Exhibit 5.1
[Letterhead of Snell & Wilmer L.L.P.]
January 22, 2018
The New Home Company Inc.
85 Enterprise
Suite 450
Aliso Viejo, California 92656
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| | Re: | Registration Statement on Form S-3 |
Ladies and Gentlemen:
We have acted as counsel to The New Home Company Inc., a Delaware corporation (the “Company”), and its subsidiaries listed on Appendix A hereto, each a Delaware limited liability company (the “Guarantors”), in connection with the preparation and filing with the Securities and Exchange Commission (the “Commission”) of a Registration Statement on Form S-3 (the “Registration Statement”) pursuant to the Securities Act of 1933, as amended (the “Act”), relating to the registration and the proposed issuance and sale by the Company from time to time pursuant to Rule 415 of the General Rules and Regulations of the Commission promulgated under the Act, as set forth in the Registration Statement, the prospectus contained therein (the “Prospectus”) and the supplements to the prospectus referred to therein (each a “Prospectus Supplement”), together or separately and in one or more series (if applicable) of:
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| | (A) | shares of the Company’s common stock, $0.01 par value per share (the “Common Stock”); |
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| | (B) | shares of the Company’s preferred stock, $0.01 par value per share (the “Preferred Stock”); |
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| | (C) | the Company’s debt securities, which may either be senior debt securities, senior subordinated debt securities or subordinated debt securities (collectively, the “Debt Securities”); |
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| | (D) | guarantees of the Debt Securities by the Guarantors (the “Debt Securities Guarantees”); |
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| | (E) | warrants for the purchase of Common Stock, Preferred Stock, Debt Securities or any combination thereof (the “Warrants”); |
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| | (F) | purchase contracts issued by the Company (the “Purchase Contracts”); and |
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| | (G) | units consisting of any combination of Common Stock, Preferred Stock, Debt Securities, Warrants or Purchase Contracts (the “Units”). |
The Registration Statement also relates to the registration of up to 6,407,484 shares of Common Stock (the Selling Stockholder Shares) to be resold from time to time by certain stockholders of the Company.
This opinion is being furnished in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Act.
The Common Stock, the Preferred Stock, the Debt Securities, the Debt Securities Guarantees, the Warrants, the Purchase Contracts, and the Units are collectively referred to herein as the “Securities.” The Securities are to be sold from time to time as set forth in the Registration Statement, the Prospectus and the Prospectus Supplements. The Debt Securities are to be issued under an indenture (the “Indenture”) between the Company and U.S. Bank National Association, as trustee (the “Trustee”), a form of which has been filed as an exhibit to the Registration Statement. The Securities are to be sold pursuant to a purchase, underwriting, subscription, placement agent or similar agreement in substantially the form to be filed under a Current Report on Form 8-K. The Debt Securities and Debt Securities Guarantees are to be issued in the form set forth in the Indenture. The Indenture may be supplemented in connection with the issuance of each such series of Debt Securities and Debt Securities Guarantees, by a supplemental indenture or other appropriate action of the Company creating such series of Debt Securities and Debt Securities Guarantees.
In rendering the opinions stated herein, we have examined and relied upon the following:
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| | (A) | the Registration Statement; |
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| | (B) | copies of the governing charter documents of the Company and each Guarantor, as amended to date; |
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| | (C) | copies of the bylaws or the operating agreement (or similar document) of the Company and each Guarantor, as currently in effect; |
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| | (D) | the form of Indenture relating to the Debt Securities and the Debt Securities Guarantees filed as an exhibit to the Registration Statement; and |
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| | (E) | copies of the resolutions of the Board of Directors of the Company and the resolutions of the Guarantors, relating to the registration of the Securities and related matters. |
We have also examined instruments, documents, certificates and records that we have deemed relevant and necessary for the basis of our opinions hereinafter expressed. In such examination, we have assumed: (i) the authenticity of original documents and the genuineness of all signatures; (ii) the conformity to the originals of all documents submitted to us as copies; (iii) the truth, accuracy and completeness of the information, representations and warranties contained in the instruments, documents, certificates and records we have reviewed; (iv) that the Registration Statement, and any amendments thereto (including post-effective
amendments), will have become effective under the Act; (v) that a Prospectus Supplement will have been filed with the Commission describing the Securities offered thereby; (vi) that the Securities will be issued and sold in compliance with applicable U.S. federal and state securities laws and in the manner stated in the Registration Statement and the applicable Prospectus Supplement; (vii) that a definitive purchase, underwriting, subscription, placement agent or similar agreement with respect to any Securities offered will have been duly authorized and validly executed and delivered by the Company and the other parties thereto; (viii) that any Securities issuable upon conversion, exchange, redemption or exercise of any Securities being offered (a “Convertible Security”) will be duly authorized, created and, if appropriate, reserved for issuance upon such conversion, exchange, redemption or exercise; (ix) with respect to shares of Common Stock or Preferred Stock offered, that there will be sufficient shares of Common Stock or Preferred Stock authorized under the Company’s organizational documents that are not otherwise reserved for issuance; and (x) the legal capacity of all natural persons. As to any facts material to the opinions expressed herein that were not independently established or verified, we have relied upon oral or written statements and representations of officers and other representatives of the Company.
