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Exhibit 8.1
_________, 1996
Board of Directors
▇▇▇▇▇▇ Pharmaceuticals, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear ▇▇▇▇▇ and Sirs:
This opinion is being delivered to you pursuant to Section 6.1(h) of
the Agreement and Plan of Merger (the "Agreement") among ▇▇▇▇▇▇ Pharmaceuticals,
Inc., a Nevada corporation ("▇▇▇▇▇▇"), its wholly-owned subsidiary, Opalacq Co.,
a Delaware corporation ("Sub"), and Oclassen Pharmaceuticals, Inc., a Delaware
corporation ("Oclassen"), dated as of September 25, 1996, as amended effective
November 14, 1996. Pursuant to the Agreement, Sub will merge with and into
Oclassen (the "Merger"), and Oclassen will become a wholly-owned subsidiary of
▇▇▇▇▇▇.
Except as otherwise provided, capitalized terms referred to herein have
the meanings set forth in the Agreement. All section references, unless
otherwise indicated, are to the Internal Revenue Code of 1986, as amended (the
"Code").
We have acted as legal counsel to ▇▇▇▇▇▇ and Sub in connection with the
Merger. As such, and for the purpose of rendering this opinion, we have examined
(or will examine on or prior to the Effective Time of the Merger) and are
relying (or will rely) upon (without any independent investigation or review
thereof) the truth and accuracy, at all relevant times, of the statements,
covenants, representations and warranties contained in the following documents
(including all schedules and exhibits thereto):
1. The Agreement (including Exhibits and Schedules);
2. Representations made to us by ▇▇▇▇▇▇ and Sub in a letter
reproduced as Exhibit A hereto;
3. Representations made to us by ▇▇▇▇▇▇▇▇ in a letter reproduced
as Exhibit B hereto;
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4. Representations made by certain shareholders of Oclassen in
"Affiliate Agreements"; and
5. Such other instruments and documents related to the formation,
organization and operation of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ and Sub or to the consummation of
the Merger and the transactions contemplated thereby as we have deemed necessary
or appropriate.
In connection with rendering this opinion, we have assumed or obtained
representations (and are relying thereon, without any independent investigation
or review thereof) that:
A. Original documents (including signatures) are authentic, documents
submitted to us as copies conform to the original documents, and there has been
(or will be by the Effective Time of the Merger) due execution and delivery of
all documents where due execution and delivery are prerequisites to
effectiveness thereof;
B. Any representation or statement made "to the knowledge of" or
otherwise similarly qualified is correct without such qualification. As to all
matters in which a person or entity making a representation has represented that
such person or entity either is not a party to, does not have, or is not aware
of, any plan, intention, understanding or agreement to take an action, there is
in fact no such plan, intention, understanding or agreement and such action will
not be taken;
C. The Merger will be consummated pursuant to the Agreement and will be
effective under the laws of the State of Delaware;
D. The shareholders of Oclassen do not, and will not on or before the
Effective Time of the Merger, have an existing plan or intent to dispose of an
amount of ▇▇▇▇▇▇ Common Stock to be received in the Merger (or to dispose of
Oclassen capital stock in anticipation of the Merger) such that the shareholders
of Oclassen will not receive and retain a meaningful continuing equity ownership
in ▇▇▇▇▇▇ that is sufficient to satisfy the continuity of interest requirement
as specified in Treas. Reg. Section 1.368-1(b) and as interpreted in certain
Internal Revenue Service rulings and federal judicial decisions;
E. After the Merger, Oclassen will hold "substantially all" of its and
Sub's properties within the meaning of Section 368(a)(2)(E)(i) of the Code and
the regulations promulgated thereunder and will continue its historic business
or sue a significant portion of its historic business assets in a business;
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F. To the extent any expenses relating to the Merger (or the "plan of
reorganization" within the meaning of Treas. Reg. Section 1.368-1(e) with
respect to the Merger) are funded directly or indirectly by a party other than
the incurring party, such expenses will be within the guidelines established in
Revenue Ruling 73-54, 1973-1 C.B. 187; any expenses paid on behalf of Oclassen
shareholders will not exceed one percent (1%) of the total consideration that
will be issued in the Merger to Oclassen shareholders in exchange for their
shares of Oclassen stock; and
G. No Oclassen shareholder guaranteed any Oclassen indebtedness
outstanding during the period immediately prior to the Merger, and at all
relevant times, including as of the Effective Time of the Merger, (i) no
outstanding indebtedness of Oclassen, ▇▇▇▇▇▇ or Sub has or will represent equity
for tax purposes; (ii) no outstanding equity of Oclassen, ▇▇▇▇▇▇ or Sub has or
will represent indebtedness for tax purposes; (iii) and no outstanding security,
instrument, agreement or arrangement that provides for, contains, or represents
either a right to acquire Oclassen stock or to share in the appreciation thereof
constitutes or will constitute "stock" for purposes of Section 368(e) of the
Code.
