1
Exhibit 1.1
BE AEROSPACE, INC.
(a Delaware corporation)
$250,000,000
8% Senior Subordinated Notes due 2008
PURCHASE AGREEMENT
February 6, 1998
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
BT Alex. Xxxxx Incorporated
Chase Securities Inc.
Credit Suisse First Boston Corporation
Xxxxxx Xxxxxxx & Co. Incorporated
c/o Merrill Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxxx Xxxxx World Headquarters
North Tower
World Financial Center
New York, New York 10281-1201
Ladies and Gentlemen:
BE Aerospace, Inc., a Delaware corporation (the "Company"), proposes
to issue and sell to each of Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
("Xxxxxxx Xxxxx"), BT Xxxx. Xxxxx Incorporated, Chase Securities Inc., Credit
Suisse First Boston Corporation and Xxxxxx Xxxxxxx & Co. Incorporated (each an
"Initial Purchaser" and together the "Initial Purchasers") $250,000,000
aggregate principal amount of its 8% Senior Subordinated Notes due 2008 (the
"Securities"). The Securities are to be issued pursuant to an indenture to be
dated as of February 13, 1998 (the "Indenture") between the Company and United
States Trust Company of New York, as trustee (the "Trustee"). The Securities and
the Indenture are more fully described in the Offering Memorandum (as
hereinafter defined). Capitalized terms used herein and not otherwise defined
herein have the respective meanings specified in the Offering Memorandum.
The Securities will be offered and sold to you without being
registered under the
-1-
2
Securities Act of 1933, as amended (the "1933 Act"), in reliance on an exemption
therefrom. The Company has prepared a preliminary offering memorandum, dated
January 29, 1998 (such preliminary offering memorandum being hereinafter
referred to as the "Preliminary Offering Memorandum"), and is preparing a final
offering memorandum, dated February 6, 1998 (such final offering memorandum, in
the form first furnished to the Initial Purchasers for use in connection with
the offering of the Securities being hereinafter referred to as the "Offering
Memorandum"), each setting forth information regarding the Company and the
Securities. The Company hereby confirms that it has authorized the use of the
Preliminary Offering Memorandum and the Offering Memorandum in connection with
the offering and resale of the Securities.
The Company understands that you propose to make an offering of the
Securities on the terms set forth in the Offering Memorandum, as soon as you
deem advisable after this Agreement has been executed and delivered, (i) to
persons in the United States whom you reasonably believe to be qualified
institutional buyers ("Qualified Institutional Buyers") as defined in Rule 144A
under the 1933 Act, as such rule may be amended from time to time ("Rule 144A"),
in transactions under Rule 144A and/or (ii) to non-U.S. persons outside the
United States to whom you reasonably believe offers and sales of the Securities
may be made in reliance upon Regulation S ("Regulation S") under the 1933 Act.
The holders of Securities will be entitled to the benefits of a
Registration Rights Agreement, in substantially the form attached hereto as
Exhibit A with such changes as shall be agreed to by the parties hereto (the
"Registration Rights Agreement"), pursuant to which the Company will file a
registration statement (the "Registration Statement") with the Securities and
Exchange Commission (the "Commission") registering the Securities or the
Exchange Securities referred to in the Registration Rights Agreement under the
1933 Act.
On January 28, 1998, the Company commenced a tender offer (the
"Tender Offer") for all outstanding 9 3/4% Senior Notes due 2003 (the "Senior
Notes") and a related consent solicitation (the "Consent Solicitation") pursuant
to which the Company is soliciting consents to certain amendments (the
"Amendments") to the Indenture, dated as of March 3, 1993, as supplemented on
January 5, 1996, between the Company and the United States Trust Company of New
York, under which the Senior Notes were issued, all as more fully described in
the Offer to Purchase and Consent Solicitation Statement, dated January 28,
1998, and related documentation (the "Offer to Purchase"). Upon consummation of
the Tender Offer and Consent Solicitation, the Company will execute a
supplemental indenture (the "Supplemental Indenture") to the Indenture, which
will give effect to the Amendments.
Section 1. Representations and Warranties. (a) The Company
represents and warrants to and agrees with the Initial Purchasers as of the date
hereof and as of the Closing Time as follows:
(i) As of their respective dates and as of the Closing Time, none of
the Preliminary Offering Memorandum, the Offering Memorandum or any
amendment or
-2-
3
supplement thereto will include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; except that this representation and warranty does not apply to
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by the Initial Purchasers
through Xxxxxxx Xxxxx expressly for use in the Preliminary Offering
Memorandum, the Offering Memorandum or any amendment or supplement
thereto.
(ii) Except for the Senior Notes and the Company's 9 7/8% Senior
Subordinated Notes due 2006, there are no debt securities of the Company
registered under the Securities Exchange Act of 1934, as amended (the
"1934 Act"), or listed on a national securities exchange or quoted in a
U.S. automated inter-dealer quotation system. The Company has been advised
that the Securities have been designated PORTAL securities in accordance
with the rules and regulations of the National Association of Securities
Dealers, Inc. ("NASD").
(iii) None of the Company or any affiliate of the Company (as
defined in Rule 501(b) under the 0000 Xxx) has directly or through any
agent, sold, offered for sale, solicited offers to buy or otherwise
negotiated in respect of, any security (as defined in the 1933 Act) by or
for the Company that are of the same or similar class as the Securities
(other than with respect to the Exchange Securities) in a manner that
would require the registration of the Securities under the 1933 Act.
(iv) None of the Company or any affiliate of the Company or any
person acting on their behalf has (A) engaged, in connection with the
offering of the Securities, in any form of general solicitation or general
advertising (as those terms are used within the meaning of Regulation D);
(B) solicited offers for, or offered or sold, such Securities by means of
any form of general solicitation or general advertising (as those terms
are used in Regulation D under the 0000 Xxx) or in any manner involving a
public offering within the meaning of Section 4(2) of the 1933 Act; or (C)
engaged in any directed selling efforts (as defined in Rule 902 of the
0000 Xxx) in the United States in connection with the Securities being
offered and sold pursuant to Regulation S.
(v) Deloitte & Touche L.L.P., which is reporting upon the audited
financial statements and related notes included in the Offering
Memorandum, is an independent public accountant with respect to the
Company in accordance with the provisions of the 1933 Act and the rules
and regulations of the Commission thereunder.
(vi) The financial statements included in the Offering Memorandum
present fairly (a) the financial position of the Company and its
subsidiaries on a consolidated basis as of the dates indicated and (b) the
results of operations and cash flows of the Company and its subsidiaries
on a consolidated basis for the periods specified, subject, in the case of
unaudited financial statements, to normal year-end adjustments which shall
not be
-3-
4
materially adverse to the condition (financial or otherwise), earnings,
business affairs or business prospects of the Company and its
subsidiaries, considered as one enterprise. Such financial statements have
been prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved. The
financial statement schedules, if any, included in the Offering Memorandum
present fairly the information required to be stated therein. The selected
financial data included in the Offering Memorandum present fairly the
information shown therein and have been compiled on a basis consistent
with that of the audited consolidated financial statements included in the
Offering Memorandum. The pro forma and "as adjusted" financial information
included in the Offering Memorandum present fairly the information shown
therein and, in the opinion of the Company, the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circumstances referred
to therein.
(vii) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware with
corporate power and authority under such laws to own, lease and operate
its properties and conduct its business as described in the Offering
Memorandum; and the Company is duly qualified to transact business as a
foreign corporation and is in good standing in each other jurisdiction in
which it owns or leases property of a nature, or transacts business of a
type, that would make such qualification necessary, except to the extent
that the failure to so qualify or be in good standing would not have a
material adverse effect on the Company and its subsidiaries, considered as
one enterprise.
(viii) The Company's only subsidiaries (either direct or indirect)
are: BEA Aerospace International Ltd., a company incorporated under the
laws of Barbados ("BEA International"), Flight Equipment & Engineering
Limited, a company incorporated under the Companies Act (United Kingdom)
("FEEL"), BE Aerospace (U.K.) Limited, a company incorporated under the
Companies Act (United Kingdom) ("BEA UK"), Fort Hill Aircraft Holdings
Limited, a company incorporated under the Companies Act (United Kingdom)
("Fort Hill"), AFI Holdings Limited, a company incorporated under the
Companies Act (United Kingdom) ("AFI"), Aircraft Furnishing Limited, a
company incorporated under the Companies Act (United Kingdom) ("AFL"), BE
Aerospace (Services) Limited, a company incorporated under the Companies
Act (United Kingdom), BE Aerospace (U.S.A.), Inc., a Delaware corporation
("BEA USA"), BE Aerospace (Netherlands) B.V., a company incorporated under
the laws of the Netherlands ("BEA Netherlands"), Royal Inventum, B.V., a
company incorporated under the laws of the Netherlands ("Royal Inventum"),
BE Aerospace (Sales & Services) B.V., a company incorporated under the
laws of the Netherlands, Xxxxxxxx Industries, Inc., a California
corporation ("Xxxxxxxx"), Acurex Corporation, a Delaware corporation
("Acurex"), BE Aerospace (France) S.A.R.L., a company incorporated under
the laws of France ("BEA France") and Xxxxx Aerospace (France) S.A.R.L., a
company incorporated under the laws of France ("Xxxxx France") (each
individually, a "Subsidiary" and collectively, the
-4-
5
"Subsidiaries"). The Company has no significant subsidiaries (as defined
in Rule 1.02 of the Commission's Regulation S-X), other than Acurex, FEEL
and Royal Inventum. AFI, Fort Hill and Xxxxxxxx are inactive subsidiaries
with no significant assets and are not engaged in any active trade or
business. Each Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization with corporate power and authority under such laws to own,
lease and operate its properties and conduct its business; and each
Subsidiary is duly qualified to transact business as a foreign corporation
and is in good standing in each other jurisdiction in which it owns or
leases property of a nature, or transacts business of a type, that would
make such qualification necessary, except to the extent that the failure
to so qualify or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, considered as one enterprise.
All of the outstanding shares of capital stock of each Subsidiary have
been duly authorized and validly issued or created and are fully paid and
non-assessable and, other than in the case of BEA France, of which five
shares are owned by Xxxx Xxxxxxxx, a French national and director of BEA
France, and five shares are owned by The K.A.D. Companies, Inc., an
investment, venture capital and consulting firm owned by Xxxx X. Xxxxxx,
the Chief Executive Officer of the Company, are owned by the Company,
directly or through one or more Subsidiaries, free and clear of any
pledge, lien, security interest, charge, claim, equity or encumbrance of
any kind, except that (1) 65% of the issued and outstanding Ordinary
Shares of FEEL are pledged to the Agent under the Amended Bank Credit
Agreement, (2) 65% of the issued and outstanding capital stock of BEA
Netherlands is pledged to the Agent under the Amended Bank Credit
Agreement, (3) the outstanding capital stock of each of BEA USA and Acurex
is pledged to the Agent under the Amended Bank Credit Agreement and (4)
the outstanding capital stock of each of CNC and BEA UK is charged to
Barclays Bank PLC pursuant to a debenture over the assets of FEEL dated
November 19, 1992. The Company does not, directly or indirectly, own any
equity or long term debt securities of any corporation, firm, partnership,
joint venture or other entity, other than the stock of its Subsidiaries, a
note from FEEL in the principal amount of (Dutch Xxxxxx)69,541, a second
note from FEEL in the principal amount of (Dutch Xxxxxx)3,200,000 and a
note from BEA Netherlands in the principal amount of Dfls. 49,385,000.
(ix) The Company had, at the date indicated in the Offering
Memorandum, a duly authorized, issued and outstanding capitalization as
set forth in the Offering Memorandum under the caption "Capitalization".
(x) All of the outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid and
non-assessable; and none of the outstanding shares of capital stock of the
Company was issued in violation of the preemptive rights of any
stockholder of the Company. There are no outstanding options to purchase,
or any rights or warrants to subscribe for, or any securities or
obligations convertible into, or any contracts or commitments to issue or
sell, any shares of Common Stock of the Company, any shares of capital
stock of any subsidiary, or any such warrants,
-5-
6
convertible securities or obligations, except as set forth in the Offering
Memorandum.
