JORDENBURT
1025 Thomas Jefferson Street, N.W. 777 Brickell Avenue
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Washington, D.C. 200007-5208 Miami, FL 33131-2803
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Simsbury, CT 06089-9658
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Fax: (860) 382-5058
FORM OF OPINION LETTER
Maxim Series Fund, Inc.
8515 E. Orchard Road
Greenwood Village, Colorado 80111
Ladies and Gentlemen:
You have requested our opinion as to the Federal income tax consequences of
the proposed acquisition of all of the assets of the Maxim U.S. Government
Securities Portfolio by the Maxim U.S. Government Mortgage Securities Portfolio
(the "Reorganization").
DEFINED TERMS
Acquired Portfolio. Hereinafter, the Maxim U.S. Government Securities
Portfolio is referred to as the "Acquired Portfolio."
Acquiring Portfolios. Hereinafter, the Maxim U.S. Government Mortgage
Securities Portfolio is referred to as the "Acquiring Portfolio."
BACKGROUND
The transaction will take place pursuant to an Agreement and Plan of
Reorganization dated ___________ (the "Plan") adopted on behalf of the Acquired
Portfolio and the Acquiring Portfolios by Maxim Series Fund, Inc. ("Maxim").
Maxim is a Maryland corporation organized as a Series company and is registered
under the Investment Company Act of 1940, as amended (the "1940 Act") as an
open-end management investment company. Both the Acquired Portfolio and the
Acquiring Portfolio are treated as corporations for federal income tax purposes.
This opinion is being delivered pursuant to Section 8(e) of the Plan. Where
relevant, capitalized terms not otherwise defined herein have the meanings they
have for the purposes of the Plan.
We have examined and are familiar with such documents, records and
other instruments relating to the Reorganization and the parties thereto as we
have deemed appropriate for purposes of this opinion letter, including the Plan
and the Registration Statement filed on ___________, with the Securities and
Exchange Commission under the Securities Act of 1933 on Form N-14, relating to
the Reorganization (the "Registration Statement") and the Prospectus/Proxy
Statement filed on __________ with the Securities and Exchange Commission.
In rendering this opinion, we have assumed that the Reorganization will
be carried out pursuant to the terms of the Plan, that factual statements and
information contained in the Registration Statement, and other documents,
records and instruments supplied to us are correct and that there will be no
material change with respect to such facts or information prior to the time of
the Reorganization. In rendering this opinion, we have also relied upon the
representations contained in the Officer's Certificate (the "Certificate")
provided to us by Maxim.
If the Reorganization is effected on a factual basis different from
that contemplated above, any or all of the opinions expressed herein may be
inapplicable. Further, our opinions are based on (i) the Internal Revenue Code
of 1986, as amended (the "Code"), (ii) Treasury Regulations, (iii) judicial
precedents and (iv) administrative interpretations (including the current ruling
practice of the Internal Revenue Service ("IRS")) as of the date hereof. If
there is any subsequent change in the applicable law or regulations, or if there
are subsequently any new administrative or judicial interpretations of the laws
or regulations, any or all of the individual opinions expressed herein may
become inapplicable.
This opinion is intended solely for delivery to Maxim and their
applicable shareholders. Only Maxim, the Acquired Portfolio, the Acquiring
Portfolio, and their applicable shareholders may rely on this opinion. We
specifically disclaim any obligation to update or supplement this opinion to
reflect any change in the law or IRS position with respect to the issues
addressed herein.
ASSUMPTIONS
1. Maxim is a corporation under Maryland law and is an open-end
management investment company operating as a series funds under the 1940 Act.
2. The Acquired Portfolio has been a regulated investment company
("RIC") under Section 851 of the Code since the date of its organization through
the end of its last complete taxable year and will qualify as a RIC for the
taxable year ending on the date of the Reorganization.
3. The Acquiring Portfolio has been a RIC within the meaning of Section
851 of the Code since the date of its organization through the end of its last
complete taxable year and will qualify as a RIC for the taxable year ending on
the date of the Reorganization.
4. The Board of Directors of Maxim, on behalf of the Acquiring
Portfolio, has determined, for valid business reasons, that it is advisable to
combine the assets of the Acquired Portfolio into the Acquiring Portfolio and
the Board of Directors has adopted the Plan, subject to, among other things,
approval by the shareholders of the Acquired Portfolio.
5. For the taxable year ending on the Closing Date, the Acquired
Portfolio shall calculate, declare and pay ordinary and capital gains dividends
on its shares in amounts sufficient to distribute all of its investment company
taxable income and all of its capital gains to the close of business on the
Closing Date. Such dividends shall be automatically reinvested in additional
shares of each Acquired Portfolio.
6. On the Closing Date, the Acquired Portfolio shall transfer all of
its assets to the Acquiring Portfolio in exchange for which the Acquiring
Portfolio shall simultaneously issue to the Acquired Portfolio, shares of the
Acquiring Portfolio (including any fractional share rounded to the nearest
one-thousandth of a share) equal in aggregate value to the net asset value of
the Acquired Portfolio.
