<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 31, 1999
File No. 333-73239
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 /X/
PRE-EFFECTIVE AMENDMENT NO. 1 /X/
POST-EFFECTIVE AMENDMENT NO. ____ /X/
STI CLASSIC FUNDS
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
2 OLIVER STREET
BOSTON, MASSACHUSETTS 02109
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER INCLUDING AREA CODE (800) 342-5734
MARK NAGLE
C/O SEI INVESTMENTS COMPANY
ONE FREEDOM VALLEY ROAD
OAKS, PENNSYLVANIA 19456
(NAME AND ADDRESS OF AGENT FOR SERVICE)
Copies to:
RICHARD W. GRANT, ESQ. JOHN H. GRADY, JR., ESQ.
MORGAN, LEWIS & BOCKIUS LLP MORGAN, LEWIS & BOCKIUS LLP
1701 MARKET STREET 1701 MARKET STREET
PHILADELPHIA, PA 19103 PHILADELPHIA, PA 19103
- --------------------------------------------------------------------------------
Registrant hereby amends this Registration Statement on such date or dates as
may be necessary to delay its effective date until the Registrant shall file a
further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission acting pursuant to said Section 8(a)
may determine.
No filing fee is required because an indefinite number of shares have previously
been registered pursuant to Rule 24f-2 under the Investment Company Act of 1940.
- --------------------------------------------------------------------------------
<PAGE>
STI CLASSIC FUNDS
ITEMS REQUIRED BY FORM N-14
Cross reference sheets, Part A and Part B are herein incorporated by reference
to the Registrant's Registration Statement filed on Form N-14 with the SEC via
EDGAR Accession No. 0000104769-99-008150 on March 2, 1999.
<PAGE>
STI CLASSIC FUNDS
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
FORM N-14
PRE-EFFECTIVE AMENDMENT NO. 1
PART C
OTHER INFORMATION
Item 15. INDEMNIFICATION.
Article VIII of the Registrant's Agreement and Declaration of Trust filed as
Exhibit (a) to the Registration Statement is incorporated by reference. Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to trustees, directors, officers and controlling persons of the
Registrant by the Registrant pursuant to the Declaration of Trust or otherwise,
the Registrant is aware that in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Act and, therefore, is unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by trustees, directors, officers or
controlling persons of the Registrant in connection with the successful defense
of any act, suit or proceeding) is asserted by such trustees, directors,
officers or controlling persons in connection with the shares being registered,
the Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issues.
Item 16. Exhibits
(1) Agreement and Declaration of Trust -- originally filed with
Registrant's Registration Statement on Form N-1A filed
February 12, 1992 and incorporated by reference to Exhibit 1
of Post-Effective Amendment No. 15 to the Registrant's
Registration Statement filed on Form N-1A with the SEC via
EDGAR Accession No. 0000912057-96-015938 on July 31, 1996.
(2)(a) By-Laws -- originally filed with Registrant's Pre-Effective
Amendment No. 1 filed on Form N-1A April 23, 1992 and
incorporated by reference to Exhibit 2 of Post-Effective
Amendment No. 15 to the Registrant's Registration Statement
filed on Form N-1A with the SEC via EDGAR Accession No.
0000912057-96-015938 on July 31, 1996.
(2)(b) Amended By-Laws - incorporated by reference to Exhibit
(b)(2) of Post-Effective Amendment No. 23 to the
Registrant's Registration Statement filed on Form N-1A with
the SEC via EDGAR Accession No. 0001047469-98-027407 on
July 15, 1998.
(3) Not applicable.
(4) Form of Agreement and Plan of Reorganization - as originally
filed with the Registrant's Registration Statement filed on
Form N-14 with the SEC via EDGAR Accession No.
0001047469-99-008150 on March 2, 1999.
(5) Not applicable.
(6)(a) Revised Investment Advisory Agreement with Trusco Capital
Management, Inc. -- as originally filed with Registrant's
Post-Effective Amendment No. 5 filed August 2, 1993 on Form
N-1A and incorporated by reference to Exhibit 5(c) of
Post-Effective Amendment No. 15 to the Registrant's
Registration Statement filed on
<PAGE>
Form N-1A with the SEC via EDGAR Accession No.
0000912057-96-015938 on July 31, 1996.
