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EXHIBIT 5.1
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center
Boston, Massachusetts 02111
617 542 6000
617 542 2241 FAX
September 19, 2000
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Credit Suisse First Boston Corporation
Robertson Stephens, Inc.
Chase Securities Inc.
J.P. Morgan Securities Inc.
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
This opinion is being furnished to you pursuant to Section 5(a) of the
Purchase Agreement, dated September 13, 2000 (the "Purchase Agreement") by and
between each of you (together, the "Initial Purchasers") and Vertex
Pharmaceuticals Incorporated, a Massachusetts corporation (the "Company")
pursuant to which the Company has agreed to issue and sell to you, and you have
agreed to purchase from the Company an aggregate of $300,000,000 principal
amount of its 5.00% Convertible Subordinated Notes due September 2007 (the
"Initial Securities") and an aggregate of $45,000,000 additional principal
amount thereof (the "Option Securities"). The Initial Securities and the Option
Securities are collectively referred to herein as the "Securities." The
Securities will be issued under an indenture dated as of September 19, 2000 (the
"Indenture") between the Company and State Street Bank and Trust Company, as
trustee (the "Trustee"). Holders of the Securities will have the registration
rights set forth in the Resale Registration Rights Agreement dated as of
September 19, 2000 (the "Registration Rights Agreement") by and among the
Company and the Initial Purchasers. Capitalized terms defined in the Purchase
Agreement and not otherwise defined herein are used herein with the meanings so
defined in the Purchase Agreement.
We have acted as outside counsel for the Company in connection with the
preparation, execution and delivery of the Purchase Agreement and the
consummation of the transactions contemplated thereby. In connection therewith,
we have examined executed originals or counterparts of the Purchase Agreement,
the Registration Rights Agreement and the Indenture (collectively, the
"Transaction Documents"), the Offering
BOSTON NEW YORK RESTON WASHINGTON
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MINTZ, LEVIN, COHN, FERRIS, GLOVSKY AND POPEO, P.C.
September 19, 2000
Page 2
Memorandum (as defined in the Purchase Agreement) and such other documents as
we have deemed necessary for purposes of this opinion.
Insofar as this opinion relates to factual matters, we have relied upon
representations and warranties of the Company, certificates of officers of the
Company and of public officials, and certificates delivered to you in connection
with the Transaction Documents and the transactions contemplated thereby.
As used herein, any reference to "our knowledge", "best of our
knowledge", "of which we have knowledge", "known to us" or words of similar
import, shall mean the conscious awareness of the existence or absence of any
facts or other information by any lawyer in this firm who was involved in
representing the Company in connection with the transactions contemplated by the
Transaction Documents or is otherwise involved on an ongoing basis in providing
legal services to the Company. Except as expressly set forth in this opinion, we
have not undertaken any independent investigation, including, without
limitation, any investigation of corporate, court or other documents or records,
to determine the existence or absence of any such facts or other information,
and no inference as to our knowledge of the existence or absence of any facts or
other information should be drawn from the fact of our representation of the
Company.
In rendering the opinions set forth herein, we have assumed without
independent inquiry or investigation, (i) the genuineness of all signatures on
all documents and instruments examined by us, (ii) the authenticity of all
documents submitted to us as originals, and (iii) the conformity to originals of
all documents submitted to us as certified, photostatic or conformed copies, and
the authenticity of the originals of such documents. We have also assumed that
each of the parties to the Transaction Documents (other than the Company) has
all requisite power and authority and has taken all necessary action (corporate
or otherwise) to execute and deliver the Transaction Documents to which it is a
party and to effect the transactions contemplated thereby and that the
Transaction Documents constitute the legal, valid and binding obligation of each
of such other parties enforceable in accordance with their respective terms.
