proceeds thereof as described in the Offering Memorandum, will not be an "investment company" as defined in the Investment Company Act of 1940 or a company controlled by an investment company. -7- 9 4. REPRESENTATIONS AND WARRANTIES OF THE INITIAL PURCHASER. The Initial Purchaser propose to offer the Notes for sale upon the terms and conditions set forth in this Agreement and the Offering Memorandum, and the Initial Purchaser hereby represents and warrants to and agrees with the Company that: (a) It will offer and sell the Notes only: (i) (x) to persons whom it reasonably believes are "qualified institutional buyers" ("QIBS") within the meaning of Rule 144A under the Act in transactions meeting the requirements of Rule 144A or (y) to institutional "accredited investors" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Act in transactions meeting the requirements of Regulation D under the Act and (ii) outside the United States to certain persons in compliance with Regulation S under the Act; (b) It is a QIB within the meaning of Rule 144A; (c) It has not and will not directly or indirectly offer or sell the Notes by any form of general solicitation, general advertising, including, but not limited to, the methods described in Rule 502(c) under the Act; and (d) Its execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all requisite action on its part, and this Agreement, when executed and delivered by the Company, will be its legal, valid and binding agreement, enforceable in accordance with its terms, except (a) as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws effecting creditor's rights generally and general principles of equity and (b) the rights of indemnity and contribution may be limited by applicable law. 5. CERTAIN COVENANTS OF THE COMPANY: The Company hereby agrees that: (a) The Company will prepare the Offering Memorandum in a form approved by the Initial Purchaser and will make no amendment or supplement to the Offering Memorandum which shall reasonably be disapproved by the Initial Purchaser promptly after reasonable notice thereof; (b) Promptly from time to time, the Company will take such action as the Initial Purchaser may reasonably request to qualify the Notes and the Shares for offering and sale under the securities laws of such jurisdictions as the Initial Purchaser may request and will comply with such laws so as to permit the continuance of sales and dealing therein in such jurisdictions for as long as may be necessary to complete the distribution of the Notes; PROVIDED, that in connection therewith the Company shall not be required to qualify as a foreign corporation, to file a general consent to service of process or subject itself to any tax in any such jurisdiction where it is not now so qualified or subject; (c) The Company will furnish the Initial Purchaser with two copies of the Offering Memorandum and each amendment or supplement thereto and such additional copies thereof in such quantities as the Initial Purchaser may from time to time reasonably request, and if, at any time prior to the completion of the resale of the Notes by the Initial Purchaser, but in any event for no more than nine months after the date of the Offering Memorandum, any event shall have occurred as a result of which the Offering Memorandum as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such -8- 10 Offering Memorandum is delivered, not misleading, or, if for any other reason it shall be necessary or desirable during such same period to amend or supplement the Offering Memorandum, the Company will notify the Initial Purchaser and upon the Initial Purchaser's request will prepare and furnish without charge to the Initial Purchaser and to any dealer in securities as many copies as the Initial Purchaser may from time to time reasonably request of an amended Offering Memorandum or a supplement to the Offering Memorandum which will correct such statement or omission or effect such compliance; (d) During the period beginning from the date hereof and continuing until the date 90 days after the date of the Offering Memorandum, the Company will not, without the prior written consent of UBS Warburg LLC, sell, contract to sell or otherwise dispose of, any Shares, any securities substantially similar to the Notes or the Shares or any securities that are convertible into or exchangeable for Shares (other than (i) the issuance of the Notes; (ii) the issuance of Shares upon conversion of the Notes; (iii) the issuance of Shares upon conversion or exercise of outstanding convertible or exchangeable securities; (iv) the issuance of Shares or securities convertible into or exchangeable for Shares in connection with the purchase by the Company of any business or assets PROVIDED THAT sales by the recipients of such shares are, during the 90 day period referred to above, subject to the volume limitations of Rule 144, and, PROVIDED, FURTHER, that after 30 days after the date of the Offering Memorandum, the Company may issue Shares or securities convertible into or exchangeable for Shares in connection with the purchase by the Company of any business or assets without regard to whether sales by the recipients of such shares are subject to the volume limitations of Rule 144; (v) the issuance of Shares or options pursuant to employee stock option or employee stock purchase plans existing on, or upon exercise of warrants outstanding as of, the date of this Agreement; or (vi) the issuance to UBS Warburg LLC of equity put options in connection with hedging activities and the issuance of Shares in settlement of such put options); (e) At any time when the Company is not subject to Section 13 or 15(d) of the Exchange Act and so long as any of the Notes (or Shares issued upon conversion thereof) are "restricted securities" within the meaning of Rule 144(a)(3) under the Act, for the benefit of holders from time to time of the Notes, the Company will furnish at its expense, upon request, to holders of Notes and prospective purchasers of Notes information (the "ADDITIONAL ISSUER INFORMATION") satisfying the requirements of subsection (d)(4)(i) of Rule 144A under the Act; (f) The Company will use its best efforts to cause the Notes to be eligible for PORTAL; (g) For so long as the Notes remain outstanding, the Company will furnish to the Initial Purchaser copies of all reports or other communications (financial or other) furnished to stockholders of the Company, and will deliver to the Initial Purchaser (i) as soon as they are available, copies of any reports and financial statements furnished to or filed by the Company with the Commission or any securities exchange on which the Notes or any class of securities of the Company is listed; and (ii) such additional information concerning the business and financial condition of the Company as the Initial -9- 11 Purchaser may from time to time reasonably request (such financial statements to be on a consolidated basis to the extent the accounts of the Company and its subsidiaries are consolidated in reports furnished to its stockholders generally or to the Commission); (h) The Company will use the net proceeds received by it from the sale of the Notes pursuant to this Agreement in the manner specified in the Offering Memorandum under the caption "Use of Proceeds"; (i) The Company will reserve and keep available at all times free of preemptive rights, Shares for the purpose of enabling the Company to satisfy any obligations to issue Shares upon conversion of the Notes; (j) The Company will use its best efforts to list, as promptly as practicable but in no event later than the time that the registration statement is declared effective in accordance with the Registration Rights Agreement, and subject to notice of issuance, the Shares on the American Stock Exchange; (k) The Company will pay all expenses, fees and taxes (other than any transfer taxes, and fees and expenses of the Initial Purchaser including, without limitation, disbursements of counsel for the Initial Purchaser except as set forth under Section 6 hereof and (iii) and (iv) below) in connection with (i) the preparation and filing of the Offering Memorandum and the printing and furnishing of copies thereof to the Initial Purchaser and to dealers (including costs of mailing and shipment), (ii) the preparation, issuance, execution, authentication and delivery of the Notes and the Shares, (iii) the word processing and/or printing of the Indenture, and the reproduction and/or printing and furnishing of copies thereof to the Initial Purchaser and to dealers (including costs of mailing and shipment), (iv) the qualification of the Notes and the Shares for offering and sale under state laws (including the legal fees and filing fees and other disbursements of counsel for the Initial Purchaser) and the printing and furnishing of copies of any blue sky surveys or legal investment surveys to the Initial Purchaser and to dealers, (v) any listing of the Notes on PORTAL, (vi) any fees payable to investment rating agencies with respect to the Notes and (vii) the performance of the Company's other obligations hereunder. (l) The Company will take reasonable precautions designed to insure that any offer or sale, direct or indirect, in the United States or to any U.S. person (as defined in Rule 902 under the Act) of any Notes or any substantially similar security issued by the Company, within six months subsequent to the date on which the distribution of the Notes has been completed (as notified to the Company by the Initial Purchaser), is made under restrictions and other circumstances reasonably designed not to affect the status of the offer and sale of the Notes in the United States and to U.S. persons contemplated by this Agreement as transactions exempt from the registration provisions of the Act (the foregoing will not prevent offers and sales made pursuant to a shelf registration statement in accordance with the Registration Rights Agreement). 6. REIMBURSEMENT OF INITIAL PURCHASER'S EXPENSES: If the Firm Notes are not delivered for any reason other than the default by the Initial Purchaser in its or obligations hereunder, the Company shall reimburse the Initial Purchaser for all of their reasonable out-of-pocket expenses, including the reasonable fees and disbursements of their counsel. Otherwise, the Company shall have no obligation to reimburse the Initial Purchaser for any expenses not specifically provided for in Section 5(k). -10- 12 7. CONDITIONS OF INITIAL PURCHASER'S OBLIGATIONS: As used in this Section 7, the word "material" shall not apply to any representations or warranties of the Company already qualified as to materiality or Material Adverse Effect. The obligations of the Initial Purchaser hereunder are subject to the accuracy in all material respects of the representations and warranties on the part of the Company on the date hereof and at the time of purchase; PROVIDED, that any representations and warranties which by their terms speak as of a specific date shall remain accurate in all material respects as of such date. The obligations of the Initial Purchaser at the additional time of purchase are subject to the accuracy in all material respects of the representations and warranties on the part of the Company on the date hereof, at the time of purchase (unless previously waived) and at the additional time of purchase, as the case may be (except for any representations and warranties which by their terms speak as of a specific date, which shall remain accurate in all material respects as of such date). Additionally, the obligations of the Initial Purchaser hereunder are subject to performance by the Company of its obligations hereunder and to the following conditions: (a) The Company shall furnish to you at the time of purchase and at the additional time of purchase, as the case may be, an opinion of Akerman Senterfitt & Eidson, P.A., counsel for the Company, addressed to the Initial Purchaser and dated the date of the time of purchase or the date of the additional time of purchase, as the case may be, and in form satisfactory to Willkie Farr & Gallagher, counsel for the Initial Purchaser, substantially in the form of EXHIBIT B hereto; (b) The Company shall furnish to you at the time of purchase and at the additional time of purchase, as the case may be, an opinion of Carol Gillespie, General Counsel of the Company, addressed to the Initial Purchaser and dated the date of the time of purchase or the date of the additional time of purchase, as the case may be, in form satisfactory to Willkie Farr & Gallagher, counsel for the Initial Purchaser, substantially in the form of EXHIBIT C hereto; (c) You shall have received from Arthur Andersen LLP (i) a draft customary comfort letter dated as of the date of this Agreement and (ii) a final customary comfort letter dated the date of the time of purchase and the date of the additional time of purchase (if applicable), as the case may be, and addressed to the Initial Purchaser without material change from the draft delivered as of the date of this Agreement; (d) You shall have received at the time of purchase and at the additional time of purchase, as the case may be, the opinion of Willkie Farr & Gallagher, counsel for the Initial Purchaser, dated the date of the time of purchase or the date of the additional time of purchase, as the case may be, in form and substance reasonably satisfactory to you; (e) At the time of purchase or the additional time of purchase, as the case may be, the Offering Memorandum shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (f) Between the time of execution of this Agreement and the time of purchase or the additional time of purchase, as the case may be, (i) no material and unfavorable change, financial or otherwise (other than as stated or incorporated by reference in the Offering Memorandum, as amended or supplemented), in the business, condition or prospects of the Company and its Subsidiaries taken as a whole shall occur or become known and (ii) no transaction which is material and -11- 13 unfavorable to the Company (other than as disclosed in the Offering Memorandum) shall have been entered into by the Company or any of its Subsidiaries; (g) The Company will, at the time of purchase or the additional time of purchase, as the case may be, deliver to you a certificate of its chief financial officer to the effect that the representations and warranties of the Company set forth in this Agreement and the conditions set forth in the lead-in paragraph to this paragraph 7 relating to the accuracy of the Company's representations and warranties and the performance by the Company of its obligations hereunder have been met; (h) You shall have received copies, duly executed by the Company, of the Registration Rights Agreement and the Indenture; (i) Each of Phillip Frost, Neil Flanzraich, Jane Hsiao and Isaac Kaye shall have entered into Lock-up Agreements in the form attached as EXHIBIT D hereto; (j) The Company shall have furnished to you such other documents and certificates as to the accuracy and completeness of any statement in the Offering Memorandum as of the time of purchase and the additional time of purchase, as the case may be, as you may reasonably request; (k) The Notes shall have been designated for trading on PORTAL, subject only to notice of issuance at or prior to the time of purchase; and (l) Between the time of execution of this Agreement and the time of purchase or additional time of purchase, as the case may be, there shall not have occurred any downgrading, nor shall any notice have been given of (i) any intended or potential downgrading or (ii) any review or possible change that does not indicate an improvement, in the rating accorded any securities of or guaranteed by the Company or any subsidiary of the Company by any "nationally recognized statistical rating organization", as that term is defined in Rule 436(g)(2) promulgated under the Act. 8. CONDITIONS TO OBLIGATIONS OF THE COMPANY: As used in this Section 8, the word "material" shall not apply to any representations or warranties of the Initial Purchaser already qualified as to materiality or Material Adverse Effect. The obligations of the Company hereunder are subject to the accuracy in all material respects of the representations and warranties on the part of the Initial Purchaser on the date hereof and at the time of purchase. The obligations of the Company at the additional time of purchase are subject to the accuracy in all material respects of the representations and warranties on the part of the Initial Purchaser on the date hereof, at the time of purchase (unless previously waived) and at the additional time of purchase, as the case may be. Additionally, the obligations of the Company hereunder are subject to performance by the Initial Purchaser of its obligations hereunder and to the following conditions: (a) The Initial Purchaser shall have delivered payment to the Company for the Firm Notes or Additional Notes, as the case may be, pursuant to Section 2 of this Agreement; and (b) No injunction, restraining order or order of any nature by any national, state, local or foreign governmental or regulatory commission, board, body, authority or agency shall have been issued as of the time of purchase or the additional time of purchase, -12- 14 as the case may be, that would prevent or interfere with the issuance or sale of the Notes; and no stop order suspending the qualification or exemption from qualification of any of the Notes in any jurisdiction shall have been issued and no proceeding for that purpose shall have been commenced or be pending or contemplated as of the time of purchase or the additional time of purchase, as the case may be. 9. TERMINATION: The obligations of the Initial Purchaser hereunder shall be subject to termination in the absolute discretion of the Initial Purchaser if, since the time of execution of this Agreement or the respective dates as of which information is given in the Offering Memorandum, (y) there has been any material adverse and unfavorable change, financial or otherwise (other than as disclosed or incorporated by reference in the Offering Memorandum), in the business, condition or prospects of the Company and its Subsidiaries taken as a whole, which would, in your judgment or in the judgment of the Initial Purchaser, make it impracticable to market the Notes, or (z) there shall have occurred any downgrading, or any notice shall have been given of (i) any intended or potential downgrading or (ii) any review or possible change that does not indicate an improvement, in the rating accorded any securities of or guaranteed by the Company or any subsidiary of the Company by any "nationally recognized statistical rating organization", as that term is defined in Rule 436(g)(2) promulgated under the Act or, if, at any time prior to the time of purchase or, with respect to the purchase of any Additional Notes, the additional time of purchase, as the case may be, trading in securities on the New York Stock Exchange shall have been suspended or minimum prices shall have been established on the New York Stock Exchange, or if a banking moratorium shall have been declared either by the United States or New York State authorities, or if the United States shall have declared war in accordance with its constitutional processes or there shall have occurred any material outbreak or escalation of hostilities or other national or international calamity or crisis of such magnitude in its effect on the financial markets of the United States as, in your judgment would make it impracticable to market the Notes. If the Initial Purchaser elects to terminate this Agreement as provided in this Section 9, the other party shall be notified as provided for herein. If the sale to the Initial Purchaser of the Notes, as contemplated by this Agreement, is not carried out by the Initial Purchaser for any reason permitted under this Agreement or if such sale is not carried out because the Company shall be unable to comply and does not comply with any of the terms of this Agreement, the Company shall not be under any obligation or liability under this Agreement (except to the extent provided in Sections 5(k), 6 and 10 hereof), and the Initial Purchaser shall be under no obligation or liability to the Company under this Agreement (except to the extent provided in Section 10 hereof). 10. INDEMNITY BY THE COMPANY AND THE INITIAL PURCHASER: (a) The Company agrees to indemnify, defend and hold harmless the Initial Purchaser, its directors and officers, and any person who controls the Initial Purchaser within the meaning of Section 15 of the Act or Section 20 of the Exchange Act (each, an "Initial Purchaser Indemnified Party"), from and against any loss, expense, liability or claim (including the reasonable cost of investigation) which the Initial Purchaser or any such person may incur under the Act, the Exchange Act or otherwise, insofar as such loss, expense, liability or claim arises out of or is based upon any untrue statement or alleged untrue statement of a material fact contained in the Offering Memorandum, or arises out of or is based upon any omission or alleged omission to state a material fact required to be stated in the Offering Memorandum or necessary to make the statements made therein not misleading, except insofar as any such loss, expense, liability or claim arises out of or is based upon any untrue statement or alleged -13- 15 untrue statement of a material fact contained in and in conformity with information furnished in writing by the Initial Purchaser to the Company expressly for use in the Offering Memorandum or arises out of or is based on any omission or alleged omission to state a material fact in connection with such information required to be stated in the Offering Memorandum or necessary to make such information not misleading. (b) If any action is brought against the Initial Purchaser Indemnified Party in respect of which indemnity may be sought against the Company pursuant to the foregoing paragraph, the Initial Purchaser Indemnified Party shall promptly notify the Company in writing of the institution of such action and the Company shall assume the defense of such action, including the employment of counsel reasonably satisfactory to the Initial Purchaser Indemnified Party and payment of all fees and expenses; PROVIDED, HOWEVER, that the omission to so notify the Company shall not relieve the Company from any liability which it may have to the Initial Purchaser Indemnified Party or otherwise except to the extent the Company is prejudiced by such omission. The Initial Purchaser Indemnified Party shall have the right to employ its own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of the Initial Purchaser Indemnified Party unless the employment of such counsel shall have been authorized in writing by the Company in connection with the defense of such action or the Company shall not have employed counsel to have charge of the defense of such action or the Initial Purchaser Indemnified Party shall have reasonably concluded upon written advice of counsel that there may be defenses available to it that are in conflict with those available to the Company (in which case the Company shall not have the right to direct that portion of the defense of such action on behalf of the Initial Purchaser Indemnified Party, but the Company may employ counsel and participate in the defense thereof but the fees and expenses of such counsel shall be at the expense of the Company), in any of which events such reasonable fees and expenses shall be borne by the Company and paid as incurred (it being understood, however, that the Company shall not be liable for the expenses of more than one separate counsel in any one action or series of related actions together with reasonably necessary local counsel representing the indemnified parties who are parties to such action). The Company shall not be liable for any settlement of any such claim or action effected without its written consent, but if settled with the written consent of the Company, the Company agrees to indemnify and hold harmless the Initial Purchaser and any such person from and against any loss or liability by reason of such settlement. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by the second sentence of this paragraph, then the indemnifying party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 60 business days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement and (iii) such indemnified party shall have given the indemnifying party at least 30 days' prior notice of its intention to settle. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding. (c) The Initial Purchaser agrees to indemnify, defend and hold harmless the Company, its directors and officers and any person who controls the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act (each, a "Company Indemnified Party") from and against any loss, expense, liability or claim (including the reasonable cost of investigation) which the Company or any such person may incur under the Act, the Exchange Act or otherwise, insofar as such loss, expense, liability or claim arises out of or is based upon any -14- 16 untrue statement or alleged untrue statement of a material fact contained in information furnished in writing by or on behalf of the Initial Purchaser to the Company expressly for use in the Offering Memorandum or arises out of or is based upon any omission or alleged omission to state a material fact in connection with such information required to be stated in the Offering Memorandum or necessary to make such information not misleading. (d) If any action is brought against any Company Indemnified Party in respect of which indemnity may be sought against the Initial Purchaser pursuant to the foregoing paragraph, the Company Indemnified Party shall promptly notify the Initial Purchaser in writing of the institution of such action and the Initial Purchaser shall assume the defense of such action; PROVIDED, HOWEVER, that the omission to notify the Initial Purchaser shall not relieve the Initial Purchaser from any liability which it may have to the Company or any such person or otherwise. The Company Indemnified Party shall have the right to employ its own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of the Company Indemnified Party unless the employment of such counsel shall have been authorized in writing by the Initial Purchaser in connection with the defense of such action or the Initial Purchaser shall not have employed counsel to have charge of the defense of such action or such Company Indemnified Party shall have reasonably concluded upon the written advice of counsel that there may be one or more defenses available to it that are in conflict with those available to the Initial Purchaser (in which case the Initial Purchaser shall not have the right to direct that portion of the defense of such action on behalf of the indemnified party or parties, but the Initial Purchaser may employ counsel and participate in the defense thereof but the fees and expenses of such counsel shall be at the expense of the Initial Purchaser), in any of which events such reasonable fees and expenses shall be borne by the Initial Purchaser and paid as incurred (it being understood, however, that the Initial Purchaser shall not be liable for the expenses of more than one separate counsel in any one action or series of related together with reasonably necessary local counsel representing the indemnified parties who are parties to such action). The Initial Purchaser shall not be liable for any settlement of such claim or action effected without the written consent of the Initial Purchaser, but if settled with the written consent of the Initial Purchaser, the Initial Purchaser agrees to indemnify and hold harmless the Company and any such person from and against any loss or liability by reason of such settlement. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by the second sentence of this paragraph, then the indemnifying party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 60 business days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement and (iii) such indemnified party shall have given the indemnifying party at least 30 days' prior notice of its intention to settle. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding. (e) If the indemnification provided for in this Section 10 is unavailable to an indemnified party under subsections (a) and (b) of this Section 10 in respect of any losses, expenses, liabilities or claims referred to therein, then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such -15- 17 losses, expenses, liabilities or claims (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Initial Purchaser on the other hand from the offering of the Notes or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and of the Initial Purchaser on the other in connection with the statements or omissions which resulted in such losses, expenses, liabilities or claims, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Initial Purchaser on the other shall be deemed to be in the same proportion as the total proceeds from the offering (net of underwriting discounts and commissions but before deducting expenses) received by the Company bear to the underwriting discounts and commissions received by the Initial Purchaser. The relative fault of the Company on the one hand and of the Initial Purchaser on the other shall be determined by reference to, among other things, whether the untrue statement or alleged untrue statement of a material fact or omission or alleged omission relates to information supplied by the Company or by the Initial Purchaser and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the losses, claims, damages and liabilities referred to above shall be deemed to include any reasonable legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any claim or action. (f) The Company and the Initial Purchaser agree that it would not be just and equitable if contribution pursuant to this Section 10 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in subsection (e) above. Notwithstanding the provisions of this Section 10, the Initial Purchaser shall not be required to contribute any amount in excess of the amount by which the total price at which the Notes underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which the Initial Purchaser has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. (g) The indemnity and contribution agreements contained in this Section 10 and the covenants, warranties and representations of the Company and the Initial Purchaser contained in this Agreement shall remain in full force and effect (regardless, with respect to representations and warranties of the Company, of any investigation made by on behalf of the Initial Purchaser, its directors or officers or any person who controls the Initial Purchaser within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, or by or on behalf of the Company, its directors and officers or any person who controls the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act), and shall survive any termination of this Agreement or the issuance and delivery of the Notes. The Company and the Initial Purchaser agree promptly to notify the other of the commencement of any litigation or proceeding against it and, in the case of the Company, against any of the Company's officers and directors, in connection with the issuance and sale of the Notes, or in connection with the Offering Memorandum. 11. NOTICES: Except as otherwise herein provided, all statements, requests, notices and agreements shall be in writing or by facsimile and, if to the Initial Purchaser, shall be sufficient in all respects if delivered or sent to UBS Warburg LLC, 299 Park Avenue, New York, NY 10171, Attention: Syndicate Department, facsimile no. 212-821-2452 and, if to the -16- 18 Company, shall be sufficient in all respects if delivered or sent to the Company at the offices of the Company at 4400 Biscayne Blvd., Miami, FL 33137, Attention: General Counsel, Facsimile no. 305-575-6049 with a copy to Akerman Senterfitt & Eidson, P.A., One S.E. Third Avenue, Miami, FL 33131, Attention: Kara MacCullough, Esq., facsimile no. 305-374-5095. 12. CONSTRUCTION: This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York. The section headings in this Agreement have been inserted as a matter of convenience of reference and are not a part of this Agreement. 13. PARTIES AT INTEREST: The Agreement herein set forth has been and is made solely for the benefit of the Initial Purchaser and the Company and the controlling persons, directors and officers referred to in Section 10 hereof, and their respective successors, assigns, executors and administrators. No other person, partnership, association or corporation (including a purchaser, as such purchaser, from the Initial Purchaser) shall acquire or have any right under or by virtue of this Agreement. 14. COUNTERPARTS: This Agreement may be signed by the parties in counterparts which together shall constitute one and the same agreement among the parties. Delivery of an executed counterpart by facsimile shall be effective as delivery of a manually executed counterpart thereof. -17- 19 If the foregoing correctly sets forth the understanding between the Company and the Initial Purchaser, please so indicate in the space provided below for the purpose, whereupon this letter and your acceptance shall constitute a binding agreement between the Company and the Initial Purchaser. Very truly yours, IVAX CORPORATION By: /s/ NEIL FLANZRAICH -------------------------------------- Name: Neil Flanzraich Title: Vice Chairman and President Accepted and agreed to as of the date first above written: UBS WARBURG LLC By: /s/ BENJAMIN D. LORELLO -------------------------------------------- Name: Benjamin D. Lorello Title: Managing Director By: /s/ STEVEN MEEHAN -------------------------------------------- Name: Steven Meehan Title: Managing Director -18- EX-4.5 4 g70686ex4-5.txt INDENTURE 5/4/01 1 EXHIBIT 4.5 ============================================================================== IVAX CORPORATION and U.S. BANK TRUST NATIONAL ASSOCIATION as Trustee ----------------- INDENTURE Dated as of May 4, 2001 ----------------- $575,000,000 Principal Amount (Plus Over-allotment Option) 4 1/2% CONVERTIBLE SENIOR SUBORDINATED NOTES DUE 2008 ============================================================================== 2 892476.5 CROSS-REFERENCE TABLE
