EXHIBIT 12
[Debevoise & Xxxxxxxx Letterhead]
[Dated as of the Closing Date]
Lord Xxxxxx Tax-Free
Income Fund, Inc.
The General Motors Building
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Lord Xxxxxx Securities Trust
The General Motors Building
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Agreement and Plan of Reorganization
dated as of _______ __, 1996
by and between
Lord Xxxxxx Tax-Free Income Fund, Inc.,
on behalf of its series,
Lord Xxxxxx National Series,
and Lord Xxxxxx Securities Trust,
on behalf of its series,
Lord Xxxxxx National Tax-Free Income Trust
------------------------------------------
Ladies and Gentlemen:
We have acted as counsel to Lord Xxxxxx Tax-Free Income Fund, Inc., a
Maryland corporation ("Tax-Free Fund"), acting on behalf of its series, Lord
Xxxxxx National Series
Lord Xxxxxx Tax-Free
Income Fund, Inc.
Lord Xxxxxx Securities Trust
2 [Date of the Closing]
("Acquiring Fund"), and Lord Xxxxxx Securities Trust, a Delaware business trust
("Securities Trust"), acting on behalf of its series, Lord Xxxxxx National Tax-
Free Income Trust ("Acquired Fund"), in connection with the proposed acquisition
(the "Reorganization") of all of the assets of Acquired Fund by Acquiring Fund
pursuant to the Agreement and Plan of Reorganization dated as of _______ __,
1996, by and between Tax-Free Fund, on behalf of Acquiring Fund, and Securities
Trust, on behalf of Acquired Fund (the "Reorganization Agreement").
In so acting, we have participated in the preparation of the Reorganization
Agreement and the preparation and filing by Acquiring Fund with the Securities
and Exchange Commission on _______ __, 1996 of a Registration Statement on Form
N-14, containing a Proxy Statement and Prospectus relating to the proposed
Reorganization and to the shares of common stock of Acquiring Fund to be issued
to Acquired Fund shareholders in the Reorganization pursuant to the
Reorganization Agreement.
As required by Section 8.5 of the Reorganization Agreement, you have
requested that we render the opinion set forth below. In rendering such
opinion, we have examined and relied upon the accuracy as of the date hereof of
the representations and warranties as to factual matters set forth in the
documents referred to above and the Letters of Representation, dated as of the
date hereof, that you have provided to us, copies of which are attached hereto.
We have also examined the originals, or copies certified or otherwise identified
to our satisfaction, of such records, documents, certificates or other
instruments as in our judgment are necessary or appropriate to enable us to
render the opinions set forth below. We have not, however, undertaken any
independent investigation of any factual matter set forth in any of the
foregoing.
Subject to the foregoing and to the qualifications and limitations set
forth herein, and assuming that the Reorganization is consummated in accordance
with the Reorganization Agreement and as described in the Registration
Statement, we are of the opinion that for United States federal income tax
purposes:
Lord Xxxxxx Tax-Free
Income Fund, Inc.
Lord Xxxxxx Securities Trust
3 [Date of the Closing]
1. The acquisition by Acquiring Fund of all of the assets of Acquired
Fund solely in exchange for the issuance of Acquiring Fund shares to
Acquired Fund and the assumption of all of the Acquired Fund liabilities by
Acquiring Fund, followed by the distribution by Acquired Fund, in complete
liquidation, of the Acquiring Fund shares to Acquired Fund shareholders in
exchange for their Acquired Fund shares, will be treated as a
"reorganization" within the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended (the "Code").
2. Acquiring Fund and Acquired Fund will each be "a party to the
reorganization" within the meaning of Section 368(b) of the Code.
3. No gain or loss will be recognized by Acquired Fund upon the
transfer of Acquired Fund's assets to Acquiring Fund in exchange for
Acquiring Fund shares and the assumption by Acquiring Fund of the
liabilities of Acquired Fund or upon the distribution of Acquiring Fund
shares to Acquired Fund's shareholders.
4. No gain or loss will be recognized by Acquiring Fund upon the
receipt of the assets of Acquired Fund in exchange for Acquiring Fund
shares and the assumption by Acquiring Fund of the liabilities of Acquired
Fund.
5. No gain or loss will be recognized by shareholders of Acquired Fund
upon the exchange of their Acquired Fund shares for Acquiring Fund shares.
6. The aggregate tax basis of the Acquiring Fund shares received by
any Acquired Fund shareholder pursuant to the Reorganization will be the
same as the aggregate tax basis of the Acquired Fund shares held by such
shareholder immediately prior to the Reorganization, and the holding period
for the Acquiring Fund shares to be received by any Acquired Fund
shareholder will include the period during which the Acquired Fund shares
exchanged therefor were held
Lord Xxxxxx Tax-Free
Income Fund, Inc.
Lord Xxxxxx Securities Trust
4 [Date of the Closing]
by such shareholder (provided that the Acquired Fund shares are held as
capital assets on the date of the Reorganization).
7. The tax basis of Acquired Fund's assets acquired by Acquiring Fund
will be the same as the tax basis of such assets to Acquired Fund
immediately prior to the Reorganization, and the holding period of the
assets of Acquired Fund in the hands of Acquiring Fund will include the
period during which those assets were held by Acquired Fund.
This opinion is limited solely to the federal law of the United States
as in effect on the date hereof and the relevant facts that exist as of the date
hereof. No assurance can be given that the law or facts will not change, and we
have not undertaken to advise you or any other person with respect to any event
subsequent to the date hereof.
We are delivering this opinion to you and, without our prior written
consent, no other persons are entitled to rely on this opinion.
Very truly yours,
[LETTERHEAD OF DEBEVOISE & XXXXXXXX]
February 29, 1996
Lord Xxxxxx Tax-Free Income Fund, Inc.
The General Motors Building
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Lord Xxxxxx Securitites Trust
The General Motors Building
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
We hereby consent to the filing of the draft opinion attached hereto as an
exhibit to the Registration Statement on Form N-14, to be filed by Lord Xxxxxx
Tax-Free Income Fund, Inc., a Maryland corporation ("Tax-Free Fund"), with the
Securities and Exchange Commission, containing a Proxy Statement and Prospectus
relating to (i) the proposed acquisition (the "Reorganization") of all of the
-
assets of Lord Xxxxxx National Tax-Free Income Trust ("Acquired Fund"), a series
of Lord Xxxxxx Securities Trust, a Delaware business trust ("Securities Trust")
by Lord Xxxxxx National Series ("Acquiring Fund"), a series of Tax-Free Fund,
pursuant to an Agreement and Plan of Reorganization to be entered into by and
between Tax-Free Fund, on behalf of Acquiring Fund, and Securities Trust, on
behalf of Acquired Fund and (ii) the shares of common stock of Acquiring Fund to
--
be issued to Acquired Fund shareholders in the Reorganization. We also hereby
consent to the use of our name under the caption "Information About the
Reorganization -- Federal Income Tax Consequences" in the Registration
Statement. In giving such consent, we do not thereby concede that we are within
the category of persons whose consent is required under Section 7 of the
Securities Act of 1933 or the Rules and Regulations of the Securities and
Exchange Commission thereunder.
Very truly yours,
/S/ DEBEVOISE & XXXXXXXX
