REGINA J. SCHRODER
e-mail: [email protected]
[Closing Date ]
Humboldt Bancorp
701 Fifth Street
Eureka, CA 95501
Tehama Bancorp
239 South Main Street
Red Bluff, CA
Ladies and Gentlemen:
You have requested our opinion with respect to the material U.S. federal
income tax consequences of the proposed merger of Tehama Bancorp ("Tehama
Bancorp") into Humboldt Bancorp ("Humboldt Bancorp"), with Humboldt Bancorp as
the surviving corporation (hereafter the "Merger").
In preparing this opinion, we have examined and relied upon the facts
stated and representations made in the Agreement and Plan of Reorganization and
Merger dated September 20, 2000 (the "Agreement") and in the Humboldt Bancorp
Registration Statement on Form S-4 filed with the Securities and Exchange
Commission, as amended, to which this opinion is appended as an exhibit (the
"Form S-4"). Except as otherwise indicated herein, all capitalized terms used in
this letter have the meaning assigned to them in the Agreement. We have also
relied upon certain management and board of directors' representations made to
us by Tehama Bancorp and Humboldt Bancorp for purposes of this opinion.
Our opinion set forth below is expressly conditioned upon (a) the accuracy
of the statements and facts concerning the Merger set forth in the Agreement and
the Form S-4, (b) the merger being consummated in the manner contemplated by and
in accordance with the terms set forth in the Agreement and the Form S-4, and
(c) the accuracy of the representations made to us by Tehama Bancorp and
Humboldt Bancorp management.
Our opinion is based on the Internal Revenue Code of 1986, as amended (the
"Code"), regulations promulgated thereunder by the U.S. Treasury Department (the
"Regulations"), Internal Revenue Service ("IRS") rulings, and court decisions,
all of which can be changed, perhaps retroactively, to affect adversely the tax
consequences of the Merger. Although the opinions expressed in
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this letter are based on our best interpretations of existing sources of law, no
assurance can be given that such interpretations would be followed if they
become the subject of judicial or administrative proceedings.
Based upon the facts and subject to the assumptions set forth above, it is
our opinion that the proposed Merger will have the following federal income tax
consequences:
o No gain or loss will be recognized by Tehama Bancorp or Humboldt
Bancorp in the merger;
o The basis and holding periods of the assets of Tehama Bancorp will
carry over to Humboldt Bancorp;
o No gain or loss will be recognized by the holders of Tehama Bancorp
common stock upon their receipt of Humboldt Bancorp common stock upon
conversion of their Tehama Bancorp common stock;
o The receipt of cash in lieu of fractional share interests of Humboldt
Bancorp common stock by holders of Tehama Bancorp common stock will
result in gain or loss equal to the difference between the payment and
the tax basis allocated to their fractional share interests. Whether
the gain or loss will constitute capital gain or loss for a particular
shareholder will depend upon whether that shareholder's Tehama Bancorp
common stock is held as a capital asset at the date of the merger;
o The receipt of cash upon exercise of dissenters' rights by holders of
Humboldt Bancorp common stock or Tehama Bancorp common stock will
result in gain or loss equal to the difference between the payment and
the tax basis of their shares. Whether the gain or loss shall
constitute capital gain or loss for a particular shareholder will
depend upon whether that shareholder's Humboldt Bancorp common stock
or Tehama Bancorp common stock is held as a capital asset at the date
of the merger, and whether the requirements of Section 302(b) of the
Code are met in the shareholder's exchange;
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o The tax basis of Humboldt Bancorp common stock received by the holders
of Tehama Bancorp common stock will be the same as the tax basis of
the Tehama Bancorp common stock converted in the merger; and
o The holding period of Humboldt Bancorp common stock in the hands of
the shareholders of Tehama Bancorp will include the period during
which the Tehama Bancorp common stock converted in the merger was
held, provided the Tehama Bancorp common stock was held as a capital
asset on the date of the merger.
This opinion is being furnished to you in connection with the Agreement and
the Form S-4, and we hereby consent to its inclusion as an exhibit to the Form
S-4. However, this opinion is not otherwise to be quoted, in whole or in part,
referred to in any other transaction, or filed with any governmental agency or
any other person without our prior and express written consent.
The opinion expressed herein is as of the date hereof, and we assume no
obligation to update or supplement such opinion to reflect any facts or
circumstances that may hereafter come to our attention or any changes in the law
that may hereafter occur.
No opinion is expressed as to the federal income tax consequences of any
aspects of the proposed transaction other than of those aspects specifically
addressed above.
Sincerely,
Bartel Eng Linn & Schroder,
a Law Corporation
