Attorneys at Law
Suite 2800
1100 Peachtree Street
Atlanta, Georgia 30309-4530
Telephone: 404.815.6500
Facsimile: 404.815.6555
Web site: www.kilstock.com
June 1, 2000 E-mail: [email protected]
Direct Dial: 404.815.6480
North Point Bancshares, Inc.
c/o Don D. Gordon
109 Highway 53 West
Dawsonville, Georgia 30534-3414
Ladies and Gentlemen:
We have been requested to render our opinion expressed below in
connection with the proposed merger (the "Merger") of North Point Bancshares,
Inc. ("North Point"), a Georgia corporation, with and into United Community
Banks, Inc. ("United"), a Georgia corporation, with United being the surviving
entity, pursuant to the terms and conditions of that certain Merger Agreement
and Plan of Reorganization dated March 3, 2000, (the "Agreement"), by and
between North Point and United. Unless otherwise indicated, terms used herein
shall have the same meaning as defined in the Agreement.
In rendering our opinion, we have examined the Agreement, applicable
law, regulations, rulings, and decisions.
Our opinions set forth below are subject to the following assumptions,
qualifications, and exceptions:
A. During the course of all of the foregoing examinations, we
have assumed (i) the genuineness of all signatures, (ii) the
authenticity of all documents submitted to us as originals, (iii) the
legal capacity of all individuals, (iv) the conformity to original
documents of all documents submitted to us as certified, conformed, or
photostatic copies, and (v) the authority of each person or persons who
executed any document on behalf of another person.
B. As to various factual matters that are material to our
opinions set forth herein, we have relied upon the factual
representations and warranties set forth in the Agreement and related
documents. We have not independently verified, nor do we assume any
responsibility for, the factual accuracy or completeness of any such
representations, warranties, statements, or certificates.
Based on and in reliance on the foregoing and the further
qualifications set forth below, and provided that the Merger is consummated in
accordance with the Agreement, it is our opinion that:
(1) The Merger and the issuance of shares of United
Common Stock to the holders of North Point Stock in
connection therewith, as described in the Agreement,
will constitute a tax-free reorganization under
section 368(a)(1)(A) of the Internal Revenue Code of
1986, as amended (the "Code").
(2) Except for the recognition of gain as required by
section 302 of the Code with respect to the receipt
by the holders of North Point Stock of cash in lieu
of the issuance of fractional shares of United Common
Stock, no gain or loss will be recognized by United,
North Point, or holders of North Point Stock as a
result of the Merger.
(3) The aggregate tax basis of the shares of United
Common Stock received by a holder of North Point
Stock pursuant to the Merger will be the same as the
tax basis of the shares of North Point Stock.
(4) The holding period of the shares of United Common
Stock received by a holder of North Point Stock as
part of the Merger will include the holding period of
the shares of North Point Stock exchanged therefor,
provided that the North Point Stock is held as a
capital asset on the date of consummation of the
Merger.
In general, cash received by holders of North Point Stock exercising
their dissenters' rights will be treated as amounts received from the sale of
their shares of North Point Stock, and (provided that such North Point Stock is
a capital asset in the hands of such shareholders) each such shareholder will
recognize capital gain or loss (short or long term, as appropriate) measured by
the difference between the sale price of such North Point Stock and such
shareholder's tax basis in such North Point Stock.
We express no opinion as to the following: (a) the tax consequences
that might be relevant to a particular holder of North Point Stock who is
subject to special treatment under certain federal income tax laws, such as
dealers in securities, banks, insurance companies, tax-exempt organizations,
non-United States persons, persons who do not hold their North Point Stock as
"capital assets" within the meaning of section 1221 of the Code, and persons who
acquired their North Point Stock pursuant to the exercise of options or
otherwise as compensation, or (b) any consequences arising under the laws of any
state, locality, or foreign jurisdiction.
This letter is solely for the information and use of you and the
shareholders of North Point and it is not to be used, circulated, quoted, or
referred to for any other purpose or relied upon by any other person for
whatever reason without our prior written consent.
KILPATRICK STOCKTON LLP
By: /s/ R. Alexander Bransford, Jr.
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R. Alexander Bransford, Jr., a partner
