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Exhibit 8.1
[FORM OF TAX OPINION]
_________, 2000
Board of Directors
King Pharmaceuticals, Inc.
501 Fifth Street, NW
Bristol, TN 37620
Gentlemen/Ladies:
This opinion is being delivered to you in accordance with Section
8.1(i) of the Agreement and Plan of Merger (the "Agreement"), dated as of July
13, 2000, by and among King Pharmaceuticals, Inc. ("King"), a Tennessee
corporation, Spirit Acquisition Corp. ("Merger Sub"), a Delaware corporation and
wholly-owned subsidiary of King, and Jones Pharma Incorporated ("Jones"), a
Delaware corporation. Pursuant to the Agreement, Merger Sub will be merged with
and into Jones (the "Merger").
In connection with the preparation of this opinion, we have examined
and with your consent relied upon (without any independent investigation or
review thereof) the following documents (including all exhibits and schedules
thereto): (1) the Agreement; (2) the Registration Statement on Form S-4 to be
filed with the Securities and Exchange Commission (the "Registration Statement")
and/or the Joint Proxy Statement/Prospectus of King and Jones; (3)
representations and certifications made to us by King (attached hereto as
Exhibit A); (4) representations and certifications made to us by Jones (attached
hereto as Exhibit B); (5) such other instruments and documents related to the
formation, organization and operation of King, Merger Sub and Jones or to the
consummation of the Merger and the transactions contemplated thereby as we have
deemed necessary or appropriate.1/
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1/ All capitalized terms used herein and not otherwise defined shall have the
same meaning as they have in the Agreement. All section references,
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King Pharmaceuticals, Inc.
_________, 2000
Page 2
The Proposed Transaction
Based solely upon our review of the documents set forth above, and
upon such information as King, Merger Sub and Jones have provided to us (which
we have not attempted to verify in any respect), and in reliance upon such
documents and information, we understand that the proposed transaction and the
relevant facts with respect thereto are as follows:
King is a vertically integrated pharmaceutical company that
manufactures, markets and sells branded prescription pharmaceutical products.
Merger Sub was organized solely for the purpose of accomplishing the merger
described below.
Jones is an emerging specialty pharmaceutical company with a
portfolio of products including thyroid-disorder drugs, a drug to control blood
loss during surgery, an anesthetic and three veterinarian pharmaceuticals.
For the reasons set forth in the Registration Statement, it is
proposed that pursuant to the Agreement and the laws of the State of Delaware
Merger Sub merge with and into Jones. Merger Sub's separate corporate existence
will cease and Jones will be the surviving corporation (the "Surviving
Corporation"). As the Surviving Corporation, Jones will succeed to all of the
assets and liabilities of Merger Sub under Delaware corporate law.
By virtue of the Merger, each share of Jones Common Stock issued and
outstanding prior to the Effective Time (excluding treasury stock, which will be
canceled and extinguished) will be converted and exchanged for the right to
receive a number of shares of King Common Stock equal to the Exchange Ratio. No
fractional shares of King Common Stock will be issued. Holders of Jones Common
Stock otherwise entitled to receive fractional shares of King Common Stock will
be entitled to receive, in lieu thereof, cash in an amount equal to the product
of such fractional part of a share multiplied by the closing price per share of
the King Common Stock on the Closing Date. Holders of Jones Common Stock are not
entitled to dissenters' rights or appraisal rights with respect to the Merger.
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unless otherwise indicated, are to the Internal Revenue Code of 1986, as amended
(the "Code").
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King Pharmaceuticals, Inc.
_________, 2000
Page 3
Assumptions and Representations
In connection with rendering this opinion, we have assumed or
obtained representations (and, with your consent, are relying thereon, without
any independent investigation or review thereof, although we are not aware of
any material facts or circumstances contrary to or inconsistent therewith) that:
1. All information contained in each of the documents we have
examined and relied upon in connection with the preparation of this opinion is
accurate and completely describes all material facts relevant to our opinion,
all copies are accurate and all signatures are genuine. We have also assumed
that 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 the effectiveness thereof.
