[FORM OF OPINION]
DECHERT
1775 Eye St., NW
Washington, DC 20006
January __, 2001
Board of Directors
CypressTree Senior Floating Rate Fund, Inc.
286 Congress Street
Boston, MA 02210
Board of Directors
North American Senior Floating
Rate Fund, Inc.
286 Congress Street
Boston, MA 02210
Dear Ladies and Gentlemen:
You have requested our opinion regarding certain Federal income tax
consequences to CypressTree Senior Floating Rate Fund, Inc. ("Target"), to the
holders of the shares of Target (the "Target Shareholders"), and to North
American Senior Floating Rate Fund, Inc. ("Acquiring Fund"), in connection with
the proposed transfer of substantially all of the properties of Target to
Acquiring Fund in exchange solely for voting shares of common stock of Acquiring
Fund ("Acquiring Fund Shares"), followed by the distribution of such Acquiring
Fund Shares received by Target in complete liquidation and termination of Target
(the "Reorganization"), all pursuant to the Agreement and Plan of Reorganization
(the "Plan") dated as of ______, 2001 between Target and Acquiring Fund.
For purposes of this opinion, we have examined and rely upon (1) the Plan,
(2) the Form N-14, dated ___________, 2001 and filed by Acquiring Fund on said
date with the Securities Exchange Commission, (3) the facts and representations
contained in the letter dated on or about the date hereof addressed to us from
Acquiring Fund, (4) the facts and representations contained in the letter dated
on or about the date hereof addressed to us from Target, and (5) such other
documents and instruments as we have deemed necessary or appropriate for
purposes of rendering this opinion.
Board of Directors
January __, 2001
Page 2
This opinion is based upon the Internal Revenue Code of 1986, as amended
(the "Code"), United States Treasury regulations, judicial decisions, and
administrative rulings and pronouncements of the Internal Revenue Service, all
as in effect on the date hereof. This opinion is conditioned upon the
Reorganization taking place in the manner described in the Plan and the
Form N-14 referred to above.
Based upon the foregoing, it is our opinion that:
1. The acquisition by Acquiring Fund of substantially all of the properties
of Target in exchange solely for Acquiring Fund Shares followed by the
distribution of Acquiring Fund Shares to the Target Shareholders in
exchange for their Target shares in complete liquidation and termination
of Target will constitute a reorganization within the meaning of section
368(a) of the Code. Target and Acquiring Fund will each be "a party to a
reorganization" within the meaning of section 368(b) of the Code.
2. Target will not recognize gain or loss upon the transfer of
substantially all of its assets to Acquiring Fund in exchange solely for
Acquiring Fund Shares except to the extent that Target's assets consist
of contracts described in section 1256(b) of the Code ("Section 1256
Contracts"); Target will be required to recognize gain or loss on the
transfer of any such Section 1256 contracts to Acquiring Fund pursuant
to the Reorganization as if such Section 1256 contracts were sold to
Acquiring Fund on the effective date of the Reorganization at their fair
market value. Target will not recognize gain or loss upon the
distribution to its shareholders of the Acquiring Fund Shares received
by Target in the Reorganization. We do not express any opinion as to
whether any accrued market discount will be required to be recognized as
ordinary income.
3. Acquiring Fund will recognize no gain or loss upon receiving the
properties of Target in exchange solely for Acquiring Fund Shares.
4. The aggregated adjusted basis to Acquiring Fund of the properties of
Target received by Acquiring Fund in the reorganization will be the same
as the aggregate adjusted basis of those properties in the hands of
Target immediately before the exchange.
5. Acquiring Fund's holding periods with respect to the properties of
Target that Acquiring Fund acquires in the transaction will include the
respective periods for which those properties were held by Target
(except where investment activities of Acquiring Fund have the effect of
reducing or eliminating a holding period with respect to an asset).
Board of Directors
January __, 2001
Page 3
6. The Target Shareholders will recognize no gain or loss upon receiving
Acquiring Fund Shares solely in exchange for Target shares.
7. The aggregate basis of the Acquiring Fund Shares received by a Target
Shareholder in the transaction will be the same as the aggregate basis
of Target shares surrendered by the Target Shareholder in exchange
therefor.
8. A Target Shareholder's holding period for the Acquiring Fund Shares
received by the Target Shareholder in the transaction will include the
holding period during which the Target Shareholder held Target shares
surrendered in exchange therefor, provided that the Target Shareholder
held such shares as a capital asset on the date of Reorganization.
We express no opinion as to the federal income tax consequences of the
Reorganization except as expressly set forth above, or as to any transaction
except those consummated in accordance with the Plan.
Our opinion as expressed herein, is solely for the benefit of Target, the
Target Shareholders, and the Acquiring Fund, and unless we give our prior
written consent, neither our opinion nor this opinion letter may be quoted in
whole or in part or relied upon by any other person.
We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement and to the references to this firm in the Tax Section. In
giving this consent, we do not admit that we come within the category of persons
whose consent is required under Section 7 of the Securities Act of 1933, as
amended, or the rules and regulations of the Securities Exchange Commission
thereunder.
Very truly yours,
Dechert