EXHIBIT 2
SHARE DISPOSITION AGREEMENT
This SHARE DISPOSITION AGREEMENT (this "Agreement") made and entered
into as of August 7, 1998, by and between the sellers signatory hereto (the
"Sellers"), and BE AEROSPACE, INC. a Delaware corporation (the "Purchaser");
W I T N E S S E T H:
WHEREAS, the Purchaser and the Sellers entered into an Acquisition
Agreement dated as of July 21, 1998 (the "Acquisition Agreement"; capitalized
terms used herein and not defined have the meanings assigned such terms
therein), pursuant to which the Purchaser has agreed to purchase from the
Sellers (i) all of the outstanding capital stock of SMR Aerospace, Inc., an Ohio
corporation, (ii) all of the limited and general partnership interests in SMR
Associates, an Ohio limited partnership and (iii) all of the membership
interests in SMR Developers, an Ohio limited liability company, in consideration
for (a) delivery to the Sellers on the date hereof of 4,000,000 shares (the "BE
Aerospace Shares") of the Purchaser's common stock, par value $.01 per share
("Purchaser Common Stock") and (b) $2,000,000 in cash;
WHEREAS, concurrently herewith, the Purchaser and the Sellers are
entering into a Registration and Transfer Agreement (the "Registration
Agreement") pursuant to which the Purchaser has agreed to file with the U.S.
Securities and Exchange Commission and maintain in effect for a specified period
a registration statement (the "Registration Statement") with respect to the BE
Aerospace Shares.
WHEREAS, the parties desire to enter into this Agreement in order to
grant to the Sellers and the Purchaser certain rights with respect to the BE
Aerospace Shares, subject to the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements and covenants hereinafter set forth, the Purchaser and the Sellers
hereby agree as follows:
SECTION 1. Definitions. As used in this Agreement, the following
capitalized terms shall have the following meanings:
NYFS10...:\80\74780\0003\139\AGR8148Z.170
"BE Aerospace Shares" means the 4,000,000 shares of Purchaser Common
Stock delivered by the Purchaser to the Sellers on the date hereof and any
securities issued with respect to the BE Aerospace Shares by reason of any
Stock Event.
"Business Day" means any day that is not a Saturday, a Sunday or
other day on which banks are required or authorized by law to be closed in
the City of New York.
"Exchange Act" means the U.S. Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder, as in effect from time
to time.
"Guaranteed Value" means the Purchase Price minus the Cash
Payment.
"Net Proceeds" means (a) in the case of an underwritten sale of the
BE Aerospace Shares held by the Sellers, the gross proceeds received by
the Sellers in such sale of the BE Aerospace Shares net of underwriter's
discounts, commissions and other expenses paid by the Sellers (whether
incurred by the Sellers, the Purchaser, the underwriters or any advisors,
and including, without limitation, accounting and legal fees) in
connection with such sale and (y) in the case of any other sale of such
shares, the gross proceeds received by the Sellers net of selling
commissions paid in connection with such sale and all other expenses paid
by the Sellers (whether incurred by the Sellers, the Purchaser, the
placements agents or any advisors, and including, without limitation,
accounting and legal fees) in connection with such sale.
"Public Offering" means a fully underwritten public offering of the
BE Aerospace Shares and any other shares of Purchaser Common Stock,
conducted pursuant to an effective registration statement under the
Securities Act.
"SEC" means the U.S. Securities and Exchange Commission.
"Securities Act" means the U.S. Securities Act of 1933, as amended
and the rules and regulations thereunder, as in effect from time to time.
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"Stock Event" means any stock split, stock dividend, combination or
similar recapitalization of the Purchaser Common Stock after the date
hereof.
"Termination Date" means December 31, 1998.
Unless the context otherwise requires: (i) "or" is not exclusive;
and (ii) words in the singular include the plural and words in the plural
include the singular.
