[L O G O]
BRIDGEWATER PLACE - POST OFFICE BOX 352
GRAND RAPIDS, MICHIGAN 00000-0000
TELEPHONE 616 / 000-0000 - Fax 616 / 000-0000 - xxx.xxxxxxxxx.xxx
XXXXXX X. XXXXX, P.C. DIRECT DIAL 616/000-0000
ADMITTED IN MICHIGAN, UTAH AND WASHINGTON D.C. E-MAIL xxxxxxx@xxxxxxxxx.xxx
August 28, 2002
Xxxxxxxx Corporation
00 Xxxx Xxxxx Xxxxxx
Xxxxxxx, XX 00000
RE: AGREEMENT AND PLAN OF MERGER
Ladies and Gentlemen:
We have acted as counsel to Xxxxxxxx Corporation ("Xxxxxxxx") in
connection with the Agreement and Plan of Merger, dated June 25, 2002 (the
"Agreement"), by and among Xxxxxxxx, Magna International, Inc.
("Magna") and Magna Mirrors Acquisition Corp. ("Sub"). All capitalized
terms used and not specifically defined herein have the meanings specified in
the Agreement.
Magna will file with the Securities and Exchange Commission under
the Securities Act of 1933, as amended (the "1933 Act"), a registration
statement on Form F-4 (the "Registration Statement"), with respect to the
shares of Class A subordinate voting stock of Magna (the "Magna Stock") to
be issued to holders of shares of common stock of Xxxxxxxx (the "Common
Stock") in connection with the Agreement. In addition, Magna has prepared,
and we have reviewed, a Proxy Statement/Prospectus which is contained in
and made a part of the Registration Statement, and the Appendices thereto,
including the Agreement and this opinion letter (the "Proxy Statement"). In
rendering our opinion, we have relied upon the facts stated in the Proxy
Statement and upon such other documents as we have deemed appropriate,
including the information about Magna and Xxxxxxxx included, referred to,
or incorporated by reference in the Proxy Statement and the Agreement.
This opinion letter is governed by and shall be interpreted in
accordance with the Legal Counsel Accord (the "Accord") of the ABA Section
of Business Law (1991). As a consequence, it is subject to a number of
qualifications, exceptions, definitions, limitations on coverage and other
limitations, all as more particularly described in the Accord. The
opinions expressed
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August 26, 2002
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herein are limited to the federal laws of the United States and no opinion is
expressed as to the laws of any other jurisdiction.
We have assumed that (i) all parties to the Agreement, and to any
other documents reviewed by us, have acted, and will act, in accordance
with the terms of the Agreement and such other documents, (ii) all facts,
information, statements and representations contained in certain
certificates of the officers of Magna and Xxxxxxxx that have been provided
to us are and as of the Effective Time will be true, correct and complete
in all respects (which facts, information, statements and representations
we have neither investigated, nor verified, and upon which we are entitled
to rely), (iii) all facts, information, statements and representations,
including, without limitation, those contained in certain certificates of
the officers of Magna and Xxxxxxxx that have been provided to us qualified by
the knowledge and/or belief of Magna and/or Xxxxxxxx or qualified by any
reference to materiality will be complete and accurate as of the Effective
Time as though not so qualified (which facts, information, statements and
representations we have neither investigated, nor verified, and upon
which we are entitled to rely), (iv) the Agreement will be consummated at the
Effective Time pursuant to the terms and conditions set forth in the
Agreement without the waiver or modification of any such terms and
conditions, (v) the Agreement is authorized by and will be effected
pursuant to applicable state law, and (vi) each Xxxxxxxx shareholder
holds (and will as of the Effective Time continue to hold) its shares of
Xxxxxxxx Common Stock as capital assets within the meaning of Section 1221
of the Code (as defined below). The opinions expressed below do not apply
to the extent that a Xxxxxxxx shareholder's unique situation would alter the
tax consequences to such shareholder. For example, the tax consequences to
a Xxxxxxxx shareholder may vary with respect to certain shareholders
(including insurance companies, tax-exempt organizations, financial
institutions, broker-dealers, persons who do not hold Xxxxxxxx Common Stock
as a capital asset, employees of Xxxxxxxx and persons who hold Xxxxxxxx
Common Stock as part of a straddle, conversion or other integrated
transaction).