(xi) This Agreement has been duly authorized, executed and delivered
by the Company.
(xii) The Registration Rights Agreement has been duly authorized,
executed and delivered by the Company and is a valid and binding agreement
of the Company, enforceable against the Company in accordance with its
terms except as (x) the enforceability thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating
to fraudulent transfers), reorganization, moratorium or similar laws
affecting creditors' rights generally, (y) the availability of equitable
remedies may be limited by equitable principles of general applicability
and (z) any rights to indemnity and contribution may be limited by federal
and state securities laws and public policy considerations.
(xiii) The Indenture has been duly authorized by the Company, will
be substantially in the form heretofore delivered to you and, when duly
executed and delivered by the Company and the Trustee, will constitute a
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or similar
laws affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity (regardless
of whether enforcement is considered in a proceeding in equity or at law);
and the Indenture conforms to the description thereof in the Offering
Memorandum.
(xiv) The Securities have been duly authorized by the Company. When
executed, authenticated, issued and delivered in the manner provided for
in the Indenture and sold and paid for as provided in this Agreement, the
Securities will constitute valid and binding obligations of the Company
entitled to the benefits of the Indenture and enforceable against the
Company in accordance with their terms, except as enforcement thereof may
be limited by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors' rights generally and
except as enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity
or at law); and the Securities conform to the description thereof in the
Offering Memorandum.
(xv) The Supplemental Indenture has been duly authorized by the
Company and, when executed and delivered by the Company and the Trustee
named therein in accordance with the terms thereof, will constitute a
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as enforcement thereof may be
limited by bankruptcy, insolvency (including, without
-6-
7
limitation, all laws relating to fraudulent transfers), reorganization or
other similar laws affecting enforcement of creditors' rights generally or
by general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law).
(xvi) Since the respective dates as of which information is given in
the Offering Memorandum, except as otherwise stated therein or
contemplated thereby, there has not been (A) any material adverse change
in the condition (financial or otherwise), earnings, business affairs or
business prospects of the Company and its subsidiaries, considered as one
enterprise, whether or not arising in the ordinary course of business, (B)
any transaction entered into by the Company or any subsidiary, other than
in the ordinary course of business, that is material to the Company and
its subsidiaries, considered as one enterprise, or (C) any dividend or
distribution of any kind declared, paid or made by the Company on its
capital stock.
(xvii) Neither the Company nor any Subsidiary is in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan agreement,
note, lease or other agreement or instrument to which it is a party or by
which it may be bound or to which any of its properties may be subject,
except for such defaults that would not have a material adverse effect on
the condition (financial or otherwise), earnings, business affairs or
business prospects of the Company and its subsidiaries, considered as one
enterprise. The execution and delivery by the Company of this Agreement,
the Registration Rights Agreement, the Indenture and the Supplemental
Indenture, the issuance, sale and delivery of the Securities by the
Company, the consummation by the Company of the transactions contemplated
in this Agreement, the Offering Memorandum (including any redemption of
the Senior Notes) and the Offer to Purchase (including the Tender Offer
and the Consent Solicitation) and compliance by the Company with the terms
of this Agreement, the Registration Rights Agreement, the Indenture and
the Supplemental Indenture have been duly authorized by all necessary
corporate action on the part of the Company and do not and will not result
in any violation of the charter or by-laws of the Company or any
Subsidiary, and do not and will not conflict with, or result in a breach
of any of the terms or provisions of, or constitute a default under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any Subsidiary under, (A)
any contract, indenture, mortgage, loan agreement, note, lease or other
agreement or instrument to which the Company or any Subsidiary is a party
or by which they may be bound or to which any of their respective
properties may be subject or (B) any existing applicable law, rule,
regulation, judgment, order or decree of any government, governmental
instrumentality or court, domestic or foreign, having jurisdiction over
the Company or any Subsidiary or any of their respective properties.
(xviii) No authorization, approval, consent or license of any
government, governmental instrumentality or court, domestic or foreign
(other than under the 1933 Act and the rules and regulations thereunder
with respect to the Registration Rights
-7-
8
Agreement and the transactions contemplated thereunder and the securities
or "blue sky" laws of the various states) is required for the valid
authorization, issuance, sale and delivery of the Securities, for the
execution, delivery or performance by the Company of this Agreement, the
Registration Rights Agreement, the Indenture and the Supplemental
Indenture or for the consummation by the Company of the transactions
contemplated in this Agreement, the Offering Memorandum and the Offer to
Purchase (including the Tender Offer and the Consent Solicitation), except
such of the foregoing as will be obtained prior to the Closing Time.
(xix) Except as disclosed in the Offering Memorandum, there is no
action, suit or proceeding before or by any government, governmental
instrumentality or court, domestic or foreign, now pending or, to the
knowledge of the Company, threatened against or affecting the Company or
any Subsidiary or any of their respective officers, in their capacity as
such, that could result in any material adverse change in the condition
(financial or otherwise), earnings, business affairs or business prospects
of the Company and its subsidiaries, considered as one enterprise, or that
could materially and adversely affect the properties or assets of the
Company and its subsidiaries, considered as one enterprise, or that could
adversely affect the consummation of the transactions contemplated in this
Agreement, the Offering Memorandum or the Offer to Purchase (including the
Tender Offer and the Consent Solicitation); the aggregate of all pending
legal or governmental proceedings that are not described in the Offering
Memorandum to which the Company or any Subsidiary is a party or which
affect any of their respective properties, including ordinary routine
litigation incidental to the business of the Company or any Subsidiary,
would not have a material adverse effect on the condition (financial or
otherwise), earnings, business affairs or business prospects of the
Company and its subsidiaries, considered as one enterprise.
(xx) There are no contracts or documents of a character that would
be required to be described in the Offering Memorandum, if it were a
prospectus filed as part of a registration statement on Form S-1 under the
1933 Act, that are not described as would be so required (other than
contracts or documents described in the Company's most recent proxy
statement filed with the Commission).
(xxi) The Company and the Subsidiaries each has good and marketable
title to all properties and assets described in the Offering Memorandum as
owned by it, free and clear of all liens, charges, encumbrances or
restrictions, except such as (A) are described in the Offering Memorandum
or (B) are neither material in amount nor materially significant in
relation to the business of the Company and its subsidiaries, considered
as one enterprise; all of the leases and subleases material to the
business of the Company and its subsidiaries, considered as one
enterprise, and under which the Company or any Subsidiary holds properties
described in the Offering Memorandum, are in full force and effect, and
neither the Company nor any Subsidiary has received any notice of any
material claim of any sort that has been asserted by anyone adverse to the
rights of the Company or
-8-
9
any Subsidiary under any of the leases or subleases mentioned above, or
affecting or questioning the rights of such corporation to the continued
possession of the leased or subleased premises under any such lease or
sublease.
(xxii) The Company and the Subsidiaries each owns, possesses or has
obtained all material governmental licenses, permits, certificates,
consents, orders, approvals and other authorizations, including, without
limitation, any licenses, permits, certificates, consents, orders,
approvals and other authorizations required to be obtained from the
Federal Aviation Administration, necessary to own or lease, as the case
may be, and to operate its properties and to carry on its business as
presently conducted, and neither the Company nor any Subsidiary has
received any notice of proceedings relating to revocation or modification
of any such licenses, permits, certificates, consents, orders, approvals
or authorizations.
(xxiii) The Company and the Subsidiaries each owns or possesses
adequate patents, patent licenses, trademarks, service marks and trade
names necessary to carry on its business as presently conducted, and
neither the Company nor any Subsidiary has received any notice of
infringement of or conflict with asserted rights of others with respect to
any patents, patent licenses, trademarks, service marks or trade names
that in the aggregate, if the subject of an unfavorable decision, ruling
or finding, could materially adversely affect the condition (financial or
otherwise), earnings, business affairs or business prospects of the
Company and its subsidiaries, considered as one enterprise.
(xxiv) To the best knowledge of the Company, no labor problem exists
with its employees or with the employees of any Subsidiary or is imminent
that could adversely affect the Company and its subsidiaries, considered
as one enterprise, and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its or any
Subsidiary's principal suppliers, contractors or customers that could be
expected to materially adversely affect the condition (financial or
otherwise), earnings, business affairs or business prospects of the
Company and its subsidiaries, considered as one enterprise.
(xxv) Neither the Company nor any Subsidiary has taken or will take,
directly or indirectly, any action designed to, or that might be
reasonably expected to, cause or result in stabilization or manipulation
of the price of the Securities.
(xxvi) Assuming (A) the accuracy of the representations and
warranties of the Initial Purchasers in Section 2 hereof and (B) the due
performance by the Initial Purchasers of the covenants and agreements set
forth in Section 2 hereof, it is not necessary in connection with the
offer, sale and delivery of the Securities to the Initial Purchasers
under, or in connection with the initial resale of such Securities by the
Initial Purchasers in accordance with, this Agreement to register the
Securities under the 1933 Act or to qualify any indenture in respect of
the Securities under the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act").
-9-
10
(xxvii) None of the Company or any affiliate (as such term is
defined in Rule 501(b) of Regulation D) of the Company or any person
acting on behalf thereof has engaged in any directed selling efforts (as
such term is defined in Regulation S) with respect to any Securities
offered and sold in reliance on Rule 903 of Regulation S, and the Company
and such affiliates and such other persons acting on behalf thereof have
complied with the offering restrictions requirement of Regulation S with
respect to the Securities.
(xxviii) The Dealer Manager Agreement, dated as of January 28, 1998,
between the Company and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated, has been authorized, executed and delivered by the Company,
constitutes a valid and binding obligation of the Company and is
enforceable against the Company in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting enforcement of
creditors' rights generally and except as enforcement thereof is subject
to general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law).
(xxix) No part of the proceeds of the sale of the Securities will be
used for any purpose that violates the provisions of any of Regulation G,
T, U or X of the Board of Governors of the Federal Reserve System or any
other regulation of such Board of Governors.
(xxx) All United States federal income tax returns of the Company
and the Subsidiaries required by law to be filed have been filed and all
United States federal income taxes which are due and payable have been
paid, except assessments against which appeals have been or will be
promptly taken and as to which adequate reserves have been provided. The
United States federal income tax returns of the Company through the period
ended February 26, 1994 have been settled and no assessment in connection
therewith has been made against the Company other than $210,462.41 paid in
connection with the Company's February 27, 1993 and February 26, 1994
federal income tax returns. The Company and the Subsidiaries each has
filed all other tax returns that are required to have been filed by it
pursuant to applicable foreign, state, local or other law except insofar
as the failure to file such returns would not have a material adverse
effect on the condition (financial or otherwise), earnings, business
affairs or business prospects of the Company and its subsidiaries,
considered as one enterprise, and has paid all taxes due pursuant to such
returns or pursuant to any assessment received by the Company and the
Subsidiaries, except for such taxes, if any, as are being contested in
good faith and as to which adequate reserves have been provided. The
charges, accruals and reserves on the books of the Company in respect of
any income and corporation tax liability for any years not finally
determined are adequate to meet any assessments or re-assessments for
additional income tax for any years not finally determined, except to the
extent of any inadequacy that would
-10-
11
not have a material adverse effect on the condition (financial or
otherwise), earnings, business affairs or business prospects of the
Company and its subsidiaries, considered as one enterprise.
(xxxi) The Company and the Subsidiaries each maintains a system of
internal accounting controls sufficient to provide reasonable assurances
that (A) transactions are executed in accordance with management's general
or specific authorization; (B) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets;
(C) access to assets is permitted only in accordance with management's
general or specific authorization; and (D) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. The Company
and its subsidiaries have not made, and, to the knowledge of the Company,
no employee or agent of the Company or any subsidiary has made, any
payment of the Company's funds or any subsidiary's funds or received or
retained any funds in violation of any applicable law, regulation or rule
or that would be required to be disclosed in the Offering Memorandum.
