-----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, PXuSZ/IcvTi5zDZcIL5nw6psqYfFh+5x/C5teLZ96N2wGPvUrMINi70OGFegqpwo JNy/JpiNeQAwPXcVGBzQVg== /in/edgar/work/20000807/0000950170-00-001229/0000950170-00-001229.txt : 20000921 0000950170-00-001229.hdr.sgml : 20000921 ACCESSION NUMBER: 0000950170-00-001229 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 20000807 FILER: COMPANY DATA: COMPANY CONFORMED NAME: IVAX CORP /DE CENTRAL INDEX KEY: 0000772197 STANDARD INDUSTRIAL CLASSIFICATION: [2834 ] IRS NUMBER: 161003559 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-43176 FILM NUMBER: 687382 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 S-3 1 0001.txt As filed with the Securities and Exchange Commission on August 7, 2000. Registration No. 333-_____. ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------------- FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ---------------------- IVAX CORPORATION ---------------------- (Exact name of registrant as specified in its charter) Florida 16-1003559 ------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 4400 Biscayne Boulevard Miami, Florida 33137 -------------------- (305) 575-6000 (Address of principal executive offices, including zip code and telephone number) Carol Gillespie, Esq. General Counsel Ivax Corporation 4400 Biscayne Boulevard Miami, FL 33137 (305) 575-6000 -------------- (Name, address and telephone number, including area code, of agent for service) With a Copy to: Alison W. Miller, Esq. Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A. 150 West Flagler Street, Suite 2200 Miami, Florida 33130 (305) 789-3200 Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective. --------------------------- If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [_] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [_] ---------------------------
Calculation of Registration Fee =================================================================================================================================== Proposed Proposed maximum maximum Amount of Title of each class of securities Amount to be offering price aggregate registration to be registered registered per security offering price fee - ----------------------------------------------- ------------------- --------------------- -------------------- --------------------- 5.5% Convertible Senior Subordinated Notes Due $250,000,000 100% $250,000,000 $66,000 2007 - ----------------------------------------------- ------------------- --------------------- -------------------- --------------------- Common Stock, par value $.10 per share 6,729,500 shares(1) N/A N/A N/A(2) (Conversion Shares) - ----------------------------------------------- ------------------- --------------------- -------------------- --------------------- Common Stock Purchase Rights(3) 6,729,500 rights(1) N/A N/A N/A(4) - ----------------------------------------------- ------------------- --------------------- -------------------- ---------------------
(1) Represents the number of shares of common stock and associated common stock purchase rights issuable upon conversion of the 5.5% Convertible Senior Subordinated Notes due 2007 registered hereby and, pursuant to Rule 416 under the Securities Act of 1933, such indeterminate number of shares of common stock and associated common stock purchase rights as may be issuable from time to time upon the conversion of the notes as a result of the antidilution provisions thereof. (2) Pursuant to Rule 457(i) of the Securities Act of 1933, no registration fee is required with respect to the Common Stock. (3) The Common Stock Purchase Rights are attached to and trade with and transfer with the Common Stock. The Common Stock Purchase Rights are only exercisable upon the occurrence of certain prescribed events, none of which has occurred. (4) Pursuant to Rule 457(i) of the Securities Act of 1933, no registration fee is required with respect to the Common Stock Purchase Rights. --------------------------- THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. ================================================================================ The information in this prospectus is not complete and may be changed. These securities may not be sold by means of this prospectus until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. SUBJECT TO COMPLETION DATED AUGUST 7, 2000 IVAX CORPORATION $250,000,000 5.5% CONVERTIBLE SENIOR SUBORDINATED NOTES DUE 2007 AND 6,729,500 SHARES COMMON STOCK ISSUABLE UPON CONVERSION OF THE NOTES ------------------------------ This prospectus covers up to: o $250,000,000 total principal amount of our 5.5% convertible senior subordinated notes due 2007, and o 6,729,500 shares of our common stock issuable upon conversion of the notes together with their related common stock purchase rights. which may be offered and sold from time to time by the selling security holders named in this prospectus. We will receive no part of the proceeds of the sales of the securities in this offering. We issued the notes on May 12, 2000 and May 23 2000 in transactions exempt from the registration requirements of the Securities Act of 1933 pursuant to Rule 144A. The notes are convertible into 26.918 shares of our common stock per $1,000 principal amount, subject to adjustment in some circumstances. We will pay cash interest of 5.5% per year on the notes on May 15 and November 15 of each year, commencing on November 15, 2000. The notes will mature on May 15, 2007. The notes are subordinated to all of our existing and future senior indebtedness and structurally subordinated to all of our subsidiaries' obligations, including trade payables. As of June 30, 2000, we had approximately $51.0 million of consolidated indebtedness and other obligations effectively ranking senior to the notes. If we experience a change in control, we must offer to repurchase the notes at 100% of their principal amount, together with accrued and unpaid interest to the date of repurchase. On or after May 29, 2003, we may at our option redeem the notes at the redemption prices stated in this prospectus, together with accrued and unpaid interest to the date of redemption. The notes are not entitled to any mandatory redemption or sinking fund. The notes trade on the PORTAL Market. Our common stock is listed on the American Stock Exchange under the trading symbol "IVX." See "Risk Factors" beginning on page 3 for a discussion of factors that you should consider before making an investment decision. ------------------------------------ Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The date of this prospectus is ______________, 2000. TABLE OF CONTENTS PAGE ABOUT THIS PROSPECTUS........................................................1 WHERE YOU CAN FIND MORE INFORMATION..........................................1 INCORPORATION BY REFERENCE...................................................1 DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS..............................2 THE COMPANY..................................................................2 RISK FACTORS.................................................................3 USE OF PROCEEDS.............................................................11 RATIO OF EARNINGS TO FIXED CHARGES..........................................11 SELLING SECURITY HOLDERS....................................................12 PLAN OF DISTRIBUTION........................................................14 TRANSFER AGENT, REGISTRAR AND TRUSTEE.......................................15 DESCRIPTION OF NOTES........................................................15 DESCRIPTION OF COMMON STOCK.................................................25 DESCRIPTION OF COMMON STOCK PURCHASE RIGHTS.................................25 CERTAIN PROVISIONS OF OUR ARTICLES OF INCORPORATION AND BYLAWS AND FLORIDA LAW.........................................27 LEGAL MATTERS...............................................................27 EXPERTS ...................................................................27 -ii- ABOUT THIS PROSPECTUS This prospectus is a part of the registration statement that we filed with the Securities and Exchange Commission, or SEC. The selling security holders named in this prospectus may from time to time sell the securities described in this prospectus. You should read this prospectus together with additional information described under the next heading "Where You Can Find More Information." You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with information different from that contained in this prospectus. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of the securities. In this prospectus, the "Company," "IVAX," "we," "us" and "our" refer to IVAX Corporation. Our principal executive offices are located at 4400 Biscayne Boulevard, Miami, Florida 33137, and our telephone number is (305) 575-6000. WHERE YOU CAN FIND MORE INFORMATION We file annual, quarterly and current reports, proxy statements and other information with the SEC. You can inspect, read and copy these reports, proxy statements and other information at the public reference facilities maintained by the SEC at: o Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549; o Suite 1400, 500 West Madison Street, Chicago, Illinois 60661-2511; and o Suite 1300, 7 World Trade Center, New York, New York 10048. You can also obtain copies of these materials from the public reference facilities of the SEC at prescribed rates. You can obtain information on the operation of the public reference facilities by calling the SEC at 1-800- SEC-0330. The SEC also maintains a web site (http://www.sec.gov) that makes available reports, proxy statements and other information regarding issuers that file electronically with it. In addition, you can inspect certain reports, proxy statements and other information we file at the offices of the American Stock Exchange, Inc., 86 Trinity Place, New York, New York 10006. INCORPORATION BY REFERENCE The SEC allows us to "incorporate by reference" into this prospectus the information we file with it, which means that we can disclose important information to you by referring you to those documents. In addition, information that we file with the SEC after the date of this prospectus will update and supersede the information contained in this prospectus and incorporated filings. The information we incorporate by reference is an important part of this prospectus. We incorporate by reference the following documents filed by us with the SEC: o our Annual Report on Form 10-K for the year ended December 31, 1999 filed on March 30, 2000 as amended by our Form 10-K/A filed on May 1, 2000; o our Quarterly Report on Form 10-Q for the quarter ended March 31, 2000 filed on May 15, 2000; o our Current Report on Form 8-K dated February 8, 2000 and filed on February 11, 2000; -1- o the description of our common stock contained in our Registration Statement on Form 8-B filed on July 28, 1993; o the description of our common stock purchase rights contained in our Current Report on Form 8-K dated December 19, 1997 and filed on December 31, 1997; and o all other documents we subsequently file pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after the date of this prospectus and before the termination of the offering, each which will be deemed to be a part of this prospectus from the date of filing. To receive a free copy of any of the documents incorporated by reference in this prospectus (other than exhibits, unless they are specifically incorporated by reference in the documents), write to or call: IVAX Corporation 4400 Biscayne Boulevard Miami, Florida 33137 Attention: Corporate Secretary Phone Number: (305) 575-6000 DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS This prospectus contains "forward-looking statements," or statements that are based on current expectations, estimates and projections rather than historical facts. We make these forward-looking statements in reliance on the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to a number of risks and uncertainties, many of which are difficult to predict and are beyond our control. Forward-looking statements are typically identified by the words "believe," "expect," "anticipate," "intend," "estimate" and similar expressions. Many of these risks and uncertainties are included under the caption "Risk Factors." Our actual results could differ materially from those contemplated by these forward-looking statements as a result of factors including but not limited to economic, competitive, governmental and technological factors affecting our operations, markets, products and prices, and other factors discussed elsewhere in this prospectus and the documents filed by us with the SEC. In light of these risks and uncertainties, the results and events contemplated by the forward-looking information contained in this prospectus might not occur. We caution you not to place undue reliance on these forward-looking statements. We do not undertake any obligation to update or revise any forward-looking statements. THE COMPANY We are a multi-national company engaged in the research, development, manufacture and marketing of pharmaceutical products. We have subsidiaries located throughout the world, some of which are among the leading pharmaceutical companies in their markets. Our current business is well established, generating net revenues in 1999 of $656 million and net income of approximately $70 million. While we expect continued growth from our current products, we recognize that our long-term growth will depend on the discovery and development of new products that will satisfy currently unmet medical needs. Accordingly, we are focusing on expanding our portfolio of proprietary and brand name pharmaceutical products through our research and development efforts and through strategic acquisitions and collaborations. As a result, although our strategy is to continue to expand our generic -2- business, we anticipate an increasing amount of our future revenues to be generated from the sale of proprietary and branded products. We market several brand name pharmaceutical products and a wide variety of generic and over-the-counter pharmaceutical products, primarily in the United States and the United Kingdom. We also maintain operations in Argentina, China, the Czech Republic, France, Germany, Hong Kong, Hungary, India, Ireland, Italy, Kazakhstan, Latvia, Peru, Poland, Russia, the Slovak Republic, Ukraine, Uruguay, and Venezuela and market our products through distributors or joint ventures in other foreign markets. RISK FACTORS You should carefully consider the following risks before making an investment decision. Our business, operating results or financial condition could be materially and adversely affected by these and other risks. You should also refer to the other information contained or incorporated by reference in this prospectus, before making an investment decision. Risks Relating to Our Company Our research and development expenditures may not result in commercially successful products. We spent approximately $54.2 million during 1999 on our research and development efforts. We have budgeted approximately $80 million in the year 2000 for research and development expenditures and may in the future increase the amounts we expend for research and development. These amounts represent a significant increase in the amounts we allocated to research and development in prior periods and, in the short term, our research and development expenditures may have an adverse impact on our earnings. Further, we cannot be sure that our research and development expenditures will, in the long term, result in the discovery or development of products which prove to be commercially successful. Our potential acquisitions may reduce our earnings, be difficult for us to integrate or require us to obtain additional financing. We search for and evaluate acquisitions which will provide new product and market opportunities, leverage our existing assets and add critical mass. On June 20, 2000 we announced that we had acquired Laboratorios Elmor S.A., a pharmaceutical company based in Venezuela. Additionally, on August 4, 2000 we announced that we had entered into a definitive agreement to acquire Wakefield Pharmaceuticals, Inc., a privately held company located in Alpharetta, Georgia, engaged in the marketing and sale of respiratory products to allergists, otolaryngologists, pulmonologists, and primary care physicians. Acquisitions commonly involve risks and may have a material effect on our results of operations. Any acquisitions we make may fail to accomplish our strategic objectives, may not be successfully integrated with our operations and may not perform as expected. In addition, based on current acquisition prices in the pharmaceutical industry, acquisitions could initially dilute our earnings and add significant intangible assets and related goodwill amortization charges. Our acquisition strategy may require us to obtain additional debt or equity financing, resulting in additional leverage and dilution of ownership, respectively. We may not be able to finance acquisitions on terms satisfactory to us. We depend on the development, manufacture and marketing of new products for our future success. Our future success is largely dependent upon our ability to develop, manufacture and market commercially viable new pharmaceutical products and generic versions of off-patent pharmaceutical products. Generally, in order to be marketed commercially: -3- o products must be continually developed and tested; o new products must be proven to be safe and effective in clinical trials; o generic products must be proven to be bioequivalent to the name brand counterpart; and o all products must receive requisite regulatory approval. Delays in the development, manufacture and marketing of new products will impact our results of operations. Each of the steps in the development, manufacture and marketing of our products, as well as the process taken as a whole, involves significant periods of time and expense. We cannot be sure that: o any of our products presently under development, if and when fully developed and tested, will perform in accordance with our expectations; o we will obtain necessary regulatory approvals in a timely manner, if at all; or o we can successfully and profitably produce and market any of our products. We depend on our patents and proprietary rights and cannot be certain of their confidentiality and protection. Our success with our proprietary products depends, in large part, on our ability to protect our current and future technologies and products and to defend our intellectual property rights. If we fail to adequately protect our intellectual property, competitors may manufacture and market products similar to ours. We have been issued numerous patents covering our technologies, and have filed, and expect to continue to file, patent applications seeking to protect newly developed technologies and products in various countries, including the United States. Patent applications in the United States are maintained in secrecy until the patent application is published or the patent is issued, but in any event no longer than 18 months after the patent application has been filed. Since publication of discoveries in the scientific or patent literature tends to follow actual discovery by several months, we cannot be certain that we were the first to file patent applications on our discoveries. We cannot be sure that patents will be issued for any of our patent applications or that any existing or future patents that we receive or license will provide competitive advantages for our products or will not be challenged, invalidated or circumvented by competitors. In addition, patent rights may not prevent our competitors from developing, using or commercializing products that are similar or functionally equivalent to our products. We also rely on trade secrets, unpatented proprietary know-how and continuing technological innovation that we seek to protect, in part, by confidentiality agreements with licensees, suppliers, employees and consultants. We cannot assure you that these parties will not breach these agreements. We also cannot be certain that we will have adequate remedies for any breach. Disputes may arise concerning the ownership of intellectual property or the applicability of confidentiality agreements. Furthermore, we cannot be sure that our trade secrets and proprietary technology will not otherwise become known or be independently developed by our competitors or, if patents are not issued for products arising from research, that we will be able to maintain the confidentiality of information relating to our products. Third parties may claim that we infringe their proprietary rights and may prevent us from manufacturing and selling certain of our products. The manufacture, use and sale of new products that are the subject of conflicting patent rights have been the subject of substantial litigation in the pharmaceutical industry. These lawsuits relate to the validity and infringement of patents or proprietary rights of third parties. We may be required to defend against charges of infringement of patents or proprietary rights of third parties. This is especially true for the sale of the generic version of products on which the patent covering the branded product is expiring, an area where infringement -4- litigation is prevalent. Our defense against charges of infringement of patent or proprietary rights of third parties could require us to incur substantial expense and to divert significant effort of our technical and management personnel, and could result in our loss of rights to develop or make certain products or require us to pay monetary damages or royalties to license proprietary rights from third parties. Although patent and intellectual property disputes in the pharmaceutical product area have often been settled through licensing or similar arrangements, costs associated with these arrangements may be substantial and could include ongoing royalties. Furthermore, we cannot be certain that the necessary licenses would be available to us on terms we believe to be acceptable. Accordingly, an adverse determination in a judicial or administrative proceeding or failure to obtain necessary licenses could prevent us from manufacturing and selling a number of our products. We are also required to certify to regulatory authorities, such as the United States Food and Drug Administration, or FDA, when seeking approval of some of our products, that the product does not infringe upon third party rights. A patent holder may challenge a notice of non-infringement or invalidity by filing suit for patent infringement within 45 days of receiving the notice. This challenge, if made, would prevent regulatory approval in the United States until the suit is resolved or until at least 30 months have elapsed. A challenge by a patent holder and the associated delay could result in additional expenses or could eventually prevent us from manufacturing and selling certain of our products. Marketing practices such as returns, allowances and charge-backs and marketing programs adopted by wholesalers may reduce sales revenues in subsequent periods. Based on industry practice, generic manufacturers, including us, have liberal return policies and have been willing to give customers post-sale inventory allowances or credits based on decreases in the market prices of generic products held in inventory. Like our competitors, we also give credits for charge-backs to wholesale customers for their sales to hospitals, group purchasing organizations, pharmacies or other retail customers that have contracts with us. Although we establish reserves based on our prior experience and our best estimates of the impact that these policies may have in subsequent periods, we cannot be sure that our reserves will be adequate or that actual product returns, inventory allowances and charge-backs will not exceed our estimates. The concentration of ownership among our principal shareholders may permit corporate matters and policies to be influenced. Our executive officers and directors and two additional shareholders currently have or share voting control over approximately 21.3% of our issued and outstanding common stock. Accordingly, these persons may have the ability to significantly influence the election of the members of our board of directors and other corporate decisions. The market price of our stock has been and may continue to be volatile because of a number of internal and external factors. The market prices for securities of companies engaged in pharmaceutical development, including ours, have been volatile. Many factors, including many over which we have no control, may have a significant impact on the market price of our common stock, including without limitation: o the announcement of technological innovations or new commercial products by us or our competitors; o changes in governmental regulation; o regulatory approvals obtained by us or our competitors; -5- o developments relating to patents or proprietary rights by us or our competitors; o publicity regarding actual or potential medical results for products under development by us or our competitors; and o period-to-period fluctuations in financial results. Our foreign operations are subject to political and economic instability and foreign currency fluctuations that may adversely affect their ability to generate revenue. Our foreign operations are subject to currency exchange fluctuations and restrictions, political instability in some countries, and uncertainty as to the enforceability of, and government control over, commercial rights. We sell products in many countries that are recognized to be susceptible to significant foreign currency risk. These products are generally sold for United States dollars, which eliminates our direct currency risk but increases our credit risk if the local currency devalues significantly and it becomes more difficult for customers to purchase the United States dollars required to pay us. Acquisitions we are currently evaluating or pursuing may increase our foreign currency risk. On May 25, 2000 we announced that we had purchased an additional 8.5% of our Czech Republic subsidiary, Galena, A.S., bringing our ownership of Galena to 94.7%. Additionally, on June 20, 2000 we announced our acquisition of Laboratorios Elmor S.A., a pharmaceutical company based in Venezuela. We may acquire additional operations in the future which may expose us to additional risk. Future inability to obtain raw materials or products from contract manufacturers could seriously affect our operations. We currently source raw materials and other products from single domestic or foreign suppliers. Although to date we have not experienced difficulty in obtaining these raw materials and products, we cannot assure you that supply interruptions will not occur in the future or that we will not have to obtain substitute materials or products, which would require additional regulatory approvals. Further, we cannot assure you that our third party suppliers will continue to do so. In addition, changes in our raw material suppliers could result in delays in production, higher raw material costs and loss of sales and customers because raw material sources for pharmaceutical products must generally be approved by regulatory authorities. Any significant interruption of supply could have a material adverse effect on our operations. We have enacted a shareholder rights plan and charter provisions that may have anti-takeover effects. We have in place a shareholders rights plan under which we issued common stock purchase rights. As a result of the plan, each share of our common stock carries with it one common stock purchase right. Each common stock purchase right entitles the registered holder to purchase from us one-half (1/2) of a share of common stock at a price of $15 per one-half (1/2) of a share of common stock, subject to adjustment. The common stock purchase rights are intended to cause substantial dilution to a person or group who attempts to acquire us on terms not approved by our board of directors. The existence of the common stock purchase rights could have the effect of making it more difficult for a third party to acquire a majority of our common stock. Other provisions of our articles of incorporation and bylaws may also have the effect of discouraging, delaying or preventing a merger, tender offer or proxy contest, which could have an adverse effect on the market price of our common stock. -6- Risks Relating to Our Industry Our revenues and profits from generic pharmaceuticals will decline as additional generic equivalents of a product are introduced. Revenues and gross profit derived from generic pharmaceutical products tend to follow a pattern based on regulatory and competitive factors unique to the generic pharmaceutical industry. As patents for brand name products and the related and regulatorily mandated exclusivity periods expire, the first generic manufacturer to apply for regulatory approval for a generic equivalent of a brand name product may be entitled to a six-month period of exclusivity during which no other generic equivalent can be approved. If we are not the first generic applicant, our generic product will be kept off the market for an additional six months after expiration of the brand name drug's patents. Whether due to the generic exclusivity period or other factors that delay the approval of other generic competitors, the first generic equivalent on the market is usually able to initially achieve relatively high revenues and gross profit. As other generic manufacturers receive regulatory approvals on competing products, prices and revenues typically decline. The timing of these declines is unpredictable and can result in a significantly curtailed period of profitability for a generic product. Accordingly, the level of revenues and gross profit attributable to generic products developed and manufactured by us is dependent, in part, on: o our ability to develop and introduce new generic products; o the timing of regulatory approval of generic products; o the number and timing of regulatory approvals of competing products; o strategies adopted by brand name companies to maintain market share; and o our cost of manufacturing. Brand name companies are selling their own generics and are finding new ways of extending their market exclusivity. In addition to competition from other generic drug manufacturers, we face competition from brand name companies as they increasingly sell their products into the generic market directly by establishing, acquiring or forming licensing or business arrangements with generic pharmaceutical companies. No regulatory approvals are required for a brand name manufacturer to sell directly or through a third party to the generic market, nor do brand name manufacturers face any other significant barriers to entry into the generic market. In addition, brand name companies are increasingly pursuing strategies to prevent or delay the introduction of generic competition. These strategies include, among others: o seeking to establish regulatory obstacles to the demonstration of the bioequivalence of generic drugs to their brand name counterparts; o instituting legal actions that automatically delay approval of generic products which involve certifications that the brand name drug's patents are invalid or would not be infringed by the generic; o obtaining approvals of patented drugs for orphan indications for which a generic is undergoing clinical trials, consequently obtaining seven years of exclusivity for that indication; o obtaining extensions of patent exclusivity by conducting trials of brand name drugs using children; and -7- o persuading the FDA to withdraw the approvals of brand name drugs that are about to go off patent so that the brand name company can substitute a new patented product. Additionally, in the United States, companies holding brand name products have lobbied Congress for amendments to the Hatch-Waxman legislation which could give them additional advantages over generic competitors. Legislative proposals, reimbursement policies of third parties, cost containment measures and health care reform could affect the marketing, pricing and demand for our products. Various legislative proposals including proposals relating to prescription drug benefits are under discussion which could materially impact the pricing and sale of our products. Further, reimbursement policies of third parties may affect the marketing of our products. Our ability to market our products will depend in part on reimbursement levels for the cost of the products and related treatment established by health care providers, including government authorities, private health insurers and other organizations, such as health maintenance organizations, or HMOs, and managed care organizations, or MCOs. Third party payors are increasingly challenging the pricing of pharmaceutical products and reviewing their reimbursement practices. In addition, the following factors could significantly influence the purchase of pharmaceutical products, which would result in lower prices and a reduced demand for our product: o the trend toward managed health care in the United States; o the growth of organizations such as HMOs and MCOs; o legislative proposals to reform health care and government insurance programs; and o price controls and non-reimbursement of new and highly priced medicines for which the economic therapeutic rationales are not established. These cost containment measures and health care reform could affect our ability to sell our products. The reimbursement status of a newly approved pharmaceutical product may be uncertain. Reimbursement may not be available for some of our products. Reimbursement for a product, if granted, may not be maintained. Limits placed on reimbursement could reduce the demand for, or make it harder for people to buy, our products. The unavailability or inadequacy of third party reimbursement for our products would reduce or possibly eliminate demand for our products. We are unable to predict whether governmental authorities will enact additional legislation or regulation which will affect third party coverage and reimbursement that reduces demand for our products. New developments by others could make our products or technologies non-competitive or obsolete. The markets in which we compete and intend to compete are undergoing, and are expected to continue to undergo, rapid and significant technological change. We expect competition to intensify as technological advances in the pharmaceutical industry are made. We cannot be sure that developments by others will not render our products or technologies obsolete or uncompetitive. Our industry is highly competitive which affects our product selection, pricing, gross profit and market share. The pharmaceutical industry is intensely competitive. Most or all of the products that we commercialize will face competition from different chemical or other agents intended to treat the same diseases. Our current and future products will also face competition from traditional forms of drug delivery and from advanced delivery systems being developed by others. Our competitors vary depending upon product categories, and within each product category, upon dosage strengths and drug delivery systems. Many of these competitors may be able to -8- develop products and processes competitive with or superior to our own for many reasons, including that they may have: o significantly greater financial resources; o larger research and development and marketing staffs; or o larger production facilities or extensive experience in preclinical testing and human clinical trials. Our industry is subject to government regulation that increases our costs and could prevent us from marketing or selling our products. Governmental authorities in the United States and other countries subject our operations to extensive regulation, including the regulation of the testing, approval, manufacture, labeling, marketing and sale of pharmaceutical products. We devote significant time, effort and expense addressing these extensive government regulations. Failure to comply with governmental regulations can result in fines, unanticipated compliance expenditures, interruptions of production and criminal prosecution. The process of obtaining regulatory approval is rigorous, time consuming and costly. We cannot be sure that we will obtain necessary approvals on a timely basis, if at all. Delays in receiving regulatory approvals would adversely affect our ability to market products commercially. Product approvals by the FDA and comparable foreign regulatory authorities may be withdrawn if compliance with regulatory standards is not maintained or if problems relating to the products are experienced after initial approval. Consolidation of our customers or wholesaler programs could result in increased pricing pressures that may adversely affect our operating results. We make a significant amount of our United States generic pharmaceutical sales to a relatively small number of drug wholesalers and retail drug chains, which represent an essential part of the distribution chain of pharmaceutical products in the United States. Both of these industries have undergone, and are continuing to undergo, significant consolidation, which has resulted in our customers gaining more purchasing leverage and consequently increasing the pricing pressures facing our United States generic pharmaceutical business. Further consolidation among our customers may result in even greater pricing pressures and correspondingly reduce the gross margins of this business, and may also cause such customers to reduce their purchases of our products. Additionally, many wholesalers have adopted programs under which they offer customers price discounts if they purchase a bundled supply of one generic supplier's products, consequently reducing the number of manufacturers selected to supply products to the wholesaler and increasing the wholesaler's ability to influence its customers' buying decisions. These programs generally require that the manufacturer charge lower prices on products sold and permit wholesalers to maintain lower inventory levels. Wholesalers may continue these types of programs or adopt other programs in the future that restrict the market for our products or require us to charge lower prices in order to access the portion of the market that they control, adversely affecting our results. Our industry is susceptible to product-related liability claims that could require us to pay substantial sums. Like all pharmaceutical companies, we face the risk of loss and associated adverse publicity from product liability lawsuits. We cannot assure you that we can avoid product liability claims. We cannot be sure that our product liability insurance will be adequate to cover claims or that we will be able to get adequate insurance coverage in the future at acceptable costs. A successful product liability claim in excess of our coverage could require us to pay substantial sums. -9- Risks Related to the Notes Increased leverage may have an impact on our financial condition and results of operations. At June 30, 2000, we had approximately $51.0 million of consolidated indebtedness and other obligations effectively ranking senior to the notes. We may incur additional indebtedness in the future. Our level of indebtedness will have several important effects on our future operations, including, without limitation: o a portion of our cash flow from operations will be dedicated to the payment of any interest or amortization required by outstanding indebtedness; o outstanding indebtedness and leverage will increase our vulnerability to adverse changes in general economic and industry conditions, as well as to competitive pressure; and o depending on the levels of our outstanding debt, our ability to obtain additional financing for working capital, capital expenditures, general corporate and other purposes may be limited. Our ability to make payments of principal and interest on our indebtedness depends upon our future performance, which will be subject to general economic conditions, industry cycles and financial, business and other factors affecting our operations, many of which are beyond our control. Our business might not continue to generate cash flow at or above current levels. If we are unable to generate sufficient cash flow from operations in the future to service our debt, we may be required, among other things: o to seek additional financing in the debt or equity markets; o to refinance or restructure all or a portion of our indebtedness, including the notes; o to sell selected assets; or o to reduce or delay planned capital expenditures. These measures might not be sufficient to enable us to service our debt. In addition, any financing, refinancing or sale of assets might not be available on economically favorable terms. The notes are subordinated to our senior indebtedness and effectively subordinated to all liabilities of our subsidiaries. The notes are subordinated in right of payment to all of our existing and future senior indebtedness, and are structurally subordinated to all liabilities, including trade payables, of our subsidiaries. For purposes of the notes, senior indebtedness includes all of our indebtedness that is not, by its terms, equal or junior to the notes in priority of repayment. As of June 30, 2000, we had approximately, $51.0 million of consolidated indebtedness and other obligations ranking senior to the notes. The indenture governing the notes does not restrict our or our subsidiaries' incurrence of senior indebtedness or other debt. By reason of subordination, in the event of the insolvency, bankruptcy, liquidation, reorganization, dissolution or winding up of our business, our assets will be available to pay the amounts due on the notes only after all senior indebtedness has been paid in full, and, therefore, sufficient assets may not remain to pay amounts due on any of the notes then outstanding. Our ability to meet our cash obligations in the future will be dependent upon the ability of our subsidiaries to make cash distributions to us. Applicable law and contractual provisions, among other things, restrict and will continue to restrict the ability of our subsidiaries to make these distributions to us. The indenture governing the notes does not limit the ability of our subsidiaries to incur these restrictions and limitations in the future. -10- Our right to participate in the assets of our subsidiaries (and thus the ability of holders of the notes to benefit indirectly from those assets) is generally subject to the prior claims of the subsidiary's creditors, including its trade creditors, except to the extent that we are recognized as a creditor of the subsidiary, in which case our claim would still be subject to any security interest of the subsidiary's other creditors. The notes, therefore, are structurally subordinated to creditors, including trade creditors, of our subsidiaries with respect to the assets of the subsidiaries against which the creditors have a claim. We may not have the ability to raise the funds necessary to finance the "change in control" offer required by the indenture. If we undergo a "change in control" (as defined in the indenture), each holder of the notes may require us to repurchase all or a portion of the holder's notes. We cannot assure you that we will have sufficient funds available for any required repurchases of these securities if a change in control occurs. In addition, the terms of our outstanding debt may prohibit or limit our ability to repurchase the notes. If we fail to repurchase the notes in that circumstance, we will be in default under the indenture governing the notes. Absence of a public market for the notes could cause purchasers of the notes to be unable to resell them for an extended period of time. Although the notes trade through the PORTAL Market, there is not an established public trading market for the notes and we cannot assure you that an active public trading market for the notes will develop or, if one develops, how liquid it will be. We have no present intention of causing the notes to be listed for trading on any national securities exchange or Nasdaq stock market. If a public trading market for the notes does not develop or is not maintained, holders of the notes may experience difficulty in reselling, or an inability to sell, the notes. If a public trading market for the notes develops, it may be discontinued at any time. If a public trading market develops for the notes, future trading prices of the notes will depend on many factors, including, among other things, the price of our common stock into which the notes are convertible, prevailing interest rates, our operating results and financial condition and the market for similar securities. Depending on these and other factors, the notes may trade at a discount from their principal amount. USE OF PROCEEDS We will receive no proceeds from this offering. The selling security holders will receive the proceeds from this offering. RATIO OF EARNINGS TO FIXED CHARGES The table below contains our consolidated ratio of earnings to fixed charges for the periods indicated:
Three months ended Year ended December 31, March 31, 2000 1999 1998 1997 1996 1995 ----------------------- --------------------------------------- Ratio of earnings to fixed charges: 15.15x 15.31x 5.85x (10.53x) (9.65x) 15.46x
The ratio of earnings to fixed charges was computed by dividing earnings by fixed charges. For purposes of computing this ratio, "earnings" consist of net income (loss) before provision for income taxes and minority -11- interests minus fixed charges. "Fixed charges" consist of the sum of interest expense on indebtedness and interest within rental expense. SELLING SECURITY HOLDERS We originally issued the notes on May 12, 2000 and May 23, 2000 in transactions exempt from the registration requirements of the Securities Act of 1933 pursuant to Rule 144A. The following table sets forth information with respect to the selling security holders and the principal amounts of notes beneficially owned by each selling security holder that may be offered under this prospectus. The information is based on information provided by or on behalf of the selling security holders. None of the selling security holders nor any of their affiliates, officers, directors or principal entity holders has held any position or office or has had any material relationship with us within the past three years. The term "selling security holder" includes, without duplication, the holders listed below and their transferees, pledgees, donees or other successors. Information concerning the selling holders may change from time to time and any changed information will be set forth in supplements to this prospectus if and when necessary. The selling security holders may offer all, some or none of the notes or common stock into which the notes are convertible pursuant to this prospectus. Because the selling security holders may offer all or some portion of the notes or the common stock, no estimate can be given as to the amount of the notes or the common stock that will be held by the selling security holders upon termination of any sales. In addition, the selling security holders identified below may have sold, transferred or otherwise disposed of all or a portion of their notes since the date on which they provided the information regarding their notes in transactions exempt from the registration requirements of the Securities Act.
