EXHIBIT 5.1
[LETTERHEAD OF MUNGER, TOLLES & OLSON LLP]
April 23, 2004
KB Home
10990 Wilshire Blvd.
Los Angeles, California 90024
Re: Registration Statement on Form S-4
Ladies and Gentlemen:
This opinion letter is being delivered by us as special counsel to (i)
KB Home, a Delaware corporation (the "Company") and (ii) KB Home Coastal Inc., a
California corporation, KB Home Colorado Inc., a Colorado corporation, KB Home
Greater Los Angeles Inc., a California corporation, KB Home Lone Star LP, a
Texas limited partnership, KB Home Nevada Inc., a Nevada corporation, KB Home
North Bay Inc., a California corporation, KB Home Phoenix Inc., an Arizona
corporation, and KB Home South Bay Inc., a California corporation (collectively,
the "Guarantors"), in connection with the proposed registration by the Company
and the Guarantors of the offering of $250,000,000 in aggregate principal amount
of the Company's 5 3/4% Senior Notes due 2014 (the "Notes"), guaranteed by the
Guarantors pursuant to the Indenture (as defined below) (the "Guarantees"),
pursuant to a Registration Statement on Form S-4, under the Securities Act of
1933, as amended (the "Act") (such Registration Statement, as amended or
supplemented, is hereinafter referred to as the "Registration Statement").
The Notes and the Guarantees are to be issued pursuant to an Indenture,
dated as of January 28, 2004, between the Company, the Guarantors and SunTrust
Bank, as Trustee (the "Base Indenture"), and a First Supplemental Indenture,
dated as of January 28, 2004, between the Company, the Guarantors and SunTrust
Bank, as Trustee (the "Supplemental Indenture," and together with the Base
Indenture, the "Indenture"). The Notes and the related Guarantees are to be
issued in exchange for and in replacement of the Company's outstanding 5 3/4%
Senior Notes due 2014, guaranteed by the Guarantors, of which $250,000,000 in
aggregate principal amount is subject to an exchange offer pursuant to the
Registration Statement (the "Restricted Notes").
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such documents, corporate records, certificates of
public officials and other instruments as we have deemed necessary or advisable
for purposes of this opinion.
For purposes of this opinion, we have assumed the authenticity of all
documents submitted to us as originals, the conformity to the originals of all
documents submitted to us as copies and the authenticity of the originals of all
documents submitted to us as copies. We have also assumed the genuineness of the
signatures of persons signing all documents in connection with which this
opinion is rendered, the authority of such persons signing on behalf of the
parties
KB Home
April 23, 2004
Page 2
thereto and the due authorization, execution and delivery of all documents by
the parties thereto. As to any facts material to the opinions expressed herein
which we have not independently established or verified, we have relied upon
statements and representations of officers and other representatives of the
Company, the Guarantors and others.
Our opinion expressed below is subject to the qualifications that we
express no opinion as to the applicability of, compliance with, or effect of (i)
any bankruptcy, insolvency, reorganization, fraudulent transfer, fraudulent
conveyance, moratorium or other similar law affecting the enforcement of
creditors' rights generally, (ii) general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law) and (iii)
public policy considerations which may limit the rights of parties to obtain
certain remedies.
Based upon and subject to the assumptions, qualifications, exclusions
and other limitations contained in this letter, we are of the opinion that when
(i) the Registration Statement becomes effective and (ii) the Notes have been
duly executed and authenticated in accordance with the provisions of the
Indenture and duly delivered to the holders of the Restricted Notes in exchange
therefor, the Notes will be binding obligations of the Company and the
Guarantees will be binding obligations of the Guarantors.
Based upon and subject to the assumptions, qualifications, exclusions
and other limitations contained in this letter, we are further of the opinion
that the information contained in the Registration Statement under the caption
"Material United States Federal Income Tax Consequences" constitutes an accurate
description, in general terms, of the indicated federal income tax consequences
to holders of the Notes of the exchange offer contemplated by the Registration
Statement.
In connection with the opinions expressed above, we have assumed that,
at or prior to the time of delivery of any of the Notes and the Guarantees, (a)
the resolutions of the Board of Directors of the Company establishing the terms
of such Notes and authorizing the issuance and exchange of such Notes, in
accordance with the Indenture and Delaware law, shall not have been modified or
rescinded; (b) the Registration Statement shall have been declared effective and
such effectiveness shall not have been terminated or rescinded; (c) the
Indenture shall have been qualified under the Trust Indenture Act of 1939, as
amended; (d) the Indenture has been duly authorized, executed and delivered by
the Trustee and the Guarantors and constitutes the legal, valid and binding
obligation of the Trustee and the Guarantors, enforceable against the Trustee
and each Guarantor in accordance with its terms; (e) the Notes shall have been
duly executed by the Company, duly authenticated by the Trustee in the manner
provided for in the Indenture and duly delivered to the holders of the
Restricted Notes in exchange therefor; and (f) since the date hereof there will
not have occurred any change in law affecting the validity or enforceability of
the Notes or the Guarantees. We have also assumed that neither the issuance and
delivery of the Notes and the Guarantees nor the compliance by the Company or
the Guarantors with the terms of the Notes or the Guarantees, as applicable,
will violate any applicable law or will result in a violation of any provision
of any instrument or agreement then binding upon the Company or the
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April 23, 2004
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Guarantors, as the case may be, or any restriction imposed by any court or
governmental body having jurisdiction over the Company or the Guarantors, as the
case may be.
We are members of the Bar only of the State of California. This opinion
is limited to the laws of the State of California, the General Corporation Law
of the State of Delaware, and the federal laws of the United States of America.
We express no opinion as to the laws of any other jurisdiction and no opinion
regarding the statutes, administrative decisions, rules, regulations or
requirements of any county, municipality, subdivision or local authority of any
jurisdiction. We note that the law of the State of New York is stated to be the
governing law in each of the Indenture and the Notes. For purposes of this
opinion, we have assumed with your permission that the law of the State of
California governs the Indenture and the Notes with respect to the legal, valid,
and binding nature thereof. Furthermore, we express no opinion as to whether a
court applying California choice-of-law rules would apply the law of the State
of New York to the Indenture and the Notes.
We hereby consent to the use of this opinion as Exhibit 5.1 and Exhibit
8.1 to the Registration Statement and to the reference to our name in the
Registration Statement and the related Prospectuses. In giving such consent, we
do not thereby admit that we are in the category of persons whose consent is
required under Section 7 of the Securities Act of 1933.
Very truly yours,
/s/ Munger, Tolles & Olson LLP