(xxxii) There are no holders of securities of the Company who have
the right to require the Company to register securities held by them under
the 1933 Act.
(xxxiii) No material event of default exists under any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument to which the Company or any Subsidiary is a party or to which
the Company or any Subsidiary is subject.
(xxxiv) The Company is not an "investment company," and will not be
as a result of the sale of the Notes pursuant to this Agreement, an
"investment company" within the meaning of the Investment Company Act of
1940, as amended (the "1940 Act").
(xxxv) Except as disclosed in the Offering Memorandum and except as
would not individually or in the aggregate have a material adverse effect
on the condition (financial or otherwise), earnings, business affairs or
business prospects of the Company and its subsidiaries, considered as one
enterprise, (A) the Company and the Subsidiaries are each in compliance
with all applicable Environmental Laws, (B) the Company and the
Subsidiaries have all permits, authorizations and approvals required under
any applicable Environmental Laws and are each in compliance with their
requirements, (C) there are no pending or threatened Environmental Claims
against the Company or any of the Subsidiaries, and (D) there are no
circumstances with respect to any property or operations of the Company or
any Subsidiary that could reasonably be anticipated to form the basis of
an Environmental Claim against the Company or any Subsidiary.
-11-
12
For purposes of this Agreement, the following terms shall have the
following meanings: "Environmental Law" means any United States (or other
applicable jurisdiction's) federal, state, local or municipal statute,
law, rule, regulation, ordinance, code, policy or rule of common law and
any judicial or administrative interpretation thereof including any
judicial or administrative order, consent decree or judgment, relating to
the environment, health, safety or any chemical, material or substance,
exposure to which is prohibited, limited or regulated by any governmental
authority. "Environmental Claims" means any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims,
liens, notices of noncompliance or violation, investigations or
proceedings relating in any way to any Environmental Law.
(xxxvi) The Second Amendment, dated January 28, 1998, to the
Company's Third Amended and Restated Credit Agreement, amended and
restated as of May 29, 1997, as further amended on November 19, 1997, has
been duly authorized by the Company and, when executed and delivered by
the Company and the other parties thereto in accordance with the terms
thereof, will constitute a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers),
reorganization or other similar laws affecting enforcement of creditors'
rights generally or by general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law).
(b) Any certificate signed by any officer of the Company or any
Subsidiary and delivered to the Initial Purchasers or to counsel for the Initial
Purchasers shall be deemed a representation and warranty by the Company to the
Initial Purchasers as to the matters covered thereby.
Section 2. Purchase, Sale and Resale of the Securities; Closing;
Representations and Warranties of the Initial Purchasers. (a) On the basis of
the representations and warranties herein contained, and subject to the terms
and conditions herein set forth, the Company agrees to sell to each of you,
severally and not jointly, and each of you severally agrees to purchase from the
Company, at a purchase price of 97.125% of the principal amount thereof, the
principal amount of the Securities set forth opposite your name on Schedule I.
(b) Payment of the purchase price for, and delivery of, the
Securities shall be made at the offices of Fried, Frank, Harris, Xxxxxxx &
Xxxxxxxx, 0 Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other place as
shall be agreed upon by the Company and you, at 9:00 A.M., New York time, on
February 13, 1998 or at such other time not more than ten full business days
thereafter as you and the Company shall determine (such date and time of payment
and delivery being herein called the "Closing Time"). The Securities shall be in
such denominations and registered in such names as you may request in writing at
least two business days before the Closing Time. The Securities, which may be in
temporary form, will be made available in New York City for examination and
packaging by you not later than 10:00 A.M. on
-12-
13
the last business day prior to the Closing Time.
(c) At the Closing Time, payment shall be made to the Company in the
aggregate amount of $242,812,500 in immediately available funds payable to the
order of the Company against delivery of the Securities to you.
(d) You have advised the Company that you propose to offer the
Securities for sale, upon the terms and conditions set forth in this Agreement
and in the Offering Memorandum. You hereby represent and warrant to the Company
that you are a Qualified Institutional Buyer as defined in Rule 144A and an
"Accredited Investor" as defined in Rule 501 of Regulation D. You agree with the
Company that you (i) will not solicit offers for, or offer or sell, the
Securities by means of any form of general solicitation or general advertising
or in any manner involving a public offering within the meaning of Section 4(2)
of the 1993 Act, or, with respect to Securities sold in reliance on Regulation
S, by means of any directed selling efforts (as defined in Rule 902 of
Regulation S) in the United States and (ii) will solicit offers for the
Securities only from, and will offer, sell or deliver the Securities, as part of
its initial offering, only to (A) persons in the United States whom you
reasonably believe to be Qualified Institutional Buyers or, if any such person
is buying for one or more institutional accounts for which such person is acting
as fiduciary or agent, only when such person has represented to you that each
such account is a Qualified Institutional Buyer to whom notice has been given
that such sale or delivery is being made in reliance on Rule 144A, and, in each
case, in a transaction under Rule 144A and (B) non-U.S. persons outside the
United States to whom you reasonably believe offers and sales of the Securities
may be made in reliance upon Regulation S, in transactions meeting the
requirements of Regulation S under the Securities Act.
Section 3. Certain Covenants of the Company. The Company covenants
with you as follows:
(a) The Company will not at any time make any amendment or
supplement to the Offering Memorandum of which you shall not have
previously been advised and furnished a copy or to which you or your
counsel shall reasonably object.
(b) The Company will promptly deliver to you, without charge, during
the period from the date hereof to the date of the completion of the
distribution of the Securities by you, such number of copies of the
Offering Memorandum, as it may then be amended or supplemented, or the
Preliminary Offering Memorandum, as it may then be amended or
supplemented, as you may reasonably request.
(c) If, at any time prior to completion of the distribution of the
Securities by you, any event shall occur or condition exist as a result of
which it is necessary, in the opinion of your counsel or counsel for the
Company, to amend or supplement the Offering Memorandum in order that the
Offering Memorandum will not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the
-13-
14
statements therein, in the light of the circumstances existing at the time
it is delivered to a purchaser, not misleading or if, in the opinion of
your counsel or counsel for the Company, it is necessary to amend or
supplement the Offering Memorandum to comply with applicable law, the
Company, at its own expense, will promptly prepare such amendment or
supplement as may be necessary so that the statements in the Offering
Memorandum as so amended or supplemented will not, in the light of the
circumstances existing at the time it is delivered to a purchaser, be
misleading or so that such Offering Memorandum as so amended or
supplemented will comply with applicable law, as the case may be, and
furnish you such number of copies as you may reasonably request.
(d) The Company will endeavor, in cooperation with you, to qualify
the Securities for offering and sale under the applicable securities laws
of such states and other jurisdictions as you may designate and to
maintain such qualifications in effect for a period of not less than a
year from the date of the Offering Memorandum; provided, however, that the
Company shall not be obligated to file any general consent to service of
process or to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so qualified or to
subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject. The Company will
file such statements and reports as may be required by the laws of each
jurisdiction in which the Securities have been qualified as above
provided. The Company will also supply you with such information as is
necessary for the determination of the legality of the Securities for
investment under the laws of such jurisdictions as you may request.
(e) Except following the effectiveness of the Registration
Statement, neither the Company nor any of its affiliates (as such term is
defined in Rule 501(b) of Regulation D) will solicit any offer to buy or
offer to sell the Securities by means of any form of general solicitation
or general advertising (within the meaning of Rule 502(C) of Regulation D)
or in any manner involving a public offering within the meaning of Section
4(2) of the 1933 Act.
(f) Neither the Company nor any of its affiliates (as such term is
defined in Rule 501(b) of the 0000 Xxx) will offer, sell or solicit offers
to buy or otherwise negotiate in respect of any security (as defined in
the 0000 Xxx) the offering of which security could be integrated with the
sale of the Securities in a manner that would require the registration of
any of the Securities under the 1933 Act.
(g) The Company will not be or become an open-end investment
company, unit investment trust or face-amount certificate company that is
or is required to be registered under the 1940 Act, and will not be or
become a closed-end investment company required to be registered, but not
registered, thereunder.
(h) During the period from the Closing Time to the earlier of (i)
two years after the Closing Time or (ii) the date of effectiveness of the
Registration Statement, the
-14-
15
Company will not, and will not permit any of its affiliates (as such term
is defined in Rule 144 under the 0000 Xxx) to, resell any of the
Securities that have been reacquired thereby, except for Securities
purchased by the Company or any of its affiliates and resold in a
transaction registered under the 1933 Act.
(i) The Company will, so long as the Securities are outstanding and
are "restricted securities" within the meaning of Rule 144(a)(3) under the
1933 Act, either (i) file reports and other information with the
Commission under Section 13 or Section 15(d) of the 1934 Act, or (ii) in
the event the Company is not subject to Section 13 or Section 15(d) of the
1934 Act, furnish to holders of the Securities and prospective purchasers
of the Securities designated by such holders, upon request of such holders
or such prospective purchasers, the information required to be delivered
pursuant to Rule 144A(d)(4) under the 1933 Act to permit compliance with
Rule 144A in connection with resale of the Securities. For a period of
five years after the Closing Time, the Company will make available to you
upon request copies of all such reports and information, together with
such other documents, reports and information as shall be furnished by the
Company to the holders of the Securities issued by it.
(j) If requested by you, the Company will use its best efforts in
cooperation with you to permit the Securities sold in transactions
described in Section 2(d)(ii) hereof to be eligible for clearance and
settlement through The Depository Trust Company.
(k) Each Security will bear the following legend until such legend
shall no longer be necessary or advisable because such Security is no
longer subject to the restrictions on transfer described therein:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES
LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN
MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED
OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF
AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO
THE DATE WHICH IS THREE YEARS AFTER THE LATER OF THE ORIGINAL ISSUE
DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE
OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
THIS SECURITY), ONLY (A) TO THE COMPANY, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR
RESALE PURSUANT TO
-15-
16
RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED
IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO
OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED
STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT,
(E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE
TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i)
PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM AND (ii) IN EACH OF THE FOREGOING
CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM
APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND
DELIVERED BY THE TRANSFEROR TO THE TRUSTEE.
(l) The Company will apply the net proceeds that it receives from
the offer and sale of the Securities issued by it in the manner set forth
with respect to it in the Offering Memorandum under the heading "Use of
Proceeds."
(m) Except following the effectiveness of the Registration
Statement, none of the Company, any affiliates (as such term is defined in
Rule 501(b) of Regulation D) or any person acting on behalf thereof (other
than you) will engage in any directed selling efforts (as such term is
defined under Regulation S) in the United States with respect to the
Securities, and each of the Company, such affiliate and such other person
acting on behalf thereof will comply with the offering restrictions
requirement of Regulation S.
(n) Prior to the Closing Time, the Company will not issue any press
release or other communications directly or indirectly or hold any press
conference with respect to the Company, the condition, financial or
otherwise, or the earnings, business affairs or business prospects of the
Company, without your prior consent, which shall not be unreasonably
withheld, unless in the judgment of the Company and its counsel, and after
notification to you, such press release or communication is required by
law.
(o) For a period of 120 days from the date of the Offering
Memorandum, the Company will not, without your prior written consent,
directly or indirectly, offer, sell, grant any option to purchase or
otherwise dispose of any debt securities of the Company (or securities
convertible or exchangeable into or exercisable for debt securities of the
-16-
17
Company), other than the Exchange Securities referred to in the
Registration Rights Agreement.