Our opinions contained in paragraphs (vi), (vii) and (viii) as to
enforceability are subject to the further qualification that such enforceability
may be (1) limited by bankruptcy, insolvency (including, without limitation,
fraudulent conveyances and fraudulent transfers), reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, (2)
limited by general equitable principles, including, without limitation, concepts
of materiality, reasonableness, good faith and fair dealing (regardless of
whether such enforceability is considered in a proceeding in equity or at law),
(3) subject to the effect of any public policy considerations or court decisions
which may limit the rights of any person or entity to obtain indemnification,
and (4) subject to the effects of generally applicable rules of law that (A)
limit or affect the enforcement of provisions that purport to require waiver or
modification of the obligations of good faith, fair dealing, diligence,
reasonableness or due notice or to waive equitable rights,
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MINTZ, LEVIN, COHN, FERRIS, GLOVSKY AND POPEO, P.C.
September 19, 2000
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remedies, or defenses, or to release or indemnify a party from or against
liability for the party's own unlawful or willful misconduct, recklessness or
gross negligence, or to preclude modification of the Transaction Documents
through custom or course of conduct, or (B) provide that forum selection
clauses are not necessarily binding on the court or courts in the forum
selected.
Based upon and subject to the foregoing assumptions, limitations and
qualifications, and subject to the penultimate paragraph of this letter, we are
of the opinion that:
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the Commonwealth of
Massachusetts.
(ii) The Company has corporate power and authority to own, lease
and operate its properties and to conduct its business as described in the
Offering Memorandum and to enter into and perform its obligations under the
Purchase Agreement, the Registration Rights Agreement, the Indenture and the
Securities.
(iii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction within the United
States in which such qualification is required, whether by reason of the
ownership or leasing of property or the maintenance of an office, except where
the failure so to qualify or to be in good standing could not reasonably be
expected to result in a Material Adverse Effect.
(iv) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Offering Memorandum in the column entitled
"Actual" under the caption "Capitalization" (except for subsequent issuances,
if any, pursuant to the Purchase Agreement or pursuant to reservations,
agreements, employee benefit plans or the exercise of convertible securities
or options referred to in the Offering Memorandum); the shares of issued and
outstanding capital stock of the Company issued since January 1, 2000 have
been duly authorized and validly issued and are fully paid and
non-assessable; and none of the outstanding shares of capital stock of the
Company was issued in violation of the preemptive or other similar rights of
any securityholder of the Company, pursuant to any agreement disclosed to us
after inquiry of the Company.
(v) Vertex Security Corp. ("Vertex Securities") has been duly
organized and is validly existing as a corporation in good standing under the
laws of the Commonwealth of Massachusetts, has corporate power and authority to
own, lease and operate its properties and is duly qualified as a foreign
corporation to transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the maintenance of an office, except where the failure so
to qualify or to be in good standing could not reasonably be expected to result
in a Material Adverse Effect. To the best of our knowledge and information, the
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MINTZ, LEVIN, COHN, FERRIS, GLOVSKY AND POPEO, P.C.
September 19, 2000
Page 4
Company does not have any subsidiaries other than the Subsidiaries, Altus
Biologics Inc. and Versal Technologies Inc.
(vi) The Purchase Agreement has been duly authorized, executed
and delivered by the Company. The Registration Rights Agreement has been duly
authorized, executed and delivered by the Company, and constitutes a valid and
legally binding obligation of the Company, enforceable against the Company in
accordance with its terms.
(vii) The Indenture has been duly authorized, executed and
delivered by the Company and (assuming the due authorization, execution and
delivery thereof by the Trustee) constitutes a valid and binding agreement of
the Company, enforceable against the Company in accordance with its terms.
(viii) The Securities are in the form contemplated by the Indenture,
have been duly authorized by the Company and, when executed by the Company and
authenticated by the Trustee in the manner provided in the Indenture (assuming
the due authorization, execution and delivery of the Indenture by the Trustee)
and issued and delivered against payment of the purchase price therefor will
constitute valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms, and will be entitled to the benefits of
the Indenture.
