<PAGE>
Exhibit 8.1
FORM OF OPINION OF LATHAM & WATKINS
, 2000
StarGuide Digital Networks, Inc.
300 East Second Street
Suite 1510
Reno, NV 89509
Re: Agreement and Plan of Merger dated as of July 7, 2000,
By and among Digital Generation Systems, Inc., SG Nevada Merger Sub Inc.,
and StarGuide Digital Networks, Inc.
Ladies and Gentlemen:
We have acted as special tax counsel for StarGuide Digital Networks, Inc., a
Nevada corporation ("StarGuide"), in connection with the proposed merger (the
"Merger") of SG Nevada Merger Sub Inc. ("Merger Sub"), a wholly owned
subsidiary of Digital Generation Systems, Inc., a California corporation
("DG"), with and into StarGuide pursuant to an Agreement and Plan of Merger,
dated as of July 7, 2000 (the "Merger Agreement"), by and among DG, Merger
Sub, and StarGuide. Unless otherwise indicated, capitalized terms not defined
herein have the meanings set forth in the Merger Agreement.
In connection with the filing by StarGuide of a registration statement (the
"Registration Statement") on Form S-4, which includes the proxy
statement/prospectus relating to the Merger Agreement, StarGuide has requested
our opinion regarding certain United States federal income tax consequences of
the Merger. In providing our opinion, we have examined and are relying upon
(without any independent investigation or review thereof) the truth and
accuracy, at all relevant times, of the statements, covenants,
representations, and warranties contained in (i) the Merger Agreement, (ii)
the Registration Statement to be filed by DG with the Securities and Exchange
Commission (the "SEC"), to which this opinion appears as an exhibit, (iii) the
certificates that will be delivered to us at the effective time of the Merger
by officers of DG and StarGuide, and (iv) such other documents and corporate
records as we have deemed necessary or appropriate for purposes of our
opinion.
In addition, we have assumed that:
1. Original documents (including signatures) are authentic, documents
submitted to us as copies conform to the original documents, and 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 the manner contemplated by the
Registration Statement and in accordance with the provisions of the Merger
Agreement;
3. All statements, descriptions and representations contained in any of the
documents referred to herein or otherwise made to us are true and correct in
all material respects, and no such actions have been taken or will be taken
which are inconsistent with such statements, descriptions or representations
or which make any such statements, descriptions or representations untrue,
incorrect or incomplete in any material respect; and
4. Any statements made in any of the documents referred to herein which are
qualified by the limitation "to the knowledge of" or which are otherwise
similarly qualified are correct and will continue to be true, correct and
complete at all times up to and including the Closing Date, in each case
without qualification.
If any of the above-described assumptions are untrue for any reason or if
the Merger is consummated in a manner that is inconsistent with the manner in
which it is described in the Merger Agreement and Registration Statement, our
opinion as expressed below may be adversely affected and may not be relied
upon.
<PAGE>
Based on such facts, assumptions and representations and subject to the
limitation set forth in the Registration Statement, the statements in the
Registration Statement set forth under the caption "Material United States
Federal Income Tax Consequences of the Merger," to the extent such statements
constitute matters of law or legal conclusions, are the opinion of Latham &
Watkins as to the material federal income tax consequences relevant to holders
of StarGuide common stock who, pursuant to the Merger, exchange their
StarGuide common stock for DG common stock. Our opinion does not address U.S.
federal income tax consequences, which 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.
This opinion represents and is based upon our best judgment regarding the
application of United States federal income tax laws arising under the
Internal Revenue Code of 1986, as amended, existing judicial decisions,
administrative regulations and published rulings and procedures. Our opinion
is not binding upon the Internal Revenue Service or the courts, and there is
no assurance that the Internal Revenue Service will not assert a contrary
position. Furthermore, no assurance can be given that future legislation,
judicial or administrative changes, on either a prospective or retroactive
basis, would not adversely affect the accuracy of the conclusions stated
herein. Nevertheless, we undertake no responsibility to advise you or your
shareholders of any new developments in the application or interpretation of
the United States federal income tax laws after the effectiveness of the
Registration Statement.
This opinion is rendered to you for use in connection with the filing of the
Registration Statement with the SEC and is not to be used, circulated, quoted
or otherwise referred to for any other purpose without our express written
permission. We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to our firm name therein. In
giving this consent, we do not admit that we are within the category of
persons whose consent is required under section 7 of the Securities Act of
1933, as amended, or the rules or regulations of the SEC promulgated
thereunder.
Very truly yours,
