EXHIBIT (12)
______________________, 2002
First American Investment Funds, Inc.
800 Nicollet Mall
Minneapolis, Minnesota 55402
Ladies and Gentlemen:
We have acted as counsel to First American Investment Funds, Inc., a
Maryland corporation ("FAIF"), in connection with the proposed acquisition of
all of the assets and the assumption of the identified liabilities of Capital
Growth Fund, Relative Value Fund, Growth & Income Fund, and Science & Technology
Fund, each of which is a separately managed series of FAIF (and each of which is
referred to herein as an "Acquired Fund"), by Large Cap Growth Fund, Large Cap
Value Fund, Equity Income Fund, and Technology Fund, respectively, each of which
is a separately managed series of FAIF (and each of which is referred to herein
as an "Acquiring Fund"), followed by the distribution of the Acquiring Fund
Shares to the corresponding Acquired Fund Shareholders in liquidation of the
Acquired Fund (each a "Reorganization" and collectively the "Reorganizations"),
pursuant to an Agreement and Plan of Reorganization dated as of _______________,
2002, by and between FAIF with respect to the Acquiring Funds and the Acquired
Funds (the "Reorganization Agreement").
In rendering the opinion set forth below, we have reviewed the
Reorganization Agreement, the Prospectus/Proxy Statement included in the
Registration Statement on Form N-14 filed with the Securities and Exchange
Commission on or about ______________, 2002, and such other materials as we have
deemed necessary or appropriate as a basis for our opinion, including the
following: (a) an officer's certificate of FAIF, dated ______________, 2002,
signed by an authorized officer of FAIF and delivered to us, and (b) an
officer's certificate of U.S. Bancorp Asset Management, Inc., the advisor to
each of the Acquiring Funds and each of the Acquired Funds, and delivered to us.
Our opinion is conditioned on, among other things, the accuracy and
completeness, as of the Closing Date and thereafter, where relevant, of the
facts, information, covenants, agreements, representations, and warranties set
forth in the Reorganization Agreement, the Prospectus/Proxy Statement, and such
other materials.
Unless otherwise provided herein, capitalized terms used in this
opinion shall have the same meaning as set forth in the Reorganization Agreement
or the Prospectus/Proxy Statement, as the case may be.
First American Investment Funds, Inc.
______________________, 2002
Page 2
Pursuant to the Reorganization Agreement, all of the assets and the
identified liabilities of each Acquired Fund as of the Closing Date will be
exchanged for shares of common stock of the corresponding Acquiring Fund, and
such Acquiring Fund will assume the identified liabilities of the Acquired Fund.
All Acquiring Fund Shares then held by the Acquired Fund, representing all of
the assets of the Acquired Fund, will be distributed to the Acquired Fund
Shareholders pursuant to the Reorganization Agreement in a liquidating
distribution and all of the issued and outstanding shares of the Acquired Fund
at the Closing Date will be cancelled on the books of the Acquired Fund. In the
distribution, each Acquired Fund Shareholder will have credited to his, her, or
its account Acquiring Fund Shares of a class corresponding to the class of
shares that he, she, or it held in the Acquired Fund, with an aggregate net
asset value equal at the Closing Date to the aggregate net asset value of the
shareholder's Acquired Fund Shares as of such time.
The acquisition of all of the assets and the identified liabilities of
each Acquired Fund by the corresponding Acquiring Fund is being undertaken
pursuant to the determination by the Board of Directors of FAIF that each
Reorganization is expected to provide certain benefits to the Acquired Fund and
the corresponding Acquiring Fund and that each Reorganization is in the best
interests of such Funds and their respective shareholders. The Board of
Directors has also determined that the interests of the existing shareholders of
each Fund will not be diluted as a result of the Reorganizations. The Board
considered, among other things, the factors that are listed in the
Prospectus/Proxy Statement in making such determinations.
Our opinion is based upon the Internal Revenue Code of 1986, as amended
(the "Code"), as of the date hereof and currently applicable Treasury
Regulations promulgated under the Code, published administrative positions of
the Internal Revenue Service in revenue rulings and revenue procedures currently
in effect, and judicial decisions. Such legal authorities are all subject to
change, either prospectively or retroactively. No assurance can be provided as
to the effect of any such change upon our opinion.
The opinion set forth herein has no binding effect on the Internal
Revenue Service or the courts. No assurance can be given that, if contested, a
court would agree with the opinion set forth herein. Rather, the opinion set
forth herein represents our best legal judgment as to the likely outcome of the
issues addressed herein if such issues were litigated.
Based upon and subject to the foregoing, it is our opinion that:
(1) Each Reorganization will constitute a "reorganization"
within the meaning of Section 368(a) of the Code, and each Acquiring Fund and
each corresponding Acquired Fund will be a party to the reorganization within
the meaning of Section 368(b) of the Code;
First American Investment Funds, Inc.
______________________, 2002
Page 3
(2) In the case of each Reorganization, 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 the Acquiring Fund Shares and the
assumption by the Acquiring Fund of the identified liabilities of the Acquired
Fund;
(3) In the case of each Reorganization, no gain or loss will
be recognized by the Acquired Fund upon the transfer of the Acquired Fund assets
to the Acquiring Fund in exchange for the Acquiring Fund Shares and the
assumption by the Acquiring Fund of the identified liabilities of the Acquired
Fund or upon the distribution (whether actual or constructive) of the Acquiring
Fund Shares to Acquired Fund Shareholders in exchange for their shares of the
Acquired Fund;
(4) In the case of each Reorganization, no gain or loss will
be recognized by the Acquired Fund Shareholders upon the exchange of their
Acquired Fund shares for the Acquiring Fund Shares in liquidation of the
Acquired Fund. Acquired Fund Shareholders subject to taxation will recognize
income upon receipt of any net investment income or net capital gains of the
Acquired Fund which are distributed by the Acquired Fund at or prior to the
Closing Date;
(5) In the case of each Reorganization, the aggregate tax
basis for the 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 held by such shareholder immediately prior to the
Reorganization, and the holding period of the Acquiring Fund Shares to be
received by each Acquired Fund Shareholder will include the period during which
the Acquired Fund shares exchanged therefor were held by such shareholder
(provided the Acquired Fund shares were held as capital assets on the Closing
Date);
(6) In the case of each Reorganization, the tax basis of the
assets of the Acquired Fund acquired by the Acquiring Fund will be the same as
the tax basis of such assets to the Acquired Fund immediately prior to the
Reorganization, and 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.
The foregoing opinion is being furnished pursuant to Section 8.6 of the
Reorganization Agreement, is solely for your benefit in connection with the
Reorganizations, may not be relied upon in any manner or for any purpose by any
other person, nor may copies be delivered to any other person without our prior
written consent. Our opinion is limited to the matters expressly addressed in
the six (6) numbered paragraphs above. No opinion is expressed and none should
be inferred as to any other matter.
First American Investment Funds, Inc.
______________________, 2002
Page 4
We consent to the filing of this opinion as an exhibit to the
above-referenced Registration Statement on Form N-14. In giving such consent, we
do not thereby admit that we are in the category of persons whose consent is
required under Section 7 of the Securities Act of 1933, as amended.
Very truly yours,
Faegre & Benson LLP