-----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, MrpaB4u59QFLpwQYqNzSMarYP9fkq4412VJ+rliWT0nHANgUB6h5XO1j4YD95a7+ 1OFxhLAOZnvBXU9cA20njw== 0000950170-00-000129.txt : 20000203 0000950170-00-000129.hdr.sgml : 20000203 ACCESSION NUMBER: 0000950170-00-000129 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 20000202 GROUP MEMBERS: FROST PHILLIP MD ET AL GROUP MEMBERS: FROST-NEVADA CORPORATION GROUP MEMBERS: FROST-NEVADA, LIMITED PARTNERSHIP GROUP MEMBERS: PATRICIA FROST GROUP MEMBERS: PHILLIP FROST, M.D. SUBJECT COMPANY: 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: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-37214 FILM NUMBER: 520098 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: IVAX CORP DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: IVACO INDUSTRIES INC DATE OF NAME CHANGE: 19871213 FORMER COMPANY: FORMER CONFORMED NAME: INLAND VACUUM INDUSTRIES INC DATE OF NAME CHANGE: 19870611 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: FROST PHILLIP MD ET AL CENTRAL INDEX KEY: 0000898860 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 000000000 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 4400 BISCAYNE BLVD CITY: MIAMI STATE: FL ZIP: 33137-3227 BUSINESS PHONE: 3055756001 MAIL ADDRESS: STREET 1: 4400 BISCAYNE BLVD CITY: MIAMI STATE: FL ZIP: 33137-3227 SC 13D/A 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 18)* IVAX CORPORATION ---------------- (Name of Issuer) COMMON STOCK, $.10 PAR VALUE ---------------------------- (Title of Class of Securities) 465823102 --------- (Cusip Number) RICHARD C. PFENNIGER, JR. 4400 BISCAYNE BOULEVARD, MIAMI, FL 33137 (305) 575-4000 ------------------------------------------------------------------ (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) NOVEMBER 18, 1999 ----------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of the Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ]. NOTE: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filed out for a reporting person's initial on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). (Continued on following page(s)) Page 1 - ------------------- ------ CUSIP NO. 465823102 13D PAGE 2 - ------------------- ------ - --------- ---------------------------------------------------------------------- 1 NAME OF REPORTING S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON PHILLIP FROST, M.D. - --------- ---------------------------------------------------------------------- 2 Check the appropriate Box if a Member of a Group (a) [X] (b) [ ] - --------- ---------------------------------------------------------------------- 3 SEC USE ONLY - --------- ---------------------------------------------------------------------- 4 SOURCE OF FUNDS* PF - --------- ---------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - --------- ---------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION USA - ------------------------- ------- ---------------------------------------------- 7 SOLE VOTING POWER NUMBER OF 0 SHARES BENEFI- ------- ---------------------------------------------- CIALLY 8 SHARED VOTING POWER OWNED BY 16,400,073 EACH ------- ---------------------------------------------- REPORTING 9 SOLE DISPOSITIVE POWER PERSON 0 WITH ------- ---------------------------------------------- 10 SHARED DISPOSITIVE POWER 16,400,073 - --------- ---------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 16,400,073 - --------- ---------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - --------- ---------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 16.05% - --------- ---------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON IN - --------- ---------------------------------------------------------------------- - ------------------- ------ CUSIP NO. 465823102 13D PAGE 3 - ------------------- ------ - --------- ---------------------------------------------------------------------- 1 NAME OF REPORTING S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON FROST-NEVADA, LIMITED PARTNERSHIP IRS I.D. #59-2749083 - --------- ---------------------------------------------------------------------- 2 Check the appropriate Box if a Member of a Group (a) [X] (b) [ ] - --------- ---------------------------------------------------------------------- 3 SEC USE ONLY - --------- ---------------------------------------------------------------------- 4 SOURCE OF FUNDS* Not Applicable - --------- ---------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - --------- ---------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION NEVADA - ------------------------- ------- ---------------------------------------------- 7 SOLE VOTING POWER NUMBER OF 0 SHARES ------- ---------------------------------------------- BENEFI- 8 SHARED VOTING POWER CIALLY 16,400,073 OWNED BY ------- ---------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING 0 PERSON ------- ---------------------------------------------- WITH 10 SHARED DISPOSITIVE POWER 16,400,073 - --------- ---------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 16,400,073 - --------- ---------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - --------- ---------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 16.05% - --------- ---------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON PN - --------- ---------------------------------------------------------------------- - ------------------- ------ CUSIP NO. 465823102 13D PAGE 4 - ------------------- ------ - --------- ---------------------------------------------------------------------- 1 NAME OF REPORTING S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON FROST-NEVADA CORPORATION IRS I.D. #59-274-9057 - --------- ---------------------------------------------------------------------- 2 Check the appropriate Box if a Member of a Group (a) [X] (b) [ ] - --------- ---------------------------------------------------------------------- 3 SEC USE ONLY - --------- ---------------------------------------------------------------------- 4 SOURCE OF FUNDS* Not Applicable - --------- ---------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - --------- ---------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION NEVADA - ------------------------- ------- ---------------------------------------------- 7 SOLE VOTING POWER NUMBER OF 0 SHARES ------- ---------------------------------------------- BENEFI- 8 SHARED VOTING POWER CIALLY 16,400,073 OWNED BY ------- ---------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING 0 PERSON ------- ---------------------------------------------- WITH 10 SHARED DISPOSITIVE POWER 16,400,073 - ------------------------- ------- ---------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 16,400,073 - --------- ---------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - --------- ---------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 16.05% - --------- ---------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON CO - --------- ---------------------------------------------------------------------- - ------------------- ------ CUSIP NO. 465823102 13D PAGE 5 - ------------------- ------ - --------- ---------------------------------------------------------------------- 1 NAME OF REPORTING S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON PATRICIA FROST - --------- ---------------------------------------------------------------------- 2 Check the appropriate Box if a Member of a Group (a) [X] (b) [ ] - --------- ---------------------------------------------------------------------- 3 SEC USE ONLY - --------- ---------------------------------------------------------------------- 4 SOURCE OF FUNDS* Not Applicable - --------- ---------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - --------- ---------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION USA - ------------------------- ------- ---------------------------------------------- 7 SOLE VOTING POWER NUMBER OF 0 SHARES ------- ---------------------------------------------- BENEFI- 8 SHARED VOTING POWER CIALLY 163,034 OWNED BY ------- ---------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING 0 PERSON ------- ---------------------------------------------- WITH 10 SHARED DISPOSITIVE POWER 163,034 - --------- ---------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 163,034 - --------- ---------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - --------- ---------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.16% - --------- ---------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON IN - --------- ---------------------------------------------------------------------- Item 1. SECURITY AND ISSUER. This is Amendment No. 18 to the Schedule 13D previously filed by Phillip Frost, M.D., Frost-Nevada, Limited Partnership (the "Partnership"), Frost-Nevada Corporation and Patricia Frost (collectively, the "Reporting Persons"), with respect to Common Stock, $.10 par value (the "Shares"), of IVAX Corporation (the "Issuer"). The principal executive officers of the Issuer are located at 4400 Biscayne Boulevard, Miami, Florida, 33137-3227. Item 2. IDENTITY AND BACKGROUND. Item 2 is amended and restated in its entirety as follows: Dr. Frost's present principal occupation is as Chairman of the Board of Directors and Chief Executive Officer of IVAX Corporation, a Florida corporation, which through its subsidiaries is engaged primarily in the research, development, manufacturing, marketing and distribution of health care products. Dr. Frost's principal business address is 4400 Biscayne Boulevard, Miami, Florida 33137. The Partnership is a limited partnership organized and existing under the laws of the State of Nevada with its principal office and business address located at 3500 Lakeside Court, Suite 200, Reno, Nevada 89509. The principal business of the Partnership is the investment in marketable securities, precious metals and commodities and real estate located in Nevada. Frost-Nevada Corporation is the sole general partner, and Dr. Frost is the sole limited partner, of the Partnership. Frost-Nevada Corporation is a corporation organized and existing under the laws of the State of Nevada with its principal office and business address located at 3500 Lakeside Court, Suite 200, Reno, Nevada 89509. The principal business of Frost-Nevada Corporation is acting as the general partner of the Partnership. Dr. Frost is the sole shareholder of Frost-Nevada Corporation. David H. Moskowitz is the sole director and officer of Frost-Nevada Corporation. David H. Moskowitz' present principal occupation is as an attorney with the law firm of David H. Moskowitz & Associates. Mr. Moskowitz' principal business address is 1890 Rose Cottage Lane, Malvern, Pennsylvania 19355. Patricia Frost is retired. Mrs. Frost's residence address is 125 East San Marino Drive, Miami, Florida, 33139. Mrs. Frost is the wife of Dr. Frost. To the best knowledge of each of the Reporting Persons, neither such Reporting Person nor Mr. Moskowitz has been convicted in any criminal proceeding (excluding traffic violations and similar misdemeanors), or was a party to any civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was subject to a judgment, decree or final order enjoining future violations of, or prohibiting activity subject to, federal or state securities laws or finding any violation with respect to such laws during the last five years. Each of Dr. Frost, Mrs. Frost and Mr. Moskowitz is a citizen of the United States. Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. Item 3 is amended and supplemented as follows: The aggregate purchase price of Shares of the Issuer purchased by Phillip Frost, M.D. reported in this Amendment No. 18, including the payment of commissions, was $2,193,912.64. The source of funds used in making these purchases was the personal funds of Page 6 Phillip Frost, M.D. Additionally, as described under Item 6. below, the Partnership was granted warrants to purchase Shares in connection with a financing transaction between the Partnership and the Issuer. Item 5. INTEREST IN SECURITIES OF THE ISSUER. Item 5 is amended in its entirety and restated as follows: AMOUNT OF SHARES PERCENTAGE NAME BENEFICIALLY OWNED CLASS* ---- ------------------ ------ Phillip Frost, M.D. 16,400,073** 16.05% Frost-Nevada Corporation 16,400,073** 16.05% Frost-Nevada, Limited 16,400,073** 16.05% Partnership Patricia Frost 163,034*** 0.16% - ---------------------------- * Based on 102,154,976 Shares consisting of 105,520,912 Shares outstanding as of October 30, 1999, as reported on the Issuer's Quarterly Report on Form 10-Q for the quarter ended September 30, 1999, adjusted by (1) 4,555,100 of company stock repurchases and (2) 254,666 shares issued subsequent to the 10-Q report date of October 30, 1999 and assumes the (1) the exercise by Phillip Frost, M.D. of options to purchase 418,750 Shares, (2) the conversion by the Partnership of $500,000 in principal amount of the Issuer's 6 1/2% Subordinated Convertible Notes due in 2001 into 15,748 Shares, and (3) the exercise by the Partnership of warrants to purchase 500,000 shares. ** These Shares are owned of record by one or more of such Reporting Persons. As the sole limited partner of the Partnership and the sole shareholder of Frost-Nevada Corporation, the general partner of the Partnership, Dr. Frost may be deemed a beneficial owner of the Shares. Record ownership of the Shares may be transferred from time to time among any or all of Dr. Frost, the Partnership and Frost-Nevada Corporation. Accordingly, solely for purposes of reporting beneficial ownership of the Shares pursuant to section 13(d) under the Securities Exchange Act of 1934, as amended, each of Dr. Frost, the Partnership and Frost-Nevada Corporation will be deemed to be the beneficial owner of Shares held by any of them. *** These Shares are owned of record by Patricia Frost. Dr. Frost disclaims beneficial ownership of these Shares. The Partnership shares the power to vote or dispose of the Shares beneficially owned by it with Frost-Nevada Corporation and Dr. Frost. Frost-Nevada Corporation, in its capacity as the general partner of the Partnership, has the power to vote or direct the vote of these Shares or to dispose or direct the disposition of these Shares for the Partnership. Frost-Nevada Corporation will be deemed the beneficial owner of the Shares owned by the Partnership by virtue of this relationship to the Partnership. Dr. Frost, in his capacity as the sole shareholder of Frost-Nevada Corporation, the general partner of the Partnership, will be deemed the beneficial owner of all Shares owned by the Partnership by virtue of his power to vote or direct the vote of the Shares or to dispose or direct the disposition of the Shares owned by the Partnership. Other than as reported on Exhibit 2 attached hereto, none of the Reporting Persons has engaged in any transaction involving Shares of the Issuer since the date of the last statement filed by the Reporting Persons. Page 7 Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. Item 6 is amended and supplemented as follows: On July 31, 1998, the Issuer granted Dr. Frost options to purchase 150,000 Shares at $8.9375 per share which expire on July 30, 2005. These options are subject to the terms and conditions of the Issuer's 1994 Stock Option Plan. On November 18, 1999 the Partnership loaned $50,000,000 to the Issuer pursuant to the terms of a Promissory Note. The loan is payable on January 17, 2001. In connection with the issuance of this loan, the Partnership was granted, pursuant to a Stock Warrant Agreement, dated November 18, 1999, warrants to purchase 500,000 Shares at $18.00 per share which expire on November 17, 2006. The descriptions of the Stock Option Agreement, Promissory Note and Stock Warrant Agreement contained herein are not intended to be complete and are qualified in their entirety by reference to these Agreements which are attached hereto as Exhibits 4, 5 and 6 and incorporated herein by reference. Item 7. MATERIAL TO BE FILED AS EXHIBITS. 1 Joint Filing Agreement. 2 Description of transactions in the Issuer's Shares by Phillip Frost, M.D. 3 Third Amended and Restated Agreement of Frost-Nevada Limited Partnership, Frost-Nevada Corporation and Phillip Frost, M.D. filed pursuant to Rule 13d-1(f)(1)(ii) of the Securities and Exchange Committee. 4 Stock Option Agreement, dated July 31, 1998 between IVAX Corporation and Phillip Frost, M.D. 5 Promissory Note, dated November 18, 1999 between IVAX Corporation and Frost-Nevada Limited Partnership. 6 Stock Warrant Agreement, dated November 18, 1999 between IVAX Corporation and Frost-Nevada Limited Partnership. Page 8 SIGNATURES After reasonable inquiry and to the best of the undersigned's knowledge and belief, the undersigned certify that the information set forth in this Statement is true, complete and correct. /s/ Phillip Frost, M.D. -------------------------------- Date: February 2, 2000 Phillip Frost, M.D. FROST-NEVADA, LIMITED PARTNERSHIP /s/ David Moskowitz -------------------------------- Date: February 2, 2000 David Moskowitz President of Frost-Nevada Corporation, General Partner FROST-NEVADA CORPORATION /s/ David Moskowitz -------------------------------- Date: February 2, 2000 David Moskowitz, President /s/ Patricia Frost -------------------------------- Date: February 2, 2000 Patricia Frost Page 9 EXHIBIT INDEX EXHIBIT DESCRIPTION ------- ----------- 1 Joint Filing Agreement. 2 Description of transactions in the Issuer's Shares by Phillip Frost, M.D. 3 Third Amended and Restated Agreement of Frost-Nevada Limited Partnership, Frost-Nevada Corporation and Phillip Frost, M.D. filed pursuant to Rule 13d-1(f)(1)(ii) of the Securities and Exchange Committee. 4 Stock Option Agreement, dated July 31, 1998 between IVAX Corporation and Phillip Frost, M.D. 5 Promissory Note, dated November 18, 1999 between IVAX Corporation and Frost-Nevada Limited Partnership. 6 Stock Warrant Agreement, dated November 18, 1999 between IVAX Corporation and Frost-Nevada Limited Partnership. EX-1 2 EXHIBIT 1 The undersigned hereby agree that this Amendment to the Schedule 13D filed by us with respect to the Common Stock of IVAX Corporation is filed on behalf of each of us. /s/ Phillip Frost, M.D. -------------------------------- Date: February 2, 2000 Phillip Frost, M.D. FROST-NEVADA, LIMITED PARTNERSHIP /s/ David Moskowitz -------------------------------- Date: February 2, 2000 David Moskowitz President of Frost-Nevada Corporation, General Partner FROST-NEVADA CORPORATION /s/ David Moskowitz -------------------------------- Date: February 2, 2000 David Moskowitz, President /s/ Patricia Frost -------------------------------- Date: February 2, 2000 Patricia Frost EX-2 3 EXHIBIT 2 Set forth below is a summary of acquisitions of beneficial ownership in the Shares of the Issuer by Phillip Frost, M.D., effected from March 28, 1997 through the date of this Amendment No. 18. These acquisitions consist of the vesting of options previously granted to Dr. Frost, vested options granted subsequent to the last 13D filing, open market purchases, and shares acquired upon the assignment of put options.
STOCK ACQUISITION DATE/ NUMBER OF SHARES EXERCISE/PURCHASE OPTIONS VESTING DATE ACQUIRED PRICE PER SHARE TYPE OF TRANSACTION - ----------------------- ---------------- ----------------- ------------------- 11/5/97 2,800 7.75 Open Market Purchase 11/5/97 7,200 7.6875 Open Market Purchase 11/5/97 10,000 7.5625 Open Market Purchase 11/6/97 10,000 7.75 Open Market Purchase 11/7/97 10,000 8 Open Market Purchase 11/10/97 500 8 Open Market Purchase 11/10/97 9,500 8.1875 Open Market Purchase 11/11/97 10,000 8.125 Open market Purchase 11/12/97 9.900 7.8125 Open Market Purchase 11/12/97 100 7.125 Open Market Purchase 11/12/97 10,000 7.75 Open Market Purchase 11/13/97 10,000 7.806 Open market Purchase 11/14/97 800 7.4375 Open Market Purchase 11/14/97 5,900 7.625 Open Market Purchase 11/14/97 3,300 7.5625 Open Market Purchase 11/17/97 10,000 7.5 Open Market Purchase 11/19/97 8,900 7.375 Open Market Purchase 11/19/97 1,100 7.4375 Open Market Purchase 11/24/97 10,000 7.0625 Open Market Purchase 11/25/97 10,000 7 Open Market Purchase 11/26/97 5,000 7 Open Market Purchase 12/1/97 5,000 6.9375 Open Market Purchase 12/10/97 10,000 6.9375 Open Market Purchase 12/11/97 10,000 6.8125 Open Market Purchase 2/21/98 18,750 26.75 Vesting of Options, Granted 2/21/96 2/24/98 18,750 20.625 Vesting of Options, Granted 2/24/95 2/25/98 12,500 34.875 Vesting of Options, Granted 2/25/94 6/22/98 120,000 7.549 Put Assignment 2/21/99 18,750 26.75 Vesting of Options, Granted 2/21/96 2/24/99 18,750 20.625 Vesting of Options, Granted 2/24/95 7/31/99 37,500 8.9375 Vesting of Options, Granted 7/31/98
EX-3 4 EXHIBIT 3 THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF FROST-NEVADA LIMITED PARTNERSHIP THIS THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP (the "Agreement") is made and entered into as of the 24th day of December, 1997, by and among FROST-NEVADA CORPORATION, a Nevada corporation, as the general partner (the "General Partner") and PHILLIP FROST, as the limited partner (the "Limited Partner"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, on December 30, 1986, the General Partner executed a Certificate of Limited Partnership forming a limited partnership known as "FROST-NEVADA LIMITED PARTNERSHIP" (the "Partnership"), under the Nevada Uniform Limited Partnership Act (the "Act") as in effect at that time in the State of Nevada, which Certificate of Limited Partnership was filed in the Public Records of the Secretary of State of Nevada on December 30, 1986; and WHEREAS, the General Partner and Limited Partner have previously executed a First Amended and Restated Certificate of Limited Partnership of FROST-NEVADA LIMITED PARTNERSHIP on February 16, 1987 and a certificate thereof was filed in the Public Records of the Secretary of State of Nevada on March 16, 1989; and WHEREAS, the General Partner and Limited Partner have previously executed a Second Amended and Restated Certificate of Limited Partnership of FROST-NEVADA LIMITED PARTNERSHIP on December 28, 1995 and a certificate thereof was filed in the Public Records of the Secretary of State of Nevada on , 199__; WHEREAS, the General Partner and the Limited Partner have executed this Third Amended and Restated Agreement of Limited Partnership of FROST-NEVADA LIMITED PARTNERSHIP as of December 24, 1997; and WHEREAS, this Agreement, dated as of December 24, 1997, is made and entered into by and between the General Partner and the Limited Partner for the purpose of setting forth the rights, obligations, and duties of the General Partner and the Limited Partner. NOW, THEREFORE, the parties hereto hereby agree that the Partnership shall be governed and operated pursuant to the terms of this Agreement of Limited Partnership as hereinafter set forth. ARTICLE I NAME, TERM, PRINCIPAL ADDRESS AND REGISTERED AGENT 1.1 NAME. The name of the Partnership is the FROST-NEVADA LIMITED PARTNERSHIP. 1.2 TERM. The term of the Partnership will continue in full force and effect until December 31, 2055, unless sooner terminated in accordance with the Act (as such term is defined herein) or provisions of this Agreement. 1.3 PRINCIPAL PLACE OF BUSINESS. The office and principal place of business of the Partnership shall be maintained at 3500 Lakeside Court Reno, Washoe County, Nevada 89509. The General Partner may from time to time change such office and principal place of business and in such event the General Partner shall notify the other Partners, in writing, at least ten (10) days prior to the effective date of any such change. The General Partner may establish additional places of business of the Partnership when and where required by the Partnership's business. 1.4 ADDRESSES. The address of each Partner is as follows: GENERAL PARTNER: Frost-Nevada Corporation 3500 Lakeside Court Reno, Nevada 89509 LIMITED PARTNER: Phillip Frost, M.D. 8800 N.W. 36th Street Miami, Florida 33178 A Partner may change its address by written notice to the Partnership and each of the other Partners. 1.5 REGISTERED OFFICE AND REGISTERED AGENT. The location of the Registered Office of the Partnership shall be at 3500 Lakeside Court, Reno, Nevada 89509 and the name of the Registered Agent of the Partnership at such office shall be Walther, Key, Maupin, Oats, Cox, Klaich & Legoy. Said Registered Agent shall keep and maintain at such address the records of the Partnership required to be kept and maintained at such address by the Act. 2 ARTICLE II BUSINESS OF THE PARTNERSHIP 2.1 PURPOSE. The purpose of the Partnership is to invest in all types of (i) securities, including without limitation, stocks, bonds, limited partnership interests and option contracts for the purchase or sale of securities or any group or index of securities, (ii) precious metals, including without limitation, contracts for the future delivery of precious metals and option contracts for the purchase or sale of precious metals or futures contracts on precious metals; (iii) commodities, including without limitation, contracts for the future delivery of commodities and option contracts for the purchase or sale of commodities or future contracts on commodities, and (iv) real property on the State of Nevada through the acquisition, holding, construction, development, operation, improvement, leasing, sale or other dealings in real property. 2.2 POWERS. Incident to its purpose, the Partnership is authorized to purchase, invest, hold, mortgage, pledge, sell, lease, manage, construct, renovate, operate, improve, alter, transfer, joint venture or otherwise convey and encumber all or any portion of the Partnership properties and exercise all other rights, powers and privileges and other incidences of ownership with respect thereto at any time and from time to time, to borrow or raise moneys without limitations and to do all other things necessary or appropriate to carry out the foregoing purpose. ARTICLE III CERTAIN DEFINITIONS 3.1 ACT. The Revised Nevada Uniform Limited Partnership Act, as from time to time amended. 