SECTION 2. Guaranteed Value for Shares Sold; Refund of Excess. (a)
If the aggregate Net Proceeds from the sale by the Sellers of BE Aerospace
Shares effected on or before the Termination Date are less than the Guaranteed
Value, then the Purchaser shall, on the Termination Date, pay to the Sellers by
wire transfer in immediately available federal funds the amount of such
deficiency and the Sellers shall transfer to the Company all BE Aerospace Shares
held by the Sellers on such date.
(b) If the aggregate Net Proceeds from the sale by the Sellers of BE
Aerospace Shares effected on or before the Termination Date are greater than the
Guaranteed Value, then the Sellers shall, on the date on which any proceeds in
excess of the Guaranteed Value are received by the Sellers, pay to the Company
by wire transfer of immediately available federal funds equal to the amount of
such excess and transfer to the Company all BE Aerospace Shares held by the
Sellers on such date.
SECTION 3. Disposition Procedures.
(a) From the date hereof until the Termination Date, the Sellers
agree to sell the BE Aerospace Shares on such terms and conditions (and
only on such terms and conditions), and at such times and utilizing such
underwriters and brokers, as shall be directed and approved by the
Purchaser in a written notice (a "Sale Notice") delivered to each Seller
in accordance with Section 5. The Sellers agree not to sell any BE
Aerospace Shares prior to the Termination Date other than pursuant to a
Sale Notice.
(b) Each Sale Notice (i) shall specify the terms upon which a sale
is to be made, including price (which may be a range), date, and method of
sale (underwritten offering, broker or private sale) and (ii) shall be
delivered to each Seller or to the Escrow Agent (as applicable) no later
than 12:00 Noon, one Business Day prior to the date of the proposed sale.
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(c) The Purchaser shall have no obligation under Section 2 with
respect to any sale of BE Aerospace Shares (i) to any Affiliate of any
Seller, or (ii) in connection with any transaction in violation of clause
(a) of this Section 3.
SECTION 4. Security for the Purchaser's Obligations Under this
Agreement. The Purchaser's obligations to the Sellers under this Agreement shall
be secured by an irrevocable stand-by letter of credit from The Chase Manhattan
Bank in the form attached hereto as Exhibit A (the "Letter of Credit"), in favor
of the Sellers. From time to time after the date hereof, as the Purchaser's
obligations to be secured by the Letter of Credit are reduced due to the receipt
by the Sellers of the Net Proceeds of sales of BE Aerospace Shares, the
available amount of the Letter of Credit shall be reduced by an amount equal to
the Net Proceeds received by the Sellers in such sales.
SECTION 5. Miscellaneous. (a) Notices. All notices, requests,
claims, demands and other communications hereunder shall be in writing and shall
be given or made (and shall be deemed to have been duly given or made upon
receipt) by delivery in person, by courier service, by cable, by telecopy, by
telegram, by telex or by registered or certified mail (postage prepaid, return
receipt requested) to the respective parties at the following addresses (or at
such other address for a party as shall be specified in a notice given in
accordance with this Section 5):
(i) if to the Sellers:
Xxxxx X. Xxxxxx and
Xxxxx X. Xxxxxx Trust -- 1998
000 Xxxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Telecopier: (000) 000-0000
Xxxxxxx X. Xxxx and
Xxxxxxx X. Xxxx Trust -- 1998
000 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxx
Telecopier: (000) 000-0000
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Xxxxx X. Xxxxx and
Xxxxx X. Xxxxx Trust -- 1998
000 Xxxx Xxxxx Xxxxx
Xxxxx, XX 00000
Attention: Xxxxx X. Xxxxx
Telecopier: (000) 000-0000
with a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
(ii) if to the Purchaser:
BE Aerospace, Inc.
0000 Xxxxxxxxx Xxxxxx Xxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
Telecopier: (000) 000-0000
with a copy to:
Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxx, Esq.
(b) Successors and Assigns. This Agreement is solely for the benefit
of, and binding upon, the parties and their respective successors. Nothing
herein shall be construed to provide any rights to any other entity or
individual. Neither this Agreement nor any of the rights or obligations
hereunder may be assigned by any party.
