1
EXHIBIT 8.1
[LETTERHEAD OF JONES, DAY, REAVIS & POGUE]
May 29, 1996
Quantum Health Resources, Inc.
Two Parkwood Crossing
310 East 96th Street, Suite 300
Indianapolis, Indiana 46240
Re: Merger by and Among Olsten Corporation, QHR
Acquisition Corp. and Quantum Health Resources,
Inc. -- U.S. Federal Income Tax Consequences
Ladies and Gentlemen:
We have acted as special tax counsel to Quantum Health Resources, Inc. (the
"Company") in connection with the adoption of the Amended and Restated Agreement
and Plan of Merger, dated as of May 1, 1996 (the "Merger Agreement"), by and
among the Company, Olsten Corporation, a Delaware corporation ("Olsten"), and
QHR Acquisition Corp., a Delaware corporation and wholly owned subsidiary of
Olsten ("QHR"). Pursuant to the Merger Agreement: (a) QHR will merge with and
into Quantum and Quantum will be the surviving corporation (the "Merger") and
(b) each share of Quantum common stock, par value $.01 per share ("Quantum
Common Stock"), issued and outstanding immediately prior to the Effective Time
(as defined in the Merger Agreement) shall be converted into the right to
receive fifty-eight one hundredths (.58) of one share of Olsten's Class B common
stock, par value $.10 ("Class B Stock"), which Class B Stock may be converted
into an equal number of shares of Olsten's common stock, par value $.10 per
share ("Olsten Common Stock"), following the Merger.
This letter will be deemed accepted by you in the form hereof upon the
closing of the Merger. Your acceptance of this letter in the form hereof
constitutes your acceptance of, and acquiescence in, the assumptions,
exclusions, limitations, and rules of construction set forth below.
1. AUTHORITIES EXAMINED
In rendering the opinion set forth below, in addition to the Documents (as
such term is defined in Section 2 below), we have examined and relied upon
provisions of the Internal Revenue Code of 1986, as amended (hereinafter
"I.R.C." or the "Code"); final, temporary and proposed regulations promulgated
under the Code by the U.S. Department of the Treasury; administrative rulings
and procedures issued by the U.S. Internal Revenue Service (hereinafter the
"Service"); judicial decisions rendered by U.S. Federal courts of competent
jurisdiction; and such other sources and authorities that we have deemed
relevant in reaching the conclusions expressed herein.
2. DOCUMENTS EXAMINED
In rendering the opinion set forth below, in addition to the sources and
authorities described above, we have examined and relied upon such instruments
and other writings that we have deemed relevant in reaching the conclusions
expressed herein (hereinafter singly a "Document" and collectively the
"Documents"), including without limitation the following:
2.1. The Certificate of an Officer of the Company, dated as of May 29,
1996, furnished to us by Douglas H. Stickney.
2.2. The Certificate of an Officer of Olsten, dated as of May 29, 1996,
furnished to us by William P. Costantini.
2
Quantum Health Resources, Inc.
May 29, 1996
2.3. The Certificates of record shareholders owning 1% or greater interests
in the Company, dated as of May 29, 1996, furnished to us by Michael
Ellis and Douglas H. Stickney.
3. OPINION
Based upon the foregoing, and subject to the assumptions, exclusions and
limitations set forth below, we are of the opinion that the Merger will be a
reorganization for federal income tax purposes as defined by Section 368(a) of
the Code, that Quantum, Olsten and QHR will each be a party to the
reorganization as defined by Section 368(b) of the Code, and that the
consequences listed in paragraphs (a) through (e) below will result from the
Merger.
