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DRAFT
Exhibit 8.1
FABIAN & XXXXXXXXX
000 XXXXX XXXXX XXXXXX, 00XX XXXXX
XXXX XXXX XXXX, XXXX 00000
TELEPHONE (000) 000-0000
FACSIMILE (000) 000-0000
August 14, 1997
FM Precision Golf Corp.
0000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx, 00000
Royal Grip, Inc.
000 Xxxx Xxxxxx Xxxxx
Xxxxx, Xxxxxxx 00000
Re: Agreement and Plan of Merger by and among FM Precision Golf Corp.,
Royal Grip, Inc., and FMPSUB, Inc.
Gentlemen:
We have acted as counsel to FM Precision Golf Corp., a Delaware corporation
("FMP"), in connection with the proposed merger (the "Merger") of FMPSUB, Inc.,
a Nevada corporation ("Merger Sub") and wholly-owned subsidiary of FMP, with and
into Royal Grip, Inc.,a Nevada corporation ("RG"), pursuant to the terms of the
Agreement and Plan of Merger dated as of May 14, 1997 (the "Merger Agreement"),
by and among FMP, RG and Merger Sub. The opinions expressed herein are being
rendered at the request of FMP for the benefit of RG and the shareholders of RG
in connection with consummation of the transactions contemplated by the Merger
Agreement, as more fully described in that certain Proxy Statement/Prospectus
(the "Prospectus") contained in Registration Statement No. 333-28841 on Form S-4
filed with the Securities and Exchange Commission pursuant to the Securities Act
of 1933 (the "Registration Statement"). All capitalized terms, unless otherwise
specified, have the meaning assigned to them in the Prospectus.
In connection with these opinions, we have examined and are familiar with
originals or copies, certified or otherwise identified to our satisfaction, of
(i) the Merger Agreement, (ii) the Prospectus, and (iii) such other documents
as we have deemed necessary or appropriate in order to enable us to render the
opinions below. In our examination, we have assumed the genuineness of all
signatures, the legal capacity of all natural persons,
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FM Precision Golf Corp.
Royal Grip, Inc.
August 14, 1997
Page 2
the authenticity of all documents submitted to us as originals, the conformity
to original documents of all documents submitted to us as certified, conformed
or photostatic copies and the authenticity of the originals of such copies.
In rendering the opinions set forth below, we have relied upon the
representations and warranties of RG set forth in the Merger Agreement and
representations made by (i) the management of RG in the form attached as
Exhibit A, (ii) shareholders of RG owning more than five percent (5%) of the
RG Common Stock prior to the Merger in the form attached as Exhibit B and
(iii) the management of FMP in the form attached as Exhibit C.
Based upon and subject to the foregoing, we are of the opinion that the
Merger will, under current law, constitute a reorganization under Sections
368(a)(1)(A) and 368(a)(2)(E) of the Code, and FMP, RG and Merger Sub will each
be a party to the reorganization within the meaning of Section 368(b) of the
Code. As a reorganization, the Merger will have the following federal income
tax consequences (and the following state income tax consequences to the extent
state income tax laws are based upon federal income tax laws) for FMP, RG and
the shareholders of RG.
1. No gain or loss will be recognized by RG, FMP or Merger Sub as a result
of the Merger.
2. No gain or loss will be recognized by Shareholders whose shares of RG
Common Stock are exchanged solely for FMP Common Stock pursuant to the Merger
except with respect to the cash received by such Shareholders in lieu of a
fractional share interest in FMP Common Stock.
3. A Shareholder who receives cash in lieu of a fractional share interest
of FMP Common Stock will be treated as if such cash had been received in
redemption of the fractional share interest. Provided that such fractional
share is held as a capital asset at the Effective Date, the receipt of such
cash should result in gain or loss in an amount equal to the difference between
the amount of cash received and the portion of the tax basis in the RG Common
Stock allocated to the fractional share interest and such gain or loss will be
treated as capital gain or loss.
4. The aggregate tax basis of the FMP Common Stock received, or in the
case of fractional shares, deemed received by Shareholders who exchange their
RG Common Stock for FMP Common Stock in the Merger will be the same as the tax
basis of the RG Common Stock surrendered in exchange therefor.
5. The holding period for the shares of FMP Common Stock received in the
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FM Precision Golf Corp.
