MAYER, BROWN, XXXX & MAW
000 XXXXX XX XXXXX XXXXXX
XXXXXXX, XXXXXXXX 00000-0000
MAIN TELEPHONE
(000) 000-0000
MAIN FAX
(000) 000-0000
June 4, 2003
To the Persons Listed on Schedule I Attached Hereto
Re: Agreement and Plan of Reorganization for the Exchange of Stock
of the Xxxxxx Xxxxxxx Growth Fund for Substantially All of the
Assets of the Xxxxxx Xxxxxxx Tax-Managed Growth Fund, dated as
of April 24, 2003 (the "Reorganization Agreement")
Ladies and Gentlemen:
We have acted as counsel to the Xxxxxx Xxxxxxx Tax-Managed Growth Fund
("Tax-Managed Growth") and the Xxxxxx Xxxxxxx Growth Fund ("Growth") in
connection with the proposed transfer of substantially all of the assets of
Tax-Managed Growth to Growth 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 June 4, 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 rendering these opinions that the information presented
in such documents or otherwise
Brussels Charlotte Chicago Cologne Frankfurt Houston London Los Angeles
Manchester New York Palo Alto Paris Washington, D.C.
Independent Mexico City Correspondent: Jauregui, Navarrete, Xxxxx x Xxxxx, S.C.
Mayer, Brown, 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
June 4, 2003
Page 2
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
Tax-Managed Growth and Growth 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 Tax-Managed Growth's assets in exchange for Growth
Shares and the assumption by Growth of certain stated liabilities of Tax-Managed
Growth followed by the distribution by Tax-Managed Growth of Growth Shares to
the Tax-Managed Growth Shareholders in exchange for their Tax-Managed 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 Tax-Managed Growth and Growth 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 Growth upon the receipt of the
assets of Tax-Managed Growth solely in exchange for Growth Shares and the
assumption by Growth of the stated liabilities of Tax-Managed Growth.
MAYER, BROWN, XXXX & MAW
June 4, 2003
Page 3
4. No gain or loss will be recognized by Tax-Managed Growth upon the
transfer of the assets of Tax-Managed Growth to Growth in exchange for Growth
Shares and the assumption by Growth of the stated liabilities of Tax-Managed
Growth or upon the distribution of Growth Shares to the Tax-Managed Growth
Shareholders in exchange for their Tax-Managed Growth shares.
5. No gain or loss will be recognized by the Tax-Managed Growth
Shareholders upon the exchange of the Tax-Managed Growth shares for Growth
Shares.
6. The aggregate tax basis for the Growth Shares received by each
Tax-Managed Growth Shareholder pursuant to the Reorganization will be the same
as the aggregate tax basis of the Tax-Managed Growth shares held by each such
Tax-Managed Growth Shareholder immediately prior to the Reorganization.
7. The holding period of the Growth Shares to be received by each
Tax-Managed Growth Shareholder will include the period during which the
Tax-Managed Growth shares surrendered in exchange therefor were held (provided
such Tax-Managed Growth shares are held as capital assets on the date of the
Reorganization).
8. The tax basis of the assets of Tax-Managed Growth acquired by Growth
will be the same as the tax basis of such assets to Tax-Managed Growth
immediately prior to the Reorganization.
9. The holding period of the assets of Tax-Managed Growth in the hands
of Growth will include the period during which those assets were held by
Tax-Managed 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,
/s/ MAYER, BROWN, XXXX & MAW
MAYER, BROWN, XXXX & MAW
JRB/KRA
MAYER, BROWN, XXXX & MAW
June 4, 2003
Page 4
Schedule I
Xxxxxx Xxxxxxx Tax-Managed Growth Fund
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxxx Growth Fund
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
