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Exhibit 8.1
PRELIMINARY DRAFT, FOR DISCUSSION PURPOSES ONLY
October __, 2000
Waste Industries, Inc.
3301 Benson Drive, Suite 601
Raleigh, NC 27609
Ladies and Gentlemen:
Thank you for asking Deloitte & Touche LLP ("Deloitte") to issue a tax
opinion to Waste Industries, Inc. ("Waste Industries"), a North Carolina
corporation, in connection with the "Merger," as defined and described in the
Agreement and Plan of Merger, dated October 6, 2000 (the "Merger Agreement"), by
and among Waste Industries; Waste Industries MergeCo, LLC, a newly formed North
Carolina limited liability company ("Waste LLC"); and Waste Holdings, Inc., a
newly formed North Carolina corporation ("Waste Holdings").
In connection with this opinion, we have examined the Merger Agreement, the
proxy statement-prospectus (the "Proxy Statement") filed with the Securities and
Exchange Commission in connection with the Merger, and such other documents and
corporate records as we have deemed necessary or appropriate in order to enable
us to render the opinion below. For purposes of this opinion, we have assumed
(i) the validity and accuracy of the documents and corporate records that we
have examined and the facts and representations concerning the Merger that have
come to our attention during our engagement; and (ii) that the Merger will be
consummated in the manner described in the Merger Agreement and the Proxy
Statement.
OPINION
Based upon the facts and representations made to us and the assumptions and
qualifications stated in this letter, it is our opinion that the federal income
tax consequences of the Merger are as follows:
1. The Merger will constitute a "reorganization" under I.R.C.ss.368(a).
2. No gain or loss will be recognized to the Waste Industries
shareholders as a result of their exchange of Waste Industries common
stock for shares of Waste Holdings common stock in the reorganization.
3. The aggregate basis in the shares of Waste Holdings common stock
received by each shareholder in the reorganization will equal the
shareholder's aggregate basis in the Waste Industries common stock
surrendered in exchange therefor.
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4. The holding period for each shareholder's shares of Waste Holdings
common stock will include the holding period for the shares of Waste
Industries common stock surrendered in exchange therefor.
5. Neither Waste Industries, Waste Holdings nor Waste LLC will recognize
any gain or loss because of the Merger.
ASSUMPTIONS AND CONDITIONS OF THIS OPINION
In rendering our opinion, we have relied upon statements and
representations made to us by Waste Industries, Waste Holdings and Waste LLC,
including in the Tax Certificates delivered to us by each company (a copy of
which is attached as Exhibit A), and we have assumed that such statements and
representations are true without regard to any qualification as to knowledge and
belief. Our opinion does not address U.S. federal income tax consequences that
may vary with, or are contingent upon, a shareholder's individual circumstances.
In addition, our opinion does not address any non-income tax or any foreign,
state or local tax consequences of the Merger.
In rendering our opinion, we have considered the applicable provisions of
the Internal Revenue Code of 1986, as amended (the "Code"), Treasury Department
regulations promulgated thereunder, pertinent judicial authorities, interpretive
rulings of the Service and such other authorities as we have considered
relevant. Please note that statutes, regulations, judicial decisions and
administrative interpretations are subject to change at any time, possibly with
retroactive effect. A change in the authorities or the accuracy or completeness
of any of the information, documents, corporate records, covenants, statements,
representations or assumptions on which our opinion is based could affect our
conclusions. This opinion is expressed as of the date of this letter, and we are
under no obligation to supplement or revise our opinion to reflect any changes
(including changes that have retroactive effect) in (i) applicable law, or (ii)
any information, document, corporate record, covenant, statement, representation
or assumption stated herein which becomes untrue or incorrect.
This letter is furnished to you solely for use in connection with the
Merger, as described in the Merger Agreement and the Proxy Statement, and is not
to be used, circulated, quoted or otherwise referred to for any other purpose
without our express written permission.
