Exhibit 8.2
[LETTERHEAD]
June 10, 1998
Horizons Technology, Inc.
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RE: FEDERAL INCOME TAX OPINION REQUIRED UNDER SECTION 9.3(b) OF THAT
CERTAIN AGREEMENT AND PLAN OF MERGER AND REORGANIZATION (THE
"REORGANIZATION AGREEMENT") DATED FEBRUARY 26, 1998, BY AND AMONG THE
TITAN CORPORATION, A DELAWARE CORPORATION ("PARENT"), SUNRISE
ACQUISITION SUB, INC., A DELAWARE CORPORATION ("MERGER SUB"), HORIZONS
TECHNOLOGY, INC., A DELAWARE CORPORATION (THE "COMPANY"), AND CERTAIN
STOCKHOLDERS OF THE COMPANY.
Gentlemen:
Parent filed on March 9, 1998 with the Securities and Exchange Commission
(the "Commission") a registration statement (the "Registration Statement") on
Form S-4 under the Securities Act of 1933, as amended (the "Securities Act").
The Registration Statement was filed in connection with issuance of 3,270,000
shares of the common stock of Parent pursuant to the merger of the Merger Sub
with and into the Company (the "Merger"). Except as otherwise indicated,
capitalized terms used herein shall have the meanings assigned to them in the
Registration Statement.
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, a Professional Corporation (the "Firm"), has acted as
counsel to the Company in connection with the Merger. You have requested the
opinions set forth in Section I hereof regarding the material federal income tax
consequences to the stockholders of the Company anticipated to result from the
Merger. Section I of this letter (the "Opinion Letter") contains the Firm's
opinion. Section II of this Opinion Letter contains limitations on the opinion.
Horizons Technology, Inc.
June 10, 1998
Page 2
I. OPINION
Based upon our analysis of the applicable authorities and subject to the
limitations set forth in Section II, the Firm is of the opinion that for federal
income tax purposes, the Merger will be a reorganization within the meaning of
Section 368(a) of the Code and the following federal income tax consequences
will result:
1. No gain or loss will be recognized for federal income tax purposes by
the holders of Company Common Stock and Company Series A Preferred
Stock upon the receipt of the Parent Common Stock solely in exchange
for such Company Common Stock and Company Series A Preferred Stock in
the Merger (except to the extent, if any, that (i) cash is received in
lieu of fractional shares, or (ii) Parent Common Stock received by a
Company Series A Preferred Stock holder is attributable to any
dividends in arrears.)
2. The aggregate tax basis of the Parent Common Stock received by
Company stockholders in the Merger (including any fractional shares of
Parent Common Stock and Company Series A Preferred Stock not actually
received) will be the same as the aggregate tax basis of the Company
Common Stock and Company Series A Preferred Stock surrendered in
exchange therefor.
4. The holding period of the Parent Common Stock received by each
Company stockholder in the Merger will include the holding period of
the shares of Company Common Stock and Company Series A Preferred
Stock surrendered in exchange therefor.
5. Cash payments received by the holders of Company Common Stock and
Company Series A Preferred Stock in lieu of fractional shares of
Parent Common Stock will be treated as if such fractional shares had
been issued in the Merger and then redeemed by Parent. A Company
stockholder receiving such cash will recognize gain or loss upon such
payment, measured by the difference (if any) between the amount of
cash received and the basis allocated to such fractional share. The
gain or loss should be capital gain or loss, provided that each such
fractional share of Parent Common Stock was held as a capital asset at
the Effective Time of the Merger.
6. A holder of Company Common Stock and Company Series A Preferred Stock
who exercises appraisal rights with respect to a share of Company
Common Stock or Company Series A Preferred Stock and receives a cash
payment for such share
Horizons Technology, Inc.
June 10, 1998
Page 3
generally should recognize capital gain or loss (if such shares was
held as a capital asset at the Effective Time of the Merger)
measured by the difference between the stockholder's basis in such
shares and the amount of cash received, provided that such payment
is not "essentially equivalent to a dividend" within the meaning of
Section 302 of the Code nor has the effect of a distribution of a
dividend within the meaning of Section 356(a)(2) of the Code after
giving effect to the constructive ownership rules of the Code
(collectively, a "Dividend Equivalent Transaction"). A sale of
shares pursuant to an exercise of appraisal rights generally will
not be a Dividend Equivalent Transaction if, as a result of such
exercise, the stockholder exercising the appraisal rights owns no
shares of capital stock of Parent (either actually or
constructively within the meaning of Section 318 of the Code)
immediately after the Merger. For non-corporate holders, any such
capital gain, will be taxed at a maximum federal income tax rate of
39.6% if the holder's holding period in the shares is 1 year or
less, at a maximum federal income tax rate of 28% if the holder's
holding period in the shares is more than 1 year but not more than
18 months and at a maximum federal income tax rate of 20% if the
holder's holding period in the shares is more than 18 months. For
corporate holders, capital gain will continue to be subject to tax
at the ordinary income tax rates applicable to corporations.
