1933 Act Registration No. 333-50211
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 23, 1998
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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. ___ [ ]
Post-Effective Amendment No. _1_ [X]
(Check appropriate box or boxes)
- --------------------------------------------------------------------------------
Exact name of Registrant as Specified in Charter:
FIRST AMERICAN INVESTMENT FUNDS, INC.
Area Code and Telephone Number:
(610) 254-1924
Address of Principal Executive Offices:
Oaks, Pennsylvania 19456
Name and Address of Agent for Service:
James R. Foggo
c/o SEI Investments Company
Oaks, Pennsylvania 19456
COPIES TO:
Kathleen L. Prudhomme, Esq.
Dorsey & Whitney LLP
220 South Sixth Street
Minneapolis, Minnesota 55402
It is proposed that this filing shall become effective (check appropriate box):
[X] immediately upon filing pursuant to paragraph (b) of rule 485
[ ] on (date) pursuant to paragraph (b) of rule 485
[ ] 60 days after filing pursuant to paragraph (a)(1) of Rule 485
[ ] on (date) pursuant to paragraph (a)(1) of Rule 485
[ ] 75 days after filing pursuant to paragraph (a)(2) of Rule 485
[ ] on January 31, 1995 pursuant to paragraph (a)(2) of Rule 485
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<PAGE>
PART A
Incorporated by reference to the Registration Statement on Form N-14, File No.
333-50211, filed April 15, 1998.
PART B
Incorporated by reference to the Registration Statement on Form N-14, File No.
333-50211, filed April 15, 1998.
PART C
ITEM 15. INDEMNIFICATION.
Incorporated by reference to the Registration Statement on Form N-14, File No.
333-50211, filed April 15, 1998.
ITEM 16. EXHIBITS.
(1) Articles of Incorporation, as amended and supplemented through
March 30, 1998. (Incorporated by reference to Exhibit (1) to
Post-Effective Amendment No. 36 to the Registrant's Registration
Statement on Form N-1A, File No. 33-16905.)
(2) Bylaws, as amended through February 23, 1998. (Incorporated by
reference to Exhibit (2) to Post-Effective Amendment No. 36 to the
Registrant's Registration Statement on Form N-1A, File No.
33-16905.)
(3) Not Applicable.
(4) Agreement and Plan of Reorganization. (Incorporated by reference
to Appendix III to the Prospectus/Proxy Statement included in Part
A of the Registration Statement on Form N-14, File No. 333-50211,
filed April 15, 1998.)
(5) Not Applicable.
(6) (a) Investment Advisory Agreement dated April 2, 1991, between
Registrant and First Bank National Association, as amended
and supplemented through August 1994. (Incorporated by
reference to Exhibit (5)(a) to Post-Effective Amendment No.
21 to the Registrant's Registration Statement on Form N-1A,
File No. 33-16905 (the "Post-Effective Amendment No. 21").)
(b) Amendment No. 8 to Exhibit A to Investment Advisory
Agreement. (Incorporated by reference to Exhibit (5)(c) to
Post-Effective Amendment No. 34 to the Registrant's
Registration Statement on Form N-1A, File No. 33-16905.)
(c) Supplement dated July 24, 1998, to Investment Advisory
Agreement dated April 2, 1991, with respect to Strategic
Income Fund. (Incorporated by reference to Exhibit 5(c) to
Post-Effective Amendment No. 38 to the Registrant's
Registration Statement on Form N-1A, File No. 33-16905.)
(d) Supplement dated July 23, 1998, to Investment Advisory
Agreement dated April 2, 1991, with respect to the Emerging
Markets Funds. (Incorporated by reference to Exhibit 5(d)
to Post-Effective Amendment No. 39 to the Registrant's
Registration Statement on Form N-1A, File No. 33-16905.)
(e) Sub-Advisory Agreement dated March 28, 1994, between First
Bank National Association and Marvin & Palmer Associates,
Inc., with respect to International Fund. (Incorporated by
reference to Exhibit 5(b) to Post-Effective Amendment No.