Based on such examination, we are of the opinion that:
1. With respect to shares of the Common Stock to be sold by the Company, when both: (a) the Board of Directors of the Company or a duly constituted and acting committee thereof (such Board of Directors or committee being hereinafter referred to as the “Board”) has taken all necessary corporate action to approve the issuance and the terms of the offering of the shares of Common Stock and related matters; and (b) certificates representing the shares of the Common Stock have been duly executed, countersigned, registered and delivered or, if issued in book entry form, an appropriate account statement evidencing shares of Common Stock credited to the purchaser’s account maintained with the Company’s transfer agent for Common Stock has been issued by said transfer agent, either (i) in accordance with the applicable definitive purchase, underwriting, subscription, placement agent or similar agreement approved by the Board or (ii) upon the conversion or exercise of any Convertible Security to purchase Common Stock, in accordance with the terms of such Convertible Security or the instrument governing such Convertible Security providing for such conversion or exercise as approved by the Board, in each case upon payment of the consideration therefor provided for therein (not less than the par value of the Common Stock), then the shares of Common Stock will be validly issued, fully paid and nonassessable.
2. With respect to any particular series of shares of Preferred Stock, when both: (a) the Board has taken all necessary corporate action to approve the issuance and terms of the shares of Preferred Stock, the terms of the offering thereof, including the adoption of a certificate of designations relating to such Preferred Stock or amendment to the Company’s certificate of incorporation, in each case, as required by applicable law (a “Certificate of Designations”) and the filing of the Certificate of Designations or amendment to the Company’s certificate of incorporation, in each case, as required by applicable law, and related matters; and (b) certificates representing the shares of the Preferred Stock have been duly executed, countersigned, registered and delivered or, if issued in book entry form, an appropriate account statement evidencing shares of Preferred Stock credited to the purchaser’s account maintained with the Company’s transfer agent for Preferred Stock has been issued by said transfer agent, either (i) in accordance with the applicable definitive purchase, underwriting, subscription, placement agent or similar agreement approved by the Board or (ii) upon the conversion or exercise of any Convertible Security to purchase Preferred Stock, in accordance with the terms of such Convertible Security or the instrument governing such Convertible Security providing for such conversion or exercise as approved by the Board, in each case upon payment of the consideration therefor provided for therein (not less than the par value of the Preferred Stock), then the shares of Preferred Stock will be validly issued, fully paid and nonassessable.
3. With respect to the Debt Securities and the Debt Security Guarantees, when: (a) the Trustee is qualified to act as Trustee under the Indenture, and the Company has filed a Form T-1 for the Trustee with the Commission; (b) the Trustee has duly executed and delivered the Indenture; (c) the Indenture has been duly authorized and validly executed and delivered by the Company and the Guarantors, to the Trustee; (d) the Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended; (e) the Board and, as applicable, the directors, managers, stockholders or members of each Guarantor, have taken all necessary action to approve the issuance and terms of such Debt Securities, the Debt Securities Guarantees, and related matters; and (f) such Debt Securities and the Debt Securities Guarantees have been duly executed, authenticated, issued and delivered in accordance with the provisions of the Indenture and the applicable definitive purchase, underwriting, subscription, placement agent or similar agreement approved by the Board and, as applicable, the directors, managers, stockholders or members of each Guarantor, or upon the exercise of Convertible Securities to purchase Debt Securities, upon payment of the consideration therefor provided for therein, such Debt Securities and the Debt Security Guarantees will constitute valid and binding obligations of the Company and the Guarantors, respectively, enforceable against the Company and the Guarantors in accordance with their terms, and entitled to the benefits of the Indenture.
