Common use of Sources and Amount of Funds Clause in Contracts

Sources and Amount of Funds. The amount required to purchase the Shares validly tendered pursuant to the Offer, consummate the Merger, and pay the costs and expenses related to the Offer and the Merger is estimated to be approximately $157.2 million. Funds required in connection with the Offer and the Merger will be obtained from (i) not less than $8.7 million in cash on hand of the Parent, (ii) the proceeds of a term loan (the "Term Loan") of $70 million to be provided by DLJ Capital Funding, Inc. ("DLJ Capital Funding") and (iii) the net proceeds of Parent's ten year senior subordinated notes (the "Parent Notes") in the aggregate principal amount of $100 million, to be privately placed with certain institutional investors. Such funds will also be used for the repayment in full of all amounts owing under Xxxxxx's current revolving credit arrangement with an unrelated banking institution and repayment in full of certain existing indebtedness of the Company. In addition to the Term Loan to be provided by it, DLJ Capital Funding will also provide Parent with a revolving credit facility (the "Revolving Credit Facility") of up to $50 million to be used by Parent, for working capital and general corporate purposes. Funds to be provided under the Revolving Credit Facility may not be used by Parent in connection with the Offer or the Merger, other than in payment of expenses. DLJ Capital Funding will syndicate the Term Loan and the Revolving Facility (together, the "Credit Facility") among various lenders pursuant to customary industry practices. If the contemplated private placement of the Parent Notes has not been completed at the time the Offer is completed, then DLJ Bridge Finance, Inc., an affiliate of DLJ, will purchase from Parent up to $100 million in senior subordinated increasing rate notes (the "Bridge Notes") the proceeds of which will be used to complete the Offer and the Merger pending completion of such private placement of the Parent Notes. Parent has entered into a commitment letter (the "Commitment Letter") with DLJ Capital Funding and DLJ Bridge Finance to provide the Term Loan and the Revolving Credit Facility and, if necessary, to purchase the Bridge Notes, all upon the terms and subject to the conditions set forth therein. Pursuant to the Commitment Letter, the Term Loan will have a term of six years with quarterly amortization resulting in aggregate annual principal payments as follows: (i) $7.0 million during the second year thereof, (ii) $10.5 million during the third year thereof, (iii) $14.0 million during the fourth year thereof, (iv) $17.5 million during the fifth year thereof, and (v) $21.0 million during the sixth year thereof. The Term Loan and the Revolving Credit Facility will bear interest, at Parent's option, at reserve-adjusted LIBOR or the base rate, plus, in each case, a margin which will initially be 2.75% and 1.75% per annum, respectively, for the six-month period following the closing and which will thereafter be based on the ratio of consolidated total debt to consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) of the Parent and its subsidiaries as determined from time to time. The Term Loan and the Revolving Credit Facility will contain certain representations and warranties, certain negative and affirmative covenants, certain conditions and events of default which are customarily required for similar financings. Such covenants will include restrictions and limitations on dividends and stock redemptions and the redemption and/or prepayment of other debt, capital expenditures, leases, incurrence of debt, liens, investments, transactions with affiliates, acquisitions, mergers, consolidations and asset sales. Furthermore, Parent will be required to maintain compliance with certain customary financial covenants. The terms of the 28

Sources and Amount of Funds. The amount required Offeror estimates that it will need approximately $1.15 billion to purchase the Shares validly tendered pursuant to in the Offer, consummate to provide funding for the consideration to be paid in the Merger, to refinance certain existing indebtedness of Smart & Final at the closing of the Merger and to pay the costs certain fees and expenses related to the Transactions. Parent has received commitments from certain lenders to provide the Offeror with senior secured credit facilities in an aggregate principal amount of $1.035 billion, comprised of the Smart Foodservice Credit Facilities (as defined below) and the Smart & Final Credit Facilities (as defined below) (collectively, the "Credit Facilities"). Subject to certain conditions, the Credit Facilities (in the case of the Smart & Final ABL Facility and the Smart Foodservice Revolving Facility (each as defined below), subject to capped amounts) will be made available to the Offeror to finance the Offer and the Merger and related transactions, refinance certain