Principal Amount of Amount of Common Stock Notes Owned and Issuable Upon Conversion of the Selling Security Holders Offered Hereby (1)(2) Notes and Offered Hereby (1)(2) ------------------------ --------------------- ------------------------------- 1976 Distribution Trust FBO A.R. Lauder Zinterhofer $ 16,000 430 1976 Distribution Trust FBO Jane A Lauder $ 16,000 430 Occidental Petroleum Corporation $ 221,000 5,948 Arpeggio Fund L.P. $ 946,810 25,486 Bancroft Convertible Fund, Inc. $ 500,000 13,459 Boulder II Limited $ 6,300,000 169,583 BP Amoco Corporation Master Trust for Employee Pension Plans $ 5,150,000 138,627 British Virgin Island Social Security Board $ 33,000 888 California Public Employees' Retirement System $ 3,000,000 80,754 Chrysler Corporation Master Retirement Trust $ 3,790,000 102,019 City University of New York $ 81,000 2,180 Continental Assurance Company Separate Account (E) $ 4,300,000 115,747 Cova Bond Debenture Fund $ 750,000 20,188 Delta Air Lines Master Trust $ 1,425,000 38,358 Deutsch Bank Securities $ 2,800,000 75,370
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Deutsch Bank AG $ 237,000 6,379 Elf Aquitaine $ 200,000 5,383 Ellsworth Convertible Growth and Income Fund, Inc. $ 500,000 13,459 Employee Benefit Convertible Securities Fund $ 240,000 6,460 Fuji U.S. Income Open $ 1,500,000 40,377 Fundamental Investors, Inc. $ 15,000,000 403,770 Grady Hospital Foundation $ 124,000 3,337 Gryphon III Convertible $ 2,946,057 79,301 Independence Blue Cross $ 122,000 3,283 Investcorp SAM $ 3,668,993 98,761 Kentfield Trading, Ltd. $ 4,513,000 121,480 Local Initiatives Support Corporation $ 53,000 1,426 Lord Abbett Bond Debenture Fund $ 10,000,000 269,180 Merrill Lynch Insurance Group $ 297,000 7,994 Motion Picture Industry Health Plan- Retiree Member Fund $ 220,000 5,921 Motion Picture Industry Health Plan- Active Member Fund $ 440,000 11,843 Nations Convertible Securities Fund $ 3,760,000 101,211 New Orleans Firefighters Pension/Relief Fund $ 131,000 3,526 OCM Convertible Limited Partnership $ 170,000 4,576 OCM Convertible Trust $ 1,265,000 34,051 Ohio Bureau of Workers Compensation $ 153,000 4,118 Onex Industrial Partners Limited $ 2,650,000 71,332 Oxford, Lord Abbett & Co. $ 1,600,000 43,068 Partner Reinsurance Company Ltd. $ 755,000 20,323 Pebble Capital, Inc. $ 2,250,000 60,565 Rhapsody Fund L.P. $ 1,922,607 51,752 Sage Capital, QIB $ 2,000,000 53,836 Shell Pension Trust $ 174,000 4,683 Silvercreek Limited Partnership $ 5,050,000 135,935 Spear, Leeds & Kellogg $ 1,000,000 26,918 State Employees' Retirement Fund of the State of Delaware $ 1,920,000 51,682 State of Connecticut Combined Investment Funds $ 3,945,000 106,191 State of Maryland Retirement Agency $ 3,018,000 81,238
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The Grable Foundation $ 122,000 3,283 The Income Fund of America, Inc. $ 15,000,000 403,770 The Northwestern Mutual Life Insurance Company(3) $ 4,000,000 107,672 UBS Warburg LLC $ 22,160,000 596,502 Vanguard Convertible Securities Fund, Inc. $ 4,070,000 109,556 Wilmington Trust Co. $ 41,350,000 1,113,059 Zurich HFR Master Hedge Fund Index Ltd. $ 110,000 2,960
(1) Amounts indicated may be in excess of the total amount registered due to sales or transfers exempt from the registration requirements of the Securities Act since the date upon which selling holders provided to us the information regarding their notes. In addition, the conversion rate and therefore, the number of shares of common stock issuable upon conversion of the notes, is subject to adjustment under certain circumstances. Accordingly, the aggregate principal amount of notes and the number of shares of common stock into which the notes are convertible may increase or decrease. (2) Assumes that the selling security holders will sell all of the securities listed. We cannot be sure that the selling security holders will sell all or any of the securities offered in this offering. The amount of securities listed in the table represents an estimate of the amount of securities to be offered by each selling security holder. (3) Includes $250,000 principal amount of notes and the associated conversion shares over which investment and voting power is shared with The Northwestern Mutual Life Insurance Company Group Annuity Separate Account. PLAN OF DISTRIBUTION The notes and the common stock covered by this prospectus may be sold from time to time to purchasers directly by the selling security holders. Alternatively, the selling security holders may from time to time offer the securities through underwriters, broker-dealers or agents, who may receive compensation in the form of underwriting discounts, concessions or commissions from the undersigned and/or the purchasers of securities for whom they may act as agent. The selling security holders and any underwriters, broker-dealers or agents that participate in the distribution of the securities may be deemed to be "underwriters" within the meaning of the Securities Act and any profit on the sale of securities by them and any discounts, commissions, concessions or other compensation received by any such underwriter, broker-dealer or agent may be deemed to be underwriting discounts and commissions under the Securities Act. Because the selling security holders may be deemed to be "underwriters" within the meaning of the Securities Act, the selling security holders will be subject to the prospectus delivery requirements of the Securities Act. We have informed the selling security holders that the anti-manipulative provisions of Regulation M promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act") may apply to their sales in the market. The notes and the common stock covered by this prospectus may be sold from time to time in one or more transactions at fixed prices, at prevailing market prices at the time of sale, at varying prices determined at the time of sale or at negotiated prices. Such prices will be determined by the selling security holders or by agreement between the selling security holders and underwriters and dealers who may receive fees or commissions in connection therewith. The sale of the securities may be effected in transactions (which may involve crosses or block transactions): (a) on any national securities exchange or quotation service on which the notes or the common stock may be listed or quoted at the time of sale, (b) in the over-the-counter market; (c) in transactions other than on such exchanges or in the over-the-counter market; or (d) through the writing of options. At the time of a particular offering of securities by a selling security holder, a supplement to this prospectus, if required, will be distributed setting forth the aggregate amount and type of securities being offered and the terms of the offering, including the name or names of any underwriters, broker-dealers or agents, any discounts, commissions and other terms constituting compensation from the selling security holders and any discounts, commissions or concessions allowed or reallowed or paid to broker-dealers. -14- To comply with the securities laws of certain jurisdictions, if applicable, the securities will be offered or sold in such jurisdictions only through registered or licensed brokers or dealers. In addition, in certain jurisdictions the securities may not be offered or sold (unless they have been registered or qualified for sale) in such jurisdictions or an exemption from registration or qualification is available and is complied with. Pursuant to the registration rights agreement we entered into with the initial purchasers of the notes, we will pay all expenses of the registration of the notes and the common stock including, without limitation, SEC filing fees and expenses of compliance with state securities or "blue sky" laws and the reasonable fees and expenses of counsel to the selling security holders. The selling security holders are responsible for all underwriting discounts and selling commissions, if any. We and the selling security holders will indemnify each other against certain liabilities, including certain liabilities under the Securities Act, or will be entitled to contribution from the other in connection therewith. TRANSFER AGENT, REGISTRAR AND TRUSTEE The transfer agent and trustee for the notes is U.S. Bank Trust National Association at 180 East Fifth Street, St. Paul, Minnesota 55101. The transfer agent and registrar for the common stock is ChaseMellon Shareholder Services, LLC, 85 Challenger Road, Overpeck Centre, Ridgefield Park, New Jersey 07660. DESCRIPTION OF NOTES This prospectus describes certain general terms and provisions of the notes. The notes are issued under an indenture between us and U.S. Bank Trust National Association, as trustee. The following statements are subject to the detailed provisions of the indenture and are qualified in their entirety by reference to the indenture, a copy of which we have filed as an exhibit to the registration statement of which this prospectus is a part. Particular provisions of the indenture which are referred to in this prospectus are incorporated by reference as a part of the statements made, and the statements are qualified in their entirety by the reference. For purposes of this "Description of Notes" section, the terms "IVAX," "we," "us," "our," and "company" refer only to IVAX Corporation and not to any of our subsidiaries. General The notes represent our unsecured general obligations, subordinate in right of payment to certain of our other obligations and are convertible into common stock. We will pay interest on the notes semi-annually on May 15 and November 15 of each year at the rate of 5.5% per annum to the persons who are registered holders of notes at the close of business on the preceding May 1 and November 1, respectively. We will make the first payment to be made on November 15, 2000. Interest payments on the notes are subject to exceptions in the case of notes redeemed or repurchased upon a change in control between a record date and the next succeeding interest payment date. Unless previously redeemed, repurchased or converted, the notes will mature on May 15, 2007. The notes are limited to $250,000,000 total principal amount. We may pay principal, premium, if any, and interest by check and may mail an interest check to a holder's registered address. Holders must surrender notes to the paying agent to collect principal payments. The notes are issued without coupons in denominations of $1,000 and whole multiples of $1,000. A holder may transfer or exchange notes in accordance with the indenture. We will not impose any service charge for any registration of transfer, exchange or conversion of the notes, except for any tax or other governmental charges that may be imposed on any transfers, registration of transfers or exchanges. The registrar for the notes need not transfer or exchange any notes selected for redemption. We may treat the registered holder of a note as its owner for all purposes. -15- Initially, the trustee will act as registrar, paying agent and conversion agent. We may appoint an additional, or change any, paying agent, registrar or conversion agent without notice. We may act as registrar, paying agent and/or conversion agent. The indenture does not contain any financial covenants or any restrictions on the payment of dividends or on the repurchase of our securities. The indenture does not require us to maintain any sinking fund or other reserves for repayment of the notes. Conversion Holders of notes are entitled, at any time before the close of business on the date of maturity of the notes, subject to prior redemption or repurchase, to convert the notes, or portions of the notes (if the portions are $1,000 or whole multiples of $1,000) into 26.918 shares of common stock per $1,000 of principal amount of notes. This rate results in a conversion price of approximately $37.15 per share. Except as described below, the number of shares into which a note is convertible will not be adjusted for dividends on any common stock issued on conversion. We will not issue fractional shares of common stock upon conversion of notes and instead will deliver a check in lieu of the fractional share based upon the market value of the common stock on the last trading day prior to the conversion date. In the case of notes called for redemption, conversion rights will expire at the close of business on the date five business days prior to the redemption date, and in the event any holder exercises its repurchase right (as defined below), the holder's conversion right will terminate upon our receipt of the written notice of exercise of the repurchase right. In the case of notes called for redemption on a redemption date between a record date and the opening of business on the next succeeding interest payment date, no cash interest will be payable on any notes converted during the period between a record date and the opening of business on the next succeeding interest payment date. We are not obligated to pay interest on a note that is converted, unless the conversion takes place between a record date for the payment of interest and the next succeeding interest payment date, in which case we will pay interest on the interest payment date to the registered holder of the note on the record date. Accordingly, if a note is converted between a record date and the next succeeding interest payment date, the note must be accompanied by funds equal to the interest payable to the registered holder on the interest payment date on the principal amount being converted, unless the note has been called for redemption on a redemption date between the record date and the interest payment date or on the interest payment date. A note converted on an interest payment date need not be accompanied by any payment, and the interest on the principal amount of that note will be paid on the interest payment date to the registered holder of that note on the immediately preceding record date. The number of shares issuable on conversion is subject to adjustment in accordance with the indenture in a number of events, including: o the payment of dividends or distributions on the common stock in shares of capital stock; o subdivisions or combinations of the common stock into a greater or smaller number of shares; o a reclassification of the common stock resulting in an issuance of any shares of our capital stock; o the distribution of rights or warrants to all holders of common stock entitling them for a period of sixty days or less to purchase common stock at less than the market price at that time; and o the distribution to all holders of common stock of assets or debt securities or any rights or warrants to purchase assets or debt securities, which assets, debt securities, rights or warrants have a total fair market value on the date the distribution is declared that exceeds the "permitted dividend amount" described below. -16- The "permitted dividend amount" means: o 10% of our market capitalization (the product of the current market price of our common stock and the number of shares of our common stock outstanding as of any particular date) minus o the total value of all dividends or distributions made to holders of common stock within the 12 months preceding the distribution (excluding any distributions or dividends referred to in the first four bullet points in the preceding paragraph), except that for any distribution not paid out of our retained earnings, the permitted dividend amount shall be zero, unless the dividend is paid out of consolidated net income or in the form of common stock. The terms of the notes do not require any adjustment for rights to purchase common stock pursuant to any plans we have for reinvestment of dividends or interest, or for a change in the par value of the common stock. To the extent that notes become convertible into cash, no adjustment will be required thereafter as to cash. No adjustment in the number of shares issuable on conversion will be made unless the adjustment would require a change of at least 1% in the conversion ratio; however, any adjustment that would otherwise be required to be made shall be carried forward and taken into account in any subsequent adjustment. We reserve the right to make increases in the conversion rate in addition to those required in the preceding provisions as we in our discretion shall determine to be advisable in order that stock-related distributions hereafter made by us to our stockholders shall not be taxable or for any other appropriate reason. Except as stated above, the number of shares issuable on conversion will not be adjusted for the issuance of common stock or any securities convertible into or exchangeable for common stock, or carrying the right to purchase common stock or any securities convertible into or exchangeable for common stock. If we reclassify the common stock or merge into, or transfer or lease substantially all of our assets to, another corporation, the holders of the notes then outstanding will be entitled after the event to convert their notes into the kind and amount of shares of capital stock, other securities, cash or other assets which they would have owned immediately after the event had their notes been converted immediately before the effective date of the event. Adjustments in the number of shares issuable upon conversion may in certain circumstances result in constructive distributions that could be taxable as dividends under the Internal Revenue Code of 1986, as amended, to holders of notes or to holders of common stock issued upon conversion of the notes. Redemption Prior to May 29, 2003, the notes are not redeemable. Redemption at Our Option The notes will be redeemable at our option, in whole or in part, for a period of not less than 30 days nor more than 60 days, at any time on or after May 29, 2003 after the mailing of a redemption notice to each holder of notes to be redeemed at the holder's address appearing in the security register. The redemption price for the notes, expressed as a percentage of the principal amount to be redeemed, is as follows: Period Beginning Redemption Price ---------------- ---------------- May 29, 2003.................. 103.143% May 16, 2004.................. 102.357% May 16, 2005.................. 101.571% May 16, 2006.................. 100.786% We will also pay accrued interest to the redemption date. -17- No "sinking fund" is provided for the notes, and the indenture does not require us to redeem the notes prior to their stated maturity. Repurchase at Option of Holders upon Change in Control Upon any change in control (as defined below) of us, each holder of the notes shall have the right, at the holder's option, to require us to repurchase all or a portion of the holder's notes (in a minimum amount of $1,000 or any integral multiple of $1,000), on the date that is 45 days after the date of the notice from us (as described in the next paragraph) at a repurchase price equal to 100% of the principal amount of the holder's notes tendered for repurchase, plus accrued interest to the repurchase date. Within 30 days after the occurrence of a change in control, we will be obligated to mail to all holders of record of the notes a notice of the occurrence of a change in control and the repurchase right arising as a result of the change in control. We will deliver a copy of the company notice to the trustee and will cause a copy of the company notice to be published in The New York Times and The Wall Street Journal or another newspaper of national circulation. To exercise the repurchase right, a holder of notes must, on or before the 30th day after the date of the company notice, deliver an irrevocable written notice to us (or an agent designated by us for this purpose) and the trustee of the holder's exercise of its repurchase right together with the notes for which the repurchase right is being exercised, duly endorsed for transfer. A "change in control" means: o the acquisition by any person, entity or "group" within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act, (excluding, for this purpose, us or our subsidiaries, or any employee benefit plan of us or our subsidiaries which acquires beneficial ownership of voting securities of us or any current affiliate of us whose beneficial ownership does not in the future exceed 45% of our outstanding common stock) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of shares of common stock sufficient to elect a majority of directors; o persons who, as of the date of the indenture, constitute the board of directors (the "incumbent board") cease for any reason to constitute at least a majority of the board of directors, provided that any person becoming a director subsequent to the date of the indenture whose election, or nomination for election by our stockholders, was approved by a vote of at least a majority of the directors then comprising the incumbent board shall be considered as though the person were a member of the incumbent board; o approval by our stockholders of a reorganization, merger or consolidation, in each case, in which persons who were our stockholders immediately prior to the reorganization, merger or consolidation do not, immediately after the reorganization, merger or consolidation, beneficially own shares sufficient to elect a majority of directors of the reorganized, merged or consolidated company; or o our liquidation or dissolution (other than pursuant to the United States Bankruptcy Code) or the conveyance, transfer or leasing of all or substantially all of our assets to any person. No quantitative or other established meaning has been given to the phrase "all or substantially all" (which appears in the definition of change in control) by courts which have interpreted this phrase in various contexts. In interpreting this phrase, courts make a subjective determination as to the portion of assets conveyed, considering factors such as the value of assets conveyed and the proportion of an entity's income derived from the assets conveyed. To the extent the meaning of the phrase "all or substantially all" is uncertain, it may be uncertain whether -18- a change in control has occurred (and, accordingly, whether the holders of notes have the right to require us to repurchase their notes). The occurrence of a change in control might, under the terms of indebtedness incurred by us from time to time, permit the lenders to require prepayment of some or all amounts outstanding under our debt agreements. In the event of a change in control, any repurchase of the notes could, absent waiver or payment in full of any amounts outstanding under our indebtedness or credit facilities, be prevented. Our failure to repurchase the notes when required would result in an event of default of the notes whether or not the repurchase is permitted by our lenders. The right to require us to repurchase notes could delay or deter a change in control of us, whether or not the change in control were supported by the board of directors. If a change in control occurs, we cannot be sure that we will have sufficient funds or financing to repay any senior indebtedness then required to be repaid or to repurchase any or all notes then required to be repurchased under the indenture. If an offer is made to repurchase notes as a result of a change in control, we intend to comply with all tender offer rules, including but not limited to Section 13(e) and 14(e) under the Exchange Act and Rules 13e-1 and 14e-1 promulgated under the Exchange Act, to the extent applicable to the offer to repurchase notes as a result of a change in control. Subordination of Notes Upon any distribution to our creditors in a liquidation or dissolution of us or in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to us or our property, the payment of all amounts due on the notes (other than cash payments due upon conversion in lieu of fractional shares) will be subordinated, to the extent provided in the indenture, in right of payment to the prior payment in full of all senior indebtedness. We will not pay, directly or indirectly, any amount due on the notes (including any repurchase price pursuant to the exercise of the repurchase right), or acquire any of the notes, in the following circumstances: o if any default in payment of principal, premium, if any, or interest on senior indebtedness (as defined below) exists, unless and until the default has been cured or waived or has ceased to exist; o if any default, other than a default in payment of principal, premium, if any, or interest, has occurred with senior indebtedness, and that default permits the holders of the senior indebtedness to accelerate its maturity, until the expiration of the "payment blockage period" described below unless and until the default has been cured or waived or has ceased to exist; or o if the maturity of senior indebtedness has been accelerated, until the senior indebtedness has been paid or the acceleration has been cured or waived. A "payment blockage period" is a period of 183 days that begins on the date that we receive a written notice from any holder of senior indebtedness or a holder's representative, or from a trustee under an indenture under which senior indebtedness has been issued, that an event of default of and as defined under any senior indebtedness (other than default in payment of the principal of, or premium, if any, or interest on any senior indebtedness), which event of default permits the holders of the senior indebtedness to accelerate its maturity, has occurred and is continuing. However, if the maturity of the senior indebtedness is accelerated, no payment may be made on the notes until the senior indebtedness that has matured has been paid or the acceleration has been cured or waived. Senior indebtedness is defined in the indenture as all indebtedness (as defined below) of us outstanding at any time except indebtedness that by its terms is subordinate in right of payment to the notes or indebtedness that is -19- not otherwise senior in right of payment to the notes. Senior indebtedness does not include our indebtedness to any of our subsidiaries. Indebtedness is defined with respect to any person as the principal of, and premium, if any, and interest on: o all indebtedness of the person for borrowed money (including all indebtedness evidenced by notes, bonds, debentures or other securities sold by the person for money); o all obligations incurred by the person in the acquisition (whether by way of purchase, merger, consolidation or otherwise and whether by the person or another person) of any business, real property or other assets (except inventory and related items acquired in the ordinary course of the conduct of the acquiror's usual business); o guarantees by the person of indebtedness described in the first two bullet points of this paragraph of another person; o all renewals, extensions, refundings, deferrals, restructurings, amendments and modifications of the indebtedness, obligation or guarantee; o all reimbursement obligations of the person for letters of credit, bankers' acceptances or similar facilities issued for the account of the person; o all capital lease obligations of the person; and o all net obligations of the person under interest rate swap or similar agreements of the person. No restrictions exist in the indenture upon the creation of additional senior indebtedness by us, or on the creation of any indebtedness by us or any of our subsidiaries. As of June 30, 2000 we had approximately $51.0 million of consolidated indebtedness and other obligations effectively ranking senior to the notes. By reason of the subordination provisions described above, in the event of insolvency, funds which would otherwise be payable to note holders will be paid to the holders of senior indebtedness to the extent necessary to pay senior indebtedness in full. As a result of these payments, our general creditors may recover proportionately less than holders of senior indebtedness and the general creditors may recover proportionately more than holders of notes or our other subordinated indebtedness. Prohibition on Layering The indenture provides that we will not incur, create, issue, guarantee or otherwise become liable for any indebtedness that is both: o subordinate or junior in right of payment to any senior indebtedness; and o senior in any respect in right of payment to the notes. Merger or Consolidation The indenture does not permit us to consolidate with, or merge into, or transfer or lease all or substantially all of our assets to, another person unless the other person is a corporation, limited liability company or other entity organized under the laws of the United States, any state of the United States or the District of Columbia and the -20- person assumes by supplemental indenture all of our obligations under the notes and the indenture, and immediately after giving effect to the transaction, no default shall exist. Defaults and Remedies An event of default includes the occurrence of any of the following: o default for 30 days in payment of interest or liquidated damages on the notes; o default in payment of principal at maturity, upon redemption or exercise of a repurchase right or otherwise; o our failure for 60 days after notice to us to comply with any of our other agreements in the indenture or the notes; and o certain events of bankruptcy or insolvency. If an event of default occurs and is continuing, the trustee or the holders of at least 25% in principal amount of the notes may declare all the notes to be due and payable immediately, except for defaults due to certain events of bankruptcy or insolvency in which case if an event of default occurs and is continuing, the total principal amount on the date of notice of acceleration shall automatically become immediately due and payable. The trustee may require indemnity satisfactory to it before it enforces the indenture or the notes. Subject to certain limitations, holders of a majority in principal amount of the notes may direct the trustee in its exercise of any trust power. The trustee may withhold from note holders notice of any default (except a default in payment of amounts due) if it determines that withholding notice is in their interests. We are required to file with the trustee annually an officers' statement as to the absence of defaults in fulfilling any of our obligations under the indenture. Modifications of the Indenture We and the trustee may amend the indenture without notice to any note holder but with the written consent of the holders of a majority in principal amount of the outstanding notes. However, without the consent of each note holder affected, an amendment may not: o reduce the amount of notes whose holders must consent to an amendment; o reduce the rate or change the time for payment of interest on any note; o reduce the principal of or change the fixed maturity of any note (including, without limitation, the optional redemption provisions or the repurchase right); o make any note payable in money other than that stated in the note; o change the provisions of the indenture regarding the right of a majority of the note holders to waive defaults under the indenture or impair the right of a majority of the note holders to waive defaults under the indenture or impair the right of any note holder to institute suit for the enforcement of any payment of principal and interest on the notes on and after their respective due dates; or o make any change that adversely affects the rights to convert any note. -21- Additionally, with the consent of the trustee but without the consent of the holders of notes, we may amend or supplement the indenture to cure any ambiguity, omission, defect or inconsistency, to reflect any merger, consolidation or other transaction in which a supplemental indenture would be required, to provide for certificated as well as uncertificated notes or to make any change that does not adversely effect the rights of any holder. Satisfaction and Discharge of Indenture The indenture will be discharged and canceled upon the satisfaction of certain conditions, including the payment of all the notes or the deposit with the trustee of funds sufficient for the payment or redemption within not more than six months prior to the maturity of the notes or within one year of redemption of all of the notes. Reports to Holder of Notes We will regularly furnish to each holder of notes copies of the annual report of stockholders, containing audited financial statements, and any other financial reports which we furnish to our stockholders. Trustee and Transfer Agent The trustee and transfer agent for the notes is U.S. Bank Trust National Association. Listing The notes are listed on the PORTAL Market. The common stock is listed on the American Stock Exchange under the symbol "IVX." Book Entry Delivery and Form Upon the initial sale of notes offered hereby, each selling security holder will be required to deliver a notice of the sale to the trustee and to us. The notice will, among other things, identify the sale as a transfer pursuant to the registration statement of which this prospectus forms a part, certify that the prospectus delivery requirements, if any, of the Securities Act have been satisfied, and certify that the selling security holder and the aggregate principal amount of notes owned by such holder are identified in the prospectus in accordance with the applicable rules and regulations under the Securities Act. Upon the initial transfer pursuant to the registration statement of which this prospectus forms a part, the notes will be issued by on or more global notes in fully registered form, without coupons in denominations of $1,000 principal amount and integral multiples thereof. Each global note will be deposited with, on or on behalf of the Depository Trust Company and registered in the name Cede & Co., as DTC's nominee. Except as set forth below, record ownership of the global note may be transferred, in whole or in part, only to another nominee of DTC or to a successor of DTC or its nominee. Ownership of beneficial interests in the global note will be limited to persons that have accounts with DTC ("participants") or persons that may hold interests through participants. Ownership of beneficial interests by participants in the global note will be shown on, and the transfer of that ownership interest will be effected only through, records maintained by the depository for the global note. Ownership of beneficial interests in the global note by persons that hold through participants will be shown on, and the transfer of that ownership interest through the participant will be effected only through, records maintained by the participant. These requirements and procedures may impair the ability to transfer beneficial interests in the global note. Payment of all amounts due on notes represented by the global note will be made to DTC or its nominee, as the case may be, as the sole holder of the notes represented thereby for all purposes under the indenture. None of -22- us, the trustee, any agent of ours or the trustee or the initial purchasers will have any responsibility or liability for any aspect of DTC's records relating to or payments made on account of beneficial ownership interests in the global note or for maintaining, supervising or reviewing any of DTC's records relating to the beneficial ownership interests. We have been advised by DTC that, upon receipt of any payment on the global note, DTC will immediately credit, on its book-entry registration and transfer system, the accounts of participants with payments in amounts proportionate to their respective beneficial interests in the principal amount of the global note as shown on the records of DTC. Payments by participants to owners of beneficial interests in the global note held through the participants will be governed by standing instructions and customary practices as is now the case with securities held for customer accounts registered in "street name," and will be the sole responsibility of the participants. The global note may not be transferred except as a whole by DTC to a nominee of DTC or by a nominee of DTC to DTC or another nominee of DTC or by DTC or any nominee to a successor of DTC or a nominee of the successor. If DTC is at any time unwilling or unable to continue as depository and a successor depository is not appointed by us or DTC within 90 days, we will issue notes in definitive form in exchange for the global note. In either instance, an owner of a beneficial interest in the global note will be entitled to have notes equal in principal amount to the beneficial interest registered in its name and will be entitled to physical delivery of the notes in definitive form. Notes so issued in definitive form will be issued in denominations of $1,000 and integral multiples of $1,000 and will be issued in registered form only, without coupons. Amounts due on the notes will be payable, and the notes may be presented for registration of transfer or exchange, at the offices of the trustee. So long as DTC for a global security, or its nominee, is the registered owner of the global note, DTC or the nominee, as the case may be, will be considered the sole holder of the notes represented by the global note for the purposes of receiving payment on the notes, receiving notices and for all other purposes under the indenture and the notes. Beneficial interests in notes will be evidenced only by, and transfers of beneficial interests in the notes will be effected only through, records maintained by DTC and its participants. Cede & Co. has been appointed as the nominee of the depository. Except as provided above, owners of beneficial interests in the global note will not be entitled to and will not be considered the holders of beneficial interests in the global note for any purposes under the indenture. Accordingly, any person owning a beneficial interest in the global note must rely on the procedures of DTC, and, if any person is not a participant, on the procedures of the participant through which the person owns its interest, to exercise any rights of a holder under the indenture. The indenture provides that DTC may grant proxies and otherwise authorize participants to give or to take any request, demand, authorization, direction, notice, consent, waiver or other action which a holder is entitled to give or take under the indenture. We understand that under existing industry practices, in the event that we request any action of holders or that an owner of a beneficial interest in the global note desires to give or take any action which a holder is entitled to give or take under the indenture, DTC would authorize the participants holding the relevant beneficial interest to give or take the action and the participants would authorize beneficial owners owning through the participants to give or take the action or would otherwise act upon the instructions of beneficial owners owning through them. DTC has advised us that it is a limited-purpose trust company organized under the laws of the State of New York, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered under the Exchange Act. DTC was created to hold the securities of its participants and to facilitate the clearance and settlement of securities transactions among its participants in the securities through electronic book-entry changes in accounts of the participants, consequently eliminating the need for physical movement of securities certificates. DTC's participants include securities brokers and dealers (including the initial purchasers), banks, trust companies, clearing corporations and certain other organizations, some of whom (and/or their representatives) own DTC. Access to DTC's book-entry system is also available to others, such as banks, brokers, dealers and trust companies, that clear through or maintain a custodial relationship with a participant, either directly or indirectly. -23- Beneficial interests in the global note may be exchanged for beneficial interests in any other global security only in connection with a transfer of such interest. These transfers are subject to compliance with customary certification requirements which are described in the indenture. Any beneficial interest in the global note that is exchanged for an interest in any other global security will cease to be an interest in the global note and will become an interest in the other global security. Accordingly, the interest will after the exchange be subject to all transfer restrictions and other procedures applicable to beneficial interests in the other global security for as long as it remains such an interest. Any exchange of a beneficial interest in the global note for a beneficial interest in any other global security will be effected by the depository by means of an instruction originated by the trustee through DTC's Deposit/Withdraw at Custodian system. Accordingly, for any such exchange, appropriate adjustments will be made in the records of the registrar to reflect a decrease in the principal amount of the global note and a corresponding increase in the principal amount of the other global security. Payments of Principal and Interest The indenture requires that all payments in respect of the notes held of record by the Depository Trust Company, or DTC, (including notes evidenced by the global securities) be made in same day funds. Payments in respect of the notes held of record by holders other than DTC may, at our option, be made by check and mailed to the holders of record as shown on the register for the notes. Registration Rights; Liquidated Damages We and the initial purchasers of the notes entered into a Registration Rights Agreement. Pursuant to the Registration Rights Agreement, we agreed to file the registration statement of which this prospectus forms a part with the SEC and to use our best efforts to cause it to be declared effective by the SEC. Notwithstanding the foregoing, we will be permitted to prohibit offers and sales of the notes and common stock pursuant to this prospectus under certain circumstances and subject to certain conditions (any period during which offers and sales are prohibited being referred to as a "Suspension Period"). We must only maintain the effectiveness of the registration statement until the earlier of (x) the date on which such note or underlying share of common stock has been effectively registered under the Securities Act of 1933 and disposed of, whether or not in accordance with the shelf registration statement, and (y) the date which is two years after the later of May 11, 2000 and the last date that we or any of our affiliates was the owner of such notes (or any predecessor thereto) or such shorter period of time as permitted by Rule 144(k) under the Securities Act or any successor provision thereunder. If the registration statement ceases to be effective (without being succeeded immediately by an additional registration statement filed and declared effective) or usable for the offer and sale of transfer restricted securities for a period of time (including any suspension period) which shall exceed 60 days in the aggregate in any 12-month period, we will pay liquidated damages to each selling security holder. The amount of liquidated damages payable during any period during which a registration default shall have occurred and be continuing is that amount which is equal to one-quarter of one percent (25 basis points) per annum per $1,000 principal amount and, if applicable, on an equivalent basis per share of common stock (subject to adjustment in the event of stock splits, stock recombinations, stock dividends and the like) constituting transfer restricted securities for each 90-day period until the registration statement again becomes effective or usable up to a maximum amount of liquidated damages of three-quarters of one percent (75 basis points) per annum per $1,000 principal amount of notes and, if applicable, on an equivalent basis per share of common stock (subject to adjustment as set forth above) constituting transfer restricted securities. All accrued liquidated damages shall be paid to record holders entitled thereto by wire transfer of immediately available funds or by federal funds check by us on each date on which interest is payable on the notes or, if no notes are outstanding, as provided in the Registration Rights Agreement. Following the cure of all registration defaults, liquidated damages will cease to accrue with respect to that registration