[XXXXX XXXXX XXXX & MAW LETTERHEAD]
March 8, 2002 0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-5820
To the Persons Listed on Main Tel (000) 000-0000
Schedule I Attached hereto Main Fax (000) 000-0000
xxx.xxxxxxxxxxxxxx.xxx
Re: Agreement and Plan of Reorganization for the Exchange
of Stock of Xxxxxx Xxxxxxx American Opportunities Fund
for Substantially All of the Assets of Xxxxxx Xxxxxxx
Capital Growth Securities, dated as of January 24, 2002
(the "Reorganization Agreement").
Ladies and Gentlemen:
We have acted as counsel to Xxxxxx Xxxxxxx Capital Growth Securities
("Capital Growth"), and Xxxxxx Xxxxxxx American Opportunities Fund ("American
Opportunities") in connection with the proposed transfer of substantially all of
the assets of Capital Growth to American Opportunities and certain other
transactions related thereto pursuant to and in accordance with the terms of the
Reorganization Agreement (the "Reorganization"). You have requested that we
provide an opinion regarding the treatment of the Reorganization under the
Internal Revenue Code of 1986, as amended (the "Code"), and the accuracy of the
tax disclosures in the proxy statement and prospectus (the "Proxy
Statement/Prospectus") on Exhibit 12 to the Form N-14 Registration Statement.
In connection with rendering these opinions, we have examined originals
or copies, certified or otherwise identified to our satisfaction, of (i) the
Reorganization Agreement, (ii) the Registration Statement on Form N-14 for the
Reorganization, and the Proxy Statement/Prospectus and other documents,
exhibits, attachments and schedules contained therein, (iii) written
representations of Xxxxxx Xxxxxxx Investment Advisors Inc ("the "Advisor")
concerning certain facts underlying and relating to the Reorganization set forth
in a letter dated March 8, 2002, and (iv) such other documents and materials as
we have deemed necessary or appropriate for purposes of the opinions set forth
below. In our examination, we have assumed the genuineness of all signatures,
the legal capacity of all natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies, and the
authenticity of the originals of such copies. We have not made an independent
investigation of the facts set forth either in the Registration Statement, the
Reorganization Agreement or such other documents that we have examined. We have
consequently assumed in rendering these opinions that the information presented
in such documents or otherwise furnished to us accurately and completely
describes in all material respects all facts relevant to the Reorganization.
[XXXXX, XXXXX, XXXX & MAW LETTERHEAD]
To the Persons Listed on
Schedule I Attached Hereto
March 8, 2002
Page 2
We have also assumed for purposes of rendering our opinions (i) the
accuracy of, and material compliance with, the representations of the Advisor
set forth in the letter referred to above, (ii) the accuracy of, and material
compliance with, the representations, warranties, covenants and agreements of
Capital Growth and American Opportunities made in the Reorganization Agreement,
and (iii) that there are no agreements or understandings other than those of
which we have been informed that would affect our conclusions set forth below.
The opinions set forth below are based on the Code, the legislative
history with respect thereto, rules and regulations promulgated thereunder, and
published rulings, court decisions and administrative authorities issued with
respect to all of the foregoing, all as in effect and existing on the date
hereof, and all of which are subject to change at any time, possibly on a
retroactive basis. In addition, there can be no assurance that positions
contrary to those stated in our opinions may not be asserted by the Internal
Revenue Service.
Any change occurring after the date hereof in, or a variation from, any
of the foregoing factual or legal bases for our opinions could affect the
conclusions set forth below.
In addition, the opinions expressed herein are given as of the date
hereof and we express no obligation to advise you of any changes in the law or
events that may hereafter come to our attention that could affect our opinions
set forth below.
Based on the foregoing, we are of the opinions that, for federal income
tax purposes:
1. The summaries of United States federal income tax consequences set
forth in the Proxy Statement/Prospectus under the headings "Synopsis -- Tax
Consequences of the Reorganization", "The Reorganization -- The Board's
Consideration" and "The Reorganization -- Tax Aspects of the Reorganization" are
accurate in all material respects as to matters of law and legal conclusions.
2. The transfer of Capital Growth's assets in exchange for American
Opportunities Shares(1) and the assumption by American Opportunities of certain
stated liabilities of Capital Growth followed by the distribution by Capital
Growth of American Opportunities Shares to the Capital Growth Shareholders in
exchange for their Capital Growth shares pursuant to and in accordance with the
terms of the Reorganization Agreement will constitute a "reorganization" within
the meaning of section 368(a)(1)(C) of the Code, and Capital Growth and American
Opportunities will each be a "party to a reorganization" within the meaning of
section 368(b) of the Code.
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(1) Capitalized terms used herein without definition have the meanings ascribed
to them in the Reorganization Agreement.
[XXXXX, XXXXX, XXXX & MAW LOGO]
To the Persons Listed on
Schedule I Attached Hereto
March 8, 2002
Page 3
3. No gain or loss will be recognized by American Opportunities upon
receipt of the assets of Capital Growth solely in exchange for American
Opportunities Shares and the assumption by American Opportunities of the stated
liabilities of Capital Growth.
4. No gain or loss will be recognized by Capital Growth upon the
transfer of the assets of Capital Growth to American Opportunities in exchange
for American Opportunities Shares and the assumption by American Opportunities
of the stated liabilities or upon the distribution of American Opportunities
Shares to the Capital Growth Shareholders in exchange for their Capital Growth
shares.
5. No gain or loss will be recognized by the Capital Growth
Shareholders upon the exchange of the Capital Growth shares for American
Opportunities Shares.
6. The aggregate tax basis for the American Opportunities Shares
received by each Capital Growth Shareholder pursuant to the Reorganization will
be the same as the aggregate tax basis of the Capital Growth shares held by each
such Capital Growth Shareholder immediately prior to the Reorganization.
7. The holding period of the American Opportunities Shares to be
received by each Capital Growth Shareholder will include the period during which
the Capital Growth shares surrendered in exchange therefore were held (provided
such Capital Growth shares are held as capital assets on the date of the
Reorganization).
8. The tax basis of the assets of Capital Growth acquired by American
Opportunities will be the same as the tax basis of such assets to Capital Growth
immediately prior to the Reorganization.
9. The holding period of the assets of Capital Growth in the hands of
American Opportunities will include the period during which those assets were
held by Capital Growth.
These opinions are being provided to you solely in connection with the
filing of the Registration Statement for the Reorganization. This opinion may
not be relied upon by you for any other purpose or relied upon by or furnished
to any other person without our prior written consent.
[XXXXX, XXXXX, XXXX & MAW LOGO]
To the Persons Listed on
Schedule I Attached Hereto
March 8, 2002
Page 4
We hereby consent to the filing of this opinion as an exhibit to the
Proxy Statement/Prospectus and to all references to this firm under the headings
"Synopsis -- Tax Consequences of the Reorganization" and "The Reorganization --
Tax Aspects of the Reorganization" in the Proxy Statement/Prospectus.
Very Truly Yours,
/s/ Xxxxx, Xxxxx, Xxxx & Maw
XXXXX, XXXXX, XXXX & MAW
SCHEDULE I
Xxxxxx Xxxxxxx American Opportunities Fund
Xxxxxx Xxxxxxx Capital Growth Securities