Section 4. Payment of Expenses. Whether or not any sale of the
Securities is consummated, the Company will pay and bear all costs and expenses
incident to the performance of its obligations under this Agreement, including
(a) the preparation and printing of the Preliminary Offering Memorandum, the
Offering Memorandum and any amendments or supplements thereto, and the cost of
furnishing copies thereof to the Initial Purchasers, (b) the preparation,
reproduction and distribution of the Securities, this Agreement, the
Registration Rights Agreement, the Indenture and any "blue sky" or legal
investment memoranda, (c) the delivery of the Securities to the Initial
Purchasers, (d) the fees and disbursements of the Company's counsel and
accountants, (e) the qualification of the Securities under the applicable
securities laws in accordance with Section 3(d) and any filing for review of the
offering with NASD, including filing fees and fees and disbursements of counsel
for the Initial Purchasers in connection therewith and in connection with the
preparation of any "blue sky" or legal investment memoranda, (f) any fees
charged by rating agencies for rating the Securities, (g) the fees and expenses
of the Trustee, including the fees and disbursements of counsel for the Trustee,
in connection with the Indenture and the Securities and (h) the cost of
obtaining approval for the trading of the Securities through PORTAL.
If this Agreement is terminated by the Initial Purchasers in
accordance with the provisions of Section 5 or 9(a)(i), the Company shall
reimburse the Initial Purchasers for all of their out-of-pocket expenses,
including the fees and disbursements of counsel for the Initial Purchasers.
Section 5. Conditions of Initial Purchasers' Obligations. The
obligations of each Initial Purchaser to purchase and pay for the Securities
that it has severally agreed to purchase hereunder are subject to the accuracy
of the representations and warranties of the Company contained herein and in
certificates of any officer of the Company and any Subsidiary delivered pursuant
to the provisions hereof, to the performance by the Company of its obligations
hereunder, and to the following further conditions:
(a) At the Closing Time, each of you shall have received a signed
opinion of each of Shearman & Sterling, counsel for the Company, and
Xxxxxx Xxxxxxxx, General Counsel of the Company, in each case dated as of
the Closing Time, in substantially the form attached hereto as Exhibit
B-1. Such opinion shall be to such further effect with respect to other
legal matters relating to this Agreement and the sale of the Securities
pursuant to this Agreement as counsel for the Initial Purchasers may
reasonably request. In giving such opinion, such counsel may rely, as to
all matters governed by the laws of jurisdictions other than the law of
the State of New York, the federal law of the United States and the
General Corporation Law of the State of Delaware, upon opinions of other
counsel, who shall be counsel satisfactory to counsel for the Initial
Purchasers, in which case the opinion shall state that they believe you
are entitled to so rely. Such counsel may
-17-
18
also state that, insofar as such opinion involves factual matters, they
have relied, to the extent they deem proper, upon certificates of officers
of the Company and the Subsidiaries and certificates of public officials;
provided that such certificates have been delivered to the Initial
Purchasers.
(b) At the Closing Time, each of you shall have received a signed
opinion of Xxxxxx Xxxxx Xxxxxxx, counsel to BEA(UK) and FEEL, dated as of
Closing Time, in substantially the form attached hereto as Exhibit B-2.
Such opinion shall be to such further effect with respect to other legal
matters relating to this Agreement and the sale of the Securities pursuant
to this Agreement as counsel for the Initial Purchasers may reasonably
request.
(c) At the Closing Time, each of you shall have received a signed
opinion of Trenite Van Doorne, counsel to Royal Inventum, dated as of
Closing Time, in substantially the form attached hereto as Exhibit B-3.
Such opinion shall be to such further effect with respect to other legal
matters relating to this Agreement and the sale of the Securities pursuant
to this Agreement as counsel for the Initial Purchasers may reasonably
request.
(d) At the Closing Time, each of you shall have received the
favorable opinion of Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, counsel for
the Initial Purchasers, dated as of the Closing Time, to the effect that
the opinions delivered pursuant to Sections 5(a), 5(b) and 5(c) appear on
their face to be appropriately responsive to the requirements of this
Agreement except, specifying the same, to the extent waived by you, and
with respect to the incorporation and legal existence of the Company, the
Securities, this Agreement, the Indenture, the Registration Rights
Agreement, the Offering Memorandum and such other related matters as you
may require. In giving such opinion such counsel may rely, as to all
matters governed by the laws of jurisdictions other than the law of the
State of New York, the federal law of the United States and the General
Corporation Law of the State of Delaware, upon the opinions of counsel
satisfactory to you. Such counsel may also state that, insofar as such
opinion involves factual matters, they have relied, to the extent they
deem proper, upon certificates of officers of the Company and the
Subsidiaries and certificates of public officials; provided that such
certificates have been delivered to the Initial Purchasers.
(e) At the Closing Time, (i) the Offering Memorandum, as it may then
be amended or supplemented, shall not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, (ii)
there shall not have been, since the respective dates as of which
information is given in the Offering Memorandum, any material adverse
change in the condition (financial or otherwise), earnings, business
affairs or business prospects of the Company and its subsidiaries,
considered as one enterprise, whether or not arising in the ordinary
course of business, (iii) no action, suit or proceeding at law or in
equity shall be
-18-
19
pending or, to the knowledge of the Company, threatened against the
Company or any Subsidiary that would be required to be set forth in the
Offering Memorandum other than as set forth therein and no proceedings
shall be pending or, to the knowledge of the Company, threatened against
the Company or any Subsidiary before or by any government, governmental
instrumentality or court, domestic or foreign, that could result in any
material adverse change in the condition (financial or otherwise),
earnings, business affairs or business prospects of the Company and its
subsidiaries, considered as one enterprise, other than as set forth in the
Offering Memorandum, (iv) the Company shall have in all material respects
complied with all agreements and satisfied all conditions on its part to
be performed or satisfied at or prior to the Closing Time, (v) no event of
default shall exist under any contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument to which the
Company or any Subsidiary is a party or to which the Company or any
Subsidiary is subject and (vi) the other representations and warranties of
the Company set forth herein shall be accurate in all material respects as
though expressly made at and as of the Closing Time. At the Closing Time,
each of you shall have received a certificate of the Chief Executive
Officer and the Chief Financial Officer of the Company, dated as of the
Closing Time, to such effect.
(f) At the time that this Agreement is executed by the Company, each
of you shall have received from Deloitte & Touche L.L.P., independent
auditors for the Company, a letter, dated such date, in form and substance
satisfactory to you, confirming that they are independent public
accountants with respect to the Company within the meaning of the 1933 Act
and the applicable published rules and regulations thereunder, and stating
in effect that:
(i) in their opinion, the audited financial statements related
to the Company and its consolidated subsidiaries and the related
financial statement schedules included in the Offering Memorandum
comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act and the related published
rules and regulations thereunder;
(ii) on the basis of procedures (but not an audit in
accordance with generally accepted auditing standards) consisting of
a reading of the latest available unaudited interim consolidated
financial statements of the Company included in the Offering
Memorandum, a reading of the minutes of all meetings of the
stockholders and directors of the Company and the Audit, Stock
Option and Compensation, and Pricing Committees of the Company's
Board of Directors since February 22, 1997 (except for those
meetings for which minutes have not yet been provided, in which case
minutes for such meetings in draft form have been read) inquiries of
certain officials of the Company and its subsidiaries responsible
for financial and accounting matters, a review in accordance with
procedures established by the American Institute of Certified Public
Accountants (the "AICPA") with respect to the nine-month periods
ended November 29, 1997 and
-19-
20
November 30, 1996 performed at the request of the Company, and such
other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
(A) the unaudited financial statements for the Company
and its consolidated subsidiaries for the nine-month periods
ended November 29, 1997 and November 30, 1996 included in the
Offering Memorandum do not comply as to form in all material
respects with the applicable accounting requirements of the
1933 Act and the related published rules and regulations or
are not in conformity with generally accepted accounting
principles applied on a basis substantially consistent with
that of the audited financial statements included in the
Offering Memorandum;
(B) at December 27, 1997 and at a specified date not
more than five days prior to the date of this Agreement, there
was any change in the capital stock of the Company or any
increase in the consolidated long-term debt of the Company and
its subsidiaries, in each case as compared with amounts shown
in the latest balance sheet included in the Offering
Memorandum, except in each case for changes, decreases or
increases that the Offering Memorandum discloses have occurred
or may occur; or
(C) for the period from the date of the latest financial
statement included in the Offering Memorandum to a specified
date prior to the date of this Agreement, there was any
decrease in consolidated net sales, operating earnings, net
earnings or net earnings per share of the Company and its
subsidiaries, in each case as compared with the comparable
period in the preceding year, except in each case for any
decreases that the Offering Memorandum discloses have occurred
or may occur;
(iii) based on a comparison of the information included under
the heading "Selected Financial Information" with the requirements
of Item 301 of Regulation S-K and inquiries of certain officials of
the Company who have responsibility for financial and accounting
matters whether this information conforms in all material respects
with the disclosure requirements of Item 301 of Regulation S-K,
nothing came to their attention as a result of the foregoing
procedures that caused them to believe that this information does
not conform in all material respects with the disclosure
requirements of item 301 of Regulation S-K; and
(iv) in addition to the procedures referred to in clause (ii)
above, they have performed other specified procedures, not
constituting an audit, with respect to certain amounts, percentages,
numerical data and financial information appearing in the Offering
Memorandum appearing in the Offering Memorandum,
-20-
21
including the Selected Financial Information, which have previously
been specified by you and which shall be specified in such letter,
and have compared certain of such items with, and have found such
items to be in agreement with, the accounting and financial records
of the Company and its subsidiaries.
(g) At the Closing Time, each of you shall have received from
Deloitte & Touche L.L.P. a letter, in form and substance satisfactory to
you and dated as of the Closing Time, to the effect that they reaffirm the
statements made in the letter furnished pursuant to Section 5(f), except
that the specified date referred to shall be a date not more than five
days prior to the Closing Time.
(h) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Time, there shall not have been any downgrading in
the rating accorded any of the Company's securities, including the
Securities, by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 436(g)(2)
under the 1933 Act, nor shall such rating organization have publicly
announced that it has under surveillance or review, with possible negative
implications, its rating of any of the Company's securities, including the
Securities.
(i) At the Closing Time, counsel for the Initial Purchasers shall
have been furnished with all such documents, certificates and opinions as
they may reasonably request for the purpose of enabling them to pass upon
the issuance and sale of the Securities as contemplated in this Agreement
and the matters referred to in Section 5(d) and in order to evidence the
accuracy and completeness of any of the representations, warranties or
statements of the Company, the performance of any of the covenants of the
Company, or the fulfillment of any of the conditions herein contained; and
all proceedings taken by the Company at or prior to the Closing Time in
connection with the authorization, issuance and sale of the Securities as
contemplated in this Agreement shall be reasonably satisfactory in form
and substance to the Initial Purchasers and to counsel for the Initial
Purchasers.
(j) At the Closing Time, the Registration Rights Agreement shall
have been fully executed and be in full force and effect.
(k) At or prior to the Closing Time, the Company shall have entered
into an amendment of the Company's Third Amended and Restated Credit
Agreement, amended and restated as of May 29, 1997, as further amended on
November 19, 1997, in the form previously delivered to counsel for Xxxxxxx
Xxxxx on behalf of the Initial Purchasers, to permit the consummation of
the Tender Offer and Consent Solicitation on the terms described in the
Offer to Purchase and the consummation of the transactions contemplated
hereby.
If any of the conditions specified in this Section 5 shall not have
been fulfilled
-21-
22
when and as required by this Agreement, this Agreement may be terminated by you
on notice to the Company at any time at or prior to the Closing Time, and such
termination shall be without liability of any party to any other party, except
as provided in Section 4. Notwithstanding any such termination, the provisions
of Sections 6, 7 and 8 shall remain in effect.
