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EXHIBIT 5.1
[SEARS, XXXXXXX AND CO. LETTERHEAD]
November 9, 1998
Credit Suisse First Boston Corporation
Xxxxxx Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
As Representative of the several Underwriters named in Schedule 1 to
the Pricing Agreement dated October 27, 1998 among SRFG, Inc., Sears,
Xxxxxxx and Co. and such Underwriters with respect to the Class A
Certificates.
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 $450,000,000 aggregate principal amount
of 5.25% Class A Master Trust Certificates, Series 1998-2 (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 November
9, 1998 (the "Series Supplement"), and to be sold to the public in accordance
with the terms of, (i) the Pricing Agreement, dated October 27, 1998, among
Sears, the Company and Credit Suisse First Boston Corporation, on behalf of each
of the Underwriters named in Schedule 1 thereto (the "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 "Underwriting Agreement"). The Trust also will issue
$32,000,000 aggregate principal amount of Class B Master Trust Certificates,
Series 1998-2 (the "Class B Certificates") and $48,000,000 aggregate principal
amount of Class C Master Trust Certificates, Series 1998-2 (the "Class C
Certificates," and together with the Offered Certificates and the Class B
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 the 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
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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 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
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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;
(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 data 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 the 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
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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 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, 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., Xxxx & 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 X. Xxxxxx
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Xxxxx X. Xxxxxx
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