(a) None of Olsten, Quantum or QHR will recognize any gain or loss as a
result of the Merger;
(b) Except for cash received in lieu of fractional share interests, a
holder of shares of Quantum Common Stock who exchanges such shares for
shares of Class B Stock pursuant to the Merger will not recognize any
gain or loss upon such exchange;
(c) The aggregate adjusted tax basis of the shares of Class B Stock
received in such exchange will be equal to the aggregate adjusted tax
basis of the shares of Quantum Common Stock surrendered therefor;
(d) If the shares of Quantum Common Stock are held as capital assets at the
Effective Time, the holding period of the shares of Class B Stock will
include the holding period of the shares of Quantum Common Stock
exchanged for such shares; and
(e) A holder of shares of Quantum Common Stock who receives cash in the
Merger in lieu of a fractional share interest of Class B Stock will be
treated as if the fractional share interest of Class B Stock was
distributed to such holder and then redeemed by Olsten for cash. The
deemed redemption will be treated as a distribution in full payment in
exchange for the fractional share interest of the Class B Stock deemed
received by the holder under Section 302(a) of the Code. Accordingly,
such holder will recognize a gain or loss equal to the difference
between the amount of cash received and the portion of such holder's
adjusted tax basis in the shares of Quantum Common Stock allocable to
the fractional share interest of Class B Stock. The gain or loss will be
long-term capital gain or loss provided that the shares of Quantum
Common Stock deemed surrendered for such fractional share interest of
Class B Stock were held as a capital asset as of the Effective Time and
for a period of more than one year.
4. ASSUMPTIONS
In rendering the opinion set forth above, we have assumed (and we have made
no independent investigation or inquiry whatsoever to confirm, and we expressly
disclaim any intent, undertaking or obligation to make any such investigation or
inquiry to confirm) that:
4.1. Each of the Documents is a genuine original of such Document or a true
copy thereof.
4.2. Each of the executed Documents has been duly authorized, executed and
delivered by each party thereto.
4.3. The signatures, seals, endorsements and initials on all executed
Documents are genuine, and where any such signature, seal, endorsement
or initials purport to have been affixed in a corporate, governmental,
fiduciary or other representative capacity, the person who affixed
such signature, seal, endorsement or initials to such Document or
Documents had full power and authority to do so.
4.4. Each Document that was required to be executed but was not executed,
or that was otherwise not in final form, on the date on which we
examined such Document, will be timely executed and/or
2
3
Quantum Health Resources, Inc.
May 29, 1996
delivered in final form, which final form will not differ in any
material respect from the form in which such Document was examined by
us on such date.
4.5. The representations made to us by Officers and 1% or greater record
shareholders, whether orally or in writing, with respect to the
subject matter of the opinion set forth above, including but not
limited to the representations contained in the Certificates listed in
Sections 2.1, 2.2, and 2.3 hereof, are true, correct and complete in
all material respects as of the date they were made and at all times
thereafter through and including the date hereof.
4.6. Neither the execution and delivery of the Documents nor the
consummation of the transactions contemplated therein by any party
thereto will contravene any other obligation to which such party is
subject and all of the undertakings, covenants and obligations
contained there are binding and enforceable in accordance with their
terms.
4.7. All assumptions made in connection with the delivery of any other
opinion to the addressee hereof or any other person, whether by
ourselves or by any other professional adviser, in connection with any
transaction or subject matter reasonably related to the subject matter
of our opinion set forth above (whether or not such assumptions are
consistent with the assumptions contained herein) are correct at all
relevant times through and including the later of the date of such
other opinion and the date hereof for purposes of permitting our
reliance on such other opinions without regard to the terms of any
such opinions.
5. EXCLUSIONS
Anything in the foregoing to the contrary notwithstanding, we expressly
decline to opine upon, and expressly disclaim any intent, undertaking or
obligation to opine upon, and hereby expressly exclude from the scope of the
opinion set forth above, the following matters:
5.1. Any and all matters arising under the laws of any State of the United
States or the District of Columbia or any political subdivision
thereof.
5.2. Any and all matters arising under the laws of any country other than
the United States. For this purpose, the dependencies, protectorates,
territories and possessions of the United States shall be deemed to be
countries other than the United States.
5.3. Any and all matters with respect to any tax other than the U.S.
federal income tax.
5.4. Any and all matters pertaining to the U.S. federal income tax
consequences to holders of options to
acquire Quantum Common stock.
5.5. The effect upon the opinion set forth above of any provision of law
that may affect any particular person differently from any other
person, by reason of such first-mentioned person's special status,
characteristics or situation, including, but not limited to, employees
of the Company and shareholders of the Company who are not U.S.
persons (within the meaning of Section 7701(a)(30) of the Code).
