Exhibit 1.1
$225,000,000
DOW ▇▇▇▇▇ & COMPANY, INC.
3.875% Senior Notes due 2008
Purchase Agreement
------------------
February 14, 2005
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
As Representatives of the
several Initial Purchasers listed
in Schedule 1 hereto
c/o ▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Dow ▇▇▇▇▇ & Company, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to the several Initial Purchasers listed in
Schedule 1 hereto (the "Initial Purchasers"), for whom you are acting as
representatives (the "Representatives"), $225,000,000 principal amount of
its 3.875% Senior Notes due 2008 (the "Notes"). The Notes will be issued
pursuant to an Indenture to be dated as of February 17, 2005 between the
Company and The Bank of New York, as trustee (the "Trustee").
The Notes will be sold to the Initial Purchasers without being
registered under the Securities Act of 1933, as amended (the "Securities
Act"), in reliance upon an exemption therefrom. The Company has prepared a
preliminary offering memorandum dated February 14, 2005 (the "Preliminary
Offering Memorandum") and will prepare an offering memorandum also dated
February 14, 2005 (the "Offering Memorandum") setting forth information
concerning the Company and the Notes. Copies of the Preliminary Offering
Memorandum have been, and copies of the Offering Memorandum will be,
delivered by the Company to the Initial Purchasers pursuant to the terms of
this Agreement. 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 Notes by the Initial
Purchasers in the manner contemplated by this Agreement. Capitalized terms
used but not defined herein shall have the meanings given to such terms in
the Offering Memorandum. References herein to the Preliminary Offering
Memorandum and the Offering Memorandum shall be deemed to refer to and
include any document incorporated by reference therein.
Holders of the Notes (including the Initial Purchasers and their
direct and indirect transferees) will be entitled to the benefits of a
Registration Rights Agreement (the "Registration Rights Agreement"), to be
dated the Closing Date (as defined below), pursuant to which the Company
will agree to file one or more registration statements with the Securities
and Exchange Commission (the "Commission") providing for the registration
under the Securities Act of the Notes or the Exchange Notes referred to
(and as defined) in the Registration Rights Agreement.
The Company hereby confirms its agreement with the several Initial
Purchasers concerning the purchase and resale of the Notes, as follows:
1. Purchase and Resale of the Notes. (a) The Company agrees to issue
and sell the Notes to the several Initial Purchasers as provided in this
Agreement, and each Initial Purchaser, on the basis of the representations,
warranties and agreements set forth herein and subject to the conditions
set forth herein, agrees, severally and not jointly, to purchase from the
Company the respective principal amount of Notes set forth opposite such
Initial Purchaser's name in Schedule 1 hereto at a price equal to 99.505%
of the principal amount thereof plus accrued interest, if any, from
February 17, 2005 to the Closing Date. The Company will not be obligated to
deliver any of the Notes except upon payment for all the Notes to be
purchased as provided herein.
(b) The Company understands that the Initial Purchasers intend to
offer the Notes for resale on the terms set forth in the Offering
Memorandum. Each Initial Purchaser, severally and not jointly, represents,
warrants and agrees that:
(i) it is a qualified institutional buyer within the meaning of
Rule 144A under the Securities Act (a "QIB") and an accredited
investor within the meaning of Rule 501(a) under the Securities Act;
(ii) it has not solicited offers for, or offered or sold, and
will not solicit offers for, or offer or sell, the Notes by means of
any form of general solicitation or general advertising within the
meaning of Rule 502(c) of Regulation D under the Securities Act
("Regulation D") or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act; and
(iii) it has not solicited offers for, or offered or sold, and
will not solicit offers for, or offer or sell, the Notes as part of
their initial offering except:
(A) within the United States to persons whom it reasonably
believes to be QIBs in transactions pursuant to Rule 144A under
the Securities Act ("Rule 144A") and in connection with each such
sale, it has taken or will take reasonable steps to ensure that
the purchaser of the Notes is aware that such sale is being made
in reliance on Rule 144A; or
(B) in accordance with the restrictions set forth in Annex A
hereto.
(c) Each Initial Purchaser acknowledges and agrees that the Company
and, for purposes of the opinions to be delivered to the Initial Purchasers
pursuant to Sections 5(f) and 5(g), counsel for the Company and counsel for
the Initial Purchasers, respectively, may rely upon the accuracy of the
representations and warranties of the Initial Purchasers, and compliance by
the Initial Purchasers with their agreements, contained in paragraph (b)
above (including Annex A hereto), and each Initial Purchaser hereby
consents to such reliance.
(d) The Company acknowledges and agrees that the Initial Purchasers
may offer and sell Notes to or through any affiliate of an Initial
Purchaser and that any such affiliate may offer and sell Notes purchased by
it to or through any Initial Purchaser.
2. Payment and Delivery. (a) Payment for and delivery of the Notes
will be made at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP at 10:00
A.M., New York City time, on February 17, 2005, or at such other time or
place on the same or such other date, not later than the fifth business day
thereafter, as the Representatives and the Company may agree upon in
writing. The time and date of such payment and delivery is referred to
herein as the "Closing Date".
(b) Payment for the Notes shall be made by wire transfer in
immediately available funds to the account(s) specified by the Company to
the Representatives against delivery to the nominee of The Depository Trust
Company, for the account of the Initial Purchasers, of one or more global
notes representing the Notes (collectively, the "Global Notes"). The Global
Notes will be made available for inspection by the Representatives not
later than 1:00 P.M., New York City time, on the business day prior to the
Closing Date.
3. Representations and Warranties of the Company. The Company
represents and warrants to each Initial Purchaser that:
(a) Offering Memorandum. The Preliminary Offering Memorandum, as of
its date, did not, and the Offering Memorandum, in the form first used by
the Initial Purchasers to confirm sales of the Notes and as of the Closing
Date, will not, contain any 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;
provided that the Company makes no representation or warranty with respect
to any statements or omissions made in reliance upon and in conformity with
information relating to any Initial Purchaser furnished to the Company in
writing by such Initial Purchaser through the Representatives expressly for
use in the Preliminary Offering Memorandum and the Offering Memorandum.
(b) Incorporated Documents. The documents incorporated by reference in
the Preliminary Offering Memorandum and the Offering Memorandum, when filed
with the Commission, conformed or will conform, as the case may be, in all
material respects with the requirements of the Exchange Act and did not and
will not contain, when so filed, an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(c) Company Financial Statements. The Company's historical financial
statements and the related notes thereto incorporated by reference in the
Preliminary Offering Memorandum and the Offering Memorandum present fairly,
in all material respects, the consolidated financial position of the
Company and its subsidiaries as of the dates indicated and the consolidated
results of their operations and the changes in their consolidated cash
flows for the periods specified; such financial statements have been
prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods covered thereby; the
other historical financial information of the Company included or
incorporated by reference in the Preliminary Offering Memorandum and the
Offering Memorandum has been derived from the accounting records of the
Company and its subsidiaries and presents fairly the information shown
thereby.
(d) MarketWatch Financial Statements. The historical financial
statements and the related notes thereto of MarketWatch, Inc.
("MarketWatch") incorporated by reference in the Preliminary Offering
Memorandum and the Offering Memorandum present fairly, in all material
respects, the financial position of the Company and its subsidiaries as of
the dates indicated and the results of their operations and the changes in
their cash flows for the periods specified; such financial statements have
been prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods covered thereby; the
other historical financial information of MarketWatch included or
incorporated by reference in the Preliminary Offering Memorandum and the
Offering Memorandum has been derived from the accounting records of the
MarketWatch and its subsidiaries and presents fairly the information shown
thereby.
(e) Pro Forma Financial Statements. The pro forma financial
information and the related notes thereto included in the Preliminary
Offering Memorandum and the Offering Memorandum have been prepared in
accordance with the Commission's rules and guidance with respect to pro
forma financial information, and the assumptions underlying such pro forma
financial information are reasonable and are set forth in the Preliminary
Offering Memorandum and the Offering Memorandum.
(f) No Material Adverse Change. Since the date of the most recent
financial statements of the Company included or incorporated by reference
in the Preliminary Offering Memorandum and the Offering Memorandum, (i)
there has not been any material change in the capital stock or long-term
debt of the Company or any of its subsidiaries, or any dividend or
distribution of any kind declared, set aside for payment, paid or made by
the Company on any class of capital stock (other than regular cash
dividends consistent with prior practice), or any material adverse change,
or any development involving a prospective material adverse change, in or
affecting the business, properties, results of operations, financial
position or prospects of the Company and its subsidiaries taken as a whole
and (ii) neither the Company nor any of its subsidiaries has sustained any
material loss or interference with its business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any labor
disturbance or dispute or any action, order or decree of any court or
arbitrator or governmental or regulatory authority, in each case except as
may occur in the ordinary course of business and except as otherwise
disclosed in the Preliminary Offering Memorandum and the Offering
Memorandum.
