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EXHIBIT 5.1
FORM OF OPINION
November 7, 2000
Photon Dynamics, Inc.
6325 San Ignacio Avenue
San Jose, California 95119-1202
Dear Ladies & Gentleman:
You have requested our opinion with respect to certain matters in connection
with the filing by Photon Dynamics, Inc. (the "Company") of a Registration
Statement on Form S-3 (the "Registration Statement") with the Securities and
Exchange Commission, covering the issuance of 1,295,000 shares of common stock,
referred to herein as the "Shares."
In connection with this opinion, we have examined and relied upon the
Registration Statement and related Prospectus, the Company's Certificate of
Incorporation and Bylaws, as amended, the Acquisition Agreement for Plan of
Arrangement by and among Photon Dynamics, Inc., Photon Dynamics Nova Scotia
Company and Image Processing Systems Inc. and the originals or copies certified
to our satisfaction of such records, documents, certificates, memoranda and
other instruments as in our judgment are necessary or appropriate to enable us
to render the opinion expressed below.
On the basis of the foregoing, and in reliance thereon, we are of the opinion
that the Shares, when sold and issued in accordance with the Registration
Statement and related Prospectus, will be validly issued, fully paid and
nonassessable.
We consent to the reference to our firm under the caption "Legal Matters" in the
Prospectus included on the Registration Statement and to the filing of this
opinion as an exhibit to the Registration Statement.
Very truly yours,
COOLEY GODWARD LLP
By: /s/ Matthew W. Sonsini
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Matthew W. Sonsini
