Exhibits 5.1 and 8.1
SIDLEY AUSTIN LLP |BEIJING GENEVA SAN FRANCISCO
787 SEVENTH AVENUE |BRUSSELS HONG KONG SHANGHAI
SIDLEY AUSTIN LLP NEW YORK, NY 10019 |CHICAGO LONDON SINGAPORE
- ----------------| 212 839 5300 |DALLAS LOS ANGELES TOKYO
SIDLEY | 212 839 5599 FAX |FRANKFURT NEW YORK WASHINGTON, DC
|
|
|FOUNDED 1866
January 31, 2007
To the Persons listed on
Schedule A hereto
Re: Select Asset Inc.
Corporate Backed Callable Trust Certificates,
J.C. Penney Debenture-Backed Series 2007-1 Trust
------------------------------------------------
Ladies and Gentlemen:
We have acted as counsel to Select Asset Inc. ("Select Asset") in
connection with (i) the transfer by Select Asset of $55,000,000 aggregate
principal amount of 7 5/8% Debentures due 2097 (the "Underlying Securities")
issued by J.C. Penney Corporation, Inc. (the "Underlying Securities Issuer")
and guaranteed by J.C. Penney Company Inc. (the "Guarantor") to the Corporate
Backed Callable Trust Certificates, J.C. Penney Debenture-Backed Series 2007-1
Trust (the "Trust") established by Select Asset and (ii) the issuance by the
Trust on the date hereof (the "Closing Date") of Class A-1 Certificates (the
"Class A-1 Certificates") and Class A-2 Certificates (the "Class A-2
Certificates" and, together with the Class A-1 Certificates, the
"Certificates") pursuant to a standard terms for trust agreements, dated as of
November 9, 2006 (the "Standard Terms"), between Select Asset and U.S. Bank
National Association ("U.S. Bank"), as trustee (the "Trustee"), as
supplemented by a series supplement thereto in respect of the Trust, dated as
of January 31, 2007 (the "Series Supplement" and, together with the Standard
Terms, the "Trust Agreement"), between Select Asset and the Trustee. The sole
assets of the Underlying Securities Issuer are 7 5/8% Debentures issued by the
Underlying Securities Issuer. Capitalized terms defined in the Trust Agreement
and used but not otherwise defined herein are used herein as so defined.
We were informed that Lehman Brothers Inc. ("Lehman") did not
participate in the original distribution of the Underlying Securities, and
that all of the Underlying Securities transferred to the Trust were acquired
recently by Lehman in the secondary market in the ordinary course of its
business. Lehman has agreed to sell the Underlying Securities to Select Asset,
which will sell the Underlying Securities to the Trust pursuant to the Trust
Agreement in exchange for the Certificates.
The Class A-1 Certificates are being offered for sale pursuant to a
prospectus, dated April 18, 2006 (the "Base Prospectus"), as supplemented by a
prospectus supplement, dated January
SIDLEY AUSTIN LLP IS A LIMITED LIABILITY PARTNERSHIP PRACTICING IN AFFILIATION
WITH OTHER SIDLEY AUSTIN PARTNERSHIPS
30, 2007 (the "Prospectus Supplement" and, together with the Base Prospectus,
the "Prospectus").
In connection with this opinion, we have examined and are familiar
with originals or copies certified or otherwise identified to our satisfaction
of: (i) the registration statement on Form S-3 (No. 333-112795) filed by
Select Asset with the Securities and Exchange Commission (the "Commission")
for registration under the Securities Act of 1933, as amended (the "Act"), and
the rules and regulations of the Commission thereunder, of trust certificates
issuable in series (the "Registration Statement"); (ii) the Base Prospectus,
in the form in which it was last filed with the Commission, as supplemented by
the Prospectus Supplement to be filed by Select Asset with the Commission
pursuant to Rule 424 under the Act; (iii) the Trust Agreement; (iv) a
securities account control agreement, dated as of January 31, 2007 (the
"Control Agreement") between Select Asset, as depositor, and U.S. Bank, as
trustee and securities intermediary; (v) the forms of the Certificates; (vi) a
warrant agent agreement, dated as of January 31, 2007 (the "Warrant Agent
Agreement") between Select Asset, as Warrant Originator, and U.S. Bank, as
warrant agent in respect of the call warrants to which the Underlying
Securities held by the Trustee are subject (the "Call Warrants" and, together
with the Certificates, the "Securities"); (vii) the forms of the Call
Warrants; (viii) an underwriting agreement, dated as of January 23, 2007 (the
"Underwriting Agreement") between Select Asset and Lehman, acting as
underwriter; and (ix) such corporate records, agreements, documents and other
instruments, and such certificates or comparable documents of public officials
and of officers and representatives of Select Asset, and have made such
inquiries of such officers and representatives, and such examination of law as
we have deemed relevant and necessary as a basis for the opinions hereinafter
set forth.
