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EXHIBIT 1.1
DEALER MANAGER AGREEMENT
January 25, 1995
BT SECURITIES CORPORATION
CS FIRST BOSTON CORPORATION
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
c/o BT Securities Corporation
One Bankers Trust Plaza
New York, New York 10006
Ladies and Gentlemen:
Food 4 Less Supermarkets, Inc., a Delaware
corporation ("Food 4 Less"), intends to merge (the "Merger")
with and into Ralphs Supermarkets, Inc., a Delaware corporation
("RSI"), with RSI surviving the Merger (as such surviving
company, the "Surviving Company"), pursuant to an Agreement and
Plan of Merger dated as of September 14, 1994 (as amended
through the date hereof, the "Merger Agreement"), by and among
Food 4 Less, Food 4 Less, Inc. ("F4L"), Food 4 Less Holdings,
Inc. ("Holdings"), RSI and the stockholders of RSI. Upon
consummation of the Merger, it is anticipated that the
Surviving Company will merge with its wholly owned subsidiary,
Ralphs Grocery Company, a Delaware corporation ("RGC"), with
the Surviving Company surviving such merger (the "Subsequent
Merger", and together with the Merger, the "Mergers"). Upon
consummation of the Mergers, the Surviving Company will change
its name to "Ralphs Grocery Company" ("Ralphs"). Prior to the
Merger, (i) F4L intends to merge with Holdings, with Holdings
surviving such merger (the "F4L Merger") and (ii) immediately
following the F4L Merger, Holdings will merge with and into its
newly formed wholly-owned subsidiary incorporated in Delaware
("New Holdings"), with New Holdings surviving such Merger (the
"Delaware Merger" and together with the F4L Merger, the "Equity
Merger").
In connection with the Mergers, Food 4 Less proposes
to offer (collectively, the "F4L Exchange Offers") (i) to
holders of its 10.45% Senior Notes due 2000 (the "Old F4L
10.45% Notes") and its 13.75% Senior Subordinated Notes due
2001 (the "Old F4L 13.75% Notes", and together with the Old
10.45% Notes, the "Old F4L Notes") upon the terms and subject
to the conditions set forth in the Prospectus and Solicitation
Statement dated January 25, 1995 (the "F4L Prospectus"), to
exchange (a) for each $1,000 principal amount of Old 10.45%
Notes, $1,000 principal amount of new Senior Notes due 2004 of
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the Surviving Company (the "New Senior Notes") and a cash
payment and (b) for each $1,000 principal amount of Old 13.75%
Notes, $1,000 principal amount of new Senior Subordinated Notes
due 2005 of the Surviving Company (the "New F4L Senior
Subordinated Notes", and together with the New Senior Notes,
the "New F4L Notes") and a cash payment and (ii) to holders of
the 9% Senior Subordinated Notes due 2003 of RGC (the "9% RGC
Notes") and the 10 1/4% Senior Subordinated Notes due 2002 of
RGC (the "10 1/4% RGC Notes", and together with the 9% RGC
Notes, the "Old RGC Notes" and together with the Old F4L Notes,
the "Old Notes") upon the terms and subject to the conditions
set forth in the Prospectus and Solicitation Statement dated
January 25, 1995 (the "RGC Prospectus"), to exchange for each
$1,000 principal amount of Old RGC Notes, $1,000 principal
amount of new Senior Subordinated Notes due 2005 of the
Surviving Company (the "New RGC Notes" and together with the
New F4L Notes, the "New Notes") and a cash payment. The New
F4L Senior Subordinated Notes will be issued pursuant to an
Indenture (the "F4L Senior Subordinated Note Indenture") to be
entered into by the Surviving Company, as issuer, each of Alpha
Beta Company, Bay Area Warehouse Stores, Inc., Bell Markets,
Inc., Cala Co., Cala Foods, Inc., Falley's, Inc., Food 4 Less
of California, Inc., Food 4 Less Merchandising, Inc., Food 4
Less of Southern California, Inc. and Food 4 Less GM, Inc., as
guarantors, (collectively, the "Subsidiary Guarantors") and
United States Trust Company of New York, as trustee (the "F4L
Senior Subordinated Note Trustee"). The New Senior Notes will
be issued pursuant to an Indenture (the "Senior Note
Indenture") to be entered into by the Surviving Company, as
issuer, the Subsidiary Guarantors, as guarantors, and Norwest
Bank Minnesota N.A., as trustee (the "Senior Note Trustee").
The New RGC Notes will be issued pursuant to an Indenture (the
"RGC Note Indenture," and together with the F4L Senior Note
Indenture and the F4L Senior Subordinated Note Indenture, the
"Indentures") to be entered into by the Surviving Company, as
issuer, the Subsidiary Guarantors, as guarantors, and United
States Trust Company of New York, as trustee (the "RGC Note
Trustee" and together with the F4L Senior Subordinated Note
Trustee and the Senior Note Trustee, the "Trustees"). The New
Notes will be unconditionally guaranteed (the "Guarantees"), on
a joint and several basis, by each of the Subsidiary Guarantors
pursuant to the terms of the applicable Indenture. As used in
this Agreement, the term "Issuers" shall refer collectively to
Food 4 Less (or after giving effect to the Mergers, the
Surviving Company) and the Subsidiary Guarantors.
Concurrently with the F4L Exchange Offers, Food 4
Less is soliciting consents (collectively, the "Consent
Solicitations") (i) from the holders of the Old F4L Notes to
amendments (the "Proposed F4L Amendments") to certain of the
provisions in the respective indentures governing the Old F4L
Notes (the "Old F4L Indentures"), all as described in the F4L
Prospectus and (ii) from the holders of the Old RGC Notes to
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amendments (the "Proposed RGC Amendments" and together with the
Proposed F4L Amendments, the "Proposed Amendments") to certain
of the provisions in the respective indentures governing the
Old RGC Notes (the "Old RGC Indentures" and together with the
Old F4L Indentures, the "Old Indentures"), all as described in
the RGC Prospectus. Upon receipt of the Requisite Consents (as
defined in the applicable prospectus) with respect to an issue
of Old Notes, the Issuers (in the case of the Old F4L Notes) or
RGC (in the case of the Old RGC Notes) will enter into an
indenture supplemental to the Old Indenture under which such
Old Notes were issued (each, a "Consent Supplemental
Indenture") with the trustee under such Old Indenture, which
will give effect to the applicable Proposed Amendments.
Concurrently with the F4L Exchange Offers, Holdings
is soliciting consents (the "Holdings Consent Solicitation",
and together with the F4L Exchange Offers and the Consent
Solicitations, the "Exchange Offers") from the holders of its
15<% Senior Discount Notes due 2004 (the "Holdings Notes") to
amendments (the "Holdings Proposed Amendments") to certain of
the provisions in the indenture governing the Holdings Notes
(the "Holdings Indenture"), as described in the Prospectus and
Solicitation Statement dated January 25, 1995. Following the
Equity Merger, New Holdings will assume the Obligations of
Holdings under the Holdings Notes and the Holdings Indenture.
Upon receipt of the Requisite Consents (as defined in the
Holdings Prospectus) New Holdings will enter into an indenture
supplemental to the Holdings Indenture (the "Holdings
Supplemental Indenture") with the trustee under the Holdings
Indenture, which will give effect to the Holdings Proposed
Amendments. As used in this Agreement, the term "Registrants"
shall refer collectively to Holdings (or after giving effect to
the consummation of the Equity Merger, New Holdings) and the
Issuers.
F4L and the Registrants hereby confirm their
agreement with you as follows:
1. Exchange Offer Materials. A registration
statement on Form S-4, including a prospectus, subject to
completion, has been filed with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933,
as amended (together with the rules and regulations of the
Commission promulgated thereunder, the "Act") by (i) the
Issuers with respect to the New Senior Notes, the New F4L
Senior Subordinated Notes and the related Guarantees and the
Old F4L Notes, after giving effect to the consummation of the
Consent Solicitations relating thereto (the "Amended F4L
Notes") (File No. 33-56451), (ii) the Issuers with respect to
the New RGC Notes and the related Guarantees and the Old RGC
Notes, after giving effect to the consummation of the Consent
Solicitations relating thereto (the "Amended RGC Notes") (File
No. 33-56445) and (iii) Holdings with respect to the Holdings
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Notes, after giving effect to the consummation of the Holdings
Consent Solicitations (the "Amended Holdings Notes", and
collectively with the Amended F4L Notes and the Amended RGC
Notes, the "Amended Notes") (File No. 33-86356); and one or
more amendments to each such registration statement also have
been so filed. After the execution of this Agreement, the
respective Registrants under each such registration statement
will file with the Commission either (x) if such registration
statement, as it may have been amended, has been declared by
the Commission to be effective under the Act, a prospectus in
the form most recently included in an amendment to such
registration statement (or, if no such amendment shall have
been filed, in such registration statement) with such changes
or insertions as are required by Rule 430A under the Act or
permitted by Rule 424(b) under the Act and as have been
provided to and approved by you prior to the execution of this
Agreement, or (y) if such registration statement, as it may
have been amended, has not been declared by the Commission to
be effective under the Act, an amendment to such registration
statement, including a form of prospectus, a copy of which
amendment has been furnished to and approved by you prior to
the execution of this Agreement. As used in this Agreement,
the term "Registration Statement" means each such registration
statement, as amended at the time when it was or is declared
effective, including all financial schedules and exhibits
thereto and including any information omitted therefrom
pursuant to Rule 430A under the Act and included in the
applicable Prospectus (as hereinafter defined); the term
"Preliminary Prospectus" means each prospectus, subject to
completion, filed with each such registration statement or any
amendment thereto (including the prospectus, subject to
completion, if any, included in such Registration Statement or
any amendment thereto at the time it was or is declared
effective); and the term "Prospectus" means each prospectus
included in each Registration Statement, in the form in which
each such prospectus was first filed with the Commission
pursuant to Rule 424(b) under the Act or, if no prospectus is
required to be filed pursuant to said Rule 424(b) with respect
to any such Registration Statement, such term means the
prospectus included in such Registration Statement.
The Registrants agree to furnish you at their own
expense with as many copies as you may reasonably request of
each Prospectus and the related Consents and Letters of
Transmittal, Notices of Guaranteed Delivery, Broker/Dealer
Letters, Client Letters, Taxpayer Guidelines, Informational
Letters from officers of Food 4 Less (collectively, the
"Letters of Transmittal") and all other related offering
materials prepared by the Registrants for use in connection
with the Exchange Offers. Each Prospectus, together with all
attachments thereto, the Consents and Letters of Transmittal
and all such other related offering materials, as such
materials may be amended, modified or supplemented from time to
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time in accordance with the terms hereof and thereof, are
herein collectively referred to as the "Offering Materials".
The Registrants authorize you to use the Offering Materials in
connection with the Exchange Offers, and you agree that you
shall not use any material in connection therewith other than
the applicable Offering Materials and such other materials, if
any, as the Registrants may approve. The Registrants agree to
cause a copy of the applicable Offering Materials to be mailed
to (x) each record holder of Old Notes or Holdings Notes and
(y) each beneficial holder of Old Notes or Holdings Notes that
is known to any of the Registrants. Thereafter, to the extent
practicable until the expiration of the Exchange Offers, each
of the Registrants shall use its best efforts to cause copies
of the appropriate Offering Materials to be mailed to each
person who becomes a record holder of Old Notes or Holdings
Notes and each beneficial holder of Old Notes or Holdings Notes
that becomes known to the Registrants.
The date or dates on which the Offering Materials are
first mailed or otherwise distributed to holders of an issue of
Old Notes or Holdings Notes is hereinafter referred to as the
"Commencement Date".
2. Agreement to Act as Dealer Managers. Each of
the Registrants hereby retains each of you, and each of you
agrees to act, as exclusive dealer managers and solicitation
agents (in either or both such capacities, the "Dealer
Managers") to the Registrants in connection with the Exchange
Offers, until the earlier of (i) the termination of the Merger
Agreement in accordance with its terms and (ii) the date of the
consummation (the "Closing") of the Exchange Offers (the
"Closing Date"). As Dealer Managers, each of you agrees,
severally and not jointly, in accordance with your respective
customary practice, to perform those services in connection
with the Exchange Offers as are customarily performed by
investment banking concerns in connection with exchange offers
and consent solicitations of like nature, including, but not
limited to, soliciting exchanges and consents pursuant to the
Exchange Offers and communicating generally regarding the
Exchange Offers with brokers, dealers, commercial banks and
trust companies and other persons, including the holders of the
Old Notes and the Holdings Notes.
(a) Each of the Registrants hereby authorizes each
of you to act as Dealer Managers in connection with the
Exchange Offers, and, on the basis of the representations,
warranties and agreements of F4L, the Registrants and RSI
herein contained and subject to the terms and conditions
hereof, each of you agree, severally and not jointly, to act as
Dealer Managers in connection with the Exchange Offers.
