XXXXX, XXXXX & XXXXX
0000 XXXXXXXX
XXX XXXX, XXX XXXX 00000-0000
MAIN TELEPHONE
212-506-2500
MAIN FAX
000-000-0000
September 13, 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 Xxxxxx Xxxxxxx Xxxx Xxxxxx
Municipal Income Trust II, dated as of August 24, 2000 (the
"Reorganization Agreement")
Ladies and Gentlemen:
We have acted as counsel to Xxxxxx Xxxxxxx Xxxx Xxxxxx Municipal Income
Trust II, ("MIT II"), and Xxxxxx Xxxxxxx Xxxx Xxxxxx Tax-Exempt Securities
Trust ("Tax-Exempt") in connection with the proposed transfer of substantially
all of the assets of MIT II 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 and 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 September 13, 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 MIT II 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 MIT II's assets in exchange for Tax-Exempt Shares (1)
and the assumption by Tax-Exempt of certain stated liabilities of MIT II
followed by the distribution by MIT II of Tax-Exempt Shares to the MIT II
Shareholders in exchange for their MIT II 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
MIT II 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 MIT II solely in exchange for Tax-Exempt Shares and the assumption by
Tax-Exempt of the stated liabilities of MIT II.
4. No gain or loss will be recognized by MIT II upon the transfer of the
assets of MIT II 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 MIT II Shareholders in exchange for their MIT II
shares.
5. No gain or loss will be recognized by the MIT II Shareholders upon the
exchange of the MIT II shares for Tax-Exempt Shares.
6. The aggregate tax basis for the Tax-Exempt Shares received by each MIT
II Shareholder pursuant to the Reorganization will be the same as the aggregate
tax basis of the MIT II shares held by each such MIT II 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 Tax-Exempt Shares to be received by each MIT
II Shareholder will include the period during which the MIT II shares
surrendered in exchange therefor were held (provided such MIT II shares are
held as capital assets on the date of the Reorganization).
8. The tax basis of the assets of MIT II acquired by Tax-Exempt will be
the same as the tax basis of such assets to MIT II immediately prior to the
Reorganization.
9. The holding period of the assets of MIT II in the hands of Tax-Exempt
will include the period during which those assets were held by MIT II.
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
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SCHEDULE I
Xxxxxx Xxxxxxx Xxxx Xxxxxx
Municipal Income Trust II
Xxxxxx Xxxxxxx Xxxx Xxxxxx
Tax-Exempt Securities Trust
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