TIA INDENTURE SECTION SECTION - ------- ----------- 310(a)(1)........................................................................ 7.10 (a)(2)..................................................................... 7.10 (a)(3)..................................................................... N.A. (a)(4)..................................................................... N.A. (b)........................................................................ 7.08; 7.10; 12.02 (c)........................................................................ N.A. 311(a)........................................................................... 7.11 (b)........................................................................ 7.11 (c)........................................................................ N.A. 312(a)........................................................................... 2.05 (b)........................................................................ 12.03 (c)........................................................................ 12.03 313(a)........................................................................... 7.06 (b)(1)..................................................................... N.A. (b)(2)..................................................................... 7.06 (c)........................................................................ 7.06; 12.02 (d)........................................................................ 7.06 314(a)........................................................................... 4.02 (b)........................................................................ N.A. (c)(1)..................................................................... 12.04 (c)(2)..................................................................... 12.04 (c)(3)..................................................................... N.A. (d)........................................................................ N.A. (e)........................................................................ 12.05 (f)........................................................................ N.A. 315(a)........................................................................... 7.01(B) (b)........................................................................ 7.05; 12.02 (c)........................................................................ 7.01(A) (d)........................................................................ 7.01(C) (e)........................................................................ 6.11 316(a)(last sentence)............................................................ 2.09 (a)(1)(A).................................................................. 6.05 (a)(1)(B).................................................................. 6.04 (a)(2)..................................................................... N.A. (b)........................................................................ 6.07 317(a)(1)........................................................................ 6.08 (a)(2)..................................................................... 6.09 (b)........................................................................ 2.04 318(a)........................................................................... 12.01
- ------------ N.A. means Not Applicable Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a part of the Indenture 3 TABLE OF CONTENTS
PAGE ---- I. DEFINITIONS AND INCORPORATION BY REFERENCE 1.01 Definitions...............................................................................1 1.02 Other Definitions.........................................................................3 1.03 Incorporation by Reference of Trust Indenture Act.........................................4 1.04 Rules of Construction.....................................................................4 II. THE SECURITIES 2.01 Form and Dating...........................................................................5 2.02 Execution and Authentication..............................................................5 2.03 Registrar, Paying Agent and Conversion Agent..............................................6 2.04 Paying Agent to Hold Money in Trust.......................................................7 2.05 Securityholder Lists......................................................................7 2.06 Transfer and Exchange.....................................................................7 2.07 Replacement Securities....................................................................8 2.08 Outstanding Securities....................................................................8 2.09 Securities Held by the Company or an Affiliate............................................8 2.10 Temporary Securities......................................................................8 2.11 Cancellation..............................................................................9 2.12 Defaulted Interest........................................................................9 2.13 CUSIP Numbers.............................................................................9 2.14 Deposit of Moneys.........................................................................9 2.15 Book-Entry Provisions for Global Securities..............................................10 2.16 Special Transfer Provisions..............................................................11 2.17 Restrictive Legends......................................................................14 III. REDEMPTION 3.01 Notices to Trustee.......................................................................14 3.02 Selection of Securities to Be Redeemed...................................................14 3.03 Notice of Redemption.....................................................................15 3.04 Effect of Notice of Redemption...........................................................16 3.05 Deposit of Redemption Price..............................................................16 3.06 Securities Redeemed in Part..............................................................16 3.07 Repurchase at Option of Holder upon a Change in Control..................................16 IV. COVENANTS 4.01 Payment of Securities....................................................................19 4.02 Maintenance of Office or Agency..........................................................19
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PAGE ---- 4.03 Reports..................................................................................20 4.04 Compliance Certificate...................................................................20 4.05 Stay, Extension and Usury Laws...........................................................20 4.06 Corporate Existence......................................................................21 4.07 Notice of Default........................................................................21 V. SUCCESSORS 5.01 When Company May Merge, etc..............................................................21 5.02 Successor Substituted....................................................................21 VI. DEFAULTS AND REMEDIES 6.01 Events of Default........................................................................22 6.02 Acceleration.............................................................................23 6.03 Other Remedies...........................................................................23 6.04 Waiver of Past Defaults..................................................................23 6.05 Control by Majority......................................................................24 6.06 Limitation on Suits......................................................................24 6.07 Rights of Holders to Receive Payment.....................................................24 6.08 Collection Suit by Trustee...............................................................25 6.09 Trustee May File Proofs of Claim.........................................................25 6.10 Priorities...............................................................................25 6.11 Undertaking for Costs....................................................................25 VII. TRUSTEE 7.01 Duties of Trustee........................................................................26 7.02 Rights of Trustee........................................................................27 7.03 Individual Rights of Trustee.............................................................28 7.04 Trustee's Disclaimer.....................................................................28 7.05 Notice of Defaults.......................................................................28 7.06 Reports by Trustee to Holders............................................................28 7.07 Compensation and Indemnity...............................................................28 7.08 Replacement of Trustee...................................................................29 7.09 Successor Trustee by Merger, etc.........................................................30 7.10 Eligibility; Disqualification............................................................30 7.11 Preferential Collection of Claims Against Company........................................30 VIII. DISCHARGE OF INDENTURE 8.01 Termination of Company's Obligations.....................................................30 8.02 Application of Trust Money...............................................................31 8.03 Repayment to Company.....................................................................31 8.04 Reinstatement............................................................................32
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PAGE ---- IX. AMENDMENTS 9.01 Without Consent of Holders...............................................................32 9.02 With Consent of Holders..................................................................32 9.03 Compliance with Trust Indenture Act......................................................33 9.04 Revocation and Effect of Consents........................................................33 9.05 Notation on or Exchange of Securities....................................................34 9.06 Trustee Protected........................................................................34 X. CONVERSION 10.01 Conversion Privilege; Restrictive Legends................................................34 10.02 Conversion Procedure.....................................................................35 10.03 Fractional Shares........................................................................35 10.04 Taxes on Conversion......................................................................36 10.05 Company to Provide Stock.................................................................36 10.06 Adjustment for Changes in Capital Stock..................................................36 10.07 Adjustment for Rights to Purchase Shares Below Market Price..............................37 10.08 Adjustment for Other Distributions.......................................................39 10.09 Voluntary Adjustment.....................................................................40 10.10 Current Market Price.....................................................................40 10.11 When Adjustment May Be Deferred..........................................................40 10.12 When No Adjustment Required..............................................................41 10.13 Notice of Adjustment.....................................................................41 10.14 Notice of Certain Transactions...........................................................41 10.15 Reorganization of the Company............................................................41 10.16 Company Determination Final..............................................................42 10.17 Trustee's Disclaimer.....................................................................42 XI. SUBORDINATION 11.01 Agreement to Subordinate.................................................................42 11.02 Certain Definitions......................................................................42 11.03 Liquidation; Dissolution; Bankruptcy.....................................................43 11.04 Company Not to Make Payments with Respect to Securities in Certain Circumstances.........43 11.05 Acceleration of Securities...............................................................44 11.06 When Distribution Must Be Paid Over......................................................44 11.07 Notice by Company........................................................................44 11.08 Subrogation..............................................................................45 11.09 Relative Rights..........................................................................45 11.10 Subordination May Not Be Impaired by Company.............................................45 11.11 Distribution or Notice to Representative.................................................45 11.12 Rights of Trustee and Paying Agent.......................................................45 11.13 Officers' Certificate....................................................................46 11.14 Obligation of Company Unconditional......................................................46
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PAGE ---- 11.15 Not to Prevent Events of Default.........................................................47 11.16 Prohibition on Incurrence of Layered Indebtedness........................................47 XII. MISCELLANEOUS 12.01 Trust Indenture Act Controls.............................................................47 12.02 Notices..................................................................................47 12.03 Communication by Holders with Other Holders..............................................48 12.04 Certificate and Opinion as to Conditions Precedent.......................................48 12.05 Statements Required in Certificate or Opinion............................................48 12.06 Rules by Trustee and Agents..............................................................49 12.07 Legal Holidays...........................................................................49 12.08 No Recourse Against Others...............................................................49 12.09 Duplicate Originals......................................................................49 12.10 Governing Law............................................................................50 12.11 No Adverse Interpretation of Other Agreements............................................50 12.12 Successors...............................................................................50 12.13 Separability.............................................................................50 12.14 Table of Contents, Headings, etc.........................................................50
-iv- 7 INDENTURE, dated as of May 4, 2001 between IVAX CORPORATION, a Florida corporation (the "COMPANY"), and U.S. BANK TRUST NATIONAL ASSOCIATION, a national banking association, as trustee (the "TRUSTEE"). Each party agrees as follows for the benefit of the other party and for the equal and ratable benefit of the Holders of the Company's 4 1/2% Convertible Senior Subordinated Notes Due 2008 (the "SECURITIES"). I. DEFINITIONS AND INCORPORATION BY REFERENCE 1.01 DEFINITIONS. "AFFILIATE" means any person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company. For this purpose, "control" shall mean the power to direct the management and policies of a person through the ownership of securities, by contract or otherwise. "AGENT" means any Registrar, Paying Agent, Conversion Agent or co-registrar. "BOARD OF DIRECTORS" means the Board of Directors of the Company or any committee of the Board authorized to act for it hereunder. "BOARD RESOLUTION" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee. "CAPITAL STOCK" means any and all shares, interests, participations or other equivalents (however designated) of capital stock of the Company and all warrants or options to acquire such capital stock. "COMMON STOCK" means the Common Stock, par value $0.10 of the Company. "COMPANY" means the party named as such above until a successor replaces it pursuant to the applicable provision hereof and thereafter means the successor. "COMPANY REQUEST" or "COMPANY ORDER" means a written request or order signed on behalf of the Company by its Chairman of the Board, its President or any Vice President and by its Treasurer or an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to the Trustee. "CORPORATE TRUST OFFICE OF THE TRUSTEE" shall be at the address of the Trustee specified in Section 12.02 or such other address as the Trustee may give notice of to the Company. "DEFAULT" means any event which is, or after notice or passage of time or both would be, an Event of Default. "DEPOSITORY" means The Depository Trust Company, its nominees and successors. 8 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended. "HOLDER" or "SECURITYHOLDER" means a person in whose name a Security is registered on the Registrar's books. "IAI GLOBAL SECURITY" means a permanent Global Security in registered form representing the aggregate Principal Amount of securities sold to Institutional Accredited Investors. "INDENTURE" means this Indenture as amended or supplemented from time to time. "INSTITUTIONAL ACCREDITED INVESTOR" means an "accredited investor" within the meaning of Rule 501(a)(1), (2), (3), or (7) under the Act that is an institutional investor. "INTEREST" includes liquidated damages, unless the context otherwise requires. "LIQUIDATED DAMAGES" has the meaning provided in the Registration Rights Agreement. "MATURITY DATE" means May 15, 2008. "OFFICER" means the Chairman of the Board, the President, any Vice President, the Chief Financial Officer, the Treasurer or the Secretary of the Company. "OFFICERS' CERTIFICATE" means a certificate signed by two Officers or by an Officer and an Assistant Treasurer or an Assistant Secretary of the Company. "OPINION OF COUNSEL" means a written opinion from legal counsel who may be an employee of or counsel for the Company or other counsel reasonably acceptable to the Trustee. "PERSON" means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or other agency or political subdivision thereof. "QIB" means a "qualified institutional buyer" within the meaning of Rule 144A under the Act. "REDEMPTION PRICE" means, with respect to a Security to be redeemed by the Company in accordance with ARTICLE III, the percentage of the outstanding principal amount of such Security payable by the Company upon such redemption. "REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement dated as of May 4, 2001 between the Company and the Initial Purchaser. "REGULATION S" means Regulation S under the Securities Act. "REGULATION S GLOBAL SECURITY" means a permanent Global Security in registered form representing the aggregate principal amount of Securities sold in reliance on Regulation S. -2- 9 "REPURCHASE PRICE" means, with respect to a Security duly tendered for purchase by the Company in accordance with SECTION 3.07, 100% of the outstanding principal amount of such Security so tendered. "RESTRICTED SECURITY" means a Security that constitutes a "restricted security" within the meaning of Rule 144(a)(3) under the Securities Act; PROVIDED, HOWEVER, that the Trustee shall be entitled to request and conclusively rely on an Opinion of Counsel with respect to whether any Security constitutes a Restricted Security. "RULE 144A GLOBAL SECURITY" means a permanent Global Security in registered form representing the aggregate principal amount of Securities sold in reliance on Rule 144A. "SEC" means the Securities and Exchange Commission. "SECURITIES" means the 4 1/2% Convertible Senior Subordinated Notes Due 2008 issued by the Company pursuant to this Indenture. "SECURITIES ACT" means the Securities Act of 1933, as amended. "SECURITYHOLDER" has the meaning given to such term in the Registration Rights Agreement. "SUBSIDIARY" means (i) a corporation a majority of whose capital stock with voting power, under ordinary circumstances, to elect directors is at the time, directly or indirectly, owned by the Company, by one or more subsidiaries of the Company or by the Company and one or more subsidiaries thereof or (ii) any other person (other than a corporation) in which the Company, one or more subsidiaries thereof or the Company and one or more subsidiaries thereof, directly or indirectly, at the date of determination thereof, have at least majority ownership interest. "TIA" means the Trust Indenture Act of 1939 (15 U.S. Code ss.ss. 77aaa-77bbbb) as in effect on the date of this Indenture, except as provided in Section 9.03. "TRUSTEE" means the party named as such in this Indenture until a successor replaces it in accordance with the provisions hereof and thereafter means the successor. "TRUST OFFICER" means any officer of the Trustee assigned by the Trustee to administer its corporate trust matters. 1.02 OTHER DEFINITIONS. TERM DEFINED IN SECTION ---- ------------------ "BANKRUPTCY LAW"............................ 6.01 "BUSINESS DAY".............................. 12.07 "CHANGE IN CONTROL"......................... 3.07 "COMPANY NOTICE"............................ 3.07 -3- 10 "CONVERSION AGENT".......................... 2.03 "CUSTODIAN"................................. 6.01 "EVENT OF DEFAULT".......................... 6.01 "GLOBAL SECURITY"........................... 2.01 "INCUMBENT BOARD"........................... 3.07 "INDEBTEDNESS".............................. 11.02 "INITIAL PURCHASER"......................... 2.02 "LEGAL HOLIDAY"............................. 12.07 "PARTICIPANTS".............................. 2.15 "PAYING AGENT".............................. 2.03 "PERMITTED DIVIDEND AMOUNT"................. 10.08 "PHYSICAL SECURITIES"....................... 2.01 "PRIVATE PLACEMENT LEGEND".................. 2.17 "REGISTRAR"................................. 2.03 "REPRESENTATIVE"............................ 11.02 "REPURCHASE DATE"........................... 3.07 "REPURCHASE RIGHT".......................... 3.07 "SENIOR INDEBTEDNESS"....................... 11.02 "U.S. GOVERNMENT OBLIGATIONS"............... 8.01 1.03 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings: "COMMISSION" means the SEC; "INDENTURE SECURITIES" means the Securities; "INDENTURE SECURITY HOLDER" means a Securityholder or a Holder; "INDENTURE TO BE QUALIFIED" means this Indenture; "INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee; and "OBLIGOR" on the indenture securities means the Company or any successor. All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA and not otherwise defined herein have the meanings so assigned to them. 1.04 RULES OF CONSTRUCTION. Unless the context otherwise requires: (i) a term has the meaning assigned to it; (ii) an accounting term not otherwise defined has the meaning assigned to it in accordance with generally accepted accounting principles in effect on the date hereof; -4- 11 (iii) "or" is not exclusive; (iv) words in the singular include the plural and in the plural include the singular; (v) provisions apply to successive events and transactions; and (vi) "herein", "hereof" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. II. THE SECURITIES 2.01 FORM AND DATING. The Securities and the Trustee's certificate of authentication shall be substantially in the form set forth in EXHIBIT A, which is incorporated in and forms a part of this Indenture. The Securities may have notations, legends or endorsements required by law, stock exchange rule or usage. Each Security shall be dated the date of its authentication. Securities offered and sold in reliance on Rule 144A, Securities offered and sold in reliance on Regulation S and Securities offered and sold to Institutional Accredited Investors shall be issued initially in the form of one or more Global Securities, substantially in the form set forth in EXHIBIT A (the "GLOBAL SECURITY"), deposited with the Trustee, as custodian for the Depository, duly executed by the Company and authenticated by the Trustee as hereinafter provided and shall bear the legends set forth in EXHIBITS B-1 AND B-2. The aggregate principal amount of the Global Security may from time to time be increased or decreased by adjustments made on the records of the Trustee, as custodian for the Depository, as hereinafter provided. Securities issued in exchange for interests in a Global Security pursuant to SECTION 2.15 may be issued and Securities offered and sold in reliance on any other exemption from registration under the Securities Act other than as described in the preceding paragraph shall be issued in the form of permanent certificated Securities in registered form in substantially the form set forth in EXHIBIT A (the "PHYSICAL SECURITIES"). All Notes offered and sold in reliance on Regulation S shall remain in the form of a Global Security for one year after the issue date for the Securities. 2.02 EXECUTION AND AUTHENTICATION. One Officer shall sign the Securities for the Company by manual or facsimile signature. If an Officer whose signature is on a Security no longer holds that office at the time the Security is authenticated, the Security shall nevertheless be valid. -5- 12 A Security shall not be valid until authenticated by the manual signature of the Trustee. The signature shall be conclusive evidence that the Security has been authenticated under this Indenture. Upon a written order of the Company signed by one Officer of the Company, the Trustee shall authenticate Securities for original issue in the principal amount of $575,000,000 and such additional principal amounts, if any, as shall be determined pursuant to the next sentence of this SECTION 2.02. Upon receipt by the Trustee of an Officers' Certificate stating that the Initial Purchaser has elected to purchase from the Company a specified principal amount of additional Securities, not to exceed $150,000,000, pursuant to Section l of the Purchase Agreement dated as of May 1, 2001, between the Company, as issuer, and UBS Warburg LLC, as initial purchaser (the "INITIAL PURCHASER"), the Trustee shall authenticate and deliver such specified principal amount of additional Securities to or upon the written order of the Company signed as provided in the immediately preceding sentence. Such Officers' Certificate must be received by the Trustee not later than June 1, 2001, at least two full business days prior to the proposed date for delivery of such additional Securities. The aggregate principal amount of Securities outstanding at any time may not exceed $725,000,000 except as provided in SECTION 2.07. Upon a written order of the Company signed by two Officers or by an Officer and an Assistant Treasurer of the Company, the Trustee shall authenticate Securities not bearing the Private Placement Legend to be issued to the transferee when sold pursuant to an effective registration statement under the Securities Act as set forth in SECTION 2.16(D). The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Securities. An authenticating agent may authenticate Securities whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such Agent. An authenticating agent has the same rights as an Agent to deal with the Company or an Affiliate. The Securities shall be issuable only in registered form without coupons and only in denominations of $1,000 principal amount and any integral multiple thereof. 2.03 REGISTRAR, PAYING AGENT AND CONVERSION AGENT. The Company shall maintain an office or agency where Securities may be presented for registration of transfer or for exchange ("REGISTRAR"), an office or agency where Securities may be presented for payment ("PAYING AGENT") and an office or agency where Securities may be presented for conversion ("CONVERSION AGENT"). The Registrar shall keep a register of the Securities and of their transfer and exchange. The Company may appoint or change one or more co-registrars, one or more additional paying agents and one or more additional conversion agents without notice and may act in any such capacity on its own behalf. The term "Registrar" includes any co-registrar; the term "PAYING AGENT" includes any additional paying agent; and the term "CONVERSION AGENT" includes any additional conversion agent. The Company shall enter into an appropriate agency agreement with any Agent not a party to this Indenture. The agreement shall implement the -6- 13 provisions of this Indenture that relate to such Agent. The Company shall notify the Trustee of the name and address of any Agent not a party to this Indenture. If the Company fails to maintain a Registrar, Paying Agent or Conversion Agent, the Trustee shall act as such. The Company initially appoints the Trustee as Paying Agent, Registrar and Conversion Agent. 2.04 PAYING AGENT TO HOLD MONEY IN TRUST. Each Paying Agent shall hold in trust for the benefit of the Securityholders or the Trustee all moneys held by the Paying Agent for the payment of the Securities, and shall notify the Trustee of any default by the Company in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent shall have no further liability for the money. If the Company acts as Paying Agent, it shall segregate and hold as a separate trust fund all money held by it as Paying Agent. 2.05 SECURITYHOLDER LISTS. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Securityholders. If the Trustee is not the Registrar, the Company shall furnish to the Trustee on or before each interest payment date and at such other times as the Trustee may request in writing a list, in such form and as of such date as the Trustee may reasonably require, of the names and addresses of Securityholders. 2.06 TRANSFER AND EXCHANGE. Where Securities are presented to the Registrar with a request to register their transfer or to exchange them for an equal principal amount of Securities of other authorized denominations, the Registrar shall register the transfer or make the exchange if its requirements for such transaction are met. To permit registrations of transfer and exchanges, the Trustee shall authenticate Securities at the Registrar's request. The Company or the Trustee, as the case may be, shall not be required (a) to issue, authenticate, register the transfer of or exchange any Security during a period beginning at the opening of business 15 days before the mailing of a notice of redemption of the Securities selected for redemption under SECTION 3.03 and ending at the close of business on the day of such mailing, or (b) to register the transfer of or exchange any Security so selected for redemption in whole or in part, except the unredeemed portion of Securities being redeemed in part. No service charge shall be made for any transfer, exchange or conversion of Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any transfer, exchange or conversion of Securities, other than exchanges pursuant to SECTIONS 2.10, 3.06, 9.05 OR 10.02 not involving any transfer. -7- 14 2.07 REPLACEMENT SECURITIES. If the Holder of a Security claims that the Security has been mutilated, lost, destroyed or wrongfully taken, the Company shall issue and the Trustee shall authenticate a replacement Security if the Trustee's requirements are met and, in the case of a mutilated Security, such mutilated Security is surrendered to the Trustee. In the case of lost, destroyed or wrongfully taken Securities, if required by the Trustee, an indemnity bond must be provided by the Holder that is sufficient in the judgment of the Trustee to protect the Company, the Trustee or any Agent from any loss which any of them may suffer if a Security is replaced. The Trustee may charge for its expenses in replacing a Security. In case any such mutilated, lost, destroyed or wrongfully taken Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security when due. Every replacement Security is an additional obligation of the Company only as provided in SECTION 2.08. 2.08 OUTSTANDING SECURITIES. Securities outstanding at any time are all the Securities authenticated by the Trustee except for those converted, those cancelled by it, those delivered to it for cancellation and those described in this SECTION 2.08 as not outstanding. A Security does not cease to be outstanding because the Company or one of its subsidiaries or Affiliates holds the Security. If a Security is replaced pursuant to SECTION 2.07, it ceases to be outstanding unless the Trustee receives proof satisfactory to it, or a court holds, that the replaced Security is held by a protected purchaser. If the Paying Agent (other than the Company) holds on a redemption date or maturity date money sufficient to pay Securities payable on that date, then on and after that date, such Securities shall be deemed to be no longer outstanding and interest on them shall cease to accrue. 2.09 SECURITIES HELD BY THE COMPANY OR AN AFFILIATE. In determining whether the Holders of the required aggregate principal amount of Securities have concurred in any direction, waiver or consent, Securities owned by the Company or a subsidiary or an Affiliate shall be considered as though not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Securities which the Trustee knows are so owned shall be so disregarded. 2.10 TEMPORARY SECURITIES. Until definitive Securities are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Securities. Temporary Securities shall be substantially in the form of definitive Securities but may have variations that the Company considers appropriate for temporary Securities. -8- 15 Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate definitive Securities in exchange for temporary Securities. 