Royal Grip, Inc.
August 14, 1997
Page 3
Merger will include the period during which the shares of RG Common Stock
surrendered in exchange therefor were held, provided that such shares were
held as capital assets at the Effective Date.
Except as set forth above, we express no opinion as to the consequences to
any party to the Merger or of any transactions related to the Merger or
contemplated by the Merger Agreement.
The opinions expressed herein are being furnished in connection with the Merger
and solely for the benefit of FMP, RG and the Shareholders of RG and is intended
to be used as an exhibit to the Registration Statement and filings with various
state securities authorities in connection with the Merger, and such persons and
entities may rely upon such opinion as if it were addressed to and had been
delivered to them on the date hereof. Except for such use, neither this opinion
nor copies hereof may be relied upon by or delivered to any other person or
entity, or quoted in whole or in part without the prior written consent of the
undersigned.
We consent to the reference to our name in the Prospectus and to the use of
this opinion as an exhibit to the Registration Statement. In giving these
consents, we do not admit that we come within the category of persons whose
consent is required under the Securities Act of 1933, or the rules and
regulations of the Securities and Exchange Commission thereunder.
Very truly yours,
Fabian & Xxxxxxxxx
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Exhibit A
Officer's Certificate
The undersigned, being the Chief Executive Officer of Royal Grip, Inc., a
Nevada corporation, hereby represents the following to Fabian & Xxxxxxxxx (with
capitalized terms having the same meaning as set forth in the Form S-4
Registration Statement under the Securities Act of 1933, as filed with the
Securities and Exchange Commission, No. 333-28841):
(1) To the best of the knowledge of the management of RG, there is no plan
or intention on the part of those shareholders of RG (the "Public
Shareholders") who own prior to the Merger less than five percent (5%) of
the stock of RG to sell, exchange or otherwise dispose of a number of
shares of FMP Common Stock received by the Public Shareholders in the
Merger that would reduce the ownership of the FMP Common Stock received by
the Public Shareholders in the Merger to a number of shares having a value
of less than fifty percent (50%) of the value of all of the formerly
outstanding shares of RG Common Stock held by the Public Shareholders
immediately prior to the Merger. For purposes of this representation,
shares of RG Common Stock exchanged for cash in lieu of fractional shares
will be treated as outstanding shares of RG Common Stock prior to the
Merger.
(2) In the twelve month period prior to the Effective Date, RG and its
subsidiaries (a) have not redeemed or purchased shares of RG Common Stock,
and (b) have not, other than in the ordinary course of business, sold
assets the fair market value of which equals or exceeds thirty percent of
the gross assets of RG and its subsidiaries immediately preceding the
Merger and ten percent of the net assets of RG and its subsidiaries
immediately preceding the Merger.
The foregoing representations are made solely for the purpose of Fabian &
Xxxxxxxxx relying thereon in issuing an opinion as to the federal and state
income tax consequences of the merger of FMPSUB, Inc., a Nevada corporation and
wholly-owned subsidiary of FMP, with and into RG, pursuant to the terms of the
Agreement and Plan of Merger dated as of May 14, 1997, (the "Merger
Agreement"), by and among FMP, RG, and FMPSUB, Inc.
Dated: 8/12/97 Royal Grip, Inc.
By: /s/ Xxxxx Xxxxxxx
--------------------------------------
Xxxxx Xxxxxxx, Chief Executive Officer
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Exhibit B
Shareholders' Certificate
The undersigned, each being a beneficial owner of more than five percent
(5%) of the outstanding shares of RG Common Stock, hereby represent the
following to Fabian & Xxxxxxxxx with respect to RG Common Stock owned by each
such beneficial owner and his or its intentions with respect to RG Common Stock
owned by him or it (with capitalized terms having the same meaning as set forth
in the Form S-4 Registration Statement under the Securities Act of 1933 of FM
Precision Golf Corp. ("FMP") as filed with the Securities and Exchange
Commission, No. 333-28841). Neither undersigned makes any
representations with respect to RG Common Stock owned by the other undersigned
or the intentions of the other undersigned:
As of the Effective Date, (a) each of the undersigned has no plan or
intention to sell, exchange or otherwise dispose of following the Merger a
number of shares of FMP Common Stock received by him or it, as the case may
be, in the Merger that would reduce the ownership of FMP Common Stock
received by him or it to a number of shares having a value of less than
fifty percent (50%) of the value of all of the formerly outstanding shares
of RG Common Stock held by him or it, as the case may be, immediately
preceding the Merger. For purposes of this representation, shares of RG
Common Stock held by the undersigned and exchanged for cash in lieu of
fractional shares in the Merger will be treated as outstanding shares of RG
Common Stock held by the undersigned immediately preceding the Merger.