6. LIMITATIONS
6.1. The opinion set forth above is furnished only as to facts and
circumstances existing at the date hereof and actually known or
represented to us on such date. If any such facts and circumstances
should change, or if a determination is made hereafter that any such
facts or circumstances were untrue or inaccurate on such date, any
such change or determination could adversely affect or render
inapplicable the opinion set forth above. We expressly disclaim any
intent, undertaking or obligation
3
4
Quantum Health Resources, Inc.
May 29, 1996
to notify the addressee hereof or any other person of any such change
or determination of which we may subsequently become aware or any
possible effects thereof on the opinion set forth above.
6.2. The opinion set forth above is furnished in express reliance on the
assumptions set forth in Section 4 hereof. If a determination is made
hereafter that any such assumption was untrue or inaccurate as of the
date hereof, any such determination could adversely affect or render
inapplicable the opinion set forth above. We expressly disclaim any
intent, undertaking or obligation to notify the addressee hereof or
any other person of any such determination of which we may
subsequently become aware or of any possible effects thereof on the
opinion set forth above.
6.3. Each of the sources and authorities described in Section 1 hereof is
subject to repeal, revocation or modification without notice, possibly
with retroactive effect; any such repeal, revocation or modification
could adversely affect or render inapplicable the opinion set forth
above. The opinion set forth above applies only to the subject matter
thereof as at the date hereof, and we expressly disclaim any intent,
undertaking or obligation to notify the addressee hereof or any other
person of any such repeal, revocation or modification or any possible
effects thereof on the opinion set forth above.
6.4. The contents of Section 3 hereof, subject to and as modified by the
remaining contents hereof, constitute the entirety of the opinion and
advice furnished by us to the addressee hereof with respect to the
subject matter hereof. This original and any simultaneously executed
counterparts hereof together constitute one and the same original
writing, which writing supersedes any and all (a) prior drafts or
versions hereof and (b) prior or contemporaneous statements,
conclusions, representations, writings, understandings, opinions,
discussions, and other communications in any form between us and the
addressee hereof relating to the subject matter hereof. In proving the
existence or contents of this letter, it shall not be necessary to
produce, refer to or account for (a) any particular executed original
counterpart hereof in preference to any other such counterpart, or (b)
more than one such counterpart.
6.5. No oral communication made after the date hereof shall modify (or be
deemed to modify) the contents hereof in any manner. No written
communication made after the date hereof shall modify (or be deemed to
modify) the contents hereof in any manner, except to the extent that
any such modification is explicitly set forth in such subsequent
written communication and contains an express reference to this
letter.
6.6. The opinion set forth above is furnished solely for the benefit of the
addressee hereof and may not, except as specifically provided below,
be used, relied upon, referred to or quoted by any other person
without our prior specific written consent thereto. There are no
express or implied third-party beneficiaries of or in the opinion set
forth above.
6.7. We hereby consent to the furnishing of this letter as Exhibit 8.1 to
the Registration Statement filed by Olsten with the Securities and
Exchange Commission to effect registration under the Securities Act of
1933, and to the reference to us and to this opinion under the caption
"Certain Federal Income Tax Consequences of the Merger" in the
Registration Statement or any exhibit thereto.
7. RULES OF CONSTRUCTION
In interpreting the provisions of this letter, the following rules of
interpretation and construction shall apply:
7.1. The terms and provisions hereof and the wording used herein shall in
all cases be interpreted and construed in accordance with their fair
meanings and not strictly for or against any person.
7.2. For all purposes hereof, any exhibits or attachments hereto constitute
an integral part of this letter.
4
5
Quantum Health Resources, Inc.
May 29, 1996
7.3. The captions at the headings of each Section of this letter are
provided for convenience of reference only, and are in no way intended
or to be used or applied to describe, interpret, construe, define or
limit the scope, extent, intent, meaning or operation of any term or
provision hereof.
7.4. Unless the context clearly requires otherwise, each reference to, and
each use of, any of the masculine, feminine or neuter genders herein
shall be deemed to constitute a reference to, and a use of, each such
gender without distinction.
7.5. Unless the context clearly requires otherwise, each reference to, and
each use of, either the singular or plural number herein shall be
deemed to constitute a reference to, and a use of, each such number
without distinction.
7.6. Capitalized terms used herein without definition have the respective
meanings set forth in the Documents.
Very truly yours,
/s/ JONES, DAY, REAVIS & POGUE
5