GIORDANO, HALLERAN & CIESLA
A PROFESSIONAL CORPORATION
ATTORNEYS AT LAW
GIORDANO, HALLERAN & CIESLA
A PROFESSIONAL CORPORATION JOHN C. GIORDANO, JR. KURT E. ANDERSON
JOHN R. HALLERAN PAUL T. COLELLA
ATTORNEYS AT LAW FRANK R. CIESLA GERALD P. LALLY
BERNARD J. BERRY, JR. SEAN E. REGAN
PLEASE RESPOND TO: THOMAS A. PLISKIN JAY S. BECKER OF COUNSEL:
U.S. POSTAL SERVICE ADDRESS: JOHN A. AIELLO TIMOTHY D. LYONS S. THOMAS GAGLIANO
POST OFFICE BOX 190 MICHAEL J. GROSS J. SCOTT ANDERSON
MIDDLETOWN, NEW JERSEY 07748 JOHN A. GIUNCO PETER B. BENNETT
EDWARD S. RADZELY LAURENCE I. ROTHSTEIN -------
OR: SHARLENE A. HUNT ROBERT J. FEINBERG
HAND DELIVERY AND OVERNIGHT SERVICE ADDRESS: PHILIP D. FORLENZA PATRICK S. CONVERY JOHN C. GIORDANO
125 HALF MILE ROAD MICHAEL J. CANNING |_| MICHAEL A. PANE, JR. (1921-1989)
RED BANK, NEW JERSEY 07701 PAUL H. SCHNEIDER DERRICK A. SCENNA
ELIZABETH CHRISTIAN MICHAEL J. VITIELLO -------
(732) 741-3900 ANDREW B. ROBINS STEVEN M. DALTON FAX:
(732) 224-6599 MICHAEL A. BRUNO
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BY THE SUPREME
LAURA N. ANDERSON GREGORY BANACKI, JR. COURT OF NEW
PAMELA J. KNAUER ROBERT E. BRENNAN, JR. JERSEY AS A
TARA L. BENSON THEODORE P. BROGOWSKI CIVIL TRIAL
CATHERINE J. BICK BRIAN H. HARVEY ATTORNEY
MONICA J. CERES MELISSA V. SKROCKI
HANA S. WOLF AFIYFA H. BOLTON
RACHEL M. RINNINSLAND CRAIG M. GIANETTI
ROSS A. GOLDSTEIN CHARLES C. JEWELL
LISA MICELI WATERS
DIRECT DIAL NUMBER DIRECT EMAIL CLIENT/MATTER NO.
pcolella@ghclaw.com 10971-0022
October 1, 2004
Monmouth Community Bancorp Allaire Community Bank
627 Second Avenue 2200 Highway 35
Long Branch, New Jersey 07740 Sea Girt, New Jersey 08750
Att: Board of Directors Att: Board of Directors
Ladies and Gentlemen:
We have acted as counsel to Monmouth Community Bancorp, a New Jersey
corporation ("Bancorp"), in connection with the proposed business combination
(the "Combination") between Bancorp and Allaire Community Bank, a New Jersey
commercial bank ("Allaire"), to be undertaken pursuant to the Agreement and Plan
of Acquisition, dated as of June 30, 2004, by and between Bancorp and Allaire
(the "Agreement"). In the event the Combination is consummated, each outstanding
share of Allaire common stock will be exchanged for one share of Bancorp common
stock. The Combination and related transactions are described in the Agreement
and in the Joint Proxy Statement/Prospectus (the "Proxy Statement") included as
part of the Registration Statement on Form S-4 to be filed by Bancorp with the
Securities and Exchange Commission (the "Registration Statement"). Capitalized
terms used and not defined herein shall have the meanings ascribed to such terms
in the Agreement.
For purposes of this opinion, we have examined and relied upon the
accuracy and completeness (without, as you are aware, independent investigation
or verification), both initially and continuing as of the Effective Time, of the
facts, information, representations, covenants and agreements contained in
originals or copies, certified or otherwise identified to our satisfaction, of
the Agreement, the Registration Statement, and such other documents as we have
deemed necessary or appropriate as a basis for the opinion set forth below. In
addition, we have relied upon the accuracy and completeness, both initially and
continuing as of the Effective Time, of certain statements, representations,
covenants and agreements made by Bancorp, Allaire and
OUR TRENTON OFFICE: 441 EAST STATE STREET, TRENTON, NEW JERSEY 08625,
PHONE: (609) 695-3900
GIORDANO, HALLERAN & CIESLA
A PROFESSIONAL CORPORATION
ATTORNEYS AT LAW
Monmouth Community Bancorp
Allaire Community Bank
October 1, 2004
Page 2
others, including factual statements and representations set forth in letters
dated the date hereof from officers of Bancorp and Allaire (the "Representation
Letters"). In rendering this opinion, we have assumed that such statements,
representations, covenants and agreements are, and will continue to be as of the
Effective Time, true and correct without regard to any qualification as to
knowledge or belief. Our opinion assumes and is expressly conditioned on, among
other things, the initial and continuing accuracy and completeness of the facts,
information, representations, covenants and agreements set forth in the
documents referred to above and the statements, representations, covenants and
agreements made by Bancorp and Allaire, including those set forth in the
Representation Letters. We have assumed that the Representation Letters will be
re-executed by appropriate officers as of the Effective Time.