21 to the Registrant's Registration Statement on Form N-1A,
File No. 33-16905.)
(f) Sub-Advisory Agreement dated July 23, 1998, between U.S.
Bank National Association and Marvin & Palmer Associates,
Inc., with respect to Emerging Markets Fund. (Incorporated
<PAGE>
by reference to Exhibit 5(f) to Post-Effective Amendment
No. 39 to the Registrant's Registration Statement on Form
N-1A, File No. 33-16905.)
(g) Sub-Advisory Agreement dated July 24, 1998, between U.S.
Bank National Association and Federated Global Research
Corp., with respect to Strategic Income Fund. (Incorporated
by reference to Exhibit 5(g) to Post-Effective Amendment
No. 39 to the Registrant's Registration Statement on Form
N-1A, File No. 33-16905.)
(h) Sub-Advisory Agreement dated July 24, 1998, between U.S.
Bank National Association and Federated Investment
Counseling, with respect to Strategic Income Fund.
(Incorporated by reference to Exhibit 5(h) to
Post-Effective Amendment No. 39 to the Registrant's
Registration Statement on Form N-1A, File No. 33-16905.)
(i) Amendment No. 1 to Sub-Advisory Agreement. (Incorporated by
reference to Exhibit 5(d) to Post-Effective Amendment No.
34 to the Registrant's Registration Statement on Form N-
1A, File No. 33-16905.)
(7) (a) Distribution Agreement [Class A and Class C] dated February
10, 1994 between Registrant and SEI Financial Services
Company. (Incorporated by reference to Exhibit (6)(a) to
the Post-Effective Amendment No. 21.)
(b) Distribution and Service Agreement [Class B] dated August
1, 1994, as amended September 14, 1994 between Registrant
and SEI Financial Services Company. (Incorporated by
reference to Exhibit (6)(b) to the Post-Effective Amendment
No. 21.)
(c) Form of Dealer Agreement. (Incorporated by reference to
Exhibit (6)(c) to the Post-Effective Amendment No. 21.)
(8) Not Applicable.
(9) (a) Custodian Agreement dated September 20, 1993, between
Registrant and First Trust National Association, as
supplemented through August 1994. (Incorporated by
reference to Exhibit (8) to Post-Effective Amendment No. 18
to the Registrant's Registration Statement on Form N-1A,
File No. 33-16905.)
(b) Supplemental dated March 15, 1994 to Custodian Agreement
dated September 20, 1993. (Incorporated by reference to
Exhibit 8(b) to Post Effective Amendment No. 40 to the
Registrant's Registration Statement on Form N-1A, File No.
33-16905.)
(c) Further supplement dated November 21, 1997, with respect to
International Index Fund, on July 23, 1998 with respect to
Strategic Income Fund and Emerging Markets Fund, to
Custodian Agreement dated September 20, 1993. (Incorporated
by reference to Exhibit 8(e) to Post-Effective Amendment
No. 39 to the Registrant's Registration Statement Form
N-1A, File No. 33-16905.)
(d) Compensation Agreement dated as of July 23, 1998, pursuant
to Custodian Agreement. (Incorporated by reference to
Exhibit (8)(b) to Post-Effective Amendment No. 38 to the
Registrant's Registration Statement on Form N-1A, File No.
33-16905.)
(10) (a) Form of Distribution Plan [Class A] shares. (Incorporated
by reference to Exhibit (15)(a) to the Post-Effective
Amendment No. 21.)
(b) Class B Distribution Plan. (Incorporated by reference to
Exhibit (15)(b) to the Post-Effective Amendment No. 21.)
(c) Service Plan [Class B]. (Incorporated by reference to
Exhibit (15)(c) to the Post-Effective Amendment No. 21.)
(d) Multiple Class Plan Pursuant to Rule 18f-3. (Incorporated
by reference to Exhibit (18) to Post-Effective Amendment
No. 23 to the Registrant's Registration Statement on Form
N-1A, File No. 33-16905.)