(6)(b) Investment Advisory Agreement with American National Bank
and Trust Company -- as originally filed with Registrant's
Post-Effective Amendment No. 6 filed on Form N-1A
October 22, 1993 and as Exhibit 5(d) of Post-Effective
Amendment No. 15 to the Registrant's Registration Statement
filed with the SEC on Form N-1A via EDGAR Accession No.
0000912057-96-015938 on July 31, 1996.
(6)(c) Investment Advisory Agreement with Sun Bank
Capital Management, National Association (now STI
Capital Management, N.A. -- as originally filed
with Registrant's Post-Effective Amendment No. 6
on Form N-1A filed October 22, 1993 and
incorporated by reference to Exhibit 5(e) of
Post-Effective Amendment No. 15 to the
Registrant's Registration Statement filed with the
SEC on Form N-1A via EDGAR Accession No.
0000912057-96-015938 on July 31, 1996.
(6)(d) Investment Advisory Agreement with Trust Company
Bank (now SunTrust Bank, Atlanta) -- as originally
filed with Registrant's Post-Effective Amendment
No. 6 on Form N-1A filed October 22, 1993 and
incorporated by reference to Exhibit D(4) of
Post-Effective Amendment No. 24 to the
Registrant's Registration Statement filed with the
SEC via EDGAR Accession No. 00001047469-98-028802
on July 30, 1998.
(7)(a) Distribution Agreement -- incorporated by reference to
Exhibit 6 of Post-Effective Amendment No. 16 to the
Registrant's Registration Statement on Form N-1A filed with
the SEC via EDGAR Accession No. 0000912057-96-021336 on
September 27, 1996.
(8) Not applicable.
(9)(a) Custodian Agreement with Trust Company Bank dated February
1, 1994 -- originally filed with Registrant's Post-Effective
Amendment No. 13 on Form N-1A filed September 28, 1995 and
incorporated by reference to Exhibit 8(b) of Post-Effective
Amendment No. 15 to the Registrant's Registration Statement
filed on Form N-1A with the SEC via EDGAR Accession No.
0000912057-96-015938 on July 31, 1996.
(9)(b) Custodian Agreement with the Bank of California --
incorporated by reference to Exhibit 8(a) of Post-Effective
Amendment No. 15 to the Registrant's Registration Statement
filed on Form N-1A with the SEC via EDGAR Accession No.
0000912057-96-015938 on July 31, 1996.
(9)(c) Fourth Amendment to Custodian Agreement by and between STI
Trust & Investment Operations, Inc. and The Bank of New York
dated May 6, 1997 -- incorporated by reference to Exhibit
8(d) of Post-Effective Amendment No. 21 to the Registrant's
Registration Statement filed on Form N-1A with the SEC via
EDGAR Accession No. 0000912057-97-032207 on September 30,
1997.
(10) Not applicable.
(11) Opinion and Consent of Morgan, Lewis & Bockius LLP that
shares will be validly issued, fully paid and non-assessable
- incorporated to the Registrant's Registration Statement
filed on Form N-14 with the SEC via EDGAR Accession No.
0000104769-99-008150 on March 2, 1999.
(12) Opinion and Consent of Hunton & Williams as to tax matters
and consequences is filed herewith.
<PAGE>
(13)(a) Transfer Agent Agreement with Federated Services Company
dated May 14, 1994 -- originally filed with Post-Effective
Amendment No. 9 on Form N-1A filed September 22, 1994 and
incorporated by reference to Exhibit 8(c) of Post-Effective
Amendment No. 15 to the Registrant's Registration Statement
on Form N-1A filed with the SEC via EDGAR Accession No.
0000912057-96-015938 on July 31, 1996.
(13)(b) Administration Agreement with SEI Financial Management
Corporation dated May 29, 1995 -- originally filed with
Post-Effective Amendment No. 12 on Form N-1A filed
August 17, 1995 and incorporated by reference to Exhibit
9(a) of Post-Effective Amendment No. 15 to the Registrant's
Registration Statement filed with the SEC via EDGAR
Accession No. 0000912057-96-015938 on July 31, 1996.
(13)(c) Consent to Assignment and Assumption of the
Administration Agreement between STI Classic Funds
and SEI Financial Management Corporation --
incorporated by reference to Exhibit 9(b) of
Post-Effective Amendment No. 21 to the
Registrant's Registration Statement filed on Form
N-1A with the SEC via EDGAR Accession No.
0000912057-97-032207 on September 30, 1997.
(14)(a) Consent of Arthur Andersen LLP is filed herewith.
