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Xxxxx Xxxxx & Xxxxx
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
February 8, 2000
To the Persons Listed on
Schedule I Attached hereto
Re: Agreement and Plan of Reorganization for the Exchange
of Stock of Xxxxxx Xxxxxxx Xxxx Xxxxxx Mid-Cap Equity
Trust for Substantially All of the Assets of Xxxxxx
Xxxxxxx Xxxx Xxxxxx Mid-Cap Dividend Growth
Securities, dated as of January 26, 2000 (the
"Reorganization Agreement").
Ladies and Gentlemen:
We have acted as counsel to Xxxxxx Xxxxxxx Xxxx Xxxxxx Mid-Cap Dividend
Growth Securities ("Mid-Cap Dividend"), and Xxxxxx Xxxxxxx Xxxx Xxxxxx Mid-Cap
Equity Trust ("Mid-Cap Equity") in connection with the proposed transfer of
substantially all of the assets of Mid-Cap Dividend to Mid-Cap Equity and
certain other transactions related thereto pursuant to and in accordance with
the terms of the Reorganization Agreement (the "Reorganization"). You have
requested that we provide an opinion regarding the treatment of the
Reorganization under the Internal Revenue Code of 1986, as amended (the "Code"),
and the accuracy of the tax disclosures in the proxy statement/prospectus (the
"Proxy Statement/Prospectus") on Exhibit 12 to the Form N-14 Registration
Statement.
In connection with rendering this opinion, we have examined originals or
copies, certified or otherwise identified to our satisfaction, of (i) the
Reorganization Agreement, (ii) the Registration Statement on Form N-14 for the
Reorganization, and the Proxy Statement/Prospectus and other documents,
exhibits, attachments and schedules contained therein, (iii) written
representations of Xxxxxx Xxxxxxx Xxxx Xxxxxx Advisors Inc. (the "Advisor")
concerning certain facts underlying and relating to the Reorganization set forth
in a letter dated February 8, 2000, and (iv) such other documents and materials
as we have deemed
February 8, 2000
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necessary or appropriate for purposes of the opinions set forth below. In our
examination, we have assumed the genuineness of all signatures, the legal
capacity of all natural persons, the authenticity of all documents submitted to
us as originals, the conformity to original documents of all documents submitted
to us as certified or photostatic copies, and the authenticity of the originals
of such copies. We have not made an independent investigation of the facts set
forth either in the Registration Statement, the Reorganization Agreement or such
other documents that we have examined. We have consequently assumed in rendering
this opinion that the information presented in such documents or otherwise
furnished to us accurately and completely describes in all material respects all
facts relevant to the Reorganization.
We have also assumed for purposes of rendering our opinion (i) the accuracy
of, and material compliance with, the representations of the Advisor set forth
in the letter referred to above, (ii) the accuracy of, and material compliance
with, the representations, warranties, covenants and agreements of Mid-Cap
Equity and Mid-Cap Dividend made in the Reorganization Agreement, and (iii) that
there are no agreements or understandings other than those of which we have been
informed that would affect our conclusions set forth below.
The opinion set forth below is based on the Code, the legislative history
with respect thereto, rules and regulations promulgated thereunder, and
published rulings, court decisions and administrative authorities issued with
respect to all of the foregoing, all as in effect and existing on the date
hereof, and all of which are subject to change at any time, possibly on a
retroactive basis. In addition, there can be no assurance that positions
contrary to those stated in our opinion may not be asserted by the Internal
Revenue Service.
Any change occurring after the date hereof in, or a variation from, any of
the foregoing factual or legal bases for our opinion could affect the
conclusions set forth below.
In addition, the opinion expressed herein is given as of the date
hereof and we express no obligation to advise you of any changes in the law or
events that may hereafter come to our attention that could affect our opinion
set forth below.
Based on the foregoing, we are of the opinion that, for federal income
tax purposes:
1. The summaries of United States federal income tax consequences set
forth in the Proxy Statement/Prospectus under the headings "Synopsis -- Tax
Consequences of the Reorganization", "The Reorganization -- The Board's
Consideration" and "The Reorganization --Tax Aspects of the Reorganization" are
accurate in all material respects as to matters of law and legal conclusions.
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2. The transfer of Mid-Cap Dividend's assets in exchange for Mid-Cap
Equity Shares(1) and the assumption by Mid-Cap Equity of certain stated
liabilities of Mid-Cap Dividend followed by the distribution by Mid-Cap Dividend
of Mid-Cap Equity Shares to the Mid-Cap Dividend Shareholders in exchange for
their Mid-Cap Dividend shares pursuant to and in accordance with the terms of
the Reorganization Agreement will constitute a "reorganization" within the
meaning of section 368(a)(1)(C) of the Code, and Mid-Cap Dividend and Mid-Cap
Equity will each be a "party to a reorganization" within the meaning of section
368(b) of the Code.
3. No gain or loss will be recognized by Mid-Cap Equity upon receipt of
the assets of Mid-Cap Dividend solely in exchange for Mid-Cap Equity Shares and
the assumption by Mid-Cap Equity of the stated liabilities of Mid-Cap Dividend.
4. No gain or loss will be recognized by Mid-Cap Dividend upon the
transfer of the assets of Mid-Cap Dividend to Mid-Cap Equity in exchange for
Mid-Cap Equity Shares and the assumption by Mid-Cap Equity of the stated
liabilities or upon the distribution of Mid-Cap Equity Shares to the Mid-Cap
Dividend Shareholders in exchange for their Mid-Cap Dividend shares.
5. No gain or loss will be recognized by the Mid-Cap Dividend
Shareholders upon the exchange of the Mid-Cap Dividend shares for Mid-Cap Equity
Shares.
6. The aggregate tax basis for the Mid-Cap Equity Shares received by
each Mid-Cap Dividend Shareholder pursuant to the Reorganization will be the
same as the aggregate tax basis of the Mid-Cap Dividend shares held by each such
Mid-Cap Dividend Shareholder immediately prior to the Reorganization.
7. The holding period of the Mid-Cap Equity Shares to be received by
each Mid-Cap Dividend Shareholder will include the period during which the
Mid-Cap Dividend shares surrendered in exchange therefor were held (provided
such Mid-Cap Dividend shares are held as capital assets on the date of the
Reorganization).
8. The tax basis of the assets of Mid-Cap Dividend acquired by Mid-Cap
Equity will be the same as the tax basis of such assets to Mid-Cap Dividend
immediately prior to the Reorganization.
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(1) Capitalized terms used herein without definition have the meanings
ascribed to them in the Reorganization Agreement.
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9. The holding period of the assets of Mid-Cap Dividend in the hands of
Mid-Cap Equity will include the period during which those assets were held by
Mid-Cap Dividend.
This opinion is being provided to you solely in connection with the filing
of the Registration Statement for the Reorganization. This opinion may not be
relied upon by you for any other purpose or relied upon by or furnished to any
other person without our prior written consent.
We hereby consent to the filing of this opinion as an exhibit to the Proxy
Statement/Prospectus and to all references to this firm under the headings
"Synopsis -- Tax Consequences of the Reorganization" and "The Reorganization --
Tax Aspects of the Reorganization" in the Proxy Statement/Prospectus.
Very truly yours,
/s/ Xxxxx, Xxxxx & Xxxxx
XXXXX, XXXXX & XXXXX
February 8, 2000
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SCHEDULE I
Xxxxxx Xxxxxxx Xxxx Xxxxxx
Mid-Cap Dividend Growth Securities
Xxxxxx Xxxxxxx Xxxx Xxxxxx
Mid-Cap Equity Trust
