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. Each of the subsidiary guarantors is 100% owned, directly or indirectly, by Solo Delaware.

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)

(13) GUARANTOR NOTE (CONTINUED)



	Condensed Consolidated Balance Sheet September 25, 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	$	—		$	—		$	13,906	$	3,575		$	9,949		$	—		$	27,430
Accounts receivable - trade	—			—			85,032		18,344			18,246			—			121,622
Accounts receivable - other	1,934			—			17,680		2,188			(24		)	(17,967		)	3,811
Inventories	—			—			227,361		21,114			26,079			(2,393		)	272,161
Deferred income taxes	—			—			6,012		—			760			—			6,772
Prepaid expenses and other current assets	—			—			25,955		2,181			3,015			—			31,151
Total current assets	1,934			—			375,946		47,402			58,025			(20,360		)	462,947
Property, plant and equipment, net	—			—			289,302		10,896			27,208			—			327,406
Intangible assets, net	—			—			749		—			—			—			749
Intercompany receivables - non-current	196,667			—			6,088		—			—			(202,755		)	—
Intercompany debt - non-current	383,461			—			37,948		—			—			(421,409		)	—
Investments in subsidiaries	(113,190		)	225,332			56,454		—			20,023			(188,619		)	—
Other assets	9,185			—			13,054		1,094			2,348			—			25,681
Total assets	$	478,057		$	225,332		$	779,541	$	59,392		$	107,604		$	(833,143	)	$	816,783
Liabilities and Shareholder’s (Deficit) Equity
Current liabilities:
Accounts payable	$	—		$	—		$	63,512	$	12,323		$	5,329		$	—		$	81,164
Intercompany payable	—			—			4,123		6,539			7,305			(17,967		)	—
Accrued expenses and other current liabilities	16,429			—			56,045		1,951			5,993			—			80,418
Current maturities of long-term debt	—			—			192		247			—			—			439
Total current liabilities	16,429			—			123,872		21,060			18,627			(17,967		)	162,021
Long-term debt, net of current maturities	621,569			—			66,326		587			3,438			—			691,920
Long-term debt, net of current maturities - intercompany	—			135,767			247,694		37,948			—			(421,409		)	—
Deferred income taxes	—			—			5,908		—			1,781			—			7,689
Long-term payable - intercompany	—			202,755			—		—			—			(202,755		)	—
Other long-term liabilities	—			—			110,409		152			4,533			—			115,094
Total liabilities	637,998			338,522			554,209		59,747			28,379			(642,131		)	976,724
Total shareholder’s (deficit) equity	(159,941		)	(113,190		)	225,332		(355		)	79,225			(191,012		)	(159,941		)
Total liabilities and shareholder’s (deficit) equity	$	478,057		$	225,332		$	779,541	$	59,392		$	107,604		$	(833,143	)	$	816,783


(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)

(13) 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 assets, 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)

(13) GUARANTOR NOTE (CONTINUED)



	Consolidated Statement of Operations For the thirteen weeks ended September 25, 2011 (In thousands)
	Solo Delaware			SF Holdings (Guarantor)			SCOC			Other Guarantors			Non- Guarantors			Eliminations			Consolidated
Net sales	$	—		$	—		$	366,047		$	30,993		$	53,969		$	(34,686	)	$	416,323
Cost of goods sold	—			—			341,859			27,711			48,828			(34,773		)	383,625
Gross profit	—			—			24,188			3,282			5,141			87			32,698
Selling, general and administrative expenses	—			—			27,173			1,809			2,946			(28		)	31,900
Loss (gain) on asset disposals	—			—			1,155			(29		)	304			—			1,430
Asset impairment	—			—			550			—			155			—			705
Operating (loss) income	—			—			(4,690		)	1,502			1,736			115			(1,337		)
Interest expense, net	3,749			6,361			7,600			124			64			—			17,898
Foreign currency exchange (gain) loss, net	—			—			(2,953		)	261			613			—			(2,079		)
Equity in loss (earnings) of subsidiaries	12,861			6,500			(2,145		)	—			—			(17,216		)	—
(Loss) income before income taxes	(16,610		)	(12,861		)	(7,192		)	1,117			1,059			17,331			(17,156		)
Income tax (benefit) provision	—			—			(692		)	(17		)	163			—			(546		)
Net (loss) income	$	(16,610	)	$	(12,861	)	$	(6,500	)	$	1,134		$	896		$	17,331		$	(16,610	)