4. With respect to the Warrants, when both: (a) the Board has taken all necessary corporate action to approve the issuance and terms of the Warrants and related matters; and (b) the Warrants have been duly executed and delivered upon payment of the consideration therefor, pursuant to the applicable definitive purchase, underwriting, subscription, placement agent, warrant or similar agreement duly authorized, executed and delivered by the Company and a warrant agent, and the certificates for the Warrants have been duly executed and delivered by the Company and such warrant agent, then the Warrants will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms.
5. With respect to the Purchase Contracts, when both: (a) the Board has taken all necessary corporate action to approve the issuance and terms of the Purchase Contracts and related matters; and (b) the Purchase Contracts have been duly executed and delivered upon payment of the consideration therefor, pursuant to the applicable definitive purchase, underwriting, subscription, placement agent or similar agreement duly authorized, executed and delivered by the Company and any applicable subscription or other agent, and the certificates for the Purchase Contracts have been duly executed and delivered by the Company and any applicable subscription or other agent, then the Purchase Contracts will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms.
6. With respect to the Units, when both: (a) the Board has taken all necessary corporate action to approve the issuance and terms of the Units (including the applicable Securities underlying the Units) and related matters; and (b) the Units (and the applicable Securities underlying the Units) have been duly executed and delivered upon payment of the consideration therefor, pursuant to the applicable definitive purchase, underwriting, subscription, placement agent or similar agreement duly authorized, executed and delivered by the Company and any applicable unit or other agents, and the certificates for the Units (including any applicable Securities underlying the Units) have been duly executed and delivered by the Company and any applicable unit or other agents, then the Units will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms.
7. The Selling Stockholder Shares have been duly authorized by all necessary corporate action of the Company and are validly issued, fully paid and nonassessable.
Our opinion that any document is valid and binding is qualified as to:
(a) limitations imposed by bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium or other laws relating to or affecting the rights of creditors generally;
(b) rights to indemnification, exculpation and contribution, which may be limited by applicable law or equitable principles;
(c) general principles of equity, including without limitation concepts of materiality, reasonableness, good faith and fair dealing, and the possible unavailability of specific performance or injunctive relief and limitation of rights of acceleration, regardless of whether such enforceability is considered in a proceeding in equity or at law;
(d) any waiver of stay, extension or usury laws or of unknown future rights; and
(e) any purported fraudulent transfer “savings” clause.
Attorneys at our firm are admitted to the practice of law in the State of Arizona and the State of New York, and we express no opinion as to the laws of any other jurisdiction, other than the Federal laws of the United States of America, the General Corporation Law of the State of Delaware and the Limited Liability Company Act of the State of Delaware.
You have informed us that the Securities may be issued and/or sold from time to time on a delayed or continuous basis, and this opinion is limited to the laws referred to above as in effect on the date hereof. We understand that prior to the issuance or sale of the Securities pursuant to the Registration Statement (i) you will advise us in writing of the terms thereof and (ii) you will afford us an opportunity to (y) review the operative documents pursuant to which such Securities are to be issued or sold and (z) file such supplement or amendment to this opinion (if any) as we may reasonably consider necessary or appropriate.
We hereby consent to the filing of this opinion letter as an exhibit to the above-referenced Registration Statement and to the use of our name wherever it appears in the Registration Statement, the Prospectus, any Prospectus Supplement, and in any amendment or supplement thereto. In giving such consent, we do not believe that we are “experts” within the meaning of such term as used in the Act or the rules and regulations of the Commission issued thereunder with respect to any part of the Registration Statement, including this opinion letter as an exhibit. In giving such consent, we do not thereby concede that we are included in the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission promulgated thereunder.
This opinion letter is given as of the date hereof, and we express no opinion as to the effect of subsequent events or changes in law occurring or becoming effective after the date hereof. We assume no obligation to update this opinion letter or otherwise advise you with respect to any facts or circumstances or changes in law that may hereafter occur or come to our attention (even though the change may affect the legal conclusions stated in this opinion letter).
Very truly yours,
/s/ Snell & Wilmer L.L.P.
Appendix A
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| 1. | TNHC Realty and Construction Inc. |
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| 2. | The New Home Company Southern California LLC |
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| 3. | The New Home Company Northern California LLC |
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| 7. | TNHC-Santa Clarita GP, LLC |
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| 11. | TNHC Grove Investment LLC |
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| 14. | Larkspur Land 8 Investors, LLC |
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| 15. | Larkspur Land 8 Owner, LLC |
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| 18. | TNHC Arizona Marketing LLC |