(b) The Registrants shall furnish you, or cause each
of the transfer agents or registrars for the Old F4L Notes and
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the Holdings Notes (collectively, the "F4L Transfer Agent and
Registrar") to furnish you, as soon as practicable after the
Commencement Date, with cards or lists or copies thereof
showing the names of persons who were the holders of record of
Old F4L Notes and Holdings Notes as of January 20, 1995 and, to
the extent available to the Registrants, the beneficial holders
of the Old F4L Notes and the Holdings Notes as of the date or
dates specified by you, together with their addresses and the
principal amount of each issue of Old F4L Notes or Holdings
Notes, as the case may be, held by them. RSI shall furnish
you, or cause each of the transfer agents for the Old RGC Notes
(the "RGC Transfer Agent and Registrar" and together with the
F4L Transfer Agent and Registrar, the "Transfer Agent and
Registrar") to furnish you, as soon as practicable after the
Commencement Date, with cards or lists or copies thereof
showing the names of persons who were the holders of record of
Old RGC Notes as of January 20, 1995 and, to the extent
available to RSI, the beneficial holders of the Old RGC Notes
as of the date or dates specified by you, together with their
addresses and the principal amount of each issue of Old RGC
Notes held by them. Additionally, the Registrants and RSI
shall update such information from time to time during the term
of this Agreement as reasonably requested by you and to the
extent such information is reasonably available to the
Registrants or RSI within the time constraints specified. Each
of you shall act hereunder as an independent contractor and
nothing contained herein or in such information shall make
(x) any of you an agent of any of F4L, the Registrants, RSI or
any of their respective affiliates or (y) any of F4L, the
Registrants or any of their respective affiliates, an agent of
any of you or any of your respective affiliates. Nothing
contained in this Agreement shall constitute any Dealer Manager
a partner of or joint venturer with F4L, any of the
Registrants, RSI or any of their respective affiliates.
(c) F4L, the Registrants and RSI agree that any
reference to any of the Dealer Managers in any Offering
Materials or in any press release or other document or
communication is subject to such Dealer Manager's prior
approval. If any Dealer Manager resigns or its engagement
hereunder is terminated prior to the dissemination of the
Offering Materials or any other release or communication, no
reference shall be made therein to such Dealer Manager. In the
event that applicable law requires a reference to any Dealer
Manager, RSI, F4L and the Registrants agree to provide such
Dealer Manager with prompt notice of such requirement to
provide such Dealer Manager a reasonable opportunity to seek an
appropriate protective order or other remedy.
(d) The Registrants authorize the Dealer Managers to
communicate with any information agent or depositary designated
or retained by the Registrants with respect to the Exchange
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Offers (respectively, the "Information Agent" and the
"Depositary") regarding the Exchange Offers.
(e) In full payment for services rendered and to be
rendered hereunder by the Dealer Managers, the Registrants
agree to pay the Dealer Managers' fees and to reimburse the
Dealer Managers for expenses as follows:
(i) At the Closing the Registrants shall pay to the
Dealer Managers a fee equal to the sum of (x) 1.0% of the
aggregate principal amount of Old Notes accepted for
exchange in the Exchange Offers, (y) 0.5% of the aggregate
principal amount of Old Notes in respect of which a
consent is accepted pursuant to the Exchange Offers (other
than any such Old Notes accepted for exchange in the
Exchange Offers) and (z) 0.5% of the aggregate principal
amount of Holdings Notes in respect of which a consent is
accepted pursuant to the Holdings Consent Solicitation.
(ii) The Registrants agree to reimburse the Dealer
Managers promptly upon demand made from time to time for
all reasonable out-of-pocket expenses (including all
reasonable fees and expenses of your counsel, Cahill
Gordon & Reindel) incurred in connection with their
services as Dealer Managers for the Exchange Offers (it
being understood that any amount previously paid by the
Registrants to the Dealer Managers constituting
reimbursement of the Dealer Managers for reasonable
out-of-pocket expenses incurred in connection with their
services as Dealer Managers for the Exchange Offers shall
not be required to be paid again to the Dealer Managers
pursuant to this Section 2(e)(ii)). If the Dealer
Managers withdraw pursuant to Section 6 hereof or
terminate this Agreement pursuant to Section 8 hereof, the
Dealer Managers shall nevertheless be entitled to receive
reimbursement of all expenses pursuant to this
Section 2(e) which have accrued to the date of such
withdrawal or termination, as the case may be.
The Registrants shall perform their obligations to
you set forth in this Section 2(e) and in Section 7 hereof
whether or not the Exchange Offers are commenced or Food 4 Less
acquires any Old Notes, or Food 4 Less or Holdings receives any
consents, pursuant to the Exchange Offers.
3. Certain Covenants.
Each of the Registrants covenants with you as
follows:
(a) Each of the Registrants will use its respective
best efforts to cause each of the Registration Statements,
if not effective at the time of execution of this
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Agreement, and any amendments thereto, to become effective
promptly. If, at the time that any Registration Statement
becomes effective, any information shall have been omitted
therefrom in reliance upon Rule 430A of the rules and
regulations of the Commission under the Act, then
immediately following the execution of this Agreement, the
appropriate Registrants will prepare, and thereafter the
appropriate Registrants will file or transmit for filing
with the Commission in accordance with such Rule 430A and
Rule 424(b) of the rules and regulations of the Commission
under the Act, copies of an amended Prospectus relating to
such Registration Statement, or, if required by such Rule
430A, a post-effective amendment to such Registration
Statement (including an amended Prospectus), containing
all information so omitted. The Registrants will give
each Dealer Manager notice of their intention to file or
prepare any amendment to any Registration Statement
(including any post-effective amendment) or any amendment
or supplement to any Prospectus (including any revised
prospectus which the Registrants propose for use by the
Dealer Managers in connection with the Exchange Offers
which differs from any prospectus on file at the
Commission at the time the Registration Statement
including such prospectus becomes effective, whether or
not such revised prospectus is required to be filed
pursuant to Rule 424(b) of the rules any regulations of
the Commission under the Act), will furnish the Dealer
Managers with copies of such amendment or supplement a
reasonable amount of time prior to such proposed filing or
use, as the case may be, and will not file any such
amendment or supplement or use any such prospectus to
which the Dealer Managers or counsel for the Dealer
Managers shall reasonably object in writing or which is
not in compliance with the Act or the rules and
regulations of the Commission under the Act. The
Registrants will advise the Dealer Managers, promptly
after any of them receives notice thereof, of the time
when any Registration Statement or any amendment thereto
has been filed or declared effective or any Prospectus or
any amendment or supplement thereto has been filed and
will provide evidence satisfactory to the Dealer Managers
of each such filing or effectiveness.
(b) The Registrants will advise the Dealer Managers,
promptly after receiving notice or obtaining knowledge
thereof, of (i) the issuance by the Commission of any stop
order suspending the effectiveness of any Registration
Statement or any amendment thereto or any order preventing
or suspending the use of any Preliminary Prospectus or any
Prospectus, or any amendment or supplement thereto,
(ii) the suspension of the qualification of any of the New
Notes or the Amended Notes for offering or sale in any
jurisdiction, (iii) the institution, threatening or
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contemplation of any proceeding for any such purpose or
(iv) any request made by the Commission for amending any
Registration Statement, for amending or supplementing any
Prospectus or for additional information. Each of the
Registrants will use its best efforts to prevent the
issuance of any such stop order and, if any such stop
order is issued, to use its best efforts to obtain the
withdrawal thereof as promptly as possible.
(c) If, during the Exchange Offers and for such
period of time thereafter as the Offering Materials are
required by law to be delivered in connection therewith,
any event occurs as a result of which it shall, in the
reasonable judgment of F4L, the Registrants or their
counsel or the Dealer Managers or their counsel, be
necessary to amend or supplement any Prospectus in order
to make the statements therein, in light of the
circumstances under which they were made, not misleading,
or, if for any other reason it is necessary, in the
reasonable judgment of any such person, at any time to
amend or supplement any Prospectus to comply with the Act,
the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission promulgated
thereunder (the "Exchange Act") or any other law, rule or
regulation, such person shall promptly inform F4L, the
Registrants and the Dealer Managers, and the Registrants
shall promptly prepare and furnish copies to you (subject
to paragraph (a) of this Section 3) of such amendments or
supplements to any such Prospectus, so that either (i) the
statements in such Prospectus, as so amended or
supplemented, will not, in light of the circumstances
under which they were made, be misleading or (ii) such
compliance is effected.
(d) Each of the Registrants shall comply with the
applicable provisions of the Act, the Exchange Act, and
the Trust Indenture Act of 1939, as amended, and the rules
and regulations of the Commission promulgated thereunder
(the "Trust Indenture Act"), in connection with the
Offering Materials, the Exchange Offers and the
transactions contemplated hereby and thereby; the
Registrants will take on a timely basis all actions
necessary or legally required in relation to the Exchange
Offers and all other actions contemplated by this
Agreement and by the Offering Materials; and (z) the
Registrants will take all necessary corporate action to
authorize any amendments to or modifications of the
Exchange Offers.
(e) The Registrants will notify you, not less than
two hours prior thereto, of the time when they propose to
commence the Exchange Offers or, after commencement, to
extend the Exchange Offers and, immediately upon the
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commencement of the Exchange Offers, the Registrants shall
advise or cause the Information Agent or the Depositary to
advise you upon your reasonable request from time to time
during the period of, and promptly after the expiration
of, the Exchange Offers, as to all names and addresses of
the holders of the Old Notes which have been tendered for
exchange, the aggregate principal amount of Old Notes
tendered for exchange and the holders of Holdings Notes in
respect of which a consent has been received, the
aggregate principal amount of Old Notes tendered for
exchange by each holder, and the aggregate principal
amount of Holdings Notes in respect of which a consent has
been received, during the immediately preceding day,
indicating the aggregate principal amount of Old Notes or
Holdings Notes, as the case may be, verified to be in
proper form for tender or consent, as the case may be,
rejected for tender or consent, as the case may be, and
being processed; and will notify you promptly following
expiration of the Exchange Offers on the Expiration Date
(as defined in the Offering Materials), of (i) the
aggregate principal amount of Old Notes so deposited,
indicating the aggregate principal amount of Old Notes
verified to be in proper form for tender or consent, as
the case may be, rejected for tender or consent, as the
case may be, and being processed and (ii) the aggregate
principal amount of Holdings Notes in respect of which a
consent has been verified to be in proper form, a consent
has been rejected and which are being processed. The
Registrants shall promptly give you notice of changes in
Expiration Dates with respect to the Exchange Offers.
Food 4 Less will not (x) accept Old Notes for exchange or
(y) accept consents in respect of Old Notes, and Holdings
will not accept consents in respect of Holdings Notes,
unless the conditions to the obligations of the Dealer
Managers set forth in Section 6 hereof have been
satisfied.
(f) The Registrants shall advise you promptly of
(i) the occurrence of any event which might reasonably be
expected to cause the Registrants to amend, withdraw or
terminate the Exchange Offers, (ii) the occurrence of any
event, or the discovery of any fact, the occurrence or
existence of which would cause any representation or
warranty contained in this Agreement to be untrue or
inaccurate in any material respect, (iii) the issuance of
any comment or order or the taking of any other action by
the Commission or any other governmental or regulatory
agency with respect to the Exchange Offers (and, if in
writing, will promptly furnish you a copy thereof),
(iv) the occurrence of any event which might reasonably be
expected to cause the Registrants to amend or supplement
any filing required by the Exchange Act, (v) the issuance
or the threatened issuance of any order or the taking of
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any other action by any administrative or judicial
tribunal or governmental agency or instrumentality
concerning the Exchange Offers (and, if in writing, will
promptly furnish you a copy thereof) and (vi) any other
information relating to the Exchange Offers which you may
from time to time reasonably request.
(g) The Registrants will, without charge, provide
(i) to each Dealer Manager and to counsel for the Dealer
Managers a signed copy of each registration statement
originally filed with respect to New Notes and the Amended
Notes and each amendment thereto (in each case including
exhibits thereto) and (ii) so long as a prospectus
relating to any of the New Notes or the Amended Notes is
required to be delivered under the Act, as many copies of
each Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto as the Dealer Managers may
reasonably request.
(h) Each of New Holdings and the Surviving Company
will make generally available to its security holders as
soon as practicable, but not later than 90 days after the
close of the period covered thereby, an earnings statement
(in form complying with the provisions of Rule 158 of the
rules and regulations of the Commission under the Act)
covering a twelve-month period beginning not later than
the first day of the fiscal quarter of New Holdings or the
Surviving Company, as the case may be, next following the
"effective date" (as defined in Rule 158) of the
Registration Statement.
(i) The Registrants will cooperate with you and your
counsel in connection with the registration or
qualification of the New Notes and the Amended Notes for
offering and sale pursuant to the Exchange Offers under
the securities or "Blue Sky" laws of such jurisdictions as
you may designate and the continuance of such
qualifications in effect for as long as may be necessary
to complete the Exchange Offers; provided, however, that
in connection therewith none of the Registrants shall be
required to (i) qualify to do business as a foreign
corporation or as a broker-dealer, (ii) execute a general
consent to service of process in any jurisdiction where it
is not then so subject, (iii) take any action that would
subject it to taxation that it would not otherwise be
subject to or (iv) amend the terms of the New Notes or the
Amended Notes. The Registrants shall promptly advise you
of the receipt by any of them of any notification with
respect to the suspension of the qualification or
exemption from qualification of the New Notes or the
Amended Notes for offering or sale in any jurisdiction or
the institution, threatening or contemplation of any
proceeding for such purpose.
