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EXHIBIT 8.1
[BRACEWELL & PATTERSON L.L.P. LETTERHEAD]
July 8, 1996
Co-Counsel, Inc.
Three Riverway, Suite 1140
Houston, TX 77056
Re: Federal Income Tax Consequences to Co-Counsel, Inc. and the
Participating Shareholders of Co-Counsel, Inc. as a Result of the
Merger of Lawyers Acquisition Corp., a wholly-owned subsidiary of
Olsten Corporation, into Co-Counsel, Inc, and as a Result of the
Conversion of Olsten Class B Common Stock Received in Such Merger into
Olsten Common Stock
Dear Ladies & Gentlemen:
We have acted as counsel to Co-Counsel, Inc., a Texas corporation (the
"Company"), in connection with the proposed merger (the "Merger") of Lawyers
Acquisition Corp., a newly-formed Texas corporation (the "Merger Sub") and
wholly-owned subsidiary of Olsten Corporation, a Delaware corporation (the
"Acquiror"), with and into the Company, pursuant to the terms of the Agreement
and Plan of Merger dated as of May 28, 1996 ("Merger Agreement") by and among
Acquiror, Merger Sub, and the Company. The terms of the Merger are more fully
described in the Proxy Statement & Prospectus/Registration Statement on Form S-4
filed with the Securities and Exchange Commission under file # jointly
prepared by the Company and the Acquiror (the "Proxy Statement &
Prospectus/Registration Statement"). For purposes of this letter, capitalized
terms used and not otherwise defined herein shall have the meanings ascribed
thereto in the Merger Agreement.
You have advised that Acquiror proposes to acquire 100% of the Company's
outstanding common capital stock, par value $.01 per share ("Company Common
Stock") by way of the Merger. In particular, it is our understanding that the
Merger will be implemented by having Merger Sub merge with and into the Company.
As a result of the Merger, all the Company Shareholders (other than those
Company Shareholders who exercise their appraisal rights under the TBCA,
entitling them to receive cash for their shares of Company Common Stock)
exchange their shares of Company Common Stock for shares of $.10 par value Class
B common stock of Acquiror ("Acquiror Class B Common Stock"). Company
Shareholders may elect to convert the Acquiror Class B Common Stock received in
the Merger into Acquiror Common Stock. Such conversion will be necessary to
permit a Company Shareholder to sell his or her shares to anyone other than a
Permitted Transferee. Moreover, such conversion will automatically occur if (i)
a Company Shareholder fails to register Acquiror Class B Common Stock in the
name of the beneficial owner (as opposed to "street name") within thirty days of
the Merger, or (ii) the Company Shareholder attempts to sells the Acquiror Class
B Common Stock to anyone other than a Permitted Transferee.
The Company has requested our opinions, to be rendered as of the Effective
Time, as to:
- the federal income tax consequences of the Merger to the Company and
the Company Shareholders who participate in the Merger; and
- the federal income tax consequences to the Company Shareholders of the
conversion of their Acquiror Class B Common Stock received in the
Merger into Acquiror Common Stock.
Our opinion does not address the federal income tax consequences to Company
Shareholders who elect to exercise their appraisal rights under the TBCA,
entitling them to receive cash for their shares of Company Common Stock.
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Co-Counsel, Inc.
July 8, 1996
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In connection with the opinions rendered below, we have examined the
following:
1. The Company's Articles of Incorporation;
2. The Company's By-Laws;
3. The Merger Agreement including the attached Plan of Merger and
Articles of Merger;
4. The Proxy Statement & Prospectus/Registration Statement;
5. The Acquiror's Certificate of Incorporation;
6. The Acquiror's By-Laws;
7. The Merger Sub's Articles of Incorporation;
8. The Merger Sub's By-Laws; and
9. such other documents as we have deemed necessary or appropriate for
purposes of this opinion.
In connection with the opinions to be rendered at the Effective Time (as
set out below) and with the consent of the Company, we have assumed generally
that:
- each of the documents referred to above has been duly authorized,
executed, and delivered, is authentic, if an original, or accurate, if
a copy, and has not been amended;
- each party has full power, authority, and legal right to enter into
and perform the terms of the Merger Agreement and the transactions
contemplated thereby;
- as of the Effective Time the Company and of the Acquiror and their
authorized representatives will make the factual representations as
set out in the forms of representation letter, reviewed by the Company
and the Acquiror, regarding these matters, and that such
representations are correct.
