SECOND AMENDMENT TO CREDIT AGREEMENT

Exhibit 10.23

SECOND AMENDMENT TO CREDIT AGREEMENT

                    This Second Amendment to Credit Agreement (this “Amendment”) is entered into as of February 18, 2003, by and among SMART & FINAL INC., a Delaware corporation (the “Borrower”), the Guarantors listed on the signature pages hereof, the financial institutions and other entities party hereto (the “Lenders”) and BNP PARIBAS, as Administrative Agent for the Lenders (the “Administrative Agent”).

RECITALS

                    A.     The Borrower, the Lenders, the Administrative Agent, Harris Trust & Savings Bank, as syndication agent, and Cooperative Centrale Raiffeisen-Boerenleenbank B.A., “Rabobank Nederland”, New York Branch, as documentation agent, are parties to that certain Credit Agreement dated as of November 30, 2001 (as amended to date, the “Credit Agreement”).  Capitalized terms used herein without definition have the meanings ascribed to such terms in the Credit Agreement.

                    B.     The Borrower, the Lenders and the Administrative Agent have agreed to amend the Credit Agreement as provided hereinbelow.

                    NOW THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereto hereby agree as follows:

                    Section 1.     Section References.  Unless otherwise expressly stated herein, all Section references herein shall refer to Sections of the Credit Agreement.

                    Section 2.     Acknowledgment and Extension of Section 2.05(b)(iii).  The Lenders hereby (a) acknowledge that the Canoga Park, California property which was sold on December 24, 2001 was in escrow on the Closing Date and that the Net Cash Proceeds in the amount of $774,254.19 from the sale of such property were not subject to the mandatory prepayment requirement of Section 2.05(b)(iii) and (b) acknowledge that the Borrower sold certain assets during the Fiscal Year ended December 29, 2002 and agree to extend the required date of prepayment of the outstanding Advances under Section 2.05(b)(iii) from the date of receipt of the Net Cash Proceeds of such asset sales to the date hereof.

                    Section 3.     Calculation of Commitment Fee under Section 2.07(a).  The Borrower hereby acknowledges and agrees that the commitment fee payable under Section 2.07(a) prior to the date hereof has been calculated on the basis of the Revolving Facility in effect prior to any reduction pursuant to Section 2.04(b).  The Lenders and the Borrower hereby agreed that from and after the date hereof, the commitment fee shall be calculated on the basis of the Revolving Facility as reduced in accordance with Section 2.04(b).

                    Section 4.     Amendment to Section 6.03 (Reporting Requirements).

                                         (a)     Section 6.03(a) (Borrowing Base Certificate).  Section 6.03(a) is hereby amended by deleting such section in its entirety and replacing it with the following:

                                         (b)     Addition of Section 6.03(q) (Business Plan) and 6.03(r) (Dispositions and Commitment Reductions).  Section 6.03(q) shall be renumbered as Section 6.03(s), and new Sections 6.03(q) and (r) are hereby added to the Credit Agreement and shall read in their entirety as follows:

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            Section 5.     Amendment to Section 6.04 (Financial Covenants).  Section 6.04 is hereby amended to read in its entirety as follows:

            Section 6.04.  Financial Covenants.  So long as any Advance or any other Obligation of any Loan Party under any Loan Document shall remain unpaid, any Letter of Credit shall be outstanding or any Lender Party shall have any Commitment hereunder, the Borrower will:

                                         (a)     Net Worth.  Maintain at all times a Consolidated Net Worth of not less than the sum of (i) $260,000,000, plus (ii) 50% of positive cumulative Consolidated Net Income for any fiscal quarter of the Borrower ending after the fiscal quarter ended October 8, 2001 (but without any deduction for any period in which Consolidated Net Income is a negative number) plus (iii) 100% of the amount of all cash proceeds of any equity issuances by the Borrower or any of its Subsidiaries after the date hereof; provided, however, that changes in other comprehensive income after December 29, 2002 shall be disregarded in calculating Consolidated Net Worth.

                                         (b)     Senior Leverage Ratio.  Not permit the Senior Leverage Ratio at the end of the fiscal quarters of the Borrower set forth below to exceed the correlative ratio indicated:

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                                         (c)     Adjusted Leverage Ratio.  Not permit the Adjusted Leverage Ratio at the end of the fiscal quarters of the Borrower set forth below to exceed the correlative ratio indicated:

                                         (d)     Fixed Charge Coverage Ratio.  Not permit the Fixed Charge Coverage Ratio at the end of the fiscal quarters of the Borrower set forth below to be less than the correlative ratio indicated:

                                         (e)     Capital Expenditures. 

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                                         (f)     Maximum EBIT Loss.  Not permit Port Stockton Food Distributors, Inc. to incur an operating loss (before interest and taxes) of more than (i) $3,750,000 for the fiscal quarter of the Borrower ending March 23, 2003, (ii) $3,500,000 for the fiscal quarter of the Borrower ending June 15, 2003 or (iii) $2,500,000 for any fiscal quarter of the Borrower thereafter. 