(14)(b) Consent of Deloitte & Touche LLP is filed herewith.
(15) Not applicable.
(16) Not applicable.
(17)(a) Prospectuses and SAIs for the Trust Shares, Investor Shares,
and Flex Shares of STI Classic Funds dated October 1,
1998 - incorporated by reference to the Rule 497(e) filing
on Form N-1A with the SEC via EDGAR accession number
0001047469-98-036330 as filed October 2, 1998.
(17)(b) Prospectuses and SAIs for Trust Class Shares of the
CrestFunds dated March 31, 1998 incorporated by reference
to the Rule 497(e) filing on Form N-1A with the SEC via
EDGAR accession number 0000916641-98-000435 as filed on
April 7, 1998.
(17)(c) Prospectus and SAI for the Investor Class A and B Shares of
the CrestFunds dated March 31, 1998 - incorporated by
reference to the Rule 485(b) filing on Form N-1A with the
SEC via EDGAR accession number 0000916641-98-000390 as filed
March 31, 1998.
(17)(d) Audited Financial Statements for the STI Classic Funds dated
May 31, 1998 - incorporated by reference to the N-30 D
filing with the SEC via EDGAR accession number
0000935069-98-000125 as filed July 30, 1998.
(17)(e) Audited Financial Statements for the Money Market Funds of
the STI Classic Funds dated May 31, 1998 - incorporated by
reference to the N-30D filing with the SEC via EDGAR
accession number 0000935069-98-000125 as filed July 30,
1998.
(17)(f) Semi-Annual Financial Report for the Money Market Funds of
the STI Classic Funds dated November 30, 1998 - incorporated
by reference to the N-30D filing with the SEC via EDGAR
accession number 0000935069-99-000011 as filed on January
28, 1999.
(17)(g) Semi-Annual Financial Report for the STI Classic Funds dated
November 30, 1998 - incorporated by reference to the N-30D
filing with the SEC via EDGAR accession number
0000935069-99-0009 as filed on January 28, 1999.
<PAGE>
(17)(h) Audited Financial Statements for the CrestFunds dated
November 30, 1998 - incorporated by reference to the N-30D
filing with the SEC via EDGAR accession number
0000935069-99-00012 as filed January 28, 1999.
(17)(i) Pro Forma Financial Statements as originally filed with the
Registrant's Registration Statement filed on Form N-14 with
the SEC via EDGAR Accession No. 0001047469-99-008150 on
March 2, 1999.
Item 17. Undertakings.
The 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.
The 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 this Registration Statement has
been signed on behalf of STI Classic Funds in the city of Oaks, and state of,
Pennsylvania on the 26th day of March, 1999.
STI Classic Funds
By: /s/ Mark Nagle
------------------------------------
Mark Nagle, President and Chief
Executive Officer
As required by the Securities Act of 1933, this registration statement has
been signed by the following persons in the capacities and on the dates
indicated:
* Trustee March 26, 1999
----------------------
F. Wendell Gooch
* Trustee March 26, 1999
----------------------
Daniel S. Goodrum
* Trustee March 26, 1999
----------------------
Jesse S. Hall
* Trustee March 26, 1999
----------------------
Wilton Looney
* Trustee March 26, 1999
----------------------
Champney A. McNair
* Trustee March 26, 1999
----------------------
T. Gordy Germany
* Trustee March 26, 1999
----------------------
Bernard F. Sliger
* Trustee March 26, 1999
----------------------
Jonathan T. Walton
* Trustee March 26, 1999
----------------------
William H. Cammack
* Controller, Treasurer & March 26, 1999
---------------------- Chief Financial Officer
Carol Rooney
/s/ Mark Nagle President & Chief March 26, 1999
---------------------- Executive Officer
Mark Nagle
* By: /s/ Mark Nagle
----------------------------------
Mark Nagle, With Power of Attorney
previously filed
<PAGE>
Exhibit Index
(1) Agreement and Declaration of Trust -- originally filed with
Registrant's Registration Statement on Form N-1A filed February 12,
1992 and incorporated by reference to Exhibit 1 of Post-Effective
Amendment No. 15 on to the Registrant's Registration Statement filed
on Form N-1A with the SEC via EDGAR Accession No. 0000912057-96-015938
on July 31, 1996.
