1
Exhibit 8
March __, 1998
CareWise, Inc. PhyCor, Inc.
Suite 2600 Suite 400
701 Fifth Avenue 30 Burton Hills Blvd.,
Seattle, WA 98104-7015 Nashville, TN 37219
Attn: John E. Gebhart III, President and Attn: Joseph C. Hutts, President and Chief
Chief Executive Officer Executive Officer
RE: TAX OPINION REGARDING MERGER OF PHYCOR/HEALTH MERGER
CORP. INTO CAREWISE, INC.
Ladies and Gentlemen:
We have been asked, as counsel to Carewise, Inc., a Delaware
corporation ("Carewise"), to render this opinion regarding certain matters
related to the U.S. federal income tax consequences of the merger (the "Merger")
of PhyCor/Health Merger. Corp. (the "Subsidiary"), a Delaware corporation and
100% subsidiary of PhyCor, Inc., a Tennessee corporation ("PhyCor"), pursuant to
that certain Agreement and Plan of Merger, dated as of December 22, 1997 by and
between Carewise, the Subsidiary and PhyCor (the "Agreement"). Capitalized terms
not otherwise defined herein shall have the same meanings given to them in the
Agreement or, if not defined therein, as described in the Registration Statement
on Form S-4 filed with the Securities and Exchange Commission on January
, 1998 relating to the Merger (the "S-4"). This opinion letter is rendered
pursuant to Section 8.1(h) of the Agreement.
In connection with our opinion, we have examined and are familiar with
originals or copies, certified or otherwise identified to our satisfaction, of
the relevant documents related to the Merger, including the Agreement and the
S-4. Furthermore, we have examined that certain PhyCor Tax Matters Certificate,
dated as of the date hereof, (the "PhyCor Tax Certificate"), that certain
Carewise Tax Matters Certificate, dated as of the date hereof, (the "Carewise
Tax Certificate") and the representations of certain stockholders contained in
those Stockholders Representation Letters regarding the Merger from certain
significant CareWise stockholders to Perkins Coie LLP (the "Stockholder
Representation Letters").
Our opinion is conditioned on, among other things, the initial and
continuing accuracy of the facts, information, covenants and representations set
forth in the documents referred to above, the representations given by PhyCor in
the PhyCor Tax Certificate, the representations given by Carewise in the
Carewise Tax Certificate, and the representations of certain Carewise
stockholders in the Stockholder Representation
2
March __, 1998
Page 2
Letters. In rendering our opinion, we have assumed the accuracy of all
information and representations and the performance of all undertakings
contained in the reviewed documents as set forth above, the conformity of all
copies to the original documents, and the genuineness of all signatures. We have
not attempted to verify independently the accuracy of any information in any
such document, and we have assumed that such documents accurately and completely
set forth all material facts relevant to this opinion. If any of these facts or
assumptions are not correct, please advise us at once as our advice may be
affected by a change in such facts or assumptions.
Based upon the foregoing and subject to the limitations discussed
below, it is our opinion that the statements made under the headings "SUMMARY
Certain U.S. Federal Income Tax Consequences" and "THE MERGER - Certain U.S.
Federal Income Tax Consequences" in the Proxy Statement/Prospectus, to the
extent that they constitute matters of law or legal conclusions, are correct in
all material respects. However, as discussed above and as indicated in the S-4,
if any of the assumptions or representations set forth above prove incorrect,
then the conclusions set forth above may not be accurate, with the consequences
discussed in the S-4 under the heading "MERGER--Federal Income Tax
Consequences--Consequences of Failure to Qualify as a Tax-Free Reorganization."
Our opinion is limited to the specific matters described in the S-4
under the caption "THE MERGER--Certain Federal Income Tax Consequences." We give
no opinion with respect to other tax matters, whether federal, state or local,
that may relate to the Merger. Our opinion may not address issues that are
material to an individual stockholder based on his or her particular tax
situation. No ruling will be requested from the Internal Revenue Service ("IRS")
regarding the Merger. Our opinion is not binding on the IRS and does not
constitute a guarantee that the IRS will not challenge the tax treatment of the
Merger.
In rendering our opinion, we have considered the applicable provisions
of the Code, Treasury Regulations promulgated thereunder and the pertinent
judicial authorities and interpretative rulings of the IRS. We caution that our
opinion is based on the federal income tax laws as they exist on the date
hereof. It is possible that subsequent changes in the tax law could be enacted
and applied retroactively to the Merger and that such changes could result in a
materially different result than the result described in the opinions above.
-2-
3
March __, 1998
Page 3
This opinion is furnished in connection with the Merger. We consent to
the reference to our firm under the caption "SUMMARY--Certain Federal Income Tax
Consequences" and "THE MERGER--Certain Federal Income Tax Consequences" and to
the filing of this opinion as an exhibit to the S-4.
Very truly yours,
-3-