October 6, 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 $350,000,000 in aggregate principal amount
of the Company's 6 3/8% Senior Notes due 2011 (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, among the Company, the Guarantors and SunTrust
Bank, as Trustee (the "Base Indenture"), a First Supplemental Indenture, dated
as of January 28, 2004, among the Company, the Guarantors and SunTrust Bank, as
Trustee (the "First Supplemental Indenture"), and a Second Supplemental
Indenture, dated as of June 30, 2004, among the Company, the Guarantors and
SunTrust Bank, as Trustee (the "Second Supplemental Indenture," and together
with the Base Indenture and the First Supplemental Indenture, the "Indenture").
The Notes and the related Guarantees are to be issued in exchange for and in
replacement of the Company's outstanding 6 3/8% Senior Notes due 2011,
guaranteed by the Guarantors, of which $350,000,000 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 thereto (other than persons signing on behalf of the Company or the
Guarantors) and the due authorization, execution and delivery of all documents
by the parties thereto (other than by the Company and the Guarantors). 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.
We hereby confirm, based on the assumptions and subject to the
qualifications and limitations set forth therein, that the statements in the
section of the Registration Statement captioned "Material United States Federal
Income Tax Consequences," to the extent that such statements include statements
of law, reflect our opinion of the material federal income tax consequences
discussed therein. No opinion is expressed on matters other than those
specifically referred to herein.
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 by
the Securities and Exchange Commission 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 constitutes the legal,
valid and binding obligation of the Trustee, enforceable against the Trustee 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 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 Prospectus. 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 Act.
Very truly yours,
MUNGER, TOLLES & OLSON LLP
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