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(j) Prior to the Closing Date, each of Holdings
(and, upon consummation of the Equity Merger, New
Holdings) and Food 4 Less (and, upon consummation of the
Mergers, the Surviving Company) will furnish to you, as
soon as practicable after they have been prepared by or
are available to Holdings (or New Holdings, as the case
may be) or Food 4 Less (or the Surviving Company, as the
case may be), as the case may be, a copy of any unaudited
interim combined financial statements of Holdings (or New
Holdings, as the case may be) and its subsidiaries or Food
4 Less (or the Surviving Company, as the case may be) and
its subsidiaries, as the case may be, for any period
subsequent to the period covered by the most recent
financial statements of Holdings and its subsidiaries of
Food 4 Less and its subsidiaries, as the case may be,
appearing in the Offering Materials.
(k) If, prior to the completion of the Exchange
Offers, Holdings (or, upon consummation of the Equity
Merger, New Holdings) or any of its subsidiaries commences
engaging in business with the government of Cuba or with
any person or affiliate located in Cuba, or if the
information reported in the Offering Materials, if any,
concerning the business of Holdings (or New Holdings, as
the case may be) or any of its subsidiaries with Cuba or
with any person or affiliate located in Cuba changes in
any material way, Holdings (or New Holdings, as the case
may be) will provide the Florida Department of Banking and
Finance notice of such business or change, as appropriate,
in a form acceptable to such Department.
(l) The Registrants will not commence the mailing of
the Offering Materials unless the conditions set forth in
Section 6 hereof with respect to the commencement of the
Exchange Offers shall have been satisfied and complied
with prior to or concurrently with the commencement of
such mailing or shall have otherwise been waived in
writing by the Dealer Managers.
4. Expenses. In addition to the obligation of the
Registrants to reimburse the Dealer Managers for their
reasonable out-of-pocket expenses as provided in Section 2(e)
hereof, the Registrants, jointly and severally, agree to pay
all costs and expenses incident to the performance of their
obligations under this Agreement, whether or not the
transactions contemplated herein are consummated or this
Agreement is terminated pursuant to Section 8 hereof,
including, but not limited to, all costs and expenses incident
to (i) the printing, word processing or other production of
documents with respect to such transactions, including any
costs of printing the registration statements originally filed
with respect to the New Notes and the Amended Notes and any
amendment thereto, any Preliminary Prospectus, any Prospectus
13
and any amendment or supplement thereto, the Indentures, this
Agreement and all other agreements related to the Exchange
Offers or the distribution of the New Notes and the Amended
Notes and any Blue Sky or legal investment memoranda, (ii) all
arrangements relating to the delivery to the Dealer Managers of
copies of the foregoing documents, (iii) the fees and
disbursements of counsel, accountants and any other experts or
advisors retained by the Registrants, (iv) preparation,
issuance and delivery to the Dealer Managers of any
certificates evidencing the New Notes, (v) the qualification of
the New Notes and the Amended Notes and determination of their
eligibility for investment under state securities and Blue Sky
laws, including filing fees and reasonable fees and
disbursements of counsel for the Dealer Managers (including any
local counsel retained to render any opinion required by any
state securities or Blue Sky authorities) relating thereto,
(vi) the fees and disbursements of the Trustees, the trustees
under the Old Indentures and the Holdings Indenture and the
Transfer Agent and Registrar and Information Agent, (vii) the
filing fees of the Commission and the National Association of
Securities Dealers, Inc. relating to the New Notes and the
Amended Notes, (viii) any meetings with holders of Old Notes
and Holdings Notes relating to the Exchange Offers, and (ix)
any fees charged by investment rating agencies for the rating
of the New Notes and the Amended Notes.
5. Representations and Warranties.
(a) Each of the Registrants, jointly and severally,
represents and warrants to and agrees with you that, as of the
Commencement Date and the Closing Date:
(i) The Commission has not issued any order
preventing or suspending the use of any Preliminary
Prospectus. When any Preliminary Prospectus was filed
with the Commission it (x) complied in all material
respects with the requirements of the Act and (y) did not
include any untrue statement of a material fact or omit to
state any material fact necessary in order to make the
statements therein, in the light of the circumstances
under which they were made, not misleading. When each
Registration Statement or any amendment thereto was or is
declared effective, it (x) complied or will comply in all
material respects with the requirements of, the Act and
the Trust Indenture Act and (y) did not or will not
include any untrue statement of a material fact or omit to
state any material fact necessary to make the statements
therein not misleading. When each Prospectus or any
amendment or supplement thereto is filed with the
Commission pursuant to Rule 424(b) (or, if any Prospectus
or such amendment or supplement is not required to be so
filed, when the Registration Statement or the amendment
thereto containing such amendment or supplement to such
14
Prospectus was or is declared effective) and on the
Closing Date (as hereinafter defined), each Prospectus, as
amended or supplemented at any such time, (x) complied or
will comply in all material respects with the requirements
of the Act and (y) did not or will not include any untrue
statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made,
not misleading. The foregoing provisions of this
paragraph (i) do not apply to statements or omissions made
in any Preliminary Prospectus, any Registration Statement
or any amendment thereto or any Prospectus or any
amendment or supplement thereto in reliance upon and in
conformity with written information furnished to the
Registrants by the Dealer Managers specifically for use
therein or to the Statements of Eligibility and
Qualification ("Form T-1s") under the Trust Indenture Act
of the respective Trustees filed as exhibits to the
Registration Statements.
(ii) Each of the Registrants has all the necessary
corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby and by the
Offering Materials. Each of the Registrants has taken all
necessary corporate action to authorize the Exchange
Offers and the Issuers have taken all necessary corporate
action to authorize the exchange of Old Notes pursuant to
the Exchange Offers.
(iii) The Offering Materials comply as to form in all
material respects with all applicable provisions of the
Act, the Exchange Act and the Trust Indenture Act, and
with all applicable rules or regulations of any
governmental or regulatory authority or body, including
applicable "Blue Sky" or similar state securities laws or
statutes; and no consent or approval of, or filing with,
any governmental or regulatory authority or body will be
required in connection with the commencement or
consummation of the Exchange Offers other than those
consents or approvals which will have been obtained or any
filing which will have been made prior to the commencement
or consummation, as the case may be, of the Exchange
Offers.
(iv) F4L and each of the Registrants has been duly
incorporated and is validly existing in good standing as a
corporation under the laws of its jurisdiction of
incorporation, with all requisite corporate power and
authority to own or lease its properties and conduct its
businesses as now conducted as described in the Offering
Materials, and is duly qualified to do business as a
foreign corporation in good standing in all other
15
jurisdictions where the ownership or leasing of its
properties or the conduct of its businesses requires such
qualification, except where the failure to be so qualified
would not have (x) a material adverse effect on the
business, condition (financial or other) or results of
operations of F4L and the Registrants (or, after giving
effect to the Equity Merger, the Mergers, and the other
transactions contemplated by the Offering Materials, New
Holdings, the Surviving Company and their subsidiaries)
taken as a whole or (y) an adverse effect on the ability
of F4L or any Registrant to perform any of its material
obligations under any of the agreements, documents or
instruments contemplated to be entered into by F4L or any
Registrant (or, after giving affect to the Equity Merger
and the Mergers, New Holdings or any of its subsidiaries)
hereby or by the Offering Materials (collectively, the
"Transaction Documents") to which it is a party either
before or after giving effect to the Mergers and the other
transactions contemplated by the Offering Materials (a
"Material Adverse Effect"); each of F4L, Holdings and Food
4 Less has, and upon consummation of the Equity Merger and
the Mergers, each of New Holdings and the Surviving
Company will have (based upon the assumptions described
and referred to in the first paragraph of each Prospectus
under the caption, "Pro Forma Capitalization"), the
authorized, issued and outstanding capitalization set
forth in the Offering Materials; the only direct or
indirect subsidiary of F4L is Holdings and the only direct
or indirect subsidiary of Holdings is Food 4 Less; the
only direct or indirect subsidiaries of Food 4 Less (or,
after giving effect to the Equity Merger, the Mergers and
the other transactions contemplated by the Offering
Materials, the Surviving Company) are the Subsidiary
Guarantors; except as aforesaid, none of F4L, Holdings,
Food 4 Less or any of the Subsidiary Guarantors owns,
directly or indirectly, any of the capital stock or other
equity securities of any other person, except that Alpha
Beta Company has an investment in Certified Grocers of
California, Inc. ("Certified"), one of the Company's
suppliers, and Food 4 Less GM, Inc. has an interest in a
joint venture with Certified; the outstanding shares of
capital stock of each of F4L and each of the Registrants
(and, upon consummation of the Equity Merger and the
Merger and the other transactions contemplated by the
Offering Materials, each of New Holdings, the Surviving
Company and each of its subsidiaries) have been duly
authorized and validly issued, are fully paid and
nonassessable and were not issued in violation of any
preemptive or similar rights granted by such person; and
except as described in the Offering Materials, all of the
outstanding shares of capital stock of each of the
Subsidiary Guarantors are owned beneficially by Food 4
Less (and, upon consummation of the Mergers and the other
16
transactions contemplated by the Offering Materials, the
Surviving Company) free and clear of all liens,
encumbrances, security interests, mortgages, pledges,
charges or claims. No holders of securities of F4L or any
of the Registrants (or, upon consummation of the Equity
Merger, the Mergers and the other transactions
contemplated by the Offering Materials, New Holdings, the
Surviving Company or any of its Subsidiaries) are entitled
to have such securities registered under the Registration
Statements.
(v) The New Notes have been duly and validly
authorized by Food 4 Less for issuance and when issued
will conform in all material respects to the description
thereof in the Offering Materials. The New Notes, when
executed by the Surviving Company and authenticated by the
applicable Trustee in accordance with the provisions of
the applicable Indenture, and delivered to exchanging
holders of Old Notes in accordance with the terms of the
applicable Offering Materials, will have been duly
executed, issued and delivered and will constitute valid
and legally binding obligations of the Surviving Company
entitled to the benefits of the applicable Indenture and
enforceable against the Surviving Company in accordance
with their terms, except that the enforcement thereof may
be subject to (w) bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally, (x)
general principles of equity and the discretion of the
court before which any proceeding therefor may be brought
(regardless of whether such enforcement is considered in a
proceeding in equity or at law), (y) the unenforceability,
under certain circumstances, of provisions imposing
penalties, forfeitures, late payment charges or an
increase in interest rate upon delinquency in payment or
the occurrence of a default, and (z) the unenforceability
of any provision requiring the payment of attorneys' fees,
except to the extent that a court determines such fees to
be reasonable. Each of the Issuers has all requisite
corporate power and authority to execute, deliver and
perform its obligations under the Indentures and the
Guarantees. Upon consummation of the Mergers, the
Surviving Company will have all requisite corporate power
and authority to issue and deliver the New Notes and each
Subsidiary Guarantor will have all requisite corporate
power and authority to issue and deliver its Guarantees to
exchanging holders of Old Notes as provided herein and in
the Offering Materials. Each Indenture has been duly
authorized by the Issuers and, when executed and delivered
by the Issuers (assuming the due authorization, execution
and delivery thereof by the applicable Trustee), will
constitute a valid and legally binding agreement of each
of the Issuers, enforceable against each of the Issuers in
17
accordance with its terms, except that the enforcement
thereof may be subject to (v) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other
laws now or hereafter in effect relating to creditors'
rights generally, including, without limitation, the
effect on the Guarantees of Section 548 of the Bankruptcy
Code and comparable provisions of state law, (w) general
principles of equity and the discretion of the court
before which any proceeding therefor may be brought
(regardless of whether such enforcement is considered in a
proceeding in equity or at law), (x) the unenforceability,
under certain circumstances, of provisions imposing
penalties, forfeitures, late payment charges or an
increase in interest rate upon delinquency in payment or
the occurrence of a default, (y) the unenforceability of
any provision requiring the payment of attorneys' fees,
except to the extent that a court determines such fees to
be reasonable and (z) the unenforceability of the
provisions contained in the Indentures relating to the
waiver of (A) stay, extension or usury laws and (B)
subrogation rights or other rights and defences of the
Subsidiary Guarantors.
(vi) The Guarantees have been duly authorized and,
when executed and delivered, will, upon the execution,
authentication and delivery of the New Notes and payment
therefor, be valid and binding obligations of each
Subsidiary Guarantor, enforceable against such Subsidiary
Guarantor in accordance with their respective terms,
except that the enforcement thereof may be subject to (w)
bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other similar laws now or
hereafter in effect relating to creditors' rights
generally, including, without limitation, the effect on
the Guarantees of Section 548 of the Bankruptcy Code and
comparable provisions of state law, (x) general principles
of equity and the discretion of the court before which any
proceeding therefor may be brought (regardless of whether
such enforcement is considered in a proceeding in equity
or at law), (y) the unenforceability, under certain
circumstances, of provisions imposing penalties,
forfeitures, late payment charges or an increase in
interest rate upon delinquency in payment or the
occurrence of a default, and (z) the unenforceability of
any provision requiring the payment of attorneys' fees,
except to the extent that a court determines such fees to
be reasonable.
