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Stradley Ronon Stevens & Young, LLP
2005 Market Street
Suite 2600
Philadelphia, PA 19103
Telephone 215.564.8000
Fax 215.564.8120
www.stradley.com
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October 4, 2019
Board of Trustees, Delaware Group Equity Funds IV
2005 Market Street
Philadelphia, PA 19103
2005 Market Street
Philadelphia, PA 19103
Board of Trustees, Delaware Group Limited-Term Government Funds
2005 Market Street
Philadelphia, PA 19103
2005 Market Street
Philadelphia, PA 19103
Board of Trustees, Delaware VIP Trust
2005 Market Street
Philadelphia, PA 19103
2005 Market Street
Philadelphia, PA 19103
Board of Trustees, First Investors Equity Funds
40 Wall Street
New York, NY 10005
40 Wall Street
New York, NY 10005
Board of Trustees, First Investors Income Funds
40 Wall Street
New York, NY 10005
40 Wall Street
New York, NY 10005
Board of Trustees, First Investors Life Series Funds
40 Wall Street
New York, NY 10005
New York, NY 10005
Board of Trustees, First Investors Tax Exempt Funds
40 Wall Street
New York, NY 10005
New York, NY 10005
| Re: |
Agreement and Plan of Reorganization (“Agreement”) adopted as of the 29th day of July 2019 by and among (i) each of the First Investors open-end registered investment companies identified
as a Target Entity on Exhibit A hereto (each a “Target Entity”), separately, where applicable, on behalf of its respective series identified on Exhibit A hereto (each a “Target Fund”); and (ii) each of the Delaware Funds by Macquarie
open-end registered investment companies identified as an Acquiring Entity on Exhibit A hereto (each an “Acquiring Entity”), separately, on behalf of its respective series identified on Exhibit A hereto (each an “Acquiring Fund”)
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Ladies and Gentlemen:
You have requested our opinion as to certain federal income tax consequences of the Reorganizations set forth on Exhibit A, attached hereto, of the Target Funds, pursuant to which:
Philadelphia, PA • Harrisburg, PA • Malvern, PA • Cherry Hill, NJ • Wilmington, DE • Washington, DC • New York, NY • Chicago, IL
A Pennsylvania Limited Liability Partnership
Board of Trustees, Delaware Group Equity Funds IV
Board of Trustees, Delaware Group Limited-Term Government Funds
Board of Trustees, Delaware VIP Trust
Board of Trustees, First Investors Equity Funds
Board of Trustees, First Investors Income Funds
Board of Trustees, First Investors Life Series Funds
Board of Trustees, First Investors Tax Exempt Funds
October 4, 2019
Page 2
(i) the Acquiring Fund will acquire the Assets and Liabilities of the Target Fund in exchange for shares of the corresponding Acquiring Fund of equal value to the net assets of the Target Fund being acquired, and (ii)
the Target Fund will distribute such shares of the Acquiring Fund to shareholders of the Target Fund, in connection with the liquidation of the Target Fund, all upon the terms and conditions of the Agreement (each such transaction, a
“Reorganization” and collectively, the “Reorganizations”). Each Acquiring Fund is, and will be immediately prior to Closing, a shell series, without assets (other than seed capital) or liabilities, created for the purpose of acquiring the Assets
and Liabilities of the Target Fund. Capitalized terms not otherwise defined herein shall have the meanings assigned to them in the Agreement.
In rendering our opinion, we have reviewed and relied upon: (a) a copy of the executed Agreement, adopted as of the 29th day of July 2019; (b) each Joint Proxy Statement/Prospectus provided to
shareholders of the Target Funds dated July 26, 2019; (c) certain representations concerning the Reorganization made to us by the Acquiring Entities, on behalf of the Acquiring Funds, and the Target Entities, on behalf of the Target Funds, in
letters dated October 4, 2019 (the “Representation Letters”); (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.
For purposes of this opinion, we have assumed that each Target Fund on the Closing Date of the applicable Reorganization satisfies, and immediately following the Closing Date of the Reorganization,
each 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 regulated investment companies.
Based on the foregoing, and provided the applicable Reorganization is carried out in accordance with the applicable laws of the State of Delaware, the terms of the Agreement and the statements in the
applicable Representation Letters for the Target Funds and the Acquiring Funds, it is our opinion with respect to each Reorganization that for federal income tax purposes:
1. The acquisition by the Acquiring
Fund of all of the Assets of its corresponding Target Fund, as provided for in the Agreement, in exchange for the Acquiring Fund shares and the assumption by the Acquiring Fund of the Liabilities of its corresponding Target Fund, followed by the
distribution by the Target Fund to its shareholders of the Acquiring Fund shares in complete liquidation of the Target Fund, will qualify as a reorganization within the meaning of Section 368(a)(1)(F) of the Code, and the Target Fund and the
Acquiring Fund each will be a “party to the reorganization” within the meaning of Section 368(b) of the Code.
