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EXHIBIT 5.1
[LETTERHEAD OF LATHAM & WATKINS]
January 22, 2001
NeoTherapeutics, Inc.
157 Technology Drive
Irvine, California 92612
Re: $50,000,000 Aggregate Offering Price of Securities
of NeoTherapeutics, Inc.
Ladies and Gentlemen:
At your request, we have examined the registration statement on Form
S-3 (the "Registration Statement") filed by NeoTherapeutics, Inc. (the
"Company") on January 2, 2001 with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Securities
Act"), relating to the offering from time to time, as set forth in the
prospectus contained in the Registration Statement (the "Prospectus") and as
shall be set forth in one or more supplements to the Prospectus (each, a
"Prospectus Supplement"), by the Company of up to $50,000,000 aggregate offering
price (as such amount may be increased pursuant to a registration statement
filed with the Commission under Rule 462(b) in connection with the Registration
Statement) of (i) debt securities (the "Debt Securities"), (ii) shares of
preferred stock, par value $.001 per share (the "Preferred Stock"), (iii) shares
of preferred stock represented by depositary shares (the "Depositary Shares"),
(iv) shares of common stock, par value $.001 per share (the "Common Stock") or
(v) warrants to purchase Debt Securities, Depositary Shares, Preferred Stock or
Common Stock (collectively, the "Warrants"). The Debt Securities, Preferred
Stock, Depositary Shares, Common Stock and Warrants are collectively referred to
as the "Securities." The Registration Statement provides that Debt Securities
may be convertible into shares of Common Stock or Preferred Stock and Preferred
Stock may be convertible into shares of Common Stock.
The Debt Securities will be issued pursuant to one or more indentures,
a form of which is attached as an exhibit to the Registration Statement, by and
among the Company and a trustee identified therein (the "Trustee"), as the same
may be amended or supplemented from time to time (each, an "Indenture"). The
Depositary Shares will be issued under one or more deposit agreements (each, a
"Deposit Agreement"), by and among the Company and a financial institution
identified therein as the depositary (each, a "Depositary"). The Company may
issue receipts ("Depositary Receipts") for Depositary Shares, each of which will
represent a fractional share of preferred stock represented by Depositary
Shares. The Warrants will be issued under one or more warrant agreements (each,
a "Warrant Agreement"), by and among the Company and a financial institution
identified therein as warrant agent (each, a "Warrant Agent").
In our capacity as your counsel in connection with such registration,
we are familiar with the proceedings taken and proposed to be taken by the
Company in connection with the authorization and issuance of the Securities and,
for the purposes of this opinion, have assumed such proceedings will be timely
completed in the manner presently proposed and that the terms of each issuance
will otherwise be in compliance with law.
As such counsel, we have examined such matters of fact and questions of
law considered appropriate for purposes of rendering the opinions expressed
below. In our examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, and the
conformity to authentic original documents of all documents submitted to us as
copies. We have been furnished with, and with your consent have relied upon,
certificates of officers of the Company with respect to certain factual matters.
In addition, we have obtained and relied upon such certificates and assurances
from public officials as we have deemed necessary.
We are opining herein as to the effect on the subject transaction only
of the federal laws of the United States, the General Corporation Law of the
State of Delaware (the "Delaware GCL") and the internal laws of the State of New
York, and we express no opinion with respect to the applicability thereto, or
the effect thereon, of the laws of any other jurisdiction or, in the case of
Delaware, any other laws or as to any matters of municipal law or the laws of
any local agencies within any state.
