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Exhibit 8.1
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June 6, 2000
North Georgia National Bank
350 West Belmont Drive
Calhoun, Georgia 30701
North Georgia Community Financial Partners, Inc.
350 West Belmont Drive
Calhoun, Georgia 30701
Ladies and Gentlemen:
You have requested our opinion with respect to all material federal income
tax consequences of the reorganization (the "Reorganization") contemplated by
the Agreement and Plan of Share Exchange dated as of March 3, 2000 (the
"Agreement") by and among North Georgia National Bank, a national bank organized
and existing under the laws of the United States (the "Bank") and North Georgia
Community Financial Partners, Inc., a corporation organized and existing under
the laws of the state of Georgia (the "Company"). For purposes of rendering this
opinion, we have reviewed and relied on the Agreement, the certificate attached
hereto, and such other documents as we have considered appropriate. Unless
otherwise indicated, terms used in this opinion have the same meaning as in the
Agreement.
For purposes of this opinion, we have assumed that the Reorganization will
be consummated at the Effective Date of the Reorganization pursuant to the terms
and conditions set forth in the Agreement. In addition, we have assumed with
your permission that the facts and representations certified to us in writing by
the Bank and the Company which are set forth in the certificate attached hereto,
apply as of the Effective Date of the Reorganization. A copy of such
certificate is attached hereto and incorporated herein by reference. We have
neither investigated nor verified the accuracy of any of the facts that have
been certified to us, upon which this opinion is based.
This opinion is based also on the Internal Revenue Code of 1986, as amended
(the "Code"), Treasury Regulations, Internal Revenue Service rulings, judicial
decisions, and other applicable authority, all as in effect on the date of this
opinion. The legal authorities on which this opinion is based may be changed at
any time. Any such changes may be retroactively applied and could modify the
opinions expressed herein. This opinion does not address any tax considerations
under foreign, state, or local laws, or the tax considerations to individual
Bank shareholders in light of their particular circumstances, including, persons
who are not United States persons, dealers in securities, tax-exempt entities,
shareholders who do not hold Bank common stock as "capital assets" within the
meaning of Code Section 1221, and shareholders who acquired their shares of Bank
common stock pursuant to the exercise of Bank options or otherwise as
compensation.
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Powell, Goldstein, Frazer & Murphy LLP
June 6, 2000
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Based upon and subject to the foregoing, we are of the opinion that the
Reorganization will constitute a reorganization within the meaning of Code
Section 368(a)(1)(B), and that the following are the material federal income tax
consequences that will result:
(a) No gain or loss will be recognized for federal income tax purposes by Bank
shareholders upon the exchange of their shares of Bank common stock for
Company common stock.
(b) The basis of the shares of Company common stock to be received by Bank
shareholders will be the same as the basis of Bank common stock surrendered
in exchange therefor.
(c) The holding period of the Company common stock to be received by each Bank
shareholder will include the period during which the shares of Bank common
stock surrendered in exchange therefor were held.
(d) Bank shareholders who receive solely cash pursuant to their statutory right
to dissent will be treated as having received such payment in redemption of
their Bank common stock, as provided in Section 302(a) of the Internal
Revenue Code. Generally, any gain or loss recognized by any such Bank
shareholder will be capital gain or loss, provided (i) the Bank common
stock constitutes a capital asset in the hands of such shareholder, and
(ii) the requirements of Code Section 302(b)(1), (2), or (3) are met. Each
affected Bank shareholder should consult such shareholder's own tax advisor
for the tax effect of such redemption (i.e., exchange treatment or
dividend).
(e) No gain or loss will be recognized for federal income tax purposes by Bank
or Company as a consequence of the Reorganization.
This opinion is being rendered solely to the parties to whom it is
addressed and may be relied upon by them and the shareholders of Bank. This
opinion may not be relied upon by any other party without the express written
permission of our Firm.
Very truly yours,
/s/ POWELL, GOLDSTEIN, FRAZER & MURPHY LLP
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June 6, 2000
Powell, Goldstein, Frazer & Murphy LLP
191 Peachtree Street NE
16th Floor
Atlanta, GA 30303
Re: Reorganization Pursuant to the Agreement and Plan of Share Exchange
dated as of March 3, 2000 by and between North Georgia National Bank and
North Georgia Community Financial Partners, Inc.