(g) Organization and Good Standing. The Company and each of its
significant subsidiaries (as defined in Section 12 hereof) have been duly
organized and are validly existing and in good standing under the laws of
their respective jurisdictions of organization, are duly qualified to do
business and are in good standing in each jurisdiction in which their
respective ownership or lease of property or the conduct of their
respective businesses requires such qualification, and have all power and
authority necessary to own or hold their respective properties and to
conduct the businesses in which they are engaged, except where the failure
to be so qualified or in good standing or have such power or authority
would not, individually or in the aggregate, have a material adverse effect
on the business, properties, results of operations, financial position or
prospects of the Company and its subsidiaries taken as a whole or on the
performance by the Company of its obligations under the Notes (a "Material
Adverse Effect"). The subsidiaries listed in Schedule 2 to this Agreement
are the only significant subsidiaries of the Company.
(h) Capitalization. The Company has an authorized capitalization as
set forth in the Preliminary Offering Memorandum and the Offering
Memorandum under the heading "Capitalization" (except for any subsequent
issuances of capital stock pursuant to the exercise of outstanding stock
options or under existing employee benefit plans); and all the outstanding
shares of capital stock or other equity interests of the Company have been
duly and validly authorized and issued, are fully paid and non-assessable
(except, in the case of any foreign subsidiary, for directors' qualifying
shares and except as otherwise described in the Preliminary Offering
Memorandum and the Offering Memorandum) and are owned directly or
indirectly by the Company, free and clear of any lien, charge, encumbrance,
security interest, restriction on voting or transfer or any other claim of
any third party.
(i) Indenture. The Indenture has been duly authorized by the Company
and, when duly executed and delivered in accordance with its terms by each
of the parties thereto, will constitute a valid and legally binding
agreement of the Company enforceable against the Company in accordance with
its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
or similar laws affecting the enforcement of creditors' rights generally or
by general equitable principles (whether considered in a proceeding in
equity or at law) (collectively, the "Enforceability Exceptions"); and on
the Closing Date, the Indenture will conform in all material respects to
the requirements of the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and the rules and regulations of the Commission applicable
to an indenture that is qualified thereunder.
(j) Registration Rights Agreement. The Registration Rights Agreement
has been duly authorized by the Company and, when duly executed and
delivered in accordance with its terms by each of the parties thereto, will
constitute a valid and legally binding agreement of the Company enforceable
against the Company in accordance with its terms, subject to the
Enforceability Exceptions, and except that rights to indemnity and
contribution thereunder may be limited by applicable law and public policy.
(k) The Notes. The Notes have been duly authorized by the Company and,
when duly executed, authenticated, issued and delivered as provided in the
Indenture and paid for as provided herein, will be duly and validly issued
and outstanding and will constitute valid and legally binding obligations
of the Company enforceable against the Company in accordance with their
terms, subject to the Enforceability Exceptions, and will be entitled to
the benefits of the Indenture.
(l) The Exchange Notes. The Exchange Notes have been duly authorized
by the Company and, when duly executed, authenticated, issued and delivered
as contemplated by the Registration Rights Agreement, will be duly and
validly issued and outstanding and will constitute valid and legally
binding obligations of the Company, as issuer, enforceable against the
Company in accordance with their terms, subject to the Enforceability
Exceptions, and will be entitled to the benefits of the Indenture.
(m) Purchase Agreement. This Agreement has been duly authorized,
executed and delivered by the Company.
(n) Descriptions of the Transaction Documents. Each of this Agreement,
the Notes, the Indenture, the Exchange Notes and the Registration Rights
Agreement (collectively, the "Transaction Documents") conforms in all
material respects to the descriptions thereof contained in the Preliminary
Offering Memorandum and the Offering Memorandum.
(o) No Violation or Default. Neither (i) the Company nor any of its
significant subsidiaries is in violation of its charter, by-laws or similar
organizational documents; (ii) the Company nor any of its subsidiaries is
in default, and no event has occurred that, with notice or lapse of time or
both, would constitute such a default, in the due performance or observance
of any term, covenant or condition contained in any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or
any of its subsidiaries is bound or to which any of the property or assets
of the Company or any of its subsidiaries is subject; or (iii) the Company
nor any of its subsidiaries is in violation of any law or statute or any
judgment, order, rule or regulation of any court or arbitrator or
governmental or regulatory authority, except, in the case of clause (ii) or
(iii) above, for any such violation that would not, individually or in the
aggregate, have a Material Adverse Effect.
(p) No Conflicts. The execution, delivery and performance by the
Company of each of the Transaction Documents, the issuance and sale of the
Notes and compliance by the Company with the terms thereof and the
consummation of the transactions contemplated by the Transaction Documents
will not (i) conflict with or result in a breach or violation 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 of its subsidiaries pursuant to, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of
the property or assets of the Company or any of its subsidiaries is
subject, (ii) result in any violation of the provisions of the charter,
by-laws or similar organizational documents of the Company or any of its
significant subsidiaries or (iii) result in the violation of any law or
statute or any judgment, order, rule or regulation of any court or
arbitrator or governmental or regulatory authority, except, in the case of
clause (i) above, for any such conflict, breach or violation that would
not, individually or in the aggregate, have a Material Adverse Effect.
(q) No Consents Required. Assuming the accuracy of the Initial
Purchasers' representations and warranties contained herein, no consent,
approval, authorization, order, registration or qualification of or with
any court or arbitrator or governmental or regulatory authority is required
for the execution, delivery and performance by the Company of each of the
Transaction Documents, the issuance and sale of the Notes and compliance by
the Company with the terms thereof and the consummation of the transactions
contemplated by the Transaction Documents, except for such consents,
approvals, authorizations, orders and registrations or qualifications as
may be required (i) under applicable state securities laws in connection
with the purchase and resale of the Notes by the Initial Purchasers and
(ii) with respect to the Exchange Notes under the Securities Act, the Trust
Indenture Act and applicable state securities laws as contemplated by the
Registration Rights Agreement.
(r) Legal Proceedings. Except as described in the Preliminary Offering
Memorandum and the Offering Memorandum, there are no legal, governmental or
regulatory investigations, actions, suits or proceedings pending to which
the Company or any of its subsidiaries is a party or to which any property
of the Company or any of its subsidiaries is the subject that, individually
or in the aggregate, if determined adversely to the Company or any of its
subsidiaries, would reasonably be expected to have a Material Adverse
Effect; and to the best knowledge of the Company, no such investigations,
actions, suits or proceedings are threatened or, to the best knowledge of
the Company, contemplated by any governmental or regulatory authority or
threatened by others.
(s) Independent Registered Public Accounting Firm.
PricewaterhouseCoopers LLP, which has certified certain financial
statements of the Company and its subsidiaries as well as of MarketWatch
and its subsidiaries, respectively, is an independent registered public
accounting firm with respect to the Company and its subsidiaries within the
meaning of Rule 101 of the Code of Professional Conduct of the American
Institute of Certified Public Accountants and its interpretations and
rulings thereunder.
(t) Investment Company Act. Neither the Company nor any significant
subsidiary is, and after giving effect to the offering and sale of the
Notes and the application of the proceeds thereof as described in the
Offering Memorandum, none of them will be, an "investment company" or an
entity "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, and the rules and regulations
of the Commission thereunder (collectively, "Investment Company Act").
(u) No Broker's Fees. Neither the Company nor any of its subsidiaries
is a party to any contract, agreement or understanding with any person
(other than this Agreement) that would give rise to a valid claim against
any of them or any Initial Purchaser for a brokerage commission, finder's
fee or like payment in connection with the offering and sale of the Notes.
(v) Rule 144A Eligibility. On the Closing Date, the Notes will not be
of the same class as securities listed on a national securities exchange
registered under Section 6 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or quoted in an automated inter-dealer
quotation system; and each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its respective date, contains or will contain
all the information that, if requested by a prospective purchaser of the
Notes, would be required to be provided to such prospective purchaser
pursuant to Rule 144A(d)(4) under the Securities Act.
