Exhibit 5.3
[Letterhead of Morris, Nichols, Arsht & Tunnell]
February 4, 1998
CalEnergy Capital Trust III
c/o CalEnergy Company, Inc.
302 South 36th Street, Suite 400
Omaha, NE 68131
Re: CalEnergy Capital Trust III
Ladies and Gentlemen:
We have acted as special Delaware counsel to CalEnergy Capital Trust
III, a Delaware statutory business trust (the "Trust"), in connection with
certain matters of Delaware law relating to (i) the issuance of the 6 1/2%
Convertible Preferred Securities (the "Preferred Securities") to the several
initial purchasers named in the Purchase Agreement (the "Initial Purchasers")
dated as of August 7, 1997 (the "Purchase Agreement") among the Initial
Purchasers, the Trust and CalEnergy Company, Inc., a Delaware corporation (the
"Company") and (ii) the registration of 5,400,000 Preferred Securities
pursuant to a Registration Statement on Form S-3 as filed by the Trust and the
Company with the Securities and Exchange Commission on or about the date
hereof (the "Registration Statement").
The Preferred Securities have been issued pursuant to the Purchase
Agreement and the Amended and Restated Declaration of Trust of the Trust dated
as of August 12, 1997 (the "Governing Instrument"). Capitalized terms used
herein and not otherwise herein defined are used as defined in the Governing
Instrument.
In rendering this opinion, we have examined and relied upon copies
of the following documents in the forms provided to us: the Certificate of
Trust of the Trust as filed in the Office of the Secretary of State of the
State of Delaware (the "State Office") on August 4, 1997 (the "Certificate");
a Declaration of Trust dated as of August 4, 1997 (the "Original Governing
CalEnergy Capital Trust III
February 4, 1998
Page 2
Instrument"); the Governing Instrument; the Indenture dated as of August 12,
1997 between the Company and The Bank of New York, as Trustee; the Purchase
Agreement; the Trust's Confidential Offering Circular dated August 7, 1997
relating to the Preferred Securities (the "Offering Circular"); the
Registration Statement; and the Registration Rights Agreement dated August 12,
1997 among the Trust, the Company, Credit Suisse First Boston Corporation and
Lehman Brothers Inc. (the "Registration Rights Agreement"); and a certificate
of good standing of the Trust obtained as of a recent date from the State
Office. 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
capacity of natural persons to complete the execution of documents. 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
Trust) 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) the due
authorization, execution and delivery by, or on behalf of, each of the parties
thereto of the above-referenced documents; (iii) that no event has occurred
subsequent to the filing of the Certificate that would cause a dissolution or
liquidation of the Trust under the Original Governing Instrument or the
Governing Instrument, as applicable; (iv) that the activities of the Trust
have been and will be conducted in accordance with the Original Governing
Instrument or the Governing Instrument, as applicable, and the Delaware
Business Trust Act, 12 Del. C. ss.ss. 3801 et seq. (the "Delaware Act"); (v)
that each Holder of Preferred Securities has made payment of the required
consideration therefor and received a Preferred Securities Certificate in
consideration thereof in accordance with the terms and conditions of the
Governing Instrument, the Offering Circular and the Purchase Agreement; (vi)
that the Preferred Securities have been issued and sold to, and held or
transferred by, the Preferred Securities Holders (and any subsequent
transferee), and all transfers have been made, in accordance with the terms,
conditions, requirements and procedures set forth in the Governing Instrument,
the Offering Circular, the Purchase Agreement and, as applicable, the
Registration Statement; (vii) that none of the Preferred Securities has been
called for redemption, redeemed, converted or canceled (except in connection
with a permitted transfer) and all of the Preferred Securities remain
outstanding; (viii) that the Sponsor has directed the Regular Trustees to take
the actions contemplated by Section 3.6(b) of the Governing Instrument; and
(ix) that the documents examined by us are in full force and effect, express
the entire understanding of the parties thereto with respect to the subject
matter thereof and have not been amended, supplemented or otherwise modified,
except as herein referenced. No opinion is expressed with respect to the
requirements of, or compliance with, federal or state securities or blue
CalEnergy Capital Trust III
February 4, 1998
Page 3
sky laws. We have not participated in the preparation of the Offering
Circular, the Registration Statement or any other offering materials relating
to the Securities 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 the Preferred Securities
constitute validly issued and, subject to the qualifications set forth below,
fully paid and nonassessable beneficial interests in the assets of the Trust.
We note that pursuant to Section 11.4 of the Governing Instrument, the Trust
may withhold amounts otherwise distributable to a Holder and pay over such
amounts to the applicable jurisdictions in accordance with federal, state and
local law and any amount withheld will be deemed to have been distributed to
such Holder and that, pursuant to the Governing Instrument, Preferred Security
Holders 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 on our review of the
above-referenced documents and the application of Delaware law as the same
exist as of 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 addressee
hereof in connection with the matters contemplated hereby and may not be
relied on by any other person or entity or for any other purpose without our
prior written consent.
Very truly yours,
MORRIS, NICHOLS, ARSHT & TUNNELL