Reed Smith LLP
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Pittsburgh, PA 15219-1886
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[FORM OF]
DRAFT
_____________ ___, 2006
[ACQUIRING FUND]
[ACQUIRED FUND]
Ladies and Gentlemen:
You have requested our opinion concerning certain federal income tax
consequences of a transaction (the "Reorganization") in which all of the assets
of [__________________________] (the "Acquired Fund"), a portfolio of
[____________________________________], will be acquired by
[________________________________________] (the "Acquiring Fund"), a portfolio
of [______________________________________], solely for Shares of the Acquiring
Fund (the "Acquiring Fund Shares"), which shall thereafter be distributed to the
shareholders of the Acquired Fund (the "Acquired Fund Shareholders") in
liquidation of the Acquired Fund. Both the Acquiring Fund and the Acquired Fund
are separate portfolios, each of which is treated as a separate corporation
under Section 851(g) of the Internal Revenue Code of 1986, as amended (the
"Code"), and has elected to be taxed as a Regulated Investment Company under
Section 851(a) of the Code. The terms and conditions of the Reorganization are
set forth in an Agreement and Plan of Reorganization dated as of [____________
____, 200__] (the "Agreement"), between the Acquiring Fund and the Acquired
Fund, attached hereto as Annex C. This opinion is rendered to you pursuant to
paragraph [_____] of the Agreement.
We have reviewed and relied upon the Registration Statement on Form N-14
(the "Registration Statement") filed with the Securities and Exchange Commission
(the "Commission") in connection with the Reorganization, the certificates
provided to us by the Acquiring Fund and the Acquired Fund in connection with
the rendering of this opinion, attached hereto as Annex A and Annex B, and such
other documents and instruments as we have deemed necessary for the purposes of
this opinion.
Based upon and subject to the foregoing, and assuming that the
Reorganization will take place as described in the Agreement, we are of the
opinion that, for federal income tax purposes with the respect to the Acquiring
Fund:
LONDON * NEW YORK * LOS ANGELES * SAN FRANCISCO *
WASHINGTON, D.C. * PHILADELPHIA * PITTSBURGH * OAKLAND
MUNICH * PRINCETON * FALLS CHURCH * WILMINGTON * NEWARK *
MIDLANDS, U.K. * CENTURY CITY * RICHMOND * LEESBURG
r e e d s m i t h . c o m
[_____________________________]
[_____________________________]
[___________________ ___, 2006]
Page 2
(a) The transfer of all of the Acquired Fund's assets in exchange for the
Acquiring Fund Shares and the assumption by the Acquiring Fund of the
liabilities of the Acquired Fund (followed by the distribution of Acquiring Fund
Shares to the Acquired Fund Shareholders in dissolution and liquidation of the
Acquired Fund) will constitute a "reorganization" within the meaning of Section
368(a) of the Code and the Acquiring Fund and the Acquired Fund will each be a
"party to a reorganization" within the meaning of Section 368(b) of the Code.
(b) No gain or loss will be recognized by the Acquiring Fund upon the
receipt of the assets of the Acquired Fund solely in exchange for Acquiring Fund
Shares, and the assumption by the Acquiring Fund of the liabilities of the
Acquired Fund.
(c) No gain or loss will be recognized by the Acquired Fund upon the
transfer of the Acquired Fund's assets to the Acquiring Fund in exchange for
Acquiring Fund Shares and the assumption by the Acquiring Fund of the
liabilities of the Acquired Fund or upon the distribution (whether actual or
constructive) of Acquiring Fund Shares to Acquired Fund Shareholders in exchange
for such shareholders' shares of the Acquired Fund.
(d) No gain or loss will be recognized by the Acquired Fund Shareholders
upon the exchange of their Acquired Fund shares for Acquiring Fund Shares in the
Reorganization.
(e) The aggregate tax basis for Acquiring Fund Shares received by each
Acquired Fund Shareholder pursuant to the Reorganization will be the same as the
aggregate tax basis of the Acquired Fund shares exchanged therefore by such
shareholder. The holding period of Acquiring Fund Shares to be received by each
Acquired Fund Shareholder will include the period during which the Acquired Fund
shares exchanged therefore were held by such shareholder, provided the Acquired
Fund shares are held as capital assets at the time of Reorganization.
(f) The tax basis of the Acquired Fund's assets acquired by the Acquiring
Fund will be the same as the tax basis of such assets to the Acquired Fund
immediately before the Reorganization. The holding period of the assets of the
Acquired Fund in the hands of the Acquiring Fund will include the period during
which those assets were held by the Acquired Fund.
Notwithstanding anything herein to the contrary, we express no opinion as
to the effect of the Reorganization on the Acquiring Fund, the Acquired Fund or
any Acquired Fund Shareholder with respect to any asset as to which unrealized
gain or loss is required to be recognized for federal income tax purposes as of
the end of a taxable year (or on the termination or transfer thereof) under a
mark-to-market system of accounting.
This opinion is expressed as of the date hereof and is based upon the Code,
Treasury regulations promulgated thereunder, administrative positions of the
Internal Revenue Service (the "Service"), and judicial decisions, all of which
are subject to change either prospectively or retroactively. There can be no
assurance that changes in the law will not take place which could affect the
opinions expressed herein or that contrary positions may not be taken by the
Service. We disclaim any undertaking to advise you with respect to any event
subsequent to the date hereof.
[_____________________________]
[_____________________________]
[___________________ ___, 2006]
Page 3
The opinions contained herein are limited to those matters expressly
covered; no opinion is to be implied in respect of any other matter. This
opinion is addressed solely to you and may not be relied upon by any other
person without our prior written consent. We hereby consent to the filing of a
copy of this opinion with the Commission as an exhibit to the Registration
Statement.
Very truly yours,
LNH:CDD:dh