(w) No Integration. Neither the Company nor any of its affiliates (as
defined in Rule 501(b) of Regulation D) 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 Securities Act), that is or
will be integrated with the sale of the Notes in a manner that would
require registration of the Notes under the Securities Act.
(x) No General Solicitation or Directed Selling Efforts. None of the
Company or any of its affiliates or any other person acting on its or their
behalf (other than the Initial Purchasers, as to which no representation is
made) has (i) solicited offers for, or offered or sold, the Notes 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 Securities Act or (ii)
engaged with respect to the Notes in any directed selling efforts within
the meaning of Regulation S under the Securities Act ("Regulation S"), and
all such persons have complied with the offering restrictions requirement
of Regulation S.
(y) Securities Law Exemptions. Assuming the accuracy of the
representations and warranties of the Initial Purchasers contained in
Section 1(b) (including Annex A hereto) and their compliance with their
agreements set forth therein, it is not necessary, in connection with the
issuance and sale of the Notes to the Initial Purchasers and the offer,
resale and delivery of the Notes by the Initial Purchasers in the manner
contemplated by this Agreement and the Offering Memorandum, to register the
Notes under the Securities Act or to qualify the Indenture under the Trust
Indenture Act.
(z) No Stabilization. The Company has not taken, directly or
indirectly, any action designed to or that could reasonably be expected to
cause or result in any stabilization or manipulation of the price of the
Notes.
(aa) Forward-Looking Statements. No forward-looking statement (within
the meaning of Section 27A of the Securities Act and Section 21E of the
Exchange Act) contained or incorporated by reference in the Preliminary
Offering Memorandum and the Offering Memorandum has been made or reaffirmed
without a reasonable basis or has been disclosed other than in good faith.
(bb) Intellectual Property. The Company and its subsidiaries own or
possess adequate rights to use all material trademarks, service marks,
trade names, trademark registrations, service ▇▇▇▇ registrations,
copyrights, licenses, patents, patent applications and know-how (including
trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures) necessary for the conduct
of their respective businesses, except as otherwise disclosed in the
Preliminary Offering Memorandum or the Offering Memorandum; and the conduct
of their respective businesses will not conflict in any material respect
with any such rights of others, and the Company and its subsidiaries have
not received any notice of any claim of infringement of or conflict with
any such rights of others, except for notices the content of which if
accurate would not, individually or in the aggregate, have a Material
Adverse Effect.
(cc) Accounting Controls. Each of the Company and its subsidiaries
maintain a system of internal accounting controls sufficient to provided
reasonable assurances that (i) transactions are executed in accordance with
management's general or specific authorization, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets, (iii) access to assets is permitted only in
accordance with management's general or specific authorization and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(dd) Disclosure Controls and Procedures. The Company and its
subsidiaries employ disclosure controls and procedures that are designed to
ensure that information required to be disclosed by the Company in the
reports that it files or submits under the Exchange Act is properly and
effectively recorded, processed, summarized and reported within the time
periods specified in applicable rules, regulations and forms promulgated by
the Commission and is properly and effectively accumulated and communicated
to the Company's directors and officers, including its principal executive
officer and principal financial officer, as appropriate, to allow timely
decisions regarding disclosure of such required information.
4. Further Agreements of the Company. The Company covenants and agrees
with each Initial Purchaser that:
(a) Delivery of Copies. The Company will deliver to the Initial
Purchasers as many copies of the Preliminary Offering Memorandum and the
Offering Memorandum (including all amendments and supplements thereto) as
the Representatives may reasonably request.
(b) Amendments or Supplements. Before making or distributing any
amendment or supplement to the Preliminary Offering Memorandum or the
Offering Memorandum or, prior to and including the Closing Date, filing
with the Commission any document that will be incorporated by reference
therein, the Company will furnish to the Representatives and counsel for
the Initial Purchasers a copy of such proposed amendment or supplement or
document to be incorporated by reference therein for review, and will not
distribute any such proposed amendment or supplement or file any such
document with the Commission to which the Representatives reasonably and
promptly object. Notwithstanding the preceding sentence, after the Closing
Date, the Company will not be required to provide the Representatives and
counsel for the Initial Purchasers, prior to filing, with copies of any
document that is to be incorporated by reference into the Preliminary
Offering Memorandum or the Offering Memorandum or to refrain from filing
any such document that is to be so incorporated by reference to which the
Representatives and counsel to the Initial Purchasers reasonably and timely
object, provided that the Company will, to the extent reasonably
practicable in the light of the circumstances, consult with the
Representatives and counsel for the Initial Purchasers as to the form and
substance of any such document that is to be so incorporated by reference
prior to its filing.
(c) Notice to the Representatives. The Company will advise the
Representatives promptly, and confirm such advice in writing, (i) of the
issuance by any governmental or regulatory authority of any order
preventing or suspending the use of the Preliminary Offering Memorandum or
the Offering Memorandum or the initiation or threatening of any proceeding
for that purpose; (ii) of the occurrence of any event at any time prior to
the completion of the initial offering of the Notes as a result of which
the Offering Memorandum as then amended or supplemented would include any
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 existing when the Offering Memorandum is delivered to a
purchaser, not misleading; and (iii) of the receipt by the Company of any
notice with respect to any suspension of the qualification of the Notes for
offer and sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose; and the Company will use its reasonable best
efforts to prevent the issuance of any such order preventing or suspending
the use of the Preliminary Offering Memorandum or the Offering Memorandum
or suspending any such qualification of the Notes and, if any such order is
issued, will obtain as soon as reasonably possible the withdrawal thereof.
(d) Ongoing Compliance of the Offering Memorandum. If at any time
prior to the completion of the initial offering of the Notes (i) any event
shall occur or condition shall exist as a result of which the Offering
Memorandum as then amended or supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein or omissions therefrom, in the
light of the circumstances existing when the Offering Memorandum is
delivered to purchasers, not misleading or (ii) it is necessary to amend or
supplement the Offering Memorandum to comply with law, the Company will
immediately notify the Initial Purchasers thereof and forthwith prepare
and, subject to Section 4(b) above, file with the Commission any document
to be incorporated by reference therein and furnish to the Initial
Purchasers such amendments or supplements to the Offering Memorandum as may
be necessary so that the statements in the Offering Memorandum as so
amended or supplemented (or including such document to be incorporated by
reference therein) will not, in the light of the circumstances existing
when the Offering Memorandum is delivered to purchasers, be misleading in
any material respect or so that the Offering Memorandum will comply with
law.
(e) Blue Sky Compliance. The Company will cooperate with the Initial
Purchasers to qualify the Notes for offer and sale under the securities or
Blue Sky laws of such jurisdictions as the Representatives shall reasonably
request and will continue such qualifications in effect so long as required
for the offering and resale of the Notes; provided that the Company shall
not be required to (i) qualify as a foreign corporation or other entity or
as a dealer in securities in any such jurisdiction where it would not
otherwise be required to so qualify, (ii) file any general consent to
service of process in any such jurisdiction, (iii) subject itself to
taxation in any such jurisdiction if it is not otherwise so subject or (iv)
make any change to its certificate of incorporation or by-laws.
(f) Clear Market. During the period from the date hereof through and
including the Closing Date, the Company will not, without the prior written
consent of the Representatives, offer, sell, contract to sell or otherwise
dispose of any debt securities issued or guaranteed by the Company and
having a tenor of more than one year.
(g) Use of Proceeds. The Company will apply the net proceeds from the
sale of the Notes as described in the Offering Memorandum under the heading
"Use of Proceeds".
(h) Rules 144(d)(4) Information. So long as the Notes remain
outstanding and are "restricted securities" within the meaning of Rule
144(a)(3) under the Securities Act, the Company will, during any period in
which the Company is not subject to and in compliance with Section 13 or
15(d) of the Exchange Act, furnish to holders of the Notes and prospective
purchasers of the Notes designated by such holders, upon the request of
such holders or such prospective purchasers, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
(i) DTC. The Company will assist the Initial Purchasers in arranging
for the Notes to be eligible for clearance and settlement through The
Depository Trust Company ("DTC").
(j) No Resales by the Company. Until the issuance of the Exchange
Notes, the Company will not, and will not permit any of its affiliates (as
defined in Rule 144 under the Securities Act) to, resell any of the Notes
that have been acquired by any of them, except for Notes purchased by the
Company or any of its affiliates and resold in a transaction registered
under the Securities Act.
(k) No Integration. Neither the Company nor any of its affiliates (as
defined in Rule 501(b) of Regulation D) will, directly or through any
agent, sell, offer for sale, solicit offers to buy or otherwise negotiate
in respect of, any security (as defined in the Securities Act), that is or
will be integrated with the sale of the Notes in a manner that would
require registration of the Notes under the Securities Act.
