EXHIBIT 1.
February 28, 2005
Xxxxxx Premier Income Trust
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Xxxxxx Master Income Trust
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Ladies and Gentlemen:
We have acted as counsel in connection with the Agreement and Plan of
Reorganization (the "Agreement") dated November 3, 2004 between Xxxxxx
Master Income Trust, a Massachusetts business trust (the "Target Fund")
and Xxxxxx Premier Income Trust, a Massachusetts business trust (the
"Acquiring Fund"). The Agreement describes a proposed transaction (the
"Transaction") to occur on February 28, 2005, or such other date as may
be decided by the parties (the "Exchange Date"), pursuant to which
Acquiring Fund will acquire substantially all of the assets of Target
Fund in exchange for shares of beneficial interest in Acquiring Fund
(the "Acquiring Fund Shares") and the assumption by Acquiring Fund of
all of the liabilities of Target Fund following which the Acquiring Fund
Shares received by Target Fund will be distributed by Target Fund to its
shareholders in liquidation and termination of Target Fund. This
opinion as to certain federal income tax consequences of the Transaction
is furnished to you pursuant to Sections 8(g) and 9(g) of the Agreement.
Capitalized terms not defined herein are used herein as defined in the
Agreement.
Target Fund is registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), as a closed-end investment company. Target
Fund has elected to be a regulated investment company for federal income
tax purposes under Section 851 of the Internal Revenue Code of 1986, as
amended (the "Code").
Acquiring Fund is registered under the 1940 Act as a closed-end
investment company. Acquiring Fund has elected to be a regulated
investment company for federal income tax purposes under Section 851 of
the Code.
For purposes of this opinion, we have considered the Agreement, the
Registration Statement (including the items incorporated by reference
therein), and such other items as we have deemed necessary to render
this opinion. In addition, you have provided us with letters dated as
of the date hereof, representing as to certain facts, occurrences and
information upon which you have indicated that we may rely in rendering
this opinion (whether or not contained or reflected in the documents and
items referred to above).
Based on the foregoing representations and our review of the documents
and items referred to above, we are of the opinion that for federal
income tax purposes, except as noted below:
(i) The Transaction will constitute a reorganization within the meaning
of Section 368(a) of the Code, and Acquiring Fund and Target Fund each
will be a "party to a reorganization" within the meaning of Section
368(b) of the Code;
(ii) No gain or loss will be recognized by Acquiring Fund upon the
receipt of the assets of Target Fund in exchange for Acquiring Fund
Shares and the assumption by Acquiring Fund of the liabilities of Target
Fund;
(iii) The basis in the hands of Acquiring Fund of the assets of Target
Fund transferred to Acquiring Fund in the Transaction will be the same
as the basis of such assets in the hands of Target Fund immediately
prior to the transfer;
(iv) The holding periods of the assets of Target Fund in the hands of
Acquiring Fund will include the periods during which such assets were
held by Target Fund;
(v) No gain or loss will be recognized by Target Fund upon the transfer
of Target Fund's assets to Acquiring Fund in exchange for Acquiring Fund
Shares and the assumption by Acquiring Fund of the liabilities of Target
Fund, or upon the distribution of Acquiring Fund Shares by Target Fund
to its shareholders in liquidation;
(vi) No gain or loss will be recognized by Target Fund shareholders upon
the exchange of their Target Fund shares for Acquiring Fund Shares;
(vii) The aggregate basis of Acquiring Fund Shares a Target Fund
shareholder receives in connection with the Transaction will be the same
as the aggregate basis of his or her Target Fund shares exchanged
therefor;
(viii) A Target Fund shareholder's holding period for his or her Acquiring
Fund Shares will be determined by including the period for which he or she
held the Target Fund shares exchanged therefor, provided that he or she
held such Target Fund shares as capital assets; and
(ix) Acquiring Fund will succeed to and take into account the items of
Target Fund described in Section 381(c) of the Code. Acquiring Fund
will take these items into account subject to the conditions and
limitations specified in Sections 381, 382, 383 and 384 of the Code and
the Regulations thereunder.
Ropes & Gray LLP will express no view with respect to the effect of the
reorganization on any transferred asset as to which any unrealized gain
or loss is required to be recognized at the end of a taxable year (or on
the termination or transfer thereof) under federal income tax
principles.
Our opinion is based on the Internal Revenue Code of 1986, as amended,
Treasury Regulations, Internal Revenue Service rulings, judicial
decisions, and other applicable authority, all as in effect on the date
of this opinion. The legal authorities on which this opinion is based
may be changed at any time. Any such changes may be retroactively
applied and could modify the opinions expressed above.
Very truly yours,
/s/ Ropes & Gray LLP
Ropes & Gray LLP
