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EXHIBIT 1.1.1
Amendment No. 1
to Dealer Manager Agreement
This AMENDMENT NO. 1 dated as of April __, 1995 (this
"Amendment") to the Dealer Manager Agreement, dated as of
January 25, 1995 (the "Dealer Manager Agreement"), among each
of Food 4 Less, Inc., Food 4 Less Holdings, Inc., Food 4 Less
Supermarkets, Inc., 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.,
Food 4 Less GM, Inc. and Ralphs Supermarkets, Inc., on the one
hand, and BT Securities Corporation ("BTSC"), CS First Boston
Corporation, and Donald, Lufkin & Jenrette Securities
Corporation (collectively, the "Dealer Managers") on the other
hand. Unless otherwise specifically defined herein, each term
used herein that is defined in the Dealer Manager Agreement
shall have the meaning assigned to such term in the Dealer
Manager Agreement.
SECTION 1. The recitals to the Dealer Manager
Agreement are hereby amended and restated in their entirety so
that it reads as follows:
"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").
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"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 April __, 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 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 April ___, 1995 (the "RGC
Prospectus"), (a) 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 collectively with New F4L
Notes, the "New Notes") and a cash payment and (b) to
purchase for cash any or all of the Old RGC Notes. 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 collectively 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, and United States Trust Company of
New York, as trustee (the "RGC Note Trustee" and
collectively with the Senior Note Trustee and the F4L
Senior Subordinated Note Trustee). The New F4L Notes and
the New RGC Notes will be unconditionally guaranteed (the
"Guarantees"), on a joint and several basis, by each of
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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, Holdings
proposes to offer (the "Holdings Offer") to the holders of
its 15 1/4% Senior Discount Notes due 2004 (the "Holdings
Notes") upon the terms and subject the conditions set
forth in the Prospectus and Solicitation Statement dated
April __, 1995 (the "Holdings Prospectus") to purchase for
cash any and all of the Holdings Notes. 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.
"Concurrently with the F4L Exchange Offers and the
Holdings Offer, (i) Food 4 Less is soliciting consents
(collectively, the "F4L Consent Solicitations") (a) 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 (b) from the holders of the Old RGC Notes
to amendments (the "Proposed RGC Amendments") to certain
of the provisions in the respective indentures governing
the Old RGC Notes (the "Old RGC Indentures"), all as
described in the RGC Prospectus and (ii) Holdings is
soliciting consents (the "Holdings Consent Solicitations"
and, together with the F4L Consent Solicitations, the
"Consent Solicitations") from the holders of the Holdings
Notes to amendments (the "Proposed Holdings Amendments"
and, collectively with the Proposed F4L Amendments and the
Proposed RGC Amendments, the "Proposed Amendments") to
certain of the provisions in the indenture governing the
Holdings Notes (the "Old Holdings Indenture" and,
collectively with the Old RGC Indentures and the Old F4L
Indentures, the "Old Indentures"), all as described in the
Holdings Prospectus. Upon receipt of the Requisite
Consents (as defined in the applicable prospectus) with
respect to an issue of Old Notes or the Holdings Notes,
the Issuers (in the case of the Old F4L Notes), RGC (in
the case of the Old RGC Notes) or Holdings (in the case of
the Holding Notes) will enter into an indenture
supplemental to the Old Indenture under which such Old
Notes or the Holdings Notes were issued (each, a "Consent
Supplemental Indenture") with the trustee under such Old
Indenture, which will give effect to the applicable
Proposed Amendments. The F4L Exchange Offer, the Holdings
Offer and the Consent Solicitations shall be referred to
collectively herein as the "Exchange Offers".
"Upon consummation of the Mergers, the Surviving
Company and the Subsidiary Guarantors will enter into an
indenture supplemental to each of the Indentures and the
Old F4L Indentures (the "Guarantor Supplemental
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Indentures" and, together with the Consent Supplemental
Indentures the "Supplemental Indentures") with the
trustees thereunder and Crawford Stores, Inc., an indirect
wholly-owned subsidiary of RSI, pursuant to which such
subsidiary (the "Additional Guarantor") will guarantee the
New Notes and the Old F4L Notes, pursuant to and in
accordance with the applicable Indenture or Old F4L
Indenture as the case may be. As used herein with respect
to periods subsequent to the consummation of the Merger,
the term "Subsidiary Guarantor" will include the
Additional Guarantor."
