April 29, 2005
Potomac Insurance Trust
33 Whitehall Street, 10th Floor
New York, New York 10004
Ladies and Gentlemen:
We have acted as counsel to Potomac Insurance Trust, a business trust formed under the laws of the Commonwealth of Massachusetts (the “Trust”), in connection with the filing with the Securities and Exchange Commission (“SEC”) of Post-Effective Amendment No. 20 to the Trust's Registration Statement on Form N-1A (File Nos. 333-93813; 811-09761) (the “Post-Effective Amendment”), regarding theissuance of shares of beneficial interestof The Potomac VP U.S. Plus Fund, The Potomac VP U.S./Short Fund, The Potomac VP OTC Plus Fund, The Potomac VP OT C/Short Fund, The Potomac VP Dow 30SM Plus Fund, The Potomac VP Dow 30SM/Short, The Potomac VP Small Cap Plus Fund, The Potomac VP Small Cap/Short Fund, The Potomac VP Money Market Fund, and the Dynamic VP HY Bond Fund, and an indefinite number of Class Ashares of beneficial interestof the Evolution VP Managed Bond Fund and the Evolution VP Managed Equity Fund.
You have requested our opinion as to the matters set forth below in connection with the filing of the Post-Effective Amendment. For purposes of rendering that opinion, we have examined the Post-Effective Amendment, the Trust’s Declaration of Trust, as amended, and Bylaws of the Trust, and the action of the Trust that provides for the issuance of the Shares, and we have made such other investigation as we have deemed appropriate. We have examined and relied upon certificates of public officials and, as to certain matters of fact material to our opinion, we have relied on a certificate of an officer of the Trust.In rendering our opinion,we also have made the assumptions that are customary in opinion letters of this kind. We have not verified any of those assumptions.
Our opinion, as set forth herein, is based on the facts in existence and the laws in effect on the date hereof and is limited to the federal laws of the United States of America and the laws of the Commonwealth of Massachusetts that, in our experience, generally are applicable to the issuance of shares by entities such as theTrust. We express no opinion with respect to any other laws.
Based upon and subject to the foregoing, we are of the opinion that:
1. | The Shares to be issued pursuant to the Post-Effective Amendment have been duly authorized for issuance by the Trust; and |
2. | When issued and paid for upon the terms provided in the Post-Effective Amendment, the Shares to be issued pursuant to the Post-Effective Amendment will be validly issued, fully paid, and nonassessable. In this regard, however, we note that the Trust is a Massachusetts business trust and, under certain circumstances, shareholders of a Massachusetts business trust could be held personally liable for the obligations of the Trust. |
This opinion is rendered solely in connection with the filing of the Post-Effective Amendment and supersedes any previous opinions of this firm in connection with the issuance of Shares. We hereby consent to the filing of this opinion with the SEC in connection with the Post-Effective Amendment and to the reference to this firm in the statement of additional information that is being filed as part of the Post-Effective Amendment. In giving our consent we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the 1933 Act or the rules and regulations of the SEC thereunder.
Very truly yours,
/s/ Kirkpatrick & Lockhart Nicholson Graham LLP
Kirkpatrick & Lockhart Nicholson Graham LLP