default. -24- We shall use our best efforts to cause the shelf registration statement to be effective for a period of two years from the effective date thereof or such shorter period that will terminate when each of the transfer restricted securities covered by the shelf registration statement ceases to be a transfer restricted security. Governing Law The indenture and, except as may otherwise be required by mandatory provisions of law, notes will be governed by and construed in accordance with the laws of the State of New York, without giving effect to its conflicts of laws principles. DESCRIPTION OF COMMON STOCK We have the authority to issue 350,000,000 shares of common stock, par value $0.10 per share. The holders of common stock are entitled to one vote per share on all matters submitted to a vote of the shareholders. The holders of common stock have equal, ratable rights to dividends from funds legally available for dividends, when, as and if declared by the board of directors, and are entitled to share ratably in all of the assets available for distribution to holders of common stock upon the liquidation, dissolution or winding-up of our affairs. Holders of common stock do not have preemptive, subscription or conversion rights. Our articles of incorporation do not include any redemption or sinking fund provisions. The outstanding shares of common stock are fully paid and nonassessable. Our articles of incorporation do not provide for cumulative voting by shareholders. Our common stock is listed on the American Stock Exchange under the trading symbol "IVX." DESCRIPTION OF COMMON STOCK PURCHASE RIGHTS On December 19, 1997, our board of directors declared a dividend of one common stock purchase right for each outstanding share of common stock. The dividend was payable as of December 29, 1997 to shareholders of record on that date. Each common stock purchase right entitles the registered holder to purchase from us one-half (1/2) of a share of common stock at a price of $15 per one-half (1/2) of a share (the "Exercise Price"), subject to certain adjustments. The description and terms of the common stock purchase rights are described and defined in that certain Rights Agreement (the "Rights Agreement") between us and the rights agent named in the Rights Agreement. The common stock purchase rights are not exercisable and are not certificated until the distribution date. Until that time the common stock purchase rights will automatically trade with the common stock. The common stock purchase rights will expire at the close of business on December 18, 2007, unless earlier redeemed by us. The number of shares of common stock issuable upon exercise of the common stock purchase rights is subject to certain adjustments from time to time in the event of a stock dividend on, or a subdivision or combination of, the common stock. The Exercise Price for the common stock purchase rights is subject to adjustment in the event of extraordinary distributions of cash or other property to holders of common stock. Until a common stock purchase right is exercised, the holder of a common stock purchase right will have no rights as a shareholder, including, without limitation, the right to vote or to receive dividends. Distribution Date Unless earlier redeemed by our board of directors, the common stock purchase rights become exercisable upon the close of business on the distribution date which is the earlier of: o the tenth day following a public announcement that a person or group of affiliated or associated persons, with certain exceptions, has acquired beneficial ownership of 15% or more of our outstanding voting stock (an "Acquiring Person") and -25- o the tenth business day (or a later date as may be determined by our board of directors) after the date of the commencement or announcement of a person's or group's intention to commence a tender or exchange offer, the completion of which would result in the ownership of 15% or more of our outstanding voting stock. Effect of Triggering Event Unless the common stock purchase rights are earlier redeemed, in the event that, after the time that a person becomes an Acquiring Person, we were to be acquired in a merger or other business combination (in which any shares of common stock are changed into or exchanged for other securities or assets) or more than 50% of our and our subsidiaries' (taken as a whole) assets or earning power were to be sold or transferred in one or a series of related transactions, the Rights Agreement provides that proper provision will be made so that each holder of record of a common stock purchase right will from and after such date have the right to receive, upon payment of the Exercise Price, that number of shares of common stock of the acquiring company having a market value at the time of the transaction equal to two times the Exercise Price. In addition, unless the common stock purchase rights are earlier redeemed, if a person or group (with certain exceptions) becomes the beneficial owner of 15% or more of our voting stock, the Rights Agreement provides that proper provision will be made so that each holder of record of a common stock purchase right, other than the Acquiring Person (whose common stock purchase rights will upon the event become null and void), will after the event have the right to receive, upon payment of the Exercise Price, that number of shares of common stock having a market value at the time of the transaction equal to two times the Exercise Price. The Rights Agreement also grants our board of directors the option, after any person or group acquires beneficial ownership of 15% or more of the voting stock but before there has been a 50% acquisition, to exchange one share of common stock for each then valid common stock purchase right (which would exclude common stock purchase rights held by the Acquiring Person that have become void). Redemption At any time on or prior to the close of business on the tenth day after the time that a person has become an Acquiring Person (or a later date as a majority of our board of directors may determine), we may redeem the common stock purchase rights in whole, but not in part, at a price of $.01 per common stock purchase right (the "Redemption Price"). Immediately upon the effective time of the action of our board of directors authorizing redemption of the common stock purchase rights, the right to exercise the common stock purchase rights will terminate and the only right of the holders of the common stock purchase rights will be to receive the Redemption Price. Amendment For as long as the common stock purchase rights are redeemable, we may, except for the Redemption Price or date of expiration of the common stock purchase rights, amend the common stock purchase rights in any manner, including an amendment to extend the time period in which the common stock purchase rights may be redeemed. At any time when the common stock purchase rights are not redeemable, we may amend the common stock purchase rights in any manner that does not materially adversely affect the interests of holders of the common stock purchase rights as holders of the common stock purchase rights. Certain Effects of the Rights The common stock purchase rights have certain anti-takeover effects. If not redeemed, the common stock purchase rights will cause substantial dilution to a person or group who attempts to acquire us on terms not approved by our board of directors. The common stock purchase rights should not interfere with any merger or other business combination approved by our board of directors because we may redeem them at $.01 per common stock purchase right at any time until the close of business on the tenth day (or a later date as described above) after a person or group has obtained beneficial ownership of 15% or more of our voting stock. -26- CERTAIN PROVISIONS OF OUR ARTICLES OF INCORPORATION AND BYLAWS AND FLORIDA LAW We are subject to several anti-takeover provisions under Florida law that apply to a public corporation organized under Florida law, unless the corporation has elected to opt out of these provisions in its articles of incorporation or bylaws. We have not elected to opt out of these provisions. Accordingly, the common stock is subject to the "affiliated transactions" and "control-share acquisition" provisions of the Florida Business Corporation Act. These provisions require, subject to certain exceptions, that an "affiliated transaction" be approved by the holders of two-thirds of the voting shares other than those beneficially owned by an "interested shareholder" or by a majority of disinterested directors and that voting rights be conferred on "control shares" acquired in specified control share acquisitions generally only to the extent conferred by resolution approved by the shareholders, excluding holders of shares defined as "interested shares." Florida law presently limits the personal liability of a corporate director for monetary damages, except where the director: o breaches his or her fiduciary duties and o the breach constitutes or includes certain unlawful distributions or certain other reckless, wanton or willful acts or misconduct. Our bylaws provide an advance notice provision pursuant to which nominations for election to the board of directors at a meeting of the shareholders and business to be brought before an annual meeting of the shareholders by shareholders must be given by written notice to the corporate secretary, subject to certain exceptions, not less than 60 days and not more than 90 days prior to the date of the meeting. Certain United States Federal Income Tax Considerations The following is a summary of certain material United States federal income and estate tax considerations relating to the purchase, ownership and disposition of the Notes and of Common Stock into which Notes may be converted, but does not purport to be a complete analysis of all the potential tax considerations relating thereto. This summary is based on the provisions of the Internal Revenue Code of 1986, as amended (the "Code"), the applicable Treasury Regulations promulgated thereunder ("Treasury Regulations"), judicial authority and current administrative rulings and practice, all of which are subject to change, possibly on a retroactive basis. This summary deals only with holders that purchase Notes at their original issuance at their issue price. This summary also deals only with holders that will hold Notes and Common Stock into which Notes may be converted as "capital assets" (within the meaning of Section 1221 of the Code). This summary does not purport to deal with all aspects of United States federal income or estate taxation that might be relevant to particular holders in light of their personal investment circumstances or status, nor does it address tax considerations applicable to investors that may be subject to special tax rules, such as certain financial institutions, tax-exempt organizations, S Corporations, insurance companies, broker-dealers, dealers or traders in securities or currencies, expatriates subject to Code Section 877 and taxpayers subject to the alternative minimum tax, and also does not discuss Notes held as part of a hedge, straddle, "synthetic security" or other integrated investment composed of a Note and one or more other investments, or situations in which the functional currency of the holder is not the United States dollar. Moreover, the effect of any applicable state, local or foreign tax laws is not discussed. The Company has not sought any ruling from the Internal Revenue Service (the "Service") with respect to the statements made and the conclusions reached in the following summary, and there can be no assurance that the Service will agree with such statements and conclusions. THE FOLLOWING DISCUSSION IS FOR GENERAL INFORMATION ONLY. INVESTORS CONSIDERING THE PURCHASE OF NOTES SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE APPLICATION OF THE UNITED STATES FEDERAL INCOME AND ESTATE TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES ARISING UNDER THE LAWS OF ANY STATE, LOCAL OR FOREIGN TAXING JURISDICTION OR UNDER ANY APPLICABLE TAX TREATY. The term "United States Holder" means a holder of a Note that is, for United States federal income tax purposes, (A) a citizen or resident of the United States, (B) a corporation created or organized under the laws of the United States or of any political subdivision thereof, (C) an estate, the income of which is subject to United States federal income taxation regardless of source, or (D) a trust, if (x) a court within the United States is able to exercise primary jurisdiction over its administration and one or more United States persons have the authority to control all of its substantial decisions, or (y), in the case of a trust that was treated as a domestic trust under the law in effect before 1997, a valid election is in place under applicable United States Treasury Regulations to treat such trust as a domestic trust. The term "Non-United States Holder" means a holder of a Note that is neither a United States Holder nor a partnership for United States federal income tax purposes. -27- A partnership for United States federal income tax purposes is not subject to the income tax on income derived from holding the Notes. A partner of the partnership may be subject to tax on such income pursuant to rules similar to the rules for United States Holders or Non-United States Holders depending on whether (i) the partnership is a United States or a non-United States partnership, (ii) the partner is a United States or a non-United States person, and (iii) the partnership is or is not engaged in a United States trade or business to which income or gain from the Notes is effectively connected. United States Holders Payment of Interest Interest on a Note generally will be includable in the income of a United States Holder as ordinary income at the time such interest is received or accrued, in accordance with such United States Holder's method of accounting for United States federal income tax purposes. Market Discount and Acquisition Premium A United States Holder (other than a United States Holder who purchased the notes upon original issuance) may be considered to have acquired its notes with "market discount" or "acquisition premium" as such phrases are defined for United States federal income tax purposes. In this event, you are advised to consult your tax advisors as to the income tax consequences of the acquisition, ownership and disposition of the notes. The gain on the disposition of a debt obligation acquired subsequent to its original issuance at a market discount generally is treated as ordinary income, not capital gain, to the extent of the "accrued market discount" as that term is defined below. This rule is not applicable if the market discount at the time of acquisition of the debt obligation is de minimis (less than 0.25 percent of the stated redemption price of the note multiplied by the number of complete years remaining to maturity). In the case of the notes, market discount would generally be the excess of: o the issue price of the notes over o the current holder's initial basis in the note. The accrued market discount would be the amount calculated by multiplying the market discount by a fraction: o the numerator of which is the number of days the note has been held by the holder, and o the denominator of which is the number of days after the holder's acquisition of the note up to and including the maturity date. If you have acquired note with "acquisition premium," i.e. at a price in excess of its face amount, this premium is generally amortizable by offsetting interest income, at your election, over the remaining term of the trust preferred security. Sale, Exchange or Redemption of the Notes Upon the sale, exchange or redemption of a Note, a United States Holder generally will recognize capital gain or loss equal to the difference between (i) the amount of cash proceeds and the fair market value of any property received on the sale, exchange or redemption (except to the extent such amount is attributable to accrued and unpaid interest, which is treated as interest subject to the rules discussed above under "Payment of Interest") and (ii) such holder's adjusted tax basis in the Note. A United States Holder's adjusted tax basis in a Note generally will equal the cost of the Note to such holder. Such capital gain or loss will be long-term capital gain or loss if the United States Holder's holding period in the Note is more than one year at the time of sale, exchange or redemption. Conversion of the Notes A United States Holder generally will not recognize any income, gain or loss upon conversion of a Note into Common Stock, except with respect to cash received in lieu of a fractional share of Common Stock. Such holder's tax basis in the Common Stock received on conversion of a Note will be the same as such holder's adjusted tax basis in the Note at the time of conversion (reduced by any basis allocable to a fractional share interest), and the holding period for the Common Stock received on conversion will generally include the holding period of the Note converted. Cash received in lieu of a fractional share of Common Stock upon conversion should be treated as a payment in exchange for the fractional share of Common Stock. Accordingly, the receipt of cash in lieu of a fractional share of Common Stock generally should result in capital gain or loss (measured by the difference between the cash received for the fractional share and the United States Holder's adjusted tax basis in the fractional share). Dividends on the Common Stock The amount of any distribution by the Company in respect of the Common Stock (including any liquidated damages in respect of Common Stock as described above under "Description of Notes--Registration Rights") will be equal to the amount of cash and the fair market value, on the date of distribution, of any property distributed. Generally, distributions will be treated as a dividend, subject to tax as ordinary income, to the extent of our current or accumulated earnings and profits, then as a tax-free return of capital to the extent of the holder's tax basis in the Common Stock, and thereafter as capital gain from the sale or exchange of such stock, long-term or short-term depending on whether the holder's holding period exceeds one year. In general, a dividend distribution to a corporate United States Holder will qualify for the 70% dividends received deduction if the holder owns less than 20% of the voting power and value of our stock (other than any non-voting, non-convertible, non-participating preferred stock). A corporate United States Holder that owns 20% or more of the voting power and value of our stock (other than any non-voting, nonconvertible, non-participating preferred stock) generally will qualify for an 80% dividends received deduction. The dividends received deduction is subject, however, to certain holding period, taxable income and other limitations. If at any time (i) we make a distribution of cash or property to our stockholders or purchase Common Stock and such distribution or purchase would be taxable to such stockholders as a dividend -28- for United States federal income tax purposes (e.g., distributions of evidences of indebtedness or assets of ours, but generally not stock dividends or rights to subscribe for Common Stock) and, pursuant to the antidilution provisions of the indenture, the conversion price of the Notes is decreased, or (ii) the conversion price of the Notes is decreased at our discretion, such decrease in conversion price may be deemed to be the payment of a taxable dividend to United States Holders of Notes (pursuant to Section 305 of the Code) to the extent of our current or accumulated earnings and profits. Such holders of Notes could therefore have taxable income as a result of an event pursuant to which they received no cash or property. Sale of Common Stock Upon the sale or exchange of Common Stock, a United States Holder generally will recognize capital gain or loss equal to the difference between (i) the amount of cash and the fair market value of any property received upon the sale or exchange and (ii) such holder's adjusted tax basis in the Common Stock. Such capital gain or loss will be long-term if the United States Holder's holding period in the Common Stock is more than one year at the time of the sale or exchange. A United States Holder's basis and holding period in Common Stock received upon conversion of a Note are determined as discussed above under "United States Holders--Conversion of the Notes." Information Reporting and Backup Withholding Tax In general, certain information is required to be reported by a payor to the Service with respect to payments of principal, premium, if any, and interest on a Note (including the payment of liquidated damages under the Registration Rights Agreement), payments of dividends on Common Stock, payments of the proceeds of the sale of a Note and payments of the proceeds of the sale of Common Stock to certain noncorporate United States Holders. The payor will be required to withhold backup withholding tax at the rate of 31% if (a) the payee fails to furnish a taxpayer identification number to the payor or establish an exemption from backup withholding, (b) the Service notifies the payor that the taxpayer identification number furnished by the payee is incorrect, (c) there has been a notified payee underreporting with respect to interest or dividends described in Section 3406(c) of the Code or (d) there has been a failure of the payee to certify under the penalty of perjury that the payee is not subject to backup withholding under the Code. Any amounts withheld under the backup withholding rules from a payment to a United States Holder will be allowed as a credit against such holder's United States federal income tax liability and may entitle the holder to a refund, provided that the required information is furnished to the Service. Non-United States Holders Payment of Interest Generally, interest income of a Non-United States Holder that is not effectively connected with a United States trade or business is subject to a withholding tax at a 30% rate (or, if applicable, a lower treaty rate). However, interest paid on a Note by us or any paying agent to a Non-United States Holder will qualify for the "portfolio interest exemption" (provided we are not a "USRPHC" as defined below under "Non-United States Holders--FIRPTA Treatment of Non-United States Holders") and therefore, subject to the discussion of backup withholding below, will not be subject to United States federal income tax or withholding tax, provided that such interest income is not effectively connected with a United States trade or business of the Non-United States Holder and provided that the Non-United States Holder (i) does not actually or constructively own (pursuant to the conversion feature of the Notes or otherwise) 10% or more of the combined voting power of all classes of our stock entitled to vote, (ii) is not a controlled foreign corporation related to us actually or constructively through stock ownership, (iii) is not a bank which acquired the Notes in consideration for an extension of credit made pursuant to a loan agreement entered into in the ordinary course of business and (iv) either (a) provides a Form W-8 (or a suitable substitute or successor form) signed under penalties of perjury that includes its name and address and certifies as to -29- its Non-United States status in compliance with applicable law and regulations, or (b) is a securities clearing organization, bank or other financial institution that holds customers' securities (including the Note) in the ordinary course of its trade or business and provides a statement to us or our agent under penalties of perjury in which it certifies that such a Form W-8 (or a suitable substitute or successor form) has been received by it from the Non-United States Holder or qualifying intermediary and furnishes us or our agent with a copy thereof. Treasury Regulations that become effective January 1, 2001 provide alternative methods for satisfying the certification requirement described in clause (iv) above. These Treasury Regulations also will require, in the case of Notes held by a foreign partnership, that (i) the certification described in clause (iv) above be provided by the partners rather than by the foreign partnership (unless the foreign partnership agrees to become a "withholding foreign partnership") and (ii) the partnership provide certain information, including a United States taxpayer identification number. A look-through rule will apply in the case of tiered partnerships. Except to the extent that an applicable treaty otherwise provides, a Non-United States Holder generally will be taxed in the same manner as a United States Holder with respect to interest if the interest income is effectively connected with a United States trade or business of the Non-United States Holder. Effectively connected interest received by a corporate Non-United States Holder may also, under certain circumstances, be subject to an additional "branch profits tax" at a 30% rate (or, if applicable, a lower treaty rate). Even though such effectively connected interest is subject to income tax, and may be subject to the branch profits tax, it is not subject to withholding tax if the holder delivers a properly executed Internal Revenue Service Form W-8ECI (or applicable successor form) to the payor. Sale, Exchange or Redemption of the Notes Subject to the discussion below under "FIRPTA Treatment of Non-United States Holders," a Non-United States Holder of a Note will generally not be subject to United States federal income tax or withholding tax on any gain realized on the sale, exchange or redemption of the Note (including the receipt of cash in lieu of fractional shares upon conversion of a Note into Common Stock but not including any amount representing interest or accrued market discount) unless (i) the gain is effectively connected with a United States trade or business of the Non-United States Holder or (ii) in the case of a Non-United States Holder who is an individual, such holder is present in the United States for a period or periods aggregating 183 days or more during the taxable year of the disposition and certain other requirements are met. Conversion of the Notes In general, no United States federal income tax or withholding tax will be imposed upon the conversion of a Note into Common Stock by a Non-United States Holder except with respect to the receipt of cash in lieu of fractional shares by Non-United States Holders upon conversion of a Note where either of the conditions described above under "Non-United States Holders--Sale, Exchange or Redemption of the Notes" is satisfied. Sale or Exchange of Common Stock Subject to the discussion below under "Non-United States Holders--FIRPTA Treatment of Non-United States Holders," a Non-United States Holder generally will not be subject to United States federal income tax or withholding tax on the sale or exchange of Common Stock unless either of the conditions described above under "Non-United States Holders--Sale, Exchange or Redemption of the Notes" is satisfied. FIRPTA Treatment of Non-United States Holders Under the Foreign Investment in Real Property Tax Act of 1980, as amended ("FIRPTA"), foreign persons generally are subject to United States federal income tax on capital gain realized on -30- the disposition of any interest (other than solely as a creditor) in a corporation that is a United States real property holding corporation (a "USRPHC"). For this purpose, a foreign person is defined as any holder who is a foreign corporation (other than certain foreign corporations that elect to be treated as domestic corporations), a nonresident alien individual, a non-resident fiduciary of a foreign estate or trust, or a foreign partnership. Under FIRPTA, a corporation is a USRPHC if the fair market value of the United States real property interests held by the corporation is 50% or more of the aggregate fair market value of certain assets of the corporation. We do not currently believe that we are a USRPHC. If we are not a USRPHC, a Non-United States Holder will not be subject to United States federal income tax imposed by FIRPTA on a sale or other disposition of the Notes or shares of Common Stock. If we are a USRPHC, a Non-United States Holder generally will not be subject to FIRPTA withholding on proceeds from a sale or other disposition of Notes or Common Stock by reason of our USRPHC status unless the holder's interest in the Notes or Common Stock exceeds the relevant threshold described below. Assuming the Common Stock is regularly traded, a Non-United States Holder will not be subject to FIRPTA withholding on a sale or other disposition of Common Stock unless such holder owns, actually or constructively, Common Stock with a fair market value in excess of 5% of the fair market value of all the Common Stock outstanding at any time during the shorter of the five-year period preceding such disposition or the holder's holding period. In the case of a sale or other disposition of Notes, the relevant ownership threshold depends upon whether the Notes are regularly traded. If the Notes are not regularly traded, a Non-United States Holder will be subject to FIRPTA withholding only if on the date the holder acquired such Notes they had a fair market value greater than 5% of the aggregate value of the outstanding Common Stock. If the Notes are publicly traded, a holder will be subject to FIRPTA withholding only if such holder owned more than 5% of the total fair market value of all the Notes outstanding at any time during the shorter of the five-year period preceding such disposition or the holder's holding period for such Notes. We believe that the Common Stock will be treated as regularly traded. Dividends Distributions by us with respect to the Common Stock that are treated as dividends paid (or deemed paid), as described above under "United States Holders--Dividends on the Common Stock" to a Non-United States Holder (excluding dividends that are effectively connected with the conduct of a trade or business in the United States by such holder and are taxable as described below) will be subject to United States federal withholding tax at a 30% rate (or lower rate provided under any applicable income tax treaty). Except to the extent that an applicable tax treaty otherwise provides, a Non-United States Holder will be taxed in the same manner as a United States Holder on dividends paid (or deemed paid) that are effectively connected with the conduct of a trade or business in the United States by the Non-United States Holder. If such Non-United States Holder is a foreign corporation, it may also be subject to a United States branch profits tax on such effectively connected income at a 30% rate or such lower rate as may be specified by an applicable income tax treaty. Even though such effectively connected dividends are subject to income tax, and may be subject to the branch profits tax, they will not be subject to United States withholding tax if the holder delivers a properly executed Internal Revenue Service Form W-8ECI (or applicable successor form) to the payor. Under current Treasury Regulations, dividends paid to an address in a foreign country are presumed to be paid to a resident of that country (unless the payor has knowledge to the contrary) for purposes of the withholding discussed above and, under the current interpretation of the Treasury Regulations, for purposes of determining the applicability of a tax treaty rate. Under Treasury Regulations that become effective for distributions after December 31, 2000, however, a Non-United States Holder of Common Stock who wishes to claim the benefit of an applicable treaty rate would be required to satisfy applicable certification and other requirements. In addition, under these Treasury -31- Regulations, in the case of Common Stock held by a foreign partnership, the certification requirement would generally be applied to the partners of the partnership (unless the partnership agrees to become a "withholding foreign partnership") and the partnership would be required to provide certain information, including a United States taxpayer identification number. These Treasury Regulations also provide look-through rules for tiered partnerships. Death of a Non-United States Holder A Note held by an individual who is a Non-United States Holder at the time of his or her death will not be includable in the decedent's gross estate for United States estate tax purposes, provided that such holder or beneficial owner did not at the time of death directly or indirectly, actually or constructively, own 10% or more of the combined voting power of all classes of our stock entitled to vote, and provided that, at the time of death, payments with respect to such Notes would not have been effectively connected with the conduct by such Non-United States Holder of a trade or business within the United States. Common Stock actually or beneficially held (other than through a foreign corporation) by a Non-United States Holder at the time of his or her death (or previously transferred subject to certain retained rights or powers) will be subject to United States federal estate tax unless otherwise provided by an applicable estate tax treaty. Information Reporting and Backup Withholding Tax United States information reporting requirements and backup withholding tax will not apply to payments on a Note to a Non-United States Holder if the statement described in "Non-United States Holders--Payment of Interest" is duly provided by such holder, provided that the payor does not have actual knowledge that the holder is a United States person. Information reporting requirements and backup withholding tax will not apply to any payment of the proceeds of the sale of a Note or any payment of the proceeds of the sale of Common Stock effected outside the United States by a foreign office of a "broker" (as defined in applicable Treasury Regulations), unless such broker is (i) a United States person, (ii) a foreign person that derives 50% of more of its gross income for certain periods from activities that are effectively connected with the conduct of a trade or business in the United States, (iii) a controlled foreign corporation for United States federal income tax purposes or (iv) (after December 31, 2000) a foreign partnership more than 50% of the capital or profits of which is owned by one or more United States persons or which engages in a United States trade or business. Payment of the proceeds of any such sale effected outside the United States by a foreign office of any broker that is described in (i), (ii), (iii) or (iv) of the preceding sentence will not be subject to backup withholding tax, but will be subject to information reporting requirements unless such broker has documentary evidence in its records that the beneficial owner is a Non-United States Holder and certain other conditions are met, or the beneficial owner otherwise establishes an exemption. Payment of the proceeds of any such sale to or through the United States office of a broker is subject to information reporting and backup withholding requirements, unless the beneficial owner of the Note provides the statement described in "Non-United States Holders--Payment of Interest" or otherwise establishes an exemption. If paid to an address outside the United States, dividends on Common Stock held by a Non-United States Holder will generally not be subject to the information reporting and backup withholding requirements described in this section, provided that the payor does not have actual knowledge that the holder is a United States person. However, under the Treasury Regulations effective with respect to payments made after December 31, 2000, dividend payments will be subject to information reporting and backup withholding unless applicable certification requirements are satisfied. For more information, see the discussion above with respect to rules applicable to foreign partnerships under the Treasury Regulations that become effective on January 1, 2001. LEGAL MATTERS Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A., of Miami, Florida, will issue an opinion about certain legal matters regarding the notes, common stock, and common stock purchase rights for us. EXPERTS Our consolidated balance sheets as of December 31, 1998 and 1999 and the related consolidated statements of operations, stockholders' equity and cash flows for each of the three years in the period ended December 31, 1999 incorporated by reference in this prospectus have been audited by Arthur Andersen LLP, independent public accountants, to the extent and for the periods indicated in their report with respect thereto and have been included in this prospectus in reliance upon the authority of the firm as experts in accounting and auditing in giving such reports. -32- PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION The following table sets forth the various expenses of IVAX Corporation (the "Registrant") in connection with the sale and distribution of the securities being registered, other than the underwriting discounts and commissions. All amounts shown are estimated except for the Securities and Exchange Commission registration fee. SEC Registration Fee............................................... $ 66,000 AMEX Listing Fee................................................... $ 17,500 Legal Fees and Expenses............................................ $ 20,000 Accounting Fees and Expenses....................................... $ 5,000 Printing Expenses ................................................. $ 5,000 Miscellaneous Expenses............................................. $ 1,500 TOTAL FEES AND EXPENSES................................... $ 115,000 ========= ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS Section 607.0831 of the Florida Business Corporation Act (the "Florida Act") provides that a director is not personally liable for monetary damages to the corporation or any person for any statement, vote, decision or failure to act regarding corporate management or policy, by a director, unless: (a) the director breached or failed to perform his duties as a director; and (b) the director's breach of, or failure to perform, those duties constitutes: (i) a violation of criminal law unless the director had reasonable cause to believe his conduct was lawful or had no reasonable cause to believe his conduct was unlawful; (ii) a transaction from which the director derived an improper personal benefit, either directly or indirectly; (iii) a circumstance under which the director is liable for an improper distribution; (iv) in a proceeding by, or in the right of the corporation to procure a judgment in its favor or by or in the right of a shareholder, conscious disregard for the best interest of the corporation, or willful misconduct; or (v) in a proceeding by or in the right of someone other than the corporation or a shareholder, recklessness or an act or omission which was committed in bad faith or with malicious purpose or in a manner exhibiting wanton or willful disregard of human rights, safety or property. Section 607.0850 of the Florida Act provides that a corporation shall have the power to indemnify any person who was or is a party to any proceeding (other than an action by, or in the right of, the corporation), by reason of the fact that he is or was a director, officer or employee or agent of the corporation, against liability incurred in connection with such proceeding if he acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interest of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. Section 607.0850 also provides that a corporation shall have the power to indemnify any person, who was or is a party to any proceeding by, or in the right of, the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the corporation, against expenses and amounts paid in settlement not II-1 exceeding, in the judgment of the board of directors, the estimated expense of litigating the proceeding to conclusion, actually and reasonably incurred in connection with the defense or settlement of such proceeding, including any appeal thereof. Section 607.0850 further provides that such indemnification shall be authorized if such person acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the corporation, except that no indemnification shall be made under this provision in respect of any claim, issue, or matter as to which such person shall have been adjudged to be liable unless, and only to the extent that, the court in which such proceeding was brought, or any other court of competent jurisdiction, shall determine upon application that, despite the adjudication of liability, but in view of all circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which court shall deem proper. Section 607.0850 further provides that to the extent that a director, officer, employee or agent has been successful on the merits or otherwise in defense of any of the foregoing proceedings, or in defense of any claim, issue or matter therein, he shall be indemnified against expenses actually and reasonably incurred by him in connection therewith. Under Section 607.0850, any indemnification under the foregoing provisions, unless pursuant to a determination by a court, shall be made by the corporation only as authorized in the specific case upon a determination that the indemnification of the director, officer, employee or agent is proper under the circumstances because he has met the applicable standard of conduct. Notwithstanding the failure of a corporation to provide such indemnification, and despite any contrary determination by the corporation in a specific case, a director, officer, employee or agent of the corporation who is or was a party to a proceeding may apply for indemnification to the appropriate court and such court may order indemnification if it determines that such person is entitled to indemnification under the applicable standard. Section 607.0850 also provides that a corporation shall have the power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation against any liability asserted against him and incurred by him in any such capacity or arising out of his status as such, whether or not the corporation would have the power to indemnify him against such liability under the provisions of Section 607.0850. The Registrant's bylaws provide that it shall indemnify its officers and directors and former officers and directors to the full extent permitted by law. The Registrant has entered into indemnification agreements with each of its officers and directors. The indemnification agreements generally provide that the Registrant will pay certain amounts incurred by an officer or director in connection with any civil or criminal action or proceeding and specifically including actions by or in the name of the Registrant (derivative suits) where the individual's involvement is by reason of the fact that he was or is an officer or director. Under the indemnification agreements, an officer or director will not receive indemnification if such person is found not to have acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Registrant. The agreements provide a number of procedures and presumptions used to determined the officer's or director's right to indemnification and include a requirement that in order to receive an advance of expenses, the officer or director must submit an undertaking to repay any expenses advanced on his behalf that are later determined he was not entitled to receive. The Registrant's directors and officers are covered by insurance policies indemnifying them against certain liabilities, including liabilities under the federal securities laws (other than liability under Section 16(b) of the Exchange Act), which might be incurred by them in such capacities. II-2 ITEM 16. EXHIBITS The following exhibits either are filed herewith or incorporated by reference to documents previously filed or will be filed by amendment, as indicated below: Exhibits Description -------- ----------- 4.1 Indenture, dated as of May 12, 2000, between the Registrant and U.S. Bank Trust, National Association, as Trustee. 4.2 Form of 5.5% Convertible Senior Subordinated Notes due 2007 in Global Form (included as Exhibit A to Exhibit 4.1 hereto). 