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Board of Directors
Laser Vision Centers, Inc.
540 Maryville Centre Drive
Suite 200
St. Louis, Missouri 63141
TLC Laser Eye Centers, Inc.
5280 Solar Drive
Suite 300
Mississauga, Ontario L4W 5M8
Ladies and Gentlemen:
You have requested our opinion with regard to certain federal income
tax consequences of the proposed merger (the "Merger") of TLC Acquisition II
Corp. ("Merger Sub), a wholly owned subsidiary of TLC Laser Eye Centers Inc.
("TLC"), with and into Laser Vision Centers, Inc. ("LaserVision").
In connection with the preparation of our opinion, we have examined
and have relied upon the following:
(i) The Agreement and Plan of Merger by and among LaserVision, TLC,
and Merger Sub, dated as of August 25, 2001, including the schedules
and exhibits thereto (the "Agreement");
(ii) TLC's Registration Statement on Form S-4, including the Joint
Proxy Statement/Prospectus contained therein, filed with the
Securities and Exchange Commission on October 12, 2001, as
supplemented and amended to the date hereof;
(iii) The representations and undertaking of TLC substantially in
the form of Exhibit A hereto; and
(iv) The representations and undertakings of LaserVision
substantially in the form of Exhibit B hereto.
Our opinion is based solely upon applicable law and the factual
information and undertakings contained in the above-mentioned documents. In
rendering our opinion, we have assumed the accuracy of all information and the
performance of all undertakings contained in each of such documents, and we have
assumed that all representations made to the knowledge of any person or entity
or with similar qualification will be true and correct as if made without such
qualification. We also have assumed the authenticity of all original documents,
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.
With regard to Section 367 of the Internal Revenue Code of 1986, as amended (the
"Code"), we have assumed, based on representations of TLC and LaserVision, that
(i) each LaserVision shareholder that owns, actually and constructively, 5
THOMPSON COBURN DRAFT DECEMBER 6, 2001
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percent or more of either the total voting power or the total value of the
common shares of TLC immediately after the Merger will timely enter into a
five-year "gain recognition agreement" with the Internal Revenue Service in
accordance with Section 1.367(a)-8 of the Treasury Regulations, (ii) TLC will
not dispose of the stock of LaserVision or sell substantially all of the assets
of LaserVision in a manner that will trigger any gain to any LaserVision
shareholder that has entered into a gain recognition agreement with the Internal
Revenue Service in accordance with the provisions set forth in Section
1.367(a)-8 of the Treasury Regulations, and (iii) section 367(a)(1) of the Code
will not apply to any LaserVision shareholder that owns, actually and
constructively, less than 5 percent of each of the total voting power or the
total value of the common shares of TLC immediately after the Merger. All of our
assumptions were made with your consent. If any fact or assumption described
herein or below is incorrect, any or all of the federal income tax consequences
described herein may be inapplicable.
OPINION
Subject to the foregoing, to the conditions and limitations
expressed elsewhere herein, and assuming that the Merger is consummated in
accordance with the Agreement, we are of the opinion that for federal income tax
purposes:
1. The Merger will constitute a reorganization within the meaning of
section 368(a)(1) of the Code, and each of LaserVision, TLC, and Merger Sub will
be a "party to a reorganization" within the meaning of section 368(b) of the
Code.
2. Assuming that section 367(a)(1) of the Code does not apply, each
shareholder of LaserVision who exchanges, in the Merger, his or its shares of
LaserVision common stock solely for TLC common shares:
a) will recognize no gain or loss as a result of the exchange,
except with regard to cash received in lieu of a fractional share,
as discussed below (Code section 354(a)(1));
b) will have an aggregate basis for the TLC common shares
received (including any fractional TLC common share deemed to be
received, as described in paragraph 3, below) equal to the aggregate
adjusted tax basis of the shares of LaserVision common stock
surrendered (Code section 358(a)(1)); and
c) will have a holding period for the TLC common shares
received (including any fractional TLC common share deemed to be
received, as described in paragraph 3, below) which includes the
period during which the shares of LaserVision common stock
surrendered were held, provided that the shares of LaserVision
common stock surrendered were capital assets in the hands of such
holder at the time of the Merger (Code section 1223(1)).
3. Each shareholder of LaserVision who receives, in the Merger, cash
in lieu of a fractional TLC common share will be treated as if the fractional
share had been received in the Merger
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and then redeemed by TLC. Provided that the shares of LaserVision common stock
surrendered were capital assets in the hands of such holder at the time of the
Merger, the receipt of such cash will cause the recipient to recognize capital
gain or loss, equal to the difference between the amount of cash received and
the portion of such holder's basis in the TLC common shares allocable to the
fractional share (Code sections 1001 and 1222; Rev. Rul. 66-365, 1966-2 C.B.
116; Rev. Proc. 77-41, 1977-2 C.B. 574).
* * * * * * * * * * * *
We express no opinion with regard to: (1) the federal income tax
consequences of the Merger not addressed expressly by this opinion, including
without limitation, (i) the tax consequences, if any, to those shareholders of
LaserVision who acquired shares of LaserVision common stock pursuant to the
exercise of employee stock options or otherwise as compensation, and (ii) the
tax consequences to special classes of shareholders, if any, including without
limitation, foreign persons, insurance companies, tax-exempt entities,
retirement plans, and dealers in securities; and (2) federal, state, local, or
foreign taxes (or any other federal, state, local, or foreign laws) not
specifically referred to and discussed herein. Further, our opinion is based
upon the Code, Treasury Regulations proposed or promulgated thereunder, and
administrative interpretations and judicial precedents relating thereto, all of
which are subject to change at any time, possibly with retroactive effect, and
we assume no obligation to advise you of any subsequent change thereto. If there
is any change in the applicable law or regulations, or if there is any new
administrative or judicial interpretation of the applicable law or regulations,
any or all of the federal income tax consequences described herein may become
inapplicable.
The foregoing opinion reflects our legal judgment solely on the
issues presented and discussed herein. This opinion has no official status or
binding effect of any kind. Accordingly, we cannot assure you that the Internal
Revenue Service or any court of competent jurisdiction will agree with this
opinion.
We hereby consent to the filing of this letter as an exhibit to the
Registration Statement and to all references made to this letter and to this
firm in the Registration Statement.
Very truly yours,