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EXHIBIT (C)(7)
STANDSTILL AGREEMENT
THIS STANDSTILL AGREEMENT (this "Agreement"), dated as of March 10,
1998, is made by and between International Home Foods, Inc., a Delaware
corporation ("IHF"), and Grist Mill Co., a Delaware corporation (the "Company").
RECITALS
WHEREAS, IHF, IHF/GM Holding Corporation, a Delaware corporation
("Parent"), IHF/GM Acquisition Corporation, a Delaware corporation and a direct
wholly-owned subsidiary of Parent ("Sub") and the Company are entering,
concurrently herewith, an Agreement and Plan of Merger (as such agreement may
hereafter be amended from time to time, the "Merger Agreement"), pursuant to
which Sub will be merged with and into the Company (the "Merger"); capitalized
terms used and not defined herein have the respective meanings ascribe to them
in the Merger Agreement; and
WHEREAS, as an inducement and a condition to entering into the Merger
Agreement, the Company has required that IHF agree, and IHF has agreed, to enter
into this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements contained herein and the
benefits to be received by the parties under the terms of the Merger Agreement,
the parties hereto, intending to be legally bound, hereby agree as follows:
1. TERM OF AGREEMENT
Except as otherwise expressly provided herein, the respective covenants
and agreements of IHF and the Company contained in this Agreement will continue
in full force and effect until March 10, 1999 (the "Termination Date").
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF IHF
Prior to the Termination Date or earlier termination of this Agreement
and subject to the further provisions hereof, except in accordance with the
terms of the Transaction Documents or as otherwise permitted by Section 3 below:
(a) IHF represents and warrants to the Company that as of
the date hereof none of (i) IHF, (ii) any corporation or other entity
controlled by IHF, including without limitation, Parent and Sub, (iii)
any affiliate of IHF, (iv) Hicks, Muse, Xxxx & Xxxxx, Inc. (the "Xxxxx
Muse"), (v) any principal of Xxxxx Muse, (vi) any corporation or other
entity controlled by Xxxxx Muse, (vii) any affiliate of Xxxxx Muse, or
(viii) any principal of any of the foregoing (collectively, the "IHF
Group") owns any Shares.
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(b) No member of the IHF Group will, directly or
indirectly, acquire any Shares without the written consent of the
Company.
(c) No member of the IHF Group shall solicit proxies or
become a "participant" in a "solicitation" (as such terms are defined
in Regulation 14A under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) in opposition to the recommendation of the
majority of the directors of the Company with respect to any matter.
(d) No member of the IHF Group shall join a partnership,
limited partnership, syndicate or other group, or otherwise act in
concert with any other person, for the purpose of acquiring, holding,
voting or disposing of Shares, or otherwise become a "person" within
the meaning of Section 13(d)(3) of the Exchange Act (in each case other
than solely with members of the IHF Group).
(e) IHF, on behalf of itself and the other members of the
IHF Group, will not (and will not assist or encourage others to)
directly or indirectly, (i) make any public announcement with respect
to, or submit any proposal for, a transaction between the Company or
any of its security holders and IHF (and/or any member of the IHF
Group, whether or not any other parties are also involved, directly or
indirectly, in such proposal or transaction) other than pursuant to the
Transaction Documents, unless such proposal is directed and disclosed
solely to the management of the Company or its designated
representatives, and the Company shall have consented in writing, in
advance, to the submission of such proposal; nor (ii) by purchase or
otherwise, acquire, offer to acquire, or agree to acquire, ownership
(including, but not limited to, beneficial ownership as defined in Rule
13d-3 under the Exchange Act) of any assets (except in the ordinary
course of the Company's business) or businesses or securities or direct
or indirect rights (including convertible securities) or options to
acquire such ownership (or otherwise act in concert with any person
which so acquires, offers to acquire, or agrees to acquire), or
otherwise seek to influence or control, the management or policies of
the Company or any of its affiliates without such permission.
(f) No member of the IHF Group shall make any public
request to waive any provision of this Agreement or to permit any
member of the IHF Group to take any actions specified herein.
3. PERMITTED INVESTMENT. Notwithstanding anything to the contrary
contained herein, the individuals referenced in clauses (iii), (v),
(vii) and (viii) of Section 2(a) above shall be permitted to acquire,
hold and dispose of shares of Company Common Stock solely for their own
individual account (and not as a member of any group as contemplated by
Section 2(d) above) in the ordinary course of business; provided,
however, that, in all events, no such individual shall at any time (i)
beneficially own, or have the power to vote or invest, more than five
percent (5%) of the shares of Company Common Stock then outstanding or
(ii) hold any shares of Company Common Stock with the purpose or effect
of changing or influencing control of the Company, or as a participant
in any transaction having such purpose or effect.
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4. MISCELLANEOUS
(a) IHF, on the one hand, and the Company, on the other,
acknowledge and agree that irreparable damage would occur in the event
any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction
or injunctions to prevent breaches of the provisions of this Agreement
and to enforce specifically the terms and provisions hereof in any
court of the United States or any state thereof having jurisdiction, in
addition to any other remedy to which they may be entitled at law or
equity.
(b) As used herein, the term "affiliate" shall have the
meaning set forth in Rule 12b-2 under the Exchange Act and the term
"person" shall mean any individual, partnership, corporation, trust or
other entity.
(c) This Agreement contain the entire understanding of
the parties with respect to the transactions contemplated hereby and
this Agreement may be amended only by an agreement in writing executed
by the parties hereto.
(d) Descriptive headings are for convenience only and
shall not control or affect the meaning or construction of any
provision of this Agreement.
(e) For the convenience of the parties, any number of
counterparts of this Agreement may be executed by the parties hereto
and each such executed counterpart shall be, and shall be deemed to be,
an original instrument.
(f) Any notice or communication required or permitted
hereunder shall be in writing and either delivered personally,
telegraphed or telecopied or sent by certified or registered mail,
postage prepaid, and shall be deemed to be given, dated and received
when so delivered personally, telegraphed or telecopied or, if mailed,
five business days after the date of mailing to the following address
or telecopy number, or to such other address or addresses as such
person may subsequently designated by notice given hereunder:
(a) if to IHF or any member of the IHF Group to:
International Home Foods, Inc.
0000 Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attn:
Telecopy:
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with copies to:
Xxxxxx & Xxxxxx, L.L.P.
0000 Xxxxxxx Xxxx Xxxxxx
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attn: A. Xxxxxxx Xxxxx, Esq.
Telecopy: (000) 000-0000
(b) if to the Company, to:
Grist Mill Co.
00000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Attn: Xx. Xxxx X. Xxxxxxxx
Telecopy: (000) 000-0000
with a copy to:
Barack Xxxxxxxxxx Xxxxxxxxxx Xxxxxxx
& Xxxxxxxxx
000 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
Telecopy: (000) 000-0000
(g) From and after the Termination Date or earlier
termination of this Agreement, the covenants of the parties set forth
herein shall be of no further force of effect and the parties shall be
under no further obligation with respect thereto.
(h) This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware
applicable to contracts made and to be performed therein.
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IN WITNESS WHEREOF, IHF and the Company have caused this Agreement to
be duly executed by their respective officers, each of whom is duly authorized,
all as of the day and year first above written.
IHF:
INTERNATIONAL HOME FOODS, INC.,
a Delaware corporation
By: /s/ XXXXXX X. XXXXX
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Xxxxxx X. Xxxxx
Vice President
COMPANY:
GRIST MILL CO.,
a Delaware corporation
By: /s/ XXXX X. XXXXXXXX
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Xxxx X. Xxxxxxxx
President
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