EXHIBIT 8.1
[Letterhead of Duane Morris LLP]
October 17, 2002
Board of Directors
Surgical Laser Technologies, Inc.
147 Keystone Drive
Montgomeryville, PA 18936-9638
Re: Proposed Merger of J Merger Corp., Inc., a wholly-owned
subsidiary of PhotoMedex, Inc., with and into Surgical
Laser Technologies, Inc.
Ladies and Gentlemen:
We have acted as counsel to Surgical Laser Technologies Inc., a
Delaware corporation (the "Company") in connection with the Agreement and Plan
of Merger dated as of September 25, 2002 (the "Agreement") by and among the
Company, PhotoMedex, Inc., a Delaware corporation (the "Buyer") and J Merger
Corp., Inc., a Delaware corporation and wholly-owned subsidiary of Buyer
("Merger Sub"), whereby Merger Sub will be merged with and into the Company with
the Company being the surviving corporation (the "Merger").
The Company has outstanding common stock, par value of $0.01 per share,
which stock constitutes all of the outstanding stock of the Company ("Company
Common Stock"). Buyer has outstanding common stock, par value of $0.01 per
share, which stock constitutes all of the outstanding stock of the Buyer ("Buyer
Common Stock").
In accordance with Section 6(f) of the Agreement, this opinion
addresses certain federal income tax consequences of the Merger.
Except as otherwise defined herein, all terms defined in the Agreement
shall have the same meaning when used in this opinion.
The elements of the Merger are as follows:
(1) Merger Sub will be merged with and into the Company, with the
Company being the surviving corporation, by statutory merger
under section 251 of the Delaware General Corporation Law. In
the Merger, each share of the Company Common Stock outstanding
immediately prior to the Effective Time (other than shares as
to which dissenters rights have been exercised and shares held
in treasury or held by Buyer) will be converted into the right
to receive 1.12 of shares of Buyer Common Stock. The Buyer
Common Stock to be received by the Company stockholders will
be voting stock, entitled to one vote per share.
(2) No fractional shares of Buyer Common Stock will be issued in
the Merger. Cash in lieu of fractional shares will be paid to
a Company stockholder in an amount of cash equal to the
product obtained by multiplying the fractional share interest
to which such Company shareholder is entitled by the average
closing price of a
Board of Directors
Surgical Laser Technologies, Inc.
October 17, 2002
Page 2
share of Buyer Common Stock as quoted on the Nasdaq National
Market for the twenty days ending on the last full trading day
immediately prior to the Effective Time.
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In rendering our opinion, we have examined and relied upon but have not
independently verified the accuracy and completeness of the facts, information,
covenants and representations contained in the Agreement and such other
documents as we have deemed necessary or appropriate as a basis for our opinion.
In addition, we have relied upon certain representation letters furnished to us
by the Company and the Buyer. Where such statements and representations are made
to the best knowledge and belief of the person making such statement or
representation, we have assumed the facts to be as so stated and represented. We
have also assumed that the Merger will be consummated in accordance with the
Agreement and state law. Our opinion is conditioned on the initial and
continuing accuracy of such facts, information, covenants, representations,
statements and assumptions. In addition, we have assumed the authenticity of all
documents submitted to us as originals, the genuineness of all signatures, the
legal capacity of natural persons, and the conformity to the originals of all
documents submitted to us as copies.
In rendering our opinion, we have considered the applicable provisions
of the Internal Revenue Code of 1986, as amended (the "Code"), Treasury
Regulations promulgated thereunder, pertinent judicial authorities, and
interpretive rulings as we have considered relevant as in effect as of the date
hereof. Statutes, regulations, judicial decisions and administrative
interpretations are subject to change at any time and, in some circumstances,
with retroactive effect. A material change in the authorities upon which our
opinion is based could affect our conclusions.
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Based solely upon the foregoing, we are of the opinion that under
current law for federal income tax purposes:
(i) The Merger will qualify as a "reorganization" under section
368(a)(1)(A) of the Code (section 368(a)(2)(E) of the Code).
The Company, Buyer and Merger Sub will each be a "party to the
reorganization" within the meaning of section 368(b) of the
Code;
Board of Directors
Surgical Laser Technologies, Inc.
October 17, 2002
Page 3
(ii) No gain or loss will be recognized by a holder of Company
Common Stock upon the receipt of Buyer Common Stock solely in
exchange for his or her Company Common Stock (section
354(a)(1) of the Code);
(iii) The basis of the Buyer Common Stock received by a holder of
Company Common Stock (including any fractional share interest
to which that stockholder may be entitled) pursuant to the
Merger will be the same as the basis of Company Common Stock
exchanged therefor (section 358(a)(1) of the Code);
(iv) The holding period of the Buyer Common Stock received by a
holder of Company Common Stock (including any fractional share
interest to which that shareholder may be entitled) pursuant
to the Merger will include the holding period of Company
Common Stock exchanged therefor, provided Company Common Stock
is held as a capital asset by the holder at the Effective Time
(section 1223(1) of the Code); and
(v) A holder of Company Common Stock who receives cash in lieu of
a fractional share of Buyer Common Stock should recognize gain
or loss equal to the difference between the cash received and
the stockholder's basis in that fractional share, and that
gain or loss should be capital gain or loss if the fractional
share would have been a capital asset in the hands of the
stockholder (Rev. Rul. 66-365, 1966-2 C.B. 116; Rev. Proc.
77-41, 1977-2 C.B. 574).
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Except as set forth above, we express no opinion as to the federal,
state, local or foreign tax consequences of the Merger or of any transactions
related thereto. This opinion is solely for your benefit and is not to be used,
quoted, circulated or otherwise referred to without our express written
permission. We hereby consent to the use of and reference to this opinion in the
Buyer's Form S-4 registration statement pursuant to which the shares of Buyer
Common Stock to be issued to Company stockholders in the Merger will be
registered and in the Proxy statement/prospectus to be provided to the Company
shareholders in connection with their vote on the Merger included in such
registration statement.
Very truly yours,
/s/ Duane Morris LLP