(2)(a) By-Laws -- originally filed with Registrant's Pre-Effective Amendment
No. 1 on Form N-1A filed April 23, 1992 and incorporated by reference
to Exhibit 2 of Post-Effective Amendment No. 15 to the Registrant's
Registration Statement filed on Form N-1A with the SEC via EDGAR
Accession No. 0000912057-96-015938 on July 31, 1996.
(2)(b) Amended By-Laws -- incorporated by reference to Exhibit (b)(2) of
Post-Effective Amendment No. 23 on Form N-1A to the Registrant's
Registration Statement filed with the SEC via EDGAR Accession No.
0001047469-98-027407 on July 15, 1998.
(3) Not applicable.
(4) Form of Agreement and Plan of Reorganization - as originally filed
with the Registrant's Registration Statement filed on Form N-14 with
the SEC via EDGAR Accession No. 0001047469-99-008150 on March 2, 1999.
(5) Not applicable.
(6)(a) Revised Investment Advisory Agreement with Trusco Capital Management,
Inc. -- as originally filed with Registrant's Post-Effective Amendment
No. 5 on Form N-1A filed August 2, 1993 and incorporated by reference
to Exhibit 5(c) of Post-Effective Amendment No. 15 to the Registrant's
Registration Statement filed on Form N-1A with the SEC via EDGAR
Accession No. 0000912057-96-015938 on July 31, 1996.
(6)(b) Investment Advisory Agreement with American National Bank and Trust
Company -- as originally filed with Registrant's Post-Effective
Amendment No. 6 filed on Form N-1A October 22, 1993 and as Exhibit
5(d) of Post-Effective Amendment No. 15 to the Registrant's
Registration Statement filed on Form N-1A with the SEC via EDGAR
Accession No. 0000912057-96-015938 on July 31, 1996.
(6)(c) Investment Advisory Agreement with Sun Bank Capital
Management, National Association (now STI Capital
Management, N.A. -- as originally filed with Registrant's
Post-Effective Amendment No. 6 on Form N-1A filed October
22, 1993 and incorporated by reference to Exhibit 5(e) of
Post-Effective Amendment No. 15 to the Registrant's
Registration Statement filed on Form N-1A with the SEC via
EDGAR Accession No. 0000912057-96-015938 on July 31, 1996.
(6)(d) Investment Advisory Agreement with Trust Company Bank (now
SunTrust Bank, Atlanta) -- as originally filed with
Registrant's Post-Effective Amendment No. 6 on Form N-1A
filed October 22, 1993 and incorporated by reference to
Exhibit D(4) of Post-Effective Amendment No. 24 to the
Registrant's Statement on Form N-1A filed with the SEC via
EDGAR Accession No. 0001047469-98-028802 on July 30, 1998.
(7)(a) Distribution Agreement -- incorporated by reference to Exhibit 6 of
Post-Effective Amendment No. 16 to the Registrant's Registration
Statement on Form N-1A filed with the SEC via EDGAR Accession No.
0000912057-96-021336 on September 27, 1996.
(8) Not applicable.
(9)(a) Custodian Agreement with Trust Company Bank dated February 1, 1994 --
originally filed with Registrant's Post-Effective Amendment No. 13 on
Form N-1A filed September 28, 1995 and incorporated by reference to
Exhibit 8(b) of Post-Effective Amendment No. 15 to the Registrant's
Registration Statement on Form N-1A filed with the SEC via EDGAR
Accession No. 0000912057-96-015938 on July 31, 1996.
<PAGE>
(9)(b) Custodian Agreement with the Bank of California -- incorporated by
reference to Exhibit 8(a) of Post- Effective Amendment No. 15 to the
Registrant's Registration Statement on Form N-1A filed with the SEC
via EDGAR Accession No. 0000912057-96-015938 on July 31, 1996.
(9)(c) Fourth Amendment to Custodian Agreement by and between STI Trust &
Investment Operations, Inc. and The Bank of New York dated May 6, 1997
-- incorporated by reference to Exhibit 8(d) of Post-Effective
Amendment No. 21 to the Registrant's Registration Statement on Form
N-1A filed with the SEC via EDGAR Accession No. 0000912057-97-032207
on September 30, 1997.
(10) Not applicable.
(11) Opinion and Consent of Morgan, Lewis & Bockius LLP that shares will be
validly issued, fully paid and non-assessable - as originally filed
with the Registrant's Registration Statement filed on Form N-14 with
the SEC via EDGAR Accession No. 0001047469-99-008150 on March 2, 1999.