Further, for purposes of this representation, shares of RG Common Stock
held by each of the undersigned at any time within the one year period
preceding the Effective Date and sold, exchanged or otherwise disposed of
during such period will be treated as outstanding shares of RG Common Stock
held by the undersigned immediately preceding the Merger.
The foregoing representation is made solely for the purpose of Fabian &
Xxxxxxxxx relying thereon in issuing an opinion as to the federal and state
income tax consequences of the merger of FMPSUB, Inc., a Nevada corporation and
wholly-owned subsidiary of FMP, with and into RG, pursuant to the terms of
the Agreement and Plan of Merger dated as of May 14, 1997, (the "Merger
Agreement)", by and among FMP, RG and FMPSUB, Inc.
Dated: 8/12/97 /s/ Xxxxx Xxxxxxx
----------------------------------------
Xxxxx Xxxxxxx
Dated: August 12, 1997 DMB Property Ventures Limited Partnership,
a Delaware Limited Partnership
By: DMB GP, Inc., an Arizona Corporation,
General Partner
By: /s/ Xxxx Xxxxxx
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Its Vice President
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Exhibit C
Officer's Certificate
The undersigned, being the Chief Executive Officer of FM Precision Golf
Corp., a Delaware corporation, hereby represents, as of the Effective Date, the
following to Fabian & Xxxxxxxxx (with capitalized terms having the same meaning
as set forth in the Form S-4 Registration Statement under the Securities Act of
1933 as filed with the Securities and Exchange Commission, No. 333-28841):
(1) FMP has no plan or intent to take any of the actions described below,
and following the Merger FMP will not take any of the actions described
below to the extent, and during the period when, any such action which
would result in the Merger not being treated as a reorganization within the
meanings of Sections 368(a)(1)(A) and Section 368(a)(2)(E) of the code: (a)
liquidate RG; (b) merge RG with or into another corporation; (c) sell or
otherwise dispose of the stock of RG except for transfers of stock to
corporations "controlled" (within the meaning of Section 368(c) of the
Code) by FMP; (d) reacquire any of its stock issued in connection with the
Merger; (e) cause RG to issue additional shares of stock of RG that would
result in FMP losing "control" (within the meaning of Section 368(c) of the
Code) of RG; and (f) cause RG to sell or otherwise dispose of any of its
assets or any of the assets of Merger Sub acquired in the Merger except for
dispositions made in the ordinary course of business or transfers described
in Section 368(a)(2)(C) of the Code.
(2) FMP, and, to the knowledge of the undersigned, any of the shareholders
of FMP owning more than five percent (5%) of the shares of FMP Common
Stock prior to the Merger, do not own, nor have they owned during the
past five years, any shares of stock of RG.
(3) FMP will, as of the Effective Date, own all of the stock of Merger Sub
and Merger Sub has been formed solely for the purpose of merging with and
into RG and, as of the Effective Date, will not have had any existing
operation, assets or liabilities (other than, if applicable, assets
required for minimum capitalization under state law, liabilities for
franchise taxes and liabilities under the Merger Agreement).
The foregoing representations are made solely for the purpose of Fabian &
Xxxxxxxxx relying thereon in issuing an opinion as to the federal and state
income tax consequences of the merger of FMPSUB, Inc., a Nevada corporation and
wholly-owned subsidiary of FMP, with and into RG, pursuant to the terms of
the Agreement and Plan of Merger
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dated as of May 14, 1997 (the "Merger Agreement"), by and among FMP, RG and
FMPSUB, Inc.
Dated: August 12, 1997 FM Precision Golf Corp.
By: /s/ Xxxxxxxxxxx X. Xxxxxxxx
----------------------------------------
Xxxxxxxxxxx X. Xxxxxxxx, Chief Executive
Officer