<PAGE>   1
                                                                 Exhibit 4.3 (b)



August 20, 1997


Outlook Group Corp.
Outlook Label Systems, Inc.
Outlook Foods, Inc.
Outlook Packaging, Inc.
1180 American Drive
Neenah, Wisconsin 54957


Re:  Waiver of and Amendment No. 3 to Loan and Security Agreement
     ------------------------------------------------------------

Ladies/Gentlemen:

Reference is hereby made to that certain Loan and Security Agreement, dated as
of November 5, 1996, as amended prior to the date hereof (as so amended, the
"Loan Agreement"), and executed by and among Outlook Group Corp. (the
"Parent"), Outlook Label Systems, Inc. ("Outlook Label"), Outlook Foods, Inc.
("Outlook Foods"), and Outlook Packaging, Inc. ("Outlook Packaging"; the
Parent, Outlook Label, Outlook Foods and Outlook Packaging being herein
collectively called the "Borrowers" and individually called a "Borrower"), and
BankAmerica Business Credit, Inc. (the "Lender").  Certain capitalized terms
used herein and not otherwise defined shall have the meaning attributed to them
in the Loan Agreement.

The Lender and the Borrowers hereby agree as follows:

1.   The Borrowers have provided the Lender with financial information which
     reflects that the following Events of Default have occurred under the Loan
     Agreement: (a) the Fixed Charge Coverage Ratio for the three consecutive
     fiscal quarter period ended May 31, 1997 was 1.16 to 1.0, which was less
     than the minimum Fixed Charge Coverage Ratio required under Section 10.21
     of the Loan Agreement of 1.20 to 1.0; and (b) the Adjusted Tangible Net
     Worth as of May 31, 1997 was $32,833,000, which was less than the Adjusted
     Tangible Net Worth required under Section 10.23 of the Loan Agreement of
     $35,000,000.

     Subject to the conditions set forth in Paragraph 3 below, the Lender 
     hereby waives the foregoing Events of Default with the understanding that
     the waivers are only applicable and shall only be effective in the
     specific instance and for the 


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<PAGE>   2

                                                                 Exhibit 4.3 (b)
 

    specific purpose for which given and for the specific period made.  The
    waivers are expressly limited to the facts and circumstances referred to
    herein and shall not operate (a) as a waiver of or consent to
    non-compliance with any other sections of the Loan Agreement, (b) as a
    waiver of, or a restriction on or prejudice with respect to, any right,
    power or remedy of the Lender under the Loan Agreement, or (c) as a waiver
    of or consent to any other Event of Default or Event under the Loan
    Agreement.

2.  The Loan Agreement is hereby amended as follows:

    a.   The definition of "Adjusted Tangible Assets" appearing in Section 1 of 
         the Loan Agreement is hereby amended and restated to read in its
         entirety as follows:

                        "Adjusted Tangible Assets" means all of the Borrowers'
                  consolidated assets except: (a) goodwill; (b) assets of any
                  Borrower constituting Intercompany Accounts; (c) fixed assets
                  to the extent of any write-up in the book value thereof
                  resulting from a revaluation effective after the Closing
                  Date; and (d) promissory notes payable to any Borrower,
                  including (i) promissory notes taken by such Borrower in
                  payment of an Account, and (ii) that certain promissory note
                  dated May 12, 1997 made by Barrier Films Corporation in favor
                  of the Parent in the face principal amount of $2,300,000.

    b.   The definition of "Fixed Charges" appearing in Section 1 of the Loan 
         Agreement is hereby amended and restated to read in its entirety as 
         follows:

                        "Fixed Charges" means as to the Borrowers on a
                  consolidated basis, for any fiscal period, the sum of (i)
                  interest expenses paid or payable in cash; (ii) scheduled
                  installments of principal paid or payable with respect to
                  Debt for borrowed money and Capital Leases; (iii) that
                  portion of Capital Expenditures not financed by borrowings
                  from third parties; (iv) income taxes paid or payable in
                  cash; and (v) scheduled increases in the IRB Reserve of
                  $142,857 per fiscal quarter.

    c.   Subparagraph (b) of Section 3.1 of the Loan Agreement is hereby 
         amended and restated to read in its entirety as follows:


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<PAGE>   3
                                                                 Exhibit 4.3 (b)