7. Immediately following the Closing, or as soon thereafter as is
conveniently practicable, the Acquired Portfolio shall distribute to each holder
of its outstanding shares the number of shares of the Acquiring Portfolio
(including any fractional share rounded to the nearest one-thousandth of a
share) as shall have an aggregate value equal to the aggregate value of the
shares of the Acquired Portfolio (including any fractional share rounded to the
nearest one-thousandth of a share) which were owned by such shareholder
immediately prior to the Closing Date, such values to be determined by the net
asset values per share of the Acquired Portfolio and the Acquiring Portfolio on
the Closing Date, in exchange for and in cancellation of the shareholder's
shares of the Acquired Portfolio.
8. The distribution to the shareholders of the Acquired Portfolio shall
be accomplished by establishing an account on the share records of the Acquiring
Portfolio in the name of each registered shareholder of the Acquired Portfolio,
and crediting that account with a number of shares of the Acquiring Portfolio
determined pursuant to the preceding paragraph. As a result of these transfers,
the shareholders of the Acquired Portfolio will cease to own shares of the
Acquired Portfolio and will instead own shares of the Acquiring Portfolio having
an aggregate net asset value equal to all the shares of the Acquired Portfolio
on the Closing Date.
9. Following the completion of the distributions described in the
preceding paragraph, and in no event later than 12 months from the date of the
Plan, the Acquired Portfolio shall terminate.
10. The only shareholders of record of the Acquired Portfolio and the
Acquiring Portfolio are: (i) Great West Life & Annuity Insurance Company
("GWL&A") separate accounts, which hold such shares as underlying investments
for variable annuity or variable life insurance contracts issued by GWL&A and
(ii) qualified plans. The owners of the variable annuity or variable life
insurance contracts ("Contract Owners") have instructed GWL&A, pursuant to the
terms of their contracts, to allocate a portion of the value of such contracts
to the sub-accounts of GWL&A's separate accounts that invest in the shares of
the Acquired Portfolio or the Acquiring Portfolio.
OPINIONS
Based on the Code, Treasury Regulations issued thereunder, IRS Rulings
and the relevant case law, as of the date hereof, and on the facts,
representations and assumptions set forth above, and the documents, records and
other instruments we have reviewed, it is our opinion that, under current
Federal income tax law in effect as of this date:
1. The Reorganization will constitute a reorganization within the
meaning of section 368(a)(1) of the Code with respect to the
Acquired Portfolio and the Acquiring Portfolio;
2. No gain or loss will be recognized by the Acquired Portfolio
or the Acquiring Portfolio upon the transfer of all the assets
of the Acquired Portfolio to the Acquiring Portfolio solely in
exchange for shares of the Acquiring Portfolio or upon the
distribution of the shares of the Acquiring Portfolio to the
holders of shares of the Acquired Portfolio solely in exchange
for all of their shares of the Acquired Portfolio;
3. No gain or loss will be recognized by shareholders of the
Acquired Portfolio upon the exchange of shares of the Acquired
Portfolio solely for shares of the Acquiring Portfolio;
4. The holding period and tax basis of the shares of the
Acquiring Portfolio received by each holder of shares of the
Acquired Portfolio pursuant to the Reorganization will be the
same as the holding period and tax basis of shares of the
Acquired Portfolio held by the shareholder (provided the
shares of the Acquired Portfolio were held as a capital asset
on the date of the Reorganization) immediately prior to the
Reorganization; and
5. The holding period and tax basis of the assets of the Acquired
Portfolio acquired by the Acquiring Portfolio will be the same
as the holding period and tax basis of the assets of the
Acquired Portfolio immediately prior to the Reorganization.
We are not expressing an opinion as to any aspect of the Reorganization
other than those opinions expressly stated above. We express our opinion herein
only for the exclusive purpose of ascertaining the federal income tax
consequences of the Reorganization contemplated in the Plan to the Acquired
Portfolio, the Acquiring Portfolio and the shareholders of the Acquired
Portfolio on the receipt of the shares of the Acquiring Portfolio in exchange
for the shares of the Acquired Portfolio pursuant to the Plan. This opinion
letter may not be relied upon by you for any other purpose, or relied upon by,
or furnished to, any other person, firm or corporation, other than those
specifically listed above, without our prior written consent.
As noted above, this opinion is based upon our analysis of the Code,
Treasury Regulations issued thereunder, IRS Rulings and case law, which we deem
relevant as of the date hereof. No assurances can be given that there will not
be a change in the existing law or that the IRS will not alter its present
views, either prospectively or retroactively, or adopt new views with regard to
any of the matters upon which we are rendering this opinion. Further, this
opinion is not binding on the IRS or any court that could ultimately determine
the taxation of the items referred to herein, nor can any assurances be given
that the IRS will not audit or question the treatment accorded to the
Reorganization on the Federal income tax returns of Maxim or the respective
shareholders.
To ensure compliance with Internal Revenue Service Circular 230, we
inform you that any U.S. federal tax advice contained in this communication is
not intended or written to be used, and cannot be used, for the purpose of (1)
avoiding penalties under the Internal Revenue Code or (2) promoting, marketing
or recommending to another party any tax-related matter[s] addressed herein.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement on Form N-14 and to the use of our name therein.
Very truly yours,
Jorden Burt LLP