In rendering our opinion expressed below, we have examined and relied on
originals, or copies certified or otherwise identified to our satisfaction, of
the Agreement and of such corporate records of Bancorp and Allaire as we have
deemed necessary or appropriate in order to enable us to render the opinion
below. We have assumed the genuineness of all signatures, the legal capacity of
all natural persons, the authenticity of all documents submitted to us as
originals, the conformity to original documents of all documents submitted to us
as certified, conformed or photostatic copies and the authenticity of the
originals of such copies. We also have assumed that the transactions related to
the Combination or contemplated by the Agreement will be consummated in
accordance with the Agreement and as described in the Registration Statement,
that none of the terms and conditions contained therein will have been waived or
modified in any respect prior to the Effective Time and the Combination will be
reported by Bancorp and Allaire on their respective federal income tax returns
in a manner consistent with the opinion expressed below.
In rendering our opinion, we have considered applicable provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), Treasury Regulations
promulgated thereunder (the "Regulations"), pertinent judicial authorities,
rulings of the Internal Revenue Service, and such other authorities as we have
considered relevant, in each case, in effect on the date hereof. It should be
noted that such laws, Code, Regulations, judicial decisions, administrative
interpretations and such other authorities are subject to change at any time
and, in some circumstances, with retroactive effect. A change in any of the
authorities upon which our opinion is based, or any variation or difference in
any fact from those set forth or assumed herein or in the Registration
Statement, the Agreement, or the Representation Letters, could affect the
conclusions set forth herein. Moreover, there can be no assurance that our
opinion will be accepted by the Internal Revenue Service, or if challenged, by a
court.
GIORDANO, HALLERAN & CIESLA
A PROFESSIONAL CORPORATION
ATTORNEYS AT LAW
Monmouth Community Bancorp
Allaire Community Bank
October 1, 2004
Page 3
Based solely upon and subject to the foregoing, and our consideration of
such other matters of fact and law as we have considered necessary or
appropriate, it is our opinion, under presently applicable United States federal
income tax law, that:
(1) the Combination will constitute a "reorganization" within the meaning
of Section 368(a) of the Code;
(2) no gain or loss will be recognized by the stockholders of Allaire who
exchange their shares of Allaire Common Stock solely for shares of Bancorp
Common Stock;
(3) the aggregate tax basis of the shares of Bancorp Common Stock received
by the Allaire stockholders who exchange all of their shares of Allaire Common
Stock for shares of Bancorp Common Stock in the Combination will be the same as
the aggregate tax basis of the shares of Allaire Common Stock surrendered in
exchange therefor;
(4) the holding period of the shares of Bancorp Common Stock received by a
stockholder of Allaire will include the holding period of the shares of Allaire
Common Stock surrendered in exchange therefor, provided the shares of Allaire
Common Stock surrendered were held as a capital asset on the date of the
exchange;
(5) each dissenting Allaire stockholder receiving cash in exchange for
his, her or its Allaire Common Stock will be treated as if he, she or it
received such cash in redemption of his, her or its Allaire Common Stock,
subject to the provisions of Section 302(b) of the Code; the amount of such
Allaire stockholder's recognized gain or loss will be the difference, if any,
between (i) the amount of cash so received and (ii) such stockholder's tax basis
in the Allaire Common Stock exchanged; and such gain or loss would be capital
gain or loss if the Allaire Common Stock was held as a capital asset, and would
be long term if the holding period was more than one year; and
(6) each dissenting Bancorp shareholder receiving cash in exchange for
his, her or its Bancorp Common Stock will be treated as if he, she or it
received such cash in redemption of his, her or its Bancorp Common Stock,
subject to the provisions of Section 302(b) of the Code; the amount of such
Bancorp shareholder's recognized gain or loss will be the difference, if any,
between (i) the amount of cash so received and (ii) such shareholder's tax basis
in the Bancorp Common Stock exchanged; and such gain or loss would be capital
gain or loss if the Bancorp Common Stock was held as a capital asset, and would
be long term if the holding period was more than one year.
GIORDANO, HALLERAN & CIESLA
A PROFESSIONAL CORPORATION
ATTORNEYS AT LAW
Monmouth Community Bancorp
Allaire Community Bank
October 1, 2004
Page 4
Our opinion does not address any consequences arising under the laws of
any state, locality or foreign jurisdiction. Additionally, this opinion does not
address the specific federal income tax consequences that may be relevant to a
particular Allaire stockholder or dissenting Bancorp shareholder receiving
special treatment under some federal income tax laws, including (i) banks; (ii)
foreign investors; (iii) financial institutions; (iv) tax-exempt organizations;
(v) insurance companies; (vi) mutual funds; (vii) traders in securities that
elect mark-to-market; (viii) dealers in securities or foreign currencies;
(ix)persons, if any, who received their Allaire Common Stock or Bancorp Common
Stock through the exercise of employee stock options or otherwise as
compensation; (x) persons who have a functional currency other than the U.S.
dollar; and (xi) persons who hold Allaire Common Stock or Bancorp Common Stock
as part of a hedge, straddle, or conversion transaction.
No rulings have been or will be sought from the Internal Revenue Service
regarding any matters relating to the Combination. We disclaim any undertaking
to advise you of any subsequent changes of the facts stated or assumed herein or
any subsequent changes in applicable law. This opinion may not be relied upon by
anyone else without our prior written consent.
We hereby consent to the filing with the Securities and Exchange
Commission of this opinion as an exhibit to the Registration Statement and to
the reference to us under the captions "Material Federal Income Tax Consequences
of the Combination" in the Registration Statement and the Proxy Statement
included as a part thereof. By giving this consent, we do not thereby admit that
we come within the category of persons whose consent is required under Section 7
of the Securities Act of 1933, as amended, or the rules and regulations
thereunder.
Very truly yours,
/s/ Giordano, Halleran & Ciesla,
a Professional Corporation
GIORDANO, HALLERAN & CIESLA,
a Professional Corporation