2.11 CANCELLATION. The Company at any time may deliver Securities to the Trustee for cancellation. The Registrar, Paying Agent and Conversion Agent shall forward to the Trustee any Securities surrendered to them for transfer, exchange, payment or conversion. The Trustee shall cancel all Securities surrendered for transfer, exchange, payment, conversion or cancellation and the Trustee shall destroy cancelled Securities and deliver a certificate of any such destruction to the Company. The Company may not issue new Securities to replace Securities that it has paid or delivered to the Trustee for cancellation or that any Securityholder has converted pursuant to ARTICLE X. 2.12 DEFAULTED INTEREST. If and to the extent the Company defaults in a payment of interest on the Securities, it shall pay the defaulted interest in any lawful manner plus, to the extent not prohibited by applicable statute or case law, interest payable on the defaulted interest at the rate provided in the Securities. It may pay the defaulted interest to the persons who are Securityholders on a subsequent special record date. The Company shall fix such record date and payment date. At least 15 days before the record date, the Company shall mail to Securityholders a notice that states the record date, payment date and amount of interest to be paid. 2.13 CUSIP NUMBERS. The Company in issuing the Securities may use one or more "CUSIP" numbers, and if so, the Trustee shall use the CUSIP numbers in notices of redemption or exchange as a convenience to Holders; PROVIDED, HOWEVER, that no representation is hereby deemed to be made by the Trustee as to the correctness or accuracy of the CUSIP numbers printed in the notice or on the Securities, and that reliance may be placed only on the other identification numbers printed on the Securities. The Company shall promptly notify the Trustee of any change in the CUSIP number. 2.14 DEPOSIT OF MONEYS. Prior to 11:00 a.m., New York City time, on each interest payment date, maturity date, redemption date and Repurchase Date, the Company shall have deposited with the Paying Agent in immediately available funds money sufficient to make cash payments, if any, due on such interest payment date, maturity date, redemption date and Repurchase Date, as the case may be, in a timely manner which permits the Paying Agent to remit payment to the Holders on such interest payment date, maturity date, redemption date and Repurchase Date, as the case may be. -9- 16 2.15 BOOK-ENTRY PROVISIONS FOR GLOBAL SECURITIES. (A) The Global Securities initially shall (i) be registered in the name of the Depository or the nominee of such Depository, (ii) be delivered to the Trustee as custodian for such Depository and (iii) bear legends as set forth in SECTION 2.17. Members of, or participants in, the Depository ("PARTICIPANTS") shall have no rights under this Indenture with respect to any Global Security held on their behalf by the Depository, or the Trustee as its custodian, or under the Global Security, and the Depository may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner of the Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depository or impair, as between the Depository and Participants, the operation of customary practices governing the exercise of the rights of a Holder of any Security. (B) Transfers of Global Securities shall be limited to transfers in whole, but not in part, to the Depository, its successors or their respective nominees. Interests of beneficial owners in the Global Securities may be transferred or exchanged for Physical Securities in accordance with the rules and procedures of the Depository and the provisions of SECTION 2.16. In addition, Physical Securities shall be transferred to all beneficial owners in exchange for their beneficial interests in Global Securities if (i) the Depository notifies the Company that it is unwilling or unable to continue as Depository for any Global Security and a successor Depository is not appointed by the Company within 90 days of such notice or (ii) an Event of Default has occurred and is continuing and the Registrar has received a written request from the Depository to issue Physical Securities. (C) In connection with any transfer or exchange of a portion of the beneficial interest in a Global Security to beneficial owners pursuant to SECTION 2.15(B), the Registrar shall (if one or more Physical Securities are to be issued) reflect on its books and records the date and a decrease in the aggregate principal amount of such Global Security in an amount equal to the aggregate principal amount of the beneficial interest in the Global Security to be transferred, and the Company shall execute and the Trustee shall authenticate and deliver, one or more Physical Securities of authorized denominations in an aggregate principal amount equal to the aggregate principal amount of the beneficial interest in the Global Security so transferred. (D) In connection with the transfer of a Global Security in its entirety to beneficial owners pursuant to SECTION 2.15(B), such Global Security shall be deemed to be surrendered to the Trustee for cancellation, and the Company shall execute, and the Trustee shall upon written instructions from the Company authenticate and deliver, to each beneficial owner identified by the Depository in exchange for its beneficial interest in such Global Security, an equal aggregate principal amount of Physical Securities of authorized denominations. (E) Any Physical Security constituting a Restricted Security delivered in exchange for an interest in a Global Security pursuant to SECTION 2.15(B) OR (C) shall, except as otherwise provided by SECTION 2.16, bear the Private Placement Legend (as defined). -10- 17 (F) The Holder of any Global Security may grant proxies and otherwise authorize any Person, including Participants and Persons that may hold interests through Participants, to take any action which a Holder is entitled to take under this Indenture or the Securities. 2.16 SPECIAL TRANSFER PROVISIONS. (A) TRANSFERS TO NON-QIB INSTITUTIONAL ACCREDITED INVESTORS AND NON-U.S. PERSONS. The following provisions shall apply with respect to the registration of any proposed transfer of a Restricted Security to any Institutional Accredited Investor which is not a QIB or to any Non-U.S. Person: (i) the Registrar shall register the transfer of any Restricted Security, whether or not such Security bears the Private Placement Legend, if (x) the requested transfer is after the second anniversary of the issue date for the Securities; PROVIDED, HOWEVER, that neither the Company nor any Affiliate of the Company has held any beneficial interest in such Security, or portion thereof, at any time on or prior to the second anniversary of the issue date for the Securities or (y)(1) in the case of a transfer to an Institutional Accredited Investor which is not a QIB (excluding Non-U.S. Persons), the proposed transferee has delivered to the Registrar a certificate substantially in the form of EXHIBIT C hereto and any legal opinions and certifications required thereby and (2) in the case of a transfer to a Non-U.S. Person on or before the first anniversary of the issue date for the Securities, the proposed transferor has delivered to the Registrar certificates substantially in the form of EXHIBIT D-1 and EXHIBIT D-2 hereto; PROVIDED, that if the transferor is a Non-U.S. Person who has previously furnished a certificate substantially in the form of EXHIBIT D-2, such transferor need not furnish a certificate in the form of EXHIBIT D-1; (ii) if the proposed transferee is a Participant and the Notes to be transferred consist of Physical Securities which after transfer are to be evidenced by an interest in the Global Security, upon receipt by the Registrar of (x) written instructions given in accordance with the Depository's and the Registrar's procedures and (y) the appropriate certificate, if any, required by clause (y) of paragraph (i) above, the Registrar shall register the transfer and reflect on its books and records the date and an increase in the aggregate principal amount of the Global Security in an amount equal to the aggregate principal amount of Physical Securities to be transferred, and the Trustee shall cancel the Physical Securities so transferred; and (iii) if the proposed transferor is a Participant seeking to transfer an interest in the Rule 144A Global Security, upon receipt by the Registrar of (x) written instructions given in accordance with the Depository's and the Registrar's procedures and (y) the appropriate certificate, if any, required by clause (y) of paragraph (i) above, the Registrar shall register the transfer and reflect on its books and records the date and (A) a decrease in the aggregate principal amount of the Rule 144A Global Security in an amount equal to the aggregate -11- 18 principal amount of the Securities to be transferred and (B) an increase in the aggregate principal amount of the Regulation S Global Security or the IAI Global Security, as the case may be, in an amount equal to the aggregate principal amount of the Securities to be transferred. (B) TRANSFERS TO QIBS. The following provisions shall apply with respect to the registration of any proposed transfer of a Restricted Security to a QIB: (i) the Registrar shall register the transfer of any Restricted Security, whether or not such Security bears the Private Placement Legend, if (x) the requested transfer is after the second anniversary of the issue date for the Securities; PROVIDED, HOWEVER, that neither the Company nor any Affiliate of the Company has held any beneficial interest in such Security, or portion thereof, at any time on or prior to the second anniversary of the issue date for the Securities or (y) such transfer is being made by a proposed transferor who has checked the box provided for on the form of Security stating, or has otherwise advised the Company and the Registrar in writing, that the sale has been made in compliance with the provisions of Rule 144A to a transferee who has signed the certification provided for on the form of Security stating, or has otherwise advised the Company and the Registrar in writing, that it is purchasing the Security for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a QIB within the meaning of Rule 144A, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as it has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon its foregoing representations in order to claim the exemption from registration provided by Rule 144A; (ii) if the proposed transferee is a Participant and the Securities to be transferred consist of Physical Securities which after transfer are to be evidenced by an interest in the Global Security, upon receipt by the Registrar of written instructions given in accordance with the Depository's and Registrar's procedures, the Registrar shall register the transfer and reflect on its books and records the date and an increase in the principal amount of the Global Security in an amount equal to the principal amount of Physical Securities to be transferred, and the Trustee shall cancel the Physical Securities so transferred; and (iii) if the proposed transferor is a Participant seeking to transfer an interest in the Regulation S Global Security or the IAI Global Security, upon receipt by the Registrar of written instructions given in accordance with the Depository's and the Registrar's procedures, the Registrar shall register the transfer and reflect on its books and records the date and (A) a decrease in the aggregate principal amount of the Regulation S Global Security or the IAI Global Security, as the case may be, in an amount equal to the aggregate -12- 19 principal amount of the Securities to be transferred and (B) an increase in the aggregate principal amount of the Rule 144A Global Security in an amount equal to the aggregate principal amount of the Securities to be transferred. (C) RESTRICTIONS ON TRANSFER AND EXCHANGE OF GLOBAL SECURITIES. Notwithstanding any other provisions of this Indenture, a Global Security may not be transferred except as a whole by the Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or another nominee of the Depository or by the Depository or any such nominee to a successor Depository or a nominee of such successor Depository. (D) PRIVATE PLACEMENT LEGEND. Upon the transfer, exchange or replacement of Securities not bearing the Private Placement Legend, the Registrar or co-Registrar shall deliver Securities that do not bear the Private Placement Legend. Upon the transfer, exchange or replacement of Securities bearing the Private Placement Legend, the Registrar or co-Registrar shall deliver only Securities that bear the Private Placement Legend unless (i) the requested transfer is after the second anniversary of the issue date for the Securities (PROVIDED, HOWEVER, that neither the Company nor any Affiliate of the Company has held any beneficial interest in such Security, or portion thereof, at any time prior to or on the second anniversary of the issue date) for the Securities, (ii) there is delivered to the Trustee an Opinion of Counsel reasonably satisfactory to the Company to the effect that neither such legend nor the related restrictions on transfer are required in order to maintain compliance with the provisions of the Securities Act or (iii) such Security has been sold pursuant to an effective registration statement under the Securities Act and the Holder selling such Securities has delivered to the Registrar or co-Registrar a notice in the form of EXHIBIT E hereto. Upon the effectiveness of the Shelf Registration Statement (as defined in the Registration Rights Agreement) the Company shall deliver to the Trustee a notice of effectiveness, a Security or Securities, an authentication order in accordance with SECTION 2.02 and an opinion of counsel in the form of EXHIBIT F hereto and, if required by the Depository, the Company shall deliver to the Depository a letter of representations in a form reasonably acceptable to the Depository. (E) GENERAL. By its acceptance of any Security bearing the Private Placement Legend, each Holder of such a Security acknowledges the restrictions on transfer of such Security set forth in this Indenture and in the Private Placement Legend and agrees that it will transfer such Security only as provided in this Indenture. The Registrar shall retain copies of all letters, notices and other written communications received pursuant to SECTION 2.15 or this SECTION 2.16. The Company shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable written notice to the Registrar. (F) TRANSFERS OF SECURITIES HELD BY AFFILIATES. Any certificate (i) evidencing a Security that has been transferred to an Affiliate of the Company within two years after the issue date for the Securities, as evidenced by a notation on the Assignment Form for such transfer or in the representation letter delivered in respect thereof or (ii) evidencing a Security that has been acquired from an Affiliate (other than by an Affiliate) in a transaction or a chain of transactions not involving any public offering, shall, until two years -13- 20 after the last date on which either the Company or any Affiliate of the Company was an owner of such Security, in each case, bear the Private Placement Legend, unless otherwise agreed by the Company (with written notice thereof to the Trustee). 2.17 RESTRICTIVE LEGENDS. Each Global Security and Physical Security that constitutes a Restricted Security shall bear the legend (the "PRIVATE PLACEMENT LEGEND") as set forth in EXHIBIT B-1 on the face thereof until after the second anniversary of the later of (i) the issue date for the Securities and (ii) the last date on which the Company or any Affiliate of the Company was the owner of such Security (or any predecessor security) (or such shorter period of time as permitted by Rule 144(k) under the Securities Act or any successor provision thereunder) (or such longer period of time as may be required under the Securities Act or applicable state securities laws in the opinion of counsel for the Company, unless otherwise agreed by the Company and the Holder thereof). Each Global Security shall also bear the legend as set forth in EXHIBIT B-2. III. REDEMPTION 3.01 NOTICES TO TRUSTEE. If the Company wants to redeem Securities pursuant to PARAGRAPH 6 of the Securities, it shall notify the Trustee at least 30 days prior to the redemption date (unless a shorter notice period shall be satisfactory to the Trustee) of the redemption date and the aggregate principal amount of Securities to be redeemed. If the Company wants to credit against any such redemption Securities it has not previously delivered to the Trustee for cancellation (other than Securities repurchased pursuant to SECTION 3.07), it shall deliver the Securities with the notice. 3.02 SELECTION OF SECURITIES TO BE REDEEMED. If less than all the Securities are to be redeemed, the Trustee shall select the Securities to be redeemed in compliance with the requirements of the principal exchange or market, if any, on which the Securities are listed, or, if the Securities are not so listed, on either a pro rata basis or by lot or such other method as the Trustee shall deem fair and equitable. The Trustee shall make the selection from Securities outstanding not previously called for redemption. The Trustee may select for redemption portions of the principal of Securities that have denominations larger than $1,000 principal amount. Securities and portions of them it selects shall be in amounts of $1,000 principal amount or whole multiples of $1,000 principal amount. The Trustee shall promptly notify the Company in writing of the Securities selected for redemption and the principal amount thereof to be redeemed. Provisions of this Indenture that apply to Securities called for redemption also apply to portions of Securities called for redemption. The Registrar need not transfer or exchange any Securities selected for redemption. Also, the Registrar need not transfer or exchange any Securities for a period of 15 days before selecting Securities to be redeemed. -14- 21 3.03 NOTICE OF REDEMPTION. At least 30 days but not more than 60 days before a redemption date, the Company shall mail by first-class mail a notice of redemption to each Holder whose Securities are to be redeemed. The notice shall identify the Securities and the aggregate principal amount thereof to be redeemed and shall state: (i) the redemption date; (ii) the Redemption Price, plus the amount of accrued and unpaid interest to be paid on the Securities called for redemption; (iii) the then current conversion rate and conversion price; (iv) the name and address of the Paying Agent and Conversion Agent; (v) the date on which the right to convert the principal of the Securities called for redemption will terminate and the place or places where such Securities may be surrendered for conversion; (vi) that Holders who want to convert Securities must satisfy the requirements in ARTICLE X; (vii) the paragraph of the Securities pursuant to which the Securities are to be redeemed; (viii) that Securities called for redemption must be surrendered to the Paying Agent to collect the Redemption Price; (ix) that interest on Securities called for redemption ceases to accrue on and after the redemption date; and (x) the CUSIP number of the Securities. The date on which the right to convert the principal of the Securities called for redemption will terminate shall be at the close of business on the date that is five business days prior to the redemption date. At the Company's request, upon reasonable prior notice, the Trustee shall give the notice of redemption in the Company's name and at the Company's expense; provided that the form and content of such notice shall be prepared by the Company. -15- 22 3.04 EFFECT OF NOTICE OF REDEMPTION. Once notice of redemption is mailed, Securities called for redemption become due and payable on the redemption date at the Redemption Price plus accrued and unpaid interest to the date of redemption, and, on and after such date (unless the Company shall default in the payment of the Redemption Price), such Securities shall cease to bear interest. Upon surrender to the Paying Agent, such Securities shall be paid at the Redemption Price plus accrued interest to the redemption date, unless the redemption date is an interest payment date, in which case the accrued interest will be paid in the ordinary course. 3.05 DEPOSIT OF REDEMPTION PRICE. On or before the redemption date, the Company shall deposit with the Paying Agent money in funds immediately available on the redemption date sufficient to pay the Redemption Price of and accrued interest on all Securities to be redeemed on that date. The Paying Agent shall return to the Company, as soon as practicable, any money not required for that purpose. 3.06 SECURITIES REDEEMED IN PART. Upon surrender of a Security that is redeemed in part, the Company shall execute and the Trustee shall authenticate for the Holder a new Security or Securities in an aggregate principal amount equal to the unredeemed portion of the Security surrendered. If any Security selected for partial redemption is converted in part, the converted portion of such Security shall be deemed (so far as may be) to be the portion selected for redemption. 3.07 REPURCHASE AT OPTION OF HOLDER UPON A CHANGE IN CONTROL. Upon any Change in Control (as defined below) with respect to the Company, each Holder of Securities shall have the right (the "REPURCHASE RIGHT"), at the Holder's option, to require the Company to repurchase all of such Holder's Securities, or a portion thereof which is $1,000 or any integral multiple thereof, on the date (the "REPURCHASE DATE") that is 45 days after the date of the Company Notice (as defined below) at the Repurchase Price set forth in the Securities, plus accrued and unpaid interest, if any, to the Repurchase Date. Within 30 days after the occurrence of a Change in Control, the Company is obligated to mail to all Holders of record of the Securities a notice (the "COMPANY NOTICE") of the occurrence of such Change in Control and the Repurchase Right arising as a result thereof. The Company shall deliver a copy of the Company Notice to the Trustee and shall cause a copy to be published at the Company's expense in THE NEW YORK TIMES and in THE WALL STREET JOURNAL or another newspaper of national circulation. To exercise the Repurchase Right, a Holder of Securities must deliver on or before the 30th day after the date of the Company Notice irrevocable written notice to the Company (or an agent designated by the Company for such purpose) and the Trustee of the Holder's exercise of such right together with the Securities with respect to which the right is being exercised, duly endorsed for transfer. -16- 23 Each Company Notice shall state: (i) the Repurchase Date; (ii) the date by which the Repurchase Right must be exercised; (iii) the Repurchase Price, plus the amount of accrued interest to be paid on the Securities to be repurchased; (iv) a description of the procedure which a Holder must follow to exercise a Repurchase Right; (v) that the Securities are to be surrendered for payment of the Repurchase Price; (vi) that exercise of the Repurchase Right is irrevocable, and Holders who elect to exercise the Repurchase Right will forfeit the right to convert Securities submitted for repurchase; (vii) the then existing conversion rate and conversion price for conversion of Securities and the place or places where such Securities may be surrendered for conversion; and (viii) the CUSIP number of the Securities. No failure of the Company to give the foregoing notice shall limit any Holder's right to exercise a Repurchase Right. In the event any Holder exercises its Repurchase Right, such Holder's conversion right will terminate upon receipt of the written notice of exercise of such Repurchase Right. To exercise a Repurchase Right a Holder shall deliver to the Company (if it is acting as its own Paying Agent) or to a Paying Agent designated by the Company for such purpose in the Company Notice within the period set forth in the second paragraph of this SECTION 3.07, (i) the Option of Holder To Elect Purchase Notice on the back of the Securities with respect to which the Repurchase Right is being exercised, duly completed and signed, with appropriate signature guarantee, and (ii) such Securities with respect to which the Repurchase Right is being exercised, duly endorsed for transfer to the Company, and the Holder of such Securities shall be entitled to receive from the Company (if it is acting as its own Paying Agent) or such Paying Agent a nontransferable receipt of deposit evidencing such deposit. In the event a Repurchase Right shall be exercised in accordance with the terms hereof, the Company shall pay or cause to be paid the applicable Repurchase Price (plus accrued and unpaid interest) with respect to the Securities as to which the Repurchase Right shall have been exercised to the Holder on the Repurchase Date. On or prior to a Repurchase Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust in accordance with SECTION 2.04) an amount of money (to be available on the Repurchase Date) sufficient to pay the Repurchase -17- 24 Price (plus accrued and unpaid interest) of all of the Securities which are to be repurchased on that date. Both the Company Notice and the notice of the Holder to the Company having been given as specified in this SECTION 3.07, the Securities so to be repurchased shall, on the Repurchase Date, become due and payable at the Repurchase Price applicable thereto (plus accrued and unpaid interest) and from and after such date (unless the Company shall default in the payment of the Repurchase Price) such Securities shall cease to bear interest. Upon surrender of any such Security for repurchase in accordance with said notice, such Security shall be paid by the Company at the Repurchase Price (plus accrued and unpaid interest). If any Security shall not be paid upon surrender thereof for repurchase, the principal shall, until paid, bear interest from the Repurchase Date at the rate borne by such Security on the principal amount of such Security. Any Security which is to be submitted for repurchase only in part shall be delivered pursuant to this SECTION 3.07 (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by the Holder thereof or its attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and make available for delivery to the Holder of such Security without service charge, a new Security or Securities, of any authorized denomination as requested by such Holder, of the same tenor and in aggregate principal amount equal to the portion of such Security not submitted for repurchase. Notwithstanding anything herein to the contrary, if the option granted to Securityholders to require the redemption of the Securities upon the occurrence of a Change in Control is determined to constitute a tender offer, the Company will comply with all applicable tender offer rules, including Rules 13e-4 and 14e-1 under the Exchange Act, upon the occurrence of a Change in Control. As used in this SECTION 3.07 of the Indenture and in the Securities: A "CHANGE IN CONTROL" of the Company means: (i) the acquisition by any person, entity or "group" within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (excluding, for this purpose, the Company and its subsidiaries, any employee benefit plan of the Company or its subsidiaries which acquires beneficial ownership of voting securities of the Company and any current affiliate of the Company whose beneficial ownership does not in the future exceed 45% of the Company's outstanding Common Stock) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of shares of Common Stock sufficient to elect a majority of directors; (ii) persons who, as of the date of this Indenture, constitute the Board of Directors (the "INCUMBENT Board") cease for any reason to constitute at least a majority of the Board of Directors, provided that any person becoming a director subsequent to the date hereof whose -18- 25 election, or nomination for election by the Company's stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such person were a member of the Incumbent Board; (iii) approval by the stockholders of the Company of a reorganization, merger or consolidation, in each case, with respect to which persons who were the stockholders of the Company immediately prior to such reorganization, merger or consolidation do not, immediately thereafter, beneficially own shares sufficient to elect a majority of directors in the election of directors of the reorganized, merged or consolidated company; or (iv) a liquidation or dissolution of the Company (other than pursuant to the United States Bankruptcy Code) or the conveyance, transfer or leasing of all or substantially all of the assets of the Company to any person. IV. COVENANTS 4.01 PAYMENT OF SECURITIES. The Company shall pay all amounts due with respect to the Securities on the dates and in the manner provided in the Securities. All such amounts shall be considered paid on the date due if the Paying Agent holds (or, if the Company is acting as Paying Agent, if the Company has segregated and holds in trust in accordance with SECTION 2.04) on that date money sufficient to pay the amount then due with respect to the Securities. The Company shall pay interest on any overdue amount (including, to the extent permitted by applicable law, overdue interest) at the rate borne by the Securities. 4.02 MAINTENANCE OF OFFICE OR AGENCY. The Company will maintain in the Borough of Manhattan, The City of New York, an office or agency (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or co-Registrar) where Securities may be surrendered for registration of transfer or exchange or conversion and where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee. The Company may also from time to time designate one or more other offices or agencies where the Securities may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; PROVIDED, HOWEVER, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the -19- 26 Borough of Manhattan, The City of New York for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. The Company hereby designates the Corporate Trust Office of the Trustee as an agency of the Company in accordance with SECTION 2.03. The Company also shall comply with the provisions of TIA ss. 314(a). 4.03 REPORTS. (A) The Company (at its own expense) will deliver to the Trustee within 15 days after the filing of the same with the Commission, copies of the quarterly and annual reports and of the information, documents and other reports, if any, which the Company is required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act. (B) Notwithstanding that the Company may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, for so long as any Securities remain outstanding the Company will promptly provide the information required by Rule 144A(d)(4) to any Holder that so requests. (C) In addition, if and when this Indenture becomes subject to the TIA, the Company will file a copy of all such information with the Commission for public availability (unless the Commission will not accept such a filing) and make such information available to investors who request it in writing. The Company will also comply with the other provisions of TIA ss. 314(a). 4.04 COMPLIANCE CERTIFICATE. The Company shall deliver to the Trustee within 120 days after the end of each fiscal year of the Company an Officers' Certificate stating whether or not the signers know of any Default or Event of Default by the Company in performing any of its obligations under this Indenture or the Securities. If they do know of any such Default or Event of Default, the certificate shall describe the Default or Event of Default and its status. 4.05 STAY, EXTENSION AND USURY LAWS. The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law has been enacted. -20- 27 4.06 CORPORATE EXISTENCE. Subject to ARTICLE V, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence and the corporate existence of each subsidiary in accordance with the respective organizational documents of each subsidiary and the rights (charter and statutory), licenses and franchises of the Company and its subsidiaries; PROVIDED, HOWEVER, that the Company shall not be required to preserve any such right, license or franchise, or the corporate existence of any subsidiary, if in the judgment of the Board of Directors, (i) such preservation or existence is not material to the conduct of business of the Company and (ii) the loss of such right, license or franchise or the dissolution of such subsidiary does not have a material adverse impact on the Holders. 4.07 NOTICE OF DEFAULT. In the event that any Default under SECTION 6.01 hereof shall occur the Company will give prompt written notice of such Default to the Trustee. V. SUCCESSORS 5.01 WHEN COMPANY MAY MERGE, ETC. The Company shall not consolidate with or merge into, or transfer or lease all or substantially all of its assets to, another person unless such other person is a corporation, a limited liability company or other entity organized under the laws of the United States, any State thereof or the District of Columbia and such person assumes by supplemental indenture all the obligations of the Company under the Securities and this Indenture, and immediately after giving effect to the transaction, no Default or Event of Default shall exist. The Company shall deliver to the Trustee prior to the consummation of the proposed transaction an Officers' Certificate to the foregoing effect and an opinion of Counsel, which may rely upon such Officers' Certificate as to the absence of Defaults and Events of Default, stating that the proposed transaction and such supplemental indenture will, upon consummation of the proposed transaction, comply with this Indenture. 5.02 SUCCESSOR SUBSTITUTED. Upon any consolidation or merger or transfer or lease of all or substantially all of the assets of the Company in accordance with SECTION 5.01, the successor person formed by such consolidation or into which the Company is merged or to which such transfer or lease is made shall succeed to, and, except in the case of a lease, be substituted for, and may exercise every right and power of, and shall assume every duty and obligation of, the Company under this Indenture with the same effect as if such successor had been named as the Company herein. When the successor assumes all obligations of the Company hereunder, except in the case of a lease, all obligations of the predecessor shall terminate. -21- 28 VI. DEFAULTS AND REMEDIES 6.01 EVENTS OF DEFAULT. An "EVENT OF DEFAULT" occurs if: (i) the Company defaults in the payment of interest or liquidated damages on any Security when the same becomes due and payable and the default continues for a period of 30 days, whether or not such payment shall be prohibited by the provisions of ARTICLE XI hereof; (ii) the Company defaults in the payment of the principal or Repurchase Price or Redemption Price of any Security when the same becomes due and payable on the Maturity Date, upon redemption or otherwise, whether or not such payment shall be prohibited by the provisions of ARTICLE XI hereof; (iii) the Company fails to comply with any of its other agreements in the Securities or this Indenture and the default continues for the period and after the notice specified below; (iv) the Company pursuant to or within the meaning of any Bankruptcy Law: (A) commences a voluntary case, (B) consents to the entry of an order for relief against it in an involuntary case, (C) consents to the appointment of a Custodian of it or for all or substantially all of its property, or (D) makes a general assignment for the benefit of its creditors; or (v) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (A) is for relief against the Company in an involuntary case, (B) appoints a Custodian of the Company for all or substantially all of its property, or (C) orders the liquidation of the Company, and the order or decree remains unstayed and in effect for 90 consecutive days. -22- 29 The term "BANKRUPTCY LAW" means Title 11, U.S. Code or any similar Federal or State law for the relief of debtors. The term "CUSTODIAN" means any receiver trustee, assignee, liquidator or similar official under any Bankruptcy Law. A default under CLAUSE (III) is not an Event of Default until the Trustee or the Holders of at least 25% in aggregate principal amount of the Securities then outstanding notify the Company and the Trustee of the default and the Company does not cure the default within 60 days after receipt of the notice. The notice must specify the default, demand that it be remedied and state that the notice is a "NOTICE OF DEFAULT". If the Holders of 25% in aggregate principal amount of the outstanding Securities request the Trustee to give such notice on their behalf, the Trustee shall do so. When a default is cured, it ceases. 