<PAGE>
(11) Opinion and Consent of Dorsey & Whitney LLP with respect to the
legality of the securities being registered. (Incorporated by
reference to Exhibit (11) to the Registration Statement on Form
N-14, File No. 333-50211, filed on April 15, 1998.)
*(12) (a) Opinion and Consent of Dorsey & Whitney LLP with respect to
tax matters relating to the reorganization of The Americas
Income Trust Inc. with and into FAIF Strategic Income Fund.
(b) Opinion and Consent of Dorsey & Whitney LLP with respect to
tax matters relating to the reorganization of Highlander
Income Fund Inc. with and into FAIF Strategic Income Fund.
(13) (a) Amended and Restated Administration Agreement dated as of
July 1, 1997 between Registrant and SEI Investments
Management Corporation. (Incorporated by reference to
Exhibit (9)(f) to Post-Effective Amendment No. 31 to the
Registrant's Registration Statement on Form N-1A, File No.
33-16905.)
(b) Sub-Administration Agreement effective January 1, 1998, by
and between SEI Investments Management Corporation and
First Bank National Association. (Incorporated by reference
to Exhibit 9(e) to Post Effective Amendment No. 31 to the
Registrant's Registration Statement on Form N-1A, File No.
33-16905.)
(c) Form of Transfer Agency Agreement dated as of October 1,
1996, between Registrant and DST Systems, Inc.
(Incorporated by reference to Exhibit (9)(d) to
Post-Effective Amendment No. 27 to the Registrant's
Registration Statement on Form N-1A, File No. 33-16905.)
(d) Shareholders Account Servicing Agreement dated October 1,
1998 between the Registrant and U.S. Bank National
Association. (Incorporation by reference from Exhibit 9(d)
to Post-Effective Amendment No. 39 to the Registrant's
Registration Statement on Form N-1A, File No. 33-16905.)
(14) (a) Consent of KPMG Peat Marwick LLP. (Incorporated by
reference to Exhibit 14(a) to the Registration Statement on
Form N-14, File No. 333-50211, filed on April 15, 1998.)
(b) Consent of KPMG Peat Marwick LLP. (Incorporated by
reference to Exhibit 14(b) to the Registration Statement on
Form N-14, File No. 333-50211, filed on April 15, 1998.)
(15) Not Applicable.
(16) Powers of Attorney of Directors signing the Registration
Statement. (Incorporated by reference to Exhibit 16 to the
Registration Statement on Form N-14, File No. 333-50211, filed on
April 15, 1998.)
(17) (a) Rule 24f-2 Election of Registrant. (Incorporated by
reference to Exhibit 17(a) to the Registration Statement on
Form N-14, File No. 333-50211, filed on April 15, 1998.)
(b) Form of Proxy Card. (Incorporated by reference to Exhibit
17(b) to the Registration Statement on Form N-14, File No.
333-50211, filed on April 15, 1998.)
- -----------------------------
* Filed herewith.
ITEM 17. UNDERTAKINGS.
(1) The undersigned Registrant agrees that prior to any public
reoffering of the securities registered through the use of a prospectus which is
a part of this Registration Statement by any person or party who is deemed to be
an underwriter within the meaning of Rule 145(c) of the Securities Act, the
reoffering prospectus will contain the information called for by the applicable
registration form for reofferings by persons who may be deemed underwriters, in
addition to the information called for by the other items of the applicable
form.
<PAGE>
(2) The undersigned Registrant agrees that every prospectus that is
filed under paragraph (1) above will be filed as a part of an amendment to the
Registration Statement and will not be used until the amendment is effective,
and that, in determining any liability under the 1933 Act, each post-effective
amendment shall be deemed to be a new registration statement for the securities
offered therein, and the offering of the securities at that time shall be deemed
to be the initial bona fide offering of them.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933, as amended, the Registrant
certifies that it meets all of the requirements for effectiveness of this
Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933
and has duly caused this Post-Effective Amendment to its Registration Statement
No. 333-50211 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Oaks, Commonwealth of Pennsylvania, on the 22nd day
of October, 1998.