In addition, to your request for our opinion on this specific matter of
federal income tax law, you have asked us to review the discussion of federal
income tax issues contained in the Registration Statement. We have reviewed the
discussion entitled "Federal Income Tax Matters" contained in the Registration
Statement and believe that, insofar as it relates to statements of law and legal
conclusions, is correct in all material respects.
II. LIMITATIONS
1. Except as otherwise indicated, the opinions set forth in Section I
are based upon the Code and its legislative history, the regulations
promulgated thereunder, judicial decisions and current administrative rulings
and practices of the Internal Revenue Service, all as in effect on the date
of this Opinion Letter. These authorities may be amended or revoked at any
time. Any such changes may or may not be retroactive with respect to
transactions entered into or contemplated prior to such changes and could
significantly alter the conclusions reached in this Opinion Letter. There is
no assurance that legislative, judicial or administrative changes will not
occur in the future. The Firm assumes no obligation to update or modify this
Opinion Letter to reflect any developments that may occur after the date of
this Opinion Letter.
Horizons Technology, Inc.
June 10, 1998
Page 4
2. The opinions set forth in Section I are not binding on the Internal
Revenue Service or the courts. Additionally, the Firm's opinions set forth
herein are dependent upon the accuracy of the representations contained in
the Certificates signed by officers of Parent, Merger Sub and the Company and
attached hereto as Exhibit "A." The Firm has relied upon those
representations and any inaccuracy in the representations could adversely
affect the opinions stated in Section I.
3. In connection with this Opinion Letter, the Firm has examined and
is familiar with originals or copies, certified or otherwise identified, of
such documents and records and such statutes, regulations and other
instruments as it deemed necessary or advisable for the purposes of the
opinions set forth herein, including (i) the Registration Statement and (ii)
the Reorganization Agreement. The Firm has assumed that all signatures on all
documents presented to it are genuine, that all documents submitted to it as
originals are accurate originals thereof, that all information submitted to
it was accurate and complete, and that all persons executing and delivering
originals or copies of documents examined by it were competent to execute and
deliver such documents.
4. The Firm is expressing its opinions only as to those matters
expressly set forth in Section I. No opinion should be inferred as to any
other matters. In addition, no opinion is expressed as to any other
transaction, including the Merger, if all of the transactions described in
the Reorganization Agreement are not consummated in accordance with the terms
of the Reorganization Agreement and without waiver of any material provision
thereof. To the extent that any of the representations, warranties,
statements and assumptions material to the Firm's opinion and upon which the
Firm has relied are not accurate and complete in all material respects at all
relevant times, the Firm's opinion would be adversely affected and should not
be relied upon.
5. This opinion does not address the various state, local or foreign
tax consequences that may result from the Merger or the other transactions
contemplated by the Reorganization Agreement. In addition, no opinion is
expressed as to any federal income tax consequence of the Merger or the other
transactions contemplated by the Reorganization Agreement except as
specifically set forth herein, and this opinion may not be relied upon except
with respect to the consequences specifically discussed herein. Furthermore,
this opinion only relates to the holders of Company capital stock who hold
such stock as a capital asset. No opinion is expressed as to the federal
income tax treatment that may be relevant to a particular investor in light
of personal circumstances or to certain types of investors subject to special
treatment under the federal income tax laws (for example, life insurance
companies, dealers in securities, taxpayers subject to the alternative
minimum tax, banks, tax-exempt organizations, non-United States persons, and
stockholders who acquired their shares of Company capital stock pursuant to
the exercise of options or otherwise as compensation or who hold their
Company capital stock as part of a
Horizons Technology, Inc.
June 10, 1998
Page 5
straddle or risk reduction transaction). Further, no opinion is expressed as
to the federal income tax treatment with respect to holders of warrants for
Company capital stock.
6. This Opinion Letter is issued for your benefit and for the benefit
of the stockholders of the Company and no other person or entity may rely
hereon without the express written consent of the Firm. Consent is given to:
(i) the reproduction of this Opinion Letter as an exhibit to the Registration
Statement and (ii) to the reference to this firm under the caption "Legal
Matters" in the Registration Statement as having rendered the opinion in the
"Federal Income Tax Matters" section of such Registration Statement. In
addition, as stated in Section 1 of this Opinion Letter, we have reviewed the
discussion entitled "Federal Income Tax Matters" contained in the
Registration Statement and believe that, insofar as it relates to statements
of law and legal conclusions, it is correct in all material respects. In
giving this consent, the Firm does not thereby admit that it comes into the
category of persons whose consent is required under section 7 of the
Securities Act or the rules and regulations of the Commission promulgated
thereunder.
Respectfully submitted,
Jenkens & ▇▇▇▇▇▇▇▇▇,
A Professional Corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, for the Firm