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(c) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(d) Titles. The titles, captions or headings of the Sections herein
are for convenience of reference only and are not intended to be a part of or to
affect the meaning or interpretation of this Agreement.
(e) Governing Law. This Agreement shall be construed, interpreted
and the rights of the parties determined in accordance with the laws of the
State of New York.
(f) Invalidity. In the event that any one or more of the provisions
contained in this Agreement shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, then to the maximum extent permitted by
law, such invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement.
(g) Entire Agreement; Modifications and Waivers. This Agreement
constitutes the entire agreement between the parties pertaining to the subject
matter hereof and supersedes agreements, understandings, negotiations and
discussions, whether oral or written, of the parties. No supplement,
modification or waiver of this Agreement shall be binding unless executed in
writing by the party to be bound thereby. No waiver of any of the provisions of
this Agreement shall be deemed or shall constitute a waiver of any other
provision hereof (whether or not similar), nor shall such waiver constitute a
continuing waiver unless otherwise expressly provided.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first written above.
BE AEROSPACE, INC.
By: /s/Xxxxxx X. XxXxxxxxx
------------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Chief Financial Officer
THE SELLERS
/s/Xxxxx X. Xxxxxx
------------------------------------
Xxxxx X. Xxxxxx
/s/Xxxxxxx X. Xxxx
------------------------------------
Xxxxxxx X. Xxxx
/s/Xxxxx X. Xxxxx
------------------------------------
Xxxxx X. Xxxxx
XXXXX X. XXXXXX TRUST - 1998
By: /s/Xxxxx X. Xxxxxx
------------------------------------
Xxxxx X. Xxxxxx, Trustee
XXXXXXX X. XXXX TRUST - 1998
By: /s/Xxxxxxx X. Xxxx
------------------------------------
Xxxxxxx X. Xxxx, Trustee
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XXXXX X. XXXXX TRUST - 1998
By: /s/Xxxxx X. Xxxxx
------------------------------------
Xxxxx X. Xxxxx, Trustee
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EXHIBIT A
FORM OF IRREVOCABLE
LETTER OF CREDIT
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EXHIBIT A
FORM OF STANDBY LETTER OF CREDIT
THE CHASE MANHATTAN BANK
Global Trade Services Group
X.X. Xxx 00, Xxxxxx Xxxxxx Station Cable Address: XXXXXXXXXX Xxx Xxxx
Xxx Xxxx, XX 00000-0000
DATE: AUGUST __, 1998
L/C NO.: [___________] CABLE CHARGE: $0.01
CUSTOMER'S REF. NO.: CABLE ADDR: XXXXXX0X
CHARGE ACCOUNT NO.: [___________] CABLE CHARGE CODE: S
ACCOUNT NAME AND ADDRESS: CUSTOMER
(SAME IF LEFT BLANK):
BE AEROSPACE
0000 XXXXXXXXX XXXXXX XXX
XXXXX 000
XXXXXXXXXX, XX 00000
SEND MESSAGE TO:
XXXXX X. XXXXXX
XXXXXXX X. XXXX
XXXXX X. XXXXX
c/o [ADDRESS]
WE HEREBY NOTIFY XXXXX X. XXXXXX, XXXXXXX X. XXXX AND XXXXX X.
XXXXX THAT WE HAVE ISSUED OUR IRREVOCABLE STANDBY LETTER OF
CREDIT NUMBER [_____________] IN YOUR FAVOR BY ORDER AND FOR
ACCOUNT OF:
BE AEROSPACE
0000 XXXXXXXXX XXXXXX XXX
XXXXXXXXXX, XX 00000
UP TO AN AGGREGATE AMOUNT OF ONE HUNDRED TWENTY MILLION U.S.
