GUARANTOR NOTE

On July 2, 2009, Solo Delaware and Solo Cup Operating Corporation (“SCOC”) co-issued $300.0 million of 10.5% Senior Secured Notes due 2013. The senior secured notes are fully and unconditionally guaranteed, on a joint and several basis, by certain of our subsidiaries. The consolidated guarantors include SF Holdings; Solo Manufacturing LLC; P.R. Solo Cup, Inc.; Lily-Canada Holding Corporation; Solo Cup Finance Limited; Solo Cup (UK) Limited; Insulpak Holdings Limited; Solo Cup Europe Limited; and Solo Cup Owings Mills Holdings.

Effective February 22, 2004, Solo Delaware acquired SF Holdings. Solo Delaware partially funded the acquisition through the issuance of its 8.5% Senior Subordinated Notes due 2014. The senior subordinated notes are fully and unconditionally guaranteed, on a joint and several basis, by certain of our subsidiaries. The consolidated guarantors of the senior subordinated notes are the same as the senior secured notes, except for SCOC, which is a guarantor of the senior subordinated notes, but a co-issuer of the senior secured notes.

The following financial information is presented in accordance with Rule 3-10 of Regulation S-X under the Securities Exchange Act of 1934. In presenting this financial information, the equity method of accounting has been applied to (1) Solo Delaware's investment in SF Holdings, (2) SF Holdings' investment in SCOC, and (3) SCOC's investment in the Other Guarantors and Non-Guarantor subsidiaries. All such subsidiaries meet the requirements to be consolidated under U.S. generally accepted accounting principles. All intercompany balances and transactions have been eliminated.

(Continued)

(11) GUARANTOR NOTE (CONTINUED)



	Condensed Consolidated Balance Sheet June 26, 2011 (In thousands)
	Solo Delaware⁽¹⁾			SF Holdings⁽²⁾ (Guarantor)			SCOC⁽³⁾		Other Guarantors⁽⁴⁾			Non- Guarantors		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—		$	—		$	6	$	3,819		$	11,267	$	—		$	15,092
Accounts receivable - trade	—			—			96,957		18,747			23,448		—			139,152
Accounts receivable - other	1,996			—			21,314		2,186			—		(21,102		)	4,394
Inventories	—			—			238,393		22,615			25,777		(2,773		)	284,012
Deferred income taxes	—			—			4,751		—			684		—			5,435
Prepaid expenses and other current assets	—			—			34,757		3,227			2,624		—			40,608
Total current assets	1,996			—			396,178		50,594			63,800		(23,875		)	488,693
Property, plant and equipment, net	—			—			324,350		12,139			29,097		—			365,586
Intangible assets, net	—			—			803		—			—		—			803
Intercompany receivables - non-current	190,306			—			6,088		—			—		(196,394		)	—
Intercompany debt - non-current	391,238			—			39,224		—			—		(430,462		)	—
Investments in subsidiaries	(95,625		)	236,538			57,742		—			20,520		(219,175		)	—
Other assets	10,135			—			10,603		1,127			2,832		—			24,697
Total assets	$	498,050		$	236,538		$	834,988	$	63,860		$	116,249	$	(869,906	)	$	879,779
Liabilities and Shareholder’s (Deficit) Equity
Current liabilities:
Accounts payable	$	—		$	—		$	75,338	$	14,481		$	6,655	$	—		$	96,474
Intercompany payable	—			—			4,182		8,349			8,571		(21,102		)	—
Accrued expenses and other current liabilities	15,460			—			83,170		2,143			6,916		—			107,689
Current maturities of long-term debt	—			—			182		272			—		—			454
Total current liabilities	15,460			—			162,872		25,245			22,142		(21,102		)	204,617
Long-term debt, net of current maturities	621,214			—			61,998		677			4,122		—			688,011
Long-term debt, net of current maturities - intercompany	—			135,769			255,471		39,222			—		(430,462		)	—
Deferred income taxes	—			—			5,311		—			1,785		—			7,096
Long-term payable - intercompany	—			196,394			—		—			—		(196,394		)	—
Other long-term liabilities	—			—			112,798		335			5,546		—			118,679
Total liabilities	636,674			332,163			598,450		65,479			33,595		(647,958		)	1,018,403
Total shareholder’s (deficit) equity	(138,624		)	(95,625		)	236,538		(1,619		)	82,654		(221,948		)	(138,624		)
Total liabilities and shareholder’s (deficit) equity	$	498,050		$	236,538		$	834,988	$	63,860		$	116,249	$	(869,906	)	$	879,779