FIRST AMERICAN INVESTMENT FUNDS, INC.
ATTEST: /s/ Michael G. Beattie By: /s/ James R. Foggo
--------------------------------- ----------------------------------
Michael G. Beattie James R. Foggo
Vice President
As required by the Securities Act of 1933, this Amendment to the
Registration Statement has been signed below by the following persons in the
capacity and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Michael G.Beattie Controller (Principal **
- --------------------------------- Financial and Accounting
Michael G. Beattie Officer)
* Director **
- ---------------------------------
Robert J. Dayton
* Director **
- ---------------------------------
Andrew M. Hunter III
* Director **
- ---------------------------------
Leonard W. Kedrowski
* Director **
- ---------------------------------
Robert L. Spies
* Director **
- ---------------------------------
Joseph D. Strauss
* Director **
- ---------------------------------
Virginia L. Stringer
* Director **
- ---------------------------------
Roger A. Gibson
* By: /s/ Kathryn L. Stanton
----------------------------
Kathryn L. Stanton
Attorney in Fact
** October 22, 1998
Exhibit 12(a)
[letterhead of Dorsey & Whitney LLP]
July 24, 1998
First American Investment Funds, Inc.
c/o SEI Corporation
Oaks, Pennsylvania 19456
Americas Income Trust Inc.
222 South Ninth St.
Minneapolis, Minnesota 55402
Ladies and Gentlemen:
We have acted as counsel to First American Investment Funds, Inc.
("FAIF") in connection with the proposed acquisition of all of the assets and
all of the liabilities of Americas Income Trust, Inc. (the "Acquired Fund"), by
Strategic Income Fund (the "Acquiring Fund"), a newly formed, separately managed
series of FAIF, pursuant to an Agreement and Plan of Reorganization dated as of
June 22, 1998, by and between the Acquired Fund and FAIF on behalf of the
Acquiring Fund (the "Agreement").
FAIF has asked us to render to it and to the Acquired Fund our
opinion concerning certain federal income tax consequences of the exchange of
Acquiring Fund Shares for the assets and liabilities of the Acquired Fund and
the distribution of such shares to Acquired Fund Shareholders upon liquidation
of the Acquired Fund, all pursuant to the Agreement (the "Reorganization"). In
this regard we have examined (1) the Agreement, (2) the Registration Statement
on Form N-14 (including, but not limited to, the Prospectus and Proxy Statement
included therein) filed with the Securities and Exchange Commission on or about
April 15, 1998, and such other documents and records as we consider necessary in
order to render this opinion. Unless otherwise provided herein, capitalized
terms used in this opinion shall have the same meaning as set forth in the
Prospectus and Proxy Statement or the Agreement, as the case may be.
Pursuant to the Agreement, all of the assets and all of the
liabilities of the Acquired Fund as of the Effective Time will be exchanged for
shares of common stock of Acquiring Fund having an aggregate net asset value
equal to the net value of the assets
<PAGE>
July 24, 1998
Page 2
of the Acquired Fund at the Effective Time. All Acquiring Fund Shares then held
by the Acquired Fund, representing all of the assets of the Acquired Fund, will
be distributed to Acquired Fund Shareholders pursuant to the Agreement in a
liquidating distribution and all of the issued and outstanding shares of the
Acquired Fund at the Effective Time shall be redeemed and cancelled on the books
of the Acquired Fund. In the distribution, each Acquired Fund Shareholder will
receive Acquiring Fund Shares of a class corresponding to the class of shares
that he or she held in the Acquiring Fund, with a net asset value equal at the
Effective Time to the net asset value of the shareholder's Acquired Fund Shares
as of such time.
The acquisition of all of the assets and all of the liabilities of
the Acquired Fund by the Acquiring Fund is being undertaken because the Board of
Directors of the Acquired Fund has determined that the Reorganization will
provide certain benefits to the Acquired Fund and is in the best interests of
the Acquired Fund and its shareholders. In approving the Reorganization, the
Board considered, among other things, the following factors: (i) the terms and
conditions of the Agreement; (ii) the investment management capabilities of U.S.