3.2 ADJUSTED CAPITAL CONTRIBUTION. The amount contributed to the capital of the Partnership by a Partner as provided in Article IV. 3.3 AFFILIATE. Any person or entity that directly or indirectly controls, is controlled by or is under common control with any other person or entity. For this purpose, the term "control" shall mean the direct or indirect ownership of twenty-five (25 %) or more of the beneficial interests or voting power of any entity or the spouse, lineal ascendants, lineal descendants and the brothers and sisters of a Person, as applicable. 3.4 AUTHORIZED EXPENSES. Expenses as are set forth or provided for in the annual budget prepared by the General Partner prior to the beginning of the fiscal year, and such emergency expenditures as the General Partner shall deem necessary on behalf of the Partnership. 3.5 AVAILABLE CASH. All cash of the Partnership resulting from normal business 3 operations (as distinguished from Extraordinary Events or the sale of all or substantially all of the Partnership's property and/or the dissolution of the Partnership), including, without limitation, dividend income, rental income, and any other income derived from the Partnership property which the General Partner, in its sole and absolute discretion, determines is available for distribution to the Partners after payment of all Partnership cash expenditures, including but not limited to, real and personal property taxes, use taxes, principal and interest payments then due on all loans, (including any mortgages encumbering the Partnership's property), expenses incident to the construction and rental of the Partnership property, insurance, present maintenance, including, but not limited to management fees, brokerage fees, or other fees incurred by the Partnership, capital improvements, accounting and legal fees, and other costs and expenses of the Partnership, and the setting aside of any amounts which the General Partner may determine, in its discretion, to be necessary as a reserve for operating expenses, capital improvements and contingencies. 3.6 CAPITAL ACCOUNT. The account established and maintained by the Partnership for each Partner, as set forth in Section 4.5 hereof. 3.7 CAPITAL CONTRIBUTION. The amount of money and the initial fair market value of any property (other than money) contributed to the Partnership by a Partner with respect to the Partnership Interest held by such Partner. 3.8 CERTIFICATE. The certificate of limited partnership filed with the Secretary of State of the State of Nevada, as the same may be amended from time to time. 3.9 CODE. The Internal Revenue Code of 1986, as same may be amended from time to time. 3.10 EXTRAORDINARY EVENT. Any financing, refinancing, insurance award (other than for substantially complete destruction of all or substantially all of the Partnership's property) and sale of Partnership assets (but less than all or substantially all of such assets), which in accordance with generally accepted accounting principles are attributable to capital but which do not result in a dissolution of the Partnership. 3.11 ORIGINAL CAPITAL CONTRIBUTION. The amount contributed to the capital of the Partnership by a Partner as provided in Article IV. 3.12 PARTNERS. Collectively, the Limited Partner and the General Partner. 3.13 PARTNERSHIP. FROST-NEVADA LIMITED PARTNERSHIP, a Nevada limited partnership. 3.14 PARTNERSHIP INTEREST. The entire ownership interest of a Partner in the Partnership at the relevant time, including the right of such Partner to any and all benefits to which a Partner may be entitled as provided in this Agreement, together with the obligations of such Partner to comply 4 with all the terms and provisions of this Agreement. A Partnership Interest does not include any rights or obligations that a Partner may have for providing services or goods for which it is separately compensated as a Person who is not a Partner. 3.15 PERSON. Any individual, corporation, trust, partnership or other form of association. 3.16 PROFITS AND LOSSES. The Partnership's income or loss, as the case may be, for each fiscal year of the Partnership determined in accordance with Code Section 703(a) (including all items of income, gain, deduction or loss that are required to be separately stated). The Partnership's Profits and Losses shall also include: (i) income of the Partnership which is exempt from tax; and (ii) the excess of the deductions for depletion over the basis of the property subject to depletion. Similarly, the Partnership's Losses shall include expenditures for the Partnership which are not deductible in computing its taxable income and are not properly chargeable to a capital account. Notwithstanding anything to the contrary in this Agreement, Profits and Losses shall not include allocations under Code Section 704(c) (which are set forth at Section 4.9 hereof or Regulatory Allocations). 3.17 REGULATORY ALLOCATIONS. The allocations set forth at Sections 4.10, 4.11, 4.12, 4.13 and 4.15. 3.18 SERVICE. Internal Revenue Service. 3.19 SUBSTITUTED LIMITED PARTNER. A person who has acquired a Partnership Interest from a Limited Partner and who has been admitted to the Partnership as a Limited Partner pursuant to Article VI. ARTICLE IV CONTRIBUTIONS TO CAPITAL; DISTRIBUTIONS; ALLOCATIONS 4.1 CAPITAL CONTRIBUTIONS OF THE PARTNERS. 4.1.1 CAPITAL CONTRIBUTIONS OF THE GENERAL PARTNER. The General Partner has contributed $1,085,690.23 in marketable securities to the Partnership. 4.1.2 CAPITAL CONTRIBUTIONS OF THE LIMITED PARTNER. The Limited Partner has contributed the assets set forth at Exhibit 4.1.2. 4.2 WITHDRAWAL AND RETURN OF CAPITAL. Except as expressly provided for in this Agreement or upon the dissolution and liquidation of the Partnership, a Partner shall have no right to receive any distribution without the consent of the General Partner, and in such circumstances. Under circumstances requiring a distribution to a Partner, no Partner shall have the right to receive property other than cash except as may be expressly provided herein. 5 4.3 ADDITIONAL CAPITAL CONTRIBUTIONS. The Partnership may accept additional Capital Contributions to the extent that such contributions are authorized by the General Partner and are in accordance with the requirements of Section 5.3 hereof. 4.4 LOANS TO THE PARTNERSHIP. The Partners may make loans to the Partnership from time to time, as authorized by the General Partner (subject to the requirements of Section 5.3 hereof), in excess of their contributions to the capital of the Partnership, and any such loans shall not be treated as a contribution to the capital of the Partnership for any purposes hereunder, nor shall any such loans entitle such Partner to any increase in his share of the profits, losses or distributions of the Partnership. The amount of any such loan shall be an obligation of the Partnership to such Partner and shall bear interest at a rate agreed to by the General Partner. Any such loan shall be repaid prior to any distributions being made to the Partners pursuant to Sections 4.8.2 and 9.3 hereof. 4.5 CAPITAL ACCOUNTS. A separate Capital Account shall be determined and maintained for each Partner in accordance with the rules of Treas. Reg. ss. 1.704-l(b)(2)(iv). Except as otherwise provided in Treas. Reg. ss. 1.704-l(b)(2)(iv), each Partner's Capital Account shall initially consist of such Partner's Capital Contribution and shall be further credited with each Partner's additional Capital Contributions and allocable share of the Partnership's income, as determined in Section 4.6 below, and shall be debited by all distributions made by the Partnership to a Partner together with each such Partner's allocable share of the Partnership's losses, as determined in Section 4.6 below. In the event that the Partnership, in conformity with the above Regulations, has property on its books at a value ("book value") greater than or less than its adjusted tax basis, the Partners' Capital Accounts shall be adjusted to reflect only allocations to them of depreciation, amortization and gain or loss as computed for book purposes (and not for tax purposes) with respect to such property. In such event, items of book depreciation, amortization and gain or loss shall be calculated in conformity with the rules of Treas. Reg. ss. 1.704-l(b)(2)(iv)(g). For purposes of calculating a Partner's Capital Account, the following adjustments shall be included as Profits and Losses: (a) any and all adjustments made to Capital Accounts pursuant to Treas. Reg. ss. 1.704-l(b)(2)(iv)(f) (optional revaluation of Capital Accounts), as it may be amended or supplemented from time to time; (b) any and all adjustments made to Capital Accounts pursuant to Treas. Reg. ss. 1.704-l(b)(2)(iv)(e) (adjustment resulting from property distribution), as it may be amended or supplemented from time to time; and (c) any and all adjustments made to Capital Accounts pursuant to Treas. Reg.ss. 1.704-l(b)(2)(iv)(n)(4) (as it may be amended or supplemented from time to time), as it relates to distributions other than in liquidation of a Partner's Interest in the Partnership. 6 4.6 ALLOCATION OF INCOME AND LOSSES. All items of Profits and Losses incurred by the Partnership shall be allocated to the Partners as follows: General Partner 1 % Limited Partner 99 % 4.7 PRINCIPLES OF ALLOCATION. It is the intention of the Partners that the allocations of Profits and Losses hereunder have substantial economic effect in accordance with the tests therefor set forth in the Treasury Regulations under Section 704(b) of the Internal Revenue Code. Accordingly, allocations not specifically provided for in this Agreement shall be made in such a manner as shall conform to the allocation rules and principles as set forth in such Regulations as in effect from time to time, and the Capital Accounts of the Partners shall be maintained in accordance with the provisions hereof construed and interpreted in the light of such Regulations. 4.8 DISTRIBUTIONS. 4.8.1 Available Cash shall be distributed periodically, as determined by the General Partner in its sole discretion, to the Partners as follows: General Partner 1 % Limited Partner 99 % 4.8.2 Net Proceeds from an Extraordinary Event which are not reinvested in other real property shall, to the extent determined by the General Partner as being available for distribution, be distributed as expeditiously as possible, in the following order of priority: (a) first, to the payment of any unpaid principal and interest on any third-party financing then due; (b) next, to the prepayment of any unpaid principal and interest on any third-party financing, if and to the extent determined by the General Partner; (c) next, to the repayment of any loans made by the Partners to the Partnership pursuant to Section 4.4 hereof, in proportion to the total amount of principal and interest payable to each such Partner, such distributions being treated first as in payment of accrued interest on such loans and next as in payment of principal of such loans: (d) next, to the Partners in proportion to their positive capital account balances until such Capital Account balances have been reduced to zero; and 7 (e) the balance, if any, as follows: General Partner 1 % Limited Partner 99 % 4.8.3 Distributions in connection with the sale of all or substantially all of the Partnership's property and/or the dissolution and winding up of the Partnership shall be made in accordance with Section 9.3 of this Agreement. 4.8.4 The Partnership, with the Partners' mutual consent, may make additional distributions of Partnership property. 4.9 ALLOCATIONS OF CERTAIN TAX ITEMS. If the fair market value of any Partnership property differs from its adjusted basis as of the day it is contributed to the Partnership, then items of income, gain, loss, deductions and credit related to such property for tax purposes shall be allocated between the Partners so as to take into account the variation between the adjusted basis of the property for tax purposes and its fair market value in the manner provided for under Code Section 704(c). Except as may be otherwise required by Code ss. 704(c), depreciation, amortization and gain or loss, as computed for tax purposes with respect to Partnership property which has a book value greater or less than its adjusted tax basis, shall be allocated among the Partners in a manner that takes into account the variation between the adjusted tax basis and the book value of such property, in the same manner as variations between the adjusted tax basis and fair market value of property contributed to the Partnership are taken into account in determining the Partners' share of tax items under Code ss. 704(c), as required by Treas. Reg. ss.1.704-l(b)(2) (iv)(f)(4) and Treas. Reg. ss. 1.704-l(b)(4)(i). In complying with the requirements of Code ss. 704(c), the General Partner is authorized to utilize any method permitted by the Treasury Regulations under Code ss. 704(c). Allocations pursuant to this Section 4.9 are solely for purposes of complying with federal, state and local tax requirements, and shall not affect, or in any way be taken into account, in computing any Partner's share of income, gain, loss, deduction or credit. 