	Consolidated Statement of Operations For the thirteen weeks ended September 26, 2010 (In thousands)
	Solo Delaware			SF Holdings (Guarantor)			SCOC			Other Guarantors			Non- Guarantors			Eliminations			Consolidated
Net sales	$	—		$	—		$	351,070		$	27,702		$	46,270		$	(15,428	)	$	409,614
Cost of goods sold	—			—			328,915			26,919			41,731			(15,349		)	382,216
Gross profit	—			—			22,155			783			4,539			(79		)	27,398
Selling, general and administrative expenses	—			—			30,064			1,778			4,712			(38		)	36,516
Loss (gain) on asset disposals	—			—			659			(1		)	—			—			658
Asset impairment	—			—			3,448			—			—			—			3,448
Operating loss	—			—			(12,016		)	(994		)	(173		)	(41		)	(13,224		)
Interest expense (income), net	3,155			5,794			9,241			156			(4		)	1			18,343
Foreign currency exchange loss (gain), net	—			—			251			(1,081		)	70			—			(760		)
Equity in loss of subsidiaries	27,582			21,788			1,084			—			—			(50,454		)	—
Gain from bargain purchase	—			—			(30		)	—			—			—			(30		)
(Loss) income before income taxes	(30,737		)	(27,582		)	(22,562		)	(69		)	(239		)	50,412			(30,777		)
Income tax (benefit) provision	—			—			(775		)	(28		)	763			—			(40		)
Net loss	$	(30,737	)	$	(27,582	)	$	(21,787	)	$	(41	)	$	(1,002	)	$	50,412		$	(30,737	)

(Continued)

(13) GUARANTOR NOTE (CONTINUED)



	Consolidated Statement of Operations For the thirty-nine weeks ended September 25, 2011 (In thousands)
	Solo Delaware			SF Holdings (Guarantor)			SCOC			Other Guarantors			Non- Guarantors			Eliminations			Consolidated
Net sales	$	—		$	—		$	1,063,584		$	90,853		$	166,335		$	(97,428	)	$	1,223,344
Cost of goods sold	—			—			986,335			83,254			150,513			(96,966		)	1,123,136
Gross profit	—			—			77,249			7,599			15,822			(462		)	100,208
Selling, general and administrative expenses	—			—			87,685			6,132			9,716			(87		)	103,446
Loss (gain) on asset disposals	—			—			701			(29		)	479			—			1,151
Asset impairment	—			—			12,893			—			155			—			13,048
Operating (loss) income	—			—			(24,030		)	1,496			5,472			(375		)	(17,437		)
Interest expense, net	10,927			18,645			22,676			418			169			—			52,835
Foreign currency exchange (gain) loss, net	—			—			(2,249		)	304			2,238			—			293
Equity in loss (earnings) of subsidiaries	60,119			41,474			(2,543		)	—			—			(99,050		)	—
(Loss) income before income taxes	(71,046		)	(60,119		)	(41,914		)	774			3,065			98,675			(70,565		)
Income tax (benefit) provision	—			—			(440		)	(54		)	975			—			481
Net (loss) income	$	(71,046	)	$	(60,119	)	$	(41,474	)	$	828		$	2,090		$	98,675		$	(71,046	)

	Consolidated Statement of Operations For the thirty-nine weeks ended September 26, 2010 (In thousands)
	Solo Delaware			SF Holdings (Guarantor)			SCOC			Other Guarantors			Non- Guarantors			Eliminations			Consolidated
Net sales	$	—		$	—		$	1,023,466		$	81,748		$	141,177		$	(72,725	)	$	1,173,666
Cost of goods sold	—			—			944,901			78,497			124,533			(72,542		)	1,075,389
Gross profit	—			—			78,565			3,251			16,644			(183		)	98,277
Selling, general and administrative expenses	—			—			96,585			5,495			10,132			(107		)	112,105
Loss (gain) on asset disposals	—			—			2,680			(24		)	(1		)	—			2,655
Asset impairment	—			—			16,666			—			—			—			16,666
Operating (loss) income	—			—			(37,366		)	(2,220		)	6,513			(76		)	(33,149		)
Interest expense, net	9,398			16,984			25,974			408			15			—			52,779
Foreign currency exchange loss (gain), net	—			—			1,017			200			(628		)	—			589
Equity in loss (earnings) of subsidiaries	77,588			60,604			(1,464		)	—			—			(136,728		)	—
Gain from bargain purchase	—			—			(1,733		)	—			—			—			(1,733		)
(Loss) income before income taxes	(86,986		)	(77,588		)	(61,160		)	(2,828		)	7,126			136,652			(84,784		)
Income tax (benefit) provision	—			—			(556		)	(94		)	2,852			—			2,202
Net (loss) income	$	(86,986	)	$	(77,588	)	$	(60,604	)	$	(2,734	)	$	4,274		$	136,652		$	(86,986	)