(l) No General Solicitation or Directed Selling Efforts. None of the
Company or any of its affiliates or any other person acting on their behalf
(other than the Initial Purchasers, as to which no covenant is given) will
(i) solicit offers for, or offer or sell, the Notes 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 Securities Act or (ii) engage with
respect to the Notes in any directed selling efforts within the meaning of
Regulation S, and all such persons will comply with the offering
restrictions requirement of Regulation S.
(m) No Stabilization. The Company will not take, directly or
indirectly, any action designed to or that could reasonably be expected to
cause or result in any stabilization or manipulation of the price of the
Notes.
(n) Ratings. The Company will take all reasonable action necessary to
enable Standard & Poor's Ratings Services, a division of McGraw Hill, Inc.
("S&P"), ▇▇▇▇▇'▇ Investors Service Inc. ("Moody's") and Fitch Ratings
("Fitch") to provide their respective ratings of the Notes.
5. Conditions of Initial Purchasers' Obligations. The obligation of
each Initial Purchaser to purchase Notes on the Closing Date as provided
herein is subject to the performance by the Company of its covenants and
other obligations hereunder and to the following additional conditions:
(a) Representations and Warranties. The representations and warranties
of the Company contained herein shall be true and correct on the date
hereof and on and as of the Closing Date; and the statements of the Company
and its officers made in any certificates delivered pursuant to this
Agreement shall be true and correct on and as of the Closing Date.
(b) No Downgrade. Subsequent to the execution and delivery of this
Agreement and prior to or on the Closing Date, (i) no downgrading shall
have occurred in the rating accorded the Notes or any other debt securities
or preferred stock issued or guaranteed by the Company by any "nationally
recognized statistical rating organization", as such term is defined by the
Commission for purposes of Rule 436(g)(2) under the Securities Act; and
(ii) no such organization shall have publicly announced that it has under
surveillance or review, or has changed its outlook with respect to, its
rating of the Notes or of any other debt securities or preferred stock
issued or guaranteed by the Company or any of its subsidiaries (other than
an announcement with positive implications of a possible upgrading).
(c) No Material Adverse Change. Subsequent to the execution and
delivery of this Agreement, no event or condition of a type described in
Section 3(f) hereof shall have occurred or shall exist, which event or
condition is not described in the Offering Memorandum (excluding any
amendment or supplement thereto or any document filed with the Commission
after the date hereof and incorporated by reference therein) and the effect
of which in the judgment of the Representatives makes it impracticable or
inadvisable to proceed with the offering, sale or delivery of the Notes on
the terms and in the manner contemplated by this Agreement and the Offering
Memorandum.
(d) Officers' Certificate. The Representatives shall have received on
and as of the Closing Date a certificate of two executive officers (one of
whom shall be the chief financial officer or other senior financial
officer) of the Company who have specific knowledge of the Company's
financial matters and are satisfactory to the Representatives (i)
confirming that such officers have carefully reviewed the Offering
Memorandum and, to the best knowledge of such officers, the representation
set forth in Section 3(a) hereof is true and correct, (ii) confirming that
the other representations and warranties of the Company in this Agreement
are true and correct and that the Company has complied with all agreements
and satisfied all conditions on their part to be performed or satisfied
hereunder at or prior to the Closing Date and (iii) to the effect set forth
in Sections 5(a) through 5(c) above.
(e) Company Comfort Letters. On the date of this Agreement and on the
Closing Date, PricewaterhouseCoopers LLP shall have furnished to the
Representatives letters, dated the respective dates of delivery thereof and
addressed to the Initial Purchasers, in form and substance reasonably
satisfactory to the Representatives, containing statements and information
of the type customarily included in accountants' "comfort letters" to
underwriters or initial purchasers with respect to the Company's financial
statements and certain financial information of the Company contained or
incorporated by reference in the Preliminary Offering Memorandum and the
Offering Memorandum; provided that the letter delivered on the Closing Date
shall use a "cut-off" date no more than three business days prior to the
Closing Date.
(f) MarketWatch Comfort Letters. On the date of this Agreement and on
the Closing Date, PricewaterhouseCoopers LLP shall have furnished to the
Representatives letters, dated the respective dates of delivery thereof and
addressed to the Initial Purchasers, in form and substance reasonably
satisfactory to the Representatives, containing statements and information
of the type customarily included in accountants' "comfort letters" to
underwriters or initial purchasers with respect to MarketWatch's financial
statements and certain financial information of MarketWatch contained or
incorporated by reference in the Preliminary Offering Memorandum and the
Offering Memorandum; provided that the letter delivered on the Closing Date
shall use a "cut-off" date no more than three business days prior to the
Closing Date.
(g) Opinion of General Counsel of the Company. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.,
General Counsel of the Company, shall have furnished to the
Representatives, at the request of the Company, his written opinion, dated
the Closing Date and addressed to the Initial Purchasers, in form and
substance reasonably satisfactory to the Representatives, to the effect set
forth in Annex B hereto.
(h) Opinion of Counsel to the Company. Fried, Frank, Harris, ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ LLP, counsel to the Company, shall have furnished to the
Representatives, at the request of the Company, their written opinion,
dated the Closing Date and addressed to the Initial Purchasers, in form and
substance reasonably satisfactory to the Representatives, to the effect set
forth in Annex C hereto. In rendering such opinion, such counsel may rely
as to matters of fact, to the extent such counsel deems proper, on
certificates of responsible officers of the Company and certificates or
other written statements of official jurisdictions having custody of
documents respecting the corporate existence or good standing of the
Company.
(i) Opinion of Counsel for the Initial Purchasers. The Representatives
shall have received on and as of the Closing Date an opinion of ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel to the Initial Purchasers, with respect to
such matters as the Representatives may reasonably request, and such
counsel shall have received such documents and information as they may
reasonably request to enable them to pass upon such matters.
(j) No Legal Impediment to Issuance. No action shall have been taken
and no statute, rule, regulation or order shall have been enacted, adopted
or issued by any federal, state or foreign governmental or regulatory
authority that would, as of the Closing Date, prevent the issuance or sale
of the Notes; and no injunction or order of any federal, state or foreign
court shall have been issued that would, as of the Closing Date, prevent
the issuance or sale of the Notes.
(k) Good Standing. The Representatives shall have received on and as
of the Closing Date satisfactory evidence of the good standing of the
Company and its significant subsidiaries in their respective jurisdictions
of organization and, in the case of the Company, good standing in such
other jurisdictions as the Representatives may reasonably request, in each
case in writing or any standard form of telecommunication, from the
appropriate governmental authorities of such jurisdictions.
(l) Registration Rights Agreement. The Initial Purchasers shall have
received a counterpart of the Registration Rights Agreement that shall have
been executed and delivered by a duly authorized officer of the Company.
(m) DTC. The Notes shall be eligible for clearance and settlement
through DTC.
(n) Additional Documents. On or prior to the Closing Date, the Company
shall have furnished to the Representatives such further certificates and
documents as the Representatives may reasonably request.
All opinions, letters, certificates and evidence mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Initial Purchasers.
6. Indemnification and Contribution.
--------------------------------
(a) Indemnification of the Initial Purchasers. The Company agrees to
indemnify and hold harmless each Initial Purchaser, its affiliates,
directors and officers and each person, if any, who controls such Initial
Purchaser within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act, from and against any and all losses, claims,
damages and liabilities (including, without limitation, legal fees and
other expenses incurred in connection with any suit, action or proceeding
or any claim asserted, as such fees and expenses are incurred), joint or
several, that arise out of, or are based upon, any untrue statement or
alleged untrue statement of a material fact contained in the Preliminary
Offering Memorandum or the Offering Memorandum (or any amendment or
supplement thereto), or any omission or alleged omission to state therein 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 insofar as such losses, claims, damages or liabilities arise out of,
or are based upon, any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with any
information relating to any Initial Purchaser furnished to the Company in
writing by such Initial Purchaser through the Representatives expressly for
use therein; provided, that with respect to any such untrue statement in or
omission from the Preliminary Offering Memorandum, the indemnity agreement
contained in this paragraph (a) shall not inure to the benefit of any
Initial Purchaser to the extent that the sale to the person asserting any
such loss, claim, damage or liability was an initial resale by such Initial
Purchaser and any such loss, claim, damage or liability of or with respect
to such Initial Purchaser results from the fact that both (i) a copy of the
Offering Memorandum (excluding any documents incorporated by reference
therein) was not sent or given to such person at or prior to the written
confirmation of the sale of such Notes to such person and (ii) the untrue
statement in or omission from such Preliminary Offering Memorandum was
corrected in the Offering Memorandum unless, in either case, such failure
to deliver the Offering Memorandum was a result of non-compliance by the
Company with the provisions of Section 4 hereof.