Section 6. Indemnification. (a) The Company agrees to indemnify and
hold harmless the Initial Purchasers and each person, if any, who controls the
Initial Purchasers within the meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of an untrue statement or alleged
untrue statement of a material fact included in any preliminary offering
memorandum or the Offering Memorandum (or any amendment or supplement
thereto) or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(d) below) any such settlement is effected with the written consent of
the Company; and
(iii) against any and all expense whatsoever, as incurred (including
fees and disbursements of counsel chosen by you), reasonably incurred in
investigating, preparing or defending against any litigation, or
investigation or proceeding by any governmental agency or body, commenced
or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission,
to the extent that any such expense is not paid under subparagraph (i) or
(ii) above;
provided, however, that this indemnity agreement does not apply to any loss,
liability, claim, damage or expense to the extent arising out of an untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by the
Initial Purchasers through Xxxxxxx Xxxxx expressly for use in any preliminary
offering memorandum or the Offering Memorandum (or any amendment or supplement
thereto). The foregoing indemnity with respect to any untrue statement contained
in or any omission from a preliminary offering memorandum shall not inure to the
benefit of any Initial Purchaser (or any person who controls such Initial
Purchaser within the meaning of Section 5 of the 0000 Xxx) from whom the person
asserting any such loss, liability, claim, damage or expense purchased any of
the Securities that are the subject thereof if the Company shall sustain the
burden of proving that such person was not sent or given a copy of the Offering
Memorandum (or any amendment or supplement thereto) at or prior to the written
confirmation of the sale of such Securities to such person and the untrue
statement contained in or the omission from such
-22-
23
preliminary offering memorandum was corrected in the Offering Memorandum (or any
amendment or supplement thereto).
(b) Each Initial Purchaser severally (but not jointly) agrees to
indemnify and hold harmless the Company, its directors, each of its officers and
each person, if any, who controls the Company within the meaning of Section 15
of the 1933 Act, against any and all loss, liability, claim, damage and expense
described in the indemnity agreement in Section 6(a), as incurred, but only with
respect to untrue statements or omissions made in any preliminary offering
memorandum or the Offering Memorandum (or any amendment or supplement thereto)
in reliance upon and in conformity with written information furnished to the
Company by such Initial Purchaser through Xxxxxxx Xxxxx expressly for use in
such preliminary offering memorandum or the Offering Memorandum (or any
amendment or supplement thereto).
(c) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve it from any liability which it may have otherwise than
on account of this indemnity agreement. In the case of parties indemnified
pursuant to Section 6(a) above, counsel to the indemnified parties shall be
selected by Xxxxxxx Xxxxx, and, in the case of parties indemnified pursuant to
Section 6(b) above, counsel to the indemnified parties shall be selected by the
Company. An indemnifying party may participate at its own expense in the defense
of such action; provided, however, that counsel to the indemnifying party shall
not (except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying party or parties be liable
for the fees and expenses of more than one counsel for all indemnified parties
in connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances. No indemnifying party shall, without the prior written consent of
the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 6 or Section 7 hereof (whether or not the indemnified parties
are actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request with such request prior to the date of such
settlement.
-23-
24
Section 7. Contribution. If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Initial Purchasers on the other hand from the
offering of the Securities pursuant to this Agreement or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company on the one hand and of the
Initial Purchasers on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and
the Initial Purchasers on the other hand in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the total discount received by the Initial Purchasers, bear to
the aggregate initial offering price of the Securities.
The relative fault of the Company on the one hand and the Initial
Purchasers on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Initial Purchasers, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and the Initial Purchasers agree that it would not be
just and equitable if contribution pursuant to this Section were determined by
pro rata allocation (even if the Initial Purchasers were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to above in this Section. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section, no Initial Purchaser
shall not be required to contribute any amount in excess of the amount by which
the total price at which the Securities sold by it were distributed to the
purchasers thereof exceeds the amount of any damages which such Initial
Purchaser has otherwise been required to pay by reason of such untrue
-24-
25
or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section, each person, if any, who controls an
Initial Purchaser within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act shall have the same rights to contribution as such Initial
Purchaser, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as the Company. The Initial Purchasers' respective
obligations to contribute pursuant to this Section are several in proportion to
the principal amount of Securities set forth opposite their respective names in
Schedule A hereto and not joint.
Section 8. Representations, Warranties and Agreements to Survive
Delivery. The representations, warranties, indemnities, agreements and other
statements of the Company or its officers set forth in or made pursuant to this
Agreement will remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Company, the Initial Purchasers or any
person who controls the Company or the Initial Purchasers within the meaning of
Section 15 of the 1933 Act and will survive delivery of and payment for the
Securities.
Section 9. Termination of Agreement. (a) The Initial Purchasers may
terminate this Agreement, by notice to the Company, at any time at or prior to
the Closing Time (i) if there has been, since the respective dates as of which
information is given in the Offering Memorandum, any material adverse change in
the condition (financial or otherwise), earnings, business affairs or business
prospects of the Company and its subsidiaries, considered as one enterprise,
whether or not arising in the ordinary course of business, or (ii) if there has
occurred any material adverse change in the financial markets or any outbreak of
hostilities or escalation thereof or other calamity or crisis the effect of
which is such as to make it, in the Initial Purchasers' judgment, impracticable
to market the Securities or enforce contracts for the sale of the Securities or
(iii) if trading in any securities of the Company has been suspended by the
Commission or the NASD, or if trading generally on either the American Stock
Exchange or the New York Stock Exchange or in the over-the-counter market has
been suspended, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices for securities have been required, by such exchange or
by order of the Commission, the NASD or any other governmental authority or (iv)
if a banking moratorium has been declared by either federal, New York or Florida
authorities.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party, except
to the extent provided in Section 4. Notwithstanding any such termination, the
provisions of Sections 6, 7 and 8 shall remain in effect.
-25-
26
Section 10. Default. If one or more of the Initial Purchasers shall
fail at the Closing Time to purchase the Securities that it or they are
obligated to purchase (the "Defaulted Securities"), the non-defaulting Initial
Purchasers shall have the right, within 24 hours thereafter, to make
arrangements to purchase all, but not less than all, of the Defaulted Securities
upon the terms herein set forth; if, however, such non-defaulting Initial
Purchasers have not completed such arrangements within such 24-hour period,
then:
(a) if the aggregate principal amount of Defaulted Securities does
not exceed 10% of the aggregate principal amount of the Securities to be
purchased, the non-defaulting Initial Purchasers shall be obligated to
purchase the full amount thereof, or
(b) if the aggregate principal amount of Defaulted Securities
exceeds 10% of the aggregate principal amount of the Securities to be
purchased, this Agreement shall terminate without liability on the part of
the non-defaulting Initial Purchasers.
No action taken pursuant to this Section shall relieve any
defaulting Initial Purchaser from liability in respect of its default.
In the event of any such default that does not result in a
termination of this Agreement, either you or the Company shall have the right to
postpone the Closing Time for a period not exceeding seven days in order to
effect any required changes in the Offering Memorandum or in any other documents
or arrangements. As used herein, the term "Initial Purchaser" includes any
person substituted for an Initial Purchaser under this Section 10.
Section 11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if delivered,
mailed or transmitted by any standard form of telecommunication. Notices to the
Initial Purchasers shall be directed to the Initial Purchasers at Xxxxxxx Xxxxx
World Headquarters, Xxxxx Xxxxx, Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Xx. Xxxxxxx X. Xxxxx with copies to Fried, Frank, Harris,
Xxxxxxx & Xxxxxxxx at 0 Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxxxx Xxxx Jacob; and notices to the Company shall be directed to it at 0000
Xxxxxxxxx Xxxxxx Xxx, Xxxxxxxxxx, Xxxxxxx 00000, Attention: Xx. Xxxx X. Xxxxxx,
Chairman of the Board of Directors and Chief Executive Officer with copies to
Shearman & Sterling at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xx. Xxxxx X. Xxxxxxxxxxx.
Section 12. Parties. This Agreement is made solely for the benefit
of the Initial Purchasers, the Company and, to the extent expressed, any person
who controls the Company or any Initial Purchaser within the meaning of Section
15 of the 1933 Act, and the directors of the Company, its officers and their
respective executors, administrators, successors and assigns and no other person
shall acquire or have any right under or by virtue of this Agreement. The term
"successors and assigns" shall not include any purchaser, as such purchaser,
from the Initial Purchasers of the Securities.
-26-
27
Section 13. Governing Law and Time. This Agreement shall be governed
by the laws of the State of New York. Specified times of the day refer to New
York City time.
-27-
28
Section 14. Counterparts. This Agreement may be executed in one or
more counterparts and when a counterpart has been executed by each party, all
such counterparts taken together shall constitute one and the same agreement.
-------------------------
-28-
29
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument will become a binding agreement between the Company and the Initial
Purchasers in accordance with its terms.
Very truly yours,
BE AEROSPACE, INC.
By:
---------------------------------
Name:
Title:
Confirmed and accepted as of
the date first above written:
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
BT Alex. Xxxxx Incorporated
Chase Securities Inc.
Credit Suisse First Boston Corporation
Xxxxxx Xxxxxxx & Co. Incorporated
By: Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
By
----------------------------------
Name:
Title:
-29-
30
================================================================================
BE AEROSPACE, INC.
(a Delaware corporation)
$250,000,000
8% Senior Subordinated Notes due 2008
PURCHASE AGREEMENT
Dated: February 6, 1998
================================================================================
31
SCHEDULE I
Principal Amount
of Securities
Initial Purchasers to be Purchased
------------------ ---------------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated............................ $118,750,000
BT Alex. Xxxxx Incorporated......................... 25,000,000
Chase Securities Inc................................ 12,500,000
Credit Suisse First Boston Corporation.............. 56,250,000
Xxxxxx Xxxxxxx & Co. Incorporated................... 37,500,000
------------
Total.......................................... $250,000,000
32
EXHIBIT A
FORM OF
REGISTRATION RIGHTS AGREEMENT
33
EXHIBIT B-1
FORM OF OPINION OF SHEARMAN & STERLING
[Shearman & Sterling Letterhead]
February 13, 1998
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
BT Alex. Xxxxx Incorporated
Chase Securities Inc.
Credit Suisse First Boston Corporation
Xxxxxx Xxxxxxx & Co. Incorporation
c/o Merrill Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxxx Xxxxx World Headquarters
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
We are acting as counsel to BE Aerospace, Inc., a Delaware
corporation (the "Company"), in connection with the sale by the Company to
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, BT Alex. Xxxxx Incorporated,
Chase Securities Inc., Credit Suisse First Boston Corporation and Xxxxxx Xxxxxxx
& Co. Incorporated (collectively, the "Initial Purchasers"), subject to the
terms and conditions set forth in the Purchase Agreement, dated February 6, 1998
(the "Purchase Agreement"), among the Company and the Initial Purchasers, of
$250,000,000 aggregate principal amount of the Company's 8% Senior Subordinated
Notes due 2008 (the "Notes") issued pursuant to an Indenture, dated as of
February 13, 1998 (the "Indenture"), between the Company and United States Trust
Company of New York, as trustee (the "Trustee"), and further subject to the
terms and conditions set forth in the Registration Rights Agreement, dated
February 13, 1998 (the "Registration Rights Agreement"), among the Company and
the Initial Purchasers. Unless otherwise noted, capitalized terms used but not
defined herein are used as defined in the Purchase Agreement.
In this capacity, we have examined copies of the Preliminary
Offering Memorandum, dated January 29, 1998, and the final Offering Memorandum,
dated February 6, 1998 relating to the offering of the Notes (such final
Offering Memorandum being hereinafter referred to as the
-1-
34
"Offering Memorandum"). We have also examined the Purchase Agreement, the
Indenture, the Registration Rights Agreement, a specimen of the Note and the
originals, or copies identified to our satisfaction, of such corporate records
of the Company, certificates of public officials, officers of the Company and
other persons, and such other documents, agreements and instruments as we have
deemed necessary as a basis for the opinions hereinafter expressed. In our
examinations, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals and the conformity
with the originals of all documents submitted to us as copies. In rendering our
opinion, we have relied as to factual matters, to the extent we deem proper,
upon the representations and warranties of the Company contained in or made
pursuant to the Purchase Agreement, the Registration Rights Agreement,
certificates of officers of the Company and certificates of public officials.
The opinions stated herein are limited to the laws of the State of New
York, the General Corporation Law of the State of Delaware and the federal laws
of the United States, and we do not express any opinion herein concerning any
other laws.
Based upon the foregoing, we are of the opinion that:
1. The Securities and the Indenture conform in all material respects
to the respective descriptions thereof contained in the Offering Memorandum
under the caption "Description of the Notes."
