[KeySpan Letterhead]
October 16, 2000
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Ladies and Gentlemen:
This opinion is furnished in connection with the filing of the
Application/Declaration on Form U-1, as amended, (File No. 70-9641) (the "Merger
Application") with the Securities and Exchange Commission (the "Commission") by
KeySpan Corporation ("KeySpan") and ACJ Acquisition LLC ("ACJ"), a direct
wholly-owned subsidiary of KeySpan, under the Public Utility Holding Company Act
of 1935, as amended (the "Act"). The Merger Application requests the
Commission's authorization and approval of the acquisition by KeySpan
Corporation ("KeySpan") and ACJ of the issued and outstanding common stock of
Eastern Enterprises ("Eastern"), pursuant to which Eastern will become a direct,
wholly-owned subsidiary of KeySpan (the "Transaction"). Upon consummation of the
Transaction, KeySpan will register as a holding company pursuant to Section 5 of
the Act. Accordingly, KeySpan also requests Commission approval for the
retention by KeySpan of the existing businesses, investments and nonutility
activities of KeySpan and Eastern. Additionally, Eastern has filed an
application/declaration with the Commission requesting the Commission's
authorization to acquire all of the issued and outstanding common stock of
EnergyNorth, Inc. ("EnergyNorth") (hereafter referred to as the "ENI
Transaction"). (See File No. 70-9605) Currently, both Eastern and EnergyNorth
are exempt holding companies pursuant to Section 3(a)(1) of the Act. If the
Commission approves the ENI Transaction, upon consummation of such transaction,
EnergyNorth will become a direct subsidiary of Eastern, and, therefore, an
indirect subsidiary of KeySpan.
I am general counsel to KeySpan and have acted as counsel to KeySpan
in connection with the filing of the Merger Application
In connection with this opinion, either I or attorneys under my
supervision in whom I have confidence have examined originals or copies,
certified or otherwise identified to my satisfaction, of such records and such
other documents, certificates and corporate or other records as I have deemed
necessary or appropriate as a basis for the opinions expressed in this letter.
In my examination, I have assumed the genuineness of all signatures, the legal
capacity of all persons, the authenticity of all documents submitted to me as
original and the conformity to the original documents of all documents submitted
to me as copies. As to any facts material to my opinion, I have, when relevant
facts were not independently established, relied upon the statement contained in
the Merger Application.
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Securities and Exchange Commission
October 16, 2000
The opinions expressed below with respect to the Transaction described
in the Merger Application are subject to the following assumptions,
qualifications, limitations, conditions and exceptions:
A. The Transaction shall have been duly authorized and
approved, to the extent required by the governing corporate
documents and applicable state laws, by the Board of
Directors of KeySpan, Eastern, EnergyNorth or of the
appropriate Subsidiary, as the case may be.
B. No act or event other than as described herein shall have
occurred subsequent to the date hereof which would change
the opinions expressed below.
C. All required approvals, authorizations, consents,
certificates, rulings and orders of, and all filings and
registrations with, all applicable federal and state
commissions and regulatory authorities with respect to the
Transaction shall have been obtained or made, as the case
may be, and shall have become final and unconditional in all
respects and shall remain in effect (including the approval
and authorization of the Commission under the Act) and the
Transaction shall have been accomplished in accordance with
all such approvals, authorizations, consents, certificates,
orders, filings and registrations.
D. The Commission shall have duly entered an appropriate order
with respect to the Transaction as described in the Merger
Application granting and permitting the Merger Application
to become effective under the Act and the rules and
regulations thereunder.
E. The solicitation of proxies from the shareholders of Eastern
and ENI with respect to the Transaction was conducted in
accordance with the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder.
F. The applicable waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, and the
rules and regulations thereunder has expired.
G. Appropriate corporate actions will have been taken by both
the issuer and acquirer of the securities contemplated by
the Merger Application and the documents transferring the
securities will have been duly authorized, executed and
delivered with all appropriate transfer or other taxes paid.
H. The parties shall have obtained all material consents,
waivers and releases, if any, required for the Transaction
under all applicable governing corporate documents,
contracts, agreements, debt instruments, indentures,
franchises, licenses and permits.
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Securities and Exchange Commission
October 16, 2000
Based on the foregoing and subject to the assumptions, qualifications,
limitations, conditions and exceptions set forth herein, I am of the opinion
that, in the event the proposed transactions are consummated in accordance with
the Merger Application:
1. All state and federal laws applicable to the
proposed Transaction will have been complied with;
2. KeySpan is a corporation validly organized, duly
existing and in good standing in the State of New
York. Eastern is a Massachusetts business trust
validly organized, duly existing in good standing
in the State of Massachusetts;
3. The shares of common stock of Eastern to be
acquired by the KeySpan in the Transaction will be
validly issued, fully paid and nonassessable, and
KeySpan, as holder thereof, will be entitled to
the rights and privileges appertaining thereto set
forth in the Declaration of Trust of Eastern.
4. KeySpan may legally acquire the shares of common
stock of Eastern.
5. The consummation of the Transaction will not
violate the legal rights of the holders of any
securities issued by KeySpan.
I am a member of the State Bar of New York and do not purport to be an
expert on, nor do I opine as to, the laws of any jurisdiction other than the
State of New York and the federal laws of the United States of America. I hereby
consent to the use of this opinion as an exhibit to the Merger Application.
Very truly yours,
/s/ Steven L. Zelkowitz
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