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                                                                     EXHIBIT 4.5

                           CERTIFICATE OF DESIGNATIONS

                                       OF

                    CONVERTIBLE PARTICIPATING PREFERRED STOCK

                                       OF

                         SOLO CUP INVESTMENT CORPORATION

              Solo Cup Investment Corporation (the "COMPANY"), a corporation
organized and existing under the General Corporation Law of the State of
Delaware (the "DGCL"), hereby certifies, pursuant to Section 151 of the DGCL,
that the following resolutions were duly adopted by its Board of Directors (the
"BOARD") on February 27, 2004:

              WHEREAS, the Company's Certificate of Incorporation, as amended,
including any amendment or supplement thereto (including any Certificate of
Amendment or Certificate of Designations) (the "CERTIFICATE OF INCORPORATION"),
authorizes five hundred thousand (500,000) shares of preferred stock, par value
$0.01 per share (the "PREFERRED STOCK"), issuable from time to time in one or
more series; and

              WHEREAS, the Certificate of Incorporation authorizes the Board to
establish and fix the number of shares to be included in any series of Preferred
Stock and the voting powers, full or limited, or no voting powers, and the
designations, preferences and relative, participating, optional or other special
rights, and qualifications, limitations or restrictions of the shares of such
series;

              NOW, THEREFORE, BE IT RESOLVED, that a series of Preferred Stock
with the powers, designations, preferences, rights, qualifications, limitations
and restrictions as provided herein is hereby authorized and established as
follows:

              Section 1.    NUMBER; DESIGNATION; RANK.

              (a) This series of convertible participating Preferred Stock is
designated as the "Convertible Participating Preferred Stock" (the "CONVERTIBLE
PARTICIPATING PREFERRED STOCK"). The number of shares constituting the
Convertible Participating Preferred Stock is 245,000 shares, par value $0.01 per
share.

              (b) The Convertible Participating Preferred Stock ranks, with
respect to dividend rights and rights upon liquidation, dissolution or winding
up of the Company senior in preference and priority to the Common Stock (as
defined in Section 10 hereof) of the Company, and each other class or series of
Equity Security (as defined in Section 10 hereof) of the Company the terms of
which do not expressly provide that it ranks senior in preference or priority
to, or on parity with, the Convertible Participating Preferred Stock with
respect to dividend rights or rights upon liquidation, dissolution or winding up
of the Company (collectively with the Common Stock, the "JUNIOR SECURITIES");


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              Section 2.    DIVIDENDS.

              (a) Each holder of issued and outstanding Convertible
Participating Preferred Stock will be entitled to receive, when, as and if
declared by the Board, out of funds of the Company legally available therefore,
for each share of Convertible Participating Preferred Stock:

                            (i)    dividends at a rate per annum equal to 10% of
                     the sum of (A) $1,000 per share (the "ORIGINAL PURCHASE
                     PRICE") plus (B) all unpaid cumulated and accrued Dividends
                     (as defined below) on such share of Convertible
                     Participating Preferred Stock, in each case as adjusted for
                     any stock dividends, splits, combinations and similar
                     events (the "REGULAR DIVIDENDS"); and

                            (ii)   participating dividends of the same type as
                     any dividends or other distribution, whether cash, in kind
                     or other property, payable or to be made on outstanding
                     shares of Common Stock equal to the amount of such
                     dividends or other distribution as would be made on the
                     number of shares of Common Stock into which such share of
                     Convertible Participating Preferred Stock could be
                     converted on the date of payment of such dividends or other
                     distribution on the Common Stock, assuming such shares of
                     Common Stock were outstanding on the applicable record date
                     for such dividend or other distribution (the "PARTICIPATING
                     DIVIDENDS" and, together with Regular Dividends, the
                     "DIVIDENDS") and any such Participating Dividends shall be
                     payable to the Person in whose name the Convertible
                     Participating Preferred Stock is registered at the close of
                     business on the applicable record date.

