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EXHIBIT 5
[REED SMITH SHAW & MCCLAY LLP LETTERHEAD]
February 4, 1998
Carey Diversified LLC
50 Rockefeller Plaza
New York, NY 10020
Re: Shelf Registration Statement; 4,800,000 Shares
Registration Statement on Form S-1
Ladies and Gentlemen:
We have acted as counsel for Carey Diversified LLC, a Delaware
limited liability company (the "Company"), in connection with the matters set
forth herein. At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of executed or
conformed counterparts, or copies otherwise proved to our satisfaction, of the
following:
(a) The Certificate of Formation of the Company, dated October
14, 1996 as filed in the office of the Secretary of State of the State of
Delaware (the "Secretary of State") on October 15, 1996;
(b) The Limited Liability Company Agreement of the Company,
dated as of October 15, 1996;
(c) The Certificate of Amendment to Certificate of Formation
of the Company, dated July 15, 1997, as filed in the office of the Secretary of
State on July 15, 1997.
(d) The First Amendment to the Limited Liability Company
Agreement of the Company, dated as of July 15, 1997;
(e) The Amended and Restated Limited Liability Company
Agreement of the Company, dated as of October 13, 1997 (the "Agreement");
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February 4, 1998
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(f) The Bylaws of the Company, adopted on October 13, 1997
(the "Bylaws") (the Agreement, together with the Bylaws, is hereinafter referred
to as the "LLC Agreement"); and
(g) Excerpts from the minutes of the meeting of the Board of
Directors of the Company held on February 11, 1998.
Initially capitalized terms used herein and not otherwise defined are
used as defined in the LLC Agreement.
For purposes of this opinion, we have not reviewed any documents
other than the documents listed in paragraphs (a) through (g) above. We have
assumed that there exists no provision in any document that we have not reviewed
that is inconsistent with the opinions stated herein. We have conducted no
independent factual investigation of our own but rather have relied solely upon
the foregoing documents, the statements and information set forth therein and
the additional matters recited or assumed herein, all of which we have assumed
to be true, complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed that
(i) all signatures on documents examined by us are genuine, (ii) all documents
submitted to us as originals are authentic, and (iii) all documents submitted to
us as copies conform with the original copies of those documents.
For purposes of this opinion, we have assumed (i) that the LLC
Agreement constitutes the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the admission
of members to, and the creation, operation, management and termination of, the
Company, and that the LLC Agreement has not been amended, (ii) except to the
extent provided in paragraph 1 below, the due organization or due formation, as
the case may be, and valid existence in good standing of each party to the
documents examined by us under the laws of the jurisdiction governing its
organization or formation, (iii) the legal capacity of natural persons who are
signatories to the documents examined by us, (iv) that each of the parties
(other than the Company and its officers and directors) to the documents
examined by us has the power and authority to execute and deliver, and to
perform its obligations under, such documents, (v) the due authorization,
execution and delivery by all parties thereto (other than the Company and its
officers and directors) of all documents examined by us, including the LLC
Agreement by the Managing Member and Carey Property Advisors L.P., a Delaware
limited partnership, (vi) that the Shares are issued and sold to
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February 4, 1998
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the Shareholders in accordance with the LLC Agreement and the Registration
Statement, and (vii) that the Shareholders will not engage in tortious or
wrongful conduct and will fulfill all of their obligations as set forth in the
LLC Agreement.
This opinion is limited to the laws of the State of Delaware and we
have not considered and express no opinion on the laws of any other
jurisdiction, including federal laws and rules and regulations relating thereto.
Our opinions are rendered only with respect to Delaware laws and rules,
regulations and orders thereunder which are currently in effect.
Based upon the foregoing, and upon our examination of such questions
of law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
(1) Upon the issuance and delivery of the Shares in accordance
with the terms set forth in the Registration Statement, the Shares will be
validly issued and, subject to the qualifications set forth in paragraph 2
below, fully paid and non-assessable limited liability company interests in the
Company.
(2) The Shareholders will not be obligated personally for any
of the debts, obligations or liabilities of the Company, whether arising in
contract, tort or otherwise, solely by reason of being a member of the Company,
except that a Shareholder may be obligated to repay any funds wrongfully
distributed to it.
Very truly yours,
/s/ REED SMITH SHAW & McCLAY LLP
REED SMITH SHAW & McCLAY LLP