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January 22, 2001
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Subject to the foregoing and the other matters set forth herein, it is
our opinion that, as of the date hereof:
(1) When (a) the applicable Indenture has been duly authorized,
executed and delivered by the Company and the Trustee, and (b) the
Debt Securities have been duly established in accordance with the
applicable Indenture and applicable law, and upon adoption by the
Board of Directors of the Company of a resolution in form and
content as required by the Delaware GCL and upon due execution and
delivery of the Debt Securities by the Company and due
authentication by the Trustee, against payment therefor in the
manner contemplated by the Registration Statement, the Prospectus
and the related Prospectus Supplement(s) and by such resolution,
and (c) the Registration Statement and any required post-effective
amendment thereto and any and all Prospectus Supplement(s) required
by applicable laws have all become effective under the Securities
Act, and assuming that (i) the terms of the Debt Securities as
executed and delivered are as described in the Registration
Statement, the Prospectus and the related Prospectus Supplement(s),
(ii) the Debt Securities as executed and delivered do not violate
any law applicable to the Company or result in a default under or
breach of any agreement or instrument binding upon the Company,
(iii) the Debt Securities as executed and delivered comply with all
requirements and restrictions, if any, applicable to the Company,
whether imposed by any court or governmental or regulatory body
having jurisdiction over the Company and (iv) the Debt Securities
are then issued and sold as contemplated in the Registration
Statement, the Prospectus and the related Prospectus Supplement(s),
the Debt Securities will constitute valid and legally binding
obligations of the Company, enforceable against the Company in
accordance with the terms of the Debt Securities.
(2) The Company has the authority pursuant to its Certificate of
Incorporation (the "Certificate"), to issue 5,000,000 shares of
Preferred Stock. When (a) a series of Preferred Stock has been duly
established in accordance with the terms of the Certificate and
applicable law, and upon adoption by the Board of Directors of the
Company of a resolution in form and content as required by the
Delaware GCL and upon issuance and delivery of and payment for such
shares in the manner contemplated by the Registration Statement,
the Prospectus and the related Prospectus Supplement(s) and by such
resolution, and (b) the Registration Statement and any required
post-effective amendment thereto and any and all Prospectus
Supplement(s) required by applicable laws have all become effective
under the Securities Act, and assuming that (i) the terms of such
shares as executed and delivered are as described in the
Registration Statement, the Prospectus and the related Prospectus
Supplement(s), (ii) the Company has a sufficient number of
authorized but unissued shares under the Certificate at the time of
issuance, (iii) such shares as executed and
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January 22, 2001
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delivered do not violate any law applicable to the Company or
result in default under or breach of any agreement or instrument
binding upon the Company, (iv) such shares as executed and
delivered comply with all requirements and restrictions, if any,
applicable to the Company, whether imposed by any court or
governmental or regulatory body having jurisdiction over the
Company and (v) such shares are then issued and sold as
contemplated in the Registration Statement, the Prospectus and the
related Prospectus Supplement(s), such shares of such series of
Preferred Stock (including, without limitation, any shares of such
series of Preferred Stock duly issued upon the exchange or
conversion of any shares of Preferred Stock that are exchangeable
or convertible into shares of such series of Preferred Stock, upon
the exercise of any Warrants exercisable for shares of such series
of Preferred Stock or upon the exchange or conversion of Debt
Securities that are exchangeable or convertible into shares of such
series of Preferred Stock) will be validly issued, fully paid and
nonassessable.
(3) When (a) the Deposit Agreement has been duly authorized, executed
and delivered by the Company and the Depositary, and (b) the
specific terms of a particular issuance of Depositary Shares have
been duly established in accordance with a Deposit Agreement and
applicable law, and upon adoption by the Board of Directors of the
Company of a resolution in form and content as required by the
Delaware GCL and when the Depositary Receipts in the form
contemplated and authorized by the Deposit Agreement have been duly
executed and delivered by the Depositary and delivered to and paid
for by the purchasers thereof in the manner contemplated by the
Registration Statement, the Prospectus and the related Prospectus
Supplement(s) and by such resolution, and (c) the Registration
Statement and any required post-effective amendment thereto and any
and all Prospectus Supplement(s) required by applicable laws have
all become effective under the Securities Act, and assuming that
(i) the terms of the Depositary Shares as executed and delivered
are as described in the Registration Statement, the Prospectus and
the related Prospectus Supplement(s), (ii) such shares as executed
and delivered do not violate any law applicable to the Company or
result in default under or breach of any agreement or instrument
binding upon the Company, (iii) such shares as executed and
delivered comply with all requirements and restrictions, if any,
applicable to the Company, whether imposed by any court or
governmental or regulatory body having jurisdiction over the
Company and (iv) the Depositary Shares and the underlying preferred
stock are then issued and sold as contemplated in the Registration
Statement, the Prospectus and the related Prospectus Supplement(s),
such Depositary Shares will be validly issued and will entitle the
holders thereof to the rights specified in the Depositary Receipts
and such Deposit Agreement for such Depositary Receipts.
