Exhibit 8.1
[Xxxxxx X. Xxxx, P.C. letterhead]
January 3, 2003
Knowledge Foundations, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
This opinion is being delivered to you in connection with (i) the Merger
Agreement (the "Merger Agreement") dated as of April 23, 2002, by and between
Knowledge Foundations, Inc., a Delaware corporation ("Parent"), KFI, Inc., a
Delaware corporation ("Transitory Subsidiary"), and BSI2000, Inc., a Colorado
corporation ("Target"), as amended on August 8, 2002 and November 20, 2002, (ii)
the Separation and Distribution Agreement (the "Redemption Agreement"), by and
between Parent, Cyber Knowledge, Inc., a Delaware corporation ("Controlled
Subsidiary"), and certain shareholders of Parent ("Shareholders"), and (iii) the
preparation and filing with the Securities and Exchange Commission of a Form S-4
Registration Statement relating to the Merger (the "Registration Statement").
Pursuant to the Redemption Agreement, Parent will (a) contribute certain assets
and liabilities to Controlled Subsidiary, and (ii) distribute the common stock
of Controlled Subsidiary to the Shareholders in exchange for the Shareholders'
Parent common stock (the "Redemption"). Pursuant to the Merger Agreement,
Transitory Subsidiary will merge with and into Target (the "Merger"), and Target
will become a wholly owned subsidiary of Parent.
Except as otherwise provided, capitalized terms referred to herein have
the meanings set forth in the 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 Parent in connection with the Merger. As
such, and for the purpose of rendering this opinion, we have examined and are
relying upon (without 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
2. The Reorganization, Redemption and Distribution Agreement;
3. The Registration Statement; and
4. Such other instruments and documents related to Parent, Target,
Transitory Subsidiary, Controlled Subsidiary, the Merger and the
Redemption, as we have deemed necessary or appropriate.
10
In connection with rendering this opinion, we have assumed or obtained
representations (and are relying thereon, without any independent investigation
or review thereof) that:
A. Original documents submitted to us (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) due execution
and delivery of all documents where due execution and delivery are prerequisites
to the effectiveness thereof;
B. The Redemption will be consummated in accordance with the Redemption
Agreement without any waiver or breach of any material provision thereof, and
the Redemption will be effective under applicable state law; and
C. The Merger will be consummated in accordance with the Merger Agreement
without any waiver or breach of any material provision thereof, and the Merger
will be effective under applicable state law.
Based upon our examination of the foregoing items and subject to the
assumptions, exceptions, limitations and qualifications set forth herein, we are
of the opinion that the statements regarding United States federal income tax
consequences set forth in the Registration Statement under the heading "The
Merger and Related Transactions--Federal Income Tax Considerations," insofar as
they constitute statements of law or legal conclusions, are correct in all
material respects. We express no opinion as to any federal, state or local,
foreign or other tax consequences, other than as set forth in the Registration
Statement under the heading "The Merger and Related Transactions--Federal Income
Tax Considerations."
In addition to the assumptions and representations described 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, will 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) No opinion is expressed as to any transaction other than the Merger
and the Redemption (whether or not undertaken in connection with the Merger or
the Redemption) or as to any transaction whatsoever, including the Merger and
the Redemption, if all the transactions described in the Merger Agreement and
the Redemption Agreement are not consummated in accordance with the terms of the
Merger Agreement and Redemption Agreement and without waiver or breach of any
material provision thereof or if all of the statements, representations,
warranties and assumptions upon which we relied are not true and accurate at all
relevant times. In the event that any one of the statements, representations,
warranties or assumptions upon
11
which we have relied to issue this opinion is incorrect, our opinion might be
adversely affected and may not be relied upon.
This opinion is rendered to you solely in connection with the filing of
the Registration Statement. We hereby consent to the filing of this opinion as
an exhibit to the Registration Statement. We also consent to the references to
our firm name wherever appearing in the Registration Statement with respect to
the discussion of the federal income tax consequences of the Merger and the
Redemption, including any amendments to the Registration Statement. This opinion
may not be relied upon for any other purpose, and may not be made available to
any other person, without our prior written consent.
Very truly yours,
TWB
OPINION-KFI /s/ Xxxxxx X. Xxxx
12