Ladies and Gentlemen:
The undersigned hereby certifies to Powell, Goldstein, Frazer & Murphy
LLP ("PGF&M"), counsel to North Georgia National Bank, a national bank organized
and existing under the laws of the United States (the "Bank") and North Georgia
Community Financial Partners, Inc., a corporation organized and existing under
the laws of the state of Georgia (the "Company"), that the facts as set forth
below with respect to the reorganization (the "Reorganization") contemplated by
that certain Agreement and Plan of Share Exchange dated as of March 3, 2000 (the
"Agreement") by and between Bank and Company are true, correct and complete in
all material respects as of the date hereof. All capitalized terms used herein
and not otherwise defined or limited herein shall have the meaning ascribed to
such terms in the Agreement.
1. The undersigned are authorized representatives of Bank and Company,
and in such capacity have personal knowledge of the matters herein set forth,
based in part on consultation with other officers or employees of Bank and
Company in a position to have knowledge of the relevant facts, and are
authorized to give this Certificate on behalf of Bank and Company.
2. In the Reorganization, shares of Bank stock will be exchanged solely
for Company stock.
3. Company will own 80% of the total combined voting power of all classes
of Bank stock entitled to be voted and at least 80% of the total number of
shares of all other classes of Bank stock immediately after the Reorganization.
4. The fair market value of the Company stock to be received by each Bank
shareholder in the Reorganization will equal the fair market value of the shares
of Bank stock surrendered by each such shareholder in the Reorganization.
5. To the best knowledge of Company and Bank, neither Company nor Bank,
nor any other person, has acquired any of the stock of Bank in contemplation of
the Reorganization, nor will acquire, purchase or redeem any of the Company
stock to be issued to the Bank shareholders in connection with the
Reorganization.
6. Bank has no plan or intention to issue additional shares of its stock,
through the exercise of options or warrants or otherwise, that would result in
Company owning less than 80% of the total
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Powell, Goldstein, Frazer & Murphy LLP
June 6, 2000
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combined voting power of all classes of stock entitled to be voted and at least
80% of the total number of shares of all other classes of stock of Bank.
7. Company and Bank will pay their respective expenses, if any, incurred in
connection with the Reorganization.
8. Bank will, in exchange for a dissenting shareholder's Bank stock, pay from
its funds, and not from the funds of Company, the amount due to such Bank
shareholder who exercises such shareholder's right to dissent to the
Reorganization and that fully complies with the Dissenters' Rights Provisions.
9. There is no intercorporate indebtedness existing between Company and Bank
and there will be no indebtedness created in favor of Company as a result of the
Reorganization.
10. On the date of the Reorganization, no liabilities of Bank or any other
person will be transferred to or assumed by Company as part of the
Reorganization and none of the shares of Bank to be surrendered by Bank
shareholders in exchange for Company stock in the Reorganization will be subject
to any liabilities.
11. No stock or securities will be issued for services rendered to or for the
benefit of Bank in connection with the Reorganization and no stock or securities
will be issued for indebtedness of Company or interest on indebtedness of
Company.
12. The transfer of Bank stock is not the result of the solicitation by a
promoter, broker, or investment house.
13. All transfers of Bank stock pursuant to the Reorganization will occur on
approximately the same date.
14. Company is not under the jurisdiction of a court in a Title 11 case under
the United States Code nor in a receivership, foreclosure or similar proceeding
in a Federal or State court.
15. Not more than 25% of the value of Bank's total assets is invested in the
stock or securities of any one issuer and not more than 50% of the value of its
total assets is invested in the stock of 5 or fewer issuers. Additionally, less
than 50% of the value of Bank's total assets are stock and securities (excluding
stock of subsidiaries) and less than 80% of the value of the Bank's total assets
are assets held for investment.
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Powell, Goldstein, Frazer & Murphy LLP
June 6, 2000
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NORTH GEORGIA NATIONAL BANK
By: /s/David J. Lance
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David J. Lance
President
NORTH GEORGIA COMMUNITY FINANCIAL PARTNERS, INC.
By: /s/ David J. Lance
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David J. Lance
President