(12) Opinion and Consent of Hunton & Williams LLP as to tax matters and
consequences is filed herewith.
(13)(a) Transfer Agent Agreement with Federated Services Company dated May 14,
1994 -- originally filed with Post-Effective Amendment No. 9 on Form
N-1A filed September 22, 1994 and incorporated by reference to Exhibit
8(c) of Post-Effective Amendment No. 15 to the Registrant's
Registration Statement on Form N-1A filed with the SEC via EDGAR
Accession No. 0000912057-96-015938 on July 31, 1996.
(13)(b) Administration Agreement with SEI Financial Management Corporation
dated May 29, 1995 -- originally filed with Post-Effective Amendment
No. 12 on Form N-1A filed August 17, 1995 and incorporated by
reference to Exhibit 9(a) of Post-Effective Amendment No. 15 to the
Registrant's Registration Statement on Form N-1A filed with the SEC
via EDGAR Accession No. 0000912057-96-015938 on July 31, 1996.
(13)(c) Consent to Assignment and Assumption of the Administration
Agreement between STI Classic Funds and SEI Financial
Management Corporation -- incorporated by reference to
Exhibit 9(b) of Post-Effective Amendment No. 21 to the
Registrant's Registration Statement on Form N-1A filed with
the SEC via EDGAR Assession No. 0000912057-97-032207 on
September 30, 1997.
(14)(a) Consent of Arthur Andersen LLP is filed herewith.
(14)(b) Consent of Deloitte & Touche LLP is filed herewith.
(15) Not applicable.
(16) Not applicable.
(17)(a) Prospectuses and SAIs for the Trust Shares, Investor Shares, and
Flex Shares of STI Classic Funds dated October 1, 1998 - incorporated
by reference to the Rule 497(e) filing on Form N-1A with the SEC via
EDGAR accession number 0001047469-98-036330 as filed October 2, 1998.
(17)(b) Prospectus and SAI for the Trust Class Shares of the CrestFunds dated
March 31, 1998 - incorporated by reference to the Rule 497(e) filing
on Form N-1A with the SEC via EDGAR accession number
0000916641-98-000435 as filed on April 7, 1998.
(17)(c) Prospectus and SAI for the Investor Class A and B Shares of the
CrestFunds dated March 31, 1998 - incorporated by reference to the
Rule 485(b) filing on Form N-1A with the SEC via EDGAR accession
number 0000916641-98-000390 as filed March 31, 1998.
(17)(d) Audited Financial Statements for the STI Classic Funds dated May 31,
1998 - incorporated by reference to the N-30 D filing with the SEC via
EDGAR accession number 0000935069-98-000125 as filed July 30, 1998.
<PAGE>
(17)(e) Audited Financial Statements for the Money Market Funds of the STI
Classic Funds dated May 31, 1998 - incorporated by reference to the
N-30D filing with the SEC via EDGAR accession number
0000935069-98-000125 as filed July 30, 1998.
(17)(f) Semi-Annual Financial Report for the Money Market Funds of the STI
Classic Funds dated November 30, 1998 - incorporated by reference to
the N-30D filing with the SEC via EDGAR accession number
0000935069-99-000011 as filed on January 28, 1999.
(17)(g) Semi-Annual Financial Report for the STI Classic Funds dated November
30, 1998 - incorporated by reference to the N-30D filing with the SEC
via EDGAR accession number 0000935069-99-0009 as filed on January 28,
1999.
(17)(h) Audited Financial Statements for the CrestFunds dated November 30,
1998 - incorporated by reference to the N-30D filing with the SEC via
EDGAR accession number 0000935069-99-00012 as filed January 28, 1999.
(17)(i) Pro Forma Financial Statements as originally filed with the
Registrant's Registration Statement filed on Form N-14 with the SEC
via EDGAR Accession No. 0001047469-99-008150 on March 2, 1999.
<PAGE>
[Hunton & Williams Letterhead]
March 29, 1999
CrestFunds, Inc.
32 South Street
Baltimore, MD 21202
STI Classic Funds
2 Oliver Street
Boston, MA 02109
REORGANIZATION OF CRESTFUNDS, INC.