of Smart & Final's existing indebtedness, pay related fees and expenses and to provide for funding of the surviving corporation. In addition, Parent has obtained a $438 million Equity Commitment Letter from the Equity Investors. Parent will contribute or otherwise advance to the Offeror the proceeds of the equity commitments, which, together with proceeds of the Credit Facilities, and Smart & Final's available cash following the Merger, will be sufficient to pay the Offer Price for all Shares tendered in the Offer, the Merger Consideration and all related fees and expenses. The equity and debt financing commitments are subject to certain conditions specified below. We do not believe our financial condition is estimated relevant to be approximately $157.2 million. Funds required your decision whether to tender Shares and accept the Offer because: (i) we were organized solely in connection with the Offer and the Merger will be obtained from (i) not less than $8.7 million in cash on hand of the Parentand, (ii) the proceeds of a term loan (the "Term Loan") of $70 million to be provided by DLJ Capital Funding, Inc. ("DLJ Capital Funding") and (iii) the net proceeds of Parent's ten year senior subordinated notes (the "Parent Notes") in the aggregate principal amount of $100 million, to be privately placed with certain institutional investors. Such funds will also be used for the repayment in full of all amounts owing under Xxxxxx's current revolving credit arrangement with an unrelated banking institution and repayment in full of certain existing indebtedness of the Company. In addition prior to the Term Loan to be provided by itExpiration Date, DLJ Capital Funding will also provide Parent with a revolving credit facility (the "Revolving Credit Facility") of up to $50 million to be used by Parent, for working capital and general corporate purposes. Funds to be provided under the Revolving Credit Facility may not be used by Parent carry on any activities other than in connection with the Offer or and the Merger, other than ; (ii) the consideration offered in payment the Offer consists solely of expenses. DLJ Capital Funding will syndicate the Term Loan and the Revolving Facility cash; (together, the "Credit Facility"iii) among various lenders pursuant to customary industry practices. If the contemplated private placement of the Parent Notes has not been completed at the time the Offer is completed, then DLJ Bridge Finance, Inc., an affiliate being made for all outstanding Shares of DLJ, will purchase from Parent up to $100 million in senior subordinated increasing rate notes (the "Bridge Notes") the proceeds of which will be used to complete the Offer and the Merger pending completion of such private placement of the Parent Notes. Parent has entered into a commitment letter (the "Commitment Letter") with DLJ Capital Funding and DLJ Bridge Finance to provide the Term Loan and the Revolving Credit Facility and, if necessary, to purchase the Bridge Notes, all upon the terms and subject to the conditions set forth therein. Pursuant to the Commitment Letter, the Term Loan will have a term of six years with quarterly amortization resulting in aggregate annual principal payments as follows: (i) $7.0 million during the second year thereof, (ii) $10.5 million during the third year thereof, (iii) $14.0 million during the fourth year thereof, Smart & Final; (iv) $17.5 million during we have received equity financing and debt financing commitments in respect of funds sufficient to purchase all Shares tendered pursuant to the fifth year thereof, and Offer; (v) $21.0 million during there is no financing condition to the sixth year thereof. The Term Loan and the Revolving Credit Facility will bear interest, at Parent's option, at reserve-adjusted LIBOR or the base rate, plus, in each case, a margin which will initially be 2.75% and 1.75% per annum, respectively, for the six-month period following the closing and which will thereafter be based on the ratio of consolidated total debt to consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) completion of the Parent Offer; and its subsidiaries (vi) if we consummate the Offer, we will acquire all remaining Shares in the Merger for cash at the same price per share as determined from time to time. The Term Loan and the Revolving Credit Facility will contain certain representations and warranties, certain negative and affirmative covenants, certain conditions and events of default which are customarily required for similar financings. Such covenants will include restrictions and limitations on dividends and stock redemptions and the redemption and/or prepayment of other debt, capital expenditures, leases, incurrence of debt, liens, investments, transactions with affiliates, acquisitions, mergers, consolidations and asset sales. Furthermore, Parent will be required to maintain compliance with certain customary financial covenants. The terms of the 28Offer Price.