The opinions set forth below are based upon, and Section numbers
cited herein refer to, the Internal Revenue Code of 1986, as amended (the
"Code"), the Treasury Regulations promulgated thereunder, the administrative
interpretations thereof and the judicial decisions with respect thereto,
all as currently in effect, and are further based upon the continued
accuracy and completeness of the documents, certifications, and
representations referred to herein as of the Effective Time of the
merger contemplated by the Agreement (the "Merger").
Based upon and subject to the assumptions, qualifications,
limitations, and representations contained herein and in the portion of
the Proxy Statement captioned "Material United States Federal Income Tax
Consequences," we are of the opinion that for United States federal income
tax purposes only (with no opinion being expressed as to any consequences
under any state, local or foreign tax laws):
(1) The Merger will qualify as a "reorganization"
within the meaning of Section 368(a) of the Code;
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(2) Xxxxxxxx, Magna and Sub will each be "a party to
a reorganization" within the meaning of Section 368(b) of the Code;
(3) No gain or loss will be recognized by the
shareholders of Xxxxxxxx who receive shares of Magna Stock in
exchange for all of their shares of Xxxxxxxx Common Stock, except
to the extent of any cash received in lieu of fractional shares of
Magna Stock;
(4) The aggregate basis of shares of Magna Stock to be
received by Xxxxxxxx shareholders pursuant to the Merger (including
fractional shares of Magna Stock for which cash is received)
will be the same as the basis of the respective shares of Xxxxxxxx
Common Stock surrendered in exchange therefore;
(5) The holding period of shares of Magna Stock
received by Xxxxxxxx shareholders pursuant to the Merger will
include the holding period for the shares of Xxxxxxxx Common
Stock surrendered in exchange therefor, provided that the
shares of Xxxxxxxx Common Stock surrendered were held as capital
assets in the hands of the relevant Xxxxxxxx shareholder on the
date of the consummation of the Merger;
(6) A Xxxxxxxx shareholder who receives cash in lieu
of a fractional share of Magna Stock will recognize gain or loss
equal to the difference, if any, between the shareholder's tax
basis in the fractional share and the amount of cash received; and
(7) Neither Xxxxxxxx, Magna nor Sub will recognize
gain or loss or any taxable event as a result of the
consummation of the Merger.
If any of the facts, representations, or assumptions on which
this opinion letter is based is determined to be untrue or incorrect, our
opinion may be adversely affected. We express no opinion as to the
accuracy of the facts, representations, and assumptions stated herein.
This opinion letter is based upon existing law and currently
applicable authority, including Treasury Regulations, and administrative
and judicial interpretations of the law and regulations. Administrative
positions of the Internal Revenue Service contained in Revenue Rulings and
Revenue Procedures, and other authorities, including statutory
provisions and judicial decisions interpreting them, are subject to change,
with possible retroactive effects, and we undertake no obligation to
advise you of any change in any matter set forth herein.
No opinion is expressed on any matters other than those specifically
stated, including, without limitation, the effect of local, state or
foreign tax laws. Furthermore, no opinion is expressed herein about the tax
treatment of the transaction under other provisions of the Code or the
Treasury Regulations issued thereunder or about the tax treatment of any
conditions existing
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at the time of, or effects resulting from, the Merger that are not
specifically addressed by this opinion letter.
No advance ruling has been obtained from the Internal Revenue
Service regarding the Merger. An opinion of counsel represents
counsel's best legal judgment, but has no binding effect or official
status of any kind. Accordingly, there may be no assurance that the
Internal Revenue Service or courts will not take positions contrary to our
opinion; however, we believe that the position stated in our opinion will
be sustained.
No person other than the addressee named herein may rely on this
opinion letter for any purpose. This opinion letter is solely for the
benefit of the party to whom it is addressed, and may not be relied upon by
any other party, nor for any purpose other than in connection with the
transaction described herein.
This opinion letter is furnished to you for use in connection
with the Registration Statement. We hereby consent to the inclusion of
this opinion as an appendix to the Proxy Statement and to the use of our
name in that portion of the Proxy Statement captioned "Material United
States Federal Income Tax Consequences." In giving such consent, we do not
thereby admit that we are in the category of persons whose consent is
required under Section 7 of the 1933 Act.
Sincerely,
/S/
Xxxxxx X. Xxxxx, P.C.
KSJ:
GRAND RAPIDS - LANSING - KALAMAZOO - GRAND HAVEN - MILWAUKEE