AND STI CLASSIC FUNDS
CERTAIN FEDERAL INCOME TAX MATTERS
Ladies and Gentlemen:
We have acted as counsel to CrestFunds, Inc., a Maryland corporation
("CrestFunds"), in connection with the proposed acquisitions of the assets of
each of CrestFunds' fifteen investment series (the "Selling Funds") by
fifteen corresponding investment series (the "Acquiring Funds") of STI
Classic Funds, a Massachusetts business trust ("STI"). For six of the fifteen
acquisitions, the Acquiring Fund will be an existing STI fund (a "C
Reorganization"). For nine of the fifteen acquisitions, the Acquiring Fund
will be a newly-formed STI fund (an "F Reorganization"). This letter
refers to the C Reorganizations and F Reorganizations collectively as the
"Reorganizations" and individually as a "Reorganization." You have requested
our opinion concerning certain federal income tax consequences of the
Reorganizations.
With respect to each Reorganization; (1) the Selling Fund will transfer
all of its assets to the corresponding Acquiring Fund in exchange for Trust
Shares, Investor Shares and/or Flex Shares of beneficial interest of the
corresponding Acquiring Fund (the "Acquiring Fund Shares"); (2) each Acquiring
Fund will assume the liabilities, if any, of
<PAGE>
CrestFunds, Inc.
STI Classic Funds
March 29, 1999
Page 2
the corresponding Selling Fund; (3) each Selling Fund will distribute the
Acquiring Fund Shares (including fractional shares, if any) to its
shareholders; and (4) each Selling Fund will terminate its existence. No
shareholders of any Selling Fund are entitled to dissenters' rights with
respect to a Reorganization.
The Reorganization will be accomplished pursuant to an Agreement and
Plan of Reorganization (the "Agreement"). In giving this opinion, we have
examined a draft of the Agreement and such other documents as we have
considered necessary. We assume that the final, executed versions of the
Agreement and other relevant documents currently in draft form will be
substantially the same as the drafts we have reviewed, except for any changes
that we approve. In addition, we assume the following facts:
1. Each Selling Fund is a separate investment series of CrestFunds that
qualifies, and will continue to qualify up to the effective time of its
Reorganization, as a regulated investment company ("RIC") under Subchapter M
of the Internal Revenue Code of 1986, as amended (the "Code"), and as a
separate corporation under section 851(g) of the Code. This means, among
other things, that for each C Reorganization, the Selling Fund will satisfy
the distribution requirements of section 852(a)(1) of the Code for its
taxable year ending on the effective date of its Reorganization.
2. Each Acquiring Fund is a separate investment series of STI that
qualifies, and will continue to qualify after its Reorganization, as a RIC
under Subchapter M of the Code and as a separate corporation under section
851(g) of the Code.
3. For each Reorganization, the fair market value of the Acquiring Fund
Shares received by a Selling Fund shareholder will be approximately equal to
the fair market value of the Selling Fund shares surrendered in exchange.
4. For each Reorganization, the Acquiring Fund will acquire at least 90%
of the fair market value of the net assets and at least 70% of the fair
market value of the gross assets held by the corresponding Selling Fund
immediately before the Reorganization. For this purpose, assets of the
Selling Fund held immediately before the Reorganization are deemed to include
(a) amounts paid or payable for expenses incurred by the Selling Fund in
connection with the Reorganization and (b) all redemptions and distributions
made by the Selling Fund in connection with the Reorganization (except for
redemptions pursuant to a demand of a shareholder in the ordinary course of
the Selling Fund's
<PAGE>
CrestFunds, Inc.
STI Classic Funds
March 29, 1999
Page 3
business as an open-end investment company pursuant to section 22(e) of
the Investment Company Act of 1940 (the "1940 Act") and regular, normal
dividends).
5. For each F Reorganization, immediately following the F
Reorganization, the Acquiring Fund will possess the same assets and
liabilities, if any, except for assets used to pay expenses incurred in
connection with the transaction, as those possessed by the Selling Fund
immediately before the F Reorganization. Assets used to pay expenses and all
redemptions and distributions (except for regular, normal redemptions and
dividends) made by the Selling Fund in connection with the F Reorganization
will, in the aggregate, constitute less than one percent of the net assets of
the Selling Fund.
6. For each C Reorganization, the Acquiring Fund will continue the
historic investment business of the Selling Fund (with substantially the same
investment objectives as those of the Selling Fund) or use a majority of the
Selling Fund's historic business assets in an investment business. For this
purpose, the Selling Fund's historic business assets include any assets
disposed of by the Selling Fund pursuant to the Agreement.