2. The Merger will be consummated in accordance with applicable state
law and will qualify as a statutory merger under applicable state law.
3. All representations made in the exhibits hereto are true, correct,
and complete in all material respects. Any representation or statement made "to
the best of knowledge" or similarly qualified is correct without such
qualification.
4. The Merger will be consummated in accordance with the Agreement
and as described in the Joint Proxy Statement/Prospectus (including satisfaction
of all covenants and conditions to the obligations of the parties without
amendment or waiver thereof); each of King, Merger Sub and Jones will comply
with all reporting obligations with respect to the Merger required under the
Code and the Treasury Regulations thereunder; and the Agreement and all other
documents and instruments referred to therein or in the Joint Proxy
Statement/Prospectus are valid and binding in accordance with their terms.
Opinion - Federal Income Tax Consequences
Based upon and subject to the assumptions and qualifications set
forth herein, it is our opinion that for federal income tax purposes the Merger
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King Pharmaceuticals, Inc.
_________, 2000
Page 4
will qualify as a reorganization within the meaning of 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 relevant current provisions of the Code and
interpretations of the foregoing as expressed in existing court decisions,
administrative determinations (including the practices and procedures of the
Internal Revenue Service (the "IRS") in issuing private letter rulings, which
are not binding on the IRS except with respect to the taxpayer that receives
such a ruling) and published rulings and procedures all as of the date hereof.
An opinion of counsel merely represents counsel's best judgment with respect to
the probable outcome on the merits and is not binding on the IRS or the courts.
There can be no assurance that positions contrary to our opinions will not be
taken by the IRS, or that a court considering the issues would not hold contrary
to such opinions. King has not requested a ruling from the IRS (and no ruling
will be sought) as to any of the federal income tax consequences addressed in
this opinion. 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 opinion expressed herein.
Nevertheless, we undertake no responsibility to advise you of any new
developments in the law or in the application or interpretation of the federal
income tax laws.
2. This letter addresses only the specific tax opinions set forth
above. This letter does not address any other federal, state, local or foreign
tax consequences that may result from the Merger or any other transaction
(including any transaction undertaken in connection with the Merger).
3. Our opinion is intended to address only the tax consequences to
King and is not intended to address (nor may it be relied upon for) the tax
consequences to Jones or holders of Jones Common Stock. We express no opinion
regarding, among other things, the tax consequences of the Merger (including the
opinion set forth above) as applied to specific stockholders of Jones that may
be relevant to particular classes of Jones shareholders, such as dealers in
securities, corporate shareholders subject to
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King Pharmaceuticals, Inc.
_________, 2000
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the alternative minimum tax, foreign persons, and holders of shares acquired
upon exercise of stock options or in other compensatory transactions.
4. Our opinion set forth herein is based upon the description of the
contemplated transactions as set forth above in the section captioned "The
Proposed Transaction," the Agreement and the Joint Proxy Statement/Prospectus.
If the actual facts relating to any aspect of the transactions differ from this
description in any material respect, our opinion may become inapplicable. No
opinion is expressed as to any transaction other than those set forth in the
section captioned "The Proposed Transaction," the Agreement and the Joint Proxy
Statement/Prospectus or to any transaction whatsoever, including the Merger, if
all the transactions described in the section captioned "The Proposed
Transaction," the Agreement and the Joint Proxy Statement/Prospectus are not
consummated in accordance with the terms of the section captioned "The Proposed
Transaction," the Agreement and the Joint Proxy Statement/Prospectus 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.
This opinion is provided to King only, and without our prior consent,
may not be relied upon, used, circulated, quoted or otherwise referred to in any
manner by any person, firm, governmental authority or entity whatsoever other
than reliance thereon by King. Notwithstanding the prior sentence, we hereby
consent to the use of the opinion letter as an exhibit to the Registration
Statement and to the use of our name in the Registration Statement. In giving
the consent, we do not thereby admit that we are an "expert" within the meaning
of the Securities Act of 1933, as amended.
Sincerely yours,
HOGAN & HARTSON L.L.P.
