[FORM OF OPINION]
______________ __, 2009
Board of Trustees
Advisor's Inner Circle Fund
c/o SEI Investments
Xxx Xxxxxxx Xxxxxx Xxxxx
Xxxx, XX 00000
Board of Trustees
Forward Funds
000 Xxxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
RE: AGREEMENT AND PLAN OF REORGANIZATION, DATED _________ __, 2009
(THE "AGREEMENT"), BETWEEN AND AMONG THE FORWARD FUNDS, A
DELAWARE STATUTORY TRUST (THE "FORWARD FUNDS"), ON BEHALF OF
ITS ACCESSOR LIMITED DURATION U.S. GOVERNMENT FUND (THE
"PREDECESSOR FUND"), AND THE ADVISORS' INNER CIRCLE FUND
("AIC"), A MASSACHUSETTS BUSINESS TRUST, ON BEHALF OF ITS USFS
FUNDS LIMITED DURATION GOVERNMENT FUND (THE "NEW FUND").
Ladies and Gentlemen:
You have requested our opinion as to certain U.S. federal income tax
consequences of the reorganization of the Predecessor Fund and the New Fund (the
"Reorganization"). The Reorganization will involve the transfer of all of the
assets of a Predecessor Fund to the New Fund, a newly created series of the
Laudus Trust, and the assumption of the liabilities of the Predecessor Fund by
the New Fund in exchange for shares of beneficial interest of the New Fund. The
shares of the New Fund will be distributed to the shareholders of the
Predecessor Fund, following which the Predecessor Fund will be liquidated. In
the distribution, holders of shares of the Predecessor Fund will receive shares
of the New Fund.(1)
In rendering our opinion, we have reviewed and relied upon (a) the
Agreement, (b) the proxy materials provided to shareholders of the Predecessor
Fund in connection with the
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(1) In the Reorganization, shareholders of the Predecessor Fund will receive
Institutional Class Shares of the New Fund ("New Fund Shares").
recently held Special Meeting of Shareholders, (c) certain representations
concerning the Reorganization made to us in letters from the Forward Funds and
AIC dated _________ __, 2009 (collectively, the "Representation Letters"), (d)
all other documents, financial and other reports and corporate minutes that we
deemed relevant or appropriate, and (e) such statutes, regulations, rulings and
decisions as we deemed material with respect to 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 Predecessor Fund on
the Closing Date of the Reorganization will satisfy, and following the
Reorganization, the New 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 specified 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 the Reorganization that:
1. The Reorganization will constitute a tax-free reorganization within the
meaning of Section 368(a) of the Code, and the Predecessor Fund and the
New 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 Predecessor Fund upon the
transfer of all of its assets to the New Fund in exchange solely for
the New Fund Shares and the assumption by the New Fund of the
Predecessor Fund's liabilities or upon the distribution of the New Fund
Shares to the Predecessor Fund's shareholders in exchange for their
shares of the Predecessor Fund.
3. No gain or loss will be recognized by the New Fund upon the receipt by
it of all of the assets of the Predecessor Fund in exchange solely for
New Fund Shares and the assumption by the New Fund of the liabilities
of the Predecessor Fund.
4. The adjusted tax basis of the assets of the Predecessor Fund received
by the New Fund will be the same as the adjusted tax basis of such
assets to the Predecessor Fund immediately prior to the Reorganization.
5. The holding period of the assets of the Predecessor Fund received by
the New Fund will include the holding period of those assets in the
hands of the Predecessor Fund immediately prior to the Reorganization.
6. No gain or loss will be recognized by the shareholders of the
Predecessor Fund upon the exchange of their Predecessor Fund Shares for
the New Fund Shares (including fractional shares to which they may be
entitled) and the assumption by the New Fund of the liabilities of the
Predecessor Fund.
7. The aggregate adjusted tax basis of the New Fund Shares received by the
shareholders of the Predecessor Fund (including fractional shares to
which they may be entitled) pursuant to the Reorganization will be the
same as the aggregate adjusted tax basis of the Predecessor Fund Shares
held by the Predecessor Fund's shareholders immediately prior to the
Reorganization.
8. The holding period of the New Fund Shares received by the shareholders
of the Predecessor Fund (including fractional shares to which they may
be entitled) will include the holding period of the Predecessor Fund
Shares surrendered in exchange therefore, provided that the Predecessor
Fund Shares were held as a capital asset on the Closing Date.
9. For purposes of section 381 of the Code, the New Fund will succeed to
and take into account as of the date of the transfer (as defined in
Section 1.381(b)-1(b) of the Treasury Regulations) the items of the
Predecessor 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.
Notwithstanding the foregoing opinions, no opinion is expressed as to the
effect of the Reorganization on (i) the Predecessor Fund or the New Fund with
respect to any asset as to which any unrealized gain or loss is required to be
recognized for U.S. federal income tax purposes at the end of a taxable year (or
on the termination or transfer thereof) under a mark-to-market system of
accounting and (ii) any shareholder of the Predecessor Fund that is required to
recognize unrealized gains and losses for U.S. federal income tax purposes under
a mark-to-market system of accounting.
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 Forward Funds and
AIC of their respective undertakings in the Agreement and the Representation
Letters.
This opinion is being rendered to the AIC, on behalf of the New Fund, and
the Forward Funds, on behalf of the Predecessor Fund, and may be relied upon
only by AIC, Forward Funds, the Predecessor Fund, the New Fund and their
respective shareholders.
Very truly yours,