4.3 Registration Rights Agreement dated as of May 12, 2000 by and between the Registrant and UBS Warburg L.L.C. and ING Barings L.L.C. 4.4 Rights Agreement dated December 19, 1997, between the Registrant and ChaseMellon Shareholder Services, L.L.C. with respect to the IVAX Corporation Shareholder Rights Plan (incorporated by reference to exhibit 4.3 to IVAX Corporation's Annual Report on Form 10-K for the year ended December 31, 1999 filed on March 30, 2000). 5 Opinion of Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A. 12 Statement regarding Computation of Ratio of Earnings to Fixed Charges. 23.1 Consent of Arthur Andersen LLP. 23.2 Consent of Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A. (included in Exhibit 5). 24 Power of Attorney (included on signature page hereto). 25 Form T-1: Statement of Eligibility of U.S. Bank Trust National Association to act as trustee under the Indenture. ITEM 17. UNDERTAKINGS (a) The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post- effective amendment to this registration statement: (i) To include any Prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the Prospectus any facts or events arising after the effective date of the registration statement (or the most recent post- II-3 effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 % change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; Provided, however, that the information required to be included in a post-effective amendment by paragraphs (a)(1)(i) and (a)(1)(ii) above may be contained in periodic reports filed with or furnished to the Securities and Exchange Commission by the Registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of their counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. II-4 (e) The undersigned Registrant hereby undertakes to file an application for the purpose of determining the eligibility of the Trustee to act under subsection (a) of Section 310 of the Trust Indenture Act (the "Act") in accordance with the rules and regulations prescribed by the Securities and Exchange Commission under Section 305(b)(2) of the Act. II-5 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Miami, State of Florida, on the 7th day of August, 2000. IVAX CORPORATION By: /s/ Phillip Frost, M.D. ------------------------------- Phillip Frost, M.D. Chairman of the Board and Chief Executive Officer POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below does hereby constitute and appoint Thomas E. Beier his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, to act for him and in his name, place and stead, in any and all capacities, to sign any and all amendments, including, without limitation, any post-effective amendments, to this Registration Statement, and to file each of the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in order to effectuate the same as fully, to all intents and purposes, as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or any of them, or their or his substitutes or resubstitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by each of the following persons in the capacities and on the dates indicated. SIGNATURE TITLE DATE - --------- ----- ---- /s/Phillip Frost, M.D. Chairman of the Board, Chief August 7, 2000 - -------------------------- Executive Officer Phillip Frost, M.D. (Principal Executive Officer) and Director /s/Thomas E. Beier Senior Vice President - Finance August 7, 2000 - -------------------------- and Chief Financial Officer Thomas E. Beier (Principal Financial Officer) /s/Thomas E. McClary Vice President - Accounting August 7, 2000 - -------------------------- (Principal Accounting Officer) Thomas E. McClary II-6 /s/Mark Andrews Director August 7, 2000 - -------------------------- Mark Andrews /s/Ernest Biekert, Ph.D. Director August 7, 2000 - -------------------------- Ernest Biekert, Ph.D. /s/Charles M. Fernandez Director August 7, 2000 - -------------------------- Charles M. Fernandez /s/Jack Fishman, Ph.D. Director August 7, 2000 - -------------------------- Jack Fishman, Ph.D. /s/Neil Flanzraich Director, President and August 7, 2000 - -------------------------- Vice Chairman of the Board Neil Flanzraich /s/Jane Hsiao, Ph.D. Director, Vice-Chairman of August 7, 2000 - -------------------------- the Board, Chief Technical Jane Hsiao, Ph.D. Officer Director and Deputy Chief - -------------------------- Executive Officer Isaac Kaye II-7 INDEX TO EXHIBITS Exhibits Description -------- ----------- 4.1 Indenture dated as of May 12, 2000 between the Registrant and U.S. Bank Trust, National Association, as Trustee. 4.2 Form of 5.5% Convertible Senior Subordinated Notes due 2007 in Global Form (included as Exhibit A to Exhibit 4.1 hereto). 4.3 Registration Rights Agreement dated as of May 12, 2000 by and between the Registrant and UBS Warburg L.L.C. and ING Barings L.L.C. 5 Opinion of Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A. 12 Statement regarding Computation of Ratio of Earnings to Fixed Charges. 23.1 Consent of Arthur Andersen LLP. 23.2 Consent of Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A. (included in Exhibit 5). 24 Power of Attorney (included on signature page hereto). 25 Form T-1: Statement of Eligibility of U.S. Bank Trust National Association to act as trustee under the Indenture. II-8 EX-4.1 2 0002.txt EXHIBIT 4.1 ================================================================================ ================================================================================ IVAX CORPORATION and U.S. BANK TRUST NATIONAL ASSOCIATION as Trustee --------------------------------- INDENTURE Dated as of May 12, 2000 --------------------------------- $200,000,000 Principal Amount (Plus Over-allotment Option) 5.5% CONVERTIBLE SENIOR SUBORDINATED NOTES DUE 2007 ================================================================================ ================================================================================ CROSS-REFERENCE TABLE TIA Indenture Section Section - ------- --------- 310 (a)(1).............................................. 7.10 (a)(2).............................................. 7.10 (a)(3).............................................. N.A. (a)(4).............................................. N.A. (b)................................................. 7.08; 7.10; 12.02 (c)................................................. N.A. 311 (a)........... ..................................... 7.11 (b)................................................. 7.11 (c)................................................. N.A. 312 (a)................................................. 2.05 (b)................................................. 12.03 (c)................................................. 12.03 313 (a)................................................. 7.06 (b)(1).............................................. N.A. (b)(2).............................................. 7.06 (c)................................................. 7.06; 12.02 (d)................................................. 7.06 314 (a)................................................. 4.02 (b)................................................. N.A. (c)(1).............................................. 12.04 (c)(2).............................................. 12.04 (c)(3).............................................. N.A. (d)................................................. N.A. (e)................................................. 12.05 (f)................................................. N.A. 315 (a)................................................. 7.01(B) (b)................................................. 7.05; 12.02 (c)................................................. 7.01(A) (d)................................................. 7.01(C) (e)................................................. 6.11 316 (a)(last sentence).................................. 2.09 (a)(1)(A)........................................... 6.05 (a)(1)(B)........................................... 6.04 - ------------------ N.A. means Not Applicable Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a part of the Indenture (a)(2).............................................. N.A. (b)................................................. 6.07 317 (a)(1).............................................. 6.08 (a)(2).............................................. 6.09 (b)................................................. 2.04 318 (a)................................................. 12.01 - ------------------ N.A. means Not Applicable Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a part of the Indenture TABLE OF CONTENTS
Page ---- I. DEFINITIONS AND INCORPORATION BY REFERENCE 1.01 Definitions...............................................................................1 1.02 Other Definitions.........................................................................3 1.03 Incorporation by Reference of Trust Indenture Act.........................................4 1.04 Rules of Construction.....................................................................4 II. THE SECURITIES 2.01 Form and Dating...........................................................................5 2.02 Execution and Authentication..............................................................5 2.03 Registrar, Paying Agent and Conversion Agent..............................................6 2.04 Paying Agent to Hold Money in Trust.......................................................7 2.05 Securityholder Lists......................................................................7 2.06 Transfer and Exchange.....................................................................7 2.07 Replacement Securities....................................................................8 2.08 Outstanding Securities....................................................................8 2.09 Securities Held by the Company or an Affiliate............................................8 2.10 Temporary Securities......................................................................9 2.11 Cancellation..............................................................................9 2.12 Defaulted Interest........................................................................9 2.13 CUSIP Numbers.............................................................................9 2.14 Deposit of Moneys.........................................................................9 2.15 Book-Entry Provisions for Global Securities..............................................10 2.16 Special Transfer Provisions..............................................................11 2.17 Restrictive Legends......................................................................14 III. REDEMPTION 3.01 Notices to Trustee.......................................................................14 3.02 Selection of Securities to Be Redeemed...................................................14 3.03 Notice of Redemption.....................................................................14 3.04 Effect of Notice of Redemption...........................................................15 3.05 Deposit of Redemption Price..............................................................16 3.06 Securities Redeemed in Part..............................................................16 3.07 Repurchase at Option of Holder upon a Change in Control..................................16 IV. COVENANTS 4.01 Payment of Securities....................................................................19 4.02 Maintenance of Office or Agency..........................................................19
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Page ---- 4.03 Reports to Holders.......................................................................19 4.04 Compliance Certificate...................................................................20 4.05 Stay, Extension and Usury Laws...........................................................20 4.06 Corporate Existence......................................................................20 4.07 Notice of Default........................................................................21 V. SUCCESSORS 5.01 When Company May Merge, etc..............................................................21 5.02 Successor Substituted....................................................................21 VI. DEFAULTS AND REMEDIES 6.01 Events of Default........................................................................21 6.02 Acceleration.............................................................................23 6.03 Other Remedies...........................................................................23 6.04 Waiver of Past Defaults..................................................................23 6.05 Control by Majority......................................................................23 6.06 Limitation on Suits......................................................................24 6.07 Rights of Holders to Receive Payment.....................................................24 6.08 Collection Suit by Trustee...............................................................24 6.09 Trustee May File Proofs of Claim.........................................................24 6.10 Priorities...............................................................................25 6.11 Undertaking for Costs....................................................................25 VII. TRUSTEE 7.01 Duties of Trustee........................................................................25 7.02 Rights of Trustee........................................................................26 7.03 Individual Rights of Trustee.............................................................27 7.04 Trustee's Disclaimer.....................................................................27 7.05 Notice of Defaults.......................................................................27 7.06 Reports by Trustee to Holders............................................................27 7.07 Compensation and Indemnity...............................................................28 7.08 Replacement of Trustee...................................................................28 7.09 Successor Trustee by Merger, etc.........................................................29 7.10 Eligibility; Disqualification............................................................29 7.11 Preferential Collection of Claims Against Company........................................29 VIII. DISCHARGE OF INDENTURE 8.01 Termination of Company's Obligations.....................................................30 8.02 Application of Trust Money...............................................................31 8.03 Repayment to Company.....................................................................31 8.04 Reinstatement............................................................................31
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Page ---- IX. AMENDMENTS 9.01 Without Consent of Holders...............................................................31 9.02 With Consent of Holders..................................................................32 9.03 Compliance with Trust Indenture Act......................................................33 9.04 Revocation and Effect of Consents........................................................33 9.05 Notation on or Exchange of Securities....................................................33 9.06 Trustee Protected........................................................................33 X. CONVERSION 10.01 Conversion Privilege; Restrictive Legends................................................34 10.02 Conversion Procedure.....................................................................34 10.03 Fractional Shares........................................................................35 10.04 Taxes on Conversion......................................................................35 10.05 Company to Provide Stock.................................................................35 10.06 Adjustment for Changes in Capital Stock..................................................35 10.07 Adjustment for Rights to Purchase Shares Below Market Price..............................36 10.08 Adjustment for Other Distributions.......................................................38 10.09 Voluntary Adjustment.....................................................................39 10.10 Current Market Price.....................................................................39 10.11 When Adjustment May Be Deferred..........................................................40 10.12 When No Adjustment Required..............................................................40 10.13 Notice of Adjustment.....................................................................40 10.14 Notice of Certain Transactions...........................................................40 10.15 Reorganization of the Company............................................................41 10.16 Company Determination Final..............................................................41 10.17 Trustee's Disclaimer.....................................................................41 XI. SUBORDINATION 11.01 Agreement to Subordinate.................................................................41 11.02 Certain Definitions......................................................................42 11.03 Liquidation; Dissolution; Bankruptcy.....................................................42 11.04 Company Not to Make Payments with Respect to Securities in Certain Circumstances.........43 11.05 Acceleration of Securities...............................................................43 11.06 When Distribution Must Be Paid Over......................................................43 11.07 Notice by Company........................................................................44 11.08 Subrogation..............................................................................44 11.09 Relative Rights..........................................................................44 11.10 Subordination May Not Be Impaired by Company.............................................44 11.11 Distribution or Notice to Representative.................................................45 11.12 Rights of Trustee and Paying Agent.......................................................45 11.13 Officers' Certificate....................................................................45 11.14 Obligation of Company Unconditional......................................................45
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Page ---- 11.15 Not to Prevent Events of Default.........................................................46 11.16 Prohibition on Incurrence of Layered Indebtedness........................................46 XII. MISCELLANEOUS 12.01 Trust Indenture Act Controls.............................................................46 12.02 Notices..................................................................................46 12.03 Communication by Holders with Other Holders..............................................47 12.04 Certificate and Opinion as to Conditions Precedent.......................................47 12.05 Statements Required in Certificate or Opinion............................................48 12.06 Rules by Trustee and Agents..............................................................48 12.07 Legal Holidays...........................................................................48 12.08 No Recourse Against Others...............................................................48 12.09 Duplicate Originals......................................................................49 12.10 Governing Law............................................................................49 12.11 No Adverse Interpretation of Other Agreements............................................49 12.12 Successors...............................................................................49 12.13 Separability.............................................................................49 12.14 Table of Contents, Headings, etc.........................................................49
- iv - INDENTURE, dated as of May 12, 2000 between IVAX CORPORATION, a Florida corporation (the "Company"), and U.S. BANK TRUST NATIONAL ASSOCIATION, a national banking association, as trustee (the "Trustee"). Each party agrees as follows for the benefit of the other party and for the equal and ratable benefit of the Holders of the Company's 5.5% Convertible Senior Subordinated Notes Due 2007 (the "Securities"). I. DEFINITIONS AND INCORPORATION BY REFERENCE 1.01 DEFINITIONS. "Affiliate" means any person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company. For this purpose, "control" shall mean the power to direct the management and policies of a person through the ownership of securities, by contract or otherwise. "Agent" means any Registrar, Paying Agent, Conversion Agent or co-registrar. "Board of Directors" means the Board of Directors of the Company or any committee of the Board authorized to act for it hereunder. "Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee. "Capital Stock" means any and all shares, interests, participations or other equivalents (however designated) of capital stock of the Company and all warrants or options to acquire such capital stock. "Common Stock" means the Common Stock, par value $0.10 of the Company. "Company" means the party named as such above until a successor replaces it pursuant to the applicable provision hereof and thereafter means the successor. "Company Request" or "Company Order" means a written request or order signed on behalf of the Company by its Chairman of the Board, its President or any Vice President and by its Treasurer or an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to the Trustee. "Corporate Trust Office of the Trustee" shall be at the address of the Trustee specified in Section 12.02 or such other address as the Trustee may give notice of to the Company. "Default" means any event which is, or after notice or passage of time or both would be, an Event of Default. "Depository" means The Depository Trust Company, its nominees and successors. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Holder" or "Securityholder" means a person in whose name a Security is registered on the Registrar's books. "IAI Global Security" means a permanent Global Security in registered form representing the aggregate Principal Amount of securities sold to Institutional Accredited Investors. "Indenture" means this Indenture as amended or supplemented from time to time. "Institutional Accredited Investor" means an "accredited investor" within the meaning of Rule 501(a)(1), (2), (3), or (7) under the Act that is an institutional investor. "interest" includes liquidated damages, unless the context otherwise requires. "liquidated damages" has the meaning provided in the Registration Rights Agreement. "Maturity Date" means May 15, 2007. "Officer" means the Chairman of the Board, the President, any Vice President, the Chief Financial Officer, the Treasurer or the Secretary of the Company. "Officers' Certificate" means a certificate signed by two Officers or by an Officer and an Assistant Treasurer or an Assistant Secretary of the Company. "Opinion of Counsel" means a written opinion from legal counsel who may be an employee of or counsel for the Company or other counsel reasonably acceptable to the Trustee. "person" means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or other agency or political subdivision thereof. "QIB" means a "qualified institutional buyer" within the meaning of Rule 144A under the Act. "Redemption Price" means, with respect to a Security to be redeemed by the Company in accordance with Article III, the percentage of the outstanding principal amount of such Security payable by the Company upon such redemption. "Registration Rights Agreement" means the Registration Rights Agreement dated as of May 12, 2000 between the Company and the Initial Purchasers. "Regulation S" means Regulation S under the Securities Act. "Regulation S Global Security" means a permanent Global Security in registered form representing the aggregate principal amount of Securities sold in reliance on Regulation S. - 2 - "Repurchase Price" means, with respect to a Security duly tendered for purchase by the Company in accordance with Section 3.07, 100% of the outstanding principal amount of such Security so tendered. "Restricted Security" means a Security that constitutes a "Restricted Security" within the meaning of Rule 144(a)(3) under the Securities Act; provided, however, that the Trustee shall be entitled to request and conclusively rely on an Opinion of Counsel with respect to whether any Security constitutes a Restricted Security. "Rule 144A Global Security" means a permanent Global Security in registered form representing the aggregate principal amount of Securities sold in reliance on Rule 144A. "SEC" means the Securities and Exchange Commission. "Securities" means the 5.5% Convertible Senior Subordinated Notes Due 2007 issued by the Company pursuant to this Indenture. "Securities Act" means the Securities Act of 1933, as amended. "Securityholder" has the meaning given to such term in the Registration Rights Agreement. "subsidiary" means (i) a corporation a majority of whose capital stock with voting power, under ordinary circumstances, to elect directors is at the time, directly or indirectly, owned by the Company, by one or more subsidiaries of the Company or by the Company and one or more subsidiaries thereof or (ii) any other person (other than a corporation) in which the Company, one or more subsidiaries thereof or the Company and one or more subsidiaries thereof, directly or indirectly, at the date of determination thereof, have at least majority ownership interest. "TIA" means the Trust Indenture Act of 1939 (15 U.S. Code ss.ss. 77aaa-77bbbb) as in effect on the date of this Indenture, except as provided in Section 9.03. "Trustee" means the party named as such in this Indenture until a successor replaces it in accordance with the provisions hereof and thereafter means the successor. "Trust Officer" means any officer of the Trustee assigned by the Trustee to administer its corporate trust matters. 1.02 OTHER DEFINITIONS. Term Defined in Section ---- ------------------ "Bankruptcy Law".............................. 6.01 "business day"................................ 12.07 "Change in Control"........................... 3.07 "Company Notice".............................. 3.07 - 3 - "Conversion Agent"............................ 2.03 "Custodian"................................... 6.01 "Event of Default"............................ 6.01 "Global Security"............................. 2.01 "Incumbent Board"............................. 3.07 "Indebtedness"................................ 11.02 "Initial Purchasers".......................... 2.02 "Legal Holiday"............................... 12.07 "Participants"................................ 2.15 "Paying Agent"................................ 2.03 "permitted dividend amount"................... 10.08 "Physical Securities"......................... 2.01 "Private Placement Legend".................... 2.17 "Registrar"................................... 2.03 "Representative".............................. 11.02 "Repurchase Date"............................. 3.07 "Repurchase Right"............................ 3.07 "Senior Indebtedness"......................... 11.02 "U.S. Government Obligations"................. 8.01 1.03 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings: "Commission" means the SEC; "indenture securities" means the Securities; "indenture security holder" means a Securityholder or a Holder; "indenture to be qualified" means this Indenture; "indenture trustee" or "institutional trustee" means the Trustee; and "obligor" on the indenture securities means the Company or any successor. All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA and not otherwise defined herein have the meanings so assigned to them. 1.04 RULES OF CONSTRUCTION. Unless the context otherwise requires: (i) a term has the meaning assigned to it; (ii) an accounting term not otherwise defined has the meaning assigned to it in accordance with generally accepted accounting principles in effect on the date hereof; - 4 - (iii) "or" is not exclusive; (iv) words in the singular include the plural and in the plural include the singular; (v) provisions apply to successive events and transactions; and (vi) "herein", "hereof" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. II. THE SECURITIES 2.01 FORM AND DATING. The Securities and the Trustee's certificate of authentication shall be substantially in the form set forth in Exhibit A, which is incorporated in and forms a part of this Indenture. The Securities may have notations, legends or endorsements required by law, stock exchange rule or usage. Each Security shall be dated the date of its authentication. Securities offered and sold in reliance on Rule 144A, Securities offered and sold in reliance on Regulation S and Securities offered and sold to Institutional Accredited Investors shall be issued initially in the form of one or more Global Securities, substantially in the form set forth in Exhibit A (the "Global Security"), deposited with the Trustee, as custodian for the Depository, duly executed by the Company and authenticated by the Trustee as hereinafter provided and shall bear the legends set forth in Exhibits B-1 and B-2. The aggregate principal amount of the Global Security may from time to time be increased or decreased by adjustments made on the records of the Trustee, as custodian for the Depository, as hereinafter provided. Securities issued in exchange for interests in a Global Security pursuant to Section 2.15 may be issued and Securities offered and sold in reliance on any other exemption from registration under the Securities Act other than as described in the preceding paragraph shall be issued in the form of permanent certificated Securities in registered form in substantially the form set forth in Exhibit A (the "Physical Securities"). All Notes offered and sold in reliance on Regulation S shall remain in the form of a Global Security for one year after the issue date for the Securities. 2.02 EXECUTION AND AUTHENTICATION. Two Officers shall sign the Securities for the Company by manual or facsimile signature. If an Officer whose signature is on a Security no longer holds that office at the time the Security is authenticated, the Security shall nevertheless be valid. - 5 - A Security shall not be valid until authenticated by the manual signature of the Trustee. The signature shall be conclusive evidence that the Security has been authenticated under this Indenture. Upon a written order of the Company signed by two Officers or by an Officer and an Assistant Treasurer of the Company, the Trustee shall authenticate Securities for original issue in the principal amount of $200,000,000 and such additional principal amounts, if any, as shall be determined pursuant to the next sentence of this Section 2.02. Upon receipt by the Trustee of an Officers' Certificate stating that the Initial Purchasers have elected to purchase from the Company a specified principal amount of additional Securities, not to exceed $50,000,000, pursuant to Section l of the Purchase Agreement dated as of May 8, 2000, between the Company, as issuer, and UBS Warburg LLC and ING Barings LLC, as initial purchasers (the "Initial Purchasers"), the Trustee shall authenticate and deliver such specified principal amount of additional Securities to or upon the written order of the Company signed as provided in the immediately preceding sentence. Such Officers' Certificate must be received by the Trustee not later than June 8, 2000, at least two full business days prior to the proposed date for delivery of such additional Securities. The aggregate principal amount of Securities outstanding at any time may not exceed $250,000,000 except as provided in Section 2.07. Upon a written order of the Company signed by two Officers or by an Officer and an Assistant Treasurer of the Company, the Trustee shall authenticate Securities not bearing the Private Placement Legend to be issued to the transferee when sold pursuant to an effective registration statement under the Securities Act as set forth in Section 2.16(D). The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Securities. An authenticating agent may authenticate Securities whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such Agent. An authenticating agent has the same rights as an Agent to deal with the Company or an Affiliate. The Securities shall be issuable only in registered form without coupons and only in denominations of $1,000 principal amount and any integral multiple thereof. 2.03 REGISTRAR, PAYING AGENT AND CONVERSION AGENT. The Company shall maintain an office or agency where Securities may be presented for registration of transfer or for exchange ("Registrar"), an office or agency where Securities may be presented for payment ("Paying Agent") and an office or agency where Securities may be presented for conversion ("Conversion Agent"). The Registrar shall keep a register of the Securities and of their transfer and exchange. The Company may appoint or change one or more co-registrars, one or more additional paying agents and one or more additional conversion agents without notice and may act in any such capacity on its own behalf. The term "Registrar" includes any co-registrar; the term "Paying Agent" includes any additional paying agent; the term "Conversion Agent" includes any additional conversion agent. - 6 - The Company shall enter into an appropriate agency agreement with any Agent not a party to this Indenture. The agreement shall implement the provisions of this Indenture that relate to such Agent. The Company shall notify the Trustee of the name and address of any Agent not a party to this Indenture. If the Company fails to maintain a Registrar, Paying Agent or Conversion Agent, the Trustee shall act as such. The Company initially appoints the Trustee as Paying Agent, Registrar and Conversion Agent. 2.04 PAYING AGENT TO HOLD MONEY IN TRUST. Each Paying Agent shall hold in trust for the benefit of the Securityholders or the Trustee all moneys held by the Paying Agent for the payment of principal of or interest on the Securities, and shall notify the Trustee of any default by the Company in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent shall have no further liability for the money. If the Company acts as Paying Agent, it shall segregate and hold as a separate trust fund all money held by it as Paying Agent. 2.05 SECURITYHOLDER LISTS. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Securityholders. If the Trustee is not the Registrar, the Company shall furnish to the Trustee on or before each interest payment date and at such other times as the Trustee may request in writing a list, in such form and as of such date as the Trustee may reasonably require, of the names and addresses of Securityholders. 2.06 TRANSFER AND EXCHANGE. Where Securities are presented to the Registrar with a request to register their transfer or to exchange them for an equal principal amount of Securities of other authorized denominations, the Registrar shall register the transfer or make the exchange if its requirements for such transaction are met. To permit registrations of transfer and exchanges, the Trustee shall authenticate Securities at the Registrar's request. The Company or the Trustee, as the case may be, shall not be required (a) to issue, authenticate, register the transfer of or exchange any Security during a period beginning at the opening of business 15 days before the mailing of a notice of redemption of the Securities selected for redemption under Section 3.03 and ending at the close of business on the day of such mailing, or (b) to register the transfer of or exchange any Security so selected for redemption in whole or in part, except the unredeemed portion of Securities being redeemed in part. No service charge shall be made for any registration of transfer, exchange or conversion of Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any transfer, registration of - 7 - transfer or exchange of Securities, other than exchanges pursuant to Sections 2.10, 3.06, 9.05 or 10.02 not involving any transfer. 2.07 REPLACEMENT SECURITIES. If the Holder of a Security claims that the Security has been mutilated, lost, destroyed or wrongfully taken, the Company shall issue and the Trustee shall authenticate a replacement Security if the Trustee's requirements are met and, in the case of a mutilated Security, such mutilated Security is surrendered to the Trustee. In the case of lost, destroyed or wrongfully taken Securities, if required by the Trustee, an indemnity bond must be provided by the Holder that is sufficient in the judgment of the Trustee to protect the Company, the Trustee or any Agent from any loss which any of them may suffer if a Security is replaced. The Trustee may charge for its expenses in replacing a Security. In case any such mutilated, lost, destroyed or wrongfully taken Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security when due. Every replacement Security is an additional obligation of the Company only as provided in Section 2.08. 2.08 OUTSTANDING SECURITIES. Securities outstanding at any time are all the Securities authenticated by the Trustee except for those converted, those cancelled by it, those delivered to it for cancellation and those described in this Section as not outstanding. A Security does not cease to be outstanding because the Company or one of its subsidiaries or Affiliates holds the Security. If a Security is replaced pursuant to Section 2.07, it ceases to be outstanding unless the Trustee receives proof satisfactory to it, or a court holds, that the replaced Security is held by a protected purchaser. If the Paying Agent (other than the Company) holds on a redemption date or maturity date money sufficient to pay Securities payable on that date, then on and after that date, such Securities shall be deemed to be no longer outstanding and interest on them shall cease to accrue. 2.09 SECURITIES HELD BY THE COMPANY OR AN AFFILIATE. In determining whether the Holders of the required aggregate principal amount of Securities have concurred in any direction, waiver or consent, Securities owned by the Company or a subsidiary or an Affiliate shall be considered as though not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Securities which the Trustee knows are so owned shall be so disregarded. - 8 - 2.10 TEMPORARY SECURITIES. Until definitive Securities are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Securities. Temporary Securities shall be substantially in the form of definitive Securities but may have variations that the Company considers appropriate for temporary Securities. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate definitive Securities in exchange for temporary Securities. 2.11 CANCELLATION. The Company at any time may deliver Securities to the Trustee for cancellation. The Registrar, Paying Agent and Conversion Agent shall forward to the Trustee any Securities surrendered to them for registration of transfer, exchange, payment or conversion. The Trustee shall cancel all Securities surrendered for registration of transfer, exchange, payment, conversion or cancellation and the Trustee shall destroy cancelled Securities and deliver a certificate of any such destruction to the Company. The Company may not issue new Securities to replace Securities that it has paid or delivered to the Trustee for cancellation or that any Securityholder has converted pursuant to Article X. 2.12 DEFAULTED INTEREST. If and to the extent the Company defaults in a payment of interest on the Securities, it shall pay the defaulted interest in any lawful manner plus, to the extent not prohibited by applicable statute or case law, interest payable on the defaulted interest at the rate provided in the Securities. It may pay the defaulted interest to the persons who are Securityholders on a subsequent special record date. The Company shall fix such record date and payment date. At least 15 days before the record date, the Company shall mail to Securityholders a notice that states the record date, payment date and amount of interest to be paid. 2.13 CUSIP NUMBERS. The Company in issuing the Securities may use one or more "CUSIP" numbers, and if so, the Trustee shall use the CUSIP numbers in notices of redemption or exchange as a convenience to Holders; provided, however, that no representation is hereby deemed to be made by the Trustee as to the correctness or accuracy of the CUSIP numbers printed in the notice or on the Securities, and that reliance may be placed only on the other identification numbers printed on the Securities. The Company shall promptly notify the Trustee of any change in the CUSIP number. 2.14 DEPOSIT OF MONEYS. Prior to 11:00 a.m., New York City time, on each interest payment date, maturity date, redemption date and Repurchase Date, the Company shall have deposited with the Paying Agent in immediately available funds money sufficient to make cash payments, if any, due on such interest payment date, maturity date, redemption date and Repurchase Date, as the case may be, in a timely manner which permits the Paying Agent to remit payment to the Holders on such interest payment date, maturity date, redemption date and Repurchase Date, as the case may be. - 9 - 2.15 BOOK-ENTRY PROVISIONS FOR GLOBAL SECURITIES. (A) The Global Securities initially shall (i) be registered in the name of the Depository or the nominee of such Depository, (ii) be delivered to the Trustee as custodian for such Depository and (iii) bear legends as set forth in Section 2.17. Members of, or participants in, the Depository ("Participants") shall have no rights under this Indenture with respect to any Global Security held on their behalf by the Depository, or the Trustee as its custodian, or under the Global Security, and the Depository may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner of the Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depository or impair, as between the Depository and Participants, the operation of customary practices governing the exercise of the rights of a Holder of any Security. (B) Transfers of Global Securities shall be limited to transfers in whole, but not in part, to the Depository, its successors or their respective nominees. Interests of beneficial owners in the Global Securities may be transferred or exchanged for Physical Securities in accordance with the rules and procedures of the Depository and the provisions of Section 2.16. In addition, Physical Securities shall be transferred to all beneficial owners in exchange for their beneficial interests in Global Securities if (i) the Depository notifies the Company that it is unwilling or unable to continue as Depository for any Global Security and a successor Depository is not appointed by the Company within 90 days of such notice or (ii) an Event of Default has occurred and is continuing and the Registrar has received a written request from the Depository to issue Physical Securities. (C) In connection with any transfer or exchange of a portion of the beneficial interest in a Global Security to beneficial owners pursuant to Section 2.15(B), the Registrar shall (if one or more Physical Securities are to be issued) reflect on its books and records the date and a decrease in the aggregate principal amount of such Global Security in an amount equal to the aggregate initial aggregate principal amount of the beneficial interest in the Global Security to be transferred, and the Company shall execute and the Trustee shall authenticate and deliver, one or more Physical Securities of authorized denominations in an aggregate principal amount equal to the aggregate principal amount of the beneficial interest in the Global Security so transferred. (D) In connection with the transfer of a Global Security in its entirety to beneficial owners pursuant to Section 2.15(B), such Global Security shall be deemed to be surrendered to the Trustee for cancellation, and the Company shall execute, and the Trustee shall upon written instructions from the Company authenticate and deliver, to each beneficial owner identified by the Depository in exchange for its beneficial interest in such Global Security, an equal aggregate principal amount of Physical Securities of authorized denominations. (E) Any Physical Security constituting a Restricted Security delivered in exchange for an interest in a Global Security pursuant to Section 2.15(B) or (C) shall, except as otherwise provided by Section 2.16, bear the Private Placement Legend (as defined). - 10 - (F) The Holder of any Global Security may grant proxies and otherwise authorize any Person, including Participants and Persons that may hold interests through Participants, to take any action which a Holder is entitled to take under this Indenture or the Securities. 