Board of Trustees, Delaware Group Equity Funds IV
Board of Trustees, Delaware Group Limited-Term Government Funds
Board of Trustees, Delaware VIP Trust
Board of Trustees, First Investors Equity Funds
Board of Trustees, First Investors Income Funds
Board of Trustees, First Investors Life Series Funds
Board of Trustees, First Investors Tax Exempt Funds
October 4, 2019
Page 3
2. No gain or loss will be recognized
by the Target Fund upon the transfer of all of its Assets to, and assumption of its Liabilities by, its corresponding Acquiring Fund in exchange solely for the Acquiring Fund shares pursuant to Sections 361(a) and 357(a) of the Code.
3. No gain or loss will be recognized
by the Acquiring Fund upon the receipt by it of all of the Assets of its corresponding Target Fund in exchange solely for the Acquiring Fund shares and the assumption by the Acquiring Fund of the Liabilities of its corresponding Target Fund
pursuant to Section 1032(a) of the Code.
4. No gain or loss will be recognized
by the Target Fund upon the distribution of its corresponding Acquiring Fund’s shares to its shareholders in complete liquidation of the Target Fund pursuant to Section 361(c)(1) of the Code.
5. The tax basis of the Assets of the
Target Fund received by the corresponding Acquiring Fund will be the same as the tax basis of the Assets to the Target Fund immediately prior to the exchange pursuant to Section 362(b) of the Code.
6. The holding periods of the Assets
of the Target Fund received by its corresponding Acquiring Fund will include the periods during which such Assets were held by the Target Fund pursuant to Section 1223(2) of the Code.
7. No gain or loss will be recognized
by the shareholders of the Target Fund upon the exchange of their Target Fund shares for its corresponding Acquiring Fund’s shares (including fractional shares to which they may be entitled), pursuant to Section 354(a) of the Code.
8. The aggregate tax basis of the
Acquiring Fund shares received by shareholders of a Target Fund (including fractional shares to which they may be entitled) will be the same as the aggregate tax basis of the Target Fund shares exchanged therefor pursuant to Section 358(a)(1) of
the Code.
9. The holding period of the Acquiring
Fund shares received by a shareholder of the Target Fund (including fractional shares to which they may be entitled) will include the holding period of the Target Fund shares exchanged therefor, provided that the shareholder held such Target Fund
as a capital asset on the date of the Reorganization pursuant to Section 1223(1) of the Code.
10. For purposes of Section 381 of the
Code, 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 regulations issued by the United States Department of the Treasury (the “Income Tax
Board of Trustees, Delaware Group Equity Funds IV
Board of Trustees, Delaware Group Limited-Term Government Funds
Board of Trustees, Delaware VIP Trust
Board of Trustees, First Investors Equity Funds
Board of Trustees, First Investors Income Funds
Board of Trustees, First Investors Life Series Funds
Board of Trustees, First Investors Tax Exempt Funds
October 4, 2019
Page 4
Regulations”), the items of the Target Fund described in Section 381(c) of the Code as if there had been no Reorganization, subject to the conditions and limitations specified in Sections 381, 382,
383 and 384 of the Code, if applicable, and the Income Tax Regulations promulgated thereunder.
Notwithstanding anything to the contrary herein, we express no opinion as to the effect of the Reorganizations on the Target Funds, the Acquiring Funds or any Target Fund shareholders with respect to
any asset as to which any gain or loss is required to be recognized for federal income tax purposes regardless of whether such transfer would otherwise be a nonrecognition transaction under the Code.
Our opinion is based upon the Code, the applicable Income Tax 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 Reorganizations.
Our opinion is conditioned upon the performance by the Acquiring Entities, on behalf of the Acquiring Funds, and the Target Entities, on behalf of the Target Funds, of the undertakings in the Agreement
and the Representation Letters. Except as expressly set forth above, we express no other opinion to any party as to the tax consequences, whether federal, state, local or foreign, with respect to (i) the Reorganizations or any transaction related
to or contemplated by such Reorganizations (or incident thereto) or (ii) the effect, if any, of the Reorganizations on any other transaction and/or the effect, if any, of any such other transaction on the Reorganizations.
We hereby consent to the use of this opinion as an exhibit to the registration statement of each Acquiring Fund on Form N-14, and any amendments thereto, covering the registration of the Acquiring Fund
Shares under the Securities Act of 1933, as amended, to be issued in the Reorganizations.
