______________, 2003
Board of Trustees
The UBS Funds
Xxx Xxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Board of Trustees
UBS Mutual Funds Securities Trust
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Agreement and Plan of Reorganization (the "Agreement") made as of the
____ day of ______, 2003, by and between The UBS Funds, a statutory
trust created under the laws of the State of Delaware (the "Trust"),
on behalf of its series, the UBS U.S. Small Cap Growth Fund (the
"Acquiring Fund"), and the UBS Mutual Funds Securities Trust, a
statutory created under the laws of the State of Delaware (the
"Securities Trust"), on behalf of its series, the UBS Enhanced
Nasdaq-100 Fund (the "Acquired Fund")
Gentlemen:
You have requested our opinion concerning certain federal income tax
consequences of the reorganization of the Acquired Fund (the "Reorganization"),
which will consist of: (i) the acquisition by the Trust, on behalf of the
Acquiring Fund, of substantially all of the property, assets and goodwill of the
Acquired Fund, in exchange solely for shares of beneficial interest, $0.001 par
value, of (a) Acquiring Fund-Class A shares ("Acquiring Fund Class A Shares"),
(b) Acquiring Fund-Class B shares ("Acquiring Fund Class B Shares"), (c)
Acquiring Fund-Class C shares ("Acquiring Fund Class C Shares"), and (d)
Acquiring Fund-Class Y shares ("Acquiring Fund Class Y Shares" and together with
Acquiring Fund Class A Shares, Acquiring Fund Class B Shares and Acquiring Fund
Class C Shares, the "Acquiring Fund Shares" which are voting securities), and
the assumption by the Trust, on behalf of the Acquiring Fund, of all of the
liabilities of the Acquired Fund; (ii) the distribution of (a) Acquiring Fund
Class A Shares to the shareholders of Class A shares of the Acquired Fund
("Acquired Fund Class A Shares"), (b) Acquiring Fund Class B Shares to the
shareholders of Class B shares of the Acquired Fund ("Acquired Fund Class B
Shares"), (c) Acquiring Fund Class C Shares to the shareholders of Class C
shares of the Acquired Fund ("Acquired Fund Class C Shares"), and (d) Acquiring
Fund Class Y Shares to the shareholders of Class Y shares of the Acquired Fund
("Acquired Fund Class Y Shares," and together with Acquired Fund Class A Shares,
Acquired Fund Class B Shares and Acquired Fund Class C Shares, the "Acquired
Fund Shares"), according to their respective interests, in complete liquidation
of the Acquired Fund; and (iii) the dissolution of the Acquired Fund, as soon as
practicable after the Closing of the Reorganization, all upon and subject to the
terms and conditions of this Agreement.
In rendering our opinion, we have reviewed and relied upon: (a) the
Agreement, made as of the __ day of ____, 2003, by and between the Trust, on
behalf of the Acquiring Fund, and the Securities Trust, on behalf of the
Acquired Fund; (b) the proxy materials provided to shareholders of the Acquired
Fund in connection with the Special Shareholders' Meeting of the Acquired Fund
held on _________, 2003; (c) certain representations concerning the
Reorganization made to us by the Trust, on behalf of the Acquiring Fund, and the
Securities Trust, on behalf of the Acquired Fund, in a letter dated _________,
2003 (the "Representation Letter"); (d) all other documents, financial and other
reports and corporate minutes we deemed relevant or appropriate; and (e) such
statutes, regulations, rulings and decisions as we deemed material in rendering
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 the Acquired Fund, on
the Closing of the Reorganization, satisfies, and immediately following the
Closing, the 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.
Based on the foregoing, and provided the Reorganization is carried out in
accordance with the applicable laws of the State of Delaware, the terms of the
Agreement and the statements in the Representation Letter with regard to matters
of fact, it is our opinion that: While not free from doubt under current law,
the acquisition by the Acquiring Fund of substantially all of the assets and the
assumption of the liabilities of the Acquired Fund in exchange solely for the
Acquiring Fund Shares, followed by the distribution by the Acquired Fund to its
shareholders of the Acquiring Fund Shares in complete liquidation of the
Acquired Fund, should result in the recognition of gain or loss to the Acquired
Fund and to its shareholders for federal income tax purposes under Sections 1001
and 331 of the Code, but not to the Acquiring Fund and its shareholders.
Our opinion is based upon the Code, the applicable Treasury Regulations,
the present positions of the Internal Revenue Service (the "Service") as are set
forth in published revenue rulings and revenue procedures, present
administrative positions of the 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 Closing of the Reorganization.
Our opinion is conditioned upon the performance by the Trust, on behalf of
the Acquiring Fund, and the Securities Trust, on behalf of the Acquired Fund, of
their undertakings in the Agreement and the Representation Letter. Our opinion
is limited to the transactions incident to the Reorganization described herein,
and no opinion is rendered with respect to (i) any other transaction or (ii) the
effect, if any, of the Reorganization (and/or the transactions incident thereto)
on any other transaction and/or the effect, if any, of any such other
transaction on the Reorganization.
This opinion is being rendered to the Trust, on behalf of its series, the
Acquiring Fund and the Securities Trust, on behalf of its series, the Acquired
Fund, and may be relied upon only by such funds and the shareholders of each. We
hereby consent to the use of this opinion as an exhibit to the Registration
Statement of the Acquiring Fund on Form N-14, and any amendments thereto,
covering the registration of the shares of the Acquiring Fund under the
Securities Act of 1933, as amended, to be issued in the Reorganization.
Very truly yours,
XXXXXXXX, XXXXX, XXXXXXX & XXXXX, LLP
By:
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, a partner
