EXHIBIT 12
[ ], 2000
Board of Trustees
Xxx Xxxxxx Life Investment Trust
0 Xxxxxxxx Xxxxx
X.X. Xxx 0000
Xxxxxxxx Xxxxxxx, XX 00000-0000
Board of Directors
The Universal Institutional Funds, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Agreement and Plan of Reorganization by and between
The Universal Institutional Funds, Inc.
Xxx Xxxxxx Life Investment Trust
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Ladies and Gentlemen:
We have acted as counsel to The Universal Institutional Funds, Inc., a Maryland
corporation (the "Fund"), in connection with the execution and delivery of the
Agreement and Plan of Reorganization (the "Agreement"), dated as of [ ], 2000,
by and between the Fund and Xxx Xxxxxx Life Investment Trust, a Delaware
business trust (the "Trust"), relating to the transfer of all the assets and
liabilities of the Trust's series, the Xxxxxx Xxxxxxx Real Estate Securities
Portfolio (the "Acquired Portfolio"), in exchange for the assumption by the
Fund's series, the U.S. Real Estate Portfolio (the "Acquiring Portfolio") of all
of the liabilities of the Acquired Portfolio and shares of common stock of the
series of the Acquiring Portfolio ("Acquiring Portfolio Shares") followed by the
distribution of such Acquiring Portfolio Shares to the holders of shares of
beneficial interest of the Acquired Portfolio ("Acquired Portfolio Shares") in
exchange for such Acquired Portfolio Shares in complete liquidation of the
Acquired Portfolio (the "Reorganization"), pursuant to the Agreement. This
opinion letter is delivered to you pursuant to Section 8(d) of the Agreement.
Capitalized terms used but not defined herein shall have the meanings assigned
to them in the Agreement.
In connection with this opinion, we have examined and are familiar with
originals or copies, certified or otherwise identified to our satisfaction, of
(i) the Agreement, (ii) the proxy materials provided to stockholders of the
Acquired Portfolio in connection with the Special Meeting of Stockholders of the
Acquired Portfolio held on , (iii) certain representations
concerning the Reorganization made to us by the Acquiring Portfolio and the
Acquired Portfolio in a letter dated ___________________ (the "Representation
Letter"), (iv) all other documents, financial and other reports and corporate
minutes which we deemed relevant or appropriate, and (v) such statutes,
regulations, rulings and decisions as we deemed material to the rendition of
this opinion. 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, conformed or photostatic copies and
the authenticity of the originals of such copies.
For purposes of this opinion, we have assumed that the Acquired Portfolio
and the Acquiring Portfolio on the effective date of the Reorganization both
satisfy, and following the Reorganization, the Acquiring Portfolio will continue
to satisfy, the requirements of subchapter M of the Internal Revenue Code of
1986, as amended (the "Code"), for qualification as a regulated investment
company.
Under regulations to be prescribed by the Secretary of Treasury under
Section 1276(d) of the Code, certain transfers of market discount bonds will be
excepted from the requirement that accrued market discount be recognized on
disposition of a market discount bond under Section 1276(a) of the Code. Such
regulations are to provide, in part, that accrued market discount will not be
included in income if no gain is recognized under Section 361(a) of the Code
where a bond is transferred in an exchange qualifying as a tax-free
reorganization. As of the date hereof, the Secretary has not issued any
regulations under Section 1276 of the Code.
Based on the foregoing and provided the Reorganization is carried out in
accordance with the applicable laws of the States of Maryland and Delaware, the
Agreement and the Representation Letter, it is our opinion that:
1. The Reorganization will constitute a tax-free reorganization within the
meaning of Section 368(a)(1)(D) of the Code, and Acquired Portfolio and
Acquiring Portfolio will each be a party to the reorganization within the
meaning of Section 368(b) of the Code.
2. No gain or loss will be recognized by Acquired Portfolio upon the
transfer of all of its assets to Acquiring Portfolio in exchange solely for
Acquiring Portfolio Shares pursuant to Section 361(a) and Section 357(a) of the
Code. We express no opinion as to whether any accrued market discount will be
required to be recognized as ordinary income pursuant to Section 1276 of the
Code.
3. No gain or loss will be recognized by Acquiring Portfolio upon the
receipt by it of all of the assets of Acquired Portfolio in exchange solely for
Acquiring Portfolio Shares pursuant to Section 1032(a) of the Code.
4. The basis of the assets of Acquired Portfolio received by Acquiring
Portfolio will be the same as the basis of such assets to Acquired Portfolio
immediately prior to the exchange pursuant to Section 362(b) of the Code.
5. The holding period of the assets of Acquired Portfolio received by
Acquiring Portfolio will include the period during which such assets were held
by Acquired Portfolio pursuant to Section 1223(2) of the Code.
6. No gain or loss will be recognized by the stockholders of Acquired
Portfolio upon the exchange of their Acquired Portfolio Shares for Acquiring
Portfolio Shares
(including fractional shares to which they may be entitled), pursuant to Section
354(a) of the Code.
7. The basis of the Acquiring Portfolio Shares received by the
stockholders of Acquired Portfolio (including fractional shares to which they
may be entitled) will be the same, in the aggregate, as the basis of the
Acquired Portfolio Shares exchanged therefor pursuant to Section 358(a)(1) of
the Code.
8. The holding period of the Acquiring Portfolio Shares received by the
stockholders of Acquired Portfolio (including fractional shares to which they
may be entitled) will include the holding period of the Acquired Portfolio
Shares surrendered in exchange therefor, provided that the Acquired Portfolio
Shares were held as a capital asset on the effective date of the Reorganization,
pursuant to Section 1223(1) of the Code.
9. Acquiring Portfolio will succeed to and take into account as of the
date of the proposed transfer (as defined in Section 1.381(b)-1(b) of the Income
Tax Regulations) the items of Acquired Portfolio described in Section 381(c) of
the Code, subject to the conditions and limitations specified in Sections 381(b)
and (c), 382, 383 and 384 of the Code.
Our opinion is based upon the Code, the applicable Treasury Regulations
promulgated thereunder, the present position of the Internal Revenue Service as
set forth in published revenue rulings and revenue procedures, present
administrative positions of the Internal Revenue Service, and existing judicial
decisions, all of which are subject to change either prospectively or
retroactively. We do not undertake to make any continuing analysis of the facts
or relevant law following the date of this letter.
Our opinion is conditioned upon the performance by Acquiring Portfolio and
Acquired Portfolio of their undertakings in the Agreement and the Representation
Letter.
This opinion is being rendered to Acquiring Portfolio and Acquired
Portfolio and may be relied upon only by such funds and the stockholders of
each.
Very truly yours,
/s/Xxxxxx, Xxxxx & Bockius LLP
