XXXXX, XXXXX & XXXXX
0000 XXXXXXXX
XXX XXXX, XXX XXXX 00000-0000
February 23, 2000
To the Persons Listed on
Schedule I Attached hereto
Re: Agreement and Plan of Reorganization for the
Exchange of Stock of Xxxxxx Xxxxxxx Xxxx Xxxxxx
New York Tax-Free Income Fund for Substantially
All of the Assets of New York Series, a
portfolio of Xxxxxx Xxxxxxx Xxxx Xxxxxx
Multi-State Municipal Series Trust, dated as of
January 26, 2000 (the "Reorganization
Agreement").
Ladies and Gentlemen:
We have acted as counsel to New York Series ("New York Series"), a
portfolio of Xxxxxx Xxxxxxx Xxxx Xxxxxx Multi-State Municipal Series Trust
("Multi-State"), and Xxxxxx Xxxxxxx Xxxx Xxxxxx New York Tax-Free Income Fund
("New York Tax-Free") in connection with the proposed transfer of substantially
all of the assets of New York Series to New York Tax-Free 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") on Exhibit 12 to the Form N-14 Registration Statement.
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 for the
Reorganization, and the Proxy Statement/Prospectus and other documents,
exhibits, attachments and schedules contained therein, (iii) written
representations of Xxxxxx Xxxxxxx Xxxx Xxxxxx Advisors Inc. (the "Advisor")
concerning certain facts underlying and relating to the Reorganization set forth
in a letter dated February 23, 2000, 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
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February 23, 2000
Page 2
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 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 New York
Tax-Free and Multi-State, on behalf of New York Series, 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", "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.
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February 23, 2000
Page 3
2. The transfer of New York Series' assets in exchange for New York
Tax-Free Shares(1) and the assumption by New York Tax-Free of certain stated
liabilities of New York Series followed by the distribution by New York Series
of New York Tax-Free Shares to the New York Series Shareholders in exchange for
their New York Series 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 New York Series and New York Tax-Free
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 New York Tax-Free upon receipt of
the assets of New York Series solely in exchange for New York Tax-Free Shares
and the assumption by New York Tax-Free of the stated liabilities of New York
Series.
4. No gain or loss will be recognized by New York Series upon the transfer
of the assets of New York Series to New York Tax-Free in exchange for New York
Tax-Free Shares and the assumption by New York Tax-Free of the stated
liabilities or upon the distribution of New York Tax-Free Shares to the New York
Series Shareholders in exchange for their New York Series shares.
5. No gain or loss will be recognized by the New York Series Shareholders
upon the exchange of the New York Series shares for New York Tax-Free Shares.
6. The aggregate tax basis for the New York Tax-Free Shares received by
each New York Series Shareholder pursuant to the Reorganization will be the same
as the aggregate tax basis of the New York Series shares held by each such New
York Series Shareholder immediately prior to the Reorganization.
7. The holding period of the New York Tax-Free Shares to be received by
each New York Series Shareholder will include the period during which the New
York Series shares surrendered in exchange therefor were held (provided such New
York Series shares are held as capital assets on the date of the
Reorganization).
8. The tax basis of the assets of New York Series acquired by New York
Tax-Free will be the same as the tax basis of such assets to New York Series
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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February 23, 2000
Page 4
9. The holding period of the assets of New York Series in the hands of New
York Tax-Free will include the period during which those assets were held by New
York Series.
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,
/s/ Xxxxx, Xxxxx & Xxxxx
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XXXXX, XXXXX & XXXXX
XXXXX, XXXXX & XXXXX
February 23, 2000
Page 5
SCHEDULE I
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Xxxxxx Xxxxxxx Xxxx Xxxxxx
Multi-State Municipal Series Trust, on behalf of New York Series
Xxxxxx Xxxxxxx Xxxx Xxxxxx
New York Tax-Free Income Fund
