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EXHIBIT 8.1
January 23, 1998
Re: Agreement and Plan of Merger
dated as of November 6, 1997 by
and between Xxxx Xxxxx, Inc.,
Q-Acquisition Corp.
and Quality Food Centers, Inc.
Xxxx Xxxxx, Inc.
0000 X.X. 00xx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Ladies and Gentlemen:
You have requested our opinion with respect to certain United States
federal income tax consequences of the proposed transaction in which
Q-Acquisition, Inc. ("Sub"), which is a newly-formed wholly-owned subsidiary of
Xxxx Xxxxx, Inc. ("Parent"), will merge (the "Merger") with and into Quality
Food Centers, Inc. ("Company"). All capitalized terms used but not defined
herein have the meanings ascribed to them in the Agreement and Plan of Merger,
dated as of November 6, 1997, as amended on January 20, 1998, by and between
Parent, Sub and Company (the "Merger Agreement"). This opinion is being
delivered as an exhibit to Parent's Registration Statement on Form S-4 relating
to the proposed Merger and to the Parent Common Stock to be issued to Company
shareholders in the Merger pursuant to the Merger Agreement (the "Registration
Statement").
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Xxxx Xxxxx, Inc. -2- January 23, 1998
In acting as counsel to Parent in connection with the Merger, we have,
in preparing our opinion, as hereinafter set forth, participated in the
preparation of the Merger Agreement and the preparation and filing with the
Securities and Exchange Commission of the Joint Proxy Statement/Prospectus
contained in Amendment No. 1 to the Registration Statement.
You have requested that we render the opinions set forth below. In
rendering such opinions, we have assumed with your consent that the Merger will
be effected in accordance with the Merger Agreement and that the representations
made by Parent, Company and Xxxxxx X. Xxxxx in letters provided to us and to
Sidley & Austin, counsel to Company are true, correct and complete as of the
date hereof and will be true, correct and complete as of the Effective Time (as
if made as of the Effective Time). We have also assumed that the representations
and warranties contained in the Merger Agreement, and statements as to factual
matters contained in the Registration Statement, are true, correct and complete
as of the date hereof and will be true, correct and complete as of the Effective
Time, and that the parties have complied with and, if applicable, will continue
to comply with, the covenants contained in the Merger Agreement. We have
examined the documents referred to above and the originals, or copies certified
or otherwise identified to our satisfaction, of such records, documents,
certificates or other instruments and made such other inquiries as in our
judgment are necessary or appropriate to enable us to render the opinions set
forth below. We have not, however, undertaken any independent investigation of
any factual matter set forth in any of the foregoing.
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Xxxx Xxxxx, Inc. -3- January 23, 1998
If the Merger is effected on a factual basis different from that
contemplated in the Merger Agreement and the Registration Statement, the
opinions expressed herein may be inapplicable. Our opinions are based on the
Internal Revenue Code of 1986, as amended (the "Code"), Treasury Regulations,
administrative interpretations, and judicial precedents as of the date hereof.
If there is any subsequent change in the applicable law or regulations, or if
there are subsequently any new applicable administrative or judicial
interpretations of the law or regulations, the opinions expressed herein may
become inapplicable.
Subject to the foregoing and to the qualifications and limitations
set forth herein, and assuming that the Merger will be consummated in accordance
with the Merger Agreement (and exhibits thereto) and the Delaware General
Corporation Law and as described in the Registration Statement, we are of the
opinion that for federal income tax purposes:
(1) The Merger will constitute a reorganization within the meaning
of section 368(a) of the Code, and Company, Sub and Parent will
each be a party to such reorganization within the meaning of
Section 368(b) of the Code;
(2) No gain or loss will be recognized by Parent, Sub or Company as
a result of the Merger;
(3) No gain or loss will be recognized by the shareholders of
Company upon the exchange of their Company Common Stock solely for
shares of Parent Common Stock pursuant to the Merger, except with
respect to cash, if any, received in lieu of fractional shares of
Parent Common Stock;
(4) The aggregate tax basis of the shares of Parent Common Stock
received solely in exchange for Company Common Stock pursuant to
the Merger (including fractional shares of Parent Common Stock for
which cash is received) will be the same as the aggregate tax basis
of the Company Common Stock exchanged therefor;
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Xxxx Xxxxx, Inc. -4- January 23, 1998
(5) The holding period for shares of Parent Common Stock received
solely in exchange for Company Common Stock pursuant to the Merger
will include the holding period of the Company Common Stock
exchanged therefor, provided such Company Common Stock was held as
a capital asset by the shareholder at the Merger Effective Time;
and
(6) A shareholder of the Company who receives cash in lieu of a
fractional share of Parent Common Stock will recognize gain or loss
equal to the difference, if any, between such shareholder's tax
basis in such fractional share (as described in clause (4) above)
and the amount of cash received.
