<PAGE>
August 31, 2000
Mid Cap
One South Street
Baltimore, Maryland 21202
Equity Appreciation
One South Street
Baltimore, Maryland 21202
Ladies and Gentlemen:
You have asked us for our opinion concerning certain federal income tax
consequences to (a) BT Pyramid Mutual Funds, a Massachusetts business trust (the
"Pyramid Trust"), on behalf of Equity Appreciation (the "Acquired Fund"), a
separate series of the Pyramid Trust, (b) BT Investment Funds, a Massachusetts
business trust (the "Investment Trust"), on behalf of Mid Cap (the "Acquiring
Fund"), a series of the Investment Trust, and (c) the holders of shares of
beneficial interest in the Acquired Fund ("Acquired Fund Shareholders") when
Acquired Fund Shareholders receive Institutional shares of the Acquiring Fund
(the "Acquiring Fund Shares") in exchange for their interests in the Acquired
Fund pursuant to an acquisition by the Acquiring Fund of all of the assets of
the Acquired Fund in exchange for the Acquiring Fund Shares and the assumption
by the Acquiring Fund of certain scheduled liabilities of the Acquired Fund (the
"Reorganization"), all pursuant to that certain Agreement and Plan of
Reorganization (the "Plan"), dated July 28, 2000 (the "Effective Date"),
between and among the Acquired Fund, the Acquiring Fund, the Pyramid Trust and
the Investment Trust.
We have reviewed such documents and materials as we have considered necessary
for the purpose of rendering this opinion. In rendering this opinion, we have
assumed that such documents as yet unexecuted will, when executed, conform in
all material respects to the proposed forms of such documents that we have
examined. In addition, we have assumed the genuineness of all signatures, the
capacity of each party executing a document to so execute that document, the
authenticity of all documents submitted to us as originals and the conformity to
original documents of all documents submitted to us as certified or photostatic
copies.
We have made inquiry as to the underlying facts which we considered to be
relevant to the conclusions set forth in this letter. The opinions expressed in
this letter are based upon certain factual statements relating to the Acquired
Fund and the Acquiring Fund set forth in
<PAGE>
the Registration Statement on Form N-14 (the "Acquiring Fund Registration
Statement") filed by the Acquiring Fund with the Securities and Exchange
Commission and representations made in letters from the Acquired Fund and the
Acquiring Fund addressed to us for our use in rendering this opinion. We have no
reason to believe that these representations and facts are not valid, but we
have not attempted to verify independently any of these representations and
facts, and this opinion is based upon the assumption that each of them is
accurate. Capitalized terms used herein and not otherwise defined shall have the
meaning given them in the Acquiring Fund Registration Statement.
The conclusions expressed herein are based upon the Internal Revenue Code of
1986, as amended (the "Code"), Treasury regulations issued thereunder, published
rulings and procedures of the Internal Revenue Service and judicial decisions,
all as in effect on the date of this letter.
Based upon the foregoing, we are of the opinion that for federal income tax
purposes:
(a) The acquisition by the Acquiring Fund of all of the assets of
the Acquired Fund solely in exchange for the issuance of
Acquiring Fund Shares to the Acquired Fund and the assumption
of certain scheduled Acquired Fund liabilities by the
Acquiring Fund, followed by the distribution by the Acquired
Fund, in liquidation of the Acquired Fund, of Acquiring Fund
Shares to the Acquired Fund Shareholders in exchange for their
Acquired Fund shares of beneficial interest and the
termination of the Acquired Fund, will constitute a
reorganization within the meaning of Section 368(a)(1) of the
Code, and the Acquired Fund and the Acquiring Fund will each
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 Acquired Fund upon
(i) the transfer of all of its assets to the Acquiring Fund
solely in exchange for the issuance of Acquiring Fund Shares
to the Acquired Fund and the assumption of certain scheduled
Acquired Fund liabilities by the Acquiring Fund and (ii) the
distribution by the Acquired Fund of such Acquiring Fund
Shares to the Acquired Fund Shareholders;
(c) No gain or loss will be recognized by the Acquiring Fund upon
the receipt of the assets of the Acquired Fund solely in
exchange for the issuance of Acquiring Fund Shares to the
Acquired Fund and the assumption of certain scheduled Acquired
Fund liabilities by the Acquiring Fund;
(d) The basis of the assets of the Acquired Fund acquired by the
Acquiring Fund will be, in each instance, the same as the
basis of those assets in the hands of the Acquired Fund
immediately prior to the transfer;
-2-
<PAGE>
(e) The tax holding period of the assets of the Acquired Fund in
the hands of the Acquiring Fund will, in each instance,
include Acquired Fund's tax holding period for those assets;
(f) The Acquired Fund Shareholders will not recognize gain or loss
upon the exchange of all of their shares of beneficial
interest of the Acquired Fund solely for Acquiring Fund Shares
as part of the transaction;
(g) The basis of the Acquiring Fund Shares received by the
Acquired Fund Shareholders in the transaction will be the same
as the basis of the shares of beneficial interest of the
Acquired Fund surrendered in exchange therefor;
(h) The tax holding period of Acquiring Fund Shares received by
the Acquired Fund Shareholders will include, for each
shareholder, the tax holding period for the shares of
beneficial interest of the Acquired Fund surrendered in
exchange therefor, provided that such Acquired Fund shares
were held as capital assets on the date of the exchange;
(i) No gain or loss will be recognized by the Acquiring Fund upon
its contribution of the assets of the Acquired Fund to the
Capital Appreciation Portfolio solely in exchange for an
interest in the Capital Appreciation Portfolio;
(j) No gain or loss will be recognized by the Capital Appreciation
Portfolio upon the contribution by the Acquiring Fund of the
assets of the Acquired Fund to the Capital Appreciation
Portfolio solely in exchange for an interest in the Capital
Appreciation Portfolio;
(k) The basis of the Capital Appreciation Portfolio in the assets
of the Acquired Fund contributed to the Capital Appreciation
Portfolio by the Acquiring Fund will be, in each instance, the
same as the basis of those assets in the hands of the
Acquiring Fund immediately prior to such contribution;
(l) The tax holding period of the Capital Appreciation Portfolio
with respect to the assets of the Acquired Fund contributed by
the Acquiring Fund to the Capital Appreciation Portfolio will,
in each instance, include the Acquired Fund's and the
Acquiring Fund's tax holding periods for such assets;
(m) The basis of the interest in the Capital Appreciation
Portfolio acquired by the Acquiring Fund as a result of its
contribution to the Capital Appreciation Portfolio of the
assets of the Acquired Fund will be the same as the Acquiring
Fund's basis in such assets; and
(n) The tax holding period of the Acquiring Fund with respect to
its interest in the Capital Appreciation Portfolio will
include the Acquired Fund's and the
-3-
<PAGE>
Acquiring Fund's tax holding periods for the assets of the
Acquired Fund contributed to the Capital Appreciation
Portfolio by the Acquiring Fund.
Very truly yours,
/s/ Willkie Farr & Gallagher
-4-