                    Section 6.     Waiver of Default.  The Lenders hereby waive any Default or Event of Default which may have occurred in connection with the Borrower’s failure to comply with Section 6.04 for the Fiscal Year or the fiscal quarter of the Borrower ended December 29, 2002.

                    Section 7.     Conditions Precedent.  The effectiveness of this Amendment is subject to the satisfaction of each of the following conditions precedent:

                              (a)     The Administrative Agent shall have received all of the following, in form and substance satisfactory to the Administrative Agent:

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                              (b)     The Administrative Agent shall have received $2,678,190.21 from the Borrower to be applied in accordance with Section 2.05(c), which amount equals the Net Cash Proceeds in excess of $2,500,000 from the sale or other disposition of assets of the Borrower or any other Loan Party during the Fiscal Year ended December 29, 2002.

                              (c)     Each of the Lenders consenting to this Amendment on or prior to 5:00 p.m. (EST) on February 14, 2003 shall have received an amendment fee of 0.15% of its Commitment (without giving effect to any reductions in the Revolving Facility or such Lender’s Commitment pursuant to Section 2.04(b)).

                              (d)     The representations and warranties contained herein and in the Credit Agreement shall be true and correct as of the date hereof as if made on the date hereof (except for those which by their terms specifically refer to an earlier date, in which case such representations and warranties shall be true and correct as of such earlier date).

                              (e)     All corporate proceedings taken in connection with the transactions contemplated by this Amendment and all other agreements, documents and instruments executed and/or delivered pursuant hereto, and all legal matters incident thereto, shall be satisfactory to the Administrative Agent.

                              (f)     No Default or Event of Default shall have occurred and be continuing, after giving effect to this Amendment.

                    Section 8.     Representations and Warranties.  The Borrower hereby represents and warrants to the Administrative Agent and the Lenders that, as of the date of and after giving effect to this Amendment, (a) the execution, delivery and performance of this Amendment and any and all other Amendment Documents executed and/or delivered in connection herewith have been authorized by all requisite corporate action on the part of the Borrower and will not violate the Borrower’s certificate of incorporation or bylaws, (b) all representations and warranties set forth in the Credit Agreement and in any other Loan Document are true and correct as if made again on and as of such date (except those, if any, which by their terms specifically relate only to an earlier date, in which case such representations and warranties are true and correct as of such earlier date), (c) no Default or Event of Default has occurred and is continuing, and (d) the Credit Agreement (as amended by this Amendment), and all other Loan Documents are and remain legal, valid, binding and enforceable obligations in accordance with the terms thereof.

                    Section 9.     Survival of Representations and Warranties.  All representations and warranties made in this Amendment or any other Loan Document

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shall survive the execution and delivery of this Amendment and the other Loan Documents, and no investigation by the Administrative Agent or the Lenders, or any closing, shall affect the representations and warranties or the right of the Administrative Agent and the Lenders to rely upon them.

                    Section 10.     Certain Waivers.  The Borrower and each Guarantor hereby agrees that neither the Administrative Agent nor any Lender shall be liable under a claim of, and hereby waives any claim against the Administrative Agent and the Lenders based upon, lender liability (including, but not limited to, liability for breach of the implied covenant of good faith and fair dealing, fraud, negligence, conversion, misrepresentation, duress, control and interference, infliction of emotional distress and defamation and breach of fiduciary duties) as a result of any discussions or actions taken or not taken by the Administrative Agent or the Lenders on or before the date hereof or the discussions conducted pursuant hereto, or any course of action taken by the Administrative Agent or any Lender in response thereto or arising therefrom.  This Section 10 shall survive the execution and delivery of this Amendment and the other Loan Documents and the  termination of the Credit Agreement.

                    Section 11.     Reference to Agreement.  Each of the Loan Documents, including the Credit Agreement, and any and all other agreements, documents or instruments now or hereafter executed and/or delivered pursuant to the terms hereof or pursuant to the terms of the Credit Agreement as amended hereby, are hereby amended so that any reference in such Loan Documents to the Credit Agreement, whether direct or indirect, shall mean a reference to the Credit Agreement as amended hereby.

                    Section 12.     Costs and Expenses.  The Borrower shall pay on demand all reasonable costs and expenses of the Administrative Agent (including the reasonable fees, costs and expenses of counsel to the Administrative Agent) incurred in connection with the preparation, execution and delivery of this Amendment.

                    Section 13.     Governing Law.  THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA.

                    Section 14.     Execution.  This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of a signature page to this Amendment by telecopier shall be effective as delivery of a manually executed counterpart of this Amendment.

                    Section 15.     Limited Effect.    This Amendment relates only to the specific matters covered herein, shall not be considered to be a waiver of any rights any Lender may have under the Credit Agreement, and shall not be considered to create a course of dealing or to otherwise obligate any Lender to execute similar amendments or grant any waivers under the same or similar circumstances in the future.

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                    Section 16.     Ratification By Guarantors.  Each of the Guarantors hereby agrees to this Amendment and acknowledges that such Guarantor’s Guaranty shall remain in full force and effect without modification thereto.

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                    IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written.