(ix) Upon issuance and delivery of the Securities in accordance
with the Purchase Agreement and the Indenture, the Securities shall be
convertible at the option of the holder thereof for shares of Common Stock in
accordance with the terms of the Securities and the Indenture; the shares of
Common Stock initially issuable upon conversion of the Securities and such
additional shares of Common Stock that may be issued in satisfaction of the
Company's obligations under the Make Whole Payment pursuant to the Provisional
Redemption of the Securities, have been duly authorized and reserved for
issuance upon such conversion by all necessary corporate action; such shares,
when issued upon such conversion against payment of the conversion price and in
accordance with the provisions of the Securities and the Indenture and such
additional shares of Common Stock that may be issued in satisfaction of the
Company's obligations under the Make Whole Payment pursuant to the Provisional
Redemption of the Securities, if issued in accordance with the provisions of the
Securities and the Indenture, will be validly issued and will be fully paid and
non-assessable and free and clear of all liens, encumbrances, equities or claims
imposed by or arising from actions of the Company and no holder of such Common
Stock is or will be subject to personal liability by reason of being such a
holder.
(x) The issuance of the shares of Common Stock upon conversion
of the Securities and such additional shares of Common Stock that may be issued
in satisfaction of the Company's obligations under the Make Whole Payment
pursuant to the Provisional Redemption of the Securities, is not subject to the
preemptive or other similar
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MINTZ, LEVIN, COHN, FERRIS, GLOVSKY AND POPEO, P.C.
September 19, 2000
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rights of any securityholder of the Company pursuant to any agreement
disclosed to us after inquiry of the Company.
(xi) The Indenture conforms in all material respects with the
1939 Act.
(xii) Based solely on our preparation of the Offering Memorandum
and review and discussion of the contents thereof with the Company, to the best
of our knowledge, except as disclosed in the Offering Memorandum, there is no
pending or threatened action, suit, proceeding, inquiry or investigation, to
which the Company or any Subsidiary is a party, or to which the property of the
Company or any Subsidiary thereof is subject, before or brought by any court or
governmental agency or body, which could reasonably be expected to result in a
Material Adverse Effect, or which could materially and adversely affect the
properties or assets thereof or the consummation of the transactions
contemplated in the Purchase Agreement, the Indenture, the Securities and the
Registration Rights Agreement or the performance by the Company of its
obligations thereunder or the transactions contemplated by the Offering
Memorandum.
(xiii) The information in the Offering Memorandum under "Description of
Notes," "Description of Capital Stock" and "Certain Federal Income Tax
Considerations," to the extent that it constitutes matters of law, summaries of
legal matters or legal documents or instruments, the Company's charter and
bylaws, or legal conclusions, has been reviewed by us and fairly summarizes the
matters referred to therein (except that we express no opinion as to the due
authorization, valid issuance and non-accessibility of shares of capital stock
of the Company issued prior to January 1, 2000). To the best of our knowledge,
there are no other statutes or regulations that are required to be described in
the Offering Memorandum that are not described as required.
(xiv) To the best of our knowledge, there are no franchises,
contracts, indentures, mortgages, loan agreements, notes or leases that would be
required to be described in the Offering Memorandum that are not described or
referred to in the Offering Memorandum, and the descriptions thereof or
references thereto fairly summarize such arrangements.
(xv) To the best of our knowledge, neither the Company nor Vertex
Securities is in violation of its charter or by-laws and based solely on an
inquiry of the Company, we know of no default by the Company or Vertex
Securities that exists in the due performance or observance of any material
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument that is described or referred to in the Offering Memorandum.
(xvi) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign (other than such as may be
required under the applicable securities laws of the various jurisdictions in
which the Securities will be offered or sold, as to
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MINTZ, LEVIN, COHN, FERRIS, GLOVSKY AND POPEO, P.C.
September 19, 2000
Page 6
which we need express no opinion) is necessary or required in connection with
the due authorization, execution and delivery of the Purchase Agreement or
the Registration Rights Agreement or the due execution, delivery or
performance of the Indenture by the Company or for the offering, issuance,
sale or delivery of the Securities to the Initial Purchasers or the resale by
the Initial Purchasers in accordance with the terms of the Purchase Agreement
or for the issuance of shares of Common Stock upon conversion of Securities.
