▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
MAIN TELEPHONE
212-506-2500
MAIN FAX
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August 24, 1999
To the Persons Listed on
Schedule I Attached hereto
Re: Agreement and Plan of Reorganization for the Exchange of Stock of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Natural Resource Development Securities,
Inc. for Substantially All of the Assets of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Metals and Minerals Trust dated as of July 29, 1999
(the "Reorganization Agreement").
Ladies and Gentlemen:
We have acted as counsel to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Metals and
Minerals Trust ("Precious Metals") and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Natural
Resource Development Securities, Inc. ("Natural Resource") in connection with
the proposed transfer of substantially all of the assets of Precious Metals to
Natural Resource 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/prospectus (the "Proxy Statement/Prospectus") as an exhibit to the
Form N-14 Registration Statement (file no. 333 -[ ]).
In connection with rendering this opinion, 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
(Registration No. 333- ) for the Reorganization, and the Proxy Statement and
Prospectus and other documents, exhibits, attachments and schedules contained
therein, (iii) written representations of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Advisor
Inc. (the "Advisor") concerning certain facts underlying and relating to the
Reorganization set forth in a letter dated August 24, 1999, and (iv) such other
documents and materials and 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 this opinion
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.
We have also assumed for purposes of rendering our opinion (i) the
accuracy of, and material compliance with, the representations of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Advisors Inc. set forth in a letter
referred to above, (ii) the accuracy of, and material compliance with, the
representations, warranties, covenants and agreements of Natural Resource and
Precious Metals 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 opinion set forth below is 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 opinion 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 opinion could affect the
conclusions set forth below.
In addition, the opinion expressed herein is 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 opinion set
forth below.
Based on the foregoing, we are of the opinion 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" 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 Precious Metals's assets in exchange for National
Resource Shares(1) and the assumption by Natural Resource of certain stated
liabilities of Precious Metals followed by the distribution by Precious Metals
of Natural Resource Shares to the Precious Metals Shareholders in exchange for
their Precious Metals 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 Precious Metals and Natural
Resource will each be a "party to a reorganization" within the meaning of
Section 368(b) of the Code.
3. No gain or loss will be recognized by Natural Resource upon receipt of
the assets of Precious Metals solely in exchange for Natural Resource Shares
and the assumption by Natural Resource of the stated liabilities of Precious
Metals.
4. No gain or loss will be recognized by Precious Metals upon the transfer
of the assets of Precious Metals to Natural Resource in exchange for Natural
Resource Shares and the assumption by Natural Resource of the stated
liabilities or upon the distribution of Natural Resource Shares to the Precious
Metals Shareholders in exchange for their Precious Metals shares.
5. No gain or loss will be recognized by the Precious Metals Shareholders
upon the exchange of the Precious Metals shares for Natural Resource Shares.
6. The aggregate tax basis for the Natural Resource Shares received by
each Precious Metals Shareholder pursuant to the Reorganization will be the
same as the aggregate tax basis of the Precious Metals shares held by each such
Precious Metals Shareholder immediately prior to the Reorganization.
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(1) Capitalized terms used herein without definition have the meanings
ascribed to them in the Reorganization Agreement.
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7. The holding period of the Natural Resource Shares to be received by
each Precious Metals Shareholder will include the period during which the
Precious Metals shares surrendered in exchange therefor were held (provided
such Precious Metals shares are held as capital assets on the date of the
Reorganization).
8. The tax basis of the assets of Precious Metals acquired by Natural
Resource will be the same as the tax basis of such assets to Precious Metals
immediately prior to the Reorganization.
9. The holding period of the assets of Precious Metals in the hands of
Natural Resource will include the period during which those assets were held by
Precious Metals.
This opinion is 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.
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,
▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇
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SCHEDULE I
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ Metals and Minerals Trust
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
National Resource Development Securities, Inc.
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