7. For each F Reorganization, the Acquiring Fund will continue the
historic investment business of the Selling Fund (with substantially the same
investment objectives as those of the Selling Fund).
8. For each Reorganization, there is no plan or intention by the
Acquiring Fund to sell or otherwise dispose of, or to cause the sale or
disposition of, any of the assets of the Selling Fund acquired in the
Reorganization, except for (a) dispositions made in the ordinary course of
business and/or (b) in the case of a C Reorganization only, the sale of a
minority of the Selling Fund's assets (including any assets disposed of by
the Selling Fund pursuant to the Agreement) if necessary to comply with the
Acquiring Fund's investment objectives or to comply with its investment
limitations.
9. For each Reorganization, there is no intercorporate indebtedness
between the Acquiring Fund and the Selling Fund.
10. For each Reorganization, none of the Selling Fund's shares has been
or will be redeemed directly or indirectly (including, without limitation,
through a partnership) by the Selling Fund in anticipation of the
Reorganization (except for redemptions
<PAGE>
CrestFunds, Inc.
STI Classic Funds
March 29, 1999
Page 4
pursuant to a demand of a shareholder in the ordinary course of the Selling
Fund's business as an open-end investment company pursuant to section 22(e)
of the 1940 Act), and the Selling Fund has not made and will not make any
extraordinary distribution with respect to its shares in anticipation of the
Reorganization (except for any distribution necessary for the Selling Fund to
comply with the distribution requirements of section 852(a)(1) of the Code).
11. For each Reorganization, the Acquiring Fund has no plan or intention
to reacquire directly or indirectly (including, without limitation, through a
partnership) or to make any extraordinary distribution with respect to any
Acquiring Fund Shares issued in the Reorganization (except for redemptions
pursuant to a demand of a shareholder in the ordinary course of the Acquiring
Fund's business as an open-end investment company pursuant to section 22(c)
of the 1940 Act).
12. For each Reorganization, the Acquiring Fund (a) has not transferred
and will not transfer cash or other property to the Selling Fund in
anticipation of the Reorganization and (b) has not made and will not make any
loan to the Selling Fund in anticipation of the Reorganization.
13. For each Reorganization, the Acquiring Fund, the Selling Fund, and
the Selling Fund's shareholders have paid or will pay their respective
expenses, if any, incurred in connection with the Reorganization, except that
the Acquiring Fund might pay expenses of the Selling Fund solely and directly
related to such Reorganization.
14. For each Reorganization, the liabilities, if any, of the Selling
Fund to be assumed by the Acquiring Fund and the liabilities to which the
assets of the Selling Fund are subject, if any, were incurred by the Selling
Fund in the ordinary course of business, except for liabilities for expenses
of the Selling Fund solely and directly related to the Reorganization.
15. For each Reorganization, on the effective date of the
Reorganization, each of the fair market value and the adjusted federal income
tax basis of the Selling Fund's assets transferred to the Acquiring Fund
will exceed the sum of the Selling Fund's liabilities, if any, assumed by the
Acquiring Fund, plus (without duplication) the amount of liabilities, if any,
to which the transferred assets are subject.
<PAGE>
CrestFunds, Inc.
STI Classic Funds
March 29, 1999
Page 5
16. For each Reorganization, the Selling Fund either (a) does not hold
any asset acquired from another corporation in a transaction in which gain or
loss was not recognized for federal income tax purposes by the transferor
corporation or (b) if it does hold an asset so acquired, it does not hold any
asset the disposition of which could be subject to tax under section 1374 of
the Code or subject to a consent under section 341(f) of the Code.
17. For each Reorganization, no Selling Fund shares acquired in
connection with the performance of services are subject to a substantial risk
of forfeiture within the meaning of section 83(a) of the Code.
18. For each Reorganization, the Acquiring Fund does not own, has not
owned during the last five years, and will not own before the
Reorganization, directly or indirectly, any of the Selling Fund shares.
19. For each Reorganization, none of the compensation received by any
shareholder-employee of the Selling Fund will be separate compensation for,
or allocable to, any Selling Fund shares; none of the Acquiring Fund Shares
received by any shareholder-employee of the Selling Fund will be separate
consideration for, or allocable to, any employment agreement; and the
compensation paid to any shareholder-employee of the Selling Fund will be for
services actually rendered and will be commensurate with amounts paid to
third parties bargaining at arm's length for similar services.