This opinion is based solely upon:
a. the representations, information, documents, and facts that we have
included or referenced in this opinion letter;
b. our assumption (without independent verification) that all of the
representations and all of the originals, copies, and signatures of
documents reviewed by us are accurate, true, and authentic;
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c. our assumption (without independent verification) that there will be
timely execution and delivery of and performance as required by the
representations and documents;
d. the understanding that only the specific Federal income tax issues and
tax consequences opined upon herein are covered by this tax opinion,
and no other federal, state, local or foreign taxes of any kind were
considered;
e. the law, regulations, cases, rulings, and other tax authority in
effect as of the date of this letter. If there are significant changes
in or to the foregoing tax authorities (for which we shall have no
responsibility to advise you), such changes may result in our opinion
being rendered invalid or necessitate (upon your request) a
reconsideration of the opinion;
f. your understanding that this opinion is not binding on the IRS or the
courts and should not be considered a representation, warranty, or
guarantee that the IRS or the courts will concur with our opinion; and
g. your understanding that the S-4 Opinion is solely for the benefit of
Waste Industries, Waste Holdings, Waste LLC and the persons who are
shareholders of Waste Industries immediately prior to the Merger; is
limited to the described transaction; and may not be relied upon by
any other person or entity.
Returns of parties who are entitled to rely on this opinion may be selected for
review by taxing authorities, who may not agree with our positions. Any
adjustments proposed are subject to certain rights of appeal. Because of the
lack of clarity in the law, however, we cannot provide assurance that the
positions asserted by taxing authorities may not ultimately be sustained. We do
not guarantee that any positions we recommend will be successful, and we
specifically disclaim any warranties or representations to that effect.
Very truly yours,
Deloitte & Touche LLP
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By: Joseph B. Kennedy
Principal
cc: Thomas W. Mahoney, D&T Washington, D.C.
J.R. Shearin, D&T Raleigh
James S. Felman, D&T Raleigh
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Exhibit A
CERTIFICATE OF WASTE INDUSTRIES, INC., WASTE
HOLDINGS, INC., AND WASTE LLC
October __, 2000
Deloitte & Touche LLP
1100 Carillon Building
227 West Trade Street
Charlotte, NC 28202-1675
Re: Agreement and Plan of Merger, dated October 6, 2000 (the "Merger
Agreement"), by and among Waste Industries; Waste Industries MergeCo, LLC,
a newly formed North Carolina limited liability company ("Waste LLC"); and
Waste Holdings, Inc., a newly formed North Carolina corporation ("Waste
Holdings")
This certificate is supplied to you in connection with your rendering of an
opinion regarding certain federal income tax consequences of the merger (the
"Merger") of Waste Industries into Waste LLC pursuant to the Merger Agreement.
Unless otherwise indicated, capitalized terms not defined herein have the
meanings set forth in the Merger Agreement.
A. Representations
After consulting with its counsel regarding the meaning of and factual support
for the following representations, the undersigned hereby certifies and
represents the following facts will be true at the Effective Time:
1. The fair market value of the Waste Holdings shares and other consideration
received by each Waste Industries shareholder will be approximately equal
to the fair market value of the Waste Industries shares surrendered in the
exchange.
2. Immediately following consummation of the transaction, the shareholders of
Waste Industries will own all of the outstanding Waste Holdings shares and
will own such shares solely by reason of their ownership of Waste
Industries shares immediately prior to the transaction.
3. Immediately following the consummation of the transaction, Waste Holdings
will possess the same assets and liabilities as those possessed by Waste
Industries immediately prior to the transaction.
4. At the time of the transaction, Waste Industries will not have outstanding
any warrants, options, convertible securities, or any other type of right
pursuant to
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which any person could acquire shares in Waste Industries other than
options issued as compensation for services actually rendered or to be
rendered.
5. Waste Holdings has no plan or intention to sell or otherwise dispose of any
of the assets of Waste Industries acquired in the transaction, except for
dispositions made in the ordinary course of business.
6. The liabilities of Waste Industries assumed by Waste Holdings plus the
liabilities, if any, to which the transferred assets are subject were
incurred by Waste Industries in the ordinary course of its business and are
associated with the assets transferred.
7. Following the transaction, Waste Holdings will continue the historic
business of Waste Industries or use a significant portion of Waste
Industries' historic business assets in a business.
8. Waste Industries, Waste Holdings and the Waste Industries shareholders will
pay their respective expenses, if any, incurred in connection with the
transaction.
9. Waste Industries is not under the jurisdiction of a court in a Title 11 or
similar case within the meaning of section 368(a)(3)(A) of the Internal
Revenue Code.