(1)	Issuer of 8.5% Senior Subordinated Notes; co-issuer of 10.5% Senior Secured Notes


(2)	Guarantor of 8.5% Senior Subordinated Notes and 10.5% Senior Secured Notes


(3)	Guarantor of 8.5% Senior Subordinated Notes; co-issuer of 10.5% Senior Secured Notes


(4)	Guarantors of 8.5% Senior Subordinated Notes and 10.5% Senior Secured Notes

(Continued)

(11) GUARANTOR NOTE (CONTINUED)



	Condensed Consolidated Balance Sheet December 26, 2010 (In thousands)
	Solo Delaware			SF Holdings (Guarantor)			SCOC		Other Guarantors			Non- Guarantors		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—		$	—		$	7,455	$	4,896		$	9,160	$	—		$	21,511
Accounts receivable - trade	—			—			82,118		16,612			17,483		—			116,213
Accounts receivable - other	2,756			—			15,633		2,184			—		(16,061		)	4,512
Inventories	—			—			189,455		15,625			24,598		(2,089		)	227,589
Deferred income taxes	—			—			12,573		—			483		—			13,056
Restricted cash	1,940			—			—		—			—		—			1,940
Prepaid expenses and other current assets	—			—			20,379		1,726			1,743		—			23,848
Total current assets	4,696			—			327,613		41,043			53,467		(18,150		)	408,669
Property, plant and equipment, net	—			—			385,381		12,905			30,827		—			429,113
Intangible asssets, net	—			—			910		—			—		—			910
Intercompany receivables - non-current	178,021			—			6,088		—			—		(184,109		)	—
Intercompany debt - non-current	407,488			—			37,894		—			—		(445,382		)	—
Investments in subsidiaries	(51,681		)	268,197			56,089		—			19,488		(292,093		)	—
Other assets	11,984			—			9,915		1,662			2,419		—			25,980
Total assets	$	550,508		$	268,197		$	823,890	$	55,610		$	106,201	$	(939,734	)	$	864,672
Liabilities and Shareholder’s (Deficit) Equity
Current liabilities:
Accounts payable	$	—		$	—		$	46,925	$	10,861		$	5,272	$	—		$	63,058
Intercompany payable	—			—			5,265		4,805			5,991		(16,061		)	—
Accrued expenses and other current liabilities	17,476			—			89,448		1,649			6,495		—			115,068
Current maturities of long-term debt	—			—			168		262			—		—			430
Total current liabilities	17,476			—			141,806		17,577			17,758		(16,061		)	178,556
Long-term debt, net of current maturities	620,536			—			13,330		747			2,672		—			637,285
Long-term debt, net of current maturities - intercompany	—			135,768			271,720		37,893			—		(445,381		)	—
Deferred income taxes	—			—			13,132		—			1,744		—			14,876
Long-term payable - intercompany	—			184,110			—		—			—		(184,110		)	—
Other long-term liabilities	—			—			115,705		667			5,087		—			121,459
Total liabilities	638,012			319,878			555,693		56,884			27,261		(645,552		)	952,176
Total shareholder’s (deficit) equity	(87,504		)	(51,681		)	268,197		(1,274		)	78,940		(294,182		)	(87,504		)
Total liabilities and shareholder’s (deficit) equity	$	550,508		$	268,197		$	823,890	$	55,610		$	106,201	$	(939,734	)	$	864,672

(Continued)

(11) GUARANTOR NOTE (CONTINUED)



	Consolidated Statement of Operations For the thirteen weeks ended June 26, 2011 (In thousands)
	Solo Delaware			SF Holdings (Guarantor)			SCOC			Other Guarantors			Non- Guarantors			Eliminations			Consolidated
Net sales	$	—		$	—		$	382,464		$	33,045		$	60,013		$	(39,646	)	$	435,876
Cost of goods sold	—			—			354,214			30,545			53,452			(39,425		)	398,786
Gross profit	—			—			28,250			2,500			6,561			(221		)	37,090
Selling, general and administrative expenses	—			—			30,395			2,152			3,443			(32		)	35,958
Gain on asset disposals	—			—			(823		)	—			—			—			(823		)
Asset impairment	—			—			12,343			—			—			—			12,343
Operating (loss) income	—			—			(13,665		)	348			3,118			(189		)	(10,388		)
Interest expense, net	3,659			6,214			7,593			131			59			—			17,656
Foreign currency exchange (gain) loss, net	—			—			(802		)	94			923			—			215
Equity in loss (income) of subsidiaries	25,479			19,265			(1,164		)	—			—			(43,580		)	—
(Loss) income before income taxes	(29,138		)	(25,479		)	(19,292		)	123			2,136			43,391			(28,259		)
Income tax (benefit) provision	—			—			(27		)	(15		)	921			—			879
Net (loss) income	$	(29,138	)	$	(25,479	)	$	(19,265	)	$	138		$	1,215		$	43,391		$	(29,138	)