4.10 MINIMUM GAIN CHARGEBACK. Notwithstanding any other provision of this Article IV, if there is a net decrease in partnership minimum gain (as such term is defined in Treas. Reg. ss. 1.704-2(f)) during any Partnership fiscal year, a Partner shall be specially allocated items of Partnership income and gain for such year (and, if necessary, subsequent years) in an amount equal to its share of the net decrease in the minimum gain. The items to be so allocated shall be determined in accordance with Section 1.704-2(f) of the Treasury Regulations. This Section 4.10 is intended to comply with the minimum gain chargeback requirement in such Section of the Treasury Regulations and shall be interpreted consistently therewith. 4.11 PARTNER NONRECOURSE DEDUCTIONS. Any partner nonrecourse deductions for any fiscal year or other period shall be allocated to the Partner who bears the risk of loss with respect to the loan to which such partner nonrecourse deduction is attributable in accordance with Regulations Section 1.704-2(i), if such sections of the Regulations become applicable to the Partnership. Partner 8 nonrecourse debt minimum gain shall be charged back to the Partners in accordance with Regulations Section 1.704-2(i)(4). 4.12 QUALIFIED INCOME OFFSET. In the event the Limited Partner unexpectedly receives any adjustments, allocations, or distributions described in Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6) of the Treasury Regulations, items of Partnership income and gain shall be specially allocated to each such Partner in an amount and manner sufficient to eliminate, to the extent required by the Regulations, the adjusted capital account deficit (as such term is used in Section 1.704-2(fl of the Treasury Regulations) of the Limited Partner as quickly as possible, provided that an allocation pursuant to this Section 4.12 shall be made only if and to the extent that the Limited Partner would have an adjusted capital account deficit after all other allocations provided for in this Article IV have been tentatively made as if this Section 4.12 were not in the Agreement. This Section 4.12 is intended to constitute a "qualified income offset" within the meaning of Section 1.704-1(b)(2)(ii)(d)(3) of the Treasury Regulations, and is to be interpreted, to the extent possible, to comply with the requirements of such Regulation as it may be amended or supplemented from time to time. 4.13 LOSS LIMITATION. The Losses allocated to the Limited Partner pursuant to Section 4.6 hereof shall not exceed the maximum amount of Losses that can be so allocated without causing the Limited Partner to have a deficit Capital Account at the end of any Fiscal Year after: (a) increasing a Limited Partner's Capital Account by amounts that he is obligated to restore pursuant to this Agreement or is deemed obligated to restore pursuant to the penultimate sentences of Treas. Reg. ss.ss. 1.704-2(g)(1) and 1.704-2(i)(5), as they may be amended or supplemented from time to time; and (b) decreasing a Limited Partner's Capital Account by the items described in Treas. Reg. ss.ss. 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(d)(5) and 1.7041(b)(2)(d)(6), as it may be amended or supplemented from time to time (an "Adjusted Deficit Capital Account"). All Losses in excess of the limitations set forth in this Section 4.13 shall be allocated to the General Partner. 4.14 FUTURE AMENDMENTS; REVALUATION OF PARTNERSHIP PROPERTY. The General Partner will have complete discretion to amend the provisions of this Agreement if such amendment would not have a material adverse effect on the Partners and if, in the opinion of counsel for the Partnership, such amendment is advisable for purposes of complying with Section 1.704-1 and 1.704-2 of the Treasury Regulations (as it may be amended or supplemented from time to time). The General Partner may, in its sole and absolute discretion, revise the Partners' Capital Accounts to reflect a revaluation of the Partnership property, provided that the revaluation adheres to the requirements of Section 1.704-1(b)(2)(iv)(fl of the Treasury Regulations. 4.15 GROSS INCOME ALLOCATION. In the event the Limited Partner has a deficit Capital Account at the end of any Partnership fiscal year which is in excess of the sum of (i) the amount the Limited Partner is obligated to restore pursuant to any provision of this Agreement, and (ii) the amount the Limited Partner is deemed to be obligated to restore pursuant to the penultimate sentences of Treas. Reg. ss.ss. 1.704-2(g)(1) and 1.704-2(i)(5), the Limited Partner shall be specially allocated items of Partnership income and gain in the amount of such excess as quickly as possible, 9 provided that an allocation pursuant to this Section 4.15 shall be made only if and to the extent that the Limited Partner would have a deficit Capital Account in excess of such sum after all other allocations provided for in this Article IV have been made, as if Section 4.12 hereof and this Section 4.15 were not in the Agreement. 4.16 CURATIVE ALLOCATIONS. In the event that income, loss or items thereof are allocated to one or more Partners pursuant to Sections 4.10, 4.11, 4.12, 4.13, and 4.15, above, subsequent income and loss first will be allocated (subject to the provisions of Sections 4.10, 4.11, 4.12, 4.13, and 4.15) to the Partners in a manner designed to result in each Partner having a Capital Account balance equal to what it would have been if the original allocation of income or loss pursuant to Sections 4.10, 4.11, 4.12, 4.13, and 4.15 had not occurred. ARTICLE V MANAGEMENT OF THE PARTNERSHIP 5.1 RIGHTS AND DUTIES OF THE GENERAL PARTNER. Except as otherwise provided herein, the General Partner shall have full, exclusive and complete authority and discretion in the management and control of the business of the Partnership and shall make all decisions affecting the business of the Partnership. Further, the General Partner shall have all of the rights and powers of a general partner as provided in the Act and as otherwise provided by law or this Agreement, and any action taken by the General Partner shall constitute the act of and serve to bind the Partnership. The General Partner shall manage and control the affairs of the Partnership to the best of its ability and shall use its best efforts to carry out the business of the Partnership as set forth in Article II. 5.2 PARTNERSHIP CHECKS. Any check or checks to be made or issued by the Partnership (with respect to any transaction or series of related transactions) shall require the signature of a person who is designated as an authorized signatory by the General Partner. Notwithstanding the foregoing, the General Partner may delegate its check signing authority to any other person and the exercise of the authority granted pursuant to such delegation shall constitute the act of the General Partner who delegated such authority, provided that such authority shall not be delegated to any person resident in the State of Florida. 5.3 LIMITATIONS ON POWERS OF GENERAL PARTNER. Notwithstanding the generality of Section 5.1 hereof, the General Partner shall not be empowered, without the written consent of the Limited Partner, to: (a) do any act in contravention of this Agreement; (b) change or reorganize the Partnership into any other legal form; (c) sell, exchange, encumber, assign, pledge, or otherwise transfer or grant a 10 security interest in all or substantially all of the assets of the Partnership; (d) incur, renew, extend, refinance, pay, or otherwise discharge indebtedness of the Partnership, other than in the ordinary course of the Partnership's business hereof; (e) pay or incur expenses that do not qualify as Authorized Expenses; (f) settle a material lawsuit or any other material dispute (including, but not limited to, a dispute concerning the income tax liabilities associated with income and loss reported by the Partnership); (g) set aside a reserve in excess of $25,000; (h) confess a judgment against the Partnership; (i) amend this Agreement except as provided for in Section 4.14; (j) require additional Capital Contributions from one or more of the Partners; or (k) offer additional Partnership Interests. 5.4 ROLE OF LIMITED PARTNER. The Limited Partner shall not participate in or have any control over the Partnership business or shall have any authority or right to act for or bind the Partnership. The Limited Partner hereby consents to the exercise by the General Partner of the powers conferred upon it by this Agreement. 5.5 DUTIES AND OBLIGATIONS OF GENERAL PARTNER. 5.5.1 As more fully set forth in Section 5.1 hereof, the General Partner shall take all actions which may be necessary or appropriate for the continuation of the Partnership's valid existence as a limited partnership under the laws of the State of Nevada and to enable the Partnership to conduct the business in which it is engaged. 5.5.2 The General Partner shall devote such time to the Partnership as may be sufficient for the proper performance of its duties hereunder. 5.6 PARTNERSHIP AGREEMENTS WITH AFFILIATES OF GENERAL PARTNER. The General Partner may utilize the services of Affiliates, as designated by the General Partner. Affiliates of the General Partner may be engaged to perform services, including but not limited to, the following: investment advice, renovation, marketing, acquisition of insurance, obtaining of financing, recordkeeping, participation at shareholder meetings, data processing, procurement of licenses, services ordinarily performed by independent contractors, and other administrative activities. The validity of any transaction, agreement or payment involving the Partnership and any Affiliate of the General Partner 11 otherwise permitted by the terms of this Agreement shall not be affected by reason of the relationship between the General Partner and such Affiliate or the approval of said transaction, agreement or payment by the General Partner. 5.7 PAYMENT OF EXPENSES. All expenses of the Partnership shall be paid by the Partnership. In the event the Partnership expenses are not billed directly to and paid by the Partnership, it shall reimburse the General Partner or pay their respective Affiliates for such expenses, including but not limited to: (a) organizational costs, including, legal and accounting fees; (b) the actual cost to the General Partner of goods, services and materials used for or by the Partnership; and (c) all other direct expenses actually incurred by the General Partner or their respective Affiliates for or on behalf of the Partnership. 5.8 INDEMNIFICATION OF THE GENERAL PARTNER. The General Partner and all Affiliates of the General Partner and their respective shareholders, partners, officers, directors and employees (hereinafter referred to individually as an "Indemnitee") shall not be liable to the Partnership or any other Partner for any loss incurred in connection with any action or inaction of an Indemnitee, if such Indemnitee, in good faith, determined that such course of conduct was in the best interest of the Partnership and did not constitute negligence of such Indemnitee. An Indemnitee shall be indemnified and held harmless by the Partnership against any and all losses, judgments, liabilities, expenses, costs (including attorney's fees) actually and necessarily incurred by said Indemnitee in connection with the defense of any suit or action (including, without limitation, all costs of appeal) to which the Indemnitee is made a party by reason of its position herein, to the fullest extent permitted under the provisions of the Act or any other applicable statute. Nothing herein shall make any Affiliate of the General Partner liable in any way for the acts, omissions, obligations or liabilities of the General Partner. 