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Exhibit 5
7 August 2000
Pearson plc
3 Burlington Gardens
London W1X 1LE
Dear Sirs
PEARSON PLC - OFFERING OF ORDINARY SHARES
INTRODUCTION
1. We are acting as English legal advisers to Pearson plc, a public
company limited by shares incorporated under the laws of England and Wales
(the COMPANY), in connection with a rights offering (the OFFERING) by the
Company of 170,528,278 new ordinary shares of 25p each of the Company (NEW
ORDINARY SHARES), some of which will be represented by American Depositary
Shares (ADSs). 22,100,000 of the New Ordinary Shares have been registered
under the US Securities Act of 1933, as amended, pursuant to a registration
statement on Form F-1 of the Company filed with the Securities and Exchange
Commission on 7 August 2000, as amended (the REGISTRATION STATEMENT).
2. For the purposes of giving this opinion we have examined the
following:
(a) a copy of the Company's Certificate of Incorporation dated 12 August
1897, a copy of the Certificate of Incorporation on Re-registration as
a public limited company dated 26 June 1981 and a copy of the
Certificate of Incorporation on Change of Name dated 1 June 1984;
(b) copies of the Memorandum and Articles of Association of the
Company in force as at 3 August 2000 (the MEMORANDUM and the ARTICLES
respectively);
(c) copies of the minutes of the meetings of the Board of Directors of the
Company or a committee thereof held on 27 July 2000, 30 July 2000 and 4
August 2000 evidencing, INTER ALIA, the Board of Directors' approval of
the Company entering into the Offering and the transactions
contemplated thereby;
(d) a draft dated 7 August 2000 of the circular comprising a prospectus in
the United Kingdom to be issued by the Company to its shareholders in
connection with the Offering (the CIRCULAR);
(e) a draft dated 7 August 2000 of the provisional allotment letter to be
issued by the Company to certain of its shareholders in connection with
the Offering (the PROVISIONAL ALLOTMENT LETTER); and
(f) those parts of the Registration Statement deemed relevant for the
purposes of giving this opinion.
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3. This opinion is confined to matters of English law. Accordingly, we
express no opinion herein with regard to any system of law other than the
laws of England as currently applied by the English courts. In particular, we
express no opinion on European Community law as it affects any jurisdiction
other than England. This opinion is to be governed by and construed in
accordance with English law as at the date of this opinion. To the extent
that the laws of the United States or the State of New York may be relevant,
we have made no independent investigation thereof and our opinion is subject
to the effects of such laws including the matters contained in the opinion of
Morgan Lewis & Bockius LLP, United States counsel for the Company.
ASSUMPTIONS
4. In considering the documents listed above and in rendering this
opinion, we have without further enquiry assumed:
(a) the genuineness of all signatures on, and the authenticity and
completeness of, all documents submitted to us whether as originals or
copies;
(b) the conformity to originals of all documents supplied to us as
photocopies or facsimile copies;
(c) that, where a document has been examined by us in draft or specimen
form, it will be or has been executed in the form of that draft or
specimen;
(d) that the Certificate of Incorporation on Re-registration as a public
limited company dated 26 June 1981 and the Certificate of Incorporation
on Change of Name dated 1 June 1984 and the Memorandum and the Articles
are currently in force;
(e) that the information revealed by our search on 4 August 2000 (carried
out by us or by ICC Information Ltd. on our behalf) of the public
documents of the Company kept at Companies House in Cardiff (the
COMPANY SEARCH) and our oral enquiry on 4 August 2000 of the Central
Registry of Winding-up Petitions (the WINDING UP ENQUIRY) below was
accurate in all respects and has not, since the time of such search or
enquiry, been altered;
(f) that the meetings of the Board of Directors of the Company or a
committee thereof were duly convened and held on 27 July 2000, 30 July
2000 and 4 August 2000 as evidenced by the minutes referred to in
paragraph 2(c); at each of such meetings a quorum of directors was
present and acting throughout; the resolutions referred to in such
minutes were duly passed and have not been amended, modified or revoked
and are in full force and effect; and each of the directors of the
Company having any interest in any of the matters discussed at each of
such meetings duly disclosed his interest therein and was entitled to
count in the quorum of such meetings and to vote on the resolutions
proposed thereat, and such minutes are a true and correct record of the
proceedings described therein;
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(g) that the directors of the Company, in authorising the provisional