(b) Indemnification of the Company. Each Initial Purchaser agrees,
severally and not jointly, to indemnify and hold harmless the Company, its
affiliates, directors and officers and each person, if any, who controls
the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the indemnity set
forth in Section 6(a) above, but only with respect to any losses, claims,
damages or liabilities that arise out of, or are based upon, any untrue
statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with any information relating to such
Initial Purchaser furnished to the Company in writing by such Initial
Purchaser through the Representatives expressly for use in the Preliminary
Offering Memorandum and the Offering Memorandum (or any amendment or
supplement thereto), it being understood and agreed that the only such
information so furnished consists of the third, fifth (second sentence
only), sixth, seventh, eighth (third sentence only), ninth and tenth
paragraphs under the caption "Plan of distribution" in the Offering
Memorandum.
(c) Notice and Procedures. If any suit, action, proceeding (including
any governmental or regulatory investigation), claim or demand shall be
brought or asserted against any person in respect of which indemnification
may be sought pursuant to either Section (a) or (b) above, such person (the
"Indemnified Person") shall promptly notify the person against whom such
indemnification may be sought (the "Indemnifying Person") in writing;
provided that the failure to notify the Indemnifying Person shall not
relieve it from any liability that it may have under this Section 6 except
to the extent that it has been materially prejudiced (through the
forfeiture of substantive rights or defenses) by such failure; and
provided, further, that the failure to notify the Indemnifying Person shall
not relieve it from any liability that it may have to an Indemnified Person
otherwise than under this Section 6. If any such proceeding shall be
brought or asserted against an Indemnified Person and it shall have
notified the Indemnifying Person thereof, the Indemnifying Person shall
retain counsel reasonably satisfactory to the Indemnified Person to
represent the Indemnified Person and any others entitled to indemnification
pursuant to this Section 6 that the Indemnifying Person may designate in
such proceeding and shall pay the fees and expenses of such counsel related
to such proceeding, as incurred. In any such proceeding, any Indemnified
Person shall have the right to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Person
unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed to the contrary; (ii) the Indemnifying Person has failed
within a reasonable time to retain counsel reasonably satisfactory to the
Indemnified Person; (iii) the Indemnified Person shall have reasonably
concluded that there may be legal defenses available to it that are
different from or in addition to those available to the Indemnifying
Person; or (iv) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them.
It is understood and agreed that the Indemnifying Person shall not, in
connection with any proceeding or related proceeding in the same
jurisdiction, be liable for the fees and expenses of more than one separate
firm (in addition to any local counsel) for all Indemnified Persons, and
that all such fees and expenses shall be reimbursed as they are incurred.
Any such separate firm for any Initial Purchaser, its affiliates, directors
and officers and any control persons of such Initial Purchaser shall be
designated in writing by ▇.▇. ▇▇▇▇▇▇ Securities Inc. and ▇▇▇▇▇▇▇ Lynch,
Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated and any such separate firm for the
Company and any control persons of the Company shall be designated in
writing by the Company. The Indemnifying Person shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the
plaintiff, the Indemnifying Person agrees to indemnify each Indemnified
Person from and against any loss or liability by reason of such settlement
or judgment. Notwithstanding the foregoing sentence, if at any time an
Indemnified Person shall have requested that an Indemnifying Person
reimburse the Indemnified Person for fees and expenses of counsel as
contemplated by this paragraph, the Indemnifying Person shall be liable for
any settlement of any proceeding effected without its written consent if
(i) such settlement is entered into more than 30 days after receipt by the
Indemnifying Person of such request and (ii) the Indemnifying Person shall
not have reimbursed the Indemnified Person in accordance with such request
prior to the date of such settlement. No Indemnifying Person shall, without
the written consent of the Indemnified Person, effect any settlement of any
pending or threatened proceeding in respect of which any Indemnified Person
is or could have been a party and indemnification could have been sought
hereunder by such Indemnified Person, unless such settlement (x) includes
an unconditional release of such Indemnified Person, in form and substance
reasonably satisfactory to such Indemnified Person, from all liability on
claims that are the subject matter of such proceeding and (y) does not
include any statement as to or any admission of fault, culpability or a
failure to act by or on behalf of any Indemnified Person.
(d) Contribution. If the indemnification provided for in Sections 6(a)
and 6(b) above is unavailable to an Indemnified Person or insufficient in
respect of any losses, claims, damages or liabilities referred to therein,
then each Indemnifying Person under such paragraph, in lieu of indemnifying
such Indemnified Person thereunder, shall contribute to the amount paid or
payable by such Indemnified Person as a result of such losses, claims,
damages or liabilities (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 from the offering of the Notes 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) but also the relative fault of the
Company on the one hand and the Initial Purchasers on the other in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, 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 shall be deemed to be in the
same respective proportions as the net proceeds (before deducting expenses)
received by the Company from the sale of the Notes and the total discounts
and commissions received by the Initial Purchasers in connection therewith,
as provided in this Agreement, bear to the aggregate offering price of the
Notes. The relative fault of the Company on the one hand and the Initial
Purchasers on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact
or the 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.
(e) Limitation on Liability. The Company and the Initial Purchasers
agree that it would not be just and equitable if contribution pursuant to
this Section 6 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 that does not take account of the equitable
considerations referred to in Section 6(d) above. The amount paid or
payable by an Indemnified Person as a result of the losses, claims, damages
and liabilities referred to in Section 6(d) above shall be deemed to
include, subject to the limitations set forth above, any legal or other
expenses incurred by such Indemnified Person in connection with any such
action or claim. Notwithstanding the provisions of this Section 6, in no
event shall an Initial Purchaser be required to contribute any amount in
excess of the amount by which the total price at which the Notes sold by
such Initial Purchaser were offered for resale exceeds the amount of any
damages that such Initial Purchaser has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Initial Purchasers' obligations to contribute
pursuant to this Section 6 are several in proportion to their respective
purchase obligations hereunder and not joint.
(f) Non-Exclusive Remedies. The remedies provided for in this Section
6 are not exclusive and shall not limit any rights or remedies that may
otherwise be available to any Indemnified Person at law or in equity.
7. Termination. This Agreement may be terminated in the absolute
discretion of the Representatives, by notice to the Company, if after the
execution and delivery of this Agreement and prior to the Closing Date (i)
trading generally shall have been suspended or materially limited on the
New York Stock Exchange or the over-the-counter market; (ii) trading of any
securities issued or guaranteed by the Company shall have been suspended on
any exchange or in any over-the-counter market; (iii) there shall have
occurred any material adverse change in the business, properties, results
of operations, financial position or prospects of the Company and its
subsidiaries taken as a whole; (iv) a general moratorium or material
disruption shall have occurred in commercial banking activities or
securities settlement or clearance services in the United States; or (v)
there shall have occurred any outbreak or escalation of hostilities or any
change in the financial markets in the United States or the international
financial markets or any calamity or crisis, either within or outside the
United States, that, in the judgment of the Representatives, is material
and adverse and makes it impracticable or inadvisable to proceed with the
offering, sale or delivery of the Notes on the terms and in the manner
contemplated by this Agreement and the Offering Memorandum.
8. Defaulting Initial Purchaser. (a) If, on the Closing Date, any
Initial Purchaser defaults on its obligation to purchase the Notes that it
has agreed to purchase hereunder, the non-defaulting Initial Purchasers may
in their discretion arrange for the purchase of such Notes by other persons
satisfactory to the Company on the terms contained in this Agreement. If,
within 36 hours after any such default by any Initial Purchaser, the
non-defaulting Initial Purchasers do not arrange for the purchase of such
Notes, then the Company shall be entitled to a further period of 36 hours
within which to procure other persons satisfactory to the non-defaulting
Initial Purchasers to purchase such Notes on such terms. If other persons
become obligated or agree to purchase the Notes of a defaulting Initial
Purchaser, either the non-defaulting Initial Purchasers or the Company may
postpone the Closing Date for up to five full business days in order to
effect any changes that in the opinion of counsel for the Company or
counsel for the Initial Purchasers may be necessary in the Offering
Memorandum or in any other document or arrangement, and the Company agrees
to promptly prepare any amendment or supplement to the Offering Memorandum
that effects any such changes. As used in this Agreement, the term "Initial
Purchaser" includes, for all purposes of this Agreement unless the context
otherwise requires, any person not listed in Schedule 1 hereto that,
pursuant to this Section 8, purchases Notes that a defaulting Initial
Purchaser agreed but failed to purchase.
