EXHIBIT 99.12
[FORM OF OPINION]
______ __, 2004
Board of Directors
Seix Funds, Inc.
000 Xxxx Xxxxxxxxx
Xxxxxxxxx Xxxx, XX 00000
Board of Trustees
STI Classic Funds
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Re: AGREEMENT AND PLAN OF REORGANIZATION, DATED _______ ___, 2004 (THE
"AGREEMENT"), BETWEEN AND AMONG THE SEIX FUNDS, INC., A MARYLAND
BUSINESS TRUST ("SEIX"), ON BEHALF OF ITS SEIX CORE BOND FUND, SEIX
INTERMEDIATE BOND FUND, SEIX HIGH YIELD BOND FUND, AND SEIX LIMITED
DURATION FUND SERIES (EACH AN "ACQUIRED FUND"), AND THE STI CLASSIC
FUNDS, A MASSACHUSETTS BUSINESS TRUST (THE "ACQUIRING TRUST"), ON
BEHALF OF ITS STI CLASSIC INSTITUTIONAL CORE BOND FUND, STI CLASSIC
INSTITUTIONAL INTERMEDIATE BOND FUND, SEIX INSTITUTIONAL HIGH YIELD
FUND, AND STI CLASSIC INSTITUTIONAL LIMITED DURATION FUND SERIES
(EACH AN "ACQUIRING FUND")
Ladies and Gentlemen:
You have requested our opinion as to certain U.S. federal income tax
consequences of the reorganization of each Acquired Fund and its corresponding
Acquiring Fund (as set forth on Appendix A; each, a "Reorganization").(1) Each
Reorganization will involve the transfer of all of the assets of the Acquired
Fund to its corresponding Acquiring Fund, a newly created series of the
Acquiring Trust, and the assumption of the liabilities of the Acquired Fund by
the Acquiring Fund in exchange for shares of the Acquiring Fund. These shares of
the Acquiring Fund will be distributed to the shareholders of the Acquired Fund,
following which the Acquired Fund will be liquidated. In the distribution,
shareholders of the Acquired Fund
-------------------
(1) Each reference to an Acquired Fund or an Acquiring Fund is made with respect
to each of its separate series, as appropriate.
Board of Trustees, Seix Funds, Inc.
Board of Trustees, STI Classic Funds
______ __, 2004
Page 2
who hold shares of Class I or Class P will receive, as specified on Appendix A,
Institutional or Class A shares of the Acquiring Fund.
In rendering our opinion, we have reviewed and relied upon (a) the
Agreement, (b) the Registration Statement/Proxy Statement on Form N-1A provided
to shareholders of each Acquired Fund in connection with the Special Meeting of
Shareholders of each Acquired Fund held on ______ __, 2004, (c) certain
representations concerning the Reorganization made to us by Seix and the
Acquiring Trust in letters dated ______ __, 2004 (the "Representation Letters"),
(d) all other documents, financial and other reports and corporate minutes that
we deemed relevant or appropriate, and (e) such statutes, regulations, rulings
and decisions as we deemed material with respect to this opinion. All terms used
herein, unless otherwise defined, are used as defined in the Agreement.
Under regulations to be prescribed by the Secretary of Treasury
under Section 1276(d) of the Internal Revenue Code of 1986, as amended (the
"Code"), certain transfers of market discount bonds will be excepted from the
requirement that accrued market discount be recognized on disposition of a
market discount bond under Section 1276(a) of the Code. Such regulations are to
provide, in part, that accrued market discount will not be included in income if
no gain is recognized under Section 361(a) of the Code where a bond is
transferred in an exchange qualifying as a federal tax-free reorganization. As
of the date hereof, the Secretary has not issued any regulations under Section
1276 of the Code.
For purposes of this opinion, we have assumed that the Acquired Fund
at the Effective Time of the Reorganization satisfies, and following the
Reorganization, the Acquiring Fund will continue to satisfy, the requirements of
subchapter M of 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 Commonwealth of Massachusetts
and the State of Maryland, the Agreement and the Representation Letters, it is
our opinion, with respect to the Acquired Fund and Acquiring Fund, that:
1. The Reorganization will constitute a tax-free reorganization
within the meaning of Section 368(a)(1)(F) of the Code, and the Acquired Fund
and Acquiring Fund will each be a party to a 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 all of its assets to the Acquiring Fund in exchange solely for the
Acquiring Fund Shares and the assumption by the Acquiring Fund of the Acquired
Fund's liabilities or upon the distribution of the Acquiring Fund Shares to the
Acquired Fund's shareholders in exchange for their shares of the Acquired Fund.