2. The statements made in the Offering Memorandum under the caption
"Exchange Offer; Registration Rights," to the extent that they constitute
matters of law or legal conclusions, have been reviewed by us and fairly present
the information disclosed therein in all material respects.
3. The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
4. The Indenture has been duly authorized, executed and delivered by
the Company and, assuming due authorization, execution and delivery by the
Trustee, constitutes a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as enforcement thereof
may be limited by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium or similar
laws affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law).
5. The Securities have been duly authorized by the Company and, when
executed and authenticated in accordance with the Indenture and issued and
delivered to and paid for by you pursuant to the Purchase Agreement, will
constitute valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms, except as
-2-
35
enforcement may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors' rights generally
and except as enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law).
6. The Registration Rights Agreement has been duly authorized,
executed and delivered by the Company and constitutes a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, except as enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting enforcement of
creditors' rights generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement is considered in
a proceeding in equity or at law) and except that rights to indemnity or
contribution may be limited by applicable federal or state securities laws and
public policy underlying such laws.
7. The execution and delivery by the Company of the Purchase
Agreement, the Registration Rights Agreement, the Supplemental Indenture and the
Indenture by the Company, the consummation by the Company of the transactions
contemplated in the Purchase Agreement and the Offer to Purchase, including
without limitation the execution and delivery of the Securities, and compliance
by the Company with the terms of the Purchase Agreement, the Registration Rights
Agreement, the Supplemental Indenture and the Indenture do not, and will not,
result in any violation of, and do not, and will not conflict with, or
constitute a default under, or result in the creation of or imposition of any a
lien under, (i) the certificate of incorporation or by-laws of the Company or
Acurex, (ii) any contract, indenture, mortgage, lease or other agreement, to
which the Company or any of its significant subsidiaries is a party or by which
any of them may be bound or to which it or any of its properties or assets are
bound, that has been filed as an exhibit to the Company's most recent Form 10-K
or which is listed on Schedule I hereto, in each case, on their face, or (iii)
any existing applicable New York State, Delaware (limited to the General
Corporation Law), or United States federal law, rule or regulation, or any
judgment, order or decree known to such counsel of any New York State or United
States federal government, governmental or regulatory instrumentality or agency
or court having jurisdiction over the Company or any of its properties or assets
8. No authorization, approval, consent or license of any
governmental or regulatory body, agency or instrumentality of the United States
or New York State is required for the (i) valid issuance of the Securities in
accordance with the provisions of the Indenture, (ii) sale of the Securities to
you as contemplated by the Purchase Agreement, (iii) execution, delivery or
performance by the Company of the Purchase Agreement, the Registration Rights
Agreement, the Indenture or the Supplemental Indenture or (iv) consummation of
the transactions contemplated by the Offer to Purchase, except such as may be
required by the Securities Act of 1933, as amended (the "Securities Act"), the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act") and the
securities or blue sky laws of the various states.
-3-
36
9. The Company is not, and will not be as a result of the sale of
the Notes pursuant to the Purchase Agreement, an investment company within the
meaning of the Investment Company Act of 1940, as amended.
10. Assuming (i) the accuracy of the representations and warranties
of the Initial Purchasers in Section 2 of the Purchase Agreement and (ii) the
due performance by the Initial Purchasers of the covenants and agreements set
forth in Section 2 of the Purchase Agreement, it is not necessary in connection
with the offer, sale and delivery of the Securities to the Initial Purchasers
under, or in connection with the initial resale of such Securities by the
Initial Purchasers in accordance with, the Purchase Agreement to register the
Securities under the 1933 Act or to qualify any indenture in respect of the
Securities under the Trust Indenture Act, it being understood that no opinion is
expressed as to any subsequent resale of Notes.
This opinion is being furnished to you solely for your benefit, and is not
to be used, circulated, quoted or otherwise referred to for any other purpose.
-4-
37
Schedule I
1. Third Amended and Restated Credit Agreement dated as of October 29,
1993, amended and restated as of May 29, 1997, as further amended on November
11, 1997 and January 28, 1998, among BE Aerospace, Inc., the Chase Manhattan
Bank, as Administrative Agent and Nationsbank, N.A. (South), as Co-Agent.
2. FEEL Credit Agreement
3. Inventum Credit Agreement
4. Letter of understanding related to the joint venture between the
Company and Xxxxxx Corporation
5. Consent Order regarding the settlement of the U.S. Government's
investigation of export sales to Iran between 1992-5
6. Indenture, dated as of March 3, 1993, as amended, between the Company
and United States Trust Company of New York
-5-
38
February 13, 1998
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
BT Alex. Xxxxx Incorporated
Chase Securities Inc.
Credit Suisse First Boston Corporation
Xxxxxx Xxxxxxx & Co. Incorporation
c/o Merrill Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxxx Xxxxx World Headquarters
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
We are acting as counsel to BE Aerospace, Inc., a Delaware
corporation (the "Company"), in connection with the sale by the Company to
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, BT Alex. Xxxxx Incorporated,
Chase Securities Inc., Credit Suisse First Boston Corporation and Xxxxxx Xxxxxxx
& Co. Incorporated (collectively, the "Initial Purchasers"), subject to the
terms and conditions set forth in the Purchase Agreement, dated February 6, 1998
(the "Purchase Agreement"), among the Company and the Initial Purchasers, of
$250,000,000 aggregate principal amount of the Company's 8% Senior Subordinated
Notes due 2008 (the "Notes") issued pursuant to an Indenture, dated as of
February 13, 1998 (the "Indenture"), between the Company and United States Trust
Company of New York, as trustee (the "Trustee"), and further subject to the
terms and conditions set forth in the Registration Rights Agreement, dated
February 13, 1998 (the "Registration Rights Agreement"), among the Company and
the Initial Purchasers. Unless otherwise noted, capitalized terms used but not
defined herein are used as defined in the Purchase Agreement.
In this capacity, we have examined copies of the Preliminary
Offering Memorandum, dated January 29, 1998, and the final Offering Memorandum,
dated February 6, 1998 relating to the offering of the Notes (such final
Offering Memorandum being hereinafter referred to as the "Offering Memorandum").
We have also reviewed and participated in discussions concerning the preparation
of the Offering Memorandum with certain officers and employees of the Company,
with its counsel and its auditors, and with your representatives. The
limitations inherent in the independent verification of factual matters and in
the role of outside counsel are such, however, that we cannot and do not assume
any responsibility for the accuracy, completeness or fairness of
-6-
39
any of the statements made in the Offering Memorandum, except as set forth in
paragraph 1 of our opinion addressed to you dated the date hereof. In addition,
with your approval, matters governed by the laws of the United Kingdom have been
passed upon by Xxxxxx Xxxxx Xxxxxxx, British counsel to the Company and matters
governed by the laws of the Netherlands have been passed upon by Trenite Van
Doorne, Dutch counsel to the Company, and we have assumed, without independent
verification, the accuracy of their legal opinions delivered to you today
pursuant to the Purchase Agreement with respect to such laws or matters governed
or affected by such laws.
Subject to the limitations set forth in the immediately preceding
paragraph, we advise you that, on the basis of the information we gained in the
course of performing the services referred to above, no facts came to our
attention which gave us reason to believe that the Offering Memorandum (other
than the financial statements and other financial data contained therein or
omitted therefrom, as to which we have not been requested to comment), as of its
date or the date hereof, contained or contains an untrue statement of a material
fact or omitted or omits to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
This letter is being furnished to you solely for your benefit, and is not
to be used, circulated, quoted or otherwise referred to for any other purpose.
Very truly yours,
-7-
40
FORM OF OPINION OF XXXXXX XXXXXXXX
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
BT Alex. Xxxxx Incorporated
Chase Securities Inc.
Credit Suisse First Boston Corporation
Xxxxxx Xxxxxxx & Co. Incorporation
c/o Merrill Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxxx Xxxxx World Headquarters
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
I am General Counsel of BE Aerospace, Inc., a Delaware corporation
(the "Company"), and have advised the Company in connection with the issuance
and sale by the Company of $200,000,000 aggregate principal amount of its 8%
Senior Subordinated Notes due 2008 (the "Securities"). This opinion is being
rendered pursuant to Section 5(a) of the Purchase Agreement dated February 6,
1998 (the "Purchase Agreement") among the Company, Xxxxxxx Lynch, Pierce, Xxxxxx
& Xxxxx Incorporated, BT Alex. Xxxxx Incorporated, Chase Securities Inc., Credit
Suisse First Boston Corporation and Xxxxxx Xxxxxxx & Co. Incorporated
(collectively, the "Initial Purchasers") relating to the issuance and sale of
the Securities. Capitalized terms used but not defined herein shall have the
meanings ascribed to such terms in the Purchase Agreement.
In such capacity I have examined a copy of the Offering Memorandum,
dated as of February 6, 1998, related to the sale of the Securities (the
"Offering Memorandum"). I have also examined the Purchase Agreement, the
Indenture, dated as of February 13, 1998, between the Company and United States
Trust Company of New York, the Registration Rights Agreement, dated as of
February 13, 1998, between the Company and the Initial Purchasers, and the
originals, or copies identified to my satisfaction, of such corporate records of
the Company, certificates of public officials, officers of the Company and other
persons, and such other documents, agreements and instruments as I have deemed
necessary as a basis for the opinions hereinafter expressed. In my examination,
I have assumed the genuineness of all signatures, the authenticity of all
documents submitted to me as originals and the conformity with the originals of
all documents submitted to me as copies. As to any facts material to the
opinions expressed herein which I did not independently establish or verify, I
have relied, without investigation, and believe that I am justified in relying,
upon such statements or representations of officers and other
-8-
41
representatives of the Company or others.
I am a member of the Bar of the State of Wisconsin. My opinions set forth
below are limited to the laws of the State of Wisconsin, the General Corporation
Law of the State of Delaware and the federal laws of the United States.
Based upon the foregoing, I am of the opinion that:
1. Each of the Company and Acurex is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, with
corporate power to own or lease all assets owned or leased by it and conduct its
business as described in the Offering Memorandum. The Company has authority to
issue, sell and deliver the Securities, to execute and deliver the Purchase
Agreement, the Registration Rights Agreement and the Indenture, and to perform
its obligations thereunder. The Company is qualified to transact business, and
is in good standing as a foreign corporation, in California, Connecticut,
Florida, Massachusetts, New Jersey and Washington; the states of California,
Connecticut, Florida, Minnesota, New Jersey and Washington being the only
jurisdictions in the United States in which the Company owns or leases real
property. Acurex is qualified to transact business, and is in good standing as a
foreign corporation, in California and Florida; the states of California and
Florida being the only jurisdictions in which Acurex owns or leases real
property.
2. The authorized, issued and outstanding capital stock of the Company is
as set forth in the Capitalization table in the Offering Memorandum under the
caption "Actual", except for issuances or forfeitures subsequent to the date of
the information provided in such table, if any, pursuant to the Company's stock
option plans. The shares of the Company's common stock, $.01 par value (the
"Common Stock") issued and outstanding on this date have been duly authorized
and validly issued and are fully paid and nonassessable. None of the outstanding
shares of Common Stock was issued in violation of any preemptive rights under
the Delaware General Corporation Law or the Restated Certificate of
Incorporation of the Company or, to the best of my knowledge, any preemptive
rights pursuant to any contract to which the Company is a party or by which it
is bound.
3. To the best of my knowledge, (i) neither the Company, Acurex nor Xxxxx
is in violation of its certificate of incorporation or by-laws or in default in
the performance of any obligation, agreement or condition in any agreement or
instrument known to us to which the Company, Acurex or Xxxxx is a party or by
which either of them is bound and which default could have a material adverse
effect on the business or financial condition of the Company and its
subsidiaries taken as a whole and (ii) neither the Company, Acurex, nor Xxxxx is
in violation of any applicable law, rule or regulation, or, to our knowledge
after having made inquiry of the Company, any order, writ, injunction or decree,
of any jurisdiction, court or governmental instrumentality, where such violation
or default could have a material adverse effect on the business or financial
condition of the Company and its subsidiaries taken as a whole.
