Opinion of Willkie Farr & Gallagher
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, NY 10022
Telephone: (212) 821-8000
Facsimile: (212) 821-8111
February 4, 1998
CalEnergy Capital Trust III
c/o CalEnergy Company, Inc.
302 South 36th Street, Suite 400
Omaha, Nebraska 68131
CalEnergy Company, Inc.
302 South 36th Street, Suite 400
Omaha, Nebraska 68131
Re: CalEnergy Company, Inc.;
CalEnergy Capital Trust III;
Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as special counsel to CalEnergy Company, Inc., a Delaware
corporation (the "Company"), and CalEnergy Capital Trust III, a statutory
business trust formed under the laws of the State of Delaware (the "Trust"), in
connection with the preparation of a Registration Statement on Form S-3, as
filed by the Company and the Trust with the Securities and Exchange Commission
(the "Commission") under the Securities Act of 1933, as amended (the "Act"), on
the date hereof (such registration statement being hereinafter referred to as
the "Registration Statement"), relating to the registration under the Act of
(i) Convertible Preferred Securities (liquidation preference $50 per Trust
Convertible Preferred Security) (the "Convertible Preferred Securities")
representing undivided beneficial ownership interests in the assets of the
Trust; (ii) the 6-1/2% Convertible Junior Subordinated Debentures due 2027 (the
"Convertible Junior Subordinated Debentures") of the Company, which may be
distributed under certain circumstances to the holders of the Convertible
Preferred Securities; (iii) the shares of common stock, par value $.0675 per
share (the "Common Stock"), of the Company, issuable upon conversion of the
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CalEnergy Company, Inc.
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Convertible Preferred Securities and the Convertible Junior Subordinated
Debentures; and (iv) the Preferred Securities Guarantee of the Company (as
defined below).
The Convertible Preferred Securities were issued pursuant to an Amended and
Restated Declaration of Trust (the "Declaration"), dated as of August 12, 1997,
among the Company, as sponsor, The Bank of New York, as property trustee (the
"Property Trustee"), The Bank of New York (Delaware), as Delaware trustee (the
"Delaware Trustee"), and Steven A. McArthur, Craig M. Hammett and Gregory E.
Abel, as the initial regular trustees (together, the "Regular Trustees").
Capitalized terms used but not otherwise defined herein have the meanings
ascribed to them in the Registration Statement.
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of (i) the certificate
of trust (the "Certificate of Trust") filed by the Delaware Trustee and the
Regular Trustees with the Secretary of State of the State of Delaware on August
4, 1997; (ii) a Declaration of Trust, dated as of August 4, 1997 (the "Original
Declaration"); (iii) the Declaration (including the form of the terms of the
Convertible Preferred Securities annexed thereto); (iv) specimen form of
Convertible Preferred Security; (v) the preferred securities guarantee
agreement, dated as of August 12, 1997 (the "Preferred Securities Guarantee"),
between the Company and The Bank of New York, as trustee; (vi) specimens of the
Convertible Junior Subordinated Debentures, which were issued pursuant to an
indenture dated as of August 12, 1997 (the "Indenture"), between the Company
and The Bank of New York, as trustee; (vii) the Indenture; and (viii) certain
resolutions of the Board of Directors of the Company relating to the issuance
of the Convertible Junior Subordinated Debentures and the shares of Common
Stock issuable upon conversion thereof. We have also examined originals or
copies, certified or otherwise identified to our satisfaction, of such other
documents, certificates and records as we have deemed necessary or appropriate
as a basis for the opinions set forth herein.
In our examination, we have assumed the legal capacity of all natural persons,
the genuineness of all signatures, the authenticity of all documents submitted
to us as originals, the conformity to original documents of all documents
submitted to us as certified or photostatic copies and the authenticity of the
originals of such copies. In making our examination of documents executed by
parties other than the Trust and the Company, we have assumed that such
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CalEnergy Company, Inc.
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parties had the power, corporate or other, to enter into and perform all
obligations thereunder and have also assumed the due authorization by all
requisite action, corporate or other, and execution and delivery by such
parties of such documents and that such documents constitute valid and binding
obligations of such parties. As to any facts material to the opinions expressed
herein which were not independently established or verified, we have relied
upon oral or written statements and representations of officers, trustees and
other representatives of the Company, the Trust and others. We have further
assumed for purposes of this opinion (i) the due formation or organization,
valid existence and good standing of each entity other than the Company that is
a party to any of the documents reviewed by us under the laws of the
jurisdiction of its respective formation or organization, (ii) that no event
has occurred subsequent to the filing of the Certificate of Trust that would
cause a dissolution or liquidation of the Trust under the Original Declaration
or the Declaration, as applicable and (iii) that activities of the Trust have
been and will be conducted in accordance with the Original Declaration or the
Declaration, as applicable, and the Delaware Business Trust Act, 12 Del. C.
Sections 3801 et seq.
The opinions expressed herein are limited to the laws of the State of New York,
the General Corporation Law of the State of Delaware and the federal laws of
the United States of America, and we express no opinion with respect to the
laws of any other country, state or jurisdiction.
Based on and subject to the foregoing and to the other qualifications and
limitations set forth herein, we are of the opinion that:
1. The Preferred Securities Guarantee is a valid and binding
agreement of the Company, enforceable against the Company in
accordance with its terms, except to the extent that enforcement
thereof may be limited by (i) bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium, or other similar laws now or
hereafter in effect relating to creditors' rights generally and (ii)
general principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity).
2. The Convertible Junior Subordinated Debentures are valid
and binding obligations of the Company, entitled to the benefits of
the Indenture and enforceable against the Company in accordance with
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CalEnergy Company, Inc.
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their terms, except to the extent that enforcement thereof may be
limited by (i) bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally and (ii) general
principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity) and except to the
extent that the waiver of stay or extension laws contained in Section
515 of the Indenture may be unenforceable.
We hereby consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement and to the use of our name under the
heading "Legal Matters" in the Registration Statement and in the related
Prospectus. In giving this consent, we do not thereby admit that we are within
the category of persons whose consent is required under Section 7 of the Act or
the rules and regulations of the Commission promulgated thereunder.
Very truly yours,
/s/ Willkie Farr & Gallagher