February 14, 1997
The Judge Group, Inc.
Xxx Xxxx Xxxxx - Xxxxx 000
Xxxx Xxxxxx, XX 00000
Re: Agreement and Plan of Merger, dated October 1, 1966, by
and among Judge Imaging Systems, Inc., The Judge Group,
Inc., and Judge Acquisition,Inc.
Dear Sirs:
You have asked us, as special counsel to The Judge Group, Inc.
("Judge"), for our opinion regarding certain Federal income tax consequences to
Judge, Judge Imaging Systems ("JIS"), and Judge Acquisition, Inc.
("Acquisition"), and their shareholders of the proposed merger pursuant to the
Agreement and Plan of Merger (the "Agreement"), dated as of October 1, 1996, by
and among JIS, Judge, and Acquisition.
JIS is a Delaware corporation. Judge is a Pennsylvania corporation.
Acquisition is a Delaware corporation and a wholly owned subsidiary of Judge.
JIS, Judge and Acquisition have entered into the Agreement providing for the
merger of JIS with and into Acquisition, with Acquisition continuing as a
surviving corporation and as a wholly owned subsidiary of Judge, subject to the
approval of the shareholders of JIS (the "Merger"). Consummation of the Merger
is subject to the satisfaction of certain conditions, including, among other
things, the completion by Judge of an initial public offering of shares of its
common stock, pursuant to the Securities Act of 1933, as amended (the
"Securities Act").
For purposes of this opinion, we have relied on certain written
representations of officers of Judge and JIS, copies of which are attached
hereto, and have assumed such representations to be true.
Based upon the Internal Revenue Code of 1986, as amended (the "Code")
applicable Treasury Department regulations in effect as of the date hereof,
current published administrative positions of the Internal Revenue Service
contained in revenue rulings and procedures, and judicial
decisions, and upon the information contained in the documents provided to us by
you (including the Proxy Statement and the Plan), and representations described
above, it is our opinion for Federal income tax purposes that:
(i) The merger of JIS with and into Acquisition will constitute a
reorganization within the meaning of section 368(a)(1)(A) and
section 368(a)(2)(D) of the Code, and Judge, Acquisition and JIS
each will be "a party to the reorganization" within the meaning of
section 368(b) of the Code;
(ii) No gain or loss will be recognized to JIS stockholders upon
receipt of shares of Judge Common Stock in exchange for their
shares of JIS Common Stock or JIS Series A Preferred Stock
pursuant to the Merger;
(iii) To the extent that they hold their shares of JIS Common Stock
and/or JIS Series A Preferred Stock as capital assets, JIS
stockholders receiving cash (i) as a result of the exercise of
dissenters' rights or (ii) in lieu of fractional shares of JIS
Common Stock and/or JIS Series A Preferred Stock will recognize
capital gain, if any, on the exchange to the extent that the cash
so received exceeds the basis allocable to such shares (provided
that the receipt of cash is not "substantially equivalent to a
dividend" by reason of such stockholders' pre-existing direct or
constructive ownership of Judge Common Stock, if any);
(iv) Each JIS stockholder's basis in shares of Judge Common Stock
received in the Merger will equal his basis in shares of JIS Common
Stock and/or JIS Series A Preferred Stock exchanged therefor; and
(v) To the extent that they hold their shares of JIS Common Stock
and/or JIS Series A Preferred Stock as capital assets, JIS
stockholders will include the holding period for the shares of JIS
Common Stock and/or JIS Series A Preferred Stock surrendered in the
Merger in their holding period of shares of Judge Common Stock
received in the Merger.
This opinion represents our best legal judgment, but it has no binding
effect or official status of any kind, and no assurance can be given that
contrary positions may not be taken by the Internal Revenue Service or a court
concerning the issues. We express no opinion relating to any Federal income tax
matter except on the basis of the facts described above. Additionally, we
express no opinion on the tax consequences under foreign, state or local laws.
In issuing our opinion, we have relied solely upon existing provisions of the
Code, existing and proposed regulations thereunder, and current administrative
positions and judicial decisions. Such laws, regulations, administrative
positions and judicial decisions are subject to change at any time. Any such
change could affect the validity of the opinion set forth above. Also, future
changes in federal income tax laws and the interpretation thereof can have
retroactive effect.
We hereby consent to the filing of this opinion as an exhibit to the
registration statement on Form S-4 (the "Registration Statement") relating to
Judge's issuance of up to 1,198,747 shares of its Common Stock, par value $.01,
pursuant to the Agreement and to the references to our firm under the caption
"Information Relating to the Proposed Reorganization -- Federal Income Tax
Consequences" in the Proxy Statement. The Registration Statement will be filed
with the Securities and Exchange Commission (the "Commission") pursuant to Rule
462(b) of the Securities Act of 1933, as amended, and incorporates by reference
the registration statement on Form S-4 (File No. 333-13753) which was declared
effective by the Commission on December 23, 1996. This does not constitute a
consent under section 7 of the Securities Act, and in consenting to such
references to our firm we have not certified any part of the Registration
Statement and do not otherwise come within the categories of persons whose
consent is required under section 7 or under the rules and regulations of the
SEC issued thereunder.
Very truly yours,
/s/ Drinker Xxxxxx & Xxxxx
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DRINKER XXXXXX & XXXXX