20. For each F Reorganization, immediately following the F
Reorganization, the Selling Fund shareholders will own all of the outstanding
Acquiring Fund Shares and will own such shares solely by reason of their
ownership of shares of the Selling Fund immediately before the F
Reorganization.
21. For each F Reorganization, the Acquiring Fund will not have any
assets before the Reorganization, except such assets as may be required to
satisfy minimum capitalization requirements.
22. For each F Reorganization, the Acquiring Fund has no plan or
intention to issue additional Acquiring Fund Shares following the F
Reorganization, except in the ordinary course of its business as an open-end
investment company.
<PAGE>
CrestFunds, Inc.
STI Classic Funds
March 29, 1999
Page 6
23. For each F Reorganization, as the time of the F Reorganization, the
Selling Fund will not have outstanding any warrants, options, convertible
securities, or any other type of right pursuant to which any person could
acquire shares in the Selling Fund.
Based on the foregoing, and assuming that (1) the preceding factual
assumptions will be accurate at the effective time of each Reorganization
and (2) the Reorganizations, including the termination of each Selling Fund's
existence, will be consummated in accordance with the Agreement, we are of
the opinion that (under existing law) for federal income tax purposes:
1. Each Reorganization will qualify as a reorganization within the
meaning of section 368(a) of the Code.
2. For each Reorganization, the Selling Fund and the Acquiring Fund each
will be a "party to a reorganization" within the meaning of section 368(b) of
the Code.
3. For each Reorganization, the Selling Fund will recognize no gain or
loss on the transfer of its assets to the Acquiring Fund in exchange solely
for Acquiring Fund Shares and the assumption of its liabilities or on the
distribution of such Acquiring Fund Shares to its shareholders.
4. For each Reorganization, the Acquiring Fund will recognize no gain or
loss on its receipt of the assets of the Selling Fund in exchange solely for
Acquiring Fund Shares and the assumption of the Selling Fund's liabilities.
5. For each Reorganization, the Acquiring Fund's basis in the assets
received from the Selling Fund will be the same as the Selling Fund's basis
in such assets immediately before the Reorganization.
6. For each Reorganization, the Acquiring Fund's holding period for the
assets received will include the period during which the Selling Fund held
such assets.
7. For each Reorganization, a Selling Fund shareholder will recognize no
gain or loss on the exchange of Selling Fund shares for Acquiring Fund Shares
in the Reorganization.
<PAGE>
CrestFunds, Inc.
STI Classic Funds
March 29, 1999
Page 7
8. For each Reorganization, the aggregate basis of the Acquiring Fund
Shares received by a Selling Fund's shareholder in the Reorganization will be
the same as the aggregate basis of the Selling Fund shares exchanged therefor.
9. For each Reorganization, the holding period for the Acquiring Fund
Shares received by a Selling Fund shareholder in the Reorganization will
include the holding period for the Selling Fund shares exchanged therefor, if
such Selling Fund shares are held as a capital asset on the effective date of
the Reorganization.
Except as set forth above, we express no opinion regarding any tax
consequences of the Reorganizations. This opinion is solely for your benefit
and may not be relied on by any other person. This opinion may not be
distributed, quoted in whole or in part or otherwise reproduced in any
document, or filed with any governmental agency without our prior written
consent.
We consent to the use of this opinion as an exhibit to the Registration
Statement under the Securities Act of 1933 filed with the Securities and
Exchange Commission by STI in connection with the Reorganizations. In giving
this consent, we do not admit that we are within the category of persons
whose consent is required by section 7 of the Securities Act of 1933 or the
rules and regulations promulgated thereunder.
Very truly yours,
/s/ Hunton & Williams
<PAGE>
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated July 24, 1998 on
the May 31, 1998 financial statements of STI Classic Funds, included in
Post-Effective Amendment No. 25 to the Registration Statement on Form N-1A dated
September 28, 1998, and to all references to our firm included in this Form N-14
Registration Statement.
/s/ Arthur Andersen LLP
Philadelphia, PA
March 30, 1999
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
CrestFunds, Inc.:
We consent to incorporation by reference of our report dated January 15, 1999
appearing in the Annual Report to Shareholders for the year ended November 30,
1998 in this Registration Statement on Form N-14 of STI Classic Funds, and to
the reference to us under the caption "Information About the STI Funds and
CrestFunds - Financial Statements" in such Registration Statement.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
New York, New York
March 29, 1999
