Registration of Securities Issued in a Business-Combination Transaction — Form S-4
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-4 Registration of Securities Issued in a 192 1.13M
Business-Combination Transaction
2: EX-2.1 Agreement and Plan of Reorganization 45 196K
3: EX-2.2 Escrow and Minority Investment Agreement 10 38K
4: EX-4.2 Clarus Incorporated Under the Laws of Delaware 2 13K
5: EX-4.3 Voting Agreement 7 29K
6: EX-4.4 Registration Rights Agreement 12 51K
7: EX-4.5 Escrow and Indemnity Agreement 15 61K
8: EX-4.6 Affiliate and Market Stand-Off Agreement 8 33K
9: EX-5.1 Opinion of Womble Carlyle Sandridge & Rice 2± 11K
10: EX-8.1 Tax Opinion Regarding Merger of Elekom, Inc. 3 20K
11: EX-10.18 Lease 23 113K
12: EX-10.19 Assignment of Lease 5 16K
13: EX-10.23 Oem Software License Agreement 22 82K
14: EX-10.24 Amendment to Oem Software License Agreement 2 14K
15: EX-21.1 List of Subsidiaries 1 7K
16: EX-23.1 Consent of Independent Public Accountants 1 7K
17: EX-23.2 Consent of Independent Accountants 1 8K
18: EX-99.1 Report of Independent Public Accountants on Financ 1 9K
19: EX-99.2 Proxy/Consent in Lieu of Special Meeting of Shareh 2 12K
20: EX-99.3 Cash/Stock Election Form 3 14K
EX-8.1 — Tax Opinion Regarding Merger of Elekom, Inc.
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EXHIBIT 8.1
September 16, 1998
Elekom, Inc.
Pacific First Plaza, Eighth Floor
155 - 108th Avenue
Bellevue, Washington 98004
Attn: Norman Behar
President and Chief Executive Officer
RE: TAX OPINION REGARDING MERGER OF ELEKOM, INC. INTO CLARUS CSA, INC.
Ladies and Gentlemen:
We have been asked, as counsel to Elekom, Inc., a Washington
corporation ("Elekom"), to render this opinion regarding the material U.S.
federal income tax consequences to the holders of the shares of Elekom capital
stock of the merger (the "Merger") of Elekom into Clarus CSA, Inc., a Delaware
corporation ("Clarus CSA") pursuant to that certain Agreement and Plan of
Reorganization, dated as of August 31, 1998 (the "Agreement"). Capitalized
terms not otherwise defined herein shall have the same meanings given to them in
the Agreement or if not defined therein as described in the Registration
Statement on Form S-4 filed with the Securities and Exchange Commission relating
to the Merger (the "S-4"). This opinion letter is rendered pursuant to Section
7.7 of the Agreement.
In connection with our opinion, we have examined and are familiar with
originals or copies, certified or otherwise identified to our satisfaction, of
the relevant documents related to the Merger, including the Agreement and the
Shareholders Agreement. Furthermore, we have examined that certain Clarus
Corporation Tax Matters Certificate, dated as of the date hereof (the "Clarus
Tax Certificate") and that certain Elekom, Inc. Tax Matters Certificate, dated
as of the date hereof (the "Elekom Tax Certificate").
Our opinion is conditioned on, among other things, the initial and
continuing accuracy of the facts, information, covenants and representations set
forth in the documents referred to above, the representations given by Clarus
Corporation in the Clarus Tax Certificate and the representations given by
Elekom in the Elekom Tax Certificate. In addition to these conditions, we have
made the following assumptions: (i) the Merger will be consummated in accordance
with the Merger Agreement; (ii) substantially all of Elekom's assets will be
acquired by Clarus CSA in the Merger, and (iii) after the Effective Time the
Company intends to continue the historic business of Elekom or use a significant
portion of its business assets in a business. We have also assumed that 50% or
more of the total Merger consideration (including for purposes of our opinion
amounts paid out of the advances made pursuant to Section 4.6 of the Merger
Agreement and used to repurchase stock from employees of Elekom pursuant to
buyback rights contained in employment related agreements governing the stock
issued to those employees (the "Elekom Buyback Provisions"), determined by value
as of the Effective Time, will constitute Company Common Stock. Assuming the
continuing accuracy of the foregoing assumptions and representations as of the
Effective Time and no change in the Code, the Treasury Regulations proposed or
promulgated thereunder, or any other administrative or judicial interpretations
thereof after the date hereof and on or before the Effective Time, we will
reissue our opinion as of the Effective Time.
In rendering our opinion, we have assumed the accuracy of all
information and representations and the performance of all undertakings
contained in the reviewed documents as set forth above, the conformity of all
copies to the original documents, and the genuineness of all signatures. We
have not attempted to verify independently the accuracy of any information in
any such document, and we have assumed that such documents accurately and
completely set forth all material facts relevant to this opinion. If any of
these facts or assumptions are not correct, please advise us at once as our
advice may be affected by a change in such facts or assumptions.
Based on the facts and assumptions set forth above, the accuracy of
the Clarus Tax Certificate and the Elekom Tax Certificate, and upon our
examination of the documents set forth above and the relevant legal authorities,
it is our opinion that the Merger will qualify as a reorganization within the
meaning of Section 368(a) of the Code and that the following are the material
federal income tax consequences for a Elekom shareholder as a result of the
Merger (other than as affected by the particular tax circumstances of an Elekom
shareholder):
(i) No gain or loss will be recognized by an Elekom shareholder as a
result of the Merger with respect to Elekom capital stock converted solely into
Company Common Stock.
