Exhibit 8.1
Exhibit 8.1
[Shearman & Sterling Letterhead]
(000) 000-0000
May 9, 2000
Mpower Communications Corp.
000 Xxxxx'x Xxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Agreement and Plan of Merger by and among
Mpower Communications Corp., Mpower Merger Sub, Inc. and
Primary Network Holdings, Inc.
dated as of April 17, 2000
--------------------------------------------
Ladies and Gentlemen:
You have requested our opinion as to certain United States
federal income tax consequences of the merger (the "Merger") of Mpower Merger
Sub, Inc. ("Merger Subsidiary"), a Delaware corporation and a wholly-owned
subsidiary of Mpower Communications Corp. (A/K/A MGC Communications Corp.)
("Parent"), a Nevada corporation, with and into Primary Network Holdings, Inc.
(the "Company"), a Delaware corporation. The Merger is being consummated
pursuant to the Agreement and Plan of Merger by and among Parent, Merger
Subsidiary and the Company dated as of April 17, 2000 (the "Merger Agreement").
Unless otherwise defined, capitalized terms used herein have the meanings
assigned to them in the Merger Agreement.
In connection with rendering our opinion, we have reviewed the
Merger Agreement, including the Exhibits thereto, the Proxy
Statement/Prospectus, and such other documents and corporate records as we have
deemed necessary or appropriate as a basis therefor. We have assumed that the
representations and warranties contained in the Merger Agreement were true,
correct and complete when made and will continue to be true, correct and
complete through the Effective Time, and that the parties have complied with
and, if applicable, will
continue to comply with the covenants contained in the Merger Agreement. We also
have assumed that statements as to factual matters contained in the Proxy
Statement/Prospectus are true, correct and complete, and will continue to be
true, correct and complete through the Effective Time. Finally, we have relied
on the representations made by Parent, Merger Subsidiary and the Company in tax
certificates provided to us dated May 9, 2000, and we have assumed that such
representations will continue to be true, correct and complete through the
Effective Time.
Based upon the foregoing, in reliance thereon and subject
thereto, and based upon the Internal Revenue Code of 1986, as amended (the
"Code"), the Treasury Regulations promulgated thereunder, judicial decisions,
revenue rulings and revenue procedures of the Internal Revenue Service, and
other administrative pronouncements, all as in effect on the date hereof, and
assuming that the Merger and related transactions will be consummated in
accordance with the terms of the Merger Agreement, it is our opinion that the
Merger will qualify as a reorganization within the meaning of Section 368(a) of
the Code, and that each of Parent, Merger Subsidiary and the Company will be a
party to such reorganization within the meaning of Section 368(b) of the Code.
No opinion is expressed as to any other matter, including the
accuracy of the representations or reasonableness of the assumptions relied upon
by us in rendering the opinion set forth above. Our opinion is based on current
United States federal income tax law and administrative practice and we do not
undertake to advise you as to any future changes in such law or practice that
may affect our opinion unless we are specifically retained to do so. We consent
to the use of this opinion as and Exhibit to the Proxy Statement/Prospectus, and
to the references to Shearman & Sterling under the captions "The Merger--Certain
U.S. Federal Income Tax Consequences" and "Legal Matters" in the Proxy
Statement/Prospectus.
Very truly yours,
/s/ Shearman & Sterling
DJL/MNS