(b) If, after giving effect to any arrangements for the purchase of
the Notes of a defaulting Initial Purchaser or Initial Purchasers by the
non-defaulting Initial Purchasers and the Company as provided in Section
8(a) above, the aggregate principal amount of such Notes that remains
unpurchased does not exceed one-eleventh of the aggregate principal amount
of all the Notes, then the Company shall have the right to require each
non-defaulting Initial Purchaser to purchase the principal amount of Notes
that such Initial Purchaser agreed to purchase hereunder plus such Initial
Purchaser's pro rata share (based on the principal amount of Notes that
such Initial Purchaser agreed to purchase hereunder) of the Notes of such
defaulting Initial Purchaser or Initial Purchasers for which such
arrangements have not been made.
(c) If, after giving effect to any arrangements for the purchase of
the Notes of a defaulting Initial Purchaser or Initial Purchasers by the
non-defaulting Initial Purchasers and the Company as provided in Section
8(a) above, the aggregate principal amount of such Notes that remains
unpurchased exceeds one-eleventh of the aggregate principal amount of all
the Notes, or if the Company shall not exercise the right described in
Section 8(b) above, then this Agreement shall terminate without liability
on the part of the non-defaulting Initial Purchasers. Any termination of
this Agreement pursuant to this Section 8 shall be without liability on the
part of the Company, except that the Company will continue to be liable for
the payment of expenses as set forth in Section 9 hereof and except that
the provisions of Section 6 hereof shall not terminate and shall remain in
effect.
(d) Nothing contained herein shall relieve a defaulting Initial
Purchaser of any liability it may have to the Company or any non-defaulting
Initial Purchaser for damages caused by its default.
9. Payment of Expenses. (a) Whether or not the transactions
contemplated by this Agreement are consummated or this Agreement is
terminated, the Company agrees to pay or cause to be paid all costs and
expenses incident to the performance of its obligations hereunder,
including without limitation, (i) the costs incident to the authorization,
issuance, sale, preparation and delivery of the Notes and any taxes payable
in that connection; (ii) the costs incident to the preparation and printing
of the Preliminary Offering Memorandum and the Offering Memorandum
(including any amendment or supplement thereto) and the distribution
thereof; (iii) the costs of reproducing and distributing each of the
Transaction Documents; (iv) the fees and expenses of the Company's counsel;
(v) the fees and expenses of the Company's and MarketWatch's independent
registered public accounting firms; (vi) the fees and expenses incurred in
connection with the registration or qualification and determination of
eligibility for investment of the Notes under the laws of such
jurisdictions as the Representatives may designate and the preparation,
printing and distribution of a Blue Sky Memorandum (including the
reasonable related fees and expenses of counsel for the Initial Purchasers,
which fees and expenses shall not be in excess of $2,500); (vii) any fees
charged by rating agencies for rating the Notes; (viii) the fees and
expenses of the Trustee and any paying agent (including related fees and
expenses of any counsel to such parties); and (ix) all expenses and
application fees incurred in connection with the approval of the Notes for
book-entry transfer by DTC.
(b) If (i) this Agreement is terminated pursuant to Section 7(ii) or
7(iii), (ii) the Company for any reason fails to tender the Notes for
delivery to the Initial Purchasers (other than a result of Section 7(i),
7(iv) or 7(v) or 8) or (iii) the Initial Purchasers decline to purchase the
Notes for any other reason permitted under this Agreement (other than a
result of Section 7(i), 7(iv) or 7(v) or 8), the Company agrees to
reimburse the Initial Purchasers for all out-of-pocket costs and expenses
(including the fees and expenses of their counsel) reasonably incurred by
the Initial Purchasers in connection with this Agreement and the offering
contemplated hereby.
10. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and any controlling persons referred to herein, and
their respective affiliates, directors and officers referred to in Section
6 hereof. Nothing in this Agreement is intended or shall be construed to
give any other person any legal or equitable right, remedy or claim under
or in respect of this Agreement or any provision contained herein. No
purchaser of Notes from any Initial Purchaser shall be deemed to be a
successor merely by reason of such purchase.
11. Survival. The respective indemnities, rights of contribution,
representations, warranties and agreements of the Company and the Initial
Purchasers contained in this Agreement or made by or on behalf of the
Company or the Initial Purchasers pursuant to this Agreement or any
certificate delivered pursuant hereto shall survive the delivery of and
payment for the Notes and shall remain in full force and effect, regardless
of any termination of this Agreement or any investigation made by or on
behalf of the Company or the Initial Purchasers.
12. Certain Defined Terms. For purposes of this Agreement, (a) except
where otherwise expressly provided, the term "affiliate" has the meaning
set forth in Rule 405 under the Securities Act; (b) the term "business day"
means any day other than a day on which banks are permitted or required to
be closed in New York City; (c) the term "subsidiary" has the meaning set
forth in Rule 405 under the Securities Act; and (d) the term "significant
subsidiary" has the meaning set forth in Rule 1-02 of Regulation S-X under
the Exchange Act.
13. Miscellaneous. (a) Authority of the Representatives. Any action by
the Initial Purchasers hereunder may be taken by ▇.▇. ▇▇▇▇▇▇ Securities
Inc. and/or ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated on behalf of
the Initial Purchasers, and any such action taken by ▇.▇. ▇▇▇▇▇▇ Securities
Inc. and/or ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated shall be
binding upon the Initial Purchasers.
(b) Notices. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given if mailed or
transmitted and confirmed by any standard form of telecommunication.
Notices to the Initial Purchasers shall be given to the Representatives c/o
▇.▇. ▇▇▇▇▇▇ Securities Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(fax: ▇▇▇-▇▇▇-▇▇▇▇); Attention: High Grade Syndication Desk - 8th Floor and
c/o Merrill ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated, ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (fax:
▇▇▇-▇▇▇-▇▇▇▇); Attention: ▇▇▇▇▇ ▇▇▇▇▇. Notices to the Company shall be
given to them at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (fax:
▇▇▇-▇▇▇-▇▇▇▇); Attention: General Counsel.
(c) Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York.
(d) Counterparts. This Agreement may be signed in counterparts (which
may include counterparts delivered by any standard form of
telecommunication), each of which shall be an original and all of which
together shall constitute one and the same instrument.
(e) Amendments or Waivers. No amendment or waiver of any provision of
this Agreement, nor any consent or approval to any departure therefrom,
shall in any event be effective unless the same shall be in writing and
signed by the parties hereto.
(f) Headings. The headings herein are included for convenience of
reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
If the foregoing is in accordance with your understanding, please
indicate your acceptance of this Agreement by signing in the space provided
below.
Very truly yours,
DOW ▇▇▇▇▇ & COMPANY, INC.
By /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President and Chief Financial Officer
Accepted:
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------
Authorized Signatory
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Authorized Signatory
For themselves and on behalf of the
several Initial Purchasers listed
in Schedule 1 hereto.
Schedule 1
Initial Purchaser Principal Amount
----------------- ----------------
▇.▇. ▇▇▇▇▇▇ Securities Inc........................ $ 90,000,000
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated.............................. 45,000,000
Banc of America Securities LLC.................... 22,500,000
Credit Suisse First Boston LLC.................... 22,500,000
Lloyds TSB Bank plc............................... 22,500,000
Mitsubishi Securities
International plc......................... 22,500,000
Total $225,000,000
Schedule 2
Significant Subsidiaries
------------------------
▇▇▇▇▇▇▇ Newspapers, Inc.
MarketWatch, Inc. (as from January 21, 2005)
ANNEX A
Restrictions on Offers and Sales Outside the United States
----------------------------------------------------------
In connection with offers and sales of Notes outside the United
States:
(a) Each Initial Purchaser acknowledges that the Notes have not been
registered under the Securities Act and may not be offered or sold within
the United States or to, or for the account or benefit of, U.S. persons
except pursuant to an exemption from, or in transactions not subject to,
the registration requirements of the Securities Act.