              (b) Subject to Section 2(a) above, Regular Dividends are payable
semi-annually in arrears on the last day of each June and December, or, if such
date is not a Business Day, the succeeding Business Day (each such day, a
"REGULAR DIVIDEND PAYMENT DATE"). The amount of Regular Dividends payable for
each full semi-annual dividend period will be computed by dividing the annual
rate by two and, in the case of the initial dividend period, on the basis of a
three hundred sixty (360) day year consisting of twelve thirty (30) day months
and the actual number of days elapsed for any period less than one month.
Regular Dividends that are not paid will cumulate and compound semi-annually to
the extent not paid. Regular Dividends shall accrue ratably on a daily basis
from the date of issuance until each Regular Dividend Payment Date based on a
three hundred sixty (360) day year consisting of twelve thirty (30) day months.
Any Regular Dividends that are declared will be paid to the holders of record of
Convertible Participating Preferred Stock as they appear in the records of the
Company at the close of business on the fifteenth (15th) day of the calendar
month in which the applicable Regular Dividend Payment Date falls or on such
other date designated by the Board for the payment of Regular Dividends that is
not more than sixty (60) days or less than ten (10) days prior to such Regular
Dividend Payment Date. Any payment of a Regular Dividend will first be credited
against the earliest cumulated but unpaid Regular Dividend due with respect to
such share that remains payable.


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              (c) Regular Dividends are payable only in cash, except as provided
in Section 5(a). Regular Dividends will accrue and cumulate whether or not the
Company has earnings or profits, whether or not there are funds legally
available for the payment of Regular Dividends and whether or not Regular
Dividends are declared.

              (d) Participating Dividends are payable at the same time as and
when dividends on the Common Stock are paid to the holders of Common Stock.

              (e) So long as any share of Convertible Participating Preferred
Stock is outstanding, no dividend may be declared or paid or set aside for
payment or other distribution declared or made upon any Junior Securities of any
kind (other than dividends payable solely in the form of Common Stock to all
holders of Common Stock and Participating Dividends payable solely in the form
of Common Stock to all holders of Convertible Participating Preferred Stock),
nor may any Junior Securities of any kind be redeemed, purchased or otherwise
acquired for any consideration (or any moneys be paid to or made available for a
sinking fund for the redemption of any shares of any such Junior Securities) by
the Company (except solely by conversion into or exchange for Junior
Securities), unless, in each case, full cumulative and accrued and unpaid
Regular Dividends on all shares of Convertible Participating Preferred Stock
have been or are contemporaneously declared and paid; PROVIDED, that this
Section 2(e) shall not restrict the redemption, repurchase or acquisition for
value of Junior Securities (i) from employees or former employees of the Company
or its Subsidiaries in connection with or following a termination of such
employee's employment with the Company or its Subsidiaries (whether by reason of
death, disability, retirement or otherwise) so long as all such redemptions,
repurchases and acquisitions do not exceed $3,000,000 in the aggregate in any
fiscal year; PROVIDED FURTHER that the Company or its Subsidiaries may carry
over and so utilize in subsequent fiscal years (A) the portion of such
$3,000,000 not utilized in any prior year and (B) the aggregate cash purchase
price paid for Junior Securities that are sold, transferred or reissued for
value by the Company or its Subsidiaries to another employee thereof within the
prior fiscal year, so long as the aggregate amount so utilized in any fiscal
year, including the $3,000,000 otherwise available during such year, does not
exceed $10,000,000 or (ii) pursuant to Section 6 hereof.