-9-
42
4. The statements made in the Offering Memorandum under the captions
"Business-Legal Proceedings," to the extent that they constitute matters of law
or legal conclusions or descriptions of legal proceedings, have been reviewed by
me and fairly present the information disclosed therein in all material
respects.
5. To the best of my knowledge, there is not pending or threatened any
action, suit, proceeding, inquiry or investigation, to which the Company or any
subsidiary is a party, or to which the property of the Company or any subsidiary
is subject, before or brought by any court or governmental agency or body, which
might reasonably be expected to result in a material adverse effect on the
Company and its subsidiaries, taken as a whole, or which might reasonably be
expected to materially and adversely affect the consummation of the transactions
contemplated in the Purchase Agreement or the performance by the Company of its
obligations thereunder.
I have reviewed and participated in the preparation of the Offering
Memorandum with other officers or employees of the Company, with its counsel and
its auditors, and with representatives of the Initial Purchasers and I advise
you that, on the basis of the information I gained in the course of performing
the services referred to above, no facts came to my attention which gave me
reason to believe that the Offering Memorandum (other than the financial
statements and other financial data contained therein or omitted therefrom, as
to which we have not been requested to comment), as of its date or the date
hereof, contained or contains an untrue statement of a material fact or omitted
or omits to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
This opinion is being furnished by me as General Counsel for the Company
to you solely for your benefit, and is not to be used, circulated, quoted or
otherwise referred to for any other purpose.
Very truly yours,
Xxxxxx X. Xxxxxxxx
-10-
43
EXHIBIT B-2
FORM OF OPINION OF XXXXXX XXXXX XXXXXXX
[Xxxxxx Xxxxx Xxxxxxx Letterhead]
[Date]
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
BT Alex. Xxxxx Incorporated
Chase Securities Inc.
Credit Suisse First Boston Corporation
Xxxxxx Xxxxxxx & Co. Incorporation
c/o Merrill Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxxx Xxxxx World Headquarters
North Tower
World Financial Center
Xxx Xxxx, XX 00000
XXX
Dear Sirs
BE Aerospace (UK) Limited and Flight Equipment and Engineering Limited
1. We have acted as English legal advisers to BE Aerospace (UK) Limited
(formerly Flight Equipment and Engineering Limited), a company registered
in England and Wales under registered number 516846, the registered office
of which is located at Xxxxxx Xxxxx, Xxxxxxxxx Xxxx, Xxxxxxxx Xxxxxxx,
Xxxxxxxxxxxx ("BEA(UK)"), since its acquisition by BE Aerospace, Inc.
(formerly BE Avionics, Inc.) (the "Issuer") on 2 April, 1992. We have also
acted as English legal advisers to Flight Equipment and Engineering
Limited, a company registered in England and Wales under registered number
1417308, the registered office of which is located at Xxxxxx Xxxxx,
Xxxxxxxxx Xxxx, Xxxxxxxx Xxxxxxx, Xxxxxxxxxxxx ("FEEL"), since 2 April,
1992. We have been asked by the Issuer, a Delaware corporation, to provide
this opinion in connection with the issue and sale by the Issuer of
US$200,000,000 principal amount of 8% Senior Subordinated Notes due 2008
(the "Securities"). We have been provided with copies of:
(a) an Offering Memorandum dated February 13, 1998, related to the
Securities (the "Offering Memorandum";
-1-
44
(b) a draft dated __________, 1998, of an indenture to be dated as of
February 13, 1998, between the Issuer and the trustee named therein
(the "Indenture") which we have been advised is the final form
thereof;
(c) the purchase agreement dated as of February 6, 1998, between the
Issuer and you relating to the issue and sale of the Securities (the
"Purchase Agreement"); and
(d) the registration rights agreement to be dated as of February 13,
1998, between the Issuer and you relating to the filing of a
registration statement with respect to the Securities (the
"Registration Rights Agreement).
2. We understand that this opinion is required by you pursuant to Section
5(b) of the Purchase Agreement.
3. For the purposes of giving this opinion, we have examined the following
documents relating to each of BEA(UK) and FEEL:-
(a) Statutory Books, including the Register of Members and the Minutes
of board meetings and general meetings of the shareholders contained
therein;
(b) copies of the Memorandum and Articles of Association and Certificate
of Incorporation; and
(c) Certificates of good standing issued by the Registrar of Companies
on _________, 1998, copies of which are annexed hereto marked "A".
4. We have carried out a search of microfiches relating to each of BEA(UK)
and FEEL supplied to us by the Companies Registration Office on _________,
1998, which revealed no order or resolution to wind up either BEA(UK) or
FEEL and no notice of the appointment of an administrator or receiver of
either BEA(UK) or FEEL. We have also carried out a search at the Central
Registry of Winding Up Petitions, London on _________, 1998, which shows
no pending petition to wind up either BEA(UK) or FEEL. We have not
conducted any further search, or any search in any District Registry of
the High Court where winding-up and administration petitions may also be
presented in certain cases, and accordingly this opinion is given on the
assumption that such searches (if made) would not reveal any circumstances
which would require amendment of this opinion.
5. Except for the documents listed in paragraph 3 above, we have not examined
for the purposes of this opinion any contracts or other documents entered
into by or affecting either BEA(UK) or FEEL or any corporate records of
either BEA(UK) or FEEL. We
-2-
45
have not made any other enquiries or searches concerning either BEA(UK) or
FEEL (whether within this firm or otherwise), except as mentioned in
paragraph 4 above. For the purposes of this opinion, we have relied as to
factual matters upon certificates of officers and directors of the Issuer
and of BEA(UK) and FEEL and have relied on representations made by the
Issuer in the Purchase Agreement.
6. This opinion is given only with respect to English law in force at the
date of this letter as applied by English Courts and is given on the basis
that it will be governed by and construed in accordance with English law.
No opinion is expressed or implied as to the laws of any other territory.
7. This opinion is based on the assumptions set out in the appendix to this
letter, which we have taken no steps to verify independently.
8. Based upon and subject to the foregoing, and subject as stated herein and
to any matters not disclosed to us, we are of the opinion that:
(a) each of BEA(UK) and FEEL is duly incorporated under the Companies
Xxx 0000 as a private company with limited liability under English
law, is validly existing under English law and has the necessary
corporate power under the Companies Xxx 0000 and 1989 and its
Memorandum and Articles of Association to conduct its business and
to own, lease and operate its properties as described in the
Offering Memorandum at pages ____ (copies of which are annexed
hereto marked "B");
(b) as reflected in the register of members of BEA(UK), the Issuer is
the registered holder of the 500,000 issued ordinary shares of
(Dutch Xxxxxx)1 each of BEA(UK) and the 380,000 issued cumulative
redeemable preference shares of (Dutch Xxxxxx)1 each of BEA(UK).
Pursuant to Section 361 Companies Xxx 0000, the register of members
of a company (as defined in that Act) is prima facie evidence of any
matters which are by that Act directed or authorised to be inserted
in it, and of legal ownership of shares;
(c) as reflected in the register of members of FEEL, BEA(UK) is the
registered holder of the 100 issued ordinary shares of (Dutch
Xxxxxx)1 each of FEEL. Pursuant to Section 361 Companies Xxx 0000,
the register of members of a company (as defined in that Act) is
prima facie evidence of any matters which are by that Act directed
or authorised to be inserted in it, and of legal ownership of
shares;
(d) in the absence of any circumstance by which a member of a company
limited by shares (as defined in the Companies Act 1985) may become
liable for the company's debts, the liability of the member
(including, with respect to BEA(UK), the Issuer or with respect to
FEEL, BEA(UK)) for such debts will be limited to the
-3-
46
par value of the shares held and any premium agreed to be paid, to
the extent that such amounts have not been paid by any previous
holder of those shares. According to the register of members of each
of BEA(UK) and FEEL, the search of microfiches relating to each of
BEA(UK) and FEEL referred to in paragraph 4 above and the
certificates of the officers and directors of the Issuer, BEA(UK)
and FEEL, but having made no other enquiry, investigation or
verification, we are of the opinion that the issued ordinary shares
of (Dutch Xxxxxx)1 each in BEA(UK) and FEEL are fully paid;
(e) the issued cumulative redeemable preference shares of (Dutch
Xxxxxx)1 each of BEA(UK) have been duly authorised, validly issued
and fully paid;
(f) the issued cumulative redeemable preference shares of (Dutch
Xxxxxx)1 each of BEA(UK) were not issued in violation of any
pre-emptive rights under statute or under the Memorandum and
Articles of Association of BEA(UK);
(g) none of the following will result in any breach of the Memorandum
and Articles of Association of either of BEA(UK) or FEEL:-
(i) the execution and delivery by the Issuer of the Purchase
Agreement, the consummation by the Issuer of the transactions
therein contemplated and the compliance by the Issuer with its
terms;
(ii) the execution and delivery by the Issuer of the Registration
Rights Agreement and the compliance by the Issuer with its
terms;
(iii) the execution and delivery by the Issuer of the Indenture and
the compliance by the Issuer with its terms;
(iv) the issue and delivery by the Issuer of the Securities as
contemplated by the Offering Memorandum;
(v) the consummation by the Issuer of the transactions
contemplated in the Offering Memorandum; and
(h) the matters referred to in paragraph 8(g)(i) to (v) inclusive above
do not and will not conflict with, or result in a breach of any of
the terms or provisions of, or constitute a default under, or result
in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of either BEA(UK) or FEEL under:-
(i) any existing English law, rule or regulation; or
(ii) to our knowledge (based solely upon written notification by
BEA(UK) and
-4-
47
FEEL) and on the basis of the certificates of the officers and
directors of BEA(UK), FEEL and the Issuer, any judgment, order
or decree of any government, governmental instrumentality or
court having jurisdiction over BEA(UK) or FEEL or any of their
properties.
9. This opinion is addressed to you in connection with the Issuer. It is
given for your benefit for the purpose of the issue of the Securities
only, and may not be disclosed or quoted to or relied upon by any other
person, without our prior written consent in each specific case, or used
for any other purpose. No person (other than you) into whose possession a
copy of this opinion may come may rely on this opinion without our express
written consent addressed to him.
Yours faithfully
Xxxxxx Xxxxx Xxxxxxx
-5-
48
Appendix to Opinion
In this opinion letter, we have assumed that:-
(a) All documents submitted to us as originals are authentic and complete and
all signatures and seals are genuine.
(b) All documents supplied to us as photocopies or facsimile transmitted
copies or other copies conform to the originals and such originals are
authentic and complete.
(c) All documents, forms, notices and information which should have been
delivered to the Companies Registration Office and the Central Registry of
Winding Up Petitions on behalf of or relating to BEA(UK) and FEEL have
been so delivered and the file of records maintained at the Companies
Registration Office and the Central Registry of Winding Up Petitions
concerning BEA(UK) and FEEL, and reproduced on microfiche for public
inspection or disclosed to us orally, was complete, accurate and
up-to-date at the time of the respective searches referred to in paragraph
4 of this opinion letter and there has been no change in the information
filed or the oral disclosure made since the date on which those searches
were made.
(d) All documents dated earlier than the date of this opinion letter on which
we have expressed reliance remain accurate, complete and in full force and
effect at the date of the opinion letter.
(e) Neither BEA(UK) nor FEEL has passed a resolution for its winding-up and no
proceedings have been instituted or steps taken for the winding-up of
BEA(UK) or FEEL or the appointment of an administrator or receiver in
respect of all or any assets of BEA(UK) or FEEL.
(f) No law (other than English law) affects any of the conclusions stated in
this opinion letter.