Bank National Association, adviser to the Acquired Fund and the Acquiring Fund
("USBNA"); (iii) the capabilities of the administrator, distributor, and other
service providers to the Acquiring Fund; (iv) the systems capabilities of USBNA
to provide shareholder servicing, reporting and systems integration with related
programs for Acquired Fund shareholders; (v) the distribution channels used by
the Acquired Fund and the Acquired Fund; (vi) the investment advisory and other
fees paid by the Acquiring Fund, and the projected expense ratios of the
Acquiring Fund as compared to those of the Acquired Fund; (vii) the expected
cost-savings for the Acquired Fund as a result of the Reorganization; (viii) the
investment objectives, policies, limitations and risks of the Acquiring Fund and
their relative compatibility with those of the Acquired Fund; (ix) the
historical investment performance records of the Acquired Fund; (x) the terms
and conditions of the Reorganization Agreement, including those provisions that
were intended to avoid dilution of the interests of the Acquired Fund's
shareholders; and (xi) the effect on Acquired Fund shareholders of the change
from a closed-end investment company to a series of an open-end investment
company.
Our opinion is based upon existing law and currently applicable
Treasury Regulations, currently published administrative positions of the
Internal Revenue Service contained in Revenue Rulings and Revenue Procedures and
judicial decisions,
<PAGE>
July 24, 1998
Page 3
all of which are subject to change prospectively and retroactively. It is not a
guarantee of the current status of the law and should not be accepted as a
guarantee that a court of law or an administrative agency will concur in the
opinion.
Based on the Agreement, the other documents referred to herein, the
facts and assumptions stated above, as well as representations made by FAIF in a
Certificate dated July 24, 1998, representations made by the Acquired Fund in a
Certificate dated July 24, 1998, representations made by USBNA in a Certificate
dated July 24, 1998, the provisions of the Code and judicial and administrative
interpretations as in existence on the date hereof, it is our opinion that the
Reorganization will constitute a reorganization within the meaning of Section
368(a)(1)(D) of the Code, and that the Acquiring Fund and the Acquired Fund will
each be a party to the reorganization within the meaning of Section 368(b) of
the Code.
On the basis of the foregoing opinion that the Reorganization will
constitute a reorganization within the meaning of Section 368 of the Code, it is
further our opinion that:
(i) Acquired Fund shareholders will recognize no income, gain or
loss upon receipt, pursuant to the Reorganization, of
Acquiring Fund Shares. 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 prior to the
Effective Time;
(ii) the tax basis of Acquiring Fund Shares received by each
Acquired Fund shareholder pursuant to the Reorganization will
be equal to the tax basis of the Acquired Fund shares
exchanged therefor;
(iii) the holding period of the Acquiring Fund shares received by
each Acquired Fund shareholder pursuant to the Reorganization
will include the period during which the Acquired Fund
shareholder held the Acquired Fund shares exchanged therefor,
provided that the Acquired Fund shares were held as a capital
asset at the Effective Time;
<PAGE>
July 24, 1998
Page 4
(iv) the Acquired Fund will recognize no income, gain or loss by
reason of the Reorganization;
(v) the Acquiring Fund will recognize no income, gain or loss by
reason of the Reorganization;
(vi) the tax basis of the assets received by the Acquiring Fund
pursuant to the Reorganization will be the same as the basis
of those assets in the hands of the Acquired Fund as of the
Effective Time;
(vii) the holding period of the assets received by the Acquiring
Fund pursuant to the Reorganization will include the period
during which such assets were held by the Acquired Fund,
provided that the Acquired Fund held such assets as capital
assets as of the Effective Time; and
(viii) the Acquiring Fund will succeed to and take into account the
earnings and profits, or deficit in earning and profits, of
the Acquired Fund as of the Effective Time.
The foregoing opinion is being furnished to FAIF and the Acquired
Fund solely for their benefit in connection with the Reorganization and may not
be relied upon by, nor may copies be delivered to, any person without our prior
written consent. Our opinion is limited to the matters expressly addressed in
the eight (8) numbered paragraphs above. No opinion is expressed and none should
be inferred as to any other matter.
