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EXHIBIT 8.1
________, 1998
Information Advantage, Inc.
0000 Xxxxxx Xxxxxxxx Xxxxx
Xxxx Xxxxxxx, XX 00000
Ladies and Gentlemen:
This opinion is being delivered to you for the purpose of satisfying
Section 6.1(c) of the Amended and Restated Agreement and Plan of Merger, dated
as of June 29, 1998 (the "Merger Agreement") among Information Advantage, Inc.,
a Delaware corporation ("IA"), its wholly-owned subsidiary, IAC Merger Corp., a
Delaware corporation ("Merger Sub"), and IQ Software Corporation, a Georgia
corporation ("IQ"). Pursuant to the Merger Agreement, Merger Sub will merge with
and into IQ (the "Merger"), and IQ will become a wholly-owned subsidiary of IA.
Except as otherwise provided, capitalized terms referred to herein have the
meanings set forth in the Merger Agreement. All section references, unless
otherwise indicated, are to the Internal Revenue Code of 1986, as amended (the
"Code").
We have acted as legal counsel to IA in connection with the Merger. As
such, and for the purpose of rendering this opinion, we have examined and are
relying (or will rely) 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 schedules and exhibits thereto):
1. The Merger Agreement (including Exhibits);
2. Representations made to us by IQ in a letter of even date;
3. Representations made to us by IA and Merger Sub in a letter of even
date;
5. The Securities and Exchange Commission Registration Statement on Form
S-4 and related Exhibits thereto relating to the Merger Agreement; and
6. Such other instruments and documents related to the formation,
organization and operation of IA, IQ and Merger Sub or to the consummation of
the Merger and the transactions contemplated thereby as we have deemed necessary
or appropriate.
In connection with rendering this opinion, we have assumed that:
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1. Original documents (including signatures) are authentic, documents
submitted to us as copies conform to the original documents, and there has been
(or will be by the Effective Time of the Merger) due execution and delivery of
all documents where due execution and delivery are prerequisites to
effectiveness thereof.
2. Any representation or statement made "to the knowledge of" or otherwise
similarly qualified is correct without such qualification and all statements and
representations, whether or not qualified, will remain true through the
Effective Time. As to all matters in which a person or entity making a
representation has represented that such person or entity either is not a party
to, does not have, or is not aware of any plan, intention, understanding or
agreement to take an action, there is in fact no plan, intention, understanding
or agreement and such action will not be taken.
3. The Merger will be consummated pursuant to the Merger Agreement and will
be effective under the laws of the state of Delaware and Georgia.
4. No IQ shareholder has guaranteed or will guarantee any IQ indebtedness
outstanding during the period immediately prior to the Merger, and at all
relevant times, including as of the Effective Time of the Merger, (i) no
outstanding indebtedness of IQ, IA or Merger Sub has or will represent equity
for tax purposes; (ii) no outstanding equity of IQ, IA or Merger Sub has or will
represent indebtedness for tax purposes; and (iii) no outstanding security,
instrument, agreement or arrangement that provides for, contains, or represents
either a right to acquire IQ stock or to share in the appreciation thereof
constitutes or will constitute "stock" for purposes of Section 368(c) of the
Code.
5. Counsel for IQ, Xxxxxx & Xxxxxx LLP, has, pursuant to Section 6.1(c) of
the Agreement, delivered an opinion to the effect that, for federal income tax
purposes, the Merger will constitute a "reorganization" within the meaning of
Section 368(a) of the Code.
6. Following the Merger, IQ will hold "substantially all" of its and Merger
Sub's properties within the meaning of Section 368(a)(2)(E)(i) of the Code and
the regulations promulgated thereunder and will continue its historic business
or use a significant portion of its historic assets in a business.
7. To the extent any expenses relating to the Merger (or the "plan of
reorganization" within the meaning of Treas. Reg. ss.1.368-1(c) with respect to
the Merger) are funded directly or indirectly by a party other than the
incurring party, such expenses will be within the guidelines established in
Revenue Ruling 73-54, 1973-1 C.B. 187; any expenses paid on behalf of IQ
shareholders will not exceed one percent (1%) of the total consideration that
will be issued in the Merger to IQ shareholders in exchange for their shares of
IQ.
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8. IQ, IA and Xxxxxx Sub will report the Merger on their respective U.S.
federal income tax returns in a manner consistent with the opinion set forth
below and will comply with all reporting obligations set forth in the Code and
the Treasury Regulation promulgated thereunder.
Based on our examination of the foregoing items and subject to the
assumptions, exceptions, limitations and qualifications set forth herein, we are
of the opinion that, if the Merger is consummated in accordance with the
provisions of the Merger Agreement (and without any waiver, breach or amendment
of any provisions thereof), for federal income tax purposes the Merger will
constitute a "reorganization" within the meaning of Section 368(a) of the Code.
In addition to the assumptions set forth above, this opinion is subject to
the exceptions, limitations and qualifications set forth below.
1. This opinion represents and is based upon our best judgment regarding
the application of federal income tax laws arising under the Code, existing
judicial decisions, administrative regulations and published rulings and
procedures. Our opinion is not binding upon the Internal Revenue Service or the
courts, and there is no assurance that the Internal Revenue Service will not
successfully assert a contrary position. Furthermore, no assurance can be given
that future legislative, judicial or administrative changes, on either a
prospective or retroactive basis, would not adversely affect the accuracy of the
conclusions stated herein. Nevertheless, we undertake no responsibility to
advise you of any new developments in the application or interpretation of the
federal income tax laws.
2. This opinion addresses only the classification of the Merger as a
reorganization under Section 368(a) of the Code, and does not address any other
federal, state, local or foreign tax consequences that may result from the
Merger or any other transaction (including any transaction undertaken in
connection with the Merger). We express no opinion regarding the tax
consequences of the Merger to shareholders of IQ that are subject special tax
rules, and we express no opinion regarding the tax consequences of the Merger
arising in connection with the ownership of options or warrants for IQ stock.
3. No opinion is expressed as to any transaction other than the Merger as
described in the Merger Agreement or to any transaction whatsoever, including
the Merger, if all the transactions described in the Merger Agreement are not
consummated in accordance with the terms of such Merger Agreement and without
waiver or breach of any material provision thereof or if all of the
representations, warranties, statements and assumptions upon which we relied are
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not true and accurate through the Effective Time and at all relevant times
thereafter. In the event any one of the statements, representations, warranties
or assumptions upon which we have relied to issue this opinion is incorrect, our
opinion might be adversely affected and may not be relied upon.
4. This opinion has been delivered to you solely for purposes of satisfying
Section 6.1(c) of the Merger Agreement; it may not be relied upon for any other
purpose (including, without limitation, satisfying any conditions in the
Agreement) or by any other person or entity, and may not be made available to
any other person or entity without our prior written consent.
Very truly yours,
XXXXXXXXX XXXXXXX XXXXXX
XXXXXXXXXX XXXXXXXX & XXXXXXXXX, LLP