2.16 SPECIAL TRANSFER PROVISIONS. (A) Transfers to Non-QIB Institutional Accredited Investors and Non-U.S. Persons. The following provisions shall apply with respect to the registration of any proposed transfer of a Restricted Security to any Institutional Accredited Investor which is not a QIB or to any Non-U.S. Person: (i) The Registrar shall register the transfer of any Restricted Security, whether or not such Security bears the Private Placement Legend, if (x) the requested transfer is after the second anniversary of the issue date for the Securities; provided, however, that neither the Company nor any Affiliate of the Company has held any beneficial interest in such Security, or portion thereof, at any time on or prior to the second anniversary of the issue date for the Securities or (y)(1) in the case of a transfer to an Institutional Accredited Investor which is not a QIB (excluding Non-U.S. Persons), the proposed transferee has delivered to the Registrar a certificate substantially in the form of Exhibit C hereto and any legal opinions and certifications required thereby and (2) in the case of a transfer to a Non-U.S. Person, the proposed transferor has delivered to the Registrar a certificate substantially in the form of Exhibit D hereto; (ii) if the proposed transferee is a Participant and the Notes to be transferred consist of Physical Securities which after transfer are to be evidenced by an interest in the Global Security, upon receipt by the Registrar of (x) written instructions given in accordance with the Depository's and the Registrar's procedures and (y) the appropriate certificate, if any, required by clause (y) of paragraph (i) above, the Registrar shall register the transfer and reflect on its books and records the date and an increase in the aggregate principal amount of the Global Security in an amount equal to the aggregate principal amount of Physical Securities to be transferred, and the Trustee shall cancel the Physical Securities so transferred; and (iii) if the proposed transferor is a Participant seeking to transfer an interest in the Rule 144A Global Security, upon receipt by the Registrar of (x) written instructions given in accordance with the Depository's and the Registrar's procedures and (y) the appropriate certificate, if any, required by clause (y) of paragraph (i) above, the Registrar shall register the transfer and reflect on its books and records the date and (A) a decrease in the aggregate principal amount of the Rule 144A Global Security in an amount equal to the aggregate principal amount of the Securities to be transferred and (B) an increase in the aggregate principal amount of the Regulation S Global Security or the IAI Global Security, as the case may be, in an amount equal to the aggregate principal amount of the Securities to be transferred. - 11 - (B) Transfers to QIBs. The following provisions shall apply with respect to the registration of any proposed transfer of a Restricted Security to a QIB: (i) the Registrar shall register the transfer of any Restricted Security, whether or not such Security bears the Private Placement Legend, if (x) the requested transfer is after the second anniversary of the issue date for the Securities; provided, however, that neither the Company nor any Affiliate of the Company has held any beneficial interest in such Security, or portion thereof, at any time on or prior to the second anniversary of the issue date for the Securities or (y) such transfer is being made by a proposed transferor who has checked the box provided for on the form of Security stating, or has otherwise advised the Company and the Registrar in writing, that the sale has been made in compliance with the provisions of Rule 144A to a transferee who has signed the certification provided for on the form of Security stating, or has otherwise advised the Company and the Registrar in writing, that it is purchasing the Security for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a QIB within the meaning of Rule 144A, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as it has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon its foregoing representations in order to claim the exemption from registration provided by Rule 144A; (ii) if the proposed transferee is a Participant and the Securities to be transferred consist of Physical Securities which after transfer are to be evidenced by an interest in the Global Security, upon receipt by the Registrar of written instructions given in accordance with the Depository's and Registrar's procedures, the Registrar shall register the transfer and reflect on its books and records the date and an increase in the principal amount of the Global Security in an amount equal to the principal amount of Physical Securities to be transferred, and the Trustee shall cancel the Physical Securities so transferred; and (iii) if the proposed transferor is a Participant seeking to transfer an interest in the Regulation S Global Security or the IAI Global Security, upon receipt by the Registrar of written instructions given in accordance with the Depository's and the Registrar's procedures, the Registrar shall register the transfer and reflect on its books and records the date and (A) a decrease in the aggregate principal amount of the Regulation S Global Security or the IAI Global Security, as the case may be, in an amount equal to the aggregate principal amount of the Securities to be transferred and (B) an increase in the aggregate principal amount of the Rule 144A Global Security in an amount equal to the aggregate principal amount of the Securities to be transferred. (C) Restrictions on Transfer and Exchange of Global Securities. Notwithstanding any other provisions of this Indenture, a Global Security may not be transferred except as a - 12 - whole by the Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or another nominee of the Depository or by the Depository or any such nominee to a successor Depository or a nominee of such successor Depository. (D) Private Placement Legend. Upon the transfer, exchange or replacement of Securities not bearing the Private Placement Legend, the Registrar or co-Registrar shall deliver Securities that do not bear the Private Placement Legend. Upon the transfer, exchange or replacement of Securities bearing the Private Placement Legend, the Registrar or co-Registrar shall deliver only Securities that bear the Private Placement Legend unless (i) the requested transfer is after the second anniversary of the issue date for the Securities (provided, however, that neither the Company nor any Affiliate of the Company has held any beneficial interest in such Security, or portion thereof, at any time prior to or on the second anniversary of the issue date) for the Securities, (ii) there is delivered to the Trustee an Opinion of Counsel reasonably satisfactory to the Company to the effect that neither such legend nor the related restrictions on transfer are required in order to maintain compliance with the provisions of the Securities Act or (iii) such Security has been sold pursuant to an effective registration statement under the Securities Act and the Holder selling such Securities has delivered to the Registrar or co-Registrar a notice in the form of Exhibit E hereto. Upon the effectiveness of the Shelf Registration Statement (as defined in the Registration Rights Agreement) the Company shall deliver to the Trustee a notice of effectiveness, a Security or Securities, an authentication order in accordance with Section 2.02 and an opinion of counsel in the form of Exhibit F hereto and, if required by the Depository, the Company shall deliver to the Depository a letter of representations in a form reasonably acceptable to the Depository. (E) General. By its acceptance of any Security bearing the Private Placement Legend, each Holder of such a Security acknowledges the restrictions on transfer of such Security set forth in this Indenture and in the Private Placement Legend and agrees that it will transfer such Security only as provided in this Indenture. The Registrar shall retain copies of all letters, notices and other written communications received pursuant to Section 2.15 or this Section 2.16. The Company shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable written notice to the Registrar. (F) Transfers of Securities Held by Affiliates. Any certificate (i) evidencing a Security that has been transferred to an Affiliate of the Company within two years after the issue date for the Securities, as evidenced by a notation on the Assignment Form for such transfer or in the representation letter delivered in respect thereof or (ii) evidencing a Security that has been acquired from an Affiliate (other than by an Affiliate) in a transaction or a chain of transactions not involving any public offering, shall, until two years after the last date on which either the Company or any Affiliate of the Company was an owner of such Security, in each case, bear the Private Placement Legend, unless otherwise agreed by the Company (with written notice thereof to the Trustee). - 13 - 2.17 RESTRICTIVE LEGENDS. Each Global Security and Physical Security that constitutes a Restricted Security shall bear the legend (the "Private Placement Legend") as set forth in Exhibit B-1 on the face thereof until after the second anniversary of the later of (i) the issue date for the Securities and (ii) the last date on which the Company or any Affiliate of the Company was the owner of such Security (or any predecessor security) (or such shorter period of time as permitted by Rule 144(k) under the Securities Act or any successor provision thereunder) (or such longer period of time as may be required under the Securities Act or applicable state securities laws in the opinion of counsel for the Company, unless otherwise agreed by the Company and the Holder thereof). Each Global Security shall also bear the legend as set forth in Exhibit B-2. III. REDEMPTION 3.01 NOTICES TO TRUSTEE. If the Company wants to redeem Securities pursuant to paragraph 6 of the Securities, it shall notify the Trustee at least 30 days prior to the redemption date (unless a shorter notice period shall be satisfactory to the Trustee) of the redemption date and the aggregate principal amount of Securities to be redeemed. If the Company wants to credit against any such redemption Securities it has not previously delivered to the Trustee for cancellation (other than Securities repurchased pursuant to Section 3.07), it shall deliver the Securities with the notice. 3.02 SELECTION OF SECURITIES TO BE REDEEMED. If less than all the Securities are to be redeemed, the Trustee shall select the Securities to be redeemed in compliance with the requirements of the principal exchange or market, if any, on which the Securities are listed, or, if the Securities are not so listed, on either a pro rata basis or by lot or such other method as the Trustee shall deem fair and equitable. The Trustee shall make the selection from Securities outstanding not previously called for redemption. The Trustee may select for redemption portions of the principal of Securities that have denominations larger than $1,000 principal amount. Securities and portions of them it selects shall be in amounts of $1,000 principal amount or whole multiples of $1,000 principal amount. The Trustee shall promptly notify the Company in writing of the Securities selected for redemption and the principal amount thereof to be redeemed. Provisions of this Indenture that apply to Securities called for redemption also apply to portions of Securities called for redemption. The Registrar need not transfer or exchange any Securities selected for redemption. Also, the Registrar need not transfer or exchange any Securities for a period of 15 days before selecting Securities to be redeemed. 3.03 NOTICE OF REDEMPTION. At least 30 days but not more than 60 days before a redemption date, the Company shall mail by first-class mail a notice of redemption to each Holder whose Securities are to be redeemed. - 14 - The notice shall identify the Securities and the aggregate principal amount thereof to be redeemed and shall state: (i) the redemption date; (ii) the Redemption Price, plus the amount of accrued and unpaid interest to be paid on the Securities called for redemption; (iii) the then current conversion rate and conversion price; (iv) the name and address of the Paying Agent and Conversion Agent; (v) the date on which the right to convert the principal of the Securities called for redemption will terminate and the place or places where such Securities may be surrendered for conversion; (vi) that Holders who want to convert Securities must satisfy the requirements in Article X; (vii) the paragraph of the Securities pursuant to which the Securities are to be redeemed; (viii) that Securities called for redemption must be surrendered to the Paying Agent to collect the Redemption Price; (ix) that interest on Securities called for redemption ceases to accrue on and after the redemption date; and (x) the CUSIP number of the Securities. The date on which the right to convert the principal of the Securities called for redemption will terminate shall be at the close of business on the date that is five business days prior to the redemption date. At the Company's request, the Trustee shall give the notice of redemption in the Company's name and at the Company's expense; provided that the form and content of such notice shall be prepared by the Company. 3.04 EFFECT OF NOTICE OF REDEMPTION. Once notice of redemption is mailed, Securities called for redemption become due and payable on the redemption date at the Redemption Price plus accrued and unpaid interest to the date of redemption, and, on and after such date (unless the Company shall default in the payment of the Redemption Price), such Securities shall cease to bear interest. Upon surrender to the Paying Agent, such Securities shall be paid at the Redemption Price plus accrued interest to the redemption date, unless the redemption date is an interest payment date, in which case the accrued interest will be paid in the ordinary course. - 15 - 3.05 DEPOSIT OF REDEMPTION PRICE. On or before the redemption date, the Company shall deposit with the Paying Agent money in funds immediately available on the redemption date sufficient to pay the Redemption Price of and accrued interest on all Securities to be redeemed on that date. The Paying Agent shall return to the Company, as soon as practicable, any money not required for that purpose. 3.06 SECURITIES REDEEMED IN PART. Upon surrender of a Security that is redeemed in part, the Company shall execute and the Trustee shall authenticate for the Holder a new Security or Securities in an aggregate principal amount equal to the unredeemed portion of the Security surrendered. If any Security selected for partial redemption is converted in part, the converted portion of such Security shall be deemed (so far as may be) to be the portion selected for redemption. 3.07 REPURCHASE AT OPTION OF HOLDER UPON A CHANGE IN CONTROL. Upon any Change in Control (as defined below) with respect to the Company, each Holder of Securities shall have the right (the "Repurchase Right"), at the Holder's option, to require the Company to repurchase all of such Holder's Securities, or a portion thereof which is $1,000 or any integral multiple thereof, on the date (the "Repurchase Date") that is 45 days after the date of the Company Notice (as defined below) at the Repurchase Price set forth in the Securities, plus accrued and unpaid interest, if any, to the Repurchase Date. Within 30 days after the occurrence of a Change in Control, the Company is obligated to mail to all Holders of record of the Securities a notice (the "Company Notice") of the occurrence of such Change in Control and the Repurchase Right arising as a result thereof. The Company shall deliver a copy of the Company Notice to the Trustee and shall cause a copy of such notice to be published at the Company's expense in THE NEW YORK TIMES and THE WALL STREET JOURNAL or another newspaper of national circulation. To exercise the Repurchase Right, a Holder of Securities must deliver on or before the 30th day after the date of the Company Notice irrevocable written notice to the Company (or an agent designated by the Company for such purpose) and the Trustee of the Holder's exercise of such right together with the Securities with respect to which the right is being exercised, duly endorsed for transfer. Each Company Notice shall state: (i) the Repurchase Date; (ii) the date by which the Repurchase Right must be exercised; (iii) the Repurchase Price, plus the amount of accrued interest to be paid on the Securities called for redemption; (iv) a description of the procedure which a Holder must follow to exercise a Repurchase Right; - 16 - (v) that the Securities are to be surrendered for payment of the Repurchase Price; (vi) that exercise of the Repurchase Right is irrevocable, and Holders who elect to exercise the Repurchase Right will forfeit the right to convert Securities submitted for repurchase; (vii) the then existing conversion rate and conversion price for conversion of Securities and the place or places where such Securities may be surrendered for conversion; and (viii) the CUSIP number of the Securities. No failure of the Company to give the foregoing notice shall limit any Holder's right to exercise a Repurchase Right. In the event any Holder exercises its Repurchase Right, such Holder's conversion right will terminate upon receipt of the written notice of exercise of such Repurchase Right. To exercise a Repurchase Right a Holder shall deliver to the Company (if it is acting as its own Paying Agent) or to a Paying Agent designated by the Company for such purpose in the Company Notice within the period set forth in the second paragraph of this Section 3.07, (i) the Option of Holder to Elect Purchase Notice on the back of the Securities with respect to which the Repurchase Right is being exercised, duly completed and signed, with appropriate signature guarantee, and (ii) such Securities with respect to which the Repurchase Right is being exercised, duly endorsed for transfer to the Company, and the Holder of such Securities shall be entitled to receive from the Company (if it is acting as its own Paying Agent) or such Paying Agent a nontransferable receipt of deposit evidencing such deposit. In the event a Repurchase Right shall be exercised in accordance with the terms hereof, the Company shall pay or cause to be paid the applicable Repurchase Price (plus accrued and unpaid interest) with respect to the Securities as to which the Repurchase Right shall have been exercised to the Holder on the Repurchase Date. On or prior to a Repurchase Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust in accordance with Section 2.04) an amount of money (to be available on the Repurchase Date) sufficient to pay the Repurchase Price (plus accrued and unpaid interest) of all of the Securities which are to be repurchased on that date. Both the Company Notice and the notice of the Holder to the Company having been given as specified in this Section 3.07, the Securities so to be repurchased shall, on the Repurchase Date, become due and payable at the Repurchase Price applicable thereto (plus accrued and unpaid interest) and from and after such date (unless the Company shall default in the payment of the Repurchase Price) such Securities shall cease to bear interest. Upon surrender of any such Security for repurchase in accordance with said notice, such Security shall be paid by the Company at the Repurchase Price (plus accrued and unpaid interest). - 17 - If any Security shall not be paid upon surrender thereof for repurchase, the principal shall, until paid, bear interest from the Repurchase Date at the rate borne by such Security on the principal amount of such Security. Any Security which is to be submitted for repurchase only in part shall be delivered pursuant to this Section 3.07 (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by the Holder thereof or its attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and make available for delivery to the Holder of such Security without service charge, a new Security or Securities, of any authorized denomination as requested by such Holder, of the same tenor and in aggregate principal amount equal to the portion of such Security not submitted for repurchase. Notwithstanding anything herein to the contrary, if the option granted to Securityholders to require the redemption of the Securities upon the occurrence of a Change in Control is determined to constitute a tender offer, the Company will comply with all applicable tender offer rules, including Rules 13e-4 and 14e-1 under the Exchange Act, upon the occurrence of a Change in Control. As used in this Section 3.07 of the Indenture and in the Security: A "Change in Control" of the Company means: (i) the acquisition by any person, entity or "group" within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (excluding, for this purpose, the Company or its subsidiaries, or any employee benefit plan of the Company or its subsidiaries which acquires beneficial ownership of voting securities of the Company or any current affiliate of IVAX whose beneficial ownership does not in the future exceed 45% of IVAX' outstanding Common Stock) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of shares of Common Stock sufficient to elect a majority of directors; (ii) persons who, as of the date of this Indenture, constitute the Board of Directors (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board of Directors, provided that any person becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such person were a member of the Incumbent Board; (iii) approval by the stockholders of the Company of a reorganization, merger or consolidation, in each case, with respect to which persons who were the stockholders of the Company immediately prior to such reorganization, merger or consolidation do not, immediately thereafter, beneficially own shares sufficient to elect a majority of directors in the election of directors of the reorganized, merged or consolidated company; or - 18 - (iv) a liquidation or dissolution of the Company (other than pursuant to the United States Bankruptcy Code) or the conveyance, transfer or leasing of all or substantially all of the assets of the Company to any person. IV. COVENANTS 4.01 PAYMENT OF SECURITIES. The Company shall pay all amounts due with respect to the Securities on the dates and in the manner provided in the Securities. All such amounts shall be considered paid on the date due if the Paying Agent holds (or, if the Company is acting as Paying Agent, if the Company has segregated and holds in trust in accordance with Section 2.04) on that date money sufficient to pay the amount then due with respect to the Securities. The Company shall pay interest on any overdue amount (including, to the extent permitted by applicable law, overdue interest) at the rate borne by the Securities. 4.02 MAINTENANCE OF OFFICE OR AGENCY. The Company will maintain in the Borough of Manhattan, The City of New York, an office or agency (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or co-Registrar) where Securities may be surrendered for registration of transfer or exchange or conversion and where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee. The Company may also from time to time designate one or more other offices or agencies where the Securities may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the Borough of Manhattan, The City of New York for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. The Company hereby designates the Corporate Trust Office of the Trustee as an agency of the Company in accordance with Section 2.03. The Company also shall comply with the provisions of TIA ss. 314(a). 4.03 REPORTS TO HOLDERS. (A) The Company (at its own expense) will deliver to the Trustee within 15 days after the filing of the same with the Commission, copies of the quarterly and annual reports and of the - 19 - information, documents and other reports, if any, which the Company is required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act. (B) Notwithstanding that the Company may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, for so long as any Securities remain outstanding the Company will promptly provide the information required by Rule 144A(d)(4) to any Holder that so requests. (C) In addition, if and when this Indenture becomes subject to the TIA, the Company will file a copy of all such information with the Commission for public availability (unless the Commission will not accept such a filing) and make such information available to investors who request it in writing. The Company will also comply with the other provisions of TIA ss. 314(a). 4.04 COMPLIANCE CERTIFICATE. The Company shall deliver to the Trustee within 120 days after the end of each fiscal year of the Company an Officers' Certificate stating whether or not the signers know of any Default or Event of Default by the Company in performing any of its obligations under this Indenture or the Securities. If they do know of any such Default or Event of Default, the certificate shall describe the Default or Event of Default and its status. 4.05 STAY, EXTENSION AND USURY LAWS. The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law has been enacted. 4.06 CORPORATE EXISTENCE. Subject to Article V, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence and the corporate existence of each subsidiary in accordance with the respective organizational documents of each subsidiary and the rights (charter and statutory), licenses and franchises of the Company and its subsidiaries; provided, however, that the Company shall not be required to preserve any such right, license or franchise, or the corporate existence of any subsidiary, if in the judgment of the Company, (i) such preservation or existence is not material to the conduct of business of the Company and (ii) the loss of such right, license or franchise or the dissolution of such subsidiary does not have a material adverse impact on the Holders. - 20 - 4.07 NOTICE OF DEFAULT. In the event that any Default under Section 6.01 hereof shall occur the Company will give prompt written notice of such Default to the Trustee. V. SUCCESSORS 5.01 WHEN COMPANY MAY MERGE, ETC. The Company shall not consolidate with or merge into, or transfer or lease all or substantially all of its assets to, another person unless such other person is a corporation, a limited liability company or other entity organized under the laws of the United States, any State thereof or the District of Columbia and such person assumes by supplemental indenture all the obligations of the Company under the Securities and this Indenture, and immediately after giving effect to the transaction, no default shall exist. The Company shall deliver to the Trustee prior to the consummation of the proposed transaction an Officers' Certificate to the foregoing effect and an opinion of Counsel stating that the proposed transaction and such supplemental indenture will, upon consummation of the proposed transaction, comply with this Indenture. Notwithstanding the foregoing, any subsidiary may consolidate with, merge into or transfer all or part of its properties and assets to the Company or any other subsidiary or subsidiaries. 5.02 SUCCESSOR SUBSTITUTED. Upon any consolidation or merger or transfer or lease of all or substantially all of the assets of the Company in accordance with Section 5.01, the successor person formed by such consolidation or into which the Company is merged or to which such transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, and shall assume every duty and obligation of, the Company under this Indenture with the same effect as if such successor had been named as the Company herein. When the successor assumes all obligations of the Company hereunder, all obligations of the predecessor shall terminate. VI. DEFAULTS AND REMEDIES 6.01 EVENTS OF DEFAULT. An "Event of Default" occurs if: (i) the Company defaults in the payment of interest or liquidated damages on any Security when the same becomes due and payable and the default continues for a period of 30 days, whether or not such payment shall be prohibited by the provisions of Article XI hereof; - 21 - (ii) the Company defaults in the payment of the principal or Repurchase Price or Redemption Price of any Security when the same becomes due and payable on the Maturity Date, upon redemption or otherwise, whether or not such payment shall be prohibited by the provisions of Article XI hereof; (iii) the Company fails to comply with any of its other agreements in the Securities or this Indenture and the default continues for the period and after the notice specified below; (iv) the Company pursuant to or within the meaning of any Bankruptcy Law: (A) commences a voluntary case, (B) consents to the entry of an order for relief against it in an involuntary case, (C) consents to the appointment of a Custodian of it or for all or substantially all of its property, or (D) makes a general assignment for the benefit of its creditors; or (v) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (A) is for relief against the Company in an involuntary case, (B) appoints a Custodian of the Company for all or substantially all of its property, or (C) orders the liquidation of the Company, and the order or decree remains unstayed and in effect for 90 consecutive days. The term "Bankruptcy Law" means Title 11, U.S. Code or any similar Federal or State law for the relief of debtors. The term "Custodian" means any receiver trustee, assignee, liquidator or similar official under any Bankruptcy Law. A default under clause (iii) is not an Event of Default until the Trustee or the Holders of at least 25% in aggregate principal amount of the Securities then outstanding notify the Company and the Trustee of the default and the Company does not cure the default within 60 days after receipt of the notice. The notice must specify the default, demand that it be remedied and state that the notice is a "Notice of Default". If the Holders of 25% in aggregate principal amount of the outstanding Securities request the Trustee to give such notice on their behalf, the Trustee shall do so. When a default is cured, it ceases. - 22 - 6.02 ACCELERATION. If an Event of Default (other than an Event of Default specified in Section 6.01(iv) or (v)) as to which the Trustee has received notice pursuant to Section 4.07 occurs and is continuing, the Trustee by notice to the Company, or the Holders of at least 25% in principal amount of the Securities then outstanding by notice to the Company and the Trustee, may declare the Securities to be due and payable. Upon such declaration such principal and interest shall be due and payable immediately. If an Event of Default specified in Section 6.01(iv) or (v) occurs, the principal of and accrued interest on all the Securities shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Securityholder. The Holders of a majority in aggregate principal amount of the Securities then outstanding by written notice to the Trustee may rescind an acceleration and its consequences if the rescission would not conflict with any order or decree and if all existing Events of Default have been cured or waived except nonpayment of principal or interest that has become due solely because of the acceleration. 6.03 OTHER REMEDIES. Notwithstanding any other provision of this Indenture, if an Event of Default occurs and is continuing, the Trustee may pursue any available remedy by proceeding at law or in equity to collect the payment of amounts due with respect to the Securities or to enforce the performance of any provision of the Securities or this Indenture. The Trustee may maintain a proceeding even if it does not possess any of the Securities or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Securityholder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative. 6.04 WAIVER OF PAST DEFAULTS. Subject to Sections 6.07 and 9.02, the Holders of a majority in aggregate principal amount of the Securities then outstanding by notice to the Trustee may waive any past Default or Event of Default and its consequences. When a Default or an Event of Default is waived, it is cured and ceases for every purpose of this Indenture. 6.05 CONTROL BY MAJORITY. The Holders of a majority in aggregate principal amount of the Securities then outstanding may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture, is unduly prejudicial to the rights of other Securityholders or would involve the Trustee in personal liability; provided that the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction. - 23 - 6.06 LIMITATION ON SUITS. Except as provided in Section 6.07, a Securityholder may pursue a remedy with respect to this Indenture or the Securities only if: (i) the Holder gives to the Trustee written notice of a continuing Event of Default; (ii) the Holders of at least 25% in aggregate principal amount of the Securities then outstanding make a written request to the Trustee to pursue the remedy; (iii) such Holder or Holders offer and if requested provide to the Trustee indemnity satisfactory to the Trustee against any loss, liability or expense; (iv) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of indemnity; and (v) during such 60-day period the Holders of a majority in aggregate principal amount of the Securities then outstanding do not give the Trustee a direction inconsistent with the request. A Securityholder may not use this Indenture to prejudice the rights of another Securityholder or to obtain a preference or priority over another Securityholder. 6.07 RIGHTS OF HOLDERS TO RECEIVE PAYMENT. Notwithstanding any other provision of this Indenture, the right of any Holder to receive payment of all amounts due with respect to the Securities, on or after the respective due dates expressed in the Securities, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of the Holder. Notwithstanding any other provision of this Indenture, the right of any Holder to bring suit for the enforcement of the right to convert the Security shall not be impaired or affected without the consent of the Holder. 6.08 COLLECTION SUIT BY TRUSTEE. If an Event of Default specified in Section 6.01(i) or (ii) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company for the whole amount due with respect to the Securities including any unpaid and accrued interest. 6.09 TRUSTEE MAY FILE PROOFS OF CLAIM. The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee, any predecessor Trustee and - 24 - the Securityholders allowed in any judicial proceedings relative to the Company, its creditors or its property. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding. 6.10 PRIORITIES. If the Trustee collects any money pursuant to this Article, it shall pay out the money in the following order: First: to the Trustee for amounts due under Section 7.07; Second: to holders of Senior Indebtedness to the extent required by Article XI; Third: to Securityholders for all amounts due and unpaid on the Securities, without preference or priority of any kind, according to the amounts due and payable on the Securities; and Fourth: to the Company. The Trustee, upon prior written notice to the Company, may fix a record date and payment date for any payment by it to Securityholders pursuant to this Section. 6.11 UNDERTAKING FOR COSTS. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit other than the Trustee of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys' fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in aggregate principal amount of the outstanding Securities. VII. TRUSTEE 7.01 DUTIES OF TRUSTEE. (A) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. (B) Except during the continuance of an Event of Default: - 25 - (i) the Trustee need perform only those duties that are specifically set forth in this Indenture and no others; and (ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture. (C) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that: (i) this paragraph does not limit the effect of Section 7.01(B); (ii) the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and (iii) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05. (D) The Trustee may refuse to perform any duty or exercise any right or power unless it receives indemnity satisfactory to it against any loss, liability or expense. (E) Every provision of this Indenture that in any way relates to the Trustee is subject to the provisions of this Section 7.01. (F) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. 7.02 RIGHTS OF TRUSTEE. (A) The Trustee may rely on any document believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in the document; if, however, the Trustee shall determine to make such further inquiry or investigation, it shall be entitled during normal business hours to examine the relevant books, records and premises of the Company, personally or by agent or attorney upon reasonable prior notice. (B) Before the Trustee acts or refrains from acting, it may require an Officers' Certificate and/or an Opinion of Counsel. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers' Certificate or Opinion of Counsel. - 26 - (C) Any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order and any resolution of the Board of Directors shall be sufficiently evidenced by a Board Resolution. (D) The Trustee may consult with counsel (such counsel to be reasonably acceptable to the Company) and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon. (E) The Trustee may act through agents or attorneys and shall not be responsible for the misconduct or negligence of any agent or attorney appointed with due care. (F) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its discretion, rights or powers hereunder. 7.03 INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Company or any Affiliate thereof with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights. The Trustee, however, must comply with Sections 7.10 and 7.11. 7.04 TRUSTEE'S DISCLAIMER. The Trustee makes no representation as to the validity or adequacy of this Indenture or the Securities; it shall not be accountable for the Company's use of the proceeds from the Securities; and it shall not be responsible for any statement in the Securities other than its certificate of authentication. 7.05 NOTICE OF DEFAULTS. If a Default or Event of Default occurs and is continuing as to which the Trustee has received notice pursuant to Section 4.07, the Trustee shall mail to each Securityholder a notice of the Default or Event of Default within 30 days after it occurs unless such Default or Event of Default has been cured or waived. Except in the case of a Default or Event of Default in payment of any amounts due with respect to any Security, the Trustee may withhold the notice if and so long as it in good faith determines that withholding the notice is in the interests of Securityholders. 7.06 REPORTS BY TRUSTEE TO HOLDERS. Within 60 days after each May 15 beginning with May 15, 2001, the Trustee shall mail to each Securityholder if required by TIA ss. 313(c) a brief report dated as of such May 15 that complies with TIA ss. 313(a). In such event, the Trustee also shall comply with TIA ss. 313(b). A copy of each report at the time of its mailing to Securityholders shall be mailed to the Company and filed by the Trustee with the SEC and each stock exchange, if any, on which the - 27 - Securities are listed. The Company shall promptly notify the Trustee when the Securities are listed on any stock exchange. 7.07 COMPENSATION AND INDEMNITY. The Company shall pay to the Trustee from time to time such compensation for its services as shall be agreed upon in writing. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses incurred by it. Such expenses shall include the reasonable compensation and out-of-pocket expenses of the Trustee's agents and counsel. The Company shall indemnify the Trustee against any loss or liability or expense (including the reasonable fees and expenses of counsel) incurred by it in connection with the acceptance or administration of this trust and the performance of its duties hereunder, including the reasonable costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers and duties hereunder. The Company need not pay for any settlement made without its consent. The Trustee shall notify the Company promptly of any claim for which it may seek indemnification. The Company need not reimburse any expense or indemnify against any loss or liability incurred by the Trustee through the Trustee's negligence or bad faith. To secure the Company's payment obligations in this Section 7.07, the Trustee shall have a lien prior to the Securities on all money or property held or collected by the Trustee, except that held in trust to pay amounts due on particular Securities. The indemnity obligations of the Company with respect to the Trustee provided for in this Section 7.07 shall survive any resignation or removal of the Trustee. When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(iv) or (v) occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any Bankruptcy Law. 7.08 REPLACEMENT OF TRUSTEE. A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee's acceptance of appointment as provided in this Section. The Trustee may resign by so notifying the Company in writing 30 business days prior to such resignation. The Holders of a majority in aggregate principal amount of the Securities then outstanding may remove the Trustee by so notifying the Trustee and the Company in writing and may appoint a successor Trustee with the Company's consent. The Company may remove the Trustee if: (i) the Trustee fails to comply with Section 7.10; - 28 - (ii) the Trustee is adjudged a bankrupt or an insolvent; (iii) a receiver or other public officer takes charge of the Trustee or its property; or (iv) the Trustee becomes incapable of acting. If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in aggregate principal amount of the Securities then outstanding may appoint a successor Trustee to replace the successor Trustee appointed by the Company. If a successor Trustee does not take office within 30 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of at least 10% in aggregate principal amount of the outstanding Securities may petition any court of competent jurisdiction for the appointment of a successor Trustee. If the Trustee fails to comply with Section 7.10, any Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Securityholders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 7.07. 7.09 SUCCESSOR TRUSTEE BY MERGER, ETC. If the Trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act shall be the successor Trustee, if such successor corporation is otherwise eligible hereunder. 7.10 ELIGIBILITY; DISQUALIFICATION. This Indenture shall always have a Trustee who satisfies the requirements of TIA ss. 310(a)(1). The Trustee shall always have or be a member of a Bank Holding Company having a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition. The Trustee shall comply with TIA ss. 310(b). 