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