[LETTERHEAD]
December 9, 2005
Old Mutual Advisor Funds
on behalf of Old Mutual Analytic Defensive Equity Fund
4643 South Ulster Street, Suite 600
Denver, CO 80237
Ladies and Gentlemen:
This opinion is being furnished to you in connection with the
reorganization (the "Reorganization") of Analytic Defensive Equity Fund (the
"Acquired Fund") and Old Mutual Analytic Defensive Equity Fund (the "Acquiring
Fund") pursuant to the Agreement and Plan of Reorganization (the "Reorganization
Plan") dated as of October 13, 2005, between The Advisors' Inner Circle Fund
(the "Acquired Fund Trust"), a Massachusetts business trust, on behalf of the
Acquired Fund, and Old Mutual Advisor Funds (the "Acquiring Fund Trust"), a
Delaware statutory trust, on behalf of the Acquiring Fund. The Reorganization
will consist of the transfer of all of the assets of the Acquired Fund (the
"Assets") to the Acquiring Fund in exchange solely for Class A, Class C and
Class Z shares of beneficial interest, par value $.001 per share, of the
Acquiring Fund (the "Acquiring Fund Shares"), the assumption by the Acquiring
Fund of all of the liabilities of the Acquired Fund (the "Liabilities") and the
distribution of the Acquiring Fund Shares to the holders of Class A, Class C and
Institutional Class shares, as applicable, of the Acquired Fund ("Acquired Fund
Shareholders") in complete liquidation of the Acquired Fund. (1)
All capitalized terms used in this opinion and not defined
herein have the respective meanings assigned to them in the Reorganization Plan
and the Prospectus/Proxy Statement included in the registration statement on
Form N-14, File No. 333-128388, filed with the Securities and Exchange
Commission on September 16, 2005 (the "Registration Statement").
For purposes of the opinion set forth below, we have reviewed
and relied upon (i) the Reorganization Plan, (ii) the Registration Statement,
and (iii) such other documents, records, and instruments as we have deemed
necessary or appropriate as a basis for our opinion. In addition, in rendering
our opinion we have relied upon certain statements and representations, which we
have neither investigated nor verified to the extent not readily ascertainable,
made by the Acquired Fund Trust, on behalf of the Acquired Fund and the
Acquiring Fund Trust, on behalf of the Acquiring Fund (the "Certified
Representations"), including, inter alia, that:
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(1) Pursuant to section 851(g)(1) of the Internal Revenue Code of 1986, as
amended (the "Code"), the Acquired Fund and the Acquiring Fund are each treated
as separate corporations for federal income tax purposes. Under Massachusetts
and Delaware law, ownership interests in the Acquired Fund and the Acquiring
Fund constitute shares of beneficial interest. Such interests are considered
stock for federal income tax purposes and are referred to as "stock" or "shares"
in this letter.
(a) there is no plan or intention for the Acquiring Fund (the
issuing corporation as defined in Treasury Regulation
ss.1.368-1(b)) or any person related (as defined in Treasury
Regulation ss.1.368-1(e)(3)) to the Acquiring Fund, to
acquire, during the five-year period beginning on the Closing
Date of the Reorganization, with consideration other than
Acquiring Fund Shares, Acquiring Fund Shares furnished in
exchange for a proprietary interest in the Acquired Fund in
the Reorganization, either directly or through a transaction,
agreement, or arrangement with any other person, other than
redemptions by the Acquiring Fund in the ordinary course of
its business as an open-end investment company pursuant to
Section 22(e) of the Investment Company Act of 1940;
(b) immediately following the Reorganization, the current
shareholders of the Acquired Fund will own all of the
outstanding shares of the Acquiring Fund in the same
proportions as the shares they owned in the Acquired Fund and
will own these shares solely by reason of their ownership of
the shares of the Acquired Fund immediately before the
Reorganization;
(c) as of the Closing Date of the Reorganization, the aggregate
fair market value of the Acquiring Fund shares (including any
fractional shares) to be received by each holder of shares of
beneficial interest of the Acquired Fund will be equal to the
aggregate fair market value of the Acquired Fund Shares
(including any fractional shares) surrendered in exchange
therefor; and
(d) the Acquired Fund is, and the Acquiring Fund will be,
qualified as a regulated investment company, as defined in
section 851 of the Code;
We also have obtained such additional information and
representations as we have deemed relevant and necessary through consultation
with the officers and trustees of the Acquired Fund and the Acquiring Fund, as
well as with other professionals engaged by them. We have assumed, with your
consent and to the extent not readily ascertainable, that all documents reviewed
by us are originals or photocopies that faithfully reproduce the originals
thereof, that all such documents have been or will be duly executed to the
extent required, that all representations and statements set forth in such
documents are true, correct, complete, and not breached, that no actions that
are inconsistent with such representations and statements will be taken, and
that all obligations imposed by any such documents on the parties thereto have
been or will be performed or satisfied in accordance with their terms. We have
further assumed that all representations made in the Certified Representations
"to the best knowledge of" any person will be true, correct, and complete as if
made without such qualification.