SECTION 2. Section 2(e)(i) of the Dealer Manager
Agreement is hereby amended and restated in its entirety so
that it reads 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
accreted value of Holdings Notes accepted for purchase in
the Exchange Offers and (z) 0.5% of (i) the aggregate
principal amount of Old Notes and (ii) the aggregate
accreted value of Holdings Notes, in each case, in respect
of which a consent is accepted pursuant to the Exchange
Offers (other than any such Old Notes or Holdings Notes
accepted for exchange or purchase in the Exchange
Offers)."
SECTION 3. Section 3(e) of the Dealer Manager
Agreement is hereby amended and restated in its entirety so
that it reads as follows:
"(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
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 and Holdings Notes which have
been tendered for exchange or purchase, the aggregate
principal amount of Old Notes and Holdings Notes tendered
for exchange or purchase, the aggregate principal amount
of Old Notes and Holdings Notes tendered for exchange or
purchase by each holder, 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
the aggregate principal amount of Old Notes and Holdings
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Notes so deposited, indicating the aggregate principal
amount of Old Notes and Holdings 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. 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 purchase or (y) accept consents in
respect of Old Notes, and Holdings will not (x) accept
Holdings Notes for purchase or (y) 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."
SECTION 4. Clause (ii) of Section 5(a) of the Dealer
Manager Agreement is hereby amended by amending and restating
the second sentence of such Clause so that it reads as follows:
"Each of Food 4 Less, the Subsidiary Guarantors and
Holdings has, and after giving effect to the Mergers and
the Equity Merger, the Surviving Company, New Holdings and
the Subsidiary Guarantors will have, taken all necessary
corporate action to authorize the Exchange Offers and upon
consummation of the Mergers the Registrants will have
taken all necessary corporate action to authorize the
exchange or purchase of Old Notes and Holdings Notes
pursuant to the Exchange Offers."
SECTION 5. Clause (x) of Section 5(a) of the Dealer
Manager Agreement is hereby amended and restated in its
entirety so that it reads as follows:
"(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 New Holdings, 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 Registrants is, nor, upon consummation of the
Mergers, will New Holdings, 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."
SECTION 6. Each of subparagraphs (2), (4) and (5) of
Section 6(u) of the Dealer Manager Agreement is hereby amended
and restated in its entirety so that it reads as follows:
"(2) The New Credit Facility (as defined in
the Offering Materials) with aggregate
commitments thereunder of not less than
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$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
sufficient to fund the Mergers and related
transactions and there shall be a sufficient
amount available to be borrowed under the term
loan facilities for a period of at least ninety
days following the Closing Date to fund the
Change of Control Offers (as defined in the
Offering Materials);
"(4) New Holdings shall have received at
least $140,000,000 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 (the "New
Equity Investment"); New Holdings shall have
purchased at least 48% of the outstanding common
stock of RSI with $100,000,000 of the proceeds of
such issuance, $131,500,000 aggregate principal
amount of its 13 5/8% Senior Subordinated Pay in
Kind Debentures due 2005 (the "Seller
Debentures") and $18,500,000 principal amount of
its 13 5/8% Senior Discount Debentures due 2005
(the "New Discount Debentures"), all as described
in the Offering Materials. New Holdings shall
have contributed such common stock of RSI
together with $12.1 million of the proceeds of
the New Equity Investment to the capital of Food
4 Less. New Holdings shall have received at
least $59,000,000 in cash consideration from
institutional investors for the issuance and sale
by New Holdings to such institutional investors
of $59,000,000 aggregate principal amount of New
Discount Debentures, all as described in the
Offering Materials. New Holdings shall have
issued (i) $15,000,000 principal amount of New
Discount Debentures to The Yucaipa Companies and
$5,000,000 principal amount of New Discount Debentures
to BTSC in satisfaction of certain fees payable by the
Company to The Yucaipa Companies and BTSC in connection
with the Mergers and the Financing and (ii) $2.5 million
principal amount of New Discount Debentures to Apollo
Advisors, L.P. in consideration of certain fees
payable by New Holdings to Apollo Advisors, L.P.