3. No gain or loss will be recognized by the Acquiring Fund upon the
receipt by it of all of the assets of the Acquired Fund in exchange solely for
Acquiring Fund Shares and the assumption by the Acquiring Fund of the
liabilities of the Acquired Fund. We express no
Board of Trustees, Seix Funds, Inc.
Board of Trustees, STI Classic Funds
______ __, 2004
Page 3
opinion as to whether any accrued market discount will be required to be
recognized as ordinary income pursuant to Section 1276 of the Code.
4. The adjusted tax basis of the assets of the Acquired Fund
received by the Acquiring Fund will be the same as the adjusted tax basis of
such assets to the Acquired Fund immediately prior to the Reorganization.
5. The holding period of the assets of the Acquired Fund received by
the Acquiring Fund will include the holding period of those assets in the hands
of the Acquired Fund immediately prior to the Reorganization.
6. No gain or loss will be recognized by the shareholders of the
Acquired Fund upon the exchange of their Acquired Fund Shares for the Acquiring
Fund Shares (including fractional shares to which they may be entitled) and the
assumption by the Acquiring Fund of the liabilities of the Acquired Fund.
7. The aggregate adjusted tax basis of the Acquiring Fund Shares
received by the shareholders of the Acquired Fund (including fractional shares
to which they may be entitled) pursuant to the Reorganization will be the same
as the aggregate tax basis of the Acquired Fund Shares held by the Acquired
Fund's shareholders immediately prior to the Reorganization.
8. 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 as of the Effective Time of the Reorganization.
9. For purposes of section 381 of the Code, the Acquiring Fund will
be treated as the same corporation as the Acquired Fund and the tax attributes
of the Acquired Fund enumerated in Section 381(c) of the Code will be taken into
account by the Acquiring Fund as if there had been no reorganization (See
Section 1.381(b)-1(a)(2) of the Treasury Regulations).
This opinion letter expresses our views only as to U.S. federal
income tax laws in effect as of the date hereof. It represents our best legal
judgment as to the matters addressed herein, but is not binding on the Internal
Revenue Service or the courts. Accordingly, no assurance can be given that the
opinions and analysis expressed herein, if contested, would be sustained by a
court. Our opinion is based upon the Code, the applicable Treasury Regulations
promulgated thereunder, the present position of the Internal Revenue Service as
set forth in published revenue rulings and revenue procedures, present
administrative positions of the Internal Revenue 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 this letter.
Board of Trustees, Seix Funds, Inc.
Board of Trustees, STI Classic Funds
______ __, 2004
Page 4
Our opinion is conditioned upon the performance by the Acquiring
Trust and Seix of their undertakings in the Agreement and the Representation
Letters.
This opinion is being rendered to the Acquiring Trust, on behalf of
each Acquiring Fund, and Xxxx, on behalf of each Acquired Fund, and may be
relied upon only by such funds and the shareholders of each such fund.
Very truly yours,
DRAFT
APPENDIX A
ACQUIRED FUND AND CLASS ACQUIRING FUND AND CLASS
----------------------- --------------------------
SEIX CORE BOND FUND STI CLASSIC INSTITUTIONAL CORE BOND FUND
- Class I Shares - Institutional Shares
- Class P Shares - Class A Shares
SEIX INTERMEDIATE BOND FUND STI CLASSIC INSTITUTIONAL INTERMEDIATE BOND FUND
- Class I Shares - Institutional Shares
SEIX HIGH YIELD FUND SEIX INSTITUTIONAL HIGH YIELD FUND
- Class I Shares - Institutional Shares
- Class P Shares - Class A Shares
SEIX LIMITED DURATION FUND STI CLASSIC INSTITUTIONAL LIMITED DURATION FUND
- Class I Shares - Institutional Shares