(Continued)

(13) GUARANTOR NOTE (CONTINUED)



	Condensed Consolidated Statement of Cash Flows For the thirty-nine weeks ended September 25, 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	$	(25,967	)	$	—	$	(21,868	)	$	(236	)	$	1,073		$	—		$	(46,998	)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property, plant and equipment	—			—		21,009			48			—			(496		)	20,561
Purchases of property, plant and equipment	—			—		(20,182		)	(916		)	(438		)	496			(21,040		)
Decrease in restricted cash	1,940			—		—			—			—			—			1,940
Other	—			—		(1,500		)	—			—			—			(1,500		)
Net cash provided by (used in) investing activities	1,940			—		(673		)	(868		)	(438		)	—			(39		)
CASH FLOWS FROM FINANCING ACTIVITIES
Net borrowings under revolving credit facilities	—			—		53,142			—			919			—			54,061
Repayments of other debt	—			—		(124		)	(212		)	—			—			(336		)
Collection on (repayment of) intercompany debt	24,027			—		(24,027		)	—			—			—			—
Net cash provided by (used in) financing activities	24,027			—		28,991			(212		)	919			—			53,725
Effect of exchange rate changes on cash	—			—		—			(6		)	(763		)	—			(769		)
Net increase (decrease) in cash and cash equivalents	—			—		6,450			(1,322		)	791			—			5,919
Cash and cash equivalents, beginning of period	—			—		7,455			4,896			9,160			—			21,511
Cash and cash equivalents, end of period	$	—		$	—	$	13,905		$	3,574		$	9,951		$	—		$	27,430

(Continued)

(13) GUARANTOR NOTE (CONTINUED)



	Condensed Consolidated Statement of Cash Flows For the thirty-nine weeks ended September 26, 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	$	(27,105	)	$	—	$	1,817		$	(375	)	$	(3,818	)	$	—		$	(29,481	)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property, plant and equipment	—			—		62			83			1			(29		)	117
Purchases of property, plant and equipment	—			—		(36,411		)	(959		)	(330		)	29			(37,671		)
Business acquisition, net of cash acquired	—			—		(23,661		)	—			—			—			(23,661		)
Decrease in restricted cash	5,840			—		—			—			—			—			5,840
Proceeds from insurance reimbursement	—			—		1,201			—			—			—			1,201
Net cash provided by (used in) investing activities	5,840			—		(58,809		)	(876		)	(329		)	—			(54,174		)
CASH FLOWS FROM FINANCING ACTIVITIES
Net borrowings under revolving credit facilities	—			—		79,000			—			—			—			79,000
Repayments of term notes	—			—		—			—			(410		)	—			(410		)
Return of capital to parent	(100		)	—		—			—			—			—			(100		)
Collection on (repayment of) intercompany debt	21,737			—		(21,737		)	—			—			—			—
Repayments of other debt	—			—		(77		)	(189		)	—			—			(266		)
Debt issuance costs	(372		)	—		(158		)	—			—			—			(530		)
Net cash provided by (used in) financing activities	21,265			—		57,028			(189		)	(410		)	—			77,694
Effect of exchange rate changes on cash	—			—		—			(104		)	678			—			574
Net increase (decrease) in cash and cash equivalents	—			—		36			(1,544		)	(3,879		)	—			(5,387		)
Cash and cash equivalents, beginning of period	—			—		5			4,517			25,484			—			30,006
Cash and cash equivalents, end of period	$	—		$	—	$	41		$	2,973		$	21,605		$	—		$	24,619