We consent to the filing of this opinion as an exhibit to the
above-referenced Registration Statement on Form N-14 and to the reference to
this firm under the caption "Information Relating to the Proposed Reorganization
- -- Federal Income Tax Consequences" in the Prospectus/Proxy Statement included
in Part A of said Registration Statement.
Very truly yours,
/s/ Dorsey & Whitney LLP
Exhibit 12(b)
[letterhead of Dorsey & Whitney LLP]
July 24, 1998
First American Investment Funds, Inc.
c/o SEI Corporation
Oaks, Pennsylvania 19456
Highlander Income Fund Inc.
222 South Ninth St.
Minneapolis, Minnesota 55402
Ladies and Gentlemen:
We have acted as counsel to First American Investment Funds, Inc.
("FAIF") in connection with the proposed acquisition of all of the assets and
all of the liabilities of Highlander Income Fund Inc. (the "Acquired Fund"), by
Strategic Income Fund (the "Acquiring Fund"), a newly formed, separately managed
series of FAIF, pursuant to an Agreement and Plan of Reorganization dated as of
June 22, 1998, by and between the Acquired Fund and FAIF on behalf of the
Acquiring Fund (the "Agreement").
FAIF has asked us to render to it and to the Acquired Fund our
opinion concerning certain federal income tax consequences of the exchange of
Acquiring Fund Shares for the assets and liabilities of the Acquired Fund and
the distribution of such shares to Acquired Fund Shareholders upon liquidation
of the Acquired Fund, all pursuant to the Agreement (the "Reorganization"). In
this regard we have examined (1) the Agreement, (2) the Registration Statement
on Form N-14 (including, but not limited to, the Prospectus and Proxy Statement
included therein) filed with the Securities and Exchange Commission on or about
April 15, 1998, and such other documents and records as we consider necessary in
order to render this opinion. Unless otherwise provided herein, capitalized
terms used in this opinion shall have the same meaning as set forth in the
Prospectus and Proxy Statement or the Agreement, as the case may be.
Pursuant to the Agreement, all of the assets and all of the
liabilities of the Acquired Fund as of the Effective Time will be exchanged for
shares of common stock of Acquiring Fund having an aggregate net asset value
equal to the net value of the assets of the Acquired Fund at the Effective Time.
All Acquiring Fund Shares then held by the
<PAGE>
July 24, 1998
Page 2
Acquired Fund, representing all of the assets of the Acquired Fund, will be
distributed to Acquired Fund Shareholders pursuant to the Agreement in a
liquidating distribution and all of the issued and outstanding shares of the
Acquired Fund at the Effective Time shall be redeemed and cancelled on the books
of the Acquired Fund. In the distribution, each Acquired Fund Shareholder will
receive Acquiring Fund Shares of a class corresponding to the class of shares
that he or she held in the Acquiring Fund, with a net asset value equal at the
Effective Time to the net asset value of the shareholder's Acquired Fund Shares
as of such time.
The acquisition of all of the assets and all of the liabilities of
the Acquired Fund by the Acquiring Fund is being undertaken because the Board of
Directors of the Acquired Fund has determined that the Reorganization will
provide certain benefits to the Acquired Fund and is in the best interests of
the Acquired Fund and its shareholders. In approving the Reorganization, the
Board considered, among other things, the following factors: (i) the terms and
conditions of the Agreement; (ii) the investment management capabilities of U.S.
