MAYER, BROWN, XXXX & MAW
000 XXXXX XX XXXXX XXXXXX
XXXXXXX, XXXXXXXX 00000-0000
MAIN TELEPHONE
(000) 000-0000
MAIN FAX
(000) 000-0000
May 9, 2003
To The Persons Listed on Schedule I Hereto
Re: Agreement and Plan of Reorganization for the Exchange of Stock
of the Xxxxxx Xxxxxxx American Opportunities Fund for
Substantially All of the Assets of the Xxxxxx Xxxxxxx All Star
Growth Fund, dated as of April 24, 2003 (the "Reorganization
Agreement")
Ladies and Gentlemen:
We have acted as counsel to the Xxxxxx Xxxxxxx All Star Growth Fund
("All Star Growth") and the Xxxxxx Xxxxxxx American Opportunities Fund
("American Opportunities") in connection with the proposed transfer of
substantially all of the assets of All Star Growth to American Opportunities 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 of Part C of 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 May 9, 2003, and (iv) such other documents and materials as we
have deemed necessary or appropriate for purposes of the opinions set forth
below. Capitalized terms used herein without definition have the meanings
ascribed to them in the Reorganization Agreement.
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
Brussels Charlotte Chicago Cologne Frankfurt Houston London Los Angeles
Manchester New York Palo Alto Paris Washington, D.C.
Independent Mexico City Correspondent: Jauregui, Navarrette, Xxxxx x Xxxxx, S.C.
Xxxxx, Xxxxx Xxxx & Maw is a U.S. General Partnership. We operate in combination
with our associated English partnership in the offices listed above.
MAYER, BROWN, XXXX & MAW
May 9, 2003
Page 2
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
All Star Growth and American Opportunities 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 opinion that, for Federal income
tax purposes:
1. The summaries of U.S. 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 All Star Growth's assets in exchange for American
Opportunities Shares and the assumption by American Opportunities of certain
stated liabilities of All Star Growth followed by the distribution by All Star
Growth of American Opportunities Shares to the All Star Growth Shareholders in
exchange for their All Star Growth 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 All Star Growth and
American Opportunities will each be a "party to a reorganization" within the
meaning of section 368(b) of the Code.
MAYER, BROWN, XXXX & MAW
May 9, 2003
Page 3
3. No gain or loss will be recognized by American Opportunities upon
the receipt of the assets of All Star Growth solely in exchange for American
Opportunities Shares and the assumption by American Opportunities of the stated
liabilities of All Star Growth.
4. No gain or loss will be recognized by All Star Growth upon the
transfer of the assets of All Star Growth to American Opportunities in exchange
for American Opportunities Shares and the assumption by American Opportunities
of the stated liabilities of All Star Growth or upon the distribution of
American Opportunities Shares to the All Star Growth Shareholders in exchange
for their All Star Growth shares.
5. No gain or loss will be recognized by the All Star Growth
Shareholders upon the exchange of the All Star Growth shares for American
Opportunities Shares.
6. The aggregate tax basis for the American Opportunities Shares
received by each All Star Growth Shareholder pursuant to the Reorganization will
be the same as the aggregate tax basis of the All Star Growth shares held by
each such All Star Growth Shareholder immediately prior to the Reorganization.
7. The holding period of the American Opportunities Shares to be
received by each All Star Growth Shareholder will include the period during
which the All Star Growth shares surrendered in exchange therefor were held
(provided such All Star Growth shares are held as capital assets on the date of
the Reorganization).
8. The tax basis of the assets of All Star Growth acquired by American
Opportunities will be the same as the tax basis of such assets to All Star
Growth immediately prior to the Reorganization.
9. The holding period of the assets of All Star Growth in the hands of
American Opportunities will include the period during which those assets were
held by All Star Growth.
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 purposes or relief 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,
MAYER, BROWN, XXXX & MAW
May 9, 2003
Page 4
/S/ MAYER, BROWN, XXXX & MAW
MAYER, BROWN, XXXX & MAW
May 9, 2003
Page 5
Schedule I
Xxxxxx Xxxxxxx American Opportunities Fund
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxxx All Star Growth Fund
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