5.9 TAX MATTERS PARTNER. If the Partnership is required by the Code or the Treasury Regulations to have a Tax Matters Partner ("TMP"), the General Partner shall serve as the TMP for the Partnership. The TMP agrees to act as a liaison between the Partnership and the Service in connection with all administrative and judicial proceedings involving tax controversies of the Partnership, and agrees to assume all the rights and duties of a TMP as set forth in the Code and the Regulations promulgated thereunder. These rights and duties include, but are not limited to: (a) the duty to notify and keep all other Partners informed of all administrative and judicial proceedings, as required by Section 6223(g) of the Code, and to furnish to each Partner, who so requests in writing, a copy of each notice or other communication received by the TMP from the Service; (b) the right to settle any claims by the Service against the Partnership; (c) the right to initiate judicial proceedings contesting adverse determinations by the Service against the Partnership; 12 (d) the right to enter into an agreement to extend the statute of limitations; (e) the right to employ experienced tax counsel to represent the Partnership in connection with any audit or investigation of the Partnership by the Service, and in connection with all subsequent administrative and judicial proceedings arising out of such audit. The fees and expenses of such counsel shall be a Partnership expense and shall be paid by the Partnership. Such counsel shall be responsible for representing the Partnership; it shall be the responsibility of the General Partner and of the Limited Partner, at their expense, to employ tax counsel to represent their respective separate interests; and (f) arrange for the preparation and delivery of Partnership information returns and Schedule K's to the Partners. The TMP shall be entitled to be reimbursed for all expenses incurred when acting in its capacity as TMP. 5.10 PARTNERSHIP BASIS ELECTIONS. In the event of a distribution of property by the Partnership within the meaning of Section 734 of the Code, or the transfer of any interest in the Partnership within the meaning of Section 743 of the Code, the General Partner, in its sole and absolute discretion, may cause the Partnership to elect to adjust the basis of its assets pursuant to Section 754 of the Code. The Partners affected by this election, if made, shall supply to the Partnership any information that may be required to make such election. ARTICLE VI LIABILITY OF PARTNERS AND TRANSFERABILITY OF INTERESTS 6.1 LIMITED LIABILITY OF LIMITED PARTNER. Except as otherwise provided in the Act or any other applicable law, the Limited Partner is not personally liable for the expenses, liabilities or obligations of the Partnership beyond the amount of his Capital Contribution. 6.2 TRANSFER OF A LIMITED PARTNER'S INTEREST; SUBSTITUTED LIMTED PARTNER. Neither the General Partner nor the Limited Partner shall transfer, sell, encumber, assign or otherwise dispose (a "Transfer") of any portion of its Partnership Interest without (a) the written consent of all other partners, which may be withheld for any reason, and (b) the Transferee shall have agreed in writing to assume all of the obligations of the transferor, to the extent of the Partnership Interest transferred, and, if requested, the General Partner shall have received an opinion of counsel satisfactory to it that such transfer or disposition would not: (i) result in a violation of the Securities Act of 1933, as amended, or of any applicable state securities laws; or 13 (ii) result in a termination of the Partnership for federal or state income tax purposes or result in the Partnership being taxed as a corporation for federal income tax purposes. The assignee of the interest of the Limited Partner or any portion there of shall become a Substitute Limited Partner if and only if the assignor gives the assignee such right; the General Partner consents to such substitution in writing, the granting or denying of which consent shall be in the absolute discretion of the General Partner; the assignee pays to the Partnership all costs and expenses incurred in connection with such substitution; and the assignee executes and delivers to the General Partner such instruments as the General Partner reasonably may require to effect such substitution and to confirm the agreement of the assignee to be bound by all of the terms and provisions of this Agreement. ARTICLE VII REPRESENTATIONS AND WARRANTIES 7.1 REPRESENTATIONS AND WARRANTIES OF THE GENERAL PARTNER AND THE PARTNERSHIP. The General Partner and the Partnership jointly and severally represent and warrant to the Limited Partner that, as of the date hereof, the Partnership is duly and validly organized as a limited partnership under the laws of the State of Nevada with full power and authority to own and operate its property and to conduct the business in which it engages and will be authorized and qualified under the laws of all other jurisdictions in which such authorization or qualification is necessary to protect the limited liability of the Limited Partner, to enable it to engage in its business, and to engage in the business of the Partnership. ARTICLE VIII WITHDRAWAL OF GENERAL PARTNER 8.1 WITHDRAWAL. The General Partner may withdraw from the Partnership provided that the withdrawing General Partner shall give to the Limited Partner ninety (90) days' prior written notice and, if necessary under applicable rulings and regulations for the Partnership to be treated for federal income tax purposes as a partnership and not as an association taxable as a corporation, shall propose a new general partner or general partners qualified and willing to manage the Partnership's business and with the minimum net worth required. The withdrawing General Partner shall be entitled to receive the fair market value of its interest upon the date of its withdrawal. 14 ARTICLE IX TERMINATION OF THE PARTNERSHIP 9.1 DISSOLUTION. The Partnership shall be dissolved upon the happening of any of the following events: (a) The adjudication of bankruptcy, filing of a petition pursuant to a chapter of the Federal Bankruptcy Act, the withdrawal, dissolution, or cessation of business of the General Partner, death of an individual General Partner, if any, or any other "event of withdrawal of a general partner" as such term is defined in the Act, unless: (i) the remaining General Partner(s), if any, elects to continue the business of the Partnership or if the remaining General Partner(s) does not so elect or if there is no remaining General Partner, within sixty (60) days after such event, the Limited Partner elects a substitute General Partner to continue the business of the Partnership and such substitute General Partner agrees in writing to accept such election; and (ii) in the case of the withdrawal of a General Partner, the applicable provisions of Article VIII shall have been complied with. (b) The sale or other disposition, not including an exchange or a distribution, of all or substantially all of the Partnership's property; (c) The Transfer by any Partner of part or all of its Partnership Interest; or (d) The unanimous written consent of the Partners. 9.2 EFFECTIVENESS. Dissolution of the Partnership shall be effective on December 31, 2055, or the day on which the event occurs giving rise to the dissolution, but the Partnership shall not terminate until the Certificate shall have been cancelled and the assets of the Partnership shall have been distributed as provided in Section 9.3 below. Notwithstanding the dissolution of the Partnership, prior to the termination of the Partnership, as aforesaid, the business of the Partnership and the affairs of the Partners, as such, shall continue to be governed by this Agreement. 9.3 LIQUIDATION. Upon dissolution of the Partnership, the General Partner shall wind up the affairs of the Partnership, apply and distribute its assets or the proceeds thereof as contemplated by this Agreement and cause the cancellation of the Certificate. As soon as possible after the dissolution of the Partnership, a full account of the assets and liabilities of the Partnership shall be taken, and a statement shall be prepared by a certified public accountant to be selected by the General Partner, setting forth the assets and liabilities of the Partnership. A copy of such statement shall be 15 furnished to each of the Partners within thirty (30) days after such dissolution. Thereafter, the General Partner shall, in its sole and absolute discretion, either liquidate the assets as promptly as is consistent with obtaining in so far as possible the fair value thereof or determine to distribute all or part of the assets in kind. Any proceeds from liquidation, together with any assets which the General Partner determines to distribute in kind shall be applied to the following order: (a) first, to the payment of debts and liabilities of the Partnership other than to Partners, to the expenses of liquidation, and to the setting up of such reserves as may be deemed reasonably necessary for any known contingent or unforeseen liabilities or obligations of the Partnership arising out of or in connection with the Partnership or its liquidation. Such reserves shall be held for the purpose of disbursement in payment of any of the aforementioned contingencies, and at the expiration of such period as the General Partner shall deem advisable, the Partnership shall distribute the balance remaining in the manner provided for herein; (b) next, to the repayment of any debts and liabilities of the Partnership to Partners not in respect of their Partnership Interests, including, without limitation, unpaid expense accounts or advances made to or for the benefit of the Partnership; (c) next, to the Partners in proportion to their then Capital Account balances until such Capital Account balances have been reduced to zero; and (d) the balance, if any, as follows: General Partner 1 % Limited Partner 99 % 9.4 GENERAL PARTNER CONTRIBUTIONS. Upon the liquidation of the General Partner's interest in the Partnership, the General Partner will contribute to the Partnership an amount equal to the deficit balance in its Capital Account after taking into account all Capital Account adjustments for the Partnership's taxable year during which such liquidation occurs. Except as provided for in the previous sentence, no Partner shall be required to contribute funds to the Partnership to restore its deficit capital account. 9.5 GAIN OR LOSS FROM DISSOLUTION. The net gain or loss, if any, resulting from such dissolution and termination shall be allocable to the Partners as provided in Section 4.6 hereof. 16 ARTICLE X BOOKS AND RECORDS; REPORTS 10.1 BOOKS AND RECORDS. The General Partner shall keep adequate books and records at one or more of its places of business, setting forth a true and accurate account of all business transactions arising out of and in connection with the conduct of the Partnership. Partners or their designated representatives shall have the right, at any reasonable time, to have access to and inspect and copy the contents of said books or records. 10.2 ANNUAL REPORTS. The Partners shall be furnished annually by the Partnership with an unaudited financial statement for the year then ended. Upon request by any Partner, the Partnership shall furnish an audited financial statements, with such costs being borne by the Partnership. ARTICLE XI POWER OF ATTORNEY 11.1 POWER OF ATTORNEY. In order to facilitate amendments of this Agreement which require the signatures of the Partners, or a proposed additional or substituted partner, and the preparation and signing of any other documentation in connection with the Partnership including the Certificate of Limited Partnership or any amendments thereto or cancellation thereof, each Partner by his or his signature hereto irrevocably makes, constitutes and appoints the General Partner, and each person who shall hereafter become a General Partner, his true and lawful attorney in his name, place and stead, with the power from time to time to make, execute, swear to, acknowledge, verify, deliver, file, record and publish: (a) any certificates or other instruments which may be required to be filed by the Partnership under the laws of the State of Nevada or of any other state or jurisdiction in which the Partnership shall transact business or in which the General Partner shall deem it advisable to file; (b) all documents, certificates or other instruments which may be required or deemed desirable by the General Partner to effectuate the provisions of any part of this Agreement and to continue the Partnership under the laws of the State of Nevada and of any state or jurisdiction in which it shall do business; and (c) all documents, certificates or other instruments which may be required to effectuate the dissolution and termination of the Partnership or the organization of any new limited partnership occurring by reason of the withdrawal, dissolution, death, bankruptcy, or adjudication of incompetency of the General Partner. 17 11.2 IRREVOCABILITY. The foregoing power of attorney is a special power of attorney coupled with an interest in favor of the General Partner, and as such shall be irrevocable, and shall survive the dissolution, death, bankruptcy or adjudication of incompetency of a Partner. 11.3 EFFECT OF ASSIGNMENT. The foregoing power of attorney shall survive the delivery of an assignment by any Partner of the whole or any portion of his Partnership Interest, except that where an assignee of a Limited Partner's interest has been approved as a Substituted Limited Partner, the foregoing power of attorney of the assignor Limited Partner shall survive the delivery of such assignment for the sole purpose of enabling the General Partner to execute, swear to, acknowledge and file any and all instruments necessary to effect such substitution. ARTICLE XII GENERAL PROVISIONS 12.1 NOTICES. Any notice, payment, demand or communication required or permitted to be given by any provision of this Agreement shall be in writing and delivered personally, sent by overnight courier or sent by registered or certified mail, return receipt requested, to a party at the address specified in Section 1.4 hereof. Any such notice shall be deemed to be given as of the date of receipt or refusal of receipt to the party at its address. Any Partner may from time to time specify a different address by notice to the Partnership. 