6.02 ACCELERATION. If an Event of Default (other than an Event of Default specified in SECTION 6.01(IV) OR (V)) as to which the Trustee has received notice pursuant to SECTION 4.07 occurs and is continuing, the Trustee by notice to the Company, or the Holders of at least 25% in principal amount of the Securities then outstanding by notice to the Company and the Trustee, may declare the Securities to be due and payable. Upon such declaration such principal and interest shall be due and payable immediately. If an Event of Default specified in SECTION 6.01(IV) OR (V) occurs, the principal of and accrued interest on all the Securities shall IPSO FACTO become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Securityholder. The Holders of a majority in aggregate principal amount of the Securities then outstanding by written notice to the Trustee may rescind an acceleration and its consequences if the rescission would not conflict with any order or decree and if all existing Events of Default have been cured or waived except nonpayment of principal or interest that has become due solely because of the acceleration. 6.03 OTHER REMEDIES. Notwithstanding any other provision of this Indenture, if an Event of Default occurs and is continuing, the Trustee may pursue any available remedy by proceeding at law or in equity to collect the payment of amounts due with respect to the Securities or to enforce the performance of any provision of the Securities or this Indenture. The Trustee may maintain a proceeding even if it does not possess any of the Securities or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Securityholder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative. 6.04 WAIVER OF PAST DEFAULTS. Subject to SECTIONS 6.07 AND 9.02, the Holders of a majority in aggregate principal amount of the Securities then outstanding by notice to the Trustee may waive any past Default or Event of Default and its consequences. -23- 30 When a Default or an Event of Default is waived, it is cured and ceases for every purpose of this Indenture. 6.05 CONTROL BY MAJORITY. The Holders of a majority in aggregate principal amount of the Securities then outstanding may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture, is unduly prejudicial to the rights of other Securityholders or would involve the Trustee in personal liability; PROVIDED that the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction. 6.06 LIMITATION ON SUITS. Except as provided in SECTION 6.07, a Securityholder may pursue a remedy with respect to this Indenture or the Securities only if: (i) the Holder gives to the Trustee written notice of a continuing Event of Default; (ii) the Holders of at least 25% in aggregate principal amount of the Securities then outstanding make a written request to the Trustee to pursue the remedy; (iii) such Holder or Holders offer and if requested provide to the Trustee indemnity satisfactory to the Trustee against any loss, liability or expense; (iv) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of indemnity; and (v) during such 60-day period the Holders of a majority in aggregate principal amount of the Securities then outstanding do not give the Trustee a direction inconsistent with the request. A Securityholder may not use this Indenture to prejudice the rights of another Securityholder or to obtain a preference or priority over another Securityholder. 6.07 RIGHTS OF HOLDERS TO RECEIVE PAYMENT. Notwithstanding any other provision of this Indenture, the right of any Holder to receive payment of all amounts due with respect to the Securities, on or after the respective due dates expressed in the Securities, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of the Holder. -24- 31 Notwithstanding any other provision of this Indenture, the right of any Holder to bring suit for the enforcement of the right to convert the Security shall not be impaired or affected without the consent of the Holder. 6.08 COLLECTION SUIT BY TRUSTEE. If an Event of Default specified in SECTION 6.01(I) OR (II) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company for the whole amount due with respect to the Securities including any unpaid and accrued interest. 6.09 TRUSTEE MAY FILE PROOFS OF CLAIM. The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee, any predecessor Trustee and the Securityholders allowed in any judicial proceedings relative to the Company, its creditors or its property. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding. 6.10 PRIORITIES. If the Trustee collects any money pursuant to this Article, it shall pay out the money in the following order: First: to the Trustee for amounts due under SECTION 7.07; Second: to holders of Senior Indebtedness to the extent required by ARTICLE XI; Third: to Securityholders for all amounts due and unpaid on the Securities, without preference or priority of any kind, according to the amounts due and payable on the Securities; and Fourth: to the Company. The Trustee, upon prior written notice to the Company, may fix a record date and payment date for any payment by it to Securityholders pursuant to this Section. 6.11 UNDERTAKING FOR COSTS. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit other than the Trustee of an undertaking to pay the costs -25- 32 of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys' fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Trustee, a suit by a Holder pursuant to SECTION 6.07 or a suit by Holders of more than 10% in aggregate principal amount of the outstanding Securities. VII. TRUSTEE 7.01 DUTIES OF TRUSTEE. (A) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. (B) Except during the continuance of an Event of Default: (i) the Trustee need perform only those duties that are specifically set forth in this Indenture and no others; and (ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture. (C) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that: (i) this paragraph does not limit the effect of SECTION 7.01(B); (ii) the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and (iii) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to SECTION 6.05. (D) The Trustee may refuse to perform any duty or exercise any right or power unless it receives indemnity satisfactory to it against any loss, liability or expense. (E) Every provision of this Indenture that in any way relates to the Trustee is subject to the provisions of this SECTION 7.01. -26- 33 (F) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. 7.02 RIGHTS OF TRUSTEE. (A) The Trustee may rely on any document believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in the document; if, however, the Trustee shall determine to make such further inquiry or investigation, it shall be entitled during normal business hours to examine the relevant books, records and premises of the Company, personally or by agent or attorney upon reasonable prior notice. (B) Before the Trustee acts or refrains from acting, it may require an Officers' Certificate and/or an Opinion of Counsel. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers' Certificate or Opinion of Counsel. (C) Any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order and any resolution of the Board of Directors shall be sufficiently evidenced by a Board Resolution. (D) The Trustee may consult with counsel (such counsel to be reasonably acceptable to the Company) and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon. (E) The Trustee may act through agents or attorneys and shall not be responsible for the misconduct or negligence of any agent or attorney appointed with due care. (F) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its discretion, rights or powers hereunder. (G) Except with respect to Section 6.01, the Trustee shall have no duty to inquire as to the performance of the Company with respect to the covenants contained in Article IV. In addition, the Trustee shall not be deemed to have knowledge of an Event of Default except (i) any Default or Event of Default occurring pursuant to Sections 6.01(i) and 6.01(ii) or (ii) any Default or Event of Default of which the Trustee shall have received written notification or obtained actual knowledge. Delivery of reports, information and documents to the Trustee under Article IV (other than Sections 4.04 and 4.07) is for informational purposes only and the Trustee's receipt of the foregoing shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company's compliance with any of their covenants hereunder (as to which the Trustee is entitled to rely conclusively on Officer's Certificates). -27- 34 7.03 INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Company or any Affiliate thereof with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights. The Trustee, however, must comply with SECTIONS 7.10 AND 7.11. 7.04 TRUSTEE'S DISCLAIMER. The Trustee makes no representation as to the validity or adequacy of this Indenture or the Securities; it shall not be accountable for the Company's use of the proceeds from the Securities; and it shall not be responsible for any statement in the Securities other than its certificate of authentication. 7.05 NOTICE OF DEFAULTS. If a Default or Event of Default occurs and is continuing as to which the Trustee has received notice pursuant to SECTION 4.07, the Trustee shall mail to each Securityholder a notice of the Default or Event of Default within 30 days after it occurs unless such Default or Event of Default has been cured or waived. Except in the case of a Default or Event of Default in payment of any amounts due with respect to any Security, the Trustee may withhold the notice if and so long as it in good faith determines that withholding the notice is in the interests of Securityholders. 7.06 REPORTS BY TRUSTEE TO HOLDERS. Within 60 days after each May 15 beginning with May 15, 2002, the Trustee shall mail to each Securityholder if required by TIA ss. 313(c) a brief report dated as of such May 15 that complies with TIA ss. 313(a). In such event, the Trustee also shall comply with TIA ss. 313(b). A copy of each report at the time of its mailing to Securityholders shall be mailed to the Company and filed by the Trustee with the SEC and each stock exchange, if any, on which the Securities are listed. The Company shall promptly notify the Trustee when the Securities are listed on any stock exchange. 7.07 COMPENSATION AND INDEMNITY. The Company shall pay to the Trustee from time to time such compensation for its services as shall be agreed upon in writing. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses incurred by it. Such expenses shall include the reasonable compensation and out-of-pocket expenses of the Trustee's agents and counsel. The Company shall indemnify the Trustee against any loss or liability or expense (including the reasonable fees and expenses of counsel) incurred by it in connection with the acceptance or administration of this trust and the performance of its duties hereunder, including the reasonable costs and expenses -28- 35 of defending itself against any claim or liability in connection with the exercise or performance of any of its powers and duties hereunder. The Company need not pay for any settlement made without its consent. The Trustee shall notify the Company promptly of any claim for which it may seek indemnification. The Company need not reimburse any expense or indemnify against any loss or liability incurred by the Trustee through the Trustee's negligence or bad faith. To secure the Company's payment obligations in this SECTION 7.07, the Trustee shall have a lien prior to the Securities on all money or property held or collected by the Trustee, except that held in trust to pay amounts due on particular Securities. The indemnity obligations of the Company with respect to the Trustee provided for in this SECTION 7.07 shall survive any resignation or removal of the Trustee. When the Trustee incurs expenses or renders services after an Event of Default specified in SECTION 6.01(IV) OR (V) occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any Bankruptcy Law. 7.08 REPLACEMENT OF TRUSTEE. A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee's acceptance of appointment as provided in this Section. The Trustee may resign by so notifying the Company in writing 30 business days prior to such resignation. The Holders of a majority in aggregate principal amount of the Securities then outstanding may remove the Trustee by so notifying the Trustee and the Company in writing and may appoint a successor Trustee with the Company's consent. The Company may remove the Trustee if: (i) the Trustee fails to comply with SECTION 7.10; (ii) the Trustee is adjudged a bankrupt or an insolvent; (iii) a receiver or other public officer takes charge of the Trustee or its property; or (iv) the Trustee becomes incapable of acting. If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in aggregate principal amount of the Securities then outstanding may appoint a successor Trustee to replace the successor Trustee appointed by the Company. If a successor Trustee does not take office within 30 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the -29- 36 Holders of at least 10% in aggregate principal amount of the outstanding Securities may petition any court of competent jurisdiction for the appointment of a successor Trustee. If the Trustee fails to comply with SECTION 7.10, any Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Securityholders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in SECTION 7.07. 7.09 SUCCESSOR TRUSTEE BY MERGER, ETC. If the Trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act shall be the successor Trustee, if such successor corporation is otherwise eligible hereunder. 7.10 ELIGIBILITY; DISQUALIFICATION. This Indenture shall always have a Trustee who satisfies the requirements of TIA ss. 310(a)(1). The Trustee shall always have or be a member of a Bank Holding Company having a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition. The Trustee shall comply with TIA ss. 310(b). 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. The Trustee shall comply with TIA ss. 311(a), excluding any creditor relationship listed in TIA ss. 311(b). A Trustee who has resigned or been removed shall be subject to TIA ss. 311(a) to the extent indicated. VIII. DISCHARGE OF INDENTURE 8.01 TERMINATION OF COMPANY'S OBLIGATIONS. The Company may terminate all of its obligations under this Indenture if all Securities previously authenticated and delivered (other than mutilated, destroyed, lost or stolen Securities which have been replaced or paid as provided in SECTION 2.07) have been delivered to the Trustee for cancellation or if: (i) the Securities mature within six months or all of them are to be called for redemption within one year under arrangements satisfactory to the Trustee for giving the notice of redemption; -30- 37 (ii) the Company irrevocably deposits in trust with the Trustee money or U.S. Government Obligations sufficient to pay the principal or Redemption Price of and any unpaid and accrued interest on the Securities to maturity or redemption, as the case may be. Immediately after making the deposit, the Company shall give notice of such event to the Securityholders; (iii) the Company has paid or caused to be paid all sums then payable by the Company to the Trustee hereunder as of the date of such deposit; and (iv) the Company has delivered to the Trustee an opinion of counsel and an Officers' Certificate stating that all conditions precedent provided for herein relating to the satisfaction and discharge of this Indenture have been complied with. The Company may make the deposit only during the one-year period and only if ARTICLE XI permits it. However, the Company's obligations in SECTIONS 2.03, 2.04, 2.05, 2.06, 2.07, 4.01, 7.07, 7.08 AND 8.03, and in ARTICLE X, shall survive until the Securities are no longer outstanding. Thereafter the Company's obligations in SECTIONS 7.07 AND 8.03 shall survive. After a deposit pursuant to this SECTION 8.01, the Trustee upon request shall acknowledge in writing the discharge of the Company's obligations under the Securities and this Indenture except for those surviving obligations specified above. In order to have money available on a payment date to pay the principal or Redemption Price of and any unpaid and accrued interest on the Securities, the U.S. Government Obligations shall be payable as to principal and any unpaid and accrued interest on or before such payment date in such amounts as will provide the necessary money. "U.S. GOVERNMENT OBLIGATIONS" means direct non-callable obligations of, or non-callable obligations guaranteed by, the United States of America for the payment of which the full faith and credit of the United States of America is pledged. 8.02 APPLICATION OF TRUST MONEY. The Trustee shall hold in trust money or U.S. Government Obligations deposited with it pursuant to SECTION 8.01. It shall apply the deposited money and the money from U.S. Government Obligations through the Paying Agent and in accordance with this Indenture to the payment of the principal or Redemption Price of and any unpaid and accrued interest on the Securities. Money and securities so held in trust are not subject to the subordination provisions of ARTICLE XI. 8.03 REPAYMENT TO COMPANY. The Trustee and the Paying Agent shall promptly pay to the Company upon request any excess money or securities held by them at any time. The Trustee and the Paying Agent shall pay to the Company upon request any money held by them for the payment of the principal or Redemption Price of and any unpaid and -31- 38 accrued interest that remains unclaimed for two years; PROVIDED, HOWEVER, that the Trustee or such Paying Agent, before being required to make any such repayment, may, at the expense and request of the Company, cause to be published once in a newspaper of general circulation in The City of New York or cause to be mailed to each Holder, notice stating that such money remains and that, after a date specified therein, which shall not be less than 30 days from the date of such publication or mailing, any unclaimed balance of such money then remaining will be repaid to the Company. After payment to the Company, Securityholders entitled to the money must look to the Company for payment as general creditors unless an applicable abandoned property law designates another person. 8.04 REINSTATEMENT. If the Trustee or Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with SECTIONS 8.01 and 8.02 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company's obligations under this Indenture and the Securities shall be revived and reinstated as though no deposit had occurred pursuant to SECTIONS 8.01 and 8.02 until such time as the Trustee or Paying Agent is permitted to apply all such money or U.S. Government Obligations in accordance with SECTIONS 8.01 and 8.02; PROVIDED, HOWEVER, that if the Company has made any payment of amounts due with respect to any Securities because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money or U.S. Government Obligations held by the Trustee or Paying Agent. IX. AMENDMENTS 9.01 WITHOUT CONSENT OF HOLDERS. The Company, with the consent of the Trustee, may amend or supplement this Indenture or the Securities without notice to or the consent of any Securityholder: (i) to cure any ambiguity, omission, defect or inconsistency; (ii) to comply with SECTIONS 5.01 AND 10.15; (iii) to provide for uncertificated Securities in addition to certificated Securities; or (iv) to make any change that does not adversely affect the rights of any Securityholder. 9.02 WITH CONSENT OF HOLDERS. The Company, with the consent of the Trustee, may amend or supplement this Indenture or the Securities without notice to any Securityholder but with the written consent of the Holders of at least a majority in aggregate principal amount of the outstanding Securities. Subject to SECTION 6.07, the Holders of a majority in aggregate principal amount of the outstanding Securities may waive -32- 39 compliance by the Company with any provision of this Indenture or the Securities without notice to any other Securityholder. However, without the consent of each Securityholder affected, an amendment, supplement or waiver, including a waiver pursuant to SECTION 6.04, may not: (i) reduce the amount of Securities whose Holders must consent to an amendment, supplement or waiver; (ii) reduce the rate of or change the time for payment of interest on any Security; (iii) reduce the principal, Redemption Price or Repurchase Price of or change the fixed maturity of any Security (including, without limitation, the optional redemption provisions); (iv) waive a default in the payment of any amount due with respect to any Security; (v) make any change in SECTION 6.04, 6.07 OR 9.02; or (vi) make any change that adversely affects the right to convert any Security or to require the Company to repurchase any of the Securities upon a Change in Control. An amendment under this Section may not make any change that adversely affects the rights under ARTICLE XI of any holder of Senior Indebtedness unless the holders of such Senior Indebtedness pursuant to its terms consent to the change. Promptly after an amendment under this SECTION 9.02 becomes effective, the Company shall mail to Securityholders a notice briefly describing the amendment. Any failure of the Company to mail such notice shall not in any way impair or affect the validity of such amendment, supplement or waiver. It shall not be necessary for the consent of the Holders under this Section to approve the particular form of any proposed amendment or supplement, but it shall be sufficient if such consent approves the substance thereof. 9.03 COMPLIANCE WITH TRUST INDENTURE ACT. Every amendment, waiver or supplement to this Indenture or the Securities shall comply with the TIA as then in effect. 9.04 REVOCATION AND EFFECT OF CONSENTS. Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder is a continuing consent by the Holder and every subsequent Holder of a Security or portion of a Security that evidences the same debt as the consenting Holder's Security, even if notation of the consent is not made on any Security. However, any such Holder or subsequent Holder may revoke the -33- 40 consent as to its Security or portion of a Security if the Trustee receives the notice of revocation before the date the amendment, supplement or waiver becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Securityholder. After an amendment, supplement or waiver becomes effective with respect to the Securities, it shall bind every Securityholder unless it makes a change described in SECTION 9.02. In that case the amendment, supplement or waiver shall bind each Holder of a Security who has consented to it and, provided that notice of such amendment, supplement or waiver is reflected on a Security that evidences the same debt as the consenting Holder's Security, every subsequent Holder of a Security or portion of a Security that evidences the same debt as the consenting Holder's Security. 9.05 NOTATION ON OR EXCHANGE OF SECURITIES. If an amendment, supplement or waiver changes the terms of a Security, the Trustee may require the Holder of the Security to deliver it to the Trustee. The Trustee may place an appropriate notation on the Security as directed and prepared by the Company about the changed terms and return it to the Holder. Alternatively, if the Company so determines, the Company in exchange for the Security shall issue and the Trustee shall authenticate a new Security that reflects the changed terms. 9.06 TRUSTEE PROTECTED. The Trustee need not sign any amendment, supplement or waiver authorized pursuant to this Article that adversely affects the Trustee's rights. The Trustee shall be entitled to receive and rely upon an Opinion of Counsel and an Officers' Certificate that any supplemental indenture, amendment or waiver complies with the Indenture. X. CONVERSION 10.01 CONVERSION PRIVILEGE; RESTRICTIVE LEGENDS. A Holder of a Security may convert such Security into Common Stock at any time during the period stated in PARAGRAPH 9 of the Securities. The number of shares issuable upon conversion of a Security is determined as follows: divide each $1,000 of the principal amount to be converted by the conversion price in effect on the conversion date. Round the result to the nearest 1/100th of a share. The initial conversion price is stated in PARAGRAPH 9 of the Securities. The conversion price is subject to adjustment in accordance with SECTIONS 10.06 THROUGH 10.12. A Holder may convert a portion of the principal of such Security if the portion is $1,000 principal amount or a whole multiple of $1,000 principal amount. Provisions of this Indenture that apply to conversion of all of a Security also apply to conversion of a portion of it. -34- 41 Any shares issued upon conversion of a Security shall bear the Private Placement Legend until after the second anniversary of the later of the issue date for the Securities and the last date on which the Company or any Affiliate of the Company was the owner of such shares or the Security (or any predecessor security) from which such shares were converted (or such shorter period of time as permitted by Rule 144(k) under the Securities Act or any successor provision thereunder) (or such longer period of time as may be required under the Securities Act or applicable state securities laws in the Opinion of Counsel for the Company, unless otherwise agreed by the Company and the Holder thereof). 10.02 CONVERSION PROCEDURE. To convert a Security a Holder must satisfy the requirements in paragraph 9 of the Securities. The date on which the Holder satisfies all those requirements is the conversion date. As soon as practicable, the Company shall deliver to the Holder through the Conversion Agent a certificate for the number of full shares of Common Stock issuable upon the conversion and a check in lieu of any fractional share. The person in whose name the certificate is registered shall be treated as a stockholder of record on and after the conversion date. Except as described below, no payment or adjustment will be made for accrued interest on, or liquidated damages with respect to, a converted Security or for dividends on any Common Stock issued on conversion. If any Security is converted between a record date for the payment of interest and the next succeeding interest payment date, unless such Security has been called for redemption on a redemption date between such dates, such Security must be accompanied by funds equal to the interest payable to the registered Holder on such interest payment date on the principal amount so converted. A Security converted on an interest payment date need not be accompanied by any payment, and the interest on the principal amount of the Security being converted will be paid on such interest payment date to the registered Holder of such Security on the immediately preceding record date. If a Holder converts more than one Security at the same time, the number of full shares issuable upon the conversion shall be based on the total principal amount of the Securities converted. Upon surrender of a Security that is converted in part the Trustee shall authenticate for the Holder a new Security equal in principal amount to the unconverted portion of the Security surrendered. If the last day on which a Security may be converted is a Legal Holiday in a place where a Conversion Agent is located, the Security may be surrendered to that Conversion Agent on the next succeeding day that is not a Legal Holiday. 10.03 FRACTIONAL SHARES. The Company will not issue fractional shares of Common Stock upon conversion of Securities and instead will deliver a check in lieu of the fractional share based upon the market value of the Common Stock on the last trading day prior to the conversion date. -35- 42 10.04 TAXES ON CONVERSION. If a Holder converts its Security, the Company shall pay any documentary, stamp or similar issue or transfer tax due on the issue of shares of Common Stock upon the conversion. However, the Holder shall pay any such tax which is due because the shares are issued in a name other than the Holder's name. 10.05 COMPANY TO PROVIDE STOCK. The Company shall reserve out of its authorized but unissued Common Stock or its Common Stock held in treasury enough shares of Common Stock to permit the conversion of all of the Securities. All shares of Common Stock which may be issued upon conversion of the Securities shall be validly issued, fully paid and non-assessable. The Company will endeavor to comply with all securities laws regulating the offer and delivery of shares of Common Stock upon conversion of Securities and will endeavor to list such shares on each national securities exchange on which the Common Stock is listed. 10.06 ADJUSTMENT FOR CHANGES IN CAPITAL STOCK. If the Company: (i) pays a dividend or makes a distribution on its Common Stock in shares of its Common Stock; (ii) subdivides its outstanding shares of Common Stock into a greater number of shares; (iii) combines its outstanding shares of Common Stock into a smaller number of shares; (iv) pays a dividend or makes a distribution on its Common Stock in shares of its capital stock other than Common Stock; or (v) issues by reclassification of its Common Stock any shares of its capital stock; then the conversion privilege and the conversion rate in effect immediately prior to such action shall be adjusted so that the Holder of a Security thereafter converted may receive the number of shares of Common Stock of the Company which it would have owned immediately following such action if it had converted the Security immediately on or prior to the record date set in connection with such action. -36- 43 The adjustment shall become effective immediately after the record date in the case of a dividend or distribution and immediately after the effective date in the case of a subdivision, combination or reclassification. If after an adjustment a Holder of a Security upon conversion of it may receive shares of two or more classes of capital stock of the Company, the Board of Directors of the Company shall determine the allocation of the adjusted conversion rate between the classes of capital stock. After such allocation, the conversion privilege and the conversion rate of each class of capital stock shall thereafter be subject to adjustment on terms comparable to those applicable to Common Stock in this ARTICLE X. The conversion rate will not be adjusted for unpaid interest. 