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EXHIBIT 5.1
OPINION OF COUNSEL
Interactive Radio Group, Inc. FTM Media, Inc.
6991 East Camelback Road 6991 East Camelback Road
Suite D-103 Suite D-103
Scottsdale, AZ 85251 Scottsdale, AZ 85251
Shareholders of Interactive Radio Group, Inc.
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Re: Merger Agreement between Interactive Radio Group, Inc. and FTM
Media, Inc. Ladies and Gentlemen:
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We have acted as counsel for each of FTM Media, Inc., a Delaware
corporation ("ACQUIRER"), and Interactive Radio Group, Inc., a Delaware
corporation ("TARGET"), in connection with the preparation, execution, and
delivery of the Merger Agreement (the "AGREEMENT"), dated as of September 24,
1999, between Acquirer and Target (Acquirer and Target are sometimes referred to
collectively as the "PARTIES"), and certain documents related or incidental
thereto and transactions to be effected thereunder. You have requested our
opinion concerning certain United States federal income tax consequences of the
statutory merger of Target with and into Acquirer (the "MERGER") pursuant to the
Agreement. Capitalized terms not defined herein have the meanings specified in
the Agreement.
In connection with this opinion, we have reviewed such documents as we
have found necessary or appropriate, including the Agreement, and related
documents pertaining to the Merger. In expressing our opinion, we are relying
upon, and the opinion stated in this letter is expressly based upon, the
information and representations contained in the documents provided to us by the
Parties and related entitites and the information and representations provided
in our discussions with representatives of the Parties and related entities.
Certain of the representations of the Parties and FTM Colorado are set forth in
the Officer's Certificates for Acquirer, Target and FTM Colorado (the "OFFICER'S
CERTIFICATES"), which are appended hereto as Exhibits A, B and C, respectively.
We assume (without any independent investigation), and have relied on the
assumptions, (i) that the Officer's Certificates will be executed by appropriate
officers of Acquirer, Target and FTM Colorado and delivered to us at or before
the time we render this opinion, and (ii) that the Officer's Certificates will
be true and correct at the time delivered and will be true and correct on the
date of the Merger. We assume that the documents and information provided to us
present an accurate and complete description of all of the facts relevant to the
Merger. Finally, we assume that the Merger will be reported by each of Acquirer,
Target and FTM Colorado on their respective federal income tax returns in a
manner consistent with the opinion set forth below.
Based upon the foregoing, and assuming that the transactions
contemplated by the documents referred to above are consummated in accordance
with their terms, we are of the opinion that, subject to all the qualifications,
limitations, and assumptions set forth herein, (i) the
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discussion under the caption "Material United States Federal Income Tax
Consequences of the Merger" in the Registration Statement, insofar as such
discussion relates to statements of law or legal conclusions (the "DISCUSSION"),
is correct in all material respects and (ii) the Merger will constitute a
"reorganization" for federal income tax purposes within the meaning of Section
368(a) of the Internal Revenue Code of 1986, as amended (the "CODE") and
accordingly:
(i) Acquirer and Target will each be parties to the
reorganization;
(ii) No gain or loss will be recognized by Acquirer or Target
as a result of the Merger; and
(iii) No gain or loss will be recognized by the shareholders of
Target who exchange their Target Common Stock for Acquirer
Common Stock pursuant to the Merger (except with respect
to cash received in lieu of a fractional share interest in
Acquirer Common Stock);
We express no opinion as to any compensation income that might be realized by
any stockholders or option holders of Target in respect of their shares of
Target, whether vested or unvested, as a consequence of the Merger.
In expressing this opinion, we mean that, if the IRS were to assert a
position contrary to the conclusions described herein and in the Discussion, the
conclusions described herein and in the Discussion, if properly presented to a
court, should prevail. The IRS may take positions contrary to the conclusions
expressed herein and in the Discussion, including contrary positions as to the
applicable facts, and there is a risk that such positions might ultimately be
sustained by the courts. Our opinion is not binding on the IRS or the courts. It
merely represents our best judgment and thus should not be construed as a
guarantee of ultimate results.
We hereby consent to the use of the name of our firm under the caption
"Material United States Federal Income Tax Consequences of the Merger" in the
Registration Statement and the related Prospectus and consent to the filing of
this opinion as an exhibit to the Registration Statement. In giving these
consents, we do not thereby admit that we come within the category of persons
whose consent is required under Section 7 of the Securities Act or the rules and
regulations of the SEC promulgated thereunder.
The opinion set forth herein is based on our interpretation of the
applicable provisions of the Code, the Income Tax Regulations promulgated
thereunder (the "Regulations"), and administrative and judicial interpretations
of the Code and the Regulations, all as currently in effect. Any or all of these
could change, and any such change could require a conclusion or
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conclusions different from the opinion expressed herein. We do not undertake to
advise you as to any future changes in the Code, the Regulations, or
administrative or judicial interpretations of either that may affect our opinion
unless we are specifically retained to do so.
This opinion is being delivered to you in our capacity as counsel for
each of Acquirer and Target and is being delivered to you for the purposes of
satisfying the requirements of the Agreement and of being included as an exhibit
to the Registration Statement. This opinion is solely for the benefit of
Acquirer, Target, and the shareholders of Target and may not be used or relied
upon by any other person.
Very truly yours,
/s/ Irell & Manella LLP
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Irell & Manella LLP
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