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. The Trustee shall comply with TIA ss. 311(a), excluding any creditor relationship listed in TIA ss. 311(b). A Trustee who has resigned or been removed shall be subject to TIA ss. 311(a) to the extent indicated. - 29 - VIII. DISCHARGE OF INDENTURE 8.01 TERMINATION OF COMPANY'S OBLIGATIONS. The Company may terminate all of its obligations under this Indenture if all Securities previously authenticated and delivered (other than mutilated, destroyed, lost or stolen Securities which have been replaced or paid as provided in Section 2.07) have been delivered to the Trustee for cancellation or if: (i) the Securities mature within six months or all of them are to be called for redemption within one year under arrangements satisfactory to the Trustee for giving the notice of redemption; (ii) the Company irrevocably deposits in trust with the Trustee money or U.S. Government Obligations sufficient to pay the principal or Redemption Price of and any unpaid and accrued interest on the Securities to maturity or redemption, as the case may be. Immediately after making the deposit, the Company shall give notice of such event to the Securityholders; (iii) the Company has paid or caused to be paid all sums then payable by the Company to the Trustee hereunder as of the date of such deposit; and (iv) the Company has delivered to the Trustee an opinion of counsel and an Officers' Certificate stating that all conditions precedent provided for herein relating to the satisfaction and discharge of this Indenture have been complied with. The Company may make the deposit only during the one-year period and only if Article XI permits it. However, the Company's obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 4.01, 7.07, 7.08 and 8.03, and in Article X, shall survive until the Securities are no longer outstanding. Thereafter the Company's obligations in Sections 7.07 and 8.03 shall survive. After a deposit pursuant to this Section 8.01, the Trustee upon request shall acknowledge in writing the discharge of the Company's obligations under the Securities and this Indenture except for those surviving obligations specified above. In order to have money available on a payment date to pay the principal or Redemption Price of and any unpaid and accrued interest on the Securities, the U.S. Government Obligations shall be payable as to principal and any unpaid and accrued interest on or before such payment date in such amounts as will provide the necessary money. "U.S. Government Obligations" means direct non-callable obligations of, or non-callable obligations guaranteed by, the United States of America for the payment of which the full faith and credit of the United States of America is pledged. - 30 - 8.02 APPLICATION OF TRUST MONEY. The Trustee shall hold in trust money or U.S. Government Obligations deposited with it pursuant to Section 8.01. It shall apply the deposited money and the money from U.S. Government Obligations through the Paying Agent and in accordance with this Indenture to the payment of the principal or Redemption Price of and any unpaid and accrued interest on the Securities. Money and securities so held in trust are not subject to the subordination provisions of Article XI. 8.03 REPAYMENT TO COMPANY. The Trustee and the Paying Agent shall promptly pay to the Company upon request any excess money or securities held by them at any time. The Trustee and the Paying Agent shall pay to the Company upon request any money held by them for the payment of the principal or Redemption Price of and any unpaid and accrued interest that remains unclaimed for two years; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may, at the expense and request of the Company, cause to be published once in a newspaper of general circulation in The City of New York or cause to be mailed to each Holder, notice stating that such money remains and that, after a date specified therein, which shall not be less than 30 days from the date of such publication or mailing, any unclaimed balance of such money then remaining will be repaid to the Company. After payment to the Company, Securityholders entitled to the money must look to the Company for payment as general creditors unless an applicable abandoned property law designates another person. 8.04 REINSTATEMENT. If the Trustee or Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with Sections 8.01 and 8.02 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company's obligations under this Indenture and the Securities shall be revived and reinstated as though no deposit had occurred pursuant to Sections 8.01 and 8.02 until such time as the Trustee or Paying Agent is permitted to apply all such money or U.S. Government Obligations in accordance with Sections 8.01 and 8.02; provided, however, that if the Company has made any payment of amounts due with respect to any Securities because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money or U.S. Government Obligations held by the Trustee or Paying Agent. IX. AMENDMENTS 9.01 WITHOUT CONSENT OF HOLDERS. The Company, with the consent of the Trustee, may amend or supplement this Indenture or the Securities without notice to or the consent of any Securityholder: (i) to cure any ambiguity, omission, defect or inconsistency; - 31 - (ii) to comply with Sections 5.01 and 10.15; (iii) to provide for uncertificated Securities in addition to certificated Securities; or (iv) to make any change that does not adversely affect the rights of any Securityholder. 9.02 WITH CONSENT OF HOLDERS. The Company, with the consent of the Trustee, may amend or supplement this Indenture or the Securities without notice to any Securityholder but with the written consent of the Holders of at least a majority in aggregate principal amount of the outstanding Securities. Subject to Section 6.07, the Holders of a majority in aggregate principal amount of the outstanding Securities may waive compliance by the Company with any provision of this Indenture or the Securities without notice to any other Securityholder. However, without the consent of each Securityholder affected, an amendment, supplement or waiver, including a waiver pursuant to Section 6.04, may not: (i) reduce the amount of Securities whose Holders must consent to an amendment, supplement or waiver; (ii) reduce the rate of or change the time for payment of interest on any Security; (iii) reduce the principal, Redemption Price or Repurchase Price of or change the fixed maturity of any Security (including, without limitation, the optional redemption provisions or the Repurchase Right); (iv) waive a default in the payment of any amount due with respect to any Security; (v) make any change in Section 6.04, 6.07 or 9.02; or (vi) make any change that adversely affects the right to convert any Security. An amendment under this Section may not make any change that adversely affects the rights under Article XI of any holder of Senior Indebtedness unless the holders of such Senior Indebtedness pursuant to its terms consent to the change. Promptly after an amendment under this Section 9.02 becomes effective, the Company shall mail to Securityholders a notice briefly describing the amendment. Any failure of the Company to mail such notice shall not in any way impair or affect the validity of such amendment, supplement or waiver. - 32 - It shall not be necessary for the consent of the Holders under this Section to approve the particular form of any proposed amendment or supplement, but it shall be sufficient if such consent approves the substance thereof. 9.03 COMPLIANCE WITH TRUST INDENTURE ACT. Every amendment, waiver or supplement to this Indenture or the Securities shall comply with the TIA as then in effect. 9.04 REVOCATION AND EFFECT OF CONSENTS. Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder is a continuing consent by the Holder and every subsequent Holder of a Security or portion of a Security that evidences the same debt as the consenting Holder's Security, even if notation of the consent is not made on any Security. However, any such Holder or subsequent Holder may revoke the consent as to its Security or portion of a Security if the Trustee receives the notice of revocation before the date the amendment, supplement or waiver becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Securityholder. After an amendment, supplement or waiver becomes effective with respect to the Securities, it shall bind every Securityholder unless it makes a change described in Section 9.02. In that case the amendment, supplement or waiver shall bind each Holder of a Security who has consented to it and, provided that notice of such amendment, supplement or waiver is reflected on a Security that evidences the same debt as the consenting Holder's Security, every subsequent Holder of a Security or portion of a Security that evidences the same debt as the consenting Holder's Security. 9.05 NOTATION ON OR EXCHANGE OF SECURITIES. If an amendment, supplement or waiver changes the terms of a Security, the Trustee may require the Holder of the Security to deliver it to the Trustee. The Trustee may place an appropriate notation on the Security as directed and prepared by the Company about the changed terms and return it to the Holder. Alternatively, if the Company so determines, the Company in exchange for the Security shall issue and the Trustee shall authenticate a new Security that reflects the changed terms. 9.06 TRUSTEE PROTECTED. The Trustee need not sign any amendment, supplement or waiver authorized pursuant to this Article that adversely affects the Trustee's rights. The Trustee shall be entitled to receive and rely upon an Opinion of Counsel and an Officers' Certificate that any supplemental indenture, amendment or waiver complies with the Indenture. - 33 - X. CONVERSION 10.01 CONVERSION PRIVILEGE; RESTRICTIVE LEGENDS. A Holder of a Security may convert such Security into Common Stock at any time during the period stated in paragraph 9 of the Securities. The number of shares issuable upon conversion of a Security is determined as follows: divide each $1,000 of the principal amount to be converted by the conversion price in effect on the conversion date. Round the result to the nearest 1/100th of a share. The initial conversion price is stated in paragraph 9 of the Securities. The conversion price is subject to adjustment in accordance with Sections 10.06 through 10.12. A Holder may convert a portion of the principal of such Security if the portion is $1,000 principal amount or a whole multiple of $1,000 principal amount. Provisions of this Indenture that apply to conversion of all of a Security also apply to conversion of a portion of it. Any shares issued upon conversion of a Security shall bear the Private Placement Legend until after the second anniversary of the later of the issue date for the Securities and the last date on which the Company or any Affiliate of the Company was the owner of such shares or the Security (or any predecessor security) from which such shares were converted (or such shorter period of time as permitted by Rule 144(k) under the Securities Act or any successor provision thereunder) (or such longer period of time as may be required under the Securities Act or applicable state securities laws in the Opinion of Counsel for the Company, unless otherwise agreed by the Company and the Holder thereof). 10.02 CONVERSION PROCEDURE. To convert a Security a Holder must satisfy the requirements in paragraph 9 of the Securities. The date on which the Holder satisfies all those requirements is the conversion date. As soon as practicable, the Company shall deliver to the Holder through the Conversion Agent a certificate for the number of full shares of Common Stock issuable upon the conversion and a check in lieu of any fractional share. The person in whose name the certificate is registered shall be treated as a stockholder of record on and after the conversion date. Except as described below, no payment or adjustment will be made for accrued interest on, or liquidated damages with respect to, a converted Security or for dividends on any Common Stock issued on conversion. If any Security is converted between a record date for the payment of interest and the next succeeding interest payment date, unless such Security has been called for redemption on a redemption date between such dates, such Security must be accompanied by funds equal to the interest payable to the registered Holder on such interest payment date on the principal amount so converted. A Security converted on an interest payment date need not be accompanied by any payment, and the interest on the principal amount of the Security being converted will be paid on such interest payment date to the registered Holder of such Security on the immediately preceding record date. - 34 - If a Holder converts more than one Security at the same time, the number of full shares issuable upon the conversion shall be based on the total principal amount of the Securities converted. Upon surrender of a Security that is converted in part the Trustee shall authenticate for the Holder a new Security equal in principal amount to the unconverted portion of the Security surrendered. If the last day on which a Security may be converted is a Legal Holiday in a place where a Conversion Agent is located, the Security may be surrendered to that Conversion Agent on the next succeeding day that is not a Legal Holiday. 10.03 FRACTIONAL SHARES. The Company will not issue fractional shares of Common Stock upon conversion of Securities and instead will deliver a check in lieu of the fractional share based upon the market value of the Common Stock on the last trading day prior to the conversion date. 10.04 TAXES ON CONVERSION. If a Holder converts its Security, the Company shall pay any documentary, stamp or similar issue or transfer tax due on the issue of shares of Common Stock upon the conversion. However, the Holder shall pay any such tax which is due because the shares are issued in a name other than the Holder's name. 10.05 COMPANY TO PROVIDE STOCK. The Company shall reserve out of its authorized but unissued Common Stock or its Common Stock held in treasury enough shares of Common Stock to permit the conversion of all of the Securities. All shares of Common Stock which may be issued upon conversion of the Securities shall be validly issued, fully paid and non-assessable. The Company will endeavor to comply with all securities laws regulating the offer and delivery of shares of Common Stock upon conversion of Securities and will endeavor to list such shares on each national securities exchange on which the Common Stock is listed. 10.06 ADJUSTMENT FOR CHANGES IN CAPITAL STOCK. If the Company: (i) pays a dividend or makes a distribution on its Common Stock in shares of its Common Stock; (ii) subdivides its outstanding shares of Common Stock into a greater number of shares; - 35 - (iii) combines its outstanding shares of Common Stock into a smaller number of shares; (iv) pays a dividend or makes a distribution on its Common Stock in shares of its capital stock other than Common Stock; or (v) issues by reclassification of its Common Stock any shares of its capital stock; then the conversion privilege and the conversion rate in effect immediately prior to such action shall be adjusted so that the Holder of a Security thereafter converted may receive the number of shares of Common Stock of the Company which it would have owned immediately following such action if it had converted the Security immediately on or prior to the record date set in connection with such action. The adjustment shall become effective immediately after the record date in the case of a dividend or distribution and immediately after the effective date in the case of a subdivision, combination or reclassification. If after an adjustment a Holder of a Security upon conversion of it may receive shares of two or more classes of capital stock of the Company, the Board of Directors of the Company shall determine the allocation of the adjusted conversion rate between the classes of capital stock. After such allocation, the conversion privilege and the conversion rate of each class of capital stock shall thereafter be subject to adjustment on terms comparable to those applicable to Common Stock in this Article X. The conversion rate will not be adjusted for accretion on principal or unpaid interest. 10.07 ADJUSTMENT FOR RIGHTS TO PURCHASE SHARES BELOW MARKET PRICE. If the Company issues to all holders of its Common Stock, as such, rights, options or warrants entitling such holders for a period of sixty days or less to subscribe for or purchase shares of Common Stock, or any securities convertible into or exchangeable for shares of Common Stock, or rights, options or warrants to subscribe for or purchase such convertible or exchangeable securities (excluding rights, options or warrants to subscribe for or purchase shares of Common Stock or convertible or exchangeable securities or rights, options, or warrants therefor issued in transactions described in Section 10.06) at a "Price Per Share" (as defined and determined according to the formula given below) lower than the current market price (see Section 10.10) on the date of such issuance, the conversion price shall be adjusted in accordance with the following formula: O + R --- AP = CP x M ---------- O + N where - 36 - AP = the adjusted conversion price. CP = the then current conversion price. O = the number of shares of Common Stock outstanding immediately prior to such issuance. N = the "Number of Shares," which (i) in the case of rights, options or warrants to subscribe for or purchase shares of Common Stock or of securities convertible into or exchangeable for shares of Common Stock, is the maximum number of shares of Common Stock initially issuable upon exercise, conversion or exchange thereof; and (ii) in the case of rights, options or warrants to subscribe for or purchase convertible or exchangeable securities, is the maximum number of shares of Common Stock initially issuable upon the conversion or exchange of the convertible or exchangeable securities issuable upon the exercise of such rights, options or warrants. R = the aggregate proceeds received or receivable by the Company, which (i) in the case of rights, options or warrants to subscribe for or purchase shares of Common Stock or of securities convertible into or exchangeable for shares of Common Stock, is the total amount received or receivable by the Company in consideration for the sale and issuance of such rights, options, warrants or convertible or exchangeable securities, plus the minimum aggregate amount of additional consideration, other than the convertible or exchangeable securities, surrendered or cancelled upon the exercise, conversion or exchange thereof, payable to the Company upon exercise, conversion or exchange thereof; and (ii) in the case of rights, options or warrants to subscribe for or purchase convertible or exchangeable securities, is the total amount received or receivable by the Company in consideration for the sale and issuance of such rights, options or warrants, plus the minimum aggregate consideration payable to the Company upon the exercise thereof, plus the minimum aggregate amount of additional consideration, other than the convertible or exchangeable securities, payable upon the conversion or exchange of the convertible or exchangeable securities; provided that in each case the proceeds received or receivable by the Company shall be deemed to be the amount of gross cash proceeds without deducting therefrom any compensation paid or discount allowed in the sale, underwriting or purchase thereof by underwriters or dealers or others performing similar services or any expenses incurred in connection therewith. M = the current market price per share of Common Stock on the date of issue of the rights, options or warrants to subscribe for or purchase shares of Common Stock or the securities convertible into or exchangeable for shares of Common Stock or the rights, options or warrants to subscribe for or purchase convertible or exchangeable securities. - 37 - "Price Per Share" shall be defined and determined according to the following formula: P = R --- N where P = Price Per Share and R and N have the meanings assigned above. If the Company shall issue rights, options, warrants or convertible or exchangeable securities for a consideration consisting, in whole or in part, of property other than cash, the amount of such consideration shall be determined in good faith by the Board of Directors whose determination shall be conclusive and evidenced by a resolution of the Board of Directors filed with the Trustee. The adjustment shall be made successively whenever any such rights, options, warrants or convertible or exchangeable securities are issued, and shall become effective immediately after the date of issue of such shares, rights, options, warrants or convertible or exchangeable securities. To the extent that such rights, options or warrants expire unexercised or to the extent any convertible or exchangeable securities are redeemed by the Company or otherwise cease to be convertible or exchangeable into shares of Common Stock, the conversion price shall be readjusted to the conversion price which would then be in effect had the adjustment made upon the date of issuance of such rights, options, warrants or convertible or exchangeable securities been made upon the basis of the issuance of rights, options or warrants to subscribe for or purchase only the number of shares of Common Stock as to which such rights, options or warrants were actually exercised and the number of shares of Common Stock that were actually issued upon the conversion or exchange of the convertible or exchangeable securities. 10.08 ADJUSTMENT FOR OTHER DISTRIBUTIONS. If the Company distributes to all holders of its Common Stock, as such, any of its assets or debt securities or any rights or warrants to purchase assets or debt securities of the Company which assets, debt securities, rights or warrants have an aggregate fair market value on the date such distribution is declared in excess of the "permitted dividend amount" (as defined below), the conversion price shall be adjusted in accordance with the formula: AP = CP x (O x M)-F --------- (O x M) where: AP = the adjusted conversion price. - 38 - CP = the then current conversion price. O = the number of shares of Common Stock outstanding on the record date mentioned below. M = the current market price per share of Common Stock, as defined in Section 10.10, on the record date mentioned below. F = the amount by which the fair market value on the date the distribution is declared of the assets, securities, rights or warrants distributed exceeds the permitted dividend amount. The Board of Directors of the Company shall make all determinations of the fair market value in connection with all distributions and dividends. The adjustment shall become effective immediately after the record date for the determination of stockholders entitled to receive the distribution. The "permitted dividend amount" on any date shall be an amount equal to (i) 10% of the current market capitalization of the Company (the product of the current market price of the Common Stock and the number of shares of Common Stock outstanding as of any particular date) minus (ii) the aggregate of the value of all dividends or distributions (other than dividends or distributions referred to in Sections 10.06 or 10.07) made to holders of Common Stock during the twelve month period ending on such date, provided that with respect to any amount of a distribution not paid out of retained earnings, the permitted dividend amount shall be zero, unless the dividend is paid out of consolidated net income or in the form of Common Stock. This Section 10.08 does not apply to reclassifications or distributions referred to in Section 10.06 or distributions referred to in Section 10.07. 10.09 VOLUNTARY ADJUSTMENT. The Company at any time may reduce the conversion price, temporarily or otherwise, by any amount but in no event shall such conversion rate be less than the par value of the Common Stock at the time such reduction is made. Such reduced conversion price shall remain in effect for so long as required under applicable law and shall be irrevocable during such period. The Company reserves the right to make such reductions in the conversion price in addition to those required in the foregoing provisions as the Company in its discretion shall determine to be advisable in order that certain stock-related distributions hereafter made by the Company to its stockholders shall not be taxable. 10.10 CURRENT MARKET PRICE. In Sections 10.07 and 10.08 the current market price per share of Common Stock on any date is the average of the last reported sale prices of a share of Common Stock on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or on the Nasdaq National Market, or, if the Common Stock is not then listed on an exchange or on the Nasdaq National Market, the closing sale prices (or the quoted closing bid - 39 - prices if there were no sales) as reported by NASDAQ, for 30 consecutive trading days commencing 45 trading days before the date in question. In the absence of one or more such quotations, the Board of Directors shall determine the current market price on the basis of such quotations as it considers appropriate. 10.11 WHEN ADJUSTMENT MAY BE DEFERRED. No adjustment in the conversion rate or conversion price will be made unless such adjustment would require a change of at least 1% in the conversion rate; provided, however, any adjustment that would otherwise be required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Article X shall be made to the nearest cent or to the nearest 1/100th of a share, as the case may be. 10.12 WHEN NO ADJUSTMENT REQUIRED. Except as set forth in Section 10.07, the conversion rate and the conversion price will not be adjusted for the issuance of Common Stock or any securities convertible into or exchangeable for Common Stock, or carrying the right to purchase any of the foregoing. No adjustment will be required for rights to purchase Common Stock pursuant to any plan of the Company for reinvestment of dividends or interest, or for a change in the par value of the Common Stock. To the extent that Securities become convertible into cash, no adjustment will be required thereafter as to cash. 10.13 NOTICE OF ADJUSTMENT. Whenever the conversion rate and conversion price are adjusted, the Company shall promptly mail to Securityholders a notice of the adjustment. The Company shall file with the Trustee an Officers' Certificate or a certificate from the Company's independent public accountants briefly stating the facts requiring the adjustment and the manner of computing it. The certificate shall be conclusive evidence that the adjustment is correct, absent manifest error. 10.14 NOTICE OF CERTAIN TRANSACTIONS. If: (i) the Company proposes to take any action that would require an adjustment in the conversion rate and conversion price; (ii) the Company proposes to take any action that would require a supplemental indenture pursuant to Section 10.15; or - 40 - (iii) there is a proposed liquidation, winding up or dissolution of the Company, the Company shall mail to Securityholders a notice stating the proposed record date for a dividend or distribution or the proposed effective date of a subdivision, combination, reclassification, consolidation, merger, transfer, lease, liquidation or dissolution. The Company shall mail the notice at least 10 days before such date. Failure to mail the notice or any defect in it shall not affect the validity of the transaction. 10.15 REORGANIZATION OF THE COMPANY. If the Company is a party to a transaction subject to Section 5.01 or a merger which reclassifies or changes its outstanding Common Stock, the successor corporation shall enter into a supplemental indenture. The supplemental indenture shall provide that the Holder of a Security may convert it into the kind and amount of securities, cash or other assets which it would have owned immediately after the consolidation, merger, transfer or lease if it had converted the Security immediately before the effective date of the transaction. The supplemental indenture shall provide for adjustments which shall be as nearly equivalent as may be practical to the adjustments provided for in this Article X. The successor Company shall mail to Securityholders a notice briefly describing the supplemental indenture. If this Section applies, Section 10.06 does not apply. 10.16 COMPANY DETERMINATION FINAL. Any determination that the Board of Directors must make pursuant to this Article is conclusive, absent manifest error. 10.17 TRUSTEE'S DISCLAIMER. The Trustee has no duty to determine when an adjustment under this Article X or under the terms of the Securities should be made, how it should be made or what it should be. Such information shall be timely provided to the Trustee in an Officer's Certificate. The Trustee has no duty to determine whether any provisions of a supplemental indenture under Section 10.15 are correct. The Trustee makes no representation as to the validity or value of any securities or assets issued upon conversion of Securities. The Trustee shall not be responsible for the Company's failure to comply with this Article. Each Conversion Agent other than the Company shall have the same protection under this Section 10.17 as the Trustee. XI. SUBORDINATION 11.01 AGREEMENT TO SUBORDINATE. The Company agrees, and each Securityholder by accepting a Security agrees, that the payment of all amounts due with respect to the Securities is subordinated in right of payment, to - 41 - the extent and in the manner provided in this Article, to the prior payment in full of all Senior Indebtedness and that the subordination is for the benefit of the holders of Senior Indebtedness. Money and securities held in trust pursuant to Article Eight are not subject to the subordination provisions of this Article XI. 11.02 CERTAIN DEFINITIONS. "Indebtedness" means, with respect to any person, the principal of, and premium, if any, and interest on (a) all indebtedness of such person for borrowed money (including all indebtedness evidenced by notes, bonds, debentures or other securities sold by such person for money), (b) all obligations incurred by such person in the acquisition (whether by way of purchase, merger, consolidation or otherwise and whether by such person or another person) of any business, real property or other assets (except inventory and related items acquired in the ordinary course of the conduct of the acquiror's usual business), (c) guarantees by such person of indebtedness described in clause (a) or (b) of another person, (d) all renewals, extensions, refundings, deferrals, restructurings, amendments and modifications of any such indebtedness, obligation or guarantee, (e) all reimbursement obligations of such person with respect to letters of credit, bankers' acceptances or similar facilities issued for the account of such person, (f) all capital lease obligations of such person and (g) all net obligations of such person under interest rate swap or similar agreements of such person. "Representative" means the indenture trustee or other trustee, agent or representative for an issue of Senior Indebtedness. "Senior Indebtedness" means all Indebtedness of the Company outstanding at any time except Indebtedness that by its terms is subordinate in right of payment to the Securities or Indebtedness that is not otherwise senior in right of payment to the Securities. Senior Indebtedness does not include Indebtedness of the Company to any of the Company's subsidiaries. 11.03 LIQUIDATION; DISSOLUTION; BANKRUPTCY. Upon any distribution of assets to creditors of the Company in a liquidation, winding up or dissolution of the Company or in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to the Company or its property: (i) holders of Senior Indebtedness shall be entitled to receive payment in full of the principal of and interest (including interest accruing after the commencement of any such proceeding) to the date of payment on the Senior Indebtedness before Securityholders shall be entitled to receive any payment of amounts due with respect to the Securities; and (ii) until the Senior Indebtedness is paid in full, any distribution to which Securityholders would be entitled but for this Article shall be made to holders of Senior Indebtedness as their interests may appear, except the Securityholders may receive securities that are subordinated to Senior - 42 - Indebtedness to at least the same extent as the Securities and payments made pursuant to Sections 8.01 and 8.02. 11.04 COMPANY NOT TO MAKE PAYMENTS WITH RESPECT TO SECURITIES IN CERTAIN CIRCUMSTANCES. No payment of amounts due may be made by the Company, directly or indirectly, with respect to the Securities (including any repurchase pursuant to the exercise of the Repurchase Right) or to acquire any of the Securities at any time if a default in payment of the principal of or premium, if any, or interest on Senior Indebtedness exists, unless and until such default shall have been cured or waived or shall have ceased to exist. During the continuance of any event of default with respect to any Senior Indebtedness, as such event of default is defined under any such Senior Indebtedness or in any agreement pursuant to which any Senior Indebtedness has been issued (other than default in payment of the principal of or premium, if any, or interest on any Senior Indebtedness), permitting the holders thereof to accelerate the maturity thereof, no payment may be made by the Company, directly or indirectly, of any amount due with respect to the Securities for 183 days following written notice to the Company, from any holder or holders thereof or their representative or representatives or the trustee or trustees under any indenture under which any instrument evidencing any such Senior Indebtedness may have been issued, that such an event of default has occurred and is continuing. However, if the maturity of such Senior Indebtedness is accelerated, no payment may be made on the Securities until such Senior Indebtedness that has matured has been paid or such acceleration has been cured or waived. Regardless of anything to the contrary herein, nothing shall prevent (a) any payment by the Trustee to the Securityholders of amounts deposited with it pursuant to Article VIII or (b) any payment by the Trustee or the Paying Agent as permitted by Section 11.12. Nothing contained in this Article XI will limit the right of the Trustee or the Securityholders to take any action to accelerate the maturity of the securities pursuant to Section 6.02 or to pursue any rights or remedies hereunder. 11.05 ACCELERATION OF SECURITIES. If payment of the Securities is accelerated because of an Event of Default, the Company shall promptly notify holders of Senior Indebtedness of the acceleration. 11.06 WHEN DISTRIBUTION MUST BE PAID OVER. In the event that the Company shall make any payment to the Trustee with respect to the Securities at a time when such payment is prohibited by Section 11.03 or 11.04, such payment shall be held by the Trustee, in trust for the benefit of, and shall be paid forthwith over and delivered to, the holders of Senior Indebtedness (pro rata as to each of such holders on the basis of the respective amounts of Senior Indebtedness held by them) or their Representative or the trustee under the indenture or other agreement (if any) pursuant to which Senior Indebtedness may have been issued, as their respective interests may appear, for application to the payment of all Senior Indebtedness remaining unpaid to the extent necessary to pay all Senior Indebtedness - 43 - in full in accordance with its terms, after giving effects to any concurrent payment or distribution to or for the holders of Senior Indebtedness. If a distribution is made to Securityholders, that because of this Article XI should not have been made to them, the Securityholders who receive the distribution shall hold it in trust for holders of Senior Indebtedness and pay it over to them as their interests may appear. 11.07 NOTICE BY COMPANY. The Company shall promptly notify the Trustee and the Paying Agent in writing of any facts known to the Company that would cause a payment of any amount due with respect to the Securities to violate this Article, but failure to give such notice shall not affect the subordination of the Securities to the Senior Indebtedness provided in this Article. 11.08 SUBROGATION. After all Senior Indebtedness is paid in full and until the Securities are paid in full, Securityholders shall be subrogated (equally and ratably with all other Indebtedness of the Company ranking pari passu with the Securities) to the rights of holders of Senior Indebtedness to receive distributions applicable to Senior Indebtedness to the extent that distributions otherwise payable to the Securityholders have been applied to the payment of Senior Indebtedness. A distribution made under this Article to holders of Senior Indebtedness which otherwise would have been made to Securityholders is not, as between the Company and Securityholders, a payment by the Company on Senior Indebtedness. 11.09 RELATIVE RIGHTS. This Article defines the relative rights of Securityholders and holders of Senior Indebtedness. Nothing in this Indenture shall: (i) impair, as between the Company and Securityholders, the obligation of the Company, which is absolute and unconditional, to pay all amounts due with respect to the Securities in accordance with their terms; (ii) affect the relative rights of Securityholders and creditors of the Company other than holders of Senior Indebtedness; or (iii) prevent the Trustee or any Securityholder from exercising its available remedies upon a Default or Event of Default, subject to the rights of holders of Senior Indebtedness to receive distributions otherwise payable to Securityholders. 11.10 SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY. No right of any holder of Senior Indebtedness to enforce the subordination of the indebtedness evidenced by the Securities shall be impaired by any act or failure to act by the Company or by its failure to comply with this Indenture. - 44 - 11.11 DISTRIBUTION OR NOTICE TO REPRESENTATIVE. Whenever a distribution is to be made or a notice given to holders of Senior Indebtedness, the distribution may be made and the notice given to their Representatives. 11.12 RIGHTS OF TRUSTEE AND PAYING AGENT. The Trustee or Paying Agent may continue to make payments on the Securities until it receives written notice of facts that would cause a payment of amounts due with respect to the Securities to violate this Article XI. Only the Company, a Representative or a holder of an issue of Senior Indebtedness that has no Representative may give the notice. The Trustee shall be entitled to rely on the delivery to it of a written notice by a person representing himself to be a holder of Senior Indebtedness (or a Representative on behalf of such holder) to establish that such notice has been given by a holder of Senior Indebtedness or a Representative on behalf of any such holder. In the event that the Trustee determines in good faith that further evidence is required with respect to the right of any person who is a holder of Senior Indebtedness to participate in any payment or distribution pursuant to this Article, the Trustee may request such person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness held by such person, the extent to which such person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such person under this Article, and if such evidence is not furnished the Trustee may defer any payment to such person pending judicial determination as to the right of such person to receive such payment or until such time as the Trustee shall be otherwise satisfied as to the right of such person to receive such payment. The Trustee in its individual or any other capacity may hold Senior Indebtedness with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights. The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness and shall not be liable to any such holder if it shall mistakenly pay over or distribute to Securityholders or the Company or any other person money or assets to which any holders of Senior Indebtedness shall be entitled by virtue of this Article or otherwise. 11.13 OFFICERS' CERTIFICATE. If there occurs an event referred to in Section 11.03 or 11.04, the Company shall promptly give to the Trustee an Officers' Certificate (on which the Trustee may conclusively rely) identifying all holders of Senior Indebtedness or their Representatives and the principal amount of Senior Indebtedness then outstanding held by each such holder and stating the reasons why such Officers' Certificate is being delivered to the Trustee. 11.14 OBLIGATION OF COMPANY UNCONDITIONAL. Nothing contained in this Article XI or elsewhere in this Indenture or in any Security is intended to or shall impair, as between the Company, its creditors other than holders of Senior Indebtedness and the Holders of the Securities, the obligation of the Company, which is absolute - 45 - and unconditional, to pay to the Holders of the Securities all amounts due with respect to the Securities as and when the same shall become due and payable in accordance with their terms, or is intended to or shall affect the relative rights of the Holders of the Securities and creditors of the Company other than the holders of the Senior Indebtedness, nor shall anything herein or therein prevent the Trustee or the Holder of any Security from exercising all remedies otherwise permitted by applicable law upon default under this Indenture, subject to the rights, if any, under this Article XI of the holders of Senior Indebtedness in respect of cash, property or securities of the Company received upon the exercise of any such remedy. Upon any distribution of assets of the Company referred to in this Article XI, the Trustee, subject to the provisions of Sections 7.01 and 7.02, and the Holders of the Securities shall be entitled to rely upon any order or decree by any court of competent jurisdiction in which such dissolution, winding up, liquidation or reorganization proceedings are pending, or a certificate of the liquidating trustee or agent or other person making any distribution to the Trustee or the Holders of the Securities, for the purpose of ascertaining the persons entitled to participate in such distribution, the holders of the Senior Indebtedness and other indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article XI. Nothing contained in this Article XI or elsewhere in this Indenture or in any Security is intended to or shall affect the obligation of the Company to make, or prevent the Company from making, at any time except during the pendency of any dissolution, winding up, liquidation or reorganization proceeding, and except during the continuance of any default specified in Section 11.04 (not cured or waived), payments at any time of all amounts due with respect to the Securities. 11.15 NOT TO PREVENT EVENTS OF DEFAULT. The failure to make any payment due with respect to the Securities by reason of any provision of this Article XI shall not be construed as preventing the occurrence of an Event of Default under Section 6.01 11.16 PROHIBITION ON INCURRENCE OF LAYERED INDEBTEDNESS. The Company shall not incur, create, issue, assume, guarantee or otherwise become liable for any Indebtedness that is both (a) subordinate or junior in right of payment to any Senior Indebtedness and (b) senior in any respect in right of payment to the Securities. XII. MISCELLANEOUS 12.01 TRUST INDENTURE ACT CONTROLS. If any provision of this Indenture limits, qualifies or conflicts with another provision which is required to be included in this Indenture by the TIA, the required provision shall control. 12.02 NOTICES. Any notice or communication by the Company or the Trustee to the other is duly given if in writing and delivered in person, mailed by first-class mail or by express delivery to the other's - 46 - address stated in this Section 12.02. The Company or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications. Any notice or communication to a Securityholder shall be mailed to its address shown on the register kept by the Registrar. Failure to mail a notice or communication to a Securityholder or any defect in it shall not affect its sufficiency with respect to other Securityholders. If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it. If the Company mails a notice or communication to Securityholders, it shall mail a copy to the Trustee and each Agent at the same time. All notices or communications shall be in writing. The Company's address is: IVAX Corporation 4400 Biscayne Boulevard Miami, Florida 33137 Attention: President The Trustee's address is: U.S. Bank Trust National Association 180 East 5th Street St. Paul, Minnesota 55101 Attention: Richard Prokosch, Corporate Finance 12.03 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS. Securityholders may communicate pursuant to TIA ss. 312(b) with other Securityholders with respect to their rights under this Indenture or the Securities. The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA ss. 312(c). 