                        (b)(i)  The "Revolver Reference Margin" and "Revolver
                   LIBOR Margin" mean per annum rates of interest charged in    
                   addition to the applicable Reference Rate or LIBOR Rate with
                   respect to Revolving Loans.  On the effective date of the
                   Waiver and Amendment No. 3 to this Agreement, the Revolver
                   Reference Margin and Revolver LIBOR Margin shall equal
                   three-quarters of one percent (0.75%) and two and
                   three-quarters percent (2.75%) respectively.  Commencing
                   with the first day of the month following the Lender's
                   receipt of the Borrowers' financial statements for the
                   fiscal quarter ending August 31, 1997, and prospectively, on
                   the first day of each month following the Lender's receipt
                   of the Borrowers' financial statements for each fiscal
                   quarter thereafter, the Revolver Reference Margin and
                   Revolver LIBOR Margin shall be subject to adjustment (up or
                   down) based on the following grid:



<TABLE>
<S>                       <C>           <C>
If Borrowers'             The Revolver  The Revolver
Fixed Charge              Reference     LIBOR
Coverage Ratio is         Margin is     Margin is

Greater than 1.50 to 1.0  0.00%         2.00%

Less than or equal to
1.50 to 1.0, but greater
than 1.30 to 1.0          0.25%         2.25%

Less than or equal to
1.30 to 1.0, but greater
than 1.20 to 1.0          0.50%         2.50%

Less than or equal to
1.20 to 1.0, but greater
than 1.10 to 1.0          0.75%         2.75%

Less than or equal to
1.20 to 1.0               1.00%         3.00%

</TABLE>

                        (ii)  The "Term Reference Rate Margin" and "Term LIBOR
                   Margin" mean per annum rates of interest charged in addition 
                   to the applicable Reference Rate or LIBOR Rate with respect
                   to Term Loans.  On the effective date of the Waiver and



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<PAGE>   4

                                                                  Exhibit 4.3(b)

                  Amendment No. 3 to this Agreement, the Term Reference Rate
                  Margin and Term LIBOR Margin shall equal one and one-quarter
                  percent (1.25%) and three and one-quarter percent (3.25%),
                  respectively.  Commencing with the first day of the month
                  following the Lender's receipt of the Borrowers' financial
                  statements for the fiscal quarter ending August 31, 1997,
                  and, prospectively, on the first day of each month following
                  the Lender's receipt of the Borrowers' financial statements
                  for each fiscal quarter thereafter, the Term Reference Rate
                  Margin and Term LIBOR Margin shall be subject to adjustment
                  (up or down) based on the following grid:




<TABLE>
<S>                           <C>             <C>
If Borrowers'                 The Revolver    The Revolver
Fixed Charge                  Reference       LIBOR
Coverage Ratio is             Margin is       Margin is

Greater than 1.50 to 1.0      0.50%           2.50%

Less than or equal to
1.50 to 1.0, but greater
than 1.30 to 1.0              0.75%           2.75%

Less than or equal to
1.30 to 1.0, but greater
than 1.20 to 1.0              1.00%           3.00%

Less than or equal to
1.20 to 1.0, but greater
than 1.10 to 1.0              1.25%           3.25%

Less than or equal to
1.10 to 1.0                   1.50%           3.30%
</TABLE>

    d.   Section 10.19 of the Loan Agreement is hereby amended and restated to
         read in its entirety as follows:

                        10.19  Capital Expenditures.  Borrowers and their
                  Subsidiaries shall not make or incur any Capital Expenditure
                  if, after giving effect thereto, the aggregate amount of all
                  Capital Expenditures by Borrowers on a consolidated basis


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<PAGE>   5

                                                                 Exhibit 4.3 (b)


                   would exceed the following respective amounts in the
                   following respective Fiscal Years: (i) $2,500,000 for the
                   1998 Fiscal Year; and (ii) $3,000,000 for the 1999 Fiscal
                   Year and each Fiscal Year thereafter.

    e.   Section 10.21 of the Loan Agreement is hereby amended and restated to 
         read in its entirety as follows:

                        10.21  Fixed Charge Coverage Ratio.  The Borrowers will
                   maintain a Fixed Charge Coverage Ratio of not less than 1.0  
                   to 1.0 for each period of four consecutive fiscal quarters
                   (in each case taken as one accounting period) ending on the
                   last day of each fiscal quarter of the Borrowers.

    f.   Section 10.22 of the Loan Agreement is hereby amended and restated to 
         read in its entirety as follows:

                        10.22  Debt Ratio.  The Borrowers will not permit the
                   ratio of Debt to Adjusted Tangible Net Worth to exceed 1.50
                   to 1.0 as at the last day of each fiscal quarter.

    g.   Section 10l.23 of the Loan Agreement is hereby amended and restated to
         read in its entirety as follows:

                        10.23  Adjusted Tangible Net Worth.  The Borrowers will
                   maintain Adjusted Tangible Net Worth of not less than the    
                   following amounts during the following periods: (i)
                   $27,500,000 for the period from and including the last day
                   of the fiscal quarter ended in August, 1997 to but excluding
                   the last day of the fiscal quarter ended in November, 1997;
                   (ii) $28,000,000 for the period from and including the last
                   day of the fiscal quarter ended in November, 1997 to but
                   excluding the last day of the fiscal quarter ended in May,
                   1998; (iii) $29,500,000 for the period from and including
                   the last day of the fiscal quarter ended in May, 1998 to but
                   excluding the last day of the fiscal quarter ended in
                   February, 1999; and (iv) thereafter, increasing by the
                   amount of $500,000 on the last day of the third fiscal
                   quarter of each subsequent Fiscal Year.

