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EXHIBIT 5.1
June 2, 1998
Credit Suisse First Boston Corporation
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
As Representative of the several Underwriters
named in Schedule 1 to the Pricing
Agreement dated May 19, 1998 among
SRFG, Inc., Sears, Xxxxxxx and Co.
and such Underwriters
with respect to the Class A Certificates,
and as Underwriter of the Class B Certificates
c/o Credit Suisse First Boston Corporation
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
I am an Assistant General Counsel of Sears, Xxxxxxx and Co. ("Sears"). The
Corporate and Securities Section of the Sears Law Department, under my
supervision, has acted as counsel to SRFG, Inc. (the "Company") and Sears in
connection with the registration under the Securities Act of 1933, as amended
(the "Act"), and the public offering of $500,000,000 aggregate principal amount
of 5.80% Class A Master Trust Certificates, Series 1998-1 and $35,300,000
aggregate principal amount of 6.00% Class B Master Trust Certificates, Series
1998-1 (together, the "Offered Certificates") of the Sears Credit Account
Master Trust II (the "Trust") issued pursuant to the Pooling and Servicing
Agreement among Sears as Servicer, the Company as Seller and The First National
Bank of Chicago as Trustee (the "Trustee"), dated as of July 31, 1994, as
amended (the "Pooling and Servicing Agreement") and the Series Supplement among
Sears as Servicer, the Company as Seller and The First National Bank of Chicago
as Trustee, dated as of June 2, 1998 (the "Series Supplement"), and to be sold
to the public in accordance with the terms of, with respect to the Class A
Master Trust Certificates, (i) the Pricing Agreement, dated May 19, 1998, among
Sears, the Company and Credit Suisse First Boston Corporation, on behalf of
each of the Underwriters named in Schedule 1 thereto (the "Class A Pricing
Agreement"), and (ii) the related Underwriting Agreement, dated May 19, 1998
among the Company, Sears and Credit Suisse First Boston Corporation as
Representative of the several Underwriters (the "Class A Underwriting
Agreement"), and with respect to the Class B Master Trust Certificates, (i) the
Pricing Agreement, dated May 19, 1998, among Sears, the Company and Credit
Suisse First Boston Corporation (the "Class B Pricing Agreement" and,
collectively with the Class A Pricing Agreement, the "Pricing Agreement") and
(ii) the related Underwriting Agreement, dated May 19, 1998, among Sears, the
Company and Credit Suisse First Boston Corporation as Representative of the
several Underwriters (the "Class B Underwriting Agreement" and, collectively
with the Class A Underwriting Agreement, the "Underwriting Agreement"). The
Trust also will issue $52,950,000 aggregate principal amount of Class C Master
Trust Certificates, Series 1998-1 (the "Class C Certificates," and together
with the Offered Certificates, the "Investor Certificates"). This opinion is
furnished to you pursuant to Section 7(c) of the Underwriting Agreement. All
terms not otherwise defined herein have the meanings given to them in the
Underwriting Agreement.
I have made such legal and factual examinations and inquiries, including
an examination of originals or copies certified or otherwise identified to my
satisfaction of such documents, corporate records and other instruments, as I
have deemed necessary or appropriate for the purposes of this opinion.
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I have obtained and relied upon, to the extent I deem appropriate,
certificates of officers and executives of the Company, Sears and its
subsidiaries, and of public officials as to factual matters and opinions of
other counsel. I call to your attention the fact that, in rendering my opinion,
I am expressing my views only as to the laws of the State of Illinois and the
federal laws of the United States of America (except as to the matters below
which are governed in part by the general corporate laws of the State of
Delaware and the State of New York, relating to the due incorporation, valid
existence and good standing of the Company and Sears, respectively, the due
authorization, execution and delivery by the Company and Sears, respectively, of
certain documents, and the absence of any violation of the provisions of the
Certificate of Incorporation or By-Laws of the Company and Sears, and except to
the extent that the opinions expressed herein are given in reliance upon the
opinion of Xxxxxx & Xxxxxxx of even date herewith, a copy of which is being
delivered to you contemporaneously herewith).
