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EXHIBIT (b)(2)
WAIVER NO. 1 (this "Waiver"), dated as of February 18, 1998, with
respect to the Credit Agreement dated as of November 1, 1996, as amended and
restated as of November 21, 1997 (the "Credit Agreement"), among International
Home Foods, Inc. (the "Borrower"), the Lenders parties thereto, Xxxxxx Xxxxxxx
Senior Funding, Inc., as Documentation Agent, Bankers Trust Company, as
Syndication Agent, and The Chase Manhattan Banker, as Administrative Agent.
Unless otherwise defined herein, capitalized terms used herein and defined in
the Credit Agreement are so used as so defined.
W I T N E S S E T H:
WHEREAS, the Borrower intends to make a tender offer (the "Tender
Offer") to acquire all of the outstanding common stock ("Tender Stock") of a
publicly traded manufacturer of private label cereal and other food products
("Private Label"), which investment shall be made, subject to the modifications
described below, pursuant to Section 7.8(p) of the Credit Agreement;
WHEREAS, in connection therewith, the Borrower has requested the
Administrative Agent, on behalf of the Lenders, to enter into this Waiver, and
the Administrative Agent is willing to do so subject to the terms and conditions
set forth herein;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
I. WAIVERS. The parties hereto hereby waive compliance by the
Borrower with (a) any provision of Section 4.11 of the Credit Agreement that
would prohibit proceeds of the Loans from being used to finance the Tender
Offer, (b) until the consummation of the Private Label Merger (as defined
below), any provision of Section 6.10 of the Credit Agreement that would require
Tender Stock or any assets of Private Label or any of its Subsidiaries to become
Collateral or that would require Private Label or any of its Subsidiaries to
become a Subsidiary Guarantor and (c) the 80% minimum investment requirement in
Section 7.8(p) of the Credit Agreement insofar as it would prohibit the Borrower
from acquiring Tender Stock or consummating the Private Label Merger; provided,
that (i) after giving effect to the initial purchase of Tender Stock, the
Borrower shall directly or indirectly own a majority of the common stock of
Private Label, (ii) the requirements described in clauses (i) through (iv) of
Section 7.8(p) of the Credit Agreement shall continue to be applicable to the
purchase of Tender Stock (except that the amount described in clause (ii)(y),
both at the time of any purchase of Tender Stock and at the time of consummation
of the Private Label Merger, need not be more than $20,000,000), (iii) while the
Tender Stock constitutes margin stock (as defined in Regulation U of the Board),
margin stock owned by the Borrower or any of its Subsidiaries that is subject to
the provisions of Section 7 (including Section 7.3) of the Credit Agreement
shall not at any time represent more than 25% of the aggregate value (determined
in accordance with Regulation U), on a consolidated basis, of all of the assets
of the Borrower and its Subsidiaries that are subject to the provisions of
Section 7 (including Section 7.3) of the Credit Agreement, (iv) the Borrower
shall acquire all of the outstanding common stock of Private Label by means of a
merger of a Wholly Owned Subsidiary of the Borrower into Private Label (the
"Private Label Merger") as promptly as practicable after it is able to do so in
accordance with applicable law and (v) concurrently with the Private Label
Merger, (x) the Tender Stock shall cease to constitute margin stock and (y)
Private Label and its Subsidiaries shall each become direct or indirect Wholly
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Owned Subsidiaries of the Borrower. Failure to comply with any of the conditions
described in the preceding provisio shall constitute an Event of Default under
the Credit Agreement.
II. MISCELLANEOUS
1. Conditions to Effectiveness. This Waiver shall become
effective on the date on which (a) the Administrative Agent shall have received
from the Required Lenders executed Lender Consent Letters (or facsimile
transmissions thereof) consenting to the execution of this Waiver by the
Administrative Agent on behalf of such Lenders and (b) the Administrative Agent
shall have received a counterpart hereof (or a facsimile transmission thereof)
executed by the Borrower.
2. Representations and Warranties. The Borrower hereby
represents and warrants as of the date hereof that, after giving effect to this
Waiver, (a) each of the representations and warranties made by it in the Credit
Agreement and the other Loan Documents to which it is a party is true and
correct in all material respects on and as of such date as if made on and as of
such date and (b) no Default or Event of Default has occurred and is continuing
as of such date.
3. No Change. Except as expressly provided herein, this
Waiver shall not modify or amend any term or provision of the Credit Agreement,
and each term and provision of the Credit Agreement shall remain in full force
and effect.
4. Counterparts. This Waiver may be executed by the
parties hereto in any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
5. GOVERNING LAW. THIS WAIVER AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS WAIVER SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this Waiver
to be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.
INTERNATIONAL HOME FOODS, INC.
By /s/ XXXXX X. MISERICORDIA
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Title: Treasurer
THE CHASE MANHATTAN BANK, as Administrative Agent
By /s/ XXXXX XXXXX
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Title: Vice President
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