In such examination, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents
of all documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such latter documents. As to all questions of
fact material to this opinion that have not been independently established, we
have relied upon certificates or comparable documents of officers and
representatives of Select Asset and upon the representations and warranties of
Select Asset contained in the Trust Agreement. We have also assumed: (i) the
due organization and valid existence of Lehman, Select Asset and U.S. Bank;
(ii) that Select Asset has all requisite corporate power and authority to
execute and deliver the Trust Agreement, the Underwriting Agreement, the
Control Agreement and the Warrant Agent Agreement and to perform its
obligations thereunder; (iii) that U.S. Bank has all requisite power and
authority to execute and deliver the Trust Agreement, the Warrant Agent
Agreement, the Control Agreement and the Securities, to perform its
obligations thereunder (in each of its respective capacities) and to
authenticate the Securities; (iv) the due and valid authorization by all
necessary corporate action of Select Asset of the execution, delivery and
performance by it of the Trust Agreement, the Underwriting Agreement, the
Control Agreement and the Warrant Agent Agreement; (v) the due and valid
authorization by all necessary action of U.S. Bank of the execution, delivery
and performance by it (in each of its respective capacities) of the Trust
Agreement, the Warrant Agent Agreement, the Control Agreement and the
Securities and the authentication by it of the Securities; (vi) the due and
valid execution and delivery by U.S. Bank (in each of its respective
capacities) of the Trust Agreement, the Control Agreement, the Warrant Agent
Agreement and the Securities; (vii) due compliance with the reporting
requirements of the
2
Securities Exchange Act of 1934, as amended, and the regulations thereunder;
and (viii) that Select Asset has a reasonable belief that the Underlying
Securities Guarantor meets the requirements for a primary issuance of
non-convertible investment grade debt on Form S-3 at the time of offering of
the Certificates. As used herein "to our knowledge" means the conscious
awareness of facts or other information by any lawyer in our firm actively
involved in negotiating the transactions contemplated by the Trust Agreement.
Based on the foregoing, and subject to the qualifications stated
herein, we are of the opinion that:
1. The Certificates, when duly executed and authenticated
and issued in accordance with the terms of the Trust Agreement and delivered
and paid for, will be validly issued and outstanding and entitled to the
benefits provided by the Trust Agreement.
2. The Registration Statement and the Prospectus (except
information of an accounting, financial or statistical nature included
therein, as to which we do not express any opinion) comply as to form in all
material respects with the requirements of the Act and the General Rules and
Regulations of the Commission thereunder as administered by the staff of the
Commission.
3. The Registration Statement has become effective under the
Act and, to the best of our knowledge, no stop order suspending its
effectiveness has been issued and no proceeding for that purpose is pending or
threatened by the Commission.
4. The Trust is not required to register as an "investment
company" as such term is defined in the Investment Company Act of 1940, as
amended.
5. When appropriate entries have been made on the book-entry
system of The Depository Trust Company ("DTC") reflecting the transfer of the
Underlying Securities from the account of the Depositor to the account of the
Trustee's participant on such system, and the Certificates have been sold to
third-parties not affiliated with the Depositor and appropriate entries have
been made on the book-entry system of DTC reflecting the transfer of the
Certificates from the account of the Depositor to the account of such
third-party's participant on such system, such entries and sale will be
sufficient to transfer and assign to the Trust all of the Depositor's right,
title and interest in the Underlying Securities, free and clear of any lien or
encumbrance in favor of any creditor of or claimant against the Depositor.
6. The execution and delivery by Select Asset of the Trust
Agreement and the Warrant Agent Agreement and the performance by Select Asset
of its obligations thereunder will not conflict with, constitute a default
under, or violate any New York, Delaware corporate or federal law or
regulation (other than federal and state securities or blue sky laws, as to
which we express no opinion in this paragraph).
7. The Trust Agreement, the Underwriting Agreement, the
Warrant Agent Agreement and the Control Agreement constitute legal, valid and
binding obligations of Select Asset, enforceable against Select Asset in
accordance with their terms.
3
8. Each Call Warrant has been validly issued and is
enforceable in accordance with its terms.
No opinion is expressed herein as to (a) the application of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally, or the
application of general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity) or (b) any
provision of any instrument, agreement or other document providing for
indemnification or contribution. In addition, we wish to advise you that
rights to indemnification and contribution may be limited by applicable law or
public policy.
With respect to matters contained in paragraph (7) above, we express
no opinion as to the enforceability of provisions of the respective agreements
referred to in paragraph (7) which provide that the assertion or employment of
any right or remedy shall not prevent the concurrent assertion or employment
of any other right or remedy, or that every right and remedy shall be
cumulative and in addition to every other right and remedy, or that any delay
or omission to exercise any right or remedy shall not impair any other right
or remedy or constitute a waiver thereof.
We are members of the bar of the State of New York, and we do not
express any opinion as to any laws other than the law of the State of New
York, the General Corporation Law of the State of Delaware and the federal
laws of the United States.
The opinions set forth herein are expressly subject to there being no
additional facts which would materially affect the validity of the assumptions
and conclusions set forth herein or upon which this opinion is based.
This opinion letter is not intended to be employed in any transaction
other than the one described above and is being delivered to you on the
understanding that neither it nor its contents may be published, communicated
or otherwise made available, in whole or in part, to any other party or
entity, without in each instance, our specific prior written consent.
Very truly yours,
/s/ Sidley Austin LLP
4
Schedule A
Select Asset Inc.
745 Seventh Avenue
New York, New York 10019
Lehman Brothers Inc.
745 Seventh Avenue
New York, New York 10019
Moody's Investors Service, Inc.
99 Church Street
New York, New York 10007
Standard & Poor's Rating Services,
a division of The McGraw-Hill Companies, Inc.
55 Water Street
New York, New York 10041
U.S. Bank National Association
100 Wall Street
New York, New York 10005
New York Stock Exchange, Inc.
20 Broad Street
New York, New York 10005