10.07 ADJUSTMENT FOR RIGHTS TO PURCHASE SHARES BELOW MARKET PRICE. If the Company issues to all holders of its Common Stock, as such, rights, options or warrants entitling such holders for a period of sixty days or less to subscribe for or purchase shares of Common Stock, or any securities convertible into or exchangeable for shares of Common Stock, or rights, options or warrants to subscribe for or purchase such convertible or exchangeable securities (excluding rights, options or warrants to subscribe for or purchase shares of Common Stock or convertible or exchangeable securities or rights, options, or warrants therefor issued in transactions described in SECTION 10.06) at a "PRICE PER SHARE" (as defined and determined according to the formula given below) lower than the current market price (see SECTION 10.10) on the date of such issuance, the conversion price shall be adjusted in accordance with the following formula: O + R -- AP = CP x M ---------- O + N WHERE AP = the adjusted conversion price. CP = the then current conversion price. O = the number of shares of Common Stock outstanding immediately prior to such issuance. N = the "NUMBER OF SHARES," which (i) in the case of rights, options or warrants to subscribe for or purchase shares of Common Stock or of securities convertible into or exchangeable for shares of Common Stock, is the maximum number of shares of Common Stock initially issuable upon exercise, conversion or exchange thereof; and (ii) in the case of rights, options or warrants to subscribe for or purchase convertible or exchangeable securities, is the maximum number of shares of Common Stock initially issuable upon the conversion or exchange of the convertible or exchangeable securities issuable upon the exercise of such rights, options or warrants. -37- 44 R = the aggregate proceeds received or receivable by the Company, which (i) in the case of rights, options or warrants to subscribe for or purchase shares of Common Stock or of securities convertible into or exchangeable for shares of Common Stock, is the total amount received or receivable by the Company in consideration for the sale and issuance of such rights, options, warrants or convertible or exchangeable securities, plus the minimum aggregate amount of additional consideration, other than the convertible or exchangeable securities, surrendered or cancelled upon the exercise, conversion or exchange thereof, payable to the Company upon exercise, conversion or exchange thereof; and (ii) in the case of rights, options or warrants to subscribe for or purchase convertible or exchangeable securities, is the total amount received or receivable by the Company in consideration for the sale and issuance of such rights, options or warrants, plus the minimum aggregate consideration payable to the Company upon the exercise thereof, plus the minimum aggregate amount of additional consideration, other than the convertible or exchangeable securities, payable upon the conversion or exchange of the convertible or exchangeable securities; PROVIDED that in each case the proceeds received or receivable by the Company shall be deemed to be the amount of gross cash proceeds without deducting therefrom any compensation paid or discount allowed in the sale, underwriting or purchase thereof by underwriters or dealers or others performing similar services or any expenses incurred in connection therewith. M = the current market price per share of Common Stock on the date of issue of the rights, options or warrants to subscribe for or purchase shares of Common Stock or the securities convertible into or exchangeable for shares of Common Stock or the rights, options or warrants to subscribe for or purchase convertible or exchangeable securities. "PRICE PER SHARE" shall be defined and determined according to the following formula: P = R -- N WHERE P = Price Per Share and R and N have the meanings assigned above. If the Company shall issue rights, options, warrants or convertible or exchangeable securities for a consideration consisting, in whole or in part, of property other than cash, the amount of such consideration shall be determined -38- 45 in good faith by the Board of Directors whose determination shall be conclusive and evidenced by a resolution of the Board of Directors filed with the Trustee. The adjustment shall be made successively whenever any such rights, options, warrants or convertible or exchangeable securities are issued, and shall become effective immediately after the date of issue of such shares, rights, options, warrants or convertible or exchangeable securities. To the extent that such rights, options or warrants expire unexercised or to the extent any convertible or exchangeable securities are redeemed by the Company or otherwise cease to be convertible or exchangeable into shares of Common Stock, the conversion price shall be readjusted to the conversion price which would then be in effect had the adjustment made upon the date of issuance of such rights, options, warrants or convertible or exchangeable securities been made upon the basis of the issuance of rights, options or warrants to subscribe for or purchase only the number of shares of Common Stock as to which such rights, options or warrants were actually exercised and the number of shares of Common Stock that were actually issued upon the conversion or exchange of the convertible or exchangeable securities. 10.08 ADJUSTMENT FOR OTHER DISTRIBUTIONS. If the Company distributes to all holders of its Common Stock, as such, any of its assets or debt securities or any rights or warrants to purchase assets or debt securities of the Company which assets, debt securities, rights or warrants have an aggregate fair market value on the date such distribution is declared in excess of the "PERMITTED DIVIDEND AMOUNT" (as defined below), the conversion price shall be adjusted in accordance with the formula: AP = CP x (O X M)-F -------- (O x M) where: AP = the adjusted conversion price. CP = the then current conversion price. O = the number of shares of Common Stock outstanding on the record date mentioned below. M = the current market price per share of Common Stock, as defined in SECTION 10.10, on the record date mentioned below. F = the amount by which the fair market value on the date the distribution is declared of the assets, securities, rights or warrants distributed exceeds the permitted dividend amount. The Board of Directors of the Company shall make all determinations of the fair market value in connection with all distributions and dividends. -39- 46 The adjustment shall become effective immediately after the record date for the determination of stockholders entitled to receive the distribution. The "PERMITTED DIVIDEND AMOUNT" on any date shall be an amount equal to (i) 10% of the current market capitalization of the Company (the product of the current market price of the Common Stock and the number of shares of Common Stock outstanding as of any particular date) minus (ii) the aggregate of the value of all dividends or distributions (other than dividends or distributions referred to in SECTIONS 10.06 OR 10.07) made to holders of Common Stock during the twelve month period ending on such date, PROVIDED that with respect to any amount of a distribution not paid out of retained earnings, the permitted dividend amount shall be zero, unless the dividend is paid out of consolidated net income or in the form of Common Stock. This SECTION 10.08 does not apply to reclassifications or distributions referred to in SECTION 10.06 or distributions referred to in SECTION 10.07. 10.09 VOLUNTARY ADJUSTMENT. The Company at any time may reduce the conversion price, temporarily or otherwise, by any amount but in no event shall such conversion rate be less than the par value of the Common Stock at the time such reduction is made. Such reduced conversion price shall remain in effect for so long as required under applicable law and shall be irrevocable during such period. The Company reserves the right to make such reductions in the conversion price in addition to those required in the foregoing provisions as the Company in its discretion shall determine to be advisable in order that certain stock-related distributions hereafter made by the Company to its stockholders shall not be taxable. 10.10 CURRENT MARKET PRICE. In SECTIONS 10.07 AND 10.08 the current market price per share of Common Stock on any date is the average of the last reported sale prices of a share of Common Stock on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or on the Nasdaq National Market, or, if the Common Stock is not then listed on an exchange or on the Nasdaq National Market, the closing sale prices (or the quoted closing bid prices if there were no sales) as reported by NASDAQ, for 30 consecutive trading days commencing 45 trading days before the date in question. In the absence of one or more such quotations, the Board of Directors shall determine the current market price on the basis of such quotations as it considers appropriate. 10.11 WHEN ADJUSTMENT MAY BE DEFERRED. No adjustment in the conversion rate or conversion price will be made unless such adjustment would require a change of at least 1% in the conversion rate; PROVIDED, HOWEVER, any adjustment that would otherwise be required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this ARTICLE X shall be made to the nearest cent or to the nearest 1/100th of a share, as the case may be. -40- 47 10.12 WHEN NO ADJUSTMENT REQUIRED. Except as set forth in SECTION 10.07, the conversion rate and the conversion price will not be adjusted for the issuance of Common Stock or any securities convertible into or exchangeable for Common Stock, or carrying the right to purchase any of the foregoing. No adjustment will be required for rights to purchase Common Stock pursuant to any plan of the Company for reinvestment of dividends or interest, or for a change in the par value of the Common Stock. To the extent that Securities become convertible into cash, no adjustment will be required thereafter as to cash. 10.13 NOTICE OF ADJUSTMENT. Whenever the conversion rate and conversion price are adjusted, the Company shall promptly mail to Securityholders a notice of the adjustment. The Company shall file with the Trustee an Officers' Certificate or a certificate from the Company's independent public accountants briefly stating the facts requiring the adjustment and the manner of computing it. The certificate shall be conclusive evidence that the adjustment is correct, absent manifest error. 10.14 NOTICE OF CERTAIN TRANSACTIONS. If: (i) the Company proposes to take any action that would require an adjustment in the conversion rate and conversion price; (ii) the Company proposes to take any action that would require a supplemental indenture pursuant to SECTION 10.15; or (iii) there is a proposed liquidation, winding up or dissolution of the Company, the Company shall mail to Securityholders a notice stating the proposed record date for a dividend or distribution or the proposed effective date of a subdivision, combination, reclassification, consolidation, merger, transfer, lease, liquidation or dissolution. The Company shall mail the notice at least 10 days before such date. Failure to mail the notice or any defect in it shall not affect the validity of the transaction. 10.15 REORGANIZATION OF THE COMPANY. If the Company is a party to a transaction subject to SECTION 5.01 or a merger which reclassifies or changes its outstanding Common Stock, the successor corporation shall enter into a supplemental indenture. -41- 48 The supplemental indenture shall provide that the Holder of a Security may convert it into the kind and amount of securities, cash or other assets which it would have owned immediately after the consolidation, merger, transfer or lease if it had converted the Security immediately before the effective date of the transaction. The supplemental indenture shall provide for adjustments which shall be as nearly equivalent as may be practical to the adjustments provided for in this ARTICLE X. The successor Company shall mail to Securityholders a notice briefly describing the supplemental indenture. If this Section applies, SECTION 10.06 does not apply. 10.16 COMPANY DETERMINATION FINAL. Any determination that the Board of Directors must make pursuant to this Article is conclusive, absent manifest error. 10.17 TRUSTEE'S DISCLAIMER. The Trustee has no duty to determine when an adjustment under this ARTICLE X or under the terms of the Securities should be made, how it should be made or what it should be. Such information shall be timely provided to the Trustee in an Officer's Certificate. The Trustee has no duty to determine whether any provisions of a supplemental indenture under SECTION 10.15 are correct. The Trustee makes no representation as to the validity or value of any securities or assets issued upon conversion of Securities. The Trustee shall not be responsible for the Company's failure to comply with this Article. Each Conversion Agent other than the Company shall have the same protection under this SECTION 10.17 as the Trustee. XI. SUBORDINATION 11.01 AGREEMENT TO SUBORDINATE. The Company agrees, and each Securityholder by accepting a Security agrees, that the payment of all amounts due with respect to the Securities is subordinated in right of payment, to the extent and in the manner provided in this ARTICLE XI, to the prior payment in full of all Senior Indebtedness and that the subordination is for the benefit of the holders of Senior Indebtedness. Money and securities held in trust pursuant to ARTICLE VIII are not subject to the subordination provisions of this ARTICLE XI. 11.02 CERTAIN DEFINITIONS. "INDEBTEDNESS" means, with respect to any person, the principal of, and premium, if any, and interest on (a) all indebtedness of such person for borrowed money (including all indebtedness evidenced by notes, bonds, debentures or other securities sold by such person for money), (b) all obligations incurred by such person in the acquisition (whether by way of purchase, merger, consolidation or otherwise and whether by such person or another person) of any business, real property or other assets (except inventory and related items acquired in the ordinary course of the conduct of the acquiror's usual -42- 49 business), (c) guarantees by such person of indebtedness described in clause (a) or (b) of another person, (d) all renewals, extensions, refundings, deferrals, restructurings, amendments and modifications of any such indebtedness, obligation or guarantee, (e) all reimbursement obligations of such person with respect to letters of credit, bankers' acceptances or similar facilities issued for the account of such person, (f) all capital lease obligations of such person and (g) all net obligations of such person under interest rate swap, currency exchange or similar agreements of such person. "REPRESENTATIVE" means the indenture trustee or other trustee, agent or representative for an issue of Senior Indebtedness. "SENIOR INDEBTEDNESS" means all Indebtedness of the Company outstanding at any time except Indebtedness that by its terms is subordinate in right of payment to the Securities or Indebtedness that is not otherwise senior in right of payment to the Securities. Senior Indebtedness does not include Indebtedness of the Company to any of the Company's subsidiaries. 11.03 LIQUIDATION; DISSOLUTION; BANKRUPTCY. Upon any distribution of assets to creditors of the Company in a liquidation, winding up or dissolution of the Company or in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to the Company or its property: (i) holders of Senior Indebtedness shall be entitled to receive payment in full of the principal of and interest (including interest accruing after the commencement of any such proceeding) to the date of payment on the Senior Indebtedness before Securityholders shall be entitled to receive any payment of amounts due with respect to the Securities; and (ii) until the Senior Indebtedness is paid in full, any distribution to which Securityholders would be entitled but for this ARTICLE XI shall be made to holders of Senior Indebtedness as their interests may appear, except the Securityholders may receive securities that are subordinated to Senior Indebtedness to at least the same extent as the Securities and payments made pursuant to SECTIONS 8.01 and 8.02. 11.04 COMPANY NOT TO MAKE PAYMENTS WITH RESPECT TO SECURITIES IN CERTAIN CIRCUMSTANCES. No payment of amounts due may be made by the Company, directly or indirectly, with respect to the Securities (including any repurchase pursuant to the exercise of the Repurchase Right) or to acquire any of the Securities at any time if a default in payment of the principal of or premium, if any, or interest on Senior Indebtedness exists, unless and until such default shall have been cured or waived or shall have ceased to exist. During the continuance of any event of default with respect to any Senior Indebtedness, as such event of default is defined under any such Senior Indebtedness or in any agreement pursuant to which any Senior Indebtedness has been issued (other than default in payment of the principal of or premium, if any, or interest on any Senior Indebtedness), permitting the holders thereof to accelerate the maturity thereof, no payment may be made by the Company, directly or indirectly, of any -43- 50 amount due with respect to the Securities for 183 days following written notice to the Company, from any holder or holders thereof or their representative or representatives or the trustee or trustees under any indenture under which any instrument evidencing any such Senior Indebtedness may have been issued, that such an event of default has occurred and is continuing. However, if the maturity of such Senior Indebtedness is accelerated, no payment may be made on the Securities until such Senior Indebtedness that has matured has been paid or such acceleration has been cured or waived. Regardless of anything to the contrary herein, nothing shall prevent (a) any payment by the Trustee to the Securityholders of amounts deposited with it pursuant to ARTICLE VIII or (b) any payment by the Trustee or the Paying Agent as permitted by SECTION 11.12. Nothing contained in this ARTICLE XI will limit the right of the Trustee or the Securityholders to take any action to accelerate the maturity of the securities pursuant to SECTION 6.02 or to pursue any rights or remedies hereunder. 11.05 ACCELERATION OF SECURITIES. If payment of the Securities is accelerated because of an Event of Default, the Company shall promptly notify holders of Senior Indebtedness of the acceleration. 11.06 WHEN DISTRIBUTION MUST BE PAID OVER. In the event that the Company shall make any payment to the Trustee with respect to the Securities at a time when such payment is prohibited by SECTION 11.03 OR 11.04, such payment shall be held by the Trustee, in trust for the benefit of, and shall be paid forthwith over and delivered to, the holders of Senior Indebtedness (PRO RATA as to each of such holders on the basis of the respective amounts of Senior Indebtedness held by them) or their Representative or the trustee under the indenture or other agreement (if any) pursuant to which Senior Indebtedness may have been issued, as their respective interests may appear, for application to the payment of all Senior Indebtedness remaining unpaid to the extent necessary to pay all Senior Indebtedness in full in accordance with its terms, after giving effects to any concurrent payment or distribution to or for the holders of Senior Indebtedness. If a distribution is made to Securityholders, that because of this ARTICLE XI should not have been made to them, the Securityholders who receive the distribution shall hold it in trust for holders of Senior Indebtedness and pay it over to them as their interests may appear. 11.07 NOTICE BY COMPANY. The Company shall promptly notify the Trustee and the Paying Agent in writing of any facts known to the Company that would cause a payment of any amount due with respect to the Securities to violate this Article, but failure to give such notice shall not affect the subordination of the Securities to the Senior Indebtedness provided in this Article. -44- 51 11.08 SUBROGATION. After all Senior Indebtedness is paid in full and until the Securities are paid in full, Securityholders shall be subrogated (equally and ratably with all other Indebtedness of the Company ranking PARI PASSU with the Securities) to the rights of holders of Senior Indebtedness to receive distributions applicable to Senior Indebtedness to the extent that distributions otherwise payable to the Securityholders have been applied to the payment of Senior Indebtedness. A distribution made under this ARTICLE XI to holders of Senior Indebtedness which otherwise would have been made to Securityholders is not, as between the Company and Securityholders, a payment by the Company on Senior Indebtedness. 11.09 RELATIVE RIGHTS. This ARTICLE XI defines the relative rights of Securityholders and holders of Senior Indebtedness. Nothing in this Indenture shall: (i) impair, as between the Company and Securityholders, the obligation of the Company, which is absolute and unconditional, to pay all amounts due with respect to the Securities in accordance with their terms; (ii) affect the relative rights of Securityholders and creditors of the Company other than holders of Senior Indebtedness; or (iii) prevent the Trustee or any Securityholder from exercising its available remedies upon a Default or Event of Default, subject to the rights of holders of Senior Indebtedness to receive distributions otherwise payable to Securityholders. 11.10 SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY. No right of any holder of Senior Indebtedness to enforce the subordination of the indebtedness evidenced by the Securities shall be impaired by any act or failure to act by the Company or by its failure to comply with this Indenture. 11.11 DISTRIBUTION OR NOTICE TO REPRESENTATIVE. Whenever a distribution is to be made or a notice given to holders of Senior Indebtedness, the distribution may be made and the notice given to their Representatives. 11.12 RIGHTS OF TRUSTEE AND PAYING AGENT. The Trustee or Paying Agent may continue to make payments on the Securities until it receives written notice of facts that would cause a payment of amounts due with respect to the Securities to violate this ARTICLE XI. Only the Company, a Representative or a holder of an issue of Senior Indebtedness that has no Representative may give the notice. -45- 52 The Trustee shall be entitled to rely on the delivery to it of a written notice by a person representing himself to be a holder of Senior Indebtedness (or a Representative on behalf of such holder) to establish that such notice has been given by a holder of Senior Indebtedness or a Representative on behalf of any such holder. In the event that the Trustee determines in good faith that further evidence is required with respect to the right of any person who is a holder of Senior Indebtedness to participate in any payment or distribution pursuant to this ARTICLE XI, the Trustee may request such person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness held by such person, the extent to which such person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such person under this Article, and if such evidence is not furnished the Trustee may defer any payment to such person pending judicial determination as to the right of such person to receive such payment or until such time as the Trustee shall be otherwise satisfied as to the right of such person to receive such payment. The Trustee in its individual or any other capacity may hold Senior Indebtedness with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights. The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness and shall not be liable to any such holder if it shall mistakenly pay over or distribute to Securityholders or the Company or any other person money or assets to which any holders of Senior Indebtedness shall be entitled by virtue of this ARTICLE XI or otherwise. 11.13 OFFICERS' CERTIFICATE. If there occurs an event referred to in SECTION 11.03 OR 11.04, the Company shall promptly give to the Trustee an Officers' Certificate (on which the Trustee may conclusively rely) identifying all holders of Senior Indebtedness or their Representatives and the principal amount of Senior Indebtedness then outstanding held by each such holder and stating the reasons why such Officers' Certificate is being delivered to the Trustee. 11.14 OBLIGATION OF COMPANY UNCONDITIONAL. Nothing contained in this ARTICLE XI or elsewhere in this Indenture or in any Security is intended to or shall impair, as between the Company, its creditors other than holders of Senior Indebtedness and the Holders of the Securities, the obligation of the Company, which is absolute and unconditional, to pay to the Holders of the Securities all amounts due with respect to the Securities as and when the same shall become due and payable in accordance with their terms, or is intended to or shall affect the relative rights of the Holders of the Securities and creditors of the Company other than the holders of the Senior Indebtedness, nor shall anything herein or therein prevent the Trustee or the Holder of any Security from exercising all remedies otherwise permitted by applicable law upon default under this Indenture, subject to the rights, if any, under this ARTICLE XI of the holders of Senior Indebtedness in respect of cash, property or securities of the Company received upon the exercise of any such remedy. Upon any distribution of assets of the Company -46- 53 referred to in this ARTICLE XI, the Trustee, subject to the provisions of SECTIONS 7.01 AND 7.02, and the Holders of the Securities shall be entitled to rely upon any order or decree by any court of competent jurisdiction in which such dissolution, winding up, liquidation or reorganization proceedings are pending, or a certificate of the liquidating trustee or agent or other person making any distribution to the Trustee or the Holders of the Securities, for the purpose of ascertaining the persons entitled to participate in such distribution, the holders of the Senior Indebtedness and other indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this ARTICLE XI. Nothing contained in this ARTICLE XI or elsewhere in this Indenture or in any Security is intended to or shall affect the obligation of the Company to make, or prevent the Company from making, at any time except during the pendency of any dissolution, winding up, liquidation or reorganization proceeding, and except during the continuance of any default specified in SECTION 11.04 (not cured or waived), payments at any time of all amounts due with respect to the Securities. 11.15 NOT TO PREVENT EVENTS OF DEFAULT. The failure to make any payment due with respect to the Securities by reason of any provision of this ARTICLE XI shall not be construed as preventing the occurrence of an Event of Default under SECTION 6.01 11.16 PROHIBITION ON INCURRENCE OF LAYERED INDEBTEDNESS. The Company shall not incur, create, issue, assume, guarantee or otherwise become liable for any Indebtedness that is both (a) subordinate or junior in right of payment to any Senior Indebtedness and (b) senior in any respect in right of payment to the Securities. XII. MISCELLANEOUS 12.01 TRUST INDENTURE ACT CONTROLS. If any provision of this Indenture limits, qualifies or conflicts with another provision which is required to be included in this Indenture by the TIA, the required provision shall control. 12.02 NOTICES. Any notice or communication by the Company or the Trustee to the other is duly given if in writing and delivered in person, mailed by first-class mail or by express delivery to the other's address stated in this SECTION 12.02. The Company or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications. Any notice or communication to a Securityholder shall be mailed to its address shown on the register kept by the Registrar. Failure to mail a notice or communication to a Securityholder or any defect in it shall not affect its sufficiency with respect to other Securityholders. If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it. -47- 54 If the Company mails a notice or communication to Securityholders, it shall mail a copy to the Trustee and each Agent at the same time. All notices or communications shall be in writing. The Company's address is: IVAX Corporation 4400 Biscayne Boulevard Miami, Florida 33137 Attention: President The Trustee's address is: U.S. Bank Trust National Association 180 East 5th Street St. Paul, Minnesota 55101 Attention: Richard Prokosch, Corporate Finance 12.03 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS. Securityholders may communicate pursuant to TIA ss. 312(b) with other Securityholders with respect to their rights under this Indenture or the Securities. The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA ss. 312(c). 12.04 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT. Upon any request or application by the Company to the Trustee to take any action under this Indenture the Company shall furnish to the Trustee: (i) an Officers' Certificate stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and (ii) an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent have been complied with. Each signer of an Officers' Certificate or an Opinion of Counsel may (if so stated) rely, effectively, upon an Opinion of Counsel as to legal matters and an Officers' Certificate as to factual matters if such signer reasonably and in good faith believes in the accuracy of the document relied upon. 12.05 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. Each Officers' Certificate or Opinion of Counsel with respect to compliance with a condition or covenant provided for in this Indenture shall include: -48- 55 (i) a statement that the person making such certificate or opinion has read such covenant or condition; (ii) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (iii) a statement that, in the opinion of such person, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with; and (iv) a statement as to whether or not, in the opinion of such person, such condition or covenant has been complied with. 12.06 RULES BY TRUSTEE AND AGENTS. The Trustee may make reasonable rules for action by or at a meeting of Securityholders. The Registrar, Paying Agent or Conversion Agent may make reasonable rules and set reasonable requirements for their respective functions. 12.07 LEGAL HOLIDAYS. A "LEGAL HOLIDAY" is a Saturday, a Sunday or a day on which banking institutions are not required to be open in The City of New York, in the State of New York or in the city in which the Trustee administers its corporate trust business. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue on that payment for the intervening period. A "BUSINESS DAY" is a day other than a Legal Holiday. 12.08 NO RECOURSE AGAINST OTHERS. No past, present or future director, officer, employee, incorporator or shareholder of the Company, as such, shall have any liability for any obligations of the Company under the Securities or this Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Security waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Securities. 12.09 DUPLICATE ORIGINALS. The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. -49- 56 12.10 GOVERNING LAW. The laws of the State of New York, including without limitation Section 5-1401 of the General Obligations Law, but otherwise without regard to principles of conflicts of law, shall govern this Indenture and the Securities. 12.11 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS. This Indenture may not be used to interpret another indenture, loan or debt agreement of the Company or a subsidiary. Any such indenture, loan or debt agreement may not be used to interpret this Indenture. 12.12 SUCCESSORS. All agreements of the Company in this Indenture and the Securities shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors. 12.13 SEPARABILITY. In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and a Holder shall have no claim therefor against any party hereto. 12.14 TABLE OF CONTENTS, HEADINGS, ETC. The Table of Contents, Cross-Reference Table and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof and shall in no way modify or restrict any of the terms or provisions hereof. -50- 57 IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the date first above written. IVAX CORPORATION By: /s/ THOMAS E. BEIER --------------------------------- Name: Thomas E. Beier Title: Chief Financial Officer U.S. BANK TRUST NATIONAL ASSOCIATION By: /s/ RICHARD H. PROKOSCH --------------------------------- Name: Richard H. Prokosch Title: Vice President -51- 58 EXHIBIT A [Face of Security] IVAX CORPORATION [INSERT PRIVATE PLACEMENT LEGEND AND GLOBAL SECURITY LEGEND AS REQUIRED] 4 1/2% CONVERTIBLE SENIOR SUBORDINATED NOTE DUE 2008 CUSIP NO. ____________ IVAX CORPORATION, a Florida corporation (herein called the "COMPANY"), for value received, hereby promises to pay to Cede & Co. or registered assigns, the principal sum of _________________ Dollars ($_______________) on May 15, 2008, and to pay interest thereon, as provided on the reverse hereof, until the principal and any unpaid and accrued interest is paid or duly provided for. The right to payment of the principal and all other amounts due with respect hereto is subordinated to the rights of Senior Indebtedness as set forth in the Indenture referred to on the reverse side hereof. Interest Payment Dates: May 15 and November 15, with the first payment to be made on November 15, 2001. Record Dates: May 1 and November 1. The provisions on the back of this certificate are incorporated as if set forth on the face hereof. IN WITNESS WHEREOF, IVAX CORPORATION has caused this instrument to be duly signed. IVAX CORPORATION By: ----------------------- Name: Title: Dated: ------------------- A-1 59 TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Securities referred to in the within-mentioned Indenture. U.S. BANK TRUST NATIONAL ASSOCIATION, as Trustee By: ------------------------------------ Authorized Signatory Dated: ------------------- A-2 60 [REVERSE OF SECURITY] IVAX CORPORATION 4 1/2% CONVERTIBLE SENIOR SUBORDINATED NOTE DUE 2008 1. INTEREST. IVAX CORPORATION, a Florida corporation (the "COMPANY"), promises to pay interest on the principal amount of this Security at the rate PER ANNUM shown above. The Company will pay interest semi-annually on May 15 and November 15 of each year, with the first payment to be made on November 15, 2001. Interest on the Securities will accrue on the principal amount from the most recent date to which interest has been paid or, if no interest has been paid, from May 4, 2001. Interest will be computed on the basis of a 360-day year of twelve 30-day months. 2. MATURITY. The Notes will mature on May 15, 2008. 3. METHOD OF PAYMENT. The Company will pay interest on the Securities (except defaulted interest) to the persons who are registered Holders of Securities at the close of business on the record date set forth on the face of this Security next preceding the applicable interest payment date. Holders must surrender Securities to a Paying Agent to collect the principal, Redemption Price or Repurchase Price of the Securities. The Company will pay all amounts due with respect to the Securities in money of the United States that at the time of payment is legal tender for payment of public and private debts. However, the Company may pay all amounts due with respect to the Securities by check payable in such money. It may mail an interest check to a Holder's registered address. 4. PAYING AGENT, REGISTRAR, CONVERSION AGENT. Initially, U.S. Bank Trust National Association (the "Trustee") will act as Paying Agent, Registrar and Conversion Agent. The Company may change any Paying Agent, Registrar or Conversion Agent without notice. The Company may act in any such capacity. 5. INDENTURE. The Company issued the Securities under an Indenture dated as of May 4, 2001 (the "INDENTURE") between the Company and the Trustee. The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code ss.ss. 77aaa-77bbbb) (the "ACT") as in effect on the date of the Indenture. The Securities are subject to all such terms, and Securityholders are referred to the Indenture and the Act for a statement of such terms. The Securities are general unsecured senior subordinated obligations of the Company limited to $575,000,000 aggregate principal amount ($725,000,000 if the Initial Purchaser (as defined in the Indenture) has elected to exercise its over-allotment option to purchase an additional $150,000,000 of the Securities), except as otherwise provided in the Indenture (except for Securities issued in substitution for destroyed, mutilated, lost or stolen Securities). Terms used herein which are defined in the Indenture have the meanings assigned to them in the Indenture. 