LAW OFFICES OF
PAUL, HASTINGS, JANOFSKY & WALKER LLP
A LIMITED LIABILITY PARTNERSHIP INCLUDING
PROFESSIONAL CORPORATIONS
75 EAST 55TH STREET
NEW YORK, NEW YORK 10022-3205
TELEPHONE (212) 318-6000
FACSIMILE (212) 319-4090
INTERNET www.phjw.com
----------
ROBERT P. HASTINGS (1910-1996)
COUNSEL
LEE J. PAUL
LEONARD S. JANOFSKY
CHARLES M. WALKER
WRITER'S DIRECT ACCESS OUR FILE NUMBER
June 16, 2000
Delafield Fund, Inc.
600 Fifth Avenue
New York, New York 10022
Attention: ___________
Reich & Tang Equity Fund, Inc.
600 Fifth Avenue
New York, New York 10022
Attention: _______________
Re: Delafield Fund, Inc. and Reich & Tang Equity Fund, Inc. Merger
--------------------------------------------------------------
Ladies and Gentlemen:
This opinion is being provided to you pursuant to Sections
10(G) and 11(D) of the Agreement and Plan of Reorganization and Liquidation,
dated March 22, 2000 (the "Agreement"), by and among Reich & Tang Equity Fund,
Inc., a Maryland corporation and open-end investment management company (the
"Corporation") and Delafield Fund, Inc., a Maryland corporation and open-end
investment management company (the "Fund"). Pursuant to the terms of the
Agreement, the Fund will acquire substantially all of the assets and liabilities
of the Corporation (the "Merger") solely in exchange for its Institutional Class
shares of its common stock, par value $.001 (the "Shares"). According to the
Merger the Shares will thereafter be distributed by the Corporation pro rata to
its shareholders in complete liquidation. The Corporation's shares will be
canceled and the separate corporate existence of the Corporation will thereupon
cease.
Except as otherwise provided, capitalized terms not defined
herein have the meanings set forth in the Agreement. All section references,
unless otherwise indicated, are to the Internal Revenue Code of 1986, as amended
(the "Code").
NEW YORK55\1314.1
<PAGE>
2
June 16, 2000
We have acted as U.S. counsel to the Corporation and the Fund
in connection with the Merger. We hereby advise you that the interests of the
Fund and the Corporation and its shareholders, may differ and be in conflict. We
also represent, in other matters, Reich & Tang Asset Management L.P., whose
interests may be in conflict with those of the shareholders of the Fund. Battle
Fowler LLP has determined that it can represent all parties on an impartial
basis, however we will be unable to represent any of the parties if differences
arise among the parties during the course of the Merger. We hereby advise each
of the parties to obtain independent corporate counsel regarding the
appropriateness of a waiver of any potential and/or actual conflicts and the
consequences thereof. Each acknowledges that it has had the opportunity to
obtain separate counsel, and acknowledges by its signature below that it waives
any conflict that may arise.
For the purpose of rendering this opinion, we have examined
originals, certified copies or copies otherwise identified to our satisfaction
as being true copies of the original of the following documents (including all
exhibits and schedules attached thereto):
(a) the Agreement; and
(b) such other instruments and documents related to the formation,
organization and operation of the Corporation and the Fund and related to the
consummation of the Merger and the transactions contemplated thereby as we have
deemed necessary or appropriate.
In connection with rendering this opinion, we have with your
permission assumed, without any independent investigation or review thereof, the
following:
1. That original documents (including signatures) are
authentic; that documents submitted to us as copies conform to the original
documents; and that there is (or will be prior to the Closing) due execution and
delivery of all documents where due execution and delivery are a prerequisite to
the effectiveness thereof;
2. That all representations, warranties and statements
made or agreed to by the Corporation, the Fund, and the management, employees,
officers, directors and shareholders thereof in connection with the Merger,
including but not limited to those set forth in the Agreement (including the
exhibits) are true and accurate at all relevant times; and that all covenants
contained in such documents are performed without waiver or breach of any
material provision thereof; and
Based on our examination of the foregoing items and subject to
the limitations, qualifications, assumptions and caveats set forth herein, we
are of the opinion that for Federal income tax purposes:
The Merger will be a reorganization within the meaning of
Section 368(a)(1)(C) of the Code.