              (f) So long as any share of Convertible Participating Preferred
Stock is outstanding, no dividend may be declared or paid or set aside for
payment or other distribution declared or made upon any Common Stock unless full
Participating Dividends on all shares of Convertible Participating Preferred
Stock have been or are contemporaneously declared and paid; PROVIDED, that this
Section 2(f) shall not restrict the redemption, repurchase or acquisition for
value of Junior Securities (i) from employees or former employees of the Company
or its Subsidiaries in connection with or following a termination of such
employee's employment with the Company or its Subsidiaries (whether by reason of
death, disability, retirement or otherwise) so long as all such redemptions,
repurchases and acquisitions do not exceed $3,000,000 in the aggregate in any
fiscal year; PROVIDED FURTHER that the Company or its Subsidiaries may carry
over and so utilize in subsequent fiscal years (A) the portion of such
$3,000,000 not utilized in any prior year and (B) the aggregate cash purchase
price paid for Junior Securities that are sold, transferred or reissued for
value by the Company or its Subsidiaries to another employee thereof within the
prior fiscal year, so long as the aggregate amount so utilized in any fiscal
year, including the $3,000,000 otherwise available during such year, does not
exceed $10,000,000 or (ii) pursuant to Section 6 hereof.


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              (g) Prior to declaring any dividend or making any distribution on
or with respect to the shares of Convertible Participating Preferred Stock, the
Company shall take all actions necessary or advisable under the DGCL to permit
the payment of Dividends to the holders of Convertible Participating Preferred
Stock. Holders of Convertible Participating Preferred Stock are not entitled to
any dividend, whether payable in cash, in kind or other property, in excess of
the Dividends provided for in this Section 2.

              Section 3.    LIQUIDATION PREFERENCE.

              (a) Upon any voluntary or involuntary liquidation, dissolution or
winding up of the Company (a "LIQUIDATION"), each share of Convertible
Participating Preferred Stock entitles the holder thereof to receive and to be
paid out of the assets of the Company available for distribution, before any
distribution or payment may be made to a holder of any Junior Securities, an
amount in cash per share equal to the greater of (i) the sum of (A) the Original
Purchase Price per share plus (B) all unpaid cumulated and accrued Dividends on
such share of Convertible Participating Preferred Stock, in each case as
adjusted for any stock dividends, splits, combinations and similar events, or
(ii) an amount equal to the amount the holders of Convertible Participating
Preferred Stock would have received upon liquidation, dissolution or winding up
of the Company had such holders converted their shares of Convertible
Participating Preferred Stock into shares of Common Stock immediately prior to
such liquidation, dissolution or winding up (such greater amount, the
"LIQUIDATION PREFERENCE").

              (b) After payment to the holders of Convertible Participating
Preferred Stock of the full Liquidation Preference to which they are entitled,
the holders of Convertible Participating Preferred Stock, in such capacity, will
have no right or claim to any of the assets of the Company.

              (c) The value of any property not consisting of cash that is
distributed by the Company to the holders of the Convertible Participating
Preferred Stock will equal the Fair Market Value (as defined in Section 10
hereof) thereof.

              Section 4.    VOTING RIGHTS; BOARD OF DIRECTORS REPRESENTATION.

              (a) The holders of Convertible Participating Preferred Stock are
entitled to vote on all matters on which the holders of Common Stock are
entitled to vote, and except as otherwise provided herein or by law, the holders
of Convertible Participating Preferred Stock will vote together with the holders
of Common Stock as a single class. Each holder of Convertible Participating
Preferred Stock is entitled to a number of votes equal to the number of shares
of Common Stock into which all of the outstanding shares of Convertible
Participating Preferred Stock held by such holder on the applicable record date
are convertible immediately prior to the vote.

              (b) So long as any shares of Convertible Participating Preferred
Stock are outstanding, and except as otherwise provided by law, none of the
Company and its Subsidiaries may take any of the following actions without the
prior vote or written consent of holders representing at least a majority of the
then outstanding shares of Convertible Participating Preferred Stock, voting
together as a separate class; PROVIDED, that no such approval shall be


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required in connection with any such action that solely is taken to finance a
redemption (or is reasonably necessary to facilitate a redemption or is
reasonably required as a result of the redemption or such other actions) of all
or a portion of the Redemption Securities (as defined in Section 10 hereof)
pursuant to Section 6 hereof:

                            (i)    the incurrence of indebtedness for borrowed
                     money (including through the issuance of debt securities or
                     the guarantee of indebtedness of another Person), other
                     than Permitted Indebtedness, in excess of $30 million in
                     the aggregate since February 27, 2004;