12.2 JURISDICTION AND APPLICABLE LAW. Each party hereto and with regard solely to matters arising out of, or in connection with, this Agreement hereby designates the laws of the State of Nevada, both substantive and procedural, without reference to the conflicts of the law provisions thereof, as the law applicable hereto, and each voluntarily submits itself to the courts of the State of Nevada as having jurisdiction over the subject matter hereof and the parties hereto. 12.3 SURVIVAL OF RIGHTS. Except as otherwise provided, this Agreement shall be binding upon and inure to the benefit of the Partners, their personal representative, successors and assigns. 12.4 VALIDITY. In the event that any provision of this Agreement shall be held to be invalid, the same shall not affect in any respect whatsoever the validity of the remainder of this Agreement. 12.5 AGREEMENTS IN COUNTERPARTS. This Agreement may be executed in several counterparts, and as executed shall constitute one Agreement, binding on all the parties hereto, notwithstanding that all the parties are not signatory to the original or to the same counterpart. 12.6 WAIVER OF PARTITION. The Partners hereby waive any right of partition as to the Partnership's property or any right to take any other action which otherwise might be available to them for the purpose of severing their relationship in connection with Partnership property. 18 12.7 HEADINGS. The headings, titles and subtitles used in this Agreement are for ease of reference only and shall not control or affect the meaning or construction of any provision hereof. 12.8 AMENDMENTS. This Agreement may be amended by the General Partner as permitted by Section 4.14 hereof and, to the extent necessary, the General Partner shall file or cause to be filed without any additional consent of the Limited Partner any amendment to the Certificate. 12.9 ENTIRE AGREEMENT. This Agreement sets forth the entire understanding of the parties with respect to the subject matter hereof. This Agreement replaces and supersedes all previous agreements and amendments entered into by the parties hereto. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day of December, 1997. GENERAL PARTNER: Attest: FROST-NEVADA CORPORATION, a Nevada corporation By: /s/ Neil Flanzraich - ----------------------------------- ----------------------------------- Neil Flanzraich, President [Corporate Seal] LIMITED PARTNER: Witness: /s/ Phillip Frost - ----------------------------------- -------------------------------------- PHILLIP FROST, M.D. 19 E X H I B I T S [TO BE SUPPLIED] 20 EX-4 5 EXHIBIT 4 1997 PLAN IVAX CORPORATION NONQUALIFIED STOCK OPTION AGREEMENT (EMPLOYEE) 1. GRANT OF OPTION. In accordance with and subject to the terms and conditions of (A) the IVAX Corporation 1997 Employee Stock Option Plan, as it may be amended from time to time (the "PLAN"), a copy of which is attached hereto as Exhibit A and (B) this Nonqualified Stock Option Agreement (the "AGREEMENT"), IVAX Corporation, a Florida corporation (the "COMPANY"), grants to the optionee identified on Schedule 1 attached hereto (the "OPTIONEE") a nonqualified stock option (the "OPTION") to purchase the number of shares (the "Shares") of its Common Stock, $.10 par value, set forth on Schedule 1, at the option price set forth in Schedule 1. 2. ACCEPTANCE BY OPTIONEE. The exercise of the Option or any portion thereof is conditioned upon acceptance by the Optionee of the terms and conditions of this Agreement, as evidenced by the Optionee's execution of Schedule 1 to this Agreement and the delivery of an executed copy of Schedule 1 to the Company. 3. VESTING OF OPTION. The Option shall become exercisable in accordance with the vesting schedule set forth in Schedule 1. In the event that the Optionee's employment with the Company or its subsidiaries is terminated prior to the date on which the Option or any portion thereof becomes vested, the non-vested portion of the Option will be void, and will not become exercisable by the Optionee. 4. EXPIRATION OF OPTION. The Option shall expire on the date set forth in Schedule 1, and may not be exercised after such date. 5. PROCEDURE FOR EXERCISE. The Option may be exercised for the number of Shares specified in a written notice delivered to the Company at least ten days prior to the date on which purchase is requested, accompanied by full payment for the Shares with respect to which the Option is being exercised, in the manner and subject to the terms and conditions set forth in the Plan. Notwithstanding the foregoing, the Option may not be exercised as to less than ten Shares at any time, or, if less than ten Shares, the number of Shares subject to the Option. If any applicable law requires the Company to take any action with respect to the Shares specified in such notice, or if any action remains to be taken under the Articles of Incorporation or Bylaws of the Company to effect due issuance of the Shares, then the Company shall take such action and the day for delivery of such Shares shall be extended for the period necessary to take such action. Neither the Optionee nor any other person entitled to exercise the Option shall be, or have any rights or privileges of, a shareholder of the Company in respect of any of the Shares issuable upon exercise of the Option, unless and until the Shares are issued to the Optionee. 6. NO RIGHT TO EMPLOYMENT. The issuance of the Option or any Shares pursuant to the Option shall not give the Optionee any right to be employed or retained in the employ of the Company nor shall it affect the right of the Company to discharge or discipline the Optionee or the right of the Optionee to terminate his or her employment. 7. REPRESENTATIONS AS TO PURCHASE OF SHARES. As a condition of the Company's obligation to issue Shares upon exercise of the Option, if requested by the Company, the Optionee shall, concurrently with the delivery of the stock certificate representing the Shares so purchased, give such written assurances to the Company, in the form and substance that its counsel reasonably requests, to the effect that the Optionee is acquiring the Shares for investment and without any present intention of reselling or redistributing the same in violation of any applicable law. In the event that the Company elects to register the Shares under the Securities Act of 1933 and any applicable state laws, the issuance of such Shares shall not be subject to the restrictions contained in this paragraph 7. 8. COMPLIANCE WITH APPLICABLE LAW. The issuance of the Shares pursuant to the exercise of this Option is subject to compliance with all applicable laws, including without limitation laws governing withholding from employees and nonresident aliens for income tax purposes. IN WITNESS WHEREOF, the Company has caused this Agreement to be executed as of the Date of Grant set forth in Schedule 1. IVAX CORPORATION By: /s/ Phillip Frost, M.D. ---------------------------- Phillip Frost, M.D. Chairman of the Board and Chief Executive Officer SCHEDULE 1 NONQUALIFIED STOCK OPTION AGREEMENT (EMPLOYEE) Name of Optionee: Phillip Frost, M.D. Number of Shares: 150,000 Option Price Per Share: $8.9375 Date of Grant: July 31, 1998 Expiration Date: July 30, 2005 Vesting Schedule: 25% of the Number of Shares on each of the first four anniversary dates of the Date of Grant The undersigned agrees to the terms and conditions of the Nonqualified Stock Option Agreement of which this Schedule 1 is a part, and acknowledges receipt of the prospectus relating to the Plan and of the Company's most recent annual report to shareholders. Date Accepted: ------------ ------------------------ Optionee ------------------------ Social Security Number EX-5 6 EXHIBIT 5 NON-NEGOTIABLE PROMISSORY NOTE Principal Amount: $50,000,000 November 18, 1999 For value received, IVAX CORPORATION, a Florida corporation (the "MAKER"), promises to pay to FROST-NEVADA, LIMITED PARTNERSHIP, a limited partnership organized under the laws of Nevada ("PAYEE"), at such place as the Payee may designate from time to time, in lawful money of the United States of America, the principal sum of FIFTY MILLION DOLLARS ($50,000,000), together with interest in arrears on the unpaid principal balance at an annual rate equal to ten percent (10%), in the manner provided below. Interest shall be calculated on the basis of a year of 365 or 366 days, as applicable, and charged for the actual number of days elapsed. The principal balance of this Note shall be due and payable on January 17, 2001. Interest shall accrue on the outstanding principal balance of this Note from the date hereof until its repayment in full, at a rate equal to ten percent (10%) per annum, and shall be payable quarterly on the last day of each March, June, September and December, commencing on March 31, 2000. The entire principal balance of this Note, together with accrued and unpaid interest, shall be due and payable on January 17, 2001. If any payment of principal or interest on this Note is due on a day which is not a Business Day, such payment shall be due on the next succeeding Business Day, and such extension of time shall be taken into account in calculating the amount of interest payable under this Note. "BUSINESS DAY" means any day other than a Saturday, a Sunday or a legal holiday on which U.S. commercial banks located in Miami, Florida are closed for the purpose of conducting commercial banking business. Maker may, without premium or penalty, at any time and from time to time, prepay all or any portion of the outstanding principal balance due under this Note, provided that each such prepayment is accompanied by accrued interest on the amount of principal prepaid calculated to the date of such prepayment. Upon default in the timely payment of principal or interest, the entire principal amount outstanding and accrued interest thereon shall at once become due and payable at the option of the Payee upon notice to the Maker. This Note shall be binding upon the Maker and its successors and assigns, and shall inure to the benefit of the Payee and its successors and assigns, but the Payee may not assign or transfer this Note without the express written consent of the Maker. This Note shall be governed by the laws of the State of Florida. The Payee shall be entitled to collect from the Maker all costs and expenses incurred by the Payee in connection with the enforcement of this Note. IN WITNESS WHEREOF, Maker has executed and delivered this Note in New York, New York, as of the date first stated above. IVAX CORPORATION By: /s/ Phillip Frost, M.D. ------------------------------ Phillip Frost, M.D. Chairman of the Board and Chief Executive Officer 2 EX-6 7 EXHIBIT 6 THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS, AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS, WHICH, IN THE OPINION OF COUNSEL FOR THE HOLDER, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO COUNSEL FOR THIS COMPANY, IS AVAILABLE. WARRANT TO PURCHASE SHARES OF COMMON STOCK OF IVAX CORPORATION November 18, 1999 This certifies that Frost-Nevada Limited Partnership, a Nevada limited partnership (the "Holder"), for value received, is entitled, subject to the adjustment and to the other terms set forth below, to purchase from IVAX Corporation, a Florida corporation (the "Company"), an aggregate of 500,000 fully paid and nonassessable shares of the Company's Common Stock, par value $.10 (the "Warrant Shares"), at a price per share of $18.00 (the "Purchase Price") at any time or from time to time, but not earlier than the Commencement Date (as defined below) or later than 5:00 P.M. (Eastern Time) on the Expiration Date (as defined below), upon surrender to the Company of this Warrant properly endorsed with the form of Subscription Agreement attached hereto as Exhibit A, such Subscription Agreement to be duly filled in and signed, and upon payment in cash by wire transfer or cashier's check of the aggregate Purchase Price for the number of shares for which this Warrant is being exercised. The Purchase Price and, in some cases, the number of shares purchasable hereunder are subject to adjustment as provided in Section 3 of this Warrant. This Warrant and all rights hereunder, to the extent not exercised in the manner set forth herein, shall terminate and become null and void on the Expiration Date. "Commencement Date" shall mean the date of this Warrant. "Expiration Date" shall mean the date seven (7) years following the Commencement Date. This Warrant Certificate is subject to the following terms and conditions: 1. EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR SHARES. This Warrant is exercisable, in whole or in part, at the option of the Holder at any time or from time to time, but not later than 5:00 P.M. (Eastern Time) on the Expiration Date. The Company agrees that the Warrant Shares purchased under this Warrant shall be and are deemed to be issued to Holder as the record owner of such shares as of the close of business on the date on which this Warrant shall have been surrendered and payment made for such shares. Subject to the provisions of Section 2, certificates for the Warrant Shares so purchased, together with any other securities or property to which Holder 1 is entitled upon such exercise, shall be delivered to Holder by the Company or the Company's transfer agent at the Company's expense within a reasonable time after the rights represented by this Warrant have been exercised. Each stock certificate so delivered shall be in such denominations of Common Stock as may be requested by Holder and shall be registered in the name of Holder or such other name as shall be designated by Holder, subject to the limitations contained in Section 2. Unless this Warrant shall have expired, a Warrant representing the number of shares, if any, with respect to which this Warrant shall not have been exercised shall be issued to the holder within the same period. 