NEW YORK55\1314.1
<PAGE>
3
June 16, 2000
The Corporation and the Fund will each be a party to the
reorganization within the meaning of Section 368(b) of the
Code.
No gain or loss will be recognized by the Corporation upon the
transfer of substantially all of its assets to the Fund in
exchange for the Shares and the Fund's assumption of certain
liabilities of the Corporation.
The tax basis of the Corporation's assets acquired by the Fund
will be the same as the tax basis of such assets to the
Corporation immediately prior to the transaction.
The holding period of the assets of the Corporation in the
hands of the Fund will include the period during which those
assets were held by the Corporation.
No gain or loss will be recognized by the Fund upon its
receipt of substantially all of the Corporation's assets
solely in exchange for the Shares.
No gain or loss will be recognized by the shareholders of the
Corporation upon their receipt of the Shares in exchange for
their shares of the Corporation.
The basis of the Shares received by the shareholders of the
Corporation will be the same as their basis in the shares of
the Corporation surrendered in exchange therefor.
The holding period of the Shares received by the shareholders
of the Corporation will include the period that they held the
Corporation shares surrendered in exchange therefor, provided
that such Corporation shares are held by them as capital
assets.
This opinion does not address the various state, local or
foreign tax consequences that may result from the Merger. In addition, no
opinion is expressed as to any Federal income tax consequence of the Merger
except as specifically set forth herein, and this opinion may not be relied upon
except by the Fund, the Company and shareholders of the Corporation, with
respect to the consequences specifically discussed herein.
This opinion addresses only the general tax consequences of
the Merger expressly described above and does not address any tax consequence
that might result to a shareholder in light of its particular circumstances,
such as shareholders who are dealers in securities, who are subject to the
alternative minimum tax provisions of the Code, who are foreign persons or who
acquired their shares in connection with stock option or stock purchase plans or
in other compensatory transactions.
No opinion is expressed as to any transaction other than the
Merger as described in the Agreement or to any other transaction whatsoever
including the Merger if all the transactions described in
NEW YORK55\1314.1
<PAGE>
4
June 16, 2000
the Agreement are not consummated in accordance with the terms of the Agreement
and without waiver of any material provision thereof. To the extent any of the
representations, warranties, statements and assumptions material to our opinion
and upon which we have relied are not complete, correct, true and accurate in
all material respects at all relevant times, our opinion would be adversely
affected and should not be relied upon.
This opinion represents only our best judgment as to the
Federal income tax consequences of the Merger and is not binding on the Internal
Revenue Service or the courts. The conclusions are based on the Code, existing
judicial decisions, administration regulations and published rulings in effect
as of the date that this opinion is dated. No assurance can be given that future
legislative, judicial or administrative changes would not adversely affect the
accuracy of the conclusions stated herein. Furthermore, by rendering this
opinion, we undertake no responsibility to advise you of any new developments in
the application or interpretation of the Federal income tax laws.
This opinion has been delivered to you for the purposes set
forth in Sections 10(G) and 11(D) of the Agreement and may not be distributed or
otherwise made available to any other person or entity without our prior written
consent.
Sincerely,
/s/ Paul, Hastings, Janofsky & Walker LLP
The undersigned has carefully read this letter opinion and hereby acknowledges
the disclosures set forth herein and waives any potential and/or actual
conflicts of interest arising from Battle Fowler LLP's simultaneous
representation of the Corporation and the Fund in connection with the Merger and
of Reich & Tang Asset Management L.P. in general. The undersigned each also
acknowledges that Battle Fowler LLP has recommended that it seek independent
legal advice regarding these potential or actual conflicts and this waiver and
each has either received such independent legal advice or has chosen not to seek
such independent legal advice.
Reich & Tang Equity Fund, Inc. Delafield Fund, Inc.
By: /s/ Richard De Sanctis By: /s/ Bernadette N. Finn
Name: Richard De Sanctis Name: Bernadette N. Finn
Title: Vice President Title: Secretary
NEW YORK55\1314.1
