<PAGE> 1
EXHIBIT 5.01
TANNER PROPP, LLP
99 PARK AVENUE
NEW YORK, NEW YORK 10016
Tel (212) 476-0700
Fax (212) 687-0056
LESTER J. TANNER
PARTNER
WRITER'S DIRECT DIAL
(212) 476-0710
September 29, 2000
MFC Development Corp.
271 North Avenue
New Rochelle,. NY 10801
Registrar & Transfer Company
10 Commerce Drive
Cranford, NJ 07016
Re: MFC DEVELOPMENT CORP.
Gentlemen and Ladies:
This letter is written in connection with the General Form For
Registration (Form 10) of the Common Stock, Par Value $.001 per share ("Common
Stock") of MFC Development Corp., a Delaware corporation ("MFC" or the
"Company"). We have sent you under separate cover documents relating to MFC
including a copy of Form 10, Exhibit 3.01 Amended Certificate of Incorporation
of the Company and Exhibit 3.03 Amended By-Laws of the Company.
Registrar and Transfer Company is also the Transfer Agent for FRM
Nexus, Inc., a Delaware corporation ("FRM Corp.") which is presently the owner
of 1,800,000 shares of Common Stock of MFC constituting all of the issued and
outstanding shares of MFC. FRM Corp. presently has a total of 1,800,000 shares
of common stock, par value $.10 per share ("FRM common stock") issued and
outstanding.
The Boards of Directors of FRM Corp. and MFC have adopted resolutions
to distribute on November 30, 2000 ( if that be the effective date of MFC's Form
10 Registration pursuant to Section 12(g) of the Securities Exchange Act of
1934) to its shareholders as of the close of business on
<PAGE> 2
TANNER PROPP, LLP
MFC Development Corp.
Registrar & Transfer Company
September 29, 2000
page 2
November 1, 2000 (the "record date") one share of MFC Common Stock for each one
share of FRM common stock owned by the shareholders of FRM Corp. The mailing of
the stock certificates of MFC to the shareholders of FRM Corp. will be
accompanied by a copy of MFC's Form 10 in the form as amended prior to its
effective date. Thereafter the persons who were the shareholders of FRM Corp. on
the record date together will own 1,800,000 shares of each of FRM Corp. and MFC.
FRM Corp. will then not own any shares of MFC nor will MFC own any shares of FRM
Corp.
MFC has been a wholly owned subsidiary of FRM Corp. since November 17,
1993. The shareholders of FRM Corp. are not providing any consideration for the
MFC Common Stock they will receive pro-rata to their ownership of FRM Corp.
common stock. The Form 10 provides adequate information about the distribution
and about MFC including the separate businesses to be conducted in the future by
the separate management and employees of each of FRM Corp. and MFC.
In our opinion the MFC Common Stock to be distributed upon the
effective date of MFC's Form 10 Registration is not required to be registered
under the Securities Act of 1933, as amended because the distribution is an
exempted transaction under Sections 4(1) and 4(2) of the Act.
In our opinion, the 1,800,000 shares of MFC Common Stock are duly
authorized, validly issued, fully paid and non-assessable shares of MFC Common
Stock and when distributed by FRM Corp. as set forth herein will be duly
authorized, validly issued, fully paid and non-assessable shares of Common Stock
of MFC legally owned by the persons who were the shareholders of FRM Corp.
on the record date.
Very truly yours,
/s/ Tanner Propp LLP