(vii) Each of the Consent Supplemental Indentures
relating to the Old F4L Notes has been duly and validly
authorized by the Issuers and each of the Consent
Supplemental Indentures will conform in all material
respects to the respective descriptions thereof in the
18
Offering Materials. Each of the Consent Supplemental
Indentures relating to the Old F4L Notes, when executed
and delivered by the Issuers (assuming the due
authorization, execution and delivery thereof by the
applicable trustee under the applicable Old Indenture and
assuming that written consents from the holders of a
majority of each issue of Old F4L Notes outstanding
authorizing execution of such Consent Supplemental
Indentures are valid and binding consents of such
holders), will have been duly executed and delivered and
will constitute valid and legally binding obligations of
the Issuers (and, upon consummation of the Mergers, the
Surviving Company and each Subsidiary Guarantor)
enforceable against the Issuers (and, upon consummation of
the Mergers, the Surviving Company and each Subsidiary
Guarantor) in accordance with their terms, except that the
enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors'
rights generally, (ii) general principles of equity and
the discretion of the court before which any proceeding
therefor may be brought (regardless of whether such
enforcement is considered in a proceeding in equity or at
law), (iii) the unenforceability, under certain
circumstances, of provisions imposing penalties,
forfeitures, late payment charges or an increase in
interest rate upon delinquency in payment or the
occurrence of a default, and (iv) the unenforceability of
any provision requiring the payment of attorneys' fees,
except to the extent that a court determines such fees to
be reasonable. Upon consummation of the Mergers, each of
the Consent Supplemental Indentures relating to the Old
RGC Notes will constitute valid and legally binding
obligations of the Surviving Company enforceable against
the Surviving Company in accordance with their terms,
except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to
creditors' rights generally, (ii) general principles of
equity and the discretion of the court before which any
proceeding therefor may be brought (regardless of whether
such enforcement is considered in a proceeding in equity
or at law), (iii) the unenforceability, under certain
circumstances, of provisions imposing penalties,
forfeitures, late payment charges or an increase in
interest rate upon delinquency in payment or the
occurrence of a default, and (iv) the unenforceability of
any provision requiring the payment of attorneys' fees,
except to the extent that a court determines such fees to
be reasonable.
(viii) The Holdings Supplemental Indenture has been
duly and validly authorized by Holdings and will conform
19
in all material respects to the description thereof in the
Offering Materials. The Holdings Supplemental Indenture,
when executed and delivered by Holdings (assuming the due
authorization, execution and delivery thereof by the
trustee under the Holdings Indenture and assuming written
consents from the holders of a majority of the outstanding
Holdings Notes authorizing execution of the Holdings
Supplemental Indenture are valid and binding consents of
such holders), will have been duly executed and delivered
and will constitute valid and legally binding obligations
of Holdings (and, after giving effect to the Equity
Merger, New Holdings) enforceable against Holdings (and
after giving effect to the Equity Merger, New Holdings) in
accordance with its terms, except that the enforcement
thereof may be subject to (w) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights
generally, (x) general principles of equity and the
discretion of the court before which any proceeding
therefor may be brought (regardless of whether such
enforcement is considered in a proceeding in equity or at
law), (y) the unenforceability, under certain
circumstances, of provisions imposing penalties,
forfeitures, late payment charges or an increase in
interest rate upon delinquency in payment or the
occurrence of a default, and (z) the unenforceability of
any provision requiring the payment of attorneys' fees,
except to the extent that a court determines such fees to
be reasonable.
(ix) This Agreement has been duly authorized,
executed and delivered by F4L and each of the Registrants
and, assuming the due authorization, execution and
delivery thereof by the Dealer Managers, constitutes the
valid and legally binding obligation of F4L and the
Registrants enforceable against F4L and the Registrants
(and after giving effect to the Equity Merger and the
Mergers, New Holdings, the Surviving Company and its
subsidiaries) in accordance with its terms, except that
the enforcement hereof may be subject to (v) bankruptcy,
insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors'
rights generally, (w) general principles of equity and the
discretion of the court before which any proceeding there-
for may be brought (regardless of whether such enforcement
is considered in a proceeding in equity or at law), (x)
the unenforceability, under certain circumstances, of
provisions imposing penalties, forfeitures, late payment
charges or an increase in interest rate upon delinquency
in payment or the occurrence of a default, (y) the
unenforceability of any provision requiring the payment
of attorneys' fees, except to the extent that a court
determines such fees to be reasonable and (z) the
20
unenforceability under certain circumstances under law or
court decisions of provisions for the indemnification of
or contribution to a party with respect to a liability
where such indemnification or contribution is contrary to
public policy. Except as described in the Offering
Materials, no consent, approval, authorization or order of
any court or governmental agency or body is required for
the performance of this Agreement, the New Notes, the
Guarantees, the Indentures, the Consent Supplemental
Indentures or any of the other Transaction Documents by
F4L or any Registrant (or upon consummation of the Equity
Merger and the Mergers, New Holdings, the Surviving
Company or any Subsidiary Guarantor) (to the extent each
such person is a party thereto) or the consummation by F4L
or any Registrant (or upon consummation of the Equity
Merger and the Mergers, New Holdings, the Surviving
Company or any Subsidiary Guarantor) of any of the
transactions contemplated hereby or thereby or by the
Offering Materials, except such as have been obtained and
such as may be required under securities or "Blue Sky"
laws in connection with the Exchange Offers, the Equity
Merger and the Mergers or any of such other transactions.
None of F4L or any of the Registrants is (and upon
consummation of the Equity Merger and the Mergers, none of
New Holdings, the Surviving Company or any of the
Subsidiary Guarantors will be) (i) in violation of its
certificate of incorporation or bylaws, (ii) in violation
of any statute, judgment, decree, order, rule or
regulation applicable to F4L or any of the Registrants (or
upon consummation of the Equity Merger and the Mergers,
New Holdings, the Surviving Company or any of the
Subsidiary Guarantors) which violation would have a
Material Adverse Effect, or (iii) in default in the
performance or observance of any obligation, agreement,
covenant or condition contained in any contract,
indenture, mortgage, deed of trust, loan agreement, note,
lease, license, franchise agreement, permit, certificate
or other agreement or instrument to which F4L or any of
the Registrants (or upon consummation of the Equity Merger
and the Mergers, New Holdings, the Surviving Company or
any of the Subsidiary Guarantors) is subject, which
default would have a Material Adverse Effect.
The execution, delivery and performance by the
Registrants (and upon consummation of the Equity Merger
and the Mergers, New Holdings, the Surviving Company and
the Subsidiary Guarantors) of this Agreement, the New
Notes, the Guarantees, the Indentures, the Consent
Supplemental Indentures and each of the other Transaction
Documents (to the extent each such person is a party
thereto), and the consummation by F4L and the Registrants
(and upon consummation of the Equity Merger and the
Mergers, New Holdings, the Surviving Company and the
21
Subsidiary Guarantors) of the transactions contemplated
hereby, thereby and by the Offering Materials will not
(after giving effect to all amendments and waivers
obtained on or prior to the Closing Date which are
described in the Offering Materials) conflict with or
constitute or result in a breach or violation by F4L or
any Registrant (or upon consummation of the Equity Merger
and the Mergers, New Holdings, the Surviving Company or
any Subsidiary Guarantor) of any of (x) the terms or
provisions of, or constitute a default by F4L or any
Registrant (or upon consummation of the Equity Merger and
the Mergers, New Holdings, the Surviving Company or any
Subsidiary Guarantor) under, any indenture, mortgage, deed
of trust, loan agreement, note, lease, license, franchise
agreement, or other agreement or instrument to which any
such person is a party or to which any of them or their
respective properties is subject, which conflict, breach,
violation or default would have a Material Adverse Effect,
(y) the certificate of incorporation or bylaws of any such
person, or (z) any statute, judgment, decree, order, rule
or regulation (excluding state securities and "Blue Sky"
laws) of any court or governmental agency or other body
applicable to any such person or any of their respective
properties, which conflict, breach, violation or default
would have a Material Adverse Effect.
(x) (x) Immediately after the consummation of the
Mergers and the other transactions contemplated by the
Offering Materials, the fair value and present fair
saleable value of the assets of the Surviving Company and
each Subsidiary Guarantor will exceed the sum of its
stated liabilities and identified contingent liabilities;
and (y) after giving effect to the execution, delivery and
performance of the Transaction Documents and the
consummation of the transactions contemplated thereby and
by the Offering Materials, none of the Issuers is, nor,
upon consummation of the Mergers, will the Surviving
Company or any Subsidiary Guarantor be, (a) left with
unreasonably small capital with which to carry on its
business as it is proposed to be conducted, (b) unable to
pay its debts (contingent or otherwise) as they mature or
(c) insolvent.
(xi) F4L and each of the Registrants have, and upon
consummation of the Equity Merger and the Mergers, New
Holdings, the Surviving Company and each of the Subsidiary
Guarantors will have, all requisite corporate power and
authority to execute, deliver and perform their respective
obligations under each of the Transaction Documents (to
the extent each is a party thereto). As of the Closing
Date, each of the Transaction Documents will have been
duly and validly authorized by F4L and each of the
Registrants (to the extent each is a party thereto); and,
22
when executed and delivered by F4L and each of the
Registrants (to the extent each is a party thereto), each
such Transaction Document will constitute a valid and
legally binding obligation of F4L and each of the
Registrants (and will, upon consummation of the Equity
Merger and the Mergers, constitute a valid and legally
binding obligation of New Holdings, the Surviving Company
and each of the Subsidiary Guarantors), to the extent each
is a party thereto, enforceable against each such person
in accordance with its terms except that the enforcement
thereof may be subject to (w) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other
similar laws now or hereafter in effect relating to
creditors' rights generally, (x) general principles of
equity and the discretion of the court before which any
proceeding therefor may be brought (regardless of whether
such enforcement is considered in a proceeding in equity
or at law), (y) the unenforceability, under certain
circumstances, of provisions imposing penalties,
forfeitures, late payment charges or an increase in
interest rate upon delinquency in payment or the
occurrence of a default, and (z) the unenforceability of
any provision requiring the payment of attorneys' fees,
except to the extent that a court determines such fees to
be reasonable.
(xii) The Equity Merger will have been duly authorized
by Holdings and F4L and will have been duly approved by
their respective stockholders; the Equity Merger will
conform in all material respects to the description
thereof in the Offering Materials. The Mergers have been
duly authorized by Food 4 Less and have been duly approved
by Food 4 Less' stockholders; the Merger Agreement
conforms and the Mergers will conform in all material
respects to the description thereof in the Offering
Materials. All representations and warranties of F4L,
Holdings and Food 4 Less set forth in the Merger Agreement
were true and correct in all materials respects at the
time as of which such representations and warranties were
made and will be true and correct at and as of the
Commencement Date and the Closing Date as if made at and
as of such date (other than to the extent any such
representation or warranty is expressly made as to only a
certain date).
(xiii) Except as disclosed in the Offering Materials,
and except as would not individually or in the aggregate
have a Material Adverse Effect (w) F4L and each of the
Registrants is in compliance with all applicable
Environmental Laws (as defined below), (x) F4L and each of
the Registrants has all permits, authorizations and
approvals required under any applicable Environmental Laws
and is in compliance with their requirements, (y) there
23
are no pending, or to the best knowledge of F4L or any of
the Registrants threatened, Environmental Claims (as
defined below) against F4L or any of the Registrants and
(z) F4L and each of the Registrants does not have
knowledge of any circumstances with respect to any of
their respective properties or operations that could
reasonably be anticipated to form the basis of an
Environmental Claim against F4L or any of the Registrants
or any of their respective properties or operations and
the business operations relating thereto. For purposes of
this Agreement, the following terms shall have the
following meanings: "Environmental Law" means, with
respect to any person, any federal, state, local or
municipal statute, law, rule, regulation, ordinance, code,
policy or rule of common law and any published judicial or
administrative interpretation thereof including any
judicial or administrative order, consent decree or
judgment binding on such person or any of its
subsidiaries, relating to the environment, health, safety
or any chemical, material or substance, exposure to which
is prohibited, limited or regulated by any such
governmental authority. "Environmental Claims" means any
and all administrative, regulatory or judicial actions,
suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigations or proceedings
relating in any way to any Environmental Law.
(xiv) The audited consolidated financial statements
and schedules of Food 4 Less included in the Offering
Materials present fairly the consolidated financial
position, results of operations and cash flows of Food 4
Less at the dates and for the periods to which they
relate, and have been prepared in accordance with
generally accepted accounting principles applied on a
consistent basis, except as otherwise stated therein, and
the unaudited consolidated financial statements of Food 4
Less and the related notes included in the Offering
Materials, if any, present fairly the consolidated
financial position, results of operations and cash flows
of Food 4 Less at the dates and for the periods to which
they relate, subject to year-end audit adjustments, and
have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis,
except as otherwise stated therein.
