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EXHIBIT 5.1
January 5, 2001
Merrill Lynch, Pierce, Fenner & Smith Incorporated
250 Vesey Street
New York, New York 10281
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Oil Service HOLDRS Trust
Registration Statement on Form S-1
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Ladies and Gentlemen:
We are acting as counsel to Merrill Lynch, Pierce, Fenner & Smith
Incorporated, a Delaware corporation (the "Initial Depositor"), and as special
counsel to the Oil Service HOLDRS Trust (the "Trust") in connection with the
preparation and filing with the Securities and Exchange Commission (the
"Commission") of the Registration Statement on Form S-1, as amended from time to
time and filed by the Initial Depositor (the "Registration Statement"), of which
the prospectus forms a part (the "Prospectus"), for the registration under the
Securities Act of 1933, as amended (the "Securities Act"), of 1,000,000,000 Oil
Service HOLDRS (the "HOLDRS") to be issued by the Trust.
In this capacity, we have examined (a) a signed copy of the
Registration Statement and (b) a copy of the depositary trust agreement between
The Bank of New York, as trustee (the "Trustee"), and Merrill Lynch, Pierce,
Fenner & Smith Incorporated, as initial depositor (the "Depositary Trust
Agreement"). We have also examined originals, or copies certified or otherwise
identified to our satisfaction, of such other corporate records of the Initial
Depositor, such other certificates and advice of public officials and of
officers of the Initial Depositor, and such other agreements, instruments and
documents as we have deemed necessary as a basis for the opinions expressed
below. In such examination we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, and the
conformity with the originals of all documents submitted to us as copies. As to
questions of fact material to such opinions, we have relied upon such
certificates and advice. The opinions set forth below are also based upon the
assumptions that: (i) the Registration Statement, as
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finally amended (including any post-effective amendments), has become effective
under the Securities Act; (ii) the amount, price, and other principal terms of
the HOLDRS have been approved by the Board of Directors of the Initial Depositor
or an authorized designee thereof; (iii) the Depositary Trust Agreement will be
duly authorized, executed and delivered by the parties thereto substantially in
the form filed as an exhibit to the Registration Statement; and (iv) the HOLDRS
will be duly authenticated by the Trustee in accordance with the Depositary
Trust Agreement and sold and delivered by the Initial Depositor against payment
therefor.
Our opinions expressed herein are limited to the laws of the State of
New York and the Federal law of the United States, and we do not express any
opinion herein concerning any other law.
Based upon and subject to the foregoing, and having regard for such
legal considerations as we have deemed relevant, we are of the opinion that the
HOLDRS will be legally issued, fully paid and nonassessable, will be legal,
valid and binding obligations of the Trust, enforceable against the Trust in
accordance with their terms, except as enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and except as enforcement thereof is
subject to general principles of equity (regardless of whether enforcement is
considered in a proceeding at law or in equity).
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement and to the use of our name under the heading "Legal
Matters" in the Prospectus. In giving this consent, we do not thereby concede
that we come within the category of persons whose consent is required by the
Securities Act or the General Rules and Regulations promulgated thereunder.
Very truly yours,
/s/ Shearman & Sterling
ABJ/LLJ/AA/LSN
JFS/ASG