6. OPTIONAL REDEMPTION. The Securities will be redeemable prior to maturity at the option of the Company, in whole or in part, at any time on or A-3 61 after May 29, 2004, at the following redemption prices (expressed as percentages of the principal amount thereof), if redeemed during the periods commencing on the dates set forth below, in each case together with accrued and unpaid interest to the redemption date: ---------------------------- -------------------------- Redemption Date Price ---------------------------- -------------------------- May 29, 2004 102.571% ---------------------------- -------------------------- May 16, 2005 101.929% ---------------------------- -------------------------- May 16, 2006 101.286% ---------------------------- -------------------------- May 16, 2007 through 100.643% May 14, 2008 inclusive ---------------------------- -------------------------- 7. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each Holder of Securities to be redeemed at its registered address. Securities in denominations larger than $1,000 principal amount may be redeemed in part but only in whole multiples of $1,000 principal amount. On and after the redemption date interest ceases to accrue on Securities or portions of them called for redemption. 8. REPURCHASE AT OPTION OF HOLDER. In the event of a Change in Control with respect to the Company, then each Holder of the Securities shall have the right, at the Holder's option, subject to the rights of the holders of Senior Indebtedness under ARTICLE XI of the Indenture, to require the Company to repurchase such Holder's Securities including any portion thereof which is $1,000 in principal amount or any integral multiple thereof on a business day (the "REPURCHASE DATE") that is 45 days after the date of the Company Notice, unless otherwise required by applicable law, at a price equal to 100% of the outstanding principal amount of such Security, plus accrued and unpaid interest to the Repurchase Date. Within 30 days after the occurrence of the Change in Control, the Company is obligated to give notice of the occurrence of such Change in Control to each Holder. Such notice shall include, among other things, the date by which Holder must notify the Company of such Holder's intention to exercise the Repurchase Right and of the procedure which such Holder must follow to exercise such right. To exercise the Repurchase Right, a Holder of Securities must deliver on or before the 30th day after the date of the Company Notice irrevocable written notice to the Company (or an agent designated by the Company for such purpose) and the Trustee of the Holder's exercise of such right together with the Securities with respect to which the right is being exercised, duly endorsed for transfer. In the event any Holder exercises its Repurchase Right, such Holder's conversion right will terminate upon receipt of the written notice of exercise of such Repurchase Right. A-4 62 A "CHANGE IN CONTROL" of the Company means (i) the acquisition by any person, entity or "group" within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (excluding, for this purpose, the Company and its subsidiaries, any employee benefit plan of the Company or its subsidiaries which acquires beneficial ownership of voting securities of the Company and any current affiliate of the Company whose beneficial ownership does not in the future exceed 45% of the Company's outstanding Common Stock), of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of shares of Common Stock sufficient to elect a majority of directors; (ii) persons who, as of the date of the Indenture, constitute the Board of Directors (the "INCUMBENT BOARD") cease for any reason to constitute at least a majority of the Board of Directors, provided that any person becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such person were a member of the Incumbent Board; (iii) approval by the stockholders of the Company of a reorganization, merger or consolidation, in each case, with respect to which persons who were the stockholders of the Company immediately prior to such reorganization, merger or consolidation do not, immediately thereafter, beneficially own shares sufficient to elect a majority of directors in the election of directors of the reorganized, merged or consolidated company, or (iv) a liquidation or dissolution of the Company (other than pursuant to the United States Bankruptcy Code) or the conveyance, transfer or leasing of all or substantially all of the assets of the Company to any person. 9. CONVERSION. A Holder may convert his or her Security into Common Stock of the Company at any time prior to the close of business on May 15, 2008, or, (x) if the Security is called for redemption by the Company, the Holder may convert it at any time before the close of business on the date that is five business days before the date fixed for such redemption, or (y) if the Security is to be repurchased by the Company pursuant to PARAGRAPH 8 hereof, the Holder may convert it at any time before the Company receives the Option of Holder To Elect Purchase Notice. The initial conversion rate is 19.9750 shares per $1,000 principal amount of Securities or an initial conversion price of $50.0625 per share, subject to adjustment in certain circumstances. To determine the number of shares issuable upon conversion of a Security, divide the principal amount to be converted by the conversion price in effect on the conversion date and round the result to the nearest 1/100th share. The Company will deliver a check in lieu of any fractional share. On conversion no payment or adjustment for any unpaid and accrued interest, or liquidated damages with respect to, the Securities will be made. If a Holder surrenders a Security for conversion A-5 63 between the record date for the payment of interest and the next interest payment date, such Security, when surrendered for conversion, must be accompanied by payment of an amount equal to the interest thereon which the registered Holder on such record date is to receive. To convert a Security a Holder must (1) complete and sign the Conversion Notice, with appropriate signature guarantee, on the back of the Security, (2) surrender the Security to a Conversion Agent, (3) furnish appropriate endorsements and transfer documents if required by the Registrar or Conversion Agent, (4) pay the amount of interest, if any, the Holder may be paid as provided in the last sentence of the above paragraph and (5) pay any transfer or similar tax if required. A Holder may convert a portion of a Security if the portion is $1,000 principal amount or a whole multiple of $1,000 principal amount. Any shares issued upon conversion of a Security shall bear the Private Placement Legend until after the second anniversary of the later of the issue date for the Securities and the last date on which the Company or any Affiliate of the Company was the owner of such shares or the Security (or any predecessor security) from which such shares were converted (or such shorter period of time as permitted by Rule 144(k) under the Securities Act or any successor provision thereunder) (or such longer period of time as may be required under the Securities Act or applicable state securities laws in the Opinion of Counsel for the Company, unless otherwise agreed by the Company and the Holder thereof). 10. SUBORDINATION. The Securities are subordinated in right of payment, in the manner and to the extent set forth in the Indenture, to the prior payment in full of all Senior Indebtedness. Each Holder by accepting a Security agrees to such subordination and authorizes the Trustee to give it effect. 11. PROHIBITION ON INCURRENCE OF LAYERED INDEBTEDNESS. The Company shall not incur, create, issue, assume, guarantee or otherwise become liable for any Indebtedness that is both (a) subordinate or junior in right of payment to any Senior Indebtedness and (b) senior in any respect in right of payment to the Securities. 12. DENOMINATIONS, TRANSFER, EXCHANGE. The Securities are in registered form without coupons in denominations of $1,000 principal amount and whole multiples of $1,000 principal amount. The transfer of Securities may be registered and Securities may be exchanged as provided in the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. The Registrar need not exchange or register the transfer of any Security selected for redemption in whole or in part. Also, it need not exchange or register the transfer of any Securities for a period of 15 days before the mailing of a notice of redemption of the Securities selected to be redeemed. 13. PERSONS DEEMED OWNERS. The registered Holder of a Security may be treated as the owner of such Security for all purposes. 14. MERGER OR CONSOLIDATION. The Company shall not consolidate with, or merge into, or transfer or lease all or substantially all of its assets to, any person unless the person is a corporation, limited liability company or other entity organized under the laws of the United States, any State thereof or the A-6 64 District of Columbia and such person assumes by supplemental indenture all the obligations of the Company under the Securities and the Indenture and immediately after giving effect to the transaction no Default or Event of Default exists. Notwithstanding the foregoing, any subsidiary of the Company may consolidate with, merge into or transfer all or part of its properties and assets to the Company or any other subsidiary or subsidiaries of the Company. 15. AMENDMENTS, SUPPLEMENTS AND WAIVERS. Subject to certain exceptions, the Indenture or the Securities may be amended or supplemented with the consent of the Holders of at least a majority in aggregate principal amount of the Securities then outstanding, and any existing Default or Event of Default may be waived with the consent of the Holders of a majority in aggregate principal amount of the Securities then outstanding. Without notice to or the consent of any Securityholder, the Indenture or the Securities may be amended or supplemented to cure any ambiguity, omission, defect or inconsistency, to provide for uncertificated Securities in addition to certificated Securities, to comply with SECTIONS 5.01 AND 10.15 of the Indenture or to make any change that does not adversely affect the rights of any Securityholder. 16. DEFAULTS AND REMEDIES. An Event of Default includes the occurrence of any of the following: default in payment of principal at maturity, upon redemption or exercise of a Repurchase Right or otherwise; default for 30 days in payment of interest or other amounts due; failure by the Company for 60 days after notice to it to comply with any of its other agreements in the Indenture or the Securities; and certain events of bankruptcy or insolvency. If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the Securities then outstanding may declare all the Securities to be due and payable immediately, except as provided in the Indenture. Securityholders may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may require indemnity satisfactory to it before it enforces the Indenture or the Securities. Subject to certain limitations, Holders of a majority in principal amount of the Securities then outstanding may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Securityholders notice of any continuing Default or Event of Default (except a Default or Event of Default in payment) if it determines that withholding notice is in the interests of the Securityholders. The Company must furnish an annual compliance certificate to the Trustee. 17. REGISTRATION RIGHTS. The Holders are entitled to shelf registration rights as set forth in the Registration Rights Agreement (as defined in the Indenture). The Holders shall be entitled to receive liquidated damages in certain circumstances, all as set forth in the Registration Rights Agreement. 18. TRUSTEE DEALINGS WITH COMPANY. The Trustee under the Indenture, or any banking institution serving as successor Trustee thereunder, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not Trustee. 19. NO RECOURSE AGAINST OTHERS. No past, present or future director, officer, employee or stockholder, as such, of the Company shall have any liability for any obligations of the Company under the Securities or the A-7 65 Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each Securityholder by accepting a Security waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities. 20. AUTHENTICATION. This Security shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent. 21. ABBREVIATIONS. Customary abbreviations may be used in the name of a Securityholder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entirety), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (Uniform Gifts to Minors Act). THE COMPANY WILL FURNISH TO ANY SECURITYHOLDER UPON WRITTEN REQUEST AND WITHOUT CHARGE A COPY OF THE INDENTURE. REQUESTS MAY BE MADE TO: IVAX Corporation 4400 Biscayne Boulevard Miami, Florida 33137 Attention: Secretary A-8 66 [FORM OF ASSIGNMENT] I or we assign to PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER - -------------------------------------- - ------------------------------------------------------------------------------- (please print or type name and address) - ------------------------------------------------------------------------------- the within Security and all rights thereunder, and hereby irrevocably constitutes and appoints - ------------------------------------------------------------------------------- attorney to transfer the Security on the books of the Company with full power of substitution in the premises. Dated: -------------------------- ---------------------------------------- NOTICE: The signature on this assignment must correspond with the name as it appears upon the face of the within Security in every particular without alteration or enlargement or any change whatsoever and be guaranteed by a guarantor institution participating in the Securities Transfer Agents Medallion Program or in such other guarantee program acceptable to the Trustee. Signature Guarantee: ---------------------------------------------------------- In connection with any transfer of this Security occurring prior to the date which is the earlier of (i) the date of the declaration by the Commission of the effectiveness of a registration statement under the Securities Act of 1933, as amended (the "SECURITIES ACT") covering resales of this Security (which effectiveness shall not have been suspended or terminated at the date of the transfer) and (ii) the Resale Restriction Termination Date, the undersigned confirms that it has not utilized any general solicitation or general advertising in connection with transfer: A-9 67 [Check One] (1) ____ to the Company or a subsidiary thereof; or (2) ____ pursuant to and in compliance with Rule 144A under the Securities Act of 1933, as amended; or (3) ____ to an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended) that has furnished to the Trustee a signed letter containing certain representations and agreements (the form of which letter can be obtained from the Trustee); or (4) ____ outside the United States to a "foreign purchaser" in compliance with Rule 904 of Regulation S under the Securities Act of 1933, as amended; or (5) ____ pursuant to the exemption from registration provided by Rule 144 under the Securities Act of 1933, as amended; or (6) ____ pursuant to an effective registration statement under the Securities Act of 1933, as amended; or (7) ____ pursuant to another available exemption from the registration statement requirements of the Securities Act of 1933, as amended. and unless the box below is checked, the undersigned confirms that such Security is not being transferred to an "affiliate" of the Company as defined in Rule 144 under the Securities Act of 1933, as amended (an "AFFILIATE"): [ ] The transferee is an Affiliate of the Company. (If the Security is transferred to an Affiliate, the restrictive legend must remain on the Security for two years following the date of the transfer). Unless one of the items is checked, the Trustee will refuse to register any of the Securities evidenced by this certificate in the name of any person other than the registered Holder thereof; PROVIDED, HOWEVER, that if item (3),(4),(5) or (7) is checked, the Company or the Trustee may require, prior to registering any such transfer of the Securities, in their sole discretion, such written legal opinions, certifications (including an investment letter in the case of box (3) or (4) and other information as the Trustee or the Company have reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933, as amended. If none of the foregoing items are checked, the Trustee or Registrar shall not be obligated to register this Security in the name of any person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in Section 2.16 of the Indenture shall have been satisfied. Dated: Signed: -------------------- ------------------------------------------ (Sign exactly as name appears on the other side of this Security) A-10 68 Signature Guarantee: ----------------------------------------------------------- TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED The undersigned represents and warrants that it is purchasing this Security for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a "qualified institutional buyer" within the meaning of Rule 144A under the Securities Act of 1933, as amended, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined transferor is relying upon the undersigned's foregoing representations in order to claim the exemption from registration provided by Rule 144A. Dated: ---------------- --------------------------------------------------- NOTICE: To be executed by an executive officer A-11 69 CONVERSION NOTICE To convert this Security into Common Stock of the Company, check the box: [ ] To convert only part of this Security, state the principal amount to be converted (must be in multiples of $1,000): $ ------------------ If you want the stock certificate made out in another person's name, fill in the form below: - -------------------------------------------------------------------------------- (Insert other person's soc. sec. or tax I.D. no.) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Print or type other person's name, address and zip code) - -------------------------------------------------------------------------------- Date: Signature(s): -------------- ------------------------------------------- ------------------------------------------- (Sign exactly as your name(s) appear(s) on the other side of this Security) Signature(s) guaranteed by: -------------------------------------------- (All signatures must be guaranteed by a guarantor institution participating in the Securities Transfer Agents Medallion Program or in such other guarantee program acceptable to the Trustee.) A-12 70 OPTION OF HOLDER TO ELECT PURCHASE NOTICE If you want to elect to have this Security purchased by the Company pursuant to SECTION 3.07 of the Indenture, check the box: [ ] If you want to elect to have only part of this Security purchased by the Company pursuant to SECTION 3.07 of the Indenture, state the principal amount: $ ------------------------------------------- (in an integral multiple of $1,000) Date: Signature(s): ------------------ ------------------------------- ------------------------------------------- (Sign exactly as your name(s) appear(s) on the other side of this Security) Signature(s) guaranteed by: ------------------------------------------- (All signatures must be guaranteed by a guarantor institution participating in the Securities Transfer Agents Medallion Program or in such other guarantee program acceptable to the Trustee.) A-13 71 EXHIBIT B-1 FORM OF PRIVATE PLACEMENT LEGEND THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS SECURITY IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.16 OF THE INDENTURE. THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS THE LATER OF (X) TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT, (E) TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(a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ny Global Security authenticated and delivered hereunder shall bear a legend (which would be in addition to any other legends required in the case of a Restricted Security) in substantially the following form: THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS SECURITY IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.16 OF THE INDENTURE. B-2 73 EXHIBIT C Form of Certificate To Be Delivered in Connection with TRANSFERS TO NON-QIB ACCREDITED INVESTORS U.S. Bank Trust National Association 180 East 5th Street St. Paul, Minnesota 55101 Attention: Corporate Finance Ladies and Gentlemen: In connection with our proposed purchase of 4 1/2% Convertible Senior Subordinated Notes due 2008 (the "SECURITIES") of IVAX CORPORATION (the "COMPANY"), we confirm that: 1. We have received a copy of the Offering Memorandum (the "OFFERING MEMORANDUM"), dated May 1, 2001, relating to the Securities and such other information as we deem necessary in order to make our investment decision. We acknowledge that we have read and agreed to the matters stated on the inside front cover of the Offering Memorandum and in the section entitled "Notice to Investors" of the Offering Memorandum, including the restrictions on duplication and circulation of the Offering Memorandum. 2. We understand that any subsequent transfer of the Securities is subject to certain restrictions and conditions set forth in the Indenture relating to the Securities (as described in the Offering Memorandum) and the undersigned agrees to be bound by, and not to resell, pledge or otherwise transfer the Securities except in compliance with, such restrictions and conditions and the Securities Act of 1933, as amended (the "SECURITIES ACT") and all applicable state securities laws. 3. We understand that the offer and sale of the Securities have not been registered under the Securities Act, and that the Securities may not be offered or sold except as permitted in the following sentence. We agree, on our own behalf and on behalf of any accounts for which we are acting as hereinafter stated, that if we should sell any Securities prior to the date that is two years after the original issuance of the Securities, we will do so only (i) to the Company or any of its subsidiaries, (ii) inside the United States in accordance with Rule 144A under the Securities Act to a "QUALIFIED INSTITUTIONAL BUYER" (as defined in Rule 144A under the Securities Act), (iii) inside the United States to an institutional "ACCREDITED INVESTOR" (as defined below) that, prior to such transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to the Trustee (as defined in the Indenture relating to the C-1 74 Securities), a signed letter containing certain representations and agreements relating to the restrictions on transfer of the Securities (the form of which letter can be obtained from the Trustee), (iv) outside the United States in accordance with Rule 904 of Regulation S under the Securities Act, (v) pursuant to the exemption from registration provided by Rule 144 under the Securities Act (if available), or (vi) pursuant to an effective registration statement under the Securities Act, and we further agree to provide to any person purchasing any of the Securities from us a notice advising such purchaser that resales of the Securities are restricted as stated herein. 4. We are not acquiring the Securities for or on behalf of, and will not transfer the Securities to, any pension or welfare plan (as defined in Section 3 of the Employee Retirement Income Security Act of 1974), except as permitted by law. 5. We understand that, on any proposed resale of any Securities, we will be required to furnish to the Trustee and the Company such certification, legal opinions and other information as the Trustee and the Company may reasonably require to confirm that the proposed sale complies with the foregoing restrictions. We further understand that the Securities purchased by us will bear a legend to the foregoing effect. 6. We are an institutional "ACCREDITED INVESTOR" (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Securities, and we and any accounts for which we are acting are each able to bear the economic risk of our or their investment, as the case may be. 7. We are acquiring the Securities purchased by us for our account or for one or more accounts (each of which is an institutional "ACCREDITED INVESTOR") as to each of which we exercise sole investment discretion. C-2 75 You, the Company, the Trustee and others are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby. Very truly yours, [Name of Transferee] By: ---------------------- Name: Title: C-3 76 EXHIBIT D-1 Form of Certificate To Be Delivered in Connection with Transfers PURSUANT TO REGULATION S U.S. Bank Trust National Association 180 East 5th Street St. Paul, Minnesota 55101 Attention: Corporate Finance Re: IVAX CORPORATION (the "COMPANY") 4 1/2% Convertible Senior Subordinated Notes due 2008 (the "SECURITIES") Ladies and Gentlemen: In connection with our proposed sale of $_________ aggregate principal amount of the Securities, we confirm that such sale has been effected pursuant to and in accordance with Regulation S under the U.S. Securities Act of 1933, as amended (the "SECURITIES ACT"), and, accordingly, we represent that: (1) the offer of the Securities was not made to a person in the United States; (2) either (a) at the time the buy offer was originated, the transferee was outside the United States or we and any person acting on our behalf reasonably believed that the transferee was outside the United States, or (b) the transaction was executed in, on or through the facilities of a designated off-shore securities market and neither we nor any person acting on our behalf knows that the transaction has been pre-arranged with a buyer in the United States; (3) no directed selling efforts have been made in the United States in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S, as applicable; (4) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act; and (5) we have advised the transferee of the transfer restrictions applicable to the Securities. D-1 77 You, the Company and counsel for the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby. Terms used in this certificate have the meanings set forth in Regulation S. Very truly yours, [Name of Transferor] By: --------------------------------------- Authorized Signature D-2 78 EXHIBIT D-2 Form of Certificate To Be Delivered in Connection with Transfers PURSUANT TO REGULATION S U.S. Bank Trust National Association 180 East 5th Street St. Paul, Minnesota 55101 Attention: Corporate Finance Re: IVAX CORPORATION (the "COMPANY") 4 1/2% Convertible Senior Subordinated Notes due 2008 (the "SECURITIES") Ladies and Gentlemen: In connection with our proposed purchase of $_________ aggregate principal amount of the Securities, we confirm that such sale has been effected pursuant to and in accordance with Regulation S under the U.S. Securities Act of 1933, as amended (the "SECURITIES ACT"), and, accordingly, we represent that: (1) the undersigned is not a U.S. person and has not acquired the Securities for the account or benefit of any U.S. person or is a U.S. person who has purchased the Securities in a transaction that did not require registration under the Securities Act; (2) the undersigned is not a distributor within the meaning of Regulation S; and (3) the undersigned agrees to resell the Securities only in accordance with the provisions of Regulation S, pursuant to registration under the Securities Act, or pursuant to an exemption from registration and agrees not to engage in hedging transactions with regard to the Securities unless in compliance with the Securities Act. You, the Company and counsel for the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby. Terms used in this certificate have the meanings set forth in Regulation S. Very truly yours, [Name of Transferee] By: ------------------------------------ Authorized Signature D-3 79 EXHIBIT E FORM OF NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT IVAX CORPORATION 4400 Biscayne Boulevard Miami, Florida 33137 U.S. Bank Trust National Association 180 East 5th Street St. Paul, Minnesota 55101 Attention: Corporate Finance Re: IVAX CORPORATION (the "COMPANY") 4 1/2% Convertible Senior Subordinated Notes Due 2008 (the "SECURITIES") Ladies and Gentlemen: Please be advised that _____________ has transferred $___________ aggregate principal amount of the Securities or __ shares of the Company's Common Stock, $0.10 par value per share, issuable on conversion of the Securities ("STOCK") pursuant to an effective Shelf Registration Statement on Form S-3 (File No. 333-_____) filed by the Company. We hereby certify that the prospectus delivery requirements, if any, of the Securities Act of 1933 as amended, have been satisfied with respect to the transfer described above and that the above-named beneficial owner of the Securities or Stock is named as a "SELLING SECURITY HOLDER" in the Prospectus dated _________, 2001, or in amendments or supplements thereto, and that the aggregate principal amount of the Securities, or number of shares of Stock transferred are [a portion of] the Securities or Stock listed in such Prospectus, as amended or supplemented, opposite such owner's name. Very truly yours, ------------------------- (Name) E-1 80 EXHIBIT F FORM OF OPINION OF COUNSEL IN CONNECTION WITH REGISTRATION OF SECURITIES [Trustee] Re: IVAX CORPORATION (the "COMPANY") 4 1/2% Convertible Senior Subordinated Notes Due 2008 (the "SECURITIES") Gentlemen: Reference is made to the Securities issued pursuant to a certain indenture dated as of May 4, 2001 by and between the Company and U.S. Bank Trust National Association, as trustee (the "TRUSTEE"). The Company issued $575,000,000 principal amount of Securities on May 4, 2001 [and an additional $150,000,000 on ________, 2001 [IF THE INITIAL PURCHASER'S OVERALLOTMENT OPTION IS EXERCISED]] in transactions exempt from registration under the Securities Act of 1933, as amended (the "SECURITIES ACT"). The Company has filed with the Securities and Exchange Commission (the "SEC") a registration statement on Form S-3 (number 333-____) (the "REGISTRATION STATEMENT") relating to the registration under the Securities Act of $ZZZ,ZZZ,ZZZ principal amount of the Securities and the shares of Common Stock of the Company (the "SHARES") issuable upon conversion of the Securities being registered. The Registration Statement was declared effective by order of the SEC dated [ ]. We have acted as counsel for the Company in connection with the issuance of the Securities and the preparation and filing of the Registration Statement and are familiar with the Securities, the Indenture, the Registration Statement, the above-mentioned SEC order and such other documents as are necessary to render this opinion. Based on the foregoing, it is our opinion that (1) the Registration Statement has become effective under the Securities Act and, to our knowledge, no stop order suspending the effectiveness of the Registration Statement has been issued, (2) assuming that the Securities covered by the Registration Statement and the Shares issuable upon conversion of such Securities are sold by a relevant Holder specified in the Registration Statement in a manner specified in the Registration Statement, such sale of the Securities and Shares issuable upon conversion of the Securities will have been duly registered under the Securities Act, and (3) the Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended. Yours truly, F-1 EX-4.6 5 g70686ex4-6.txt FORM OF 4 1/2% CONVERTIBLE SENIOR SUB. NOTES 1 EXHIBIT 4.6 Form of 4 1/2% Convertible Senior Subordinated Notes due 2008 [Face of Security] IVAX CORPORATION [INSERT PRIVATE PLACEMENT LEGEND AND GLOBAL SECURITY LEGEND AS REQUIRED] 4 1/2% CONVERTIBLE SENIOR SUBORDINATED NOTE DUE 2008 CUSIP NO. ____________ IVAX CORPORATION, a Florida corporation (herein called the "COMPANY"), for value received, hereby promises to pay to Cede & Co. or registered assigns, the principal sum of _________________ Dollars ($_______________) on May 15, 2008, and to pay interest thereon, as provided on the reverse hereof, until the principal and any unpaid and accrued interest is paid or duly provided for. The right to payment of the principal and all other amounts due with respect hereto is subordinated to the rights of Senior Indebtedness as set forth in the Indenture referred to on the reverse side hereof. Interest Payment Dates: May 15 and November 15, with the first payment to be made on November 15, 2001. Record Dates: May 1 and November 1. The provisions on the back of this certificate are incorporated as if set forth on the face hereof. IN WITNESS WHEREOF, IVAX CORPORATION has caused this instrument to be duly signed. IVAX CORPORATION By: ----------------------- Name: Title: Dated: ------------------- 1 2 TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Securities referred to in the within-mentioned Indenture. U.S. BANK TRUST NATIONAL ASSOCIATION, as Trustee By: ------------------------------------ Authorized Signatory Dated: ------------------- 2 3 [REVERSE OF SECURITY] IVAX CORPORATION 4 1/2% CONVERTIBLE SENIOR SUBORDINATED NOTE DUE 2008 1. INTEREST. IVAX CORPORATION, a Florida corporation (the "COMPANY"), promises to pay interest on the principal amount of this Security at the rate PER ANNUM shown above. The Company will pay interest semi-annually on May 15 and November 15 of each year, with the first payment to be made on November 15, 2001. Interest on the Securities will accrue on the principal amount from the most recent date to which interest has been paid or, if no interest has been paid, from May 4, 2001. Interest will be computed on the basis of a 360-day year of twelve 30-day months. 2. MATURITY. The Notes will mature on May 15, 2008. 3. METHOD OF PAYMENT. The Company will pay interest on the Securities (except defaulted interest) to the persons who are registered Holders of Securities at the close of business on the record date set forth on the face of this Security next preceding the applicable interest payment date. Holders must surrender Securities to a Paying Agent to collect the principal, Redemption Price or Repurchase Price of the Securities. The Company will pay all amounts due with respect to the Securities in money of the United States that at the time of payment is legal tender for payment of public and private debts. However, the Company may pay all amounts due with respect to the Securities by check payable in such money. It may mail an interest check to a Holder's registered address. 