(b) Each Initial Purchaser, severally and not jointly, represents,
warrants and agrees that:
(i) Such Initial Purchaser has offered and sold the Notes, and
will offer and sell the Notes, (A) as part of their distribution at
any time and (B) otherwise until 40 days after the later of the
commencement of the offering of the Notes and the Closing Date, only
in accordance with Regulation S under the Securities Act ("Regulation
S") or Rule 144A or any other available exemption from registration
under the Securities Act.
(ii) None of such Initial Purchaser or any of its affiliates or
any other person acting on its or their behalf has engaged or will
engage in any directed selling efforts with respect to the Notes, and
all such persons have complied and will comply with the offering
restrictions requirement of Regulation S.
(iii) At or prior to the confirmation of sale of any Notes sold
in reliance on Regulation S, such Initial Purchaser will have sent to
each distributor, dealer or other person receiving a selling
concession, fee or other remuneration that purchase Notes from it
during the distribution compliance period a confirmation or notice to
substantially the following effect:
"The Notes covered hereby have not been registered under the U.S.
Securities Act of 1933, as amended (the "Securities Act"), and
may not be offered or sold within the United States or to, or for
the account or benefit of, U.S. persons (i) as part of their
distribution at any time or (ii) otherwise until 40 days after
the later of the commencement of the offering of the Notes and
the date of original issuance of the Notes, except in accordance
with Regulation S or Rule 144A or any other available exemption
from registration under the Securities Act. Terms used above have
the meanings given to them by Regulation S."
(iv) Such Initial Purchaser has not and will not enter into any
contractual arrangement with any distributor with respect to the
distribution of the Notes, except with its affiliates or with the
prior written consent of the Company.
Terms used in paragraph (a) and this paragraph (b) and not otherwise
defined in this Agreement have the meanings given to them by Regulation S.
(c) Each Initial Purchaser, severally and not jointly, represents,
warrants and agrees that:
(i) it has not offered or sold and prior to the date six months
after the Closing Date will not offer or sell any Notes to persons in
the United Kingdom except to persons whose ordinary activities involve
them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or otherwise
in circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of the
United Kingdom Public Offers of Securities Regulations 1995 (as
amended);
(ii) it has only communicated or caused to be communicated and
will only communicate or cause to be communicated any invitation or
inducement to engage in investment activity (within the meaning of
Section 21 of the United Kingdom Financial Services and Markets Act
2000 (the "FSMA")) received by it in connection with the issue or sale
of any Notes in circumstances in which Section 21(1) of the FSMA does
not apply to the Company; and
(iii) it has complied and will comply with all applicable
provisions of the FSMA with respect to anything done by it in relation
to the Notes in, from or otherwise involving the United Kingdom.
(d) Each Initial Purchaser acknowledges that no action has been or
will be taken by the Company that would permit a public offering of the
Notes, or possession or distribution of the Preliminary Offering
Memorandum, the Offering Memorandum or any other offering or publicity
material relating to the Notes, in any country or jurisdiction where action
for that purpose is required.
Annex B
Form of Opinion of General Counsel of the Company
-------------------------------------------------
February 17, 2005
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
As Representatives of the several Initial Purchasers
C/O ▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
In my capacity as General Counsel of Dow ▇▇▇▇▇ & Company, Inc., a
Delaware corporation (the "Company"), I have acted as counsel in connection
with the issue and sale of $225,000,000 principal amount of the Company's
3.875% Senior Notes due 2008 (the "Notes").
This opinion is being delivered to you pursuant to Section 5(g) of the
Purchase Agreement, dated as of February 14, 2005 (the "Purchase
Agreement"), among the Company, ▇.▇. ▇▇▇▇▇▇ Securities Inc., ▇▇▇▇▇▇▇ ▇▇▇▇▇
& Co., and ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, as
Representatives of the several Initial Purchasers named in schedule I
thereto. Terms used herein which are defined in the Purchase Agreement
shall have the respective meanings set forth in the Purchase Agreement,
unless otherwise defined herein.
In connection with this opinion, I have examined executed copies of
the Purchase Agreement and the other Transaction Documents and such
corporate documents and records of the Company and its subsidiaries,
certificates of public officials and officers of the Company and its
subsidiaries, and such other documents, as I have deemed necessary or
appropriate for the purposes of this opinion. In stating my opinion, I have
assumed the genuineness of all signatures of, and the authority of, persons
signing the Transaction Documents on behalf of parties thereto other than
the Company, the authenticity of all documents submitted to me as originals
and the conformity to authentic original documents of all documents
submitted to me as certified, conformed or photostatic copies.
Based upon the foregoing, I am of the opinion that:
1. Each of the Company and its significant subsidiaries (a) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, (b) has the corporate power and
authority and the legal right to own and operate its property, to lease the
property it operates under lease and to conduct the business in which it is
currently engaged and (c) to the best of my knowledge, is duly qualified as
a foreign corporation and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of property or the
conduct of its business requires such qualification and where the failure
to be so qualified would have a Material Adverse Effect.
2. The authorized capital stock of the Company conforms as to legal
matters in all material respects to the description thereof contained in
the Offering Memorandum under the heading "Capitalization"; the shares of
capital stock of the Company outstanding on the Closing Date have been duly
authorized and are validly issued, fully paid and non-assessable; and all
of the outstanding shares of capital stock of each significant subsidiary
of the Company have been duly authorized and are validly issued, fully paid
and non-assessable and are owned directly or indirectly by the Company.
3. The Company has the corporate power and authority to execute and
deliver each of the Transaction Documents and to perform its obligations
thereunder and has taken all necessary corporate action to authorize the
issuance and sale of the Notes on the terms and conditions of the Purchase
Agreement and to authorize the execution, delivery and performance of each
of the Transaction Documents.
4. The execution, delivery and performance by the Company of each of
the Transaction Documents, the issue and sale of the Notes thereunder as
provided therein and the consummation of the transactions contemplated by
the Transaction Documents, will not violate any provision of any existing
law or regulation applicable to the Company, or, to the best of my
knowledge, of any order, judgment, award or decree of any court, arbitrator
or governmental authority binding upon or applicable to the Company, or of
the certificate of incorporation or bylaws of the Company or any of its
significant subsidiaries, or, to the best of my knowledge, of any mortgage,
indenture, lease, contract or other agreement, instrument or undertaking by
which the Company or any of its significant subsidiaries or any of their
respective assets may be bound, and, to the best of my knowledge, will not
result in or require the creation or imposition of any lien on any of its
or their respective properties, assets or revenues pursuant to the
provisions of any such mortgage, indenture, lease, contract or other
agreement, instrument or undertaking.
5. To the best of my knowledge, no litigation, investigation or
proceeding of or before any court, arbitrator or governmental authority is
pending or threatened by or against the Company or any of its significant
subsidiaries or against any of its or their respective properties or
revenues (a) with respect to the Transaction Documents or any of the
transactions contemplated thereby or (b) except for the litigation with
Cantor ▇▇▇▇▇▇▇▇▇▇ Securities and Market Data Corporation that is described
in "Legal Proceedings" and Note 3 to the financial statements included in
the Company's Form 10-Q report for the third quarter of 2004, which would,
if decided adversely to the Company or any of its significant subsidiaries,
have a Material Adverse Effect.
6. The documents incorporated by reference in the Offering Memorandum
(other than the financial statements, notes, schedules and other financial
data included in, incorporated by reference in, or omitted therefrom, as to
which I express no opinion), when filed with the Commission, complied as to
form in all material respects with the requirements of the Exchange Act and
the rules and regulations of the Commission thereunder.
The opinions expressed herein are limited to the matters stated
herein, and no opinion is implied or may be inferred beyond the matters
expressly stated herein. The opinions expressed herein are given as of the
date hereof, and I undertake no obligation to supplement this letter if any
applicable laws change after the date hereof or if I become aware of any
facts that might change the opinions expressed herein or for any other
reason.
The opinions expressed herein are solely for your benefit in
connection with the transactions contemplated by the Purchase Agreement and
may not be used or relied on in any manner or for any other purpose by any
other person or entity (including by any person that acquires Notes from
you) and may not be quoted in whole or in part without my prior written
consent. In addition, this letter and its benefits are not assignable
without my prior written consent to any person that acquires Notes from
you.
Very truly yours,
Annex C
Form of Opinion of Counsel to the Company
-----------------------------------------
February 17, 2005
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
As Representatives of the several Initial Purchasers
C/O ▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We are acting as counsel to Dow ▇▇▇▇▇ & Company, Inc., a Delaware
corporation (the "Company"), in connection with the issue and sale of
$225,000,000 principal amount of 3.875% Senior Notes due 2008 (the
"Notes").
