EX-8
FORM OF OPINION
, 1998
Board of Directors
UBS Private Investor Funds, Inc. UBS Small Cap Growth Fund
000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Board of Trustees
The Xxxxxxx Funds U.S. Small Capitalization Fund
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
Re: AGREEMENT AND PLAN OF REORGANIZATION, DATED AS OF THE DAY OF ,
1998, BY AND BETWEEN UBS PRIVATE INVESTOR FUNDS, INC. (THE
"CORPORATION") ON BEHALF OF THE UBS SMALL CAP GROWTH FUND ("ACQUIRED
FUND") AND THE XXXXXXX FUNDS (THE "TRUST") ON BEHALF OF U.S. SMALL
CAPITALIZATION FUND ("ACQUIRING FUND")
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Ladies and Gentlemen:
You have requested our opinion as to certain federal income tax
consequences of the reorganization of Acquired Fund whereby, Acquired Fund will
transfer substantially all of its property, assets, and goodwill and liabilities
to Acquiring Fund in exchange solely for Class I Shares of Acquiring Fund (the
"Acquiring Fund Shares"), followed by the distribution by Acquired Fund of
Acquiring Fund Shares to the shareholders of Acquired Fund, the cancellation of
all of the outstanding Shares of beneficial interest of Acquired Fund (the
"Acquired Fund Shares") and the liquidation of Acquired Fund (the
"Reorganization").
, 1998
Page 2
In rendering our opinion, we have reviewed and relied upon (a) the
Agreement and Plan of Reorganization, dated as of the th day of , 1998,
by and between the Corporation and the Trust ("Agreement"), (b) the proxy
materials provided to stockholders of Acquired Fund in connection with the
Special Meeting of Stockholders of Acquired Fund held on , 1998, (c)
certain representations concerning the Reorganization made to us by Custodian
Funds and the Acquired Fund in a letter dated , 1998 (the
"Representation Letter"), (d) all other documents, financial and other reports
and corporate minutes which we deemed relevant or appropriate, and (e) such
statutes, regulations, rulings and decisions as we deemed material to the
rendition of this opinion. All terms used herein, unless otherwise defined, are
used as defined in the Agreement.
For purposes of this opinion, we have assumed that Acquired Fund on
the effective date of the Reorganization satisfies, and following the
Reorganization, Acquiring Fund 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 State of Maryland and the State of
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) of the Code, and Acquired Fund and
Acquiring Fund 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 Fund upon the
transfer of all of its assets to Acquiring Fund in exchange solely for Acquiring
Fund 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 Fund upon the
receipt by it of all of the assets of Acquired Fund in exchange solely for
Acquiring Fund Shares pursuant to Section 1032(a) of the Code.
4. The basis of the assets of Acquired Fund received by Acquiring
Fund will be the same as the basis of such assets to Acquired Fund immediately
prior to the exchange pursuant to Section 362(b) of the Code.
5. The holding period of the assets of Acquired Fund received by
Acquiring Fund will include the period during which such assets were held by
Acquired Fund pursuant to Section 1223(2) of the Code.
, 1998
Page 3
6. No gain or loss will be recognized by the stockholders of
Acquired Fund upon the exchange of their Acquired Fund Shares for Acquiring Fund
Shares (including fractional shares to which they may be entitled), pursuant to
Section 354(a) of the Code.
7. The basis of the Acquiring Fund Shares received by the
stockholders of Acquired Fund (including fractional shares to which they may be
entitled) will be the same as the basis of the Acquired Fund Shares exchanged
therefor pursuant to Section 358(a)(1) of the Code.
8. The holding period of the Acquiring Fund Shares received by the
stockholders of Acquired Fund (including fractional shares to which they may be
entitled) will include the holding period of the Acquired Fund Shares
surrendered in exchange therefor, provided that the Acquired Fund Shares were
held as a capital asset on the effective date of the Reorganization, pursuant to
Section 1223(1) of the Code.
9. Acquiring Fund 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 Fund 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 Fund and
Acquired Fund of their undertakings in the Agreement and the Representation
Letter.
This opinion is being rendered to Acquiring Fund and Acquired Fund and
may be relied upon only by such funds and the stockholders of each.
Very truly yours,
XXXXXXXX, XXXXX, XXXXXXX & XXXXX, LLP
By:___________________________________
Xxxxxxx X. Xxxxxxxxx, a Partner
