_____________, 2003
Board of Trustees
Delaware VIP Trust
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Re: Agreement and Plan of Reorganization (the "Plan") dated as of
______________, 2003, adopted by the Delaware VIP Trust
("Trust"), a statutory trust formed under the laws of the State
of Delaware, on behalf of two of the Trust's series, Delaware VIP
Devon Series (the "Acquired Fund") and Delaware VIP Large Cap
Value Series (the "Acquiring Fund") ("Acquiring Fund" and
together with the Acquired Fund, the "Funds")
-----------------------------------------------------------------
Ladies and Gentlemen:
You have requested our opinion concerning certain federal income tax
consequences of the reorganization of the Acquired Fund (the "Reorganization"),
which will consist of: (i) the acquisition by the Acquiring Fund of
substantially all of the property, assets and goodwill, subject to the
liabilities, of the Acquired Fund, in exchange solely for shares of beneficial
interest, without par value, of the Acquiring Fund-Standard Class (the
"Acquiring Fund-Standard Class Shares") and shares of beneficial interest,
without par value, of the Acquiring Fund -Service Class (the "Acquiring
Fund-Service Class Shares") (the Acquiring Fund-Standard Class Shares and the
Acquiring Fund-Service Class Shares are collectively referred to as the
"Acquiring Fund Shares"); (ii) the distribution of (a) the Acquiring
Fund-Standard Class Shares to the holders of the Acquired Fund -Standard Class
shares (the "Acquired Fund-Standard Class Shares"), and (b) the Acquiring
Fund-Service Class Shares to the holders of the Acquired Fund -Service Class
shares (the "Acquired Fund-Service Class Shares") (the Acquired Fund-Standard
Class Shares and the Acquired Fund-Service Class Shares are collectively
referred to as the "Acquired Fund-Shares"), according to their respective
interests in complete liquidation of the Acquired Fund; and (iii) the subsequent
dissolution of the Acquired Fund, as soon as practicable after the closing (the
"Closing Date") of the Reorganization, all upon and subject to the terms and
conditions of the Plan.
In rendering our opinion, we have reviewed and relied upon: (a) the Plan,
made as of the ____ day of __________, 2003, by the Trust on behalf of the
Acquired Fund and the Acquiring Fund; (b) the proxy materials provided to
shareholders of the Acquired Fund in connection with the Special Meeting of
Shareholders of the Acquired Fund held on April 4, 2003; (c) certain
representations concerning the Reorganization made to us by the Trust on behalf
of Acquired Fund and the Acquiring Fund in a letter dated __________, 2003 (the
"Representation Letter"); (d) all other documents, financial and other reports
and corporate minutes we deemed relevant or appropriate; and (e) such statutes,
regulations, rulings and decisions as we deemed material in rendering this
opinion. All terms used herein, unless otherwise defined, are used as defined in
the Plan.
For purposes of this opinion, we have assumed that the Acquired Fund, on
the Closing Date, satisfies, and immediately following the Closing Date, the
Acquiring Fund will continue to satisfy, the requirements of Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Code"), for qualification as a
regulated investment company.
Based on the foregoing, and provided the Reorganization is carried out in
accordance with the applicable laws of the State of Delaware, the terms of the
Plan and the statements in the Representation Letter, it is our opinion that:
1. The acquisition by the Acquiring Fund of substantially all of the assets
of the Acquired Fund as provided for in the Plan in exchange for the Acquiring
Fund Shares and the assumption by the Acquiring Fund of all of the liabilities
of the Acquired Fund, followed by the distribution by the Acquired Fund to its
shareholders of the Acquiring Fund Shares in complete liquidation of the
Acquired Fund, will qualify as a reorganization within the meaning of Section
368(a)(1) of the Code, and the Acquired Fund and the Acquiring Fund each will be
a "party to the reorganization" within the meaning of Section 368(b) of the
Code.
2. No gain or loss will be recognized by the Acquired Fund upon the
transfer of substantially all of its assets to the Acquiring Fund in exchange
solely for the Acquiring Fund Shares and Acquiring Fund's assumption of Acquired
Fund's liabilities pursuant to Section 361(a) and Section 357(a) of the Code.
3. No gain or loss will be recognized by the Acquiring Fund upon the
receipt by it of substantially all of the assets of the Acquired Fund in
exchange for the Acquiring Fund Shares pursuant to Section 1032(a) of the Code.
4. No gain or loss will be recognized by the Acquired Fund upon the
distribution of the Acquiring Fund Shares to its shareholders in complete
liquidation of the Acquired Fund (in pursuance of the Plan) pursuant to Section
361(c)(1) of the Code.
5. The basis of the assets of the Acquired Fund received by the Acquiring
Fund will be the same as the basis of these assets to the Acquired Fund
immediately prior to the exchange pursuant to Section 362(b) of the Code.
6. The holding period of the assets of the Acquired Fund received by the
Acquiring Fund will include the period during which such assets were held by the
Acquired Fund pursuant to Section 1223(2) of the Code.
7. No gain or loss will be recognized by the shareholders of the Acquired
Fund upon the exchange of their Acquired Fund Shares for Acquiring Fund Shares
(including fractional shares to which they may be entitled) pursuant to Section
354(a) of the Code.
8. The basis of the Acquiring Fund Shares received by the shareholders of
the Acquired Fund (including fractional shares to which they may be entitled)
will be the same as the basis of the Acquired Fund Shares exchanged therefor
pursuant to Section 358(a)(1) of the Code.
9. The holding period of the Acquiring Fund Shares received by the
shareholders of the Acquired Fund (including fractional shares to which they may
be entitled) will include the holding period of the Acquired Fund Shares
surrendered in exchange therefor, provided that the Acquired Fund Shares were
held as a capital asset pursuant to Section 1223(1) of the Code on the Closing
Date.
10. The Acquiring Fund will succeed to and take into account, as of the
date of the transfer as defined in Section 1.381(b)-1(b) of the income tax
regulations issued by the United States Department of the Treasury (the
"Treasury Regulations"), the items of the Acquired Fund described in Section
381(c) of the Code, subject to the conditions and limitations specified in
Sections 381, 382, 383 and 384 of the Code and the Treasury Regulations.
Our opinion is based upon the Code, the applicable Treasury Regulations,
the present positions of the Internal Revenue Service (the "Service") as are set
forth in published revenue rulings and revenue procedures, present
administrative positions of the Service, and existing judicial decisions, all of
which are subject to change either prospectively or retroactively. We do not
undertake to make any continuing analysis of the facts or relevant law following
the date of the Reorganization.
Our opinion is conditioned upon the performance by the Trust on behalf of
the Acquiring Fund and the Acquired Fund of their undertakings in the Plan and
the Representation Letter. Our opinion is limited to the transactions incident
to the Reorganization described herein, and no opinion is rendered with respect
to (i) any other transaction or (ii) the effect, if any, of the Reorganization
(and/or the transactions incident thereto) on any other transaction and/or the
effect, if any, of any such other transaction on the Reorganization.
This opinion is being rendered to the Trust on behalf of Acquiring Fund and
the Acquired Fund and may be relied upon only by such Funds and the shareholders
of each. We hereby consent to the use of this opinion as an exhibit to the
Registration Statement of the Acquiring Fund on Form N-14, and any amendments
thereto, covering the registration of the shares of the Acquiring Fund under the
Securities Act of 1933, as amended, to be issued in the Reorganization.
Very truly yours,
XXXXXXXX, XXXXX, XXXXXXX & XXXXX, LLP
By: _________________________
, a Partner