This opinion is delivered to you pursuant to Section 5(h) of the
Purchase Agreement, dated February 14, 2005 (the "Purchase Agreement"),
between the Company and ▇.▇. ▇▇▇▇▇▇ Securities Inc., ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.,
and ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, as Representatives
of the several Initial Purchasers named in schedule I thereto. All
capitalized terms used herein that are defined in, or by reference in, the
Purchase Agreement have the meanings assigned to such terms therein or by
reference therein, unless otherwise defined herein. With your permission,
all assumptions and statements of reliance herein have been made without
any independent investigation or verification on our part except to the
extent otherwise expressly stated, and we express no opinion with respect
to the subject matter or accuracy of such assumptions or items relied upon.
In connection with this opinion, we have (i) investigated such
questions of law, (ii) examined originals or certified, conformed or
reproduction copies of such agreements, instruments, documents and records
of the Company, such certificates of public officials and such other
documents and (iii) received such information from officers and
representatives of the Company and others as we have deemed necessary or
appropriate for the purposes of this opinion.
In all such examinations, we have assumed the legal capacity of all
natural persons, the genuineness of all signatures, the authenticity of
original and certified documents and the conformity to original or
certified documents of all copies submitted to us as conformed or
reproduction copies. As to various questions of fact relevant to the
opinions expressed herein, we have relied upon, and assume the accuracy of,
representations and warranties contained in the Purchase Agreement and
certificates and oral or written statements and other information of or
from public officials, officers or representatives of the Company and
others and assume compliance on the part of all parties to the Purchase
Agreement with the covenants and agreements contained therein.
With respect to the opinion expressed in paragraph (vi) below, our
opinion is limited to our review of only those laws and regulations that,
in our experience, are normally applicable to transactions of the type
contemplated in the Purchase Agreement and the other Documents (as defined
below).
To the extent it may be relevant to the opinions expressed herein, we
have assumed (i) that the Company is validly existing as a corporation and
in good standing under the laws of the State of Delaware and has the
corporate power and authority to (a) execute and deliver the Purchase
Agreement, the Notes, the Exchange Notes, the Indenture and the
Registration Rights Agreement (collectively, the "Documents"), (b) perform
its obligations thereunder and (c) consummate the transactions contemplated
thereby and (ii) that all of the parties to the Documents will comply with
all laws applicable thereto.
Based upon the foregoing, and subject to the limitations,
qualifications and assumptions set forth herein, we are of the opinion
that:
(i) The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
(ii) The Notes have been duly authorized by the Company and, when
executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Initial Purchasers in
accordance with the terms of the Purchase Agreement, will be valid and
binding obligations of the Company, enforceable in accordance with their
terms, and will be entitled to the benefits of the Indenture and the
Registration Rights Agreement pursuant to which such Notes are to be
issued.
(iii) The Exchange Notes have been duly authorized by the Company.
(iv) The Indenture has been duly authorized, executed and delivered by
the Company and, when duly executed and delivered by the Trustee, will be a
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms.
(v) The Registration Rights Agreement has been duly authorized,
executed and delivered by the Company and, when duly executed and delivered
by the parties thereto, will be a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms.
(vi) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body is
required under any United States federal or New York State statute or any
provision of the Delaware General Corporation Law known to us to be
applicable to the Company for the issue and sale of the Notes or the
consummation by the Company of the transactions contemplated by the
Purchase Agreement, the Registration Rights Agreement, the Indenture, the
Notes and the Exchange Notes, except for such consents, approvals,
authorizations, orders and registrations or qualifications as may be
required (i) under applicable state securities laws in connection with the
purchase and resale of the Notes by the Initial Purchasers and (ii) with
respect to the Exchange Notes under the Securities Act and applicable state
securities laws as contemplated by the Registration Rights Agreement
(vii) The statements relating to legal matters or documents included
in the Offering Memorandum under the captions "Description of the notes"
and "Exchange offer and registration rights," insofar as such descriptions
constitute a summary of the legal matters or documents referred to therein,
fairly summarize in all material respects such matters or documents.
(viii) The statements under the caption "United States federal tax
considerations" in the Offering Memorandum, insofar as such statements
purport to summarize matters of United States federal tax law, fairly and
accurately summarize the matters set forth therein.
(ix) Assuming that each Initial Purchaser is a QIB and based upon the
accuracy of, and compliance with, the representations, warranties and
agreements of the Company and the Initial Purchasers in the Purchase
Agreement, it is not necessary in connection with the offer, sale and
delivery of the Notes to the Initial Purchasers under the Purchase
Agreement or in connection with the initial resale of such Notes by the
Initial Purchasers in accordance with the Purchase Agreement to register
the Notes under the Securities Act or to qualify the Indenture under the
Trust Indenture Act of 1939, it being understood that no opinion is
expressed as to any subsequent resale of any Notes.
(x) The Company is not, and after giving effect to the offering and
sale of the Notes and the application of the proceeds thereof as described
in the Offering Memorandum will not be, an "investment company" as such
term is defined in the Investment Company Act of 1940, as amended.
In the course of the preparation by the Company of the Offering Memorandum
(other than the documents incorporated by reference therein), we
participated in conferences with certain of the officers and
representatives of, and the independent public accountants for, the Company
and MarketWatch, Inc. ("MarketWatch"). Given the limitations inherent in
the role of outside counsel and the independent verification of factual
matters and the character of determinations involved in the process of
preparing the Offering Memorandum, we are not passing upon and do not
assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Offering Memorandum and have made no
independent check or verification thereof except as set forth in paragraphs
(vii) and (viii) above. Subject to the foregoing and on the basis of the
information we gained in the course of the performance of the services
referred to above, including information obtained from officers and
representatives of, and the independent public accountants for, the Company
and MarketWatch, no facts have come to our attention that cause us to
believe that the Offering Memorandum (including the documents incorporated
by reference therein) as of its date and as of the date and time of
delivery of this letter contained or contains any untrue statement of a
material fact or omitted or omits to state a material fact necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading. In each case, however, we express no
view or belief with respect to financial statements, notes, schedules or
other financial data included in, incorporated by reference in, or omitted
from the Offering Memorandum.
The opinions set forth above are subject to the following
qualifications:
A. We express no opinion as to the validity, binding effect or
enforceability of any provision of the Indenture, the Registration Rights
Agreement or the Notes:
(i) relating to indemnification, contribution or exculpation;
(ii) related to choice of governing law to the extent that the
legality, validity, binding effect or enforceability of any such
provision is to be determined by any court other than a court of the
State of New York, in each case applying the choice of law principles
to the State of New York;
(iii) specifying that provisions thereof may be waived only in
writing, to the extent that an oral agreement or an implied agreement
by trade practice or course of conduct has been created that modifies
any provision of such agreement; and
(iv) which may be construed to be in the nature of a penalty.
B. The opinions expressed above are subject to the effect of, and we
express no opinions herein as to, the application of the securities or Blue
Sky laws of any state of the United States.
C. Our opinions above are subject to the following:
(i) bankruptcy, insolvency, reorganization, moratorium and other
laws now or hereafter in effect affecting creditors' rights and
remedies generally;
(ii) general principles of equity (including, without limitation,
standards of materiality, good faith, fair dealing and reasonableness,
equitable defenses and limits as to the availability of equitable
remedies), whether such principles are considered in a proceeding in
equity or at law; and
(iii) the application of any applicable fraudulent conveyance,
fraudulent transfer, fraudulent obligation, or preferential transfer
law or any law governing the distribution of assets of any person now
or hereafter in effect affecting creditors' rights and remedies
generally.
The opinions expressed herein are limited to the laws of the United
States of America and the laws of the State of New York and, to the extent
relevant, the General Corporation Law of the State of Delaware, each as
currently in effect, and no opinion is expressed with respect to any other
laws or any effect that such other laws may have on the opinions expressed
herein. The opinions expressed herein are limited to the matters stated
herein, and no opinion is implied or may be inferred beyond the matters
expressed stated herein. The opinions expressed herein are given as of the
date hereof, and we undertake no obligation to supplement this letter if
any applicable laws change after the date hereof or if we become aware of
any facts that might change the opinions expressed herein or for any other
reason.
The opinions expressed herein are solely for your benefit in
connection with the Purchase Agreement and may not be relied on in any
manner or for any purpose by any other person or entity (including by any
person that acquires Notes from you) and may not be quoted in whole or in
part without our prior written consent. In addition, this letter and its
benefits are not assignable without our prior written consent to any person
that acquires Notes from you.
Very truly yours,