The audited consolidated financial statements and
schedules of Holdings included in the Offering Materials
present fairly the consolidated financial position,
results of operations and cash flows of Holdings at the
dates and for the periods to which they relate, and have
been prepared in accordance with generally accepted
accounting principles applied on a consistent basis,
except as otherwise stated therein, and the unaudited
24
consolidated financial statements of Holdings and the
related notes included in the Offering Materials, if any,
present fairly the consolidated financial position,
results of operations and cash flows of Holdings at the
dates and for the periods to which they relate, subject to
year-end audit adjustments, and have been prepared in
accordance with generally accepted accounting principles
applied on a consistent basis, except as otherwise stated
therein.
The audited consolidated financial statements and
schedules of New Holdings included in the Offering
Materials present fairly the consolidated financial
position of New Holdings at the dates to which they
relate, and have been prepared in accordance with
generally accepted accounting principles applied on a
consistent basis, except as otherwise stated therein, and
the unaudited consolidated financial statements of New
Holdings and the related notes included in the Offering
Materials, if any, present fairly the consolidated
financial position, results of operations and cash flows
of New Holdings at the dates and for the periods to which
they relate, subject to year-end audit adjustments, and
have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis,
except as otherwise stated therein.
The pro forma financial statements and other pro
forma financial information (including the notes thereto)
included in the Offering Materials have been prepared in
accordance with applicable requirements of Regulation S-X
promulgated under the Exchange Act and have been properly
computed on the bases described therein. The assumptions
used in the preparation of the pro forma financial
statements and other pro forma financial information
included in the Offering Materials are reasonable and the
adjustments used therein are appropriate to give effect to
the transactions or circumstances referred to therein.
Arthur Andersen LLP, which has audited certain of
such financial statements and schedules as set forth in
their reports included in the Offering Materials, is an
independent public accounting firm as required by the Act.
The statistical and market-related data (including,
without limitation, the estimated cost savings
information) included in the Offering Materials are based
on or derived from sources which F4L and the Registrants
believe to be reliable and accurate.
(xv) Except as described in the Offering Materials,
there is not pending or, to the knowledge of F4L or any of
the Registrants, threatened, any action, suit, proceeding,
inquiry or investigation to which F4L or any Registrant,
25
or to which the property of F4L or any Registrant is
subject, before or brought by any court or governmental
agency or body, which would if adversely determined have a
Material Adverse Effect.
(xvi) F4L and each of the Registrants has (and upon
consummation of the Equity Merger and the Mergers, New
Holdings, the Surviving Company and each of its
subsidiaries will have) (a) good and marketable title to
all the real properties and other material assets
(personal, tangible, intangible or mixed) owned by it, or
purported to be owned by it, and, as of the Closing Date,
such title will be free and clear of all liens, except for
liens which would be permitted under the Indentures and
(b) peaceful and undisturbed possession under all leases
to which it is a party as lessee or sublessee, except for
such defects in title or lack of possession that, in the
aggregate, could not reasonably be expected to have a
Material Adverse Effect. F4L and each of the Registrants
operates (and upon consummation of the Equity Merger and
the Mergers, New Holdings, the Surviving Company and each
of its subsidiaries will operate) all material real and
personal property leased by it under valid and enforceable
leases and has, and upon consummation of the Equity Merger
and the Mergers, shall have, performed in all material
respects the obligations required to be performed by it
with respect to each such lease except for such leases and
obligations which, in the aggregate, could not reasonably
be expected to have a Material Adverse Effect. As to
leases with respect to which F4L or any Registrant is the
lessor, the lessees and other parties under such leases
are in compliance with all terms and conditions thereunder
and such leases are in full force and effect except for
any failures to comply or remain in full force and effect
which could not reasonably be expected to have a Material
Adverse Effect. All tangible assets and properties of
each of F4L and the Registrants are in good working order
(subject to ordinary wear and tear) and are adequate for
the uses to which they are being put or would be put in
the ordinary course of business except for such assets and
properties as are not material in the aggregate to the
business, condition (financial or otherwise) or results of
operations of F4L and the Registrants taken as a whole.
(xvii) F4L and the Registrants own, or are licensed
under, and have the rights to use, all trademarks and
trade names (collectively, "Intellectual Property") used
in, or necessary for the conduct of, their businesses as
currently conducted, and the consummation of the
transactions contemplated hereby and by the Offering
Materials will not alter or impair any such rights. To
the best knowledge of F4L and the Registrants, no claims
have been asserted by any person to the use of any such
26
Intellectual Property or challenging or questioning the
validity or effectiveness of any license or agreement
related thereto. To the best knowledge of F4L and the
Registrants, there is no valid basis for any such claim
and the use of such Intellectual Property by F4L and the
Registrants does not infringe on the rights of any person.
F4L and each Registrant has obtained all licenses,
permits, franchises and other governmental authorizations,
the lack of which would have a Material Adverse Effect.
(xviii) Subsequent to the respective dates as of which
information is given in the Offering Materials and except
as described therein or contemplated thereby, (x) neither
F4L or any of the Registrants has incurred any material
liabilities or obligations, direct or contingent, or
entered into any material transactions, not in the
ordinary course of business and (y) neither F4L or any of
the Registrants has purchased any of its respective
outstanding capital stock, nor declared, paid or otherwise
made any dividend or distribution of any kind on their
respective capital stock or otherwise.
(xix) All taxes, assessments, fees and other charges
(including, without limitation, withholding taxes,
penalties, and interest) due or claimed to be due from F4L
or any of the Registrants that are due and payable have
been paid, other than those being contested in good faith
or those currently payable without penalty or interest and
for which an adequate reserve or accrual has been
established in accordance with generally accepted
accounting principles, and except where the failure so to
pay is not reasonably likely to have, singly or in the
aggregate, a Material Adverse Effect. F4L and the
Registrants know of no actual or proposed additional tax
assessments for any fiscal period against F4L or any of
the Registrants that, singly or in the aggregate, is
reasonably likely to have a Material Adverse Effect.
(xx) None of F4L or the Registrants, or any agent
acting on behalf of any of them has taken or will take any
action that might cause this Agreement, the issuance or
sale of the New Notes or the issuance of the Guarantees to
violate Regulation G, T, U or X of the Board of Governors
of the Federal Reserve System as in effect on the Closing
Date.
(xxi) None of F4L, nor any of the Registrants is now,
nor after giving effect to the Equity Merger and the
Mergers and the other transactions contemplated by the
Offering Materials will New Holdings, the Surviving
Company or any Subsidiary Guarantor be, an "investment
company" or a company "controlled by" an "investment
27
company" within the meaning of the Investment Company Act
of 1940, as amended.
(xxii) Except as described in the Offering Materials,
there are no consensual encumbrances or restrictions on
the ability of any subsidiary of F4L (or after giving
effect to the Equity Merger, the Mergers and the other
transactions contemplated by the Offering Materials, New
Holdings) (x) to pay dividends or make any other
distributions on such subsidiary's capital stock or to pay
any indebtedness owed to F4L (or after giving effect to
the Equity Merger, the Mergers and the other transactions
contemplated by the Offering Materials, New Holdings) or
any other subsidiary of F4L (or after giving effect to the
Equity Merger, the Mergers and the other transactions
contemplated by the Offering Materials, New Holdings),
(y) to make any loans or advances to, or investments in,
F4L (or after giving effect to the Equity Merger, the
Mergers and the other transactions contemplated by the
Offering Materials, New Holdings) or any other subsidiary
of F4L (or after giving effect to the Equity Merger, the
Mergers and the other transactions contemplated by the
Offering Materials, New Holdings) or (z) to transfer any
of its property or assets to F4L (or after giving effect
to the Equity Merger, the Mergers and the other
transactions contemplated by the Offering Materials, New
Holdings or any other subsidiary of F4L (or after giving
effect to the Equity Merger and the Mergers and the other
transactions contemplated by the Offering Materials, New
Holdings).
(xxiii) Except as stated in the Offering Materials, none
of F4L or any of the Registrants know of any outstanding
claims for services, either in the nature of a finder's
fee, financial advisory fee, origination fee or similar
fee, with respect to the transactions contemplated hereby.
(xxiv) F4L and each of its subsidiaries is in
compliance with all provisions of Section 517.075 of
Florida Statutes 1987, as amended.
(xxv) Neither F4L nor any of its subsidiaries nor, to
the best of their knowledge, any of their respective
directors, officers or controlling persons has taken,
directly or indirectly, any action designed, or which
might reasonably be expected, to cause or result, under
the Act or otherwise, in, or which has constituted,
stabilization or manipulation of the price of any security
of F4L or RSI or any of their respective subsidiaries to
facilitate the Exchange Offers.
(b) F4L and each of the Registrants, jointly and
severally, represents and warrants to and agrees with you that,
28
as of the Closing Date, F4L and the Registrants have delivered
to the Dealer Managers a true and correct copy of each of the
Transaction Documents, together with all related agreements and
all schedules and exhibits thereto, and there have been no
material amendments, alterations, modifications or waivers of
any of the provisions of any of the Transaction Documents since
its date of execution, other than any such amendments,
alterations, modifications and waivers as to which the Dealer
Managers have been advised in writing and which would not be
required to be disclosed in the Offering Materials; each of the
Transaction Documents conforms in all material respects to the
description thereof in the Offering Materials; and there exists
as of the Closing Date (after giving effect to the transactions
contemplated by each of the Transaction Documents and the
Offering Materials) no event or condition which would
constitute a default or an event of default (in each case as
defined in each of the Transaction Documents) under any of the
Transaction Documents which would result in a Material Adverse
Effect or materially adversely affect the ability of F4L, the
Registrants or to the best knowledge of F4L and the
Registrants, RSI or RGC to consummate the transactions
contemplated by the Transaction Documents and the Offering
Materials.
(c) RSI represents and warrants to and agrees with
you that, as of the Commencement Date and the Closing Date:
(i) RSI has all the necessary corporate power and
authority to execute and deliver this Agreement and to
perform its obligations hereunder and RSI and its
subsidiaries have all necessary corporate power and
authority to consummate the transactions contemplated
hereby and by the Offering Materials.
(ii) RSI and each of its subsidiaries has been duly
incorporated and is validly existing in good standing as a
corporation under the laws of its jurisdiction of
incorporation, with all requisite corporate power and
authority to own or lease its properties and conduct its
businesses as now conducted as described in the Offering
Materials, and is duly qualified to do business as a
foreign corporation in good standing in all other
jurisdictions where the ownership or leasing of its
properties or the conduct of its businesses requires such
qualification, except where the failure to be so qualified
would not have (x) a material adverse effect on the
business, condition (financial or other) or results of
operations of RSI and its subsidiaries (or, after giving
effect to the Mergers, the Surviving Company and its
subsidiaries) taken as a whole or (y) an adverse effect on
the ability of RSI or any of its subsidiaries to perform
any of its material obligations under any of the
Transaction Documents to which it is a party either before
29
or after giving effect to the Mergers and the other
transactions contemplated by the Offering Materials (a
"Ralphs Material Adverse Effect"); RSI has the authorized,
issued and outstanding capitalization set forth in the
Offering Materials; [the only direct or indirect
subsidiaries of RSI are RGC and Crawford Stores, Inc.];
except as aforesaid, neither RSI nor any of its
subsidiaries owns, directly or indirectly, any of the
capital stock or other equity securities of any other
person; the outstanding shares of capital stock of each of
RSI and each of its subsidiaries have been duly authorized
and validly issued, are fully paid and nonassessable and
were not issued in violation of any preemptive or similar
rights granted by RSI or any of its subsidiaries; and
except as described in the Offering Materials, all of the
outstanding shares of capital stock of [each of RGC and
Crawford Stores, Inc.] are owned beneficially by RSI free
and clear of all liens, encumbrances, security interests,
mortgages, pledges, charges or claims. No holders of
securities of RSI or any of its subsidiaries are entitled
to have such securities registered under the Registration
Statements.
(iii) Except as described in the Offering Materials,
no consent, approval, authorization or order of any court
or governmental agency or body is required for the
performance of this Agreement or any of the other
Transaction Documents by RSI or any of its subsidiaries
(to the extent each such person is a party thereto) or the
consummation by RSI or any of its subsidiaries of the
transactions contemplated thereby or by the Offering
Materials, except such as have been obtained and such as
may be required under securities or "Blue Sky" laws in
connection with the Exchange Offers, the Mergers or any of
such transactions. Neither RSI nor any of its
subsidiaries is (x) in violation of its certificate of
incorporation or bylaws, (y) in violation of any statute,
judgment, decree, order, rule or regulation applicable to
RSI or any of its subsidiaries which violation would have
a Ralphs Material Adverse Effect, or (iii) in default in
the performance or observance of any obligation,
agreement, covenant or condition contained in any
contract, indenture, mortgage, deed of trust, loan
agreement, note, lease, license, franchise agreement,
permit, certificate or other agreement or instrument to
which RSI or any of its subsidiaries is subject, which
default would have a Ralphs Material Adverse Effect.