in connection with the Mergers, all as set forth
in the Offering Materials. New Holdings and Food
4 Less shall have the issued, authorized and
outstanding capitalization set forth in the
Offering Materials;
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"(5) Simultaneously with the Closing, the
Issuers shall have consummated the issuance and
sale of (i) $295,000,000 aggregate principal
amount of New Senior Notes and (ii) $200,000,000
aggregate principal amount of New RGC Notes, all
pursuant to the Public Offering (as defined in
the Offering Materials) for gross cash proceeds
of not less than $495,000,000 on terms and
conditions satisfactory in form and substance to
the Dealer Managers, and Cahill Gordon & Reindel,
counsel to the Managers; and"
SECTION 7. Section 7 of the Dealer Manager Agreement
is hereby amended by (i) adding in the twenty-fourth line of
such Section the phrase ",Holdings Notes" immediately after the
phrase "Old Notes" contained in such line of such Section and
(ii) amending and restating clause (i) of the third paragraph
of such Section so that it reads in its entirety as follows:
"(i) the aggregate principal amount of Old Notes and
Holdings Notes solicited for exchange, purchase or consent
pursuant to the Exchange Offers bears to"
SECTION 8. Exhibit D to the Dealer Manager Agreement
is hereby replaced in its entirety by Exhibit A hereto and all
references in the Dealer Manager Agreement to Exhibit D thereto
shall be deemed to be references to Exhibit A to this
Amendment.
SECTION 9. Each of F4L, the Registrants and RSI
hereby represents and warrants that each of the representations
and warranties made by such person in the Dealer Manager
Agreement as of the Commencement Date are true and correct as
of the date hereof (except as expressly provided therein).
SECTION 10. All terms, provisions, covenants,
representations, warranties, agreements and conditions
contained in the Dealer Manager Agreement shall remain in full
force and effect except as expressly contemplated herein and
shall not otherwise be deemed waived, modified or amended
hereby.
SECTION 11. This amendment shall be governed by, and
construed in accordance with, the internal laws of the state of
New York without reference to its principles of conflict of
laws.
SECTION 12. This Amendment 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.
If the foregoing correctly sets forth our
understanding, please indicate your acceptance thereof in the
space provided below for that purpose, whereupon this Amendment
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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
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
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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 OF
MERCHANDISING, INC.,
as a Guarantor
By:
Name: Mark A. Resnik
Title: Secretary
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: Jan Charles Gray
Title: Senior Vice President,
General Counsel and
Secretary
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This Amendment 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 CORPORATION
By:
Name:
Title:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By:
Name:
Title:
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Exhibit A to Amendment No. 1
to Dealer Manager Agreement
FORM OF OPINION OF LATHAM & WATKINS
1. Each of New Holdings, the Surviving Company (immediately after the
consummation of the Mergers) and the Subsidiary Guarantors other than Falley's
(collectively, the "Corporations") has been duly incorporated and is validly
existing and in good standing under the laws of its state of incorporation with
corporate power and authority to own or lease its properties and to conduct its
business as now conducted as described in each Prospectus.
2. Immediately following the consummation of the Mergers, each of the
Surviving Company, Cala Co. and Food 4 Less of Southern California, Inc. is duly
qualified to do business as a foreign corporation in California and is in good
standing in California.
3. Immediately following the consummation of the Mergers, the Surviving
Company or a subsidiary or subsidiaries of the Surviving Company own of record
in the aggregate 100% of the capital stock of each corporation that is a
Subsidiary Guarantor and all such capital stock has been duly authorized and
validly issued and is fully paid and nonassessable.
4. Upon consummation of the Mergers, (i) the Surviving Company will have
full corporate power and authority to execute, deliver and perform its
obligations under the Indentures, the New Notes, and the supplemental indentures
pursuant to which the Surviving Company will assume the obligations of Food 4
Less and RGC under the Consent Supplemental Indentures relating to the Old Notes
(the "Assumption Supplemental Indentures"), and will have full corporate power
and authority to issue the New Notes and (ii) each of the Subsidiary Guarantors
other than Falley's will have full corporate power and authority to issue the
Guarantees and perform its obligations under the Guarantees. New Holdings has
full corporate power and authority to perform its obligations under the
supplemental indenture pursuant to which New Holdings will assume the
obligations of Holdings under the Holdings Notes (the "Holdings Assumption
Indenture") and the Holdings Supplemental Indenture.