Based on the documents, assumptions, and representations described above,
we anticipate that, as of the Effective Time, we will render the following
opinions that, for federal income tax purposes:
(a) the Merger will constitute a reorganization described in section
368(a)(1)(A) of the Code;
(b) the Company will be a party to the reorganization within the
meaning of section 368(b) of the Code;
(c) the Company will not recognize any gain or loss as a result of
participating in the Merger;
(d) except for cash received in lieu of fractional share interests, a
Company Shareholder who, as a result of the Merger, exchanges his
or her Company Common Stock for Acquiror Class B Common Stock in
the Merger will not recognize any gain or loss upon such exchange;
(e) a Company Shareholder's aggregate adjusted tax basis in the shares
of Acquiror Class B Common Stock received pursuant to the Merger
in exchange for Company Common Stock will be equal to the
aggregate adjusted tax basis of the shares of Company Common Stock
surrendered therefore (decreased by the amount of any tax basis
allocable to fractional shares of Acquiror Class B Common Stock in
lieu of which cash will be paid);
(f) each Company Shareholder who held Company Common Stock as a
capital asset at the Effective Time will include in his or her
holding period for the Acquiror Class B Common Stock received in
the Merger the holding period of the shares of Company Common
Stock exchanged for such shares;
(g) a Company Shareholder who receives cash in the Merger in lieu of a
fractional share of Acquiror Class B Common Stock will be treated
as if the fractional share interest of Acquiror Class B Common
Stock was distributed to such holder and then redeemed by the
Acquiror for
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Co-Counsel, Inc.
July 8, 1996
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cash. The deemed redemption will be treated as a distribution in
full payment in exchange for the fractional share interest of the
Acquiror Class B Common Stock deemed received by the holder under
section 302(a) of the Code. Accordingly, such holder will
recognize gain or loss equal to the difference the amount of cash
received and the portion of such holder's adjusted tax basis in
the shares of Company Common Stock allocable to the fractional
share interest of Acquiror Class B Common Stock. The gain or loss
will be long-term capital gain or loss provided the shares of
Company Common Stock deemed surrendered for such fractional share
interest of Acquiror Class B Common Stock were held by the holder
as a capital asset as of the Effective Time for a period of more
than one year.
(i) unless an exemption applies, under the backup withholding rules of
Code Section 3406, an exchange agent (such as the Acquiror) shall
be required to withhold, and will withhold, 31% of all cash
payments to which a Company Shareholder is entitled pursuant to
the Merger unless such Company Shareholder provides his or her
taxpayer identification number (Social Security Number in the case
of an individual, or Employer Identification Number in other
cases) and certifies that such number is correct.
(j) the conversion of Acquiror Class B Common Stock into Acquiror
Common Stock by a Company Shareholder who acquired his or her
Company Class B Common Stock as a result of the Merger will not
result in the recognition of gain or loss because the exchange
constitutes an exchange of common stock for common stock for the
same corporation under the rules of section 1036 of the Code or a
recapitalization under the rules of section 368(a)(1)(E) of the
Code.
The foregoing opinions are limited to the federal income tax matters
addressed herein, and no other opinions are rendered with respect to other
federal tax matters or to any issues arising under the tax laws of any state or
locality.
The foregoing opinions are based on current provisions of the Code and the
Regulations, published administrative interpretations thereof, and published
court decisions. The Service has not issued Regulations or administrative
interpretations with respect to various provisions of the Code relating to
reorganizations or conversions of stock. Our ability to render the foregoing
opinion as of the Effective Time assumes that no legislative, judicial or
administrative changes or interpretations will occur prior to the Effective Time
which would make it impossible for us to render such opinions at that time. No
assurance can be give that future legislative, judicial or administrative change
or interpretations which occur after the Effective Time will not adversely
affect the conclusions set out herein. Moreover, there is no assurance that the
Internal Revenue Service will not successfully contest some or all of the
conclusions set out herein.
These opinions are being furnished solely for the benefit of the Company
and the Company Shareholders in connection with the Merger and may not be used
or relied upon for any other purpose. We hereby consent to the filing of this
form of opinion (and will consent to the filing of our opinion to be rendered as
the Effective Time) as an exhibit to the Proxy Statement &
Prospectus/Registration Statement. In giving this consent, we do not admit that
we are in the category of persons whose consent is required by Section 7 of the
1993 Act or the rules and regulations promulgated thereunder by the Securities
and Exchange Commission.
Very truly yours,
BRACEWELL & PATTERSON, L.L.P.
Bracewell & Patterson, L.L.P.