The execution, delivery and performance by RSI and
its subsidiaries of this Agreement and each of the other
Transaction Documents (to the extent each such person is a
party thereto), and the consummation by RSI and its
subsidiaries of the transactions contemplated hereby,
30
thereby and by the Offering Materials will not (after
giving effect to all amendments or waivers obtained on or
prior to the Closing Date which are described in the
Offering Materials) conflict with or constitute or result
in a breach or violation by RSI or any of its subsidiaries
of any of (x) the terms or provisions of, or constitute a
default by RSI or any of its subsidiaries under, any
indenture, mortgage, deed of trust, loan agreement, note,
lease, license, franchise agreement, or other agreement or
instrument to which any such person is a party or to which
any of them or their respective properties is subject,
which conflict, breach, violation or default would have a
Ralphs Material Adverse Effect, (y) the certificate of
incorporation or bylaws of any such person, or (z) any
statute, judgment, decree, order, rule or regulation
(excluding state securities and "Blue Sky" laws) of any
court or governmental agency or other body applicable to
any such person or any of their respective properties,
which conflict, breach, violation or default would have a
Ralphs Material Adverse Effect.
(iv) Each of the Consent Supplemental Indentures
relating to the Old RGC Notes has been duly and validly
authorized by RGC. Each of the Consent Supplemental
Indentures relating to the Old RGC Notes, when executed
and delivered by RGC (assuming the due authorization,
execution and delivery thereof by the applicable trustee
under the applicable Old Indenture and assuming that
written consents from the holders of a majority of each
issue of Old RGC Notes outstanding authorizing execution
of such Consent Supplemental Indentures are valid and
binding consents of such holders), will have been duly
executed and delivered and will constitute valid and
legally binding obligations of RGC (and, upon consummation
of the Mergers, the Surviving Company) enforceable against
RGC (and, upon consummation of the Mergers, the Surviving
Company) in accordance with their terms, except that the
enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors'
rights generally, (ii) general principles of equity and
the discretion of the court before which any proceeding
therefor may be brought (regardless of whether such
enforcement is considered in a proceeding in equity or at
law), (iii) the unenforceability, under certain
circumstances, of provisions imposing penalties,
forfeitures, late payment charges or an increase in
interest rate upon delinquency in payment or the
occurrence of a default, and (iv) the unenforceability of
any provision requiring the payment of attorneys' fees,
except to the extent that a court determines such fees to
be reasonable.
31
(v) RSI and its subsidiaries have all requisite
corporate power and authority to execute, deliver and
perform their respective obligations under each of the
Transaction Documents (to the extent each is a party
thereto). As of the Closing Date, each of the Transaction
Documents will have been duly and validly authorized by
RSI and its subsidiaries (to the extent each is a party
thereto); and, when executed and delivered by RSI and its
subsidiaries (to the extent each is a party thereto), each
such Transaction Document will constitute a valid and
legally binding obligation of RSI and its subsidiaries, to
the extent each is a party thereto, enforceable against
each such person in accordance with its terms except that
the enforcement thereof may be subject to (w) bankruptcy,
insolvency, reorganization, moratorium, fraudulent
conveyance or other similar laws now or hereafter in
effect relating to creditors' rights generally, (x)
general principles of equity and the discretion of the
court before which any proceeding therefor may be brought
(regardless of whether such enforcement is considered in a
proceeding in equity or at law), (y) the unenforceability,
under certain circumstances, of provisions imposing
penalties, forfeitures, late payment charges or an
increase in interest rate upon delinquency in payment or
the occurrence of a default, and (z) the unenforceability
of any provision requiring the payment of attorneys' fees,
except to the extent that a court determines such fees to
be reasonable.
(vi) The Mergers have been duly authorized by RSI and
RGC and have been duly approved by their respective
stockholders. All representations and warranties of RSI
set forth in the Merger Agreement were true and correct in
all materials respects at the time as of which such
representations and warranties were made and will be true
and correct at and as of the Commencement Date and the
Closing Date as if made at and as of such date (other than
to the extent any such representation or warranty is
expressly made as to only a certain date).
(vii) Except as disclosed in the Offering Materials,
and except as would not individually or in the aggregate
have a Ralphs Material Adverse Effect (w) RSI and each of
its subsidiaries is in compliance with all applicable
Environmental Laws, (x) RSI and each of its subsidiaries
has all permits, authorizations and approvals required
under any applicable Environmental Laws and is in
compliance with their requirements, (y) there are no
pending, or to the best knowledge of RSI threatened,
Environmental Claims against RSI or any of its
subsidiaries and (z) RSI and each of its subsidiaries does
not have knowledge of any circumstances with respect to
any of their respective properties or operations that
32
could reasonably be anticipated to form the basis of an
Environmental Claim against RSI or any of its subsidiaries
or any of their respective properties or operations and
the business operations relating thereto.
(viii) The audited consolidated financial statements
and schedules of RSI (as successor to RGC) and RGC
included in the Offering Materials present fairly the
consolidated financial position, results of operations and
cash flows of RSI (as successor to RGC) and RGC,
respectively, at the dates and for the periods to which
they relate, and have been prepared in accordance with
generally accepted accounting principles applied on a
consistent basis, except as otherwise stated therein, and
the unaudited consolidated financial statements of RSI (as
successor to RGC) and the related notes included in the
Offering Materials, if any, present fairly the
consolidated financial position, results of operations and
cash flows of RSI (as successor to RGC) at the dates and
for the periods to which they relate, subject to year-end
audit adjustments, and have been prepared in accordance
with generally accepted accounting principles applied on a
consistent basis, except as otherwise stated therein. The
pro forma financial statements and other pro forma
financial information (including the notes thereto)
included in the Offering Materials have been prepared in
accordance with applicable requirements of Regulation S-X
promulgated under the Exchange Act and have been properly
computed on the bases described therein. The assumptions
used in the preparation of the pro forma financial
statements and other pro forma financial information
included in the Offering Materials are reasonable and the
adjustments used therein are appropriate to give effect to
the transactions or circumstances referred to therein.
KPMG Peat Marwick, which has examined certain of such
financial statements and schedules as set forth in their
reports included in the Offering Materials, are
independent public accounting firms as required by the
Act. The statistical and market-related data (including,
without limitation, the estimated cost savings
information) included in the Offering Materials are based
on or derived from sources which RSI believes to be
reliable and accurate.
(ix) Except as described in the Offering Materials,
there is not pending or, to the knowledge of RSI,
threatened, any action, suit, proceeding, inquiry or
investigation to which RSI or any of its subsidiaries, or
to which the property of RSI or any of its subsidiaries is
subject, before or brought by any court or governmental
agency or body, which would if adversely determined have a
Ralphs Material Adverse Effect.
33
(x) RSI and each of its subsidiaries (a) has good
and marketable title to all the real properties and other
material assets (personal, tangible, intangible or mixed)
owned by it, or purported to be owned by it, and, as of
the Closing Date such title will be free and clear of all
liens, except for liens which would be permitted under the
Indentures and (b) enjoys peaceful and undisturbed
possession under all leases to which it is a party as
lessee or sublessee, except for defects in title or lack
of possession that, in the aggregate, could not reasonably
be expected to have a Ralphs Material Adverse Effect. RSI
and each of its subsidiaries operates all material real
and personal property leased by it under valid and
enforceable leases and has performed in all material
respects the obligations required to be performed by it
with respect to each such lease except for such leases and
obligations which, in the aggregate, could not reasonably
be expected to have a Ralphs Material Adverse Effect. As
to leases with respect to which RSI or any of its
subsidiaries is the lessor, the lessees and other parties
under such leases are in compliance with all terms and
conditions thereunder and such leases are in full force
and effect except for any failures to comply or remain in
full force and effect which could not reasonably be
expected to have a Ralphs Material Adverse Effect. All
tangible assets and properties of RSI and its subsidiaries
are in good working order (subject to ordinary wear and
tear) and are adequate for the uses to which they are
being put or would be put in the ordinary course of
business except for such assets and properties as are not
material in the aggregate to the business, condition
(financial or otherwise) or results of operations of RSI
and its subsidiaries taken as a whole.
(xi) RSI and its subsidiaries own, or are licensed
under, and have the rights to use, all trademarks and
trade names (collectively, "Intellectual Property") used
in, or necessary for the conduct of, their businesses as
currently conducted, and the consummation of the
transactions contemplated hereby and by the Offering
Materials will not alter or impair any such rights. To
the best of RSI's knowledge, no claims have been asserted
by any person to the use of any such Intellectual Property
or challenging or questioning the validity or
effectiveness of any license or agreement related thereto.
To the best of RSI's knowledge, there is no valid basis
for any such claim and the use of such Intellectual
Property by RSI and its subsidiaries does not infringe on
the rights of any person. RSI and each of its
subsidiaries has obtained all licenses, permits,
franchises and other governmental authorizations, the lack
of which would have a Ralphs Material Adverse Effect.
34
(xii) Subsequent to the respective dates as of which
information is given in the Offering Materials and except
as described therein or contemplated thereby, (x) none of
RSI or any of its subsidiaries has incurred any material
liabilities or obligations, direct or contingent, or
entered into any material transactions, not in the
ordinary course of business and (y) none of RSI or any of
its subsidiaries has purchased any of its respective
outstanding capital stock, nor declared, paid or otherwise
made any dividend or distribution of any kind on their
respective capital stock or otherwise.
(xiii) All taxes, assessments, fees and other charges
(including, without limitation, withholding taxes,
penalties, and interest) due or claimed to be due from RSI
or any of its subsidiaries that are due and payable have
been paid, other than those being contested in good faith
or those currently payable without penalty or interest and
for which an adequate reserve or accrual has been
established in accordance with generally accepted
accounting principles, and except where the failure so to
pay is not reasonably likely to have, singly or in the
aggregate, a Ralphs Material Adverse Effect. RSI knows of
no actual or proposed additional tax assessments for any
fiscal period against RSI or any of its subsidiaries that,
singly or in the aggregate, is reasonably likely to have a
Ralphs Material Adverse Effect.
(xiv) Neither RSI nor any of its subsidiaries is an
"investment company" or a company "controlled by" an
"investment company" within the meaning of the Investment
Company Act of 1940, as amended.
(xv) Except as described in the Offering Materials,
there are no consensual encumbrances or restrictions on
the ability of any subsidiary of RSI (x) to pay dividends
or make any other distributions on such subsidiary's
capital stock or to pay any indebtedness owed to RSI or
any other subsidiary of RSI, (y) to make any loans or
advances to, or investments in, RSI or any other
subsidiary of RSI or (z) to transfer any of its property
or assets to RSI or any other subsidiary of RSI.
(xvi) Except as stated in the Offering Materials, RSI
does not know of any outstanding claims for services,
either in the nature of a finder's fee, financial advisory
fee, origination fee or similar fee, with respect to the
transactions contemplated hereby.
(xvii) RSI and each of its subsidiaries is in
compliance with all provisions of Section 517.075 of
Florida Statutes 1987, as amended.
35
(xviii) Neither RSI nor any of its subsidiaries nor, to
the best of their knowledge, any of their respective
directors, officers or controlling persons has taken,
directly or indirectly, any action designed, or which
might reasonably be expected, to cause or result, under
the Act or otherwise, in, or which has constituted,
stabilization or manipulation of the price of any security
of RSI or F4L or any of their respective subsidiaries to
facilitate the Exchange Offers.
The representations and warranties set forth in this
Section 5 shall remain operative and in full force and effect
regardless of (i) any investigation made by or on behalf of any
Indemnified Party referred to in Section 7, (ii) any
termination of this Agreement or (iii) any withdrawal by you
pursuant to Section 8 or otherwise.
6. Conditions of Dealer Managers' Obligations.
Your obligations to act and to continue to act (as the case may
be) as Dealer Managers shall be subject, in your sole
discretion, to the accuracy of the representations and
warranties contained herein as of the Commencement Date and as
of the Closing Date as if made on and as of such date (except
as expressly provided therein), to the accuracy of the
statements of the officers of F4L made pursuant to the
provisions hereof, to the performance by F4L, the Registrants
and RSI of their covenants and agreements hereunder and to the
following additional conditions unless waived in writing by the
Dealer Managers:
(a) If any Registration Statement originally filed
with respect to the New Notes or the Amended Notes or any
amendment thereto filed prior to the Closing Date has not
been declared effective as of the time of execution
hereof, such Registration Statement or such amendment
shall have been declared effective not later than 12:00
noon, New York City time, on the date on which the
amendment to the Registration Statement originally filed
with respect to such New Notes or the Amended Notes, as
the case may be, or to such Registration Statement, as the
case may be, containing information regarding the initial
public offering price of such New Notes has been filed
with the Commission, or such later time and date as shall
have been consented to by the Dealer Managers; if
required, each Prospectus and any amendment or supplement
thereto shall have been filed in accordance with Rule
424(b) under the Act; no stop order suspending the
effectiveness of any Registration Statement or any
amendment thereto or the qualification of any Indenture or
any Old Indenture under the Trust Indenture Act shall have
been issued and no proceedings for that purpose shall have
been instituted or threatened or, to the knowledge of the
Registrants or the Dealer Managers, shall be contemplated
36
by the Commission; and the Dealer Managers shall have
received a certificate dated the Closing Date and signed
by the Chairman, Vice Chairman, President, a Senior Vice
President or a Vice President of Holdings (who may rely
upon the best of his information and belief), to that
effect.
