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EXHIBIT 5.1
DEWEY BALLANTINE LLP
1301 AVENUE OF THE AMERICAS
NEW YORK 10019-6092
TEL 212 259-8000 FAX 212 259-6333
July 5, 2000
AppliedTheory Corporation
1500 Broadway, 3rd Floor
New York, NY 10036
Re: AppliedTheory Corporation
Registration Statement on Form S-3
Ladies and Gentlemen:
This opinion is furnished by us as counsel for AppliedTheory
Corporation, a Delaware corporation (the "Company"), in connection with the
Registration Statement on Form S-3 (the "Registration Statement") being filed
today by the Company with the Securities and Exchange Commission (the
"Commission") via EDGAR. The Registration Statement relates to the resale from
time to time by the parties identified therein of shares of common stock, par
value $.01 per share, of the Company they acquired or may acquire through: (i)
the conversion of 5% Convertible Debentures due June 5, 2003 (the "Debentures"),
(ii) the exercise of warrants issued concurrently with the issuance of the
Debentures, (iii) the exercise of warrants to be granted upon the exercise of
put or call options arising under a Purchase Agreement, dated as of June 5,
2000, by and among the Company, Halifax Fund, L.P., Palladin Partners I, L.P.,
Palladin Overseas Fund Ltd., The Gleneagles Fund Company, Lancer Securities
(Cayman) Ltd., Elliott Associates, L.P., and Westgate International, L.P., which
agreement was entered into in connection with the Company's grant of the
Debentures, (iv) the conversion of a convertible promissory note issued as
payment of investment banking fees to Lillian Capital LLC and (v) the Company's
acquisition of CRL Network Services, Inc., now a wholly-owned subsidiary of the
Company that has been renamed AppliedTheory California Corporation. The
instruments described in the preceding (i) through (iii) are referred to
collectively as the "Placement Instruments" and are described in greater detail
in the Company's current report on Form 8-K, filed with the Commission on June
20, 2000 and the shares of the Company's common stock issuable pursuant to the
Placement Instruments are hereinafter referred to as the "Shares".
This opinion is delivered in accordance with the requirements of Item
601(b)(5) of Regulation S-K under the Securities Act.
We have examined and are familiar with originals, or copies certified
or otherwise identified to our satisfaction, of such corporate records of the
Company, certificates of officers of the Company or public officials and such
other documents as we have deemed appropriate as a basis for the opinions
express below.
NEW YORK WASHINGTON LOS ANGELES LONDON HONG KONG BUDAPEST PRAGUE WARSAW
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Based upon the foregoing, we are of the opinion that:
1. The Company is a corporation duly organized and validly
existing under the laws of the State of Delaware.
2. The shares of the Company's common stock being offered
pursuant to the Registration Statement by James and Judy
Linstruth, Robyn Raschke, Gary A. Angel, Olivia Han, Joseph M.
Breall, James G. Couch and Robert L. Ross have been duly
authorized, validly issued and are fully paid and
nonassessable.
3. When Shares are issued and delivered upon exercise or
conversion, as the case may be, of any of the Placement
Instruments, in accordance with the terms thereof, such Shares
will be duly authorized, validly issued and fully paid and
nonassessable.
4. When shares of the Company's common stock are issued and
delivered upon conversion of the convertible promissory note
issued as payment of investment banking fees to Lillian
Capital LLC, in accordance with the terms of such convertible
promissory note, such shares will be duly authorized, validly
issued and fully paid and nonassessable.
We are members of the bar of the State of New York and express no
opinion as to the laws of any jurisdiction except the State of New York, the
federal law of the United States of America, and the General Corporation Law of
the State of Delaware.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our name in the prospectus
constituting a part of such Registration Statement under the heading "Legal
Matters." In giving such consent, we do not thereby admit that we come within
the category of persons whose consent is required under Section 7 of the
Securities Act, as amended, or the rules and regulations of the Commission
promulgated thereunder.
Very truly yours,
DEWEY BALLANTINE LLP