	Consolidated Statement of Operations For the thirteen weeks ended June 27, 2010 (In thousands)
	Solo Delaware			SF Holdings (Guarantor)			SCOC			Other Guarantors			Non- Guarantors			Eliminations			Consolidated
Net sales	$	—		$	—		$	359,817		$	28,922		$	51,120		$	(20,680	)	$	419,179
Cost of goods sold	—			—			336,549			26,964			43,661			(20,590		)	386,584
Gross profit	—			—			23,268			1,958			7,459			(90		)	32,595
Selling, general and administrative expenses	—			—			36,161			1,844			2,805			(44		)	40,766
Loss (gain) on asset disposals	—			—			1,100			(65		)	(1		)	—			1,034
Asset impairment	—			—			13,218			—			—			—			13,218
Operating (loss) income	—			—			(27,211		)	179			4,655			(46		)	(22,423		)
Interest expense, net	2,761			5,660			8,785			121			8			—			17,335
Foreign currency exchange loss (gain), net	—			—			198			117			(341		)	—			(26		)
Equity in loss (income) of subsidiaries	36,960			31,300			(3,485		)	—			—			(64,775		)	—
Gain on bargain purchase	—			—			(1,703		)	—			—			—			(1,703		)
(Loss) income before income taxes	(39,721		)	(36,960		)	(31,006		)	(59		)	4,988			64,729			(38,029		)
Income tax provision (benefit)	—			—			294			(33		)	1,431			—			1,692
Net (loss) income	$	(39,721	)	$	(36,960	)	$	(31,300	)	$	(26	)	$	3,557		$	64,729		$	(39,721	)

(Continued)

(11) GUARANTOR NOTE (CONTINUED)



	Consolidated Statement of Operations For the twenty-six weeks ended June 26, 2011 (In thousands)
	Solo Delaware			SF Holdings (Guarantor)			SCOC			Other Guarantors			Non- Guarantors			Eliminations			Consolidated
Net sales	$	—		$	—		$	697,538		$	59,860		$	112,365		$	(62,742	)	$	807,021
Cost of goods sold	—			—			644,472			55,543			101,688			(62,193		)	739,510
Gross profit	—			—			53,066			4,317			10,677			(549		)	67,511
Selling, general and administrative expenses	—			—			60,513			4,324			6,768			(59		)	71,546
(Gain) loss on asset disposals	—			—			(454		)	—			175			—			(279		)
Asset impairment	—			—			12,343			—			—			—			12,343
Operating (loss) income	—			—			(19,336		)	(7		)	3,734			(490		)	(16,099		)
Interest expense, net	7,176			12,285			15,078			293			104			—			34,936
Foreign currency exchange loss, net	—			—			704			43			1,626			—			2,373
Equity in loss (income) of subsidiaries	47,258			34,973			(396		)	—			—			(81,835		)	—
(Loss) income before income taxes	(54,434		)	(47,258		)	(34,722		)	(343		)	2,004			81,345			(53,408		)
Income tax provision (benefit)	—			—			251			(37		)	812			—			1,026
Net (loss) income	$	(54,434	)	$	(47,258	)	$	(34,973	)	$	(306	)	$	1,192		$	81,345		$	(54,434	)

	Consolidated Statement of Operations For the twenty-six weeks ended June 27, 2010 (In thousands)
	Solo Delaware			SF Holdings (Guarantor)			SCOC			Other Guarantors			Non- Guarantors			Eliminations			Consolidated
Net sales	$	—		$	—		$	661,386		$	54,047		$	94,908		$	(46,289	)	$	764,052
Cost of goods sold	—			—			604,980			51,577			82,803			(46,187		)	693,173
Gross profit	—			—			56,406			2,470			12,105			(102		)	70,879
Selling, general and administrative expenses	—			—			66,522			3,718			5,419			(70		)	75,589
Loss (gain) on asset disposals	—			—			2,021			(23		)	(1		)	—			1,997
Asset impairment	—			—			13,218			—			—			—			13,218
Operating (loss) income	—			—			(25,355		)	(1,225		)	6,687			(32		)	(19,925		)
Interest expense, net	6,245			11,189			16,732			252			17			—			34,435
Foreign currency exchange loss (gain), net	—			—			767			1,280			(697		)	—			1,350
Equity in loss (income) of subsidiaries	50,004			38,815			(2,554		)	—			—			(86,265		)	—
Gain on bargain purchase	—			—			(1,703		)	—			—			—			(1,703		)
(Loss) income before income taxes	(56,249		)	(50,004		)	(38,597		)	(2,757		)	7,367			86,233			(54,007		)
Income tax provision (benefit)	—			—			218			(66		)	2,090			—			2,242
Net (loss) income	$	(56,249	)	$	(50,004	)	$	(38,815	)	$	(2,691	)	$	5,277		$	86,233		$	(56,249	)