(b) There shall not have been any legal action or
other administrative proceeding instituted or threatened
against any of F4L, RSI or any of their respective
subsidiaries or against you relating to Exchange Offers or
the Dealer Managers' activities in connection therewith,
the Mergers or any of the other transactions contemplated
by the Transaction Documents or the Offering Materials.
(c) The proceedings taken at or prior to the Closing
Date in connection with the Exchange Offers and the other
transactions contemplated by the Transaction Documents and
the Offering Materials shall be in form and substance
reasonably satisfactory to you and your counsel, and such
counsel shall have been furnished with all such documents,
certificates and opinions as they may reasonably request
in order to evidence the accuracy and completeness in all
material respects of any of the representations or
warranties of F4L, the Registrants or RSI, the performance
in all material respects of any covenants of the Issuers
theretofore to be performed, or the compliance with any of
the conditions herein contained.
(d) On the Commencement Date, you shall have
received, dated as of such date, (i) the opinion of Latham
& Watkins, special counsel for F4L and the Registrants,
substantially in the form of Exhibit A hereto, (ii) the
opinion of Irwin, Clutter & Severson, special Kansas
counsel to F4L and the Registrants, substantially in the
form of Exhibit B hereto and (iii) the opinion of Wilkie,
Farr & Gallagher, special counsel to RSI and RGC,
substantially in the form of Exhibit C hereto.
(e) On the Closing Date, you shall have received,
dated as of such date, (i) the opinion of Latham &
Watkins, special counsel for F4L and the Registrants,
substantially in the form of Exhibit D hereto, (ii) the
opinion of Irwin, Clutter & Severson, special Kansas
counsel to F4L and the Registrants, substantially in the
form of Exhibit E hereto and (iii) the opinion of Wilkie,
Farr & Gallagher, special counsel to RSI and RGC,
substantially in the form of Exhibit F hereto.
(f) On the Closing Date, you shall have received an
opinion, dated as of such date, of Cahill Gordon &
Reindel, counsel for the Dealer Managers, with respect to
the sufficiency of certain corporate proceedings and other
37
legal matters relating to this Agreement, and such other
related matters as the Dealer Managers may require. In
rendering such opinion, Cahill Gordon & Reindel shall have
received and may rely upon such certificates and other
documents and information as they may reasonably request
to pass upon such matters. In addition, in rendering
their opinion, Cahill Gordon & Reindel may state that
their opinion is limited to matters of New York, Delaware
corporate and federal law.
(g) On the Commencement Date and the Closing Date,
you shall have received from Arthur Andersen LLP,
independent public accountants for F4L and the
Registrants, letters dated, respectively, the Commencement
Date and the Closing Date, in form and substance
reasonably satisfactory to the Dealer Managers and Cahill
Gordon & Reindel, counsel for the Dealer Managers.
(h) On the Commencement Date and the Closing Date,
you shall have received from KPMG Peat Marwick,
independent public accountants for RSI and RGC, letters
dated, respectively, the Commencement Date and the Closing
Date, in form and substance reasonably satisfactory to the
Dealer Managers and Cahill Gordon & Reindel, counsel for
the Dealer Managers.
(i) On the Closing Date, the Dealer Managers shall
have received copies of all certificates, documents and
opinions delivered under the Transaction Documents in
connection with the Mergers and the Financing (as defined
in the Offering Materials), together with letters
addressed to the Dealer Managers, in form and substance
satisfactory to the Dealer Managers, stating that the
Dealer Managers may rely on such certificates and opinions
as if they had been addressed to the Dealer Managers.
(j) Subsequent to the respective dates of the most
recent financial statements of Holdings, Food 4 Less and
RSI contained in the Offering Materials, there shall have
been no material adverse change in the business, condition
(financial or other) or results of operations of either
(i) F4L and its subsidiaries taken as a whole or (ii) RSI
and its subsidiaries taken as a whole (each, a "Material
Adverse Change") or any development involving a
prospective Material Adverse Change, except as set forth
in, or contemplated by, the Offering Materials.
(k) None of the Exchange Offers, the issuance of New
Notes, the Mergers or any of the other transactions
contemplated by any of the Transaction Documents or the
Offering Materials shall be enjoined (temporarily or
permanently) and no restraining order or other injunctive
order shall have been issued or any action, suit or
38
proceeding shall have been commenced with respect to the
Exchange Offers, this Agreement, the Mergers or any of the
other transactions contemplated by the Offering Materials,
before any court or governmental authority.
(l) On the Commencement Date and the Closing Date,
the Dealer Managers shall have received a certificate,
dated such date, of the Vice Chairman, President or any
Vice President and the Chief or Principal Financial
Officer of F4L to the effect that:
(i) The representations and warranties of F4L
and the Registrants in this Agreement are true and
correct in all material respects as if made on and as
of such date, and F4L and the Registrants have
performed all covenants and agreements and satisfied
all conditions on their part to be performed or
satisfied at or prior to such date (and, in the case
of the certificate to be delivered on te Closing
Date, after giving effect to the Exchange Offers, and
the other transactions contemplated thereby, by the
Transaction Documents and by the Offering Materials);
(ii) No stop order suspending the effectiveness
of any Registration Statement or any amendment
thereto or the qualification of any Indenture or any
Old Indenture under the Trust Indenture Act has been
issued, and no proceedings for those purposes have
been instituted or threatened or, to the best of each
Registrant's knowledge, as the case may be, are
contemplated by the Commission;
(iii) Subsequent to the date as of which
information is given in the Offering Materials, there
has not been any material adverse change, or any
developments involving a prospective material adverse
change, in the business, condition (financial or
other) or results of operations of F4L and its
subsidiaries (or after giving effect to the Equity
Merger and the Mergers, New Holdings, the Surviving
Company and their subsidiaries) taken as a whole; and
(iv) Neither the Exchange Offers, the issuance
of the New Notes by Food 4 Less hereunder, the
issuance of the Guarantees by the Subsidiary
Guarantors nor any of the other transactions
contemplated hereby, by the Transaction Documents or
by the Offering Materials has been enjoined
(temporarily or permanently).
(m) On the Commencement Date and the Closing Date,
the Dealer Managers shall have received a certificate,
dated such date, of the Vice Chairman, President or any
39
Vice President and the Chief or Principal Financial
Officer of RSI to the effect that:
(i) The representations and warranties of RSI
in this Agreement are true and correct in all
material respects as if made on and as of such date,
and RSI and its subsidiaries have performed all
covenants and agreements and satisfied all conditions
on their part to be performed or satisfied at or
prior to such date (and, in the case of the
certificate to be delivered on the Closing Date,
after giving effect to the Exchange Offers, and the
other transactions contemplated hereby, by the
Transaction Documents and by the Offering Materials);
and
(ii) Subsequent to the date as of which
information is given in the Offering Materials, there
has not been any material adverse change, or any
developments involving a prospective material adverse
change, in the business, condition (financial or
other) or results of operations of RSI and its
subsidiaries taken as a whole.
(n) On or before the Closing Date, the Registrants
and RGC and the applicable trustees under the Old
Indentures shall have executed and delivered the
appropriate Consent Supplemental Indentures, each of which
shall be reasonably satisfactory in form and substance to
the Dealer Managers and Cahill Gordon & Reindel, counsel
for the Dealer Managers, and each such Agreement shall be
in full force and effect.
(o) On or before the Closing Date, Holdings and the
trustee under the Holdings Indenture shall have executed
and delivered the Holdings Supplemental Indenture, which
shall be reasonably satisfactory in form and substance to
the Dealer Managers and Cahill Gordon & Reindel, counsel
to the Dealer Managers, and such Agreement shall be in
full force and effect.
(p) On the Closing Date, the Dealer Managers shall
have received a certificate, dated such date, of the Vice
Chairman, President or any Vice President and the Chief or
Principal Financial Officer of F4L to the effect that:
(i) There have been no material amendments,
alterations, modifications, or waivers of any
provisions of any of the Transaction Documents since
the date of the execution and delivery thereof by the
parties thereto; and
40
(ii) F4L and the Registrants, to the extent each
is a party thereto, have complied in all material
respects with all agreements and covenants in the
Transaction Documents and performed in all material
respects all conditions specified therein
contemplated by the Offering Materials to be complied
with or performed by them at or prior to the Closing.
(q) On the Closing Date, the Dealer Managers shall
have received a certificate, dated such date, of the Vice
Chairman, President or any Vice President and the Chief or
Principal Financial Officer of RSI to the effect that RSI
and its subsidiaries, to the extent each is a party
thereto, have complied in all material respects with all
agreements and covenants in the Transaction Documents and
performed in all material respects all conditions
specified therein contemplated by the Offering Materials
to be complied with or performed by them at or prior to
the Closing.
(r) On the Closing Date, the Dealer Managers shall
have received (i) a letter, dated the Closing Date, from
Houlihan, Lokey, Howard & Zukin, Inc. with respect to the
solvency of the Surviving Company and its subsidiaries in
form, scope and substance reasonably satisfactory to the
Dealer Managers and (ii) an environmental audit report
from [ ] in form, scope and substance
reasonably satisfactory to the Dealer Managers.
(s) On the Closing Date, F4L, the Registrants, RSI
and RGC shall have, to the extent each is a party thereto,
complied in all material respects with all agreements and
covenants in the Transaction Documents and performed all
conditions specified therein (other than agreements or
covenants which have been waived but only if such waivers
are not required to be set forth in the Offering
Materials) to be complied with or performed at or prior to
the Closing, and each of the Transaction Documents shall
be in full force and effect.
(t) The Equity Merger shall have been consummated on
the terms and conditions set forth in the Offering
Materials.
(u) On the Closing Date:
(1) the Certificates of Merger with respect to
the Mergers shall be any form and substance
satisfactory to the Dealer Managers and Cahill Gordon
& Reindel, counsel for the Dealer Managers, shall
have been pre-cleared for filing with the Secretary
of State of the State of Delaware and shall be ready
in all respects for filing immediately upon
41
consummation of the Exchange Offers and the other
transactions contemplated by the Offering Materials
to be consummated prior to the Mergers;
(2) the New Credit Facility (as defined in the
Offering Materials) with aggregate commitments
thereunder of not less than $1,075,000,000 shall be
in full force and effect, no event shall have
occurred and no event shall have failed to occur,
which would relieve the lenders under the New Credit
Facility (the "Lenders") of their obligation to
advance funds, or preclude them from advancing funds
to Food 4 Less thereunder, and concurrently with the
Closing the Lenders shall have advanced funds under
the New Credit Facility in an amount at least equal
to $750,000,000 under the term loan facilities and
such additional amounts under the revolving credit
facility as are necessary to fund the Mergers and
related transactions;
(3) The New Notes and Guarantees to be issued
to exchanging holders of Old Notes shall have been
executed by the applicable Issuers and delivered to
the applicable Trustee pursuant to the applicable
Indenture, and each Trustee shall have authenticated
such securities in accordance with the applicable
Indenture;
(4) New Holdings shall have received at least
$150,000,000 in cash from institutional investors as
consideration for the issuance and sale by New
Holdings of shares of capital stock of New Holdings
on the terms and conditions described in the Offering
Materials; New Holdings shall have purchased at least
48% of the outstanding common stock of RSI with the
proceeds of such issuance and $100,000,000 aggregate
principal amount of its 13% Senior Subordinated Pay
In Kind Debentures due 2006, all as described in the
Offering Materials. New Holdings shall have
contributed such common stock of RSI to the capital
of Food 4 Less; New Holdings and Food 4 Less shall
have the issued, authorized and outstanding
capitalization set forth in the Offering Materials;
(5) Simultaneously with the Closing, the
Issuers shall have consummated the issuance and sale
of $400,000,000 aggregate principal amount of New
Senior Notes pursuant to the Public Offering (as
defined in the Offering Materials) for gross proceeds
of not less than $400,000,000 on terms and conditions
satisfactory in form and substance to the Dealer
Managers, and Cahill Gordon & Reindel, counsel to the
Dealer Managers; and
42
(6) All conditions to the consummation of the
Exchange Offers set forth in the Offering Materials
shall have been satisfied without waiver and all
other transactions contemplated by the Offering
Materials to be consummated at or prior to the
consummation of the Mergers shall have been
consummated.
(v) Simultaneously with the Closing, (x) the closing
contemplated by the Merger Agreement, including without
limitation the Mergers, shall have been consummated in
accordance with the terms of the Merger Agreement and
(y) immediately following consummation of the Merger, the
Subsequent Merger shall have been consummated in
accordance with the terms described in the Offering
Materials.