Based on our examination of the foregoing items and subject to the
assumption, exceptions, limitations and qualifications set forth herein, we are
of the opinion that, for federal income tax purposes, the Merger will be a
"reorganization" as defined in Section 368(a) of the Code.
In addition to the assumptions set forth above, this opinion is subject
to the exceptions, limitations and qualifications set forth below.
1. This opinion represents and is based upon our best judgment
regarding the application of federal income tax laws arising under the Code,
existing judicial decisions, administrative regulations and published rulings
and procedures. Our opinion is not binding upon the Internal Revenue Service or
the courts, and there is no assurance that the Internal Revenue Service will not
successfully assert a contrary position. Furthermore, no assurance can be given
that future legislative, judicial or administrative changes, on either a
prospective or retroactive basis, would not adversely affect the accuracy of the
conclusions stated herein. Nevertheless, we undertake no responsibility to
advise you of any new developments in the application or interpretation of the
federal income tax laws.
2. This opinion addresses only the classification of the Merger as a
reorganization under Section 368(a) of the Code, and does not address any other
federal, state, local or foreign tax consequences that may result from the
Merger or any other transaction (including any
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transaction undertaken in connection with the Merger). In particular, except as
expressly stated in the preceding sentence, we express no opinion regarding (i)
whether and the extent to which any Oclassen shareholder who has provided or
will provide services to Oclassen, ▇▇▇▇▇▇ or Sub will have compensation income
under any provision of the Code; (ii) the effects of such compensation income,
including but not limited to the effect upon the basis and holding period of the
▇▇▇▇▇▇ stock received by any such shareholder in the Merger; (iii) and the
potential application of the "golden parachute" provisions (Sections 280G,
3121(v)(2) and 4999) of the Code, the alternative minimum tax provisions
(Sections 55, 56 and 57) of the Code or Sections 305, 306, 357, 424 and 708,
or the regulations promulgated thereunder; (iv) the corporate level tax
consequences of the Merger to ▇▇▇▇▇▇, Sub or Oclassen, including without
limitation the recognition of any gain and the survival and/or availability,
after the Merger, of any of the federal income tax attributes or elections of
Oclassen, after application of any provision of the Code, as well as the
regulations promulgated thereunder and judicial interpretations thereof; (v)
the basis of any equity interest in Oclassen acquired by ▇▇▇▇▇▇ in the Merger;
(vi) the tax consequences of any transaction in which Oclassen stock or a right
to acquire Oclassen stock was received: (vii) the tax consequences to any
Oclassen shareholder or to Oclassen, ▇▇▇▇▇▇ or Sub of a forfeiture to ▇▇▇▇▇▇ of
all or any part of the shares held in the escrow Fund; and (viii) the tax
consequences of the Merger (including the opinion set forth above) as applied
to shareholders of Oclassen with special tax status or circumstances and/or
holders of options or warrants for Oclassen stock or that may be relevant to
particular classes of Oclassen shareholders and/or holders of options or
warrants for Oclassen stock such as dealers in securities, corporate
shareholders subject to the alternative minimum tax, foreign persons, and
holders of shares acquired upon exercise of stock options or in other
compensatory transactions.
3. No opinion is expressed as to any transaction other than the Merger
as described in the Agreement or to any transaction whatsoever, including the
Merger, if all the transactions described in the Agreement are not consummated
in accordance with the terms of such Agreement and without waiver or breach of
any material provision thereof or if all of the representations, warranties,
statements and assumptions upon which we relied are not true and accurate at all
relevant times. In the event any one of the statements, representations,
warranties or assumptions upon which we have relied to issue this opinion is
incorrect, our opinion might be adversely affected and may not be relied upon.
4. This opinion has been delivered to you for the purpose of satisfying
the conditions set forth in Section 6.1(h) of the Agreement and is intended
solely for your benefit; it may not be relied upon for any other purpose or by
any other person or entity, and may not be made available to any other person or
entity without our prior written consent.
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Very truly yours,
▇'▇▇▇▇▇▇ & ▇▇▇▇▇▇