12.04 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT. Upon any request or application by the Company to the Trustee to take any action under this Indenture the Company shall furnish to the Trustee: (i) an Officers' Certificate stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and (ii) an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent have been complied with. - 47 - Each signer of an Officers' Certificate or an Opinion of Counsel may (if so stated) rely, effectively, upon an Opinion of Counsel as to legal matters and an Officers' Certificate as to factual matters if such signer reasonably and in good faith believes in the accuracy of the document relied upon. 12.05 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. Each Officers' Certificate or Opinion of Counsel with respect to compliance with a condition or covenant provided for in this Indenture shall include: (i) a statement that the person making such certificate or opinion has read such covenant or condition; (ii) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (iii) a statement that, in the opinion of such person, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with; and (iv) a statement as to whether or not, in the opinion of such person, such condition or covenant has been complied with. 12.06 RULES BY TRUSTEE AND AGENTS. The Trustee may make reasonable rules for action by or at a meeting of Securityholders. The Registrar, Paying Agent or Conversion Agent may make reasonable rules and set reasonable requirements for their respective functions. 12.07 LEGAL HOLIDAYS. A "Legal Holiday" is a Saturday, a Sunday or a day on which banking institutions are not required to be open in The City of New York, in the State of New York or in the city in which the Trustee administers its corporate trust business. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue on that payment for the intervening period. A "business day" is a day other than a Legal Holiday. 12.08 NO RECOURSE AGAINST OTHERS. No past, present or future director, officer, employee, incorporator or shareholder of the Company, as such, shall have any liability for any obligations of the Company under the Securities or this Indenture or for any claim based on, in respect of, or by reason of, such - 48 - obligations or their creation. Each Holder by accepting a Security waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Securities. 12.09 DUPLICATE ORIGINALS. The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. 12.10 GOVERNING LAW. The laws of the State of New York, including without limitation Section 5-1401 of the General Obligations Law, but otherwise without regard to principles of conflicts of law, shall govern this Indenture and the Securities. 12.11 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS. This Indenture may not be used to interpret another indenture, loan or debt agreement of the Company or a subsidiary. Any such indenture, loan or debt agreement may not be used to interpret this Indenture. 12.12 SUCCESSORS. All agreements of the Company in this Indenture and the Securities shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors. 12.13 SEPARABILITY. In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and a Holder shall have no claim therefor against any party hereto. 12.14 TABLE OF CONTENTS, HEADINGS, ETC. The Table of Contents, Cross-Reference Table and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof and shall in no way modify or restrict any of the terms or provisions hereof. - 49 - IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the date first above written. IVAX CORPORATION By: --------------------------------- Name: Title: U.S. BANK TRUST NATIONAL ASSOCIATION By: --------------------------------- Name: Title: - 50 - EXHIBIT A [Face of Security] IVAX CORPORATION [INSERT PRIVATE PLACEMENT LEGEND AND GLOBAL SECURITY LEGEND AS REQUIRED] 5.5% CONVERTIBLE SENIOR SUBORDINATED NOTE DUE 2007 CUSIP NO. ____________ IVAX CORPORATION, a Florida corporation (herein called the "Company"), for value received, hereby promises to pay to Cede & Co. or registered assigns, the principal sum of _________________ Dollars ($_______________) on May 15, 2007, and to pay interest thereon, as provided on the reverse hereof, until the principal and any unpaid and accrued interest is paid or duly provided for. The right to payment of the principal and all other amounts due with respect hereto is subordinated to the rights of Senior Indebtedness as set forth in the Indenture referred to on the reverse side hereof. Interest Payment Dates: May 15 and November 15, with the first payment to be made on November 15, 2000. Record Dates: May 1 and November 1. The provisions on the back of this certificate are incorporated as if set forth on the face hereof. IN WITNESS WHEREOF, IVAX CORPORATION has caused this instrument to be duly signed. IVAX CORPORATION By: --------------------------------- Name: Title: By: --------------------------------- Name: Title: Dated: ------------------------------ A-1 TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Securities referred to in the within-mentioned Indenture. U.S. BANK TRUST NATIONAL ASSOCIATION, as Trustee By: --------------------------------- Authorized Signatory Dated: ------------------------------ A-2 [REVERSE OF SECURITY] IVAX CORPORATION 5.5% CONVERTIBLE SENIOR SUBORDINATED NOTE DUE 2007 1. Interest. IVAX CORPORATION, a Florida corporation (the "Company"), promises to pay interest on the principal amount of this Security at the rate per annum shown above. The Company will pay interest semi-annually on May 15 and November 15 of each year, with the first payment to be made on November 15, 2000. Interest on the Securities will accrue on the principal amount from the most recent date to which interest has been paid or, if no interest has been paid, from May 12, 2000. Interest will be computed on the basis of a 360-day year of twelve 30-day months. 2. Maturity. The Notes will mature on May 15, 2007. 3. Method of Payment. The Company will pay interest on the Securities (except defaulted interest) to the persons who are registered Holders of Securities at the close of business on the record date set forth on the face of this Security next preceding the applicable interest payment date. Holders must surrender Securities to a Paying Agent to collect the principal, Redemption Price or Repurchase Price of the Securities. The Company will pay all amounts due with respect to the Securities in money of the United States that at the time of payment is legal tender for payment of public and private debts. However, the Company may pay all amounts due with respect to the Securities by check payable in such money. It may mail an interest check to a Holder's registered address. 4. Paying Agent, Registrar, Conversion Agent. Initially, U.S. Bank Trust National Association (the "Trustee") will act as Paying Agent, Registrar and Conversion Agent. The Company may change any Paying Agent, Registrar or Conversion Agent without notice. The Company may act in any such capacity. 5. Indenture. The Company issued the Securities under an Indenture dated as of May 12, 2000 (the "Indenture") between the Company and the Trustee. The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code ss.ss. 77aaa-77bbbb) (the "Act") as in effect on the date of the Indenture. The Securities are subject to all such terms, and Securityholders are referred to the Indenture and the Act for a statement of such terms. The Securities are general unsecured senior subordinated obligations of the Company limited to $200,000,000 aggregate principal amount ($250,000,000 if the Initial Purchasers (as defined in the Indenture) have elected to exercise their over-allotment option to purchase an additional $50,000,000 of the Securities), except as otherwise provided in the Indenture (except for Securities issued in substitution for destroyed, mutilated, lost or stolen Securities). Terms used herein which are defined in the Indenture have the meanings assigned to them in the Indenture. 6. Optional Redemption. The Securities will be redeemable at the option of the Company, in whole or in part, at any time on or after May 29, 2003, at the following redemption A-3 prices (expressed as percentages of the principal amount thereof), if redeemed during the periods commencing on the dates set forth below, in each case together with accrued and unpaid interest to the redemption date: ---------------------------- -------------------------- Redemption Date Price ---------------------------- -------------------------- May 29, 2003 103.143% ---------------------------- -------------------------- May 16, 2004 102.357% ---------------------------- -------------------------- May 16, 2005 101.571% ---------------------------- -------------------------- May 16, 2006 until 100.786% May 14, 2007 ---------------------------- -------------------------- 7. Notice of Redemption. Notice of redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each Holder of Securities to be redeemed at its registered address. Securities in denominations larger than $1,000 principal amount may be redeemed in part but only in whole multiples of $1,000 principal amount. On and after the redemption date interest ceases to accrue on Securities or portions of them called for redemption. 8. Repurchase at Option of Holder. In the event of a Change in Control with respect to the Company, then each Holder of the Securities shall have the right, at the Holder's option, subject to the rights of the holders of Senior Indebtedness under Article XI of the Indenture, to require the Company to repurchase such Holder's Securities including any portion thereof which is $1,000 in principal amount or any integral multiple thereof on a business day (the "Repurchase Date") that is 45 days after the date of the Company Notice, unless otherwise required by applicable law, at a price equal to 100% of the outstanding principal amount of such Security, plus accrued and unpaid interest to the Repurchase Date. Within 30 days after the occurrence of the Change in Control, the Company is obligated to give notice of the occurrence of such Change in Control to each Holder. Such notice shall include, among other things, the date by which Holder must notify the Company of such Holder's intention to exercise the Repurchase Right and of the procedure which such Holder must follow to exercise such right. To exercise the Repurchase Right, a Holder of Securities must deliver on or before the 30th day after the date of the Company Notice irrevocable written notice to the Company (or an agent designated by the Company for such purpose) and the Trustee of the Holder's exercise of such right together with the Securities with respect to which the right is being exercised, duly endorsed for transfer. In the event any Holder exercises its Repurchase Right, such Holder's conversion right will terminate upon receipt of the written notice of exercise of such Repurchase Right. A-4 A "Change in Control" of the Company means (i) the acquisition by any person, entity or "group" within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (excluding, for this purpose, the Company or its subsidiaries, or any employee benefit plan of the Company or its subsidiaries which acquires beneficial ownership of voting securities of the Company or any current affiliate of IVAX whose beneficial ownership does not in the future exceed 45% of IVAX outstanding Common Stock) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of shares of Common Stock sufficient to elect a majority of directors; (ii) persons who, as of the date of the Indenture, constitute the Board of Directors (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board of Directors, provided that any person becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such person were a member of the Incumbent Board; (iii) approval by the stockholders of the Company of a reorganization, merger or consolidation, in each case, with respect to which persons who were the stockholders of the Company immediately prior to such reorganization, merger or consolidation do not, immediately thereafter, beneficially own shares sufficient to elect a majority of directors in the election of directors of the reorganized, merged or consolidated company, or (iv) a liquidation or dissolution of the Company (other than pursuant to the United States Bankruptcy Code) or the conveyance, transfer or leasing of all or substantially all of the assets of the Company to any person. 9. Conversion. A Holder may convert his or her Security into Common Stock of the Company at any time prior to the close of business on May 15, 2007, or, (x) if the Security is called for redemption by the Company, the Holder may convert it at any time before the close of business on the date that is five business days before the date fixed for such redemption, or (y) if the Security is to be repurchased by the Company pursuant to paragraph 8 hereof, the Holder may convert it at any time before the Company receives the Option of Holder to Elect Purchase Notice. The initial conversion rate is 26.918 shares per $1,000 principal amount of Securities or an initial conversion price of $37.1499 per share, subject to adjustment in certain circumstances. To determine the number of shares issuable upon conversion of a Security, divide the principal amount to be converted by the conversion price in effect on the conversion date and round the result to the nearest 1/100th share. The Company will deliver a check in lieu of any fractional share. On conversion no payment or adjustment for any unpaid and accrued interest, or liquidated damages with respect to, the Securities will be made. If a Holder surrenders a Security for conversion between the record date for the payment of interest and the next interest payment date, such Security, when surrendered for conversion, must be accompanied by payment of an amount equal to the interest thereon which the registered Holder on such record date is to receive. A-5 To convert a Security a Holder must (1) complete and sign the Conversion Notice, with appropriate signature guarantee, on the back of the Security, (2) surrender the Security to a Conversion Agent, (3) furnish appropriate endorsements and transfer documents if required by the Registrar or Conversion Agent, (4) pay the amount of interest, if any, the Holder may be paid as provided in the last sentence of the above paragraph and (5) pay any transfer or similar tax if required. A Holder may convert a portion of a Security if the portion is $1,000 principal amount or a whole multiple of $1,000 principal amount. Any shares issued upon conversion of a Security shall bear the Private Placement Legend until after the second anniversary of the later of the issue date for the Securities and the last date on which the Company or any Affiliate of the Company was the owner of such shares or the Security (or any predecessor security) from which such shares were converted (or such shorter period of time as permitted by Rule 144(k) under the Securities Act or any successor provision thereunder) (or such longer period of time as may be required under the Securities Act or applicable state securities laws in the Opinion of Counsel for the Company, unless otherwise agreed by the Company and the Holder thereof). 10. Subordination. The Securities are subordinated in right of payment, in the manner and to the extent set forth in the Indenture, to the prior payment in full of all Senior Indebtedness. Each Holder by accepting a Security agrees to such subordination and authorizes the Trustee to give it effect. 11. Prohibition on Incurrence of Layered Indebtedness. The Company shall not incur, create, issue, assume, guarantee or otherwise become liable for any Indebtedness that is both (a) subordinate or junior in right of payment to any Senior Indebtedness and (b) senior in any respect in right of payment to the Securities. 12. Denominations, Transfer, Exchange. The Securities are in registered form without coupons in denominations of $1,000 principal amount and whole multiples of $1,000 principal amount. The transfer of Securities may be registered and Securities may be exchanged as provided in the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. The Registrar need not exchange or register the transfer of any Security selected for redemption in whole or in part. Also, it need not exchange or register the transfer of any Securities for a period of 15 days before the mailing of a notice of redemption of the Securities selected to be redeemed. 13. Persons Deemed Owners. The registered Holder of a Security may be treated as the owner of such Security for all purposes. 14. Merger or Consolidation. The Company shall not consolidate with, or merge into, or transfer or lease all or substantially all of its assets to, any person unless the person is a corporation, limited liability company or other entity organized under the laws of the United States, any State thereof or the District of Columbia and such person assumes by supplemental indenture all the obligations of the Company under the Securities and the Indenture and immediately after giving effect to the transaction no Default or Event of Default exists. A-6 Notwithstanding the foregoing, any subsidiary of the Company may consolidate with, merge into or transfer all or part of its properties and assets to the Company or any other subsidiary or subsidiaries of the Company. 15. Amendments, Supplements and Waivers. Subject to certain exceptions, the Indenture or the Securities may be amended or supplemented with the consent of the Holders of at least a majority in aggregate principal amount of the Securities then outstanding, and any existing Default or Event of Default may be waived with the consent of the Holders of a majority in aggregate principal amount of the Securities then outstanding. Without notice to or the consent of any Securityholder, the Indenture or the Securities may be amended or supplemented to cure any ambiguity, omission, defect or inconsistency, to provide for uncertificated Securities in addition to certificated Securities, to comply with Sections 5.01 and 10.15 of the Indenture or to make any change that does not adversely affect the rights of any Securityholder. 16. Defaults and Remedies. An Event of Default includes the occurrence of any of the following: default in payment of principal at maturity, upon redemption or exercise of a Repurchase Right or otherwise; default for 30 days in payment of interest or other amounts due; failure by the Company for 60 days after notice to it to comply with any of its other agreements in the Indenture or the Securities; and certain events of bankruptcy or insolvency. If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the Securities then outstanding may declare all the Securities to be due and payable immediately, except as provided in the Indenture. Securityholders may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may require indemnity satisfactory to it before it enforces the Indenture or the Securities. Subject to certain limitations, Holders of a majority in principal amount of the Securities then outstanding may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Securityholders notice of any continuing Default or Event of Default (except a Default or Event of Default in payment of principal or interest) if it determines that withholding notice is in their interests. The Company must furnish an annual compliance certificate to the Trustee. 17. Registration Rights. The Holders are entitled to shelf registration rights as set forth in the Registration Rights Agreement (as defined in the Indenture). The Holders shall be entitled to receive liquidated damages in certain circumstances, all as set forth in the Registration Rights Agreement. 18. Trustee Dealings with Company. The Trustee under the Indenture, or any banking institution serving as successor Trustee thereunder, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not Trustee. 19. No Recourse Against Others. No past, present or future director, officer, employee or stockholder, as such, of the Company shall have any liability for any obligations of the Company under the Securities or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each Securityholder by accepting a Security waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities. A-7 20. Authentication. This Security shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent. 21. Abbreviations. Customary abbreviations may be used in the name of a Securityholder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entirety), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (Uniform Gifts to Minors Act). THE COMPANY WILL FURNISH TO ANY SECURITYHOLDER UPON WRITTEN REQUEST AND WITHOUT CHARGE A COPY OF THE INDENTURE. REQUESTS MAY BE MADE TO: IVAX Corporation 4400 Biscayne Boulevard Miami, Florida 33137 Attention: Secretary A-8 [FORM OF ASSIGNMENT] I or we assign to PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER - ----------------------------------------- - -------------------------------------------------------------------------------- (please print or type name and address) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- the within Security and all rights thereunder, and hereby irrevocably constitutes and appoints - -------------------------------------------------------------------------------- attorney to transfer the Security on the books of the Company with full power of substitution in the premises. Dated: ----------------------------------- ---------------------------------- NOTICE: The signature on this assignment must correspond with the name as it appears upon the face of the within Security in every particular without alteration or enlargement or any change whatsoever and be guaranteed by a guarantor institution participating in the Securities Transfer Agents Medallion Program or in such other guarantee program acceptable to the Trustee. Signature Guarantee: ------------------------------------------------------------ In connection with any transfer of this Security occurring prior to the date which is the earlier of (i) the date of the declaration by the Commission of the effectiveness of a registration statement under the Securities Act of 1933, as amended (the "Securities Act") covering resales of this Security (which effectiveness shall not have been suspended or terminated at the date of the transfer) and (ii) the Resale Restriction Termination Date, the undersigned confirms that it has not utilized any general solicitation or general advertising in connection with transfer: [Check One] A-9 (1) ____ to the Company or a subsidiary thereof; or (2) ____ pursuant to and in compliance with Rule 144A under the Securities Act of 1933, as amended; or (3) ____ to an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended) that has furnished to the Trustee a signed letter containing certain representations and agreements (the form of which letter can be obtained from the Trustee); or (4) ____ outside the United States to a "foreign purchaser" in compliance with Rule 904 of Regulation S under the Securities Act of 1933, as amended; or (5) ____ pursuant to the exemption from registration provided by Rule 144 under the Securities Act of 1933, as amended; or (6) ____ pursuant to an effective registration statement under the Securities Act of 1933, as amended; or (7) ____ pursuant to another available exemption from the registration statement requirements of the Securities Act of 1933, as amended. and unless the box below is checked, the undersigned confirms that such Security is not being transferred to an "affiliate" of the Company as defined in Rule 144 under the Securities Act of 1933, as amended (an "Affiliate"): [ ] The transferee is an Affiliate of the Company. (If the Security is transferred to an Affiliate, the restrictive legend must remain on the Security for two years following the date of the transfer). Unless one of the items is checked, the Trustee will refuse to register any of the Securities evidenced by this certificate in the name of any person other than the registered Holder thereof; provided, however, that if item (3),(4),(5) or (7) is checked, the Company or the Trustee may require, prior to registering any such transfer of the Securities, in their sole discretion, such written legal opinions, certifications (including an investment letter in the case of box (3) or (4)) and other information as the Trustee or the Company have reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933, as amended. If none of the foregoing items are checked, the Trustee or Registrar shall not be obligated to register this Security in the name of any person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in Section 2.16 of the Indenture shall have been satisfied. Dated: Signed: -------------------------------- -------------------------------- (Sign exactly as name appears on the other side of this Security) A-10 Signature Guarantee: ------------------------------------------------------------ TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED The undersigned represents and warrants that it is purchasing this Security for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a "qualified institutional buyer" within the meaning of Rule 144A under the Securities Act of 1933, as amended, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined transferor is relying upon the undersigned's foregoing representations in order to claim the exemption from registration provided by Rule 144A. Dated: ----------------------------------- ---------------------------------- NOTICE: To be executed by an executive officer A-11 CONVERSION NOTICE To convert this Security into Common Stock of the Company, check the box: [ ] To convert only part of this Security, state the principal amount to be converted (must be in multiples of $1,000): $ ------------------ If you want the stock certificate made out in another person's name, fill in the form below: - -------------------------------------------------------------------------------- (Insert other person's soc. sec. or tax I.D. no.) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Print or type other person's name, address and zip code) - ------------------------------------------------------------------------------ Dated: Signed: -------------------------------- -------------------------------- (Sign exactly as your name(s) appear(s) on the other side of this Security) Signature(s) guaranteed by: ----------------------------------------------------- (All signatures must be guaranteed by a guarantor institution participating in the Securities Transfer Agents Medallion Program or in such other guarantee program acceptable to the Trustee.) A-12 OPTION OF HOLDER TO ELECT PURCHASE NOTICE If you want to elect to have this Security purchased by the Company pursuant to Section 3.07 of the Indenture, check the box: [ ] If you want to elect to have only part of this Security purchased by the Company pursuant to Section 3.07 of the Indenture, state the principal amount: $ ----------------------------------- (in an integral multiple of $1,000) Dated: Signed: -------------------------------- -------------------------------- (Sign exactly as your name(s) appear(s) on the other side of this Security) Signature(s) guaranteed by: ----------------------------------------------------- (All signatures must be guaranteed by a guarantor institution participating in the Securities Transfer Agents Medallion Program or in such other guarantee program acceptable to the Trustee.) A-13 EXHIBIT B-1 FORM OF PRIVATE PLACEMENT LEGEND THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS SECURITY IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.16 OF THE INDENTURE. THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS THE LATER OF (X) TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT, (E) TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(a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ny Global Security authenticated and delivered hereunder shall bear a legend (which would be in addition to any other legends required in the case of a Restricted Security) in substantially the following form: THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS SECURITY IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.16 OF THE INDENTURE. B-1 EXHIBIT C Form of Certificate To Be Delivered in Connection with Transfers to Non-QIB Accredited Investors U.S. Bank Trust National Association 180 East 5th Street St. Paul, Minnesota 55101 Attention: Corporate Finance Ladies and Gentlemen: In connection with our proposed purchase of 5.5% Convertible Senior Subordinated Notes due 2007 (the "Securities") of IVAX CORPORATION (the "Company"), we confirm that: 1. We have received a copy of the Offering Memorandum (the "Offering Memorandum"), dated May 8, 2000, relating to the Securities and such other information as we deem necessary in order to make our investment decision. We acknowledge that we have read and agreed to the matters stated on the inside front cover of the Offering Memorandum and in the section entitled "Notice to Investors" of the Offering Memorandum, including the restrictions on duplication and circulation of the Offering Memorandum. 2. We understand that any subsequent transfer of the Securities is subject to certain restrictions and conditions set forth in the Indenture relating to the Securities (as described in the Offering Memorandum) and the undersigned agrees to be bound by, and not to resell, pledge or otherwise transfer the Securities except in compliance with, such restrictions and conditions and the Securities Act of 1933, as amended (the "Securities Act") and all applicable state securities laws. 3. We understand that the offer and sale of the Securities have not been registered under the Securities Act, and that the Securities may not be offered or sold except as permitted in the following sentence. We agree, on our own behalf and on behalf of any accounts for which we are acting as hereinafter stated, that if we should sell any Securities prior to the date that is two years after the original issuance of the Securities, we will do so only (i) to the Company or any of its subsidiaries, (ii) inside the United States in accordance with Rule 144A under the Securities Act to a "qualified institutional buyer" (as defined in Rule 144A under the Securities Act), (iii) inside the United States to an institutional "accredited investor" (as defined below) that, prior to such transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to the Trustee (as defined in the Indenture relating to the Securities), a signed letter containing certain representations and agreements relating to the restrictions on transfer of the Securities (the form of which letter can be obtained from the Trustee), (iv) outside the United States in accordance with Rule 904 of Regulation S under the Securities Act, (v) pursuant to the exemption from registration provided by Rule 144 under the Securities Act (if available), or C-1 (vi) pursuant to an effective registration statement under the Securities Act, and we further agree to provide to any person purchasing any of the Securities from us a notice advising such purchaser that resales of the Securities are restricted as stated herein. 4. We are not acquiring the Securities for or on behalf of, and will not transfer the Securities to, any pension or welfare plan (as defined in Section 3 of the Employee Retirement Income Security Act of 1974), except as permitted by law. 5. We understand that, on any proposed resale of any Securities, we will be required to furnish to the Trustee and the Company such certification, legal opinions and other information as the Trustee and the Company may reasonably require to confirm that the proposed sale complies with the foregoing restrictions. We further understand that the Securities purchased by us will bear a legend to the foregoing effect. 6. We are an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Securities, and we and any accounts for which we are acting are each able to bear the economic risk of our or their investment, as the case may be. 7. We are acquiring the Securities purchased by us for our account or for one or more accounts (each of which is an institutional "accredited investor") as to each of which we exercise sole investment discretion. C-2 You, the Company, the Trustee and others are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby. Very truly yours, [Name of Transferee] By: -------------------------------- Name: Title: C-3 EXHIBIT D Form of Certificate To Be Delivered in Connection with Transfers Pursuant to Regulation S U.S. Bank Trust National Association 180 East 5th Street St. Paul, Minnesota 55101 Attention: Corporate Finance Re: IVAX CORPORATION (the "Company") 5.5% Convertible Senior Subordinated Notes due 2007 (the "Securities") Ladies and Gentlemen: In connection with our proposed sale of $_________ aggregate principal amount of the Securities, we confirm that such sale has been effected pursuant to and in accordance with Regulation S under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, we represent that: (1) the offer of the Securities was not made to a person in the United States; (2) either (a) at the time the buy offer was originated, the transferee was outside the United States or we and any person acting on our behalf reasonably believed that the transferee was outside the United States, or (b) the transaction was executed in, on or through the facilities of a designated off-shore securities market and neither we nor any person acting on our behalf knows that the transaction has been pre-arranged with a buyer in the United States; (3) no directed selling efforts have been made in the United States in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S, as applicable; (4) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act; and (5) we have advised the transferee of the transfer restrictions applicable to the Securities. D-1 You, the Company and counsel for the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby. Terms used in this certificate have the meanings set forth in Regulation S. Very truly yours, [Name of Transferor] By: ---------------------------------- Authorized Signature D-2 EXHIBIT E Form of Notice of Transfer Pursuant to Registration Statement IVAX CORPORATION 4400 Biscayne Boulevard Miami, Florida 33137 U.S. Bank Trust National Association 180 East 5th Street St. Paul, Minnesota 55101 Attention: Corporate Finance Re: IVAX CORPORATION (the "Company") 5.5% Convertible Senior Subordinated Notes Due 2007 (the "Securities") Ladies and Gentlemen: Please be advised that _____________ has transferred $___________ aggregate principal amount of the Securities or __ shares of the Company's Common Stock, $0.10 par value per share, issuable on conversion of the Securities ("Stock") pursuant to an effective Shelf Registration Statement on Form S-3 (File No. 333-_____) filed by the Company. We hereby certify that the prospectus delivery requirements, if any, of the Securities Act of 1933 as amended, have been satisfied with respect to the transfer described above and that the above-named beneficial owner of the Securities or Stock is named as a "Selling Security Holder" in the Prospectus dated _________, 2000, or in amendments or supplements thereto, and that the aggregate principal amount of the Securities, or number of shares of Stock transferred are [a portion of] the Securities or Stock listed in such Prospectus, as amended or supplemented, opposite such owner's name. Very truly yours, ------------------------- (Name) E-1 EXHIBIT F Form of Opinion of Counsel in Connection with Registration of Securities [Trustee] Re: IVAX CORPORATION (the "Company") 5.5% Convertible Senior Subordinated Notes Due 2007 (the "Securities") Gentlemen: Reference is made to the Securities issued pursuant to a certain indenture dated as of May 12, 2000 by and between the Company and U.S. Bank Trust National Association, as trustee (the "Trustee"). The Company issued $200,000,000 principal amount of Securities on May 12, 2000 [and an additional $50,000,000 on ________, 2000 [IF THE INITIAL PURCHASERS' OVERALLOTMENT OPTION IS EXERCISED]] in transactions exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"). The Company has filed with the Securities and Exchange Commission (the "SEC") a registration statement on Form S-3 (number 333-____) (the "Registration Statement") relating to the registration under the Securities Act of $ZZZ,ZZZ,ZZZ principal amount of the Securities and the shares of Common Stock of the Company (the "Shares") issuable upon conversion of the Securities being registered. The Registration Statement was declared effective by order of the SEC dated[_____________]. We have acted as counsel for the Company in connection with the issuance of the Securities and the preparation and filing of the Registration Statement and are familiar with the Securities, the Indenture, the Registration Statement, the above-mentioned SEC order and such other documents as are necessary to render this opinion. Based on the foregoing, it is our opinion that (1) the Registration Statement has become effective under the Securities Act and, to our knowledge, no stop order suspending the effectiveness of the Registration Statement has been issued, (2) assuming that the Securities covered by the Registration Statement and the Shares issuable upon conversion of such Securities are sold by a relevant Holder specified in the Registration Statement in a manner specified in the Registration Statement, such sale of the Securities and Shares issuable upon conversion of the Securities will have been duly registered under the Securities Act, and (3) the Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended. Yours truly, F-1 EX-4.3 3 0003.txt EXHIBIT 4.3 $250,000,000 Principal Amount IVAX CORPORATION 5.5% Convertible Senior Subordinated Notes Due 2007 REGISTRATION RIGHTS AGREEMENT May 12, 2000 UBS WARBURG LLC ING BARINGS LLC c/o Warburg Dillon Read LLC 299 Park Avenue New York, New York 10171 Dear Sirs: IVAX Corporation, a Florida corporation (the "Company"), proposes to issue and sell to UBS Warburg LLC, and ING Barings LLC, as initial purchasers (the "Initial Purchasers"), upon the terms set forth in a purchase agreement dated May 8, 2000 (the "Purchase Agreement"), $200,000,000 aggregate principal amount of its 5.5% Convertible Senior Subordinated Notes due 2007 (the "Firm Notes"), which will be convertible into Common Stock of the Company, par value $0.10 per share (the "Conversion Shares"), as well as an additional allotment of up to $50,000,000 initial principal amount of the same which the Initial Purchasers may subsequently elect to purchase pursuant to the terms of the Purchase Agreement (the "Additional Notes" and together with the Firm Notes, the "Notes"). The Notes will be issued pursuant to an indenture, of even date herewith (the "Indenture") between the Company and U.S. Bank Trust National Association (the "Trustee"). As an inducement to the Initial Purchasers, the Company agrees with the Initial Purchasers, for the benefit of the holders of the Notes (including, without limitation, the Initial Purchasers) and Conversion Shares (collectively, the "Securityholders"), as follows: 1. Shelf Registration. (a) The Company shall file with the Securities and Exchange Commission (the "Commission") within 90 days after the date hereof (the "Closing Date") a single registration statement (the "Shelf Registration Statement") on Form S-1 or Form S-3, if the use of such form is then available, to cover resales of Transfer Restricted Securities (as defined below) by the Holders (as defined below). The Company shall use its best efforts to cause the Shelf Registration Statement to be declared effective by the Commission on or prior to 180 days from the Closing Date. "Transfer Restricted Securities" means each Note and any Conversion Share until the earlier of the (x) the date on which such Note or Conversion Share has been effectively registered under the Securities Act of 1933 (the "Securities Act") and disposed of, whether or not in accordance with the Shelf Registration Statement, and (y) the date which is two years (or such shorter period of time as permitted by Rule 144(k) under the Securities Act (or any similar provisions then in force)) after the later of (A) the date of original issue of the Notes and (B) the last day that the Company or any of its "affiliates" (as defined under the Securities Act) was the owner of such Notes (or any predecessor thereto). (b) The Company shall use its best efforts to cause the Shelf Registration Statement to be effective for a period of two years (or for such longer period if extended pursuant to Section 2(i)) from the effective date thereof or such shorter period that will terminate when each Transfer Restricted Security covered by the Shelf Registration Statement ceases to be a Transfer Restricted Security (the "Shelf Registration Period"). The Company shall be deemed not to have used its best efforts to keep the Shelf Registration Statement effective during the requisite period if it voluntarily takes any action that would result in Holders of Transfer Restricted Securities covered thereby not being able to offer and sell such Transfer Restricted Securities during that period, unless such action is required by applicable law or otherwise permitted hereunder, including, without limitation, by Section 2(i) hereof. (c) Notwithstanding any other provisions of this Agreement to the contrary, the Company shall cause the Shelf Registration Statement and the related prospectus and any amendment or supplement thereto, as of the effective date of the Shelf Registration Statement, amendment or supplement, (i) to comply in all material respects with the applicable requirements of the Securities Act and the rules and regulations of the Commission and (ii) not to contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, except that the foregoing shall not apply to any information provided to the Company by any Initial Purchaser or Holder for inclusion in the Shelf Registration Statement. 