EXHIBIT 5
WARSHAW BURSTEIN COHEN
SCHLESINGER & KUH, LLP
555 Fifth Avenue
New York, New York 10017
Telephone: (212) 984-7700
Facsimile: (212) 972-9150
April 14, 1997
C-Phone Corporation
6714 Netherlands Drive
Wilmington, North Carolina 28405
Gentlemen and Ladies:
You have requested our opinion, as counsel for C-Phone Corporation, a
New York corporation (the "Company"), in connection with the Registration
Statement on Form S-3 (the "Registration Statement") under the Securities Act of
1933 (the "Act"), filed by the Company with the Securities and Exchange
Commission (the "Commission").
The Registration Statement relates to the offering by certain selling
shareholders of up to 3,684,668 shares of the Company's common stock, $.01 par
value per share (the "Common Stock"), consisting of (i) 200,000 shares (the
"1994 Warrant Shares") of Common Stock reserved for issuance upon the exercise
of certain warrants (the "1994 Warrants") to purchase Common Stock issued
pursuant to the Representative's Warrant Agreement (the "Representative's
Warrant Agreement"), dated as of August 20, 1994, between the Company and
Josephthal Lyon & Ross Incorporated ("Josephthal"), the representative of the
underwriters in the Company's August 1994 public offering, (ii) 833,667 shares
(the "Original Shares") of Common Stock issued in the Company's March 1997
private placement (the "1997 Placement") pursuant to Securities Purchase
Agreements, dated as of March 31, 1997, between the Company and the various
subscribers named therein (the "Purchase Agreements"), (iii) 2,501,001
additional shares (the "Rights Shares") of Common Stock issuable, under certain
circumstances and without any additional consideration, upon exercise of
contingent value rights (the "Rights"), to the holders of the Original Shares
upon the sale of the Original Shares, and (iv) 150,000 shares (the "1997 Warrant
Shares") of Common Stock reserved for issuance upon the exercise of certain
warrants (the "1997 Warrants") to purchase the Common Stock issued in the 1997
Placement pursuant to the Placement Agent Warrant Agreement (the "Placement
Agent Warrant Agreement"), dated as of March 31, 1997, between the Company and
Josephthal, as placement agent for the 1997 Placement.
In the preparation of our opinion, we have examined (1) the Restated
Certificate of Incorporation of the Company, as amended to date, (2) the By-Laws
of the Company, in effect on the date hereof, (3) minutes of meetings of the
Company's Board of Directors, as made available to us by executive officers of
the Company, (4) a certificate from an executive officer of the Company, (5) the
Registration Statement, (6) the Purchase Agreements, including the exhibits
incorporated by reference therein, (7) the Representative's Warrant Agreement
and (8) the Placement Agent Warrant Agreement. In our examinations, we have
assumed the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to the originals of all documents
submitted to us as certified, photostatic or conformed copies, and the
authenticity of the originals of all such latter documents.
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Based upon such examination, we are of the opinion that:
(1) the Original Shares have been validly issued and are fully
paid and non-assessable;
(2) the Rights Shares, when issued and delivered in accordance
with the terms of the Rights, will be validly issued, fully
paid and non-assessable;
(3) the 1994 Warrant Shares, when issued and delivered in
accordance with the terms of the Representative's Warrant
Agreement, will be validly issued, fully paid and
non-assessable; and
(4) the 1997 Warrant Shares, when issued and delivered in
accordance with the terms of the Placement Agent Warrant
Agreement, will be validly issued, fully paid and
non-assessable.
We hereby consent to the filing of our opinion as an exhibit to the
Registration Statement and to the reference to our firm under the caption "Legal
Matters" in the prospectus included in the Registration Statement. In so doing,
we do not admit that we are in the category of persons whose consent is required
under Section 7 of the Act or the rules and regulations of the Commission
promulgated thereunder.
Certain partners of our Firm beneficially own an aggregate of 12,105
shares of Common Stock.
Sincerely yours,
WARSHAW BURSTEIN COHEN
SCHLESINGER & KUH, LLP
AAK/MDS
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