[LETTERHEAD OF RICHARDS, LAYTON & FINGER, P.A.]
May 16, 2001
KeySpan Trust I
KeySpan Trust II
KeySpan Trust III
c/o KeySpan Corporation
One MetroTech Center
Brooklyn, New York 11201
Re: KeySpan Trust I, KeySpan Trust II and KeySpan Trust III
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Ladies and Gentlemen:
We have acted as special Delaware counsel for KeySpan
Corporation, a New York corporation (the "Company"), KeySpan Trust I, a Delaware
business trust ("Trust I"), KeySpan Trust II, a Delaware business trust ("Trust
II") and KeySpan Trust III, a Delaware business trust ("Trust III") (Trust I,
Trust II and Trust III are hereinafter collectively referred to as the "Trusts"
and sometimes hereinafter individually referred to as a "Trust"), in connection
with the matters set forth herein. At your request, this opinion is being
furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of Trust I, as filed with the office of the
Secretary of State of the State of Delaware (the "Secretary of State")
on May 3, 2001;
(b) The Certificate of Trust of Trust II, as filed with the Secretary of
State on May 3, 2001;
(c) The Certificate of Trust of Trust III, as filed with the Secretary of
State on May 3, 2001;
(d) The Declaration of Trust of Trust I, dated as of May 3, 2001, among
the Company and the trustees named therein;
(e) The Declaration of Trust of Trust II, dated as of May 3, 2001, among
the Company and the trustees named therein;
(f) The Declaration of Trust of Trust III, dated as of May 3, 2001, among
the Company and the trustees named therein;
(g) The Registration Statement (the "Registration Statement") on Form S-3,
including a preliminary prospectus (the "Prospectus"), relating to,
among other things, the Trust Preferred Securities of the Trusts
representing preferred undivided beneficial interests in the assets of
the Trusts (each, a "Preferred Security" and collectively, the
"Preferred Securities"), filed by the Company and the Trusts with the
Securities and Exchange Commission on or about May __, 2001;
(h) A form of Amended and Restated Declaration of Trust for each of the
Trusts, to be entered into between the Company, the trustees of the
Trust named therein, and the holders, from time to time, of the
undivided beneficial interests in the assets of such Trust
(collectively, the "Declarations of Trust" and individually, a
"Declaration of Trust"), attached as an exhibit to the Registration
Statement; and
(i) A Certificate of Good Standing for each of the Trusts, dated May __,
2001, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise
defined are used as defined in the Declarations of Trust.
For purposes of this opinion, we have not reviewed any
documents other than the documents listed in paragraphs (a) through (i) above.
In particular, we have not reviewed any document (other than the documents
listed in paragraphs (a) through (i) 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 is
inconsistent with the opinions stated herein. We have conducted no independent
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, we have assumed (i) that each of
the Declarations of Trust will constitute 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 applicable Trust, and that the
Declarations of Trust and the Certificates of Trust will be in full force and
effect and will not be amended, (ii) except to the extent provided in paragraph
1 below, the due organization or due formation, 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 organization or formation, (iii) the
legal capacity of natural persons who are parties to the documents examined by
us, (iv) that each of the parties to the documents examined by us has the power
and authority to execute and deliver, and to perform its obligations under, such
documents, (v) the due authorization, execution and delivery by all parties
thereto of all documents examined by us, (vi) the receipt by each Person to whom
a Preferred Security is to be issued by the Trusts (collectively, the "Preferred
Security Holders") of a Preferred Security Certificate for such Preferred
Security and the payment for such Preferred Security, in accordance with the
Declarations of Trust and the Registration Statement, and (vii) that the
Preferred Securities are authenticated, issued and sold to the Security Holders
in accordance with the Declarations of Trust and the Registration Statement. We
have not participated in the preparation of the Registration Statement or the
Prospectus and assume no responsibility for their contents.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder which are currently in effect.
Based upon the foregoing, and upon our examination of such
questions of law and statutes of the State of Delaware as we have considered
necessary or appropriate, and subject to the assumptions, qualifications,
limitations and exceptions set forth herein, we are of the opinion that:
1. Each of the Trusts has been duly created and is validly existing in
good standing as a business trust under the Business Trust Act.
2. The Preferred Securities of each Trust will represent valid and,
subject to the qualifications set forth in paragraph 3 below, legally
issued, fully paid and nonassessable undivided beneficial interests in the
assets of the applicable Trust.
3. The Preferred Security Holders, as beneficial owners of the
applicable 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 Security Holders may be obligated to
make payments as set forth in the Declarations of Trust.
We consent to the filing of this opinion with the Securities
and Exchange Commission as an exhibit to the Registration Statement. We hereby
consent to the use of our name under the heading "Legal Opinions" in the
Prospectus. In giving the foregoing consents, 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.
Very truly yours,