On the basis of the foregoing and in reliance thereon, I am of the opinion
that, as of the date hereof:
(i) The Company and Sears have been duly incorporated and are validly
existing as corporations in good standing under the laws of their
respective states of incorporation;
(ii) Each of the Underwriting Agreement and Pricing Agreement has been
duly authorized, executed and delivered on the part of the Company
and Sears;
(iii) The issue and sale of the Investor Certificates and the compliance
by the Company with all of the provisions of the Investor
Certificates, the Underwriting Agreement, the Pricing Agreement,
the Purchase Agreement, the Contribution Agreement, the Receivables
Warehouse Agreement, the Assignment of Additional Funds, the
Pooling and Servicing Agreement and the Series Supplement will not
(a) conflict with or result in any breach which would constitute a
material default under, or, except as contemplated by the Pooling
and Servicing Agreement or the Series Supplement, result in the
creation or imposition of any lien, charge or encumbrance upon any
of the property or assets of the Company, material to the Company,
pursuant to the terms of, any indenture, loan agreement or other
agreement or instrument for borrowed money known to me to which the
Company is a party or by which the Company may be bound or to which
any of the property or assets of the Company, material to the
Company, is subject, (b) result in any violation of the provisions
of the Certificate of Incorporation, as amended, or the By-Laws of
the Company, or (c) to the best of my knowledge, result in any
material violation of any statute or any order, rule or regulation
applicable to the Company of any court or any federal, state or
other regulatory authority or other governmental body having
jurisdiction over the Company, provided, however, that except to
the extent discussed in paragraphs (vi)(c), (ix) (x), (xi), (xii)
and the paragraph immediately following paragraph (xii), I express
no opinion as to the Act, the Exchange Act, the Trust Indenture Act
and the Investment Company Act and provided, further, that I express
no opinion as to the securities laws of the various states or other
jurisdictions which are applicable to the issue and sale of the
Investor Certificates and I express no opinion as to state laws
pertaining to the perfection of security interests;
(iv) To the best of my knowledge, no consent, approval, authorization or
other order of, or filing with, any court or any federal, state or
other regulatory authority or other governmental body having
jurisdiction over Sears or the Company is required for the
consummation by Sears and the Company, as applicable, of the
transactions contemplated by the Bank Assignment Agreement, the
Purchase Agreement, the Contribution Agreement, the Assignment of
Additional Funds and the Receivables Warehouse Agreement or for the
issue and sale of the Investor Certificates except as may be
required under the Act, the Exchange Act, the Trust Indenture Act
and the Investment Company Act and the securities laws of the
various states or other jurisdictions which are applicable to the
issue and sale of the Investor Certificates and
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except for the filing of any financing or continuation statements
required to perfect the Trust's, the Company's and Sears respective
interests in the Receivables;
(v) The compliance by Sears with all of the provisions of the
Underwriting Agreement, the Bank Assignment Agreement, the Pricing
Agreement, the Purchase Agreement, the Contribution Agreement, the
Receivables Warehouse Agreement, the Pooling and Servicing
Agreement and the Series Supplement will not (a) conflict with or
result in any breach which would constitute a material default
under, or, except as contemplated by the Bank Assignment Agreement,
the Pooling and Servicing Agreement, the Series Supplement, the
Purchase Agreement, the Contribution Agreement or the Receivables
Warehouse Agreement, result in the creation or imposition of any
lien, charge or encumbrance upon any of the property or assets of
Sears or any subsidiary thereof, material to Sears and its
subsidiaries (whether or not consolidated) considered as a whole,
pursuant to the terms of, any indenture, loan agreement or other
agreement or instrument for borrowed money known to me to which
Sears, the Company, Sears Xxxxxxx Acceptance Corp., Sears DC Corp.,
Sears National Bank or Sears Overseas Finance N.V. is a party or by
which Sears or any of the foregoing subsidiaries may be bound or to
which any of the property or assets of Sears or of the foregoing
subsidiaries, material to Sears and its subsidiaries (whether or
not consolidated) considered as a whole, is subject, (b) result in
any violation of the provisions of the Restated Certificate of
Incorporation or the By-Laws of Sears or (c) to the best of my
knowledge, result in any material violation of any statute or any
order, rule or regulation applicable to Sears of any court or any
federal, state or other regulatory authority or other governmental
body having jurisdiction over Sears, provided, however, that except
to the extent discussed in paragraphs (vi)(c), (ix), (x), (xi),
(xii) and the paragraph immediately following paragraph (xii), I
express no opinion as to the Act, the Exchange Act, the Trust
Indenture Act and the Investment Company Act and the rules and
regulations under each such act; and provided, further, that I
express no opinion as to the securities laws of the various states
or other jurisdictions which are applicable to the issue and sale
of the Investor Certificates and I express no opinion as to the
state laws pertaining to the perfection of security interests;
(vi) (a) Each of the Pooling and Servicing Agreement, the Series
Supplement, the Purchase Agreement, the Contribution
Agreement and the Receivables Warehouse Agreement has been
duly authorized, executed and delivered on the part of the
Company and Sears and, as to each of the Company and Sears,
is a valid and binding instrument enforceable in accordance
with its terms, except as the foregoing may be limited by
bankruptcy, insolvency, reorganization, moratorium or
similar laws now or hereafter in effect relating to
creditors' rights generally, general principles of equity
(whether considered in a proceeding at law or in equity) or
the discretion of the court before which any proceeding