Based upon the foregoing, and subject to the qualifications
set forth below, it is our opinion that, for federal income tax purposes:
(a) the transfer of all of the Assets to the Acquiring Fund in
exchange solely for the Acquiring Fund Shares and the
assumption by the Acquiring Fund of the Liabilities, followed
by the distribution by the Acquired Fund of the Acquiring Fund
Shares to the Acquired Fund Shareholders in complete
liquidation of the Acquired Fund, will qualify as a
"reorganization" as defined in section 368(a)(1)(F) of the
Code, and each of the Acquired Fund and the Acquiring Fund
will be "a party to a reorganization" within the meaning of
section 368(b) of the Code;
(b) no gain or loss will be recognized by the Acquiring Fund upon
the receipt of the Assets in exchange solely for Acquiring
Fund Shares and the assumption by the Acquiring Fund of the
Liabilities pursuant to the Reorganization;
(c) no gain or loss will be recognized by the Acquired Fund upon
the transfer of the Assets to the Acquiring Fund in exchange
solely for Acquiring Fund Shares and the assumption by the
Acquiring Fund of the Liabilities or upon the distribution
(whether actual or constructive) of Acquiring Fund Shares to
Acquired Fund Shareholders in exchange for their shares of the
Acquired Fund in liquidation of the Acquired Fund pursuant to
the Reorganization;
(d) no gain or loss will be recognized by Acquired Fund
Shareholders upon the exchange of their Acquired Fund shares
for the Acquiring Fund Shares pursuant to the Reorganization;
(e) the aggregate tax basis for the Acquiring Fund Shares received
by each Acquired Fund Shareholder pursuant to the
Reorganization will be the same as the aggregate tax basis of
the Acquired Fund shares held by such Acquired Fund
Shareholder immediately prior to the Reorganization, and the
holding period of the Acquiring Fund Shares received by each
Acquired Fund Shareholder pursuant to the Reorganization will
include the period during which the Acquired Fund shares
exchanged therefor were held by such Acquired Fund Shareholder
(provided the Acquired Fund shares were held as capital assets
on the date of the exchange); and
(f) the tax basis of each Asset acquired by the Acquiring Fund
pursuant to the Reorganization will be the same as the tax
basis of that Asset to the Acquired Fund immediately prior to
the Reorganization, and the holding period of each Asset in
the hands of the Acquiring Fund will include the period during
which such Asset was held by the Acquired Fund.
Our opinion, which is not binding on the Internal Revenue
Service or the courts, is based upon existing statutory, regulatory, and
administrative and judicial authority, any of which may be changed at any time
with retroactive effect to the detriment of the Acquiring Fund, the Acquired
Fund, and/or their shareholders. We do not undertake to advise you as to any
changes after the date of this opinion in the above-referenced authorities that
may affect our opinion unless we are specifically requested to do so. As noted
above, our opinion is based solely on the documents that we have examined, the
assumptions we have made, the additional information that we have obtained, and
the representations that have been made to us. Our opinion cannot be relied upon
if any of the facts contained in such documents, such additional information, or
any of our assumptions or the representations made to us is, or later becomes,
inaccurate.
Finally, our opinion is limited to the tax matters
specifically stated above, and we have not been asked to address, nor have we
addressed, any other matters relating to the Reorganization, the Acquiring Fund,
the Acquired Fund, or any investment in or by the Acquiring Fund or the Acquired
Fund. Without limiting the foregoing statement, no opinion is expressed as to
the effect of the Reorganization on (i) the Acquired Fund or the Acquiring Fund
with respect to any Asset as to which any unrealized gain or loss is required to
be recognized for 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 Acquired Fund that is required to
recognize unrealized gains and losses for federal income tax purposes under a
mark-to-market system of accounting.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement. The giving of this consent, however, does not
constitute an admission that we are "experts" within the meaning of Section 11
of the Securities Act of 1933, as amended, or within the category of persons
whose consent is required by Section 7 of such Act.
This opinion is intended for the exclusive use of the
Acquiring Fund Trust, on behalf of the Acquiring Fund. Except as otherwise set
forth above, this opinion may not be circulated or relied upon by any other
person or entity or for any other purpose without our prior consent.
Very truly yours,
/s/ Kramer Levin Naftalis & Frankel LLP