2. Registration Procedures. In connection with the proposed offer and sale of the Transfer Restricted Securities in accordance with the methods of distribution set forth in the Shelf Registration Statement (the "Shelf Registration"), the following provisions apply: (a) The Company shall prepare and mail to each Securityholder identified by the Initial Purchasers a questionnaire requesting such information regarding such Securityholder and the distribution of Transfer Restricted Securities as the Company may reasonably require for inclusion in the Shelf Registration Statement and asking each such Securityholder to confirm that it will comply with applicable securities laws, including the Securities Act and the rules and regulations promulgated thereunder. Each Securityholder to whom such questionnaire is mailed shall deliver a completed questionnaire together with its written confirmation to the Company within fifteen days of receipt. The Company will include in the Shelf Registration Statement as a selling security holder each Securityholder that returns its questionnaire and confirmation within fifteen days of receipt and will use reasonable efforts to include in the Shelf Registration Statement any Securityholder which fails to provide the Company with a completed questionnaire and confirmation within fifteen days of receipt but otherwise provides the - 2 - completed questionnaire and confirmation prior to the commencement of the Shelf Registration Period. The Company shall have no obligation to include in the Shelf Registration Statement (whether by post-effective amendment, by prospectus supplement or otherwise) a Securityholder which fails to timely provide the Company with a completed questionnaire and confirmation. "Holder" means each Securityholder who (i) is so identified by the Initial Purchasers in writing within 5 business days after receipt by the Initial Purchasers of a written request by the Company and (ii) delivers to the Company a completed questionnaire containing the required information and confirmation within such fifteen-day period or is otherwise included as a selling security holder in the Shelf Registration Statement. (b) The Company shall (i) furnish to the Initial Purchasers, prior to the filing thereof with the Commission, a copy of the Shelf Registration Statement and each amendment thereof and each supplement, if any, to the prospectus included therein and, in the event that the Initial Purchasers (with respect to any portion of an unsold allotment from the original offering) is participating in the Shelf Registration, the Company shall use its best efforts to reflect in each such document, when so filed with the Commission, such comments as the Initial Purchasers reasonably may propose; and (ii) include in such Shelf Registration Statement (or amendment or supplements) the names of the Holders who propose to sell Transfer Restricted Securities pursuant to the Shelf Registration Statement as selling securityholders. (c) The Company shall give written notice to the Initial Purchasers and Holders of the Transfer Restricted Securities (which notice pursuant to clauses (ii)-(v) hereof shall be accompanied by an instruction to suspend the use of the prospectus contained in the Shelf Registration Statement (the "Prospectus") and any sales pursuant to such Prospectus until the requisite changes have been made): (i) when the Shelf Registration Statement or any amendment thereto has been filed with the Commission and when the Shelf Registration Statement or any post-effective amendment thereto has become effective; (ii) of any request by the Commission for amendments or supplements to the Shelf Registration Statement or the Prospectus or for additional information; (iii) of the issuance by the Commission of any stop order suspending the effectiveness of the Shelf Registration Statement or the initiation of any proceedings for that purpose; (iv) of the receipt by the Company or its legal counsel of any written notification with respect to the suspension of the qualification of the Transfer Restricted Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and (v) of the happening of any event (but not the details thereof) that requires the Company to make changes in the Prospectus in order that the - 3 - Prospectus does not contain an untrue statement of a material fact nor omits to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. Any notice given hereunder shall be kept confidential and the recipient of a notice agrees that neither they nor their affiliates will engage in any unlawful transactions in the Company's securities based on the information contained in such notice. (d) The Company shall make every reasonable effort to obtain the withdrawal at the earliest possible time, of any order suspending the effectiveness of the Shelf Registration Statement. (e) The Company shall furnish to each Holder of Transfer Restricted Securities included within the coverage of the Shelf Registration Statement, without charge, at least one copy of the Shelf Registration Statement and any post-effective amendment thereto, including financial statements and schedules, and, if the Holder so requests in writing, all exhibits thereto (including those, if any, incorporated by reference). (f) The Company shall, during the Shelf Registration Period, deliver to each Holder of Transfer Restricted Securities included within the coverage of the Shelf Registration, without charge, as many copies of the Prospectus (including each preliminary Prospectus) and any amendment or supplement thereto as such person may reasonably request. The Company consents, subject to the provisions of this Agreement, to the use of the Prospectus or any amendment or supplement thereto by each of the selling Holders of the Transfer Restricted Securities covered by the Prospectus in connection with the offering and sale of the Transfer Restricted Securities covered by the Prospectus, or any amendment or supplement thereto, included in the Shelf Registration Statement. (g) Prior to any public offering of the Transfer Restricted Securities pursuant to any Shelf Registration Statement, the Company shall use its best efforts to register or qualify or cooperate with the Holders of the Transfer Restricted Securities included therein and their respective counsel in connection with the registration or qualification or exemption from registration or qualification of the Transfer Restricted Securities included in the Shelf Registration Statement for offer and sale under the securities or "blue sky" laws of such states of the United States as any Holder of the Transfer Restricted Securities included in the Shelf Registration Statement reasonably requests in writing and do any and all other acts or things reasonably necessary or advisable to enable the offer and sale in such states of the Transfer Restricted Securities covered by such Shelf Registration Statement; provided, however, that the Company shall not be required to (i) qualify as a foreign corporation to do business in any jurisdiction where it is not then so qualified or (ii) take any action which would subject it to general service of process or to taxation in any jurisdiction where it is not then so subject or (iii) subject itself to taxation in any jurisdiction in which it is not now so subject. - 4 - (h) The Company shall cooperate with the Holders of the Transfer Restricted Securities to facilitate the timely preparation and delivery prior to settlement of any sales pursuant to the Shelf Registration Statement of certificates representing the Transfer Restricted Securities sold pursuant to the Shelf Registration Statement free of any restrictive legends and in such denominations and registered in such names as the Holders may request provided that such request is made a reasonable period of time prior to sales of the Transfer Restricted Securities pursuant to such Shelf Registration Statement. (i) Upon the occurrence of any event contemplated by paragraphs (ii) through (v) of Section 2(c) above during the Shelf Registration Period, the Company shall promptly prepare and file a post-effective amendment to the Shelf Registration Statement or a supplement to the Prospectus and any other required document so that, as thereafter delivered to Holders of the Transfer Restricted Securities covered thereby or purchasers of Transfer Restricted Securities, the Prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that the Company may delay preparing, filing and distributing any such supplement or amendment (such period of delay, a "Suspension Period") if the Company determines in good faith that the preparation or filing of such supplement or amendment would, in the reasonable judgment of the Company, (i) interfere with or affect any pending or contemplated corporate development (whether or not a final decision has been made with respect to such development) or (ii) involve initial or continuing disclosure obligations that are not in the best interests of the Company's shareholders at such time; provided, further, that such delay shall not extend for a period of more than 30 business days in any three-month period or more than 60 business days in any twelve-month period. If the Company notifies the Initial Purchasers and the Holders of the Transfer Restricted Securities in accordance with paragraphs (ii) through (v) of Section 2(c) above to suspend the use of the Prospectus until the requisite changes to the Prospectus have been made, then the Initial Purchasers and the Holders of the Transfer Restricted Securities shall suspend use of such Prospectus and the period of effectiveness of the Shelf Registration Statement provided for in Section 1(b) above shall be extended by the number of days from and including the date of the giving of such notice to and including the date when the Initial Purchasers and the Holders of the Transfer Restricted Security shall have received such amended or supplemented prospectus pursuant to this Section 2(i). (j) Not later than the effective date of the Shelf Registration Statement, the Company will provide CUSIP numbers for the Notes and the Conversion Shares registered under the Shelf Registration Statement and provide the Trustee with a certificate for the Notes, in a form eligible for deposit with The Depository Trust Company, it being understood that such securities will continue to bear any appropriate restrictive legends. (k) The Company will comply with all rules and regulations of the Commission to the extent and so long as they are applicable to the Shelf Registration Statement and will make generally available to its security holders (or otherwise provide - 5 - in accordance with Section 11(a) of the Securities Act) an earnings statement satisfying the provisions of Section 11(a) of the Securities Act, no later than 45 days after the end of a 12-month period (or 90 days, if such period is a fiscal year) beginning with the first month of the Company's first fiscal quarter commencing after the effective date of the Shelf Registration Statement, which statement shall cover such 12-month period. (l) The Company shall cause the Indenture to be qualified under the Trust Indenture Act of 1939, as amended, in a timely manner and containing such changes, if any, as shall be necessary or desirable for such qualification. In the event that such qualification would require the appointment of a new trustee under the Indenture, the Company shall appoint a new trustee thereunder pursuant to the applicable provisions of the Indenture. (m) In addition to the questionnaire and confirmation provided for by Section 2(a) above, the Company may require each Holder of Transfer Restricted Securities to be sold pursuant to the Shelf Registration Statement to furnish to the Company such information regarding the Holder and the distribution of the Transfer Restricted Securities as the Company may from time to time reasonably require for inclusion in the Shelf Registration Statement, and the Company may exclude from the Shelf Registration Statement the Transfer Restricted Securities of any Holder that fails to furnish such information promptly after receiving such request. (n) The Company shall enter into such customary agreements (including, if requested, an underwriting agreement in customary form) and take all such other action, if any, as any Holder which, together with its "affiliates" (as defined in the Securities Act), holds $40,000,000 or greater in aggregate initial principal amount of the Transfer Restricted Securities and which, together with its affiliates, intends to sell at least $40,000,000 in initial aggregate principal amount of Transfer Restricted Securities in an underwritten offering, shall reasonably request in order to facilitate the disposition of the Transfer Restricted Securities pursuant to the Shelf Registration Statement; provided, that in no event shall the Company be required to cause any representatives to attend any informational or roadshow presentations or pay any expenses related thereto. (o) The Company shall, subject to the execution and delivery to the Company of any confidentiality agreements that the Company may reasonably request (i) make reasonably available for inspection by the Holders, any underwriter participating in any disposition of Transfer Restricted Securities pursuant to the Shelf Registration Statement and any attorney, accountant or other agent retained by the Holders or any such underwriter all relevant financial and other records, corporate documents and properties of the Company and (ii) cause the Company's officers, directors, employees, accountants and auditors to supply all relevant information reasonably requested by the Holders or any such underwriter, attorney, accountant or agent in connection with the Shelf Registration Statement, in each case, as shall be reasonably necessary to enable such persons, to conduct a reasonable investigation within the meaning of Section 11 of the Securities Act; provided, however, that the foregoing inspection and information gathering shall be coordinated on behalf of the Initial Purchasers and the other parties by - 6 - one firm of counsel, which firm shall be Willkie Farr & Gallagher until another firm shall be designated as described in Section 3 hereof. (p) The Company, if requested by any Holder of the Transfer Restricted Securities referred to in paragraph (n) above, shall cause (i) its counsel to deliver an opinion relating to the Transfer Restricted Securities in customary form addressed to such Holder and the managing underwriters, if any, thereof and dated, in the case of the initial opinion, the effective date of such Shelf Registration Statement covering the matters customarily covered in underwritten offerings, (ii) its counsel to deliver a statement in customary form relating to the compliance as to form of such Shelf Registration Statement (but not any documents incorporated by reference therein) and of the Indenture with the requirements of the Securities Act and the Trust Indenture Act, respectively; and, as of the date of the opinion and as of the effective date of the Shelf Registration Statement or most recent post-effective amendment thereto, as the case may be that no fact had come to such counsel's attention in connection with the preparation of the Shelf Registration Statement causing such counsel to believe that such Shelf Registration Statement and the Prospectus, as then amended or supplemented (but not any documents incorporated by reference therein), contained an untrue statement of a material fact or omitted to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which such statements were made, not misleading; (iii) its officers to execute and deliver all customary documents and certificates and updates thereof requested by any underwriters of the applicable Transfer Restricted Securities; and (iv) its independent public accountants and the independent public accountants, if any, with respect to any other entity for which financial information is provided in the Shelf Registration Statement to provide to the selling Holder(s) of the applicable Transfer Restricted Securities and any underwriter therefor a comfort letter in customary form and covering matters of the type customarily covered in comfort letters in connection with primary underwritten offerings, subject to receipt of appropriate documentation as contemplated, and only if permitted, by Statement of Auditing Standards No. 72. (q) The Company will use its best efforts to (i) if the Notes have been rated prior to the initial sale of such Notes, confirm such ratings will apply to the Notes covered by the Shelf Registration Statement, or (ii) if the Notes were not previously rated, cause the Notes covered by the Shelf Registration Statement to be rated with the appropriate rating agencies, if so requested by Holders of a majority in aggregate initial principal amount of Transfer Restricted Securities covered by such Shelf Registration Statement, or by the managing underwriters, if any. (r) In the event that any broker-dealer registered under the Exchange Act shall underwrite any Transfer Restricted Securities or participate as a member of an underwriting syndicate or selling group or "assist in the distribution" (within the meaning of the Conduct Rules (the "Rules") of the National Association of Securities Dealers, Inc. ("NASD")) thereof, whether as a Holder of such Transfer Restricted Securities or as an underwriter, a placement or sales agent or a broker or dealer in respect thereof, or otherwise, the Company, if requested by such broker-dealer, will assist such broker-dealer in complying with the requirements of such Rules, including, without limitation, - 7 - by (i) if such Rules, including Rule 2720, shall so require, engaging a "qualified independent underwriter" (as defined in Rule 2720) to participate in the preparation of the Shelf Registration Statement relating to such Transfer Restricted Securities, to exercise usual standards of due diligence in respect thereto and, if any portion of the offering contemplated by such Shelf Registration Statement is an underwritten offering or is made through a placement or sales agent, to recommend the yield of such Transfer Restricted Securities, (ii) indemnifying any such qualified independent underwriter to the extent of the indemnification of underwriters provided in Section 4 hereof and (iii) providing such information to such broker- dealer as may be required in order for such broker-dealer to comply with the requirements of the Rules. (s) The Company shall use its best efforts to take all other steps necessary to effect the registration of the Transfer Restricted Securities covered by the Shelf Registration Statement contemplated hereby. 3. Registration Expenses. The Company shall bear all fees and expenses incurred in connection with the performance of its obligations under Sections 1 and 2 hereof whether or not the Shelf Registration Statement is filed or becomes effective, shall bear or reimburse the Holders of the Transfer Restricted Securities covered thereby for the reasonable fees and disbursements of one firm of counsel, which firm shall be Willkie Farr & Gallagher until another firm shall be designated by the Holders of a majority in initial principal amount of the Notes covered thereby to act as counsel for the Holders in connection therewith. The Holders shall be responsible for all other fees and expenses, such as brokerage fees, underwriting discounts and commissions. 4. Indemnification. (a) To the extent permitted by law, the Company agrees to indemnify and hold harmless each Holder of Transfer Restricted Securities covered by the Shelf Registration Statement and each person, if any, who controls such Holder within the meaning of the Securities Act or the Exchange Act (each Holder and such controlling persons are referred to collectively as the "Indemnified Parties") from and against any losses, claims, damages or liabilities, joint or several, or any actions in respect thereof (including, but not limited to, any losses, claims, damages, liabilities or actions relating to purchases and sales of the Transfer Restricted Securities) to which each Indemnified Party may become subject under the Securities Act, the Securities Exchange Act of 1934, as amended (the "Exchange Act") or otherwise, insofar as such losses, claims, damages, liabilities or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Shelf Registration Statement or Prospectus or in any amendment or supplement thereto or in any preliminary Prospectus included in the Shelf Registration Statement, or arise out of, or are based upon, the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in light of the circumstances under which such statements were made, and shall reimburse, as incurred, the Indemnified Parties for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action in respect thereof; provided, however, that (i) the Company shall not be liable in any such case to the extent that such loss, claim, damage or liability arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in the Shelf Registration Statement or Prospectus or in any amendment or supplement thereto or in any preliminary Prospectus - 8 - included in the Shelf Registration Statement in reliance upon and in conformity with written information pertaining to an Initial Purchaser or a Holder and furnished to the Company by or on behalf of such Initial Purchaser or Holder specifically for inclusion therein and (ii) with respect to any untrue statement or omission or alleged untrue statement or omission made in any preliminary Prospectus included in the Shelf Registration Statement, the indemnity agreement contained in this subsection (a) shall not inure to the benefit of any Holder from whom the person asserting any such losses, claims, damages or liabilities purchased the Transfer Restricted Securities concerned, to the extent that a prospectus relating to such Transfer Restricted Securities was required to be delivered by such Holder under the Securities Act in connection with such purchase and any such loss, claim, damage or liability of such Holder results from the fact that there was not sent or given to such person, at or prior to the written confirmation of the sale of such Transfer Restricted Securities to such person, a copy of the final Prospectus if the Company had previously furnished copies thereof to such Holder; provided further, however, that this indemnity agreement will be in addition to any liability which the Company may otherwise have to such Indemnified Party. The Company shall also indemnify underwriters, their officers and directors and each person who controls such underwriters within the meaning of the Securities Act or the Exchange Act to the same extent as provided above with respect to the indemnification of the Holders of the Transfer Restricted Securities if requested by such Holders. (b) To the extent permitted by law, each Holder of the Transfer Restricted Securities covered by the Shelf Registration Statement severally and not jointly, will indemnify and hold harmless the Company and each person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act from and against any losses, claims, damages or liabilities or any actions in respect thereof, to which the Company or any such controlling person may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such losses, claims, damages, liabilities or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Shelf Registration Statement or Prospectus or in any amendment or supplement thereto or in any preliminary Prospectus included in the Shelf Registration Statement, or arise out of or are based upon the omission or alleged omission to state therein a material fact necessary to make the statements therein not misleading, but in each case only to the extent that the untrue statement or omission or alleged untrue statement or omission was made in reliance upon and in conformity with written information pertaining to such Holder and furnished to the Company by or on behalf of such Holder specifically for inclusion therein; and, subject to the limitation set forth immediately preceding this clause, shall reimburse, as incurred, the Company for any legal or other expenses reasonably incurred by the Company or any such controlling person in connection with investigating or defending any loss, claim, damage, liability or action in respect thereof. This indemnity agreement will be in addition to any liability which such Holder may otherwise have to the Company or any of its controlling persons. (c) Promptly after receipt by an indemnified party under this Section 4 of notice of the commencement of any action or proceeding (including a governmental investigation), such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 4, notify the indemnifying party of the commencement thereof; but the omission so to notify the indemnifying party will not, in any event, relieve the indemnifying party from any obligations to any indemnified party. - 9 - In case any such action is brought against any indemnified party, and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (which may be counsel for the indemnifying party) unless such indemnified party shall have been advised by counsel that there may be one or more defenses reasonably available to such indemnified party that are in conflict with the defenses available to the indemnifying party or its affiliates or controlling persons, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof the indemnifying party will not be liable to such indemnified party under this Section 4 for any legal or other expenses, other than reasonable costs of investigation, subsequently incurred by such indemnified party in connection with the defense thereof. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened action in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party unless such settlement includes an unconditional release of such indemnified party from all liability on any claims that are the subject matter of such action. An indemnifying party will not be liable for any settlement of any action or claim effected without its written consent; provided, however, that such consent will not be reasonably withheld. (d) If the indemnification provided for in this Section 4 is unavailable or insufficient to hold harmless an indemnified party under subsections (a) or (b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to in subsection (a) or (b) above (i) in such proportion as is appropriate to reflect the relative benefits received by the indemnifying party or parties on the one hand and the indemnified party on the other from the sale of the Transfer Restricted Securities, pursuant to the Shelf Registration Statement, or (ii) if the allocation provided by the foregoing clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the indemnifying party or parties on the one hand and the indemnified party on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities (or actions in respect thereof) as well as any other relevant equitable considerations. The relative fault of the parties shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or such Holder or such other indemnified party, as the case may be, on the other, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any action or claim which is the subject of this subsection (d). Notwithstanding any other provision of this Section 4(d), the Holders of the Transfer Restricted Securities shall not be required to contribute any amount in excess of the amount by which the net proceeds received by such Holders from - 10 - the sale of the Transfer Restricted Securities pursuant to the Shelf Registration Statement exceeds the amount of damages which such Holders have otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this paragraph (d), each person, if any, who controls such indemnified party within the meaning of the Securities Act or the Exchange Act shall have the same rights to contribution as such indemnified party and each person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act shall have the same rights to contribution as the Company. (e) The agreements contained in this Section 4 shall survive the sale of the Transfer Restricted Securities pursuant to the Shelf Registration Statement and shall remain in full force and effect, regardless of any termination or cancellation of this Agreement or any investigation made by or on behalf of any indemnified party. 5. Liquidated Damages Under Certain Circumstances. If (i) the Shelf Registration Statement is not filed with the Commission on or prior to 90 days after the Closing Date, (ii) the Shelf Registration Statement has not been declared effective by the Commission within 180 days after the Closing Date or (iii) the Shelf Registration Statement is filed and declared effective but shall thereafter during the Shelf Registration Period cease to be effective (without being succeeded immediately by an additional registration statement filed and declared effective) or usable for the offer and sale of Transfer Restricted Securities for a period of time (including any Suspension Period) which shall exceed 60 days in the aggregate in any 12-month period (each such event referred to in clauses (i) through (iii), a "Registration Default"), the Company will pay liquidated damages to each Holder of Transfer Restricted Securities that timely complied with the requirements of Section 2(a). The amount of liquidated damages payable during any period during which a Registration Default shall have occurred and be continuing is that amount which is equal to one-quarter of one percent (25 basis points) per annum per $1,000 initial principal amount and, if applicable, on an equivalent basis per Conversion Share (subject to adjustment in the event of stock splits, stock recombinations, stock dividends and the like) constituting Transfer Restricted Securities for each 90-day period until the applicable registration statement is filed and the applicable Registration Default has been cured, up to a maximum amount of liquidated damages of three-quarters of one percent (75 basis points) per annum per $1,000 initial principal amount of Notes and, if applicable, on an equivalent basis per Conversion Share (subject to adjustment as set forth above) constituting Transfer Restricted Securities. All accrued liquidated damages shall be paid to Holders of record entitled to receive such payments by wire transfer of immediately available funds or by federal funds check by the Company on the regular interest payment date. Following the cure of all Registration Defaults or, if earlier, the termination of the Shelf Registration Period, liquidated damages will cease to accrue with respect to such Registration Default. 6. Rules 144 and 144A. The Company shall use its best efforts to file the reports required to be filed by it under the Securities Act and the Exchange Act in a timely manner and, if at any time the Company is not required to file such reports, it will, upon the request of any Holder of Notes, make publicly available other information so long as necessary to permit sales of their securities pursuant to Rules 144 and 144A. The Company covenants that it will take - 11 - such further action as any Holder of Notes may reasonably request, all to the extent required from time to time to enable such Holder to sell Notes without registration under the Securities Act within the limitation of the exemptions provided by Rules 144 and 144A (including the requirements of Rule 144A(d)(4)). The Company will provide a copy of this Agreement to prospective purchasers of Notes identified to the Company by the Initial Purchasers upon request. Upon the request of any Holder of Notes, the Company shall deliver to such Holder a written statement as to whether it has complied with such requirements. Notwithstanding the foregoing, nothing in this Section 6 shall be deemed to require the Company to register any of its securities pursuant to the Exchange Act. 7. Underwritten Registrations. If any of the Transfer Restricted Securities covered by the Shelf Registration Statement are to be sold in an underwritten offering, the investment banker or investment bankers and manager or managers that will administer the offering ("Managing Underwriters") will be selected by the Company; provided, that such selection is consented to by the Holders of a majority in aggregate initial principal amount of Transfer Restricted Securities to be included in such offering, which consent shall not be unreasonably withheld or delayed. No person may participate in any underwritten registration hereunder unless such person (i) agrees to sell such person's Transfer Restricted Securities on the basis provided in any underwriting arrangements approved by the persons entitled hereunder to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements. 8. Miscellaneous. (a) Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, except by the Company and the written consent of the Holders of a majority in initial principal amount of the Transfer Restricted Securities affected by such amendment, modification, supplement, waiver or consents. (b) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand delivery, first-class mail, facsimile transmission, or overnight air courier: (1) if to a Holder of the Transfer Restricted Securities, at the most current address given by such Holder to the Company in writing. (2) if to the Initial Purchasers: UBS Warburg LLC ING Barings LLC c/o UBS Warburg LLC 299 Park Avenue New York, NY 10171 Fax No.: (212) 821-2446 Attention: Syndicate Department - 12 - with a copy to: Willkie Farr & Gallagher 787 7th Avenue New York, NY 10019 Fax No.: (212) 728-8111 Attention: William J. Grant, Esq. (3) if to the Company, at its address as follows: IVAX Corporation 4400 Biscayne Boulevard Miami, FL 33137 Fax No.: (305) 575-6049 Attention: Chief Legal Officer with a copy to: Stearns Weaver Miller Weissler Alhadeff & Sitterson P.A. 150 West Flagler Street, Suite 2200 Miami, FL 33130 Fax No.: (305) 789-3395 Attention: Alison W. Miller, Esq. All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; three business days after being deposited in the mail, postage prepaid, if mailed; when receipt is acknowledged by recipient's facsimile machine operator, if sent by facsimile transmission; and on the day delivered, if sent by overnight air courier. (c) No Conflicting Agreements. The Company has not, as of the date hereof, entered into, nor shall it, on or after the date hereof, enter into, any agreement with respect to its securities that conflicts with the provisions hereof. (d) Successors and Assigns. This Agreement shall be binding upon the Company and each Holder of Transfer Restricted Securities and their respective successors and assigns. (e) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart by facsimile shall be effective as delivery of a manually executed counterpart thereof. (f) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. - 13 - (g) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. (h) Severability. If any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby. (i) Transfer Restricted Securities Held by the Company. Whenever the consent or approval of Holders of a specified percentage of initial principal amount of Transfer Restricted Securities is required hereunder, Transfer Restricted Securities held by the Company or its affiliates (other than subsequent Holders of Transfer Restricted Securities if such subsequent Holders are deemed to be affiliates solely by reason of their holdings of such Transfer Restricted Securities) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage. - 14 - If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement on the Initial Purchasers and the Company in accordance with its terms. Very truly yours, IVAX CORPORATION By: /S/ ------------------------------------- Name: Title: Accepted and agreed to as of the date first above written UBS WARBURG LLC ING BARINGS LLC By: UBS WARBURG LLC ------------------------------------- By: /S/ ------------------------------------- Name: Title: - 15 - EX-5 4 0004.txt EXHIBIT 5 LAW OFFICES STEARNS WEAVER MILLER WEISSLER ALHADEFF & SITTERSON, P.A. MUSEUM TOWER 150 WEST FLAGLER STREET MIAMI, FLORIDA 33130 --------- MIAMI (305) 789-3200 o BROWARD (954) 463-5440 FAX (305) 789-3395 WWW.STEARNSWEAVER.COM
E. RICHARD ALHADEFF LISHA D. HOGUE ELIZABETH G. RICE OWEN S. FREED LOUISE JACOWITZ ALLEN ALICE R. HUNEYCUTT GLENN M. RISSMAN SENIOR COUNSEL STUART D. AMES RICHARD B. JACKSON ANDREW L. RODMAN ALEXANDER ANGUEIRA SHARON LEE JOHNSON KEITH E. ROUNSAVILLE DAVID M. SMITH LAWRENCE J. BAILIN MICHAEL I. KEYES MIMI L. SALL LAND USE CONSULTANT ANA T. BARNETT ROBERT T. KOFMAN NICOLE S. SAYFIE PATRICK A. BARRY CHAD K. LANG RICHARD E. SCHATZ SHAWN BAYNE FRANK J. LOPEZ DAVID M. SEIFER TAMPA OFFICE SUSAN FLEMING BENNETT TERRY M. LOVELL JOSE G. SEPULVEDA SUITE 2200 LISA K. BERG JOY SPILLIS LUNDEEN JAY B. SHAPIRO SUNTRUST FINANCIAL CENTRE MARK J. BERNET GEOFFREY MacDONALD MARTIN S. SIMKOVIC 401 EAST JACKSON STREET HANS C. BEYER MONA E. MARKUS CURTIS H. SITTERSON TAMPA, FLORIDA 33602 RICHARD I. BLINDERMAN BRIAN J. McDONOUGH MARK D. SOLOV ------- MATTHEW W. BUTTRICK ANTONIO R. MENENDEZ EUGENE E. STEARNS (813) 223-4800 JENNIFER STEARNS BUTTRICK FRANCISCO J. MENENDEZ THOMAS T. STEELE PETER L. DESIDERIO ALISON W. MILLER BRADFORD SWING MARK P. DIKEMAN VICKI LYNN MONROE SUSAN J. TOEPFER FORT LAUDERDALE OFFICE DREW M. DILLWORTH HAROLD D. MOOREFIELD, JR. ANNETTE TORRES SUITE 1900 SHARON QUINN DIXON JIMMY L. MORALES DENNIS R. TURNER 200 EAST BROWARD BOULEVARD ALAN H. FEIN JOHN N. MURATIDES RONALD L. WEAVER FORT LAUDERDALE, FLORIDA 33301 ANGELO M. FILIPPI JOHN K. OLSON ROBERT I. WEISSLER ------- ELISE FRIEDBAUER JEFFREY A. NORMAN PATRICIA G. WELLES (954) 462-9500 ROBERT E. GALLAGHER, JR. KARA E. PLUNKETT MARTIN B. WOODS CHAVA E. GENET DAVID C. POLLACK LATASHA A. GETHERS DARRIN J. QUAM PATRICIA K. GREEN JOHN M. RAWICZ JOSEPH K. HALL PATRICIA A. REDMOND
August 7, 2000 Phillip Frost, M.D. Chief Executive Officer IVAX Corporation 4400 Biscayne Boulevard Miami, Florida 33137 Re: IVAX Corporation - Offering of 5.5% Convertible Senior Subordinated Notes due 2007 (the "Notes") and shares of Common Stock, par value $0.10 per share (the "Common Stock") Dear Dr. Frost: As counsel to IVAX Corporation, a Florida corporation ("IVAX"), we have examined the Articles of Incorporation and Amended and Restated Bylaws of IVAX and that certain Indenture, dated May 12, 2000, between IVAX and U.S. Bank Trust, National Association, as Trustee (the "Indenture"), as well as such other documents and proceedings as we have considered necessary for the purposes of this opinion. We have also examined and are familiar with the proceedings taken by IVAX to authorize the issuance of up to $250,000,000 of Notes and the shares of Common Stock issuable upon conversion of the Notes. In addition, we have examined a copy of IVAX' Registration Statement on Form S-3, pursuant to which the resale of the Notes and Common Stock issuable upon conversion of the Notes by certain Selling Securityholders named therein will be registered under the Securities Act of 1933, as amended. In rendering this opinion we have assumed, without independent investigation: (i) the authenticity of all documents submitted to us as originals; (ii) the conformity to original documents of all documents submitted to us as certified or photostatic copies; and (iii) the genuineness of all Phillip Frost, M.D. July 31, 2000 Page 2 signatures. In addition, as to questions of material fact to the opinions expressed herein, we have relied upon such certificates of public officials, corporate agents and officers of IVAX and such other certificates as we deemed relevant. Based upon the foregoing, and having regard to legal considerations which we deem relevant, we are of the opinion that: (i) the Notes are valid and binding obligations of IVAX entitled to the benefits of the Indenture and enforceable against IVAX in accordance with their terms except to the extent that enforcement thereof may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally, and (b) general principles of equity regardless of whether enforceability is considered in a proceeding at law or in equity; and (ii) following the issuance of the Common Stock upon the conversion of the Notes in accordance with the terms of the Indenture, the Common Stock will be validly issued, fully paid and non-assessable. In addition, we hereby consent to the use of our opinions included herein and to all references to this firm under the heading "Legal Matters" in the Prospectus included in IVAX' Registration Statement on Form S-3, pursuant to which the Notes and Common Stock will be registered under the Securities Act of 1933, as amended. Very truly yours, STEARNS WEAVER MILLER WEISSLER ALHADEFF & SITTERSON, P.A. STEARNS WEAVER MILLER WEISSLER ALHADEFF & SITTERSON, P.A. EX-12 5 0005.txt EXHIBIT 12 Computation of Ratio of Earnings to Fixed Charges (dollars in thousands) (unaudited)
3 Months Ended Years Ended December 31, March 31, ----------------------------------------------------------------------------------------- 1995 1996 1997 1998 1999 2000 Fixed Charges Interest expense on indebtedness $ 8,086 $ 15,996 $ 14,685 $ 6,857 $ 5,556 $ 2,042 Interest expense on portion of rent expense representative of interest 498 435 394 340 366 96 Total Fixed Charges 8,584 $ 16,431 $ 15,079 $ 7,197 $ 5,922 $ 2,138 Earnings (Loss): Net income (loss) before provision for income taxes and minority interest $ 124,128 $ (189,389) $ (160,544) $ 34,876 $ 84,735 $ 30,249 Fixed charges per above 8,584 16,431 15,079 7,197 5,922 2,138 Total earnings (loss) $ 132,712 $ (172,958) $ (145,465) $ 42,073 $ 90,657 $ 32,387 Ratio of earnings to fixed charges 15.46 (10.53) (9.65) (5.85) 15.31 15.15 Coverage deficiency - $ (189,389) $ (160,544) $ - - -
EX-23.1 6 0006.txt EXHIBIT 23.1 CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS As independent certified public accountants, we hereby consent to the incorporation by reference in this Registration Statement on Form S-3 of our report dated February 4, 2000, except with respect to the matters discussed in Notes 12 and 16 therein, as to which the dates are February 22, 2000 and March 10, 2000 respectively, included in the IVAX Corporation's Annual Report on Form 10-K for the year ended December 31, 1999 and to all references to our Firm included in this Registration Statement. Arthur Andersen LLP Miami, Florida, August 4, 2000. EX-25 7 0007.txt EXHIBIT 25 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------- FORM T-1 Statement of Eligibility Under the Trust Indenture Act of 1939 of a Corporation Designated to Act as Trustee U.S. BANK TRUST NATIONAL ASSOCIATION (Exact name of Trustee as specified in its charter) United States 41-0257700 (State of Incorporation) (I.R.S. Employer Identification No.) U.S. Bank Trust Center 180 East Fifth Street St. Paul, Minnesota 55101 (Address of Principal Executive Offices) (Zip Code) Ivax Corporation (Exact name of Registrant as specified in its charter) Florida 16-1003559 (State of Incorporation) (I.R.S. Employer Identification No.) 4400 Biscayne Boulevard Miami, FL 33137 (Address of Principal Executive Offices) (Zip Code) 5.5% Convertible Senior Subordinated Notes Due 2007 (Title of the Indenture Securities) GENERAL 1. General Information Furnish the following information as to the Trustee. (a) Name and address of each examining or supervising authority to which it is subject. Comptroller of the Currency Washington, D.C. (b) Whether it is authorized to exercise corporate trust powers. Yes 2. AFFILIATIONS WITH OBLIGOR AND UNDERWRITERS If the obligor or any underwriter for the obligor is an affiliate of the Trustee, describe each such affiliation. None See Note following Item 16. Items 3-15 are not applicable because to the best of the Trustee's knowledge the obligor is not in default under any Indenture for which the Trustee acts as Trustee. 16. LIST OF EXHIBITS List below all exhibits filed as a part of this statement of eligibility and qualification. 1. Copy of Articles of Association.* 2. Copy of Certificate of Authority to Commence Business.* 3. Authorization of the Trustee to exercise corporate trust powers (included in Exhibits 1 and 2; no separate instrument).* 4. Copy of existing By-Laws.* 5. Copy of each Indenture referred to in Item 4. N/A. 6. The consents of the Trustee required by Section 321(b) of the act. 7. Copy of the latest report of condition of the Trustee published pursuant to law or the requirements of its supervising or examining authority is incorporated by reference to Registration Number 22-22451. * Incorporated by reference to Registration Number 22-27000. NOTE The answers to this statement insofar as such answers relate to what persons have been underwriters for any securities of the obligors within three years prior to the date of filing this statement, or what persons are owners of 10% or more of the voting securities of the obligors, or affiliates, are based upon information furnished to the Trustee by the obligors. While the Trustee has no reason to doubt the accuracy of any such information, it cannot accept any responsibility therefor. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee, U.S. Bank Trust National Association, an Association organized and existing under the laws of the United States, has duly caused this statement of eligibility and qualification to be signed on its behalf by the undersigned, thereunto duly authorized, and its seal to be hereunto affixed and attested, all in the City of Saint Paul and State of Minnesota on the 7th day of August, 2000. U.S. BANK TRUST NATIONAL ASSOCIATION /s/ Laurie Howard --------------------------- Laurie Howard Vice President /s/ Harry H. Hall, Jr. - --------------------------- Harry H. Hall, Jr. Assistant Secretary EXHIBIT 6 CONSENT In accordance with Section 321(b) of the Trust Indenture Act of 1939, the undersigned, U.S. BANK TRUST NATIONAL ASSOCIATION hereby consents that reports of examination of the undersigned by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon its request therefor. Dated: August 7, 2000 U.S. BANK TRUST NATIONAL ASSOCIATION /s/ Laurie Howard --------------------------- Laurie Howard Vice President -----END PRIVACY-ENHANCED MESSAGE-----