FORM OF OPINION
[______ __, 2002]
Board of Trustees
The Advisors' Inner Circle Fund
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Board of Trustees
Advisors Series Trust
0000 X. Xxxxxxxxx Xxxx, Xxxxx 000X
Xxxxxxx, XX 00000
Re: Agreement and Plan of Reorganization, dated as of the
17th of September, 2002 (the "Agreement"), between
and among the Advisors Series Trust, a Delaware
business trust, (the "Acquired Trust") on behalf of
its Chartwell Large Cap Value Fund series and its
Chartwell Small Cap Value Fund series (each an
"Acquired Fund" and together, the "Acquired Funds"),
and The Advisors' Inner Circle Fund, a Massachusetts
business trust (the "Acquiring Trust"), on behalf of
its Chartwell Large Cap Value Fund series and its
Chartwell Small Cap Value Fund series (each an
"Acquiring Fund" and together, the "Acquiring Funds")
Ladies and Gentlemen:
You have requested our opinion as to certain U.S. federal
income tax consequences of the reorganization of the Acquired Funds and the
Acquiring Funds (the "Reorganization"). The Reorganization will involve the
transfer of all of the assets of each Acquired Fund to the corresponding
Acquiring Funds, each a newly created series of the Acquiring Trust, and the
assumption of the liabilities of each Acquiring Fund by the corresponding
Acquiring Fund in exchange for shares of such Acquiring Fund. These shares of
the Acquiring Fund will in each case be distributed to the shareholders of the
corresponding Acquired Fund, following which each Acquired Fund shall be
liquidated. In the distribution, shareholders of each Acquired Fund who hold
Acquired Fund Institutional Class Shares will receive Acquiring Fund
Institutional Class Shares and shareholders of each Acquired Fund who hold
Acquired Fund Advisor Class Shares will receive Acquiring Fund Advisor Class
Shares.
In rendering our opinion, we have reviewed and relied upon (a)
the Agreement, (b) the proxy materials provided to shareholders of the Acquired
Trust in connection with the Special Meeting of Shareholders of the Acquired
Trust [to be] held on November 25, 2002, (c) certain representations concerning
the Reorganization made to us by the Acquired Trust and the Acquiring Trust in
letters dated [_____ __, 2002] (the "Representation Letters"), (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.
Under regulations to be prescribed by the Secretary of
Treasury under Section 1276(d) of the Internal Revenue Code of 1986, as amended
(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.
For purposes of this opinion, we have assumed that the
Acquired Funds at the Effective Time of the Reorganization satisfy, and
following the Reorganization, the Acquiring Funds will continue to satisfy, the
requirements of subchapter M of 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 Commonwealth of
Massachusetts and the State of Delaware, the Agreement and the Representation
Letters, it is our opinion, with respect to each Acquired Fund and Acquiring
Fund, that:
1. The Reorganization will constitute a tax-free
reorganization within the meaning of Section 368(a)(1)(F) of the Code, and the
Acquired Fund and Acquiring Fund will each be a party to a reorganization within
the meaning of Section 368(b) of the Code.
2. No gain or loss will be recognized by the Acquired Fund
upon the transfer of all of its assets to the Acquiring Fund in exchange solely
for the Acquiring Fund Shares and the assumption by the Acquiring Fund of the
Acquired Fund's liabilities or upon the distribution of the Acquiring Fund
Shares to the Acquired Fund's shareholders in exchange for their shares of the
Acquired Fund.
3. No gain or loss will be recognized by the Acquiring Fund
upon the receipt by it of all of the assets of the Acquired Fund in exchange
solely for Acquiring Fund Shares and the assumption by the Acquiring Fund of the
liabilities of the Acquired Fund.
4. The adjusted tax basis of the assets of the Acquired Fund
received by the Acquiring Fund will be the same as the adjusted tax basis of
such assets to the Acquired Fund immediately prior to the Reorganization.
5. The holding period of the assets of the Acquired Fund
received by the Acquiring Fund will include the holding period of those assets
in the hands of the Acquired Fund immediately prior to the Reorganization.
6. No gain or loss will be recognized by the shareholders of
the Acquired Fund upon the exchange of their Acquired Fund Shares for the
Acquiring Fund Shares (including fractional shares to which they may be
entitled) and the assumption by the Acquiring Fund of the liabilities of the
Acquired Fund.
7. The aggregate adjusted tax basis of the Acquiring Fund
Shares received by the shareholders of the Acquired Fund (including fractional
shares to which they may be entitled) pursuant to the Reorganization will be the
same as the aggregate tax basis of the Acquired Fund Shares held by the Acquired
Fund's shareholders immediately prior to the Reorganization.
8. The holding period of the Acquiring Fund Shares received by
the shareholders of the 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 as of the Effective Time of the Reorganization.
9. For purposes of section 381 of the Code, the Acquiring Fund
will be treated as the same corporation as the Acquired Fund and the tax
attributes of the Acquired Fund enumerated in section 381(c) will be taken into
account by the Acquiring Fund as if there had been no reorganization (section
1.381(b)-1(a)(2) of the Regulations).
This opinion letter expresses our views only as to U.S.
federal income tax laws in effect as of the date hereof. It represents our best
legal judgment as to the matters addressed herein, but is not binding on the
Internal Revenue Service or the courts. Accordingly, no assurance can be given
that the opinions and analysis expressed herein, if contested, would be
sustained by a court. 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 the
Acquiring Trust and the Acquired Trust of their undertakings in the Agreement
and the Representation Letters.
This opinion is being rendered to Acquiring Trust, on behalf
of the Acquiring Funds, and Acquired Trust on behalf of the Acquired Funds, and
may be relied upon only by such funds and the shareholders of each such fund.
Very truly yours,