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(4) The Company has the authority pursuant to its Certificate, to issue
up to 25,000,000 shares of Common Stock. Upon adoption by the Board
of Directors of the Company of a resolution in form and content as
required by the Delaware GCL and upon issuance and delivery of and
payment for such shares in the manner contemplated by the
Registration Statement, the Prospectus and the related Prospectus
Supplement(s) and by such resolution, and when the Registration
Statement and any required post-effective amendment thereto and any
and all Prospectus Supplement(s) required by applicable laws have
all become effective under the Securities Act, and assuming that
(i) the terms of such shares as executed and delivered are as
described in the Registration Statement, the Prospectus and the
related Prospectus Supplement(s), (ii) the Company has a sufficient
number of authorized but unissued shares under the Certificate at
the time of issuance, (iii) such shares as executed and delivered
do not violate any law applicable to the Company or result in a
default under or breach of any agreement or instrument binding upon
the Company, (iv) such shares as executed and delivered comply with
all requirements and restrictions, if any, applicable to the
Company, whether imposed by any court or governmental or regulatory
body having jurisdiction over the Company and (v) such shares are
then issued and sold as contemplated in the Registration Statement,
the Prospectus and the related Prospectus Supplement(s), such
shares of Common Stock (including, without limitation, any Common
Stock duly issued upon the exchange or conversion of any shares of
Preferred Stock that are exchangeable or convertible into Common
Stock, upon the exercise of any Warrants exercisable for Common
Stock or upon the exchange or conversion of Debt Securities that
are exchangeable or convertible into Common Stock) will be validly
issued, fully paid and nonassessable.
(5) When (a) the Warrant Agreement has been duly authorized, executed
and delivered by the Company and the Warrant Agent, and (b) the
Warrants have been duly executed and delivered in accordance with
applicable law and the Warrant Agreement, and upon adoption by the
Board of Directors of the Company of a resolution in form and
content as required by the Delaware GCL and the Warrant Agreement,
and upon issuance and delivery of and payment for the Warrants in
the manner contemplated by the Registration Statement, the
Prospectus and the related Prospectus Supplement(s) and by such
resolution, and (c) the Registration Statement and any required
post-effective amendment thereto and any and all Prospectus
Supplement(s) required by applicable laws have all become effective
under the Securities Act, and assuming that (i) the terms of the
Warrants as executed and delivered are as described in the
Registration Statement, the Prospectus and the related Prospectus
Supplement(s), (ii) the Warrants as executed and delivered do not
violate any law applicable to the Company or result in a default
under or breach of any agreement or instrument binding upon the
Company, (iii) the Warrants as executed and delivered comply with
all requirements and restrictions, if any, applicable to the
Company, whether imposed by any court or governmental or regulatory
body having jurisdiction over the Company and (iv) the Warrants are
then issued and sold as contemplated in the Registration Statement,
the Prospectus and the related Prospectus Supplement(s), the
Warrants will constitute valid and legally binding obligations of
the Company, enforceable against the Company in accordance with
their terms.
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(6) When (a) the applicable Indenture has been duly authorized,
executed and delivered by the Company and the Trustee, and (b) the
Debt Securities have been duly executed and delivered by all
parties thereto, and (c) the Registration Statement and any
required post-effective amendment thereto and any and all
Prospectus Supplement(s) required by applicable laws have all
become effective under the Securities Act, and assuming that (i)
the terms of the applicable Indenture as executed and delivered are
as described in the Registration Statement, the Prospectus and the
related Prospectus Supplement(s), (ii) the applicable Indenture as
executed and delivered does not violate any law applicable to the
Company or result in a default under or breach of any agreement or
instrument binding upon the Company, (iii) the applicable Indenture
as executed and delivered complies with all requirements and
restrictions, if any, applicable to the Company, whether imposed by
any court or governmental or regulatory body having jurisdiction
over the Company and (iv) the Debt Securities are then issued and
sold as contemplated in the Registration Statement, the Prospectus
and the related Prospectus Supplement(s), the applicable Indenture
will constitute the valid and legally binding obligation of the
Company, enforceable against the Company under the laws of the
State of New York in accordance with the terms of the applicable
Indenture.