(Continued)

(11) GUARANTOR NOTE (CONTINUED)



	Condensed Consolidated Statement of Cash Flows For the twenty-six weeks ended June 26, 2011 (In thousands)
	Solo Delaware			SF Holdings (Guarantor)		SCOC			Other Guarantors			Non- Guarantors			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES
Net cash (used in) provided by operating activities	$	(18,189	)	$	—	$	(26,566	)	$	(347	)	$	1,099		$	—		$	(44,003	)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property, plant and equipment	—			—		1,717			—			—			(479		)	1,238
Purchases of property, plant and equipment	—			—		(13,531		)	(802		)	(126		)	479			(13,980		)
Decrease in restricted cash	1,940			—		—			—			—			—			1,940
Other	—			—		(1,500		)	—			—			—			(1,500		)
Net cash provided by (used in) investing activities	1,940			—		(13,314		)	(802		)	(126		)	—			(12,302		)
CASH FLOWS FROM FINANCING ACTIVITIES
Net borrowings under revolving credit facilities	—			—		48,762			—			1,450			—			50,212
Repayments of other debt	—			—		(82		)	(143		)	—			—			(225		)
Collection on (repayment of) intercompany debt	16,249			—		(16,249		)	—			—			—			—
Net cash provided by (used in) financing activities	16,249			—		32,431			(143		)	1,450			—			49,987
Effect of exchange rate changes on cash	—			—		—			215			(316		)	—			(101		)
Net (decrease) increase in cash and cash equivalents	—			—		(7,449		)	(1,077		)	2,107			—			(6,419		)
Cash and cash equivalents, beginning of period	—			—		7,455			4,896			9,160			—			21,511
Cash and cash equivalents, end of period	$	—		$	—	$	6		$	3,819		$	11,267		$	—		$	15,092

(Continued)

(11) GUARANTOR NOTE (CONTINUED)



	Condensed Consolidated Statement of Cash Flows For the twenty-six weeks ended June 27, 2010 (In thousands)
	Solo Delaware			SF Holdings (Guarantor)		SCOC			Other Guarantors			Non- Guarantors			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES
Net cash (used in) provided by operating activities	$	(18,821	)	$	—	$	(30,308	)	$	(1,050	)	$	(6,535	)	$	—		$	(56,714	)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property, plant and equipment	—			—		54			84			—			(24		)	114
Purchases of property, plant and equipment	—			—		(30,751		)	(366		)	(264		)	24			(31,357		)
Business acquisition, net of cash acquired	—			—		(23,661		)	—			—			—			(23,661		)
Decrease in restricted cash	4,270			—		—			—			—			—			4,270
Net cash provided by (used in) investing activities	4,270			—		(54,358		)	(282		)	(264		)	—			(50,634		)
CASH FLOWS FROM FINANCING ACTIVITIES
Net borrowings under revolving credit facilities	—			—		100,200			—			—			—			100,200
Repayments of term notes	—			—		—			—			(410		)	—			(410		)
Return of capital to parent	(100		)	—		—			—			—			—			(100		)
Collection on (repayment of) intercompany debt	15,024			—		(15,024		)	—			—			—			—
Repayments of other debt	—			—		(38		)	(126		)	—			—			(164		)
Debt issuance costs	(373		)	—		(157		)	—			—			—			(530		)
Net cash provided by (used in) financing activities	14,551			—		84,981			(126		)	(410		)	—			98,996
Effect of exchange rate changes on cash	—			—		—			(283		)	645			—			362
Net increase (decrease) in cash and cash equivalents	—			—		315			(1,741		)	(6,564		)	—			(7,990		)
Cash and cash equivalents, beginning of period	—			—		5			4,517			25,484			—			30,006
Cash and cash equivalents, end of period	$	—		$	—	$	320		$	2,776		$	18,920		$	—		$	22,016