[Letterhead of Morris, Nichols, Arsht & Tunnell]
September 18, 1997
The CalEnergy Trusts
(as defined below)
c/o CalEnergy Company, Inc.
302 South 36th Street, Suite 400
Omaha, Nebraska 68131
Re: The CalEnergy Trusts (as defined below)
Ladies and Gentlemen:
We have acted as special Delaware counsel to CalEnergy
Capital Trust IV, CalEnergy Capital Trust V and CalEnergy Capital Trust IV,
each a Delaware statutory business trust (collectively referred to herein as
the "CalEnergy Trusts" and each individually as a "CalEnergy Trust"), in
connection with certain matters of Delaware law relating to the registration
of Preferred Securities pursuant to Registration Statement No. 333-32821 on
Form S-3 as filed with the Securities and Exchange Commission on August 4,
1997 and Pre-Effective Amendment No. 1 thereto as filed on the date hereof (as
so amended, the "Registration Statement"). Capitalized terms used herein and
not otherwise herein defined are used as defined in the form of the Amended
and Restated Declaration of Trust attached as an exhibit to the Registration
Statement.
In rendering this opinion, we have examined copies of the
following documents in the forms provided to us: the Certificates of Trust of
CalEnergy Capital Trust IV and CalEnergy Capital Trust V, each as filed in the
Office of the Secretary of State of Delaware (the "State Office") on August 4,
1997, and the Certificate of Trust of CalEnergy Capital Trust VI, as filed in
the State Office on September 16, 1997 (the Certificate of Trust of each
CalEnergy Trust is referred to herein as a "Certificate"); the Declaration of
Trust of CalEnergy Capital Trust IV and CalEnergy Capital Trust V, each dated
as of August 4, 1997, and the Declaration of Trust of CalEnergy Capital Trust
VI, dated as of September 16, 1997 (the Declaration of Trust of each CalEnergy
Trust is referred to herein as an "Original Governing Instrument"); the form
of Amended and Restated Declaration of Trust attached as an exhibit to the
Registration Statement; and the Registration Statement. In such examinations,
we have assumed the genuineness of all signatures, the conformity to original
documents of all documents submitted to us as drafts or copies or forms of
documents to be executed and the legal
The CalEnergy Trusts
c/o CalEnergy Company, Inc.
September 18, 1997
Page 2
capacity of natural persons to complete the execution of documents. We have
further assumed for purposes of this opinion: (i) the due authorization,
organization or creation, valid existence and good standing of the CalEnergy
Trusts and each entity that is a party to any of the documents reviewed by us
under the laws of the jurisdiction of its respective formation, organization
or creation; (ii) the due authorization, execution and delivery by, or on
behalf of, each of the parties thereto of the above referenced documents with
respect to each CalEnergy Trust; (iii) that CalEnergy Company, Inc., The Bank
of New York, The Bank of New York (Delaware) and the appropriate Regular
Trustees will duly authorize, execute and deliver an amended and restated
declaration of trust for each CalEnergy Trust in the form of the Amended and
Restated Declaration of Trust attached as an exhibit to the Registration
Statement (each a "Governing Instrument") and all other documents contemplated
thereby or by the Registration Statement to be executed in connection with the
creation of each CalEnergy Trust and the issuance by each such CalEnergy Trust
of Preferred Securities, in each case prior to the first issuance of Preferred
Securities; (iv) that the Preferred Securities of each CalEnergy Trust will be
offered and sold pursuant to a prospectus and a prospectus supplement thereto
(collectively, the "Prospectus") that will be consistent with, and accurately
describe, the terms of the applicable Governing Instrument relating to each
such CalEnergy Trust and all other relevant documents; (v) that no event has
or will occur subsequent to the filing of any Certificate that would cause a
dissolution or liquidation of any CalEnergy Trust under the applicable
Original Governing Instrument or the applicable Governing Instrument; (vi)
that the activities of each CalEnergy Trust have been and will be conducted in
accordance with its Original Governing Instrument or Governing Instrument, as
applicable, and the Delaware Business Trust Act, 12 Del. C. Section 3801 et
seq. (the "Delaware Act"); (vii) that each Holder of Preferred Securities of
each CalEnergy Trust will make payment of the required consideration therefor
and receive a Preferred Securities Certificate in consideration thereof in
accordance with the terms and conditions of the applicable Governing
Instrument and as described in the Prospectus, and that the Preferred
Securities of each CalEnergy Trust are otherwise issued and sold to the
Preferred Securities Holders of such CalEnergy Trust in accordance with the
terms, conditions, requirements and procedures set forth in the applicable
Governing Instrument and as described in the Prospectus; and (viii) that the
documents examined by us, or contemplated hereby, express the entire
understanding of the parties thereto with respect to the subject matter
thereof and have not been, and, prior to the issuance of Preferred Securities
by each CalEnergy Trust, will not be, modified, supplemented or otherwise
amended, except as herein referenced. No opinion is expressed with respect to
the requirements of, or compliance with, federal or state securities or blue
sky laws. Further, we express no opinion with respect to
The CalEnergy Trusts
c/o CalEnergy Company, Inc.
September 18, 1997
Page 3
the Registration Statement or any other offering materials relating to the
Preferred Securities offered by any CalEnergy Trust and we assume no
responsibility for their contents. As to any fact material to our opinion,
other than those assumed, we have relied without independent investigation on
the above referenced documents and on the accuracy, as of the date hereof, of
the matters therein contained.
Based on and subject to the foregoing, and limited in all
respects to matters of Delaware law, it is our opinion that, upon issuance,
the Preferred Securities of each CalEnergy Trust will constitute validity
issued and, subject to the terms of the applicable Governing Instrument, fully
paid and non-assessable beneficial interests in the assets of such CalEnergy
Trust. We note that pursuant to Section 11.4 of the applicable Governing
Instrument, each CalEnergy Trust may withhold amounts otherwise distributable
to a Holder of Securities in such CalEnergy Trust and pay over such amounts to
the applicable jurisdictions in accordance with federal, state and local law
and any amounts withheld will be deemed to have been distributed to such
Holder and that, pursuant to the applicable Governing Instrument, the
Preferred Security Holders of each CalEnergy Trust may be obligated to make
payments or provide indemnity or security under the circumstances set forth
therein.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement and to the use of our name under the
heading "LEGAL MATTERS" in the Prospectus forming a part thereof. In giving
this 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 Securities and Exchange
Commission thereunder. This opinion speaks only as of the date hereof and is
based on our understandings and assumptions as to present facts, and our
review of the above referenced documents and the application of Delaware law
as the same exist on the date hereof, and we undertake no obligation to update
or supplement this opinion after the date hereof for the benefit of any person
or entity with respect to any facts or circumstances that may hereafter come
to our attention or any changes in facts or law that may hereafter occur or
take effect. This opinion is intended solely for the benefit of the addresses
hereof in connection with the matters contemplated hereby and may not be
relied upon by any other person or entity or for any other purpose without our
prior written consent.
Very truly yours,
/s/ MORRIS, NICHOLS,
ARSHT & TUNNELL
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MORRIS, NICHOLS, ARSHT & TUNNELL