                            (ii)   other than under the Debt Instruments and as
                     permitted under the Debt Instruments, creating, incurring,
                     assuming or suffering to exist any Lien upon any of its
                     property, whether now owned or hereafter acquired, except
                     for (a) Liens incurred under the Debt Instruments and Liens
                     in existence on the date hereof listed on Schedule 5.08(b)
                     to the Credit Agreement (as defined in Section 10 hereof)
                     and any renewals, modifications, replacements or extensions
                     thereof, provided that such Liens do not extend to any
                     additional property and the renewal, refinancing, refunding
                     or extension of the obligations secured or benefited by
                     such Liens is permitted by the Debt Instruments, (b)
                     easements (including, without limitation, reciprocal
                     easement agreements and utility easements), rights-of-way,
                     restrictions (including zoning restrictions), covenants,
                     conditions, encroachments, variations, subdivisions, minor
                     defects or irregularities in title and other similar
                     encumbrances incurred in the ordinary course of business
                     that, in the aggregate, are not substantial in amount and
                     that 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 Company or
                     any of its Subsidiaries, (c) (i) carrier's, warehousemen's,
                     processor's, landlord's, suppliers', 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 60 days or (ii) Liens for taxes,
                     assessments or governmental charges or levies not yet due
                     or, in each case, that are being contested in good faith by
                     appropriate proceedings, PROVIDED that adequate reserves
                     with respect thereto are maintained on the books of the
                     Company or its Subsidiaries, as the case may be, in
                     conformity with GAAP, and (d) Liens not otherwise permitted
                     hereunder, so long as neither (i) the aggregate outstanding
                     principal amount of the obligations secured thereby nor
                     (ii) the aggregate Fair Market Value (determined as of the
                     date such Lien is incurred) of the assets subject thereto
                     exceeds (as to the Company and all Subsidiaries) $30
                     million at any one time;

                            (iii)  entering into or suffering to exist any
                     agreement that prohibits or limits the ability of the
                     Company or any of its Subsidiaries to create, incur, assume
                     or suffer to exist any Lien upon any of its property,
                     whether now owned or hereafter acquired other than under
                     the Debt Instruments and as permitted under the Debt
                     Instruments;


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                            (iv)   entering into any transaction with an
                     Affiliate of the Company (including, without limitation,
                     the purchase, sale, lease or exchange of any property, or
                     rendering of any service or modification or amendment of
                     any existing agreement or arrangement); PROVIDED, HOWEVER,
                     that this provision shall not prohibit any employment and
                     benefit arrangements in effect on the Closing Date that are
                     not in violation of Section 6.10 of the Preferred Stock
                     Purchase Agreement and were disclosed to VCP in writing
                     prior to the Closing Date, together with such future
                     increases as are in the ordinary course and (1)(A)
                     consistent with arrangements with employees generally, who
                     are not Affiliates and otherwise are similarly situated or
                     (B) approved by the Board, including at least one
                     Convertible Participating Preferred Stock Director (as
                     defined below), or (2) not in violation of Section 6.10 of
                     the Preferred Stock Purchase Agreement; PROVIDED FURTHER,
                     HOWEVER, that this provision shall not prohibit the payment
                     to Solo Family Members of compensation (whether in the form
                     of salary, bonus, reimbursement of personal expenses, or
                     otherwise) in accordance with Section 6.10 of the Preferred
                     Stock Purchase Agreement; PROVIDED, HOWEVER, that no
                     Affiliate shall be appointed an officer of the Company
                     after the date hereof unless such appointment shall have
                     been approved by the Board, including at least one
                     Convertible Participating Preferred Stock Director (other
                     than any reappointment of an officer serving in such
                     capacity prior to the Closing Date and disclosed to VCP in
                     writing prior to the Closing Date);