3.   The waivers of the Events of Default under the Loan Agreement set forth
     in Paragraph 1 above and the amendments to the Loan Agreement set forth in
     Paragraph 2 above shall be effective 


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<PAGE>   6

                                                                 Exhibit 4.3 (b)


    upon the Lender's receipt of all of the following, each in form and 
    substance  satisfactory to the Lender:

    a.   A counterpart original of this letter agreement duly executed by the 
         Borrowers;

    b.   A photocopy of a letter or other instrument duly executed by The State 
         of Wisconsin Investment Board ("SWIB") relating to the Amended and
         Restated Note Purchase Agreement, dated as of November 5, 1996, as
         amended or otherwise modified prior to the date hereof, between the
         Parent and SWIB (the "Note Purchase Agreement"), pursuant to which
         SWIB shall have (i) waived the events of default that may have
         occurred under the Note Purchase Agreement as a result of the
         financial information described in Paragraph 1 above, and (ii) amended
         the Note Purchase Agreement in a manner consistent with the amendments
         to the Loan Agreement described in Paragraph 2 above; and

    c.   A photocopy of all such other notices, consents and/or waivers that    
         may be required to be delivered or obtained by the Borrowers in
         connection with the occurrence of the Events of Default under the Loan
         Agreement (including, without limitation, a waiver from General
         Electric Capital Corporation), all of which items shall reflect any
         necessary consents and/or waivers that are required to be obtained by
         the Borrowers with respect to such Events of Default.

4.  The Borrowers shall pay to the Lender on demand all costs and expenses that 
    the Lender pays or incurs in connection with the negotiation, preparation
    and consummation of this letter agreement and any and all matters
    incidental thereto, including, without limitation, attorneys' fees and
    disbursements which shall include the allocated costs of the Lender's
    in-house counsel fees and disbursements.

5.  This letter agreement shall be deemed to have been made in the State of
    Illinois and shall be governed by and interpreted in accordance with the
    laws of such state, except that no doctrine of choice of law shall be used
    to apply the laws of any other state or jurisdiction.

6.  This letter agreement may be executed by one or more of the parties hereto  
    on any number of counterparts, and all of said counterparts taken together
    shall be deemed to constitute one and the same instrument.




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<PAGE>   7

                                                                  Exhibit 4.3(b)


7.   Except to the extent expressly waived or amended herein, the Loan
     Agreement and the other Loan Documents remain in full force and effect and
     are each hereby ratified and confirmed.

8.   This letter agreement shall become effective in accordance with its terms
     upon its execution by the Lender and the Borrowers, whereupon each
     reference to the Loan Agreement in the Loan Agreement and in any other
     document, instrument or agreement executed and/or delivered in connection
     with the Loan Agreement shall mean and be a reference to the Loan
     Agreement as amended hereby.

Please evidence the agreement of the Borrowers (as borrowers and as guarantors)
with the terms of this letter agreement by signing in the spaces below.

Sincerely,

BANKAMERICA BUSINESS CREDIT, INC.


By: /s/ Thomas G. Sullivan
   ------------------------------
Name: Thomas G. Sullivan
     ----------------------------
Title: V.P.
      ---------------------------











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                                                                  Exhibit 4.3(b)


ACCEPTED AND AGREED
this 21st day of August, 1997:


OUTLOOK GROUP CORP.


By: /s/ Thomas C. Aschenbrenner
   ------------------------------
Name: Thomas C. Aschenbrenner
      ---------------------------
Title: CFO
      ---------------------------


OUTLOOK LABEL SYSTEMS, INC.


By: /s/ Thomas C. Aschenbrenner
   ------------------------------
Name: Thomas C. Aschenbrenner
     ----------------------------
Title: CFO
      ---------------------------


OUTLOOK FOODS, INC.


By: /s/ Thomas C. Aschenbrenner
   ------------------------------
Name: Thomas C. Aschenbrenner
     ----------------------------
Title: CFO
      ---------------------------


OUTLOOK PACKAGING, INC.


By: /s/ Thomas C. Aschenbrenner
   ------------------------------
Name: Thomas C. Aschenbrenner
     ----------------------------
Title: CFO
      ---------------------------








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