MAYER, BROWN & PLATT
1675 BROADWAY
NEW YORK, NEW YORK 10019-5820
MAIN TELEPHONE
212-506-2500
MAIN FAX
212-262-1910
September 13, 2000
To the Persons Listed on
Schedule I Attached hereto
Re: Agreement and Plan of Reorganization for the Exchange of Stock of
Morgan Stanley Dean Witter Tax-Exempt Securities Trust for
Substantially All of the Assets of Morgan Stanley Dean Witter
Municipal Income Trust III, dated as of August 24, 2000 (the
"Reorganization Agreement").
Ladies and Gentlemen:
We have acted as counsel to Morgan Stanley Dean Witter Municipal Income
Trust III, ("MIT III"), and Morgan Stanley Dean Witter Tax-Exempt Securities
Trust ("Tax-Exempt") in connection with the proposed transfer of substantially
all of the assets of MIT III 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 Morgan Stanley Dean Witter 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 III 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 III's assets in exchange for Tax-Exempt Shares1 and
the assumption by Tax-Exempt of certain stated liabilities of MIT III followed
by the distribution by MIT III of Tax-Exempt Shares to the MIT III Shareholders
in exchange for their MIT III 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 III 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 III solely in exchange for Tax-Exempt Shares and the assumption
by Tax-Exempt of the stated liabilities of MIT III.
4. No gain or loss will be recognized by MIT III upon the transfer of the
assets of MIT III 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 III Shareholders in exchange for their MIT III
shares.
5. No gain or loss will be recognized by the MIT III Shareholders upon the
exchange of the MIT III shares for Tax-Exempt Shares.
6. The aggregate tax basis for the Tax-Exempt Shares received by each MIT
III Shareholder pursuant to the Reorganization will be the same as the
aggregate tax basis of the MIT III shares held by each such MIT III Shareholder
immediately prior to the Reorganization.
- - ----------
1 Capitalized terms used herein without definition have the meanings ascribed
to them in the Reorganization Agreement.
2
7. The holding period of the Tax-Exempt Shares to be received by each MIT
III Shareholder will include the period during which the MIT III shares
surrendered in exchange therefor were held (provided such MIT III shares are
held as capital assets on the date of the Reorganization).
8. The tax basis of the assets of MIT III acquired by Tax-Exempt will be
the same as the tax basis of such assets to MIT III immediately prior to the
Reorganization.
9. The holding period of the assets of MIT III in the hands of Tax-Exempt
will include the period during which those assets were held by MIT III.
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/ Mayer, Brown & Platt
---------------------
Mayer, Brown & Platt
3
SCHEDULE I
Morgan Stanley Dean Witter
Municipal Income Trust III
Morgan Stanley Dean Witter
Tax-Exempt Securities Trust
4