(xvii) It is not necessary in connection with the offer, sale and
delivery of the Securities to the Initial Purchasers and to each Subsequent
Purchaser in the manner contemplated by the Purchase Agreement and the Offering
Memorandum or in connection with the conversion of the Notes into shares of the
Common Stock in the manner contemplated in the Indenture to register the
Securities or the shares of Common Stock issuable upon conversion of the Notes
under the 1933 Act or to qualify the Indenture under the 1939 Act.
(xviii) The execution, delivery and performance of the Purchase
Agreement, the Indenture, the Registration Rights Agreement and the Securities
and the consummation of the transactions contemplated in the Purchase Agreement,
the Registration Rights Agreement and in the Offering Memorandum (including the
use of the proceeds from the sale of the Securities as described in the Offering
Memorandum under the caption "Use Of Proceeds" and the issuance of the shares of
Common Stock issuable upon conversion of the Securities) and compliance by the
Company with its obligations under the Purchase Agreement, the Indenture, the
Registration Rights Agreement and the Securities do not and will not, whether
with or without the giving of notice or lapse of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined in Section
1(a)(xiv) of the Purchase Agreement) under or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or Vertex Securities pursuant to any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease or any other agreement or
instrument, referred to in the Offering Memorandum, to which the Company or
Vertex Securities is a party or by which either of them may be bound, or to
which any of the property or assets of the Company or Vertex Securities is
subject (except for such conflicts, breaches or defaults or liens, charges or
encumbrances that could not reasonably be expected to have a Material Adverse
Effect or have been waived pursuant to the amendment to the Credit Agreement,
dated as of September 13, 2000, by and between the Company and Fleet National
Bank, relating to the issuance of the Securities), nor will such action result
in any violation of the provisions of the charter or by-laws of the Company or
Vertex Securities, or any applicable law, statute, rule, regulation (other than
such as may be required under the applicable securities laws of the various
jurisdictions in which Securities will be offered or sold, as to which we offer
no opinion), and any judgment, order, writ or decree, known to us, of any
government, government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or Vertex Securities or any of their respective
properties, assets or operations.
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MINTZ, LEVIN, COHN, FERRIS, GLOVSKY AND POPEO, P.C.
September 19, 2000
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(xiv) The Company is not, and, upon the offering and sale of the
Securities as contemplated in the Purchase Agreement and the application of the
net proceeds therefrom as described in the Offering Memorandum, will not be, an
"investment company" or an entity "controlled" by an "investment company," as
such terms are defined in the 1940 Act.
In the course of the preparation of the Offering Memorandum, we
participated in conferences with officers, representatives and in-house
attorneys of the Company, representatives of the independent public accountants
for the Company, and with the Initial Purchasers and their counsel during which
the contents of the Offering memorandum and related matters were discussed, and
although we have not verified and are not passing upon and do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Offering Memorandum, on the basis of the foregoing, no facts
have come to our attention which have caused us to believe that the Offering
Memorandum as of the date the Offering Memorandum was issued or at the Closing
Time, 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 the light of the circumstances under which they were made, not
misleading, except that we express no view or belief with respect to the
financial statements (including the notes thereto) and schedules and other
financial and accounting data included in the Offering Memorandum.
We express no opinion as to any matter other than as expressly set
forth above, and no other opinion is intended to be implied nor may be inferred
herefrom. The opinions expressed herein are given as of the date hereof, and we
undertake no obligation hereby and disclaim any obligation to advise you of any
change after the date hereof pertaining to any matter referred to herein. This
opinion is rendered solely for your benefit and may not be circulated, quoted,
relied upon or otherwise referred to by any other person without our written
consent, except that State Street Bank and Trust Company, in its capacity as
Trustee under the Indenture, may rely on this opinion as if addressed to it.
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MINTZ, LEVIN, COHN, FERRIS, GLOVSKY AND POPEO, P.C.
September 19, 2000
Page 8
Very truly yours,
/s/ Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C.
MINTZ, LEVIN, COHN, FERRIS,
GLOVSKY and POPEO, P.C.