10. The Parties are participating in the Merger to enable Waste Industries to
(i) simplify its organizational structure; (ii) segregate for operational
and liability purposes the distinct business activities of Waste Industries
and its subsidiaries; and (iii) make it easier to implement financing of
future acquisitions by allowing Waste Holdings to pledge shares of its
subsidiaries as collateral for a loan.
11. As of the Effective Time, neither Waste Holdings nor any corporation
affiliated with Waste Holdings: (i) will be under any obligation, or will
have entered into any agreement to redeem or repurchase any Waste Holdings
shares issued in the Merger; or (ii) will have any plan or intention to
reacquire Waste Holdings shares issued in the Merger. After the Merger, no
dividends or distributions will be made to the former Waste Industries
shareholders by Waste Holdings other than regular, normal dividends or
distributions made to all holders of Waste Holdings shares.
12. None of the compensation received by any shareholder-employee of Waste
Industries will be separate consideration for, or allocable to, any of
their shares of Waste Industries shares; none of the Waste Holdings shares
to be received by any shareholder-employee of Waste Industries will be
separate consideration for, or allocable to, any employment agreement; and
the compensation to be paid to any such shareholder-employee will be for
services actually rendered and will be commensurate with amounts paid to
third parties bargaining at arm's-length for similar services.
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13. The Merger Agreement and the transactions contemplated therein represent
the full and complete agreement among the Parties regarding the Merger, and
there are no other written or oral agreements regarding the Merger and to
which any of the Parties is a party other than those expressly referred to
or contemplated in the Merger Agreement.
14. The facts relating to the Merger, as such facts are described in the Proxy
Statement-Prospectus filed with the Securities Exchange Commission in
connection with the Merger (the "Proxy Statement"), insofar as such facts
pertain to the Parties, are true, complete and accurate in all material
respects. Each of the representations made by the Parties in the Merger
Agreement and other documents associated therewith is true and accurate.
15. Waste Industries is not an investment company as defined in section
368(a)(2)(F)(iii) and (iv). The term investment company in this context
means a corporation fifty percent or more of the value whose total assets
are stock and securities and eighty percent or more of the value of whose
total assets are assets held for investment. In making the fifty percent
and eighty percent determinations under the preceding sentence, stock and
securities in any subsidiary corporation shall be disregarded and the
parent corporation shall be deemed to own its ratable share of the
subsidiary's assets, and a corporation shall be considered a subsidiary if
the parent owns fifty percent or more of the combined voting power of all
classes of stock entitled to vote, or fifty percent or more of the total
value of shares of all classes of stock outstanding.
B. Conditions and Limitations of the Deloitte & Touche LLP Opinion
The undersigned recognizes and agrees that (i) the opinion of Deloitte &
Touche LLP (the "Opinion") will be based on the representations set forth herein
and will assume that all of the representations and statements set forth herein
are true without regard to any qualification as to knowledge or belief and will
be based on the statements contained in the Merger Agreement and the documents
related thereto; (ii) the Opinion will be subject to certain limitations and
qualifications including that the Opinion may not be relied upon if any such
representations are not accurate in all material respects without regard to any
qualification as to knowledge or belief; and (iii) notwithstanding any
provisions of the Merger Agreement to the contrary, the representations set
forth in this letter shall survive without limitation.
The undersigned recognizes and agrees that the Opinion will not address any
tax consequences of the Merger or any action taken in connection therewith
except as expressly set forth in the Opinion.
The undersigned hereby undertakes to inform Deloitte & Touche LLP, and the
Parties immediately should any of the statements or representations set forth in
this letter become untrue, incorrect or incomplete in any respect on or prior to
the time at which Waste Industries is merged into Waste LLC.
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In witness whereof, Waste Industries, Inc., Waste Holdings, Inc., and Waste
LLC executed this certificate as of the date and year first above-written.
[signatures only on next page]
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WASTE INDUSTRIES, INC.
a North Carolina corporation
By:
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Name:
Title:
WASTE HOLDINGS, INC.
a North Carolina corporation
By:
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Name:
Title:
WASTE INDUSTRIES, LLC
a North Carolina LLC
By Waste Holdings, Inc. as Manager
By:
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Name:
Title:
