INTERNATIONAL HOME FOODS INC, S-1, 1997-09-24

INTERNATIONAL HOME FOODS INC
S-1, 1997-09-24
CANNED, FROZEN & PRESERVD FRUIT, VEG & FOOD SPECIALTIES

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 24, 1997

REGISTRATION NO. 333-
================================================================================

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------

FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------

INTERNATIONAL HOME FOODS, INC.
(Exact name of registrant as specified in its charter)

<TABLE>
<C> <C> <C>
DELAWARE 2032 13-3377322
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>

1633 LITTLETON ROAD
PARSIPPANY, NEW JERSEY 07054
(201) 359-9920
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
---------------------

C. DEAN METROPOULOS
INTERNATIONAL HOME FOODS, INC.
1633 LITTLETON ROAD
PARSIPPANY, NEW JERSEY 07054
(201) 359-9920
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------------

Copies to:

<TABLE>
<S> <C>
A. WINSTON OXLEY EDWARD D. SOPHER
JAMES A. KRAUSE AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P.
VINSON & ELKINS L.L.P. 590 MADISON AVENUE
3700 TRAMMELL CROW CENTER NEW YORK, NEW YORK 10022
2001 ROSS AVENUE (212) 872-1000
DALLAS, TEXAS 75201-2975
(214) 220-7700
</TABLE>

---------------------

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this registration statement becomes effective.
---------------------

If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]
---------------------

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
==============================================================================================================
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED OFFERING PRICE(1)(2) REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stock, $.01 par value per share...................... $230,000,000 $69,697
==============================================================================================================
</TABLE>

(1) In accordance with Rule 457(o) under the Securities Act of 1933, the number
of shares being registered and the proposed maximum offering price per share
are not included in this table.

(2) Estimated solely for the purpose of calculating the registration fee.
---------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.

================================================================================
<PAGE> 2

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.

SUBJECT TO COMPLETION, DATED SEPTEMBER 24, 1997
PROSPECTUS
, 1997

[LOGO]

INTERNATIONAL HOME FOODS, INC.

COMMON STOCK

All of the shares of common stock, $.01 par value ("Common Stock"), offered
hereby are being sold by International Home Foods, Inc. ("International Home
Foods," "IHF" or the "Company").

Prior to this offering (the "Offering"), there has been no public market
for the Common Stock. It is currently estimated that the initial public offering
price will be between $ and $ per share. See "Underwriting"
for information relating to the factors to be considered in determining the
initial public offering price.

Application will be made to the New York Stock Exchange for listing of the
Common Stock under the symbol " ."

SEE "RISK FACTORS" BEGINNING ON PAGE 11 HEREIN FOR A DISCUSSION OF CERTAIN
MATTERS THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.

------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
PRICE UNDERWRITING PROCEEDS
TO THE DISCOUNTS AND TO THE
PUBLIC COMMISSIONS(1) COMPANY(2)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share..................................... $ $ $
Total(3)...................................... $ $ $
- -------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933. See
"Underwriting."
(2) Before deducting expenses estimated at $ , which will be paid by
the Company.
(3) The Company has granted to the Underwriters an option, exercisable within 30
days of the date hereof, to purchase up to additional shares of
Common Stock at the Price to the Public less Underwriting Discounts and
Commissions, solely to cover over-allotments, if any. If such option is
exercised in full, the total Price to the Public, Underwriting Discounts and
Commissions and Proceeds to the Company will be $ , $ and $ ,
respectively. See "Underwriting."

The Shares are being offered by the several Underwriters when, as and if
delivered to and accepted by the Underwriters and subject to various prior
conditions, including their right to reject orders in whole or in part. It is
expected that delivery of share certificates will be made in New York, New York
on or about , 1997.

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
BT ALEX. BROWN
CHASE SECURITIES INC.
CREDIT SUISSE FIRST BOSTON
GOLDMAN, SACHS & CO.
MORGAN STANLEY DEAN WITTER
<PAGE> 3

CERTAIN PERSONS PARTICIPATING IN THE OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE SECURITIES
OFFERED HEREBY, INCLUDING OVER-ALLOTMENT, STABILIZING TRANSACTIONS, SYNDICATE
SHORT COVERING TRANSACTIONS AND PENALTY BIDS. FOR A DESCRIPTION OF THESE
ACTIVITIES, SEE "UNDERWRITING."

[The inside cover will contain art work of colored brand trademarks and
logos of the Company including "Chef Boyardee(R)," "Bumble Bee(R)," "PAM(R),"
"Polaner(R) All Fruit," "Original Ro*Tel(R)," "Campfire(R)," "Ranch Style(R),"
"Crunch 'n Munch(R)," "Gulden's(R)," "Luck's," "Dennison's(R) Since 1915,"
"Jiffy Pop(R)," "Wheatena(R)," "Maypo(R)" and "G. Washington's(R)."]

---------------------

The Company intends to furnish its stockholders with annual reports
containing audited financial statements and quarterly reports for each of the
first three quarters of each fiscal year containing interim unaudited financial
information.

---------------------

"Chef Boyardee," "Bumble Bee," "PAM," "Polaner," "Franklin Crunch 'n Munch"
(hereinafter "Crunch 'n Munch"), "Gulden's," "Campfire," "Marshmallow Munchie,"
"Ranch Style," "Luck's," "Dennison's," "Ro*Tel," "Jiffy Pop" and "G.
Washington's" are registered trademarks of the Company. Registration of the Chef
Jr. trademark is pending. "Wheatena," "Maypo" and "Maltex" are registered
trademarks licensed to the Company. This Prospectus also includes trademarks of
companies other than the Company.
<PAGE> 4

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information and financial statements,
including the notes thereto, appearing elsewhere in this Prospectus. Except as
otherwise indicated, (i) all references to market, category, segment sales,
market share percentages and market positions reflect grocery sales dollars for
the 52-week period ended August 31, 1997, as gathered by A.C. Nielsen
("Nielsen") for United States and Mexico markets, (ii) the information provided
in this Prospectus assumes no exercise of the Underwriters' over-allotment
option and (iii) references to the Company include the Company and its
subsidiaries. "Aggregate net sales" includes the effect of (i) the acquisition
(the "Bumble Bee Acquisition") of the assets and certain liabilities of Bumble
Bee Seafoods, Inc. and its operating subsidiaries ("Bumble Bee Seafoods"), (ii)
the purchase of Heritage Brands Holding, Inc. ("Heritage"), (iii) the purchase
of Productos Del Monte S.A. de C.V. ("Productos Del Monte") and (iv) the
purchase of Creative Products, Inc. of Rossville ("Creative Products") as if
they had occurred at the beginning of the period discussed. The branded canned
seafood business acquired in the Bumble Bee Acquisition is referred to herein as
the Bumble Bee Business. All information in this Prospectus reflects a for one
reverse stock split effected prior to the closing of the Offering. Certain
statements contained in this summary and elsewhere in this Prospectus,
including, but not limited to, information with respect to the Company's
business and liquidity and capital resources, are forward-looking statements.

BUSINESS

OVERVIEW

The Company is a leading North American manufacturer and marketer of a
diversified, well-established portfolio of shelf-stable food products with
popular brand names, including Chef Boyardee prepared foods, Bumble Bee premium
canned seafood, PAM cooking spray, Polaner fruit spreads and spices and Gulden's
mustard. In the United States, 11 of the Company's 14 principal branded product
lines command the number one position in their defined markets. For the fiscal
year ended December 31, 1996, these 11 branded product lines accounted for
$863.2 million or 58.3% of the Company's aggregate net sales. Many of the
Company's brands also command leading market positions in Canada, Mexico and
Puerto Rico. The Company's portfolio of leading brands provides the Company with
a strong presence in the United States as well as an attractive platform for
continued international expansion, particularly in Latin America. The Company's
brand name business is complemented by growing food service and private label
businesses and sales to the U.S. military.

In November 1996, the Company was the subject of a leveraged
recapitalization pursuant to which affiliates of Hicks, Muse, Tate & Furst
Incorporated ("Hicks Muse") and C. Dean Metropoulos, the Company's new Chairman
and Chief Executive Officer, acquired control of the Company (the "IHF
Acquisition") from American Home Products Corporation ("American Home
Products"). Under Mr. Metropoulos' direction, the Company has implemented a
strategy to increase sales and profits by (i) growing sales of existing brands,
(ii) expanding distribution into alternative markets, (iii) completing strategic
acquisitions and (iv) achieving cost savings. The Company's pro forma net sales
and operating profit for the fiscal year ended December 31, 1996 were $1,338.4
million and $157.7 million, respectively, and for the six month period ended
June 30, 1997 were $673.4 million and $77.8 million, respectively. See
"Unaudited Pro Forma Financial Statements."

Company's products include Ro*Tel canned tomatoes with green chilies and strong
regional brands such as Ranch Style and Luck's canned beans and Dennison's
chili. In the snack foods category, the Company's brands include Crunch 'n Munch
glazed popcorn and pretzels, Campfire marshmallows and marshmallow crisp rice
bars and Jiffy Pop unpopped popcorn. The Company, through its Productos Del
Monte subsidiary, is also a leading processor and marketer of branded catsup,
canned vegetables and bottled salsa in Mexico.

The Company's recognizable portfolio of leading brands provides a critical
mass of brand name sales that (i) allows the Company to realize synergies in
manufacturing, marketing, distribution and raw material sourcing, (ii) creates a
position of strength with retailers that is critical in maintaining and securing
valuable retail shelf space for its products and (iii) provides a strong
platform for introducing product line extensions and new products. The following
table sets forth market positions and market shares of the Company's principal
product lines, along with certain competitors' market share information.

MARKET POSITION OF PRINCIPAL PRODUCT LINES

<TABLE>
<CAPTION>
MARKET SHARE NUMBER TWO
------------------------------- COMPETITOR'S
PRODUCT LINE CATEGORY/SEGMENT POSITION PERCENTAGE PERCENTAGE
------------ ---------------- ------------------ ---------- ------------
<S> <C> <C> <C> <C>
UNITED STATES
CHEF BOYARDEE BRANDED PRODUCTS
Chef Boyardee.................. Canned Pasta....................... #1 57% 37%
Chef Boyardee.................. Pizza Mixes........................ #1 69% 15%
BUMBLE BEE BRANDED PRODUCTS
Bumble Bee..................... Canned White Meat Tuna(1).......... #1 39% 36%
Bumble Bee..................... Canned Light Meat Tuna(1).......... #2 16% NA
Bumble Bee..................... Canned Salmon(1)................... #1 20% 13%
SPECIALTY BRANDS
PAM............................ Cooking Spray...................... #1 52% 13%
Polaner........................ Fruit-Juice-Sweetened Spreads...... #1 43% 30%
Gulden's....................... Brown Mustard...................... #1 50% 25%
SOUTHWESTERN CUISINE
Ro*Tel......................... Canned Tomatoes with Green
Chilies............................ #1 76% 2%
Ranch Style.................... Canned Beans(2).................... #1 in Southwest(3) 26% 13%
Luck's......................... Canned Beans(2).................... #1 in Southeast(3) 30% 26%
Dennison's..................... Canned Chili....................... #4 in West(3)(4) 18% NA
SNACK FOODS
Crunch 'n Munch................ Glazed Popcorn..................... #1 37% 32%
Campfire....................... Marshmallow Crisp Rice Bars........ #3 8% NA
MEXICO
Productos Del Monte............ Catsup............................. #1 44% 31%
</TABLE>

- ---------------

(1) Market data for Bumble Bee branded products is based on the 52-week period
ended August 3, 1997 as gathered by Information Resources, Inc.

(2) The canned beans category includes both the pork and beans and miscellaneous
beans categories. In their respective regions, Ranch Style leads both
categories with a total market share of 26%, and Luck's leads the
miscellaneous beans category with a market share of 30%.

(3) The Company defines (i) the Southwest region to include Nielsen reported
information for Texas, Oklahoma, New Mexico and Arizona, (ii) the Southeast
region to include Nielsen reported information for Georgia, Alabama, North
Carolina, South Carolina, Kentucky, Tennessee and Virginia and (iii) the
West region to include Nielsen reported information for Colorado, Wyoming,
Idaho, Nevada, California, Oregon, Arizona, Washington and Utah.

(4) Dennison's has the #2 market share in California, which represents
approximately 74% of Dennison's net sales.
4
<PAGE> 6

BUSINESS STRATEGY

The Company's objectives are to increase sales and earnings by (i) growing
sales of existing brands through expansion of the Company's product offerings
and refocused marketing efforts, (ii) expanding distribution in food service,
private label and international markets, (iii) completing strategic acquisitions
and (iv) continuing to achieve cost savings.

- Leverage Leading Brands. The Company intends to expand its product
offerings by leveraging its existing portfolio of leading brands.
Management believes that (i) Chef Boyardee and Bumble Bee can serve as a
strong platform to expand the Company's product line into other
quick-meal products, (ii) Dennison's, Ranch Style, Luck's and Ro*Tel can
be utilized to develop a broader southwestern cuisine business and (iii)
Crunch 'n Munch, Campfire and Jiffy Pop can be the cornerstone of a
diversified snack foods business. In addition, management has formulated
a number of new products in its existing product lines to capitalize on
the growing trends toward healthy and convenient foods. In the last 12
months, the Company has introduced 10 new products under its existing
brand names, two of which were the first fat-free or 99% fat-free entries
into the categories in which they compete.

- Refocus Marketing Efforts. To revitalize its established brand names, the
Company has refocused its marketing and packaging efforts. Specifically,
the Company has (i) changed its marketing and promotional campaigns to
more effectively address its target markets, (ii) increased advertising
expenditures to enhance brand equity and (iii) introduced new packaging
for a majority of its products. Since 1995, the Company has refocused its
marketing efforts by emphasizing consumer advertising (a "pull" strategy)
and de-emphasizing trade spending and discounting (a "push" strategy). As
a result, advertising costs as a percentage of total marketing expenses
increased from 16.3% in 1994 to 28.6% in the first six months of 1997
while trade promotion expenses as a percentage of total marketing
expenditures declined from 63.5% to 54.7%. The Company recently
introduced several new television advertising campaigns, such as those
promoting Chef Boyardee as an ideal "fourth meal" to be served after
school and PAM cooking spray as a flavorful, healthy alternative to
cooking oils, butter and margarine. Since the new Chef Boyardee
television campaign was introduced in November 1996, consumer sales of
Chef Boyardee's principal product lines have increased significantly,
with consumer sales through August 1997 increasing 8.2% over the
comparable 1996 period. In addition, the Company recently began
television advertising for its Ranch Style brand for the first time in
five years. The Company has also redesigned the packaging of a majority
of its products to emphasize the brand name, contemporize the
presentation and make the products visually more appealing to consumers.

- Expand into Food Service, Private Label and International
Markets. Management believes that the food service and private label
businesses, which together represent 8.9% of the Company's aggregate 1996
net sales, offer significant growth opportunities. Management believes
that it can further develop these businesses by utilizing the Company's
established sales and distribution capabilities and excess plant
capacity. As part of this strategy, the Company recently acquired
Creative Products, the leading manufacturer of cooking spray sold to
private label and food service customers in the U.S. Management believes
that Creative Products' dedicated private label and food service sales
force can help the Company increase sales of many of its other products
in these markets. In addition, management believes that attractive
opportunities exist to expand the Company's sales in international
markets with growing economies and attractive demographics. The Company
recently acquired Productos Del Monte, a leading producer and distributor
of branded catsup, canned vegetables and bottled salsa in Mexico. The
Company plans to leverage the infrastructure of Productos Del Monte as a
platform to successfully expand the Company's southwestern cuisine,
cooking spray, canned pasta and canned seafood products into Mexico and
other growing Latin America markets.

be generated by leveraging the Company's production, distribution, sales
and administrative capabilities. In addition, an important element of
management's evaluation of a strategic acquisition is the potential
savings attainable through rationalization of the target company's cost
structure.

- Continue to Achieve Cost Savings. Since the IHF Acquisition, the Company
has achieved annualized net cost savings of approximately $25.3 million,
including approximately $11.1 million associated with the integration of
the Bumble Bee Business. These savings have been achieved primarily
through (i) reductions in overhead and duplicative administrative, sales
and other personnel ($15.5 million), (ii) streamlining production,
distribution, research and administrative functions ($7.3 million) and
(iii) savings in packaging and brokerage expenses ($2.5 million). To
achieve these cost savings, the Company incurred one time charges of
approximately $5.0 million, most of which was recognized in the year ended
December 31, 1996. Management expects to be able to achieve further cost
savings by continuing these initiatives.

COMPETITIVE STRENGTHS

Management believes that the Company has the following competitive
strengths that will enable it to execute its business strategy effectively.

- Well-Positioned Products in Growing Markets. The Company's diversified
portfolio of branded products is well-positioned to meet the growing
demand for convenient and healthy foods. Many of the Company's products,
such as Chef Boyardee canned pasta and Bumble Bee canned seafood, are
quick and easy to prepare and nutritionally sound. As such, management
believes these products are particularly appealing to families with
children. Many of the Company's other brands also benefit from the trend
toward healthier eating, including PAM, Polaner, Ro*Tel and Ranch Style.
The Company has introduced several new products that capitalize on the
trend toward fat-free foods such as Chef Boyardee 99% Fat-Free, Crunch 'n
Munch Fat-Free and Luck's Fat-Free Beans. In addition, the Company's
strong southwestern cuisine products provide a platform to capitalize on
the cuisine's growing national popularity. Furthermore, through the
acquisition of Productos Del Monte, the Company has established a
presence in the growing Mexico market for processed food products.

- Well-Developed Infrastructure with Capacity for Growth. The Company's
manufacturing plants and distribution network have significant excess
capacity that can be utilized to support the (i) growth of the Company's
existing branded and nonbranded businesses, (ii) introduction of new
products and entry into new markets and (iii) integration of strategic
acquisitions. The Company's principal manufacturing facilities in Milton,
Pennsylvania and Vacaville, California are operating at approximately 55%
and 28% of their respective capacities (based on a five-day, two-shift
work schedule). In addition, the Company has a comprehensive U.S. sales
force and distribution network which management believes has the capacity
to support substantial increases in volume. Management believes this
sales and distribution network enables the Company to meet or exceed
customer service requirements by delivering 85% of its sales volume to
customers within 24 hours and 100% within 48 hours.

- Strong Management. The Company's senior management team is comprised of
food and consumer product industry veterans led by C. Dean Metropoulos,
the Company's Chairman and CEO, and John Bess, the Company's President and
COO. Mr. Metropoulos is CEO of The Morningstar Group, Inc. ("Morningstar")
and has been CEO of several other food companies, including Stella Foods,
Inc. ("Stella"). During Mr. Metropoulos' tenure at Morningstar and Stella,
he implemented successful sales growth and cost reduction strategies which
dramatically increased sales and earnings at both companies. Many of these
strategies are similar to those that are being implemented by the Company.
Mr. Bess has extensive experience in growing established brand names by
implementing aggressive consumer based marketing programs. Mr. Bess has 21
years of management and consumer marketing experience at The Procter &
Gamble Company ("Procter & Gamble"), most recently serving as Vice
President and Managing Director of Worldwide Strategic Planning for
Procter & Gamble's global hair care business, which generated 1996 sales
of $2.6 billion. In addition, the Company's six general
6
<PAGE> 8

managers overseeing brand performance have an average of approximately 20
years of experience in the food industry.

- Strong Profit Margins to Fund Growth. Management believes that the
Company benefits from one of the highest operating profit margins in the
branded food products industry. From 1991 through 1996 (prior to the
Bumble Bee Acquisition), the Company achieved an average annual operating
profit margin of 15.2%. As a result of the Company's strong operating
profit margins, the Company generated cash flow from operations of $146.0
million in 1996. Management believes that its relatively high operating
profit margins and cash flow from operations result from the Company's
leading market position in high margin food categories as well as the cost
efficiencies gained from significant historical investment in the
Company's manufacturing and distribution network. The Company's strong
financial performance and its relatively low capital expenditure
requirements are expected to generate significant cash flow to fund the
Company's internal growth strategy.

OWNERSHIP AND MANAGEMENT

Upon completion of the Offering, Hicks Muse will beneficially own
approximately % and C. Dean Metropoulos will beneficially own approximately
% of the outstanding shares of Common Stock. None of Hicks Muse, Mr.
Metropoulos or their related entities is selling any shares in the Offering. See
"Principal Stockholders."

Hicks Muse is a private investment firm based in Dallas, New York, St.
Louis and Mexico City that specializes in acquisitions, recapitalizations and
other principal investing activities. Hicks Muse has a distinctive investment
philosophy emphasizing growth of sales and earnings in existing portfolio
companies by pursuing strategic acquisitions. Since the firm's inception in
1989, Hicks Muse has completed or has pending 148 transactions having a combined
transaction value exceeding $24.1 billion. Of the completed or pending
transactions, 44 have been acquisitions of platform companies such as
International Home Foods and 104 have been strategic acquisitions by a platform
company such as the Bumble Bee Acquisition by International Home Foods. This
strategy has been successfully employed in a number of Hicks Muse portfolio
companies such as Berg Electronics, Inc. and Chancellor Media Corporation. In
International Home Foods, Hicks Muse has combined its financial experience with
the operating management experience of Mr. Metropoulos. Hicks Muse and Mr.
Metropoulos have established an exclusive relationship to pursue acquisitions of
food companies that Mr. Metropoulos will manage. See "Risk Factors -- Control by
Principal Stockholder; Relationship with Principal Stockholder and Management;
Allocation of Corporate Opportunities."
7
<PAGE> 9

THE OFFERING

<TABLE>
<S> <C>
Common Stock offered................. shares

Common Stock to be outstanding after
the Offering(1).................... shares

Use of proceeds...................... Redemption of $160.0 million principal amount of the
Company's 10 3/8% Senior Subordinated Notes due 2006
("Senior Subordinated Notes") at a redemption price of
110.375%, plus accrued and unpaid interest thereon, with the
remainder to repay indebtedness under the Company's senior
secured credit facilities (the "Senior Bank Facilities").
See "Use of Proceeds."

Proposed New York Stock Exchange
symbol.............................
</TABLE>

- ---------------

(1) Excludes shares of Common Stock issuable upon exercise of
outstanding stock options granted to certain employees of the Company. In
addition, the Company has reserved shares of Common Stock for issuance
in connection with options that may be granted under the Company's 1997
Stock Option Plan (the "Stock Option Plan"). See "Management -- Benefit
Plans."

RISK FACTORS

Prospective purchasers of the Common Stock should consider carefully all of
the information set forth in this Prospectus and, in particular, should evaluate
the specific factors set forth under the caption "Risk Factors" beginning on
page 11, which provides a discussion of certain risks involved in an investment
in the Common Stock.
8
<PAGE> 10

SUMMARY HISTORICAL AND PRO FORMA FINANCIAL DATA

The following table sets forth summary historical and pro forma as adjusted
financial data of the Company for the periods ended and as of the dates
indicated. The summary historical statement of operations data for the years
ended December 31, 1994, 1995 and 1996 and the summary historical balance sheet
data as of December 31, 1996 are derived from the audited financial statements
of the Company included elsewhere in this Prospectus. The summary historical
statement of operations data for the six month periods ended June 30, 1996 and
1997 and the summary historical balance sheet data as of June 30, 1997 are
derived from the unaudited financial statements of the Company included
elsewhere in this Prospectus and which, in the opinion of management, include
all adjustments necessary for a fair presentation. The selected historical
statement of operations data for the year ended December 31, 1993 are derived
from the audited financial statements of the Company not included in the
Prospectus. The summary historical statement of operations data for the year
ended December 31, 1992 are derived from the unaudited financial statements of
the Company which are not included in this Prospectus and which, in the opinion
of management, include all adjustments necessary for a fair presentation. The
summary pro forma as adjusted financial data reflect adjustments, where
appropriate, to the historical financial data of the Company to give effect to
(i) the IHF Acquisition, (ii) the Bumble Bee Acquisition and (iii) the Offering.
This information should be read in conjunction with the Company's historical
consolidated financial statements, and the unaudited pro forma financial
statements and related notes thereto appearing elsewhere in this Prospectus and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, SIX MONTHS ENDED JUNE 30,
----------------------------------------------------------- -------------------------------
1992 1993 1994 1995 1996(1)(2) 1996 1997(1)(2)
---------------------- ----------------------
PRO FORMA PRO FORMA
ACTUAL AS ADJUSTED ACTUAL AS ADJUSTED
(IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales...................... $865.8 $935.7 $997.3 $ 818.9 $ 942.8 $1,338.4 $449.3 $ 494.4 $ 673.4
Cost of goods sold............. 402.6 432.0 463.1 398.2 444.9 723.1 214.2 230.8 358.4
------ ------ ------ ------- -------- -------- ------ -------- --------
Gross profit................... 463.2 503.7 534.2 420.7 497.9 615.3 235.1 263.6 315.0
Marketing expenses:
Advertising.................. 36.8 33.2 32.8 42.4 58.6 59.0 30.9 31.2 31.3
Consumer promotion........... 26.2 21.5 25.5 23.5 17.5 19.0 10.4 11.5 13.2
Trade promotion.............. 101.0 118.7 127.6 102.0 101.0 182.9 45.8 59.7 98.3
Other........................ 15.2 16.5 14.9 18.5 14.4 20.1 6.0 6.8 8.3
------ ------ ------ ------- -------- -------- ------ -------- --------
Total marketing
expenses............... 179.2 189.9 200.8 186.4 191.5 281.0 93.1 109.2 151.1
Other operating expenses:
Selling...................... 43.3 47.2 52.3 45.9 46.3 55.5 22.0 22.0 26.0
Storage, packing and
shipping................... 51.0 57.6 63.4 55.3 55.2 53.4 26.6 28.0 27.4
Administrative............... 17.0 20.5 23.2 23.6 19.7 30.8 9.8 11.8 17.5
General and other............ 16.4 35.2 35.3 40.9 32.0 36.9 13.2 14.2 15.2
------ ------ ------ ------- -------- -------- ------ -------- --------
Total other operating
expenses(1)(2)......... 127.7 160.5 174.2 165.7 153.2 176.6 71.6 76.0 86.1
------ ------ ------ ------- -------- -------- ------ -------- --------
Operating profit............... 156.3 153.3 159.2 68.6 153.2 157.7(3) 70.4 78.4 77.8
Interest expense............... -- -- -- -- 17.1 90.1 -- 51.8 47.4
Interest income and other,
net.......................... -- -- -- -- 0.2 0.3 -- 1.6 --
Provision for income taxes..... 56.7 60.9 63.3 29.4 53.3 32.2 26.8 11.3 17.7
------ ------ ------ ------- -------- -------- ------ -------- --------
Net income..................... $ 99.6 $ 92.4 $ 95.9 $ 39.2 $ 83.0 $ 35.7 $ 43.6 $ 16.9 $ 12.7
====== ====== ====== ======= ======== ======== ====== ======== ========

Income per common share............................................ $ 0.25 $ 0.05
Pro forma income per common share(4)...............................
Weighted average number of shares outstanding(4)...................

BALANCE SHEET DATA (END OF
PERIOD):
Working capital (excluding current portion of long-term debt)...... $ 107.6 $ 120.4 $ 127.2
Total assets....................................................... 968.3 962.3 1,112.0
Long-term debt (including current portion)......................... 1,070.0 1,057.0 1,001.4
Stockholders' equity (deficit)..................................... (264.2) (247.4) (75.5)
</TABLE>

9
<PAGE> 11
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, SIX MONTHS ENDED JUNE 30,
----------------------------------------------------------- -------------------------------
1992 1993 1994 1995 1996(1)(2) 1996 1997(1)(2)
---------------------- ----------------------
PRO FORMA PRO FORMA
ACTUAL AS ADJUSTED ACTUAL AS ADJUSTED
(IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
OTHER FINANCIAL DATA:
EBITDA(5)...................... $168.1 $178.3 $185.6 $ 98.8 $ 172.2 $ 181.4 $ 79.6 $ 92.1 $ 93.1
Depreciation and
amortization................. 11.8 25.0 26.4 30.2 19.0 23.7 9.2 13.7 15.3
Capital expenditures........... 18.6 22.0 31.1 24.2 11.9 13.4 4.9 8.0 8.1
Cash flows provided by (used
in):
Operating activities......... $113.5 $ 88.5 $ 83.4 $ 145.5 $ 146.0 $ 80.4 $ 68.6
Investing activities......... (75.6) (89.6) (31.1) (24.2) (41.0) (4.9) (8.0)
Financing activities......... (37.9) 1.6 (51.6) (121.6) (59.0) (75.5) (32.0)
</TABLE>

- ---------------

(1) Operating expenses for historical periods include certain nonrecurring
charges recognized by the Company in connection with the IHF Acquisition and
subsequent management initiatives aggregating $6.0 for the year ended
December 31, 1996, consisting of: severance expense ($3.2), costs associated
with change of corporate name and relabeling of the Company's products
($1.2), expenses of hiring and relocating of certain senior executives
($1.2) and other costs ($0.4). Nonrecurring charges recognized in the six
months ended June 30, 1997 amounted to $1.7, consisting of additional
severance ($0.7), relocation expense ($0.7) and relabeling costs ($0.3).

(2) Operating expenses on a pro forma as adjusted basis for the year ended
December 31, 1996 include the nonrecurring charges referred to in Note (1)
above, plus the following nonrecurring charges in connection with the
integration of the Bumble Bee Business: $4.9, consisting of purchase
accounting adjustments ($2.5), write-off of deferred financing fees ($1.1)
and management fees paid to the former owners of the business ($1.3). For
the six months ended June 30, 1997, such nonrecurring charges amounted to
$0.9 million, consisting of management fees paid to the former owners of the
business ($.66) and severance ($0.3).

(3) Operating profit for the year ended December 31, 1996 on a pro forma as
adjusted basis was $157.7. Excluding the effect of the nonrecurring charges
discussed in Notes (1) and (2) above of $10.9, including the $0.4 operating
profit of Heritage for the period prior to its acquisition (January 1, 1996
through October 31, 1996) and including the $25.3 of annualized net cost
savings achieved since the IHF Acquisition, operating profit on a pro forma
as adjusted basis would have been $194.3. The annualized cost savings
primarily reflect elimination of employee positions and facility
consolidations, net of increased corporate overhead. There can be no
assurance the cost savings will be realized.

(4) Due to the change in the Company's capital structure as a result of the IHF
Acquisition, historical share and per share data for periods prior to the
IHF Acquisition are not comparable to or meaningful in the context of future
periods.

(5) EBITDA represents operating profit before depreciation and amortization.
While EBITDA is not intended to represent cash flow from operations as
defined by GAAP and should not be considered as an indicator of operating
performance or an alternative to cash flow (as measured by GAAP) as a
measure of liquidity, it is included herein to provide additional
information with respect to the ability of the Company to meet its future
debt service, capital expenditures and working capital requirements. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
10
<PAGE> 12

RISK FACTORS

This Prospectus contains forward-looking statements. The words
"anticipate," "believe," "expect," "plan," "intend," "estimate," "project,"
"will," "could," "may" and similar expressions are intended to identify
forward-looking statements. Such statements reflect the Company's current views
with respect to future events and financial performance and involve risks and
uncertainties, including without limitation the risks described in this section.
Should one or more of these risks or uncertainties occur, or should underlying
assumptions prove incorrect, actual results may vary materially and adversely
from those anticipated, believed, expected, planned, intended, estimated,
projected or otherwise indicated. Investors should carefully consider the
following risk factors, in addition to the other information contained in this
Prospectus, before purchasing the Common Stock offered hereby.

SUBSTANTIAL LEVERAGE AND STOCKHOLDERS' DEFICIT

The Company is highly leveraged. As of June 30, 1997, on a pro forma as
adjusted basis for the Bumble Bee Acquisition, the Offering and the application
of the net proceeds therefrom, the Company had outstanding indebtedness of
$1,001.4 million, including $761.4 million under the Senior Bank Facilities and
$240.0 million of Senior Subordinated Notes, and a stockholders' deficit of
$75.5 million. A substantial portion of the cash flow from the Company's
operations will be applied to the service of the Company's obligations in
respect of its indebtedness for the foreseeable future. In addition to periodic
interest payments, the Company is required to make semiannual repayments of the
term loans under its Senior Bank Facilities and is further required to apply a
portion of its excess cash flow to repay the loans thereunder. See "Description
of Indebtedness.".

The Company's high degree of leverage could have important consequences to
the holders of the Common Stock, including but not limited to the following: (i)
the Company's ability to obtain additional financing for working capital,
capital expenditures, acquisitions, general corporate purposes or other purposes
may be impaired in the future, (ii) a substantial portion of the Company's cash
flow from operations must be dedicated to the payment of principal and interest
on its indebtedness, thereby reducing the funds available to the Company for
other purposes, (iii) certain of the Company's borrowings are at variable rates
of interest (including borrowings under the Senior Bank Facilities), which
expose the Company to the risk of increased interest rates, (iv) the Company may
be substantially more leveraged than certain of its competitors, which may place
the Company at a competitive disadvantage and (v) the Company's substantial
degree of leverage may limit its flexibility to adjust to changing market
conditions, reduce its ability to withstand competitive pressures and make it
more vulnerable to a downturn in general economic conditions or its business.

The Company's ability to make scheduled payments or to refinance its
obligations with respect to its indebtedness will depend on its financial and
operating performance, which in turn will be subject to prevailing economic
conditions and to certain financial, business and other factors beyond its
control. If the Company's cash flow and capital resources are insufficient to
fund its debt service obligations, the Company may be forced to reduce or delay
planned expansion and capital expenditures, sell assets, obtain additional
equity capital or restructure its debt. There can be no assurance that the
Company's operating results, cash flow and capital resources will be sufficient
for payment of its indebtedness in the future. In the absence of such operating
results and resources, the Company could face substantial liquidity problems and
might be required to dispose of material assets or operations to meet its debt
service and other obligations, and there can be no assurance as to the timing of
such sales or the proceeds that the Company could realize therefrom. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources" and "Description of
Indebtedness."

RESTRICTIVE DEBT COVENANTS

The Senior Bank Facilities and the indenture related to the Senior
Subordinated Notes (the "Indenture") contain a number of significant covenants
that, among other things, restrict the ability of the Company and its
subsidiaries to dispose of assets, incur additional indebtedness, incur
guarantee obligations, repay other indebtedness or amend other debt instruments,
pay dividends, create liens on assets, enter into leases, make

11
<PAGE> 13

investments, loans or advances, make acquisitions, engage in mergers or
consolidations, make capital expenditures, engage in certain transactions with
subsidiaries and affiliates and otherwise restrict corporate activities. In
addition, the Company is required to comply with specified financial ratios and
satisfy certain financial condition tests. The Company's ability to comply with
such agreements may be affected by events beyond its control, including
prevailing economic, financial and industry conditions. The breach of any of
such covenants or restrictions could result in a default under the Senior Bank
Facilities or the Indenture, which would permit the senior lenders or the
holders of the Senior Subordinated Notes, as the case may be, to declare all
amounts borrowed thereunder to be due and payable, together with accrued and
unpaid interest. If the Company were unable to repay its indebtedness to its
senior lenders, such lenders could proceed against the collateral securing such
indebtedness. If the indebtedness under the Senior Bank Facilities or the Senior
Subordinated Notes were to be accelerated, there can be no assurance that the
assets of the Company would be sufficient to repay in full such indebtedness and
the other indebtedness of the Company.

GENERAL RISKS OF FOOD INDUSTRY

The food products manufacturing industry is subject to the risk of adverse
changes in general economic conditions; adverse changes in local markets
resulting in greater risks inherent in the limited shelf life of food products
in case of oversupply; lack of attractiveness of a particular food product line
after its novelty has worn off; evolving consumer preferences and nutritional
and health-related concerns; federal, state and local food processing controls;
consumer product liability claims; the risk of product tampering; and the
availability and expense of insurance. See "Business."

DEPENDENCE ON RAW MATERIALS

The primary raw materials used in the Company's operations include tin
cans, flour, meat, tuna, salmon, tomatoes, corn, fruit and fruit-juice
concentrates, beans and peanuts. All of the Company's raw materials are
generally available from numerous suppliers, other than white albacore tuna
processed by the Bumble Bee Business, for which there is limited worldwide
supply and number of suppliers. The prices of many of these raw materials are
affected by, among other things, agricultural policies of the United States
government and weather conditions. Movement in the price level of these raw
materials can have a corresponding impact on finished product costs, and hence,
gross margins. The ability of the Company to pass through increases in costs of
raw materials to its customers is dependent upon competitive conditions and
pricing methodologies employed in the various markets in which the Company
operates. See "Business -- Raw Materials."

IMPLEMENTATION OF BUSINESS STRATEGY; STRATEGIC ACQUISITIONS

The Company intends to pursue a business strategy of increasing sales and
earnings in its core business through growing sales of existing brands and
achieving cost savings. No assurance can be given that the Company will be
successful in implementing this strategy. See "Business -- Business Strategy."

The Company also intends to pursue a business strategy of growth through
strategic acquisitions. The Company cannot predict whether it will be successful
in pursuing any acquisition opportunities or what the consequences of any
acquisitions would be. The Company is currently evaluating certain strategic
acquisitions; however, the Company has no binding commitment to acquire any
business or other material assets. No assurance can be given that any strategic
acquisition will be consummated or that, if consummated, it will be successful.
The Company's acquisition strategy involves numerous risks, including
difficulties in the integration of the operations, systems and management of
acquired businesses and the diversion of management's attention from other
business concerns. Depending on the nature, size and timing of future
acquisitions, the Company may be required to raise additional financing. There
can be no assurance that the Senior Bank Facilities, the Indenture or any other
loan agreement to which the Company may become a party will permit such
additional financing, and there can be no assurance that any additional
financing will be available on terms acceptable to the Company, or at all.

12
<PAGE> 14

COMPETITION

The food products business is highly competitive. Numerous brands and
products compete for shelf space and sales, with competition based primarily on
brand recognition and loyalty, price, quality and convenience. The Company
competes with a significant number of companies of varying sizes, including
divisions or subsidiaries of larger companies. A number of these competitors
have broader product lines as well as substantially greater financial and other
resources available to them and lower fixed costs, and there can be no assurance
that the Company can compete successfully with such other companies. In
addition, many of the Company's competitors may be substantially less leveraged.
Competitive pressures or other factors could cause the Company's products to
lose market share or result in significant price erosion, which could have a
material adverse effect on the Company. See "Business."

CONTROL BY PRINCIPAL STOCKHOLDER; RELATIONSHIP WITH PRINCIPAL STOCKHOLDER AND
MANAGEMENT; ALLOCATION OF CORPORATE OPPORTUNITIES

In connection with the IHF Acquisition, Hicks Muse acquired beneficial
ownership of 80% of the Company's outstanding Common Stock. All of the members
of the Company's Board of Directors were nominated by Hicks Muse. After
completion of the Offering, Hicks Muse and certain of its officers, employees
and affiliates will continue to own or control a significant portion of the
outstanding shares of Common Stock and, accordingly, will be able to (i) direct
the election of a majority of the members of the Board of Directors of the
Company and therefore direct the management and policies of the Company, (ii)
practically determine the outcome of any corporate or other matter submitted to
the Company's stockholders for approval, including any merger, consolidation,
sale of all or substantially all of the Company's assets or "going private"
transaction and (iii) prevent or cause a change of control of the Company. The
interests of Hicks Muse may conflict with those of other shareholders of the
Company. The Company has recently acquired Productos del Monte from an affiliate
of Hicks Muse. See "Principal Stockholders" and "Certain Relationships and
Related Transactions." In addition, certain officers and directors of the
Company, including Mr. Metropoulos, also serve as officers or directors of other
portfolio companies of Hicks Muse. Service as a director or officer of both the
Company and another company (other than a subsidiary of the Company) could
create or appear to create potential conflicts of interest when the director or
officer is faced with decisions that could have different implications for the
Company and such other company. A conflict of interest could also exist with
respect to allocation of the time and attention of persons who are officers of
both the Company and one or more other companies. Under Delaware law, directors
and officers have a fiduciary duty to act in good faith and in what they believe
to be in the best interests of the corporation and its stockholders. Such duties
include the duty to refrain from impermissible self-dealing and to deal fairly
with respect to transactions in which such directors or officers, or other
companies with which they are affiliated, have an interest.

Neither Hicks Muse nor Mr. Metropoulos is restricted from acquiring or
managing other companies in the food business, including companies that may be
competitive with the Company. Hicks Muse has stated that it expects to commit
significant amounts of equity capital to acquire food and other branded consumer
product companies in North America and Latin America that Mr. Metropoulos will
help manage. There is no agreement requiring that any such acquisition
opportunities be pursued through the Company. As a result, conflicts may exist
between the Company on the one hand and Hicks Muse and Mr. Metropoulos on the
other hand with respect to the allocation of corporate opportunities, including
acquisition opportunities. No assurance can be given that any such conflicts
will be resolved in favor of the Company.

GOVERNMENTAL REGULATION

The Company's operations are subject to extensive regulation by the United
States Food and Drug Administration ("FDA"), the United States Department of
Agriculture and other state and local authorities regarding the processing,
packaging, storage, distribution, advertising and labeling of the Company's
products and environmental compliance. The Company's manufacturing facilities
and products are subject to periodic inspection by federal, state and local
authorities. The Company's advertising is subject to regulation by the Federal
Trade Commission ("FTC") pursuant to the Federal Trade Commission Act and
regulations issued thereunder. In addition, the Company is subject to similar
laws in foreign jurisdictions in which it conducts

13
<PAGE> 15

operations. The Company believes that it is currently in substantial compliance
with all material governmental laws and regulations and maintains all material
permits and licenses relating to its operations. Nevertheless, there can be no
assurance that the Company is in compliance with such laws and regulations or
that it will be able to comply with any future laws and regulations. Failure by
the Company to comply with applicable laws and regulations could subject the
Company to civil remedies, including fines, injunctions, recalls or seizures, as
well as potential criminal sanctions, which could have a material adverse effect
on the Company. See "Business -- Certain Legal and Regulatory Matters."

ENVIRONMENTAL MATTERS

The past and present business operations of the Company and the past and
present ownership and operation of real property by the Company are subject to
extensive and changing federal, state, local and foreign environmental laws and
regulations pertaining to the discharge of materials into the environment and
the handling and disposition of wastes (including solid and hazardous wastes) or
otherwise relating to protection of the environment. Compliance with such laws
and regulations is not expected to have a material impact on the Company's
capital expenditures, earnings or competitive position. No assurance can be
given, however, that additional environmental issues relating to presently known
matters or identified sites or to other matters or sites will not require
additional, currently unanticipated investigation, assessment or expenditures.
See "Business -- Certain Legal and Regulatory Matters -- Environmental."

TRADEMARKS

The Company believes that its trademarks and other proprietary rights are
important to its success and its competitive position. Accordingly, the Company
devotes substantial resources to the establishment and protection of its
trademarks on a worldwide basis. There can be no assurance that the actions
taken by the Company to establish and protect its trademarks and other
proprietary rights will be adequate to prevent imitation of its products by
others or to prevent others from seeking to block sales of the Company's
products as violative of the trademarks and proprietary rights of others.
Moreover, no assurance can be given that others will not assert rights in, or
ownership of, trademarks and other proprietary rights of the Company or that the
Company will be able to successfully resolve such conflicts. In additions, the
laws of certain foreign countries may not protect proprietary rights to the same
extent as do the laws of the United States. See "Business -- Trademarks."

PRODUCT LIABILITY; PRODUCT RECALLS

The Company may be subject to significant liability should the consumption
of any of its products cause injury, illness or death and may be required to
recall certain of its products in the event of contamination or damage to the
products. There can be no assurance that product liability claims will not be
asserted against the Company or that the Company will not be obligated to recall
its products. The Company has not historically incurred material expenditures in
respect of product liability claims and is effectively self-insured against such
liabilities. A product liability judgment against the Company or a product
recall could have a material adverse effect on the Company's business, financial
condition and results of operations.

DILUTION

Persons purchasing shares of Common Stock in the Offering will incur
immediate dilution in the net tangible book value per share of Common Stock of
approximately $ per share. This dilution is calculated based on an assumed
initial public offering price of $ per share (the midpoint of the estimated
offering range). In addition, the exercise of existing stock options would
result in further dilution. Dilution for this purpose represents the difference
between the per share initial public offering price of the Common Stock and the
pro forma as adjusted net tangible book value per share of Common Stock after
giving effect to the Offering and the use of proceeds therefrom. See "Dilution."

14
<PAGE> 16

SHARES ELIGIBLE FOR FUTURE SALE; REGISTRATION RIGHTS

Upon completion of the Offering, the Company will have outstanding
shares of Common Stock. Of these shares, the shares of
Common Stock sold in the Offering ( shares if the Underwriters'
over-allotment option is exercised in full) will be freely transferable without
restriction under the Securities Act of 1933 (the "Securities Act"), by persons
other than "affiliates" of the Company within the meaning of Rule 144
promulgated under the Securities Act ("Rule 144"). The Company issued the
remaining shares of Common Stock in reliance on exemptions from the
registration requirements of the Securities Act, and those shares are
"restricted" securities under Rule 144. For purposes of Rule 144,
shares of Common Stock are currently eligible for sale and there will be (i)
shares of Common Stock eligible for sale beginning in
and (ii) shares of Common Stock eligible for sale beginning in
, based on current Securities and Exchange Commission
("Commission") rules and subject to compliance with the manner-of-sale, volume
and other limitations of Rule 144.

The Company is a party to a registration rights agreement (the
"Registration Rights Agreement") with certain of its stockholders, including
affiliates of Hicks Muse and American Home Products, which grants those
stockholders, who hold an aggregate of shares of Common Stock, the
right to require the Company, subject to certain limitations, to effect up to an
aggregate of six "demand" registrations under the Securities Act for the sale of
such stockholders' shares of Common Stock. The parties to the Registration
Rights Agreement have waived their rights to participate as selling stockholders
in the Offering. See "Certain Relationships and Related Transactions."

Each of the Company, its officers and directors, Hicks Muse and its
affiliates, and certain other stockholders of the Company has agreed that it
will not (i) offer, pledge, sell, solicit an offer to buy, contract to sell,
grant any option, right or warrant to purchase, or otherwise transfer or dispose
of, directly or indirectly, or file with the Commission a registration statement
under the Securities Act relating to any shares of Common Stock, or any
securities that are convertible into or exercisable or exchangeable for Common
Stock or (ii) enter into any swap or other arrangement that transfers all or a
portion of the economic consequences associated with ownership of any Common
Stock, for a period of days after the date of this Prospectus without the
prior written consent of Donaldson, Lufkin & Jenrette Securities Corporation,
except pursuant to certain limited exceptions. See "Shares Eligible for Future
Sale" and "Underwriting."

Future sales of substantial amounts of Common Stock, or the perception that
such sales could occur, may affect the market price of the Common Stock
prevailing from time to time. See "Shares Eligible for Future Sale" and
"Underwriting."

NO PRIOR PUBLIC MARKET

Prior to the Offering, there has been no public market for the Common Stock
and there can be no assurance that an active public market will develop or be
sustained after the Offering or that the initial public offering price
corresponds to the price at which the Common Stock will trade in the public
market subsequent to the Offering. The initial public offering price for the
Common Stock will be determined by negotiations among the Company and the
representatives of the Underwriters based upon the consideration of certain
factors set forth herein under "Underwriting." Market conditions in the food
industry and market fluctuations in the stock market generally may have an
adverse impact on the market price of the Common Stock.

15
<PAGE> 17

THE COMPANY

The Company is a leading North American manufacturer and marketer of a
diversified, well-established portfolio of shelf-stable food products with
popular brand names. Prior to November 1, 1996, the Company was an indirect
wholly-owned subsidiary of American Home Products. Effective on November 1,
1996, an affiliate of Hicks Muse acquired 80% of the outstanding capital stock
of the Company from American Home Products for approximately $1,225.6 million in
cash in a transaction treated as a recapitalization for financial accounting
purposes. Also effective on November 1, 1996, the Company acquired all of the
outstanding capital stock of Heritage from an affiliate of Hicks Muse for
approximately $70.8 million in cash in a transaction treated as a purchase for
financial accounting purposes. Heritage manufactures and markets the Company's
Campfire branded products. In connection with these transactions, the Company
incurred approximately $1,070.0 million of indebtedness, consisting of $670.0
million of borrowings under the Senior Bank Facilities and the issuance of
$400.0 million of principal amount of the Senior Subordinated Notes. See
"Principal Stockholders" and "Certain Relationships and Related Transactions."

On July 1, 1997, the Company consummated the acquisition of substantially
all of the assets of Bumble Bee Seafoods for approximately $160.0 million in
cash, plus fees and expenses, and the assumption of certain liabilities,
including trade payables. Bumble Bee is one of the leading brands of premium
canned seafood in the U.S. and the leading brand of canned white meat tuna and
canned salmon in the U.S. The assets acquired consisted primarily of inventory,
accounts receivable, property, plant and equipment and trademarks used by the
Bumble Bee Business for the processing and marketing of the Company's Bumble Bee
canned seafood products. Prior to this transaction, Bumble Bee Seafoods was
highly leveraged and had capital constraints which limited Bumble Bee Seafoods'
ability to source raw materials and most effectively market its products. To
facilitate the purchase of the Bumble Bee Business by the Company free and clear
of existing liens, Bumble Bee Seafoods filed for bankruptcy. In connection with
the transaction, the Company increased its borrowings under the Senior Bank
Facilities by $110.0 million. The remainder of the purchase price was provided
from the Company's available cash on hand. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Bumble Bee
Seafoods" and "Business -- Products and Markets -- Bumble Bee."

On October 1, 1997, the Company acquired Productos Del Monte from an
affiliate of Hicks Muse for approximately $40.0 million in the form of shares of
Common Stock. Productos Del Monte is a leading manufacturer and marketer of
branded catsup, canned vegetables and bottled salsa in Mexico. During 1996,
Productos Del Monte had net sales of $49.7 million. The acquisition of Productos
Del Monte was treated as a combination of entities under common control.
Accordingly, the historical accounting values of Productos Del Monte were
carried over for financial accounting purposes. See "Certain Relationships and
Related Transactions."

On October 1, 1997, the Company acquired Creative Products for
approximately $52.0 million in cash. The acquisition was funded through
borrowings under the Company's Senior Bank Facilities. Creative Products is the
leading manufacturer of cooking spray sold to private label customers and food
service operators. In addition, Creative Products manufactures on a contract
basis a number of health and beauty aid products, including hair mousses, hair
sprays and deodorants. In 1996, Creative Products had net sales of $46.0
million. The acquisition of Creative Products was treated as a purchase for
financial accounting purposes.

The Company was incorporated on October 28, 1986. The Company's principal
executive offices are located at 1633 Littleton Road, Parsippany, New Jersey
07054, and its main telephone number at that address is (201) 359-9920.

16
<PAGE> 18

USE OF PROCEEDS

The net proceeds to be received by the Company from the Offering (after
deducting the underwriting discounts and commissions and estimated offering
expenses), based on an assumed initial public offering price of $ per share,
the midpoint of the estimated offering range, are estimated to be approximately
$ million. Approximately $180.0 million of the net proceeds from the
Offering will be used by the Company to redeem in the aggregate $160.0 million
principal amount of the Company's 10 3/8% Senior Subordinated Notes due 2006 at
a redemption price of 110.375%, including accrued and unpaid interest thereon.
The remaining net proceeds will be used to repay indebtedness under the
revolving credit line of the Senior Bank Facilities. This revolving credit
facility indebtedness, which was incurred in connection with the Bumble Bee
Acquisition, bears interest at LIBOR plus 2% and matures on March 31, 2003. For
a description of the Senior Subordinated Notes and the Senior Bank Facilities,
see "Description of Indebtedness."

DIVIDEND POLICY

The right of the Company to participate in any distribution of earnings or
assets is subject to the prior claims of the creditors of the Company. The
Senior Bank Facilities and the Indenture contain certain restrictive covenants,
including covenants that restrict or prohibit the Company's ability to pay
dividends and make other distributions. The Company intends to retain future
earnings for use in the Company's business and does not anticipate declaring or
paying any cash or stock dividends on shares of its Common Stock in the
foreseeable future. Further, any determination to declare and pay dividends will
be made by the Board of Directors of the Company in light of the Company's
earnings, financial position, capital requirements and credit agreements and
such other factors as the Board of Directors deems relevant. See "Risk
Factors -- Restrictive Debt Covenants" and "Description of Indebtedness."

DILUTION

As of June 30, 1997, the Company had a pro forma as adjusted deficit in net
tangible book value of $333.6 million or approximately $ per share of Common
Stock after giving effect to the Bumble Bee Acquisition and the Offering. Net
tangible book value per share is determined by dividing the tangible net worth
of the Company (tangible assets less total liabilities) by the total number of
shares of Common Stock outstanding. After giving effect to the sale by the
Company of the shares of Common Stock offered hereby at an assumed initial
public offering price of $ per share and the deduction of the estimated
underwriting discount and offering expenses payable by the Company in connection
therewith, but without taking into account any other changes in such net
tangible book value after June 30, 1997, the deficit in net tangible book value
of the Company as of June 30, 1997, as adjusted, would have been approximately
$ million or $
per share. This represents an immediate dilution of $ per share to new
investors purchasing shares at the assumed initial public offering price. The
following table illustrates the per share dilution in pro forma net tangible
book value to new investors. The table assumes no exercises of any options to
purchase Common Stock outstanding at June 30, 1997.

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share............. $
Net pro forma tangible book value (deficit) per share as
of
June 30, 1997.......................................... $
Increase per share attributable to the Offering...........
--------
Pro forma net tangible book value (deficit) per share as
adjusted for this Offering.............................
--------
Net tangible book value dilution per share to new
investors................................................. $
========
</TABLE>

17
<PAGE> 19

The following table summarizes as of June 30, 1997, after giving effect to
the sale of the shares of Common Stock offered hereby, the number of shares of
Common Stock purchased from the Company, the total consideration paid therefore
and the average price per share paid by the existing stockholders and by the new
investors purchasing shares of Common Stock in this offering before deduction of
the estimated underwriting discounts and commissions and offering expenses
payable by the Company:

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE
----------------- ------------------- PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
<S> <C> <C> <C> <C> <C>
Existing stockholders.............. % $ % $
New investors...................... % %
------- ----- ------- ----- -------
Total......................... 100.0% $ 100.0% $
======= ===== ======= ===== =======
</TABLE>

18
<PAGE> 20

CAPITALIZATION

The following table sets forth the historical capitalization of the Company
as of June 30, 1997 ("Actual"), the unaudited pro forma capitalization of the
Company after giving effect to the Bumble Bee Acquisition ("Pro Forma"), and the
unaudited pro forma as adjusted capitalization of the Company, after giving
further effect to the Offering and the application of the net proceeds therefrom
("Pro Forma As Adjusted"). This table should be read in conjunction with the
historical consolidated financial statements of the Company, the unaudited pro
forma financial statements and the related notes thereto included elsewhere in
this Prospectus.

<TABLE>
<CAPTION>
AS OF JUNE 30, 1997
----------------------------------------
ACTUAL PRO FORMA PRO FORMA
(IN MILLIONS) AS ADJUSTED
<S> <C> <C> <C>
Long-term debt (including current maturities):
Revolving credit facility(1)(2)(3)..................... $ -- $ 30.0 $ 24.4
Term loans(2).......................................... 657.0 737.0 737.0
10 3/8% Senior Subordinated Notes due 2006(3).......... 400.0 400.0 240.0
-------- -------- --------
Total long-term debt........................... 1,057.0 1,167.0 1,001.4
-------- -------- --------
Stockholders' equity (deficiency)(4):
Preferred stock (no shares issued and outstanding)..... -- -- --
Voting common stock.................................... 3.3 3.3 3.3
Non-voting common stock................................ -- -- --
Additional paid-in capital(5).......................... (264.0) (264.0) (79.0)
Retained earnings...................................... 15.3 15.3 2.2
Foreign currency translation adjustment................ (2.0) (2.0) (2.0)
-------- -------- --------
Total stockholders' equity (deficiency)........ (247.4) (247.4) (75.5)
-------- -------- --------
Total capitalization........................... $ 809.6 $ 919.6 $ 925.9
======== ======== ========
</TABLE>

- ---------------

(1) The revolving credit facility provides for borrowings of up to $140.0
million. See "Description of Indebtedness."

(2) Pro Forma and Pro Forma As Adjusted gives effect to the incremental
borrowings under the Senior Bank Facilities to fund the Bumble Bee
Acquisition.

(3) Pro Forma As Adjusted gives effect to the redemption of $160.0 million of
Senior Subordinated Notes and the application of the remaining net proceeds
to repay $5.6 million of borrowings under the revolving credit facility.

(4) Pro Forma As Adjusted gives effect to the $200.0 million of proceeds from
the Offering, less (i) the related fees and expenses of $15.0 million and
(ii) a $13.1 million extraordinary charge, net of tax, consisting of the
write-off of deferred financing costs of $3.1 million, net of tax, and the
redemption premium paid of $10.0 million, net of tax.

(5) As a result of the IHF Acquisition, the Company has a stockholders'
deficiency for accounting purposes.

19
<PAGE> 21

SELECTED HISTORICAL FINANCIAL AND OPERATING INFORMATION

The following table sets forth selected historical financial and operating
information of the Company for the periods ended and as of the dates indicated.
The selected historical statement of operations data for the years ended
December 31, 1994, 1995 and 1996 and the historical balance sheet data as of
December 31, 1995 and 1996 are derived from the audited financial statements of
the Company included elsewhere in this Prospectus. The selected historical
statement of operations data for the six months ended June 30, 1996 and 1997 and
the selected historical balance sheet data as of June 30, 1997 are derived from
the unaudited financial statements of the Company included elsewhere in this
Prospectus and which, in the opinion of management, include all adjustments
necessary for a fair presentation. The selected historical statement of
operations data for the year ended December 31, 1993 and the selected historical
balance sheet data as of December 31, 1993 and 1994 are derived from the audited
financial statements of the Company not included in this Prospectus. The
selected historical statement of operations data for the year ended December 31,
1992 and the selected historical balance sheet data as of June 30, 1996 and
December 31, 1992 are derived from the unaudited financial statements of the
Company which are not included in this Prospectus and which, in the opinion of
management, include all adjustments necessary for a fair presentation. This
table should be read in conjunction with the Company's historical consolidated
financial statements and related notes thereto included elsewhere in this
Prospectus and with "Management's Discussion and Analysis of Financial Condition
and Results of Operations."

<TABLE>
<CAPTION>
SIX MONTHS
ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
------------------------------------------ -----------------
1992 1993 1994 1995 1996 1996 1997
(IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales.......................................... $865.8 $935.7 $997.3 $818.9 $942.8 $449.3 $ 494.4
Cost of goods sold................................. 402.6 432.0 463.1 398.2 444.9 214.2 230.8
------ ------ ------ ------ ------ ------ --------
Gross profit....................................... 463.2 503.7 534.2 420.7 497.9 235.1 263.6
Marketing expenses:
Advertising...................................... 36.8 33.2 32.8 42.4 58.6 30.9 31.2
Consumer promotion............................... 26.2 21.5 25.5 23.5 17.5 10.4 11.5
Trade promotion.................................. 101.0 118.7 127.6 102.0 101.0 45.8 59.7
Other............................................ 15.2 16.5 14.9 18.5 14.4 6.0 6.8
------ ------ ------ ------ ------ ------ --------
Total marketing expenses.................... 179.2 189.9 200.8 186.4 191.5 93.1 109.2
Other operating expenses:
Selling.......................................... 43.3 47.2 52.3 45.9 46.3 22.0 22.0
Storage, packing and shipping ................... 51.0 57.6 63.4 55.3 55.2 26.6 28.0
Administrative................................... 17.0 20.5 23.2 23.6 19.7 9.8 11.8
General and other................................ 16.4 35.2 35.3 40.9 32.0 13.2 14.2
------ ------ ------ ------ ------ ------ --------
Total other operating expenses.............. 127.7 160.5 174.2 165.7 153.2 71.6 76.0
------ ------ ------ ------ ------ ------ --------
Operating profit................................... 156.3 153.3 159.2 68.6 153.2 70.4 78.4
Interest expense................................... -- -- -- -- 17.1 -- 51.8
Interest income and other, net..................... -- -- -- -- 0.2 -- 1.6
Provision for income taxes......................... 56.7 60.9 63.3 29.4 53.3 26.8 11.3
------ ------ ------ ------ ------ ------ --------
Net income......................................... $ 99.6 $ 92.4 $ 95.9 $ 39.2 $ 83.0 $ 43.6 $ 16.9
====== ====== ====== ====== ====== ====== ========
Income per common share(1)......................... $ 0.25 $ 0.05
Pro forma income per common share(1)...............
Weighted average number of shares outstanding(1)...
BALANCE SHEET DATA (END OF PERIOD):
Inventories........................................ $108.7 $134.2 $148.0 $139.9 $129.2 $116.0 $ 111.7
Working capital (excluding current portion of
long-term debt).................................. 128.4 157.9 197.1 120.6 107.6 93.1 120.4
Property, plant and equipment, net................. 140.5 152.0 169.7 176.8 186.0 173.8 185.4
Total assets....................................... 387.3 496.0 540.5 463.6 968.3 437.6 962.3
Long-term debt (including current portion)......... -- -- -- -- 1,070.0 -- 1,057.0
Stockholders' equity (deficit)..................... 330.1 423.6 467.1 385.0 (264.2) 353.1 (247.4)
OTHER FINANCIAL DATA:
EBITDA(2).......................................... $168.1 $178.3 $185.6 $ 98.8 $172.2 $ 79.6 $ 92.1
Depreciation and amortization...................... 11.8 25.0 26.4 30.2 19.0 9.2 13.7
Capital expenditures............................... 18.6 22.0 31.1 24.2 11.9 4.9 8.0
Cash flows provided by (used in):
Operating activities............................. $113.5 $ 88.5 $ 83.4 $145.5 $146.0 $ 80.4 $ 68.6
Investing activities............................. (75.6) (89.6) (31.1) (24.2) (41.0) (4.9) (8.0)
Financing activities............................. (37.9) 1.6 (51.6) (121.6) (59.0) (75.5) (32.0)
</TABLE>

- ---------------
(1) Due to the change in the Company's capital structure as a result of the IHF
Acquisition, historical share and per share data for periods prior to the
IHF Acquisition are not comparable to or meaningful in the context of future
periods.
(2) EBITDA represents operating profit before depreciation and amortization.
While EBITDA is not intended to represent cash flow from operations as
defined by GAAP and should not be considered as an indicator of operating
performance or an alternative to cash flow (as measured by GAAP) as a
measure of liquidity, it is included herein to provide additional
information with respect to the ability of the Company to meet its future
debt service, capital expenditures and working capital requirements. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

20
<PAGE> 22

UNAUDITED PRO FORMA FINANCIAL STATEMENTS

The following unaudited pro forma financial statements ("Unaudited Pro
Forma Financial Statements") of the Company are based on the audited and
unaudited historical consolidated financial statements of both the Company and
Bumble Bee Seafoods, which are included elsewhere in this Prospectus.

The Unaudited Pro Forma Balance Sheet has been prepared to give effect to
(i) the Bumble Bee Acquisition and the related financing and (ii) the Offering
as though such transactions occurred as of June 30, 1997. The Unaudited Pro
Forma Statements of Operations give effect to (i) the Bumble Bee Acquisition,
(ii) the Offering and (iii) for the period ended December 31, 1996, the IHF
Acquisition, as if the transactions occurred on January 1, 1996. The Unaudited
Pro Forma Financial Statements do not give effect to the pre-acquisition
operations of Heritage or the operations of Productos Del Monte and Creative
Products.

The Bumble Bee Acquisition was accounted for using the purchase method of
accounting. The total purchase price of the Bumble Bee Business was allocated to
the tangible and intangible assets acquired and liabilities assumed based upon
their respective fair values. The allocation of the Bumble Bee Business purchase
price reflected in the Unaudited Pro Forma Financial Statements is preliminary,
but is not expected to differ materially from the final purchase price
allocation.

The unaudited pro forma adjustments are based upon available information
and certain assumptions that the Company believes are reasonable. The Unaudited
Pro Forma Financial Statements and accompanying notes should be read in
conjunction with the historical consolidated financial statements of the Company
and Bumble Bee Seafoods, and other financial information pertaining to the
Company including "The Company," "Capitalization" and "Management's Discussion
and Analysis of Financial Condition and Results of Operations" included
elsewhere herein. The Unaudited Pro Forma Financial Statements are not
indicative of either future results of operations or the results that might have
occurred if the foregoing transactions had been consummated on the indicated
dates.

21
<PAGE> 23

INTERNATIONAL HOME FOODS, INC.

UNAUDITED PRO FORMA BALANCE SHEET
AS OF JUNE 30, 1997
(IN MILLIONS)

ASSETS

<TABLE>
<CAPTION>
HISTORICAL ADJUSTMENTS
--------------------- FOR THE ADJUSTMENTS
BUMBLE BEE BUMBLE BEE FOR THE PRO FORMA
IHF SEAFOODS ACQUISITION PRO FORMA OFFERING(h) AS ADJUSTED
<S> <C> <C> <C> <C> <C> <C>
Current Assets:
Cash and cash
equivalents............ $ 74.5 $ 2.4 $ (58.7)(a) $ 18.2 $ -- $ 18.2
Accounts receivable,
net.................... 50.6 29.5 -- 80.1 -- 80.1
Inventories............... 111.7 61.6 2.4(b) 175.7 -- 175.7
Prepaid expenses and other
current assets......... 18.2 15.7 (12.6)(c) 21.3 -- 21.3
-------- ------ ------- -------- ------- --------
Total current
assets.......... 255.0 109.2 (68.9) 295.3 -- 295.3
Property, plant and
equipment, net............ 185.4 19.0 1.6(b) 206.0 -- 206.0
Intangible assets, net...... 151.1 71.9 7.5(d) 230.5 -- 230.5
Deferred income taxes....... 341.2 -- -- 341.2 8.7 349.9
Other assets................ 29.6 2.7 3.2(e) 35.5 (5.2) 30.3
-------- ------ ------- -------- ------- --------
Total assets...... $ 962.3 $202.8 $ (56.6) $1,108.5 $ 3.5 $1,112.0
======== ====== ======= ======== ======= ========

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

Current Liabilities:
Accounts payable.......... $ 28.0 $ 58.2 $ (44.4)(c) $ 41.8 $ -- $ 41.8
Accrued liabilities....... 106.7 34.2 (11.8)(c) 129.1 (2.8) 126.3
Current portion of
long-term debt......... 28.5 161.1 (123.1)(f) 66.5 (5.6) 60.9
-------- ------ ------- -------- ------- --------
Total current
liabilities..... 163.2 253.5 (179.3) 237.4 (8.4) 229.0
Long-term debt.............. 1,028.5 -- 72.0(f) 1,100.5 (160.0) 940.5
Other liabilities........... 18.0 -- -- 18.0 -- 18.0
Stockholders' equity
(deficiency).............. (247.4) (50.7) 50.7(g) (247.4) 171.9 (75.5)
-------- ------ ------- -------- ------- --------
Total liabilities
and
stockholders'
equity
(deficiency).... $ 962.3 $202.8 $ (56.6) $1,108.5 $ 3.5 $1,112.0
======== ====== ======= ======== ======= ========
</TABLE>

See Accompanying Notes to Unaudited Pro Forma Balance Sheet.

22
<PAGE> 24

INTERNATIONAL HOME FOODS, INC.

NOTES TO THE UNAUDITED PRO FORMA BALANCE SHEET
(IN MILLIONS)

(a) The adjustment reflects the uses of cash in connection with the Bumble Bee
Acquisition as follows:

<TABLE>
<S> <C>
Purchase price from available Company cash.................. $(53.1)
Cash excluded from Bumble Bee Acquisition................... (2.4)
Deferred financing fees..................................... (3.2)
------
$(58.7)
======
</TABLE>

(b) To record the excess of cost over fair value of net assets acquired
resulting from the preliminary purchase price allocation as follows:

<TABLE>
<S> <C>
Purchase price from available Company cash.................. $ 53.1
Increase in borrowings under Senior Bank Facilities......... 110.0
------
Total cost of Bumble Bee Acquisition including
transaction fees................................ 163.1
Less acquired assets:
Current assets............................................ 94.1
Property, plant and equipment............................. 19.0
Intangible assets......................................... 20.9
Other assets.............................................. 2.7
Liabilities assumed......................................... (36.1)
------
Excess of cost over fair value of net assets acquired....... $ 62.5
======
</TABLE>

The excess of cost over fair value of net assets acquired of $62.5 has been
allocated on a preliminary basis as follows:

<TABLE>
<S> <C>
Inventory................................................... $ 2.4
Property, plant and equipment............................... 1.6
Goodwill.................................................... 58.5
-----
$62.5
=====
</TABLE>

(c) The adjustments reflect the elimination of certain assets not acquired and
liabilities not assumed in connection with the Bumble Bee Acquisition:

<TABLE>
<S> <C>
Assets
Other current assets...................................... $(12.6)
Liabilities
Interest payable.......................................... (9.3)
Other accrued liabilities................................. (2.5)
Notes payable............................................. (44.4)
</TABLE>

(d) The adjustment reflects the recording of and elimination of intangible
assets in connection with the Bumble Bee Acquisition as follows:

<TABLE>
<S> <C>
Goodwill resulting from the Bumble Bee Acquisition.......... $ 58.5
Elimination of Bumble Bee Seafoods' historical
organizational cost....................................... (8.0)
Elimination of Bumble Bee Seafoods' historical goodwill..... (43.0)
------
$ 7.5
======
</TABLE>

23
<PAGE> 25

INTERNATIONAL HOME FOODS, INC.

NOTES TO THE UNAUDITED PRO FORMA BALANCE SHEET -- (CONTINUED)
(IN MILLIONS)

(e) The adjustment reflects the capitalized deferred financing fees of $3.2
associated with the borrowings incurred in connection with the Bumble Bee
Acquisition under the Senior Bank Facilities.

(f) The adjustment to debt incurred reflects additional debt under the Senior
Bank Facilities and the elimination of debt not assumed in connection with
the Bumble Bee Acquisition as follows:

<TABLE>
<S> <C>
Debt not assumed............................................ $(161.1)
Increase in revolving credit facility....................... 30.0
Increase in term loans, current............................. 8.0
-------
Decrease in current portion of long-term debt............... $(123.1)
=======
Increase in long-term debt.................................. $ 72.0
=======
</TABLE>

(g) The adjustment reflects the elimination of the historical stockholder's
deficiency of Bumble Bee Seafoods.

(h) Adjustment reflects the assumed proceeds from the Offering and application
of proceeds therefrom as follows:

<TABLE>
<S> <C>
Gross proceeds from the Offering............................ $200.0
Uses:
Redemption of Senior Subordinated Notes................... 160.0
Redemption premium........................................ 16.6
Fees and expenses......................................... 15.0
Repayment of revolving credit facility.................... 5.6
Accrued interest on Senior Subordinated Notes............. 2.8
------
$200.0
======
</TABLE>

The effect of the Offering on stockholders' equity (deficiency) is as
follows:

<TABLE>
<S> <C>
Gross proceeds from the Offering............................ $200.0
Less:
Fees and expenses......................................... 15.0
Extraordinary charge, net of tax.......................... 13.1
------
Net increase in stockholders' equity........................ $171.9
======
</TABLE>

The extraordinary charge consists of the write-off of deferred financing
fees of $5.2 and the redemption premium of $16.6 less related income tax
benefit of $8.7. The extraordinary charge will be recorded in the period
the Senior Subordinated Notes are redeemed.

24
<PAGE> 26

INTERNATIONAL HOME FOODS, INC.

UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(IN MILLIONS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
ADJUSTMENTS
FOR THE
HISTORICAL ADJUSTMENTS IHF
------------------- FOR THE ACQUISITION
BUMBLE BEE BUMBLE BEE AND THE PRO FORMA
IHF SEAFOODS ACQUISITION PRO FORMA OFFERING AS ADJUSTED(h)(i)
<S> <C> <C> <C> <C> <C> <C>

Net sales................ $942.8 $395.6 $ -- $1,338.4 $ -- $1,338.4
Cost of goods sold....... 444.9 275.7 2.5(a) 723.1 -- 723.1
------ ------ ------ -------- ------ --------
Gross profit........... 497.9 119.9 (2.5) 615.3 -- 615.3
Marketing expenses....... 191.5 89.5 -- 281.0 -- 281.0
Selling, general and
administrative
expenses............... 148.9 25.8 (2.4)(b) 172.3 -- 172.3
Provision for
restructuring and
goodwill write-off..... 4.3 63.0 (63.0)(b) 4.3 -- 4.3
------ ------ ------ -------- ------ --------
Operating profit....... 153.2 (58.4) 62.9 157.7 -- 157.7
Interest expense......... 17.1 19.3 (9.9)(c) 26.5 63.6(e) 90.1
Other income (expense),
net.................... 0.2 0.1 -- 0.3 -- 0.3
------ ------ ------ -------- ------ --------
Income (loss) before
provision for income
taxes............... 136.3 (77.6) 72.8 131.5 (63.6) 67.9
Provision for (benefit
from) income taxes..... 53.3 0.4 3.9(d) 57.6 (25.4)(d) 32.2
------ ------ ------ -------- ------ --------
Net income (loss)...... $ 83.0 $(78.0) $ 68.9 $ 73.9 $(38.2) $ 35.7(f)
====== ====== ====== ======== ====== ========
Pro forma income per
common share(g)........ $ $
====== ========
Weighted average number
of common shares.......
====== ========
</TABLE>

See Accompanying Notes to Unaudited Pro Forma Statements of Operations.

25
<PAGE> 27

INTERNATIONAL HOME FOODS, INC.

UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997
(IN MILLIONS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
ADJUSTMENTS
PRO FORMA FOR THE
HISTORICAL ADJUSTMENTS IHF
------------------- FOR THE ACQUISITION
BUMBLE BEE BUMBLE BEE AND THE PRO FORMA
IHF SEAFOODS ACQUISITION PRO FORMA OFFERING AS ADJUSTED(h)(i)
<S> <C> <C> <C> <C> <C> <C>

Net sales.............. $494.4 $179.0 $ -- $673.4 $ -- $673.4
Cost of goods sold..... 230.8 127.5 0.1(a) 358.4 -- 358.4
------ ------ ----- ------ ----- -------
Gross profit......... 263.6 51.5 (0.1) 315.0 -- 315.0
Marketing expenses..... 109.2 41.9 -- 151.1 -- 151.1
Selling, general and
administrative
expenses............. 76.0 11.2 (1.1)(b) 86.1 -- 86.1
------ ------ ----- ------ ----- -------
Operating profit..... 78.4 (1.6) 1.0 77.8 -- 77.8
Interest expense....... 51.8 10.0 (5.5)(c) 56.3 (8.9)(e) 47.4
Other income (expense),
net.................. 1.6 (1.6) -- -- -- --
------ ------ ----- ------ ----- -------
Income (loss) before
provision for
income taxes...... 28.2 (13.2) 6.5 21.5 8.9 30.4
Provision for income
taxes................ 11.3 0.2 2.6(d) 14.1 3.6(d) 17.7
------ ------ ----- ------ ----- -------
Net income (loss).... $ 16.9 $(13.4) $ 3.9 $ 7.4 $ 5.3 $ 12.7(f)
====== ====== ===== ====== ===== =======
Pro forma income per
common share(g)...... $ $
====== =======
Weighted average number
of common shares.....
====== =======
</TABLE>

See Accompanying Notes to Unaudited Pro Forma Statements of Operations.

26
<PAGE> 28

INTERNATIONAL HOME FOODS, INC.

NOTES TO THE UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS
(IN MILLIONS)

(a) The adjustment reflects the effect of adjusting inventory to estimated fair
value and an increase in depreciation resulting from the adjustment of
property, plant, and equipment to estimated fair value in connection with
the Bumble Bee Acquisition. Property, plant and equipment is depreciated
over approximately 10 years.

<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED ENDED
DECEMBER 31, JUNE 30,
1996 1997
<S> <C> <C>
Fair value adjustment to inventory.................. $2.4 $ --
Increase in depreciation expense.................... 0.1 0.1
---- ----
$2.5 $0.1
==== ====
</TABLE>

(b) The adjustments reflect (i) the amortization of goodwill associated with the
Bumble Bee Acquisition reduced by the elimination of the amortization of
Bumble Bee Seafoods' historical goodwill and organizational costs and (ii)
the elimination of the write-down of Bumble Bee Seafoods' goodwill. Goodwill
is amortized over 40 years.

<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED ENDED
DECEMBER 31, JUNE 30,
1996 1997
<S> <C> <C>
Goodwill amortization............................... $ 1.4 $ 0.7
Elimination of the Bumble Bee Seafoods' historical
goodwill and organizational cost amortization..... (3.8) (1.8)
------ -----
$ (2.4) $(1.1)
====== =====
Elimination of the write-down of Bumble Bee
Seafoods' historical goodwill..................... $(63.0) $ --
====== =====
</TABLE>

(c) The adjustment reflects interest associated with the additional borrowings
under the Senior Bank Facilities for the Bumble Bee Acquisition,
amortization of deferred financing fees and the elimination of interest
related to the pre-acquisition indebtedness of Bumble Bee Seafoods.

<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED ENDED
DECEMBER 31, JUNE 30,
1996 1997
<S> <C> <C>
Senior Bank Facilities:
Revolving credit facility, $30.0 at 9.5%.......... $ 2.9 $ 1.4
Term loan-tranche A, $80.0 at 7.9%................ 6.0 2.8
------ ------
Interest expense before amortization of deferred
financing fees.................................... 8.9 4.2
Amortization of deferred financing fees(1).......... 0.5 0.3
------ ------
Pro forma interest expense........................ 9.4 4.5
Elimination of Bumble Bee Seafoods' historical
interest expense.................................. (19.3) (10.0)
------ ------
Net adjustment.................................... $ (9.9) $ (5.5)
====== ======
</TABLE>

- ---------------

(1) Adjustment reflects the amortization of incremental deferred financing
fees associated with the Senior Bank Facilities. Deferred financing
fees are amortized by the effective interest method over the term of
the related debt.

27
<PAGE> 29

INTERNATIONAL HOME FOODS, INC.

NOTES TO THE UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS -- (CONTINUED)
(IN MILLIONS)

(2) With respect to the $110.0 of debt incurred in connection with Bumble
Bee Acquisition, the effect of a 1/4% increase or decrease in interest
rates would increase or decrease total interest expense by
approximately $0.20 and $0.08 for the year ended December 31, 1996 and
the six months ended June 30, 1997, respectively, and would increase or
decrease net income by approximately $0.08 and $0.04 in the same
periods.

(d) The tax effect of the pro forma adjustments is based on the estimated
applicable combined effective tax rate of 40.0% for the periods presented.
The pro forma adjustment related to the elimination of the write-down of
Bumble Bee Seafoods' historical goodwill of $63.0 is not tax effected.

(e) The adjustment reflects the increase in interest expense associated with a
full year of borrowings under the Senior Subordinated Notes, the Senior Bank
Facilities and the amortization of related deferred financing fees incurred
in connection with the IHF Acquisition, net of (i) the historical interest
expense of IHF and (ii) the interest expense related to the redemption of
$160.0 of Senior Subordinated Notes and the repayment of $5.6 of borrowings
under the revolving credit facility in connection with the Offering.

<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED ENDED
DECEMBER 31, JUNE 30,
1996 1997
<S> <C> <C>
Interest Expense:
Senior Subordinated Notes, $400.0 at 10.375%...... $ 41.5 $ --
Senior Bank Facilities, $670.0 at 8.62%........... 52.9 --
------ -----
Interest expense.................................. 94.4 --
Amortization of deferred financing fees........... 3.4 (0.3)
------ -----
Pro Forma interest expense........................ 97.8 (0.3)
Elimination of interest expense associated with:
IHF historical interest expense................ (17.1) --
Redemption of $160.0 of Senior Subordinated
Notes........................................ (16.6) (8.3)
Repayment of $5.6 of borrowings under the
revolving credit facility.................... (0.5) (0.3)
------ -----
Net adjustment............................ $ 63.6 $(8.9)
====== =====
</TABLE>

(f) Net income does not give effect to the extraordinary charge to be recorded
in conjunction with the redemption of the Senior Subordinated Notes in
connection with the Offering.

(g) Pro forma income per share is based on the weighted average number of shares
of common stock and common stock equivalents outstanding during the period
adjusted for the for one reverse stock split. The pro forma as adjusted
weighted average shares include the shares of common stock outstanding prior
to the Offering and the shares to be issued in the Offering.

(h) The pro forma statements of operations for the periods ended December 31,
1996 and June 30, 1997 exclude the results of Productos Del Monte and
Creative Products and, for the ten months ended October 31, 1996, Heritage
which was acquired by IHF on November 1, 1996. Productos Del Monte and
Creative Products had net sales of $49.7 and $46.0, respectively, for the
year ended December 31, 1996 and $20.8 and $25.8 for the period ended June
30, 1997, respectively. For the ten month period ended October 31, 1996,
Heritage had net sales of $47.3.

28
<PAGE> 30

INTERNATIONAL HOME FOODS, INC.

NOTES TO THE UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS -- (CONTINUED)
(IN MILLIONS)

(i) Operating expenses for historical periods include certain nonrecurring
charges recognized by the Company in connection with the IHF Acquisition and
subsequent management initiatives aggregating $6.0 for the year ended
December 31, 1996, consisting of severance expense ($3.2), costs associated
with change of corporate name and relabeling of the Company's products
($1.2), expenses of hiring and relocating of certain senior executives
($1.2) and other costs ($0.4). Nonrecurring charges recognized in the six
months ended June 30, 1997 amounted to $1.7, consisting of additional
severance ($0.7), relocation expense ($0.7), and relabeling costs ($0.3).

(j) Operating expenses on a pro forma as adjusted basis for the year ended
December 31, 1996 include the nonrecurring charges referred to in Note (1)
above, plus the following nonrecurring charges in connection with the
integration of the Bumble Bee Business: $4.9, consisting of purchase
accounting adjustments ($2.5), write-off of deferred financing fees ($1.1)
and management fees paid to the former owners of the business ($1.3). For
the six months ended June 30, 1997, such nonrecurring charges amounted to
$0.9 million, consisting of management fees paid to the former owners of the
business ($0.6) and severance ($0.3).

29
<PAGE> 31

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

GENERAL

The following discussion and analysis of financial condition and results of
operations of the Company should be read in conjunction with the consolidated
financial statements and related notes thereto of the Company included elsewhere
in this Prospectus. Periodically, the Company may make statements about the
trends, future plans and the Company's prospects. Actual results may differ from
those described in such forward looking statements based on the risks and
uncertainties facing the Company, including but not limited to changes in the
economic conditions and changes in the food products manufacturing industry and
the other factors described in "Risk Factors."

The Company sells its products primarily to grocery wholesalers and
distributors, grocery stores and supermarkets, convenience stores, drug and mass
merchants and warehouse clubs. Sales are reported net of discounts and returns.
In general, raw material costs constitute between 60.0% and 80.0% of cost of
goods sold for each of the Company's products. The other components of cost of
goods sold are labor and overhead costs. As is customary in the industry, the
Company incurs substantial marketing expenses. Marketing expenses primarily
include (i) trade promotions, which are directed at obtaining retail display
support, achieving key price points and securing retail shelf space, (ii)
advertising, which is comprised of television, newspaper and magazine
advertising, and (iii) consumer promotions, which include targeted coupons and
on-package offers. Selling expenses represent commissions paid to food brokers
and costs of the Company's field sales force.

For financial reporting purposes, the IHF Acquisition was treated as a
leveraged recapitalization, such that the Company's assets and liabilities
remain at their historical bases. The Unaudited Pro Forma Financial Statements
do not include the effect of the recent acquisitions of Productos Del Monte or
Creative Products, each of which has lower gross margins and operating income as
a percentage of net sales than those of the Company historically. However,
management believes it should be able to increase the operating profit margins
of these companies through cost reductions. See "Business -- Business Strategy."

RESULTS OF OPERATIONS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, SIX MONTHS ENDED JUNE 30,
------------------------------------------------------------ ---------------------------------------
1994 1995 1996 1996 1997
------------------ ------------------ ------------------ ------------------ ------------------
% OF % OF % OF % OF % OF
AMOUNT NET SALES AMOUNT NET SALES AMOUNT NET SALES AMOUNT NET SALES AMOUNT NET SALES
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales............ $997.3 100.0% $818.9 100.0% $942.8 100.0% $449.3 100.0% $494.4 100.0%
Cost of goods sold... 463.1 46.4% 398.2 48.6% 444.9 47.2% 214.2 47.7% 230.8 46.7%
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Gross profit......... 534.2 53.6% 420.7 51.4% 497.9 52.8% 235.1 52.3% 263.6 53.3%
Marketing expenses:
Advertising........ 32.8 3.3% 42.4 5.2% 58.6 6.2% 30.9 6.9% 31.2 6.3%
Consumer
promotion........ 25.5 2.5% 23.5 2.9% 17.5 1.8% 10.4 2.3% 11.5 2.3%
Trade promotion.... 127.6 12.8% 102.0 12.5% 101.0 10.7% 45.8 10.2% 59.7 12.1%
Other.............. 14.9 1.5% 18.5 2.2% 14.4 1.5% 6.0 1.3% 6.8 1.3%
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total marketing
expenses........... 200.8 20.1% 186.4 22.8% 191.5 20.2% 93.1 20.7% 109.2 22.0%
Other operating
expenses:
Selling............ 52.3 5.3% 45.9 5.6% 46.3 4.9% 22.0 4.9% 22.0 4.4%
Storage, packing
and shipping..... 63.4 6.4% 55.3 6.7% 55.2 5.9% 26.6 5.9% 28.0 5.7%
Administrative..... 23.2 2.3% 23.6 2.9% 19.7 2.1% 9.8 2.2% 11.8 2.4%
General and other.. 35.3 3.5% 40.9 5.0% 32.0 3.4% 13.2 2.9% 14.2 2.9%
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total other operating
expenses........... 174.2 17.5% 165.7 20.2% 153.2 16.3% 71.6 15.9% 76.0 15.4%
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Income from
operations......... 159.2 16.0% 68.6 8.4% 153.2 16.3% 70.4 15.7% 78.4 15.9%
Interest expense..... -- -- 17.1 1.8% -- 51.8 10.5%
Interest income and
other, net......... -- -- 0.2 -- 1.6 0.3%
Provision for income
taxes.............. 63.3 6.4% 29.4 3.6% 53.3 5.7% 26.8 6.0% 11.3 2.3%
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net income........... $95.9 9.6% $39.2 4.8% $83.0 8.8% $43.6 9.7% $16.9 3.4%
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
</TABLE>

30
<PAGE> 32

DISCUSSION OF CERTAIN HISTORICAL PERFORMANCE

From 1987 to 1994, the Company's net sales and operating profit increased
at compounded annual rates of 6.4% and 4.4%, respectively. In 1995, however, the
Company experienced a substantial decline in net sales and operating profit. The
Company's net sales and operating profit decreased from $997.3 million and
$159.2 million, respectively, in 1994 to $818.9 million and $68.6 million,
respectively, in 1995. The specific causes of these declines, however, have been
subsequently addressed by the Company, as evidenced by the fact that during 1996
net sales increased to $942.8 million and operating profit increased to $153.2
million.

The decline in net sales and profitability in 1995 stemmed largely from a
prior "push" marketing strategy that relied heavily on trade promotions and
sales discounting. In the fourth quarter of 1994, the Company offered
significant trade incentives to its customers, a practice similarly pursued in
the fourth quarter of 1993. These trade incentives resulted in forward buying by
customers in advance of consumer purchases, thereby significantly increasing
customer inventories of the Company's products by the end of 1994. The reliance
on trade incentives as well as consumer promotions reduced marketing funds
available to support advertising, which builds brand equity and consumer
loyalty, for the Company's core brands. Advertising funds available for the
Company's core products were further diminished by the introduction in 1994 of
Chef Boyardee Sesame Street canned pasta. The Company directed $3.3 million, or
10.0% of its total advertising expense in 1994, to the launch and support of
this product.

During the first quarter of 1995, the Company's net sales were
significantly reduced as retailers sold the excess inventory of the Company's
products that they held at the end of 1994. This reduction was compounded by the
effects of an industry-wide reduction in inventory levels by the supermarket
trade. In addition, the Chef Boyardee Sesame Street product line proved
unsuccessful and was discontinued in 1995. To reduce costs and maintain
profitability in the face of declining sales, the Company significantly reduced
advertising spending during the first half of 1995. This action, coupled with
lower advertising spending for the Company's core brands in 1994, resulted in
market share losses and depressed sales.

In response to the sharp declines in net sales and profitability in the
first half of 1995, the Company undertook a number of initiatives, including
substantially increasing advertising spending beginning in the fourth quarter of
1995 to strengthen consumer brand support. Advertising expense in the fourth
quarter of 1995 was approximately $14.0 million, which represented approximately
one-third of total advertising expense in 1995. The significant increase in
advertising spending in the fourth quarter of 1995 further depressed
profitability in that year but provided a foundation for the Company's growth in
net sales and profitability in 1996 and the first six months of 1997. In 1996
and 1997 the Company has further increased advertising expense from 1995 levels.

SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO SIX MONTHS ENDED JUNE 30, 1996

Net Sales. For the six months ended June 30, 1997, net sales were $494.4
million, an increase of $45.1 million, or 10.0%, over the comparable 1996
period. Approximately $22.3 million of the six month increase was related to net
sales of Heritage which was acquired in November 1996 and therefore not
reflected in the 1996 period amounts. The balance of the increase was due to
volume increases in net sales of the Chef Boyardee branded products ($10.9
million, or 5.7%) and snack foods other than Heritage ($6.6 million or 26.7%).

Cost of Goods Sold. For the six months ended June 30, 1997, cost of goods
sold as a percentage of net sales declined to 46.7% from 47.7% for the
comparable 1996 period. The improvement primarily resulted from a more favorable
sales volume mix and continuing overall reductions in the Company's
manufacturing costs which reflect management's cost reduction initiatives. In
addition, results for the 1996 period were adversely impacted by the Company's
relabeling of many of its products resulting in the sale of products with old
labels at a reduced price.

Total Marketing Expenses. Total marketing expenses were $109.2 million for
the six months ended June 30, 1997, as compared to $93.1 million in the
comparable 1996 period, an increase of $16.1 million or 17.3%. Expressed as a
percentage of net sales, total marketing expenses increased to 22.0% in the 1997
period from 20.7% in the 1996 period. The increase was primarily attributable to
marketing expenses of Heritage,

31
<PAGE> 33

which has generally higher trade promotion expenses as a percentage of net
sales, and trade promotion expenses associated with securing retail shelf space
for existing and new products. Advertising expenses during the first six months
of 1997 were comparable to the 1996 period, with increased spending to support
snack foods offset by curtailed spending for Polaner fruit spreads ($4.0 million
in the first six months of 1996) pending a refocused marketing and advertising
program being undertaken.

Total Other Operating Expenses. Other operating expenses were $76.0 million
for the six months ended June 30, 1997, as compared to $71.6 million in the
comparable 1996 period, an increase of $4.4 million or 6.1%. Expressed as a
percentage of net sales, other operating expenses decreased slightly to 15.4% in
the 1997 period from 15.9% in the 1996 period as a result of lower selling and
storage, packing and shipping expenses as a percentage of net sales, offset by
increased administrative expenses. In the third quarter of 1997, the Company
expects to record a non-cash compensation expense associated with the grant of
stock options at below fair market value to the Company's new President and
other employees. In addition, the Company will record a non-cash compensation
expense of approximately $ million relating to stock options of its
Chief Executive Officer.

Income from Operations. For the six months ended June 30, 1997, income from
operations increased to $78.4 million, up $8.0 million, or 11.4%, from the
comparable 1996 six month period. This increase was primarily the result of
increased sales, and the improvement in gross profit margin, partially offset by
higher operating expenses.

Interest Expense. Interest expense for the six months ended June 30, 1997
was $51.8 million. There was no interest expense in the comparable 1996 period
as all financing activities of the Company were funded by the former parent
company, American Home Products, which did not allocate interest costs to its
various subsidiaries.

Interest Income and Other, Net. The Company earned approximately $1.6
million of interest on its excess cash during the six months ended June 30,
1997. As of June 30, 1997, the Company's short term investments were $66.3
million.

Provision for Income Taxes. For the six months ended June 30, 1997, income
taxes decreased by $15.5 million over the comparable 1996 period due to lower
income before taxes. The effective tax rate increased to 40.1% in 1997 from
38.1% in 1996 due to higher state and local statutory tax rates. The Company
anticipates sufficient future taxable income to realize deferred tax assets
recorded at June 30, 1997. In the event management determines that sufficient
future taxable income may not be generated to fully realize the deferred tax
assets, the Company will provide a valuation allowance by a charge to income tax
expense in the period of such determination.

Net Income. For the six months ended June 30, 1997, net income decreased by
$26.7 million versus the comparable 1996 period. This decrease is primarily due
to interest expense of $51.8 million (none in the comparable 1996 period),
partially offset by the increase in operating income of $8.0 million.

YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995

Net Sales. The Company's net sales were $942.8 million in 1996, as compared
to $818.9 million in 1995, an increase of $123.9 million. In 1995, net sales
were depressed, particularly in the first quarter, as retailers sold the excess
inventory of the Company's products that they held at the end of 1994. The sales
weakness in 1995 was compounded by the effects of an industry wide reduction in
inventory levels by the supermarket trade. In contrast, during 1996, the
Company's customers did not have excess inventory of the Company's products and
the general inventory reductions pursued by the retail trade in 1996 were not as
significant as those pursued in 1995. As a result, during 1996 the Company's net
sales to the retail trade more closely matched the retail trade's actual sales
to consumers. The Company's net sales in 1996 also benefited from management's
emphasis on improving merchandising and building brand awareness through
increased media advertising. Management believes that these efforts increased
sales across most of the Company's major product lines. Additionally, $7.4
million of the increase in net sales was due to the inclusion of Heritage sales
after the November 1, 1996 acquisition.

32
<PAGE> 34

Cost of Goods Sold. Cost of goods sold was $444.9 million in 1996 as
compared to $398.2 million in 1995, an increase of $46.7 million or 11.7%.
Expressed as a percentage of net sales, cost of goods sold decreased to 47.2% in
1996 from 48.6% in 1995. The decrease in cost of goods sold as a percentage of
net sales was primarily attributable to a higher absorption of overhead charges
as a result of higher production volumes.

Total Marketing Expenses. Total marketing expenses were $191.5 million in
1996 as compared to $186.4 million in 1995, an increase of $5.1 million or 2.7%.
Expressed as a percentage of net sales, total marketing expense declined to
20.2% in 1996 from 22.8% in 1995 primarily as a result of a reduction in
consumer and trade promotion spending as a percentage of net sales. The
Company's total marketing expenses, excluding media advertising, declined to
14.1% of net sales in 1996 from 17.6% of net sales in 1995 as a result of a
reduction in coupon promotions and improved management of trade promotion
spending. Media advertising during 1996 increased by approximately 38.2% to
$58.6 million, or 6.2% of net sales, from $42.4 million, or 5.2% of net sales
during 1995 as a result of management's renewed emphasis on consumer advertising
to build brand equity and consumer loyalty.

Total Other Operating Expenses. Other operating expenses were $153.2
million in 1996 as compared to $165.7 million in 1995, a decrease of $12.5
million or 7.5%. Expressed as a percentage of net sales, other operating
expenses declined to 16.3% of net sales in 1996 from 20.2% in 1995. Included in
the 1996 other operating expenses was a one-time charge for restructuring and
other charges of $4.3 million. Exclusive of this charge, other operating
expenses decreased in 1996 by $16.8 million or 10.1% and were 15.8% of net
sales. This decrease was principally due to (i) a reduction in the commission
percentage paid to brokers, (ii) improved efficiencies in logistics and
distribution, and (iii) administrative headcount reductions.

Income from Operations. For the year ended December 31, 1996, income from
operations was $153.2 million, an increase of $84.6 million, over the comparable
1995 period. This increase was primarily the result of increased net sales, the
improvement in gross margins and lower other operating expenses.

Interest Expense. Interest expense for the year ended December 31, 1996 was
$17.1 million, reflecting interest on indebtedness incurred in connection with
the IHF Acquisition completed in November 1996. There was no interest expense in
1995.

Provision for Income Taxes. For the year ended December 31, 1996, income
taxes increased $23.9 million over the comparable period due to higher income
before taxes. The effective tax rate decreased from 42.9% in 1995 to 39.1% in
1996 primarily due to nondeductible intangible amortization in the 1995 period.
The Company anticipates sufficient future taxable income to realize deferred tax
assets recorded at December 31, 1996. In the event management determines that
sufficient future taxable income may not be generated to fully realize the
deferred tax assets, the Company will provide a valuation allowance by a charge
to income tax expense in the period of such determination.

Net Income. For the year ended December 31, 1996, net income increased by
$43.8 million versus the comparable 1995 period. The increase was primarily due
to an increase in income from operations.

YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994

Net Sales. The Company's net sales were $818.9 million in 1995, as compared
to $997.3 million in 1994, a decrease of $178.4 million, or 17.9%. Of the $178.4
million decrease, management believes $104.0 million was attributable to
retailers selling excess inventory of the Company's products during 1995 that
they accumulated by the end of 1994 and to management's strategy of reducing
discounts and incentives which had been offered by the Company to its retail
customers in the fourth quarters of 1994 and 1993. Of the $104.0 million
decrease, (i) approximately $90.0 million related to excess net sales to grocery
retailers in the fourth quarters of 1993 and 1994 and (ii) approximately $14.0
million was due to unusual discounts and incentives given to mass merchandisers
in 1994 which were not repeated in 1995. In addition, management believes that
$56.0 million of the 1995 net sales decrease was due to (i) market share erosion
across many of the Company's major product lines caused by a significant
reduction in media advertising support for these brands in 1994 and the first
half of 1995 and (ii) the failure of the Chef Boyardee Sesame Street canned
pasta

33
<PAGE> 35

product line. Moreover, management believes $18.0 million of the net sales
decrease was due to an industry-wide reduction in inventory levels by the
supermarket trade.

Cost of Goods Sold. Cost of goods sold was $398.2 million in 1995, as
compared to $463.1 million in 1994, a decrease of $64.9 million, or 14.0%.
Expressed as a percentage of net sales, cost of goods sold increased to 48.6% in
1995 from 46.4% in 1994. The increase in cost of goods sold as a percentage of
net sales was primarily attributable to underabsorbed overhead charges as a
result of lower production volumes. In addition, the Company estimates that 1995
margins were negatively impacted by approximately $5.0 million related to the
discontinuation of Chef Boyardee Sesame Street canned pasta. This $5.0 million
amount reflects inventory write-offs of $0.7 million, accrued contractual
royalty payments of $1.0 million and a $3.3 million estimate of the reduced
margins realized on sales of the product resulting from price discounting
following its termination.

Total Marketing Expenses. Total marketing expenses were $186.4 million in
1995, as compared to $200.8 million in 1994, a decrease of $14.4 million, or
7.2%. This decrease was primarily due to a decrease in trade and consumer
promotions of $27.6 million, offset in part by an increase in media advertising
of $9.6 million. Expressed as a percentage of net sales, however, total
marketing expenses increased to 22.8% in 1995 from 20.1% in 1994, primarily as a
result of the increase in media advertising expenditures. Management increased
media advertising expenditures by $9.6 million, or 121%, during the last three
months of 1995 over the corresponding 1994 period in an effort to reverse the
erosion in market share of the Company's product lines.

Total Other Operating Expenses. Other operating expenses were $165.7
million in 1995, as compared to $174.2 million in 1994, a decrease of $8.5
million, or 4.9%. Expressed as a percentage of net sales, other operating
expenses increased to 20.2% in 1995 from 17.5% in 1994, primarily as a result of
lower sales, and an increase in general and other expenses of $5.6 million
principally related to an increase in post retirement benefits costs and
severance for administrative headcount reductions.

Income from Operations. For the year ended December 31, 1995, income from
operations decreased to $68.6 million, a decrease of $90.6 million or 56.9% from
the comparable 1994 period. This decrease was primarily due to a decrease in net
sales.

Provision for Income Taxes. For the year ended December 31, 1995, income
taxes decreased $33.9 million over the comparable period due to lower income
before taxes. The effective tax rate increased to 42.9% from 39.8% primarily due
to an increase in the amortization of intangibles, which was not deductible for
tax purposes.

Net Income. For the year ended December 31, 1995, net income decreased by
$56.7 million versus the 1994 period. This decrease was primarily due to lower
sales.

BUMBLE BEE SEAFOODS

The Company acquired the Bumble Bee Business on July 1, 1997 from Bumble
Bee Seafoods. See "The Company." Bumble Bee is one of the leading brands of
premium canned seafood in the U.S. and the leading brand of canned white meat
tuna and canned salmon in the U.S. The assets acquired consist primarily of
inventory, accounts receivable, property, plant and equipment and trademarks
used by the Bumble Bee Business for the processing and marketing of Bumble Bee
canned seafood products. Prior to this transaction, Bumble Bee Seafoods was
highly leveraged and had capital constraints which limited its ability to secure
raw materials and most effectively market its products.

Net sales of the Bumble Bee Business were $179.0 million in the six month
period ended June 30, 1997, as compared to $209.3 million in the comparable 1996
period. This decline was largely due to the inability of Bumble Bee Seafoods to
purchase raw fish caused by cash constraints resulting from Bumble Bee Seafoods'
highly leveraged capital structure. Cost of sales, expressed as a percentage of
net sales, were 71.2% in the six month period ended June 30, 1997, as compared
to 68.1% in the comparable 1996 period. This was primarily caused by an increase
in the raw material cost of light meat tuna. Operating expenses, expressed as a
percentage of net sales, were 29.6% for the six month period ended June 30, 1997
and 29.3% for the comparable 1996 period.

34
<PAGE> 36

The Company's historical financial information does not include the
operations of the Bumble Bee Business prior to the Bumble Bee Acquisition.

SEASONALITY

The Company's inventory levels are moderately seasonal and affected by the
growing season for commodity products such as tomatoes, fruits, beans and
peanuts. As these products are harvested in August through October, inventory
levels tend to grow during this period. The Company's inventory levels in its
seafoods business are also affected by the seasonal fishing cycle.

LIQUIDITY AND CAPITAL RESOURCES

The Company historically has generated positive cash flows from operations.
In the years ended December 31, 1994, 1995 and 1996 and in the six months ended
June 30, 1997 the Company generated $83.4 million, $145.5 million, $146.0
million and $68.6 million of cash flows from operations, respectively. Capital
expenditures have amounted to $31.1 million, $24.2 million, $11.9 million and
$8.0 million for the years ended December 31, 1994, 1995 and 1996 and for the
six months ended June 30, 1997, respectively. In all of 1997, the Company
expects to spend approximately $20.0 million on capital projects to maintain
facilities and also to upgrade its management information systems, which is
expected to be completed in the first quarter of 1998. The Company also has a
$10.2 million balloon royalty payment due in January 1998 under a licensing
agreement related to the Company's cereal products business.

In connection with the IHF Acquisition, the Company entered into the Senior
Bank Facilities and issued the Senior Subordinated Notes. The Senior Bank
Facilities initially consisted of $670.0 million of borrowings under term loans
and a $100.0 million revolving credit facility. In connection with the Bumble
Bee Acquisition, the Company amended the Senior Bank Facilities, increasing the
borrowings under the term loans to $737.0 million and increasing the revolving
credit facility to $140.0 million. The amended term loans are comprised of a
$369.5 million tranche and $367.5 million tranche maturing in 2003 and 2004,
respectively. At August 31, 1997, there was $15.0 million outstanding under the
revolving credit facility, which matures in 2003 or, if earlier, upon repayment
of the term loans. Borrowings under the Senior Bank Facilities bear interest at
variable rates generally based on the London Interbank Offered Rate plus
applicable margins. The term loans under the Senior Bank Facilities require
periodic principal payments in increasing amounts prior to their final
maturities. Scheduled repayments under the Senior Bank Facilities for the second
half of 1997 and 1998 are $16.5 million and $39.0 million, respectively. See
"Description of Indebtedness -- Senior Bank Facilities." The Company has
outstanding $400.0 million of 10 3/8% Senior Subordinated Notes due 2006,
without any scheduled repayments of principal prior to maturity, requiring
semi-annual interest payments. The Company expects to use approximately $180.0
million of the net proceeds of the Offering to redeem $160.0 million principal
amount of the Senior Subordinated Notes, including redemption premium and
accrued interest. See "Description of Indebtedness -- Senior Subordinated
Notes." Both the Senior Bank Facilities and the terms of the Senior Subordinated
Notes contain a number of significant covenants that, among other things,
restrict the ability of the Company to dispose of assets, incur additional
indebtedness, repay other indebtedness or amend other debt instruments, pay
dividends, create liens on assets, enter into capital leases, make investments
or acquisitions, engage in mergers or consolidations, make capital expenditures,
engage in certain transactions with affiliates, amend the Indenture and
otherwise restrict corporate activities. In addition, under the Senior Bank
Facilities the Company is required to comply with specified minimum interest
coverage, maximum leverage and minimum fixed charge coverage ratios. See
"Description of Indebtedness."

Since the IHF Acquisition, the Company has utilized significant cash flows
from operations and financing activities to implement strategic acquisitions.
The Company acquired Heritage in November 1996, the Bumble Bee Business in July
1997 and Creative Products in October 1997, requiring cash outlays of
approximately $70.0 million, $160.0 million and $52.0 million, respectively. The
acquisition of Heritage was financed through proceeds from the Senior
Subordinated Notes and term loan borrowings under the Senior Bank Facilities at
the time of the IHF Acquisition. The acquisition of the Bumble Bee Business was
financed through term loan borrowings under the Senior Bank Facilities and cash
on hand. The acquisition of Creative Products was financed through borrowings
under the revolving credit facility. The Company acquired Productos Del Monte in
October 1997 for $40.0 million in the form of shares of Common Stock.

35
<PAGE> 37

The Company believes that cash generated from operations and borrowings
under the revolving credit facility will be sufficient to satisfy working
capital requirements and required capital expenditures. Further expansion of the
business through acquisitions may require the Company to incur additional
indebtedness or issue equity securities. There can be no assurance that
additional debt or equity will be available to the Company, or if available will
be on terms acceptable to the Company.

The Company currently does not use derivative financial instruments for
trading or speculative purposes, nor is the Company a party to leveraged
derivatives. In accordance with the Senior Bank Facilities, the Company is
required to enter into interest rate protection agreements to the extent
necessary to provide that, when combined with the Senior Subordinated Notes, at
least 50% of the Company's aggregate indebtedness is subject to either a fixed
interest rate or interest rate protection agreement through December 1998. To
comply with required interest rate protection provisions, the Company entered
into an interest rate collar transaction that becomes effective in September
1997 and expires in December 1998. The notional amount of the collar is $135.0
million with the cap set at 8.0% and the floor set at 5.25%.

RECENT PRONOUNCEMENTS

The American Institute of Certified Public Accountants issued Statement of
Position ("SOP") 96-1, "Environmental Remediation Liabilities" in October 1996.
SOP 96-1 provides authoritative guidance on specific accounting issues in
connection with recognizing, measuring and disclosing environmental cleanup
liabilities. The Company adopted this SOP during the first quarter of 1997;
there was no impact on the Company's results of operations or financial position
upon adoption.

In June 1996, Statement of Financial Accounting Standards ("SFAS") No. 125,
"Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities," was issued to provide accounting and reporting standards for
transfers and servicing of financial assets and extinguishments of liabilities.
This statement became effective for transfers and servicing of financial assets
and extinguishments of liabilities occurring after December 31, 1996. The
adoption of this statement did not have a material effect on the financial
statements.

In March 1997, SFAS 128, "Earnings per Share," was issued to establish
standards for computing and presenting earnings per share ("EPS"). The statement
applies to entities with publicly held common stock or potential common stock
and excludes entities whose publicly traded securities include only debt. The
statement is effective for financial statements issued for periods ending after
December 15, 1997; earlier application is not permitted. The Company anticipates
that this statement, upon adoption, will not have a material effect on the EPS
disclosure.

In June 1997, SFAS 130, "Reporting Comprehensive Income," was issued to
establish standards for reporting and displaying of comprehensive income and its
components in a full set of general-purpose financial statements. This statement
requires disclosure of the components of comprehensive income including, among
other things, foreign currency translation adjustments, minimum pension
liability items and unrealized gains and losses on certain investments in debt
and equity securities. The Company would be required to show components of
comprehensive income in a financial statement displayed as prominently as the
other required financial statements. The statement is effective for fiscal years
beginning after December 15, 1997. The Company anticipates compliance with this
statement in 1998.

In June 1997, SFAS 131 "Disclosures About Segments of an Enterprise and
Related Information," was issued to establish standards for public business
enterprises reporting information regarding operating segments in annual and
interim financial statements issued to shareholders. It also establishes
standards for related disclosures about products and services, geographic areas
and major customers. This statement is effective for financial statements for
periods beginning after December 15, 1997. In the initial year of application,
comparative information for earlier years is to be restated.

EXTRAORDINARY ITEM

In connection with the Offering and the redemption of $160.0 million of the
Senior Subordinated Notes, the Company expects to record an extraordinary loss
on the early extinguishment of debt of approximately $13.1 million.

36
<PAGE> 38

BUSINESS

OVERVIEW

In November 1996, the Company was the subject of a leveraged
recapitalization pursuant to which affiliates of Hicks Muse and C. Dean
Metropoulos, the Company's new Chairman and Chief Executive Officer, acquired
control of the Company from American Home Products. Under Mr. Metropoulos'
direction, the Company has implemented a strategy to increase sales and profits
by (i) growing sales of existing brands, (ii) expanding distribution into
alternative markets, (iii) completing strategic acquisitions and (iv) achieving
cost savings. The Company's pro forma net sales and operating profit for the
fiscal year ended December 31, 1996 were $1,338.4 million and $157.7 million,
respectively, and for the six month period ended June 30, 1997 were $673.4
million and $77.8 million, respectively. See "Unaudited Pro Forma Financial
Statements."

In the United States, the Company groups its brands into five general
categories consisting of Chef Boyardee branded products, Bumble Bee branded
products, specialty brands, southwestern cuisine and snack foods. The Company's
two largest brands, the nationally distributed families of Chef Boyardee
prepared foods and Bumble Bee premium canned seafoods, represented 27.0% and
26.7%, respectively, of the Company's aggregate net sales in 1996. Chef Boyardee
is one of the nation's most widely recognized brands and is found in over half
of American homes with children. Bumble Bee is one of the leading brands of
premium canned seafood in the U.S. and is the leading brand of canned white meat
tuna and salmon in the U.S. The Company's strong Chef Boyardee and Bumble Bee
brands are complemented by its specialty brands, including PAM cooking spray,
Polaner fruit spreads and spices, Gulden's mustard, Maypo, Wheatena and Maltex
hot cereals and G. Washington's dry seasonings and broths. In the growing market
for southwestern cuisine, the Company's products include Ro*Tel canned tomatoes
with green chilies and strong regional brands such as Ranch Style and Luck's
canned beans and Dennison's chili. In the snack foods category, the Company's
brands include Crunch 'n Munch glazed popcorn and pretzels, Campfire
marshmallows and marshmallow crisp rice bars and Jiffy Pop unpopped popcorn. The
Company, through its Productos Del Monte subsidiary, is also a leading processor
and marketer of branded catsup, canned vegetables and bottled salsa in Mexico.

The Company's recognizable portfolio of leading brands provides a critical
mass of brand name sales that (i) allows the Company to realize synergies in
manufacturing, marketing, distribution and raw material sourcing, (ii) creates a
position of strength with retailers that is critical in maintaining and securing
valuable retail shelf space for existing and new brands and (iii) provides a
strong platform for introducing product line extensions and new products. The
following table sets forth market positions and market shares of the Company's
principal product lines, along with certain competitors' market share
information.

37
<PAGE> 39

MARKET POSITION OF PRINCIPAL PRODUCT LINES

<TABLE>
<CAPTION>
MARKET SHARE NUMBER TWO
------------------------------- COMPETITOR'S
PRODUCT LINE CATEGORY/SEGMENT POSITION PERCENTAGE PERCENTAGE
------------ ---------------- ------------------ ---------- ------------
<S> <C> <C> <C> <C>
UNITED STATES
CHEF BOYARDEE BRANDED PRODUCTS
Chef Boyardee.................. Canned Pasta....................... #1 57% 37%
Chef Boyardee.................. Pizza Mixes........................ #1 69% 15%
BUMBLE BEE BRANDED PRODUCTS
Bumble Bee..................... Canned White Meat Tuna............. #1 39% 36%
Bumble Bee..................... Canned Light Meat Tuna............. #2 16% NA
Bumble Bee..................... Canned Salmon...................... #1 20% 13%
SPECIALTY BRANDS
PAM............................ Cooking Spray...................... #1 52% 13%
Polaner........................ Fruit-Juice-Sweetened Spreads...... #1 43% 30%
Gulden's....................... Brown Mustard...................... #1 50% 25%
SOUTHWESTERN CUISINE
Ro*Tel......................... Canned Tomatoes with Green
Chilies............................ #1 76% 12%
Ranch Style.................... Canned Beans(1).................... #1 in Southwest(2) 26% 13%
Luck's......................... Canned Beans(1).................... #1 in Southeast(2) 30% 26%
Dennison's..................... Canned Chili....................... #4 in West(2)(3) 18% NA
SNACK FOODS
Crunch 'n Munch................ Glazed Popcorn..................... #1 37% 32%
Campfire....................... Marshmallow Crisp Rice Bars........ #3 8% NA
MEXICO
Productos Del Monte............ Catsup............................. #1 44% 31%
</TABLE>

- ---------------

(1) The canned beans category includes both the pork and beans and miscellaneous
beans categories. In their respective regions, Ranch Style leads both
categories with a total market share of 26%, and Luck's leads the
miscellaneous beans category with a market share of 30%.

(2) The Company defines (i) the Southwest region to include Nielsen reported
information for Texas, Oklahoma, New Mexico and Arizona, (ii) the Southeast
region to include Nielsen reported information for Georgia, Alabama, North
Carolina, South Carolina, Kentucky, Tennessee and Virginia and (iii) the
West region to include Nielsen reported information for Colorado, Wyoming,
Idaho, Nevada, California, Oregon, Arizona, Washington, and Utah.

(3) Dennison's has the #2 market share in California, which represents
approximately 74% of Dennison's net sales.

BUSINESS STRATEGY

38
<PAGE> 40

Since 1995, the Company has refocused its marketing efforts by
emphasizing consumer advertising (a "pull" strategy) and de-emphasizing
trade spending and discounting (a "push" strategy). As a result,
advertising costs as a percentage of total marketing expenses increased
from 16.3% in 1994 to 28.6% in the first six months of 1997 while trade
promotion expenses as a percentage of total marketing expenditures
declined from 63.5% to 54.7%. The Company recently introduced several new
television advertising campaigns, such as those promoting Chef Boyardee
as an ideal "fourth meal" to be served after school and PAM cooking spray
as a flavorful, healthy alternative to cooking oils, butter and
margarine. Since the new Chef Boyardee television campaign was introduced
in November 1996, consumer sales of Chef Boyardee's principal product
lines have increased significantly, with consumer sales through August
1997 increasing 8.2% over the comparable 1996 period. In addition, the
Company recently began television advertising for its Ranch Style brand
for the first time in five years. The Company has also redesigned the
packaging of a majority of its products to emphasize the brand name,
contemporize the presentation and make the products visually more
appealing to consumers.

- Complete Strategic Acquisitions. The Company will continue to pursue
opportunities to make acquisitions that complement and expand its core
businesses or that enable the Company to enter new markets. Since the IHF
Acquisition, the Company has more aggressively pursued acquisitions and
has acquired (i) Heritage, the manufacturer of the Company's Campfire
branded products, (ii) the Bumble Bee Business, (iii) Productos Del Monte
and (iv) Creative Products. Management believes that additional strategic
acquisition opportunities exist and that incremental revenue and earnings
can be generated by leveraging the Company's production, distribution,
sales and administrative capabilities. In addition, an important element
of management's evaluation of a strategic acquisition is the potential
savings attainable through rationalization of the target company's cost
structure.

- Continue to Achieve Operating Cost Savings. Since the IHF Acquisition,
the Company has achieved annualized net cost savings of approximately
$25.3 million, including approximately $11.1 million associated with the
integration of the Bumble Bee Business. These savings have been achieved
primarily through (i) reductions in overhead and duplicative
administrative, sales and other personnel ($15.5 million), (ii)
streamlining production, distribution, research and administrative
functions ($7.3 million) and (iii) savings in packaging and brokerage
expenses ($2.5 million). To achieve these cost savings, the Company
incurred one time charges of approximately $5.0 million, most of which was
recognized in the year ended December 31, 1996. Management expects to be
able to achieve further cost savings by continuing these initiatives.

COMPETITIVE STRENGTHS

Management believes that the Company has the following competitive
strengths that will enable it to execute its business strategy effectively.

- Well-Positioned Products in Growing Markets. The Company's diversified
portfolio of branded products is well-positioned to meet the growing
demand for convenient and healthy foods. Many of the

39
<PAGE> 41

Company's products, such as Chef Boyardee canned pasta and Bumble Bee
canned seafood, are quick and easy to prepare and nutritionally sound. As
such, management believes these products are particularly appealing to
families with children. Many of the Company's other brands also benefit
from the trend toward healthier eating, including PAM, Polaner, Ro*Tel
and Ranch Style. The Company has introduced several new products that
capitalize on the trend toward fat-free foods such as Chef Boyardee 99%
Fat-Free, Crunch 'n Munch Fat Free and Luck's Fat-Free Beans. In
addition, the Company's strong southwestern cuisine products provide a
platform to capitalize on the cuisine's growing national popularity.
Furthermore, through the acquisition of Productos Del Monte, the Company
has established a presence in the growing Mexico market for processed
food products.

- Strong Management. The Company's senior management team is comprised of
food industry veterans led by C. Dean Metropoulos, the Company's Chairman
and CEO, and John Bess, the Company's President and COO. Mr. Metropoulos
is CEO of Morningstar and has been CEO of several other food companies,
including Stella. During Mr. Metropoulos' tenure at Morningstar and
Stella, he implemented successful sales growth and cost reduction
strategies which dramatically increased sales and earnings at both
companies. Many of these strategies are similar to those that are being
implemented by the Company. Mr. Bess has extensive experience in growing
established brand names by implementing aggressive consumer based
marketing programs. Mr. Bess has 21 years of management and consumer
marketing experience at Procter & Gamble, most recently serving as Vice
President and Managing Director of Worldwide Strategic Planning for
Procter & Gamble's global hair care business, which generated 1996 sales
of $2.6 billion. In addition, the Company's six general managers
overseeing brand performance have an average of approximately 20 years of
experience in the food industry.

INDUSTRY

The U.S. food industry is characterized by relatively stable growth based
on modest price and population increases. Over the last ten years, the industry
has experienced consolidation as competitors have shed non-core business lines
and made strategic acquisitions to complement category positions, maximize
economies of scale in raw material sourcing and production and expand retail
distribution. The importance of sustaining strong relationships with retailers
has become a critical success factor for food companies and is driving many
initiatives such as category management. Food companies with category leadership
positions and

40
<PAGE> 42

strong retail relationships have increasingly benefited from these initiatives
as a way to maintain shelf space and maximize distribution efficiencies.

Consumer demand for food products in the United States is being strongly
influenced by the growth of the "baby boomer" population. The changing
lifestyles and needs of these individuals -- now between the ages of 31 and
50 -- have driven the introduction of nutritious foods that are convenient to
prepare and provide quick family meal alternatives. The primary target market
for convenience foods includes baby boomer parents and approximately 39 million
children between the ages of 5 and 14.

In addition to the U.S. market, certain international markets with
above-average population growth and expanding economies (such as Latin America)
offer substantial growth potential for the industry, especially for companies
with existing international sales of popular U.S. brands. Moreover, the food
service and private label markets provide alternative opportunities for growth
by branded food companies.

PRODUCTS AND MARKETS

In the United States, the Company manufactures and markets popular branded
food products that are leaders within their respective markets. The Company's
domestic branded food business is complemented by a strong presence in Canada,
Mexico and Puerto Rico, growing food service and private label businesses and
sales to the U.S. military.

In the United States, the Company groups its brands into five general
categories consisting of Chef Boyardee branded products, Bumble Bee branded
products, specialty brands, southwestern cuisine and snack foods. The following
table sets forth aggregate net sales and related information for each of these
five general categories and the Company's other markets for the periods
indicated.(1)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, SIX MONTHS ENDED JUNE 30,
--------------------------------------------------- ---------------------------------
1994 1995 1996 1996 1997
--------------- --------------- --------------- --------------- ---------------
% OF % OF % OF % OF % OF
AMOUNT TOTAL AMOUNT TOTAL AMOUNT TOTAL AMOUNT TOTAL AMOUNT TOTAL
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CHEF BOYARDEE........ $ 452 29.1% $ 354 26.1% $ 400 27.0% $190 26.0% $201 27.9%
BUMBLE BEE........... 410 26.4% 394 29.1% 396 26.7% 209 28.7% 179 24.9%
SPECIALTY BRANDS
PAM................ 86 5.5% 67 4.9% 85 5.8% 40 5.5% 37 5.2%
Polaner............ 72 4.6% 60 4.4% 61 4.1% 32 4.4% 27 3.8%
Gulden's........... 18 1.2% 17 1.3% 17 1.1% 10 1.4% 10 1.3%
All Other(2)....... 5 0.4% 4 0.3% 4 0.3% 2 0.3% 2 0.3%
------ ------ ------ ------ ------ ------ ---- ------ ---- ------
Total
Speciality..... 181 11.7% 148 10.9% 167 11.3% 84 11.6% 76 10.6%
SOUTHWESTERN CUISINE
Ro*Tel............. 26 1.6% 19 1.4% 26 1.8% 11 1.5% 12 1.7%
Ranch Style........ 47 3.1% 41 3.0% 44 3.0% 24 3.3% 25 3.4%
Luck's............. 28 1.8% 27 2.0% 29 1.9% 14 1.9% 13 1.8%
Dennison's......... 27 1.7% 19 1.4% 22 1.5% 11 1.5% 11 1.6%
------ ------ ------ ------ ------ ------ ---- ------ ---- ------
Total
Southwestern... 128 8.2% 106 7.8% 121 8.2% 60 8.2% 61 8.5%
SNACK FOODS
Crunch 'n Munch.... 53 3.4% 40 3.0% 49 3.3% 23 3.1% 29 4.1%
Campfire........... 40 2.6% 53 3.9% 55 3.7% 26 3.6% 22 3.1%
Jiffy Pop.......... 6 0.4% 5 0.3% 5 0.3% 2 0.3% 2 0.3%
------ ------ ------ ------ ------ ------ ---- ------ ---- ------
Total Snack...... 99 6.4% 98 7.2% 109 7.3% 51 7.0% 54 7.5%
OTHER MARKETS
Canada............. 56 3.6% 53 3.9% 49 3.3% 24 3.2% 27 3.8%
Food service and
private label.... 106 6.9% 111 8.2% 131 8.8% 61 8.3% 69 9.6%
Mexico, Puerto Rico
and
International.... 100 6.4% 71 5.2% 89 6.0% 41 5.6% 42 5.8%
Military........... 21 1.3% 20 1.5% 21 1.4% 10 1.4% 11 1.6%
------ ------ ------ ------ ------ ------ ---- ------ ---- ------
Total Other
Markets.... 283 18.2% 255 18.8% 289 19.5% 136 18.5% 149 20.7%
------ ------ ------ ------ ------ ------ ---- ------ ---- ------
AGGREGATE NET
SALES...... $1,553 100.0% $1,355 100.0% $1,482 100.0% $730 100.0% $720 100.0%
====== ====== ====== ====== ====== ====== ==== ====== ==== ======
</TABLE>

41
<PAGE> 43

- ---------------

(1) Aggregate net sales include sales of the Company as well as sales of
Heritage, the Bumble Bee Business, Productos Del Monte and Creative Products
for each of the periods shown.

(2) Includes Wheatena, Maypo and Maltex.

CHEF BOYARDEE (27.0% OF 1996 AGGREGATE NET SALES)

Created by Hector Boiardi in 1929 and acquired by the Company in 1946, Chef
Boyardee is one of the nation's most recognizable brand names. The Chef Boyardee
product line consists of canned pasta, microwave pasta, pizza kits, dry dinners
and pizza and spaghetti sauces. Chef Boyardee products are found in over half of
all American homes with children. Management believes that Chef Boyardee
products appeal to families with children because they are generally convenient,
nutritionally sound and inexpensive relative to other quick meal and snacking
alternatives. Canned pasta is purchased most frequently by women with children
between the ages of 3 and 12.

Chef Boyardee has consistently held the number one share in the $535.4
million canned pasta market. The Company separates the canned pasta category
into two segments: "All Family" and "Kids." The "All Family" segment represents
canned pasta products primarily consumed by children over the age of six as well
as adults. The "Kids" segment represents canned pasta products typically in the
shapes of popular cartoon and comic book characters that are primarily consumed
by children age six and under. The Company's "All Family" canned pasta line
consists primarily of Beef Ravioli and Mini-Ravioli, in both regular and 99%
fat-free product offerings, as well as Spaghetti & Meatballs and Beefaroni, and
accounts for approximately 87% of the Company's canned pasta sales. The
Company's "Kids" canned pasta line features the newly introduced Chef Jr. line
and has been reformulated to appeal to younger children. The Chef Jr. line
includes shapes such as ABCs and 123s, dinosaurs, creatures of the sea, and
licensed characters such as Spiderman, X-Men and Teenage Mutant Ninja Turtles.
The Chef Jr. line accounts for approximately 13% of the Company's canned pasta
sales.

As the table below indicates, Chef Boyardee is the leading brand in the
canned pasta category with a 57% market share, followed by the Campbell Soup
Company's Franco American brand at 37%. The remaining seven percent of this
category is fragmented, with private label accounting for approximately five
percent.

<TABLE>
<CAPTION>
MARKET SHARE
-----------------------------
CHEF FRANCO
SEGMENT SIZE BOYARDEE AMERICAN OTHER
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C>
"All Family"............................ $332 77% 15% 8%
"Kids".................................. 203 23% 72% 5%
------
Total Canned Pasta................. $535 57% 37% 6%
======
</TABLE>

As indicated in the table above, Chef Boyardee holds a dominant position in
its core "All Family" category while Franco American products have the number
one position in the "Kids" category. Management believes that its "All Family"
products compete primarily within the broader category of prepared or quick
meals.

Management intends to continue to build Chef Boyardee's brand equity
through strong advertising support and packaging that aggressively promote the
Chef Boyardee brand name. In addition, management believes that sales of Chef
Boyardee products can be enhanced by (i) leveraging the Company's dominant
position in the "All Family" category by targeting advertising campaigns toward
children ages 9 to 13, the older segment of the brand's traditional consumer
base, (ii) encouraging greater use of Chef Boyardee products, particularly as an
after school snack, and (iii) promoting the nutritional benefits of Chef
Boyardee, including its 99% fat-free products, versus other quick meal
alternatives.

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<PAGE> 44

BUMBLE BEE (26.7% OF 1996 AGGREGATE NET SALES)

Founded in 1899 and acquired by the Company in July 1997, Bumble Bee is one
of the leading brands of premium canned seafood products in the U.S. The Bumble
Bee product line consists principally of canned white meat tuna, canned light
meat tuna and canned salmon. Bumble Bee holds number one shares of the canned
white meat tuna market and the canned salmon market and is the second leading
brand in the canned light meat tuna market. Similar to the Company's Chef
Boyardee product line, management believes that Bumble Bee products appeal to
consumers because they are convenient to prepare and more nutritious relative to
other quick meal and snacking alternatives.

The canned tuna market in the U.S. is approximately $1.2 billion and is
generally segmented into two main categories, white meat ($534.2 million) and
light meat ($706.3 million). White meat tuna is processed from albacore tuna and
has a superior quality image and premium price compared to light meat tuna
(which is processed from skipjack and yellowfin tuna) due to its milder flavor,
lighter color and firmer texture. The Company's canned white meat tuna product
line represented 47.9% of the Company's canned tuna sales in 1996 and has
significantly higher gross margins than the Company's light meat tuna products.

As the table below indicates, Bumble Bee is the market leader in the white
meat canned tuna segment with a 39% market share, followed by H.J. Heinz
Company's Starkist brand and Van Camp Seafood Company, Inc.'s Chicken of the Sea
brand. In the light meat canned tuna segment, Bumble Bee is the second leading
brand with a 16% market share. Private label represents 6% and 14% of the canned
white meat market and canned light meat tuna market, respectively. In addition
to Bumble Bee's leading market positions in canned tuna, Bumble Bee is also the
market leader in canned salmon with a 20% market share.

<TABLE>
<CAPTION>
MARKET SHARE
--------------------------------------------------
SEGMENT SIZE BUMBLE BEE STARKIST CHICKEN OF THE SEA OTHER
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
Canned White Meat Tuna....... $534 39% 36% 14% 11%
Canned Light Meat Tuna....... $706 16% 51% 15% 18%
</TABLE>

Sales of Bumble Bee products have suffered as a result of being owned by a
financially troubled company that was highly leveraged and had capital
constraints which limited Bumble Bee Seafoods ability to source raw fish and
effectively market its products. To help stimulate sales of Bumble Bee products,
management intends to (i) pursue a consumer-based marketing and advertising
strategy that leverages the equity of the Bumble Bee brand name and promotes the
healthy and convenience features of its products, (ii) introduce complementary
products under the Bumble Bee brand name that emphasize the convenience and
nutritional benefits of canned seafood, (iii) broaden the distribution of Bumble
Bee products to include alternative markets such as food service operators and
(iv) aggressively source albacore tuna for Bumble Bee canned white meat tuna.

SPECIALTY BRANDS (11.3% OF 1996 AGGREGATE NET SALES)

The Company's portfolio of specialty brands consists primarily of PAM,
Polaner and Gulden's, each of which commands leading national positions in its
defined markets. These brands have broad consumer recognition that has been
developed through strong marketing and advertising support.

PAM. PAM established the market for non-stick cooking spray with its
introduction in the 1960s. The Company's PAM products include Original, Butter
and Olive Oil non-stick cooking sprays. The Company's advertising and marketing
strategy for PAM emphasizes that it is the only all-natural cooking spray for
healthy, low-fat cooking. As a result of PAM's image and performance, the brand
enjoys a loyal customer base and a premium price.

In grocery outlets, the non-stick cooking spray category has grown at a
compound annual rate of approximately 11% from 1993 to 1996. Management believes
that this rapid sales growth has been driven by a trend toward healthier eating
and cooking. Several well-known chefs and numerous cookbook and magazine recipes
have advocated cooking sprays in lieu of fattier oils and spreads. PAM is the
market leader in the

43
<PAGE> 45

$160.0 million non-stick cooking spray category with 52% of the market, while
CPC International, Inc.'s Mazola, Procter & Gamble's Crisco and ConAgra's Wesson
have market shares of 13%, 5% and 3%, respectively. Private label accounts for
most of the remaining market share with approximately 20%, of which Creative
Products produces the majority.

Management intends to capitalize on PAM's premium image and the trend
toward healthier eating by identifying and promoting new usage occasions through
print advertising campaigns and on-package and in-store recipe suggestions. The
Company plans to introduce two new flavors, garlic and lemon, and a barbecue
spray that is formulated to withstand higher heat. In addition, the Company has
begun to distribute PAM in Mexico.

Polaner. The Polaner brand is comprised of a broad array of products
competing within the general fruit spread (including jams, jellies, preserves
and fruit-juice-sweetened spreads) and wet spices markets. The focal point of
the Company's Polaner marketing efforts are the "All-Fruit"
fruit-juice-sweetened line of spreads that accounted for approximately 74% of
all Polaner brand sales in 1996. The Company emphasizes Polaner's premium image
and quality in order to differentiate the brand from its competitors.

Fruit spreads are a $680.0 million category, with the fruit-juice-sweetened
segment representing $94.0 million of the category. The fruit-juice-sweetened
segment consists of premium products that contain less refined sugar than other
spreads such as jams and preserves. The primary consumers of fruit-juice-
sweetened spreads are women over the age of 35 with higher incomes. Since the
Polaner brand was acquired by the Company and expanded to national distribution
less than three years ago, its market share in the fruit-juice-sweetened segment
has increased from 32% in 1993 to 43% currently. Polaner's nearest competitor in
this segment is J.M. Smucker Co.'s Simply Fruit at 30%.

Gulden's. Charles Gulden created Gulden's mustard in New York City in 1862
and received a number of awards in international food competitions. The Company
acquired the brand in 1962. Gulden's mustard is the leader in the brown mustard
segment with a 50% market share, followed by French's Deli Style with a 25%
market share. Brown mustard is a $41.0 million segment of the $268.9 million
mustard category. The brown mustard grocery segment grew at a compound annual
rate of 10% between 1993 and 1996.

Other Grocery Brands. A number of smaller brands complete the Company's
national specialty brands portfolio, including Maypo, Wheatena and Maltex hot
cereals and G. Washington's dry seasonings and broths.

SOUTHWESTERN CUISINE (8.2% OF 1996 AGGREGATE NET SALES)

The Company offers products in the growing southwestern cuisine market on a
national basis with tomato-based items and on a regional basis with beans and
chili. Canned beans and canned chili are $964.4 million and $290.9 million
categories, respectively, with the West and Southwest representing approximately
60% of total U.S. canned chili volume. Tomatoes with green chilies is a $38.5
million category, with the Southwest representing approximately 61% of total
U.S. volume.

A number of the Company's products in the southwestern cuisine categories,
including Dennison's black bean chili with chorizo sausage and beef and Ro*Tel
diced tomatoes with green chilies, are targeted at the U.S. Hispanic population
which is expected to increase 30% between 1996 and 2005 according to the most
recent Bureau of Census report. In addition, management believes that the
growing national market for beans, which is being driven by trends toward
healthier eating, will benefit the Company's Ranch Style brand. In general,
southwestern cuisine products have enjoyed above average growth over the past
five years.

Ro*Tel. The Company's Ro*Tel brand, which consists of diced tomatoes with
green chilies and whole tomatoes with green chilies, has a 76% market share. The
brand was introduced in the early 1940s and acquired by the Company in 1992. The
brand is known as a zesty, robust and flavorful tomato ingredient used primarily
in combination with processed cheese as a dip for tortilla chips. The Company's
marketing strategy for Ro*Tel has primarily consisted of print advertising
campaigns and on-package recipes which feature Ro*Tel as the secret ingredient
that can be used to enhance traditional dishes. The Company recently introduced
two product extensions, "mild" and "extra hot" and has plans to launch two more
flavors in 1997,

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<PAGE> 46

Mexican Fiesta and Italian Harvest. In addition, management has initiated a
program to expand Ro*Tel sales and is planning to market Ro*Tel in Mexico.

Ranch Style. Ranch Style beans were created in the early 1930s and soon
became known for their authentic western-style flavor. The Company purchased the
brand in 1983. The Ranch Style product line consists of pork 'n beans, baked
beans, refried beans, other beans, chili and beef-stew. The brand is marketed
primarily in the southwestern United States where it led the region with a 23%
share of the miscellaneous canned bean market and a 33% share of the pork and
beans market. With ingredients that are low in fat and high in protein, Ranch
Style products are positioned to satisfy the growing trend toward healthy
eating. The Company expanded the line offering by introducing four new baked
bean items as well as beans with sweet onions. Ranch Style has had a presence in
Mexico for over five years and management believes the brand can be further
expanded in other Latin America markets. On a combined basis, Ranch Style leads
the canned bean category in the Southwest with a 26% market share.

Luck's. Luck's was created in the early 1950s in Seagrove, North Carolina.
The Company acquired the product line in 1967. Luck's is the leader in the $62.4
million miscellaneous bean market in the Southeast with a 30% market share. The
Luck's product family primarily includes bean products known for their
traditional southern-style flavor. In July 1997, the Company launched the first
fat-free entries into the miscellaneous beans category with four new Luck's
fat-free items.

Dennison's. The Company's Dennison's product line was originated as a
family recipe by Mrs. May Belle Dennison in 1915 and was purchased by the
Company in 1954. The Dennison's line consists primarily of chili con carne with
and without beans, extra hot chili and recently introduced black bean and
vegetarian chili. These products are marketed as the "Stand Up" chili with a
distinctly extra thick and hearty profile. The brand has traditionally been
marketed in the West where it has an 18% share of the region's $111.0 million
canned chili market.

SNACK FOODS (7.3% OF 1996 AGGREGATE NET SALES)

In the snack food category, the Company's brands include Crunch 'n Munch
glazed popcorn and pretzels, Campfire marshmallows and marshmallow crisp rice
bars and Jiffy Pop unpopped popcorn.

Crunch 'n Munch. Crunch 'n Munch, a combination of popcorn and fresh dry
roasted peanuts coated with a butter toffee glaze, was created in 1966. Crunch
'n Munch, which holds the number one position in the glazed popcorn segment, is
offered in four flavors (Buttery Toffee, Caramel, Almond Supreme and Fat Free
Buttery Toffee). Crunch 'n Munch is positioned as a snack to satisfy the salty
and sweet cravings of consumers. The Company believes that the brand's new
contemporary package design, which emphasizes the Crunch 'n Munch brand name,
and its new fat free product, as well as further product line extensions such as
the recently introduced Crunch 'n Munch Glazed Pretzels in two flavors (Toffee
and Apple Cinnamon), will allow it to increase its consumer base. Moreover,
management believes that the brand can achieve significantly higher levels of
sales with increased marketing support.

Glazed popcorn is a $75.1 million segment within the $5 billion snack
category, a category which grew at an annual rate of five percent from 1992 to
1995. Glazed popcorn products are purchased by consumers of all ages. Younger
households are more likely to purchase Borden, Inc.'s Cracker Jack brand due to
its appeal to kids, while older households are more likely to purchase Crunch 'n
Munch due to its appeal to adults. Crunch 'n Munch commands a 37% market share,
followed by Cracker Jack at 32%. No other competitor accounts for more than 10%
of the market.

Campfire. The Company's Campfire product line consists of marshmallows and
marshmallow crisp rice bars. The Campfire brand name enjoys broad consumer
recognition, as it is the oldest brand name in the marshmallow category.
Campfire Marshmallow Munchie is the third leading marshmallow crisp rice bar
with an 8% market share of this $155.6 million market, behind Kellogg Company's
Rice Krispies brand with a 64% market share and General Mills, Inc.'s Golden
Graham Treats with a 20% market share. Campfire marshmallow is the second
leading brand in the $113.3 million grocery marshmallow market with a 6% market
share.

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<PAGE> 47

Favorite Brands, Inc.'s Jet Puff brand is the market leader with a 48% market
share, with private label accounting for the balance of the market.

Management believes that Campfire sales will continue to grow over the next
several years due to (i) growth in the marshmallow crisp rice bar category and
(ii) the Campfire product line gaining a larger share of the branded and private
label marshmallow and marshmallow crisp rice bar markets through expanded
distribution.

OTHER MARKETS (19.5% OF 1996 AGGREGATE NET SALES)

The Company's branded business in the United States is complemented by a
strong presence in Canada, Mexico and Puerto Rico, growing food service and
private label businesses, and sales to the U.S. military.

Canada. The Company markets Chef Boyardee canned pasta, PAM cooking spray,
Crunch 'n Munch glazed popcorn and certain other products in Canada. The Company
commands the number one market share position in canned pasta, cooking spray and
glazed popcorn sales in Canada, with Chef Boyardee canned pasta, PAM and Crunch
'n Munch.

Food Service. The Company supplies many of its products to restaurants,
institutions, schools, ballparks, the vending trade, distributors and chain
accounts. In addition, the Company has implemented a number of initiatives to
expand the penetration of its branded products in the food service industry,
including broadening its product lines to meet the specialized needs of the food
service industry and increasing its marketing and sales efforts. The Company's
recent acquisition of Creative Products has expanded its product offering and
sales to food service customers. Management believes that opportunities exist to
utilize the Company's excess plant capacity to facilitate additional growth in
food service sales.

Private Label. The primary products manufactured by the Company under
private labels are prepared pasta, jams and jellies, cooking spray and
marshmallow products. Private label represents an additional opportunity for
growth and the utilization of excess plant capacity. Management believes that
the addition of Creative Products' dedicated private label sales force will help
the Company broaden its private label business.

Mexico, Puerto Rico and International. Through the Company's subsidiary,
Productos Del Monte, the Company is a leading manufacturer and marketer of
branded catsup, canned vegetables and bottled salsa in Mexico. The Company
intends to expand sales of its U.S. products in Mexico, initially targeting PAM
and Ranch Style, and plans to use Productos Del Montes sales and distribution
capabilities to achieve this strategy. In addition, the Company markets Chef
Boyardee canned pasta, Crunch 'n Munch and Jiffy Pop in Puerto Rico. Chef
Boyardee, with over 25 years of sales in Puerto Rico, commands 98% of the Puerto
Rico canned pasta market. Moreover, the Company's products are exported to over
35 other countries.

Military. The Company sells many of its products to U.S. military bases
both in the U.S. and internationally. Products sold to the military include Chef
Boyardee canned pasta, PAM cooking spray, Crunch 'n Munch glazed popcorn,
Polaner fruit spreads and Ranch Style beans.

MARKETING, SALES AND DISTRIBUTION

The Company's marketing programs consist of advertising, consumer
promotions and trade promotions. The Company's advertising program is comprised
of television, newspaper and magazine advertising aimed at increasing consumer
awareness of the Company's brands and building customer loyalty. Consumer
promotions include targeted coupons and on-package offers designed to generate
trial usage and increase purchase frequency. The Company's trade promotions
focus on obtaining retail display support, achieving key price points and
securing retail shelf space. The Company intends to continue to focus its
marketing efforts towards building brand equity through consumer advertising and
trial generating activities rather than trade spending and discounting.

The Company sells its products in the United States through its direct
sales force and a network of food brokers. The Company maintains U.S. regional
sales offices in New Jersey, North Carolina, Georgia, Illinois, Texas,
California and Florida. The Company's products reach all major classes of trade,
including grocery

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<PAGE> 48

wholesalers and distributors, grocery stores and supermarkets, convenience
stores, drug and mass merchants and warehouse clubs. The Company distributes its
products in the United States through 26 distribution points, nine of which are
owned by the Company and 17 of which are leased. The Company's distribution
system uses a combination of common carrier trucking, Company trucks and
inter-modal rail transport. In Canada, the Company operates six distribution
points, one of which is Company-owned. In Mexico, Productos Del Monte operates
five distribution centers. Management believes that the Company's comprehensive
U.S. sales and distribution network enables the Company to deliver 85% of its
sales volume to customers within 24 hours and 100% within 48 hours. Management
believes that the Company's sales and distribution network has the capacity to
support substantial increases in volume.

None of the Company's customers represent more than 10% of the Company's
aggregate net sales.

COMPETITION

RAW MATERIALS

The primary raw materials used in the Company's operations include tin
cans, flour, meat, tomatoes, tuna, salmon, fruit and fruit-juice concentrates,
beans and peanuts. All of the Company's raw materials are widely available from
numerous suppliers, other than white albacore tuna processed by the Bumble Bee
Business, for which there is limited worldwide supply and number of suppliers.

PRODUCTION AND FACILITIES

The Company operates the manufacturing plants described in the following
table. All of these plants are owned by the Company, other than the Utah
facility, which the Company leases under an operating lease with an initial term
that expires in 1999 and containing a renewal option for an additional five year
term. Management believes that the Company's manufacturing plants have
sufficient capacity to accommodate the Company's planned growth over the next
five years.

<TABLE>
<CAPTION>
LOCATION SQUARE FEET PRODUCTS MANUFACTURED
<S> <C> <C>
Milton, Pennsylvania........ 895,000 Canned pasta, microwave products, mustard, glazed
popcorn, pizza kits, dinner kits and sauces
Vacaville, California....... 354,800 Canned pasta, microwave products, tomatoes with
green chilies, chili and tomato paste
Mayaguez, Puerto Rico....... 222,000 Canned tuna
Irapuato, Mexico............ 212,000 Catsup, canned vegetables and bottled salsa
Clearfield, Utah............ 210,000 Marshmallows and marshmallow crisp rice bars
Fort Worth, Texas........... 204,800 Beans and chili
Seagrove, North Carolina.... 198,000 Beans, vegetables, fruit and popcorn
Rossville, Illinois......... 193,000 Cooking spray and health and beauty aids
Niagara Falls, Canada....... 165,500 Canned pasta, pizza kits, dinner kits, sauces and
glazed popcorn
Santa Fe Springs, 122,000
California................ Canned tuna
Manta, Ecuador.............. 66,000 Canned tuna and tuna loins for processing in the
Company's Santa Fe Springs facility
Highspire, Pennsylvania..... 29,000 Cereals
</TABLE>

The Company has also entered into co-packing (third party manufacturing)
agreements with several manufacturers for Bumble Bee canned salmon, Polaner
fruit spreads and spices, PAM cooking spray and

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<PAGE> 49

G. Washington's dry seasonings and broths. In 1995, these plants produced
approximately eight million cases of finished product for the Company, as
compared to approximately 50 million cases of products produced by the Company.
In addition, the Company owns or leases 37 distribution points throughout North
America and Latin America. See "Marketing, Sales and Distribution."

The Company leases office space in Parsippany, New Jersey, San Diego,
California and Greenwich, Connecticut under operating leases expiring in
November 2006, January 1998 and October 2004, respectively. In addition, the
Company owns a 30% interest in a water treatment plant adjacent to its Puerto
Rico processing plant.

TRADEMARKS

The Company owns a number of registered trademarks, including Chef
Boyardee, Bumble Bee, PAM, Franklin Crunch 'n Munch, Polaner, Gulden's, Jiffy
Pop, Dennison's, Luck's, Ranch Style, Ro*Tel, Campfire, Marshmallow Munchie and
G. Washington's. Registration of the Chef Jr. trademark is pending. Wheatena,
Maypo and Maltex are registered trademarks licensed to the Company. Management
is not aware of any fact that would have a materially adverse impact on the
continuing use of these trademarks. See "Risk Factors -- Trademarks."

EMPLOYEES

As of October 1, 1997, the Company employed approximately 6,400 people.
Approximately 49% of the Company's employees are unionized. Approximately 56% of
the unionized employees are represented by the United Food & Commercial Workers
International Union (part of the AFL-CIO) and have collective bargaining
agreements which extend into the year 2001. Approximately 25% of the unionized
employees are represented by the Teamsters Union and have recently renegotiated
collective bargaining agreements. During the negotiation in July 1997, the
Teamsters Union employees went on strike for six days. The strike was resolved
and a new collective bargaining agreement that expires December 31, 2000 was
entered into on terms satisfactory to the Company. The Company is not aware of
any pending or threatened National Labor Relations Board arbitration proceedings
relating to the strike.

CERTAIN LEGAL AND REGULATORY MATTERS

Food Safety and Labeling. The Company is subject to the Food, Drug and
Cosmetic Act and regulations promulgated thereunder by the FDA. This
comprehensive regulatory program governs, among other things, the manufacturing,
composition and ingredients, labeling, packaging and safety of food. For
example, the FDA regulates manufacturing practices for foods through its current
"good manufacturing practices" regulations and specifies the recipes for certain
foods. In addition, the Nutrition Labeling and Education Act of 1990 prescribes
the format and content of certain information required to appear on the labels
of food products. The Company is subject to regulation by certain other
governmental agencies, including the U.S. Department of Agriculture. Although
the Company has voluntarily recalled products from time to time in the past, no
such recall has had a material effect on the Company's results of operations.

The operations and products of the Company are also subject to state and
local regulation through such measures as licensing of plants, enforcement by
state health agencies of various state standards and inspection of facilities.
Enforcement actions for violations of federal, state and local regulations may
include seizure and condemnation of products, cease and desist orders,
injunctions or monetary penalties. Management believes that the Company's
facilities and practices are sufficient to maintain compliance with applicable
government regulations, although there can be no assurances in this regard.

Federal Trade Commission. The Company is subject to certain regulations by
the FTC. Advertising of the Company's products is subject to regulation by the
FTC pursuant to the Federal Trade Commission Act and the regulations promulgated
thereunder.

Employee Safety Regulations. The Company is subject to certain health and
safety regulations, including regulations issued pursuant to the Occupational
Safety and Health Act. These regulations require the

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<PAGE> 50

Company to comply with certain manufacturing, health and safety standards to
protect its employees from accidents.

Environmental. The Company's operations and properties are subject to a
wide variety of increasingly complex and stringent federal, state and local laws
and regulations governing the use, storage, handling, generation, treatment,
emission, release, discharge and disposal of certain materials, substances and
wastes, the remediation of contaminated soil and groundwater, and the health and
safety of employees. As such, the nature of the Company's operations exposes it
to the risk of claims with respect to environmental matters.

The Company has been named as a potentially responsible party (a "PRP") at
two federal Superfund sites. At the first site, the United States Environmental
Protection Agency ("EPA") has concluded that the Company is a de minimis party,
but EPA has withdrawn a de minimis settlement offer it made to the Company and
other de minimis parties at the site. However, a PRP group at the site has
recently made a de minimis settlement offer similar to the one previously made
by EPA. Under the PRP group's offer, the Company would be credited for monies it
had previously contributed toward the performance of a Remedial
Investigation/Feasibility Study, and it would not be required to make any
additional payments to resolve its liability at this site. The Company is
presently evaluating this offer. At the second site, the Company has accepted a
de minimus settlement offer from the EPA and expects to pay such settlement in
late 1997.

In April 1997, the Company received an estimate from an independent
environmental consultant in connection with potential clean-up costs at its
facilities (other than those facilities utilized in the Bumble Bee Business).
Such consultant estimated clean-up costs to be between $500,000 and $5.0
million. In 1995, the water treatment plant in Mayaguez, Puerto Rico that is 30%
owned by the Company entered into a consent decree pursuant to which it agreed
to implement remedial capital improvements to improve its waste-water discharge.
The Company will be responsible for 30% of the costs of these improvements,
which are not expected to be material to the Company. Based upon its experience
to date, the Company believes that the future cost of compliance with existing
environmental laws, regulations and decrees, and liability for known
environmental claims, will not have a material adverse effect on the Company's
financial statements as a whole. However, future events, such as changes in
existing laws and regulations or their interpretation, and more vigorous
enforcement policies of regulatory agencies, may give rise to additional
expenditures or liabilities that could be material.

Insurance. The Company maintains general liability, product liability,
property, workers' compensation and other insurance in amounts and on terms that
it believes are customary for companies similarly situated. The Company does not
generally maintain insurance for product liability claims.

Litigation. The Company, in the ordinary course of business, is involved in
various legal proceedings. The Company does not believe the outcome of these
proceedings will have a material adverse effect on the Company's financial
condition or results of operations.

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<PAGE> 51

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table provides information concerning the directors and
executive officers of the Company.

<TABLE>
<CAPTION>
NAME AGE POSITION
<S> <C> <C>
C. Dean Metropoulos.......... 50 Chairman of the Board and Chief Executive Officer
John H. Bess................. 45 President and Chief Operating Officer
William J. Feeney............ 45 Executive Vice President
N. Michael Dion.............. 40 Senior Vice President and Chief Financial Officer
Christopher J. Guida......... 36 Senior Vice President -- Grocery Field Sales
Michael Larney............... 40 Senior Vice President and General Manager -- Chef
Boyardee
Gerry Lopez.................. 38 Senior Vice President and General Manager --
Southwestern Cuisine
M. Kelley Maggs.............. 45 Senior Vice President and General Counsel
Albert J. Soricelli, Jr...... 43 Senior Vice President of New Ventures and
International
John Sottile................. 43 Senior Vice President and General Manager --
Specialty Brands
Frank Valdez................. 46 Senior Vice President and General Manager --
Operations
Stephen Van Tassell.......... 41 Senior Vice President -- Snack Foods
Lynne M. Misericordia........ 34 Treasurer
Thomas O. Hicks.............. 51 Director
L. Hollis Jones.............. 43 Director
Michael J. Levitt............ 38 Director
M. L. Lowenkron.............. 66 Director
Alan B. Menkes............... 38 Director
Roger T. Staubach............ 55 Director
Charles W. Tate.............. 52 Director
</TABLE>

Executive officers of the Company are appointed by the Board of Directors
and serve at the Board's discretion. A brief biography of each director and
executive officer follows:

C. Dean Metropoulos has served as Chairman of the Board of Directors and
Chief Executive Officer of the Company since November 1996. Mr. Metropoulos is
the Chief Executive Officer of C. Dean Metropoulos & Co., a management services
company and Morningstar. From 1983 through 1993, Mr. Metropoulos served as
President and Chief Executive Officer of Stella. Prior to 1983, Mr. Metropoulos
served in several executive positions with GTE Corporation, including Vice
President and General Manager-Europe, and Vice President and Controller-GTE
International. Mr. Metropoulos also serves as a director of Morningstar and
Ghirardelli Chocolate Company ("Ghirardelli").

John H. Bess joined the Company in September 1997 as President and Chief
Operating Officer. From 1975 until joining the Company, Mr. Bess held numerous
positions with Procter & Gamble, most recently serving as Vice President and
Managing Director of Worldwide Strategic Planning. Mr. Bess is a graduate of
Clark University and received an M.B.A. in marketing from New York University.

William J. Feeney has been the Company's Executive Vice President since
January 1997. From January 1997 to September 1997, Mr. Feeney managed day-to-day
operations of the Company. He has been with the Company for 25 years, primarily
in sales management, as well as senior positions in marketing. Mr. Feeney
received his B.S. from the State University of New York.

N. Michael Dion joined the Company as a Senior Vice President and its Chief
Financial Officer in December 1996. Prior to joining the Company, Mr. Dion
served as the Vice President of Finance for C. Dean

50
<PAGE> 52

Metropoulos & Co. and for LBJ Holdings, Inc., a Connecticut based baking
company. Mr. Dion also served as a financial advisor to Morningstar and to
Ghirardelli. Prior to joining Metropoulos & Co., Mr. Dion was the Vice President
of Finance for Stella from 1990 through December 1994. Mr. Dion is a Certified
Public Accountant and holds a B.S. in Business Administration and Finance and
Accounting from the University of Vermont.

Christopher J. Guida has served as the Company's Senior Vice
President -- Grocery Field Sales since November 1996. He joined the Company in
1984. His experience at the Company includes field and broker sales management,
sales training and customer service positions. Mr. Guida received his B.A.
degree from Oaklava University.

Michael Larney joined the Company in 1979 and has served as the Company's
Senior Vice President & General Manager -- Chef Boyardee since November 1996.
From 1979 to 1996, Mr. Larney worked in the Company's grocery field sales
division. Mr. Larney received his B.A. from the University of Connecticut.

Gerry Lopez has served as Senior Vice President & General
Manager -- Southwestern Cuisine since April 1997. Before joining the Company,
Mr. Lopez held a variety of positions, including Area Vice President for
Frito-Lay, at Pepsico from 1986 to 1996. Mr. Lopez graduated with a M.B.A. from
Harvard University and a B.B.A. from George Washington University.

M. Kelley Maggs joined the Company as Senior Vice President and General
Counsel in November 1996. Prior to joining the Company, Mr. Maggs served as Vice
President, Secretary and General Counsel for Stella Foods, Inc. from 1993
through 1996. Before joining Stella he was in private law practice from 1979
through 1993. Mr. Maggs holds a B.A. from Niagara University and a J.D. from
George Mason University.

Albert J. Soricelli joined the Company in 1979 and was promoted to Senior
Vice President -- New Ventures and International in 1989. Before joining the
Company, Mr. Soricelli held positions with International Playtex, P.R. Mallory
and International PepsiCo. Mr. Soricelli received his M.B.A. and his B.B.A. from
Iona College.

John Sottile joined the Company in December 1996 as Senior Vice President &
General Manager -- Specialty Brands. Mr. Sottile worked as a Senior Vice
President at Stella from 1989 to 1995. In addition, Mr. Sottile's experience
includes marketing and general management at Joseph E. Seagram & Sons and Kraft
Foods. Mr. Sottile received his M.B.A. from Fordham University.

Frank Valdez joined the Company in September 1997 as Senior Vice President
& General Manager -- Operations. Prior to coming to the Company, Mr. Valdez was
President and Chief Operating Officer for USA Detergents, Inc. from 1995 to
1997. Mr. Valdez served in various positions, including Director of
Manufacuring, with Reckett & Coleman from 1990 to 1995. Mr. Valdez graduated
from the University of Pennsylvania with a M.B.A. and the University of Maryland
with a B.B.A.

Stephen Van Tassel has been the Company's Senior Vice President -- Snack
Foods since August 1, 1995. He joined the Company in 1992, and before becoming
Senior Vice President, held various positions with the Company, primarily in
product management. Before joining the Company, Mr. Van Tassel held positions
with General Mills and ConAgra. Mr. Van Tassel received his B.A. from Bowdoin
College and his M.B.A. from Dartmouth College.

Lynne M. Misericordia has been employed with the Company since August 1985
and was named Treasurer of the Company in November 1996. Ms. Misericordia has
held several other financial positions in the Company since 1992. From 1988 to
1992 she held positions in American Home Products's compliance and finance
departments. Ms. Misericordia received her B.A. from Babson College.

Thomas O. Hicks has been a Director of the Company since November 1996. Mr.
Hicks has been Chairman and Chief Executive Officer of Hicks Muse since
co-founding the firm in 1989. Prior to forming Hicks Muse, Mr. Hicks co-founded
Hicks & Haas Incorporated in 1983 and served as its Co-Chairman and Co-Chief
Executive Officer through 1989. Mr. Hicks also serves as a director of
Chancellor Media Corporation, Berg Electronics Corp., Sybron International
Corporation, Capstar Broadcasting Corporation, CorpGroup Limited, CCI Holdings
and Grupo MVS, S.A. de C.V.

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<PAGE> 53

L. Hollis Jones became a Director of the Company on January 3, 1997. Since
August of 1995, Mr. Jones has been the President and Chief Operating Officer of
Morningstar. From January 1994 until July 1995, Mr. Jones was President of his
own management consulting firm, Hollis Jones, Inc. From February 1983 until
forming his own management consulting firm, Mr. Jones held various positions of
increasing responsibility at Campbell Taggart, Inc., a subsidiary of
Anheuser-Busch, including Vice President-General Manager of its bakery division
from June 1992 to January 1994 and President of its diversified division from
June 1991 to June 1992.

Michael J. Levitt has been a Director of the Company since November 1996.
Mr. Levitt is a Managing Director and Principal of Hicks Muse. Before joining
Hicks Muse, Mr. Levitt was a Managing Director and Deputy Head of Investment
Banking with Smith Barney Inc. from 1993 through 1995. From 1986 through 1993,
Mr. Levitt was with Morgan Stanley & Co. Incorporated, most recently as a
Managing Director responsible for the New York based Financial Entrepreneurs
Group. Mr. Levitt also serves as a director of Atrium Companies, Inc., Sunrise
Television Corp. and Ghirardelli.

M. L. Lowenkron has been a Director of the Company since November 1996.
From January 1995 through May 1996, Mr. Lowenkron served as President and Chief
Executive Officer of G. Heileman Brewing Co. Mr. Lowenkron served as Chairman of
the Board and Chief Executive Officer of A&W Brands, Inc. ("A&W") from December
1991 to October 1993, and served as President of A&W and its predecessors from
1980 to October 1993. Mr. Lowenkron serves as a Director of Hat Brands, Inc.,
Triarc Companies Inc., Depuy Inc. and 7 Up/RC Bottling Company of Southern
California Inc. Mr. Lowenkron also serves as First Vice Chairman of the National
Easter Seal Society.

Alan B. Menkes has been a Director of the Company since November 1996. Mr.
Menkes is a Managing Director and Principal of Hicks Muse. Before joining Hicks
Muse in 1992, Mr. Menkes was employed by The Carlyle Group, a Washington
D.C.-based private investment firm, most recently as a Senior Vice President.
Mr. Menkes also serves as a director of Hedstrom Holdings, Inc. Mr. Menkes also
serves as a vice president and assistant secretary of the Company.

Roger T. Staubach has been a Director of the Company since November 1996.
Since 1983, Mr. Staubach has served as the Chairman and Chief Executive Officer
of The Staubach Company, a diversified real estate company. Mr. Staubach also
serves as a director of Halliburton Company, Brinker International, Inc., and
Columbus Realty Trust, and as a trustee of American AAdvantage Funds.

Charles W. Tate has been a Director of the Company since November 1996. Mr.
Tate is President of Hicks Muse, which he joined as Managing Director and
Principal in 1991. From 1972 to 1991, Mr. Tate was a Managing Director at Morgan
Stanley & Co. Incorporated in the merchant banking division and in the mergers
and acquisitions department. Mr. Tate also serves as a director of Morningstar,
International Wire Group, Inc., Berg Electronics Corp., Seguros Comercial
America, S.A. de C.V., Vidiro Formas, S.A. and Mandeville Cable Partners
Argentina.

ELECTION AND COMMITTEES OF DIRECTORS

Each of the directors of the Company was appointed by Hicks Muse at the
time of, or shortly after, the IHF Acquisition. The Board of Directors has been
reclassified into three classes. The directors of each class are elected for
three-year terms, with the terms of the three classes staggered so that
directors from a single class are elected at each annual meeting of the
stockholders. Mr. Jones and Mr. Staubach are Class I directors whose terms of
office will expire at the annual meeting of stockholders in 1998; Messrs.
Menkes, Levitt, and Lowenkron are Class II directors whose terms of office will
expire at the annual meeting of stockholders in 1999; and Messrs. Hicks, Tate
and Metropoulos are Class III directors whose terms of office will expire at the
annual meeting of stockholders in 2000.

The Board of the Directors of the Company has three committees: an audit
committee, a compensation committee and an executive committee. The audit
committee's functions include recommending to the Board of Directors the
engagement of the Company's independent public accountants and reviewing with
such accountants the plans for, and the result and scope of, their auditing
engagement. The compensation

52
<PAGE> 54

committee determines the compensation of executive officers, including bonuses,
and administers the Company's Stock Option Plan. The executive committee is
authorized to exercise the powers of the Board of Directors during the intervals
between the meetings of the Board of Directors and is from time to time
delegated certain authority in matters pertaining to the Company. The audit
committee consists of Messrs. Staubach, Lowenkron and Jones. The compensation
committee consists of Messrs. Tate, Lowenkron and Staubach. The executive
committee consists of Messrs. Menkes, Metropoulos and Tate.

COMPENSATION OF EXECUTIVE OFFICERS

The following table sets forth for 1996 and 1995 the compensation awarded
to or earned by each person serving as the Company's chief executive officer
during 1996 and the four most highly compensated executive officers of the
Company other than the Company's chief executive officer at the end of 1996 (the
"Named Executive Officers").

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
------------
ANNUAL COMPENSATION SECURITIES
--------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS COMPENSATION($)(1)
<S> <C> <C> <C> <C> <C>
C. Dean Metropoulos
Chief Executive Officer(2)...... 1996 150,000 -- 18,750,000(3) --
1995 -- -- -- --
Kenneth J. Martin
President(4).................... 1996 309,616 1,233,333 7,033,400(3) 9,652
1995 280,000 230,000(5) 30,000 7,528
Stephen Van Tassel
Senior Vice President of New
Product Development.......... 1996 179,900 60,000 505,000(3)
1995 174,800 -- 7,000 6,209
Albert J. Soricelli, Jr.
Senior Vice President of
International, New Ventures,
Canada and Food Service...... 1996 166,904 100,000 410,000(3)
1995 162,000 -- 10,000 5,767
William J. Feeney
Senior Vice President of
Sales........................ 1996 164,808 120,000 710,000(3)
1995 155,000 -- 6,000 5,014
</TABLE>

- ---------------

(1) Amounts represent employer contributions to savings and retirement plans.

(2) Mr. Metropoulos commenced his employment with the Company on November 1,
1996. Mr. Metropoulos has an annual base salary of $900,000 and is entitled
to receive an annual bonus of up to the same amount. In addition, Mr.
Metropoulos is eligible to participate in the Company's benefit plans and
also receives certain other perquisites, including reimbursement of country
club dues.

(3) Messrs. Metropoulos, Martin, Van Tassel, Soricelli and Feeney were granted
options to acquire 18,750,000, 7,000,000, 500,000, 400,000 and 700,000
shares of Common Stock, respectively, and 0, 33,400, 5,000, 10,000 and
10,000 shares of American Home Products common stock, respectively, during
1996. See "Option Grants in Last Fiscal Year" below.

(4) Mr. Martin resigned from the Company in January 1997. Concurrently with his
resignation, Mr. Martin's options to acquire the Company's stock were
cancelled. Mr. Bess was hired in September 1997 to replace Mr. Martin as
President and Chief Operating Officer. His annual base salary is $300,000
and he is entitled to receive an annual bonus of up to the same amount. In
addition, Mr. Bess is eligible to participate in the Company's benefit
plans. In connection with the hiring of Mr. Bess by the Company,

53
<PAGE> 55

Mr. Bess was granted an option to purchase an aggregate of 2,000,000 shares
of Common Stock. The exercise price is $1.08 per share, increasing at an
annual rate of 8% per year from the date of grant through the date of
exercise. The options vest in equal increments on each of the first three
anniversaries of their grant date and expire on the tenth anniversary of
their date of grant.

(5) Includes cash in the amount of $115,000 and stock of American Home Products
in the amount of $115,000.

The following table contains information about stock options granted by the
Company and by American Home Products to the Named Executive Officers in 1996.

OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
NUMBER OF % OF TOTAL STOCK PRICE
SECURITIES OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO OPTION TERMS($)(1)
OPTION EMPLOYEES IN EXERCISE PRICE EXPIRATION ---------------------------
NAME GRANTED 1996 PER SHARE DATE(1) 5% 10%
<S> <C> <C> <C> <C> <C> <C>
OPTIONS GRANTED BY THE COMPANY
C. Dean
Metropoulos(2)....... 18,750,000 48.22% $ 1.00 11-01-2006 11,791,774 29,882,671
Kenneth J. Martin(3)... 7,000,000 18.00% 1.00 11-01-2006 4,402,262 11,156,197
Stephen Van Tassel..... 500,000 1.29% 1.00 11-01-2006 314,450 796,850
Albert J. Soricelli,
Jr................... 400,000 1.03% 1.00 11-01-2006 251,560 637,480
William J. Feeney...... 700,000 1.80% 1.00 11-01-2006 440,230 1,115,590
OPTIONS GRANTED BY AMERICAN HOME PRODUCTS
C. Dean Metropoulos.... -- -- -- -- -- --
Kenneth J. Martin...... 33,400 0.42% $53.0625 05-23-2006 60,462(4) 121,039(4)
Stephen Van Tassel..... 5,000 * $53.0625 05-23-2006 9,126(4) 18,120(4)
Albert J. Soricelli,
Jr................... 10,000 0.13% $53.0625 05-23-2006 18,252(4) 36,239(4)
William J. Feeney...... 10,000 0.13% $53.0625 05-23-2006 18,252(4) 36,239(4)
</TABLE>

- ---------------

* Less than 1%.

(1) These gains are based on assumed rates of stock price appreciation of 5% and
10% compounded annually from the date the option was granted through
November 1, 2006, the expiration date of the options.

(2) The exercise price of Mr. Metropoulos' options was $1.00 per share on the
date of grant, November 1, 1996. The exercise price is increased annually by
an annual rate of 8% per year.

(3) Mr. Martin resigned from the Company in January 1997. Concurrently with his
resignation, Mr. Martin's options were cancelled.

(4) The initial expiration of these options was May 23, 2006. By their terms,
however, these options terminated on January 31, 1997. Potential realizable
value amounts represent hypothetical gains that could be achieved for the
options if they had been exercised at the end of such three month period.
These gains are based on assumed rates of stock price appreciation of 5% and
10% from the date the option was granted through January 31, 1997, the
accelerated expiration date of the options.

54
<PAGE> 56

The following table provides information about the number of shares of
stock of the Company and of American Home Products issued upon exercises by the
Named Executive Officers during 1996 and the value realized by the Named
Executive Officers. The table also provides information about the number and
value of options exercisable for shares of stock of the Company and of American
Home Products held by the Named Executive Officers at December 31, 1996.

AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES DECEMBER 31, 1996 DECEMBER 31, 1996 ($)(1)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C> <C> <C>
OPTIONS OF THE COMPANY
C. Dean Metropoulos..... -- -- 18,750,000 -- 0 --
Kenneth J. Martin(2).... -- -- -- 7,000,000 -- 0
Stephen Van Tassel...... -- -- -- 500,000 -- 0
Albert J. Soricelli,
Jr.................... -- -- -- 400,000 -- 0
William J. Feeney....... -- -- -- 700,000 -- 0
OPTIONS OF AMERICAN HOME PRODUCTS(3)
C. Dean Metropoulos..... -- -- -- -- -- --
Kenneth J. Martin....... 55,000 982,959 0 -- -- --
Stephen Van Tassel...... 10,400 182,475 1,600 -- 32,800 --
Albert J. Soricelli,
Jr.................... 15,400 331,961 9,000 -- 220,219 --
William J. Feeney....... 47,800 1,446,793 11,600 -- 286,125 --
</TABLE>

- ---------------

(1) Based upon a value of the Company's common stock of $1.00 per share and upon
a value of American Home Products common stock of $58.625 per share, the
closing market price on December 31, 1996.

(2) Mr. Martin resigned from the Company in January 1997. Concurrently with his
resignation, Mr. Martin's options were cancelled.

(3) In addition to the amounts set forth in the table above, American Home
Products granted options to Messrs. Martin, Tassel, Soricelli and Feeney in
1996. By their terms, however, these options terminated on January 31, 1997.
Messrs. Martin, Tassel, Soricelli and Feeney received $271,375, $40,625,
$81,250 and $81,250, respectively, in connection with these cancellations.

MANAGEMENT BONUSES

Management and certain employees are eligible to receive annual bonuses.
The compensation committee of the Board of Directors determines the amount of
such bonuses.

BENEFIT PLANS

Stock Option Plan. The Stock Option Plan gives certain individuals and key
employees of the Company who are responsible for the continued growth of the
Company an opportunity to acquire a proprietary interest in the Company, and
thus to create in such persons an increased interest in and a greater concern
for the welfare of the Company. The Stock Option Plan provides for the grant of
options to acquire up to 45,000,000 shares of Common Stock. Grants of stock
options with respect to 40,364,659 shares of Common Stock have been made under
the Stock Option Plan.

The Stock Option Plan is administered by the Company's compensation
committee, which is currently comprised of Messrs. Tate, Lowenkron and Staubach.
The compensation committee has authority, subject to the terms of the Stock
Option Plan (including the formula grant provisions and the provisions relating
to incentive stock options contained therein), to determine when and to whom to
make grants or awards under

55
<PAGE> 57

the Stock Option Plan, the number of shares to be covered by the grants or
awards, the types and terms of the grants and awards, and in the case of grants
to stock options, the exercise price of stock options. Moreover, the
compensation committee will have the authority, subject to the provisions of the
Stock Option Plan, to establish such rules and regulations as it deems necessary
for the proper administration of the Stock Option Plan and to make such
determinations and interpretations and to take such action in connection with
the Stock Option Plan and any grants and awards thereunder as it deems necessary
or advisable. The compensation committee's determinations and interpretations
under the Stock Option Plan are final, binding and conclusive on all
participants and need not be uniform and may be made by the compensation
committee selectively among persons who receive, or are eligible to receive,
grants and awards under the Stock Option Plan.

Grants of "incentive stock options" within the meaning of section 422 of
the Internal Revenue Code of 1986, as amended (the "Code") and non-qualified
stock options (options which do not qualify under section 422 of the Code) may
be made under the Stock Option Plan to key employees. Grants of non-qualified
stock options may be made to eligible non-employees (as defined in the Stock
Option Plan).

The exercise price per share of Common Stock under each option is fixed by
the compensation committee on the date of grant; provided, however, that the
exercise price of an incentive stock option granted to a person who, at the time
of grant, owns shares of the Company which possessing more than 10% of the total
combined voting power of all classes of stock of the Company may not be less
than 110% of the fair market value of a share of Common Stock on the date of
grant. No option is exercisable after the expiration of ten years from the date
of grant, unless, as to any non-qualified stock option, otherwise expressly
provided in the option agreement; provided, however, that no incentive stock
option granted to a person who, at the time of grant, owns stock of the Company
possessing more than 10% of the total combined voting power of all classes of
stock of the Company is exercisable after the expiration of five years from the
date of grant.

In the event of a change of control or sale of the Company, all outstanding
stock options may, subject to the sole discretion of the compensation committee,
become exercisable in full at such time or times as the compensation committee
may determine. Each stock option accelerated by the compensation committee would
terminate on such date (not later than the stated exercise date) as the
compensation committee determines.

Unless an option or other agreement provides otherwise, upon the date of
death of an optionee (or upon the termination of an optionee because of such
optionee's disability), the person who acquires the right to exercise the option
of such optionee (or the optionee in the case of disability) must exercise such
option within 180 days after the date of death (or termination in the case in
disability), unless a longer period is expressly provided in such incentive
stock option or a shorter period is established by the compensation committee,
but in no event after the expiration date of such option. Following an
optionee's termination of employment for cause, all stock options held by such
optionee will immediately be canceled as of the date of termination of
employment. Following an optionee's termination of employment for other than
cause, such optionee must exercise his stock option within 30 days after the
date of such termination, unless a longer period is expressly provided in such
stock option or a shorter period is established by the compensation committee,
provided that no incentive stock option shall be exercisable more than three
months after such termination.

The option exercise price may be paid in cash, or, in the discretion of the
compensation committee, by the delivery of shares of Common Stock then owned by
the participant, or by a combination of these methods. Also, in the discretion
of the compensation committee, payment may be made by delivering a properly
executed exercise notice to the Company together with a copy of irrevocable
instructions to a broker to deliver promptly to the Company the amount of sale
or loan proceeds to pay the exercise price.

Except as otherwise expressly provided in any non-qualified stock option,
stock options may be transferred by a participant only by will or by the laws of
descent and distribution and may be exercised only by the participant during his
lifetime.

If an optionee's employment is terminated for any reason or a change of
control occurs, the Company or its designee, may purchase the remaining options
and/or shares of Common Stock held by such optionee at a

56
<PAGE> 58

price per share equal to fair market value. Prior to the transfer by an optionee
of any shares of Common Stock issued to such optionee upon exercise of a stock
option, the Company or its designee has the right to acquire such shares of
Common Stock on the same terms and conditions as the proposed transfer.

Retirement Plans. The Company sponsors various retirement plans for
substantially all of its employees. For example, on January 1, 1997, the Company
established defined benefit plans for its salaried and collectively-bargained
employees. In addition, the Company also sponsors a Section 401(k) defined
contribution plan for all non-union employees.

COMPENSATION OF DIRECTORS

Directors who are officers, employees or otherwise affiliates of the
Company do not receive compensation for their services as directors.
Non-employee directors receive an annual retainer of $24,000, plus $3,000 for
attending each meeting of the Board of Directors and $1,000 for attending each
committee meeting. At the option of each director, the compensation may be paid
in the any of three methods: (i) in options granted under the Stock Option Plan,
(ii) in cash, or (iii) one-half in cash and one-half in options. Directors of
the Company are entitled to reimbursement of their reasonable out-of-pocket
expenses in connection with their travel to and attendance at meetings of the
board of directors or committees thereof. In connection with their appointment
as directors, Messrs. Lowenkron and Staubach were each granted non-qualified
stock options under the Stock Option Plan to purchase 100,000 shares of Common
Stock for $1.00 per share and Mr. Jones was granted a non-qualified stock option
under the Stock Option Plan to purchase 10,159 shares of Common Stock for $1.00
per share. These options are fully vested and expire 10 years from their date of
grant.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Board of Directors of the Company has appointed Messrs. Tate
(chairman), Lowenkron, and Staubach as members of its Compensation Committee.
None of the members of the Compensation Committee is or has been an officer or
employee of the Company. Mr. Tate is President of Hicks Muse, which in
connection with the IHF Acquisition beneficially acquired approximately 80% of
the Common Stock. See "Principal Stockholders" and "Certain Relationships and
Related Transactions." Messrs. Lowenkron and Staubach have been granted options
to purchase Common Stock of the Company. See "-- Compensation of Directors."

LIMITATIONS OF LIABILITY AND INDEMNIFICATION MATTERS

The Company's Certificate of Incorporation provides that no director of the
Company shall be personally liable to the Company or its stockholders for
monetary damages for breach of his fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to the Company or
its stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) in respect of
certain unlawful dividend payments or stock redemptions or purchases or (iv) for
any transaction from which the director derived an improper personal benefit.
The effect of these provisions is to eliminate the rights of the Company and its
stockholders (through stockholders' derivative suits on behalf of the Company)
to recover monetary damages against a director for breach of fiduciary duty as a
director (including breaches resulting from grossly negligent behavior), except
in the situations described above.

The Company has entered into indemnification agreements with each of its
directors and executive officers under which the Company will indemnify the
director or officer to the fullest extent permitted by law, and to advance
expenses, if the director or officer becomes a party to or witness or other
participant in any threatened, pending or completed action, suit or proceeding
(a "Claim") by reason of any occurrence related to the fact that the person is
or was a director, officer, employee, agent or fiduciary of the Company or a
subsidiary of the Company or another entity at the Company's request (an
"Indemnifiable Event"), unless a reviewing party (either outside counsel or a
committee appointed by the Board of Directors) determines that the person would
not be entitled to indemnification under applicable law. In addition, if a
change in control or a potential change in control of the Company occurs and if
the person indemnified so requests, the Company will establish a trust for the
benefit of the indemnitee and fund the trust in an amount sufficient to satisfy
all

57
<PAGE> 59

expenses reasonably anticipated at the time of the request to be incurred in
connection with any Claim relating to an Indemnifiable Event. The reviewing
party will determine the amount deposited in the trust. An indemnitee's rights
under his indemnification agreement will not be exclusive of any other rights
under the Company's Certificate of Incorporation or By-laws or applicable law.

The Company believes that these provisions and agreements will assist the
Company in attracting and retaining qualified individuals to serve as directors
and officers.

58
<PAGE> 60

PRINCIPAL STOCKHOLDERS

The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of October 1, 1997, by (i) each
person the Company knows to be the beneficial owner of 5% or more of the
outstanding shares of Common Stock, (ii) each Named Executive Officer, (iii)
each director of the Company and (iv) all executive officers and directors of
the Company as a group. Except as indicated in the footnotes to this table and
pursuant to applicable community property laws, the Company believes that each
stockholder named in this table has sole investment and voting power with
respect to the shares set forth opposite such stockholder's name.

<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED PRIOR TO THE OWNED AFTER THE
OFFERING(1) OFFERING(1)
---------------------- --------------------
BENEFICIAL OWNER NUMBER PERCENT NUMBER PERCENT
<S> <C> <C> <C> <C>
Hicks Muse Parties(2).............................. 67.7%
c/o Hicks, Muse, Tate & Furst Incorporated
200 Crescent Court, Suite 1600
Dallas, Texas 75201
American Home Products Parties(3).................. 18.9%
Five Giralda Farms
Madison, New Jersey 07940
State Treasurer of the State of Michigan(4)........ 5.7%
Bureau of Investments
430 W. Allegan
Lansing, Michigan 48922
C. Dean Metropoulos(5)............................. 5.4%
1633 Littleton Road
Parsippany, New Jersey 07054
Kenneth J. Martin.................................. *
Stephen Van Tassel(6).............................. *
Albert J. Soricelli, Jr.(7)........................ *
William J. Feeney(8)............................... *
Thomas O. Hicks(2)................................. 67.6%
M.L. Lowenkron(9).................................. *
Roger T. Staubach(10).............................. *
L. Hollis Jones(11)................................ *
Charles W. Tate(12)................................ --
Alan B. Menkes(12)................................. --
Michael J. Levitt(12).............................. --
All executive officers and directors as a group (12
persons)(13)..................................... 69.8%
</TABLE>

- ---------------

* Less than 1%.

(1) Shares beneficially owned and percentage of ownership are based on
shares of Common Stock outstanding before the Offering and
shares of Common Stock outstanding after the Offering. Beneficial
ownership is determined in accordance with the rules of the SEC and
generally includes voting or disposition power with respect to securities.

(2) Includes (i) shares owned of record by Hicks, Muse, Tate & Furst
Equity Fund III L.P., a limited partnership of which the ultimate general
partner is Hicks, Muse Fund III Incorporated ("Fund III Inc."); (ii)
shares owned of record by HM/3 Coinvestors, L.P., a limited
partnership of which the ultimate general partner is Fund III Inc.; and
(iii) shares owned of record by HM3/IH Partners L.P., a limited
partnership of which the ultimate general partner is Fund III Inc. Thomas
O. Hicks is a controlling stockholder of Fund III Inc. and serves as Chief

59
<PAGE> 61

Executive Officer, Chief Operating Officer, President, Secretary and
Chairman of the Board of Fund III Inc. Accordingly, Mr. Hicks may be deemed
to be the beneficial owner of the Common Stock held by Hicks, Muse, Tate &
Furst Equity Fund III, L.P., HM/3 Coinvestors, L.P., and HM3/IH Partners,
L.P. Mr. Hicks disclaims beneficial ownership of the shares of Common Stock
not owned of record by him.

(3) Includes shares owned of record by AHP Subsidiary Holding Corporation, a
subsidiary of American Home Products.

(4) The State Treasurer of the State of Michigan holds the shares as custodian
for the Michigan Public School Employees' Retirement System, the Michigan
State Employees' Retirement System, the Michigan State Police Retirement
System, and the Michigan Judges Retirement System.

(5) Includes shares issuable to Mr. Metropoulos upon the exercise of
stock options that are currently exercisable.

(6) Includes shares subject to stock options that are exercisable
within 60 days. Excludes shares subject to stock options that are
not exercisable within 60 days.

(7) Includes shares subject to stock options that are exercisable
within 60 days. Excludes shares subject to stock options that are
not exercisable within 60 days.

(8) Includes shares subject to stock options that are exercisable
within 60 days. Excludes shares subject to stock options that are
not exercisable within 60 days.

(9) Includes shares issuable upon the exercise of stock options that
are currently exercisable.

(10) Includes shares issuable upon the exercise of stock options that
are currently exercisable.

(11) Includes shares issuable upon the exercise of stock options that
are currently exercisable.

(12) Messrs. Tate, Menkes, and Levitt are officers of Fund III Inc. None of Mr.
Tate, Mr. Menkes or Mr. Levitt has the power to vote or dispose the common
stock of Fund III Inc.

(13) Includes shares issuable upon the exercise of stock options that
are currently exercisable or exercisable within 60 days.

60
<PAGE> 62

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The descriptions set forth below do not purport to be complete and are
qualified in their entirety by reference to the applicable agreements.

THE IHF ACQUISITION AND RELATED AGREEMENTS

Effective on November 1, 1996, an affiliate ("Hicks Muse Holding") of Hicks
Muse acquired 80% of the outstanding capital stock of the Company from American
Home Products for approximately $1,225.6 million in cash in a transaction
treated as a recapitalization for financial accounting purposes. Concurrently
with this acquisition, the Company acquired all of the outstanding capital stock
of Heritage from an affiliate of Hicks Muse for approximately $70.8 million in
cash, comprised of approximately $40.8 million used to repay existing
indebtedness of Heritage and approximately $30.0 million to acquire the equity
of Heritage. The acquisition of Heritage was treated as a purchase for financial
accounting purposes. The purchase price for Heritage was determined by the
Company based upon the historic operations of Heritage and the benefits the
Company believes will be realized from its acquisition. Heritage was formed in
1994 by the Hicks Muse affiliate to acquire (i) the Campfire marshmallow
business from Borden, Inc. for approximately $5.0 million and (ii) Angela
Maries's, Inc., a manufacturer of marshmallow rice crisp bars for approximately
$35.0 million. In connection with the acquisition of the Company by an affiliate
of Hicks Muse and the acquisition by the Company of Heritage, the Company
incurred approximately $1,070.0 million of indebtedness, consisting of $670.0
million of borrowings under the Senior Bank Facilities and the issuance of
$400.0 million of aggregate principal amount of the Senior Subordinated Notes.

In connection with the IHF Acquisition, Hicks Muse Holding, American Home
Products and the Company agreed that, for so long as American Home Products
beneficially owns at least five percent of the common stock of the Company,
Hicks Muse Holding and the Company will, at the request of American Home
Products, use all reasonable efforts to cause there to be nominated and elected
to the Board of Directors of the Company one designee of American Home Products.

Until the earlier of (i) November 1, 2001 and (ii) the date on which a
third party acquires control of the Company, without the consent of Hicks Muse
Holding, American Home Products has agreed not to sell or otherwise dispose of
any of the Common Stock it holds without first notifying Hicks Muse Holding and
affording Hicks Muse Holding an opportunity to offer to buy the shares on terms
proposed by Hicks Muse Holding. In the event that American Home Products rejects
Hicks Muse Holding's offer, American Home Products will be permitted to sell not
less than 90% of the shares it proposed to sell in its notice to Hicks Muse
Holding to a third party on per share terms no less favorable to American Home
Products than those set forth in Hicks Muse Holding's offer; provided that,
before selling such shares at a price per share less than 110% of the price per
share set forth in Hicks Muse Holding's offer, American Home Products will be
required to offer to sell such shares to Hicks Muse Holding at such higher price
per share. These restrictions on transfer will not apply to a sale of shares, on
or after November 1, 1997, by American Home Products under a registration
statement filed under the Securities Act or under Rule 144 under the Securities
Act.

Hicks Muse Holding has agreed that, if it proposes to sell or dispose of
shares of Common Stock in a single transaction or series of related
transactions, then it will offer to include in the proposed sale or disposition
a designated number of shares held by American Home Products not to exceed the
product of (i) the number of shares to be sold by Hicks Muse Holding to the
proposed transferee multiplied by (ii) a fraction the numerator of which is the
number of shares held by American Home Products and the denominator of which is
the number of shares held by each of Hicks Muse Holding and American Home
Products in the aggregate. If American Home Products accepts the offer, Hicks
Muse Holdings must reduce, to the extent necessary, the number of shares it
otherwise would have sold in the proposed sale so as to permit American Home
Products to sell the number of shares that it is entitled to sell under the
foregoing terms. American Home Products' "co-sale" rights described above do not
apply to (i) a sale pursuant to a public offering registered under the
Securities Act, (ii) a sale in accordance with Rule 144 under the Securities
Act, (iii) a sale to an affiliate of Hicks Muse or (iv) a sale or sales in a
single transaction or series of related transactions which, in the aggregate, do
not involve more than ten percent of the shares outstanding.

61
<PAGE> 63

REGISTRATION RIGHTS AGREEMENT

American Home Products, Hicks Muse Holding and the Company have entered
into a Registration Rights Agreement under which each of American Home Products
and Hicks Muse Holding is entitled to exercise three demand and seven
"piggy-back" rights to require the Company to register the common stock of the
Company held by them for sale under the Securities Act. The demand rights may
only be exercised commencing six months after the date of this Prospectus. In
addition, the demand rights may only be exercised with respect to a number of
shares that is at least equal to the lesser of (i) five percent of the number of
shares then outstanding and (ii) that number of shares having an estimated
aggregate offering price of at least $20 million. The exercise of the demand and
piggy-back rights are subject to such other limitations and conditions as are
customary in registration rights agreements.

MONITORING AND OVERSIGHT AGREEMENT

In November 1996, the Company entered into a ten-year agreement (the
"Monitoring and Oversight Agreement") with an affiliate of Hicks Muse ("Hicks
Muse Partners") pursuant to which the Company will pay Hicks Muse Partners an
annual fee of $1.0 million for oversight and monitoring services to the Company.
The annual fee is adjustable at the end of each fiscal year to an amount equal
to 0.1% of the consolidated net sales of the Company, but in no event may the
fee be less than $1.0 million. Messrs. Hicks, Tate, Menkes and Levitt, directors
of the Company, are each principals of Hicks Muse Partners. In addition, the
Company has agreed to indemnify Hicks Muse Partners, its affiliates and
shareholders, and their respective directors, officers, agents, employees and
affiliates from and against all claims, actions, proceedings, demands,
liabilities, damages, judgments, assessments, losses and costs, including fees
and expenses, arising out of or in connection with the services rendered by
Hicks Muse Partners thereunder. The Monitoring and Oversight Agreement makes
available the resources of Hicks Muse Partners concerning a variety of financial
and operational matters. The services that have been and will continue to be
provided by Hicks Muse Partners could not otherwise be obtained by the Company
without the addition of personnel or the engagement of outside professional
advisors. In management's opinion, the fees provided for under the Monitoring
and Oversight Agreement reasonably reflect the benefits received and to be
received by the Company.

FINANCIAL ADVISORY AGREEMENT

In November 1996, the Company entered into an agreement (the "Financial
Advisory Agreement") pursuant to which Hicks Muse Partners provides services as
financial advisor to the Company. Pursuant to the Financial Advisory Agreement,
Hicks Muse Partners is entitled to receive a fee equal to 1.5% of the
"transaction value" (as defined) for each "add-on transaction" (as defined) in
which the Company is involved. The term "transaction value" means the total
value of any add-on transaction, including, without limitation, the aggregate
amount of the funds required to complete the add-on transaction (excluding any
fees payable pursuant to the Financial Advisory Agreement and any fees, if any,
paid to any other person or entity for financial advisory, investment banking,
brokerage or any other similar services rendered in connection with such add-on
transaction) and including the amount of any indebtedness, preferred stock or
similar items assumed (or remaining outstanding). The term "add-on transaction"
means any future proposal for a tender offer, acquisition, sale, merger,
exchange offer, recapitalization, restructuring or other similar transaction
directly or indirectly involving the Company or any of its subsidiaries and any
other person or entity. The Financial Advisory Agreement makes available the
resources of Hicks Muse Partners concerning a variety of financial and
operational matters. The services that have been and will continue to be
provided by Hicks Muse Partners could not otherwise be obtained by the Company
without the addition of personnel or the engagement of outside professional
advisors. In management's opinion, the fees provided for under the Financial
Advisory Agreement reasonably reflect the benefits received and to be received
by the Company. The Company has paid Hicks Muse Partners financial advisory fees
of approximately $22.2 million since November 1, 1996.

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PRODUCTOS DEL MONTE

On October 1, 1997, the Company acquired Productos Del Monte from an
affiliate of Hicks Muse for approximately $40.0 million in the form of Common
Stock. See "The Company." Productos Del Monte is a leading manufacturer and
marketer of branded catsup, canned vegetables and bottled salsa in Mexico.
Productos Del Monte was acquired by a Hicks Muse affiliate in October 1996 from
the Del Monte Corporation for approximately $40.0 million. The affiliate of
Hicks Muse has filed a lawsuit against the Del Monte Corporation claiming
damages in connection with its acquisition of Productos Del Monte based upon
breaches of representations and warranties contained in the acquisition
agreement. In connection with the acquisition of Productos Del Monte by the
Company, the Company will succeed to the rights of the Hicks Muse affiliate
under that lawsuit. Management plans to leverage the infrastructure of Productos
Del Monte as a platform to launch the Company's southwestern cuisine, cooking
spray, canned pasta products and canned seafood products into Mexico and other
growing Latin America markets. The purchase price for Productos Del Monte was
determined by the Company based upon the historic operations of Productos Del
Monte and the benefits the Company believes will be realized from its
acquisition. There can be no assurance, however, that these benefits will be
realized. The acquisition of Productos Del Monte was treated as a combination of
entities under common control. Accordingly, the historical accounting values of
Productos Del Monte were carried over for financial accounting purposes. During
1997, the Company has sold approximately $200,000 of Ranch Style beans to
Productos Del Monte. These sales were made at the Company's cost plus 10%.

C. DEAN METROPOULOS & CO.

C. Dean Metropoulos and certain other employees of the Company, including
Mr. Metropoulos' brother, Evan Metropoulos, are also employees of C. Dean
Metropoulos & Co., a food company management firm. In this capacity, these
employees of the Company provide management services for Morningstar and
Ghirardelli, an affiliate of Hicks Muse. The Company is reimbursed for the
actual costs of these services, as well as the actual cost of the overhead of
the Company incurred in connection therewith. During 1997, the Company has been
reimbursed $285,000 pursuant to this arrangement.

FORMER AMERICAN HOME PRODUCTS ARRANGEMENTS

Prior to the IHF Acquisition, the Company was a wholly-owned subsidiary of
American Home Products. The Company was provided certain administrative services
and other benefits directly by American Home Products, or charged a pro-rata
share of American Home Products' costs for obtaining these services and benefits
from third parties. These services and benefits included (i) treasury, tax,
legal, environmental, safety, public relations, advertising, audit and other
administrative services, (ii) employee group health, auto, property, product
liability and other insurance coverages, (iii) corporate office space and (iv)
pension plans, post retirement benefits, and defined contribution plans. During
1996, 1995 and 1994 American Home Products charged the Company approximately
$65.5 million, $65.4 million and $55.5 million, respectively, for these services
and other benefits. In connection with the IHF Acquisition, the Company and
American Home Products entered into a six month transitional services agreement
for the continued provision of certain of these services and other benefits for
an aggregate payment of $150,000.

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DESCRIPTION OF CAPITAL STOCK

The authorized capital stock of the Company consists of shares of
common stock, $0.01 par value per share ("Common Stock"), shares of
non-voting common stock, $0.01 par value per share ("Non-Voting Common Stock"),
and shares of preferred stock, $0.01 par value per share ("Preferred
Stock"). Upon completion of the Offering, shares of Common Stock will be
issued and outstanding ( shares if the Underwriters exercise their
over-allotment option in full), shares of Non-Voting Common Stock will be
issued and outstanding, and no shares of Preferred Stock will be issued and
outstanding. As of November 1, 1997, the Company had outstanding shares
of Common Stock and shares of Non-Voting Common Stock held of record
by 42 and one stockholder(s), respectively.

COMMON STOCK

The rights of the holders of Common Stock and Non-Voting Common Stock are
identical in all respects, except for voting rights. All of the shares of Common
Stock and Non-Voting Common Stock are validly issued, fully paid and
nonassessable.

The holders of the Common Stock are entitled to one vote for each share
held on all matters submitted to a vote of common stockholders. The Non-Voting
Common Stock has no voting rights, except as otherwise required by law. The
shares of Common Stock and Non-Voting Common Stock do not have cumulative voting
rights. Shares of Common Stock and Non-Voting Common Stock have no preemptive
rights, conversion rights, redemption rights or sinking fund provisions, except
that shares of Non-Voting Common Stock are convertible at the option of the
holder into shares of Common Stock on a one-for-one basis. The Common Stock and
the Non-Voting Common Stock are not subject to redemption by the Company. All
shares of Common Stock issued in the Offering will be validly issued, fully paid
and nonassessable.

Subject to the rights of the holders of any class of capital stock of the
Company having preference or priority over the Common Stock and the Nonvoting
Common Stock the holders of Common Stock and the Non-Voting Common Stock are
entitled to dividends in such amounts as may be declared by the Board of
Directors of the Company from time to time out of funds legally available for
such payments and, in the event of liquidation, to share ratably in any assets
of the Company remaining after payment in full of all creditors and provision
for any liquidation preferences on any outstanding preferred stock ranking prior
to the Common Stock and the Non-Voting Common Stock.

PREFERRED STOCK

The Company is authorized to issue shares of Preferred Stock. The
Board of Directors of the Company, in its sole discretion, may designate and
issue one or more series of Preferred Stock from the authorized and unissued
shares of Preferred Stock. Subject to limitations imposed by law or the
Company's Certificate of Incorporation, the Board of Directors of the Company is
empowered to determine the designation of and the number of shares constituting
a series of Preferred Stock. In addition, the Company's Board of Directors may
designate the dividend rate, the terms and conditions of any voting and
conversion rights, the amounts payable upon redemption or upon the liquidation,
dissolution or winding-up of the Company, the provisions of any sinking fund for
the redemption or purchase of shares, and the preferences and relative rights
among the series of Preferred Stock. Such rights, preferences, privileges and
limitations could adversely effect the rights of holders of Common Stock and the
Non-Voting Common Stock.

CERTAIN PROVISIONS OF THE CERTIFICATE OF INCORPORATION AND BYLAWS

The Company's Board of Directors is divided into three classes. The
directors of each class are elected for three-year terms, with the terms of the
three classes staggered so that directors from a single class are elected at
each annual meeting of stockholders. Stockholders may remove a director only for
cause. In general, the Board of Directors, not the stockholders, has the right
to appoint persons to fill vacancies on the Board of Directors.

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The Company's Certificate of Incorporation provides that stockholders may
act only at annual or special meetings of stockholders and not by written
consent. The Certificate of Incorporation requires (i) the approval of the
holders of greater than 25% of the outstanding voting stock to call a special
meeting of the stockholders, (ii) the approval by the holders of at least
66 2/3% of the outstanding voting stock to amend the Certificate of
Incorporation, and (iii) the approval of at least 66 2/3% of the Board of
Directors to amend the Bylaws of the Company.

DELAWARE LAW PROVISIONS

Generally, Section 203 of the General Corporation Law of the State of
Delaware prohibits a publicly held Delaware corporation from engaging in a
"business combination" with an "interested stockholder" for a period of three
years after the date of the transaction in which the person became an interested
stockholder, unless one of the following events occurs: (i) prior to the date of
the business combination, the transaction is approved by the board of directors
of the Company; (ii) upon consummation of the transaction which resulted in the
stockholder becoming an interested stockholder, the interested stockholder owns
at least 85% of the outstanding voting stock; or (iii) on or after such date the
business combination is approved by the board and by the affirmative vote of at
least two-thirds of the outstanding voting stock which is not owned by the
interested stockholder. A "business combination" includes mergers, asset sales
and other transactions resulting in a financial benefit to the stockholder. An
"interested stockholder" is a person who, together with affiliates and
associates, owns (or within three years, did own) 15% or more of the
corporation's voting stock.

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for the Common Stock is Harris Trust and
Savings Bank.

DESCRIPTION OF INDEBTEDNESS

SENIOR BANK FACILITIES

The description set forth below does not purport to be complete and is
qualified in its entirety by reference to the underlying agreements of the
Senior Bank Facilities, which have been filed as exhibits to the registration
statement of which this Prospectus is a part.

The Chase Manhattan Bank ("Chase"), Bankers Trust Company and Morgan
Stanley Senior Funding, Inc. ("Morgan") are agents of the lenders and lenders to
the Company under the Senior Bank Facilities. The Senior Bank Facilities consist
of (a) a 5 3/4 year Tranche A Senior Secured Term Loan Facility providing for
term loans to the Company in a principal amount of $367.5 million (the "Tranche
A Term Facility"); and (b) an 7 1/4 year Tranche B Senior Secured Term Loan
Facility providing for term loans to the Company in a principal amount of $369.5
million (the "Tranche B Term Facility" and collectively with the Tranche A Term
Facility, the "Term Facilities"); and (c) a Senior Secured Revolving Credit
Facility providing for revolving loans to the Company and the issuance of
letters of credit for the account of the Company in an aggregate principal and
stated amount at any time not to exceed $140.0 million (of which not more than
$30.0 million may be represented by Letters of Credit) (the "Revolving
Facility").

A portion of each Term Facility was drawn on closing of the IHF
Acquisition. The remainder of each Term Facility was drawn as incremental term
loans in connection with the Bumble Bee Acquisition.

Amounts repaid or prepaid under any Term Facility may not be reborrowed.
Loans under the Revolving Facility are available until the earlier of (a) March
31, 2003 (the "Scheduled Revolving Credit Termination Date") and (b) the date on
which the Tranche A Term Loans mature or are repaid in full (the "Revolving
Credit Termination Date"). Letters of Credit under the Revolving Facility are
available at any time. No Letter of Credit shall have an expiration date after
the earlier of (a) one year from the date of its issuance and (b) five business
days before the Scheduled Revolving Credit Termination Date. Letters of Credit
may be renewed for one-year periods, provided that no Letter of Credit shall
extend beyond the time specified in clause (b) of the previous sentence.

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Loans under the Tranche A Term Facility amortize in twelve semi-annual
installments commencing September 30, 1997 in the following amounts: (a) $16.0
million for the first installment, (b) $19.0 million for the second and third
installments, (c) $25.5 million for the fourth and fifth installments, (d) $32.0
million for the sixth and seventh installments, (e) $35.0 million for the eighth
installment, (f) $38.5 million for the ninth and tenth installments, (g) $41.5
million for the eleventh installment, and (h) $45.0 million for the twelfth
installment. Loans made under the Tranche B Term Facility amortize in fifteen
semi-annual installments commencing September 30, 1997 in the following amounts:
(a) $500,000 for the first twelve installments, (b) $121.0 million for the
thirteenth and fourteenth installments and (c) $121.5 million for the fifteenth
and final installment.

The Company is required to make mandatory prepayments of loans, and
revolving credit commitments will be mandatorily reduced in amounts, at times
and subject to certain exceptions (a) in respect of 75% of consolidated excess
cash flow of the Company starting with fiscal year 1997 (such amount may be
reduced to 50% of excess cash flow for each fiscal year of the Company
(commencing with the 1998 fiscal year) based upon the achievement of certain
performance targets) and (b) in respect of 100% of the net proceeds of certain
dispositions of material assets or the stock of subsidiaries or the issuance of
capital stock or the incurrence of certain indebtedness by the Company or any of
its subsidiaries (the lenders have waived this requirement with respect to the
proceeds from this Offering). At the Company's option, loans may be prepaid, and
revolving credit commitments may be permanently reduced, in whole or in part at
any time in certain minimum amounts. Prepayments of the Term Loan Facilities
shall be applied to the Tranche A Term Loans, and the Tranche B Term Loans
ratably and to the installments thereof ratably in accordance with the then
remaining number of installments and may not be reborrowed, provided that the
first $40.0 million of optional prepayments of the Term Loans may be applied to
such installments as the Borrower may elect (other than the first twelve
installments in respect of the Tranche B Term Loans).

The obligations of the Company under the Senior Bank Facilities are
unconditionally and irrevocably guaranteed by each of the Company's direct or
indirect domestic subsidiaries (collectively, the "Guarantors"). In addition,
the Senior Bank Facilities are secured by first priority or equivalent security
interests in (i) all the capital stock of, or other equity interests in, each
direct or indirect domestic subsidiary of the Company and 65% of the capital
stock of, or other equity interests in, each direct foreign subsidiary of the
Company, or any of its domestic subsidiaries and (ii) all tangible and
intangible assets (including, without limitation, intellectual property and
owned real property) of the Company and the Guarantors (subject to certain
exceptions and qualifications).

At the Company's option, the interest rates per annum applicable to the
Senior Bank Facilities will be either Adjusted LIBOR (as defined) plus a margin
of (i) 2.00% with respect to the Tranche A Term Loan Facility and the Revolving
Facility and (ii) 2.25% with respect to the Tranche B Term Loan Facility, or the
Alternate Base Rate (as defined) plus a margin of (i) 1.00% with respect to the
Tranche A Term Loan Facility and the Revolving Facility and (ii) 1.25% with
respect to the Tranche B Term Loan Facility. The Alternate Base Rate is the
highest of (a) Chase's Prime Rate, (b) the secondary market rate for three-month
certificates of deposit (grossed up for maximum statutory reserve requirements)
plus 1% and (c) the Federal Funds Effective Rate plus 0.5%.

The Company will pay a commission on the face amount of all outstanding
letters of credit at a per annum rate equal to the Applicable Margin then in
effect with respect to LIBOR loans under the Revolving Facility minus the
Fronting Fee (as defined). A fronting fee equal to 1/4% per annum on the face
amount of each Letter of Credit (the "Fronting Fee") shall be payable quarterly
in arrears to the issuing lender for its own account. Initially the Company will
also pay a per annum fee equal to 0.50% on the undrawn portion of the
commitments in respect of the Revolving Facility (the "Commitment Fee"). The
Commitment Fee shall be subject to determination in accordance with the pricing
grid set forth above after January 1, 1998.

The Senior Bank Facilities also contain a number of significant covenants
that, among other things, restrict the ability of the Company to dispose of
assets, incur additional indebtedness, repay other indebtedness or amend other
debt instruments, pay dividends, create liens on assets, make investments or
acquisitions, engage in mergers or consolidations, make capital expenditures, or
engage in certain transactions with

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affiliates, amend the Indenture and otherwise restrict corporate activities. In
addition, under the Senior Bank Facilities the Company is required to comply
with specified minimum interest coverage, maximum leverage and minimum fixed
charge coverage ratios.

SENIOR SUBORDINATED NOTES

The Senior Subordinated Notes were issued under an Indenture, dated as of
November 1, 1996, among the Company, certain of its subsidiaries (the
"Subsidiary Guarantors") and the United States Trust Company of New York, as
Trustee (the "Trustee"), a copy of which has been filed as an exhibit to the
registration statement of which this Prospectus is a part. The Indenture is
subject to and governed by the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"). The following summary of certain provisions of the
Senior Subordinated Notes does not purport to be complete and is subject to, and
is qualified in its entirety by reference to, all the provisions of the
Indenture (including the definitions of certain terms therein and those terms
made a part thereof by the Trust Indenture Act) and the Senior Subordinated
Notes.

The Senior Subordinated Notes are unsecured, senior subordinated
obligations of the Company, limited to the aggregate principal amount thereof,
and will mature on November 1, 2006. Each note bears interest at the rate of
10 3/8% and is payable semiannually on May 1 and November 1 of each year.

Except as set forth below, the Senior Subordinated Notes are not redeemable
at the option of the Company prior to November 1, 2001. On and after such date,
the Senior Subordinated Notes are redeemable, at the Company's option, in whole
or in part, at any time upon not less than 30 nor more than 60 days prior
notice, at the following redemption prices (expressed in percentages of
principal amount), plus accrued and unpaid interest to the redemption date
(subject to the right of holders of record on the relevant record date to
receive interest due on the relevant interest payment date):

If redeemed during the 12-month period commencing on November 1 of the
years set forth below:

<TABLE>
<CAPTION>
REDEMPTION
PERIOD PRICE
<S> <C>
2001........................................................ 105.188%
2002........................................................ 103.458%
2003........................................................ 101.729%
2004 and thereafter......................................... 100.000%
</TABLE>

In addition, at any time and from time to time prior to November 1, 2000,
the Company may redeem in the aggregate up to $160.0 million principal amount of
Senior Subordinated Notes with the proceeds of one or more equity offerings by
the Company so long as there is a public market at the time of such redemption,
at a redemption price of 110.375%, plus accrued and unpaid interest, if any, to
the redemption date (subject to the right of holders of record on the relevant
record date to receive interest due on the relevant interest payment date);
provided, however, that at least $200.0 million aggregate principal amount of
the Senior Subordinated Notes must remain outstanding after each such
redemption. At any time on or prior to November 1, 2001, the Senior Subordinated
Notes may also be redeemed as a whole at the option of the Company upon the
occurrence of a change of control at a premium.

The payment of the principal of, premium (if any), and interest on the
Senior Subordinated Notes is subordinated in right of payment, to the payment
when due of all senior indebtedness (as defined in the Indenture) of the
Company. As of June 30, 1997, on a pro forma as adjusted basis, the outstanding
senior indebtedness of the Company would have been $761.4 million (exclusive of
unused commitments).

Each Subsidiary Guarantor unconditionally guarantees, jointly and
severally, on a senior subordinated basis, the full and prompt payment of
principal of and interest on the Senior Subordinated Notes, and of all other
obligations of the Company under the Indenture. The indebtedness evidenced by
each Subsidiary Guaranty (including the payment of principal of, premium, if
any, and interest on the Senior Subordinated Notes) will be subordinated to
guarantor senior indebtedness (as defined in the Indenture) on the same basis as
the Senior Subordinated Notes are subordinated to senior indebtedness.

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Change of Control. Upon the occurrence of a change of control, each holder
has the right to require the Company to repurchase all or any part of such
holder's Senior Subordinated Notes at a purchase price in cash equal to 101% of
the principal amount thereof plus accrued and unpaid interest, if any, to the
date of purchase.

Limitation on Incurrence of Additional Indebtedness. Subject to certain
exceptions under the Indenture, the Company shall not, and shall not permit any
of its restricted subsidiaries (as defined in the Indenture) to, incur any
indebtedness; provided, however, that the Company and any of its restricted
subsidiaries may incur indebtedness if on the date thereof the Consolidated
Coverage Ratio (as defined in the Indenture) would be greater than 2.00:1.00, if
such Indebtedness is Incurred on or prior to November 1, 1998 and 2.25:1.00, if
such indebtedness is Incurred thereafter.

Limitation on Restricted Payments. Subject to certain exceptions set forth
in the Indenture, the Company shall not, and shall not permit any of its
restricted subsidiaries, directly or indirectly, to make any restricted payment
(as defined in the Indenture) if at the time the Company or such Restricted
Subsidiary makes such restricted payment:

(i) a default shall have occurred and be continuing (or would result
therefrom);

(ii) the Company is not able to incur an additional $1.00 of indebtedness
pursuant to the "Limitation on Indebtedness" covenant; or

(iii) the aggregate amount of such restricted payment and all other
restricted payments declared or made subsequent to the issue date would exceed
the sum of: (A) 50% of the consolidated net income accrued during the period
from the issue date to the end of the most recent fiscal quarter ending prior to
the date of such restricted payment as to which financial results are available
(but in no event ending more than 135 days prior to the date of such restricted
payment) (or, in case such consolidated net income shall be a deficit, minus
100% of such deficit); (B) the aggregate net proceeds received by the Company
from any person (other than a subsidiary of the Company) subsequent to November
1, 1996; (C) the amount by which indebtedness of the Company is reduced upon the
conversion or exchange (other than by a restricted subsidiary) subsequent to the
issue date of any indebtedness of the Company convertible or exchangeable for
capital stock of the Company (less the amount of any cash, or other property,
distributed by the Company upon such conversion or exchange); (D) the amount
equal to the net reduction in investments made by the Company or any of its
restricted subsidiaries in any person resulting from (i) repurchases or
redemptions of such investments by such person, proceeds realized upon the sale
of such investment to an unaffiliated purchaser, and repayments of loans or
advances or other transfers of assets by such person to the Company or any
restricted subsidiary of the Company or (ii) the redesignation of unrestricted
subsidiaries as restricted subsidiaries not to exceed, in the case of any
unrestricted subsidiary, the amount of investments previously made by the
Company or any restricted subsidiary in such unrestricted subsidiary, which
amount was included in the calculation of the amount of restricted payments;
provided, however, that no amount shall be included under this clause (D) to the
extent it is already included in consolidated net income; and (E) the aggregate
net cash proceeds received by a person in consideration for the issuance of such
person's capital stock which are held by such person at the time such person is
merged with and into the Company in accordance with the "Merger and
Consolidation" covenant subsequent to the issue date; provided, however, that
concurrently with or immediately following such merger the Company uses an
amount equal to such net cash proceeds to redeem or repurchase the Company's
capital stock.

Other Restrictive Covenants. The Indenture contains certain other
restrictive covenants that, among other things, impose limitations (subject to
certain exceptions) on the Company with respect to (i) distributions from
restricted subsidiaries, (ii) sales of assets and subsidiary stock, (iii)
issuances of capital stock of restricted subsidiaries, and (iv) a merger and
consolidation involving the Company.

Events of Default. Each of the following constitutes an event of default
under the Indenture: (i) a default in any payment of interest on any note when
due, continued for 30 days, (ii) a default in the payment of principal of any
note when due at its stated maturity, upon optional redemption, upon required
repurchase, upon declaration or otherwise (iii) the failure by the Company to
comply with its obligations under the merger and consolidation covenants of the
Indenture, (iv) the failure by the Company to comply for 30 days after

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notice with any of its obligations under the other covenants described in the
Indenture, (v) the failure by the Company to comply for 60 days after notice
with its other agreements contained in the Indenture, (vi) indebtedness of the
Company or any restricted subsidiary is not paid within any applicable grace
period after final maturity or is accelerated by the holders thereof because of
a default and the total amount of such indebtedness unpaid or accelerated
exceeds $20 million and such default shall not have been cured or such
acceleration rescinded after a 10 day period (the "cross acceleration
provision"), (vii) certain events of bankruptcy, insolvency or reorganization of
the Company or a significant subsidiary, (viii) any judgment or decree for the
payment of money in excess of $20 million (to the extent not covered by
insurance) is rendered against the Company or a significant subsidiary and such
judgment or decree shall remain undischarged or unstayed for a period of 60 days
after such judgment becomes final and non-appealable or (ix) any Subsidiary
Guaranty by a significant subsidiary ceases to be in full force and effect
(except as contemplated by the terms of the Indenture) or any Subsidiary
Guarantor that is a significant subsidiary denies or disaffirms its obligations
under the Indenture or its Subsidiary Guaranty and such default continues for 10
days. However, a default under clauses (iv) and (v) will not constitute an event
of default until the Trustee or the holders of 25% in principal amount of the
outstanding Senior Subordinated Notes notify the Company of the default and the
Company does not cure such default within the time specified in clauses (iv) and
(v) hereof after receipt of such notice.

If an event of default occurs and is continuing, the Trustee or the holders
of at least 25% in principal amount of the outstanding Senior Subordinated Notes
may declare the principal of and accrued and unpaid interest, if any, on all the
Senior Subordinated Notes to be due and payable. Upon such a declaration, such
principal and accrued and unpaid interest shall be due and payable immediately.
If an event of default relating to certain events of bankruptcy, insolvency or
reorganization of the Company occurs and is continuing, the principal of and
accrued and unpaid interest on all the Senior Subordinated Notes will become and
be immediately due and payable without any declaration or other act on the part
of the Trustee or any holders. Under certain circumstances, the holders of a
majority in principal amount of the outstanding Senior Subordinated Notes may
rescind any such acceleration with respect to the Senior Subordinated Notes and
its consequences.

SHARES ELIGIBLE FOR FUTURE SALE

Prior to the Offering, there has been no market for the Common Stock. The
sale, or availability for sale, of substantial amounts of Common Stock in the
public market subsequent to the Offering could adversely affect the prevailing
market price of the shares of Common Stock and could impair the Company's
ability to raise additional capital through the sale of equity securities.

Upon completion of the Offering, the Company will have shares of
Common Stock outstanding ( shares if the Underwriters' over-allotment
option is exercised in full). Of these shares, the shares sold in the
Offering ( shares if the Underwriters' over-allotment option is
exercised in full) will be freely tradable without restriction or further
registration under the Securities Act, except that any shares purchased by
"affiliates" of the Company, as that term is defined under the Securities Act
("Affiliates"), may generally only be sold in compliance with the limitations of
Rule 144 described below.

The remaining shares of Common Stock are deemed "Restricted
Shares" under Rule 144. The number of shares of Common Stock available for sale
in the public market is limited by restrictions under the Securities Act and
lock-up agreements under which the holders of such shares have agreed not to
sell or otherwise dispose of any of their shares for a period of days after
the effective date of this Offering (the "Lock-Up Period") without the prior
written consent of Donaldson, Lufkin & Jenrette Securities Corporation. Because
of these restrictions, on the date of this Prospectus, no shares other than
those offered hereby will be eligible for sale. Upon expiration of the Lock-Up
Period, all of the Restricted Shares will become available for sale in the
public market, subject to Rule 144 and Rule 701 of the Securities Act (other
than shares which will become available for sale in October 1998.)

In general, under Rule 144 of the Securities Act as currently in effect,
beginning 90 days after this Offering, a person (or persons whose shares are
aggregated) who has beneficially owned "restricted" shares for

69
<PAGE> 71

at least one year, including a person who may be deemed an affiliate of the
Company, is entitled to sell within any three-month period a number of shares of
Common Stock that does not exceed the greater of 1.0% of the then-outstanding
shares of Common Stock ( shares after giving effect to this Offering) or
the average weekly trading volume of the Common Stock as reported through the
New York Stock Exchange during the four calendar weeks preceding such sale.
Sales under Rule 144 of the Securities Act are subject to certain restrictions
relating to manner of sale, notice and the availability of current public
information about the Company. In addition, under Rule 144(k) of the Securities
Act, a person who is not an affiliate of the Company at any time 90 days
preceding a sale, and who has beneficially owned shares for at least one year,
would be entitled to sell such shares immediately following this Offering
without regard to the volume limitations, manner of sale provisions or notice or
other requirements of Rule 144 of the Securities Act.

Rule 701 under the Securities Act provides that shares of Common Stock
acquired on the exercise of outstanding options may be resold by persons other
than affiliates beginning 90 days after the date of this Prospectus, subject
only to the manner of sale provisions of Rule 144, and by affiliates, beginning
90 days after the date of this Prospectus, subject to all provisions of Rule 144
except its minimum holding period. The Company intends to register on a
registration statement on Form S-8, shortly after the date of this Prospectus,
for a total of shares of Common Stock reserved for issuance under the
Stock Option Plan.

70
<PAGE> 72

UNDERWRITING

Under the terms and subject to the conditions contained in an Underwriting
Agreement dated , 1997 (the "Underwriting Agreement"), the
Underwriters named below ("Underwriters'), for whom Donaldson, Lufkin & Jenrette
Securities Corporation, BT Alex. Brown Incorporated, Chase Securities Inc.,
Credit Suisse First Boston Corporation, Goldman, Sachs & Co., and Morgan Stanley
& Co. Incorporated are acting as representatives (the "Representatives"), have
severally but not jointly agreed to purchase from the Company the following
respective numbers of shares of Common Stock:

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES
<S> <C>
Donaldson, Lufkin & Jenrette Securities Corporation.........
BT Alex. Brown Incorporated.................................
Chase Securities Inc........................................
Credit Suisse First Boston Corporation......................
Goldman, Sachs & Co.........................................
Morgan Stanley & Co. Incorporated...........................

-------
Total.............................................
=======
</TABLE>

The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent and that the
Underwriters will be obligated to purchase all of the shares of Common Stock
offered hereby (other than those shares covered by the over-allotment option
described below) if any are purchased. The Underwriting Agreement provides that,
in the event of a default by an Underwriter, in certain circumstances the
purchase commitments of nondefaulting Underwriters may be increased or the
Underwriting Agreement may be terminated.

The Company has granted to the Underwriters an option, expiring at the
close of business on the 30th day after the date of this Prospectus, to purchase
up to additional shares of Common Stock at the initial public offering
price less the underwriting discounts and commissions, all as set forth on the
cover page of this Prospectus. Such option may be exercised only to cover
over-allotments, if any, in the sale of the shares of Common Stock. To the
extent such option is exercised, each Underwriter will become obligated, subject
to certain conditions, to purchase approximately the same percentage of such
additional shares of Common Stock as it was obligated to purchase pursuant to
the Underwriting Agreement.

The Company has been advised by the Representatives that the Underwriters
propose to offer the shares of Common Stock to the public initially at the
public offering price set forth on the cover page of this Prospectus and,
through the Representatives, to certain dealers at such price less a concession
of $ per share. The Underwriters and such dealers may allow a discount
of $ per share on sales to certain other dealers. After the initial
public offering, the public offering price and concession and discount to
dealers may be changed by the Representatives.

The Representatives have informed the Company that they do not expect
discretionary sales by the Underwriters to exceed five percent of the shares of
Common Stock being offered hereby.

71
<PAGE> 73

The Company has agreed to indemnify the Underwriters against certain
liabilities, including civil liabilities under the Securities Act, or contribute
to payments which the Underwriters may be required to make in respect thereof.

The Company, its officers and directors, Hicks Muse and its affiliates and
all other stockholders of the Company have agreed that they will not (i) offer,
sell, pledge, contract to sell, announce their intention to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase or otherwise transfer or dispose of,
directly or indirectly, or file with the Commission a registration statement
under the Securities Act relating to any shares of Common Stock, or any
securities that are convertible into, or exercisable or exchangeable for shares
of Common Stock, (ii) enter into any swap or other arrangement that transfers
all or a portion of the economic consequences associated with the ownership of
any Common Stock (regardless of whether any of the transactions described in
clause (i) or (ii) is to be settled by the delivery of Common Stock, or such
other securities, in cash or otherwise), except to the Underwriters pursuant to
the Underwriting Agreement, for a period of days after the date of this
Prospectus without the prior written consent of Donaldson, Lufkin & Jenrette
Securities Corporation. Notwithstanding the foregoing, during such period, (i)
the Company may grant stock options pursuant to the Company's existing stock
option plan consistent with past practice and (ii) the Company may issue shares
of Common Stock upon the exercise of any option or warrant or the conversion of
a security outstanding on the date hereof.

Prior to the Offering, there has been no public market for the Common
Stock. The initial public offering price for the shares of Common Stock will be
determined by negotiations between the Company and the Representatives. Among
the factors to be considered in determining the initial public offering price
will be prevailing market conditions, the results of operations of the Company
in recent periods, the market capitalizations and stages of development of other
companies that the Company and the Representatives believe to be comparable to
the Company, estimates of the business potential of the Company, the present
state of the Company's development, and other factors deemed relevant.

The Company has applied to list the shares of Common Stock on the New York
Stock Exchange. In connection with the listing of the Common Stock on the New
York Stock Exchange, the Underwriters will undertake to sell round lots of 100
or more shares of Common Stock to a minimum of 2,000 beneficial owners.

Affiliates of each of BT Alex. Brown Incorporated, Chase Securities Inc.
and Morgan Stanley & Co. Incorporated are agents and lenders under the Senior
Bank Facilities and receive customary fees in such capacity. In addition,
affiliates of BT Alex. Brown Incorporated and Chase Securities Inc. participated
in the equity financing for the IHF Acquisition and owned 2.9% and 4.3%,
respectively, of the Company's Common Stock outstanding immediately prior to the
Offering. BT Alex. Brown Incorporated and Chase Securities Inc. also acted as
initial purchasers of the Senior Subordinated Notes and currently hold $10.0
million and $0.5 million principal amount, respectively, of the Senior
Subordinated Notes, which were acquired in the ordinary course of market making
activities. Affiliates of BT Alex. Brown Incorporated and Chase Securities Inc.
are limited partners of investment funds managed by Hicks Muse. The
Representatives and their affiliates have in the past rendered other financial
services to the Company and its affiliates and may do so in the future.

The Representatives, on behalf of the Underwriters, may engage in
over-allotment, stabilizing transactions, syndicate covering transactions and
penalty bids in accordance with Regulation M under the Exchange Act.
Over-allotment involves syndicate sales in excess of the offering size, which
creates a syndicate short position. Stabilizing transactions permit bids to
purchase the underlying security so long as the stabilizing bids do not exceed a
specified maximum. Syndicate covering transactions involve purchases of
securities in the open market after the distribution has been completed in order
to cover syndicate short positions. Penalty bids permit the Representatives to
reclaim a selling concession from a syndicate member when the securities
originally sold by such syndicate member are purchased in a syndicate covering
transaction to cover syndicate short positions. Such stabilizing transactions,
syndicate covering transactions and penalty bids may cause the price of the
securities to be higher than it would otherwise be in the absence of such
transaction.

72
<PAGE> 74

LEGAL MATTERS

The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by Vinson & Elkins L.L.P., Dallas, Texas. Certain legal
matters in connection with the Offering will be passed upon for the Underwriters
by Akin, Gump, Strauss, Hauer & Feld, L.L.P., New York, New York.

EXPERTS

The consolidated balance sheet of International Home Foods, Inc. and
Subsidiaries as of December 31, 1996 and the consolidated statements of
operations and parent company's investment and advances, changes in
stockholders' deficiency, and cash flows for the year ended December 31, 1996,
included in this Prospectus, have been included herein in reliance on the report
of Coopers & Lybrand L.L.P., independent accountants, given on the authority of
that firm as experts in accounting and auditing.

The combined balance sheet of the Company as of December 31, 1995 and the
combined statements of operations and parent company's investment and advances
and of cash flows for each of the two years in the period ended December 31,
1995, included in this Prospectus, have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in the report with respect thereto,
and are included herein in reliance upon the authority of said firm as experts
in accounting and auditing in giving said report.

The financial statements of Bumble Bee Seafoods, Inc. as of December 31,
1995 and 1996, and for each of the years in the three-year period ended December
31, 1996, have been included herein and in the registration statement in
reliance upon the report of KPMG Peat Marwick LLP, independent certified public
accountants, appearing elsewhere herein, and upon the authority of said firm as
experts in accounting and auditing. The report of KPMG Peat Marwick LLP contains
an explanatory paragraph that states that Bumble Bee Seafoods' notes payable and
subordinated note payable were due and payable in May 1996 and nonpayment has
constituted events of default. Bumble Bee Seafoods does not currently have funds
to retire these obligations. Such conditions raise substantial doubt about
Bumble Bee Seafoods' ability to continue as a going concern. The consolidated
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

AVAILABLE INFORMATION

The Company has filed with the Commission a registration statement (the
"Registration Statement") under the Securities Act with respect to the shares of
Common Stock offered hereby. As permitted by the rules and regulations of the
Commission, this Prospectus does not contain all of the information set forth in
the Registration Statement. For further information with respect to the Company
and the Common Stock offered hereby, reference is made to the Registration
Statement, including the exhibits and schedules filed therewith. Statements
contained in this Prospectus concerning the provisions of any contract,
agreement or other document referred to herein or therein are not necessarily
complete, but contain a summary of the material terms of such contracts,
agreements or other documents. With respect to each contract, agreement or other
document filed as an exhibit to the Registration Statement, reference is made to
the exhibit for the complete contents of the exhibit, and each statement
concerning its provisions is qualified in its entirety by such reference. The
Registration Statement may be inspected, without charge, at the offices of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 and at its regional
offices at 7 World Trade Center, New York, New York, 10048 and Citicorp Center,
500 West Madison Street, Chicago, Illinois 60661-2551. Copies of such materials
may also be obtained by mail at prescribed rates from the Public Reference
Section of the Commission at its principal office at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Copies of such materials may also be obtained from the
web site that the Commission maintains at www.sec.gov.

73
<PAGE> 75

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
INTERNATIONAL HOME FOODS, INC.
REPORT OF INDEPENDENT ACCOUNTANTS........................... F-2
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS.................... F-3
CONSOLIDATED FINANCIAL STATEMENTS:
Consolidated Balance Sheets as of December 31, 1995 and
1996 and
June 30, 1997 (unaudited).............................. F-4
Consolidated Statements of Operations and Parent Company's
Investment and Advances for the years ended December
31, 1994, 1995 and 1996 and for the six month periods
ended June 30, 1996 and 1997 (unaudited)............... F-5
Consolidated Statements of Changes in Stockholders' Equity
(Deficiency) for the year ended December 31, 1996 and
for the six month period ended June 30, 1997
(unaudited)............................................ F-6
Consolidated Statements of Cash Flows for the years ended
December 31, 1994, 1995 and 1996 and for the six month
periods ended June 30, 1996 and 1997 (unaudited)....... F-7
Notes to Consolidated Financial Statements................ F-8
BUMBLE BEE SEAFOODS, INC.
INDEPENDENT AUDITORS' REPORT................................ F-27
CONSOLIDATED FINANCIAL STATEMENTS:
Consolidated Balance Sheets as of December 31, 1995 and
1996 (audited) and
June 30, 1997 (unaudited).............................. F-28
Consolidated Statements of Operations and Accumulated
Deficit for the years ended December 31, 1994, 1995 and
1996 (audited) and for the six month periods ended June
30, 1996 and 1997 (unaudited).......................... F-29
Consolidated Statements of Cash Flows for the years ended
December 31, 1994, 1995 and 1996 (audited) and for the
six month periods ended June 30, 1996 and 1997
(unaudited)............................................ F-30
Notes to the Consolidated Financial Statements............ F-31
</TABLE>

F-1
<PAGE> 76

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders of International Home Foods, Inc.:

We have audited the accompanying consolidated balance sheet of
International Home Foods, Inc. and Subsidiaries as of December 31, 1996 and the
related consolidated statements of operations and parent company's investment
and advances, changes in stockholders' deficiency, and cash flows for the year
ended December 31, 1996. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of International
Home Foods, Inc. and Subsidiaries as of December 31, 1996, and the consolidated
results of their operations and their cash flows for the year ended December 31,
1996, in conformity with generally accepted accounting principles.

COOPERS & LYBRAND L.L.P.

Parsippany, New Jersey
April 18, 1997 except as to Note 15,
which is as of May 2, 1997

F-2
<PAGE> 77

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To American Home Products Corporation:

We have audited the accompanying combined balance sheet of American Home
Food Products identified in Notes 1 and 2, as of December 31, 1995, and the
related combined statements of operations and parent company's investment and
advances, and cash flows for each of the two years in the period ended December
31, 1995. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the combined financial position of American
Home Food Products as of December 31, 1995 and the combined results of their
operations and their cash flows for each of the two years in the period ended
December 31, 1995, in conformity with generally accepted accounting principles.

ARTHUR ANDERSEN LLP

New York, New York
October 11, 1996

F-3
<PAGE> 78

INTERNATIONAL HOME FOODS, INC.

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
(SEE NOTES 1 AND 2)

<TABLE>
<CAPTION>
DECEMBER 31
--------------------- JUNE 30,
1995 1996 1997
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents............................... $ -- $ 45,859 $ 74,549
Accounts receivable, net of allowances.................. 45,674 48,801 50,533
Inventories............................................. 139,850 129,205 111,710
Prepaid expenses and other current assets............... 3,832 8,197 4,841
Deferred income taxes................................... -- 11,571 13,389
-------- ---------- ----------
Total current assets............................ 189,356 243,633 255,022
Property, plant and equipment, net........................ 176,755 186,002 185,398
Intangible assets, net.................................... 97,443 153,938 151,040
Deferred income taxes..................................... -- 353,034 341,211
Other assets.............................................. 93 31,664 29,620
-------- ---------- ----------
Total assets.................................... $463,647 $ 968,271 $ 962,291
======== ========== ==========
LIABILITIES, PARENT COMPANY'S
INVESTMENT AND ADVANCES AND
STOCKHOLDERS' EQUITY (DEFICIENCY)

CURRENT LIABILITIES:
Due to banks............................................ $ -- $ 9,278 $ 6,883
Current portion of long-term debt....................... -- 26,000 28,500
Accounts payable........................................ 13,092 18,679 21,047
Amount payable to minority stockholder.................. -- 16,556 --
Accrued salaries, wages and benefits.................... 9,272 14,379 13,262
Accrued advertising and promotion....................... 27,465 38,127 45,522
Accrued interest........................................ -- 10,843 11,290
Other accrued liabilities............................... 18,902 28,151 36,648
-------- ---------- ----------
Total current liabilities....................... 68,731 162,013 163,152
Long-term debt.......................................... -- 1,044,000 1,028,500
Post retirement benefits obligation..................... -- 16,689 18,039
Other noncurrent liabilities, primarily accrued
royalties............................................ 9,919 9,764 --
-------- ---------- ----------
Total liabilities............................... 78,650 1,232,466 1,209,691
-------- ---------- ----------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY (DEFICIENCY):
Preferred stock -- par value $.01 per share; authorized,
100,000,000 shares; no shares issued or
outstanding.......................................... $ -- $ -- $ --
Common stock -- par value $.01 per share; authorized,
1,900,000,000 shares; issued and outstanding
330,000,000 shares................................... -- 3,300 3,300
Additional paid-in capital.............................. -- (263,999) (263,999)
Retained earnings (accumulated deficit)................. -- (1,598) 15,299
Former parent company's investment and advances......... 384,997 -- --
Foreign currency translation adjustment................. -- (1,898) (2,000)
-------- ---------- ----------
Total stockholders' equity (deficiency)......... 384,997 (264,195) (247,400)
-------- ---------- ----------
Total liabilities, parent company's investment
and advances, and stockholders' equity
(deficiency).................................. $463,647 $ 968,271 $ 962,291
======== ========== ==========
</TABLE>

The accompanying notes to consolidated financial statements
are an integral part of these statements.

F-4
<PAGE> 79

INTERNATIONAL HOME FOODS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND
PARENT COMPANY'S INVESTMENT AND ADVANCES
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
(SEE NOTES 1 AND 2)

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
---------------------------------- -----------------------
1994 1995 1996 1996 1997
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net sales........................ $997,321 $818,861 $ 942,792 $449,298 $ 494,422
Cost of sales.................... 463,137 398,122 444,879 214,185 230,794
-------- -------- ------------ -------- ------------
Gross profit................... 534,184 420,739 497,913 235,113 263,628
Marketing expenses............... 200,757 186,396 191,527 93,078 109,254
Selling, general and
administrative expenses........ 174,211 165,736 148,903 71,578 76,020
Provision for restructuring and
other charges.................. -- -- 4,308 -- --
-------- -------- ------------ -------- ------------
Income from operations........... 159,216 68,607 153,175 70,457 78,354
Interest expense................. -- -- 17,072 -- 51,765
Interest income and other, net... -- -- 177 (86) 1,572
-------- -------- ------------ -------- ------------
Income before provision for
income taxes................ 159,216 68,607 136,280 70,371 28,161
Provision for income taxes....... 63,296 29,414 53,319 26,784 11,264
-------- -------- ------------ -------- ------------
Net income..................... 95,920 39,193 82,961 43,587 16,897
Parent company's investment
and advances, beginning
of period...................... 423,551 467,139 -- 384,997 --
Advances, withdrawals and
dividends, net................. (52,332) (121,335) -- (75,529) --
-------- -------- ------------ -------- ------------
Parent company's investment and
advances, end of period........ $467,139 $384,997 $ -- $353,055 $ --
======== ======== ============ ======== ============
Net income per common share...... $ 0.25 $ 0.05
Weighted average number of shares
outstanding.................... 330,000,000 330,000,000
============ ============
</TABLE>

The accompanying notes to consolidated financial statements
are an integral part of these statements.

F-5
<PAGE> 80

INTERNATIONAL HOME FOODS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN
STOCKHOLDERS' EQUITY (DEFICIENCY)
(IN THOUSANDS, EXCEPT SHARE AMOUNT)
(SEE NOTES 1 AND 2)

<TABLE>
<CAPTION>
FOR THE FOR THE SIX
YEAR ENDED MONTHS ENDED
DECEMBER 31, JUNE 30,
1996 1997
(UNAUDITED)
<S> <C> <C>
Common Stock:
Balance at beginning of period............................ $ -- $ 3,300
Effect of merger transaction -- issued 330,000,000
shares................................................. 3,300 --
--------- ---------
Balance at end of period.................................. $ 3,300 $ 3,300
========= =========
Additional paid-in capital:
Balance at beginning of period............................ $ -- $(263,999)
Effect of merger transaction.............................. (263,999) --
--------- ---------
Balance at end of period.................................. $(263,999) $(263,999)
========= =========
Foreign currency translation adjustment:
Balance at beginning of period............................ $ -- $ (1,898)
Effect of merger transaction.............................. (1,662)
Translation adjustment for the period November 1, 1996 to
December 31, 1996 and January 1, 1997 to June 30, 1997,
respectively........................................... (236) (102)
--------- ---------
Balance at end of period.................................. $ (1,898) $ (2,000)
========= =========
Former parent company's investment and advances
Balance at beginning of period............................ $ 384,997 --
Net income*............................................... 84,559
Other activity, net**..................................... (101,256)
Effect of merger transaction.............................. (630,661)
Transfer to common stock, additional paid-in capital, and
foreign currency translation adjustment on November 1,
1996................................................... 262,361
---------
Balance at end of period.................................. $ --
=========
Retained earnings (accumulated deficit):
Balance at beginning of period............................ $ -- $ (1,598)
Net loss for the period November 1, 1996 to December 31,
1996 and net income for the period January 1997 to June
30, 1997, respectively................................. (1,598) 16,897
--------- ---------
Balance at end of period.................................. $ (1,598) $ 15,299
========= =========
</TABLE>

- ---------------

* For the period January 1, 1996 to October 31, 1996.

** Consists principally of advances, withdrawals, dividends, and foreign
currency translation adjustments.

The accompanying notes to consolidated financial statements
are an integral part of these statements.

F-6
<PAGE> 81

INTERNATIONAL HOME FOODS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(SEE NOTES 1 AND 2)

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEARS ENDED DECEMBER 31, JUNE 30,
---------------------------------- ----------------------
1994 1995 1996 1996 1997
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income.................................. $ 95,920 $ 39,193 $ 82,961 $ 43,587 $ 16,897
Adjustments to reconcile net income to net
cash provided from operating activities --
Depreciation and amortization............. 26,389 30,154 19,019 9,178 13,678
Deferred income taxes..................... -- -- (1,032) -- 10,005
Provision for restructuring and other
charges................................. -- -- 4,308 -- --
Changes in assets and liabilities
Accounts receivable....................... (24,711) 61,710 1,253 (2,257) (1,732)
Inventories............................... (13,802) 8,103 14,970 23,822 17,495
Other current assets...................... (1,259) 1,051 (3,133) 237 3,356
Accounts payable.......................... (2,728) (2,578) (352) 287 2,368
Accrued liabilities....................... 3,280 8,246 30,298 5,397 15,222
Other..................................... 360 (343) (2,342) 178 (8,682)
-------- --------- ----------- -------- --------
Net cash provided from operating
activities........................... 83,449 145,536 145,950 80,429 68,607
-------- --------- ----------- -------- --------
INVESTING ACTIVITIES:
Purchases of plant and equipment, net....... (31,117) (24,201) (11,905) (4,896) (7,966)
Purchase of business, net of cash
acquired.................................. -- -- (29,136) -- --
-------- --------- ----------- -------- --------
Net cash used in investing activities... (31,117) (24,201) (41,041) (4,896) (7,966)
-------- --------- ----------- -------- --------
FINANCING ACTIVITIES:
Dividends paid to American Home Products.... (93,761) (5,818) (1,539) -- --
Change in former parent company's investment
and advances, net......................... 42,134 (115,793) (99,121) (75,528) --
Increase (decrease) due to banks............ -- -- 9,278 -- (2,395)
Redemption of common stock of IHF and
distribution to American Home Products
Corporation............................... -- -- (1,209,000) -- --
Issuance of long-term bank debt............. -- -- 670,000 -- --
Issuance of Senior Subordinated Notes....... -- -- 400,000 -- --
Payment of debt issuance costs.............. -- -- (30,649) -- --
Retirement of Heritage long-term debt and
accrued interest.......................... -- -- (40,763) -- --
Issuance of common stock, net of issuance
costs..................................... -- -- 242,744 -- --
Repayment of long-term debt................. -- -- -- -- (13,000)
Payment to minority stockholder............. -- -- -- -- (16,556)
-------- --------- ----------- -------- --------
Net cash used in financing activities... (51,627) (121,611) (59,050) (75,528) (31,951)
-------- --------- ----------- -------- --------
Effect of exchange rates on cash............ (705) 276 -- (5) --
-------- --------- ----------- -------- --------
Increase in cash and cash equivalents....... -- -- 45,859 -- 28,690
Cash and cash equivalents at beginning of
period.................................... -- -- -- -- 45,859
-------- --------- ----------- -------- --------
Cash and cash equivalents at end of
period.................................... $ -- $ -- $ 45,859 $ -- $ 74,549
======== ========= =========== ======== ========
Cash paid during the period for:
Interest.................................. -- -- 5,568 -- 44,935
Income taxes.............................. 3,528 2,409 827 482 277
</TABLE>

The accompanying notes to consolidated financial statements
are an integral part of these statements.

F-7
<PAGE> 82

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS)
(SEE NOTES 1 AND 2)

(DATA WITH REGARD TO JUNE 30, 1996 AND 1997
AND FOR THE SIX MONTHS THEN ENDED ARE UNAUDITED)

(1) DESCRIPTION OF BUSINESS, MERGER, AND ACQUISITION

BACKGROUND AND BASIS OF PRESENTATION

On September 5, 1996, American Home Products Corporation ("American Home
Products"), AHP Subsidiary Holding Corporation and other parties entered into an
agreement ("Agreement") pursuant to which an affiliate ("Hicks Muse Holding") of
Hicks, Muse, Tate & Furst Equity Fund III, L.P. ("Hicks Muse") acquired,
effective November 1, 1996, an 80 percent interest in International Home Foods,
Inc. ("IHF" or "the Company") and its subsidiary, M. Polaner, Inc., for
approximately $1,226,000. In connection with this transaction (the "IHF
Acquisition"), American Home Products contributed all of its other food products
businesses into IHF. Effective November 1, 1996, these entities and businesses
constitute IHF. In connection with the Agreement, IHF received $264,000 of
equity financing and incurred indebtedness of $1,070,000. Approximately $962,000
of the proceeds was used to redeem shares of common stock of IHF which were
indirectly held by American Home Products and $264,000 was distributed to
American Home Products. At December 31, 1996, the Company has a liability to
American Home Products of $16,556 for the estimated unpaid redemption amount due
upon final determination of the purchase price. As a result of the redemption,
American Home Products continues to beneficially own approximately 20 percent of
the Company. The IHF Acquisition has been accounted for as a leveraged
recapitalization such that the Company's assets and liabilities remain at their
historical bases for financial reporting purposes; for income tax purposes, the
transaction has been treated as a taxable business combination such that the
consolidated financial statements reflect a "step-up" in tax basis (see Note 8).

Earnings, advances, withdrawals, dividends, foreign currency translation
adjustments, and other transactions between the Company and American Home
Products for periods prior to November 1, 1996 are reflected in former parent
company's investment and advances in the accompanying financial statements which
are presented on a combined basis prior to November 1, 1996 and on a
consolidated basis subsequent to November 1, 1996. The combined financial
statements for periods prior to November 1, 1996 reflect the financial position,
results of operations, and cash flows of the Company as if the Company was a
stand-alone entity. The Company began presenting retained earnings (accumulated
deficit) as a separate component of stockholders' equity (deficiency) effective
November 1, 1996.

The effects of the IHF Acquisition are summarized as follows:

<TABLE>
<CAPTION>
<S> <C>
Redemption and distribution to AHP Subsidiary Holding
Corporation............................................... $(1,225,556)
Issuance of common stock.................................... 264,000
Fees........................................................ (21,256)
Recognition of postretirement benefits obligation........... (16,207)
Deferred income taxes....................................... 368,358
-----------
$ (630,661)
===========
</TABLE>

Pro forma unaudited net income (loss) for the years ended December 31, 1995
and 1996, assuming the IHF Acquisition had occurred at the beginning of 1995,
would have been ($22,002) and $31,241, respectively. Decreases to reported net
income result from increased pro forma interest expense, partially offset by the
related tax effects. The unaudited pro forma amounts do not purport to be
indicative of what the Company's actual results of operations would have been
had the IHF Acquisition been consummated on January 1, 1995 or to project the
Company's results of operations for any future period.

F-8
<PAGE> 83

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles and necessarily include amounts based
on judgments and estimates made by management. Actual results could differ from
these estimates. Estimates are used when accounting for potential bad debts,
inventory obsolescence and spoilage, trade and promotion allowances, coupon
redemptions, depreciation and amortization, deferred income taxes and tax
valuation allowances, restructuring charges, and contingencies, among other
items.

ACQUISITION

Immediately after the IHF Acquisition and effective November 1, 1996, the
Company acquired Heritage Brands Holdings, Inc. and subsidiaries ("Heritage")
for approximately $70,800, including the assumption of approximately $40,800 of
debt which was repaid immediately following consummation of the acquisition, in
a transaction accounted for using the purchase method of accounting. The excess
of the purchase price of Heritage over the fair value of assets acquired and
liabilities assumed resulted in goodwill and other intangible assets of
approximately $59,100 (an increase of approximately $25,000 over the amount of
Heritage's unamortized goodwill and intangible assets prior to the acquisition)
which are being amortized over 20 years. The acquisition was not significant
and, accordingly, pro forma financial information has not been provided. The
results of operations and cash flows of Heritage have been included in the
accompanying consolidated financial statements of the Company since November 1,
1996.

BUSINESS

The Company operates in one business segment which manufactures and markets
a diversified portfolio of shelf-stable food products. The Company sells its
products primarily in the United States and Canada and is not dependent on any
single or major group of customers for its sales. The Company's canned pasta
product line accounted for approximately 40-50 percent of consolidated sales for
all periods presented.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

PRINCIPLES OF COMBINATION/CONSOLIDATION

For periods through October 31, 1996, the accompanying financial statements
included the operations of the following indirect wholly-owned subsidiaries of
American Home Products: American Home Food Products, Inc. (now, the Company) and
its subsidiary M. Polaner, Inc., American Home Foods, Inc. (now I.H.F.P, Inc.),
Luck's Incorporated, Canadian Home Products Limited, and certain related assets
owned by American Home Products (collectively, American Home Food Products) and
its subsidiaries. Effective November 1, 1996, the consolidated operations of the
Company include the aforementioned entities and Heritage (see Note 1). All
significant intercompany balances and transactions have been eliminated in the
combined and consolidated financial statements. The accompanying combined and
consolidated financial statements are referred to herein as "consolidated"
financial statements.

CASH AND CASH EQUIVALENTS

All highly liquid investments with original maturities of three months or
less are considered to be cash equivalents. The Company's cash and cash
equivalents at December 31, 1996 and June 30, 1997 consist of cash in banks and
investments in the commercial paper of several companies.

F-9
<PAGE> 84

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

INVENTORIES:

Inventories are valued at the lower of cost or market, with cost determined
on a first-in, first-out basis.

PROPERTY, PLANT AND EQUIPMENT:

Property, plant and equipment are stated at cost. Normal maintenance and
repairs are expensed. Additions and improvements either to provide necessary
capacity, improve the efficiency of production, or to modernize the facilities
are capitalized. Depreciation is calculated using the straight-line method over
the estimated useful lives of the related assets; generally 40 years for
building and leasehold improvements, 15 years for machinery and equipment, and 5
to 20 years for furniture and fixtures.

INTANGIBLE AND OTHER ASSETS:

Goodwill represents the excess of cost over the fair value of net assets
acquired and is being amortized using the straight-line method over periods of
20-40 years. Deferred financing costs relate to costs incurred in connection
with the agreements for bank and other indebtedness. Such costs are being
amortized over the terms of the financings using the interest or straight-line
method, as appropriate. Amortization of deferred financing costs is included in
interest expense in the accompanying consolidated financial statements.

The Company continually reviews goodwill to evaluate whether changes have
occurred that would suggest goodwill may be impaired based on the estimated cash
flows of the entity acquired over the remaining amortization period. If this
review indicates that the remaining estimated useful life of goodwill requires
revision or that the goodwill is not recoverable, the carrying amount of the
goodwill is reduced by the estimated shortfall of cash flows on a discounted
basis.

During 1995, Statement of Financial Accounting Standards (SFAS) No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of," was issued. The effect of adopting this pronouncement in 1996
was not significant.

RESEARCH AND DEVELOPMENT:

Research and development costs are charged to expense as incurred and
amounted to $6,782, $6,447 and $3,823 for the years ended December 31, 1994,
1995 and 1996 and $2,098 and $1,001 for the six months ended June 30, 1996 and
1997, respectively.

ADVERTISING:

Advertising costs are charged to expense as incurred and amounted to
$32,839, $42,386, and $58,551 for the years ended December 31, 1994, 1995 and
1996 and $30,889 and $31,217 for the six months ended June 30, 1996 and 1997,
respectively.

FORMER PARENT COMPANY INVESTMENT AND ADVANCES:

Former parent company's investment and advances includes the stockholder's
equity of the individual American Home Products subsidiaries described in Note
2. The equity of the individual subsidiaries represents the original investment
by American Home Products, plus accumulated net income and net advances,
withdrawals and dividends. For periods prior to November 1, 1996, cash receipts
were transferred to American Home Products by daily cash sweeps, and American
Home Products made funds available for operating expenses.

F-10
<PAGE> 85

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

INTERIM FINANCIAL INFORMATION:

The unaudited consolidated financial statements presented herein have been
prepared by the Company without audit and, in the opinion of management, contain
all adjustments necessary to present fairly and on a basis consistent with the
consolidated financial statements for the year ended December 31, 1996, the
Company's consolidated financial position as of June 30, 1997, and the results
of their operations and cash flows for the six months ended June 30, 1996 and
1997.

The results of operations for the six months ended June 30, 1997 are not
necessarily indicative of the results to be expected for the entire year.

FOREIGN CURRENCY TRANSLATION:

The assets and liabilities of the Company's foreign subsidiary, Canadian
Home Products Limited, are translated into United States dollars at period end
exchange rates. Income, expense and cash flow amounts are translated using
monthly average exchange rates. Translation adjustments were accumulated in
former parent company investment and advances through October 31, 1996 and
effective November 1, 1996, are accumulated as a separate component of
stockholders' deficiency. Transaction gains and losses are reflected in other
income (expense) net, and have not been significant.

FINANCIAL INSTRUMENTS:

The cost of interest rate collars is amortized as interest expense over the
terms of the related agreements. Interest expense is adjusted, if required, to
reflect the interest rates included in these collar agreements.

INCOME (LOSS) PER SHARE:

Net income (loss) per share is based on the weighted average number of
shares of common stock and common stock equivalents outstanding during each
respective period. Proceeds from the exercise of the dilutive stock options are
assumed to be used to repurchase outstanding shares of the Company's common
stock at the average fair market value during the period.

INCOME TAXES:

The Company's operations were included in the consolidated income tax
returns of American Home Products through October 31, 1996. The Company was
charged by American Home Products based on the statutory tax rates adjusted for
permanent differences, but without regard for temporary differences.
Accordingly, the Company's financial statements for periods prior to the IHF
Acquisition do not reflect deferred tax assets or liabilities since those
amounts were being provided for by American Home Products. Deferred tax assets
and liabilities prior to the IHF Acquisition would have reflected temporary
differences between assets and liabilities for financial reporting purposes and
income tax purposes. Such temporary differences were primarily attributable to
depreciation, allowances for doubtful accounts, and nondeductible reserves and
were not significant through October 31, 1996. The income tax provision on a
stand-alone basis for periods prior to November 1, 1996 would not differ
materially from the income tax provision reflected in the accompanying
consolidated financial statements.

Effective November 1, 1996, the Company's operations are included in the
consolidated federal income tax returns of its parent. For periods after
November 1, 1996, the Company's income tax provision has been prepared on a
separate return basis, with deferred income taxes provided for differences in
the financial statement and tax bases of assets and liabilities. The tax effects
of the temporary differences which resulted from the "step-up" in tax basis (see
Notes 1 and 8) have been reflected in stockholders' equity (deficiency) as of
November 1, 1996. The Company intends to permanently reinvest its undistributed
Canadian earnings in

F-11
<PAGE> 86

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

the Canadian operations; accordingly, deferred income taxes, which would not be
significant, have not been provided for the repatriation of such undistributed
earnings.

RECLASSIFICATIONS:

Certain 1994 and 1995 amounts have been reclassified to conform with the
1996 presentation.

(3) INVENTORIES

Inventories are as follows:

<TABLE>
<CAPTION>
SIX MONTHS
DECEMBER 31, ENDED
-------------------- JUNE 30,
1995 1996 1997
(UNAUDITED)
<S> <C> <C> <C>
Raw materials...................................... $ 27,175 $ 29,932 $ 29,874
Work in progress................................... 30,117 26,790 16,481
Finished goods..................................... 82,558 72,483 65,355
-------- -------- --------
Total.................................... $139,850 $129,205 $111,710
======== ======== ========
</TABLE>

(4) PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are as follows:

<TABLE>
<CAPTION>
SIX MONTHS
DECEMBER 31, ENDED
-------------------- JUNE 30,
1995 1996 1997
(UNAUDITED)
<S> <C> <C> <C>
Land............................................... $ 4,494 $ 4,589 $ 4,589
Buildings and leasehold improvements............... 101,622 107,923 109,486
Machinery and equipment............................ 172,093 185,867 188,998
Furniture and fixtures............................. 18,893 19,917 21,725
-------- -------- --------
297,102 318,296 324,798
Less -- accumulated depreciation and
amortization..................................... 120,347 132,294 139,400
-------- -------- --------
Total.................................... $176,755 $186,002 $185,398
======== ======== ========
</TABLE>

Depreciation expense aggregated $13,380, $17,144 and $15,683 for the years
ended December 31, 1994, 1995, 1996 and $7,840 and $10,869 for the six months
ended June 30, 1996 and 1997, respectively.

(5) INTANGIBLE AND OTHER ASSETS

Intangible assets are as follows:

<TABLE>
<CAPTION>
SIX MONTHS
DECEMBER 31, ENDED
-------------------- JUNE 30,
1995 1996 1997
(UNAUDITED)
<S> <C> <C> <C>
Goodwill and tradenames........................... $110,579 $169,749 $169,667
Less -- accumulated amortization.................. 13,136 15,811 18,627
-------- -------- --------
Net intangible assets........................ $ 97,443 $153,938 $151,040
======== ======== ========
</TABLE>

F-12
<PAGE> 87

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

Amortization of intangibles totaled $13,010, $13,010 and $2,675 for the
years ended December 31, 1994, 1995 and 1996 and $1,338 and $2,809 for the six
months ended June 30, 1996 and 1997, respectively. All fully amortized
intangibles have been retired.

Other assets at December 31, 1996 and June 30, 1997 include deferred
financing fees incurred in connection with the Company's issuance of long-term
debt. Such costs aggregated $32,149; amortization expense for the period
November 1, 1996 (date of debt issuance) to December 31, 1996 and for the six
months ended June 30, 1997 was $661 and $2,299, respectively.

(6) ALLOWANCE FOR DOUBTFUL ACCOUNTS AND SALES RETURNS AND ALLOWANCES

The allowance for doubtful accounts and sales returns and allowances and
their related activity, are as follows:

<TABLE>
<CAPTION>
WRITE-OFFS AND
BEGINNING CHARGED REDUCTIONS, NET ENDING
BALANCE TO EXPENSE OF RECOVERIES BALANCE
<S> <C> <C> <C> <C>
Year Ended December 31, 1994........ $3,126 $ 588 $240 $3,474
Year Ended December 31, 1995........ 3,474 1,103 513 4,064
Year Ended December 31, 1996........ 4,064 563 296 4,331
Six Months Ended June 30, 1997...... 4,331 816 115 5,032
</TABLE>

(7) BUSINESS RESTRUCTURING AND OTHER CHARGES

In December 1996, a pretax charge was recorded for severance costs of
$3,240 and other charges (principally non-cash) of $1,068.

The severance charge covers both voluntary and involuntary terminations of
approximately 125 employees, including management, sales and marketing,
technical, and administrative personnel. Employee separations were substantially
completed prior to December 31, 1996.

During 1996, cash payments of $437 were charged against the business
restructuring reserve. Management believes that the remaining reserves for
business restructuring of $2,871 at December 31, 1996 are adequate to complete
its plans. As of June 30, 1997, all of the remaining cash payments were made.

(8) INCOME TAXES

The provision for income taxes is as follows:

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
----------------------------- ------------------
1994 1995 1996 1996 1997
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Domestic........................ $54,558 $24,126 $45,334 $22,753 $ 9,856
Foreign......................... 2,567 2,411 1,193 606 282
State........................... 6,171 2,877 6,792 3,425 1,126
------- ------- ------- ------- -------
$63,296 $29,414 $53,319 $26,784 $11,264
======= ======= ======= ======= =======
</TABLE>

F-13
<PAGE> 88

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

A reconciliation between the Company's effective tax rate and U.S.
statutory rate is as follows:

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
-------------------- ------------
1994 1995 1996 1996 1997
<S> <C> <C> <C> <C> <C>
U.S. statutory rate............................ 35% 35% 35% 35% 35%
State tax, net of federal benefit.............. 3 3 4 3 4
Amortization of other intangibles and purchase
price over fair value........................ 2 5 -- -- --
Other.......................................... -- -- -- -- 1
--- --- --- --- ---
Effective tax rate............................. 40% 43% 39% 38% 40%
=== === === === ===
</TABLE>

The provision for income taxes for 1996 is as follows:

<TABLE>
<CAPTION>
PERIOD FROM PERIOD FROM
JANUARY 1, 1996 TO NOVEMBER 1, 1996 TO
OCTOBER 31, 1996 DECEMBER 31, 1996
<S> <C> <C>
Current:
Federal.......................................... $46,136 $ --
Foreign.......................................... 1,228 41
State............................................ 6,944 2
------- -------
54,308 43
------- -------
Deferred:
Federal.......................................... -- (802)
Foreign.......................................... -- (76)
State............................................ -- (154)
------- -------
-- (1,032)
------- -------
$54,308 $ (989)
======= =======
</TABLE>

For federal and state income tax purposes, the IHF Acquisition (see Note 1)
is a taxable business combination and is a qualified stock purchase. The buyer
and seller have elected jointly to treat the IHF Acquisition as an asset
acquisition under Section 338(h)(10) of the Internal Revenue Code of 1986, as
amended. A preliminary allocation of the purchase price to the tax bases of
assets and liabilities based on their respective estimated fair values at
November 1, 1996 has been made for income tax purposes and will be finalized
during 1997. In connection with the IHF Acquisition, the Company has recorded a
deferred tax asset of approximately $368,000 at November 1, 1996 related to
future tax deductions for the net excess of the tax bases of the assets and
liabilities over the financial statement carrying amounts with a corresponding
credit to additional paid-in capital. Historically, the Company has generated
operating income and realization of the deferred tax assets is dependent upon
the Company's ability to generate sufficient future taxable income which
management believes is more likely than not. The Company anticipates future
taxable income after debt service and adjusting for the effects of the IHF
Acquisition and acquisition discussed in Note 1 sufficient to realize the
deferred tax assets existing at November 1, 1996, December 31, 1996 and June 30,
1997. Future taxable income is based on management's forecasts of the operating
results of the Company and there can be no assurance that such results will be
achieved. Management continually reviews such forecasts in comparison with
actual results and expected trends. In the event management determines that
sufficient future taxable income may not be generated to fully realize the
deferred tax assets, the Company will provide a valuation allowance by a charge
to income tax expense in the period of such determination.

As discussed in Note 2, the Company's consolidated financial statements for
periods prior to November 1, 1996 do not reflect deferred income taxes as all
such taxes were provided for by American Home

F-14
<PAGE> 89

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

Products. Deferred tax assets and liabilities established as a result of the IHF
Acquisition and the purchase of Heritage have been reflected on the accompanying
consolidated balance sheets, effective November 1, 1996, as an adjustment to the
former parent company's investment and advances account or goodwill, as
appropriate.

The components of deferred tax assets at November 1, 1996 and December 31,
1996 are as follows:

<TABLE>
<CAPTION>
NOVEMBER 1, DECEMBER 31, JUNE 30,
1996 1996 1997
(UNAUDITED)
<S> <C> <C> <C>
Current deferred tax assets:
Allowance for doubtful accounts................ $ 2,196 $ 1,771 $ 1,857
Inventory reserves............................. 14,813 2,850 2,825
Other accruals................................. 2,557 6,950 8,707
-------- -------- --------
Net current deferred tax assets.................. 19,566 11,571 13,389
Noncurrent deferred tax assets:
Property, plant, and equipment................. 15,668 15,607 12,891
Tradenames..................................... 189,909 187,689 182,849
Goodwill....................................... 139,874 137,813 133,801
Other.......................................... 829 855 2,615
Net operating loss carryforwards............... 727 14,070 12,055
Valuation allowance............................ (3,000) (3,000) (3,000)
-------- -------- --------
Net noncurrent deferred tax assets............... 344,007 353,034 341,211
-------- -------- --------
Net deferred tax assets.......................... $363,573 $364,605 $354,600
======== ======== ========
</TABLE>

At December 31, 1996, the Company had a net operating loss carryforward for
federal and state income tax purposes of approximately $35,500 which expires
principally in 2011. The Company has established a $3,000 valuation allowance
related to certain deferred tax assets for state purposes due to state
limitations regarding the utilization of net operation loss carryforwards.

(9) LONG-TERM DEBT

Long-term debt at December 31, 1996 and June 30, 1997 is as follows:

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1996 1997
(UNAUDITED)
<S> <C> <C>
Senior secured bank facilities:
Tranche A............................................... $ 300,000 $ 287,500
Tranche B............................................... 200,000 199,750
Tranche C............................................... 170,000 169,750
---------- ----------
670,000 657,000
Senior Subordinated Notes................................. 400,000 400,000
---------- ----------
1,070,000 1,057,000
Less: Current portion................................... 26,000 28,500
---------- ----------
Long-term debt.......................................... $1,044,000 $1,028,500
========== ==========
</TABLE>

In connection with the purchase of an 80% interest in the Company by an
affiliate of Hicks Muse from a subsidiary of American Home Products and the
acquisition of Heritage and related assumption of Heritage's debt (see Note 1),
the Company entered into a $770,000 Credit Agreement with Chase Manhattan Bank,
Bankers Trust Company, and Morgan Stanley Senior Funding, Inc. (see Note 16) and
issued $400,000 of 10 3/8% Senior Subordinated Notes ("Senior Subordinated
Notes"). The Credit Agreement provides for term loans ("Term Loans") in three
tranches aggregating $670,000 and a revolving credit loan facility ("Re-

F-15
<PAGE> 90

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

volver") of $100,000. At December 31, 1996 and June 30, 1997, there were no
borrowings under the Revolver nor were any letters of credit outstanding.

Tranche A of the Term Loans is a $300,000, 6 1/2-year facility; Tranche B
of the Term Loans is a $200,000, eight-year facility; and Tranche C of the Term
Loans is a $170,000, nine-year facility. Each tranche requires semi-annual
principal payments in increasing amounts, and amounts paid under the Term Loans
may be not be reborrowed. Borrowings under the Term Loans and the Revolver bear
interest based on either the London Interbank Offered Rate ("LIBOR") or an
Alternate Base Rate, as defined, plus applicable margins which range from 0.5
percent to 3.5 percent. At December 31, 1996, the rates in effect on Tranches A,
B, and C were 8.0%, 8.6%, and 9.1%, respectively. In accordance with the Credit
Agreement, in February 1997, the Company entered into interest rate protection
agreements to the extent necessary to provide that, when combined with the
Senior Subordinated Notes, at least 50% of the Company's aggregate indebtedness
is subject to either a fixed interest rate or interest rate protection through
December 1998. Included in the Term Loans are certain Eurodollar loans which
qualify as fixed interest under the terms of the Credit Agreement. In order to
comply with required interest rate protection provisions, the Company also
entered into an interest rate collar transaction that becomes effective in
September 1997 and expires in December 1998. The notional amount of the collar
is $135,000 with the cap set at 8% and the floor set at 5.25%. The agreement is
with a financial institution having a credit rating (Moody's/S&P) of Aa3/A+,
which minimizes non-performance risk.

Borrowings and letters of credit issued under the Revolver are available to
the Company until the earlier of March 31, 2003 or the date on which the Tranche
A Term Loans mature or are repaid in full. The Company pays a commitment fee of
0.5% on the unused portion of the Revolver.

The Company is required to make mandatory prepayments on the Term Loans and
credit commitments under the Revolver will be mandatorily reduced based on (a)
excess levels of cash flow, as defined; (b) all of the net proceeds from certain
asset or subsidiary dispositions; and (c) the issuance of capital stock or the
incurrence of certain indebtedness. At the Company's option, loans may be
prepaid and credit commitments under the Revolver may be permanently reduced.

Obligations under the Credit Agreement are unconditionally and irrevocably
guaranteed by each of the Company's domestic subsidiaries. In addition, such
obligations are collateralized by first priority or equivalent collateral
interests in (a) all of the capital stock of, or other equity interests in, each
domestic subsidiary of the Company and 65% of the capital stock, or other equity
interests in, each foreign subsidiary of the Company and (b) all tangible and
intangible assets of the Company and its subsidiaries, subject to certain
exceptions and qualifications.

The Credit Agreement also contains a number of significant covenants that,
among other things, restrict the ability of the Company to dispose of assets,
incur additional indebtedness, repay other indebtedness, pay dividends, make
investments or acquisitions, engage in mergers or consolidations, make capital
expenditures, or engage in certain transactions with affiliates, and otherwise
restrict corporate activities. In addition, under the Credit Agreement,
effective beginning March 31, 1997, the Company is required to comply with
specified minimum interest coverage, maximum leverage, and minimum fixed charge
coverage ratios, as defined.

The Senior Subordinated Notes are due on November 1, 2006 and require
semi-annual interest payments. The Senior Subordinated Notes may be redeemed
prior to November 1, 2000 in up to an aggregate principal amount of $160,000
with the proceeds of one or more equity offerings, as defined, by the Company
under certain conditions at a redemption price of 110.375 percent. The Senior
Subordinated Notes may also be redeemed prior to November 1, 2001 at a
redemption price of 100 percent upon the occurrence of a change in control, as
defined. Except as discussed above, the Senior Subordinated Notes are not
redeemable prior to November 1, 2001. The Senior Subordinated Notes will be
redeemable, in whole or in part, at the Company's

F-16
<PAGE> 91

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

option at redemption prices decreasing from 105.188% at November 2001 to 100
percent on November 1, 2004 and thereafter.

Each of the Company's subsidiaries (I.H.F.P., Inc., Luck's Incorporated,
Canadian Home Products Limited, M. Polaner, Inc., and Heritage) fully and
unconditionally guarantee the Senior Subordinated Notes, on a joint and several
basis.

The Senior Subordinated Notes contain certain restrictive covenants
limiting, among other things (a) the incurrence of additional indebtedness; (b)
the declaration or payment of dividends or other capital stock distributions or
redemptions; (c) the redemption of certain subordinated obligations; (d)
investments; (e) sales of assets; and (f) consolidations, mergers, and transfers
of all or substantially all of the Company's assets.

The Company filed a registration statement on Form S-4 pursuant to the
Securities Act of 1933, which became effective on February 19, 1997, to register
the Senior Subordinated Notes. The Company has issued a Prospectus to offer to
exchange the unregistered Senior Subordinated Notes for registered Senior
Subordinated Notes. The exchange offer expired on March 27, 1997 and all of the
Senior Subordinated Notes have been exchanged.

The fair value of the Company's debt at December 31, 1996 and June 30, 1997
approximates its carrying value.

Future principal payments on the Company's long-term debt at December 31,
1996 are as follows:

<TABLE>
<S> <C>
1997........................................................ $ 26,000
1998........................................................ 31,000
1999........................................................ 41,000
2000........................................................ 51,000
2001........................................................ 58,500
Thereafter.................................................. 862,500
----------
$1,070,000
==========
</TABLE>

(10) EMPLOYEE BENEFIT PLANS:

For the American Home Products defined benefit pension plans in which the
Company participated prior to the IHF Acquisition, the amounts charged to the
Company by American Home Products aggregated $2,651 and $2,762 for the years
ended December 31, 1994, 1995, $3,188 for the period January 1, 1996 to October
31, 1996, and $1,369 for the six months ended June 30, 1996, respectively.

The postretirement health care costs relating to the Company's
participation in the American Home Products postretirement plan represented
charges for actual retiree benefit costs based on the ratio of the Company's
participants to total American Home Products participants and aggregated $3,334
and $3,494 for the years ended December 31, 1994 and 1995, $3,239 for the period
January 1, 1996 to October 31, 1996, and $1,922 for the six months ended June
30, 1996, respectively.

In periods prior to November 1, 1996, the Company participated in certain
defined contribution plans sponsored by American Home Products. Expense
recognized for these plans aggregated $1,082 and $1,027 for the years ended
December 31, 1994 and 1995, $955 for the period from January 1, 1996 to October
31, 1996, and $580 for the six months ended June 30, 1996, respectively.

For periods prior to the IHF Acquisition the Company has not provided
certain disclosures required by Statement of Financial Accounting Standards No.
87, "Employers' Accounting for Pensions" since, under the American Home Products
plans, the assets are not segregated or restricted by subsidiary and the benefit

F-17
<PAGE> 92

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

obligations have not been assumed by the Company. Further, certain disclosures
prescribed by Statement of Financial Accounting Standards No. 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions," have not been
provided since the American Home Products plan is unfunded and the American Home
Products plan's benefit obligations will not be assumed by the Company.

In conjunction with the IHF Acquisition, and pursuant to the American Home
Products Agreement of Sale and Plan of Merger ("Sale Agreement"), the Company
adopted new pension and postretirement plans for individuals previously covered
under the American Home Products pension and postretirement plans, with
provisions and benefits substantially equivalent to those of the American Home
Products Plans.

The Company sponsors various retirement plans for substantially all of its
employees. The Company sponsors two insignificant defined benefit pension plans
for collectively-bargained employees of its Highspire and Canadian operations.
It is the Company's policy to contribute the amounts necessary to meet the
minimum funding requirements of defined benefit plans under applicable laws. The
aggregate accumulated benefit obligation, projected benefit obligation, plan
assets, and accrued pension costs of the Highspire and Canadian plans were $153,
$154, $136, and $19, respectively, at December 31, 1996. Net periodic pension
cost for the Highspire and Canadian plans was insignificant for all periods
presented. Assumptions used in accounting for these plans included a
weighted-average discount rate of 7.5 percent, an expected long-term rate of
return on plan assets of 7.5 percent, and a rate of increase in compensation
levels of 0-3.5 percent.

Effective January 1, 1997, the Company established defined benefit plans
for its salaried and collectively-bargained employees. Benefits earned under the
plan will include service from November 1, 1996 to December 31, 1996; prior
service cost for the two-month period was insignificant. Benefits under the
plans will be based primarily on compensation levels and years of service.

Pursuant to the Sale Agreement, the Company provides certain health care
and life insurance benefits for most of its retired employees. Generally,
employees become eligible for benefits after attaining specified age and service
requirements. In connection with the IHF Acquisition, at November 1, 1996, the
Company has recorded its postretirement benefits obligation with a corresponding
charge to paid-in capital. The following table sets forth the plan's funded
status reconciled with amounts reported in the Company's consolidated balance
sheet:

<TABLE>
<CAPTION>
NOVEMBER 1, 1996 DECEMBER 31, 1996
<S> <C> <C>
Accumulated postretirement benefit obligation:
Retirees.................................................. $ -- $ --
Fully eligible participants............................... -- --
Other active participants................................. (16,207) (16,855)
-------- --------
Total benefits earned....................................... (16,207) (16,855)
Plan assets at fair value................................. -- --
-------- --------
Funded status............................................... (16,207) (16,855)
Unrecognized net loss....................................... -- 166
-------- --------
Accrued postretirement benefit obligation................... $(16,207) $(16,689)
======== ========
</TABLE>

Net periodic postretirement benefit cost for the period from November 1,
1996 to December 31, 1996 consisted of the following components:

<TABLE>
<S> <C>
Service cost................................................ $245
Interest cost on postretirement benefit obligation.......... 237
----
Net periodic postretirement benefit cost.......... $482
====
</TABLE>

F-18
<PAGE> 93

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

Net periodic postretirement benefit cost for the six months ended June 30,
1997 was $1,350.

The discount rate used to measure the accumulated postretirement benefit
obligation as of November 1, 1996, December 31, 1996 and June 30, 1997 was 7.5
percent. The assumed health care cost trend rate used to measure the expected
cost of benefits was 8.5 percent for 1996 and is assumed to trend downward to
6.0 percent for 2010 and thereafter. The health care trend rate has a
significant effect on the amounts reported. For example, increasing the health
care cost trend rate by one percentage point in each year would increase the
accumulated postretirement benefit obligation as of December 31, 1996 by $3,686
and the service cost and interest components of the net periodic postretirement
benefit cost for the period from November 1, 1996 to December 31, 1996 by $100.

Effective November 1, 1996, the Company also sponsors a 401(k) defined
contribution plan for nonunion employees. Contributions for the period November
1, 1996 to December 31, 1996 were insignificant. Employer contributions for the
six months ended June 30, 1997 amounted to $443.

The Company also participates in union-sponsored multiemployer pension,
life insurance and health and welfare plans which provide benefits to union
employees located at the Company's facility in Vacaville, CA. The Company's
contributions to these plans were $2,885, $3,121 and $2,993 for the years ended
December 31, 1994, 1995, and 1996, respectively, and $1,369 and $1,404 for the
six months ended June 30, 1996 and 1997, respectively.

(11) RELATED PARTY TRANSACTIONS:

The consolidated statements of income for periods through October 31, 1996
included the costs of certain administrative and other services provided by
American Home Products. These services included treasury, tax, personnel, legal,
environmental, safety, public relations, audit, and other related costs. The
charges to the Company for corporate administration approximated $2,500 through
October 31, 1996. Charges for the six month period ended June 30, 1996 amounted
to $1,470. Such charges are representative of costs which would have been
incurred by the Company on a stand alone basis.

American Home Products also charged the Company for its share of group
insurance costs (medical, dental, basic life, etc.) based on American Home
Product's historical claims experience and current claim trends and the ratio of
the Company's employees to total American Home Products domestic employees. The
charges, which are reflected in the accompanying consolidated statements of
income, amounted to $11,733 and $11,941 for the years ended December 31, 1994
and 1995, and $9,143 for the 10 months ended October 31, 1996, respectively.
Charges for the six months ended June 30, 1996 were $5,523.

The consolidated statements of income include rent for 35,000 square feet
of space in American Home Product's corporate headquarters. The rent expense
related to this space amounted to $965, $905, and $946 for the years ended
December 31, 1994, 1995, and 1996, respectively. The Company vacated this space
and relocated its corporate headquarters at the end of 1996.

Various self-insurance coverages were provided to the Company through
American Home Product's consolidated programs through October 31, 1996. Auto,
property, product liability, and other insurance coverages provided by American
Home Products were allocated to the Company based on past claims history,
exposure, trends, and judgment. The changes, which are reflected in the
accompanying consolidated statements of income for the years ended December 31,
1994 and 1995 and for the 10 months ended October 31, 1996 amounted to $426, and
$421, and $346, respectively. Charges for the six months ended June 30, 1996
were $166.

The Company purchased advertising through a wholly-owned subsidiary of
American Home Products through 1996. The rates at which the Company purchased
advertising reflected the rates obtained by the

F-19
<PAGE> 94

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

consolidated purchasing of American Home Products. The charges, which are
reflected in the accompanying consolidated statements of income for the years
ended December 31, 1994, 1995 and 1996, amounted to $32,839, $42,386, and
$45,186, respectively. Charges for the six months ended June 30, 1996 and 1997
amounted to $23,295 and $727, respectively.

Effective November 1, 1996, the Company entered into a transition services
agreement with American Home Products under which American Home Products, until
six months after November 1, 1996, provides to the Company, for a fee, certain
facilities and services. In addition, American Home Products agreed to assist
the Company for 90 days after November 1, 1996 with the administration of
welfare benefit plans for payment by the Company to American Home Products based
on past practices. Charges to date by American Home Products to the Company
under these arrangements were insignificant.

Effective November 1, 1996, the Company entered into a 10-year monitoring
and oversight agreement with an affiliate of its indirect majority stockholder,
Hicks Muse. The agreement provides for an annual fee of the greater of $1,000 or
0.1 percent of the budgeted consolidated net sales of the Company for the
current year. In addition, effective November 1, 1996, the Company entered into
a financial advisory agreement with the affiliate under which the affiliate will
be entitled to a fee of 1.5 percent of the transaction value, as defined, for
each add-on transaction, as defined. In 1996, the Company incurred financial
advisory fees of $167 and paid transaction fees of $19,320 to such affiliate
relating to the IHF Acquisition (see Note 1). Expenses under the agreement for
the six months ended June 30, 1997 totaled $500.

Included in prepaid expenses and other current assets at December 31, 1996
is a receivable of approximately $3,600 from American Home Products for
reimbursement of payroll taxes related to option exercises by employees.

F-20
<PAGE> 95

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

Following is an analysis of the activity in the Parent Company's Investment
and Advances account for the years ended December 31, 1994, 1995, for the ten
months ended October 31, 1996 and the six months ended June 30, 1996 and 1997:

<TABLE>
<CAPTION>
TEN MONTHS ENDED SIX MONTHS ENDED
YEARS ENDED DECEMBER 31, OCTOBER 31, JUNE 30,
------------------------ ---------------- ---------------------
1994 1995 1996 1996 1997
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Beginning balance --
Former parent company's
investment and
advances................ $423,551 $467,139 $ 384,997 $ 384,997 $ --
Net income................... 95,920 39,193 84,559 43,587
Distribution of net income
through parent company's
investment and advances
account.................... (95,920) (39,193) (84,559) (43,587) --
-------- -------- --------- --------- --------
423,551 467,139 384,997 384,997 --
-------- -------- --------- --------- --------
Changes in other assets and
liabilities through the
accounts:
Depreciation and
amortization............ 26,389 30,154 15,093 9,178 --
Accounts receivable........ (24,711) 61,710 (6,585) (2,257) --
Inventories................ (13,802) 8,103 10,903 23,822 --
Prepaid expenses and other
current assets.......... (1,259) 1,051 (820) 237 --
Other noncurrent assets.... (19) 13 34 (1) --
Accounts payable........... (2,728) (2,578) 1,334 287 --
Accrued salaries, wages and
benefits................ (369) 197 2,248 2,076 --
Accrued advertising and
promotion............... 8,073 2,947 (168) 5,553 --
Other accrued
liabilities............. (4,424) 5,102 672 (2,232) --
Other...................... 379 (356) 1,132 175 --
Purchases of plant and
equipment,
net..................... (31,117) (24,201) (7,146) (4,896) --
-------- -------- --------- --------- --------
(43,588) 82,142 16,697 31,942 --
-------- -------- --------- --------- --------
Effect of merger
transaction................ -- -- (630,661) -- --
Transfer to common stock
Additional paid-in capital,
and foreign currency
translation adjustment
on
November 1, 1996........ -- -- 262,361 -- --
-------- -------- --------- --------- --------
Ending balance --
Parent company's investment
and advances............ $467,139 $384,997 $ -- $ 353,055 $ --
======== ======== ========= ========= ========
</TABLE>

F-21
<PAGE> 96

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

(12) STOCK COMPENSATION PLANS

During 1995 and 1996 and in prior years, certain employees of the Company
were granted stock options under the American Home Products stock option plans.
These options had a ten-year term and generally vested one year from date of
grant. The American Home Products stock options awarded to Company employees
during 1996 or prior were exercised, canceled, or settled in cash by January 31,
1997.

Effective November 1, 1996, the Company adopted the International Home
Foods, Inc. 1996 Stock Option Plan ("the IHF Plan") which provides for the grant
of stock options at fair value on the date of grant. Generally, stock options
have a ten-year term and vest immediately or ratably over three years. Certain
options have been granted with an exercise price which increases by 8 percent
per year until the exercise date. The total number of shares of common stock
authorized for grant under the IHF Plan is 45,000,000.

The Company has adopted the disclosure-only provisions of SFAS No. 123,
"Accounting for Stock-Based Compensation," but applies Accounting Principles
Board Opinion No. 25 and related interpretations in accounting for its plans. No
compensation expense was recognized for 1995, 1996 or for the first six months
in 1997. If the Company had elected to recognize compensation cost based on the
fair value of the options at the grant dates, consistent with the method
prescribed by SFAS No. 123, net income would have been reduced to the pro forma
amount indicated below:

<TABLE>
<CAPTION>
1995 1996
<S> <C> <C> <C>
Net income As reported $39,193 $82,961
Pro forma $38,445 $81,735
</TABLE>

Note: The pro forma disclosure shown above is not representative of the
effects on net income in future years.

The fair value of the American Home Products stock options used to compute
pro forma net income disclosures is the estimated present value at grant date
using the Black-Scholes option-pricing model with the following weighted-average
assumptions:

<TABLE>
<CAPTION>
1995 1996
<S> <C> <C>
Expected volatility....................................... 15.7% 15.0%
Expected term............................................. 4 years 4 years
Dividend yield............................................ 4.4% 4.3%
Risk-free interest rate................................... 6.1% 6.4%
</TABLE>

IHF options granted on November 1, 1996 were valued using the minimum value
method permitted under SFAS No. 123 for companies which do not have publicly
traded equity securities and the following assumptions: expected term of four
years, zero percent dividend yield, and six percent risk-free interest rate.

F-22
<PAGE> 97

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

Presented below is a summary of the status of the American Home Products'
options held by the Company's employees, and IHF stock options, for 1995 and
1996:

<TABLE>
<CAPTION>
1995 1996
---- ----
WEIGHTED WEIGHTED
SHARES AVERAGE EXERCISE SHARES AVERAGE EXERCISE
(000'S) PRICE PER SHARE (000'S) PRICE PER SHARE
<S> <C> <C> <C> <C>
American Home Products options:
Outstanding at beginning of year.......... 1,877 $30.21 1,471 $33.11
Granted................................... 510 $38.13 171 $52.99
Exercised................................. 843 $29.38 758 $32.64
Forfeited/Expired......................... 73 $36.73 12 $45.11
Settled................................... -- -- 150 *
Outstanding at end of year................ 1,471 $33.11 722 $34.20
IHF indexed options:
Granted................................... -- -- 25,750 $ 1.00
Forfeited**............................... -- -- -- --
Outstanding at December 31, 1996**........ -- -- 25,750 $ 1.01
IHF options exercisable at end of year...... -- -- 18,750 $ 1.01
IHF non-indexed options:
Granted................................... -- -- 9,330 $ 1.00
Forfeited................................. -- -- -- --
Outstanding at December 31, 1996.......... -- -- 9,330 $ 1.00
IHF options exercisable at end of year...... -- -- 210 $ 1.00
</TABLE>

- ---------------

* 150,000 options were settled for $61.19 per option which represents the
stock's fair value at November 1, 1996.

** 7,000,000 options were forfeited by an officer upon termination in February
1997.

The weighted-average fair value of American Home Products stock options
granted during 1995 and 1996 is $4.81 and $7.21 per option, respectively. The
weighted-average fair value of IHF non-indexed options granted on November 1,
1996 is $.21 per option. The IHF indexed options, which provide for an eight
percent per annum increase in exercise price, have no value under the minimum
value method.

As of December 31, 1996, the 35,080,000 stock options outstanding under the
IHF plan including 7,000,000 options that were subsequently forfeited by a
former officer, have exercise prices ranging from $1.00 to $1.01 and a
weighted-average exercise price of $1.01. Such options have a remaining
contractual life of 10 years and 18,960,000 were exercisable at December 31,
1996.

(13) COMMITMENTS AND CONTINGENCIES

The Company has ongoing royalty arrangements with several parties,
primarily representing licensing agreements for its wet spices business and for
the use of characters in the Company's canned pasta business. The accompanying
consolidated statements of income include royalty costs which amounted to
$2,065, $3,136 and $2,113 for the years ended December 31, 1994, 1995, and 1996
and $1,043 and $1,035 for the six months ended June 30, 1996 and 1997,
respectively.

There is also a royalty obligation related to the Company's licensing
agreement for its cereals business entered into in 1988. The agreement includes
a minimum annual royalty of $750, payable annually, as well as a $10,250 balloon
payment payable in January 1998. As of December 31, 1995 and 1996 and June 30,
1997, $9,873, $10,155 and $10,297, respectively, have been accrued towards the
annual minimum royalty for each of

F-23
<PAGE> 98

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

the periods and the appropriate shares of the balloon obligation. There are no
minimum royalty requirements after December 31, 1997; however, an ongoing
royalty of four percent of net sales will continue.

The Company leases certain facilities and equipment under operating leases.
Rental expenses, including rent related to the Company's lease with American
Home Products (see Note 11), aggregated $1,566, $1,868, and $1,884 for the years
ended December 31, 1994, 1995, and 1996, respectively. Future minimum lease
payments under noncancellable operating leases at December 31, 1996 are as
follows:

<TABLE>
<S> <C>
1997............................................... $ 1,956
1998............................................... 1,548
1999............................................... 1,306
2000............................................... 1,066
2001 and later years............................... 6,451
-------
$12,327
=======
</TABLE>

In the ordinary course of business, the Company enters into contracts for
the purchase of certain of its raw materials and is involved in various pending
or threatened litigation and claims. The Company has responsibility for
environmental, safety, and cleanup obligations under various local, state and
federal laws, including the Comprehensive Environmental Response, Compensation
and Liability Act, commonly known as Superfund. The Company has been identified
as a potentially responsible party at two Superfund sites. Although the outcome
of any legal proceeding cannot be predicted with certainty, management believes
through its discussions with counsel and the United States Environmental
Protection Agency that its proportionate share of any liability arising from
such matters, or the resolution of any other pending or threatened litigation or
claims, in the aggregate will not have a material adverse effect on the
consolidated financial position, results of operations, or cash flows of the
Company.

(14) GUARANTOR FINANCIAL DATA:

The Company's Senior Subordinated Notes are fully and unconditionally
guaranteed by each of the Company's subsidiaries on a joint and several basis.
The Company has not presented separate financial statements and other
disclosures concerning each of the subsidiary guarantors because management has
determined that such information is not material to the holders of the Senior
Subordinated Notes.

Presented below is summarized combined financial information of the
subsidiary guarantors:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------- JUNE 30,
1995 1996 1997
(UNAUDITED)
<S> <C> <C> <C>
Current assets.............................................. $ 88,873 $ 91,835 $ 86,978
Noncurrent assets........................................... 156,193 254,729 256,274
Current liabilities......................................... 24,526 46,354 44,456
Noncurrent liabilities...................................... 225,280 248,052 235,793
</TABLE>

<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31, FOR THE SIX FOR THE SIX
--------------------------------- MONTHS ENDED MONTHS ENDED
1994 1995 1996 JUNE 30, 1996 JUNE 30, 1997
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net sales.......................... $147,480 $131,950 $136,873 $ 62,663 $ 68,569
Gross profit....................... 69,754 65,066 58,382 28,873 30,082
Net income/(loss).................. (7,607) (3,028) (1,054) (801) 831
Net cash provided by operating
activities....................... 3,803 32,379 11,540 17,611 17,660
Net cash used in investing
activities....................... (18,462) (12,467) (11,457) (3,876) (5,060)
Net cash provided by (used in)
financing activities............. 14,659 (19,912) 1,029 (13,735) (11,299)
</TABLE>

F-24
<PAGE> 99

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

(15) BUMBLE BEE ACQUISITION

On May 2, 1997 the Company agreed to acquire the ongoing canned seafood
business of Bumble Bee Seafoods, Inc. for approximately $163 million, including
transaction fees, in cash plus the assumption of certain liabilities estimated
to be between $30 and $40 million.

Bumble Bee is one of the world's largest distributors of canned seafood
products. Bumble Bee's principal products include canned tuna and salmon. To
expedite completion of the sale, Bumble Bee has filed for protection under
Chapter 11 of the Federal Bankruptcy Code. It is anticipated that under the
reorganization, Bumble Bee will continue to function on a business as usual
basis. Bumble Bee has obtained debtor-in-possession financing of $83.5 million,
which should allow Bumble Bee to maintain normal day to day operations,
including payment of its trade obligations.

(16) SUBSEQUENT EVENTS (UNAUDITED)

Effective July 1, 1997, the Company consummated the acquisition of
substantially all of the assets (the "Assets") of Bumble Bee Seafoods, Inc. and
its wholly-owned subsidiaries, Bumble Bee International, Inc., Santa Fe Springs
Holding Company and Commerce Distributing Company (CDC) (collectively, the
"Sellers"), pursuant to the terms of an Asset Purchase and Sale Agreement dated
as of May 1, 1997 (the "Agreement") by and among the Sellers, on the one hand,
and the Company and its wholly-owned subsidiary, Bumble Bee Acquisition
Corporation, on the other hand. The aggregate consideration paid for the Assets
was approximately $163 million in cash and the assumption of certain liabilities
of the Sellers, including trade payables and certain accrued liabilities. The
Assets consist primarily of inventory, accounts receivable, property, plant and
equipment and trademarks formerly used by the Sellers for the processing and
marketing of canned seafood products, principally tuna and salmon, including
processing facilities in Puerto Rico, Ecuador and California. The transaction
was approved by an order of the Federal Bankruptcy Court for the Southern
District of California on June 19, 1997, as part of the bankruptcy proceedings
of the Sellers.

Concurrent with the acquisition of the Assets, the Company amended and
restated its existing credit agreement with Chase Manhattan Bank as of July 1,
1997. The existing senior secured bank facilities were increased from $670
million (less a $13 million principal payment made in the first quarter of 1997)
to $737 million and the Company's Revolver was increased from $100 million to
$140 million. The Company financed the purchase of the Assets with the $80
million increase in the term facility, a $30 million draw on the Company's
Revolver, and the balance of the purchase price from the Company's available
cash balances as of the date of the closing.

The provisions of the new credit agreement provide that borrowings under
Tranches A and B are increased to $367.5 million, and $369.5 million
respectively and the previous Tranche C is included as part of Tranche B. The
final maturity dates of Tranche A, March 31, 2003, and the new Tranche B,
September 30, 2004, remained unchanged. Applicable margins on borrowings which
bear interest based on the LIBOR as defined, have been changed from 2.5% to 2%
on Tranche A and from 3% to 2.25% on Tranche B. The applicable margins under the
alternate base rate, as defined, have been changed from 1.5% to 1%, and 2% to
1.25% on Tranche A and B, respectively. The new agreement also includes
financial covenants substantially similar related to consolidated leverage
ratio, as defined, consolidated interest coverage, as defined, consolidated
fixed charge coverage ratio, as defined, and limitations on indebtedness,
capital expenditures and payment of dividends.

In September 1997, the Company initiated the process of registering shares
of common stock under an initial public offering ("IPO"). The proceeds from the
sale of the securities would be used by the Company to redeem $160 million
principal amount of the Senior Subordinated Notes, at a redemption price of
110.375%, and pay off borrowings under the credit agreement.

F-25
<PAGE> 100

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

The Company has signed a definitive letter of intent to purchase the stock
of Creative Products, Inc. for approximately $52 million in cash and, in
connection with the IPO discussed above intends to issue stock for Productos Del
Monte, S.A. De C.V.

IMPACT OF RECENT ACCOUNTING STANDARDS

The American Institute of Certified Public Accountants issued Statement of
Position 96-1, "Environmental Remediation Liabilities" ("SOP 96-1") in October
1996. SOP 96-1 provides authoritative guidance on specific accounting issues in
connection with recognizing, measuring and disclosing environmental cleanup
liabilities. The Company adopted this SOP during the first quarter of 1997;
there was no impact on the Company's results of operations or financial position
upon adoption.

In June 1996, Statement of Financial Accounting Standards No. 125 (SFAS
125), "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities", was issued to provide accounting and reporting
standards for transfers and servicing of financial assets and extinguishments of
liabilities. This statement became effective for transfers and servicing of
financial assets and extinguishments of liabilities occurring after December 31,
1996. The Company does not anticipate that the adoption of this Statement will
have a material effect on the Financial Statements.

In March 1997, SFAS 128, "Earnings per share", was issued to establish
standards for computing and presenting earnings per share ("EPS"). The Statement
applies to entities with publicly held common stock or potential common stock
and excludes entities whose publicly traded securities include only debt. The
Statement is effective for financial statements issued for periods ending after
December 15, 1997; earlier application is not permitted. The Company anticipates
that this statement, upon adoption, will not have a material effect on the EPS
disclosure.

In June 1997, SFAS 130, "Reporting Comprehensive Income", was issued to
establish standards for reporting and displaying of comprehensive income and its
components in a full set of general-purpose financial statements. This statement
requires disclosure of the components of comprehensive income including, among
other things, foreign currency translation adjustments, minimum pension
liability items and unrealized gains and losses on certain investments in debt
and equity securities. The Company would be required to show components of
comprehensive income in a financial statement displayed as prominently as the
other required financial statements. The statement is effective for fiscal years
beginning after December 15, 1997. The Company anticipates compliance with this
Statement in 1998.

In June 1997, SFAS 131 "Disclosures About Segments of an Enterprise and
Related Information", was issued to establish standards for public business
enterprises reporting information regarding operating segments in annual and
interim financial statements issued to shareholders. It also establishes
standards for related disclosures about products and services, geographic areas
and major customers. This statement is effective for financial statements for
periods beginning after December 15, 1997. In the initial year of application,
comparative information for earlier years is to be restated. The Company
operates in one business segment which manufactures and markets a diversified
portfolio of shelf-stable food products, and accordingly, does not believe the
segment reporting aspect of this statement will impact their financial
statements. The Company is currently assessing the impact of this Statement.

F-26
<PAGE> 101

INDEPENDENT AUDITORS' REPORT

To the Board of Directors
of Bumble Bee Seafoods, Inc.:

We have audited the accompanying consolidated balance sheets of Bumble Bee
Seafoods, Inc. and subsidiaries as of December 31, 1995 and 1996, and the
related consolidated statements of operations and accumulated deficit, and cash
flows for each of the years in the three-year period ended December 31, 1996.
These consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Bumble Bee
Seafoods, Inc. and subsidiaries as of December 31, 1995 and 1996, and the
results of their operations and their cash flows for each of the years in the
three-year period ended December 31, 1996, in conformity with generally accepted
accounting principles.

The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. As discussed in Note
6 to the consolidated financial statements, the Company's notes payable and
subordinated note payable were due and payable in May 1996; non-payment has
constituted events of default. The Company does not currently have the funds to
retire these obligations. Such conditions raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans related to
this matter are described in Note 6 to the consolidated financial statements.
The consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

KPMG PEAT MARWICK LLP

San Diego, California
April 11, 1997

F-27
<PAGE> 102

BUMBLE BEE SEAFOODS, INC.

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PAR VALUE INFORMATION)

<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, JUNE 30,
1995 1996 1997
(UNAUDITED)
<S> <C> <C> <C>
ASSETS (NOTE 6)
Current Assets:
Cash...................................................... $ 2,815 $ 2,098 $ 2,443
Trade accounts receivable, less allowance for doubtful
accounts of $985 and $844 in 1995 and 1996,
respectively........................................... 36,053 32,174 29,419
Other receivables......................................... 1,148 607 --
Inventories (note 2)...................................... 82,300 82,312 61,621
Prepaid expenses.......................................... 4,775 4,758 15,679
-------- --------- ---------
Total current assets.............................. $127,091 $ 121,949 $ 109,162
Investment in SEAFMAN at cost (note 1)...................... $ 1,992 $ 1,992 $ 1,992
Property and equipment, net (note 3)........................ 21,367 20,308 18,986
Goodwill, less accumulated amortization of $30,174 and
$97,547 in 1995 and 1996, respectively.................... 140,635 73,262 71,967
Other assets................................................ 733 725 726
-------- --------- ---------
Total assets...................................... $291,818 $ 218,236 $ 202,833
======== ========= =========
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
Current liabilities:
Notes payable (note 6).................................... $100,150 $ 100,150 $ 93,500
Revolving line of credit (note 6)......................... 68,313 70,111 67,626
Accounts payable:
Trade and other (note 7)............................... 51,164 51,516 58,238
Unicord Public Company Limited (note 7)................ 7,514 7,062 6,580
Accrued liabilities.................................... 24,045 26,733 27,638
-------- --------- ---------
Total current liabilities......................... $251,186 $ 255,572 $ 253,582
Stockholder's equity (deficit) (note 6):
Common Stock, $1.00 par value; authorized, issued and
outstanding 35,000 shares.............................. 35 35 35
Additional paid-in capital................................ 121,965 121,965 121,965
Accumulated deficit....................................... (81,368) (159,336) (172,749)
-------- --------- ---------
Total stockholder's equity (deficit).............. 40,632 (37,336) (50,749)
-------- --------- ---------
Commitments, contingencies and subsequent event (notes 8
and 9)
Total liabilities and stockholder's equity
(deficit)....................................... $291,818 $ 218,236 $ 202,833
======== ========= =========
</TABLE>

See accompanying notes to consolidated financial statements.

F-28
<PAGE> 103

BUMBLE BEE SEAFOODS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT
(IN THOUSANDS, EXCEPT SHARE INFORMATION)

<TABLE>
<CAPTION>
SIX MONTHS ENDED
FOR YEARS ENDED DECEMBER 31, JUNE 30,
-------------------------------- -------------------------
1994 1995 1996 1996 1997
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Sales, net of allowances................. $410,192 $393,704 $ 395,607 $ 209,279 $ 179,014
Cost of sales (note 7)................... 285,409 273,888 275,678 142,605 127,521
-------- -------- ---------- --------- ---------
Gross profit........................... 124,783 119,816 119,929 66,674 51,493
Selling and promotional expenses......... 93,864 90,561 96,431 52,360 41,875
General and administrative expenses...... 14,592 13,419 14,459 6,738 9,882
Amortization and write-off of goodwill... 4,632 5,227 67,373 2,291 1,294
-------- -------- ---------- --------- ---------
Operating income (loss)................ 11,695 10,609 (58,334) 5,285 (1,558)
-------- -------- ---------- --------- ---------
Other expense:
Interest expense (note 6).............. 11,344 16,209 19,322 9,361 10,041
Other expense (income), net............ 502 1,620 (127) 9 1,631
-------- -------- ---------- --------- ---------
11,846 17,829 19,195 9,370 11,672
-------- -------- ---------- --------- ---------
Loss before income taxes............ (151) (7,220) (77,529) (4,085) (13,230)
Income taxes (note 4).................... 613 642 439 219 183
-------- -------- ---------- --------- ---------
Net loss............................... (764) (7,862) (77,968) (4,304) (13,413)
Accumulated deficit at beginning of
period................................. (72,742) (73,506) (81,368) (85,672) (159,336)
-------- -------- ---------- --------- ---------
Accumulated deficit at end of period..... $(73,506) $(81,368) $ (159,336) $(178,499) $(172,749)
======== ======== ========== ========= =========
</TABLE>

See accompanying notes to consolidated financial statements.

F-29
<PAGE> 104

BUMBLE BEE SEAFOODS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
FOR YEARS ENDED DECEMBER 31, SIX MONTHS ENDED JUNE 30,
---------------------------- -------------------------
1994 1995 1996 1996 1997
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net loss................................ $ (764) $(7,862) $(77,968) $ (4,304) $(13,413)
Adjustments to reconcile net loss to net
cash provided by (used in) operating
activities:
Depreciation and amortization........ 2,786 2,559 2,589 1,288 1,323
Amortization and write-off of
goodwill........................... 4,632 5,227 67,373 2,291 1,295
(Gain) loss on disposal of fixed
assets............................. (93) 13 -- -- --
Change in assets and liabilities:
(Increase) decrease in trade
accounts receivable and other
receivables..................... 690 (3,550) 4,420 (4,842) 2,783
Decrease (increase) in
inventories..................... (4,718) 138 (12) 25,304 20,691
Decrease (increase) in prepaid
expenses and other assets....... 1,426 (1,234) 25 401 (674)
Increase (decrease) in trade and
other payables.................. 1,745 (95) 352 (8,368) (9,961)
Decrease in Unicord Public Company
Limited payable................. (4,026) (1,174) (452) (14) (53)
Increase in accrued liabilities.... 3,900 4,508 7,188 2,905 841
------- ------- -------- -------- --------
Net cash provided by (used in)
operating activities.......... 5,578 (1,470) 3,515 14,661 2,832
------- ------- -------- -------- --------
Cash flows from investing activities:
Proceeds from sale of fixed assets...... 147 31 -- -- --
Acquisition of machinery and
equipment............................ (1,413) (1,152) (1,530) (889) (1)
------- ------- -------- -------- --------
Net cash used in investing
activities.................... (1,266) (1,121) (1,530) (889) (1)
------- ------- -------- -------- --------
Cash flows from financing activities:
Contribution of capital Unicord Public
Company Limited...................... -- 4,000 -- -- --
Principal proceeds from revolving line
of credit, net....................... 2,152 7,057 1,798 (10,480) (2,486)
Principal repayments on long-term
debt................................. (7,000) (8,000) (4,500) (4,500) --
------- ------- -------- -------- --------
Net cash provided by (used in)
financing activities.......... (4,848) 3,057 (2,702) (14,980) (2,486)
------- ------- -------- -------- --------
Net increase (decrease) in cash........... (536) 466 (717) (1,208) 345
Cash at beginning of period............... 2,885 2,349 2,815 2,815 2,098
------- ------- -------- -------- --------
Cash at end of period..................... $ 2,349 $ 2,815 $ 2,098 $ 1,607 $ 2,443
======= ======= ======== ======== ========
Supplemental disclosures of cash flow
information:
Cash paid during the period for:
Interest............................. $11,007 $13,369 $ 12,083 $ 6,174 $ 14,034
Income taxes......................... 681 716 387 4 128
</TABLE>

See accompanying notes to consolidated financial statements.

F-30
<PAGE> 105

BUMBLE BEE SEAFOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
DECEMBER 31, 1994, 1995 AND 1996

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND DESCRIPTION OF BUSINESS

Bumble Bee Seafoods, Inc. (the "Company" or "BBSI") was incorporated in the
state of Delaware on June 11, 1984 and commenced operations effective June 8,
1985. The Company produces, distributes and markets various canned seafoods and
seafood derivative products including tuna, salmon and pet foods. The Company
operates plants in Mayaguez, Puerto Rico and Santa Fe Springs, California.

In September 1989, in simultaneous transactions, Unicord Public Company
Limited ("Unicord"), a Thailand-based company, acquired all outstanding common
stock of Uni Group, Inc. ("UGI"), a Delaware corporation through a wholly-owned
subsidiary, Uni Group, Inc., a British Virgin Islands corporation, and UGI
acquired all outstanding stock of BBSI. The acquisition cost of $285,000 was
financed by approximately $35,000 of cash and $250,000 of notes payable.

The acquisition was accounted for as a purchase. Push-down accounting was
applied to reflect the fair market value of the assets acquired and liabilities
assumed, including liabilities incurred to finance the transaction.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the financial statements of
the Company and its wholly-owned subsidiaries, Bumble Bee International, Inc.
("BBII"), Commerce Distributing Company, and Santa Fe Springs Holding Company.
All significant intercompany balances and transactions have been eliminated in
consolidation.

The Company has a minority ownership interest in Sociedad Ecuatoriana de
Alimentos y Frigorificos Manta, C.A. ("SEAFMAN"), an Ecuador corporation. In
accordance with Ecuadorian regulations, the Company may not hold, either legally
or beneficially, a controlling interest in SEAFMAN or exercise significant
influence over its operations. The investment in SEAFMAN is accounted for at
cost, which approximates its value under the equity method of accounting.

INVENTORIES

Raw fish inventories are stated at specifically identified cost. All other
inventories are stated at weighted average cost, not in excess of market.

GOODWILL

Goodwill, which represents the excess of purchase price over fair value of
net assets acquired, is amortized on a straight-line basis over the expected
periods to be benefited, 40 years. The Company assesses the recoverability of
this intangible asset whenever events or changes in circumstances indicate that
the goodwill will not be recoverable. The amount of goodwill impairment, if any,
is measured as the amount by which the carrying amount of goodwill exceeds its
fair value.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are stated at cost. Depreciation on machinery
and equipment is calculated using the straight-line method over the estimated
useful lives of the assets, generally ranging from three to ten years; buildings
are depreciated using the straight-line method over 20 years. Leasehold
improvements are amortized using the straight-line method over the shorter of
the lease term or the estimated useful life of the asset.

F-31
<PAGE> 106

BUMBLE BEE SEAFOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

INCOME TAXES

The Company accounts for income taxes under the asset and liability method.
Under this method, deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases and operating loss and tax credit carryforwards. Deferred
tax assets and liabilities are measured using enacted tax rates applied to
taxable income in the years in which those temporary differences are expected to
be recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in operations in the period that includes the
enactment date. The Company maintains a valuation allowance against deferred tax
assets in order to reduce the amount of those deferred tax assets to an amount
that management believes will be realized. Management bases such estimates on
several factors, including the reversal of deferred tax liabilities, projected
future taxable income and tax planning strategies.

COMMITMENTS AND CONTINGENCIES

Liabilities for loss contingencies, including environmental remediation
costs, arising from claims, assessments, litigation, fines and penalties, and
other sources are recorded when it is probable that a liability has been
incurred and the amount of the assessment and/or remediation can be reasonably
estimated. Recoveries from third parties which are probable of realization are
separately recorded, and are not offset against the related liability in
accordance with Financial Accounting Standards Board Interpretation No. 39,
"Offsetting of Amounts Related to Certain Contracts."

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts of all receivables, trade accounts payable and accrued
liabilities approximate fair value due to the short-term nature of such
instruments. It is not practicable to estimate the fair value of amounts due to
Unicord Public Company Limited, trade acceptances to foreign banks, and notes
payable as the payment of these obligations is dependent upon receiving proceeds
from the sale of substantially all of the assets of the Company and the approval
of the payment of certain portions of these obligations by the Federal
Bankruptcy Court (Notes 6, 7 and 9).

USE OF ESTIMATES

Management of the Company has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the consolidated financial
statements and the reported amounts of revenue and expenses during the reporting
period to prepare these consolidated financial statements in conformity with
generally accepted accounting principles. Actual results could differ from those
estimates.

IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE DISPOSED OF

The Company adopted the provisions of SFAS No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of
(SFAS No. 121), on January 1, 1996. This Statement requires that long-lived
assets and certain identifiable intangibles, including goodwill, be reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability of assets to
be held and used is measured by a comparison of the carrying amount of an asset
to future net cash flows expected to be generated by the asset. If such assets
are considered to be impaired, the impairment to be recognized is measured by
the amount by which the carrying amounts of the assets exceed the fair values of
the assets. Assets to be disposed of are reported at the lower of the carrying
amount or fair value less costs to sell. In conjunction with the pending sale of
the assets of the Company (Note 9) and in applying the provisions of SFAS No.
121, the Company recorded a charge to operations of $63,000 for the year ended
December 31, 1996, representing the write-down of goodwill due to impairment.

F-32
<PAGE> 107

BUMBLE BEE SEAFOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NET LOSS PER COMMON SHARE

The computation of net loss per share is based on the weighted-average
number of outstanding common shares during each year. The weighted-average
number of common shares outstanding for the years ended December 31, 1994, 1995
and 1996 was 35,000.

INTERIM FINANCIAL INFORMATION:

The results of operations for the six months ended June 30, 1997 are not
necessarily indicative of the results to be expected for the entire year.

RECLASSIFICATIONS

Certain 1994 and 1995 amounts have been reclassified to conform with the
1996 presentation.

(2) INVENTORIES

Inventories at December 31, 1995 and 1996 are comprised of the following:

<TABLE>
<CAPTION>
1995 1996
<S> <C> <C>
Raw fish, materials and supplies............................ $12,035 $13,615
Finished goods, primarily canned fish....................... 70,265 68,697
------- -------
$82,300 $82,312
======= =======
</TABLE>

(3) PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment at December 31, 1995 and 1996 consists of the
following:

<TABLE>
<CAPTION>
1995 1996
<S> <C> <C>
Land........................................................ $ 3,090 $ 3,090
Buildings................................................... 11,853 11,978
Machinery and equipment..................................... 19,616 20,892
Furniture and fixtures...................................... 1,181 1,192
Leasehold improvements...................................... 1,216 1,369
Construction in progress.................................... 254 218
-------- --------
37,210 38,739
Less accumulated depreciation and amortization.............. (15,843) (18,431)
-------- --------
$ 21,367 $ 20,308
======== ========
</TABLE>

(4) INCOME TAXES

The provision for income taxes are primarily the result of local taxes in
Puerto Rico related to the operations of BBII.

Differences between expected income taxes calculated using the federal
statutory rate of 35% in 1995 and 1996, and actual tax expense as disclosed in
the accompanying consolidated statements of operations and

F-33
<PAGE> 108

BUMBLE BEE SEAFOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

accumulated deficit are attributable primarily to Puerto Rico income tax and tax
benefits of operating losses not recognized, and the Puerto Rico and possession
tax credit.

The tax effects of temporary differences that give rise to significant
portions of deferred tax assets and liabilities are presented below:

<TABLE>
<CAPTION>
1995 1996
<S> <C> <C>
Deferred tax assets:
Operating loss carryforward............................... $ 53,932 $ 60,526
Accounts receivable reserves and allowances............... 597 996
Accrued liabilities -- not deductible for tax............. 1,884 1,464
Long-term debt -- OID difference.......................... 536 --
-------- --------
Total gross deferred tax assets................... 56,949 62,986
Less valuation allowance.................................... (48,079) (54,088)
Net deferred tax assets........................... 8,870 8,898
Deferred tax liabilities:
Property, plant and equipment, principally due to
differences in depreciation............................ $ 554 $ 504
Inventory allowances...................................... 327 319
Intangible assets......................................... 7,989 8,075
-------- --------
Total gross deferred tax liabilities.............. 8,870 8,898
-------- --------
Net deferred taxes................................ $ -- $ --
======== ========
</TABLE>

During the years ended December 31, 1995 and 1996, the valuation allowance
increased by $8,559 and $6,009, respectively. These changes in the valuation
allowance are primarily related to the increase in operating loss carryforward
amounts and the Company's historical levels of taxable income.

In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred tax
assets will be realized. The ultimate realization of deferred tax assets is
dependent upon the generation of future taxable income during the periods in
which those temporary differences become deductible. Management considers the
scheduled reversal of deferred tax liabilities, projected future taxable income
and tax planning strategies in making this assessment. Based on the level of
historical taxable income and projections for future taxable income over the
periods in which the deferred tax assets are deductible, management believes
that it is more likely than not that the Company will realize the benefits of
these deductible differences, net of the existing valuation allowance at
December 31, 1996. The amount of the deferred tax asset considered realizable,
however, could be reduced if estimates of future taxable income during the
carryforward period are reduced.

F-34
<PAGE> 109

BUMBLE BEE SEAFOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

As of December 31, 1996, the Company has net operating loss carryforwards
of approximately $154,811 for federal income tax reporting purposes are as
follows:

<TABLE>
<CAPTION>
YEAR OF OPERATING
EXPIRATION LOSS CARRYFORWARDS
<S> <C>
2004...................................................... $ 7,587
2005...................................................... 28,547
2006...................................................... 289
2007...................................................... 43,642
2008...................................................... 17,903
2009...................................................... 17,635
2010...................................................... 17,088
2011...................................................... 22,120
--------
$154,811
========
</TABLE>

The Company has available for state tax reporting purposes operating loss
carryforwards of approximately $90,601 as of December 31, 1996. The portion of
the state tax carryforwards related to California are subject to a California
law adopted in July 1991, which retroactively suspended utilization of
California net operating loss carryforwards for the years ended 1991 and 1992.
With respect to state net operating loss carryforwards incurred in California
and suspended in 1991 and 1992, the carryforward period is extended for two
years for losses incurred prior to 1991 and for one year for losses incurred in
1991. In 1993, California adopted a law reducing the net operating loss
carryforward period from 15 years to 5 years, retroactive to loss years
beginning with 1987.

(5) EMPLOYEE BENEFIT PLANS

The Company has a retirement savings plan under the provisions of Section
401(k) of the Internal Revenue Code as a benefit for employees. Company
contributions consist of matching contributions and discretionary contributions,
with the latter being terminated by the Board of Directors. The contributions
are placed in a trust. During the years ended December 31, 1994, 1995 and 1996,
the Company charged approximately $216, $216 and $219, respectively, to
operations for this plan.

BBII has a non-contributory defined benefit pension plan covering
substantially all of its employees. The benefits are based on the employee's
years of service and compensation prior to retirement. BBII's funding policy is
to contribute an amount neither less than the ERISA minimum funding requirement
nor more than the maximum that would be deductible for tax purposes. Assets of
the plan consist primarily of certificates of deposits and mutual funds.

Net pension costs for 1994, 1995 and 1996 include the following components:

<TABLE>
<CAPTION>
1994 1995 1996
<S> <C> <C> <C>
Service cost -- benefits earned during the period.......... $ 515 $ 551 $ 560
Interest cost on projected benefit obligation.............. 258 321 345
Actual return on plan assets............................... (208) (343) (341)
Net amortization of prior service cost and deferral of net
gain..................................................... 11 138 76
----- ----- -----
Net pension costs........................................ $ 576 $ 667 $ 640
===== ===== =====
</TABLE>

F-35
<PAGE> 110

BUMBLE BEE SEAFOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following table sets forth the plans' funded status as of December 31,
1995 and 1996:

<TABLE>
<CAPTION>
1995 1996
<S> <C> <C>
Actuarial present value of benefit obligations:
Vested benefits........................................... $ 4,015 $ 4,032
Nonvested benefits........................................ 330 390
------- -------
Accumulated benefit obligation......................... $ 4,345 $ 4,422
======= =======
Projected benefit obligation................................ $(5,322) $(5,382)
Plan assets at fair market value............................ 3,285 3,696
------- -------
Projected benefit obligation in excess of plan
assets............................................... (2,037) (1,686)
Unrecognized net (gain) loss................................ 604 110
Unrecognized prior service cost............................. 17 14
Unrecognized transition obligation.......................... 50 42
Asset loss (gain)........................................... (115) (65)
------- -------
Accrued pension cost................................... $(1,481) $(1,585)
======= =======
</TABLE>

Assumptions used in accounting for the pension plan as of December 31, 1995
and 1996 were:

<TABLE>
<S> <C>
Discount rate............................................... 7.0%
Rate of increase in compensation............................ 4.0%
Expected rate of return on plan assets...................... 8.0%
</TABLE>

(6) NOTES PAYABLE

Notes payable are comprised of the following as of December 31, 1995 and
1996:

<TABLE>
<CAPTION>
1995 1996
<S> <C> <C>
Note payable A, prime rate plus 1.75%....................... $ 25,000 $ 20,500
Note payable B, prime rate plus 1.75%, with 0.5% increases
on November 15, 1995 and each six-month anniversary
thereafter................................................ 30,000 30,000
Subordinated note payable, including interest due at
maturity of $2,150 and $6,650, respectively............... 45,150 49,650
-------- --------
$100,150 $100,150
======== ========
</TABLE>

In May 1991, the Company negotiated amended and restated credit agreements.
Under the terms of the agreements, UGI contributed $43,000 additional capital to
BBSI. As restructured, the senior debt is secured by all assets of BBSI and by
the shares of BBSI, and the subordinated debt is secured by the shares of BBSI
and guaranteed by UGI.

Note payable A was for an original amount of $55,500 and bears interest at
the prime rate plus 1.75% (10.5% and 10.0% at December 31, 1995 and 1996,
respectively) with scheduled quarterly installments and a final payment of
$20,500 due on May 15, 1996. Note payable B was for $30,000 and bears interest
at the bank's prime rate plus 1.75% (12.0% and 11.5% at December 31, 1995 and
1996, respectively) with interest payable monthly and increasing 0.5% per annum
each six-month period beginning November 15, 1995, due on May 15, 1996.

Under terms of the amended and restated subordinated credit agreement, the
$65,000 due plus accrued interest of $7,382 at May 15, 1991 was reduced by a
cash payment of $22,000 with the remaining principal balance converted into a
note payable of $43,000. The note included no interest for four years and simple
interest at 5% in the fifth year, principal and interest due on May 16, 1996.

F-36
<PAGE> 111

BUMBLE BEE SEAFOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The terms of the amended and restated credit agreement include a revolving
loan facility with a maximum credit availability of $71,000 at the prime rate
plus 1.75% (10.5% and 10.0% at December 31, 1995 and 1996, respectively). The
amount outstanding under the revolving line of credit was $68,313 and $70,111 at
December 31, 1995 and 1996, respectively.

On May 15, 1996, the Company received notice from the lenders indicating it
was in default of the credit agreement and that all amounts due under the notes
were immediately due and payable. The notice further indicated that although the
lenders are entitled to immediately cease making advances under the revolving
line of credit, they would continue to make advances to the Company at their
discretion on a day-to-day basis for working capital purposes. The Company has
subsequently received notice from the lenders indicating that such advances will
continue up to the earlier of (a) April 25, 1997, or (b) five business days
after the termination in writing by any of the parties to the sale transaction
described in Note 9. Additionally, under the terms of the notice, the Company
continues to accrue the additional 3% penalty interest on the outstanding loans.
In February 1997, the Company paid $5,970 of the accrued penalty interest; any
additional penalty interest will be payable when the loans are paid in full.

During October 1995, the Company received from its subordinated lender
notice of acceleration, due to the senior note default, declaring the unpaid
portion of $43,000 and the accrued interest thereon immediately due and payable.
The notice also modified the interest rate so that interest accrues at 2% over
prime. On May 16, 1996, the subordinated note became due and payable in full and
as a result of non-payment, the Company is in default. The Company's
subordinated lender has orally indicated to management its intent to forbear,
for an unspecified period of time, from enforcing certain of its rights that
arise because of the default.

Management is pursuing a transaction, discussed more fully in Note 9, to
sell substantially all of the assets of the Company in order to satisfy, in
part, the debt obligations. The accompanying consolidated financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.

(7) RELATED PARTY TRANSACTIONS

The Company purchases canned tuna and frozen tuna loins under agreements
with Unicord Public Company Limited. During the years ended December 31, 1994,
1995 and 1996, the Company purchased $46,850, $3,198 and $0, respectively, of
products under the above described agreements. In conjunction with these
purchases, the Company issued trade acceptances to foreign banks, which advanced
funds to Unicord Public Company Limited upon shipment of the product. Included
in trade and other accounts payable are amounts due to foreign banks under these
trade acceptance arrangements totaling approximately $27,831 as of December 31,
1995 and 1996. Net accounts payable due to Unicord Public Company Limited
related to the above purchases as of December 31, 1995 and 1996 were $7,514 and
$7,062, respectively. In addition, the Company purchases canned tuna and frozen
tuna loins from SEAFMAN. Total purchases from SEAFMAN during the years ended
December 31, 1994, 1995 and 1996 were $10,436, $11,377 and $11,832,
respectively. Net accounts payable related to the above purchases at December
31, 1995 and 1996 were $1,922 and $583, respectively.

(8) COMMITMENTS AND CONTINGENCIES

LEASE AGREEMENTS

As of December 31, 1996, the Company had noncancelable lease commitments
for certain buildings and equipment which are accounted for as operating leases
and expiring at various dates through 2005. Rent expense for the years ended
December 31, 1994, 1995 and 1996 was approximately $2,227, $2,261 and $2,201,
respectively.

The Company has also agreed to make payments under lease agreements for the
use of certain production machinery and equipment. The agreements require fixed
payments plus additional sums based on output.

F-37
<PAGE> 112

BUMBLE BEE SEAFOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Total payments made under these arrangements for the years ended December 31,
1994, 1995 and 1996 amounted to $315, $339 and $300, respectively.

The future minimum rental payments under these agreements are as follows:

<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31,
<S> <C> <C>
1997.............................................. $1,846
1998.............................................. 1,557
1999.............................................. 1,354
2000.............................................. 1,278
2001.............................................. 1,317
Thereafter........................................ 1,373
------
Total........................................... $8,725
======
</TABLE>

PURCHASE COMMITMENTS

In connection with its business, the Company and BBII routinely enter into
commitments relating to the purchase of certain finished goods and raw fish. As
of December 31, 1996, aggregate future commitments for such purchases are
estimated to be $15,716. These commitments expire on August 31, 1997. The
Company expects such purchase commitments to approximate market value and does
not anticipate any losses related to the commitments.

LEGAL MATTERS

The Company is involved in various claims and legal actions arising in the
ordinary course of business. In the opinion of management, based in part upon
advice from legal counsel, the ultimate disposition of these other matters will
not have a material adverse effect on the Company's consolidated financial
position, results of operations or liquidity.

(9) SUBSEQUENT EVENT (UNAUDITED)

On May 1, 1997 the Company entered into an Asset Purchase and Sale
Agreement (the "Agreement") by and among the Company and International Home
Foods, Inc. ("IHF") and its wholly-owned subsidiary, Bumble Bee Acquisition
Corporation. On May 2, 1997, the Company declared bankruptcy with the Federal
Bankruptcy Court for the Southern District of California. The transaction was
approved by an order of the Federal Bankruptcy Court for the Southern District
of California on June 19, 1997. On July 1, 1997, IHF consummated the acquisition
of substantially all of the assets (the "Assets") of the Company, pursuant to
the terms of the Agreement. The aggregate consideration paid for the assets was
approximately $160 million in cash and the assumption of certain liabilities of
the Company, including trade payables and certain accrued liabilities including
pension cost. The Assets consisted primarily of inventory, accounts receivable,
property, plant and equipment and trademarks formerly used by the Company for
the processing and marketing of canned seafood products, principally tuna and
salmon, including processing facilities in Puerto Rico and California.

F-38
<PAGE> 113

======================================================

NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER MADE
BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY OF THE
UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES
OTHER THAN THOSE TO WHICH IT RELATES OR AN OFFER TO SELL, OR A SOLICITATION OF
AN OFFER TO BUY, TO ANY PERSON IN ANY JURISDICTION WHERE SUCH AN OFFER OR
SOLICITATION WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
Prospectus Summary.................... 3
Risk Factors.......................... 11
The Company........................... 16
Use of Proceeds....................... 17
Dividend Policy....................... 17
Dilution.............................. 17
Capitalization........................ 19
Selected Historical Financial and
Operating Information............... 20
Unaudited Pro Forma Financial
Statements.......................... 21
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 30
Business.............................. 37
Management............................ 50
Principal Stockholders................ 59
Certain Relationships and Related
Transactions........................ 61
Description of Capital Stock.......... 64
Description of Indebtedness........... 65
Shares Eligible for Future Sale....... 69
Underwriting.......................... 71
Legal Matters......................... 73
Experts............................... 73
Available Information................. 73
Index to Financial Statements......... F-1
</TABLE>

------------------

UNTIL , 1997 (25 DAYS AFTER THE COMMENCEMENT OF THIS OFFERING) ALL
DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES OFFERED HEREBY,
WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A
PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A
PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS.

======================================================
======================================================

INTERNATIONAL HOME FOODS, INC.

[LOGO]

COMMON STOCK

--------------------

PROSPECTUS
--------------------

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION

BT ALEX. BROWN

CHASE SECURITIES INC.

CREDIT SUISSE FIRST BOSTON

GOLDMAN, SACHS & CO.

MORGAN STANLEY DEAN WITTER

, 1997
======================================================
<PAGE> 114

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The estimated expenses payable by International Home Foods, Inc. (the
"Registrant" or the "Company") in connection with the registration of the
securities offered hereby, other than underwriting discounts and commissions,
are as follows:

<TABLE>
<S> <C>
SEC Registration Fee........................................ $ 69,697
NASD Filing Fee............................................. 23,500
New York Stock Exchange Listing Fee......................... *
Blue Sky Qualification Fees and Expenses.................... *
Accounting Fees and Expenses................................ *
Legal Fees and Expenses..................................... *
Transfer Agent and Registrar Fees........................... *
Printing and Engraving Expenses............................. *
Miscellaneous............................................... *
--------
Total............................................. $ *
========
</TABLE>

- ---------------

* To be determined.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Article Ten of the Certificate of Incorporation of the Registrant provides
that the Registrant shall indemnify its officers and directors to the maximum
extent allowed by the Delaware General Corporation Law. Pursuant to Section 145
of the Delaware General Corporation Law, the Registrant generally has the power
to indemnify its current and former directors against expenses and liabilities
incurred by them in connection with any suit to which they are, or are
threatened to be made, a party by reason of their serving in those positions so
long as they acted in good faith and in a manner they reasonably believed to be
in, or not opposed to, the best interests of the Registrant, and with respect to
any criminal action, so long as they had no reasonable cause to believe their
conduct was unlawful. With respect to suits by or in the right of the
Registrant, however, indemnification is generally limited to attorneys' fees and
other expenses and is not available if the person is adjudged to be liable to
the Registrant, unless the court determines that indemnification is appropriate.
The statute expressly provides that the power to indemnify authorized thereby is
not exclusive of any rights granted under any bylaw, agreement, vote of
stockholders or disinterested directors, or otherwise. The Registrant also has
the power to purchase and maintain insurance for its directors and officers and
has purchased a policy providing such insurance.

The preceding discussion of the Registrant's Certificate of Incorporation
and Section 145 of the Delaware General Corporation Law is not intended to be
exhaustive and is qualified in its entirety by the Certificate of Incorporation
and Section 145 of the Delaware General Corporation Law.

The Registrant has entered into indemnification agreements with the
Registrant's directors and officers. Pursuant to such agreements, the Registrant
will, to the extent permitted by applicable law, indemnify such persons against
all expenses, judgments, fines and penalties incurred in connection with the
defense or settlement of any actions brought against them by reason of the fact
that they were directors or officers of the Registrant or assumed certain
responsibilities at the direction of the Registrant.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

The following information relates to all securities issued or sold by the
Registrant in the last three years and not registered under the Securities Act.
Each of the transactions described below was conducted in reliance upon the
exemption from registration provided in Section 4(2) of the Securities Act and
the rules and

II-1
<PAGE> 115

regulations promulgated thereunder. Furthermore, each of the certificates
representing the Registrant's securities issued in connection with such
transactions contains a restrictive legend.

On November 1, 1996, the Company sold $400,000,000 of its 10 3/8% Senior
Subordinated Notes due 2006 (the "Senior Subordinated Notes"). The Senior
Subordinated Notes were sold to Chase Securities Inc. and BT Alex. Brown
Incorporated, as initial purchasers. The discount paid to the initial purchasers
equaled $12,000,000.

On November 1, 1996, the Company sold 266,000,000 shares of its common
stock, par value $0.01 per share (the "Common Stock") to a group of accredited
investors for $266,000,000.

On October 1, 1997, the Company issued 20,000,000 shares of Common Stock to
two accredited investors in exchange for all of the outstanding capital stock of
DM US Holding Corp.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits:

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
<C> <S>
1.1 -- Form of Underwriting Agreement.+
2.1.1 -- Agreement of Sale and Plan of Merger (the "Merger
Agreement") entered into among AHP Subsidiary Holding
Corporation, American Home Food Products, Inc., AHFP
Holding Corporation and AHFP Acquisition Corporation,
dated as of September 5, 1996.(1)
2.1.2 -- First Amendment to Agreement of Sale and Plan of Merger,
dated as of October 31, 1996.(1)
3.1 -- Amended and Restated Certificate of Incorporation of the
Company.+
3.2 -- Amended and Restated Bylaws of the Company.+
4.1 -- Form of Common Stock Certificate.+
4.2 -- Registration Rights Agreement made as of November 1, 1996
by and among the Company, AHP Subsidiary Holding
Corporation and AHFP Holding Corporation.(1)
4.3 -- Indenture, dated as of November 1, 1996 between the
Company and United States Trust Company of New York.(1)
5.1 -- Opinion of Vinson & Elkins L.L.P.+
10.1 -- Transitional Services Agreement dated as of November 1,
1996 between American Home Products Corporation and the
Company.(1)
10.2 -- Financial Advisory Agreement dated as of November 1, 1996
by and between the Company and Hicks, Muse & Company
Partners, L.P. ("HMCo").(1)
10.3 -- 1997 Stock Option Plan of the Company.+
10.4 -- Nonqualified Stock Option Agreement dated November 1,
1996 by and between the Company and C. Dean
Metropoulos.(1)
10.5 -- Nonqualified Stock Option Agreement dated November 1,
1996 by and between the Company and Kenneth J. Martin.(1)
10.6 -- Nonqualified Stock Option Agreement dated November 12,
1996 by and between the Company and M.L. Lowenkron.(1)
</TABLE>

II-2
<PAGE> 116
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
<C> <S>
10.7 -- Nonqualified Stock Option Agreement dated November 12,
1996 by and between the Company and Roger T. Staubach.(1)
10.8 -- Nonqualified Stock Option Agreement dated January 3,
1997, by and between the Company and L. Hollis Jones.(1)
10.9 -- Nonqualified Stock Option Agreement by and between the
Company and John H. Bess.+
10.10 -- Indemnification Agreement dated November 1, 1996 between
the Company and C. Dean Metropoulos, together with a
schedule identifying substantially identical documents
and setting forth the material details in which those
documents differ from the foregoing documents.(1)
10.11 -- Monitoring and Oversight Agreement dated as of November
1, 1996 by and between the Company and HMCo.(1)
10.12 -- Credit Agreement, dated November 1, 1996, amended and
restated July 1, 1997, by and among the Company and the
bank's signatory thereto.*
10.13 -- Share Exchange Agreement, dated September , 1997,
between the Company and AHFP Holding Corporation.+
10.14 -- Custom Manufacturing Agreement, between Accra Pac, Inc.
and I.H.F.P., Inc.+
10.15 -- Amended and Restated Jams Manufacturing Agreement, dated
March 3, 1997, between Roseland Manufacturing, Inc. and
the Company.+
10.16 -- Asset Purchase and Sale Agreement, dated May 1, 1997, by
and among Bumble Bee Seafoods, Inc., Bumble Bee
International, Inc., Commerce Distributing Company, Santa
Fe Springs Holding Company, the Company and Bumble Bee
Acquisition Corporation.(2)
11.1 -- Statement Re: Computation of Per Share Earnings.*
11.2 -- Statement Re: Computation of Pro Forma Per Share Earnings
for Recapitalization.*
21.1 -- Subsidiaries of the Company.*
23.1 -- Consent of Coopers & Lybrand L.L.P., Independent
Accountants.*
23.2 -- Consent of Arthur Andersen LLP, Independent Public
Accountants.*
23.3 -- Consent of KPMG Peat Marwick LLP, Independent
Accountants.*
23.4 -- Consent of Vinson & Elkins L.L.P. (included in its
opinion filed as Exhibit 5.1 hereto).+
24.1 -- Powers of Attorney (set forth on signature page).*
27.1 -- Financial Data Schedule.*
</TABLE>

- ---------------

* Filed herewith.

+ To be filed by amendment.

(1) Incorporated by reference to the Company's Registration Statement on Form
S-4, dated February 19, 1997, File No. 333-18859.

(2) Incorporated by reference to the Company's Current Report on Form 8-K, dated
July 16, 1997, File No. 333-18859.

II-3
<PAGE> 117

The undersigned Registrant also hereby undertakes that:

(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

II-4
<PAGE> 118

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
Company has duly caused this Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Parsippany, State
of New Jersey, on the 24th day of September, 1997.

INTERNATIONAL HOME FOODS, INC.

By: /s/ C. DEAN METROPOULOS

----------------------------------
C. Dean Metropoulos,
Chief Executive Officer

KNOW ALL MEN BY THESE PRESENTS, that the undersigned directors and officers
of International Home Foods, Inc., a Delaware corporation, which is filing a
Registration Statement on Form S-1 with the Securities and Exchange Commission,
Washington, D.C. 20549 under the provisions of the Securities Act of 1933 (the
"Securities Act") hereby constitute and appoint Alan B. Menkes and N. Michael
Dion, and each of them, the individual's true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for the person and
in his or her name, place and stead, in any and all capacities, to sign such
Registration Statement and any or all amendments, including post-effective
amendments, to the Registration Statement, including a Prospectus or an amended
Prospectus therein and any registration statement for the same offering that is
to be effective upon filing pursuant to Rule 462(b) under the Securities Act,
and all other documents in connection therewith to be filed with the Securities
and Exchange Commission, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact as agents or any of them, or their
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following person in the capacities
and on the date indicated.

<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
--------- -------- ----
<C> <S> <C>

/s/ C. DEAN METROPOULOS Chairman of the Board and September 24, 1997
- ----------------------------------------------------- Chief Executive Officer
C. Dean Metropoulos (Principal Executive
Officer)

/s/ N. MICHAEL DION Chief Financial Officer September 24, 1997
- ----------------------------------------------------- (Principal Financial and
N. Michael Dion Accounting Officer)

/s/ L. HOLLIS JONES Director September 24, 1997
- -----------------------------------------------------
L. Hollis Jones

/s/ THOMAS O. HICKS Director September 24, 1997
- -----------------------------------------------------
Thomas O. Hicks

/s/ CHARLES W. TATE Director September 24, 1997
- -----------------------------------------------------
Charles W. Tate

/s/ ALAN B. MENKES Director September 24, 1997
- -----------------------------------------------------
Alan B. Menkes
</TABLE>

II-5
<PAGE> 119
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
--------- -------- ----
<C> <S> <C>

/s/ MICHAEL J. LEVITT Director September 24, 1997
- -----------------------------------------------------
Michael J. Levitt

/s/ M.L. LOWENKRON Director September 24, 1997
- -----------------------------------------------------
M.L. Lowenkron

/s/ ROGER T. STAUBACH Director September 24, 1997
- -----------------------------------------------------
Roger T. Staubach
</TABLE>

II-6
<PAGE> 120

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
<C> <S>

1.1 -- Form of Underwriting Agreement.+
2.1.1 -- Agreement of Sale and Plan of Merger (the "Merger
Agreement") entered into among AHP Subsidiary Holding
Corporation, American Home Food Products, Inc., AHFP
Holding Corporation and AHFP Acquisition Corporation,
dated as of September 5, 1996.(1)
2.1.2 -- First Amendment to Agreement of Sale and Plan of Merger,
dated as of October 31, 1996.(1)
3.1 -- Amended and Restated Certificate of Incorporation of the
Company.+
3.2 -- Amended and Restated Bylaws of the Company.+
4.1 -- Form of Common Stock Certificate.+
4.2 -- Registration Rights Agreement made as of November 1, 1996
by and among the Company, AHP Subsidiary Holding
Corporation and AHFP Holding Corporation.(1)
4.3 -- Indenture, dated as of November 1, 1996 between the
Company and United States Trust Company of New York.(1)
5.1 -- Opinion of Vinson & Elkins L.L.P.+
10.1 -- Transitional Services Agreement dated as of November 1,
1996 between American Home Products Corporation and the
Company.(1)
10.2 -- Financial Advisory Agreement dated as of November 1, 1996
by and between the Company and Hicks, Muse & Company
Partners, L.P. ("HMCo").(1)
10.3 -- 1997 Stock Option Plan of the Company.+
10.4 -- Nonqualified Stock Option Agreement dated November 1,
1996 by and between the Company and C. Dean
Metropoulos.(1)
10.5 -- Nonqualified Stock Option Agreement dated November 1,
1996 by and between the Company and Kenneth J. Martin.(1)
10.6 -- Nonqualified Stock Option Agreement dated November 12,
1996 by and between the Company and M.L. Lowenkron.(1)
10.7 -- Nonqualified Stock Option Agreement dated November 12,
1996 by and between the Company and Roger T. Staubach.(1)
10.8 -- Nonqualified Stock Option Agreement dated January 3,
1997, by and between the Company and L. Hollis Jones.(1)
10.9 -- Nonqualified Stock Option Agreement by and between the
Company and John H. Bess.+
10.10 -- Indemnification Agreement dated November 1, 1996 between
the Company and C. Dean Metropoulos, together with a
schedule identifying substantially identical documents
and setting forth the material details in which those
documents differ from the foregoing documents.(1)
10.11 -- Monitoring and Oversight Agreement dated as of November
1, 1996 by and between the Company and HMCo.(1)
10.12 -- Credit Agreement, dated November 1, 1996, amended and
restated July 1, 1997, by and among the Company and the
bank's signatory thereto.*
10.13 -- Share Exchange Agreement, dated September , 1997,
between the Company and AHFP Holding Corporation.+
</TABLE>
<PAGE> 121
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
<C> <S>
10.14 -- Custom Manufacturing Agreement, between Accra Pac, Inc.
and I.H.F.P., Inc.+
10.15 -- Amended and Restated Jams Manufacturing Agreement, dated
March 3, 1997, between Roseland Manufacturing, Inc. and
the Company.+
10.16 -- Asset Purchase and Sale Agreement, dated May 1, 1997, by
and among Bumble Bee Seafoods, Inc., Bumble Bee
International, Inc., Commerce Distributing Company, Santa
Fe Springs Holding Company, the Company and Bumble Bee
Acquisition Corporation.(2)
11.1 -- Statement Re: Computation of Per Share Earnings.*
11.2 -- Statement Re: Computation of Pro Forma Per Share Earnings
for Recapitalization.*
21.1 -- Subsidiaries of the Company.*
23.1 -- Consent of Coopers & Lybrand L.L.P., Independent
Accountants.*
23.2 -- Consent of Arthur Andersen LLP, Independent Public
Accountants.*
23.3 -- Consent of KPMG Peat Marwick LLP, Independent
Accountants.*
23.4 -- Consent of Vinson & Elkins L.L.P. (included in its
opinion filed as Exhibit 5.1 hereto).+
24.1 -- Powers of Attorney (set forth on signature page).*
27.1 -- Financial Data Schedule.*
</TABLE>

- ---------------

* Filed herewith.

+ To be filed by amendment.

(1) Incorporated by reference to the Company's Registration Statement on Form
S-4, dated February 19, 1997, File No. 333-18859.

(2) Incorporated by reference to the Company's Current Report on Form 8-K, dated
July 16, 1997, File No. 333-18859.

<PAGE> 1
CONFORMED COPY

================================================================================

$877,000,000

CREDIT AGREEMENT

among

INTERNATIONAL HOME FOODS, INC.,
as Borrower,

The Several Lenders
from Time to Time Parties Hereto,

MORGAN STANLEY SENIOR FUNDING, INC.,
as Documentation Agent,

BANKERS TRUST COMPANY,
as Syndication Agent,

and

THE CHASE MANHATTAN BANK,
as Administrative Agent

Dated as of November 1, 1996,
as Amended and Restated as of July 1, 1997

================================================================================
<PAGE> 2
TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Other Definitional Provisions . . . . . . . . . . . . . . . . . 26

SECTION 2. AMOUNT AND TERMS OF LOANS . . . . . . . . . . . . . . . . . . . . 26
2.1 Term Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.2 Procedure for Incremental Term Loan Borrowing . . . . . . . . . 27
2.3 Repayment of Term Loans . . . . . . . . . . . . . . . . . . . . 27
2.4 Revolving Credit Commitments . . . . . . . . . . . . . . . . . . 28
2.5 Procedure for Revolving Credit Borrowing . . . . . . . . . . . . 28
2.6 Swing Line Commitment . . . . . . . . . . . . . . . . . . . . . 29
2.7 Procedure for Swing Line Borrowing; Refunding of Swing Line
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.8 Commitment Fees, etc. . . . . . . . . . . . . . . . . . . . . . 31
2.9 Termination or Reduction of Revolving Credit Commitments . . . . 31
2.10 Optional Prepayments . . . . . . . . . . . . . . . . . . . . . 31
2.11 Mandatory Prepayments and Commitment Reductions . . . . . . . . 32
2.12 Conversion and Continuation Options . . . . . . . . . . . . . . 33
2.13 Minimum Amounts and Maximum Number of Eurodollar Tranches . . . 34
2.14 Interest Rates and Payment Dates . . . . . . . . . . . . . . . 34
2.15 Computation of Interest and Fees . . . . . . . . . . . . . . . 34
2.16 Inability to Determine Interest Rate . . . . . . . . . . . . . 35
2.17 Pro Rata Treatment and Payments . . . . . . . . . . . . . . . . 35
2.18 Requirements of Law . . . . . . . . . . . . . . . . . . . . . . 37
2.19 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
2.20 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
2.21 Change of Lending Office . . . . . . . . . . . . . . . . . . . 40
2.22 Replacement of Lenders under Certain Circumstances . . . . . . 41

SECTION 3. LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . . . . . . 41
3.1 L/C Commitment . . . . . . . . . . . . . . . . . . . . . . . . . 41
3.2 Procedure for Issuance of Letter of Credit . . . . . . . . . . . 41
3.3 Commissions, Fees and Other Charges . . . . . . . . . . . . . . 42
3.4 L/C Participations . . . . . . . . . . . . . . . . . . . . . . . 42
3.5 Reimbursement Obligation of the Borrower . . . . . . . . . . . . 43
3.6 Obligations Absolute . . . . . . . . . . . . . . . . . . . . . . 44
3.7 Letter of Credit Payments . . . . . . . . . . . . . . . . . . . 44
3.8 Applications . . . . . . . . . . . . . . . . . . . . . . . . . . 44
</TABLE>

i
<PAGE> 3
<TABLE>
<S> <C> <C>
SECTION 4. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . 44
4.1 Financial Condition . . . . . . . . . . . . . . . . . . . . . . 45
4.2 No Change . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
4.3 Corporate Existence; Compliance with Law . . . . . . . . . . . . 46
4.4 Corporate Power; Authorization; Enforceable Obligations . . . . 47
4.5 No Legal Bar . . . . . . . . . . . . . . . . . . . . . . . . . . 47
4.6 No Material Litigation . . . . . . . . . . . . . . . . . . . . . 47
4.7 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
4.8 Ownership of Property; Liens . . . . . . . . . . . . . . . . . . 48
4.9 Intellectual Property . . . . . . . . . . . . . . . . . . . . . 48
4.10 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
4.11 Federal Regulations . . . . . . . . . . . . . . . . . . . . . . 48
4.12 Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . 49
4.13 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
4.14 Investment Company Act; Other Regulations . . . . . . . . . . . 49
4.15 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . 49
4.16 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . 49
4.17 Environmental Matters . . . . . . . . . . . . . . . . . . . . . 50
4.18 Accuracy of Information, etc . . . . . . . . . . . . . . . . . 51
4.19 Security Documents . . . . . . . . . . . . . . . . . . . . . . 51
4.20 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
4.21 Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . 52
4.22 Regulation H . . . . . . . . . . . . . . . . . . . . . . . . . 52

SECTION 5. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . 52
5.1 Conditions to Initial Extension of Credit . . . . . . . . . . . 52
5.2 Conditions to Each Extension of Credit . . . . . . . . . . . . . 56
5.3 Conditions to Amendment/Restatement Closing Date . . . . . . . . 57

SECTION 6. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . 59
6.1 Financial Statements . . . . . . . . . . . . . . . . . . . . . . 60
6.2 Certificates; Other Information . . . . . . . . . . . . . . . . 60
6.3 Payment of Obligations . . . . . . . . . . . . . . . . . . . . . 62
6.4 Conduct of Business and Maintenance of Existence, etc. . . . . 62
6.5 Maintenance of Property; Insurance . . . . . . . . . . . . . . . 62
6.6 Inspection of Property; Books and Records; Discussions . . . . . 62
6.7 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
6.8 Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . 63
6.9 Interest Rate Protection . . . . . . . . . . . . . . . . . . . . 63
6.10 Additional Collateral, etc . . . . . . . . . . . . . . . . . . 64

</TABLE>

ii
<PAGE> 4
<TABLE>
<S> <C>
SECTION 7. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . 66
7.1 Financial Condition Covenants . . . . . . . . . . . . . . . . . 66
7.2 Limitation on Indebtedness . . . . . . . . . . . . . . . . . . . 68
7.3 Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . 69
7.4 Limitation on Fundamental Changes . . . . . . . . . . . . . . . 71
7.5 Limitation on Sale of Assets . . . . . . . . . . . . . . . . . . 71
7.6 Limitation on Dividends . . . . . . . . . . . . . . . . . . . . 72
7.7 Limitation on Capital Expenditures . . . . . . . . . . . . . . . 72
7.8 Limitation on Investments, Loans and Advances . . . . . . . . . 73
7.9 Limitation on Optional Payments and Modifications of Debt
Instruments, etc. . . . . . . . . . . . . . . . . . . . . . . 74
7.10 Limitation on Transactions with Affiliates . . . . . . . . . . 74
7.11 Limitation on Sales and Leasebacks . . . . . . . . . . . . . . 75
7.12 Limitation on Changes in Fiscal Periods . . . . . . . . . . . . 75
7.13 Limitation on Negative Pledge Clauses . . . . . . . . . . . . . 75
7.14 Limitation on Lines of Business . . . . . . . . . . . . . . . . 75
7.15 Limitation on Amendments to Acquisition Documents . . . . . . . 75

SECTION 8. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . 76

SECTION 9. THE AGENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
9.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . 80
9.2 Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . 80
9.3 Exculpatory Provisions . . . . . . . . . . . . . . . . . . . . . 80
9.4 Reliance by Administrative Agent . . . . . . . . . . . . . . . . 80
9.5 Notice of Default . . . . . . . . . . . . . . . . . . . . . . . 81
9.6 Non-Reliance on Agents and Other Lenders . . . . . . . . . . . . 81
9.7 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . 82
9.8 Agent in Its Individual Capacity . . . . . . . . . . . . . . . . 82
9.9 Successor Administrative Agent . . . . . . . . . . . . . . . . . 82
9.10 Authorization to Release Liens . . . . . . . . . . . . . . . . 83
9.11 Documentation Agent and Syndication Agent . . . . . . . . . . . 83

SECTION 10. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . 83
10.1 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . 83
10.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
10.3 No Waiver; Cumulative Remedies . . . . . . . . . . . . . . . . 85
10.4 Survival of Representations and Warranties . . . . . . . . . . 85
10.5 Payment of Expenses and Taxes . . . . . . . . . . . . . . . . . 85
10.6 Successors and Assigns; Participations and Assignments . . . . 86
10.7 Adjustments; Set-off . . . . . . . . . . . . . . . . . . . . . 88
10.8 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 89
10.9 Severability . . . . . . . . . . . . . . . . . . . . . . . . . 89
10.10 Integration . . . . . . . . . . . . . . . . . . . . . . . . . 89
10.11 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . 90
</TABLE>

iii
<PAGE> 5
<TABLE>
<S> <C> <C>
10.12 Submission To Jurisdiction; Waivers . . . . . . . . . . . . . 90
10.13 Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . 90
10.14 WAIVERS OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . 91
10.15 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . 92

</TABLE>

iv
<PAGE> 6
SCHEDULES:

1.1A Commitments as of Closing Date
1.1B Mortgaged Property
1.1C Revolving Credit Commitments and Term Loans as of

Amendment/Restatement
Closing Date
1.1D Additional Mortgaged Property
2.17 Certain Funding Procedures
4.4 Consents, Authorizations, Filings and Notices
4.15 Subsidiaries on Closing Date
4.15-A Subsidiaries on Amendment/Restatement Closing Date
4.19(a) UCC Filing Jurisdictions
4.19(a)-A UCC Filing Jurisdictions--Bumble Bee
4.19(b) Mortgage Filing Jurisdictions
4.19(b)-A Mortgage Filing Jurisdictions--Bumble Bee
7.2(e) Existing Indebtedness
7.3(f) Existing Liens
7.8(g) Existing Investments
7.10 Certain Fees

EXHIBITS:

A Form of Guarantee and Collateral Agreement
B Form of Compliance Certificate
C Form of Closing Certificate
D-1 Form of Mortgage -- Borrower
D-2 Form of Mortgage -- Subsidiary Guarantor
E Form of Assignment and Acceptance
F Form of Legal Opinion of Vinson & Elkins
G-1 Form of Term Note
G-2 Form of Revolving Credit Note
G-3 Form of Swing Line Note

<PAGE> 7

CREDIT AGREEMENT, dated as of November 1, 1996, as amended and
restated as of July 1, 1997, among INTERNATIONAL HOME FOODS, INC., a Delaware
corporation (the "Borrower"), the several banks and other financial
institutions or entities from time to time parties to this Agreement (the
"Lenders"), MORGAN STANLEY SENIOR FUNDING, INC., as documentation agent (in
such capacity, the "Documentation Agent"), BANKERS TRUST COMPANY, as
syndication agent (in such capacity, the "Syndication Agent"), and THE CHASE
MANHATTAN BANK, as administrative agent for the Lenders hereunder.

W I T N E S S E T H :

WHEREAS, the Borrower entered into the Credit Agreement, dated as
of November 1, 1996, as amended and modified pursuant to the First Amendment
and Waiver with respect thereto dated as of April 7, 1997 (as so amended, the
"Existing Credit Agreement"), with Morgan Stanley Senior Funding, Inc., as
documentation agent, Bankers Trust Company, as syndication agent, The Chase
Manhattan Bank, as administrative agent, and the several banks and other
financial institutions or entities parties thereto;

WHEREAS, the parties hereto have agreed to amend and restate the
Existing Credit Agreement as provided in this Agreement, which Agreement shall
become effective upon the satisfaction of certain conditions precedent set
forth in Section 5.3 hereof; and

WHEREAS, it is the intent of the parties hereto that this
Agreement not constitute a novation of the obligations and liabilities existing
under the Existing Credit Agreement or evidence repayment of any of such
obligations and liabilities and that this Agreement amend and restate in its
entirety the Existing Credit Agreement and re-evidence the obligations of the
Borrower outstanding thereunder;

NOW, THEREFORE, in consideration of the above premises, the
parties hereto hereby agree that on the Amendment/Restatement Closing Date (as
defined below) the Existing Credit Agreement shall be amended and restated in
its entirety as follows:

SECTION 1. DEFINITIONS

1.1 Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:

"ABR": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greatest of (a) the
Prime Rate in effect on such day, (b) the Base CD Rate in effect on such
day plus 1% and (c) the Federal Funds Effective Rate in effect on such
day plus 1/2 of 1%. For purposes hereof: "Prime Rate" shall mean the
rate of interest per annum publicly announced from time to time by Chase
as its prime rate in effect at its principal office in New York City
(the Prime Rate not being intended to be the lowest rate of interest
charged by Chase in connection with extensions of credit to debtors);
"Base CD Rate" shall mean the sum of (a) the product of (i) the Three-
Month Secondary CD Rate and (ii) a fraction, the numerator of which is
one and the denominator of which is one minus the
<PAGE> 8
C/D Reserve Percentage and (b) the C/D Assessment Rate; "Three-Month
Secondary CD Rate" shall mean, for any day, the secondary market rate
for three-month certificates of deposit reported as being in effect on
such day (or, if such day shall not be a Business Day, the next
preceding Business Day) by the Board through the public information
telephone line of the Federal Reserve Bank of New York (which rate will,
under the current practices of the Board, be published in Federal
Reserve Statistical Release H.15(519) during the week following such
day), or, if such rate shall not be so reported on such day or such next
preceding Business Day, the average of the secondary market quotations
for three-month certificates of deposit of major money center banks in
New York City received at approximately 10:00 A.M., New York City time,
on such day (or, if such day shall not be a Business Day, on the next
preceding Business Day) by the Administrative Agent from three New York
City negotiable certificate of deposit dealers of recognized standing
selected by it; and "Federal Funds Effective Rate" shall mean, for any
day, the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by
federal funds brokers, as published on the next succeeding Business Day
by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by the
Administrative Agent from three federal funds brokers of recognized
standing selected by it. Any change in the ABR due to a change in the
Prime Rate, the Base CD Rate or the Federal Funds Effective Rate shall
be effective as of the opening of business on the effective day of such
change in the Prime Rate, the Base CD Rate or the Federal Funds
Effective Rate, respectively.

"ABR Loans": Loans the rate of interest applicable to which is
based upon the ABR.

"Acquisition Agreement": the Agreement of Sale and Plan of
Merger, dated as of September 5, 1996, among the Sellers, AH Food Co.,
the Buyer and the Merger Sub.

"Acquisitions": the collective reference to the AHP Acquisition
and the Heritage Acquisition.

"Adjustment Date": as defined in the Pricing Grid.

"Administrative Agent": Chase, together with its affiliates, as
the arranger of the Facilities and as the administrative agent for the
Lenders under this Agreement and the other Loan Documents, together with
any of its successors.

"Affiliate": as to any Person, any other Person which, directly
or indirectly, is in control of, is controlled by, or is under common
control with, such Person. For purposes of this definition, "control"
of a Person means the power, directly or indirectly, either to (a) vote
51% or more of the securities having ordinary voting power for the
election of directors (or persons performing similar functions) of such
Person or (b) direct or cause the direction of the management and
policies of such Person, whether by contract or otherwise.

2
<PAGE> 9
"Agents": the collective reference to the Administrative Agent,
the Syndication Agent and the Documentation Agent.

"Agreement": this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.

"AH Food Co.": American Home Food Products, Inc., a Delaware
corporation.

"AHP": American Home Products Corporation, a Delaware
corporation.

"AHP Acquisition": as defined in Section 5.1(b).

"AHP Food Business": as defined in Section 5.1(b).

"AHP Holding": AHP Subsidiary Holding Corporation, a Delaware
corporation.

"Amendment/Restatement Closing Date": July 1, 1997.

"Applicable Margin": for each Type of Loan, the rate per annum
set forth under the relevant column heading below:

<TABLE>
<CAPTION>
ABR Loans Eurodollar Loans
--------- ----------------
<S> <C> <C>
Tranche A Term Loans
Revolving Credit Loans and
Swing Line Loans 1.0% 2.0%

Tranche B Term Loans 1.25% 2.25%
</TABLE>

; provided, that on and after the first Adjustment Date occurring after
the date that is six months after the Amendment/Restatement Closing
Date, the Applicable Margin will be determined pursuant to the Pricing
Grid.

"Application": an application, in such form (reasonably
acceptable to the Borrower) as the relevant Issuing Lender may specify
from time to time, requesting such Issuing Lender to open a Letter of
Credit.

"Asset Sale": any Disposition of Property other than (a) any
Disposition of Property permitted by any of clauses (a) through (h) of
Section 7.5 and (b) any Disposition of Property which, together with any
related Disposition of Property, yields gross proceeds to the Borrower
or any of its Subsidiaries (valued at the initial principal amount
thereof in the case of non-cash proceeds consisting of notes or other
debt securities and valued at fair market value in the case of other
non-cash proceeds) of less than $1,000,000, provided, that the

3
<PAGE> 10
aggregate gross proceeds of Dispositions of Property excluded from the
definition of "Asset Sale" pursuant to this clause (b) shall not exceed
$5,000,000 in any fiscal year of the Borrower.

"Asset Swap": any substantially concurrent purchase and sale, or
exchange, of Property used or usable in the business of the Borrower and
its Subsidiaries.

"Assignee": as defined in Section 10.6(c).

"Assignor": as defined in Section 10.6(c).

"Available Revolving Credit Commitment": as to any Lender at any
time, an amount equal to (a) such Lender's Revolving Credit Commitment
minus (b) such Lender's Revolving Extensions of Credit; provided, that
in calculating any Lender's Revolving Extensions of Credit for the
purpose of determining such Lender's Available Revolving Credit
Commitment pursuant to Section 2.8(a), the aggregate principal amount of
Swing Line Loans then outstanding shall be deemed to be zero.

"Board": the Board of Governors of the Federal Reserve System of
the United States (or any successor).

"Borrowing Date": any Business Day specified by the Borrower as
a date on which the Borrower requests the Lenders to make Loans
hereunder.

"Bumble Bee": Bumble Bee Seafoods, Inc., a Delaware corporation.

"Bumble Bee Acquisition": as defined in Section 5.3(b).

"Bumble Bee Confidential Information Memorandum": the
Confidential Information Memorandum dated June 1997 and furnished to the
Lenders in connection with the amendment and restatement of the Existing
Credit Agreement.

"Bumble Bee Pro Forma Financial Statements": as defined in
Section 4.1(a)(ii).

"Bumble Bee Purchase Agreement": the Asset Purchase and Sale
Agreement, dated as of May 1, 1997, among Bumble Bee, Bumble Bee
International, Inc., Commerce Distributing Company and Santa Fe Springs
Holding Company, as sellers, the Borrower and Bumble Bee Acquisition
Corporation, as buyer.

"Business": as defined in Section 4.17.

"Business Day": a day other than a Saturday, Sunday or other day
on which commercial banks in New York City are authorized or required by
law to close.

4
<PAGE> 11
"Buyer": AHFP Holding Corporation, a Delaware corporation.

"Canadian Subsidiary": any Subsidiary of the Borrower organized
under the laws of Canada (or any jurisdiction therein).

"Canadian Subsidiary Equivalent Outstandings": as defined in
Section 7.2(h).

"Capital Expenditures": for any period, with respect to any
Person, the aggregate of all expenditures by such Person and its
Subsidiaries for the acquisition or leasing (pursuant to a capital
lease) of fixed or capital assets or additions to equipment (including
replacements, capitalized repairs and improvements during such period)
which should be capitalized under GAAP on a consolidated balance sheet
of such Person and its Subsidiaries.

"Capital Lease Obligations": as to any Person, the obligations
of such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under
GAAP and, for the purposes of this Agreement, the amount of such
obligations at any time shall be the capitalized amount thereof at such
time determined in accordance with GAAP.

"Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person
(other than a corporation) and any and all warrants, rights or options
to purchase any of the foregoing.

"Cash Equivalents": (a) marketable direct obligations issued by,
or unconditionally guaranteed by, the United States Government or issued
by any agency thereof and backed by the full faith and credit of the
United States, in each case maturing within one year from the date of
acquisition; (b) certificates of deposit, time deposits, eurodollar time
deposits or overnight bank deposits having maturities of six months or
less from the date of acquisition issued by any Lender or by any
commercial bank organized under the laws of the United States of America
or any state thereof having combined capital and surplus of not less
than $250,000,000; (c) commercial paper of an issuer rated at least A-2
by Standard & Poor's Ratings Services or P-2 by Moody's Investors
Service, Inc., or carrying an equivalent rating by a nationally
recognized rating agency, if both of the two named rating agencies cease
publishing ratings of commercial paper issuers generally, and maturing
within six months from the date of acquisition; (d) money market
accounts or funds with or issued by Qualified Issuers; and (e)
repurchase obligations with a term of not more than 90 days for
underlying securities of the types described in clause (a) above entered
into with any bank meeting the qualifications specified in clause (b)
above.

"C/D Assessment Rate": for any day as applied to any ABR Loan,
the annual assessment rate in effect on such day which is payable by a
member of the Bank Insurance

5
<PAGE> 12
Fund maintained by the Federal Deposit Insurance Corporation (the
"FDIC") classified as well-capitalized and within supervisory subgroup
"B" (or a comparable successor assessment risk classification) within
the meaning of 12 C.F.R. Part 327 (or any successor provision) to the
FDIC (or any successor) for the FDIC's (or such successor's) insuring
time deposits at offices of such institution in the United States.

"C/D Reserve Percentage": for any day as applied to any ABR
Loan, that percentage (expressed as a decimal) which is in effect on
such day, as prescribed by the Board, for determining the maximum
reserve requirement for a Depositary Institution (as defined in
Regulation D of the Board as in effect from time to time) in respect of
new non-personal time deposits in Dollars having a maturity of 30 days
or more.

"Chase": The Chase Manhattan Bank.

"Closing Date": November 1, 1996.

"Code": the Internal Revenue Code of 1986, as amended from time
to time.

"Collateral": all Property of the Loan Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by any
Security Document.

"Commitment Fee Rate": 1/2 of 1% per annum; provided, that on
and after the first Adjustment Date occurring after the date that is six
months after the Amendment/Restatement Closing Date, the Commitment Fee
Rate will be determined pursuant to the Pricing Grid.

"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Borrower within the
meaning of Section 4001 of ERISA or is part of a group which includes
the Borrower and which is treated as a single employer under Section 414
of the Code.

"Compliance Certificate": a certificate duly executed by a
Responsible Officer substantially in the form of Exhibit B.

"Confidential Information Memorandum": the Confidential
Information Memorandum dated October 1996 and furnished to the Lenders.

"Consolidated Current Assets": at a particular date, all amounts
(other than cash and Cash Equivalents) which would, in conformity with
GAAP, be set forth opposite the caption "total current assets" (or any
like caption) on a consolidated balance sheet of the Borrower and its
Subsidiaries at such date.

6
<PAGE> 13
"Consolidated Current Liabilities": at a particular date, all
amounts which would, in conformity with GAAP, be set forth opposite the
caption "total current liabilities" (or any like caption) on a
consolidated balance sheet of the Borrower and its Subsidiaries at such
date, but excluding (a) the current portion of any Funded Debt of the
Borrower and its Subsidiaries, (b) without duplication of clause (a)
above, all Indebtedness consisting of Revolving Credit Loans or Swing
Line Loans to the extent otherwise included therein, (c) accrued
interest expense and (d) accrued income tax expense.

"Consolidated EBITDA": for any period, Consolidated Net Income
for such period plus, without duplication and to the extent reflected as
a charge in the statement of such Consolidated Net Income for such
period, the sum of (a) total income tax expense, (b) interest expense,
amortization or writeoff of debt discount and debt issuance costs and
commissions, discounts and other fees and charges associated with
Indebtedness (including the Loans), (c) depreciation and amortization
expense, (d) amortization of intangibles (including, but not limited to,
goodwill) and organization costs, (e) any extraordinary expenses or
losses (including, whether or not otherwise includable as a separate
item in the statement of such Consolidated Net Income for such period,
losses on sales of assets other than inventory sold in the ordinary
course of business) and (f) any other non-cash charges, and minus, to
the extent included in the statement of such Consolidated Net Income for
such period, the sum of (a) interest income, (b) any extraordinary
income or gains (including, whether or not otherwise includable as a
separate item in the statement of such Consolidated Net Income for such
period, gains on the sales of assets other than inventory sold in the
ordinary course of business) and (c) any other non-cash income, all as
determined on a consolidated basis.

"Consolidated Fixed Charge Coverage Ratio": for any period, the
ratio of (a) (i) Consolidated EBITDA for such period less (ii) the
lesser of (x) the aggregate amount actually paid by the Borrower and its
Subsidiaries in cash during such period on account of Capital
Expenditures (excluding (1) the principal amount of Indebtedness (other
than Loans) incurred in connection with such expenditures and (2)
Capital Expenditures made pursuant to Section 7.7(b)) and (y) if
applicable, the Scheduled Capital Expenditure Amount for such period to
(b) Consolidated Fixed Charges for such period.

"Consolidated Fixed Charges": for any period, the sum (without
duplication) of (a) Consolidated Interest Expense for such period, (b)
Consolidated Tax Expense for such period and (c) scheduled payments made
during such period on account of principal of Indebtedness of the
Borrower or any of its Subsidiaries (including the Term Loans).

"Consolidated Interest Coverage Ratio": for any period, the
ratio of (a) Consolidated EBITDA for such period to (b) Consolidated
Interest Expense for such period.

"Consolidated Interest Expense": for any period, total cash
interest expense (including that attributable to Capital Lease
Obligations), net of interest income, of the

7
<PAGE> 14
Borrower and its Subsidiaries for such period with respect to all
outstanding Indebtedness of the Borrower and its Subsidiaries
(including, without limitation, all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers'
acceptance financing and net costs under Interest Rate Protection
Agreements to the extent such net costs are allocable to such period in
accordance with GAAP).

"Consolidated Leverage Ratio": as at the last day of any period,
the ratio of (a) Consolidated Total Debt on such day to (b) Consolidated
EBITDA for such period.

"Consolidated Net Income": for any period, the consolidated net
income (or loss) of the Borrower and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP; provided that there shall be
excluded therefrom the income (or deficit) of any Person accrued prior
to the date it becomes a Subsidiary of the Borrower or is merged into or
consolidated with the Borrower or any of its Subsidiaries.

"Consolidated Tax Expense": for any period, provision for cash
income taxes made by the Borrower or any of its Subsidiaries for such
period on a consolidated basis.

"Consolidated Total Debt": at any date, the aggregate principal
amount of all Indebtedness (excluding (a) Indebtedness of the type
described in clause (d), (h) or (i) of the definition thereof to the
extent such Indebtedness would not appear on a consolidated balance
sheet of the Borrower and its Subsidiaries in accordance with GAAP, (b)
Indebtedness of the type described in clause (f) of the definition
thereof to the extent such Indebtedness consists of undrawn amounts in
respect of letter of credit facilities and (c) Trade Acceptances that
have payment terms of not more than 90 days from the date of
acceptance), net of cash and Cash Equivalents, of the Borrower and its
Subsidiaries at such date, determined on a consolidated basis in
accordance with GAAP.

"Consolidated Working Capital": the excess of Consolidated
Current Assets over Consolidated Current Liabilities.

"Continuing Directors": the directors of the Borrower on the
Closing Date, after giving effect to the Acquisitions and the other
transactions contemplated hereby, and each other director, if, in each
case, such other director's nomination for election to the board of
directors of the Borrower is recommended by a majority of the then
Continuing Directors or such other director receives the vote of the
Permitted Investors in his or her election by the shareholders of the
Borrower.

"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.

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<PAGE> 15
"Contributed Equity": (a) the proceeds of any capital
contribution made to the Borrower (or to a Parent and in turn
contributed to the Borrower) by any member of the Existing Investor
Group and (b) the proceeds of any private placement of Capital Stock of
the Borrower (or of a Parent and in turn contributed to the Borrower)
consummated after the Closing Date, provided, that the aggregate amount
of proceeds of sales of Capital Stock to Persons other than members of
the Existing Investor Group that may be included in "Contributed Equity"
pursuant to this clause (b) shall not exceed $25,000,000 during the
period from the Closing Date to the first anniversary thereof and shall
not exceed $50,000,000 during the term of this Agreement. As used in
this definition, (i) "Existing Investor Group" refers to any Permitted
Investor (other than any Parent), AHP or any of its Affiliates or any
Person that owns Capital Stock of the Buyer on the Closing Date or that
acquires Capital Stock of the Buyer within 60 days after the Closing
Date and (ii) "Parent" refers to the Buyer or any other direct or
indirect holding company parent of the Borrower.

"Default": any of the events specified in Section 8, whether or
not any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.

"Disposition": with respect to any Property, any sale, lease,
sale and leaseback, assignment, conveyance, transfer or other
disposition thereof; and the terms "Dispose" and "Disposed of" shall
have correlative meanings.

"Dollars" and "$": lawful currency of the United States of
America.

"Domestic Subsidiary": any Subsidiary of the Borrower organized
under the laws of any jurisdiction within the United States of America.

"ECF Percentage": 75%; provided, that, with respect to each
fiscal year of the Borrower ending on or after December 31, 1998, the
ECF Percentage shall be reduced to 50% if the Consolidated Leverage
Ratio as of the last day of such fiscal year is not greater than 4.50 to
1.0.

"Environmental Laws": any and all foreign, Federal, state, local
or municipal laws, rules, orders, regulations, statutes, ordinances,
codes, decrees, requirements of any Governmental Authority or other
Requirements of Law (including common law) regulating, relating to or
imposing liability or standards of conduct concerning protection of
human health or the environment, as now or may at any time hereafter be
in effect.

"Equity Financing Proceeds": any Contributed Equity used to
finance any Capital Expenditure made pursuant to Section 7.7(b) or any
investment made pursuant to Section 7.8(h).

"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.

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<PAGE> 16
"Eurocurrency Reserve Requirements": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on
such day (including, without limitation, basic, supplemental, marginal
and emergency reserves under any regulations of the Board or other
Governmental Authority having jurisdiction with respect thereto) dealing
with reserve requirements prescribed for eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in Regulation D of the Board)
maintained by a member bank of the Federal Reserve System.

"Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum
equal to the rate at which Chase is offered Dollar deposits at or about
10:00 A.M., New York City time, two Business Days prior to the beginning
of such Interest Period in the interbank eurodollar market where the
eurodollar and foreign currency and exchange operations in respect of
its Eurodollar Loans are then being conducted for delivery on the first
day of such Interest Period for the number of days comprised therein and
in an amount comparable to the amount of its Eurodollar Loans to be
outstanding during such Interest Period.

"Eurodollar Loans": Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.

"Eurodollar Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to the
nearest 1/100th of 1%):

Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements

"Eurodollar Tranche": the collective reference to Eurodollar
Loans the then current Interest Periods with respect to all of which
begin on the same date and end on the same later date (whether or not
such Loans shall originally have been made on the same day).

"Event of Default": any of the events specified in Section 8,
provided that any requirement for the giving of notice, the lapse of
time, or both, has been satisfied.

"Excess Cash Flow": for any fiscal year of the Borrower, the
excess, if any, of (a) the sum, without duplication, of (i) Consolidated
EBITDA for such fiscal year, (ii) decreases in Consolidated Working
Capital for such fiscal year, (iii) the amount of any refund received by
the Borrower and its Subsidiaries during such fiscal year on taxes paid
by the Borrower and its Subsidiaries, (iv) cash dividends, cash interest
and other similar cash payments received by the Borrower during such
fiscal year in respect of investments to the extent not included in
Consolidated Net Income to determine Consolidated EBITDA for such fiscal
year, (v) any purchase price adjustments paid to the Borrower or any of
its Subsidiaries during such fiscal year pursuant to the Acquisition
Agreement or the Bumble Bee Purchase

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<PAGE> 17
Agreement, and (vi) extraordinary cash gains to the extent subtracted or
otherwise not included in Consolidated Net Income to determine
Consolidated EBITDA for such fiscal year over (b) the sum, without
duplication, of (i) the aggregate amount actually paid by the Borrower
and its Subsidiaries in cash during such fiscal year on account of
Capital Expenditures (excluding (x) the principal amount of Indebtedness
incurred in connection with such expenditures and (y) any such
expenditures made pursuant to Section 7.7(b) except, in the case of this
clause (y), to the extent that the amounts used to make such
expenditures were included in determining Consolidated EBITDA for such
fiscal year), (ii) the aggregate amount of all prepayments of Revolving
Credit Loans and Swing Line Loans during such fiscal year to the extent
accompanying permanent optional reductions of the Revolving Credit
Commitments and all optional prepayments of the Term Loans during such
fiscal year, (iii) the aggregate amount of all regularly scheduled
principal payments of Funded Debt (including, without limitation, the
Term Loans) of the Borrower and its Subsidiaries made during such fiscal
year (other than in respect of any revolving credit facility to the
extent there is not an equivalent permanent reduction in commitments
thereunder), (iv) increases in Consolidated Working Capital for such
fiscal year, (v) cash interest expense of the Borrower and its
Subsidiaries for such fiscal year, (vi) cash taxes actually paid in such
fiscal year or to be paid in the subsequent fiscal year on account of
such fiscal year to the extent added to Consolidated Net Income to
determine Consolidated EBITDA for such fiscal year, (vii) the amount of
all loans and advances made in such fiscal year pursuant to Section
7.8(d) (net of any repayments of such loans and advances made during
such fiscal year), (viii) the amount of all investments made in such
fiscal year pursuant to Section 7.8(n), (ix) the amount of all deposits
required to be made by the Borrower or any of its Subsidiaries during
such fiscal year in connection with investments made pursuant to Section
7.8(l) (net of any amounts returned in respect of such deposits during
such fiscal year), (x) dividends paid by the Borrower during such fiscal
year in accordance with Section 7.6 to the extent not subtracted in the
determination of Consolidated Net Income of the Borrower for such fiscal
year, (xi) previously expensed royalty payments made during such fiscal
year to the extent not subtracted in the determination of Consolidated
Net Income of the Borrower for such fiscal year, (xii) any purchase
price adjustments paid by the Borrower or any of its Subsidiaries during
such fiscal year pursuant to the Acquisition Agreement or the Bumble Bee
Purchase Agreement, and (xiii) extraordinary cash losses to the extent
added to Consolidated Net Income to determine Consolidated EBITDA for
such fiscal year.

"Excess Cash Flow Application Date": as defined in Section
2.11(c).

"Excluded Foreign Subsidiaries": any Foreign Subsidiary the
pledge of all of whose Capital Stock as Collateral would, in the good
faith judgment of the Borrower, result in adverse tax consequences to
the Borrower.

"Facility": each of (a) the extensions of credit made hereunder
in the form of Tranche A Term Loans (the "Tranche A Term Loan
Facility"), (b) the extensions of credit made

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<PAGE> 18
hereunder in the form of Tranche B Term Loans (the "Tranche B Term Loan
Facility") and (c) the Revolving Credit Commitments and the extensions
of credit made thereunder (the "Revolving Credit Facility").

"Federal Funds Effective Rate": as defined in the definition of
"ABR".

"Foreign Subsidiary": any Subsidiary of the Borrower that is not
a Domestic Subsidiary.

"Funded Debt": as to any Person, all Indebtedness of such Person
that matures more than one year from the date of its creation or matures
within one year from such date but is renewable or extendible, at the
option of such Person, to a date more than one year from such date or
arises under a revolving credit or similar agreement that obligates the
lender or lenders to extend credit during a period of more than one year
from such date, including, without limitation, all current maturities
and current sinking fund payments in respect of such Indebtedness
whether or not required to be paid within one year from the date of its
creation and, in the case of the Borrower, Indebtedness in respect of
the Loans.

"GAAP": generally accepted accounting principles in the United
States of America as in effect from time to time set forth in the
opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and the statements
and pronouncements of the Financial Accounting Standards Board and the
rules and regulations of the Securities and Exchange Commission, or in
such other statements by such other entity as may be in general use by
significant segments of the accounting profession, which are applicable
to the circumstances of the Borrower as of the date of determination,
except that for purposes of Section 7.1, GAAP shall be determined on the
basis of such principles in effect on the Amendment/Restatement Closing
Date and consistent with those used in the preparation of the audited
financial statements of the AHP Food Business or Heritage, as the case
may be, in respect of the fiscal year ended December 31, 1995 delivered
pursuant to Section 4.1(b) (or, to the extent applicable to Bumble Bee
and its Subsidiaries, on the basis of such principles in effect on the
Amendment/Restatement Closing Date and consistent with those used in the
preparation of the audited financial statements of Bumble Bee in respect
of the fiscal year ended December 31, 1996 delivered pursuant to Section
4.1(b)). In the event that any "Accounting Change" (as defined below)
shall occur and such change results in a change in the method of
calculation of financial covenants, standards or terms in this
Agreement, then the Borrower and the Administrative Agent agree to enter
into negotiations in order to amend such provisions of this Agreement so
as to equitably reflect such Accounting Changes with the desired result
that the criteria for evaluating the Borrower's financial condition
shall be the same after such Accounting Changes as if such Accounting
Changes had not been made. Until such time as such an amendment shall
have been executed and delivered by the Borrower, the Administrative
Agent and the Required Lenders, all financial covenants, standards and
terms in this Agreement shall continue to be calculated or construed as
if such Accounting Changes had

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<PAGE> 19
not occurred. "Accounting Changes" refers to changes in accounting
principles required by the promulgation of any rule, regulation,
pronouncement or opinion by the Financial Accounting Standards Board of
the American Institute of Certified Public Accountants or, if
applicable, the Securities and Exchange Commission (or successors
thereto or agencies with similar functions).

"Governmental Authority": any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.

"Guarantee and Collateral Agreement": the Guarantee and
Collateral Agreement to be executed and delivered by the Borrower and
each Subsidiary Guarantor, substantially in the form of Exhibit A, as
the same may be amended, supplemented or otherwise modified from time to
time.

"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another
Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which the guaranteeing person has
issued a reimbursement, counterindemnity or similar obligation, in
either case guaranteeing or in effect guaranteeing any Indebtedness,
leases, dividends or other obligations (the "primary obligations") of
any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation of
the guaranteeing person, whether or not contingent, (i) to purchase any
such primary obligation or any property constituting direct or indirect
security therefor, (ii) to advance or supply funds (1) for the purchase
or payment of any such primary obligation or (2) to maintain working
capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation or (iv)
otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the
term Guarantee Obligation shall not include endorsements of instruments
for deposit or collection in the ordinary course of business. The
amount of any Guarantee Obligation of any guaranteeing person shall be
deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Guarantee Obligation is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person may
be liable are not stated or determinable, in which case the amount of
such Guarantee Obligation shall be such guaranteeing person's maximum
reasonably anticipated liability in respect thereof as determined by the
Borrower in good faith.

"Heritage": Heritage Brands Holdings, Inc., a Delaware
corporation.

13
<PAGE> 20
"Heritage Acquisition": as defined in Section 5.1(b).

"Hicks Muse": Hicks, Muse, Tate & Furst Incorporated.

"HM Equity": as defined in Section 5.1(b).

"Incremental Term Loans": as defined in Section 2.1.

"Incur": as defined in Section 7.2; and the term "Incurrence"
shall have a correlative meaning.

"Indebtedness": of any Person at any date, without duplication,
(a) all indebtedness of such Person for borrowed money, (b) all
obligations of such Person for the deferred purchase price of property
or services (other than current trade payables and accrued expenses
incurred in the ordinary course of such Person's business), (c) all
obligations of such Person evidenced by notes, bonds, debentures or
other similar instruments, (d) all indebtedness created or arising under
any conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of
the seller or lender under such agreement in the event of default are
limited to repossession or sale of such property), (e) all Capital Lease
Obligations of such Person, (f) all obligations of such Person,
contingent or otherwise, as an account party under acceptance, letter of
credit or similar facilities, (g) indebtedness incurred in connection
with any Receivables Facility, (h) all Guarantee Obligations of such
Person in respect of obligations of the kind referred to in clauses (a)
through (g) above and (i) all obligations of the kind referred to in
clauses (a) through (h) above secured by (or for which the holder of
such obligation has an existing right, contingent or otherwise, to be
secured by) any Lien on property (including, without limitation,
accounts and contract rights) owned by such Person, whether or not such
Person has assumed or become liable for the payment of such obligation.

"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245
of ERISA.

"Insolvent": pertaining to a condition of Insolvency.

"Initial Public Offering": an underwritten public offering by
the Borrower of Capital Stock of the Borrower pursuant to a registration
statement filed with the Securities and Exchange Commission in
accordance with the Securities Act of 1933, as amended.

"Intellectual Property": as defined in Section 4.9.

"Interest Payment Date": (a) as to any ABR Loan, the last day of
each March, June, September and December to occur while such Loan is
outstanding, (b) as to any Eurodollar Loan having an Interest Period of
three months or less, the last day of such Interest Period,

14
<PAGE> 21
(c) as to any Eurodollar Loan having an Interest Period longer than
three months, each day which is three months, or a whole multiple
thereof, after the first day of such Interest Period and the last day of
such Interest Period and (d) as to any Loan, the date of repayment
thereof at final stated maturity.

"Interest Period": as to any Eurodollar Loan, (a) initially, the
period commencing on the borrowing or conversion date, as the case may
be, with respect to such Eurodollar Loan and ending one, two, three, six
or (if available to all Lenders under the relevant Facility) nine or
twelve months thereafter, as selected by the Borrower in its notice of
borrowing or notice of conversion, as the case may be, given with
respect thereto; and (b) thereafter, each period commencing on the last
day of the next preceding Interest Period applicable to such Eurodollar
Loan and ending one, two, three, six or (if available to all Lenders
under the relevant Facility) nine or twelve months thereafter, as
selected by the Borrower by irrevocable notice to the Administrative
Agent not less than three Business Days prior to the last day of the
then current Interest Period with respect thereto; provided that, all of
the foregoing provisions relating to Interest Periods are subject to the
following:

(i) if any Interest Period would otherwise end on a day
that is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless the result of
such extension would be to carry such Interest Period into
another calendar month in which event such Interest Period shall
end on the immediately preceding Business Day;

(ii) any Interest Period that would otherwise extend
beyond the Revolving Credit Termination Date or beyond the date
final payment is due on the Tranche A Term Loans or the Tranche B
Term Loans, as the case may be, shall end on the Revolving Credit
Termination Date or such due date, as applicable;

(iii) any Interest Period that begins on the last Business
Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of
such Interest Period) shall end on the last Business Day of a
calendar month; and

(iv) the Borrower shall select Interest Periods so as not
to require a payment or prepayment of any Eurodollar Loan during
an Interest Period for such Loan.

"Interest Rate Protection Agreement": any interest rate
protection agreement, interest rate futures contract, interest rate
option, interest rate cap or other interest rate hedge arrangement, to
or under which the Borrower or any of its Subsidiaries is a party or a
beneficiary on the Closing Date or becomes a party or a beneficiary
after the Closing Date.

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<PAGE> 22
"Issuing Lender": Chase or any of its affiliates or, with the
approval of the Administrative Agent, any of the other Lenders which
chooses to be an Issuing Lender, in its capacity as issuer of any Letter
of Credit.

"L/C Commitment": $30,000,000.

"L/C Fee Payment Date": the last day of each March, June,
September and December and the last day of the Revolving Credit
Commitment Period.

"L/C Obligations": at any time, an amount equal to the sum of
(a) the aggregate then undrawn and unexpired amount of the then
outstanding Letters of Credit and (b) the aggregate amount of drawings
under Letters of Credit which have not then been reimbursed pursuant to
Section 3.5.

"L/C Participants": with respect to any Letter of Credit, the
collective reference to all the Revolving Credit Lenders other than the
Issuing Lender that issued such Letter of Credit.

"Letters of Credit": as defined in Section 3.1(a).

"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title
retention agreement and any capital lease having substantially the same
economic effect as any of the foregoing).

"Loan": any loan made by any Lender pursuant to this Agreement.

"Loan Documents": this Agreement, the Security Documents and the
Notes.

"Loan Parties": the Borrower and each Subsidiary of the Borrower
which is a party to a Loan Document.

"Majority Facility Lenders": with respect to any Facility, the
holders of not less than 51% of the aggregate unpaid principal amount of
the Term Loans or the Total Revolving Extensions of Credit, as the case
may be, outstanding under such Facility (or, in the case of the
Revolving Credit Facility, prior to any termination of the Revolving
Credit Commitments, the holders of not less than 51% of the aggregate
Revolving Credit Commitments).

"Majority Revolving Credit Facility Lenders": the Majority
Facility Lenders in respect of the Revolving Credit Facility.

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<PAGE> 23
"Material Adverse Effect": a material adverse effect on (a) the
business, assets, property, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole or (b)
the validity or enforceability of this Agreement or any of the other
Loan Documents or the rights or remedies of the Administrative Agent or
the Lenders hereunder or thereunder.

"Materials of Environmental Concern": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or
any hazardous or toxic substances, materials or wastes, defined or
regulated as such in or under any Environmental Law, including, without
limitation, asbestos, polychlorinated biphenyls and urea-formaldehyde
insulation.

"Merger": as defined in Section 5.1(b).

"Merger Sub": AHFP Acquisition Corporation, a Delaware
corporation.

"Mortgaged Properties": the real properties listed on Schedule
1.1B or Schedule 1.1D, as to which the Administrative Agent for the
benefit of the Lenders shall be granted a Lien pursuant to the
Mortgages.

"Mortgages": each of the mortgages and deeds of trust made by
any Loan Party in favor of, or for the benefit of, the Administrative
Agent for the benefit of the Lenders, substantially in the form of
Exhibit D-1 or D-2, as the case may be (with such changes thereto as
shall be advisable under the law of the jurisdiction in which such
mortgage or deed of trust is to be recorded), as the same may be
amended, supplemented or otherwise modified from time to time.

"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.

"Net Cash Proceeds": (a) in connection with any Asset Sale or
any Recovery Event, the proceeds thereof in the form of cash and Cash
Equivalents (including any such proceeds received by way of deferred
payment of principal pursuant to a note or installment receivable or
purchase price adjustment receivable or otherwise, but only as and when
received) of such Asset Sale or Recovery Event, net of attorneys' fees,
accountants' fees, investment banking fees, survey costs, title
insurance premiums, amounts required to be applied to the repayment of
Indebtedness secured by a Lien expressly permitted hereunder on any
asset which is the subject of such Asset Sale or Recovery Event (other
than any Lien pursuant to a Security Document) and other customary fees
and expenses actually incurred in connection therewith, net of taxes
paid or reasonably estimated to be payable as a result thereof (after
taking into account any available tax credits or deductions and any tax
sharing arrangements) and net of purchase price adjustments reasonably
expected to be payable in connection therewith and

17
<PAGE> 24
(b) in connection with any issuance or sale of equity securities or debt
securities or instruments or the incurrence of loans, the cash proceeds
received from such issuance or incurrence, net of attorneys' fees,
investment banking fees, accountants' fees, underwriting discounts and
commissions and other customary fees and expenses actually incurred in
connection therewith, provided that, with respect to any issuance or
sale of debt securities or instruments as described in this clause (b),
to the extent that such cash proceeds are used to refinance any
Indebtedness permitted by this Agreement, then such cash proceeds shall
not constitute "Net Cash Proceeds" for the purpose of this Agreement.

"Non-Excluded Taxes": as defined in Section 2.19(a).

"Non-U.S. Lender": as defined in Section 2.19(b).

"Notes": the collective reference to the Tranche A Term Notes,
the Tranche B Term Notes, the Revolving Credit Notes and the Swing Line
Note.

"Obligations": the unpaid principal of and interest on
(including, without limitation, interest accruing after the maturity of
the Loans and Reimbursement Obligations and interest accruing after the
filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to the Borrower,
whether or not a claim for post-filing or post-petition interest is
allowed in such proceeding) the Loans and all other obligations and
liabilities of the Borrower to the Administrative Agent or to any Lender
(or, in the case of Interest Rate Protection Agreements, any affiliate
of any Lender), whether direct or indirect, absolute or contingent, due
or to become due, or now existing or hereafter incurred, which may arise
under, out of, or in connection with, this Agreement, any other Loan
Document, the Letters of Credit, any Interest Rate Protection Agreement
entered into with any Lender or any affiliate of any Lender or any other
document made, delivered or given in connection herewith or therewith,
whether on account of principal, interest, reimbursement obligations,
fees, indemnities, costs, expenses (including, without limitation, all
fees, charges and disbursements of counsel to the Administrative Agent
or to any Lender that are required to be paid by the Borrower pursuant
hereto) or otherwise.

"Participant": as defined in Section 10.6(b).

"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).

"Permitted Investors": the collective reference to Hicks Muse
and its Affiliates and principals.

"Permitted Issuance": (a) the issuance by the Borrower of shares
of Capital Stock as dividends on issued and outstanding Capital Stock of
the same class of the Borrower or pursuant to any dividend reinvestment
plan, (b) the issuance by the Borrower of options or

18
<PAGE> 25
other equity securities of the Borrower to outside directors, members of
management or employees of the Borrower or any Subsidiary of the
Borrower, (c) the issuance of securities as interest or dividends on
pay-in-kind debt or preferred equity securities permitted hereunder and
under the Security Documents, (d) the issuance to the Borrower or any
Subsidiary (or any director, with respect to directors' qualifying
shares) by any Subsidiary of the Borrower of any of its Capital Stock,
in each case with respect to this clause (d) to the extent such Capital
Stock is pledged to the Administrative Agent for the benefit of the
Lenders pursuant to the Guarantee and Collateral Agreement (provided,
that only 65% of the Capital Stock of an Excluded Foreign Subsidiary is
required to be so pledged) and (e) the issuance of Contributed Equity.

"Person": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or
other entity of whatever nature.

"Plan": at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.

"Pricing Grid": the pricing grid attached hereto as Annex A.

"Prime Rate": as defined in the definition of "ABR".

"Pro Forma Balance Sheet": as defined in Section 4.1(a)(i).

"Projections": as defined in Section 6.2(c).

"Properties": as defined in Section 4.17.

"Property": any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or
intangible, including, without limitation, Capital Stock.

"Qualified Issuer": any commercial bank (a) which has capital
and surplus in excess of $250,000,000 and (b) the outstanding long-term
debt securities of which are rated at least A-2 by Standard & Poor's
Ratings Services or at least P-2 by Moody's Investors Service, Inc., or
carry an equivalent rating by a nationally recognized rating agency if
both of the two named rating agencies cease publishing ratings of
investments.

"Receivables Facility": one or more non-recourse receivables
facilities providing for the sale, encumbrance or other Disposition, at
any time or from time to time, of all or a portion of the accounts
receivable of the Borrower or any of its Subsidiaries.

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<PAGE> 26
"Receivables Facility Assets": accounts receivable and related
ancillary rights, including, without limitation, any security interests
or guarantees securing the payment of such receivables, of the Borrower
or any of its Subsidiaries, that are sold, encumbered or otherwise
Disposed of at any time or from time to time in connection with a
Receivables Facility.

"Receivables SPV": a special purpose company established by the
Borrower or any of its Subsidiaries and so existing solely for purposes
of a Receivables Facility.

"Recovery Event": any settlement of or payment in respect of any
property insurance or casualty insurance claim or any condemnation
proceeding relating to any Property of the Borrower or any of its
Subsidiaries, excluding any such settlement or payment which, together
with any related settlement or payment, yields gross proceeds to the
Borrower or any of its Subsidiaries of less than $1,000,000.

"Refunded Swing Line Loans": as defined in Section 2.7.

"Refunding Date": as defined in Section 2.7.

"Register": as defined in Section 10.6(d).

"Reimbursement Obligation": the obligation of the Borrower to
reimburse each Issuing Lender pursuant to Section 3.5 for amounts drawn
under Letters of Credit.

"Reinvestment Deferred Amount": with respect to any Reinvestment
Event, the aggregate Net Cash Proceeds received by the Borrower or any
of its Subsidiaries in connection therewith which are not applied to
prepay the Term Loans or reduce the Revolving Credit Commitments
pursuant to Section 2.11(b) as a result of the delivery of a
Reinvestment Notice.

"Reinvestment Event": any Asset Sale or Recovery Event in
respect of which the Borrower has delivered a Reinvestment Notice.

"Reinvestment Notice": a written notice executed by a
Responsible Officer stating that no Event of Default has occurred and is
continuing and that the Borrower (directly or indirectly through a
Subsidiary) intends and expects to use all or a specified portion of the
Net Cash Proceeds of an Asset Sale or Recovery Event to acquire assets
useful in its business.

"Reinvestment Prepayment Amount": with respect to any
Reinvestment Event, the Reinvestment Deferred Amount relating thereto
less any amount expended prior to the relevant Reinvestment Prepayment
Date to acquire assets useful in the Borrower's business.

20
<PAGE> 27
"Reinvestment Prepayment Date": with respect to any Reinvestment
Event, the earlier of (a) the date occurring six months after such
Reinvestment Event and (b) the date on which the Borrower shall have
determined not to, or shall have otherwise ceased to, acquire assets
useful in the Borrower's business with all or any portion of the
relevant Reinvestment Deferred Amount.

"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.

"Reportable Event": any of the events set forth in Section
4043(b) of ERISA, other than those events as to which the thirty day
notice period is waived under the regulations issued pursuant to Section
4043(b) of ERISA.

"Required Lenders": the holders of not less than 51% of the sum
of (a) the aggregate unpaid principal amount of the Term Loans and (b)
the aggregate Revolving Credit Commitments or, if the Revolving Credit
Commitments have been terminated, the Total Revolving Extensions of
Credit.

"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents
of such Person, and any law, treaty, rule or regulation (including,
without limitation, Environmental Laws) or determination of an
arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.

"Responsible Officer": the chief executive officer, the
president, any senior vice president, the chief financial officer or the
treasurer of the Borrower (including, in any event, any person who is an
officer of the Borrower and is named on the closing certificate
delivered by the Borrower on the Closing Date pursuant to Section 5.1(g)
whether or not such person holds any of the foregoing positions).

"Revolving Credit Commitment": as to any Lender, the obligation
of such Lender, if any, to make Revolving Credit Loans and participate
in Swing Line Loans and Letters of Credit, in an aggregate principal
and/or face amount not to exceed the amount set forth under the heading
"Revolving Credit Commitment" opposite such Lender's name on Schedule
1.1A or, on the Amendment/Restatement Closing Date, Schedule 1.1C, as
the same may be changed from time to time pursuant to the terms hereof.
The original aggregate amount of the Revolving Credit Commitments, as of
the Closing Date, was $100,000,000. The original aggregate amount of
the Revolving Credit Commitments, as of the Amendment/Restatement
Closing Date, is $140,000,000.

"Revolving Credit Commitment Period": the period from and
including the Closing Date to the Revolving Credit Termination Date.

21
<PAGE> 28
"Revolving Credit Facility": as defined in the definition of
"Facility".

"Revolving Credit Lender": each Lender which has a Revolving
Credit Commitment or which has made Revolving Credit Loans.

"Revolving Credit Loans": as defined in Section 2.4.

"Revolving Credit Note": any promissory note of the Borrower
evidencing Revolving Credit Loans.

"Revolving Credit Percentage": as to any Revolving Credit Lender
at any time, the percentage which such Lender's Revolving Credit
Commitment then constitutes of the aggregate Revolving Credit
Commitments (or, at any time after the Revolving Credit Commitments
shall have expired or terminated, the percentage which the aggregate
principal amount of such Lender's Revolving Credit Loans then
outstanding constitutes of the aggregate principal amount of the
Revolving Credit Loans then outstanding).

"Revolving Credit Termination Date": the earlier of (a) the
Scheduled Revolving Credit Termination Date and (b) the date on which
the Tranche A Term Loans shall be paid in full.

"Revolving Extensions of Credit": as to any Revolving Credit
Lender at any time, an amount equal to the sum of (a) the aggregate
principal amount of all Revolving Credit Loans made by such Lender then
outstanding, (b) such Lender's Revolving Credit Percentage of the L/C
Obligations then outstanding and (c) such Lender's Revolving Credit
Percentage of the aggregate principal amount of Swing Line Loans then
outstanding.

"Scheduled Capital Expenditure Amount": in connection with the
calculation of the Consolidated Fixed Charge Coverage Ratio as at the
end of any period of four consecutive fiscal quarters of the Borrower
ending on the last day of any fiscal quarter set forth below, the amount
set forth opposite such fiscal quarter:

<TABLE>
<CAPTION>
Fiscal Quarter Ending Amount
--------------------- -----------
<S> <C>
December 31, 1997 to December 31, 1998 $38,000,000
March 31, 1999 $39,250,000
June 30, 1999 $40,500,000
September 30, 1999 $41,750,000
December 31, 1999 and thereafter $43,000,000
</TABLE>

"Scheduled Revolving Credit Termination Date": March 31, 2003.

"Security Documents": the collective reference to the Guarantee
and Collateral Agreement, the Mortgages and all other security documents
hereafter delivered to the

22
<PAGE> 29
Administrative Agent granting a Lien on any Property of any Person to
secure the obligations and liabilities of any Loan Party under any Loan
Document.

"Sellers": the collective reference to AHP and AHP Holding.

"Senior Subordinated Note Indenture": the Indenture entered into
by the Borrower and certain of its Subsidiaries in connection with the
issuance of the Senior Subordinated Notes, together with all instruments
and other agreements entered into by the Borrower or such Subsidiaries
in connection therewith, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with Section 7.9.

"Senior Subordinated Notes": the subordinated notes of the
Borrower issued on the Closing Date pursuant to the Senior Subordinated
Note Indenture.

"Single Employer Plan": any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.

"Solvent": when used with respect to any Person, means that, as
of any date of determination, (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including,
without limitation, contingent liabilities, of such Person, (b) the
present fair salable value of the assets of such Person is not less than
the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured, (c) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and
liabilities mature, and (d) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction,
for which such Person's property would constitute an unreasonably small
capital.

"Specified Change of Control": a "Change of Control" as defined
in the Senior Subordinated Note Indenture.

"Subsequent Purchase": as defined in Section 5.1(b).

"Subsidiary": as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or
other ownership interests having ordinary voting power (other than stock
or such other ownership interests having such power only by reason of
the happening of a contingency) to elect a majority of the board of
directors or other managers of such corporation, partnership or other
entity are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries,
or both, by such Person. Unless otherwise qualified, all references to
a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a
Subsidiary or Subsidiaries of the Borrower.

23
<PAGE> 30
"Subsidiary Guarantor": each Subsidiary of the Borrower other
than any Excluded Foreign Subsidiary and any Receivables SPV.

"Swing Line Commitment": the obligation of the Swing Line Lender
to make Swing Line Loans pursuant to Section 2.6 in an aggregate
principal amount at any one time outstanding not to exceed $10,000,000.

"Swing Line Lender": as defined in Section 2.6.

"Swing Line Loans": as defined in Section 2.6.

"Swing Line Note": any promissory note of the Borrower
evidencing Swing Line Loans.

"Swing Line Participation Amount": as defined in Section 2.7.

"Term Loan Facilities": the collective reference to the Tranche
A Term Loan Facility and the Tranche B Term Loan Facility.

"Term Loan Lenders": the collective reference to the Tranche A
Term Loan Lenders and the Tranche B Term Loan Lenders.

"Term Loans": the collective reference to the Tranche A Term
Loans and the Tranche B Term Loans.

"Test Period": any period of four consecutive fiscal quarters of
the Borrower (or, if less, (a) in the case of financial covenant
calculations as of any date or for any period occurring or ending on or
prior to June 30, 1997, the number of full fiscal quarters of the
Borrower subsequent to the Closing Date and (b) in the case of financial
covenant calculations or calculations pursuant to the Pricing Grid as of
any date or for any period occurring or ending after June 30, 1997 and
on or prior to March 31, 1998, the number of full fiscal quarters of the
Borrower subsequent to June 30, 1997).

"Total Revolving Extensions of Credit": at any time, the
aggregate amount of the Revolving Extensions of Credit of the Revolving
Credit Lenders at such time.

"Trade Acceptances": any trade acceptance accepted by the
Borrower or any of its Subsidiaries in connection with purchases from
suppliers made in the ordinary course of business.

"Tranche A Term Loan": as defined in Section 2.1.

"Tranche A Term Loan Facility": as defined in the definition of
"Facility".

24
<PAGE> 31
"Tranche A Term Loan Lender": each Lender which has made a
Tranche A Term Loan.

"Tranche A Term Loan Percentage": as to any Tranche A Term Loan
Lender, the percentage which the principal amount of such Lender's
Tranche A Term Loan then outstanding constitutes of the aggregate
principal amount of the Tranche A Term Loans then outstanding.

"Tranche A Term Note": any promissory note of the Borrower
evidencing Tranche A Term Loans.

"Tranche B Term Loan": as defined in Section 2.1.

"Tranche B Term Loan Facility": as defined in the definition of
"Facility".

"Tranche B Term Loan Lender": each Lender which has made a
Tranche B Term Loan.

"Tranche B Term Loan Percentage": as to any Lender at any time,
the percentage which the principal amount of such Lender's Tranche B
Term Loan then outstanding constitutes of the aggregate principal amount
of the Tranche B Term Loans then outstanding.

"Tranche B Term Note": any promissory note of the Borrower
evidencing Tranche B Term Loans.

"Transferee": as defined in Section 10.6(g).

"Type": as to any Loan, its nature as an ABR Loan or a
Eurodollar Loan.

"Unapplied Excess Cash Flow": any Excess Cash Flow that is not
required to be applied toward the prepayment of the Term Loans and the
reduction of the Revolving Credit Commitments pursuant to Section
2.11(c), as determined on each Excess Cash Flow Application Date in
respect of the immediately preceding fiscal year of the Borrower.

"Uniform Customs": the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, as the same may be revised from time to time.

"Wholly Owned Subsidiary": as to any Person, any other Person
all of the Capital Stock of which (other than directors' qualifying
shares required by law) is owned by such Person directly and/or through
other Wholly Owned Subsidiaries.

25
<PAGE> 32
"Wholly Owned Subsidiary Guarantor": any Subsidiary Guarantor
that is a Wholly Owned Subsidiary of the Borrower.

1.2 Other Definitional Provisions. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in the other Loan Documents or any certificate or other
document made or delivered pursuant hereto or thereto.

(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to the Borrower and its Subsidiaries not defined in
Section 1.1 and accounting terms partly defined in Section 1.1, to the extent
not defined, shall have the respective meanings given to them under GAAP;
provided that, if the Borrower notifies the Administrative Agent that the
Borrower requests an amendment to any provision hereof to eliminate the effect
of any change occurring after the Closing Date in GAAP or in the application
thereof on the operation of such provision (or if the Administrative Agent
notifies the Borrower that the Required Lenders request an amendment to any
provision hereof for such purpose), regardless of whether any such notice is
given before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until such
notice shall have been withdrawn or such provision amended in accordance
herewith.

(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.

(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.

SECTION 2. AMOUNT AND TERMS OF LOANS

2.1 Term Loans. Subject to the terms and conditions hereof, (a)
each Tranche A Term Loan Lender severally agrees, on the Amendment/Restatement
Closing Date, to make and/or maintain outstanding, a term loan (a "Tranche A
Term Loan") to the Borrower and (b) each Tranche B Term Loan Lender severally
agrees, on the Amendment/Restatement Closing Date, to make and/or maintain
outstanding a term loan (a "Tranche B Term Loan") to the Borrower, in each case
in the respective amounts specified on Schedule 1.1C. A portion of the Tranche
B Term Loans to be so maintained by the Tranche B Term Loan Lenders represents
"Tranche C Term Loans" outstanding under the Existing Credit Agreement which
have been re-designated as Tranche B Term Loans for the purposes of this
Agreement. Term Loans made to the Borrower (rather than maintained) on the
Amendment/Restatement Closing Date are referred to herein as "Incremental Term
Loans". The aggregate outstanding principal amount of the Tranche A Term Loans
and the Tranche B Term Loans on the Amendment/Restatement Closing Date, after
giving effect to the making of the Incremental Term Loans, shall be
$367,500,000 and $369,500,000, respectively. The Term Loans

26
<PAGE> 33
may from time to time be Eurodollar Loans or ABR Loans, as determined by the
Borrower and notified to the Administrative Agent in accordance with Sections
2.2 and 2.12.

2.2 Procedure for Incremental Term Loan Borrowing. The Borrower
shall give the Administrative Agent irrevocable notice (which notice must be
received by the Administrative Agent prior to 10:00 A.M., New York City time,
one Business Day prior to the anticipated Amendment/Restatement Closing Date)
requesting that the Term Loan Lenders make the Incremental Term Loans on the
Amendment/Restatement Closing Date and specifying the amount to be borrowed.
The Incremental Term Loans made on the Amendment/Restatement Closing Date shall
initially be ABR Loans. Upon receipt of such notice the Administrative Agent
shall promptly notify each Term Loan Lender thereof. Not later than 12:00
Noon, New York City time, on the Amendment/Restatement Closing Date each Term
Loan Lender shall make available to the Administrative Agent at its office
specified in Section 10.2 an amount in immediately available funds equal to the
Incremental Term Loan or Incremental Term Loans to be made by such Lender. The
Administrative Agent shall credit the account of the Borrower on the books of
such office of the Administrative Agent with the aggregate of the amounts made
available to the Administrative Agent by the Term Loan Lenders in immediately
available funds.

2.3 Repayment of Term Loans. (a) The Tranche A Term Loan of
each Tranche A Lender shall mature in 12 consecutive semi-annual installments,
commencing on September 30, 1997, each of which shall be in an amount equal to
such Lender's Tranche A Term Loan Percentage multiplied by the amount set forth
below opposite such installment:

<TABLE>
<CAPTION>
Installment Principal Amount
----------- ----------------
<S> <C>
September 30, 1997 $16,000,000
March 31, 1998 19,000,000
September 30, 1998 19,000,000
March 31, 1999 25,500,000
September 30, 1999 25,500,000
March 31, 2000 32,000,000
September 30, 2000 32,000,000
March 31, 2001 35,000,000
September 30, 2001 38,500,000
March 31, 2002 38,500,000
September 30, 2002 41,500,000
March 31, 2003 45,000,000
</TABLE>

(b) The Tranche B Term Loan of each Tranche B Lender shall
mature in 15 consecutive semi-annual installments, commencing on September 30,
1997, each of which shall be in an amount equal to such Lender's Tranche B Term
Loan Percentage multiplied by the amount set forth below opposite such
installment:

27
<PAGE> 34
<TABLE>
<CAPTION>
Installment Principal Amount
----------- ----------------
<S> <C>
September 30, 1997 $ 500,000
March 31, 1998 500,000
September 30, 1998 500,000
March 31, 1999 500,000
September 30, 1999 500,000
March 31, 2000 500,000
September 30, 2000 500,000
March 31, 2001 500,000
September 30, 2001 500,000
March 31, 2002 500,000
September 30, 2002 500,000
March 31, 2003 500,000
September 30, 2003 121,000,000
March 31, 2004 121,000,000
September 30, 2004 121,500,000
</TABLE>

2.4 Revolving Credit Commitments. (a) Subject to the
terms and conditions hereof, each Revolving Credit Lender severally agrees to
make revolving credit loans ("Revolving Credit Loans") to the Borrower from
time to time during the Revolving Credit Commitment Period in an aggregate
principal amount at any one time outstanding which, when added to such Lender's
Revolving Credit Percentage of the sum of (i) the L/C Obligations then
outstanding and (ii) the aggregate principal amount of the Swing Line Loans
then outstanding, does not exceed the amount of such Lender's Revolving Credit
Commitment. During the Revolving Credit Commitment Period the Borrower may use
the Revolving Credit Commitments by borrowing, prepaying the Revolving Credit
Loans in whole or in part, and reborrowing, all in accordance with the terms
and conditions hereof. The Revolving Credit Loans may from time to time be
Eurodollar Loans or ABR Loans, as determined by the Borrower and notified to
the Administrative Agent in accordance with Sections 2.5 and 2.12, provided
that no Revolving Credit Loan shall be made as a Eurodollar Loan after the day
that is one month prior to the Scheduled Revolving Credit Termination Date.

(b) The Borrower shall repay all outstanding Revolving Credit
Loans on the Revolving Credit Termination Date.

2.5 Procedure for Revolving Credit Borrowing. The Borrower may
borrow under the Revolving Credit Commitments during the Revolving Credit
Commitment Period on any Business Day, provided that the Borrower shall give
the Administrative Agent irrevocable notice (which notice must be received by
the Administrative Agent prior to 12:00 Noon, New York City time, (a) three
Business Days prior to the requested Borrowing Date, in the case of Eurodollar
Loans, or (b) one Business Day prior to the requested Borrowing Date, in the
case of ABR Loans), specifying (i) the amount and Type of Revolving Credit
Loans to be borrowed, (ii) the requested Borrowing Date and (iii) in the case
of Eurodollar Loans, the respective amounts of each such Type

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<PAGE> 35
of Loan and the respective lengths of the initial Interest Period therefor.
Each borrowing under the Revolving Credit Commitments shall be in an amount
equal to (x) in the case of ABR Loans, $1,000,000 or a whole multiple of
$500,000 in excess thereof (or, if the then aggregate Available Revolving
Credit Commitments are less than $1,000,000, such lesser amount) and (y) in the
case of Eurodollar Loans, $5,000,000 or a whole multiple of $1,000,000 in
excess thereof; provided, that the Swing Line Lender may request, on behalf of
the Borrower, borrowings under the Revolving Credit Commitments which are ABR
Loans in other amounts pursuant to Section 2.7. Upon receipt of any such
notice from the Borrower, the Administrative Agent shall promptly notify each
Revolving Credit Lender thereof. Each Revolving Credit Lender will make the
amount of its pro rata share of each borrowing available to the Administrative
Agent for the account of the Borrower at the office of the Administrative Agent
specified in Section 10.2 prior to 12:00 Noon, New York City time, on the
Borrowing Date requested by the Borrower in funds immediately available to the
Administrative Agent. Such borrowing will then be made available to the
Borrower by the Administrative Agent crediting the account of the Borrower on
the books of such office with the aggregate of the amounts made available to
the Administrative Agent by the Revolving Credit Lenders and in like funds as
received by the Administrative Agent.

2.6 Swing Line Commitment. (a) Subject to the terms and
conditions hereof, Chase (in such capacity, the "Swing Line Lender") agrees to
make a portion of the credit otherwise available to the Borrower under the
Revolving Credit Commitments from time to time during the Revolving Credit
Commitment Period by making swing line loans ("Swing Line Loans") to the
Borrower; provided that (i) the aggregate principal amount of Swing Line Loans
outstanding at any time shall not exceed the Swing Line Commitment then in
effect (notwithstanding that the Swing Line Loans outstanding at any time, when
aggregated with the Swing Line Lender's other outstanding Revolving Credit
Loans hereunder, may exceed the Swing Line Commitment then in effect) and (ii)
the Borrower shall not request, and the Swing Line Lender shall not make, any
Swing Line Loan if, after giving effect to the making of such Swing Line Loan,
the aggregate amount of the Available Revolving Credit Commitments would be
less than zero. During the Revolving Credit Commitment Period, the Borrower
may use the Swing Line Commitment by borrowing, repaying and reborrowing, all
in accordance with the terms and conditions hereof. Swing Line Loans shall be
ABR Loans only.

(b) The Borrower shall repay all outstanding Swing Line Loans on
the Revolving Credit Termination Date.

2.7 Procedure for Swing Line Borrowing; Refunding of Swing Line
Loans. (a) Whenever the Borrower desires that the Swing Line Lender make
Swing Line Loans it shall give the Swing Line Lender irrevocable telephonic
notice confirmed promptly in writing (which telephonic notice must be received
by the Swing Line Lender not later than 1:00 P.M., New York City time, on the
proposed Borrowing Date), specifying (i) the amount to be borrowed and (ii) the
requested Borrowing Date (which shall be a Business Day during the Revolving
Credit Commitment Period). Each borrowing under the Swing Line Commitment
shall be in an amount equal to $250,000 or a whole multiple of $100,000 in
excess thereof. Not later than 3:00 P.M., New York City time, on the

29
<PAGE> 36
Borrowing Date specified in a notice in respect of Swing Line Loans, the Swing
Line Lender shall make available to the Administrative Agent at its office
specified in Section 10.2 an amount in immediately available funds equal to the
amount of the Swing Line Loan to be made by the Swing Line Lender. The
Administrative Agent shall make the proceeds of such Swing Line Loan available
to the Borrower on such Borrowing Date by depositing such proceeds in the
account of the Borrower with the Administrative Agent on such Borrowing Date in
immediately available funds.

(b) The Swing Line Lender, at any time and from time to time in
its sole and absolute discretion may, on behalf of the Borrower (which hereby
irrevocably directs the Swing Line Lender to act on its behalf), on one
Business Day's notice given by the Swing Line Lender no later than 12:00 Noon,
New York City time, request each Revolving Credit Lender to make, and each
Revolving Credit Lender hereby agrees to make, a Revolving Credit Loan, in an
amount equal to such Revolving Credit Lender's Revolving Credit Percentage of
the aggregate amount of the Swing Line Loans (the "Refunded Swing Line Loans")
outstanding on the date of such notice, to repay the Swing Line Lender. Each
Revolving Credit Lender shall make the amount of such Revolving Credit Loan
available to the Administrative Agent at its office set forth in Section 10.2
in immediately available funds, not later than 10:00 A.M., New York City time,
one Business Day after the date of such notice. The proceeds of such Revolving
Credit Loans shall be immediately applied by the Swing Line Lender to repay the
Refunded Swing Line Loans. The Borrower irrevocably authorizes the Swing Line
Lender to charge the Borrower's accounts with the Administrative Agent (up to
the amount available in each such account) in order to immediately pay the
amount of such Refunded Swing Line Loans to the extent amounts received from
the Revolving Credit Lenders are not sufficient to repay in full such Refunded
Swing Line Loans.

(c) If prior to the time a Revolving Credit Loan would have
otherwise been made pursuant to Section 2.7(b), one of the events described in
Section 8(f) shall have occurred and be continuing with respect to the Borrower
or if for any other reason, as determined by the Swing Line Lender in its sole
discretion, Revolving Credit Loans may not be made as contemplated by Section
2.7(b), each Revolving Credit Lender shall, on the date such Revolving Credit
Loan was to have been made pursuant to the notice referred to in Section 2.7(b)
(the "Refunding Date"), purchase for cash an undivided participating interest
in an amount equal to (i) its Revolving Credit Percentage times (ii) the
aggregate principal amount of Swing Line Loans then outstanding which were to
have been repaid with such Revolving Credit Loans (the "Swing Line
Participation Amount").

(d) Whenever, at any time after the Swing Line Lender has
received from any Revolving Credit Lender such Lender's Swing Line
Participation Amount, the Swing Line Lender receives any payment on account of
the Swing Line Loans, the Swing Line Lender will distribute to such Lender its
Swing Line Participation Amount (appropriately adjusted, in the case of
interest payments, to reflect the period of time during which such Lender's
participating interest was outstanding and funded and, in the case of principal
and interest payments, to reflect such Lender's pro rata portion of such
payment if such payment is not sufficient to pay the principal of and interest
on all Swing Line Loans then due); provided, however, that in the event that
such payment received

30
<PAGE> 37
by the Swing Line Lender is required to be returned, such Revolving Credit
Lender will return to the Swing Line Lender any portion thereof previously
distributed to it by the Swing Line Lender.

(e) Each Revolving Credit Lender's obligation to make the Loans
referred to in Section 2.7(b) and to purchase participating interests pursuant
to Section 2.7(c) shall be absolute and unconditional and shall not be affected
by any circumstance, including, without limitation, (i) any setoff,
counterclaim, recoupment, defense or other right which such Revolving Credit
Lender or the Borrower may have against the Swing Line Lender, the Borrower or
any other Person for any reason whatsoever; (ii) the occurrence or continuance
of a Default or an Event of Default or the failure to satisfy any of the other
conditions specified in Section 5; (iii) any adverse change in the condition
(financial or otherwise) of the Borrower; (iv) any breach of this Agreement or
any other Loan Document by the Borrower, any other Loan Party or any other
Revolving Credit Lender; or (v) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.

2.8 Commitment Fees, etc. (a) The Borrower agrees to pay to
the Administrative Agent for the account of each Revolving Credit Lender a
commitment fee for the period from and including the Closing Date to the last
day of the Revolving Credit Commitment Period, computed at the Commitment Fee
Rate on the average daily amount of the Available Revolving Credit Commitment
of such Lender during the period for which payment is made, payable quarterly
in arrears on the last day of each March, June, September and December and on
the Revolving Credit Termination Date, commencing on the first of such dates to
occur after the Closing Date.

(b) The Borrower agrees to pay to the Administrative Agent the
fees in the amounts and on the dates previously agreed to in writing by the
Borrower and the Administrative Agent.

2.9 Termination or Reduction of Revolving Credit Commitments.
The Borrower shall have the right, upon not less than three Business Days'
notice to the Administrative Agent, to terminate the Revolving Credit
Commitments or, from time to time, to reduce the amount of the Revolving Credit
Commitments; provided that no such termination or reduction of Revolving Credit
Commitments shall be permitted if, after giving effect thereto and to any
prepayments of the Revolving Credit Loans and Swing Line Loans made on the
effective date thereof, the Total Revolving Extensions of Credit would exceed
the Revolving Credit Commitments then in effect. Any such reduction shall be
in an amount equal to $1,000,000, or a whole multiple thereof, and shall reduce
permanently the Revolving Credit Commitments then in effect. Upon receipt of
any notice pursuant to this Section 2.9, the Administrative Agent shall
promptly notify each Revolving Credit Lender of the contents thereof.

2.10 Optional Prepayments. The Borrower may at any time and
from time to time prepay the Loans, in whole or in part, without premium or
penalty, upon irrevocable notice delivered to the Administrative Agent at least
three Business Days prior thereto in the case of Eurodollar Loans and at least
one Business Day prior thereto in the case of ABR Loans, which notice shall
specify the date and amount of prepayment and whether the prepayment is of
Eurodollar Loans, ABR Loans or a combination thereof, and, if of a combination
thereof, the amount allocable to each;

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provided, that if a Eurodollar Loan is prepaid on any day other than the last
day of the Interest Period applicable thereto, the Borrower shall also pay any
amounts owing pursuant to Section 2.20. Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof. If
any such notice is given, the amount specified in such notice shall be due and
payable on the date specified therein. Amounts prepaid on account of the Term
Loans may not be reborrowed. Partial prepayments of Eurodollar Loans shall be
in an aggregate principal amount of $1,000,000 or a whole multiple thereof.
Partial prepayments of ABR Loans (other than Swing Line Loans) shall be in an
aggregate principal amount of $500,000 or a whole multiple thereof. Partial
prepayments of Swing Line Loans shall be in an aggregate principal amount of
$100,000 or a whole multiple thereof.

2.11 Mandatory Prepayments and Commitment Reductions. (a) If
any Capital Stock or Indebtedness shall be issued or Incurred by the Borrower
or any of its Subsidiaries (excluding any Permitted Issuance and any Incurrence
of Indebtedness in accordance with Section 7.2 (other than Section 7.2(i)) as
in effect on the Amendment/Restatement Closing Date), an amount equal to 100%
of the Net Cash Proceeds thereof (excluding any Equity Financing Proceeds)
shall be applied on the date of such issuance or Incurrence toward the
prepayment of the Term Loans and the reduction of the Revolving Credit
Commitments as set forth in Section 2.11(d).

(b) If on any date the Borrower or any of its Subsidiaries shall
receive Net Cash Proceeds from any Asset Sale or Recovery Event then, unless a
Reinvestment Notice shall be delivered in respect thereof, such Net Cash
Proceeds shall be applied, within five Business Days after such date, toward
the prepayment of the Term Loans and the reduction of the Revolving Credit
Commitments as set forth in Section 2.11(d); provided, that, notwithstanding
the foregoing, (i) the aggregate Net Cash Proceeds of Asset Sales that may be
excluded from the foregoing requirement in any fiscal year of the Borrower
pursuant to a Reinvestment Notice, when added to the aggregate fair market
value of Property Disposed of in connection with Asset Swaps during such fiscal
year, shall not exceed $20,000,000 and (ii) on each Reinvestment Prepayment
Date, an amount equal to the Reinvestment Prepayment Amount with respect to the
relevant Reinvestment Event shall be applied toward the prepayment of the Term
Loans and the reduction of the Revolving Credit Commitments as set forth in
Section 2.11(d).

(c) If, for any fiscal year of the Borrower commencing with the
fiscal year ending December 31, 1997, there shall be Excess Cash Flow, the
Borrower shall, on the relevant Excess Cash Flow Application Date, apply the
ECF Percentage of such Excess Cash Flow toward the prepayment of the Term Loans
and the reduction of the Revolving Credit Commitments as set forth in Section
2.11(d). Each such prepayment and commitment reduction shall be made on a date
(an "Excess Cash Flow Application Date") no later than five days after the
earlier of (i) the date on which the financial statements of the Borrower
referred to in Section 6.1(a), for the fiscal year with respect to which such
prepayment is made, are required to be delivered to the Lenders and (ii) the
date such financial statements are actually delivered.

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(d) Amounts to be applied in connection with prepayments and
Revolving Credit Commitment reductions made pursuant to this Section 2.11 shall
be applied, first, to the prepayment of the Term Loans and, second, to reduce
permanently the Revolving Credit Commitments. Any such reduction of the
Revolving Credit Commitments shall be accompanied by prepayment of the
Revolving Credit Loans and/or Swing Line Loans to the extent, if any, that the
Total Revolving Extensions of Credit exceed the amount of the aggregate
Revolving Credit Commitments as so reduced, provided that if the aggregate
principal amount of Revolving Credit Loans and Swing Line Loans then
outstanding is less than the amount of such excess (because L/C Obligations
constitute a portion thereof), the Borrower shall, to the extent of the balance
of such excess, replace outstanding Letters of Credit and/or deposit an amount
in cash in a cash collateral account established with the Administrative Agent
for the benefit of the Lenders on terms and conditions satisfactory to the
Administrative Agent. The application of any prepayment pursuant to this
Section 2.11 shall be made first to ABR Loans and second to Eurodollar Loans.
Amounts prepaid on account of the Term Loans may not be reborrowed.

2.12 Conversion and Continuation Options. (a) The Borrower may
elect from time to time to convert Eurodollar Loans to ABR Loans by giving the
Administrative Agent at least one Business Day's prior irrevocable notice of
such election, provided that any such conversion of Eurodollar Loans may only
be made on the last day of an Interest Period with respect thereto. The
Borrower may elect from time to time to convert ABR Loans to Eurodollar Loans
by giving the Administrative Agent at least three Business Days' prior
irrevocable notice of such election (which notice shall specify the length of
the initial Interest Period therefor), provided that no ABR Loan under a
particular Facility may be converted into a Eurodollar Loan (i) when any Event
of Default has occurred and is continuing and the Administrative Agent or the
Majority Facility Lenders in respect of such Facility have determined in its or
their sole discretion not to permit such conversions or (ii) after the date
that is one month prior to the final scheduled termination or maturity date of
such Facility. Upon receipt of any such notice the Administrative Agent shall
promptly notify each relevant Lender thereof.

(b) Any Eurodollar Loan may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Borrower giving irrevocable notice to the Administrative Agent, in accordance
with the applicable provisions of the term "Interest Period" set forth in
Section 1.1, of the length of the next Interest Period to be applicable to such
Loans, provided that no Eurodollar Loan under a particular Facility may be
continued as such (i) when any Event of Default has occurred and is continuing
and the Administrative Agent has or the Majority Facility Lenders in respect of
such Facility have determined in its or their sole discretion not to permit
such continuations or (ii) after the date that is one month prior to the final
scheduled termination or maturity date of such Facility, and provided, further,
that if the Borrower shall fail to give any required notice as described above
in this paragraph or if such continuation is not permitted pursuant to the
preceding proviso such Loans shall be automatically converted to ABR Loans on
the last day of such then expiring Interest Period. Upon receipt of any such
notice the Administrative Agent shall promptly notify each relevant Lender
thereof.

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2.13 Minimum Amounts and Maximum Number of Eurodollar Tranches.
Notwithstanding anything to the contrary in this Agreement, all borrowings,
conversions, continuations and optional prepayments of Eurodollar Loans
hereunder and all selections of Interest Periods hereunder shall be in such
amounts and be made pursuant to such elections so that, after giving effect
thereto, (a) the aggregate principal amount of the Eurodollar Loans comprising
each Eurodollar Tranche shall be equal to $5,000,000 or a whole multiple of
$1,000,000 in excess thereof, (b) no more than six Eurodollar Tranches under a
particular Facility shall be outstanding at any one time and (c) no more than
sixteen Eurodollar Tranches in the aggregate shall be outstanding at any one
time.

2.14 Interest Rates and Payment Dates. (a) Each Eurodollar
Loan shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such
day plus the Applicable Margin.

(b) Each ABR Loan shall bear interest at a rate per annum equal
to the ABR plus the Applicable Margin.

(c) (i) If all or a portion of the principal amount of any Loan
or Reimbursement Obligation shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), all outstanding Loans and
Reimbursement Obligations (whether or not overdue) shall bear interest at a
rate per annum which is equal to (x) in the case of the Loans, the rate that
would otherwise be applicable thereto pursuant to the foregoing provisions of
this Section 2.14 plus 2% or (y) in the case of Reimbursement Obligations, the
rate applicable to ABR Loans under the Revolving Credit Facility plus 2%, and
(ii) if all or a portion of any interest payable on any Loan or Reimbursement
Obligation or any commitment fee or other amount payable hereunder shall not be
paid when due (whether at the stated maturity, by acceleration or otherwise),
such overdue amount shall bear interest at a rate per annum equal to the rate
applicable to ABR Loans under the relevant Facility plus 2% (or, in the case of
any such other amounts that do not relate to a particular Facility, the rate
applicable to ABR Loans under the Revolving Credit Facility plus 2%), in each
case, with respect to clauses (i) and (ii) above, from the date of such
non-payment until such amount is paid in full (as well after as before
judgment).

(d) Interest shall be payable in arrears on each Interest
Payment Date, provided that interest accruing pursuant to paragraph (c) of this
Section 2.14 shall be payable from time to time on demand.

2.15 Computation of Interest and Fees. (a) Interest, fees and
commissions payable pursuant hereto shall be calculated on the basis of a 360-
day year for the actual days elapsed, except that, with respect to ABR Loans
the rate of interest on which is calculated on the basis of the Prime Rate, the
interest thereon shall be calculated on the basis of a 365- (or 366-, as the
case may be) day year for the actual days elapsed. The Administrative Agent
shall as soon as practicable notify the Borrower and the relevant Lenders of
each determination of a Eurodollar Rate. Any change in the interest rate on a
Loan resulting from a change in the ABR or the Eurocurrency Reserve

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Requirements shall become effective as of the opening of business on the day on
which such change becomes effective. The Administrative Agent shall as soon as
practicable notify the Borrower and the relevant Lenders of the effective date
and the amount of each such change in interest rate.

(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate applicable to any Eurodollar Loan.

2.16 Inability to Determine Interest Rate. If prior to the
first day of any Interest Period:

(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that,
by reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for
such Interest Period, or

(b) the Administrative Agent shall have received notice from the
Majority Facility Lenders in respect of the relevant Facility that the
Eurodollar Rate determined or to be determined for such Interest Period
will not adequately and fairly reflect the cost to such Lenders (as
conclusively certified by such Lenders) of making or maintaining their
affected Loans during such Interest Period,

the Administrative Agent shall give telecopy or telephonic notice thereof to
the Borrower and the relevant Lenders as soon as practicable thereafter. If
such notice is given (x) any Eurodollar Loans under the relevant Facility
requested to be made on the first day of such Interest Period shall be made as
ABR Loans, (y) any Loans under the relevant Facility that were to have been
converted on the first day of such Interest Period to Eurodollar Loans shall be
continued as ABR Loans and (z) any outstanding Eurodollar Loans under the
relevant Facility shall be converted to ABR Loans on the last day of the
Interest Period applicable thereto. Until such notice has been withdrawn by
the Administrative Agent, no further Eurodollar Loans under the relevant
Facility shall be made or continued as such, nor shall the Borrower have the
right to convert Loans under the relevant Facility to Eurodollar Loans.

2.17 Pro Rata Treatment and Payments. (a) Each borrowing by
the Borrower from the Lenders hereunder, each payment by the Borrower on
account of any commitment fee and any reduction of the Revolving Credit
Commitments shall be made, with regard to the applicable Facility, pro rata
according to the respective Tranche A Term Loan Percentages, Tranche B Term
Loan Percentages or Revolving Credit Percentages, as the case may be, of the
relevant Lenders.

(b) Each payment (including each prepayment) by the Borrower on
account of principal of and interest on the Term Loans shall be made pro rata
according to the respective

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outstanding principal amounts of the Term Loans then held by the Term Loan
Lenders. The amount of each principal payment of the Term Loans (other than
scheduled repayments of installments of principal) shall be applied to reduce
the then remaining installments of the Tranche A Term Loans and the Tranche B
Term Loans, pro rata based upon the then remaining number of installments
thereof, after giving effect to all prior reductions thereto (i.e., each then
remaining installment of the Tranche A Term Loans or Tranche B Term Loans, as
the case may be, shall be reduced by an amount equal to the aggregate amount to
be applied to the Tranche A Term Loans or Tranche B Term Loans, as the case may
be, divided by the number of the then remaining installments for such Tranche A
Term Loans or Tranche B Term Loans); provided, that if the amount to be so
applied to any installment would exceed the then remaining amount of such
installment, then an amount equal to such excess shall be applied to the next
succeeding installment after giving effect to all prior reductions thereto
(including the amount of prepayments theretofore allocated pursuant to the
preceding portion of this sentence). Notwithstanding the foregoing, the first
$40,000,000 of optional prepayments of the Term Loans shall be applied to such
installments of the Term Loans as the Borrower shall elect (other than
scheduled installments of the Tranche B Term Loans prior to September 30,
2003).

(c) Each payment (including each prepayment) by the Borrower on
account of principal of and interest on the Revolving Credit Loans shall be
made pro rata according to the respective outstanding principal amounts of the
Revolving Credit Loans then held by the Revolving Credit Lenders.

(d) All payments (including prepayments) to be made by the
Borrower hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without setoff or counterclaim and shall be made prior
to 12:00 Noon, New York City time, on the due date thereof to the
Administrative Agent, for the account of the Lenders, at the Administrative
Agent's office specified in Section 10.2, in Dollars and in immediately
available funds. The Administrative Agent shall distribute such payments to
the Lenders promptly upon receipt in like funds as received. If any payment
hereunder becomes due and payable on a day other than a Business Day, such
payment shall be extended to the next succeeding Business Day (except, in the
case of Eurodollar Loans, as otherwise provided in clause (i) of the definition
of "Interest Period"). In the case of any extension of any payment of
principal pursuant to the preceding sentence, interest thereon shall be payable
at the then applicable rate during such extension.

(e) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. If such amount is not made available to
the Administrative Agent by the required time on the Borrowing Date therefor,
such Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon at a rate equal to the daily average Federal Funds Effective
Rate for the period until such Lender makes such amount immediately available
to the

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Administrative Agent. A certificate of the Administrative Agent submitted to
any Lender with respect to any amounts owing under this Section 2.17(e) shall
be conclusive in the absence of manifest error. If such Lender's share of such
borrowing is not made available to the Administrative Agent by such Lender
within three Business Days of such Borrowing Date, the Administrative Agent
shall also be entitled to recover such amount with interest thereon at the rate
per annum applicable to ABR Loans under the relevant Facility, on demand, from
the Borrower.

(f) Certain procedures relating to extensions of credit
outstanding under the Existing Credit Agreement and extensions of credit to be
made on the Amendment/Restatement Closing Date are described on Schedule 2.17.

2.18 Requirements of Law. (a) If the adoption of or any change
in any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the Closing Date:

(i) shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement, any Letter of Credit, any
Application or any Eurodollar Loan made by it, or change the basis of
taxation of payments to such Lender in respect thereof (except for Non-
Excluded Taxes covered by Section 2.19, the establishment of a tax based
on the overall net income of such Lender and changes in the rate of tax
on the overall net income of such Lender);

(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of,
advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the Eurodollar Rate
hereunder; or

(iii) shall impose on such Lender any other condition;

and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting
into, continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay such Lender,
upon its demand, any additional amounts necessary to compensate such Lender for
such increased cost or reduced amount receivable. If any Lender becomes
entitled to claim any additional amounts pursuant to this Section 2.18, it
shall promptly (and in any event no later than 90 days after such Lender
becomes entitled to make such claim) notify the Borrower (with a copy to the
Administrative Agent) of the event by reason of which it has become so
entitled. If the Borrower notifies the Administrative Agent within five
Business Days after any Lender notifies the Borrower of any increased cost
pursuant to the foregoing provisions of this Section 2.18(a), the Borrower may
convert

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all Eurodollar Loans of such Lender then outstanding into ABR Loans in
accordance with Section 2.12 and shall, additionally, reimburse such Lender for
any cost in accordance with Section 2.20.

(b) If any Lender shall have determined that the adoption of or
any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the Closing Date shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under or in respect of any Letter
of Credit to a level below that which such Lender or such corporation could
have achieved but for such adoption, change or compliance (taking into
consideration such Lender's or such corporation's policies with respect to
capital adequacy) by an amount deemed by such Lender to be material, then from
time to time, after submission by such Lender to the Borrower (with a copy to
the Administrative Agent) of a written request therefor, the Borrower shall pay
to such Lender such additional amount or amounts as will compensate such Lender
or such corporation for such reduction; provided that the Borrower shall not be
required to compensate a Lender pursuant to this paragraph for any amounts
incurred more than six months prior to the date that such Lender notifies the
Borrower of such Lender's intention to claim compensation therefor; and
provided further that, if the circumstances giving rise to such claim have a
retroactive effect, then such six-month period shall be extended to include the
period of such retroactive effect.

(c) A certificate as to any additional amounts payable pursuant
to this Section 2.18, showing in reasonable detail the calculation thereof and
certifying that it is generally charging such costs to other similarly situated
borrowers under similar credit facilities, submitted by any Lender to the
Borrower (with a copy to the Administrative Agent), shall be conclusive in the
absence of manifest error, provided that the determination of such amounts
shall be made in good faith in a manner generally consistent with such Lender's
standard practices. The obligations of the Borrower pursuant to this Section
2.18 shall survive the termination of this Agreement and the payment of the
Loans and all other amounts payable hereunder for a period of nine months
thereafter.

2.19 Taxes. (a) All payments made by the Borrower under this
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding net income taxes and franchise taxes (imposed in lieu of
net income taxes) imposed on the Administrative Agent or any Lender as a result
of a present or former connection between the Administrative Agent or such
Lender and the jurisdiction of the Governmental Authority imposing such tax or
any political subdivision or taxing authority thereof or therein (other than
any such connection arising solely from the Administrative Agent or such Lender
having executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement or any other Loan Document). If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld from any
amounts payable to the Administrative Agent or any Lender hereunder, the

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amounts so payable to the Administrative Agent or such Lender shall be
increased to the extent necessary to yield to the Administrative Agent or such
Lender (after payment of all Non-Excluded Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement, provided, however, that the Borrower shall not be required to
increase any such amounts payable to any Lender that is not organized under the
laws of the United States of America or a state thereof to the extent such
Lender's compliance with the requirements of Section 2.19(b) at the time such
Lender becomes a party to this Agreement fails to establish a complete
exemption from such withholding. Whenever any Non-Excluded Taxes are payable
by the Borrower, as promptly as possible thereafter the Borrower shall send to
the Administrative Agent for its own account or for the account of such Lender,
as the case may be, a certified copy of an original official receipt received
by the Borrower showing payment thereof. If the Borrower fails to pay any Non-
Excluded Taxes when due to the appropriate taxing authority or fails to remit
to the Administrative Agent the required receipts or other required documentary
evidence, the Borrower shall indemnify the Administrative Agent and the Lenders
for any incremental taxes, interest or penalties that may become payable by the
Administrative Agent or any Lender as a result of any such failure. The
agreements in this Section 2.19 shall survive the termination of this Agreement
and the payment of the Loans and all other amounts payable hereunder for a
period of nine months thereafter.

(b) Each Lender (or Transferee) that is not (i) a citizen or
resident of the United States of America, (ii) a corporation, partnership or
other entity created or organized in or under the laws of the United States of
America (or any jurisdiction thereof), or (iii) an estate or trust that is
subject to federal income taxation regardless of the source of its income
(each, a "Non-U.S. Lender") shall deliver to the Borrower and the
Administrative Agent (or, in the case of a Participant, to the Lender from
which the related participation shall have been purchased) two copies of either
U.S. Internal Revenue Service Form 1001 or Form 4224, or, in the case of a
Non-U.S. Lender claiming exemption from U.S. federal withholding tax under
Section 871(h) or 881(c) of the Code with respect to payments of "portfolio
interest", a Form W-8, or any subsequent versions thereof or successors thereto
(and, if such Non-U.S. Lender delivers a Form W-8, an annual certificate
representing, under penalty of perjury, that such Non-U.S. Lender is not a
"bank" for purposes of Section 881(c) of the Code, is not a 10-percent
shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of the
Borrower and is not a controlled foreign corporation related to the Borrower
(within the meaning of Section 864(d)(4) of the Code)), properly completed and
duly executed by such Non-U.S. Lender claiming complete exemption from, or a
reduced rate of, U.S. federal withholding tax on all payments by the Borrower
under this Agreement and the other Loan Documents. Such forms shall be
delivered by each Non-U.S. Lender on or before the date it becomes a party to
this Agreement (or, in the case of any Participant, on or before the date such
Participant purchases the related participation). In addition, each Non-U.S.
Lender shall deliver such forms on or before the expiration or obsolescence and
promptly upon the invalidity of any form previously delivered by such Non-U.S.
Lender and after the occurrence of any event requiring a change in the most
recently provided form and, if necessary, obtain any extensions of time
reasonably requested by the Borrower of the Administrative Agent for filing and
completing such forms. Each Non-U.S. Lender agrees, to the extent legally
entitled to do so, upon reasonable request by the Borrower, to provide to the
Borrower (for the benefit of the Borrower and the Administrative

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Agent) such other forms as may be reasonably required in order to establish the
legal entitlement of such Lender to an exemption from withholding with respect
to payments of interest under this Agreement or the other Loan Documents,
provided that in determining the reasonableness of such a request, such Lender
shall be entitled to consider the cost of complying with such request (to the
extent unreimbursed by the Borrower) that would be imposed on such Lender.
Each Non-U.S. Lender shall promptly notify the Borrower at any time it
determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification
adopted by the U.S. taxing authorities for such purpose). Notwithstanding any
other provision of this Section 2.19(b), a Non-U.S. Lender shall not be
required to deliver any form pursuant to this Section 2.19(b) that such
Non-U.S. Lender is not legally able to deliver.

2.20 Indemnity. The Borrower agrees to indemnify each Lender
and to hold each Lender harmless from any loss (excluding loss of profit) or
expense which such Lender may sustain or incur as a consequence of (a) default
by the Borrower in making a borrowing of, conversion into or continuation of
Eurodollar Loans after the Borrower has given a notice requesting the same in
accordance with the provisions of this Agreement, (b) default by the Borrower
in making any prepayment after the Borrower has given a notice thereof in
accordance with the provisions of this Agreement or (c) the making of a
prepayment of Eurodollar Loans on a day which is not the last day of an
Interest Period with respect thereto. Such indemnification may include an
amount equal to the excess, if any, of (i) the amount of interest which would
have accrued on the amount so prepaid, or not so borrowed, converted or
continued, for the period from the date of such prepayment or of such failure
to borrow, convert or continue to the last day of such Interest Period (or, in
the case of a failure to borrow, convert or continue, the Interest Period that
would have commenced on the date of such failure) in each case at the
applicable rate of interest for such Loans provided for herein (excluding,
however, the Applicable Margin included therein, if any) over (ii) the amount
of interest (as reasonably determined by such Lender) which would have accrued
to such Lender on such amount by placing such amount on deposit for a
comparable period with leading banks in the interbank eurodollar market. A
certificate as to any amounts payable pursuant to this Section 2.20, showing in
reasonable detail the calculation thereof, submitted to the Borrower by any
Lender shall be conclusive in the absence of manifest error. This covenant
shall survive the termination of this Agreement and the payment of the Loans
and all other amounts payable hereunder for a period of nine months thereafter.

2.21 Change of Lending Office. Each Lender agrees that, upon
the occurrence of any event giving rise to the operation of Section 2.18 or
2.19(a) with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such event with the
object of avoiding the consequences of such event; provided, that such
designation is made on terms that, in the sole judgment of such Lender, cause
such Lender and its lending office(s) to suffer no economic, legal or
regulatory disadvantage, and provided, further, that nothing in this Section
2.21 shall affect or postpone any of the obligations of any Borrower or the
rights of any Lender pursuant to Section 2.18 or 2.19(a).

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2.22 Replacement of Lenders under Certain Circumstances. The
Borrower shall be permitted to replace any Lender which (a) requests
reimbursement for amounts owing pursuant to Section 2.18 or 2.19 or (b)
defaults in its obligation to make Loans hereunder, with a replacement
financial institution; provided that (i) such replacement does not conflict
with any Requirement of Law, (ii) no Event of Default shall have occurred and
be continuing at the time of such replacement, (iii) prior to any such
replacement, such Lender shall have taken no action under Section 2.21 so as to
eliminate the continued need for payment of amounts owing pursuant to Section
2.18 or 2.19, (iv) the Borrower shall repay (or the replacement financial
institution shall purchase, at par) all Loans and other amounts (including
accrued interest and fees) owing to such replaced Lender on or prior to the
date of replacement, (v) the Borrower shall be liable to such replaced Lender
under Section 2.20 if any Eurodollar Loan owing to such replaced Lender shall
be prepaid (or purchased) other than on the last day of the Interest Period
relating thereto, (vi) the replacement financial institution, if not already a
Lender, shall be reasonably satisfactory to the Administrative Agent, (vii) the
replaced Lender shall be obligated to make such replacement in accordance with
the provisions of Section 10.6, (viii) until such time as such replacement
shall be consummated, the Borrower shall pay all additional amounts (if any)
required pursuant to Section 2.18 or 2.19, as the case may be, and (ix) any
such replacement shall not be deemed to be a waiver of any rights which the
Borrower, the Administrative Agent or any other Lender shall have against the
replaced Lender.

SECTION 3. LETTERS OF CREDIT

3.1 L/C Commitment. (a) Subject to the terms and conditions
hereof, each Issuing Lender, in reliance on the agreements of the other
Revolving Credit Lenders set forth in Section 3.4(a), agrees to issue letters
of credit ("Letters of Credit") for the account of the Borrower on any Business
Day during the Revolving Credit Commitment Period in such form as may be
approved from time to time by such Issuing Lender; provided that no Issuing
Lender shall have any obligation to issue any Letter of Credit if, after giving
effect to such issuance, (i) the L/C Obligations would exceed the L/C
Commitment or (ii) the aggregate amount of the Available Revolving Credit
Commitments would be less than zero. Each Letter of Credit shall (i) be
denominated in Dollars and (ii) expire no later than the earlier of (x) the
first anniversary of its date of issuance and (y) the date which is five
Business Days prior to the Scheduled Revolving Credit Termination Date,
provided that any Letter of Credit with a one-year term may provide for the
renewal thereof for additional one-year periods (which shall in no event extend
beyond the date referred to in clause (y) above).

(b) Each Letter of Credit shall be subject to the Uniform
Customs and, to the extent not inconsistent therewith, the laws of the State of
New York.

(c) No Issuing Lender shall at any time be obligated to issue
any Letter of Credit hereunder if such issuance would conflict with, or cause
such Issuing Lender or any L/C Participant to exceed any limits imposed by, any
applicable Requirement of Law.

3.2 Procedure for Issuance of Letter of Credit. The Borrower
may from time to time request that an Issuing Lender issue a Letter of Credit
by delivering to such Issuing Lender at its

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address for notices specified herein an Application therefor, completed to the
satisfaction of such Issuing Lender, and such other certificates, documents and
other papers and information as such Issuing Lender may reasonably request.
Upon receipt of any Application, the relevant Issuing Lender will process such
Application and the certificates, documents and other papers and information
delivered to it in connection therewith in accordance with its customary
procedures and shall promptly issue the Letter of Credit requested thereby (but
in no event shall any Issuing Lender be required to issue any Letter of Credit
earlier than three Business Days after its receipt of the Application therefor
and all such other certificates, documents and other papers and information
relating thereto) by issuing the original of such Letter of Credit to the
beneficiary thereof or as otherwise may be agreed to by the relevant Issuing
Lender and the Borrower. The relevant Issuing Lender shall furnish a copy of
such Letter of Credit to the Borrower promptly following the issuance thereof.
The relevant Issuing Lender shall promptly furnish to the Administrative Agent
notice of the issuance of each Letter of Credit (including the amount thereof).
The Administrative Agent will furnish to the Revolving Credit Lenders (a)
prompt notice of the issuance of each standby Letter of Credit and (b) a
monthly report setting forth for the relevant month the total aggregate daily
amount available to be drawn under commercial Letters of Credit that were
outstanding during such month.

3.3 Commissions, Fees and Other Charges. (a) The Borrower will
pay to the Administrative Agent, for the account of each Revolving Credit
Lender, a commission on all outstanding Letters of Credit at a per annum rate
equal to the Applicable Margin then in effect with respect to Eurodollar Loans
under the Revolving Credit Facility minus the fronting fee referred to below,
shared ratably among the Revolving Credit Lenders and payable quarterly in
arrears on each L/C Fee Payment Date after the issuance date. In addition, the
Borrower shall pay to each Issuing Lender for its own account a fronting fee of
1/4 of 1% per annum in respect of each Letter of Credit issued by such Issuing
Lender, payable quarterly in arrears on each L/C Fee Payment Date after the
Issuance Date.

(b) In addition to the foregoing fees and commissions, the
Borrower shall pay or reimburse the relevant Issuing Lender for such normal and
customary costs and expenses as are incurred or charged by such Issuing Lender
in issuing, negotiating, effecting payment under, amending or otherwise
administering any Letter of Credit.

3.4 L/C Participations. (a) Each Issuing Lender irrevocably
agrees to grant and hereby grants to each L/C Participant, and, to induce each
Issuing Lender to issue Letters of Credit hereunder, each L/C Participant
irrevocably agrees to accept and purchase and hereby accepts and purchases from
the relevant Issuing Lender, on the terms and conditions hereinafter stated,
for such L/C Participant's own account and risk an undivided interest equal to
such L/C Participant's Revolving Credit Percentage in such Issuing Lender's
obligations and rights under each Letter of Credit issued by such Issuing
Lender and the amount of each draft paid by such Issuing Lender thereunder.
Each L/C Participant unconditionally and irrevocably agrees with each Issuing
Lender that, if a draft is paid under any Letter of Credit issued by such
Issuing Lender for which such Issuing Lender is not reimbursed in full by the
Borrower in accordance with the terms of this Agreement, such L/C Participant
shall pay to such Issuing Lender upon demand an amount equal

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to such L/C Participant's Revolving Credit Percentage of the amount of such
draft, or any part thereof, which is not so reimbursed.

(b) If any amount required to be paid by any L/C Participant to
any Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed
portion of any payment made by such Issuing Lender under any Letter of Credit
is paid to such Issuing Lender within three Business Days after the date such
payment is due, such L/C Participant shall pay to such Issuing Lender on demand
an amount equal to the product of (i) such amount, times (ii) the daily average
Federal Funds Effective Rate during the period from and including the date such
payment is required to the date on which such payment is immediately available
to such Issuing Lender, times (iii) a fraction the numerator of which is the
number of days that elapse during such period and the denominator of which is
360. If any such amount required to be paid by any L/C Participant pursuant to
Section 3.4(a) is not made available to such Issuing Lender by such L/C
Participant within three Business Days after the date such payment is due, such
Issuing Lender shall be entitled to recover from such L/C Participant, on
demand, such amount with interest thereon calculated from such due date at the
rate per annum applicable to ABR Loans under the Revolving Credit Facility. A
certificate of the relevant Issuing Lender submitted to any L/C Participant
with respect to any amounts owing under this Section shall be conclusive in the
absence of manifest error.

(c) Whenever, at any time after an Issuing Lender has made
payment under any Letter of Credit and has received from any L/C Participant
its pro rata share of such payment in accordance with Section 3.4(a), such
Issuing Lender receives any payment related to such Letter of Credit (whether
directly from the Borrower or otherwise, including proceeds of collateral
applied thereto by such Issuing Lender), or any payment of interest on account
thereof, such Issuing Lender will distribute to such L/C Participant its pro
rata share thereof; provided, however, that in the event that any such payment
received by such Issuing Lender shall be required to be returned by such
Issuing Lender, such L/C Participant shall return to such Issuing Lender the
portion thereof previously distributed by such Issuing Lender to it.

3.5 Reimbursement Obligation of the Borrower. The Borrower
agrees to reimburse each Issuing Lender on each date on which such Issuing
Lender notifies the Borrower of the date and amount of a draft presented under
any Letter of Credit and paid by such Issuing Lender for the amount of (a) such
draft so paid and (b) any taxes, fees, charges or other costs or expenses
incurred by such Issuing Lender in connection with such payment. Each such
payment shall be made to such Issuing Lender in lawful money of the United
States of America and in immediately available funds. Interest shall be
payable on any and all amounts remaining unpaid by the Borrower under this
Section from the date such amounts become payable (whether at stated maturity,
by acceleration or otherwise) until payment in full at the rate set forth in
Section 2.14(c). Each drawing under any Letter of Credit shall (unless an
event of the type described in clause (i) or (ii) of Section 8(f) shall have
occurred and be continuing with respect to the Borrower, in which case the
procedures specified in Section 3.4 for funding by L/C Participants shall
apply) constitute a request by the Borrower to the Administrative Agent for a
borrowing pursuant to Section 2.5 of ABR Loans (or, at the option of the
Administrative Agent and the Swing Line Lender in their sole discretion, a

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borrowing pursuant to Section 2.7 of Swing Line Loans) in the amount of such
drawing. The Borrowing Date with respect to such borrowing shall be the date
of payment of the relevant draft.

3.6 Obligations Absolute. The Borrower's obligations under this
Section 3 shall be absolute and unconditional under any and all circumstances
and irrespective of any setoff, counterclaim or defense to payment which the
Borrower may have or have had against any Issuing Lender (except to the extent
resulting from the gross negligence or willful misconduct of such Issuing
Lender), any beneficiary of a Letter of Credit or any other Person. The
Borrower also agrees with each Issuing Lender that, subject to the last
sentence of this Section 3.6, no Issuing Lender shall be responsible for, and
the Borrower's Reimbursement Obligations under Section 3.5 shall not be
affected by, among other things, the validity or genuineness of documents or of
any endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, or any dispute between or among the Borrower and
any beneficiary of any Letter of Credit or any other party to which such Letter
of Credit may be transferred or any claims whatsoever of the Borrower against
any beneficiary of such Letter of Credit or any such transferee. No Issuing
Lender shall be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors,
omissions or delays in transmission found by a final and nonappealable decision
of a court of competent jurisdiction to have resulted from the gross negligence
or willful misconduct of the Issuing Lender that issued such Letter of Credit.
The Borrower agrees that any action taken or omitted by any Issuing Lender
under or in connection with any Letter of Credit or the related drafts or
documents, if done in the absence of gross negligence or willful misconduct and
in accordance with the standards or care specified in the Uniform Commercial
Code of the State of New York, shall be binding on the Borrower and shall not
result in any liability of any Issuing Lender to the Borrower.

3.7 Letter of Credit Payments. If any draft shall be presented
for payment under any Letter of Credit, the relevant Issuing Lender shall
promptly notify the Borrower of the date and amount thereof. The
responsibility of each Issuing Lender to the Borrower in connection with any
draft presented for payment under any Letter of Credit issued by it shall, in
addition to any payment obligation expressly provided for in such Letter of
Credit, be limited to determining that the documents (including each draft)
delivered under such Letter of Credit in connection with such presentment are
substantially in conformity with such Letter of Credit.

3.8 Applications. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 3, the provisions of this Section 3 shall apply.

SECTION 4. REPRESENTATIONS AND WARRANTIES

To induce the Administrative Agent and the Lenders to enter into
this Agreement and to make the Loans and issue or participate in the Letters of
Credit, the Borrower hereby represents and warrants to the Administrative Agent
and each Lender that:

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4.1 Financial Condition. (a) (i) The unaudited pro forma
consolidated balance sheet of the Borrower and its consolidated Subsidiaries as
at September 30, 1996 (including the notes thereto) (the "Pro Forma Balance
Sheet"), copies of which have heretofore been furnished to each Lender, has
been prepared giving effect (as if such events had occurred on such date) to
(i) the consummation of the Acquisitions, (ii) the Loans to be made and the
Senior Subordinated Notes to be issued on the Closing Date and the use of
proceeds thereof and (iii) the payment of fees and expenses in connection with
the foregoing. The Pro Forma Balance Sheet presents fairly on a pro forma
basis the financial position of the Borrower and its consolidated Subsidiaries
as at September 30, 1996 and is based upon good faith estimates and assumptions
believed by management of the Borrower to be reasonable at the time made,
assuming that the events specified in the preceding sentence had actually
occurred at such date.

(ii) The unaudited pro forma consolidated balance sheet and
statement of EBITDA of the Borrower and its consolidated Subsidiaries as at, or
for the fiscal year ended, December 31, 1996 (including the notes thereto) (the
"Bumble Bee Pro Forma Financial Statements"), copies of which have heretofore
been furnished to each Lender, has been prepared giving effect to (i) the
consummation of the Bumble Bee Acquisition (including the results of the
bankruptcy proceeding to which Bumble Bee shall have been subject), (ii) the
Loans to be made on the Amendment/Restatement Closing Date and the use of
proceeds thereof and (iii) the payment of fees and expenses in connection with
the foregoing. The Bumble Bee Pro Forma Financial Statements present fairly on
a pro forma basis the financial position of the Borrower and its consolidated
Subsidiaries as at December 31, 1996 and is based upon good faith estimates and
assumptions believed by management of the Borrower to be reasonable at the time
made.

(b) (i) The audited consolidated balance sheets of the AHP Food
Business as at December 31, 1994 and December 31, 1995, and the related
consolidated statements of income and of cash flows for the fiscal years ended
on such dates, reported on by and accompanied by an unqualified report from
Arthur Andersen LLP, present fairly the consolidated financial condition of the
AHP Food Business as at such date, and the consolidated results of its
operations and its consolidated cash flows for the respective fiscal years then
ended. The audited consolidated balance sheet of Heritage and its consolidated
Subsidiaries as at December 31, 1995, and the related consolidated statements
of income and of cash flows for the fiscal years ended on such dates, reported
on by and accompanied by an unqualified report from Coopers & Lybrand L.L.P.,
present fairly the consolidated financial condition of Heritage and its
consolidated Subsidiaries as at such date, and the consolidated results of
their operations and their consolidated cash flows for the fiscal year then
ended. The unaudited consolidated balance sheet of the AHP Food Business as at
September 30, 1996, and the related unaudited consolidated statements of income
and cash flows for the nine-month period ended on such date, present fairly the
consolidated financial condition of the AHP Food Business as at such date, and
the consolidated results of its operations and its consolidated cash flows for
the nine-month period then ended (subject to normal year-end audit
adjustments). The unaudited consolidated balance sheets of Heritage and its
consolidated Subsidiaries as at September 30, 1996, and the related unaudited
consolidated statements of income and cash flows for the nine-month period
ended on such date, present fairly the consolidated

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financial condition of Heritage and its consolidated Subsidiaries as at such
date, and the consolidated results of their operations and their consolidated
cash flows for the nine-month period then ended (subject to normal year-end
audit adjustments). All such financial statements, including the related
schedules and notes thereto, have been prepared in accordance with GAAP applied
consistently throughout the periods involved (except as approved by the
relevant firm of accountants and disclosed therein). The most recent balance
sheets referred to above reflect, as required by GAAP, with respect to the AHP
Food Business or Heritage, as the case may be, any material Guarantee
Obligations, contingent liabilities and liabilities for taxes, and any
long-term leases and unusual forward or long-term commitments, including,
without limitation, any interest rate or foreign currency swap or exchange
transaction or other obligation in respect of derivatives, in each case as of
the date of such balance sheets. During the period from September 30, 1996 to
and including the Closing Date there has been no sale, transfer or other
disposition by the AHP Food Business or Heritage of any material part of its
business or Property (other than in connection with the Acquisitions).

(ii) The audited consolidated balance sheets of Bumble Bee as at
December 31, 1995 and December 31, 1996, and the related consolidated
statements of income and of cash flows for the fiscal years ended on such
dates, reported on by and accompanied by a report from Peat Marwick LLP,
present fairly the consolidated financial condition of Bumble Bee as at such
dates, and the consolidated results of its operations and its consolidated cash
flows for the respective fiscal years then ended. The unaudited consolidated
balance sheet of Bumble Bee as at March 31, 1997, and the related unaudited
consolidated statements of income and cash flows for the three-month period
ended on such date, present fairly the consolidated financial condition of
Bumble Bee as at such date, and the consolidated results of its operations and
its consolidated cash flows for the three-month period then ended (subject to
normal year-end audit adjustments). All such financial statements, including
the related schedules and notes thereto, have been prepared in accordance with
GAAP applied consistently throughout the periods involved (except as approved
by the relevant firm of accountants and disclosed therein). During the period
from December 31, 1996 to and including the Amendment/Restatement Closing Date
there has been no sale, transfer or other disposition by Bumble Bee or any of
its Subsidiaries of any material part of its business or Property (other than
in connection with the Bumble Bee Acquisition).

4.2 No Change. Since December 31, 1996 there has been no
development or event which has had or could reasonably be expected to have a
Material Adverse Effect (it being understood that the reference to the Borrower
and its Subsidiaries in the definition of "Material Adverse Effect" includes
the Property acquired pursuant to the Bumble Bee Acquisition).

4.3 Corporate Existence; Compliance with Law. Each of the
Borrower and each of its Subsidiaries (a) is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization,
(b) has the corporate power and authority, and the legal right, to own and
operate its property, to lease the property it operates as lessee and to
conduct the business in which it is currently engaged, (c) is duly qualified as
a foreign corporation and in good standing under the laws of each jurisdiction
where its ownership, lease or operation of property or the conduct

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of its business requires such qualification and (d) is in compliance with all
Requirements of Law except to the extent that the failure to comply therewith
could not, in the aggregate, reasonably be expected to have a Material Adverse
Effect.

4.4 Corporate Power; Authorization; Enforceable Obligations.
Each Loan Party has the corporate power and authority, and the legal right, to
make, deliver and perform the Loan Documents to which it is a party and, in the
case of the Borrower, to borrow and obtain other extensions of credit
hereunder. Each Loan Party has taken all necessary corporate action to
authorize the execution, delivery and performance of the Loan Documents to
which it is a party and, in the case of the Borrower, to authorize the
borrowings and other extensions of credit on the terms and conditions of this
Agreement. No consent or authorization of, filing with, notice to or other act
by or in respect of, any Governmental Authority or any other Person is required
in connection with the Acquisitions, the Bumble Bee Acquisition and the
borrowings and other extensions of credit hereunder or with the execution,
delivery, performance, validity or enforceability of this Agreement or any of
the other Loan Documents, except (i) consents, authorizations, filings and
notices described in Schedule 4.4, which consents, authorizations, filings and
notices have been obtained or made and are in full force and effect, (ii)
consents under immaterial Contractual Obligations relating to limitations on
the assignability thereof and (iii) the filings referred to in Section 4.19.
Each Loan Document has been duly executed and delivered on behalf of each Loan
Party party thereto. This Agreement constitutes, and each other Loan Document
upon execution will constitute, a legal, valid and binding obligation of each
Loan Party party thereto, enforceable against each such Loan Party in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).

4.5 No Legal Bar. The execution, delivery and performance of
this Agreement and the other Loan Documents, the issuance of Letters of Credit,
the borrowings hereunder and the use of the proceeds thereof will not violate
any Requirement of Law or any material Contractual Obligation of the Borrower
or any of its Subsidiaries and will not result in, or require, the creation or
imposition of any Lien on any of their respective properties or revenues
pursuant to any Requirement of Law or any such Contractual Obligation (other
than the Liens created by the Security Documents). No Requirement of Law or
Contractual Obligation applicable to the Borrower or any of its Subsidiaries
could reasonably be expected to have a Material Adverse Effect.

4.6 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Borrower, threatened by or against the Borrower or any
of its Subsidiaries or against any of their respective properties or revenues
(a) with respect to any of the Loan Documents or any of the transactions
contemplated hereby or thereby, or (b) which could reasonably be expected to
have a Material Adverse Effect.

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4.7 No Default. Neither the Borrower nor any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect which could reasonably be expected to have a
Material Adverse Effect. No Default or Event of Default has occurred and is
continuing.

4.8 Ownership of Property; Liens. Each of the Borrower and each
of its Subsidiaries has title in fee simple to, or a valid leasehold interest
in, all its real property, and good title to, or a valid leasehold interest in,
all its other property, and none of such property is subject to any Lien except
as permitted by Section 7.3.

4.9 Intellectual Property. Each of the Borrower and each of its
Subsidiaries owns (subject only to the recording of conveyance and assignment
documentation in the U.S. Patent and Trademark Office and other applicable
jurisdictions, which recording shall be completed promptly after the Closing
Date), or is licensed to use, all trademarks, tradenames, service marks,
copyrights, technology, know-how and processes ("Intellectual Property")
necessary for the conduct of its business as currently conducted. Except as,
in the aggregate, could not reasonably be expected to have a Material Adverse
Effect, (a) no claim has been asserted and is pending by any Person challenging
or questioning the use of any Intellectual Property or the validity of any
Intellectual Property (nor does the Borrower know of any valid basis for any
such claim) and (b) the use of Intellectual Property by the Borrower and its
Subsidiaries does not infringe on the rights of, and no Intellectual Property
of the Borrower or any of its Subsidiaries is being infringed upon by, any
Person.

4.10 Taxes. Each of the Borrower and each of its Subsidiaries
has filed or caused to be filed all Federal and all material state and other
material tax returns which are required to be filed and has paid all taxes
shown to be due and payable on said returns or on any assessments made against
it or any of its property and all other taxes, fees or other charges imposed on
it or any of its property by any Governmental Authority (other than any taxes,
fees or other charges the amount or validity of which are currently being
contested in good faith by appropriate proceedings and with respect to which
reserves in conformity with GAAP have been provided on the books of the
Borrower or its Subsidiaries, as the case may be); and no tax Lien has been
filed, and, to the knowledge of the Borrower, no material claim is being
asserted, with respect to any such tax, fee or other charge.

4.11 Federal Regulations. No Letters of Credit and no part of
the proceeds of any Loans will be used for "purchasing" or "carrying" any
"margin stock" within the respective meanings of each of the quoted terms under
Regulation G or Regulation U of the Board as now and from time to time
hereafter in effect or for any purpose which violates the provisions of the
Regulations of the Board. If requested by any Lender or the Administrative
Agent, the Borrower will furnish to the Administrative Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR
Form G-3 or FR Form U-1 referred to in said Regulation G or Regulation U, as
the case may be.

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4.12 Labor Matters. There are no strikes or other labor disputes
against the Borrower or any of its Subsidiaries pending or, to the knowledge of
the Borrower, threatened that (individually or in the aggregate) could
reasonably be expected to have a Material Adverse Effect. Hours worked by and
payment made to employees of the Borrower and its Subsidiaries have not been in
violation of the Fair Labor Standards Act or any other applicable Requirement
of Law dealing with such matters that (individually or in the aggregate) could
reasonably be expected to have a Material Adverse Effect. All payments due
from the Borrower or any of its Subsidiaries on account of employee health and
welfare insurance that (individually or in the aggregate) could reasonably be
expected to have a Material Adverse Effect if not paid have been paid or
accrued as a liability on the books of the Borrower or the relevant Subsidiary.

4.13 ERISA. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Plan, and
each Plan has complied in all material respects with the applicable provisions
of ERISA and the Code. No termination of a Single Employer Plan has occurred,
and no Lien in favor of the PBGC or a Plan has arisen, during such five-year
period. The present value of all accrued benefits under each Single Employer
Plan (based on those assumptions used to fund such Plans) did not, as of the
last annual valuation date prior to the date on which this representation is
made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits by a material amount. Neither the Borrower nor any
Commonly Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan that could reasonably be expected to have a Material Adverse
Effect, and neither the Borrower nor any Commonly Controlled Entity would
become subject to any liability under ERISA that could reasonably be expected
to have a Material Adverse Effect if the Borrower or any such Commonly
Controlled Entity were to withdraw completely from all Multiemployer Plans as
of the valuation date most closely preceding the date on which this
representation is made or deemed made. No such Multiemployer Plan is in
Reorganization or Insolvent.

4.14 Investment Company Act; Other Regulations. No Loan Party
is an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
No Loan Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) which limits its ability to incur Indebtedness.

4.15 Subsidiaries. The Subsidiaries listed on Schedule 4.15
constitute all the Subsidiaries of the Borrower at the Closing Date. The
Subsidiaries listed on Schedule 4.15-A constitute all the Subsidiaries of the
Borrower at the Amendment/Restatement Closing Date.

4.16 Use of Proceeds. The proceeds of the Term Loans shall be
used to finance a portion of the Acquisitions and the Bumble Bee Acquisition
and to pay related fees and expenses. The proceeds of the Revolving Credit
Loans and the Swing Line Loans shall be used for general corporate purposes.
The Letters of Credit shall be used for general corporate purposes.

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4.17 Environmental Matters. Except as, in the aggregate, could
not reasonably be expected to have a Material Adverse Effect:

(a) the facilities and properties owned, leased or operated by
the Borrower or any of its Subsidiaries (the "Properties") do not
contain, and have not previously contained, any Materials of
Environmental Concern in amounts or concentrations or under
circumstances which (i) constitute or constituted a violation of, or
(ii) could give rise to liability under, any Environmental Law;

(b) the Properties and all operations at the Properties are in
compliance, and have in the last five years been in compliance, with all
applicable Environmental Laws, and there is no contamination at, under
or about the Properties or violation of any Environmental Law with
respect to the Properties or the business operated by the Borrower or
any of its Subsidiaries (the "Business");

(c) neither the Borrower nor any of its Subsidiaries has assumed
any liability of any other Person under Environmental Laws;

(d) neither the Borrower nor any of its Subsidiaries has
received or is aware of any notice of violation, alleged violation, non-
compliance, liability or potential liability regarding environmental
matters or compliance with Environmental Laws with regard to any of the
Properties or the Business, nor does the Borrower have knowledge or
reason to believe that any such notice will be received or is being
threatened;

(e) Materials of Environmental Concern have not been transported
or disposed of from the Properties in violation of, or in a manner or to
a location which could give rise to liability under, any Environmental
Law, nor have any Materials of Environmental Concern been generated,
treated, stored or disposed of at, on or under any of the Properties in
violation of, or in a manner that could give rise to liability under,
any applicable Environmental Law;

(f) no judicial proceeding or governmental or administrative
action is pending or, to the knowledge of the Borrower, threatened,
under any Environmental Law to which the Borrower or any Subsidiary is
or will be named as a party with respect to the Properties or the
Business, nor are there any consent decrees or other decrees, consent
orders, administrative orders or other orders, or other administrative
or judicial requirements outstanding under any Environmental Law with
respect to the Properties or the Business; and

(g) there has been no release or threat of release of Materials
of Environmental Concern at or from the Properties, or arising from or
related to the operations of the Borrower or any Subsidiary in
connection with the Properties or otherwise in connection with the
Business, in violation of or in amounts or in a manner that could give
rise to liability under Environmental Laws.

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4.18 Accuracy of Information, etc. No statement or information
contained in this Agreement, any other Loan Document, the Confidential
Information Memorandum, the Bumble Bee Confidential Information Memorandum or
any other document, certificate or statement furnished to the Administrative
Agent or the Lenders, or any of them, by or on behalf of any Loan Party for use
in connection with the transactions contemplated by this Agreement or the other
Loan Documents, contained as of the date such statement, information, document
or certificate was so furnished (or (a) in the case of the Confidential
Information Memorandum, as of the Closing Date or (b) in the case of the Bumble
Bee Confidential Information Memorandum, as of the Amendment/Restatement
Closing Date), any untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements contained herein or
therein not misleading. The projections and pro forma financial information
and other estimates and opinions contained in the materials referenced above
are based upon good faith estimates and assumptions believed by management of
the Borrower to be reasonable at the time made, it being recognized by the
Lenders that such financial information as it relates to future events is not
to be viewed as fact and that actual results during the period or periods
covered by such financial information may differ from the projected results set
forth therein by a material amount. As of the Closing Date, the
representations and warranties of the Buyer and the Merger Sub and, to the best
knowledge of the Borrower, the Sellers and AH Food Co. in the Acquisition
Agreement are true and correct in all material respects. As of the
Amendment/Restatement Closing Date, the representations and warranties of the
Buyer (as defined in the Bumble Bee Purchase Agreement) and, to the best
knowledge of the Borrower, the Sellers (as defined in the Bumble Bee Purchase
Agreement) in the Bumble Bee Purchase Agreement are true and correct in all
material respects. There is no fact known to any Loan Party that could
reasonably be expected to have a Material Adverse Effect that has not been
expressly disclosed herein, in the other Loan Documents, in the Confidential
Information Memorandum, in the Bumble Bee Confidential Information Memorandum
or in any other documents, certificates and statements furnished to the
Administrative Agent and the Lenders for use in connection with the
transactions contemplated hereby and by the other Loan Documents.

4.19 Security Documents. (a) The Guarantee and Collateral
Agreement is effective to create in favor of the Administrative Agent, for the
benefit of the Lenders, a legal, valid and enforceable security interest in the
Collateral described therein and proceeds thereof. In the case of the Pledged
Stock described in the Guarantee and Collateral Agreement, when stock
certificates representing such Pledged Stock are delivered to the
Administrative Agent, and in the case of the other Collateral described in the
Guarantee and Collateral Agreement, when financing statements in appropriate
form are filed in the offices specified on Schedule 4.19(a) (or, in the case of
Collateral granted by Bumble Bee and its Subsidiaries, Schedule 4.19(a)-A), the
Guarantee and Collateral Agreement shall constitute a fully perfected Lien on,
and security interest in, all right, title and interest of the Loan Parties in
such Collateral and the proceeds thereof, as security for the Obligations (as
defined in the Guarantee and Collateral Agreement), in each case prior and
superior in right to any other Person subject, except in the case of such
Pledged Stock, to Liens permitted by paragraphs (a) through (f) of Section 7.3.

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(b) Each of the Mortgages is effective to create in favor of the
Administrative Agent, for the benefit of the Lenders, a legal, valid and
enforceable Lien on the Mortgaged Properties described therein and proceeds
thereof, and when the Mortgages are filed in the offices specified on Schedule
4.19(b) (or, in the case of Mortgages granted by Bumble Bee and its
Subsidiaries, Schedule 4.19(b)-A), each Mortgage shall constitute a fully
perfected Lien on, and security interest in, all right, title and interest of
the Loan Parties in the Mortgaged Properties and the proceeds thereof, as
security for the Obligations (as defined in the relevant Mortgage), in each
case prior and superior in right to any other Person, subject to Liens
permitted by paragraphs (a) through (f) of Section 7.3.

4.20 Solvency. On the Closing Date, each Loan Party is, and
after giving effect to the Acquisitions and the incurrence of all Indebtedness
and obligations being incurred in connection herewith and therewith will be,
Solvent. On the Amendment/Restatement Closing Date, each Loan Party is, and
after giving effect to the Bumble Bee Acquisition and the incurrence of all
Indebtedness and obligations being incurred in connection herewith and
therewith will be, Solvent.

4.21 Senior Indebtedness. The Obligations constitute "Senior
Indebtedness" of the Borrower under and as defined in the Senior Subordinated
Note Indenture. The obligations of each Subsidiary Guarantor under the
Guarantee and Collateral Agreement constitute "Guarantor Senior Indebtedness"
of such Subsidiary Guarantor under and as defined in the Senior Subordinated
Note Indenture.

4.22 Regulation H. No Mortgage encumbers improved real property
which is located in an area that has been identified by the Secretary of
Housing and Urban Development as an area having special flood hazards and in
which flood insurance has been made available under the National Flood
Insurance Act of 1968.

SECTION 5. CONDITIONS PRECEDENT

5.1 Conditions to Initial Extension of Credit. The agreement of
each Lender to make the initial extension of credit requested to be made by it
is subject to the satisfaction, prior to or concurrently with the making of
such extension of credit on the Closing Date, of the following conditions
precedent:

(a) Loan Documents. The Administrative Agent shall have
received (i) this Agreement, executed and delivered by a duly authorized
officer of the Borrower, (ii) the Guarantee and Collateral Agreement,
executed and delivered by a duly authorized officer of the Borrower and
each Subsidiary Guarantor, (iii) each of the Mortgages, executed and
delivered by a duly authorized officer of each party thereto, and (iv)
for the account of each relevant Lender, Notes conforming to the
requirements hereof and executed and delivered by a duly authorized
officer of the Borrower.

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(b) Acquisitions, HM Equity, Senior Subordinated Notes, etc.
The following transactions shall have been consummated, in each case on
terms and conditions reasonably satisfactory to the Lenders:

(i) Merger Sub shall have merged (the "Merger") with and
into AH Food Co. (with AH Food Co. being the surviving
corporation); AH Food Co. shall have changed its name to
International Home Foods, Inc.; at the time of the Merger and
after giving effect to certain related transactions referred to
below, the Borrower and its Subsidiaries shall conduct a business
(the "AHP Food Business") that manufactures, markets and sells
specialty foods products and, immediately prior to such
transactions, was conducted by AH Food Co., the Sellers and their
affiliates; certain Subsidiaries and other assets of the Sellers
and their affiliates included in the AHP Food Business shall
either have been transferred to AH Food Co. immediately prior to
the Merger or purchased by the Borrower (any such purchase, a
"Subsequent Purchase") immediately after the Merger, as
contemplated by the Acquisition Agreement; in conjunction with
the Merger, the Buyer shall have paid consideration to the
Sellers, the Borrower shall have redeemed shares of common stock
of the Borrower held by the Sellers and the Borrower shall have
paid to the Sellers the purchase price for any Subsequent
Purchase, with the aggregate amount expended (the "AHP Purchase
Price") by the Buyer and the Borrower in connection with such
transactions, together with the value of the shares of common
stock of the Borrower held by the Sellers after giving effect to
the Merger (valued on the same basis as the HM Equity) being
equal to not more than $1,275,000,000, subject to adjustment as
provided in the Acquisition Agreement; and after giving effect to
the foregoing transactions, 80% of the common stock of the
Borrower shall be owned by the Buyer and 20% of the common stock
of the Borrower shall be owned by the Sellers (all of the
foregoing transactions, collectively, the "AHP Acquisition");

(ii) the Borrower shall have acquired (the "Heritage
Acquisition") at least 75% of the capital stock of Heritage for a
purchase price (the "Heritage Purchase Price") (including
repayment of assumed Indebtedness of Heritage) of not more than
$70,000,000 and all Indebtedness of Heritage outstanding
immediately prior to the Heritage Acquisition shall have been
paid in full;

(iii) (x) the Buyer shall have received at least
$264,000,000 from the proceeds of equity (the "HM Equity") issued
by the Buyer to funds managed by Hicks Muse and other investors
satisfactory to the Lenders, and such proceeds shall have been
applied to finance a portion of the AHP Purchase Price and the
Heritage Purchase Price; and (y) the value of the shares of
common stock of the Borrower held by the Sellers after giving
effect to the AHP Acquisition (valued at a price per share by
reference to the HM Equity) shall be at least $66,000,000;
provided, that a portion of the amount referred to in clause (x)
above may be funded with the proceeds of unsecured loans to the
Buyer; and

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(iv) the Borrower shall have received at least
$400,000,000 in gross cash proceeds from the issuance of the
Senior Subordinated Notes.

(c) Pro Forma Balance Sheet; Financial Statements. The Lenders
shall have received (i) the Pro Forma Balance Sheet, (ii) audited
consolidated financial statements of the AHP Food Business for the 1994
and 1995 fiscal years and audited financial statements of Heritage for
the 1995 fiscal year and (iii) unaudited interim consolidated financial
statements of the AHP Food Business and Heritage for each fiscal month
and quarterly period ended subsequent to the date of the latest
applicable financial statements delivered pursuant to clause (ii) of
this paragraph as to which such financial statements are available, and
such financial statements shall not, in the reasonable judgment of the
Lenders, reflect any material adverse change in the consolidated
financial condition of the AHP Food Business or Heritage, as the case
may be, as reflected in the financial statements or projections
contained in the Confidential Information Memorandum

(d) Lien Searches. The Administrative Agent shall have received
the results of a recent lien search in each of the jurisdictions where
assets of the Loan Parties are located, and such search shall reveal no
liens on any of the assets of the Borrower or its Subsidiaries except
for liens permitted by Section 7.3.

(e) Environmental Audit. The Administrative Agent shall have
received an environmental audit with respect to the real properties of
the Borrower and its Subsidiaries specified by the Administrative Agent.

(f) Expenses. The Administrative Agent shall have received
satisfactory evidence that the fees and expenses to be incurred in
connection with the Acquisitions and the financing thereof shall not
exceed $55,000,000.

(g) Closing Certificate. The Administrative Agent shall have
received, with a counterpart for each Lender, a certificate of each Loan
Party, dated the Closing Date, substantially in the form of Exhibit C,
with appropriate insertions and attachments.

(h) Legal Opinions. The Administrative Agent shall have
received the following executed legal opinions:

(i) the legal opinion of Vinson & Elkins, counsel to
the Borrower and its Subsidiaries, substantially in the form of
Exhibit F; and

(ii) the legal opinion of local counsel in each of
California, Pennsylvania and Ontario.

Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent
may reasonably require.

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(i) Pledged Stock; Stock Powers. The Administrative Agent shall
have received the certificates representing the shares of Capital Stock
pledged pursuant to the Guarantee and Collateral Agreement, together
with an undated stock power for each such certificate executed in blank
by a duly authorized officer of the pledgor thereof.

(j) Filings, Registrations and Recordings. Each document
(including, without limitation, any Uniform Commercial Code financing
statement) required by the Security Documents or under law or reasonably
requested by the Administrative Agent to be filed, registered or
recorded in order to create in favor of the Administrative Agent, for
the benefit of the Lenders, a perfected Lien on the Collateral described
therein, prior and superior in right to any other Person (other than
with respect to Liens expressly permitted by Section 7.3), shall be in
proper form for filing, registration or recordation.

(k) Mortgages, etc. (i) The Administrative Agent shall have
received a Mortgage with respect to each Mortgaged Property, executed
and delivered by a duly authorized officer of each party thereto.

(ii) If reasonably requested by the Administrative Agent, the
Administrative Agent shall have received, and the title insurance
company issuing the policy referred to in Section 5.1(m)(iii) (the
"Title Insurance Company") shall have received, maps or plats of an as-
built survey of the sites of the Mortgaged Properties certified to the
Administrative Agent and the Title Insurance Company in a manner
satisfactory to them, dated a date satisfactory to the Administrative
Agent and the Title Insurance Company by an independent professional
licensed land surveyor reasonably satisfactory to the Administrative
Agent and the Title Insurance Company, which maps or plats and the
surveys on which they are based shall be made in accordance with the
Minimum Standard Detail Requirements for Land Title Surveys jointly
established and adopted by the American Land Title Association and the
American Congress on Surveying and Mapping in 1992, and, without
limiting the generality of the foregoing, there shall be surveyed and
shown on such maps, plats or surveys the following: (A) the locations on
such sites of all the buildings, structures and other improvements and
the established building setback lines; (B) the lines of streets
abutting the sites and width thereof; (C) all access and other easements
appurtenant to the sites; (D) all roadways, paths, driveways, easements,
encroachments and overhanging projections and similar encumbrances
affecting the site, whether recorded, apparent from a physical
inspection of the sites or otherwise known to the surveyor; (E) any
encroachments on any adjoining property by the building structures and
improvements on the sites; (F) if the site is described as being on a
filed map, a legend relating the survey to said map; and (G) the flood
zone designations, if any, in which the Mortgaged Properties are
located; provided, that any of the foregoing items so requested by the
Administrative Agent may be delivered after the Closing Date subject to
compliance with Section 6.10(e).

(iii) The Administrative Agent shall have received in respect of
each Mortgaged Property a mortgagee's title insurance policy (or
policies) or marked up unconditional binder

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for such insurance. Each such policy shall (A) be in an amount
reasonably satisfactory to the Administrative Agent; (B) be issued at
ordinary rates; (C) insure that the Mortgage insured thereby creates a
valid first Lien on such Mortgaged Property free and clear of all
defects and encumbrances, except as disclosed therein; (D) name the
Administrative Agent for the benefit of the Lenders as the insured
thereunder; (E) be in the form of ALTA Loan Policy - 1970 (Amended
10/17/70 and 10/17/84) (or equivalent policies) to the extent available
in the applicable jurisdictions; (F) contain such endorsements and
affirmative coverage as the Administrative Agent may reasonably request
to the extent available in the applicable jurisdictions; and (G) be
issued by title companies satisfactory to the Administrative Agent
(including any such title companies acting as co-insurers or reinsurers,
at the option of the Administrative Agent). The Administrative Agent
shall have received evidence satisfactory to it that all premiums in
respect of each such policy, all charges for mortgage recording tax, and
all related expenses, if any, have been paid.

(iv) If reasonably requested by the Administrative Agent, the
Administrative Agent shall have received (A) a policy of flood insurance
which (1) covers any parcel of improved real property which is
encumbered by any Mortgage, (2) is written in an amount not less than
the outstanding principal amount of the indebtedness secured by such
Mortgage which is reasonably allocable to such real property or the
maximum limit of coverage made available with respect to the particular
type of property under the National Flood Insurance Act of 1968,
whichever is less, and (3) has a term ending not later than the maturity
of the Indebtedness secured by such Mortgage and (B) confirmation that
the Borrower has received the notice required pursuant to Section
208(e)(3) of Regulation H of the Board; provided, that any of the
foregoing items so requested by the Administrative Agent may be
delivered after the Closing Date subject to compliance with Section
6.10(e).

(v) The Administrative Agent shall have received a copy of all
recorded documents referred to, or listed as exceptions to title, in the
title policy or policies referred to in Section 5.1(k)(iii) and a copy
of all other material documents affecting the Mortgaged Properties.

(l) Solvency Opinion. The Administrative Agent shall have
received a solvency opinion from Corporate Valuation Advisors, Inc.

(m) Insurance. The Administrative Agent shall have received
insurance certificates satisfying the requirements of the Guarantee and
Collateral Agreement and the Mortgages.

5.2 Conditions to Each Extension of Credit. The agreement of
each Lender to make any extension of credit requested to be made by it on any
date (including, without limitation, its initial extension of credit) is
subject to the satisfaction of the following conditions precedent:

(a) Representations and Warranties. Each of the representations
and warranties made by any Loan Party in or pursuant to the Loan
Documents shall be true and correct in all material respects on and as
of such date as if made on and as of such date.

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(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
extensions of credit requested to be made on such date.

(c) Revolving Credit Facility. In the case of any extension of
credit under the Revolving Credit Facility, after giving effect thereto,
the sum of the Total Revolving Extensions of Credit and the Canadian
Subsidiary Equivalent Outstandings shall not exceed $140,000,000.

Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the conditions contained in this
Section 5.2 have been satisfied.

5.3 Conditions to Amendment/Restatement Closing Date. The
effectiveness of the amendment and restatement of the Existing Credit Agreement
pursuant to this Agreement, and the agreement of each Lender to make any
extension of credit requested to be made by it on the Amendment/Restatement
Closing Date, is subject to the satisfaction, prior to or concurrently with the
making of any such extension of credit on the Amendment/Restatement Closing
Date, of the following conditions precedent:

(a) Loan Documents. The Administrative Agent shall have
received (i) this Agreement, executed and delivered by a duly authorized
officer of the Borrower, (ii) a supplement to the Guarantee and
Collateral Agreement, executed and delivered by a duly authorized
officer of the Borrower and each Subsidiary Guarantor, in form and
substance satisfactory to the Administrative Agent, (iii) a Mortgage in
respect of each Mortgaged Property listed on Schedule 1.1D, executed and
delivered by a duly authorized officer of each party thereto, (iv) for
the account of each relevant Lender, to the extent necessary, Notes
conforming to the requirements hereof and executed and delivered by a
duly authorized officer of the Borrower and (v) an Addendum executed and
delivered by each Lender listed on Schedule 1.1C.

(b) Bumble Bee Acquisition. The Borrower, through Bumble Bee
Acquisition Corporation, a Wholly Owned Subsidiary of the Borrower,
shall have acquired (the "Bumble Bee Acquisition") substantially all of
the assets of Bumble Bee and its Subsidiaries for a purchase price of
not more than $163,000,000 (plus or minus any purchase price adjustments
as provided in the Bumble Bee Purchase Agreement), on the terms and
conditions set forth in the Bumble Bee Purchase Agreement. The Borrower
shall have at least $36,600,000 of excess cash-on-hand available to
finance a portion of the purchase price for the Bumble Bee Acquisition.
Not more than $133,400,000 of Indebtedness shall have been incurred by
the Borrower and its Subsidiaries to finance the Bumble Bee Acquisition
and the payment of related fees and expenses. None of the material
terms and conditions of the Bumble Bee Purchase Agreement shall have
been amended or waived without the consent of the Required Lenders. No
Indebtedness (including trade payables owing to affiliates), other than
Assumed

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Liabilities (as defined in the Bumble Bee Purchase Agreement), or Liens,
other than Permitted Encumbrances (as defined in the Bumble Bee Purchase
Agreement), shall be assumed in connection with the Bumble Bee
Acquisition, and the existing creditors of Bumble Bee and its
Subsidiaries shall have expressly released any such Indebtedness or
Liens on terms satisfactory to the Administrative Agent. All material
orders of the bankruptcy court relating to Bumble Bee and the Bumble Bee
Acquisition shall be satisfactory to the Administrative Agent. All
governmental and third party approvals (including landlords' and other
consents) necessary in connection with the Bumble Bee Acquisition, the
financing thereof contemplated hereby and the continuing operations of
Bumble Bee and its Subsidiaries shall have been obtained and be in full
force and effect, and all applicable waiting periods shall have expired
without any action being taken or threatened by any competent authority
which would restrain, prevent or otherwise impose adverse conditions on
the Bumble Bee Acquisition or the financing thereof.

(c) Bumble Bee Pro Forma Financial Statements; Financial
Statements. The Lenders shall have received (i) the Bumble Bee Pro
Forma Financial Statements and (ii) unaudited interim consolidated
financial statements of Bumble Bee and its Subsidiaries for each fiscal
month and quarterly period ended subsequent to the last day of Bumble
Bee's 1996 fiscal year as to which such financial statements are
available.

(d) Lien Searches. The Administrative Agent shall have received
the results of a recent lien search in each of the jurisdictions where
assets of Bumble Bee and its Subsidiaries are located, and such search
shall reveal no liens on any of the assets of Bumble Bee or its
Subsidiaries except for liens permitted by Section 7.3.

(e) Environmental Audit. The Administrative Agent shall have
received an environmental audit with respect to the real properties of
Bumble Bee and its Subsidiaries located in California and Puerto Rico.

(f) Expenses. The Administrative Agent shall have received
satisfactory evidence that the fees and expenses to be incurred in
connection with the Bumble Bee Acquisition and the financing thereof
shall not exceed $7,000,000.

(g) Closing Certificate. The Administrative Agent shall have
received, with a counterpart for each Lender, a certificate of the
Borrower and each former Subsidiary of Bumble Bee that is a Loan Party,
dated the Closing Date, substantially in the form of Exhibit C, with
appropriate insertions and attachments.

(h) Legal Opinions. The Administrative Agent shall have
received the following executed legal opinions:

(i) the legal opinion of Vinson & Elkins, counsel to
the Borrower and its Subsidiaries, substantially in the form of
Exhibit F (revised as appropriate to

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reflect the transactions contemplated hereby in connection with
the Bumble Bee Acquisition); and

(ii) the legal opinion of local counsel in each of
California and Puerto Rico.

Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent
may reasonably require.

(i) Pledged Stock; Stock Powers. The Administrative Agent shall
have received the certificates representing the shares of Capital Stock
pledged by Bumble Bee or any of its Subsidiaries pursuant to the
Guarantee and Collateral Agreement, together with an undated stock power
for each such certificate executed in blank by a duly authorized officer
of the pledgor thereof.

(j) Filings, Registrations and Recordings. Each document
(including, without limitation, any Uniform Commercial Code financing
statement) required by the Security Documents or under law or reasonably
requested by the Administrative Agent to be filed, registered or
recorded in order to create in favor of the Administrative Agent, for
the benefit of the Lenders, a perfected Lien on the Collateral granted
by Bumble Bee or any of its Subsidiaries, prior and superior in right to
any other Person (other than with respect to Liens expressly permitted
by Section 7.3), shall be in proper form for filing, registration or
recordation.

(k) Mortgages. The Administrative Agent shall have received a
Mortgage with respect to each Mortgaged Property listed on Schedule
1.1D, executed and delivered by a duly authorized officer of each party
thereto, together with documents of the type delivered in respect of the
Mortgaged Properties listed on Schedule 1.1B pursuant to Section 5.1(k).

(l) Insurance. The Administrative Agent shall have received
insurance certificates satisfying the requirements of the Guarantee and
Collateral Agreement and the relevant Mortgages, after giving effect to
the Bumble Bee Acquisition.

SECTION 6. AFFIRMATIVE COVENANTS

The Borrower hereby agrees that, so long as the Revolving Credit
Commitments remain in effect, any Letter of Credit remains outstanding or any
Loan or other amount is owing to any Lender or the Administrative Agent
hereunder, the Borrower shall and shall cause each of its Subsidiaries to:

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6.1 Financial Statements. Furnish to the Administrative Agent
(with sufficient copies for each Lender, which shall in turn be promptly
distributed by the Administrative Agent to the Lenders):

(a) as soon as available, but in any event within 95 days after
the end of each fiscal year of the Borrower, a copy of the audited
consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such year and the related audited
consolidated statements of income and of cash flows for such year,
setting forth in each case in comparative form the figures for the
previous year, reported on without a "going concern" or like
qualification or exception, or qualification arising out of the scope of
the audit, by independent certified public accountants of nationally
recognized standing;

(b) as soon as available, but in any event not later than 45
days after the end of each of the first three quarterly periods of each
fiscal year of the Borrower, the unaudited consolidated balance sheet of
the Borrower and its consolidated Subsidiaries as at the end of such
quarter and the related unaudited consolidated statements of income and
of cash flows for such quarter and the portion of the fiscal year
through the end of such quarter, setting forth in each case in
comparative form the figures for the previous year, certified by a
Responsible Officer as being fairly stated in all material respects
(subject to normal year-end audit adjustments); and

(c) as soon as available, but in any event not later than 30
days after the end of each month occurring during each fiscal year of
the Borrower (other than the third, sixth, ninth and twelfth such
month), the unaudited consolidated balance sheet of the Borrower and its
Subsidiaries as at the end of such month and the related unaudited
consolidated statements of income and of cash flows for such month and
the portion of the fiscal year through the end of such month, setting
forth in each case in comparative form the figures for the previous
year, certified by a Responsible Officer as being fairly stated in all
material respects (subject to normal year-end audit adjustments).

All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein); provided, that financial statements delivered pursuant
to paragraphs (b) and (c) above shall not be required to contain footnote
disclosure.

6.2 Certificates; Other Information. Furnish to the
Administrative Agent (with sufficient copies for each Lender, which shall in
turn be promptly distributed by the Administrative Agent to the Lenders) or, in
the case of clause (f), to the relevant Lender:

(a) concurrently with the delivery of the financial statements
referred to in Section 6.1(a), a certificate of the independent
certified public accountants reporting on such

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financial statements stating that in making the examination necessary
therefor no knowledge was obtained of any Default or Event of Default,
except as specified in such certificate;

(b) concurrently with the delivery of any financial statements
pursuant to Section 6.1, (i) a certificate of a Responsible Officer
stating that, to the best of such Responsible Officer's knowledge, each
Loan Party during such period has observed or performed all of its
covenants and other agreements, and satisfied every condition, contained
in this Agreement and the other Loan Documents to which it is a party to
be observed, performed or satisfied by it, and that such Responsible
Officer has obtained no knowledge of any Default or Event of Default
except as specified in such certificate and (ii) in the case of
quarterly or annual financial statements, (x) a Compliance Certificate
containing all information necessary for determining compliance by the
Borrower and its Subsidiaries with the provisions of this Agreement
referred to therein as of the last day of the relevant fiscal quarter or
fiscal year and (y) to the extent not previously disclosed to the
Administrative Agent, a listing of any state or province within the
United States or Canada where any Loan Party keeps inventory or
equipment and of any Intellectual Property arising under the laws of the
United States or Canada (or any jurisdiction therein) acquired by any
Loan Party since the date of the most recent list delivered pursuant to
this clause (y) (or, in the case of the first such list so delivered,
since the Closing Date);

(c) as soon as available, and in any event no later than 45 days
after the end of each fiscal year of the Borrower, a detailed
consolidated budget for the following fiscal year (including a projected
consolidated balance sheet of the Borrower and its Subsidiaries as of
the end of the following fiscal year, and the related consolidated
statements of projected cash flow, projected changes in financial
position and projected income), and, as soon as available, significant
revisions, if any, of such budget and projections with respect to such
fiscal year (collectively, the "Projections"), which Projections shall
in each case be accompanied by a certificate of a Responsible Officer
stating that such Projections are based upon good faith estimates and
assumptions believed by management of the Borrower to be reasonable at
the time made, it being recognized by the Lenders that such financial
information as it relates to future events is not to be viewed as fact
and that actual results during the period or periods covered by such
financial information may differ from the projected results set forth
therein by a material amount;

(d) within 45 days after the end of each fiscal quarter of the
Borrower, a narrative discussion and analysis of the financial condition
and results of operations of the Borrower and its Subsidiaries for such
fiscal quarter and for the period from the beginning of the then current
fiscal year to the end of such fiscal quarter, as compared to the
portion of the Projections covering such periods and to the comparable
periods of the previous year;

(e) within five days after the same are sent, copies of all
financial statements and reports which the Borrower sends to the holders
of any class of its debt securities or public equity securities and
within five days after the same are filed, copies of all financial

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statements and reports which the Borrower may make to, or file with, the
Securities and Exchange Commission or any successor or analogous
Governmental Authority; and

(f) promptly, such additional financial and other information as
any Lender may from time to time reasonably request.

6.3 Payment of Obligations. Pay, discharge or otherwise satisfy
at or before maturity or before they become delinquent, as the case may be, all
its material obligations of whatever nature, except where the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of the Borrower or its Subsidiaries, as the case may be.

6.4 Conduct of Business and Maintenance of Existence, etc. (a)
(i) Continue to engage in business of the same general type as now conducted by
it, (ii) preserve, renew and keep in full force and effect its corporate
existence and (iii) take all reasonable action to maintain all rights,
privileges and franchises necessary or desirable in the normal conduct of its
business, except, in each case, as otherwise permitted by Section 7.4 and
except, in the case of clause (iii) above, to the extent that failure to do so
could not reasonably be expected to have a Material Adverse Effect; and (b)
comply with all Contractual Obligations and Requirements of Law except to the
extent that failure to comply therewith could not, in the aggregate, reasonably
be expected to have a Material Adverse Effect.

6.5 Maintenance of Property; Insurance. (a) Keep all property
useful and necessary in its business in good working order and condition,
ordinary wear and tear excepted and (b) maintain with financially sound and
reputable insurance companies insurance on all its property in at least such
amounts and against at least such risks (but including in any event public
liability, product liability and business interruption) as are usually insured
against in the same general area by companies engaged in the same or a similar
business.

6.6 Inspection of Property; Books and Records; Discussions. (a)
Keep proper books of records and account in which full, true and correct
entries in conformity with GAAP and all Requirements of Law shall be made of
all dealings and transactions in relation to its business and activities and
(b) upon reasonable prior notice and at any reasonable time, permit
representatives of the Administrative Agent or any Lender to visit and inspect
any of its properties and examine and, if reasonably requested, make copies of
its contracts, books and records and to discuss the business, operations,
properties and financial and other condition of the Borrower and its
Subsidiaries with officers and employees of the Borrower and its Subsidiaries
and with its independent certified public accountants; provided that the
Administrative Agent or such Lender shall notify the Borrower prior to any
contact with such accountants and give the Borrower the opportunity to
participate in such discussions.

6.7 Notices. Promptly give notice to the Administrative Agent
and each Lender of:

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(a) the occurrence of any Default or Event of Default;

(b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries or (ii)
litigation, investigation or proceeding which may exist at any time
between the Borrower or any of its Subsidiaries and any Governmental
Authority and which has a reasonable likelihood of being adversely
determined, which in either case, if not cured or if adversely
determined, as the case may be, could reasonably be expected to have a
Material Adverse Effect;

(c) any litigation or proceeding affecting the Borrower or any
of its Subsidiaries in which the amount involved is $10,000,000 or more
and not covered by insurance or in which injunctive or similar relief is
sought;

(d) the following events, as soon as possible and in any event
within 30 days after the Borrower knows or has reason to know thereof:
(i) the occurrence of any Reportable Event with respect to any Plan, a
failure to make any required contribution to a Plan, the creation of any
Lien in favor of the PBGC or a Plan or any withdrawal from, or the
termination, Reorganization or Insolvency of, any Multiemployer Plan or
(ii) the institution of proceedings or the taking of any other action by
the PBGC or the Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the
termination, Reorganization or Insolvency of, any Plan; and

(e) any development or event which has had or could reasonably
be expected to have a Material Adverse Effect.

Each notice pursuant to this Section 6.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Borrower or the relevant Subsidiary
proposes to take with respect thereto.

6.8 Environmental Laws. (a) Except as could not reasonably be
expected to have a Material Adverse Effect, comply with, and ensure compliance
by all tenants and subtenants, if any, with, all applicable Environmental Laws,
and obtain and comply with and maintain, and ensure that all tenants and
subtenants obtain and comply with and maintain, any and all licenses,
approvals, notifications, registrations or permits required by applicable
Environmental Laws.

(b) Conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws.

6.9 Interest Rate Protection. In the case of the Borrower, (a)
within 90 days after the Closing Date, enter into Interest Rate Protection
Agreements to the extent necessary to provide that at least 50% of the
aggregate principal amount of the Senior Subordinated Notes and the Term Loans

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outstanding on the Closing Date is subject to either a fixed interest rate or
interest rate protection for a period of not less than one year and (b) within
90 days after the Amendment/Restatement Closing Date, enter into additional
Interest Rate Protection Agreements to the extent necessary to provide that at
least 50% of the aggregate principal amount of the Senior Subordinated Notes
and the Term Loans outstanding on the Amendment/Restatement Closing Date is
subject to either a fixed interest rate or interest rate protection, with any
additional Interest Rate Protection Agreements required by this clause (b)
having a term of not less than one year (provided, that, in each case, in the
event that the term thereof shall be less than two years, such Interest Rate
Protection Agreements shall be extended or replaced no later than the
expiration of such term, with the term of such extended or replacement Interest
Rate Protection Agreements ending no earlier than the second anniversary of the
date on which the original Interest Rate Protection Agreements were entered
into), which Interest Rate Protection Agreements shall in each case have terms
and conditions reasonably satisfactory to the Administrative Agent.

6.10 Additional Collateral, etc. (a) With respect to any
Property acquired after the Closing Date by the Borrower or any of its
Subsidiaries (other than (x) any Property described in paragraph (b), (c) or
(d) below, (y) any Property subject to a Lien expressly permitted by Section
7.3(g) and (z) Receivables Facility Assets) as to which the Administrative
Agent, for the benefit of the Lenders, does not have a perfected Lien, promptly
(i) execute and deliver to the Administrative Agent such amendments to the
Guarantee and Collateral Agreement or such other documents as the
Administrative Agent deems necessary or advisable in order to grant to the
Administrative Agent, for the benefit of the Lenders, a security interest in
such Property and (ii) take all actions necessary or advisable to grant to the
Administrative Agent, for the benefit of the Lenders, a perfected first
priority security interest in such Property, including without limitation, the
filing of Uniform Commercial Code financing statements in such jurisdictions as
may be required by the Guarantee and Collateral Agreement or by law or as may
be reasonably requested by the Administrative Agent.

(b) With respect to any fee interest in any real estate which,
together with any related parcel of real estate not yet subject to a Mortgage,
has a value (determined inclusive of any improvements thereof) of at least
$5,000,000 acquired after the Closing Date by the Borrower or any of its
Subsidiaries (other than any such real estate subject to a Lien expressly
permitted by Section 7.3(g)), promptly (i) execute and deliver a first priority
mortgage or deed of trust (subject only to Liens permitted by Section 7.3) in
favor of the Administrative Agent, for the benefit of the Lenders, covering
such real estate, in form and substance reasonably satisfactory to the
Administrative Agent, (ii) if reasonably requested by the Administrative Agent,
provide the Lenders with (x) title and extended coverage insurance covering
such real estate in an amount at least equal to the purchase price of such real
estate (or such other amount as shall be reasonably specified by the
Administrative Agent) as well as a current ALTA survey thereof, together with a
surveyor's certificate and (y) any consents or estoppels reasonably deemed
necessary or advisable by the Administrative Agent in connection with such
mortgage or deed of trust, each of the foregoing in form and substance
reasonably satisfactory to the Administrative Agent and (iii) if reasonably
requested by the Administrative Agent, deliver to the Administrative Agent
legal opinions relating to the matters

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<PAGE> 71
described above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the Administrative Agent.

(c) With respect to any new Subsidiary (other than an Excluded
Foreign Subsidiary or any Receivables SPV) created or acquired after the
Closing Date (which, for the purposes of this paragraph (c), shall include any
existing Subsidiary that ceases to be an Excluded Foreign Subsidiary) by the
Borrower or any of its Subsidiaries, promptly (i) execute and deliver to the
Administrative Agent such amendments to the Guarantee and Collateral Agreement
as the Administrative Agent deems necessary or advisable in order to grant to
the Administrative Agent, for the benefit of the Lenders, a perfected first
priority security interest in the Capital Stock of such new Subsidiary which is
owned by the Borrower or any of its Subsidiaries, (ii) deliver to the
Administrative Agent the certificates representing such Capital Stock, together
with undated stock powers, in blank, executed and delivered by a duly
authorized officer of the Borrower or such Subsidiary, as the case may be,
(iii) cause such new Subsidiary (A) to become a party to the Guarantee and
Collateral Agreement and (B) to take such actions necessary or advisable to
grant to the Administrative Agent for the benefit of the Lenders a perfected
first priority security interest in the Collateral described in the Guarantee
and Collateral Agreement with respect to such new Subsidiary, including,
without limitation, the filing of Uniform Commercial Code financing statements
in such jurisdictions as may be required by the Guarantee and Collateral
Agreement or by law or as may be reasonably requested by the Administrative
Agent, and (iv) if reasonably requested by the Administrative Agent, deliver to
the Administrative Agent legal opinions relating to the matters described
above, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Administrative Agent.

(d) With respect to any new Excluded Foreign Subsidiary created
or acquired after the Closing Date by the Borrower or any of its Subsidiaries,
promptly (i) execute and deliver to the Administrative Agent such amendments to
the Guarantee and Collateral Agreement as the Administrative Agent deems
necessary or advisable in order to grant to the Administrative Agent, for the
benefit of the Lenders, a perfected first priority security interest in the
Capital Stock of such new Subsidiary which is owned by the Borrower or any of
its Subsidiaries (provided that in no event shall more than 65% of the total
outstanding Capital Stock of any such new Subsidiary be required to be so
pledged), (ii) deliver to the Administrative Agent the certificates
representing such Capital Stock, together with undated stock powers, in blank,
executed and delivered by a duly authorized officer of the Borrower or such
Subsidiary, as the case may be and (iii) if reasonably requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.

(e) Within 60 days after the Closing Date, deliver any items
requested by the Administrative Agent pursuant to Sections 5.1(k)(ii) and
5.1(k)(iv) and not delivered on the Closing Date, together with, in the case of
surveys, such endorsements to the title insurance policies referred to in
Section 5.1(k)(iii) relating to the matters disclosed in such surveys as may be
reasonably requested by the Administrative Agent. In the case of the Borrower,
within 30 days after the Closing

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Date, acquire that portion of the capital stock of Heritage not acquired by the
Borrower on the Closing Date.

SECTION 7. NEGATIVE COVENANTS

7.1 Financial Condition Covenants.

(a) Consolidated Leverage Ratio. Permit the Consolidated
Leverage Ratio as at the last day of any Test Period ending with any fiscal
quarter set forth below to exceed the ratio set forth below opposite such
fiscal quarter:

<TABLE>
<CAPTION>
Fiscal Quarter Ending Consolidated Leverage Ratio
--------------------- ---------------------------
<S> <C>
3/31/97-12/31/97 6.50 to 1.0
3/31/98-6/30/98 6.40 to 1.0
9/30/98 6.20 to 1.0
12/31/98 6.10 to 1.0
3/31/99 5.95 to 1.0
6/30/99 5.90 to 1.0
9/30/99 5.80 to 1.0
12/31/99 5.70 to 1.0
3/31/00 5.60 to 1.0
6/30/00 5.50 to 1.0
9/30/00 5.40 to 1.0
12/31/00 5.30 to 1.0
3/31/01-6/30/01 5.00 to 1.0
9/30/01-12/31/01 4.90 to 1.0
3/31/02-6/30/02 4.60 to 1.0
9/30/02-12/31/02 4.40 to 1.0
3/31/03 4.30 to 1.0
6/30/03 4.20 to 1.0
9/30/03 4.10 to 1.0
12/31/03 and thereafter 4.00 to 1.0
</TABLE>

(b) Consolidated Interest Coverage Ratio. Permit the
Consolidated Interest Coverage Ratio for any Test Period ending with any fiscal
quarter set forth below to be less than the ratio set forth below opposite such
fiscal quarter:

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<PAGE> 73
<TABLE>
<CAPTION>
Fiscal Quarter Consolidated Interest
Ending Coverage Ratio
-------------- ---------------------
<S> <C>
3/31/97-3/31/98 1.50 to 1.0
6/30/98-12/31/98 1.55 to 1.0
3/31/99-12/31/99 1.60 to 1.0
3/31/00-6/30/00 1.70 to 1.0
9/30/00-12/31/00 1.75 to 1.0
3/31/01-6/30/01 1.80 to 1.0
9/30/01-12/31/01 1.90 to 1.0
3/31/02-6/30/02 2.00 to 1.0
9/30/02-12/31/02 2.10 to 1.0
3/31/03-9/30/03 2.20 to 1.0
12/31/03 and 2.30 to 1.0
thereafter
</TABLE>

(c) Consolidated Fixed Charge Coverage Ratio. Permit the
Consolidated Fixed Charge Coverage Ratio for any Test Period ending with any
fiscal quarter set forth below to be less than the ratio set forth below
opposite such fiscal quarter:

<TABLE>
<CAPTION>
Fiscal Quarter Consolidated Fixed
Ending Charge Coverage Ratio
--------------------- ----------------------
<S> <C>
3/31/97-12/31/00 1.00 to 1.0
3/31/01-12/31/03 1.05 to 1.0
3/31/04 and thereafter 1.10 to 1.0
</TABLE>

Notwithstanding anything to the contrary herein, (i) for the purposes of
determining the Consolidated Leverage Ratio, the Consolidated Interest Coverage
Ratio and the Consolidated Fixed Charge Coverage Ratio pursuant to this Section
7.1 or pursuant to the Pricing Grid for the Test Periods ending March 31, 1997,
June 30, 1997, September 30, 1997, December 31, 1997 and March 31, 1998, (i)
Consolidated EBITDA for the relevant Test Period shall be deemed to equal
actual Consolidated EBITDA for such Test Period plus $151,500,000,
$102,600,000, $148,800,000, $97,700,000 and $48,000,000, respectively; (ii)
Consolidated Interest Expense for the relevant Test Period shall be deemed to
equal actual Consolidated Interest Expense for such Test Period multiplied by
4, 2, 4, 2 and 4/3, respectively, (iii) Consolidated Tax Expense for the
relevant Test Period shall be deemed to equal actual Consolidated Tax Expense
for such Test Period multiplied by 4, 2, 4, 2 and 4/3, respectively, (iv)
scheduled payments payable during the relevant Test Period on account of
principal of Indebtedness shall be appropriately annualized (e.g., the
aggregate amount of the principal installments of the Term Loans due on March
31, 1997 shall be multiplied by 2 for the purposes of determining the
Consolidated Fixed Charge Coverage Ratio for the Test Periods ending March 31,
1997 and June 30, 1997), and (v) Capital Expenditures for the relevant Test
Period shall

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be deemed to equal actual Capital Expenditures for such Test Period plus
$11,000,000, $7,400,000, $15,300,000, $10,400,000 and $4,000,000, respectively.

7.2 Limitation on Indebtedness. Create, incur, assume or suffer
to exist (in each case, to "Incur") any Indebtedness, except:

(a) Indebtedness of any Loan Party pursuant to any Loan
Document;

(b) Indebtedness of the Borrower to any Subsidiary and of any
Wholly Owned Subsidiary Guarantor to the Borrower or any other
Subsidiary;

(c) purchase money Indebtedness and Indebtedness secured by
Liens permitted by Section 7.3(g), provided, that the aggregate amount
of Indebtedness incurred pursuant to this Section 7.2(c) shall not
exceed $25,000,000 at any one time outstanding;

(d) Capital Lease Obligations, provided, that the aggregate
principal amount of Capital Lease Obligations incurred pursuant to this
Section 7.2(d) in any fiscal year of the Borrower, when added to the
aggregate amount of other Capital Expenditures made during such fiscal
year pursuant to Section 7.7(a), shall not exceed the amount permitted
to be expended during such fiscal year pursuant to Section 7.7(a);

(e) Indebtedness outstanding on the Closing Date and listed on
Schedule 7.2(e) and any refinancings, refundings, renewals or extensions
thereof (without any increase in the principal amount thereof);

(f) guarantees made in the ordinary course of business by the
Borrower or any of its Subsidiaries of obligations of any Wholly Owned
Subsidiary Guarantor;

(g) (i) Indebtedness of the Borrower in respect of the Senior
Subordinated Notes in an aggregate principal amount not to exceed
$400,000,000 and (ii) subordinated Guarantee Obligations of any
Subsidiary Guarantor in respect of such Indebtedness;

(h) Indebtedness of any Canadian Subsidiary incurred for working
capital purposes in the ordinary course of business, provided that (i)
the U.S.$ equivalent (determined in good faith by the Borrower) of the
aggregate outstanding principal amount thereof (the "Canadian Subsidiary
Equivalent Outstandings") shall not exceed $10,000,000 at any one time
and (ii) on the date of any incurrence thereof, after giving effect
thereto, the sum of the Canadian Subsidiary Equivalent Outstandings and
the Total Revolving Extensions of Credit shall not exceed $140,000,000;

(i) Indebtedness of any Receivables SPV pursuant to a
Receivables Facility on terms and conditions reasonably satisfactory to
the Required Lenders;

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(j) Trade Acceptances in an aggregate face amount not to exceed
$10,000,000 at any one time outstanding;

(k) at any time after the Revolving Credit Commitments shall
have been terminated (other than pursuant to Section 8), Indebtedness in
respect of unsecured revolving lines of credit in an aggregate
outstanding principal amount not exceeding $100,000,000 at any one time;
and

(l) additional Indebtedness of the Borrower or any of its
Subsidiaries in an aggregate principal amount (for the Borrower and all
Subsidiaries) not to exceed $25,000,000 at any one time outstanding.

7.3 Limitation on Liens. Create, incur, assume or suffer to
exist any Lien upon any of its Property or revenues, whether now owned or
hereafter acquired, except for:

(a) Liens for taxes not yet due or which are being contested in
good faith by appropriate proceedings, provided that adequate reserves
with respect thereto are maintained on the books of the Borrower or its
Subsidiaries, as the case may be, in conformity with GAAP (or, in the
case of Foreign Subsidiaries, generally accepted accounting principles
in effect from time to time in their respective jurisdictions of
incorporation);

(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 30 days or
which are being contested in good faith by appropriate proceedings;

(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation;

(d) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations,
insurance contracts, surety and appeal bonds, performance bonds and
other obligations of a like nature incurred in the ordinary course of
business;

(e) easements, rights-of-way, restrictions, covenants, minor
exceptions to title and other similar encumbrances (i) incurred in the
ordinary course of business which, in the aggregate, are not substantial
in amount and which do not in any case materially detract from the value
of the property subject thereto or materially interfere with the
ordinary conduct of the business of the Borrower or any of its
Subsidiaries or (ii) which are set forth in the "marked up" commitments
for title insurance delivered to the Administrative Agent on the Closing
Date;

(f) Liens in existence on the Amendment/Restatement Closing Date
listed on Schedule 7.3(f), securing Indebtedness permitted by Section
7.2(e), provided that no such

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Lien is spread to cover any additional property after the Closing Date
and that the amount of Indebtedness secured thereby is not increased;

(g) (i) Liens securing Indebtedness of the Borrower or any of
its Subsidiaries incurred to finance the acquisition of fixed or capital
assets (provided that (x) such Liens shall be created substantially
simultaneously with the acquisition of such fixed or capital assets, (y)
such Liens do not at any time encumber any property other than the
property financed by such Indebtedness and (z) the amount of
Indebtedness secured thereby is not increased) and (ii) Liens existing
on any property or asset at the time of acquisition thereof by the
Borrower or any Subsidiary or existing on any property or asset of any
Person that becomes a Subsidiary after the Closing Date at the time such
Person becomes a Subsidiary (provided that (x) such Lien is not created
in contemplation of or in connection with such acquisition or such
Person becoming a Subsidiary, as the case may be, (y) such Lien shall
not apply to any other property or assets of the Borrower or any of its
Subsidiaries and (z) such Lien shall secure only those obligations which
it secures on the date of such acquisition or the date such Person
becomes a Subsidiary, as the case may be);

(h) Liens created pursuant to the Security Documents;

(i) any interest or title of a lessor under any lease entered
into by the Borrower or any of its Subsidiaries in the ordinary course
of its business and covering only the assets so leased;

(j) any obligations or duties affecting any of the Property of
the Borrower or its Subsidiaries to any municipality or public authority
with respect to any franchise, grant, license or permit which do not
materially impair the use of such Property for the purposes for which it
is held;

(k) with respect to Property located in Canada, reservations,
limitations, provisos and conditions in any original grant from the
Crown or any freehold lessor of any Property of the Borrower or any of
its Subsidiaries;

(l) Liens encumbering inventory and accounts receivable of a
Canadian Subsidiary securing Indebtedness of such Canadian Subsidiary
incurred pursuant to Section 7.2(h);

(m) Liens imposed by operation of law with respect to any
judgments or orders not constituting an Event of Default;

(n) Liens on any Receivables Facility Assets to secure the
repayment of any Indebtedness incurred under any Receivables Facility
permitted by Section 7.2(i); and

(o) Liens not otherwise permitted by this Section 7.3 so long as
neither (i) the aggregate outstanding principal amount of the
obligations secured thereby nor (ii) the

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aggregate fair market value (determined as of the date such Lien is
incurred) of the assets subject thereto exceeds (as to the Borrower and
all Subsidiaries) $5,000,000 at any one time.

7.4 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or Dispose of all or substantially all
of its property, business or assets, or make any material change in its present
method of conducting business, except:

(a) any Subsidiary of the Borrower may be merged or consolidated
with or into the Borrower (provided that the Borrower shall be the
continuing or surviving corporation) or with or into any Wholly Owned
Subsidiary Guarantor (provided that the Wholly Owned Subsidiary
Guarantor shall be the continuing or surviving corporation); and

(b) any Subsidiary of the Borrower may sell, lease, transfer or
otherwise dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to the Borrower or any Wholly Owned Subsidiary
Guarantor.

7.5 Limitation on Sale of Assets. Dispose of any of its
property, business or assets (including, without limitation, receivables and
leasehold interests), whether now owned or hereafter acquired, or, in the case
of any Subsidiary, issue or sell any shares of such Subsidiary's Capital Stock
to any Person, except:

(a) the Disposition of obsolete or worn out property in the
ordinary course of business;

(b) the Disposition of inventory in the ordinary course of
business;

(d) the sale or issuance of any Subsidiary's Capital Stock to
the Borrower or any Wholly Owned Subsidiary Guarantor;

(e) transfers resulting from any casualty or condemnation of
property or assets;

(f) licenses or sublicenses of intellectual property and general
intangibles and licenses, leases or subleases of other property in the
ordinary course of business and which do not materially interfere with
the business of the Borrower and its Subsidiaries;

(g) any consignment arrangements or similar arrangements for the
sale of assets in the ordinary course of business;

(h) (i) the sale or discount of overdue accounts receivable
arising in the ordinary course of business, but only in connection with
the compromise or collection thereof and (ii)

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the Disposition at any time or from time to time for fair market value
of Receivables Facility Assets; and

(i) the Disposition of other assets having a fair market value
not to exceed $25,000,000 in the aggregate for any fiscal year of the
Borrower, provided, that (i) except in the case of an Asset Swap, at
least 75% of the consideration received by the Borrower and its
Subsidiaries in connection with each such Disposition shall be in the
form of cash or Cash Equivalents and (ii) the aggregate fair market
value of Property Disposed of in connection with Asset Swaps during any
fiscal year of the Borrower, when added to the aggregate Net Cash
Proceeds of Asset Sales excluded from the requirements of Section
2.11(b) during such fiscal year pursuant to a Reinvestment Notice, shall
not exceed $20,000,000.

7.6 Limitation on Dividends. Declare or pay any dividend (other
than dividends payable solely in common stock of the Person making such
dividend) on, or make any payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any shares of any class of Capital Stock of
the Borrower or any Subsidiary or any warrants or options to purchase any such
Capital Stock, whether now or hereafter outstanding, or make any other
distribution in respect thereof, either directly or indirectly, whether in cash
or property or in obligations of the Borrower or any Subsidiary (collectively,
"Restricted Payments"), except that:

(a) any Subsidiary may make Restricted Payments to the Borrower
or any Wholly Owned Subsidiary Guarantor;

(b) Permitted Issuances may be made; and

(c) so long as no Default or Event of Default shall have
occurred and be continuing, the Borrower may (i) purchase the Borrower's
common stock or common stock options from present or former officers or
employees of the Borrower or any Subsidiary upon the death, disability
or termination of employment of such officer or employee, provided, that
the aggregate amount of payments under this clause (i) during the term
of this Agreement shall not exceed $15,000,000 net of any proceeds
received by the Borrower in connection with resales of any common stock
or common stock options so purchased and (ii) pay management fees to
Hicks Muse and its Affiliates expressly permitted by Section 7.10.

7.7 Limitation on Capital Expenditures. Make or commit to make
(by way of the acquisition of securities of a Person or otherwise) any Capital
Expenditure, except (a) Capital Expenditures of the Borrower and its
Subsidiaries in the ordinary course of business not exceeding $38,000,000 in
any fiscal year of the Borrower ending on or prior to December 31, 1998 or
$43,000,000 in any subsequent fiscal year; provided, that (i) up to $15,000,000
of any such amount referred to above, if not so expended in the fiscal year for
which it is permitted, may be carried over for expenditure in the next
succeeding fiscal year and (ii) Capital Expenditures made pursuant to this
clause (a) during any fiscal year shall be deemed made, first, in respect of
amounts carried over from

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the prior fiscal year pursuant to subclause (i) above and, second, in respect
of amounts permitted for such fiscal year as provided above and (b) Capital
Expenditures made pursuant to an Asset Swap or with the proceeds of any
Reinvestment Deferred Amount, any Unapplied Excess Cash Flow or any Contributed
Equity.

7.8 Limitation on Investments, Loans and Advances. Make any
advance, loan, extension of credit (by way of guaranty or otherwise) or capital
contribution to, or purchase any stock, bonds, notes, debentures or other
securities of or any assets constituting a business unit of, or make any other
investment in, any Person, except:

(a) extensions of trade credit in the ordinary course of
business;

(b) investments in Cash Equivalents;

(d) loans and advances to employees of the Borrower or its
Subsidiaries in the ordinary course of business (including, without
limitation, for travel, entertainment and relocation expenses) in an
aggregate amount for the Borrower and its Subsidiaries not to exceed
$5,000,000 at any one time outstanding;

(e) the Acquisitions and the Bumble Bee Acquisition;

(f) investments by the Borrower or any of its Subsidiaries in
the Borrower or any Wholly Owned Subsidiary Guarantor;

(g) loans, advances or investments in existence on the Closing
Date and listed on Schedule 7.8(g), and extensions, renewals,
modifications or restatements or replacements thereof, provided that no
such extension, renewal, modification or restatement shall (i) increase
the amount of the original loan, advance or investment, or (ii)
adversely affect the interests of the Lenders with respect to such
original loan, advance or investment or the interests of the Lenders
under this Agreement or any other Loan Document in any respect;

(h) investments made by the Borrower or any of its Subsidiaries
with the proceeds of any Reinvestment Deferred Amount or any Unapplied
Excess Cash Flow;

(i) investments made by the Borrower or any of its Subsidiaries
pursuant to an Asset Swap or with the proceeds of any Contributed
Equity, so long as, after giving pro forma effect thereto (as certified
to the Administrative Agent by a Responsible Officer prior to
consummation of such investment), no Default or Event of Default shall
have occurred and be continuing (including, without limitation, pursuant
to Section 7.1); and

(j) Investments constituting Capital Expenditures permitted by
Section 7.7;

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(k) promissory notes and other similar non-cash consideration
received by the Borrower and its Subsidiaries in connection with the
Dispositions permitted by Section 7.5;

(l) Investments consisting of Interest Rate Protection
Agreements and commodity and currency hedging arrangements entered into
in the ordinary course of business of the Borrower or any of its
Subsidiaries and not for purposes of speculation;

(m) Investments (including debt obligations and Capital Stock)
received in connection with the bankruptcy or reorganization of
suppliers and customers and in settlement of delinquent obligations of,
and other disputes with, customers and suppliers arising in the ordinary
course of business;

(n) Investments on customary terms required to create and
capitalize a Receivables SPV; and

(o) in addition to investments otherwise expressly permitted by
this Section 7.8, investments by the Borrower or any of its Subsidiaries
in an aggregate amount (valued at cost) not to exceed $30,000,000 at any
one time outstanding, so long as, after giving pro forma effect thereto
(as certified to the Administrative Agent by a Responsible Officer prior
to consummation of such investment, in the case of any single investment
in excess of $15,000,000), no Default or Event of Default shall have
occurred and be continuing (including, without limitation, pursuant to
Section 7.1).

7.9 Limitation on Optional Payments and Modifications of Debt
Instruments, etc. (a) Make or offer to make any optional payment, prepayment,
repurchase or redemption of or otherwise defease or segregate funds with
respect to the Senior Subordinated Notes, (b) amend, modify, waive or otherwise
change, or consent or agree to any amendment, modification, waiver or other
change to, any of the terms of the Senior Subordinated Notes or the Senior
Subordinated Note Indenture (other than any such amendment, modification,
waiver or other change which (i) would extend the maturity or reduce the amount
of any payment of principal thereof or which would reduce the rate or extend
the date for payment of interest thereon and (ii) does not involve the payment
of a consent fee) or (c) designate any Indebtedness as "Designated Senior
Indebtedness" for the purposes of the Senior Subordinated Note Indenture.

7.10 Limitation on Transactions with Affiliates. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of Property or the rendering of any service, with any Affiliate (other
than the Borrower or any Wholly Owned Subsidiary Guarantor) unless such
transaction is (a) otherwise permitted under this Agreement, (b) in the
ordinary course of business of the Borrower or such Subsidiary, as the case may
be, and (c) upon fair and reasonable terms no less favorable to the Borrower or
such Subsidiary, as the case may be, than it would obtain in a comparable arm's
length transaction with a Person which is not an Affiliate. Notwithstanding
the foregoing, the Borrower and its Subsidiaries may pay to Hicks Muse and its
Affiliates fees and expenses, as set forth on Schedule 7.10, pursuant to a
monitoring and oversight

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agreement and a financial advisory agreement, in each case approved by the
board of directors of the Borrower.

7.11 Limitation on Sales and Leasebacks. Enter into any
arrangement with any Person providing for the leasing by the Borrower or any
Subsidiary of real or personal property which has been or is to be sold or
transferred by the Borrower or such Subsidiary to such Person or to any other
Person to whom funds have been or are to be advanced by such Person on the
security of such property or rental obligations of the Borrower or such
Subsidiary.

7.12 Limitation on Changes in Fiscal Periods. Permit the fiscal
year of the Borrower to end on a day other than December 31 or change the
Borrower's method of determining fiscal quarters.

7.13 Limitation on Negative Pledge Clauses. Enter into with any
Person, or suffer to exist, any agreement, other than (a) this Agreement and
the other Loan Documents, (b) the Senior Subordinated Note Indenture and (c) in
the case of clause (i) below only, any agreements governing any purchase money
Liens or Capital Lease Obligations otherwise permitted hereby (in which case,
any prohibition or limitation shall only be effective against the assets
financed thereby), which prohibits or limits the ability of the Borrower or any
of its Subsidiaries to (i) create, incur, assume or suffer to exist any Lien
upon any of its Property or revenues, whether now owned or hereafter acquired,
or (ii) pay dividends or make other distributions, or pay any Indebtedness
owed, to the Borrower or any of its Subsidiaries.

7.14 Limitation on Lines of Business. Enter into any business,
either directly or through any Subsidiary, except for those businesses in which
the Borrower and its Subsidiaries are engaged on the Amendment/Restatement
Closing Date or which are reasonably related thereto.

7.15 Limitation on Amendments to Acquisition Documents. (a)
Amend, supplement or otherwise modify (pursuant to a waiver or otherwise) the
terms and conditions of the indemnities furnished to the Borrower or any of its
Subsidiaries pursuant to the Acquisition Agreement, the Bumble Bee Purchase
Agreement or any other document delivered by the relevant sellers or any of
their affiliates in connection therewith such that after giving effect thereto
such indemnities shall be materially less favorable to the interests of the
Loan Parties or the Lenders with respect thereto or (b) otherwise amend,
supplement or otherwise modify the terms and conditions of the Acquisition
Agreement, the Bumble Bee Purchase Agreement or any such other documents except
to the extent that any such amendment, supplement or modification could not
reasonably be expected to have a Material Adverse Effect.

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SECTION 8. EVENTS OF DEFAULT

If any of the following events shall occur and be continuing:

(a) The Borrower shall fail to pay any principal of any Loan or
Reimbursement Obligation when due in accordance with the terms hereof;
or the Borrower shall fail to pay any interest on any Loan or
Reimbursement Obligation, or any other amount payable hereunder or under
any other Loan Document, within five days after any such interest or
other amount becomes due in accordance with the terms hereof; or

(b) Any representation or warranty made or deemed made by any
Loan Party herein or in any other Loan Document or which is contained in
any certificate, document or financial or other statement furnished by
it at any time under or in connection with this Agreement or any such
other Loan Document shall prove to have been inaccurate in any material
respect on or as of the date made or deemed made; or

(c) (i) any Loan Party shall default in the observance or
performance of any agreement contained in clause (i) or (ii) of Section
6.4(a) (with respect to the Borrower only), Section 6.7(a) or Section 7
of this Agreement or Section 5.5 or 5.7(b) of the Guarantee and
Collateral Agreement or (ii) an "Event of Default" under and as defined
in any Mortgage shall have occurred and be continuing; or

(d) any Loan Party shall default in the observance or
performance of any other agreement contained in this Agreement or any
other Loan Document (other than as provided in paragraphs (a) through
(c) of this Section), and such default shall continue unremedied for a
period of 30 days after notice from the Administrative Agent or the
Required Lenders; or

(e) The Borrower or any of its Subsidiaries shall (i) default in
making any payment of any principal of or interest on any Indebtedness
(including, without limitation, any Guarantee Obligation, but excluding
the Loans, Reimbursement Obligations and Guarantee Obligations pursuant
to the Guarantee and Collateral Agreement) beyond the period of grace,
if any, provided in the instrument or agreement under which such
Indebtedness was created; or (ii) default in the observance or
performance of any other agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition
is to cause, or to permit the holder or beneficiary of such Indebtedness
(or a trustee or agent on behalf of such holder or beneficiary) to
cause, with the giving of notice if required, such Indebtedness to
become due prior to its stated maturity or (in the case of any such
Indebtedness constituting a Guarantee Obligation) to become payable;
provided, that a default, event or condition described in clause (i) or
(ii) of this paragraph (e) shall not at any time constitute an Event of
Default under this Agreement unless, at such time, one or more defaults,
events or conditions (without duplication as to the same item of
Indebtedness) of the type described in clauses (i) and (ii) of this
paragraph (e)

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shall have occurred and be continuing with respect to Indebtedness the
outstanding principal amount of which exceeds in the aggregate
$10,000,000; or

(f) (i) The Borrower or any of its Subsidiaries shall commence
any case, proceeding or other action (A) under any existing or future
law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an
order for relief entered with respect to it, or seeking to adjudicate it
a bankrupt or insolvent, or seeking reorganization, winding-up,
liquidation, dissolution, composition or other relief with respect to it
or its debts, or (B) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it or for all or
any substantial part of its assets, or the Borrower or any of its
Subsidiaries shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against the Borrower or any
of its Subsidiaries any case, proceeding or other action of a nature
referred to in clause (i) above which (A) results in the entry of an
order for relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 60 days; or (iii)
there shall be commenced against the Borrower or any of its Subsidiaries
any case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of an order
for any such relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within 60 days from the entry thereof;
or (iv) the Borrower or any of its Subsidiaries shall take any action in
furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or (iii)
above; or (v) the Borrower or any of its Subsidiaries shall generally
not, or shall be unable to, or shall admit in writing its inability to,
pay its debts as they become due; or

(g) (i) Any Person shall engage in any "prohibited transaction"
(as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any Plan or any Lien in favor of the PBGC or a Plan
shall arise on the assets of the Borrower or any Commonly Controlled
Entity, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed (or a trustee
shall be appointed) to administer, or to terminate, any Single Employer
Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is, in the reasonable opinion of the Required
Lenders, likely to result in the termination of such Plan for purposes
of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for
purposes of Title IV of ERISA, (v) the Borrower or any Commonly
Controlled Entity shall, or in the reasonable opinion of the Required
Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer
Plan or (vi) any other event or condition shall occur or exist with
respect to a Plan; and in each case in clauses (i) through (vi) above,
such event or condition, together with all other such events or
conditions, if any, could reasonably be expected to have a Material
Adverse Effect; or

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(h) One or more judgments or decrees shall be entered against
the Borrower or any of its Subsidiaries involving in the aggregate a
liability (not paid or fully covered by insurance as to which the
relevant insurance company has acknowledged coverage) of $10,000,000 or
more, and all such judgments or decrees shall not have been vacated,
discharged, stayed or bonded pending appeal within 30 days from the
entry thereof; or

(i) Any Loan Document shall, at any time, cease to be in full
force and effect (unless released by the Administrative Agent at the
direction of the Required Lenders or all Lenders (to the extent required
by Section 10.1) or as otherwise permitted under this Agreement or the
other Loan Documents) or shall be declared null and void (and, if such
invalidity is such so as to be amenable to cure without materially
disadvantaging the position of the Administrative Agent and the Lenders
thereunder, the relevant Loan Party shall have failed to cure such
invalidity within 30 days after notice from the Administrative Agent or
such shorter time period as is specified by the Administrative Agent in
such notice and is reasonable in the circumstances), or the validity or
enforceability thereof shall be contested by any Loan Party, or any of
the Liens intended to be created by any Security Document shall cease to
be or shall not be a valid and perfected Lien having the priority
contemplated thereby (and, if such invalidity is such so as to be
amenable to cure without materially disadvantaging the position of the
Administrative Agent and the Lenders as secured parties thereunder, the
relevant Loan Party shall have failed to cure such invalidity within 30
days after notice from the Administrative Agent or such shorter time
period as specified by the Administrative Agent in such notice and is
reasonable in the circumstances); or

(j) (i) The Permitted Investors shall cease to have the power,
directly or indirectly, to vote or direct the voting of securities
having a majority of the ordinary voting power for the election of
directors of the Borrower, provided that the occurrence of the foregoing
event shall not be deemed an Event of Default if (A) at any time prior
to the consummation of an Initial Public Offering, (1) the Permitted
Investors otherwise have the right to designate (and do so designate) a
majority of the board of directors of the Borrower or (2) the Permitted
Investors and their employees, directors and officers (the "HM Group")
own of record and beneficially an amount of common stock of the Borrower
equal to at least 50% of the amount of common stock of the Borrower
(adjusted for stock splits, stock dividends and other similar events on
an equitable basis) owned by the HM Group of record and beneficially as
of the Closing Date and such ownership by the HM Group represents the
largest single block of voting securities of the Borrower held by any
"person" or "group" for purposes of Section 13(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or (B) at any
time after the consummation of an Initial Public Offering, (1) no
"person" or "group" (as such terms are used in Sections 13(d) and 14(d)
of the Exchange Act), excluding the Permitted Investors, shall become
the "beneficial owner" (as defined in Rules 13(d)-3 and 13(d)-5 under
the Exchange Act), directly or indirectly, of more than the greater of
(x) 15% of the then outstanding voting stock of the Borrower and (y) the
percentage of the then outstanding voting stock of the Borrower owned by
the Permitted Investors and (2) the board

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of directors of the Borrower shall consist of a majority of Continuing
Directors; or (ii) a Specified Change of Control shall occur; or

(k) The Senior Subordinated Notes or the guarantees thereof
shall cease, for any reason, to be validly subordinated to the
Obligations or the obligations of the Subsidiary Guarantors under the
Guarantee and Collateral Agreement, as the case may be, as provided in
the Senior Subordinated Note Indenture, or any Loan Party, any Affiliate
of any Loan Party, the trustee in respect of the Senior Subordinated
Notes or the holders of at least 25% in aggregate principal amount of
the Senior Subordinated Notes shall so assert;

then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Revolving Credit Commitments shall immediately terminate and
the Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement and the other Loan Documents (including, without
limitation, all amounts of L/C Obligations, whether or not the beneficiaries of
the then outstanding Letters of Credit shall have presented the documents
required thereunder) shall immediately become due and payable, and (B) if such
event is any other Event of Default, either or both of the following actions
may be taken: (i) with the consent of the Majority Revolving Credit Facility
Lenders, the Administrative Agent may, or upon the request of the Majority
Revolving Credit Facility Lenders, the Administrative Agent shall, by notice to
the Borrower declare the Revolving Credit Commitments to be terminated
forthwith, whereupon the Revolving Credit Commitments shall immediately
terminate; and (ii) with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Borrower, declare the Loans
hereunder (with accrued interest thereon) and all other amounts owing under
this Agreement and the other Loan Documents (including, without limitation, all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) to be due and payable forthwith, whereupon the same shall
immediately become due and payable. With respect to all Letters of Credit with
respect to which presentment for honor shall not have occurred at the time of
an acceleration pursuant to this paragraph, the Borrower shall at such time
deposit in a cash collateral account opened by the Administrative Agent an
amount equal to the aggregate then undrawn and unexpired amount of such Letters
of Credit. Amounts held in such cash collateral account shall be applied by
the Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other
obligations of the Borrower hereunder and under the other Loan Documents.
After all such Letters of Credit shall have expired or been fully drawn upon,
all Reimbursement Obligations shall have been satisfied and all other
obligations of the Borrower hereunder and under the other Loan Documents shall
have been paid in full, the balance, if any, in such cash collateral account
shall be returned to the Borrower (or such other Person as may be lawfully
entitled thereto). Except as otherwise expressly provided above in this
Section 8, the Borrower waives presentment, demand, protest or other notice of
any kind.

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SECTION 9. THE AGENTS

9.1 Appointment. Each Lender hereby irrevocably designates and
appoints the Administrative Agent as the agent of such Lender under this
Agreement and the other Loan Documents, and each Lender irrevocably authorizes
the Administrative Agent, in such capacity, to take such action on its behalf
under the provisions of this Agreement and the other Loan Documents and to
exercise such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.

9.2 Delegation of Duties. The Administrative Agent may execute
any of its duties under this Agreement and the other Loan Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent
shall not be responsible for the negligence or misconduct of any agents or
attorneys in-fact selected by it with reasonable care.

9.3 Exculpatory Provisions. Neither any Agent nor any of their
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing are found
by a final and nonappealable decision of a court of competent jurisdiction to
have resulted from its or such Person's own gross negligence or willful
misconduct) or (ii) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by any Loan Party or
any officer thereof contained in this Agreement or any other Loan Document or
in any certificate, report, statement or other document referred to or provided
for in, or received by the Agents under or in connection with, this Agreement
or any other Loan Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or for any failure of any Loan Party a party thereto to perform its
obligations hereunder or thereunder. The Agents shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of any Loan Party.

9.4 Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
instrument, writing, resolution, notice, consent, certificate, affidavit,
letter, telecopy, telex or teletype message, statement, order or other document
or conversation believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Borrower), independent accountants and other experts selected by

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the Administrative Agent. The Administrative Agent may deem and treat the
payee of any Note as the owner thereof for all purposes unless a written notice
of assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Required Lenders (or, if so specified by this Agreement, all Lenders) as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense (other than any liability
described in the proviso to the first sentence of Section 9.7) which may be
incurred by it by reason of taking or continuing to take any such action. The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the other Loan Documents in
accordance with a request of the Required Lenders (or, if so specified by this
Agreement, all Lenders), and such request and any action taken or failure to
act pursuant thereto shall be binding upon all the Lenders and all future
holders of the Loans.

9.5 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Administrative Agent has received notice from a
Lender or the Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default". In the
event that the Administrative Agent receives such a notice, the Administrative
Agent shall give notice thereof to the Lenders. The Administrative Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders (or, if so specified by this
Agreement, all Lenders); provided that unless and until the Administrative
Agent shall have received such directions, the Administrative Agent may (but
shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem
advisable in the best interests of the Lenders.

9.6 Non-Reliance on Agents and Other Lenders. Each Lender
expressly acknowledges that neither the Agents nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or affiliates have
made any representations or warranties to it and that no act by any Agent
hereafter taken, including any review of the affairs of a Loan Party or any
affiliate of a Loan Party, shall be deemed to constitute any representation or
warranty by any Agent to any Lender. Each Lender represents to the Agents that
it has, independently and without reliance upon any Agent or any other Lender,
and based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and
their affiliates and made its own decision to make its Loans hereunder and
enter into this Agreement. Each Lender also represents that it will,
independently and without reliance upon any Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their affiliates. Except for notices,
reports and other documents expressly required to be furnished to the Lenders
by the Administrative Agent hereunder, the Administrative Agent

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shall not have any duty or responsibility to provide any Lender with any credit
or other information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of any Loan Party or
any affiliate of a Loan Party which may come into the possession of the
Administrative Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.

9.7 Indemnification. The Lenders agree to indemnify each Agent
in its capacity as such (to the extent not reimbursed by the Borrower and
without limiting the obligation of the Borrower to do so), ratably according to
their respective Revolving Credit Percentages, Tranche A Term Loan Percentages
and Tranche B Term Loan Percentages in effect on the date on which
indemnification is sought under this Section 9.7 (or, if indemnification is
sought after the date upon which the Revolving Credit Commitments shall have
terminated and the Loans shall have been paid in full, ratably in accordance
with such Percentages immediately prior to such date), from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at any
time (including, without limitation, at any time following the payment of the
Loans) be imposed on, incurred by or asserted against such Agent in any way
relating to or arising out of, the Loans, the Revolving Credit Commitments,
this Agreement, any of the other Loan Documents or any documents contemplated
by or referred to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by such Agent under or in connection
with any of the foregoing; provided that no Lender shall be liable for the
payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements which
are found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from such Agent's gross negligence or willful
misconduct. The agreements in this Section 9.7 shall survive the payment of
the Loans and all other amounts payable hereunder.

9.8 Agent in Its Individual Capacity. Each Agent and its
affiliates may make loans to, accept deposits from and generally engage in any
kind of business with any Loan Party as though such Agent were not an Agent.
With respect to its Loans made or renewed by it and with respect to any Letter
of Credit issued or participated in by it, each Agent shall have the same
rights and powers under this Agreement and the other Loan Documents as any
Lender and may exercise the same as though it were not an Agent, and the terms
"Lender" and "Lenders" shall include each Agent in its individual capacity.

9.9 Successor Administrative Agent. The Administrative Agent
may resign as Administrative Agent upon 30 days' notice to the Lenders. If the
Administrative Agent shall resign as Administrative Agent under this Agreement
and the other Loan Documents, then the Required Lenders shall appoint from
among the Lenders a successor agent for the Lenders, which successor agent
shall be approved by the Borrower (which approval shall not be unreasonably
withheld or delayed), whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent's rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on

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the part of such former Administrative Agent or any of the parties to this
Agreement or any holders of the Loans. After any retiring Administrative
Agent's resignation as Administrative Agent, the provisions of this Section 9
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement and the other Loan
Documents.

9.10 Authorization to Release Liens. The Administrative Agent
is hereby irrevocably authorized by each of the Lenders to release any Lien
covering any Property of the Borrower or any of its Subsidiaries that is the
subject of a Disposition which is permitted by this Agreement or which has been
consented to in accordance with Section 10.1.

9.11 Documentation Agent and Syndication Agent. Neither the
Documentation Agent nor the Syndication Agent shall have any duties or
responsibilities hereunder in its capacity as such.

SECTION 10. MISCELLANEOUS

10.1 Amendments and Waivers. Neither this Agreement, any other
Loan Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 10.1. The
Required Lenders and each Loan Party party to the relevant Loan Documents may,
or, with the written consent of the Required Lenders, the Administrative Agent
and each Loan Party party to the relevant Loan Document may, from time to time,
(a) enter into written amendments, supplements or modifications hereto and to
the other Loan Documents for the purpose of adding any provisions to this
Agreement or the other Loan Documents or changing in any manner the rights of
the Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on
such terms and conditions as the Required Lenders or the Administrative Agent,
as the case may be, may specify in such instrument, any of the requirements of
this Agreement or the other Loan Documents or any Default or Event of Default
and its consequences; provided, however, that no such waiver and no such
amendment, supplement or modification shall (i) forgive the principal amount or
extend the final scheduled date of maturity of any Loan, extend the scheduled
date of any amortization payment in respect of any Term Loan, reduce the stated
rate of any interest, fee or letter of credit commission payable hereunder or
extend the scheduled date of any payment thereof, or increase the amount or
extend the expiration date of any Lender's Revolving Credit Commitment, in each
case without the written consent of each Lender directly affected thereby; (ii)
amend, modify or waive any provision of this Section 10.1 or reduce any
percentage specified in the definition of Required Lenders, consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement and the other Loan Documents, release all or substantially
all of the Collateral or release all or substantially all of the Subsidiary
Guarantors from their obligations under the Guarantee and Collateral Agreement,
in each case without the written consent of all Lenders; (iii) amend, modify or
waive any condition precedent to any extension of credit under the Revolving
Credit Facility set forth in Section 5.2 without the written consent of the
Majority Revolving Credit Facility Lenders; (iv) change the allocation of
payments among the Term Loan Facilities specified in Section 2.17(b) or the
allocation of payments between the Term Loan Facilities and the Revolving
Credit Facility pursuant to Section 2.11(d), in each case without the

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written consent of the Majority Facility Lenders in respect of each Facility
adversely affected thereby; (v) reduce the percentage specified in the
definition of Majority Facility Lenders without the written consent of all
Lenders under each affected Facility; (vi) amend, modify or waive any provision
of Section 9 without the written consent of the Administrative Agent; (vii)
amend, modify or waive any provision of Section 2.6 or 2.7 without the written
consent of the Swing Line Lender; or (viii) amend, modify or waive any
provision of Section 3 without the written consent of each affected Issuing
Lender. Any such waiver and any such amendment, supplement or modification
shall apply equally to each of the Lenders and shall be binding upon the Loan
Parties, the Lenders, the Administrative Agent and all future holders of the
Loans. In the case of any waiver, the Loan Parties, the Lenders and the
Administrative Agent shall be restored to their former position and rights
hereunder and under the other Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon.

10.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice,
when received, addressed as follows in the case of the Borrower and the
Administrative Agent, and as set forth in an administrative questionnaire
delivered to the Administrative Agent in the case of the Lenders, or to such
other address as may be hereafter notified by the respective parties hereto:

The Borrower: International Home Foods, Inc.
1633 Littleton Road
Parsippany, New Jersey 07054
Attention: Lynn Misericordia
Telecopy: 201-254-5460

with copies to: Hicks, Muse, Tate & Furst Incorporated
200 Crescent Court, Suite 1600
Dallas, Texas 75201
Attention: Lawrence D. Stuart, Jr.
Telecopy: 214-740-7313

Hicks, Muse, Tate & Furst Incorporated
1325 Avenue of the Americas, 25th Floor
New York, New York 10019
Attention: Alan B. Menkes
Andrew S. Rosen
Telecopy: 212-424-1450

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The Administrative Agent: The Chase Manhattan Bank Loan
and Agency Services Group
One Chase Manhattan Plaza
New York, New York 10081
Attention: Sandra Miklave
Telecopy: 212-552-5658

with a copy to: The Chase Manhattan Bank
270 Park Avenue
New York, New York 10017
Attention: Karen Sharf
Telecopy: 212-270-5659

provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders shall not be effective until received.

10.3 No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of the Administrative Agent or any Lender,
any right, remedy, power or privilege hereunder or under the other Loan
Documents shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power
or privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.

10.4 Survival of Representations and Warranties. All
representations and warranties made hereunder, in the other Loan Documents and
in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Loans hereunder.

10.5 Payment of Expenses and Taxes. The Borrower agrees (a) to
pay or reimburse the Administrative Agent for all its reasonable out-of-pocket
costs and expenses incurred in connection with the development, preparation and
execution of, and any amendment, supplement or modification to, this Agreement
and the other Loan Documents and any other documents prepared in connection
herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including, without limitation,
the reasonable fees and disbursements of counsel to the Administrative Agent,
(b) to pay or reimburse each Lender and the Administrative Agent for all its
reasonable costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the other Loan Documents and
any such other documents, including, without limitation, the reasonable fees
and disbursements of counsel (including the allocated fees and expenses of in-
house counsel) to each Lender and of counsel to the Administrative Agent, (c)
to pay, indemnify, and hold harmless each Lender and the Administrative Agent
from and against any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other taxes, if any,

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which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation or administration of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, this Agreement, the other Loan
Documents and any such other documents, and (d) to pay, indemnify and hold
harmless each Lender and the Administrative Agent and their respective
officers, directors, trustees, professional advisors, employees, affiliates,
agents and controlling persons (each, an "indemnitee") from and against any and
all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement, performance
and administration of this Agreement, the other Loan Documents and any such
other documents, including, without limitation, any of the foregoing relating
to the use of proceeds of the Loans or the violation of, noncompliance with or
liability under, any Environmental Law applicable to the operations of the
Borrower any of its Subsidiaries or any of the Properties (all the foregoing in
this clause (d), collectively, the "indemnified liabilities"), provided, that
the Borrower shall have no obligation hereunder to any indemnitee with respect
to indemnified liabilities to the extent such indemnified liabilities are found
by a final and nonappealable decision of a court of competent jurisdiction to
have resulted from the gross negligence or willful misconduct of such
indemnitee. The agreements in this Section 10.5 shall survive repayment of the
Loans and all other amounts payable hereunder.

10.6 Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrower, the Lenders, the Administrative Agent, all future holders of the
Loans and their respective successors and assigns, except that the Borrower may
not assign or transfer any of its rights or obligations under this Agreement
without the prior written consent of each Lender.

(b) Any Lender may, without the consent of the Borrower, in
accordance with applicable law, at any time sell to one or more banks,
financial institutions or other entities (each, a "Participant") participating
interests in any Loan owing to such Lender, any Revolving Credit Commitment of
such Lender or any other interest of such Lender hereunder and under the other
Loan Documents. In the event of any such sale by a Lender of a participating
interest to a Participant, such Lender's obligations under this Agreement to
the other parties to this Agreement shall remain unchanged, such Lender shall
remain solely responsible for the performance thereof, such Lender shall remain
the holder of any such Loan for all purposes under this Agreement and the other
Loan Documents, and the Borrower and the Administrative Agent shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement and the other Loan Documents. In
no event shall any Participant under any such participation have any right to
approve any amendment or waiver of any provision of any Loan Document, or any
consent to any departure by any Loan Party therefrom, except to the extent that
such amendment, waiver or consent would reduce the principal of, or interest
on, the Loans or any fees payable hereunder, or postpone the date of the final
maturity of the Loans, in each case to the extent subject to such
participation. The Borrower agrees that if amounts outstanding under this
Agreement and the Loans are due or unpaid, or shall have been declared or shall
have become due and payable upon the occurrence of an Event of Default, each
Participant shall, to the maximum

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extent permitted by applicable law, be deemed to have the right of setoff in
respect of its participating interest in amounts owing under this Agreement to
the same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement, provided that, in purchasing
such participating interest, such Participant shall be deemed to have agreed to
share with the Lenders the proceeds thereof as provided in Section 10.7(a) as
fully as if it were a Lender hereunder. The Borrower also agrees that each
Participant shall be entitled to the benefits of Sections 2.18, 2.19 and 2.20
with respect to its participation in the Revolving Credit Commitments and the
Loans outstanding from time to time as if it were a Lender; provided that, in
the case of Section 2.19, such Participant shall have complied with the
requirements of said Section and provided, further, that no Participant shall
be entitled to receive any greater amount pursuant to any such Section than the
transferor Lender would have been entitled to receive in respect of the amount
of the participation transferred by such transferor Lender to such Participant
had no such transfer occurred.

(c) Any Lender (an "Assignor") may, in accordance with
applicable law, at any time and from time to time assign to any Lender or any
affiliate thereof or, with the consent of the Borrower and the Administrative
Agent (which, in each case, shall not be unreasonably withheld or delayed), to
an additional bank, financial institution or other entity (an "Assignee") all
or any part of its rights and obligations under this Agreement pursuant to an
Assignment and Acceptance, substantially in the form of Exhibit E, executed by
such Assignee and such Assignor (and, in the case of an Assignee that is not
then a Lender or an affiliate thereof, by the Borrower and the Administrative
Agent) and delivered to the Administrative Agent for its acceptance and
recording in the Register; provided that no such assignment to an Assignee
(other than any Lender or any affiliate thereof) shall be in an aggregate
principal amount of less than $5,000,000 (other than in the case of an
assignment of all of a Lender's interests under this Agreement), unless
otherwise agreed by the Borrower and the Administrative Agent. Any such
assignment need not be ratable as among the Facilities. Upon such execution,
delivery, acceptance and recording, from and after the effective date
determined pursuant to such Assignment and Acceptance, (x) the Assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender
hereunder with a Revolving Credit Commitment and/or Loans as set forth therein,
and (y) the Assignor thereunder shall, to the extent provided in such
Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all of an
Assignor's rights and obligations under this Agreement, such assigning Lender
shall cease to be a party hereto). Notwithstanding any provision of this
Section 10.6, the consent of the Borrower shall not be required, and, unless
requested by the Assignee and/or the Assignor, new Notes shall not be required
to be executed and delivered by the Borrower, for any assignment which occurs
at any time when any of the events described in Section 8(f) shall have
occurred and be continuing.

(d) The Administrative Agent shall maintain at its address
referred to in Section 10.2 a copy of each Assignment and Acceptance delivered
to it and a register (the "Register") for the recordation of the names and
addresses of the Lenders and the Revolving Credit Commitments of, and the
principal amount of the Loans owing to, each Lender from time to time. The
entries in the

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Register shall be conclusive, in the absence of manifest error, and the
Borrower, each other Loan Party, the Administrative Agent and the Lenders shall
treat each Person whose name is recorded in the Register as the owner of the
Loan recorded therein for all purposes of this Agreement. Any assignment of
any Loan or other obligation hereunder (whether or not evidenced by a Note)
shall be effective only upon appropriate entries with respect thereto being
made in the Register.

(e) Upon its receipt of an Assignment and Acceptance executed by
an Assignor and an Assignee (and, in the case of an Assignee that is not then a
Lender or an affiliate thereof, by the Borrower and the Administrative Agent)
together with payment to the Administrative Agent of a registration and
processing fee of $4,000, the Administrative Agent shall (i) promptly accept
such Assignment and Acceptance and (ii) record the information contained
therein in the Register on the effective date determined pursuant thereto.

(f) The Loans made by each Lender shall be evidenced by a Note
issued by the Borrower, substantially in the form of Exhibit G-1, G-2 or G-3,
as the case may be, payable to the order of such Lender. Each Lender is hereby
authorized to record, on the schedule annexed to and constituting a part of the
relevant Note, information regarding the relevant Loans made by such Lender,
and any such recordation shall constitute prima facie evidence of the accuracy
of the information so recorded, provided that the failure to make any such
recordation or any error in such recordation shall not affect the Borrower's
obligations hereunder or under any Note. On or prior to the effective date of
an Assignment and Acceptance, the Borrower, at its own expense, shall execute
and deliver to the Administrative Agent, in exchange for the relevant Notes,
new Notes to the order of the Assignee and, if applicable, the Assignor. Such
new Notes shall be dated the Closing Date and shall otherwise be in the form of
the Notes replaced thereby.

(g) The Borrower authorizes each Lender to disclose to any
Participant or Assignee (each, a "Transferee") and any prospective Transferee
any and all financial information concerning the Loan Parties and their
respective affiliates which has been delivered to such Lender by or on behalf
of any Loan Party pursuant to this Agreement or any other Loan Document or
which has been delivered to such Lender by or on behalf any Loan Party in
connection with such Lender's credit evaluation of the Loan Parties and their
respective affiliates, under the condition that such Transferee or prospective
Transferee shall previously have agreed to be bound by the provisions of
Section 10.15.

(h) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this Section 10.6 concerning assignments of
Loans and Notes relate only to absolute assignments and that such provisions do
not prohibit assignments creating security interests, including, without
limitation, any pledge or assignment by a Lender of any Loan or Note to any
Federal Reserve Bank in accordance with applicable law.

10.7 Adjustments; Set-off. (a) Except to the extent that this
Agreement provides for payments to be allocated to the Lenders under a
particular Facility, if any Lender (a "Benefitted Lender") shall at any time
receive any payment of all or part of its Loans or the Reimbursement

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Obligations owing to it, or interest thereon, or receive any collateral in
respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to
events or proceedings of the nature referred to in Section 8(f), or otherwise),
in a greater proportion than any such payment to or collateral received by any
other Lender, if any, in respect of such other Lender's Loans or the
Reimbursement Obligations owing to such other Lender, or interest thereon, such
Benefitted Lender shall purchase for cash from the other Lenders a
participating interest in such portion of each such other Lender's Loans and/or
of the Reimbursement Obligations owing to each such other Lender, or shall
provide such other Lenders with the benefits of any such collateral, or the
proceeds thereof, as shall be necessary to cause such Benefitted Lender to
share the excess payment or benefits of such collateral or proceeds ratably
with each of the Lenders; provided, however, that if all or any portion of such
excess payment or benefits is thereafter recovered from such Benefitted Lender,
such purchase shall be rescinded, and the purchase price and benefits returned,
to the extent of such recovery, but without interest.

(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise) to set off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of the Borrower. Each Lender
agrees promptly to notify the Borrower and the Administrative Agent after any
such setoff and application made by such Lender, provided that the failure to
give such notice shall not affect the validity of such setoff and application.

10.8 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. A set of the copies of this
Agreement signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.

10.9 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

10.10 Integration. This Agreement and the other Loan Documents
represent the entire agreement of the Borrower, the Administrative Agent and
the Lenders with respect to the subject matter hereof and thereof, and there
are no promises, undertakings, representations or warranties by the
Administrative Agent or any Lender relative to subject matter hereof or thereof
not expressly set forth or referred to herein or in the other Loan Documents.

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10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

10.12 Submission To Jurisdiction; Waivers. The Borrower hereby
irrevocably and unconditionally:

(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment
in respect thereof, to the non-exclusive general jurisdiction of the
Courts of the State of New York, the courts of the United States of
America for the Southern District of New York, and appellate courts from
any thereof;

(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or
that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;

(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to the Borrower at its address set forth in Section 10.2 or at
such other address of which the Administrative Agent shall have been
notified pursuant thereto;

(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction; and

(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this Section 10.12 any special, exemplary, punitive or
consequential damages.

10.13 Acknowledgements. The Borrower hereby acknowledges that:

(a) it has been advised by counsel in the negotiation, execution
and delivery of this Agreement and the other Loan Documents;

(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower arising out of or in
connection with this Agreement or any of the other Loan Documents, and
the relationship between Administrative Agent and Lenders, on one hand,
and the Borrower, on the other hand, in connection herewith or therewith
is solely that of debtor and creditor; and

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(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Lenders or among the Borrower and the Lenders.

10.14 WAIVERS OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE
AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY
JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

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10.15 Confidentiality. Each Lender agrees to keep information
obtained by it pursuant hereto and the other Loan Documents identified as
confidential in writing at the time of delivery confidential in accordance with
such Lender's customary practices and agrees that it will only use such
information in connection with the transactions contemplated by this Agreement
and not disclose any of such information other than (a) to such Lender's
employees, representatives, directors, attorneys, auditors, agents,
professional advisors, trustees or affiliates who are advised of the
confidential nature of such information, (b) to the extent such information
presently is or hereafter becomes available to such Lender on a non-
confidential basis from any source or such information that is in the public
domain at the time of disclosure, (c) to the extent disclosure is required by
law (including applicable securities laws), regulation, subpoena or judicial
order or process (provided that notice of such requirement or order shall be
promptly furnished to the Borrower unless such notice is legally prohibited) or
requested or required by bank, securities, insurance or investment company
regulations or auditors or any administrative body or commission to whose
jurisdiction such Lender may be subject, (d) to any rating agency to the extent
required in connection with any rating to be assigned to such Lender, (e) to
Transferees or prospective Transferees who agree to be bound by the provisions
of this Section 10.15, (f) to the extent required in connection with any
litigation between any Loan Party and any Lender with respect to the Loans or
this Agreement and the other Loan Documents or (g) with the Borrower's prior
written consent. The agreements in this Section 10.15 shall survive repayment
of the Loans and all other amounts payable hereunder.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered by their proper and duly authorized officers
as of the day and year first above written.

INTERNATIONAL HOME FOODS, INC.

By:
----------------------------------
Name:
-----------------------------
Title:
----------------------------

THE CHASE MANHATTAN BANK, as
Administrative Agent

By:
----------------------------------
Name:
-----------------------------
Title:
----------------------------

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BANKERS TRUST COMPANY, as Syndication
Agent

By:
----------------------------------
Name:
-----------------------------
Title:
----------------------------

MORGAN STANLEY SENIOR FUNDING, INC.,
as Documentation Agent

By:
----------------------------------
Name:
-----------------------------
Title:
----------------------------

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Annex A

PRICING GRID

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
Applicable Margin for Applicable Margin
Eurodollar Loans for ABR Loans
------------------------------------------
Commitment
Consolidated Leverage Ratio A/RC B A/RC B Fee Rate
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Greater than or equal to 2.25% 2.50% 1.25% 1.50% 0.500%
5.75 to 1.0
- ----------------------------------------------------------------------------------------------------------
Greater than or equal to 5.00 to 1.0 2.00% 2.25% 1.00% 1.25% 0.500%
and less than 5.75 to 1.0
- ----------------------------------------------------------------------------------------------------------
Greater than or equal to 4.25 to 1.0 1.75% 2.25% 0.75% 1.25% 0.500%
and less than 5.00 to 1.0
- ----------------------------------------------------------------------------------------------------------
Greater than or equal to 3.75 to 1.0 1.50% 2.125% 0.50% 1.125% 0.375%
and less than 4.25 to 1.0
- ----------------------------------------------------------------------------------------------------------
Greater than or equal to 3.25 to 1.0 1.25% 2.00% 0.25% 1.00% 0.375%
and less than 3.75 to 1.0
- ----------------------------------------------------------------------------------------------------------
Less than 3.25 to 1.0 1.00% 2.00% 0% 1.00% 0.300%
- ----------------------------------------------------------------------------------------------------------
</TABLE>

As used above, "A/RC" refers to Tranche A Term Loans, Revolving Credit Loans
and Swing Line Loans and "B" refers to Tranche B Term Loans.

Changes in the Applicable Margin or the Commitment Fee Rate resulting from
changes in the Consolidated Leverage Ratio shall become effective on the date
(the "Adjustment Date") on which financial statements are delivered to the
Lenders pursuant to Section 6.1 (but in any event not later than the 45th day
after the end of each of the first three quarterly periods of each fiscal year
or the 95th day after the end of each fiscal year, as the case may be) and
shall remain in effect until the next change to be effected pursuant to this
paragraph. If any financial statements referred to above are not delivered
within the time periods specified above, then, until such financial statements
are delivered, the Consolidated Leverage Ratio as at the end of the fiscal
period that would have been covered thereby shall for the purposes of this
definition be deemed to be greater than 5.75 to 1. Each determination of the
Consolidated Leverage Ratio pursuant to this paragraph shall be made with
respect to the Test Period ending at the end of the period covered by the
relevant financial statements and, to the extent applicable, in accordance with
the last paragraph of Section 7.1.

<PAGE> 1
EXHIBIT 11.1

INTERNATIONAL HOME FOODS, INC.
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
Year Ended Six Months Ended
December 31, June 30,
1996 1997
------------ ----------------
<S> <S> <S>
Computation for statement of earnings:
Net income............................ $ 83.0 $ 16.9
============ ============

Computation for weighted average
common shares outstanding:
Weighted average common shares
outstanding......................... 330,000,000 330,000,000
Incremental common shares applicable
to common stock options and warrants
based on the estimated fair value
of the stock........................ -- --
Common stock options and warrants
excluded based on antidilutive
effect.............................. -- --
Weighted average common shares........ 330,000,000 330,000,000
============ ============
Primary and full diluted income per
common share........................ $ 0.25 $ 0.05
============ ============
</TABLE>

<PAGE> 1
EXHIBIT 11.2

INTERNATIONAL HOME FOODS, INC.
STATEMENT RE COMPUTATION OF PRO FORMA PER SHARE EARNINGS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)

Six Months
Year Ended Ended
December 31, June 30, 1996
1996 1996
------------ -------------
<S> <S> <S>
Computation for statement of earnings:
Pro forma income.................... $
========= ========

Computation for weighted average
common shares outstanding:
Weighted average common shares
outstanding.........................
Incremental common shares applicable
to common stock options and warrants
based on the estimated fair value
of the stock........................
Common stock options and warrants
excluded based on antidilutive
effect..............................
Weighted average common shares........
========= =========
Primary and full diluted income per
common share........................ $ $
========= =========
</TABLE>

<PAGE> 1
EXHIBIT 21.1
SUBSIDIARIES OF THE COMPANY

<TABLE>
<CAPTION>
Jurisdiction of
Subsidiary Incorporation or Organization
- ---------- -----------------------------
<S> <C>
I.H.F.P., Inc. Delaware
Luck's, Incorporated Delaware
M. Polaner, Inc. Delaware
Canadian Home Products Limited Canada
Heritage Brands Holdings, Inc. Delaware
Heritage Brands, Inc. Delaware
Campfire, Inc. Delaware
Bumble Bee Acquisition Corporation Delaware
Sociedad Ecuatoriama de Alimentos
Frigorificos Manta C.A. Ecuador
Santa Fe Springs Holding Corp. Delaware
Commerce Acquisition Corporation Delaware
Bumble Bee International Inc.
Acquisition Corp. Delaware
DM US Holding, Inc. Delaware
HMTF Mexico Holdings, S.A. de C.V. Mexico
Productos Del Monte, S.A. de C.V. Mexico
Frutas y Verduras Selectas, S. de R.L.
de C.V. Mexico
Creative Products of Rossville, Inc. Delaware
</TABLE>

<PAGE> 1

EXHIBIT 23.1

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the inclusion in this registration statement on Form S-1
(Registration No. 333- ) of our report dated April 18, 1997 except as
to Note 15, for which the date is May 2, 1997, on our audit of the consolidated
financial statements of International Home Foods, Inc. as of December 31, 1996
and for the year ended December 31, 1996. We also consent to the reference to
our Firm under the caption "Experts."

Coopers & Lybrand L.L.P.

Parsippany, New Jersey
September 23, 1997

<PAGE> 1

EXHIBIT 23.2

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

We hereby consent to the use of our report and to all references to our
Firm included in or made a part of this registration statement.

Arthur Andersen LLP

New York, NY
September 23, 1997

<PAGE> 1

EXHIBIT 23.3

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the use of our report included herein and to the reference to
our firm under the heading "Experts" in the prospectus.

Our report dated April 11, 1997, contains an explanatory paragraph that
states that the Company's notes payable and subordinated note payable were due
and payable in May 1996 and nonpayment has constituted events of default. The
Company does not currently have funds to retire these obligations. Such
conditions raise substantial doubt about the Company's ability to continue as a
going concern. The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

KPMG Peat Marwick LLP

San Diego, California
September 23, 1997

<ARTICLE> 5
<MULTIPLIER> 1,000,000

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 8
<SECURITIES> 66
<RECEIVABLES> 55
<ALLOWANCES> 4
<INVENTORY> 111
<CURRENT-ASSETS> 255
<PP&E> 324
<DEPRECIATION> 139
<TOTAL-ASSETS> 962
<CURRENT-LIABILITIES> 163
<BONDS> 0
0
0
<COMMON> 3
<OTHER-SE> (250)
<TOTAL-LIABILITY-AND-EQUITY> 962
<SALES> 494
<TOTAL-REVENUES> 494
<CGS> 231
<TOTAL-COSTS> 231
<OTHER-EXPENSES> 185
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 52
<INCOME-PRETAX> 28
<INCOME-TAX> 11
<INCOME-CONTINUING> 17
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 17
<EPS-PRIMARY> .05
<EPS-DILUTED> 0

</TABLE>