allotment of New Ordinary Shares, have exercised their powers in
accordance with their duties under all applicable laws and the
memorandum and articles of association of the Company in force at the
relevant time;
(h) that all such further meetings of the Board of Directors of the Company
or of any committee thereof which may be required in order validly to
allot (whether provisionally or otherwise) and issue the New Ordinary
Shares will be duly convened and held and the requisite resolutions to
give effect to such allotment and issue will be duly passed and that,
without prejudice to the generality of the foregoing, the directors of
the Company will exercise their powers in accordance with their duties
under all applicable laws and the memorandum and articles of
association of the Company in force at the relevant time;
(i) full compliance by the Company with the provisions of the Circular and
the Provisional Allotment Letter;
(j) that all the New Ordinary Shares to be offered pursuant to the Offering
are subscribed in full by those persons who were holders of Ordinary
Shares at close of business on 28 July 2000 or by persons in whose
favour the rights thereto were duly renounced;
(k) that all conditions precedent to the allotment and issue of the New
Ordinary Shares have been or will be duly and properly satisfied;
(l) that there are no agreements or arrangements in existence, made prior
to the Offering, which affect the enforceability of the Offering or the
New Ordinary Shares in accordance with their terms; and
(m) that you have relied and will continue to rely as to matters governed
by the laws of the state of New York and of the United States upon the
opinion or opinions of Morgan, Lewis & Bockius LLP, United States
counsel for the Company.
OPINION
5. On the basis of, and subject to, the foregoing and the matters set
out in paragraph 6 below and subject to any matters not disclosed to us, and
having regard to such considerations of English law applying at the date of
this letter as we consider relevant, we are of the opinion that, save as
disclosed in the Registration Statement, when issued and delivered against
payment in full therefor in accordance with and as contemplated by the
provisions of the Circular and the Provisional Allotment Letter, the New
Ordinary Shares will be validly issued and fully paid and no further
contributions in respect of the New Ordinary Shares will be required to be
made to the Company by the holders thereof only by virtue of their being such
holders.
QUALIFICATIONS
6. Our opinion is subject to the following qualifications:
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(a) the Company Search is not conclusively capable of revealing whether or
not:
(i) a winding up order has been made or a resolution passed for
the winding up of a company; or
(ii) an administration order has been made; or
(iii) a receiver, administrative receiver, administrator or
liquidator has been appointed,
as notice of these matters may not be filed with the Registrar of
Companies immediately and, when filed, may not be entered on the public
microfiche of the relevant company immediately. In addition, that
search is not capable of revealing, prior to the making of the relevant
order, whether or not a winding up petition or a petition for an
administration order has been presented;
(b) the Winding Up Enquiry relates only to a compulsory winding up and is
not conclusively capable of revealing whether or not a winding up
petition in respect of a compulsory winding up has been presented since
details of the petition may not have been entered on the records of the
Central Registry of Winding-up Petitions immediately or, in the case of
a petition presented to a County Court, may not have been notified to
the Central Registry and entered on such records at all, and the
response to an enquiry only relates to the period of approximately four
years prior to the date when the enquiry was made; and
(c) this opinion is subject to all applicable laws relating to insolvency,
bankruptcy, administration, reorganisation, liquidation or analogous
circumstances.
BENEFIT OF OPINION
7. This opinion is addressed to the Addressee solely for its own benefit
in relation to the Offering and, except as provided in this paragraph and in
paragraph 8 or with our prior written consent, is not to be transmitted or
disclosed to or used or relied upon by any other person or used or relied
upon by the Addressee for any other purpose. This opinion may be relied upon
in relation to the Offering by Goldman Sachs International and Cazenove &
Co., and by The Bank of New York as Depositary Bank.
8. We consent to the filing of this opinion as an exhibit to the
Registration Statement relating to the New Ordinary Shares or part thereof and
to references to us under the headings "Service of Process and Enforcement of
Liabilities" and "Validity of Securities" in the Registration Statement
relating to the New Ordinary Shares or part thereof.
Yours faithfully,
/s/ Freshfields Bruckhaus Deringer
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