Exhibit 12
[Mayer, Brown, Xxxx & Maw Letterhead]
June 19, 2002
To the Persons Listed on
Schedule I Attached hereto
Re: Agreement and Plan of Reorganization for the Exchange of Stock of Xxxxxx
Xxxxxxx Limited Duration Fund for Substantially All of the Assets Xxxxxx
Xxxxxxx North American Government Income Trust, dated as of April 25, 2002
(the "Reorganization Agreement").
Ladies and Gentlemen:
We have acted as counsel to Xxxxxx Xxxxxxx North American Government
Income Trust ("North American"), and Xxxxxx Xxxxxxx Limited Duration Fund
("Limited Duration") in connection with the proposed transfer of substantially
all of the assets of North American to Limited Duration and certain other
transactions related thereto pursuant to and in accordance with the terms of
the Reorganization Agreement (the "Reorganization"). You have requested that we
provide an opinion regarding the treatment of the Reorganization under the
Internal Revenue Code of 1986, as amended (the "Code"), and the accuracy of the
tax disclosures in the proxy statement and prospectus (the "Proxy Statement/
Prospectus") on Exhibit 12 to the Form N-14 Registration Statement.
In connection with rendering these opinions, we have examined originals or
copies, certified or otherwise identified to our satisfaction, of (i) the
Reorganization Agreement, (ii) the Registration Statement on Form N-14 for the
Reorganization, and the Proxy Statement/Prospectus and other documents,
exhibits, attachments and schedules contained therein, (iii) written
representations of Xxxxxx Xxxxxxx Investment Advisors, Inc. ("the "Advisor")
concerning certain facts underlying and relating to the Reorganization set
forth in a letter dated June 19, 2002, and (iv) such other documents and
materials as we have deemed necessary or appropriate for purposes of the
opinions set forth below. In our examination, we have assumed the genuineness
of all signatures, the legal capacity of all natural persons, the authenticity
of all documents submitted to us as originals, the conformity to original
documents of all documents submitted to us as certified or photostatic copies,
and the authenticity of the originals of such copies. We have not made an
independent investigation of the facts set forth either in the Registration
Statement, the Reorganization Agreement or such other documents that we have
examined. We have consequently assumed in rendering these opinions that the
information presented in such documents or otherwise furnished to us accurately
and completely describes in all material respects all facts relevant to the
Reorganization.
We have also assumed for purposes of rendering our opinions (i) the
accuracy of, and material compliance with, the representations of the Advisor
set forth in the letter referred to above, (ii) the accuracy of, and material
compliance with, the representations, warranties, covenants and agreements of
North American and Limited Duration made in the Reorganization Agreement, and
(iii) that there are no agreements or understandings other than those of which
we have been informed that would affect our conclusions set forth below.
The opinions set forth below are based on the Code, the legislative
history with respect thereto, rules and regulations promulgated thereunder, and
published rulings, court decisions and administrative
authorities issued with respect to all of the foregoing, all as in effect and
existing on the date hereof, and all of which are subject to change at any
time, possibly on a retroactive basis. In addition, there can be no assurance
that positions contrary to those stated in our opinions may not be asserted by
the Internal Revenue Service.
Any change occurring after the date hereof in, or a variation from, any of
the foregoing factual or legal bases for our opinions could affect the
conclusions set forth below.
In addition, the opinions expressed herein are given as of the date hereof
and we express no obligation to advise you of any changes in the law or events
that may hereafter come to our attention that could affect our opinions set
forth below.
Based on the foregoing, we are of the opinions that, for federal income
tax purposes:
1. The summaries of United States federal income tax consequences set
forth in the Proxy Statement/Prospectus under the headings "Synopsis -- Tax
Consequences of the Reorganization", "The Reorganization -- The Board's
Consideration" and "The Reorganization -- Tax Aspects of the Reorganization"
are accurate in all material respects as to matters of law and legal
conclusions.
2. The transfer of North American's assets in exchange for Limited
Duration Shares1 and the assumption by Limited Duration of certain stated
liabilities of North American followed by the distribution by North American of
Limited Duration Shares to the North American Shareholders in exchange for
their North American shares pursuant to and in accordance with the terms of the
Reorganization Agreement will constitute a "reorganization" within the meaning
of section 368(a)(1)(C) of the Code, and North American and Limited Duration
will each be a "party to a reorganization" within the meaning of section 368(b)
of the Code.
3. No gain or loss will be recognized by Limited Duration upon receipt of
the assets of North American solely in exchange for Limited Duration Shares and
the assumption by Limited Duration of the stated liabilities of North American.
4. No gain or loss will be recognized by North American upon the transfer
of the assets of North American to Limited Duration in exchange for Limited
Duration Shares and the assumption by Limited Duration of the stated
liabilities or upon the distribution of Limited Duration Shares to the North
American Shareholders in exchange for their North American shares.
5. No gain or loss will be recognized by the North American Shareholders
upon the exchange of the North American shares for Limited Duration Shares.
6. The aggregate tax basis for the Limited Duration Shares received by
each North American Shareholder pursuant to the Reorganization will be the same
as the aggregate tax basis of the North American shares held by each such North
American Shareholder immediately prior to the Reorganization.
7. The holding period of the Limited Duration Shares to be received by
each North American Shareholder will include the period during which the North
American shares surrendered in exchange therefore were held (provided such
North American shares are held as capital assets on the date of the
Reorganization).
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1 Capitalized terms used herein without definition have the meanings ascribed
to them in the Reorganization Agreement.
8. The tax basis of the assets of North American acquired by Limited
Duration will be the same as the tax basis of such assets to North American
immediately prior to the Reorganization.
9. The holding period of the assets of North American in the hands of
Limited Duration will include the period during which those assets were held by
North American.
These opinions are being provided to you solely in connection with the
filing of the Registration Statement for the Reorganization. This opinion may
not be relied upon by you for any other purpose or relied upon by or furnished
to any other person without our prior written consent.
We hereby consent to the filing of this opinion as an exhibit to the Proxy
Statement/Prospectus and to all references to this firm under the headings
"Synopsis -- Tax Consequences of the Reorganization" and "The Reorganization --
Tax Aspects of the Reorganization" in the Proxy Statement/Prospectus.
Sincerely,
/s/ Xxxxx, Xxxxx, Xxxx & Maw
XXXXX, XXXXX, XXXX & MAW
SCHEDULE I
Xxxxxx Xxxxxxx Limited Duration Fund
Xxxxxx Xxxxxxx North American Government Income Trust
