XXXXXXX XXXXX XXXXXXX & XXXXX, LLP
Philadelphia, PA 19103-7098
Telephone (000) 000-0000
Fax (000) 000-0000
XXXXXXX X. XXXXXXX, III
XXxxxxxx@xxxxxxxx.xxx
000-000-0000
May 8, 2003
Board of Trustees
Xxxxxxxxx Global Investment Trust
000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000-0000
Board of Directors
Xxxxxxxxx Funds, Inc.
000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000-0000
RE: AGREEMENT AND PLAN OF REORGANIZATION (THE "PLAN") DATED AS OF
MARCH 5, 2003, BY AND BETWEEN XXXXXXXXX GLOBAL INVESTMENT TRUST
("TRUST"), A STATUTORY TRUST FORMED UNDER THE LAWS OF THE STATE
OF DELAWARE, ON BEHALF OF ITS SERIES, XXXXXXXXX LATIN AMERICA
FUND ("ACQUIRED FUND"), AND XXXXXXXXX FUNDS, INC., A CORPORATION
INCORPORATED UNDER THE LAWS OF THE STATE OF MARYLAND ("COMPANY"),
ON BEHALF OF ITS SERIES, XXXXXXXXX FOREIGN FUND ("ACQUIRING FUND"
AND TOGETHER WITH THE ACQUIRED FUND, THE "FUNDS")
-------------------------------------------------------------------------------
Ladies and Gentlemen:
You have requested our opinion concerning certain federal
income tax consequences of the reorganization of the Acquired Fund (the
"Reorganization"), which will consist of: (i) the acquisition by the Company on
behalf of Acquiring Fund of substantially all of the property, assets and
goodwill of Acquired Fund in exchange solely for full and fractional Class A,
Class C and Advisor Class shares of common stock, par value $1.00 per share, of
Acquiring Fund (collectively, "Acquiring Fund Shares"); (ii) the distribution of
Acquiring Fund Shares to the shareholders of Class A, Class C and Advisor Class
shares of Acquired Fund (collectively, "Acquired Fund Shares"), according to
their respective interests in Acquired Fund in complete liquidation of Acquired
Fund; and (iii) the dissolution of Acquired Fund as soon as is practicable after
the closing (the "Closing Date") of the Reorganization, all upon and subject to
the terms and conditions of the Plan.
In rendering our opinion, we have reviewed and relied upon:
(a) the Plan, made as of the 5th day of March, 2003, by and between the Trust on
behalf of Acquired Fund and the Company on behalf of Acquiring Fund; (b) the
proxy materials provided to shareholders of the Acquired Fund in connection with
the Special Meeting of Shareholders of the Acquired Fund held on May 2, 2003;
(c) certain representations concerning the Reorganization made to us by the
Trust on behalf of Acquired Fund and the Company on behalf of Acquiring Fund in
a letter dated May 8, 2003 (the "Representation Letter"); (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. All terms used herein, unless
otherwise defined, are used as defined in the Plan.
For purposes of this opinion, we have assumed that the
Acquired Fund, on the Closing Date, satisfies, and immediately following the
Closing Date, the 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 a regulated investment company.
Based on the foregoing, and provided the Reorganization is
carried out in accordance with the applicable laws of the State of Delaware and
the State of Maryland, the terms of the Plan and the statements in the
Representation Letter, it is our opinion that:
1. The acquisition by the Acquiring Fund of substantially all
of the assets of the Acquired Fund as provided for in the Plan in exchange for
the Acquiring Fund Shares, followed by the distribution by the Acquired Fund to
its shareholders of the Acquiring Fund Shares in complete liquidation of the
Acquired Fund, will qualify as a reorganization within the meaning of Section
368(a)(1) of the Code, and the Acquired Fund and the Acquiring Fund each will be
a "party to the reorganization" within the meaning of Section 368(b) of the
Code.
2. No gain or loss will be recognized by the Acquired Fund
upon the transfer of substantially all of its assets to the Acquiring Fund in
exchange solely for the Acquiring Fund Shares pursuant to Section 361(a) and
Section 357(a) of the Code.
3. No gain or loss will be recognized by the Acquiring Fund
upon the receipt by it of substantially all of the assets of the Acquired Fund
in exchange solely for the Acquiring Fund Shares pursuant to Section 1032(a) of
the Code.
4. No gain or loss will be recognized by the Acquired Fund upon
the distribution of the Acquiring Fund Shares to its shareholders in complete
liquidation of the Acquired Fund (in pursuance of the Plan) pursuant to Section
361(c)(1) of the Code.
5. The basis of the assets of the Acquired Fund received by the
Acquiring Fund will be the same as the basis of these assets to the Acquired
Fund immediately prior to the exchange pursuant to Section 362(b) of the Code.
6. The holding period of the assets of the Acquired Fund
received by the Acquiring Fund will include the period during which such assets
were held by the Acquired Fund pursuant to Section 1223(2) of the Code.
7. No gain or loss will be recognized by the shareholders of the
Acquired Fund upon the exchange of their Acquired Fund Shares for Acquiring Fund
Shares (including fractional shares to which they may be entitled) pursuant to
Section 354(a) of the Code.
8. The basis of the Acquiring Fund Shares received by the
shareholders of the Acquired Fund (including fractional shares to which they may
be entitled) will be the same as the basis of the Acquired Fund Shares exchanged
therefor pursuant to Section 358(a)(1) of the Code.
9. The holding period of the Acquiring Fund Shares received by
the shareholders of the Acquired Fund (including fractional shares to which they
may be entitled) will include the holding period of the Acquired Fund Shares
surrendered in exchange therefor, provided that the Acquired Fund Shares were
held as a capital asset pursuant to Section 1223(1) of the Code on the Closing
Date.
10. 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 income
tax regulations issued by the United States Department of the Treasury (the
"Treasury Regulations"), the items of the Acquired Fund described in Section
381(c) of the Code, subject to the conditions and limitations specified in
Sections 381, 382, 383 and 384 of the Code and the Treasury Regulations.
Our opinion is based upon the Code, the applicable Treasury
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 Reorganization.
Our opinion is conditioned upon the performance by the Company
on behalf of the Acquiring Fund and the Trust on behalf of the Acquired Fund of
their undertakings in the Plan and the Representation Letter. Our opinion is
limited to the transactions incident to the Reorganization described herein, and
no opinion is rendered with respect to (i) any other transaction or (ii) the
effect, if any, of the Reorganization (and/or the transactions incident thereto)
on any other transaction and/or the effect, if any, of any such other
transaction on the Reorganization.
This opinion is being rendered to the Company on behalf of
Acquiring Fund and the Trust on behalf of Acquired Fund and may be relied upon
only by such Funds and the shareholders of each. We hereby consent to the use of
this opinion as an exhibit to the Registration Statement of the Acquiring Fund
on Form N-14, and any amendments thereto, covering the registration of the
shares of the Acquiring Fund under the Securities Act of 1933, as amended, to be
issued in the Reorganization.
Very truly yours,
XXXXXXXX, XXXXX, XXXXXXX & XXXXX, LLP
By:/s/ XXXXXXX X. XXXXXXX, III
-------------------------------------
Xxxxxxx X. Xxxxxxx XXX, a Partner
