Xxxxx, Xxxxx & Xxxxx
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
March 1, 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 Tax-Exempt
Securities Trust for Substantially All of the Assets
of Michigan 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 Michigan Series ("Michigan Series"), a
portfolio of Xxxxxx Xxxxxxx Xxxx Xxxxxx Multi-State Municipal Series Trust
("Multi-State"), and Xxxxxx Xxxxxxx Xxxx Xxxxxx Tax-Exempt Securities Trust
("Tax-Exempt") in connection with the proposed transfer of substantially all of
the assets of Michigan Series to Tax-Exempt 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 March 1, 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 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 Tax-Exempt and Multi-State, on behalf of Michigan
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.
2. The transfer of Michigan Series' assets in exchange for Tax-Exempt
Shares(1) and the assumption by Tax-Exempt of certain stated liabilities of
Michigan Series followed by the distribution by Michigan Series of Tax-Exempt
Shares to the Michigan Series Shareholders in exchange for their Michigan 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 Michigan Series and Tax-Exempt 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 Tax-Exempt upon receipt of the
assets of Michigan Series solely in exchange for Tax-Exempt Shares and the
assumption by Tax-Exempt of the stated liabilities of Michigan Series.
4. No gain or loss will be recognized by Michigan Series upon the
transfer of the assets of Michigan Series to Tax-Exempt in exchange for
Tax-Exempt Shares and the assumption by Tax-Exempt of the stated liabilities or
upon the distribution of Tax-Exempt Shares to the Michigan Series Shareholders
in exchange for their Michigan Series shares.
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(1) Capitalized terms used herein without definition have the meanings
ascribed to them in the Reorganization Agreement.
5. No gain or loss will be recognized by the Michigan Series
Shareholders upon the exchange of the Michigan Series shares for Tax-Exempt
Shares.
6. The aggregate tax basis for the Tax-Exempt Shares received by each
Michigan Series Shareholder pursuant to the Reorganization will be the same as
the aggregate tax basis of the Michigan Series shares held by each such Michigan
Series Shareholder immediately prior to the Reorganization.
7. The holding period of the Tax-Exempt Shares to be received by each
Michigan Series Shareholder will include the period during which the Michigan
Series shares surrendered in exchange therefor were held (provided such Michigan
Series shares are held as capital assets on the date of the Reorganization).
8. The tax basis of the assets of Michigan Series acquired by
Tax-Exempt will be the same as the tax basis of such assets to Michigan Series
immediately prior to the Reorganization.
9. The holding period of the assets of Michigan Series in the hands of
Tax-Exempt will include the period during which those assets were held by
Michigan 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
XXXXX, XXXXX & XXXXX
SCHEDULE I
Xxxxxx Xxxxxxx Xxxx Xxxxxx
Multi-State Municipal Series Trust, on behalf of Michigan Series
Xxxxxx Xxxxxxx Xxxx Xxxxxx
Tax-Exempt Securities Trust