therefor may be brought;
(b) The Investor Certificates have been duly authorized and
(assuming their due authentication by the Trustee) have been
duly executed, issued and delivered and constitute valid and
binding obligations of the Trust in accordance with their
terms, entitled to the benefits of the Pooling and Servicing
Agreement and the Series Supplement, except as the foregoing
may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws now or hereafter in effect
relating to creditors' rights generally, general principles
of equity (whether considered in a proceeding at law or in
equity) or the discretion of the court before which any
proceeding therefor may be brought;
(c) The Pooling and Servicing Agreement is not required to be
qualified under the Trust Indenture Act; and the Trust is
not required to be registered under the Investment Company
Act;
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(vii) The Bank Assignment Agreement has been duly authorized, executed
and delivered by Sears and, as to Sears, is a valid and binding
instrument enforceable in accordance with its terms, except as
the foregoing may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in
effect relating to creditors' rights generally, general
principles of equity (whether considered in a proceeding at law
or in equity) or the discretion of the court before which any
proceeding therefor may be brought;
(viii) The Assignment of Additional Funds has been duly authorized,
executed and delivered by the Company and, as to the Company, is
a valid and binding instrument enforceable in accordance with its
terms, except as the foregoing may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws now or
hereafter in effect relating to creditors' rights generally,
general principles of equity (whether considered in a proceeding
at law or in equity) or the discretion of the court before which
any proceeding therefor may be brought;
(ix) I do not know of any pending legal or governmental proceedings
required to be described in the Prospectus which are not
described as required;
(x) The documents incorporated by reference in the Prospectus as
amended or supplemented (other than financial, statistical and
accounting date therein, as to which I express no opinion), when
they became effective or were filed with the Commission, as the
case may be, complied as to form in all material respects with
the requirements of the Act or the Exchange Act, as applicable,
and the rules and regulations thereunder;
(xi) The Registration Statement and Prospectus as amended or
supplemented (excluding the documents incorporated therein)
(other than financial, statistical and accounting data therein as
to which I express no opinion) comply as to form in all material
respects with the requirements of the Act and the rules and
regulations of the Commission thereunder; and
(xii) I do not know of any contract or other document to which the
Company or Sears is a party required to be filed as an exhibit to
the Registration Statement or required to be incorporated in the
Prospectus as amended or supplemented, or required to be
described in the Prospectus as amended or supplemented, which has
not been so filed or described.
With respect to the statements of belief set forth below, I have not
independently verified the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus and the limitations
inherent in the examination made by me and the knowledge available to me are
such that I am unable to assume, and I do not assume, any responsibility for
the accuracy, completeness or fairness of any of the statements contained
therein. I confirm, however, that as a result of (1) the examinations made by
me, as described above, and (2) my participation in conferences with
representatives of Sears, the Company and you and your counsel, at which
conferences the contents of the Registration Statement, the Underwriting
Agreement and related matters were discussed, nothing has come to my attention
which has caused me to believe that (a) any of the documents referred to in
subdivision (x) above (other than financial, statistical and accounting data
therein, as to which I express no belief), in each case after excluding any
statement in any such document which does not constitute part of the
Registration Statement or the Prospectus as amended or supplemented pursuant to
Rule 412 of Regulation C under the Act and after substituting therefor any
statement modifying or superseding such excluded statement, when they became
effective or were filed, as the case may be, contained, in the case of
documents which became effective under the Act, an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, and, in the case of
documents which were filed under the Exchange Act with the
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Commission, an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading or (b) the
Registration Statement or the Prospectus, as amended or supplemented, (other
than financial, statistical and accounting data therein, as to which I express
no belief) contains an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading.
In rendering my opinion, I have assumed that the Bank Assignment
Agreement, the Assignment of Additional Funds, the Pooling and Servicing
Agreement and the Series Supplement have been duly authorized, executed and
delivered by the parties thereto other than the Company and Sears and that the
signatures (other than those on behalf of the Company and Sears) on all
documents examined by me are genuine, assumptions which I have not
independently verified.
This opinion is furnished by me as counsel for the Company and Sears to
Credit Suisse First Boston Corporation as Representative of the several
Underwriters of the Class A Certificates and Credit Suisse First Boston
Corporation as Representative of the several Underwriters of the Class B
Certificates, and is solely for the benefit of the Underwriters, and is not to
be otherwise used, circulated or relied upon without my express written
consent, except that Standard & Poor's, Xxxxx'x Investors Service, Inc., Fitch
IBCA, Inc., Duff & Xxxxxx Credit Rating Company and The First National Bank of
Chicago may rely upon each of the foregoing opinions as if such opinions were
addressed to them.
Very truly yours,
/s/ XXXXX XXXXXX
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Xxxxx X. Xxxxxx
