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EXHIBIT 8.1
[Letterhead of Pillsbury Madison & Sutro LLP]
April 9, 1998
Cortech, Inc.
6850 North Broadway
Denver, CO 80221
Ladies and Gentlemen:
This opinion is being delivered to you in connection with the S-4
Registration Statement (the "Registration Statement") filed pursuant to the
Agreement and Plan of Merger and Reorganization dated as of December 22, 1997
(the "Reorganization Agreement") by and among Cortech, Inc., a Delaware
corporation ("Parent"), Cortech Merger Sub, Inc., a Delaware corporation and
wholly-owned subsidiary of Parent ("Merger Sub"), and BioStar, Inc., a Delaware
corporation (the "Company").
Except as otherwise provided, capitalized terms used but not defined
herein shall have the meanings set forth in the Reorganization Agreement. All
section references, unless otherwise indicated, are to the Internal Revenue
Code of 1986, as amended (the "Code").
We have acted as counsel to the Parent and Merger Sub in connection
with the Merger. For the purpose of rendering this opinion, we have examined,
and are relying upon (without any independent investigation or review thereof)
the truth and accuracy, at all relevant times, of the statements, covenants,
representations and warranties contained in, the following documents (including
all exhibits and schedules attached thereto):
(a) the Reorganization Agreement;
(b) those certain tax representation letters delivered to us by
Parent, Merger Sub and the Company containing certain representations of
Parent, Merger Sub and the Company (the "Tax Representation Letters");
(c) Continuity of Interest Certificates delivered by certain
stockholders of the Company in favor of Parent, Merger Sub and the Company
(the "Continuity of Interest Certificates"); and
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Cortech, Inc.
April 9, 1998
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(d) such other instruments and documents related to the formation,
organization and operation of Parent, Merger Sub and the Company and related to
the consummation of the Merger and the other transactions contemplated by the
Reorganization Agreement as we have deemed necessary or appropriate.
In connection with rendering this opinion, we have assumed (without
any independent investigation or review thereof) that:
(i) Original documents submitted to us (including
signatures thereto) are authentic, documents submitted to us as copies conform
to the original documents, and that all such documents have been (or will be by
the Effective Time) duly and validly executed and delivered where due execution
and delivery are a prerequisite to the effectiveness thereof;
(ii) All representations, warranties and statements made
or agreed to by Parent, Merger Sub and the Company, their managements,
employees, officers, directors and stockholders in connection with the Merger,
including, but not limited to, those set forth in the Reorganization Agreement
(including the exhibits thereto), the Tax Representation Letters and the
Continuity of Interest Certificates are true and accurate at all relevant
times;
(iii) All covenants contained in the Reorganization
Agreement (including exhibits thereto), the Tax Representation Letters and the
Continuity of Interest Certificates are performed without waiver or breach of
any material provision thereof;
(iv) There is no plan or intention on the part of the
stockholders of the Company to engage in a sale, exchange, transfer,
distribution, pledge, or other disposition or any transaction which results in
a reduction of risk of ownership, or a direct or indirect disposition of shares
of Parent Common Stock to be received in the Merger that would reduce the
Company's stockholders' ownership of Parent Common Stock to a number of shares
having an aggregate fair market value, as of the Effective Time, of less than
fifty percent (50%) of the aggregate fair market value of all of the Company
capital stock outstanding immediately prior to the Effective Time. (For
purposes of the preceding sentence, shares of Company capital stock pursuant to
which stockholders of the Company exercise appraisal rights in the Merger,
which are exchanged for consideration in the Merger other than shares of Parent
Common Stock, including being exchanged for cash in lieu of fractional shares
of Parent Common Stock or are sold, redeemed or disposed of in a transaction
that is in contemplation of or related to the Merger, shall be considered
shares of Company capital stock held by stockholders of the Company immediately
prior to the Merger which are exchanged for shares of Parent Common Stock in
the Merger and then disposed of pursuant to a plan); and
(v) Any representation or statement made "to the best of
knowledge" or similarly qualified is correct without such qualification.
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Cortech, Inc.
April 9, 1998
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Based on our examination of the foregoing items and subject to the
limitations, qualifications, assumptions and caveats set forth herein, we are
of the opinion that, for federal income tax purposes, the Merger will be a
reorganization within the meaning of Section 368(a)(1) of the Code.
In addition to your request for our opinion on this specific matter of
federal income tax law, you have asked us to review the discussion of federal
income tax issues contained in the Registration Statement. We have reviewed the
discussion entitled "Federal Income Tax Consequences" contained in the
Registration Statement and believe that such information fairly presents the
current federal income tax law applicable to the Merger and the material federal
tax consequences to Parent, Merger Sub, the Company and the Company's
stockholders as a result of the Merger.
We consent to the reference to our firm under the caption "Federal
Income Tax Consequences" in the Proxy Statement included in the Registration
Statement and to the filing of this opinion as an exhibit to the Proxy Statement
and to the Registration Statement.
This opinion does not address the various state, local or foreign tax
consequences that may result from the Merger or the other transactions
contemplated by the Reorganization Agreement. In addition, no opinion is
expressed as to any federal income tax consequences of the Merger or the other
transactions contemplated by the Reorganization Agreement except as
specifically set forth herein, and this opinion may not be relied upon except
with respect to the consequences specifically discussed herein.
No opinion is expressed as to any transaction other than the Merger as
described in the Reorganization Agreement, or as to any other transaction
whatsoever, including the Merger, if all of the transactions described in the
Reorganization Agreement are not consummated in accordance with the terms of
the Reorganization Agreement and without waiver of any material provision
thereof. To the extent that the representations, warranties, statements and
assumptions material to our opinion and upon which we have relied are not
accurate and complete in all material respects at all relevant times, our
opinion would be adversely affected and should not be relied upon.
This opinion only represents our best judgement as to the federal
income tax consequences of the Merger and is not binding on the Internal
Revenue Service or any court of law, tribunal, administrative agency or other
governmental body. The conclusions are based on the Code, existing judicial
decisions, administrative regulations and published rulings. No assurance can
be given that future legislative, judicial or administrative changes or
interpretations would not adversely affect the accuracy of the conclusions
stated herein. Nevertheless, by rendering this opinion, we undertake no
responsibility to advise you of any new developments in the application or
interpretation of the federal income tax laws.
This opinion is being delivered in connection with the Registration
Statement. It is intended for the benefit of the Parent and Merger Sub and may
not be relied upon or utilized for any other purpose or by any other person and
may not be made available to any other person without our prior written consent.
Sincerely,
/s/ PILLSBURY MADISON & SUTRO LLP