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Very truly yours,
/s/ Stradley Ronon Stevens & Young, LLP
Stradley Ronon Stevens & Young, LLP
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EXHIBIT A
CHART OF REORGANIZATIONS
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Target Trust/Fund
(and share classes) |
Corresponding Acquiring Trust/Fund
(and share classes) |
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First Investors Equity Funds
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Delaware Group Equity Funds IV
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First Investors Growth & Income Fund
Class A Advisor Class Institutional Class |
Delaware Growth and Income Fund
Class A Institutional Class Class R6 |
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First Investors Equity Income Fund
Class A Advisor Class Institutional Class |
Delaware Equity Income Fund
Class A Institutional Class Class R6 |
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First Investors Select Growth Fund
Class A Advisor Class Institutional Class |
Delaware Growth Equity Fund
Class A Institutional Class Class R6 |
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First Investors Opportunity Fund
Class A Advisor Class Institutional Class |
Delaware Opportunity Fund
Class A Institutional Class Class R6 |
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First Investors Special Situations Fund
Class A Advisor Class Institutional Class |
Delaware Special Situations Fund
Class A Institutional Class Class R6 |
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First Investors Global Fund
Class A Advisor Class Institutional Class |
Delaware Global Equity Fund
Class A Institutional Class Class R6 |
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First Investors International Fund
Class A Advisor Class Institutional Class |
Delaware International Fund
Class A Institutional Class Class R6 |
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First Investors Total Return Fund
Class A Advisor Class Institutional Class |
Delaware Total Return Fund
Class A Institutional Class Class R6 |
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First Investors Covered Call Strategy Fund
Class A Advisor Class Institutional Class |
Delaware Covered Call Strategy Fund
Class A Institutional Class Class R6 |
Exhibit A, Page 1
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Target Trust/Fund
(and share classes) |
Corresponding Acquiring Trust/Fund
(and share classes) |
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First Investors Hedged U.S. Equity Opportunities Fund
Class A Advisor Class Institutional Class |
Delaware Hedged U.S. Equity Opportunities Fund
Class A Institutional Class Class R6 |
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First Investors Premium Income Fund
Class A Advisor Class Institutional Class |
Delaware Premium Income Fund
Class A Institutional Class Class R6 |
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First Investors Tax-Exempt Funds
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Delaware Group Limited-Term Government Funds
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First Investors Tax Exempt Income Fund
Class A Advisor Class Institutional Class |
Delaware Tax-Exempt Income Fund
Class A Institutional Class Class R6 |
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First Investors Tax Exempt Opportunities Fund
Class A Advisor Class Institutional Class |
Delaware Tax-Exempt Opportunities Fund
Class A Institutional Class Class R6 |
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First Investors California Tax Exempt Fund
Class A Advisor Class Institutional Class |
Delaware Tax-Free California II Fund
Class A Institutional Class Class R6 |
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First Investors New Jersey Tax Exempt Fund
Class A Advisor Class Institutional Class |
Delaware Tax-Free New Jersey Fund
Class A Institutional Class Class R6 |
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First Investors New York Tax Exempt Fund
Class A Advisor Class Institutional Class |
Delaware Tax-Free New York II Fund
Class A Institutional Class Class R6 |
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First Investors Oregon Tax Exempt Fund
Class A Advisor Class Institutional Class |
Delaware Tax-Free Oregon Fund
Class A Institutional Class Class R6 |
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First Investors Income Funds
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Delaware Group Equity Funds IV
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First Investors Limited Duration Bond Fund
Class A Advisor Class Institutional Class |
Delaware Limited Duration Bond Fund
Class A Institutional Class Class R6 |
Exhibit A, Page 2
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Target Trust/Fund
(and share classes) |
Corresponding Acquiring Trust/Fund
(and share classes) |
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First Investors Investment Grade Fund
Class A Advisor Class Institutional Class |
Delaware Investment Grade Fund
Class A Institutional Class Class R6 |
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First Investors Floating Rate Fund
Class A Advisor Class Institutional Class |
Delaware Floating Rate II Fund
Class A Institutional Class Class R6 |
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First Investors Fund for Income
Class A Advisor Class Institutional Class |
Delaware Fund for Income
Class A Institutional Class Class R6 |
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First Investors Strategic Income Fund
Class A Advisor Class |
Delaware Strategic Income II Fund
Class A Institutional Class
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First Investors International Opportunities Bond Fund
Class A Advisor Class Institutional Class |
Delaware International Opportunities Bond Fund
Class A Institutional Class Class R6 |
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First Investors Government Cash Management Fund
Class A Institutional Class |
Delaware Government Cash Management Fund
Class A Class R6
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First Investors Life Series Funds
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Delaware VIP Trust
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First Investors Life Series Equity Income Fund
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Delaware VIP Equity Income Series
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First Investors Life Series Growth & Income Fund
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Delaware VIP Growth and Income Series
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First Investors Life Series Select Growth Fund
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Delaware VIP Growth Equity Series
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First Investors Life Series Opportunity Fund
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Delaware VIP Opportunity Series
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First Investors Life Series Special Situations Fund
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Delaware VIP Special Situations Series
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First Investors Life Series International Fund
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Delaware VIP International Series
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First Investors Life Series Total Return Fund
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Delaware VIP Total Return Series
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First Investors Life Series Limited Duration Bond Fund
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Delaware VIP Limited Duration Bond Series
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First Investors Life Series Investment Grade Fund
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Delaware VIP Investment Grade Series
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First Investors Life Series Fund for Income
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Delaware VIP Fund for Income Series
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Exhibit A, Page 3
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Target Trust/Fund
(and share classes) |
Corresponding Acquiring Trust/Fund
(and share classes) |
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First Investors Life Series Covered Call Strategy Fund
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Delaware VIP Covered Call Strategy Series
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First Investors Life Series Government Cash Management Fund
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Delaware VIP Government Cash Management Series
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Exhibit A, Page 4