2. SHARES TO BE FULLY PAID; RESERVATION OF SHARES. The Company covenants and agrees that all shares of Common Stock that may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be duly authorized, validly issued, fully paid and nonassessable. The Company covenants that it will reserve and keep available a sufficient number of shares of its authorized but unissued Common Stock for such exercise. The Company will take all such reasonable action as may be necessary to assure that such shares of Common Stock may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of any domestic securities exchange or automated quotation system upon which the Common Stock may be listed. 3. ADJUSTMENT OF PURCHASE PRICE; NUMBER OF SHARES. The Purchase Price and the number of shares purchasable upon the exercise of this Warrant shall be subject to adjustment from time to time upon the occurrence of certain events described below. 3.1 SUBDIVISION OR COMBINATION OF STOCK AND STOCK DIVIDEND. In case the Company shall at any time subdivide its outstanding shares of Common Stock into a greater number of shares or declare a dividend upon its Common Stock payable solely in shares of Common Stock, the Purchase Price in effect immediately prior to such subdivision or declaration shall be proportionately reduced, and the number of shares issuable upon exercise of the Warrant shall be proportionately increased. Conversely, in case the outstanding shares of Common Stock of the Company shall be combined into a smaller number of shares, the Purchase Price in effect immediately prior to such combination shall be proportionately increased, and the number of shares issuable upon exercise of the Warrant shall be proportionately reduced. 3.2 NOTICE OF ADJUSTMENT. Promptly after any adjustment of the Purchase Price or any increase or decrease in the number of shares of Common Stock purchasable upon the exercise of this Warrant, the Company shall give written notice thereof, by first class mail, postage prepaid, addressed to Holder at the address of Holder as shown on the books of the Company. The notice shall be signed by the Company's chief financial officer and shall state the effective date of the adjustment and the Purchase Price resulting from such adjustment and the increase or decrease, if any, in the number of shares purchasable at such price upon the exercise of this Warrant, setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based. 2 3.3 OTHER NOTICES. If at any time: (a) the Company shall declare any cash dividend upon its Common Stock; (b) the Company shall declare any dividend upon its Common Stock payable in shares of Common Stock or make any special dividend or other distribution to the holders of its Stock: (c) the Company shall offer for subscription pro rata to the holders of the Common Stock any additional shares of stock of any class or series or other rights; (d) there shall be any reclassification or recapitalization of its Common Stock or any consolidation or merger of the Company with another corporation, or a sale of all or substantially all of the Company's assets to another corporation; or (e) there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Company; then, in any one or more of said cases, the Company shall give Holder (i) at least thirty (30) days written notice of the date on which the books of the Company shall close or a record shall be taken for such dividend, distribution or subscription rights or for determining rights to vote in respect of any such dissolution, liquidation or winding up; (ii) at least ten (10) days prior written notice of the date on which the books of the Company shall close or a record shall be taken for determining rights to vote in respect of any such consolidation, merger or sale; and (iii) in the case of any such consolidation, merger, sale, dissolution, liquidation or winding up, at least thirty (30) days written notice of the date when the same shall take place. Any notice given in accordance with clause (i) above shall also specify, in the case of any such dividend, distribution or option rights, the date on which the holders of Common Stock shall be entitled thereto. Any notice given in accordance with clause (iii) above shall also specify the date on which the holders of Common Stock shall be entitled to exchange their Common Stock for securities or other property deliverable upon such consolidation, merger, sale, dissolution, liquidation or winding-up, as the case may be. If Holder does not exercise this Warrant prior to the occurrence of an event described above, except as provided in Sections 3.1 and 3.4, Holder shall not be entitled to receive the benefits accruing to existing holders of the Common Stock in such event. Notwithstanding anything herein to the contrary, if and to the extent Holder chooses to exercise this Warrant within the 10-day period following receipt of the notice specified in clause (ii) above, Holder may elect to pay the aggregate Purchase Price by delivering to the Company cash by wire transfer or a cashier's check in the amount as provided in the first paragraph of this Warrant. 3.4 CHANGES IN COMMON STOCK. In case at any time following the Commencement Date, the Company shall be a party to any transaction (including, without limitation, a merger, consolidation, sale of all or substantially all of the Company's assets or recapitalization of the Common Stock) in which the previously outstanding Common Stock shall be changed into or exchanged for different securities of the Company or common stock or other securities of another 3 corporation or interests in a non-corporate entity or other property (including cash) or any combination of any of the foregoing (each such transaction being herein called a "Transaction" and the date of consummation of a Transaction being herein called a "Consummation Date"), then, as a condition of the consummation of such Transaction, lawful and adequate provisions shall be made so that the Holder, upon the exercise hereof at any time on or after the Consummation Date of such Transaction, shall be entitled to receive, and this Warrant shall thereafter represent the right to receive, in lieu of the Warrant Shares issuable upon such exercise prior to such Consummation Date, the highest amount of securities or other property to which the Holder would actually have been entitled as a stockholder upon the consummation of such Transaction if the Holder had exercised this Warrant immediately prior thereto. The provisions of this Section 3.4 shall similarly apply to successive Transactions. 4. ISSUE TAX. The issuance of certificates for the Warrant Shares upon the exercise of the Warrant shall be made without charge to the Holder for any issue tax in respect thereof; PROVIDED, HOWEVER, that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any certificate in a name other than that of the Holder. 5. NO VOTING OR DIVIDEND RIGHTS; LIMITATION OF LIABILITY. Nothing contained in this Warrant shall be construed as conferring upon the Holder the right to vote or to consent or, except as set forth in Section 3.3 hereof, to receive notice as a stockholder in respect of any election of directors of the Company or any other matters or any rights whatsoever as a stockholder of the Company, until, and only to the extent that, this Warrant shall have been exercised. Except for the adjustment to the Purchase Price pursuant to Section 3.1 in the event of a dividend on the Common Stock payable in shares of Common Stock, no dividends or interest shall be payable or accrued in respect of this Warrant or the interest represented thereby or the shares of Common Stock purchasable hereunder until, and only to the extent that, this Warrant shall have been exercised. No provisions hereof, in the absence of affirmative action by the Holder to purchase shares of Common Stock, and no mere enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the Purchase Price or as a stockholder of the Company, whether such liability is asserted by the Company or by its creditors. 6. RESTRICTIONS ON TRANSFERABILITY OF SECURITIES; COMPLIANCE WITH SECURITIES ACT. 6.1 RESTRICTIONS ON TRANSFERABILITY. This Warrant and the Warrant Shares shall not be transferable in the absence of registration under the Securities Act of 1933, as amended (the "Securities Act"), or an exemption therefrom under the Securities Act. 6.2 RESTRICTIVE LEGEND. Each certificate representing the Warrant Shares or any other securities issued in respect of the Warrant Shares upon any stock split, stock dividend, recapitalization, merger, consolidation or similar event, shall be stamped or otherwise imprinted with a legend in substantially the following form (in addition to any legend required under applicable state 4 securities laws): THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS, AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS, WHICH, IN THE OPINION OF COUNSEL FOR THE HOLDER, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO COUNSEL FOR THE COMPANY, IS AVAILABLE. 6.3 REGISTRATION RIGHTS. (a) If (but without any obligation to do so) the Company proposes to register any shares of Common Stock under the Securities Act in connection with an underwritten public offering of such securities (other than a registration relating solely to the sale of securities to participants in a stock plan of the Company, or a registration which does not relate to shares of Common Stock, or a registration on any form which does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Warrant Shares), the Company shall, at such time, promptly give the Holder written notice of such registration. Upon the written request of the Holder given within ten (10) days after receipt of such notice from the Company, the Company shall, subject to the provisions of this subsection 6.3, use its best efforts to cause to be registered under the Securities Act all of the Warrant Shares that the Holder has requested be registered. (b) In connection with any offering subject to subsection 6.3(a), the Company shall not be required to include any of the Holder's securities in such underwriting unless the Holder accepts the terms of the underwriting agreement as agreed upon between the Company and the underwriters selected by the Company. If the Holder holds Warrant Shares, and if the Company's offering is to be registered on a form that also permits registration of securities offered by selling shareholders, the Holder shall be entitled to include in the offering all or any portion of the Warrant Shares, subject to prior exercise of this Warrant. Notwithstanding the foregoing, if the managing underwriter of any such offering, which managing underwriter shall be selected by the Company, determines that the number of shares proposed to be sold by the Company, by other shareholders having registration rights, and/or by the Holder is greater than the number of shares that the managing underwriter believes feasible to sell at the time, at the price and upon the terms approved by the Company, then the number of shares that the managing underwriter believes may be sold shall be allocated for inclusion in the registration statement in the following order of priority: (i) shares being offered by the Company; and (ii) pro-rata among the other shareholders and the Holder, based on the number of shares of Common Stock each 5 shareholder requested to be registered. (c) Whenever required under this section 6.3 to effect the registration of any Warrant Shares, the Company shall, from and after the effective date of the applicable registration statement: (i) Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement; (ii) Furnish to the Holder such numbers of copies of a prospectus in conformity with the requirements of the