DOLLARS AND NO CENTS ($120,000,000.00)
AVAILABLE BY A SINGLE BENEFICIARIES' DRAFT AT SIGHT DRAWN ON THE
CHASE MANHATTAN BANK, NEW YORK, NEW YORK 10041
ACCOMPANIED BY:
A SIGNED CERTIFICATION BY ALL OF THE BENEFICIARIES THAT: (1) "THE DATE IS
DECEMBER 31, 1998 AND BE AEROSPACE, INC., OF 0000 XXXXXXXXX XXXXXX XXX,
XXXXXXXXXX, XXXXXXX 00000 HAS FAILED TO PAY THE AMOUNTS OWED TO THE
BENEFICIARIES PURSUANT TO SECTION 2 OF THE SHARE DISPOSITION AGREEMENT DATED AS
OF ____________, 1998 AMONG XXXXX X. XXXXXX, XXXXX X. XXXXXX TRUST - 1998,
XXXXXXX X. XXXX, XXXXXXX X. XXXX - 1998, XXXXX X. XXXXX, XXXXX X. XXXXX - 1998
AND BE AEROSPACE AND THE AMOUNT OF THE DRAFT ACCOMPANYING THIS CERTIFICATION IS
NOT IN EXCESS OF THE AMOUNT OWED BY BE AEROSPACE TO THE BENEFICIARIES
THEREUNDER" OR (2) "BE AEROSPACE, INC. OF 0000 XXXXXXXXX XXXXXX XXX, XXXXXXXXXX,
XXXXXXX 00000 HAS FILED A PETITION FOR REORGANIZATION OR OTHER RELIEF UNDER THE
FEDERAL BANKRUPTCY LAWS AND THE AMOUNT OF THE DRAFT ACCOMPANYING THIS
CERTIFICATION IS NOT IN EXCESS OF THE AMOUNT OWED BY BE AEROSPACE TO THE
BENEFICIARIES PURSUANT TO SECTION 2 OF THE SHARE DISPOSITION AGREEMENT DATED AS
OF ____________, 1998 AMONG XXXXX X. XXXXXX, XXXXX X. XXXXXX TRUST - 1998,
XXXXXXX X. XXXX, XXXXXXX X. XXXX TRUST - 1998, XXXXX X. XXXXX, XXXXX X. XXXXX -
1998 AND BE AEROSPACE.
THE AVAILABLE AMOUNT HEREUNDER SHALL BE REDUCED BY THE AMOUNT
WHICH THE BENEFICIARIES CERTIFY TO THE ISSUER HAS BEEN PAID BY BE
AEROSPACE TO THE BENEFICIARIES PURSUANT TO SECTION 2 OF THE SHARE
DISPOSITION AGREEMENT DATED AS OF ____________, 1998 AMONG XXXXX X.
XXXXXX, XXXXX X. XXXXXX - 1998, XXXXXXX X. XXXX, XXXXXXX X. XXXX TRUST
- 1998, AND XXXXX X. XXXXX, XXXXX X. XXXXX - 1998 AND BE AEROSPACE.
DRAFT MUST BE DRAWN AND PRESENTED AT THIS OFFICE AT 00 XXXXX
XXXXXX, TRADE SERVICES, XXXX 0000, XXX XXXX, XXX XXXX 00000 NOT
LATER THAN JANUARY 16, 1999.
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THE DRAFT DRAWN HEREUNDER MUST BE MARKED: "DRAWN UNDER THE
CHASE MANHATTAN BANK, NEW YORK LETTER OF CREDIT NUMBER
[__________]" AND INDICATE THE DATE HEREOF.
WE HEREBY ENGAGE WITH THE BENEFICIARY THAT THE DRAFT DRAWN
UNDER AND IN COMPLIANCE WITH THE TERMS OF THIS CREDIT WILL BE
DULY HONORED.
THIS LETTER OF CREDSHALL BE GOVERNED BY NEW YORK LAW, SUBJECT TO THE UNIFORM
CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS (1993 REVISION) INTERNATIONAL
CHAMBER OF COMMERCE PUBLICATION NO. 500.
STOP.
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