                            (v)    any amendment, repeal or alteration of the
                     Company's Certificate of Incorporation or Bylaws if such
                     amendment, repeal or alteration would adversely alter or
                     change the rights, preferences or privileges of the
                     Convertible Participating Preferred Stock or the Common
                     Stock;

                            (vi)   any amendment, alteration or change to the
                     powers, designations, preferences, rights, privileges,
                     qualifications, limitations or restrictions of the
                     Convertible Participating Preferred Stock (including by way
                     of merger, consolidation or otherwise);

                            (vii)  any reclassification of Common Stock;

                            (viii) declaring or paying any dividend or other
                     distribution (other than (A) dividends payable solely in
                     the form of Common Stock to all holders of Common Stock and
                     Participating Dividends solely in the form of Common Stock
                     to all holders of Convertible Participating Preferred Stock
                     and (B) distributions or dividends pursuant to Sections 5
                     and 6 hereof) on, or make any payment on account of, or
                     setting apart assets for a sinking or other analogous fund
                     for, the purchase, redemption, defeasance, retirement or
                     other acquisition of, any Equity Securities (other than in
                     connection with a redemption of all or a portion of the
                     Redemption Securities in accordance with Section 6 hereof),
                     whether now or hereafter


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                     outstanding, other than the redemption, repurchase or
                     acquisition for value of Junior Securities from employees
                     or former employees of the Company or its Subsidiaries in
                     connection with or following a termination of such
                     employee's employment with the Company or its Subsidiaries
                     (whether by reason of death, disability, retirement or
                     otherwise) so long as all such redemptions, repurchases and
                     acquisitions do not exceed $3,000,000 in the aggregate in
                     any fiscal year; PROVIDED FURTHER that the Company or its
                     Subsidiaries may carry over and so utilize in subsequent
                     fiscal years (i) the portion of such $3,000,000 not
                     utilized in any prior year and (ii) the aggregate cash
                     purchase price paid for Junior Securities that are sold,
                     transferred or reissued for value by the Company or its
                     Subsidiaries to another employee thereof within the prior
                     fiscal year, so long as the aggregate amount so utilized in
                     any fiscal year, including the $3,000,000 otherwise
                     available during such year, does not exceed $10,000,000;

                            (ix)   any authorization, creation (by way of
                     reclassification or otherwise) or issuance of any capital
                     stock or Equity Securities of the Company or any of its
                     Subsidiaries other than (a) in accordance with the terms of
                     stock option plans of the Company approved by the Board in
                     accordance with the Certificate of Incorporation and the
                     Bylaws (1) prior to the date hereof or (2) after the date
                     hereof (but prior to the utilization of the exception set
                     forth in the proviso to this clause (ix) and in accordance
                     with this clause (ix)(a)(2)), (b) the shares of Common
                     Stock issued upon the exercise, conversion or exchange of
                     such Equity Securities and (c) dividends payable in shares
                     of Common Stock or Redeemable Preferred stock upon
                     conversion of all or a portion of the Convertible
                     Participating Preferred Stock in accordance with Section 5
                     hereof; PROVIDED, HOWEVER, that the affirmative vote of at
                     least a majority of the then outstanding shares of
                     Convertible Participating Preferred Stock, voting together
                     as a separate class, shall not be required in connection
                     with any such actions reasonably taken by the Company
                     solely to satisfy its obligations under Section 3.6 of the
                     Stockholders Agreement in connection with an IPO requested
                     pursuant to Section 3.6 of the Stockholders Agreement (or
                     actions reasonably necessary to facilitate such IPO or
                     reasonably required as a result of such IPO or such other
                     actions);

              (c) The holders of Convertible Participating Preferred Stock,
voting together as a separate class, are entitled to elect two directors to the
Board (each, a "CONVERTIBLE PARTICIPATING PREFERRED STOCK DIRECTOR") at a
special or annual meeting of stockholders of the Company called for the purpose
of electing directors or at any special meeting of the holders of Convertible
Participating Preferred Stock or by written consent; in each case, by the vote
or written consent of a majority of such holders. Notwithstanding any provision
to the contrary, but in accordance with Section 4(a) hereof, holders of
Convertible Participating Preferred Stock are entitled to vote together with the
holders of Common Stock, as a single class, in the general election of
directors.

