law offices
Silver, Freedman & Taff, L.L.P.
a limited liability partnership including professional corporations
1100 NEW YORK AVENUE, N.W.
SIDNEY J. SILVER, P.C. WASHINGTON, D.C. 20005-3934 TELECOPIER NUMBER
ROBERT L. FREEDMAN, P.C. (202) 414-6100 (202) 682-0354
BARRY P. TAFF, P.C. WWW.SFTLAW.COM
JAMES S. FLEISCHER, P.C. OF COUNSEL
JEFFREY M. WERTHAN, P.C. JOHN F. BREYER, JR.
KIP A. WEISSMAN, P.C. LAWRENCE J. EISENBERG
MARTIN L. MEYROWITZ, P.C. E. PRESTON RUTLEDGE
RICHARD S. GARABEDIAN, P.C. JOHN B. SELMAN*
DAVE M. MUCHNIKOFF, P.C. JAMES W. LANCE*
STEVEN M. ABRAMSON, P.C. MARTIN J. O'RIORDAN*
BRIAN L. ALPERT, P.C. DANIEL C. HOLDGREIWE*
GARY A. LAX, P.C.
MICHAEL S. SADOW, P.C.
NANCY M. STILES, P.C.
BETH A. FREEDMAN
CRAIG M. SCHEER
MICHAEL A. TROY*
MICHAEL R. GARTMAN
*NOT ADMITTED IN D.C.
June 26, 2000
Board of Directors Board of Directors
Cohoes Bancorp, Inc. Hudson River Bancorp, Inc.
75 Remsen Street One Hudson City Center
Cohoes, New York 12047 Hudson, New York 12534
Re: Federal Income Tax Consequences Arising from the Merger
contemplated by that certain Agreement and Plan of Merger
dated as of April 25, 2000 between Cohoes Bancorp, Inc. and
Hudson River Bancorp, Inc. (the "Agreement")
Ladies and Gentlemen:
In connection with filings to be made by the parties with regulatory
authorities and the Securities and Exchange Commission, set forth hereinbelow is
this firm's opinion relating to certain federal income tax consequences
applicable to the proposed Merger contemplated by the Agreement. Capitalized
terms used herein which are not expressly defined herein shall have the meaning
assigned to them in the Agreement.
FACTS
Pursuant to the Agreement, it is proposed that the Merger will be
implemented through the merger of Cohoes with and into Hudson. In the Merger,
each shareholder of Cohoes will exchange all of such holder's Cohoes Common
Stock for Hudson Common Stock and cash in lieu of any fractional share interest.
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Board of Directors
June 26, 2000
Page 2
ASSUMPTIONS
A. The Merger will be implemented strictly in accordance with the terms
of the Agreement.
B. All conditions precedent contained in the Agreement shall be
performed or waived prior to the Effective Time.
C. The representations of Cohoes and Hudson made in their respective
tax representation letters to counsel dated June 26, 2000 and June 23, 2000,
respectively, are true and correct as of the date hereof and will be true and
correct as of the Effective Time.
D. All of the shareholders of Cohoes are citizens or residents of the
United States of America ("U.S. Holders"). For purposes hereof, U.S. Holders do
not include certain classes of taxpayers including but not limited to foreign
persons, insurance companies, tax-exempt organizations, financial institutions,
dealers in securities, persons who acquired or acquire Cohoes Common Stock
pursuant to the exercise of stock options or otherwise as compensation and
persons who hold shares of Cohoes Common Stock in a hedging transaction or as
part of a straddle or conversion transaction.
OPINIONS
Subject to the foregoing and to the conditions and limitations
expressed elsewhere herein, we are of the opinion on the date hereof that for
federal income tax purposes:
1. the Merger will constitute a tax-free reorganization within the
meaning of Section 368(a) of the Code and Cohoes and Hudson will each be a party
to the reorganization;
2. no gain or loss will be recognized by Hudson or Cohoes as a result
of the Merger;
3. except as provided in paragraph 4 below, no gain or loss will be
recognized by any U.S. Holder who exchanges all of his or her Cohoes Common
Stock solely for Hudson Common Stock in the Merger; and in such case, the
aggregate adjusted tax basis of the shares of Hudson Common Stock (including a
fractional share interest in Hudson Common Stock deemed received and redeemed as
described below) received by such U.S. Holder will be the same as the aggregate
adjusted tax basis of the shares of the Cohoes Common Stock exchanged therefor;
4. the holding period of the Hudson Common Stock received by a U.S.
Holder who exchanges all of his or her Cohoes Common Stock solely for Hudson
Common Stock in the Merger
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Board of Directors
June 26, 2000
Page 3
will include the holding period of the Cohoes Common Stock surrendered and
exchanged therefor, provided that such shares of Cohoes Common Stock were held
as a capital asset by such U.S. Holder at the Effective Time;
5. a U.S. Holder who receives cash in lieu of a fractional share
interest in Hudson Common Stock in the Merger will be treated as having received
such fractional share interest and then as having received the cash in
redemption of such fractional share interest; under Section 302 of the Code, if
such deemed distribution is "substantially disproportionate" with respect to the
U.S. Holder or is "not essentially equivalent to a dividend" after giving effect
to the constructive ownership rules of the Code, the U.S. Holder would generally
recognize capital gain or loss equal to the difference between the amount of
cash received and the U.S. Holder's adjusted tax basis in the fractional share
interest (determined as described in paragraph 3 above); such capital gain or
loss would be long-term capital gain or loss if the U.S. Holder's holding period
in a fractional share interest is more than one year; long-term capital gain of
a non-corporate U.S. Holder is generally subject to a maximum tax rate of 20% if
the holding period exceeds one year; and
6. the Bank Merger, if consummated immediately after the Effective
Time, will qualify as a reorganization within the meaning of Section 368(a) of
the Code; and the consummation of the Bank Merger will not adversely affect the
qualification of the Merger as a reorganization within the meaning of Section
368(a) of the Code.
The foregoing opinions reflect our legal judgment based upon the facts
and assumptions presented herein. This opinion has no official status or binding
effect of any kind. Accordingly, we cannot assure you that the IRS or any court
of competent jurisdiction will agree with this opinion.
We hereby consent to the filing of this letter with the Securities and
Exchange Commission as an exhibit to the Registration Statement and to all
references made to this letter in the Registration Statement.
Very truly yours,
/s/ Barry P. Taff, P.C.
SILVER, FREEDMAN & TAFF, L.L.P.
