[letterhead of Xxxxxxxx Xxxxxx LLP]
August 28, 2000
Equality Bancorp, Inc.
0000 Xxxxx Xxxxx Xxxx.
St. Louis, Missouri 63118
Re: Agreement and Plan of Merger By and Among Allegiant Bancorp, Inc.,
Allegiant Acquisition Corporation and Equality Bancorp, Inc.,
dated as of July 26, 2000
Ladies and Gentlemen:
You have requested our opinion concerning the material federal
income tax consequences in connection with the proposed merger (the
"Merger") of Allegiant Acquisition Corporation ("Acquisition Corp."), a
Delaware corporation and wholly-owned subsidiary of Allegiant Bancorp,
Inc. ("Allegiant"), a Missouri corporation, with and into Equality
Bancorp, Inc. ("Equality"), a Delaware corporation, pursuant to an
Agreement and Plan of Merger, dated as of July 26, 2000 (the "Merger
Agreement"), by and among Allegiant, Acquisition Corp. and Equality. In
the Merger, each issued and outstanding share of common stock of
Equality, par value $.01 per share, will be converted into the right to
receive 1.118 shares of common stock, par value $.01 per share, of
Allegiant.
In that connection, you have requested our opinion regarding the
material federal income tax consequences of the Merger. In providing
our opinion, we have examined the Merger Agreement, and such other
documents and corporate records as we have deemed necessary or
appropriate for purposes of our opinion. In addition, we have assumed
that (i) the Merger will be consummated in the manner contemplated and
in accordance with the provisions of the Merger Agreement, (ii) the
statements concerning the Merger set forth in the Merger Agreement are
true, correct and complete and will continue to be true, correct and
complete at all times up to and including the "Effective Time," as that
term is defined in the Merger Agreement, and (iii) the representations
made to us by Equality, Allegiant and Acquisition Corp., in their
respective letters to us each dated the date hereof, and delivered to us
for purposes of this opinion are true, correct and complete and will
continue to be true, correct and complete at all times up to and
including the Effective Time. If any of the above-described assumptions
are untrue for any reason or if the Merger is consummated in a manner
that is inconsistent with the manner in which it is described in the
Merger Agreement, our opinions as expressed below may be adversely
affected and may not be relied upon.
The opinion expressed herein is based upon existing statutory,
regulatory and judicial authority, any of which may be changed at any
time with retroactive effect. Our opinion is limited to the tax matters
specifically covered hereby, and we have not been asked to address, nor
have we addressed, any other tax consequences of the Merger or any other
transactions.
Based upon the foregoing, we are of the opinion that (i) the
Merger will be treated for U.S. federal income tax purposes as a
reorganization within the meaning of section 368(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), (ii) holders of Equality
common stock who exchange their Equality common stock for Allegiant
common stock pursuant to the Merger Agreement will not recognize gain or
loss for federal income tax purposes, except with respect to cash, if
any, they receive in lieu of fractional shares of Allegiant common
stock, (iii) holders of Equality common stock who receive cash in lieu
of fractional shares of Allegiant common stock in the Merger will
generally be treated as if the fractional shares of Allegiant common
stock had been distributed to them as part of the Merger and then
redeemed by Allegiant in exchange for the cash actually distributed in
lieu of the fractional shares, with such redemption qualifying as an
exchange under section 302 of the Code; consequently, to the extent the
Equality common stock exchanged is held as a capital asset at the time
of the Merger, such holders generally will recognize capital gain or
loss with respect to cash payments they receive in lieu of fractional
shares; the tax rate applicable to capital gains of a non-corporate
holder varies depending on the holder's holding period of the shares,
and any such capital gain will generally be subject to a maximum federal
income tax rate of 20% if the holder has held the Equality common stock
for more than 12 months at the Effective Time, (iv) each holder's
aggregate tax basis in the Allegiant common stock received in the Merger
will be the same as the holder's aggregate tax basis in the Equality
common stock exchanged therefor, decreased by the amount of any tax
basis allocable to any fractional share interest for which cash is
received, and (v) the holding period of the Allegiant common stock
received by an Equality stockholder pursuant to the Merger Agreement
will include the holding period of the Equality common stock surrendered
in exchange therefor to the extent the Equality common stock exchanged
is held as a capital asset at the time of the Merger.
We express no opinion with regard to: (1) the federal income tax
consequences of the Merger not addressed expressly by this opinion,
including without limitation, (i) the tax consequences, if any, to those
stockholders or employees of the Equality who hold employee stock
options or who acquired shares of Equality common stock pursuant to the
exercise of employee stock options or otherwise as compensation, and
(ii) the tax consequences to special classes of stockholders, if any,
including without limitation, foreign persons, insurance companies, tax-
exempt entities, retirement plans, and dealers in securities; and (2)
federal, state, local, or foreign taxes (or any other federal, state,
local, or foreign laws) not specifically referred to and discussed
herein. Further, our opinion is based upon the Code, Treasury
Regulations proposed or promulgated thereunder, and administrative
interpretations and judicial precedents relating thereto, all of which
are subject to change at any time, possibly with retroactive effect, and
we assume no obligation to advise you of any subsequent change thereto.
If there is any change in the applicable law or regulations, or if there
is any new administrative or judicial interpretation of the applicable
law or regulations, any or all of the federal income tax consequences
described herein may become inapplicable.
-2-
The foregoing opinion reflects our legal judgment solely on the
issues presented and discussed herein. This opinion has no official
status or binding effect of any kind. Accordingly, we cannot assure you
that the Internal Revenue Service or any court of competent jurisdiction
will agree with this opinion.
We hereby consent to the filing of this letter as an exhibit to
Allegiant's Registration Statement on Form S-4 with respect to the
Merger and to all references made to this letter and all corresponding
references to this firm in such Registration Statement and the Joint
Proxy Statement/Prospectus forming a part thereof.
Very truly yours,
XXXXXXXX XXXXXX LLP
/s/ Xxxxxxxx Xxxxxx LLP
-3-
