Exhibit 8.1
September 25, 2002
Rock Hill Bank & Trust
000 Xxxx Xxxx Xxxxxx
Xxxx Xxxx, XX 00000
The South Financial Group, Inc.
Carolina First Bank
000 X. Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
RE: Certain U.S. Federal income tax consequences of consummation of
transactions contemplated in that certain Asset Sale Agreement dated
September 3, 2002 (the "Asset Sale Agreement") by and between Carolina
First Bank, a South Carolina-chartered, non-member bank ("Carolina
First Bank"), The South Financial Group, Inc., a bank holding
corporation formed under the laws of the State of South Carolina and
the sole shareholder of Carolina First Bank ("TSFG"), and Rock Hill
Bank & Trust, a South Carolina-chartered, non-member bank ("Rock Hill
Bank")
Gentlemen and Ladies:
We have served as special tax counsel to TSFG and Carolina First Bank
in connection with their entry into and consummation of the transactions
contemplated in the Asset Sale Agreement. This opinion is delivered to you
pursuant to Sections 7.9 and 8.7 of the Asset Sale Agreement. Capitalized terms
used in this opinion and not otherwise defined have the meaning ascribed to such
terms in the Asset Sale Agreement.
The Asset Sale Agreement provides for the sale of substantially all of
the assets of Rock Hill Bank to Carolina First Bank in exchange for 430,017
shares of TSFG common stock (the "Stock Consideration") and the right to receive
cash Earnout Payments, as defined in the Asset Sale Agreement (the "Asset
Sale"). After the Asset Sale, the former operations of Rock Hill Bank will be
conducted as branch operations of Carolina First Bank. The Asset Sale Agreement
also provides that Carolina First Bank will assume certain liabilities of Rock
Hill Bank, including all deposit liabilities as part of the Asset Sale.
As to matters of fact material to this opinion, we have made the
following factual assumptions in rendering the opinion hereinafter set forth:
Rock Hill Bank & Trust
September 25, 2002
Page 2
(a) That the transactions contemplated in the Asset Sale
Agreement, including without limitation the Asset Sale, will be
consummated in strict compliance with the terms and conditions of the
Asset Sale Agreement;
(b) That all representations and warranties contained in the
Asset Sale Agreement are true and will be true as of the Effective Time
and that each party to the Asset Sale Agreement will perform all
obligations, duties or other responsibilities agreed upon by such party
therein; and
(c) That prior to the transactions contemplated in the Asset
Sale Agreement, TSFG already owned approximately 22% of the outstanding
common stock of RHBT Financial Corporation, a bank holding corporation
formed under the laws of the State of Delaware and the sole shareholder
of Rock Hill Bank ("RHBT Financial"), acquired via a previous merger.
Based upon the foregoing, we are of the opinion that, in connection
with the Asset Sale:
(1) Rock Hill Bank will recognize gain on the excess of the
fair market value of the Stock Consideration plus the current fair
market value of the Earnout Payments over Rock Hill Bank's adjusted
basis in the assets sold to Carolina First Bank pursuant to the Asset
Purchase Agreement.
(2) Any net operating loss of Rock Hill Bank for its current
year and its net operating loss carry forward from past years will be
available to offset all or a portion of any taxable income of Rock
Hill Bank contemplated in paragraph (1) above.
(3) Carolina First Bank will not take any of the tax
attributes of Rock Hill Bank in connection with the Asset Sale.
(4) Carolina First Bank will take a tax basis in the assets of
Rock Hill Bank that it acquires equal to the fair market value of the
Stock Consideration plus the amount of liabilities assumed by Carolina
First Bank in the Asset Sale. In the event that Carolina First Bank is
required to pay any Earnout Payments, it will be entitled to add those
amounts to its tax basis in the assets of Rock Hill Bank that it
acquires when and if any such Earnout Payments are paid.
We express no opinion other than that expressly stated immediately
above. This opinion is based on the current state of U.S. federal tax law as
evidenced by applicable statutes, regulations, rulings and judicial decisions.
Any of these statutes, regulations, rulings and judicial decisions can change at
any time on a prospective or retroactive basis, in which event some or all of
the previous opinion may become inapplicable. This opinion speaks only as of its
date and applies only to the matters specifically covered by this letter. We
expressly disclaim any obligation to supplement this opinion if any applicable
laws change after the date of this opinion,
Rock Hill Bank & Trust
September 25, 2002
Page 3
or if we become aware of any facts that might change the opinions expressed
above after the date of this opinion.
This opinion does not cover all tax consequences that may be relevant
to RHBT Financial shareholders in light of their particular circumstances and
does not cover aspects of tax consequences that may be applicable to RBHT
Financial shareholders subject to special federal income tax treatment (such as
insurance companies, dealers in securities, certain retirement plans, financial
institutions, tax exempt organizations or foreign persons, holders that acquired
their shares of RHBT Financial common stock pursuant to the exercise of employee
stock options or otherwise as compensation, and holders who are not United
States persons), nor does it cover state or local tax consequences.
The opinions expressed above are solely for the benefit of Rock Hill
Bank, RBHT Financial and RBHT Financial's shareholders in connection with the
Asset Sale and may not be relied on in any manner for any other purpose or by
any other person.
We consent to the use of this opinion as an exhibit to the Registration
Statement on Form S-4 (the "Registration Statement") filed by TSFG on or about
September 25, 2002, pursuant to the Securities Act of 1933, as amended, and
consent to being named in the Registration Statement under the heading "LEGAL
MATTERS."
Very truly yours,
/s/ Wyche, Burgess, Xxxxxxx & Xxxxxx, P.A.
Wyche, Burgess, Xxxxxxx & Xxxxxx, P.A.