5. To the best of our knowledge, there is no action, suit, proceeding or
investigation pending or threatened against or affecting any of the Registrants
or any of their respective properties or assets in any court or before any
governmental authority or arbitration board or tribunal that seeks to restrain,
enjoin, prevent the consummation of or otherwise challenge the Exchange Offers
or the issuance, sale and delivery of the New Notes or the Guarantees or any of
the other transactions contemplated by the Registration Statements.
6. Each of the Indentures and the Assumption Supplemental Indentures has
been duly authorized, executed and delivered by the Surviving Company and the
Subsidiary Guarantors other than Falley's and
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(assuming due authorization, execution and delivery by the applicable Trustee)
is the legally valid and binding agreement of each of them, enforceable against
each of them in accordance with its terms.
7. The Holdings Supplemental Indenture and the Holdings Assumption
Indenture have been duly authorized, executed and delivered by New Holdings and
(assuming due authorization, execution and delivery by applicable trustee) are
the legally valid and binding agreements of New Holdings, enforceable against
New Holdings in accordance with their terms.
8. Each of the Consent Supplemental Indentures relating to the Old F4L
Notes has been duly authorized, executed and delivered by Food 4 Less and the
Subsidiary Guarantors other than Falley's and (assuming due authorization,
execution and delivery by the applicable trustee under the Old F4L Indentures)
is the legally valid and binding agreement of each of Food 4 Less and the
Subsidiary Guarantors other than Falley's, enforceable against each of them in
accordance with its terms.
9. Upon consummation of the Mergers, the New Notes will have been duly
authorized by the Surviving Company for issuance and, when executed and
authenticated in accordance with the terms of the applicable Indenture and
delivered to exchanging holders of Old Notes in accordance with the terms of the
Registration Statements, will be legally valid and binding obligations of the
Surviving Company, enforceable against the Surviving Company in accordance with
their terms.
10. The Guarantees have been duly authorized by the Subsidiary Guarantors
and, when executed in accordance with the terms of the applicable Indenture and
upon due execution, authentication and delivery of the New Notes, will be
legally valid and binding obligations of the Subsidiary Guarantors, enforceable
against the Subsidiary Guarantors in accordance with their terms.
11. Upon the consummation of the Mergers, the execution and delivery of the
Indentures, the New Notes, the Guarantees, the Assumption Supplemental Indenture
and the Holdings Assumption Indenture by New Holdings, the Surviving Company and
the Subsidiary Guarantors other than Falley's, to the extent each is a party
thereto, the issuance and sale of the New Notes in exchange for Old Notes, the
purchase of Old RGC Notes and Holdings Notes and the making of the Guarantees
pursuant to the Indentures will not result in the violation by New Holdings, the
Surviving Company or the Subsidiary Guarantors other than Falley's of its
certificate or articles of incorporation and bylaws or any federal, New York,
California, or Delaware General Corporation Law statute, rule or regulation
known to us to be applicable to New Holdings, the Surviving Company or any
Subsidiary Guarantor other than Falley's (other than state securities laws as to
which we express no opinion, or federal securities laws, as specifically
addressed elsewhere herein) or in the breach of or a default by New Holdings,
the Surviving Company or any Subsidiary Guarantor other than Falley's under any
of the material agreements or court orders specifically directed to New
Holdings, the Surviving Company or any Subsidiary Guarantor other than Falley's
(which material agreements have been identified to us by an officer of such
person as material to such person), which violation,
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breach or default would have a material adverse effect on New Holdings, the
Surviving Company and the Subsidiary Guarantors, taken as a whole.
