[Letterhead of Cadwalader, Wickersham & Taft]
November 5, 1998
The Bear Stearns Companies Inc.
245 Park Avenue
New York, NY 10167
Ladies and Gentlemen:
We have acted as special counsel for The Bear Stearns Companies Inc., a
Delaware corporation (the "Company"), in connection with the preparation of the
Company's Registration Statement on Form S-3 (the "Registration Statement")
pursuant to the Securities Act of 1933, as amended (the "Securities Act"), being
filed with the Securities and Exchange Commission (the "Commission") on the date
hereof and to which this opinion letter is an exhibit. The Registration
Statement relates to an indeterminate aggregate principal amount of Junior
Subordinated Deferrable Interest Debentures (the "Debentures") of the Company,
an indeterminate aggregate liquidation amount of Preferred Securities (the
"Preferred Securities") of Bear Stearns Capital Trust II, Bear Stearns Capital
Trust III, Bear Stearns Capital Trust IV and Bear Stearns Capital Trust V, each
a Delaware business trust (collectively, the "Trusts"), the guarantees by the
Company (the "Guarantees") of the Preferred Securities and an indeterminate
number of shares of the Company's Preferred Stock, par value $1.00 per share
(the "Preferred Stock"), as may be issued from time to time, collectively with
an aggregate offering price of $750,000,000. The Debentures and the Preferred
Stock will be, and the Guarantees will relate to Preferred Securities that will
be, issued in one or more series, the terms of which shall be fixed prior to
issuance by the Company and the applicable Trust.
In rendering the opinions expressed below, we have examined and relied
upon, among other things, (a) the Registration Statement, including the
Prospectus constituting a part thereof, (b) the form of indenture (the
"Indenture"), to be entered into between the Company and The Chase Manhattan
Bank, as trustee, and the form of supplemental indenture under which each issue
of Debentures will be made filed as exhibits to the Registration Statement, (c)
the form of Preferred Securities Guarantee Agreement under which the Guarantees
will be made filed as an exhibit to the Registration Statement and (d) originals
or copies, certified or otherwise identified to our satisfaction, of such
certificates, corporate, public or other records, and other documents as we have
deemed appropriate for the purpose of rendering this opinion letter. In
connection with such examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals, the
conformity to original documents and instruments of all documents and
instruments submitted to us as copies or specimens, and the authenticity of the
originals of such documents and instruments submitted to us as copies or
specimens. We have also made such investigations of law as we have deemed
appropriate. In addition, we have assumed that the Debentures and the
The Bear Stearns Companies Inc. -2- November 5, 1998
Guarantees will be executed and delivered in substantially the form in which
they are filed as exhibits to the Registration Statement.
We are members of the Bar of the State of New York, and in rendering the
opinions below, we do not purport to be an expert in, or express any opinion
concerning, the laws of any jurisdiction other than the substantive laws of the
State of New York, the General Corporation Law of the State of Delaware and,
where expressly referred to below, the substantive federal laws of the United
States of America (in each case without regard to conflicts of law principles).
Based upon the foregoing and subject to the qualifications set forth
herein, we are of the opinion that:
1. The Debentures and the Guarantees will be legally and validly issued and
binding obligations of the Company (except to the extent enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or other similar laws affecting the enforcement of
creditors' rights generally and by the effect of general principles of equity,
regardless of whether enforceability is considered in a proceeding in equity or
at law), when (a) the Registration Statement, as finally amended, shall have
become effective under the Securities Act and the Indenture shall have been
qualified under the Trust Indenture Act of 1939, as amended, and (b) the
Debentures shall have been duly executed, authenticated and delivered, and the
Guarantees shall have been duly executed and delivered, as contemplated in the
Prospectus and applicable Prospectus Supplement.
2. The Company has been duly incorporated and is validly existing as a
corporation under the laws of the State of Delaware.
3. The shares of Preferred Stock will be validly issued, fully paid and
non-assessable when (a) the Registration Statement, as finally amended, shall
have become effective under the Securities Act and (b) the Preferred Stock shall
have been issued, paid for and delivered as contemplated in the Prospectus and
applicable Prospectus Supplement; provided that the issuance of shares of
Preferred Stock is duly authorized by the Company's Board of Directors and that
the number of shares of Preferred Stock issued at no time exceeds the maximum
number of shares of Preferred Stock authorized to be issued by the Company's
Certificate of Incorporation.
The Bear Stearns Companies Inc. -3- November 5, 1998
We hereby consent to the filing of this opinion letter as an exhibit to the
Registration Statement and to the reference to this Firm in the Prospectus
constituting a part of the Registration Statement under the caption "Legal
Matters," without admitting that we are "experts" within the meaning of the
Securities Act or the rules and regulations of the Commission issued thereunder
with respect to any part of the Registration Statement, including this exhibit.
Very truly yours,
/s/ Cadwalader, Wickersham & Taft