On or before the Commencement Date and the Closing
Date, the Dealer Managers and counsel for the Dealer Managers
shall have received such further documents, opinions,
certificates and schedules or instruments relating to the
business, corporate, legal and financial affairs of F4L and the
Registrants and RSI and its subsidiaries as they shall have
heretofore reasonably requested.
All such opinions, certificates, letters, schedules,
documents or instruments delivered pursuant to this Agreement
will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Dealer
Managers and counsel for the Dealer Managers. F4L, the
Registrants and RSI shall furnish to the Dealer Managers such
conformed copies of such opinions, certificates, letters,
schedules, documents and instruments in such quantities as the
Dealer Managers shall reasonably request.
In the event that any of the foregoing conditions is
not met when required to be met, then you shall be entitled to
withdraw as Dealer Manager in connection with the Exchange
Offers without any liability or penalty to you or any other
"indemnified party" (as defined in Section 7) and without loss
of any right to the payment of all expenses payable hereunder.
7. Indemnification. F4L and the Registrants,
jointly and severally, agree to indemnify and hold harmless
each Dealer Manager and its respective affiliates, the
directors, officers, agents, representatives and employees of
such Dealer Manager or its affiliates and each other person, if
any, controlling such Dealer Manager and its affiliates (each
an "indemnified party") from and against any and all losses,
actions, claims, damages or liabilities, and will reimburse any
indemnified party for all costs and expenses (including counsel
fees) as they are incurred by such indemnified party in
connection with investigating, preparing to defend or defending
43
any such action or claim caused by or arising out of, or in
connection with, the Exchange Offers (whether or not
consummated), including, but not limited to, actions, claims,
liabilities or expenses arising out of or based upon any breach
of any agreement or representation of F4L, the Registrants or
RSI contained in this Agreement, the structuring and
development of the Exchange Offers, an untrue statement or
alleged untrue statement of a material fact in any of the
Offering Materials or an omission or an alleged omission to
state a material fact in any of the Offering Materials
necessary to make the statements therein not misleading, or the
transmittal of the Offering Materials to holders of Old Notes
or Holdings Notes, or which arise out of or are based upon any
failure by Food 4 Less or Holdings to accept Old Notes or
consents properly tendered pursuant to the Exchange Offers;
provided, however, that neither F4L nor any of the Registrants
will be liable to any indemnified party to the extent that any
claims, liabilities, losses, damages, costs or expenses are
finally judicially determined by a court of competent
jurisdiction to have resulted primarily from the gross
negligence or willful misconduct of such indemnified party.
Neither F4L nor any Registrant will, without the
prior written consent of the Dealer Managers, settle or
compromise or consent to the entry of any judgment in any
pending or threatened claim, action, suit or proceeding in
respect of which indemnification may be sought by an
indemnified party hereunder (whether or not any indemnified
party is a party to such claim, action, suit or proceeding),
unless such settlement, compromise or consent includes an
unconditional release of the indemnified parties from all
liability arising out of such claim, action, suit or
proceeding.
Promptly after receipt by an indemnified party under
this Section 7 of notice of the commencement of any action,
such indemnified party will, if a claim in respect thereof is
to be made against F4L and the Registrants under this
Section 7, notify F4L and the Registrants of the commencement
thereof; but the omission so to notify F4L and the Registrants
will not relieve F4L and the Registrants from any liability
which they may have to any indemnified party otherwise than
under this Section 7. In case any such action is brought
against any indemnified party, and it notifies F4L and the
Registrants of the commencement thereof, F4L and the
Registrants will be entitled to participate therein and, to the
extent that they may wish to assume the defense thereof, with
counsel satisfactory to such indemnified party; provided,
however, that if the defendants in any such action include both
the indemnified party and any indemnifying party and the
indemnified party shall have reasonably concluded that there
may be one or more legal defenses available to it and/or other
indemnified parties that are different from or additional to
44
those available to any such indemnifying party, then the
indemnifying parties shall not have the right to direct the
defense of such action on behalf of such indemnified party or
parties and such indemnified party or parties shall have the
right to select separate counsel to defend such action on
behalf of such indemnified party or parties. After notice from
the indemnifying parties to such indemnified party of its
election so to assume the defense thereof and approval by such
indemnified party of counsel appointed to defend such action,
the indemnifying parties will not be liable to such indemnified
party under this Section 7 for any legal or other expenses,
other than reasonable costs of investigation, subsequently
incurred by such indemnified party in connection with the
defense thereof, unless (i) the indemnified party shall have
employed separate counsel in accordance with the proviso to the
immediately preceding sentence (it being understood, however,
that in connection with such action the indemnifying parties
shall not be liable for the expenses of more than one separate
counsel (in addition to local counsel) in any one action or
separate but substantially similar actions in the same
jurisdiction arising out of the same general allegations or
circumstances, designated by the Dealer Managers, representing
the indemnified parties, who are parties to such action or
actions) or (ii) the indemnifying parties have authorized the
employment of counsel for the indemnified party at the expense
of the indemnifying parties. After such notice from the
indemnifying parties to such indemnified party, the
indemnifying parties will not be liable for the costs and
expenses of any settlement of such action effected by such
indemnified party without the consent of the indemnifying
parties, unless such indemnified party waived its rights under
this Section 7, in which case the indemnified party may effect
such a settlement without such consent.
In circumstances in which the indemnity agreement
provided for in the preceding paragraphs of this Section 7 is
unavailable or insufficient to hold harmless an indemnified
party in respect of any losses, claims, damages or liabilities
(or actions in respect thereof), each indemnifying party, in
order to provide for just and equitable contribution, shall
contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion
as is appropriate to reflect (i) the relative benefits received
by the indemnifying party or parties on the one hand and the
indemnified party on the other from the Exchange Offers or
(ii) if the allocation provided by the foregoing clause (i) is
not permitted by applicable law, not only such relative
benefits but also the relative fault of the indemnifying party
or parties on the one hand and the indemnified party on the
other in connection with such losses, claims, damages or
liabilities (or actions in respect thereof). The relative
benefits received by F4L and the Registrants on the one hand
45
and the indemnified parties on the other shall be deemed to be
in the same proportion as (i) the aggregate principal amount of
Old Notes and Holdings Notes solicited for exchange or consent
pursuant to the Exchange Offers bears to (ii) the fees paid or
proposed to be paid by F4L and the Registrants to such
indemnified party under this Agreement. The indemnity,
reimbursement and contribution obligations of F4L and the
Registrants under this Agreement shall be in addition to any
rights that a Dealer Manager or any other indemnified party may
have at common law or otherwise. F4L, the Registrants and the
Dealer Managers agree that it would not be equitable if the
amount of such contribution were determined by pro rata or per
capita allocation (even if F4L and the Registrants on the one
hand and the indemnified parties on the other hand were treated
as one entity for such purpose) or by any other method of
allocation that does not take into account the equitable
considerations referred to in the first sentence of this
paragraph. Notwithstanding any other provision of this
paragraph, the indemnified parties shall not be obligated to
make contributions hereunder that in the aggregate exceed the
total fees received by the Dealer Managers under this
Agreement, less the aggregate amount of any damages that the
indemnified parties have otherwise been required to pay for
which indemnification is provided for hereunder. For purposes
of this paragraph, each person, if any, who controls either of
the Dealer Managers within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act shall have the same rights to
contribution as the Dealer Managers.
8. Termination. (a) This Agreement may be
terminated (i) by the Dealer Managers at any time upon notice
to F4L and the Registrants if (A) F4L or any of the Registrants
shall mail or otherwise distribute or propose to mail or
otherwise distribute any supplement to any Offering Materials
to which the Dealer Managers shall reasonably object or which
shall be reasonably disapproved by its counsel, (B) at any time
prior to the Closing, the Exchange Offers are terminated or
withdrawn for any reason (other than failure of the Dealer
Managers to perform their obligations hereunder) or any
restraining order or other injunctive order shall have been
issued or any action, suit or proceeding shall have been
commenced with respect to the Exchange Offers, this Agreement,
the Mergers or any of the other transactions contemplated by
the Offering Materials, before any court or governmental
authority which makes it inadvisable for the Dealer Managers,
in their discretion, to continue to act as Dealer Managers
hereunder or (C) there is a good faith disagreement between the
Dealer Managers, F4L or any of the Registrants with respect to
a material term or condition of the Exchange Offers or the
Offering Materials, or (ii) by F4L and the Registrants upon
notice to the Dealer Managers, if there is a good faith
disagreement between the Dealer Managers and F4L and the
46
Registrants with respect to a material term or condition of the
Exchange Offers or the Offering Materials.
(b) Termination of this Agreement pursuant to this
Section 8 shall be without liability of any party to any other
party except as provided in Section 11 hereof.
9. Notices. Notice given pursuant to any of the
provisions of this Agreement shall be in writing and shall be
mailed or delivered (a) to F4L and the Registrants:
c/o Food 4 Less, Inc.
777 South Harbor Boulevard
La Habra, California 90631
Attention: Mark A. Resnik, Esq.
with a copy to:
Latham & Watkins
633 West Fifth Street, Suite 4000
Los Angeles, California 90071
Attention: Pamela Kelly, Esq.
or (b) to the Dealer Managers:
c/o BT Securities Corporation
One Bankers Trust Plaza
New York, New York 10005
Attention: Lori Finkel
with a copy to:
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
Attention: William M. Hartnett, Esq.
Any notice given hereunder may be made by telecopier or
telephone, but if so made shall be subsequently confirmed in
writing.
10. Tombstone. F4L and the Registrants acknowledge
that the Dealer Managers may at any time after the issuance of
any New Notes place an announcement in such newspapers and
periodicals as they may choose, at their own cost (but subject
to the reasonable approval of the Registrants), stating that
they acted as dealer managers to F4L and the Registrants in
connection with the Exchange Offers.
11. Survival. The provisions of Section 4 hereof,
the indemnity and contribution agreements contained in
Section 7 hereof and the respective representations and
warranties set forth in Section 5 hereof shall remain operative
47
and in full force and effect regardless of (i) any
investigation made by or on behalf of any Dealer Manager, or by
or on behalf of any affiliate of such Dealer Manager or any
person controlling such Dealer Manager or affiliate,
(ii) consummation of the Exchange Offers or (iii) any
termination of this Agreement or of any Dealer Manager's
engagement hereunder, and shall be binding upon and shall inure
to the benefit of, any successors, assigns, heirs and personal
representatives of F4L and the Registrants, the Dealer
Managers, RSI and the indemnified parties referred to in
Section 7 hereof.
12. Applicable Law. This Agreement shall be
governed by and construed in accordance with the internal laws
of the State of New York, without reference to its principles
of conflicts of laws.
13. Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed to be
an original, but all of which together shall constitute one and
the same instrument.
14. Headings. The section headings in this
Agreement have been inserted as a matter of convenience of
reference only and are not a part hereof.
15. Joint and Several Obligations. All of the
obligations of F4L and the Registrants hereunder shall be joint
and several obligations of F4L and each of the Registrants.
48
If the foregoing correctly sets forth our
understanding, please indicate your acceptance thereof in the
space provided below for that purpose, whereupon this letter
shall constitute a binding agreement among F4L, each
Registrant, RSI and the Dealer Managers.
Very truly yours,
FOOD 4 LESS, INC.
By:
Name: Mark A. Resnik
Title: Secretary
FOOD 4 LESS HOLDINGS, INC.
By:
Name: Mark A. Resnik
Title: Secretary
FOOD 4 LESS SUPERMARKETS, INC.
By:
Name: Mark A. Resnik
Title: Secretary
ALPHA BETA COMPANY,
as a Guarantor
By:
Name: Mark A. Resnik
Title: Secretary
BAY AREA WAREHOUSE STORES, INC.
By:
Name: Mark A. Resnik
Title: Secretary
49
BELL MARKETS, INC.,
as a Guarantor
By:
Name: Mark A. Resnik
Title: Secretary
CALA CO.,
as a Guarantor
By:
Name: Mark A. Resnik
Title: Secretary
CALA FOODS, INC.,
as a Guarantor
By:
Name: Mark A. Resnik
Title: Secretary
FALLEY'S, INC.,
as a Guarantor
By:
Name: Mark A. Resnik
Title: Secretary
FOOD 4 LESS OF CALIFORNIA, INC.,
as a Guarantor
By:
Name: Mark A. Resnik
Title: Secretary
FOOD 4 LESS MERCHANDISING, INC.,
as a Guarantor
By:
Name: Mark A. Resnik
Title: Secretary
50
FOOD 4 LESS OF SOUTHERN
CALIFORNIA, INC.,
as a Guarantor
By:
Name: Mark A. Resnik
Title: Secretary
FOOD 4 LESS GM, INC.
as a Guarantor
By:
Name: Mark A. Resnik
Title: Secretary
RALPHS SUPERMARKETS, INC.
By:
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
BT SECURITIES CORPORATION
By________________________________
Name: Lori Finkel
Title: Managing Director
CS FIRST BOSTON SECURITIES CORPORATION
By________________________________
Name:
Title:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By________________________________
Name:
Title: