Exhibit 5.1
[On Ward and Smith, P.A. letterhead.]
November 14, 2001
MountainBank Financial Corporation
201 Wren Drive
Hendersonville, NC 28792
RE: Our File 960574-0018
Ladies and Gentlemen:
We have acted as counsel to MountainBank Financial Corporation ("MFC") in
connection with the preparation of a Registration Statement on Form S-4
(Registration No. 333-71516), as amended by Amendment No. 1, including the form
of Proxy Statement/Prospectus contained therein (the "Registration Statement"),
which has been filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended (the "Act"), for purposes of registering
under the Act the offer and issuance by MFC of up to an aggregate of 805,129
shares (the "Shares") of its $4.00 par value common stock ("MFC Stock") to the
shareholders of First Western Bank ("First Western") pursuant to the terms of a
certain Agreement and Plan of Reorganization and Merger dated as of September
17, 2001, by and between First Western, MFC, and MFC's subsidiary bank,
MountainBank, in the form filed as Exhibit 2.1 to the Registration Statement
(the "Agreement"). As provided in and subject to the terms and conditions of the
Agreement (including the approval of First Western's shareholders and the
receipt of required regulatory approvals), it is proposed that First Western be
merged with and into MountainBank (the "Merger"), at which time each outstanding
share of First Western's common stock ("First Western Stock") held of record by
its shareholders (other than shareholders who exercise their statutory right of
dissent under North Carolina law) will be converted into 0.50 shares of MFC
Stock.
In connection with rendering the opinions set forth in this letter, we have
examined or relied upon copies of the following documents:
1. the Registration Statement and the Proxy Statement/Prospectus
contained therein; and,
2. the form of Agreement filed as Exhibit 2.1 to the Registration
Statement.
We have also examined the minutes of proceedings of MFC's Board of Directors and
such certificates of public officials, records and other certificates and
instruments as we have deemed necessary for the purposes of the opinions
expressed herein.
In delivering this letter, we have assumed (i) the authenticity of all documents
submitted to us as originals and the conformity to the original or certified
copies of all documents submitted to us as conformed or reproduction copies,
(ii) that the minutes of proceedings of MFC's Board of Directors are accurate
and complete and contain minutes of all actions pertaining to the Agreement and
the transactions described therein, (iii) that the final, executed versions of
all relevant documents, including the Agreement, are identical in all material
respects to the versions reviewed by us, and (iv) that the Merger will be
completed, and the MFC Stock will be issued, in accordance with the terms of the
Agreement and as described in the Registration Statement.
Based upon and subject to the foregoing, as well as the qualifications set forth
in subsequent portions of this letter, we are of the opinion as of this date
that, (i) when the Registration Statement has become effective, and upon
compliance with the pertinent provisions of the Act, and compliance with the
securities or "blue sky" laws of various jurisdictions in which the MFC Stock
will be offered, and (ii) when the Merger has become effective in accordance
with the terms of the Agreement and as described in the Registration Statement,
then the Shares issued to the shareholders of First Western in exchange for
their shares of First Western Stock will be validly issued, fully paid and
nonassessible.
In rendering the opinions set forth above, we have assumed, without independent
verification, that:
a. First Western has the corporate power and authority to execute,
deliver the Agreement and to perform its obligations thereunder;
b. No event will take place subsequent to the date hereof that would
cause any action taken in connection with the Agreement or the
transactions described therein to fail to comply with any law, rule,
regulation, order, judgment, decree or duty, or that would permit any
party to cancel, rescind, or otherwise avoid any act;
c. All certificates of public officials have been properly given and are
accurate and complete;
d. There has been no mutual mistake of fact, fraud, duress or undue
influence in connection with the Agreement or the transactions
described therein, and the conduct of the parties to the Agreement has
complied with any requirement of good faith, fair dealing and
conscionability;
e. There are no agreements or understandings, or any usage of trade or
course of dealing, among the parties that, in any case, would define,
supplement or qualify the terms of the Agreement, or the transactions
described therein.
In addition, all opinions and statements set forth in this letter are expressly
limited and qualified as follows:
(1) The opinions expressed herein are limited to matters of North Carolina
law and the federal laws of the United States of America.
(2) Our opinions are limited to the matters expressly stated herein, and
no opinion may be inferred or implied beyond the matters expressly
stated.
(3) The enforceability of all or various provisions of the Agreement may
be limited by (i) the effect of applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws from time to time in effect
relating to or limiting the enforcement of creditors' rights
generally, (ii) general principles of equity and applicable laws or
court decisions limiting the availability of specific performance,
injunctive relief and other equitable remedies, and (iii) federal
and/or state bank holding company, commercial bank, savings bank,
thrift institution and deposit insurance laws and regulations, and the
application of principles of public policy underlying such laws and
regulations.
(4) We express no opinion herein as to the enforceability of any choice of
law or indemnification provisions contained in the Agreement.
(5) Except as otherwise expressly specified herein, the opinions herein
are limited to matters in existence as of the date hereof, and we
undertake no responsibility to revise or supplement this letter or the
opinions herein to reflect any change in the law or facts.
We consent to the filing of this opinion as an exhibit to the Registration
Statement and to the reference to Ward and Smith, P.A. under the caption "Legal
Matters" in the Registration Statement. In giving this consent, we do not admit
that we are in the category of persons whose consent is required by Section 7 of
the Act or the rules and regulations promulgated thereunder by the Securities
and Exchange Commission.
Yours truly,
/s/ Ward and Smith, P.A.
WARD AND SMITH, P.A.