The opinions set forth in clauses 1, 3, 5 and 6 above are subject to
the following exceptions, limitations and qualifications: (i) the effect of
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or
other similar laws now or hereafter in effect relating to or affecting the
rights or remedies of creditors; (ii) the effect of general principles of
equity, whether enforcement is considered in a proceeding in equity or at law,
and the discretion of the court before which any proceeding therefor may be
brought and (iii) the unenforceability under certain circumstances under law or
court decisions of provisions providing for the indemnification of or
contribution to a party with respect to a liability where such indemnification
or contribution is contrary to public policy. We express no opinion (i)
concerning the enforceability of the waiver of rights or defenses with respect
to stay, extension or usury laws or (ii) with respect to whether acceleration of
Debt Securities may affect the collectibility of any portion of the stated
principal amount thereof which might be determined to constitute unearned
interest thereon.
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We assume for purposes of this opinion that the Company has been duly
organized and is validly existing as a corporation under the laws of the State
of Delaware and has the corporate power and authority to issue and sell the
Securities.
To the extent that the obligations of the Company under each Indenture
may be dependent upon such matters, we assume for purposes of this opinion that
each Trustee is duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization; that each Trustee is duly qualified to
engage in the activities contemplated by each Indenture; that each Indenture has
been duly authorized, executed and delivered by the applicable Trustee and
constitutes the legal, valid and binding obligation of such Trustee, enforceable
against such Trustee in accordance with its terms; that each Trustee is in
compliance, generally and with respect to acting as a trustee under the
applicable Indenture, with all applicable laws and regulations; and that each
Trustee has the requisite organizational and legal power and authority to
perform its obligations under the applicable Indenture.
To the extent that the obligations of the Company under each Deposit
Agreement may be dependent upon such matters, we assume for purposes of this
opinion that the Depositary is duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization; that the Depositary
is duly qualified to engage in the activities contemplated by the Deposit
Agreement; that the Deposit Agreement has been duly authorized, executed and
delivered by the Depositary and constitutes the legal, valid and binding
obligation of the Depositary, enforceable against the Depositary in accordance
with its terms; that the Depositary is in compliance, generally and with respect
to acting as a Depositary under the Deposit Agreement, with all applicable laws
and regulations; and that the Depositary has the requisite organizational and
legal power and authority to perform its obligations under the Deposit
Agreement.
To the extent that the obligations of the Company under each Warrant
Agreement may be dependent upon such matters, we assume for purposes of this
opinion that the Warrant Agent is duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization; that the Warrant
Agent is duly qualified to engage in the activities contemplated by the Warrant
Agreement; that the Warrant Agreement has been duly authorized, executed and
delivered by the Warrant Agent and constitutes the legal, valid and binding
obligation of the Warrant Agent, enforceable against the Warrant Agent in
accordance with its terms; that the Warrant Agent is in compliance, generally
and with respect to acting as a Warrant Agent under the Warrant Agreement, with
all applicable laws and regulations; and that the Warrant Agent has the
requisite organizational and legal power and authority to perform its
obligations under the Warrant Agreement.
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We consent to your filing this opinion as an exhibit to the
Registration Statement, to the incorporation by reference of this opinion into
any registration statement of the Company filed pursuant to Rule 462(b) of the
Securities Act in relation to the Registration Statement, and to the reference
to our firm under the caption "Validity of Securities" in the prospectus
included therein.
This opinion is rendered only to you and is solely for your benefit in
connection with the transactions covered hereby. This opinion may not be relied
upon by you for any other purpose, or furnished to, quoted to, or relied upon by
any other person, firm or corporation for any purpose, without our prior written
consent.
Very truly yours,
/s/ Latham & Watkins