4. PAYING AGENT, REGISTRAR, CONVERSION AGENT. Initially, U.S. Bank Trust National Association (the "Trustee") will act as Paying Agent, Registrar and Conversion Agent. The Company may change any Paying Agent, Registrar or Conversion Agent without notice. The Company may act in any such capacity. 5. INDENTURE. The Company issued the Securities under an Indenture dated as of May 4, 2001 (the "INDENTURE") between the Company and the Trustee. The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code ss.ss. 77aaa-77bbbb) (the "ACT") as in effect on the date of the Indenture. The Securities are subject to all such terms, and Securityholders are referred to the Indenture and the Act for a statement of such terms. The Securities are general unsecured senior subordinated obligations of the Company limited to $575,000,000 aggregate principal amount ($725,000,000 if the Initial Purchaser (as defined in the Indenture) has elected to exercise its over-allotment option to purchase an additional $150,000,000 of the Securities), except as otherwise provided in the Indenture (except for Securities issued in substitution for destroyed, mutilated, lost or stolen Securities). Terms used herein which are defined in the Indenture have the meanings assigned to them in the Indenture. 6. OPTIONAL REDEMPTION. The Securities will be redeemable prior to maturity at the option of the Company, in whole or in part, at any time on or 3 4 after May 29, 2004, at the following redemption prices (expressed as percentages of the principal amount thereof), if redeemed during the periods commencing on the dates set forth below, in each case together with accrued and unpaid interest to the redemption date: ---------------------------- -------------------------- Redemption Date Price ---------------------------- -------------------------- May 29, 2004 102.571% ---------------------------- -------------------------- May 16, 2005 101.929% ---------------------------- -------------------------- May 16, 2006 101.286% ---------------------------- -------------------------- May 16, 2007 through 100.643% May 14, 2008 inclusive ---------------------------- -------------------------- 7. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each Holder of Securities to be redeemed at its registered address. Securities in denominations larger than $1,000 principal amount may be redeemed in part but only in whole multiples of $1,000 principal amount. On and after the redemption date interest ceases to accrue on Securities or portions of them called for redemption. 8. REPURCHASE AT OPTION OF HOLDER. In the event of a Change in Control with respect to the Company, then each Holder of the Securities shall have the right, at the Holder's option, subject to the rights of the holders of Senior Indebtedness under ARTICLE XI of the Indenture, to require the Company to repurchase such Holder's Securities including any portion thereof which is $1,000 in principal amount or any integral multiple thereof on a business day (the "REPURCHASE DATE") that is 45 days after the date of the Company Notice, unless otherwise required by applicable law, at a price equal to 100% of the outstanding principal amount of such Security, plus accrued and unpaid interest to the Repurchase Date. Within 30 days after the occurrence of the Change in Control, the Company is obligated to give notice of the occurrence of such Change in Control to each Holder. Such notice shall include, among other things, the date by which Holder must notify the Company of such Holder's intention to exercise the Repurchase Right and of the procedure which such Holder must follow to exercise such right. To exercise the Repurchase Right, a Holder of Securities must deliver on or before the 30th day after the date of the Company Notice irrevocable written notice to the Company (or an agent designated by the Company for such purpose) and the Trustee of the Holder's exercise of such right together with the Securities with respect to which the right is being exercised, duly endorsed for transfer. In the event any Holder exercises its Repurchase Right, such Holder's conversion right will terminate upon receipt of the written notice of exercise of such Repurchase Right. 4 5 A "CHANGE IN CONTROL" of the Company means (i) the acquisition by any person, entity or "group" within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (excluding, for this purpose, the Company and its subsidiaries, any employee benefit plan of the Company or its subsidiaries which acquires beneficial ownership of voting securities of the Company and any current affiliate of the Company whose beneficial ownership does not in the future exceed 45% of the Company's outstanding Common Stock), of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of shares of Common Stock sufficient to elect a majority of directors; (ii) persons who, as of the date of the Indenture, constitute the Board of Directors (the "INCUMBENT BOARD") cease for any reason to constitute at least a majority of the Board of Directors, provided that any person becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such person were a member of the Incumbent Board; (iii) approval by the stockholders of the Company of a reorganization, merger or consolidation, in each case, with respect to which persons who were the stockholders of the Company immediately prior to such reorganization, merger or consolidation do not, immediately thereafter, beneficially own shares sufficient to elect a majority of directors in the election of directors of the reorganized, merged or consolidated company, or (iv) a liquidation or dissolution of the Company (other than pursuant to the United States Bankruptcy Code) or the conveyance, transfer or leasing of all or substantially all of the assets of the Company to any person. 9. CONVERSION. A Holder may convert his or her Security into Common Stock of the Company at any time prior to the close of business on May 15, 2008, or, (x) if the Security is called for redemption by the Company, the Holder may convert it at any time before the close of business on the date that is five business days before the date fixed for such redemption, or (y) if the Security is to be repurchased by the Company pursuant to PARAGRAPH 8 hereof, the Holder may convert it at any time before the Company receives the Option of Holder To Elect Purchase Notice. The initial conversion rate is 19.9750 shares per $1,000 principal amount of Securities or an initial conversion price of $50.0625 per share, subject to adjustment in certain circumstances. To determine the number of shares issuable upon conversion of a Security, divide the principal amount to be converted by the conversion price in effect on the conversion date and round the result to the nearest 1/100th share. The Company will deliver a check in lieu of any fractional share. On conversion no payment or adjustment for any unpaid and accrued interest, or liquidated damages with respect to, the Securities will be made. If a Holder surrenders a Security for conversion 5 6 between the record date for the payment of interest and the next interest payment date, such Security, when surrendered for conversion, must be accompanied by payment of an amount equal to the interest thereon which the registered Holder on such record date is to receive. To convert a Security a Holder must (1) complete and sign the Conversion Notice, with appropriate signature guarantee, on the back of the Security, (2) surrender the Security to a Conversion Agent, (3) furnish appropriate endorsements and transfer documents if required by the Registrar or Conversion Agent, (4) pay the amount of interest, if any, the Holder may be paid as provided in the last sentence of the above paragraph and (5) pay any transfer or similar tax if required. A Holder may convert a portion of a Security if the portion is $1,000 principal amount or a whole multiple of $1,000 principal amount. Any shares issued upon conversion of a Security shall bear the Private Placement Legend until after the second anniversary of the later of the issue date for the Securities and the last date on which the Company or any Affiliate of the Company was the owner of such shares or the Security (or any predecessor security) from which such shares were converted (or such shorter period of time as permitted by Rule 144(k) under the Securities Act or any successor provision thereunder) (or such longer period of time as may be required under the Securities Act or applicable state securities laws in the Opinion of Counsel for the Company, unless otherwise agreed by the Company and the Holder thereof). 10. SUBORDINATION. The Securities are subordinated in right of payment, in the manner and to the extent set forth in the Indenture, to the prior payment in full of all Senior Indebtedness. Each Holder by accepting a Security agrees to such subordination and authorizes the Trustee to give it effect. 11. PROHIBITION ON INCURRENCE OF LAYERED INDEBTEDNESS. The Company shall not incur, create, issue, assume, guarantee or otherwise become liable for any Indebtedness that is both (a) subordinate or junior in right of payment to any Senior Indebtedness and (b) senior in any respect in right of payment to the Securities. 12. DENOMINATIONS, TRANSFER, EXCHANGE. The Securities are in registered form without coupons in denominations of $1,000 principal amount and whole multiples of $1,000 principal amount. The transfer of Securities may be registered and Securities may be exchanged as provided in the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. The Registrar need not exchange or register the transfer of any Security selected for redemption in whole or in part. Also, it need not exchange or register the transfer of any Securities for a period of 15 days before the mailing of a notice of redemption of the Securities selected to be redeemed. 13. PERSONS DEEMED OWNERS. The registered Holder of a Security may be treated as the owner of such Security for all purposes. 14. MERGER OR CONSOLIDATION. The Company shall not consolidate with, or merge into, or transfer or lease all or substantially all of its assets to, any person unless the person is a corporation, limited liability company or other entity organized under the laws of the United States, any State thereof or the 6 7 District of Columbia and such person assumes by supplemental indenture all the obligations of the Company under the Securities and the Indenture and immediately after giving effect to the transaction no Default or Event of Default exists. Notwithstanding the foregoing, any subsidiary of the Company may consolidate with, merge into or transfer all or part of its properties and assets to the Company or any other subsidiary or subsidiaries of the Company. 15. AMENDMENTS, SUPPLEMENTS AND WAIVERS. Subject to certain exceptions, the Indenture or the Securities may be amended or supplemented with the consent of the Holders of at least a majority in aggregate principal amount of the Securities then outstanding, and any existing Default or Event of Default may be waived with the consent of the Holders of a majority in aggregate principal amount of the Securities then outstanding. Without notice to or the consent of any Securityholder, the Indenture or the Securities may be amended or supplemented to cure any ambiguity, omission, defect or inconsistency, to provide for uncertificated Securities in addition to certificated Securities, to comply with SECTIONS 5.01 AND 10.15 of the Indenture or to make any change that does not adversely affect the rights of any Securityholder. 16. DEFAULTS AND REMEDIES. An Event of Default includes the occurrence of any of the following: default in payment of principal at maturity, upon redemption or exercise of a Repurchase Right or otherwise; default for 30 days in payment of interest or other amounts due; failure by the Company for 60 days after notice to it to comply with any of its other agreements in the Indenture or the Securities; and certain events of bankruptcy or insolvency. If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the Securities then outstanding may declare all the Securities to be due and payable immediately, except as provided in the Indenture. Securityholders may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may require indemnity satisfactory to it before it enforces the Indenture or the Securities. Subject to certain limitations, Holders of a majority in principal amount of the Securities then outstanding may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Securityholders notice of any continuing Default or Event of Default (except a Default or Event of Default in payment) if it determines that withholding notice is in the interests of the Securityholders. The Company must furnish an annual compliance certificate to the Trustee. 17. REGISTRATION RIGHTS. The Holders are entitled to shelf registration rights as set forth in the Registration Rights Agreement (as defined in the Indenture). The Holders shall be entitled to receive liquidated damages in certain circumstances, all as set forth in the Registration Rights Agreement. 18. TRUSTEE DEALINGS WITH COMPANY. The Trustee under the Indenture, or any banking institution serving as successor Trustee thereunder, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not Trustee. 19. NO RECOURSE AGAINST OTHERS. No past, present or future director, officer, employee or stockholder, as such, of the Company shall have any liability for any obligations of the Company under the Securities or the 7 8 Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each Securityholder by accepting a Security waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities. 20. AUTHENTICATION. This Security shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent. 21. ABBREVIATIONS. Customary abbreviations may be used in the name of a Securityholder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entirety), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (Uniform Gifts to Minors Act). THE COMPANY WILL FURNISH TO ANY SECURITYHOLDER UPON WRITTEN REQUEST AND WITHOUT CHARGE A COPY OF THE INDENTURE. REQUESTS MAY BE MADE TO: IVAX Corporation 4400 Biscayne Boulevard Miami, Florida 33137 Attention: Secretary 8 9 [FORM OF ASSIGNMENT] I or we assign to PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER - -------------------------------------- - ------------------------------------------------------------------------------- (please print or type name and address) - ------------------------------------------------------------------------------- the within Security and all rights thereunder, and hereby irrevocably constitutes and appoints - ------------------------------------------------------------------------------- attorney to transfer the Security on the books of the Company with full power of substitution in the premises. Dated: -------------------------- ---------------------------------------- NOTICE: The signature on this assignment must correspond with the name as it appears upon the face of the within Security in every particular without alteration or enlargement or any change whatsoever and be guaranteed by a guarantor institution participating in the Securities Transfer Agents Medallion Program or in such other guarantee program acceptable to the Trustee. Signature Guarantee: ---------------------------------------------------------- In connection with any transfer of this Security occurring prior to the date which is the earlier of (i) the date of the declaration by the Commission of the effectiveness of a registration statement under the Securities Act of 1933, as amended (the "SECURITIES ACT") covering resales of this Security (which effectiveness shall not have been suspended or terminated at the date of the transfer) and (ii) the Resale Restriction Termination Date, the undersigned confirms that it has not utilized any general solicitation or general advertising in connection with transfer: 9 10 [Check One] (1) ____ to the Company or a subsidiary thereof; or (2) ____ pursuant to and in compliance with Rule 144A under the Securities Act of 1933, as amended; or (3) ____ to an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended) that has furnished to the Trustee a signed letter containing certain representations and agreements (the form of which letter can be obtained from the Trustee); or (4) ____ outside the United States to a "foreign purchaser" in compliance with Rule 904 of Regulation S under the Securities Act of 1933, as amended; or (5) ____ pursuant to the exemption from registration provided by Rule 144 under the Securities Act of 1933, as amended; or (6) ____ pursuant to an effective registration statement under the Securities Act of 1933, as amended; or (7) ____ pursuant to another available exemption from the registration statement requirements of the Securities Act of 1933, as amended. and unless the box below is checked, the undersigned confirms that such Security is not being transferred to an "affiliate" of the Company as defined in Rule 144 under the Securities Act of 1933, as amended (an "AFFILIATE"): [ ] The transferee is an Affiliate of the Company. (If the Security is transferred to an Affiliate, the restrictive legend must remain on the Security for two years following the date of the transfer). Unless one of the items is checked, the Trustee will refuse to register any of the Securities evidenced by this certificate in the name of any person other than the registered Holder thereof; PROVIDED, HOWEVER, that if item (3),(4),(5) or (7) is checked, the Company or the Trustee may require, prior to registering any such transfer of the Securities, in their sole discretion, such written legal opinions, certifications (including an investment letter in the case of box (3) or (4) and other information as the Trustee or the Company have reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933, as amended. If none of the foregoing items are checked, the Trustee or Registrar shall not be obligated to register this Security in the name of any person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in Section 2.16 of the Indenture shall have been satisfied. Dated: Signed: -------------------- ------------------------------------------ (Sign exactly as name appears on the other side of this Security) 10 11 Signature Guarantee: ----------------------------------------------------------- TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED The undersigned represents and warrants that it is purchasing this Security for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a "qualified institutional buyer" within the meaning of Rule 144A under the Securities Act of 1933, as amended, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined transferor is relying upon the undersigned's foregoing representations in order to claim the exemption from registration provided by Rule 144A. Dated: ---------------- --------------------------------------------------- NOTICE: To be executed by an executive officer 11 12 CONVERSION NOTICE To convert this Security into Common Stock of the Company, check the box: [ ] To convert only part of this Security, state the principal amount to be converted (must be in multiples of $1,000): $ ------------------ If you want the stock certificate made out in another person's name, fill in the form below: - -------------------------------------------------------------------------------- (Insert other person's soc. sec. or tax I.D. no.) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Print or type other person's name, address and zip code) - -------------------------------------------------------------------------------- Date: Signature(s): -------------- ------------------------------------------- ------------------------------------------- (Sign exactly as your name(s) appear(s) on the other side of this Security) Signature(s) guaranteed by: -------------------------------------------- (All signatures must be guaranteed by a guarantor institution participating in the Securities Transfer Agents Medallion Program or in such other guarantee program acceptable to the Trustee.) 12 13 OPTION OF HOLDER TO ELECT PURCHASE NOTICE If you want to elect to have this Security purchased by the Company pursuant to SECTION 3.07 of the Indenture, check the box: [ ] If you want to elect to have only part of this Security purchased by the Company pursuant to SECTION 3.07 of the Indenture, state the principal amount: $ ------------------------------------------- (in an integral multiple of $1,000) Date: Signature(s): ------------------ ------------------------------- ------------------------------------------- (Sign exactly as your name(s) appear(s) on the other side of this Security) Signature(s) guaranteed by: ------------------------------------------- (All signatures must be guaranteed by a guarantor institution participating in the Securities Transfer Agents Medallion Program or in such other guarantee program acceptable to the Trustee.) 13 EX-5.1 6 g70686ex5-1.txt OPINION OF AKERMAN SENTERFITT 1 Exhibit 5.1 Opinion of Akerman, Senterfitt & Eidson, P.A. July 31, 2001 IVAX Corporation 4400 Biscayne Boulevard Miami, Florida 33137 Ladies and Gentlemen: We have acted as counsel to IVAX Corporation, a Florida corporation (the "Company"), in connection with the preparation and filing with the Securities and Exchange Commission (the "Commission") of a Registration Statement on Form S-3 (the "Registration Statement"), under the Securities Act of 1933, as amended (the "Securities Act"), relating to the registration by the Company of (i) $725,000,000 of principal amount of its 4 1/2% Convertible Senior Subordinated Notes due 2008 (the "4 1/2% Notes") and (ii) 18,102,344 shares of the Company's common stock, par value $.10 per share, issuable upon conversion of the 4 1/2% Notes (the "Conversion Shares"), all of which are to be sold by certain holders of the 4 1/2% Notes or the Conversion Shares as described in the Registration Statement. The Notes were issued under an Indenture, dated as of May 4, 2001, between the Company and U.S. Bank Trust National Association, as trustee (the "Indenture"). In so acting, we have examined originals, or copies certified or otherwise identified to our satisfaction, of (i) the Registration Statement and the exhibits thereto, (ii) the Indenture; (iii) the Registration Rights Agreement, dated May 4, 2001, between the Company and UBS Warburg LLC, as initial purchaser; (iv) the form of the 4 1/2% Notes; (v) the Articles of Incorporation of the Company, as amended; and (vi) such documents, records, certificates and other instruments of the Company as in our judgment are necessary or appropriate for purposes of this opinion. In our examination of the aforesaid documents, we have assumed, without independent investigation, the genuineness of all signatures, the legal capacity of all individuals who have executed any of the documents, the authenticity of all documents submitted to us as originals and the conformity to the original documents of all copies. Based upon the foregoing examination, we are of the opinion that (i) the 4 1/2% Notes are legally issued and binding obligations of the Company, subject to applicable bankruptcy, insolvency, reorganization, receivership, arrangement, fraudulent conveyance, moratorium or other similar laws affecting creditor' rights generally and general principals of equity regardless of whether such enforceability is considered in a proceeding in equity or at law and (ii) the Conversion Shares have been duly authorized by the Company, 2 IVAX Corporation July 31, 2001 Page 2 - --------------------------- and when issued and delivered in accordance with the terms of the Indenture, will be validly issued, fully paid and nonassessable, assuming no change in applicable law. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of our name under the caption "Legal Matters" in the Registration Statement. In giving such consent, we do not thereby admit that we are included within the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission thereunder. Sincerely, AKERMAN, SENTERFITT & EIDSON, P.A. /s/ Akerman, Senterfitt & Eidson, P.A. EX-10.28 7 g70686ex10-28.txt REGISTRATION RIGHTS AGREEMENT 1 EXHIBIT 10.28 $575,000,000 Principal Amount IVAX CORPORATION 4 1/2% Convertible Senior Subordinated Notes Due 2008 REGISTRATION RIGHTS AGREEMENT May 4, 2001 UBS WARBURG LLC 299 Park Avenue New York, New York 10171 Dear Sirs: IVAX Corporation, a Florida corporation (the "Company"), proposes to issue and sell to UBS Warburg LLC, as initial purchaser (the "Initial Purchaser"), upon the terms set forth in a purchase agreement dated May 1, 2001 (the "Purchase Agreement"), $575,000,000 aggregate principal amount of its 4 1/2% Convertible Senior Subordinated Notes due 2008 (the "Firm Notes"), which will be convertible into Common Stock of the Company, par value $0.10 per share (the "Conversion Shares"), as well as an additional allotment of up to $150,000,000 initial principal amount of the same which the Initial Purchaser may subsequently elect to purchase pursuant to the terms of the Purchase Agreement (the "Additional Notes" and together with the Firm Notes, the "Notes"). The Notes will be issued pursuant to an indenture, of even date herewith (the "Indenture") between the Company and U.S. Bank Trust National Association (the "Trustee"). As an inducement to the Initial Purchaser, the Company agrees with the Initial Purchaser, for the benefit of the holders of the Notes (including, without limitation, the Initial Purchaser) and Conversion Shares (collectively, the "Securityholders"), as follows: 1. Shelf Registration. (a) The Company shall file with the Securities and Exchange Commission (the "Commission") within 90 days after the date hereof (the "Closing Date") a single registration statement (the "Shelf Registration Statement") on Form S-1 or Form S-3, if the use of such form is then available, to cover resales of Transfer Restricted Securities (as defined below) by the Holders (as defined below). The Company shall use its best efforts to cause the Shelf Registration Statement to be declared effective by the Commission on or prior to 180 days from the Closing Date. "Transfer Restricted Securities" means each Note and any Conversion Share until the earlier of the (x) the date on which such Note or Conversion Share has been effectively registered under the Securities Act of 1933, as amended (the "Securities Act") and disposed of, whether or not in accordance with the Shelf Registration Statement, and (y) the date which is two years (or such shorter period of time as permitted by Rule 144(k) under the Securities Act (or any similar provisions then in force)) after 2 the later of (A) the date of original issue of the Notes and (B) the last day that the Company or any of its "affiliates" (as defined under the Securities Act) was the owner of such Notes (or any predecessor thereto). (b) The Company shall use its best efforts to cause the Shelf Registration Statement to be effective for a period of two years (or for such longer period if extended pursuant to Section 2(i)) from the effective date thereof or such shorter period that will terminate when each Transfer Restricted Security covered by the Shelf Registration Statement ceases to be a Transfer Restricted Security (the "Shelf Registration Period"). The Company shall be deemed not to have used its best efforts to keep the Shelf Registration Statement effective during the requisite period if it voluntarily takes any action that would result in Holders of Transfer Restricted Securities covered thereby not being able to offer and sell such Transfer Restricted Securities during that period, unless such action is required by applicable law or otherwise permitted hereunder, including, without limitation, by Section 2(i) hereof. (c) Notwithstanding any other provisions of this Agreement to the contrary, the Company shall cause the Shelf Registration Statement and the related prospectus and any amendment or supplement thereto, as of the effective date of the Shelf Registration Statement, amendment or supplement, (i) to comply in all material respects with the applicable requirements of the Securities Act and the rules and regulations of the Commission and (ii) not to contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, except that the foregoing shall not apply to any information provided to the Company by the Initial Purchaser or any Holder for inclusion in the Shelf Registration Statement. 2. Registration Procedures. In connection with the proposed offer and sale of the Transfer Restricted Securities in accordance with the methods of distribution set forth in the Shelf Registration Statement (the "Shelf Registration"), the following provisions apply: (a) The Company shall prepare and mail to each Securityholder identified by the Initial Purchaser a questionnaire requesting such information regarding such Securityholder and the distribution of Transfer Restricted Securities as the Company may reasonably require for inclusion in the Shelf Registration Statement and asking each such Securityholder to confirm that it will comply with applicable securities laws, including the Securities Act and the rules and regulations promulgated thereunder. Each Securityholder to whom such questionnaire is mailed shall deliver a completed questionnaire together with its written confirmation to the Company within fifteen days of receipt. The Company will include in the Shelf Registration Statement as a selling security holder each Securityholder that returns its questionnaire and confirmation within fifteen days of receipt and will use reasonable efforts to include in the Shelf Registration Statement any Securityholder which fails to provide the Company with a completed questionnaire and confirmation within fifteen days of receipt but otherwise provides the completed questionnaire and confirmation prior to the commencement of the Shelf Registration Period. The Company shall have no obligation to include in the Shelf Registration Statement (whether by post-effective amendment, by prospectus supplement or otherwise) a Securityholder which fails to timely provide the Company with a completed questionnaire and confirmation. "Holder" means each Securityholder who (i) is so identified by the Initial Purchaser in writing within 5 business days after receipt by the Initial Purchaser -2- 3 of a written request by the Company and (ii) delivers to the Company a completed questionnaire containing the required information and confirmation within such fifteen-day period or is otherwise included as a selling security holder in the Shelf Registration Statement. (b) The Company shall (i) furnish to the Initial Purchaser, prior to the filing thereof with the Commission, a copy of the Shelf Registration Statement and each amendment thereof and each supplement, if any, to the prospectus included therein and, in the event that the Initial Purchaser (with respect to any portion of an unsold allotment from the original offering) is participating in the Shelf Registration, the Company shall use its best efforts to reflect in each such document, when so filed with the Commission, such comments as the Initial Purchaser reasonably may propose; and (ii) include in such Shelf Registration Statement (or amendment or supplements) the names of the Holders who propose to sell Transfer Restricted Securities pursuant to the Shelf Registration Statement as selling securityholders. (c) The Company shall give written notice to the Initial Purchaser and Holders of the Transfer Restricted Securities (which notice pursuant to clauses (ii)-(v) hereof shall be accompanied by an instruction to suspend the use of the prospectus contained in the Shelf Registration Statement (the "Prospectus") and any sales pursuant to such Prospectus until the requisite changes have been made): (i) when the Shelf Registration Statement or any amendment thereto has been filed with the Commission and when the Shelf Registration Statement or any post-effective amendment thereto has become effective; (ii) of any request by the Commission for amendments or supplements to the Shelf Registration Statement or the Prospectus or for additional information; (iii) of the issuance by the Commission of any stop order suspending the effectiveness of the Shelf Registration Statement or the initiation of any proceedings for that purpose; (iv) of the receipt by the Company or its legal counsel of any written notification with respect to the suspension of the qualification of the Transfer Restricted Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and (v) of the happening of any event (but not the details thereof) that requires the Company to make changes in the Prospectus in order that the Prospectus does not contain an untrue statement of a material fact nor omits to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. -3- 4 Any notice given hereunder shall be kept confidential and the recipient of a notice agrees that neither they nor their affiliates will engage in any unlawful transactions in the Company's securities based on the information contained in such notice. (d) The Company shall make every reasonable effort to obtain the withdrawal at the earliest possible time, of any order suspending the effectiveness of the Shelf Registration Statement. (e) The Company shall furnish to each Holder of Transfer Restricted Securities included within the coverage of the Shelf Registration Statement, without charge, at least one copy of the Shelf Registration Statement and any post-effective amendment thereto, including financial statements and schedules, and, if the Holder so requests in writing, all exhibits thereto (including those, if any, incorporated by reference). (f) The Company shall, during the Shelf Registration Period, deliver to each Holder of Transfer Restricted Securities included within the coverage of the Shelf Registration, without charge, as many copies of the Prospectus (including each preliminary Prospectus) and any amendment or supplement thereto as such person may reasonably request. The Company consents, subject to the provisions of this Agreement, to the use of the Prospectus or any amendment or supplement thereto by each of the selling Holders of the Transfer Restricted Securities covered by the Prospectus in connection with the offering and sale of the Transfer Restricted Securities covered by the Prospectus, or any amendment or supplement thereto, included in the Shelf Registration Statement. (g) Prior to any public offering of the Transfer Restricted Securities pursuant to any Shelf Registration Statement, the Company shall use its best efforts to register or qualify or cooperate with the Holders of the Transfer Restricted Securities included therein and their respective counsel in connection with the registration or qualification or exemption from registration or qualification of the Transfer Restricted Securities included in the Shelf Registration Statement for offer and sale under the securities or "blue sky" laws of such states of the United States as any Holder of the Transfer Restricted Securities included in the Shelf Registration Statement reasonably requests in writing and do any and all other acts or things reasonably necessary or advisable to enable the offer and sale in such states of the Transfer Restricted Securities covered by such Shelf Registration Statement; provided, however, that the Company shall not be required to (i) qualify as a foreign corporation to do business in any jurisdiction where it is not then so qualified or (ii) take any action which would subject it to general service of process or to taxation in any jurisdiction where it is not then so subject or (iii) subject itself to taxation in any jurisdiction in which it is not now so subject. (h) The Company shall cooperate with the Holders of the Transfer Restricted Securities to facilitate the timely preparation and delivery prior to settlement of any sales pursuant to the Shelf Registration Statement of certificates representing the Transfer Restricted Securities sold pursuant to the Shelf Registration Statement free of any restrictive legends and in such denominations and registered in such names as the Holders may request provided that such -4- 5 request is made a reasonable period of time prior to sales of the Transfer Restricted Securities pursuant to such Shelf Registration Statement. (i) Upon the occurrence of any event contemplated by paragraphs (ii) through (v) of Section 2(c) above during the Shelf Registration Period, the Company shall promptly prepare and file a post-effective amendment to the Shelf Registration Statement or a supplement to the Prospectus and any other required document so that, as thereafter delivered to Holders of the Transfer Restricted Securities covered thereby or purchasers of Transfer Restricted Securities, the Prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that the Company may delay preparing, filing and distributing any such supplement or amendment (such period of delay, a "Suspension Period") if the Company determines in good faith that the preparation or filing of such supplement or amendment would, in the reasonable judgment of the Company, (i) interfere with or affect any pending or contemplated corporate development (whether or not a final decision has been made with respect to such development) or (ii) involve initial or continuing disclosure obligations that are not in the best interests of the Company's shareholders at such time; provided, further, that such delay shall not extend for a period of more than 30 business days in any three-month period or more than 60 business days in any twelve-month period. If the Company notifies the Initial Purchaser and the Holders of the Transfer Restricted Securities in accordance with paragraphs (ii) through (v) of Section 2(c) above to suspend the use of the Prospectus until the requisite changes to the Prospectus have been made, then the Initial Purchaser and the Holders of the Transfer Restricted Securities shall suspend use of such Prospectus and the period of effectiveness of the Shelf Registration Statement provided for in Section 1(b) above shall be extended by the number of days from and including the date of the giving of such notice to and including the date when the Initial Purchaser and the Holders of the Transfer Restricted Security shall have received such amended or supplemented prospectus pursuant to this Section 2(i). (j) Not later than the effective date of the Shelf Registration Statement, the Company will provide CUSIP numbers for the Notes and the Conversion Shares registered under the Shelf Registration Statement and provide the Trustee with a certificate for the Notes, in a form eligible for deposit with The Depository Trust Company, it being understood that such securities will continue to bear any appropriate restrictive legends. (k) The Company will comply with all rules and regulations of the Commission to the extent and so long as they are applicable to the Shelf Registration Statement and will make generally available to its security holders (or otherwise provide in accordance with Section 11(a) of the Securities Act and Rule 158 thereunder) an earnings statement satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder, no later than 45 days after the end of a 12-month period (or 90 days, if such period is a fiscal year) beginning with the first month of the Company's first fiscal quarter commencing after the -5- 6 effective date of the Shelf Registration Statement, which statement shall cover such 12-month period. (l) The Company shall cause the Indenture to be qualified under the Trust Indenture Act of 1939, as amended, in a timely manner and containing such changes, if any, as shall be necessary or desirable for such qualification. In the event that such qualification would require the appointment of a new trustee under the Indenture, the Company shall appoint a new trustee thereunder pursuant to the applicable provisions of the Indenture. (m) In addition to the questionnaire and confirmation provided for by Section 2(a) above, the Company may require each Holder of Transfer Restricted Securities to be sold pursuant to the Shelf Registration Statement to furnish to the Company such information regarding the Holder and the distribution of the Transfer Restricted Securities as the Company may from time to time reasonably require for inclusion in the Shelf Registration Statement, and the Company may exclude from the Shelf Registration Statement the Transfer Restricted Securities of any Holder that fails to furnish such information promptly after receiving such request. (n) The Company shall enter into such customary agreements (including, if requested, an underwriting agreement in customary form) and take all such other action, if any, as any Holder which, together with its "affiliates" (as defined in the Securities Act), holds $40,000,000 or greater in aggregate initial principal amount of the Transfer Restricted Securities and which, together with its affiliates, intends to sell at least $40,000,000 in initial aggregate principal amount of Transfer Restricted Securities in an underwritten offering, shall reasonably request in order to facilitate the disposition of the Transfer Restricted Securities pursuant to the Shelf Registration Statement; provided, that in no event shall the Company be required to cause any representatives to attend any informational or roadshow presentations or pay any expenses related thereto. (o) The Company shall, subject to the execution and delivery to the Company of any confidentiality agreements that the Company may reasonably request (i) make reasonably available for inspection by the Holders, any underwriter participating in any disposition of Transfer Restricted Securities pursuant to the Shelf Registration Statement and any attorney, accountant or other agent retained by the Holders or any such underwriter all relevant financial and other records, corporate documents and properties of the Company and (ii) cause the Company's officers, directors, employees, accountants and auditors to supply all relevant information reasonably requested by the Holders or any such underwriter, attorney, accountant or agent in connection with the Shelf Registration Statement, in each case, as shall be reasonably necessary to enable such persons, to conduct a reasonable investigation within the meaning of Section 11 of the Securities Act; provided, however, that the foregoing inspection and information gathering shall be coordinated on behalf of the Initial Purchaser and the other parties by one firm of counsel, which firm shall be Willkie Farr & Gallagher until another firm shall be designated as described in Section 3 hereof. -6- 7 (p) The Company, if requested by any Holder of the Transfer Restricted Securities referred to in paragraph (n) above, shall cause (i) its counsel to deliver an opinion relating to the Transfer Restricted Securities in customary form addressed to such Holder and the managing underwriters, if any, thereof and dated, in the case of the initial opinion, the effective date of such Shelf Registration Statement covering the matters customarily covered in underwritten offerings, (ii) its counsel to deliver a statement in customary form relating to the compliance as to form of such Shelf Registration Statement (but not any documents incorporated by reference therein) and of the Indenture with the requirements of the Securities Act and the Trust Indenture Act, respectively; and, as of the date of the opinion and as of the effective date of the Shelf Registration Statement or most recent post-effective amendment thereto, as the case may be that no fact had come to such counsel's attention in connection with the preparation of the Shelf Registration Statement causing such counsel to believe that such Shelf Registration Statement and the Prospectus, as then amended or supplemented (but not any documents incorporated by reference therein), contained an untrue statement of a material fact or omitted to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which such statements were made, not misleading; (iii) its officers to execute and deliver all customary documents and certificates and updates thereof requested by any underwriters of the applicable Transfer Restricted Securities; and (iv) its independent public accountants and the independent public accountants, if any, with respect to any other entity for which financial information is provided in the Shelf Registration Statement to provide to the selling Holder(s) of the applicable Transfer Restricted Securities and any underwriter therefor a comfort letter in customary form and covering matters of the type customarily covered in comfort letters in connection with primary underwritten offerings, subject to receipt of appropriate documentation as contemplated, and only if permitted, by Statement of Auditing Standards No. 72. (q) In the event that any broker-dealer registered under the Exchange Act shall underwrite any Transfer Restricted Securities or participate as a member of an underwriting syndicate or selling group or "assist in the distribution" (within the meaning of the Conduct Rules (the "Rules") of the National Association of Securities Dealers, Inc. ("NASD")) thereof, whether as a Holder of such Transfer Restricted Securities or as an underwriter, a placement or sales agent or a broker or dealer in respect thereof, or otherwise, the Company, if requested by such broker-dealer, will assist such broker-dealer in complying with the requirements of such Rules, including, without limitation, by (i) if such Rules, including Rule 2720, shall so require, engaging a "qualified independent underwriter" (as defined in Rule 2720) to participate in the preparation of the Shelf Registration Statement relating to such Transfer Restricted Securities, to exercise usual standards of due diligence in respect thereto and, if any portion of the offering contemplated by such Shelf Registration Statement is an underwritten offering or is made through a placement or sales agent, to recommend the yield of such Transfer Restricted Securities, (ii) indemnifying any such qualified independent underwriter to the extent of the indemnification of underwriters provided in Section 4 hereof and (iii) providing such information to such broker- dealer as may be required in order for such broker-dealer to comply with the requirements of the Rules. -7- 8 (r) The Company shall use its best efforts to take all other steps necessary to effect the registration of the Transfer Restricted Securities covered by the Shelf Registration Statement contemplated hereby. 3. Registration Expenses. The Company shall bear all fees and expenses incurred in connection with the performance of its obligations under Sections 1 and 2 hereof whether or not the Shelf Registration Statement is filed or becomes effective, shall bear or reimburse the Holders of the Transfer Restricted Securities covered thereby for the reasonable fees and disbursements of one firm of counsel, which firm shall be Willkie Farr & Gallagher until another firm shall be designated by the Holders of a majority in initial principal amount of the Notes covered thereby to act as counsel for the Holders in connection therewith. The Holders shall be responsible for all other fees and expenses, such as brokerage fees, underwriting discounts and commissions. 4. Indemnification. (a) To the extent permitted by law, the Company agrees to indemnify and hold harmless each Holder of Transfer Restricted Securities covered by the Shelf Registration Statement and each person, if any, who controls such Holder within the meaning of the Securities Act or the Exchange Act (each Holder and such controlling persons are referred to collectively as the "Indemnified Parties") from and against any losses, claims, damages or liabilities, joint or several, or any actions in respect thereof (including, but not limited to, any losses, claims, damages, liabilities or actions relating to purchases and sales of the Transfer Restricted Securities) to which each Indemnified Party may become subject under the Securities Act, the Securities Exchange Act of 1934, as amended (the "Exchange Act") or otherwise, insofar as such losses, claims, damages, liabilities or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Shelf Registration Statement or Prospectus or in any amendment or supplement thereto or in any preliminary Prospectus included in the Shelf Registration Statement, or arise out of, or are based upon, the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in light of the circumstances under which such statements were made, and shall reimburse, as incurred, the Indemnified Parties for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action in respect thereof; provided, however, that (i) the Company shall not be liable in any such case to the extent that such loss, claim, damage or liability arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in the Shelf Registration Statement or Prospectus or in any amendment or supplement thereto or in any preliminary Prospectus included in the Shelf Registration Statement in reliance upon and in conformity with written information pertaining to the Initial Purchaser or such Holder and furnished to the Company by or on behalf of the Initial Purchaser or Holder specifically for inclusion therein and (ii) with respect to any untrue statement or omission or alleged untrue statement or omission made in any preliminary Prospectus included in the Shelf Registration Statement, the indemnity agreement contained in this subsection (a) shall not inure to the benefit of any Holder from whom the person asserting any such losses, claims, damages or liabilities purchased the Transfer Restricted Securities concerned, to the extent that a prospectus relating to such Transfer Restricted Securities was required to be delivered by such Holder under the Securities Act in connection with such purchase and any such loss, claim, damage or liability of such Holder results from the fact that there was not sent or given to such person, at or prior to the written confirmation of the sale of such Transfer Restricted Securities to such person, a copy of the final -8- 9 Prospectus if the Company had previously furnished copies thereof to such Holder; provided further, however, that this indemnity agreement will be in addition to any liability which the Company may otherwise have to such Indemnified Party. The Company shall also indemnify underwriters, their officers and directors and each person who controls such underwriters within the meaning of the Securities Act or the Exchange Act to the same extent as provided above with respect to the indemnification of the Holders of the Transfer Restricted Securities if requested by such Holders. (b) To the extent permitted by law, each Holder of the Transfer Restricted Securities covered by the Shelf Registration Statement severally and not jointly, will indemnify and hold harmless the Company and each person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act from and against any losses, claims, damages or liabilities or any actions in respect thereof, to which the Company or any such controlling person may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such losses, claims, damages, liabilities or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Shelf Registration Statement or Prospectus or in any amendment or supplement thereto or in any preliminary Prospectus included in the Shelf Registration Statement, or arise out of or are based upon the omission or alleged omission to state therein a material fact necessary to make the statements therein not misleading, but in each case only to the extent that the untrue statement or omission or alleged untrue statement or omission was made in reliance upon and in conformity with written information pertaining to such Holder and furnished to the Company by or on behalf of such Holder specifically for inclusion therein; and, subject to the limitation set forth immediately preceding this clause, shall reimburse, as incurred, the Company for any legal or other expenses reasonably incurred by the Company or any such controlling person in connection with investigating or defending any loss, claim, damage, liability or action in respect thereof. This indemnity agreement will be in addition to any liability which such Holder may otherwise have to the Company or any of its controlling persons. (c) Promptly after receipt by an indemnified party under this Section 4 of notice of the commencement of any action or proceeding (including a governmental investigation), such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 4, notify the indemnifying party of the commencement thereof; but the omission so to notify the indemnifying party will not, in any event, relieve the indemnifying party from any obligations to any indemnified party. In case any such action is brought against any indemnified party, and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (which may be counsel for the indemnifying party) unless such indemnified party shall have been advised by counsel that there may be one or more defenses reasonably available to such indemnified party that are in conflict with the defenses available to the indemnifying party or its affiliates or controlling persons, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof the indemnifying party will not be liable to such indemnified party under this Section 4 for any legal or other expenses, other than reasonable costs of investigation, subsequently incurred by such indemnified party in -9- 10 connection with the defense thereof. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened action in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party unless such settlement includes an unconditional release of such indemnified party from all liability on any claims that are the subject matter of such action. An indemnifying party will not be liable for any settlement of any action or claim effected without its written consent; provided, however, that such consent will not be reasonably withheld. (d) If the indemnification provided for in this Section 4 is unavailable or insufficient to hold harmless an indemnified party under subsections (a) or (b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to in subsection (a) or (b) above (i) in such proportion as is appropriate to reflect the relative benefits received by the indemnifying party or parties on the one hand and the indemnified party on the other from the sale of the Transfer Restricted Securities, pursuant to the Shelf Registration Statement, or (ii) if the allocation provided by the foregoing clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the indemnifying party or parties on the one hand and the indemnified party on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities (or actions in respect thereof) as well as any other relevant equitable considerations. The relative fault of the parties shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or such Holder or such other indemnified party, as the case may be, on the other, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any action or claim which is the subject of this subsection (d). Notwithstanding any other provision of this Section 4(d), the Holders of the Transfer Restricted Securities shall not be required to contribute any amount in excess of the amount by which the net proceeds received by such Holders from the sale of the Transfer Restricted Securities pursuant to the Shelf Registration Statement exceeds the amount of damages which such Holders have otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this paragraph (d), each person, if any, who controls such indemnified party within the meaning of the Securities Act or the Exchange Act shall have the same rights to contribution as such indemnified party and each person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act shall have the same rights to contribution as the Company. -10- 11 (e) The agreements contained in this Section 4 shall survive the sale of the Transfer Restricted Securities pursuant to the Shelf Registration Statement and shall remain in full force and effect, regardless of any termination or cancellation of this Agreement or any investigation made by or on behalf of any indemnified party. 5. Liquidated Damages Under Certain Circumstances. If (i) the Shelf Registration Statement is not filed with the Commission on or prior to 90 days after the Closing Date, (ii) the Shelf Registration Statement has not been declared effective by the Commission within 180 days after the Closing Date or (iii) the Shelf Registration Statement is filed and declared effective but shall thereafter during the Shelf Registration Period cease to be effective (without being succeeded immediately by an additional registration statement filed and declared effective) or usable for the offer and sale of Transfer Restricted Securities for a period of time (including any Suspension Period) which shall exceed 60 days in the aggregate in any 12-month period (each such event referred to in clauses (i) through (iii), a "Registration Default"), the Company will pay liquidated damages to each Holder of Transfer Restricted Securities that timely complied with the requirements of Section 2(a). The amount of liquidated damages payable during any period during which a Registration Default shall have occurred and be continuing is that amount which is equal to one-quarter of one percent (25 basis points) per annum per $1,000 initial principal amount and, if applicable, on an equivalent basis per Conversion Share (subject to adjustment in the event of stock splits, stock recombinations, stock dividends and the like) constituting Transfer Restricted Securities for each 90-day period until the applicable registration statement is filed and the applicable Registration Default has been cured, up to a maximum amount of liquidated damages of three-quarters of one percent (75 basis points) per annum per $1,000 initial principal amount of Notes and, if applicable, on an equivalent basis per Conversion Share (subject to adjustment as set forth above) constituting Transfer Restricted Securities. All accrued liquidated damages shall be paid to Holders of record entitled to receive such payments by wire transfer of immediately available funds or by federal funds check by the Company on the regular interest payment date. Following the cure of all Registration Defaults or, if earlier, the termination of the Shelf Registration Period, liquidated damages will cease to accrue with respect to such Registration Default. 6. Rules 144 and 144A. The Company shall use its best efforts to file the reports required to be filed by it under the Securities Act and the Exchange Act in a timely manner and, if at any time the Company is not required to file such reports, it will, upon the request of any Holder of Notes, make publicly available other information so long as necessary to permit sales of their securities pursuant to Rules 144 and 144A. The Company covenants that it will take such further action as any Holder of Notes may reasonably request, all to the extent required from time to time to enable such Holder to sell Notes without registration under the Securities Act within the limitation of the exemptions provided by Rules 144 and 144A (including the requirements of Rule 144A(d)(4)). The Company will provide a copy of this Agreement to prospective purchasers of Notes identified to the Company by the Initial Purchaser upon request. Upon the request of any Holder of Notes, the Company shall deliver to such Holder a written statement as to whether it has complied with such requirements. Notwithstanding the foregoing, nothing in this Section 6 shall be deemed to require the Company to register any of its securities pursuant to the Exchange Act. -11- 12 7. Underwritten Registrations. If any of the Transfer Restricted Securities covered by the Shelf Registration Statement are to be sold in an underwritten offering, the investment banker or investment bankers and manager or managers that will administer the offering ("Managing Underwriters") will be selected by the Company; provided, that such selection is consented to by the Holders of a majority in aggregate initial principal amount of Transfer Restricted Securities to be included in such offering, which consent shall not be unreasonably withheld or delayed. No person may participate in any underwritten registration hereunder unless such person (i) agrees to sell such person's Transfer Restricted Securities on the basis provided in any underwriting arrangements approved by the persons entitled hereunder to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements. 8. Miscellaneous. (a) Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, except by the Company and the written consent of the Holders of a majority in initial principal amount of the Transfer Restricted Securities affected by such amendment, modification, supplement, waiver or consents. (b) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand delivery, first-class mail, facsimile transmission, or overnight air courier: (1) if to a Holder of the Transfer Restricted Securities, at the most current address given by such Holder to the Company in writing. (2) if to the Initial Purchaser: UBS Warburg LLC 299 Park Avenue New York, NY 10171 Fax No.: (212) 821-2446 Attention: Syndicate Department with a copy to: Willkie Farr & Gallagher 787 7th Avenue New York, NY 10019 Fax No.: (212) 728-8111 Attention: William J. Grant, Esq. -12- 13 (3) if to the Company, at its address as follows: IVAX Corporation 44 Biscayne Boulevard Miami, FL 33137 Fax No.: (305) 575-6049 Attention: Chief Legal Officer with a copy to: Akerman Senterfitt & Eidson, P.A. One S.E. Third Avenue Miami, FL 33131 Fax No.: (305) 374-5095 Attention: Kara MacCullough, Esq. All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; three business days after being deposited in the mail, postage prepaid, if mailed; when receipt is acknowledged by recipient's facsimile machine operator, if sent by facsimile transmission; and on the day delivered, if sent by overnight air courier. (c) No Conflicting Agreements. The Company has not, as of the date hereof, entered into, nor shall it, on or after the date hereof, enter into, any agreement with respect to its securities that conflicts with the provisions hereof. (d) Successors and Assigns. This Agreement shall be binding upon the Company and each Holder of Transfer Restricted Securities and their respective successors and assigns. (e) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart by facsimile shall be effective as delivery of a manually executed counterpart thereof. (f) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. (g) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. (h) Severability. If any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the -13- 14 remaining provisions contained herein shall not be affected or impaired thereby. (i) Transfer Restricted Securities Held by the Company. Whenever the consent or approval of Holders of a specified percentage of initial principal amount of Transfer Restricted Securities is required hereunder, Transfer Restricted Securities held by the Company or its affiliates (other than subsequent Holders of Transfer Restricted Securities if such subsequent Holders are deemed to be affiliates solely by reason of their holdings of such Transfer Restricted Securities) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage. -14- 15 If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement on the Initial Purchaser and the Company in accordance with its terms. Very truly yours, IVAX CORPORATION By: /s/ THOMAS E. BEIER ---------------------------------- Name: Thomas E. Beier Title: Chief Financial Officer Accepted and agreed to as of the date first above written UBS WARBURG LLC By: /s/ BENJAMIN D. LORELLO ---------------------------------- Name: Benjamin D. Lorello Title: Managing Director By: /s/ STEVEN MEEHAN ---------------------------------- Name: Steven Meehan Title: Managing Director -15- EX-12.2 8 g70686ex12-2.txt COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES 1 EXHIBIT 12.2 COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
Years Ended December 31, ------------------------------------------------------------------- Quarter Ended 1996 1997 1998 1999 2000 March 31, 2001 --------- --------- --------- --------- --------- -------------- (dollars in thousands) (unaudited) Fixed Charges: Interest expense on indebtedness $ 15,996 $ 14,685 $ 6,857 $ 5,556 $ 14,773 $ 4,492 Interest expense on portion of rent expense representative of interest 435 394 340 366 350 111 Total Fixed Charges $ 16,431 $ 15,079 $ 7,197 $ 5,922 $ 15,123 $ 4,603 Earnings (Loss): Net income (loss) before provision income taxes and minority interest $(189,389) $(160,544) $ 34,876 $ 84,735 $ 152,981 $ 73,365 Fixed charges per above 16,431 15,079 7,197 5,922 15,123 4,603 Total earnings (loss) $(172,958) $(145,465) $ 42,073 $ 90,657 $ 168,104 $ 77,968 Ratio of earnings to fixed charges (10.5) (9.6) 5.8 15.3 11.1 16.9 Coverage deficiency $(189,389) $(160,544) -- -- -- --
EX-25.1 9 g70686ex25-1.txt STATEMENT OF ELIGIBILITY OF TRUSTEE 1 EXHIBIT 25.1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------- FORM T-1 Statement of Eligibility Under the Trust Indenture Act of 1939 of a Corporation Designated to Act as Trustee U.S. BANK TRUST NATIONAL ASSOCIATION (Exact name of Trustee as specified in its charter) United States 41-0257700 (State of Incorporation) (I.R.S. Employer Identification No.) U.S. Bank Trust Center 180 East Fifth Street St. Paul, Minnesota 55101 (Address of Principal Executive Offices) (Zip Code) IVAX CORPORATION (Exact name of Registrant as specified in its charter) Florida 16-1003559 (State of Incorporation) (I.R.S. Employer Identification No.) 4400 Biscayne Boulevard Miami, Florida 33137 (Address of Principal Executive Offices) (Zip Code) 4 1/2% CONVERTIBLE SENIOR SUBORDINATED NOTES DUE 2008 (Title of the Indenture Securities) 2 GENERAL 1. GENERAL INFORMATION Furnish the following information as to the Trustee. (a) Name and address of each examining or supervising authority to which it is subject. Comptroller of the Currency Washington, D.C. (b) Whether it is authorized to exercise corporate trust powers. Yes 2. AFFILIATIONS WITH OBLIGOR AND UNDERWRITERS If the obligor or any underwriter for the obligor is an affiliate of the Trustee, describe each such affiliation. None See Note following Item 16. Items 3-15 are not applicable because to the best of the Trustee's knowledge the obligor is not in default under any Indenture for which the Trustee acts as Trustee. 16. LIST OF EXHIBITS List below all exhibits filed as a part of this statement of eligibility and qualification. 1. Copy of Articles of Association.* 2. Copy of Certificate of Authority to Commence Business.* 3. Authorization of the Trustee to exercise corporate trust powers (included in Exhibits 1 and 2; no separate instrument).* 4. Copy of existing By-Laws.* 5. Copy of each Indenture referred to in Item 4. N/A. 6. The consents of the Trustee required by Section 321(b) of the act. 7. Copy of the latest report of condition of the Trustee published pursuant to law or the requirements of its supervising or examining authority is incorporated by reference to Registration Number 333-43278. * Incorporated by reference to Registration Number 22-27000. 2 3 NOTE The answers to this statement insofar as such answers relate to what persons have been underwriters for any securities of the obligors within three years prior to the date of filing this statement, or what persons are owners of 10% or more of the voting securities of the obligors, or affiliates, are based upon information furnished to the Trustee by the obligors. While the Trustee has no reason to doubt the accuracy of any such information, it cannot accept any responsibility therefor. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee, U.S. Bank Trust National Association, an Association organized and existing under the laws of the United States, has duly caused this statement of eligibility and qualification to be signed on its behalf by the undersigned, thereunto duly authorized, and its seal to be hereunto affixed and attested, all in the City of Saint Paul and State of Minnesota on the 25th day of July, 2001. U.S. BANK TRUST NATIONAL ASSOCIATION /s/ Richard H. Prokosch ------------------------------------------ Richard H. Prokosch Vice President /s/ Lori-Anne Rosenberg - -------------------------------- Lori-Anne Rosenberg Assistant Secretary 3 4 EXHIBIT 6 CONSENT In accordance with Section 321(b) of the Trust Indenture Act of 1939, the undersigned, U.S. BANK TRUST NATIONAL ASSOCIATION hereby consents that reports of examination of the undersigned by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon its request therefor. Dated: July 25, 2001 U.S. BANK TRUST NATIONAL ASSOCIATION /s/ Richard H. Prokosch ----------------------------------------- Richard H. Prokosch Vice President -----END PRIVACY-ENHANCED MESSAGE-----