Bank National Association, adviser to the Acquired Fund and the Acquiring Fund
("USBNA"); (iii) the capabilities of the administrator, distributor, and other
service providers to the Acquiring Fund; (iv) the systems capabilities of USBNA
to provide shareholder servicing, reporting and systems integration with related
programs for Acquired Fund shareholders; (v) the distribution channels used by
the Acquired Fund and the Acquired Fund; (vi) the investment advisory and other
fees paid by the Acquiring Fund, and the projected expense ratios of the
Acquiring Fund as compared to those of the Acquired Fund; (vii) the expected
cost-savings for the Acquired Fund as a result of the Reorganization; (viii) the
investment objectives, policies, limitations and risks of the Acquiring Fund and
their relative compatibility with those of the Acquired Fund; (ix) the
historical investment performance records of the Acquired Fund; (x) the terms
and conditions of the Reorganization Agreement, including those provisions that
were intended to avoid dilution of the interests of the Acquired Fund's
shareholders; and (xi) the effect on Acquired Fund shareholders of the change
from a closed-end investment company to a series of an open-end investment
company.
Our opinion is based upon existing law and currently applicable
Treasury Regulations, currently published administrative positions of the
Internal Revenue Service contained in Revenue Rulings and Revenue Procedures and
judicial decisions, all of which are subject to change prospectively and
retroactively. It is not a guarantee of the current status of the law and should
not be accepted as a guarantee that a court of
<PAGE>
July 24, 1998
Page 3
law or an administrative agency will concur in the opinion.
Based on the Agreement, the other documents referred to herein, the
facts and assumptions stated above, as well as representations made by FAIF in a
Certificate dated July 24, 1998, representations made by the Acquired Fund in a
Certificate dated July 24, 1998, representations made by USBNA in a Certificate
dated July 24, 1998, the provisions of the Code and judicial and administrative
interpretations as in existence on the date hereof, it is our opinion that the
Reorganization will constitute a reorganization within the meaning of Section
368(a)(1)(C) of the Code, and that the Acquiring Fund and the Acquired Fund will
each be a party to the reorganization within the meaning of Section 368(b) of
the Code.
On the basis of the foregoing opinion that the Reorganization will
constitute a reorganization within the meaning of Section 368 of the Code, it is
further our opinion that:
(i) Acquired Fund shareholders will recognize no income, gain or
loss upon receipt, pursuant to the Reorganization, of
Acquiring Fund Shares. 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 prior to the
Effective Time;
(ii) the tax basis of Acquiring Fund Shares received by each
Acquired Fund shareholder pursuant to the Reorganization will
be equal to the tax basis of the Acquired Fund shares
exchanged therefor;
(iii) the holding period of the Acquiring Fund shares received by
each Acquired Fund shareholder pursuant to the Reorganization
will include the period during which the Acquired Fund
shareholder held the Acquired Fund shares exchanged therefor,
provided that the Acquired Fund shares were held as a capital
asset at the Effective Time;
(iv) the Acquired Fund will recognize no income, gain or loss by
reason of the Reorganization;
<PAGE>
July 24, 1998
Page 4
(v) the Acquiring Fund will recognize no income, gain or loss by
reason of the Reorganization;
(vi) the tax basis of the assets received by the Acquiring Fund
pursuant to the Reorganization will be the same as the basis
of those assets in the hands of the Acquired Fund as of the
Effective Time;
(vii) the holding period of the assets received by the Acquiring
Fund pursuant to the Reorganization will include the period
during which such assets were held by the Acquired Fund,
provided that the Acquired Fund held such assets as capital
assets as of the Effective Time; and
(viii) the Acquiring Fund will succeed to and take into account the
earnings and profits, or deficit in earning and profits, of
the Acquired Fund as of the Effective Time.
The foregoing opinion is being furnished to FAIF and the Acquired
Fund solely for their benefit in connection with the Reorganization and may not
be relied upon by, nor may copies be delivered to, any person without our prior
written consent. Our opinion is limited to the matters expressly addressed in
the eight (8) numbered paragraphs above. No opinion is expressed and none should
be inferred as to any other matter.
We consent to the filing of this opinion as an exhibit to the
above-referenced Registration Statement on Form N-14 and to the reference to
this firm under the caption "Information Relating to the Proposed Reorganization
- -- Federal Income Tax Consequences" in the Prospectus/Proxy Statement included
in Part A of said Registration Statement.
Very truly yours,
/s/ Dorsey & Whitney LLP
