__________, 2004
Board of Trustees
Xxxxxxxxx Capital Accumulator Fund
000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000-0000
Board of Directors
Xxxxxxxxx Growth Fund, Inc.
000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000-0000
RE: AGREEMENT AND PLAN OF REORGANIZATION (THE "PLAN") DATED AS
OF _________, 2004, BY AND BETWEEN XXXXXXXXX CAPITAL
ACCUMULATOR FUND, A STATUTORY TRUST CREATED UNDER THE LAWS
OF THE STATE OF DELAWARE ("ACQUIRED FUND"), AND XXXXXXXXX
GROWTH FUND, INC., A CORPORATION ORGANIZED UNDER THE LAWS
OF THE STATE OF MARYLAND ("ACQUIRING FUND")
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 of the Acquired Fund in
exchange solely for full and fractional Class A shares of common stock, par
value $1.00 per share, of the Acquiring Fund (the " Acquiring Fund Shares"),
which are voting securities; (ii) the distribution of the Acquiring Fund Shares
to the shareholders of the Acquired Fund according to their respective interests
in the Acquired Fund in complete liquidation of the Acquired Fund; and (iii) the
dissolution of the Acquired Fund as soon as is practicable after the closing
(the "Closing" and the date of closing the "Closing Date"), 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 _____, 2004, by and between 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 _________, 2004; (c) certain representations concerning the
Reorganization made to us by the Acquired Fund and the Acquiring Fund in a
letter dated __________, 2004 (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 of the Reorganization, satisfies, and immediately following the
Closing, 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 and State of
Maryland, 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 the assets of
the Acquired Fund as provided for in the Plan in exchange for the Acquiring Fund
Shares 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 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 the assets of the Acquired Fund in exchange
solely 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 shares in the Acquired Fund (the "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 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 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