12. The execution and delivery of the Consent Supplemental Indentures by
Holdings, Food 4 Less and the Subsidiary Guarantors other than Falley's (to the
extent each is a party thereto) will not result in the violation by Holdings,
Food 4 Less or any Subsidiary Guarantor other than Falley's of its certificate
or articles of incorporation and bylaws or any federal, New York, California or
Delaware General Corporation Law statute, rule or regulation known to us to be
applicable to Holdings, Food 4 Less and the Subsidiary Guarantors other than
Falley's (other than state securities laws as to which we express no opinion, or
federal securities laws, as specifically addressed elsewhere herein), or in the
breach of or a default by Holdings Food 4 Less and the Subsidiary Guarantors
other than Falleys's under any of the material agreements or court orders
specifically directed to Holdings, Food 4 Less and the Subsidiary Guarantors
other than Falley's (which material agreements have been identified to us by an
officer of such person as material to such person), which violation, breach or
default would have a material adverse effect on Holdings, Food 4 Less and the
Subsidiary Guarantors, taken as a whole.
13. To the best of our knowledge, no consent, approval, authorization or
order of, or filing with, any federal, New York, California, or Delaware court
or governmental agency or body is required for the issuance of the New Notes in
exchange for the Old Notes, the purchase of Old RGC Notes, the purchase of
Holdings Notes or the Consent Solicitations, except (i) such as have been
obtained or made under the Act or the Trust Indenture Act or otherwise, and
(ii)such as may be required under state securities laws in connection with the
issuance of such New Notes and Guarantees by the Surviving Company and the
Subsidiary Guarantors.
14. We call your attention to the fact that the New Indentures, the New
Notes, the Guarantees, the Assumption Supplemental Indentures, the Consent
Supplemental Indentures and the Holdings Assumption Indenture select the
internal laws of the State of New York as the governing law. It is our opinion
that a New York State court or a federal court sitting in New York will honor
the parties' choice of the internal laws of the State of New York as the law
applicable to such documents.
15. It is our opinion that the material federal income tax consequences to
holders whose Old Notes or Holdings Notes, as the case may be, are tendered and
exchanged in the Exchange Offers are accurately set forth under the heading
"Certain Federal Income Tax Considerations" in the applicable Prospectus.
16. Each of the Indentures, the New Notes, the Guarantees and the Consent
Supplemental Indentures conforms to the description thereof in the Registration
Statements in all material respects.
17. Each Indenture is, and each old F4L Indenture and the Holdings
Indenture has been, and is, duly qualified under the Trust Indenture Act.
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18. Each Registration Statement has become effective under the Act and, to
the best of our knowledge, no stop order suspending the effectiveness of any
Registration Statement has been issued under the Act and no proceedings therefor
have been initiated by the Commission and any required filing of any Prospectus
pursuant to Rule 424(b) under the Act has been made in accordance with Rules
424(b) and 430A under the Act.
19. Each Registration Statement and each Prospectus comply as to form in
all material respects with the applicable requirements for registration
statements on Form S-4 under the Act, and comply as to form in all material
respects with the applicable requirements of the Trust Indenture Act and the
Exchange Act; it being understood, however, that we express no opinion with
respect to the financial statements, schedules and other financial and
statistical data included in any Registration Statement, Prospectus or in the
exhibits to any Registration Statement or with respect to any Form T-1. In
passing upon the compliance as to form of each Registration Statement and each
Prospectus, we have assumed that the statements made therein are correct and
complete.
20. The consummation of the Exchange Offers on the terms set forth in the
Registration Statements complies with the applicable requirements of Sections 13
and 14 of the Exchange Act and the rules and regulations promulgated thereunder.
21. To the best of our knowledge, there are no contracts or documents of a
character required to be described in any Registration Statement or Prospectus
or to be filed as exhibits to any Registration Statement that are not described
and filed as required.
In addition, we have participated in conferences with officers and other
representatives of F4L, the Registrants and RSI, representatives of the
independent public accountants for F4L, the Registrants, and RSI, and your
representatives, at which the contents of the Registration Statements and each
Prospectus and related matters were discussed and, although we are not passing
upon, and do not assume any responsibility for, the accuracy, completeness or
fairness of the statements contained in the Registration Statements or any
Prospectus and have not made any independent check or verification thereof,
during the course of such participation (relying as to materiality to a large
extent upon the statements of officers and other representatives of F4L,
Registrants and RSI), no facts came to our attention that caused us to believe
that any Registration Statement, at the time it became effective, contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
or that any Prospectus, as of its date, contained an untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; it being understood that we express no belief with respect to
the financial statements, schedules and other financial and statistical data
included in any Registration Statement or Prospectus or with respect to any Form
T-1.