Securities Act, and such other documents as it may reasonably request in order to facilitate the disposition of Warrant Shares owned by the Holder; (iii) Use its best efforts to register and qualify the securities covered by such registration statement under the securities laws of such jurisdictions as shall be reasonably requested by the Holder, provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions; (iv) Notify the Holder at any time when the Holder informs the Company that it intends to deliver a prospectus relating thereto for the purpose of offering or selling any Warrant Shares covered by such registration statement, of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, after which the Company will promptly amend the prospectus, and the Holder agrees not to deliver the prospectus until such amendment has been declared effective; (v) Furnish, at the request of the Holder, on the date that such Warrant Shares are delivered to the underwriters, an opinion, dated such date, of the Company's counsel for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering, addressed to the underwriters and to the Holder; and (vi) List the Warrant Shares being registered on the American Stock Exchange. (d) It shall be a condition precedent to the obligations of the Company to take any 6 action pursuant to this section 6.3 that the Holder shall furnish to the Company such information regarding itself, the Warrant Shares held by it, any investment banker, broker or other agent retained by the Holder to assist it in selling the Warrant Shares, and the intended method of disposition of such securities as shall be reasonably required to effect the registration of its Warrant Shares. (e) Except as otherwise provided herein, all expenses other than underwriting discounts and commissions relating to Warrant Shares incurred in connection with the registration, filings or qualifications pursuant to this section 6.3, including, without limitation, all registration, filing and qualification fees, printing and accounting fees and fees and disbursements of the Company's counsel, shall be borne by the Company. Notwithstanding the foregoing, all underwriting discounts and selling commissions applicable to the Warrant Shares covered by any registration and all fees and disbursements of special counsel to the Holder shall be borne by the Holder, in proportion to the number of Warrant Shares sold by the Holder, and if any applicable state securities laws require the Holder to share the expenses of the offering with the Company, then the Holder shall share such expenses in accordance with the applicable law of such state. (f) So long as the Company has given every notice required by this section 6.3, the Holder shall not have any right to take any action to restrain or otherwise delay any such registration as the result of any controversy that might arise with respect to the interpretation or implementation of this section 6.3. (g) In the event any Warrant Shares are included in a registration statement under this section 6.3: (i) To the extent permitted by law, the Company will indemnify and hold harmless the Holder, the officers and directors of the Holder, any underwriter (as defined in the Securities Act) for the Holder and each person, if any, who controls the Holder or underwriter within the meaning of the Securities Act or the Securities Exchange Act of 1934, as amended (the "Exchange Act"), against any losses, claims, damages or liabilities (joint or several) to which they may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively, a "Violation"): (A) any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (B) 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, or (C) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or regulation promulgated under the Securities Act, the Exchange Act or any state securities law. The Company will 7 reimburse the Holder, officer or director, underwriter or controlling person for any legal or other expenses reasonably incurred by it in connection with investigating or defending any such loss, claim, damage, liability or action; PROVIDED, HOWEVER, that the indemnity agreement contained in this clause (i) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by the Holder, or by any officer, director, underwriter or controlling person of the Holder. (ii) To the extent permitted by law, the Holder will indemnify and hold harmless the Company, each of its directors, each of its officers who has signed the registration statement, each person, if any, who controls the Company within the meaning of the Securities Act, each agent and any underwriter for the Company or any person who controls such underwriter, against any losses, claims, damages or liabilities (joint or several) to which the Company or any such director, officer, controlling person, agent or underwriter, director or officer or controlling person thereof, may become subject, under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by the Holder or by any officer, director, underwriter or controlling person of the Holder expressly for use in connection with such registration; and the Holder will reimburse any legal or other expenses reasonably incurred by the Company or any such director, officer, controlling person, agent or underwriter, officer, director or controlling person thereof, in connection with investigating or defending any such loss, claim, damage, liability or action; PROVIDED, HOWEVER, that the indemnity agreement contained in this clause (ii) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld. (iii) Promptly after receipt by an indemnified party under this subsection 6.3(g) of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this subsection 6.3(g), deliver to the indemnifying party a written notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; PROVIDED, HOWEVER, that an indemnified party shall have the right to retain its 8 own counsel, reasonably satisfactory to the indemnifying party, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this subsection 6.3(g), but the omission so to deliver written notice to the indemnifying party shall not relieve it of any liability that it may have to any indemnified party otherwise than under this subsection 6.3(g). (iv) The obligations of the indemnifying party under this subsection 6.3(g) shall survive the completion of any offering of Warrant Shares in a registration statement under this section 6.3 and otherwise. 7. MODIFICATION AND WAIVER. This Warrant and any provision hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of the same is sought. 8. NOTICES. Any notice, request or other document required or permitted to be given or delivered to the Holder or the Company shall be delivered or shall be sent by certified or registered mail, return receipt requested, postage prepaid, or by commercial overnight courier, to the Holder at its address as shown on the books of the Company or, if to the Company, at the address indicated therefor on the signature page of this Warrant. 9. DESCRIPTIVE HEADINGS AND GOVERNING LAW. The descriptive headings of the several sections and paragraphs of this Warrant are inserted for convenience only and do not constitute a part of this Warrant. This Warrant shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the State of Florida. 10. LOST WARRANTS OR STOCK CERTIFICATES. The Company represents and warrants to the Holder that upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant or any stock certificate deliverable upon the exercise hereof and, in the case of any such loss, theft or destruction, upon receipt of an indemnity and, if requested, bond reasonably satisfactory to the Company, or in the case of any such mutilation, upon surrender and cancellation of this Warrant or such stock certificate, the Company at its expense will make and deliver a new Warrant or stock certificate, of like tenor, in lieu of the lost stolen, destroyed or mutilated Warrant or stock certificate. 11. FRACTIONAL SHARES. No fractional shares shall be issued upon exercise of this Warrant. The Company shall, in lieu of issuing any fractional share, pay the holder entitled to such fraction a sum in cash equal to the fair market value of any such fractional interest as it shall appear 9 on the public market, or if there is no public market for such shares, then as shall be reasonably determined by the Company. IN WITNESS WHEREOF, the Company and the Holder have caused this Warrant to be executed by their officers, thereunto duly authorized, as of this 18th day of November, 1999. IVAX CORPORATION By: /s/ Neil Flanzraich -------------------------------- Neil Flanzraich Vice Chairman and President Address: 4400 Biscayne Blvd. Miami, FL 33137 FROST-NEVADA LIMITED PARTNERSHIP By: /s/ Frost-Nevada Corporation -------------------------------- Its General Partner By: /s/ David Moskowitz -------------------------------- David Moskowitz President Address: 3500 Lakeside Ct. Suite 200 Reno, NV 89509 10 EXHIBIT A FORM OF SUBSCRIPTION AGREEMENT (To be signed and delivered upon exercise of Warrant) IVAX Corporation 4400 Biscayne Blvd. Miami, Florida 33137 Attention: Secretary The undersigned, the holder of the within Warrant, hereby irrevocably elects to exercise the purchase right represented by such Warrant for, and to purchase thereunder, ________ shares of Common Stock, par value $.10 per share (the "Stock"), of IVAX Corporation (the "Company"), and subject to the following paragraph, herewith makes payment of Dollars ($ ) therefor and requests that the certificates for such shares be issued in the name of, and delivered to, , whose address is If the exercise of this Warrant is not covered by a registration statement effective under the Securities Act of 1933, as amended (the "Securities Act"), the undersigned represents that (i) the undersigned is acquiring such Stock for investment for its own account, not as nominee or agent, and not with a view to the distribution thereof, and the undersigned has not signed or otherwise arranged for the selling, granting any participation in, or otherwise distributing the same; (ii) the undersigned has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of the undersigned's investment in the Stock; (iii) the undersigned has received all of the information the undersigned has requested from the Company and considers necessary or appropriate for deciding whether to purchase the shares of Stock; (iv) the undersigned has the ability to bear the economic risks of its prospective investment; (v) the undersigned is able, without materially impairing its financial condition, to hold the shares of Stock for an indefinite period of time and to suffer complete loss on its investment; (vi) the undersigned understands and agrees that (A) it may be unable to readily liquidate its investment in the shares of Stock and that the Shares must be held indefinitely unless subsequent disposition thereof is registered or qualified under the Securities Act and applicable state securities or Blue Sky laws or is exempt from such registration or qualification, and that the Company is not 11 required to register the same or to take any action or make such an exemption available except to the extent provided in the within Warrant and (B) the exemption from registration under the Securities Act afforded by Rule 144 promulgated by the Securities and Exchange Commission ("Rule 144") depends upon the satisfaction of various conditions by the undersigned and the Company and that, if applicable, Rule 144 affords the basis for sales under certain circumstances in limited amounts, and that if such exemption is utilized by the undersigned, such conditions must be fully complied with by the undersigned and the Company, as required by Rule 144; (VII) the undersigned either (A) is familiar with the definition of and the undersigned is an "Accredited Investor" within the meaning of such term under Rule 501 of Regulation D promulgated under the Securities Act, or (B) is providing representations and warranties reasonably satisfactory to the Company and its counsel, to the effect that the sale and issuance of Stock upon the exercise of such Warrant may be made without registration under the Securities Act or any applicable state securities and Blue Sky laws; and (VIII) the address set forth below is the true and correct address of the undersigned. DATED: (Signature must conform in all respects to name of Holder as specified on the face of the Warrant or with the name of the assignee appearing on the assignment form attached hereto.) -------------------------------------------- (Name) -------------------------------------------- (Title, if applicable) -------------------------------------------- (Address) -------------------------------------------- If said number of shares shall not be all the shares exchangeable or purchasable under the within Warrant, a new Warrant is to be issued in the name of the undersigned for the balance remaining of the shares purchasable thereunder. 12 -----END PRIVACY-ENHANCED MESSAGE-----