LAW OFFICES OF
KELLER ROHRBACK L.L.P.
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A PROFESSIONAL LIMITED LIABILITY PARTNERSHIP
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EXHIBIT 8
March 31, 2004
Cascade Financial Corporation Issaquah Bancshares, Inc.
2828 Colby Avenue 1055 NW Maple Street
Everett, WA 98201 P.O. Box 1263
Issaquah, WA 98027
Re: Bank Merger/Tax Consequences
Ladies and Gentlemen:
This letter responds to your request for our opinion as to certain of
the federal income tax consequences of the proposed merger (the "Merger") of
Issaquah Bancshares, Inc. ("Issaquah") into Cascade Financial Corporation
("Cascade") in exchange for cash and Cascade common stock. The time at which
the Merger becomes effective is hereafter referred to as the "Effective Date."
This opinion is being delivered in connection with Cascade's Registration
Statement on Form S-4 relating to the proposed Merger (the "Registration
Statement") to which this opinion appears as an exhibit.
We have acted as legal counsel to Cascade in connection with the
Merger. In acting as counsel to Cascade in connection with the Merger, we have,
in preparing our opinion, as hereinafter set forth, participated in the
preparation of the Merger Agreement and the preparation and filing of the
Registration Statement. For the purpose of rendering this opinion, we have
examined and relied upon originals, certified copies, or copies otherwise
identified to our satisfaction as being true copies of the originals of the
following documents, including all exhibits and schedules attached to them:
1. The Agreement and Plan of Merger dated as of February 11, 2004,
between Cascade, Cascade Bank, Issaquah and Issaquah Bank (the
"Merger Agreement").
2. Form S-4 Registration Statement and Prospectus of Cascade filed with
the Securities and Exchange Commission on or about March 31, 2004.
3. The Proxy Statement of Issaquah (included as part of the Registration
Statement).
4. Such other documents, instruments, records and information pertaining
to the Merger as we have deemed necessary for rendering our opinion.
We have assumed, without independent investigation or review, the
accuracy and completeness of the facts and representations and warranties
contained in those documents or
March 31, 2004 KELLER ROHRBACK L.L.P.
Page 2
otherwise made known to us through the Effective Date of the Merger, and that
the Merger will be effected in accordance with the terms of the Merger
Agreement.
Our opinion is based on the Internal Revenue Code of 1986, as amended
(the "Code"), Treasury Regulations, administrative interpretations, and
judicial precedents as of the date hereof. If there is any subsequent change in
the applicable law or regulations, or if there are subsequently any new
applicable administrative or judicial interpretations of the law or
regulations, or if there are any changes in the facts or circumstances
surrounding the Merger, the opinion expressed herein may become inapplicable.
Based upon our review of the facts described above and our analysis of
the law, and subject to the qualifications and limitations set forth herein,
and the completion of the transactions described in the manner contemplated by
the Merger Agreement, it is our opinion that:
A. The Merger will be treated as a reorganization under Section
368(a)(1)(A) of the Code and Cascade and Issaquah will each be a party to that
reorganization within the meaning of Section 368(b) of the Code; provided,
however, that at least fifty percent (50%) of the sum of (1) the Aggregate
Consideration (as defined in section 1.3(A) of the Merger Agreement) payable in
cash and Cascade common stock to the Issaquah shareholders in the Merger and
(2) any additional cash paid with respect to Issaquah options pursuant to
section 1.5 of the Merger Agreement, is paid in Cascade common stock.
B. Provided the Merger satisfies the condition in the foregoing
paragraph that at least 50% of the total consideration for the Merger is paid
in Cascade common stock, it is further our opinion that the material federal
income tax consequences of the Merger will be:
1. Parties. No gain or loss will be recognized by Cascade or
Issaquah as a result of the Merger.
2. Shareholders of Issaquah. We hereby confirm our opinion set forth
in the discussion contained in the Registration Statement under the caption
"The Merger - Certain Federal Income Tax Consequences".
We express our opinion herein only as to those matters specifically
set forth above and no opinion should be inferred as to the tax consequences of
the Merger under any state, local or foreign law, or with respect to other
areas of United States federal taxation. We are members of the Bar of the State
of Washington, and we do not express any opinion herein concerning any law
other than the federal law of the United States.
Our opinion is intended solely for the benefit of Cascade and
Issaquah, and their respective shareholders, and may not be relied upon for any
other purpose or by any other person or entity or made available to any other
person or entity without our prior written consent.
March 31, 2004 KELLER ROHRBACK L.L.P.
Page 3
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and the reference to us in the Proxy
Statement/Prospectus under the heading "The Merger - Certain Federal Income Tax
Consequences" and "Legal Opinions." By giving the foregoing consent, we do not
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 of the Securities and Exchange Commission thereunder.
Sincerely,
/s/ KELLER ROHRBACK L.L.P.