We express our opinions herein only as to those matters
specifically set forth above and no opinion should be inferred as to the tax
consequences of the Merger under any state, local or foreign law, or with
respect to other areas of United States federal taxation. We are members of the
Bar of the State of New York, and we do not express any opinion herein
concerning any law other than the federal law of the United States. This opinion
letter is rendered to you in connection with the above described transaction.
This opinion letter may not be relied upon by you for any other purpose, or
relied upon by, or furnished to, any other person, firm or corporation without
our prior written consent. We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement and to the use of our name under the
caption "The FM/QFC Merger -- Certain United States Federal Income Tax
Consequences" in the Registration Statement.
Very truly yours,
XXXXXXX XXXXXXX & XXXXXXXX
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EXHIBIT 8.1
(Continued)
January 23, 1998
Re: Agreement and Plan of Merger
Dated as of November 6, 1997,
By and Among Xxxx Xxxxx, Inc.,
FFL Acquisition Corp.
and Food 4 Less Holdings, Inc.
Xxxx Xxxxx, Inc.
0000 X.X. 00xx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Ladies and Gentlemen:
We have acted as special counsel for Xxxx Xxxxx, Inc., a Delaware
corporation ("Parent"), in connection with the proposed merger (the "Merger") of
FFL Acquisition Corp., a Delaware corporation ("Sub") and a wholly owned
subsidiary of Parent, with Food 4 Less Holdings, Inc., a Delaware corporation
("Company"), pursuant to an Agreement and Plan of Merger dated as of November 6,
1997, as amended on January 20, 1998, (the "Merger Agreement"), by and among
Parent, Sub and Company under which each issued and outstanding share of Company
stock, not owned directly or indirectly by Company, Parent or Sub will be
converted into the right to receive common stock of Parent ("Parent Common
Stock").
In that connection, you have requested our opinion regarding
certain material United States federal income tax consequences of the Merger. In
providing our opinion, we have examined the Merger Agreement, the registration
statement on Form S-4 which includes the Proxy Statement/Prospectus of the
Company and Parent with the Securities and Exchange Commission (the "SEC"), to
which this opinion appears as an exhibit (the "Registration Statement"), and
such other documents and corporate records as we have deemed necessary or
appropriate for purposes of our opinion. In addition, we have assumed that (i)
the Merger will be consummated in the manner contemplated by the
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Registration Statement and in accordance with the provisions of the Merger
Agreement, (ii) the statements concerning the Merger set forth in the Merger
Agreement and the Registration Statement are true, correct and complete and will
not later become inaccurate, (iii) the representations made to us by Company,
Parent and certain stockholders in their respective letters to us each dated the
date hereof, and delivered to us for purposes of this opinion are true, correct
and complete and will not later become inaccurate (such letters, the
"Representation Letters"), (iv) any representations made in the Representation
Letters or in the Merger Agreement "to the best knowledge of" or similarly
qualified are correct and will continue to be true, correct and complete at all
times up to and including the Closing Date, in each case without such
qualification, and (v) the representations made to us in the Representation
Letters will again be made to us as of the Effective Time. If any of the
above-described assumptions are untrue for any reason or if the Merger is
consummated in a manner that is inconsistent with the manner in which it is
described in the Merger Agreement and Registration Statement, our opinion as
expressed below may be adversely affected and may not be relied upon.
The opinion expressed herein is based upon existing statutory,
regulatory and judicial authority, any of which may be changed at any time with
retroactive effect. Our opinion is limited to the tax matters specifically
covered hereby, and we have not been asked to address, nor have we addressed,
any other tax consequences of the Merger or any other transactions. We are
members of the Bar of the State of New York, and we do not express any opinion
herein concerning any law other than the federal law of the United States.
Based upon the foregoing, and subject to the qualifications and
limitations stated herein, we are of the opinion that the statements set forth
in the Registration Statement under the caption "The FM/Food 4 Less Merger --
Certain United States Federal Income Tax Consequences", represent an accurate
summary of the material United States federal income tax consequences of the
Merger in all material respects.
We express no opinion on any issue relating to United States
federal income tax consequences other than those described under the caption
"The FM/Food 4 Less Merger -- Certain United States Federal Income Tax
Consequences." We are furnishing this opinion in connection with the filing of
the Registration Statement with the SEC, and this opinion is not to be used,
circulated, quoted or otherwise referred to for any other purpose without our
express written permission.
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We consent to the filing of this opinion as Exhibit 8.1 to the
Registration Statement and to the references to our firm name therein. In giving
this consent, we do not admit that we are within the category of persons whose
consent is required under Section 7 of the Securities Act of 1933, as amended,
or the rules or regulations of the SEC promulgated thereunder.
Very truly yours,
XXXXXXX XXXXXXX & XXXXXXXX