(ii) The tax basis of Company Common Stock received by a shareholder
in the Merger will equal the tax basis of that shareholder in the Elekom capital
stock surrendered by that shareholder in the Merger, decreased by any basis
allocable to fractional share interests in Company Common Stock for which cash
is received and any other cash received by that shareholder in exchange for
Elekom capital stock and increased by any gain recognized by such shareholder in
the Merger.
(iii) The holding period of the Company Common Stock received in the
Merger will include the period during which the shareholder held the Elekom
capital stock, assuming such Elekom capital stock is held as a capital asset at
the Effective Time.
(iv) Elekom shareholders who receive cash upon the exercise of
dissenter rights or receive cash as their entire Merger consideration (including
for all purposes of this opinion cash received pursuant to the Elekom Buyback
Provisions) will recognize gain or loss for federal income tax purposes,
measured by the difference between the amount of cash received and the basis of
the Elekom capital stock surrendered in the Merger. Any gain or loss recognized
will be capital gain or loss, provided that such share of Elekom capital stock
is held as a capital asset at the Effective Time and the receipt of cash is not
essentially equivalent to a dividend. Furthermore, such gain or loss will be a
long-term capital gain or loss if such share of Elekom capital stock has been
held for more than 12 months. Any Company Common Stock received by a holder of
Elekom Preferred Stock may be treated as taxable ordinary income to the extent
received for accrued but unpaid dividends or as a liquidation preference.
(v) Any Elekom shareholder who receives some cash (including cash
received pursuant to the Elekom Buyback Provisions) and some Company Common
stock in the Merger will recognize gain in an amount equal to the lesser of the
cash received or the gain realized with respect to all of their Elekom stock.
Such gain will be capital gain provided that such share of Elekom capital stock
was held as a capital asset at the Effective Time and the receipt of cash is not
essentially equivalent to a dividend. No loss may be recognized by any such
shareholder.
(vi) The receipt of cash in lieu of a fractional share will be
treated as if they had received the fractional share and then received cash in
redemption of that share, resulting in the recognition of gain or loss. Such
gain or loss will be treated as capital gain or loss provided that such share of
Elekom capital stock was held as a capital asset at the Effective Time and the
receipt of cash is not essentially equivalent to a dividend.
(vii) No gain or loss will be recognized by Elekom, Clarus CSA or the
Company as a result of the Merger.
With respect to gain realized as a result of the receipt of cash from
escrowed funds, shareholders should consult with their own tax advisers to
determine if installment method reporting is available with respect to such
gain.
If contrary to the assumptions above, the value of the stock portion
of the total Merger consideration (including for all purposes of this opinion
cash received pursuant to the Elekom Buyback Provisions) were to fall below 50%
but not below 40%, we believe that the Merger should still qualify as a
reorganization but cannot give any assurances that the Internal Revenue Service
will not challenge the Merger. If the stock portion of the total Merger
consideration were to fall below 40%, we believe that there would be a
significant risk that the Merger would not qualify as a reorganization, and in
that case we could not render a favorable opinion on the reorganization status
of the Merger for federal income tax purposes.
A successful IRS challenge to the reorganization status of the Merger
(as a result of a failure of the "continuity of interest" requirement or
otherwise) would result in Elekom being treated as having sold its assets in a
taxable sale and then as having distributed the proceeds to the shareholders in
redemption of their stock. In such event, each holder of Elekom capital stock
would recognize gain or loss with respect to each share of Elekom capital stock
surrendered equal to the difference between the shareholder's basis in such
share and the fair market value, at the Effective Time, of the Company Common
Stock received in exchange therefor (plus any cash received for fractional
shares). In such event, a shareholder's aggregate basis in the Company Common
Stock so received would equal its fair market value, and the shareholder's
holding period for such stock would begin the day after the Effective Time.
Our opinion is limited to the specific matters addressed above. We
give no opinion with respect to other tax matters, whether federal, state or
local, that may relate to the Merger. Our opinion may not address issues that
are material to an individual shareholder based on his or her particular tax
situation. No ruling will be requested from the Internal Revenue Service
("IRS") regarding the Merger. Our opinion is not binding on the IRS and does
not constitute a guarantee that the IRS will not challenge the tax treatment of
the Merger.
In rendering our opinion, we have considered the applicable provisions
of the Code, Treasury Regulations promulgated thereunder and the pertinent
judicial authorities and interpretative rulings of the IRS. We caution that our
opinion is based on the federal income tax laws as they exist on the date
hereof. It is possible that subsequent changes in the tax law could be enacted
and applied retroactively to the Merger and that such changes could result in a
materially different result than the result described in the opinions above.
This opinion is furnished in connection with the Merger. We consent
to the reference to our firm under the caption "SUMMARY--Material Federal Income
Tax Consequences of the Merger" and "THE MERGER--Material Federal Income Tax
Consequences of the Merger" and to the filing of this opinion as an exhibit to
the S-4.
Very truly yours,
PERKINS COIE
Dates Referenced Herein and Documents Incorporated by Reference
| Referenced-On Page |
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| This ‘S-4’ Filing | | Date | | First | | Last | | | Other Filings |
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| |  |
| | 9/17/98 |
| Filed on: | | 9/16/98 | | 1 |
| | 8/31/98 | | 1 | | | | | 8-K |
| List all Filings |
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