EXHIBIT 5.4
[Letterhead of Morris, James, Hitchens & Williams LLP]
July 17, 2001
Covanta Capital Trust III
c/o Covanta Energy Corporation
40 Lane Road
Fairfield, New Jersey 07004
Re: Covanta Capital Trust III
Ladies and Gentlemen:
We have acted as special Delaware counsel for Covanta Energy Corporation, a
Delaware corporation ("Company"), and for Covanta Capital Trust III, a Delaware
statutory business trust (the "Trust"), for purposes of giving the opinions set
forth herein. This opinion letter is being furnished to you at your request.
For purposes of giving the opinions set forth below, our examination of
documents has been limited to the examination of originals or copies furnished
to us of the following:
(a) The Trust Agreement of the Trust, dated as of July 16, 2001, between
the Company and the trustee of the Trust named therein;
(b) The Certificate of Trust of the Trust, as filed in the office of the
Secretary of State of the State of Delaware (the "Secretary of State") on July
16, 2001 (the "Certificate");
(c) A Registration Statement (the "Registration Statement") on Form S-3
(Registration Nos. 333-____________), to be filed with the Securities and
Exchange Commission on or about July 17, 2001, relating to the Preferred
Securities (Liquidation Amount $ per Preferred Security) of the Trust,
representing preferred undivided beneficial ownership interests in the assets of
the Trust (each, a "Preferred Security" and collectively, the "Preferred
Securities"); and
Covanta Capital Trust III
c/o Covanta Energy Corporation
July 17, 2001
Page 2
(d) A form of Amended and Restated Trust Agreement of the Trust (including
Exhibits A, C, and D attached thereto)(the "Trust Agreement");
(e) A Certificate of Good Standing for the Trust, dated a recent date,
obtained from the Secretary of State.
Unless otherwise defined herein, all capitalized terms used in this opinion
letter shall have the respective meanings provided in the Trust Agreement,
except that reference herein to any document shall mean such document as in
effect on the date hereof.
For the purposes of this opinion letter, we have not reviewed any documents
other than the documents listed in paragraphs (a) through (e) above. In
particular, we have not reviewed any document (other than the documents listed
in paragraphs (a) through (e) above) that is referred to in or incorporated by
reference into the documents reviewed by us. We have assumed that there exists
no provision in any document that we have not reviewed that bears upon or is
inconsistent with or contrary to the opinions stated herein. We have conducted
no 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 (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion letter, we have assumed (i) that the Trust
Agreement constitutes the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the creation,
operation, and termination of the Trust, and that the Trust Agreement and the
Certificate are in full force and effect and have not been amended, (ii) except
to the extent provided in paragraph 1 below, the due creation, due formation or
due organization, 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 creation, formation or organization, (iii) the legal capacity of
each natural person who is a party to the documents examined by us, (iv) that
each of the parties to the documents examined by us has all requisite power and
authority to execute and deliver, and to perform its obligations under, such
documents, (v) that each of the parties to the documents examined by
Covanta Capital Trust III
c/o Covanta Energy Corporation
July 17, 2001
Page 3
us has duly authorized, executed and delivered such documents, (vi) the receipt
by each Person to whom a Preferred Security is to be issued by the Trust (the
"Preferred Securityholders") of an appropriate certificate for such Preferred
Security and the payment for each Preferred Security acquired by it, all in
accordance with the Trust Agreement and the Registration Statement, and (vii)
that the Preferred Securities are issued to the Preferred Securityholders in
accordance with the Trust Agreement and the Registration Statement. We have not
participated in the preparation of the Registration Statement and assume no
responsibility for its contents.
The opinions in this letter are limited to the laws of the State of
Delaware (other than the securities laws of the State of Delaware) and we have
not considered and express no opinion on the effect of or concerning matters
involving the laws of any other jurisdiction, or rules, regulations, orders and
decisions relating to such laws, including, without limitation, the federal laws
of the United States of America.
Based upon the foregoing, and subject to the assumptions, qualifications,
limitations and exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly formed and is validly existing in good standing
as a business trust under the Delaware Business Trust Act, 12 Del. C.ss.ss.3801,
et seq.
2. The Preferred Securities have been duly authorized by the Trust pursuant
to the Trust Agreement and will represent valid and, subject to the
qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.
3. The Preferred Securityholders, as beneficial owners of the Trust, will
be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Preferred
Securityholders may be obligated to make payments and provide indemnity and/or
security as set forth in the Trust Agreement.
We consent to the filing of this opinion letter with the Securities and
Exchange Commission as an exhibit to the Registration Statement. In giving the
foregoing consent, we do not thereby admit that we come within the category of
Persons whose consent is required under Section 7 of the Securities Act of 1933,
as amended, or the rules and regulations of the
Covanta Capital Trust III
c/o Covanta Energy Corporation
July 17, 2001
Page 4
Securities and Exchange Commission thereunder. Except as stated above, without
our prior written consent, this opinion letter may not be furnished or quoted
to, or relied upon by, any other Person for any purpose.
Very truly yours,
/s/ Morris, James, Hitchens & Williams LLP
RLS/fg