(g) The resolutions contained in the minutes referred to in paragraph 3(a) of
this opinion letter were duly passed at a properly convened, constituted
and conducted meeting of duly appointed directors and shareholders,
respectively, of BEA(UK) and FEEL at which all constitutional, statutory
and other formalities were duly observed (including, if applicable, those
relating to the declaration of directors' interests or the power of
interested directors to vote); such resolutions have not been amended or
rescinded and are in full force and effect; and the minutes of such
meetings referred to in paragraph 3(a) of this opinion letter are a true
record of the proceedings at such meetings.
(h) The certificates of the officers and directors of the Issuer and BEA(UK)
and FEEL provided for the purposes of this opinion letter are true and
accurate in all respects.
-6-
49
EXHIBIT B-3
FORM OF OPINION OF TRENITE VAN DOORNE
[Trenite van Doorne Letterhead]
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated
BT Alex. Xxxxx Incorporated
Chase Securities Inc.
Credit Suisse First Boston Corporation
Xxxxxx Xxxxxxx & Co Incorporated
c/o Merrill Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxxxx Xxxxx World Headquarters
North Tower
World Financial Center
Xxx Xxxx, XX 00000
XXX
Rotterdam, 6 February 1998
Dear Sirs,
We have acted as legal advisers in The Netherlands to BE Aerospace
(Netherlands) B.V. ("BEAN"), Koninklijke Fabriek Inventum B.V. ("KFI") and BE
Aerospace (Sales and Services) B.V. ("BEASS"), which companies have their
registered office at Xxxxxxxxxxx 0, 0000 XX Xxxxxxxxxx, Xxx Xxxxxxxxxxx, for the
purpose of rendering an opinion on certain matters of Netherlands law in
connection with the issue and sale by BE Aerospace Inc. of US$ 200,000,000
principal amount of [ ]% Senior Subordinated Notes due 2008.
For the purposes of this opinion we have examined and relied only on
the documents listed in Schedule 1 and Schedule 2, which shall form part of this
opinion. The documents listed in Schedule 1 are referred to as the "Documents"
and the documents listed in Schedule 2 as the "Certificates". BEAN, KFI and
BEASS are hereinafter referred to as the "Dutch Companies" and each company
individually as the "Dutch Company".
In connection with our examination and in giving this opinion, we
have assumed:
(a) the genuineness of the signatures to the Documents and the
Certificates, the authenticity and completeness of the
Documents and the Certificates submitted to us as originals,
the conformity to the original documents of the Documents and
the Certificates submitted to
-7-
50
us as copies and the authenticity and completeness of those
original documents;
(b) the legal capacity (handelingsbekwaambeid) of the natural
persons acting on behalf of the parties, the due incorporation
and valid existence of, the power, authority and legal rights
of, and the due authorization and execution of the Documents
by the parties thereto under any applicable law;
(c) the due compliance with all matters of, and the validity,
binding effect and enforceability of the Documents under any
applicable law (other than Dutch law) and in any jurisdiction
(other than The Netherlands) in which an obligation under the
Documents falls to be performed; and
(d) the accuracy, validity and binding effect of the Certificates
and the matters certified or evidenced thereby at the date
hereof and any other relevant date; and
(e) the due execution by the parties thereto of the Documents
submitted to and examined by us in draft in the form of those
drafts.
This opinion is given only with respect to Dutch law as generally
interpreted and applied by the Dutch courts as at the date of this opinion. As
to matters of fact we have relied on the representations and warranties
expressed in the Documents and the Certificates. We do not express an opinion on
the representations or warranties made by the parties to the Documents, matters
of fact, matters of foreign law, international law, including, without
limitation, the law of the European Union, and tax and anti-trust law, except to
the extent that those representations and warranties and matters of fact and law
are explicitly covered by the opinions below and except to the extent the law of
the European Union (other than anti-trust and tax law) has direct force and
effect in The Netherlands. No opinion is given on commercial, accounting or
non-legal matters or on the ability of the parties to meet their financial or
other obligations under the Documents. We have assumed that foreign law which
may apply with respect to the Documents or the transactions contemplated thereby
and any document not examined by us would not be such as to affect this opinion.
Based on and subject to the foregoing, and subject to the
qualifications set out below and the matters of fact, documents or events not
disclosed to us, we express the following opinions:
1. Each of the Dutch Companies is duly incorporated and validly
existing under the law of The Netherlands as a private company
with limited liability (besloten vennootschap met beperkte
aansprakelijkheid) and possesses the capacity to xxx and to be
sued in its own name.
-8-
51
2. It does not appear from the Extracts that any Dutch Company
has been wound up (ontbinding) or has been declared bankrupt
(faillissement) or that any Dutch Company has been granted a
(provisional) suspension of payment ((voorlopige) surseance).
3. According to the deed of incorporation and the shareholders
register of BEAN, BE Aerospace Inc. ("BEAI" or the "Issuer"),
with registered office at 0000 Xxxxxxxxx Xxxxxx Xxx,
Xxxxxxxxxx, Xxxxxxx 00000, U.S.A., is the registered holder of
36 (thirty six) issued ordinary registered shares, with a par
value of NLG 1,000 each, and BE Aerospace (USA) Inc. ("BEAU"),
with registered office at 0000 Xxxxxxxxx Xxxxxx Xxx,
Xxxxxxxxxx, Xxxxxxx 00000, U.S.A., is the registered holder of
4 (four) issued ordinary registered shares, with a par value
of NLG 1,000 each, in the issued share capital of BEAN
consisting of 40 shares.
4. According to the shareholders register of KFI and the Deed of
Transfer KFI, BEAN is the registered holder of 5,584 (five
thousand five hundred and eighty-four) issued ordinary
registered shares, with a par value of NLG 500 each, in the
issued share capital of KFI consisting of 5,604 shares.
5. According to the shareholders register of BEASS and the Deeds
of Transfer, BEAN is the registered holder of 40 (forty)
shares, with a par value of NLG 1,000 each, in the issued
share capital of BEASS consisting of 40 shares.
6. In the absence of any circumstance by which a shareholder of a
private company with limited liability (een besloten
vennootschap xxx beperkle aansprakelijkheid) may become liable
for the company's debts, the liability of BEAN, as shareholder
of KFI and BEASS, will be limited to the obligation to fully
pay the par value of the shares held and any share premium
agreed to be paid, to the extent that such amounts have not
been paid.
7. Pursuant to the Articles of Association, BEAI and BEAU, as
shareholders of BEAN, are each personally liable for
everything performed in the name of BEAN.
8. According to the Shareholders Registers and the Extracts, but
having made no other enquiry, investigations or verification,
the par value of the issued ordinary shares in BEAN, KFI and
BEASS is fully paid.
9. The execution and delivery by the Issuer of the Documents and
where appropriate the consummation by the Issuer of the
transaction therein contemplated and the compliance by the
Issuer with its terms will not
-9-
52
result in any conflict with rules of Netherlands law or in any
breach of the articles of association of either BEAN or KFI.
The opinions expressed above are subject to the following
qualifications:
(A) Our opinions expressed herein are subject to and limited by
applicable bankruptcy, insolvency, reorganization, suspension
of payment and other laws relating to or affecting the
protection or enforcement of priorities and creditors' rights
generally. including, without limitation, those governing the
avoidance or the validity of transactions entered into and
security created at a time when a company is, or may in
consequence thereof become, unable to pay its debts.
(B) We have assumed that the relevant Extracts fully and
accurately reflect the corporate status and position of each
of the Dutch Companies. It is noted, however, that the
Extracts may not completely and accurately reflect that status
and position insofar as there may be a delay between the
taking of a corporate action (such as the issuance of shares,
the appointment or removal of a director, a winding-up or
(provisional) suspension of payment resolution or the making
of a court order, like a winding-up, (provisional) suspension
of payment or bankruptcy order) and the filing of the
necessary documentation at the Commercial Register and a
further delay between that filing and an entry appearing on
the file of the relevant party at the Commercial Register.
(C) There is no public register of shares in The Netherlands. In
respect of the title to shares in the share capital of BEAN,
KFI and BEASS respectively per the date of this opinion, we
have compared the deed of incorporation of BEAN with the
shareholders register of BEAN, the Deed of Transfer KFI with
the shareholders register of KFI and the Deeds of Transfer
with the shareholders register of BEASS and established the
consistency of each of these Certificates. The absence of any
registration in the Shareholders Registers of any subsequent
transfer of title to the shares of BEAN, KFI or BEASS (as the
case may be) is, however, no conclusive evidence that any such
subsequent transfer of title has not occurred
(D) We have assumed that the difference between the total number
of shares issued in the share capital of KFI and the number of
shares held by BEAN, as reflected in the shareholders register
of KFI, is explained by the fact that at conversion of the
company of KFI from a company limited by shares (naamloze
vennootschap) into a closed company with limited liability
(besloten vennootschap xxx beperkte aansprakelijkheid) on 2
March 1992, not each holder of shares has offered its shares
in order to be registered as a shareholder of the company, as
converted. Pursuant to section 2:183, subsection 4, of the
-10-
53
Dutch Civil Code, after conversion a shareholder is not able
to exercise the rights pertaining to the shares as long as the
shareholder has not been registered in the shareholders
register of the company.
(E) We have assumed that there are no contractual or other
restrictions binding on the Dutch Companies, which would
affect this opinion.
(F) We note that under Dutch securities law it is prohibited
(subject to certain exemptions and exceptions) in or from The
Netherlands to offer securities, such as the Securities, on
issue or to propose such an offer by means of advertisements
or documents.
This opinion, which is strictly limited to the matters stated herein
and which is not to be read as extending by implication to other matters in
connection with the Documents or otherwise, is given subject to the
conditions(1), including the limitation of liability, set out at the bottom of
the front page of this opinion letter, and on the basis that it is governed by
and to be construed in accordance with Dutch law and that any action, arising
out of it, is to be determined by the competent court in Rotterdam which shall
have exclusive jurisdiction in relation thereto. We do not assume any obligation
to advise you (or any other person entitled to rely on this opinion) of
subsequent changes in, or in the interpretation of, Dutch law.
This opinion is given solely for your benefit in this particular
matter and the context specified herein. It may not, without our prior written
consent, be transmitted or otherwise disclosed to, or relied upon by, others,
referred to in other matters or context whatsoever, or be quoted or made public
in any way, save that the opinion may be disclosed to your legal advisors.
Yours faithfully,
Trenite Van Doorne
----------
(1) The partnership Trenite Van Doorne is the exclusive contractual party with
respect to all work and services undertaken. Netherlands law shall apply. The
aggregate liability of the partnership, its partners and each of its servants
shall be limited to the proceeds available under the partnership's professional
liability insurance.
-11-
54
SCHEDULE 1
Documents
(a) a draft dated February 2, 1998 of an indenture between the Issuer and the
trustee named therein (the "Indenture") which we have been advised is the
final form thereof;
(b) a draft dated February 2, 1998 of a purchase agreement between the Issuer
and yourselves relating to the issue and sale of the Securities (the
"Purchase Agreement");
(c) a draft dated February 2, 1998 of a registration rights agreement between
the Issuer and yourselves relating to the filing of a registration
statement with respect to the Securities (the "Registration Rights
Agreement").
-12-
55
SHEDULE 2
Certificates
(a) copies of the notarial deed of incorporation of BEAN, KFI and BEASS, dated
28 April 1993, 20 May 1915 and 20 August 1990 respectively (the "Deeds of
Incorporation");
(b) copies of the articles of association (as amended) of BEAN and KFI dated
20 May 1994 and of BEASS, dated 11 January 1995 (the "Articles of
Association");
(c) copies of the register of shareholders of BEAN, KFI and BEASS respectively
(the "Shareholders Registers");
(d) extracts dated 6 February 1998 (updated by computer generated extracts
dated [__] February 1998) from the Commercial Register (Handelsregister)
in Utrecht, The Netherlands, in respect of BEAN, KFI and BEASS
respectively (the "Extracts");
(e) two notarial deeds of transfer of shares in the share capital of BEASS,
dated 22 September 1994 (the "Deeds of Transfer");
(f) a notarial deed of transfer of shares in the share capital of KFI, dated
29 April 1993 (the "Deed of Transfer KFI").
-1-