              (d) If (i) an Event of Default (as defined in Section 10 hereof)
occurs and the lenders under the applicable Debt Instrument accelerate the
indebtedness thereunder, (ii) the


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outstanding shares of Convertible Participating Preferred Stock that are
required to be redeemed or repurchased are not legally permitted to be redeemed
or repurchased on the applicable Redemption Date as required by Section 6(a),
6(b) or 6(f) hereof, (iii) the Company does not perform its payment obligations
under Section 6(a), 6(b) or 6(f) hereof or does not pay dividends declared by
the Board and otherwise payable as provided in this Certificate of Designations
and the Certificate of Incorporation, (iv) the Company Substantially
Underperforms or (v) the Company does not redeem all Redemption Securities owned
by VCP and its Affiliates pursuant to Section 6(c) hereof prior to the last date
on which it may do so pursuant to Section 6(c)(iv) hereof, then the number of
directors constituting the entire Board will be increased to a number so that
after the newly created vacancies are filled by the holders of the Convertible
Participating Preferred Stock as provided in the next succeeding sentence, such
number of Additional Convertible Participating Preferred Stock Directors (as
defined below), together with the Convertible Participating Preferred Stock
Directors, will constitute a majority of the entire Board (and shall include the
Chairman of the Board). The holders representing a majority of the outstanding
shares of Convertible Participating Preferred Stock, voting together as a
separate class, will be entitled to elect such number of directors (the
"ADDITIONAL CONVERTIBLE PARTICIPATING PREFERRED STOCK DIRECTORS") to the Board
necessary to fill the vacancies created pursuant to the preceding sentence, at a
special or annual meeting of stockholders of the Company called for the purpose
of electing directors or at any special meeting of the holders of Convertible
Participating Preferred Stock or by written consent.

              (e) Only the holders of Convertible Participating Preferred Stock,
voting together as a separate class, are entitled to fill any vacancy caused by
the resignation, death or removal of a Convertible Participating Preferred Stock
Director or Additional Convertible Participating Preferred Stock Director, and
only the holders of Convertible Participating Preferred Stock are entitled to
remove from office a Convertible Participating Preferred Stock Director or
Additional Convertible Participating Preferred Stock Director without Cause.

              Section 5.    CONVERSION.

              Each share of Convertible Participating Preferred Stock is
convertible into shares of Common Stock as provided in this Section 5.

              (a) OPTIONAL CONVERSION; LIQUIDITY EVENTS.

                            (i)    Subject to the terms hereof, each holder of
                     Convertible Participating Preferred Stock is entitled to
                     convert, at any time and from time to time at the option
                     and election of such holder, any or all shares of
                     outstanding Convertible Participating Preferred Stock held
                     by such holder into a number of duly authorized, validly
                     issued, fully paid and non-assessable shares of Common
                     Stock equal to the amount (the "CONVERSION AMOUNT")
                     determined by dividing (i) the Original Purchase Price by
                     (ii) the Conversion Price in effect at the time of
                     conversion; PROVIDED, that with respect to shares of
                     Convertible Participating Preferred Stock that have been
                     called for redemption pursuant to Section 6 hereof, such
                     shares may only be converted into Common Stock at any time
                     prior to the close of business on the applicable Redemption
                     Date or, if the Company shall


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                     default in the payment of the applicable Redemption Price,
                     at any time thereafter until such shares are actually
                     redeemed. The right to convert pursuant to this Section
                     5(a), (x) may be exercised no more than twice (excluding
                     all conversions referred to in the immediately following
                     proviso) and (y) the initial conversion must be at least
                     equal to 50% of the outstanding Convertible Participating
                     Preferred Stock and any subsequent conversion must be of
                     all remaining outstanding Convertible Participating
                     Preferred Stock; PROVIDED that if such conversion is in
                     connection with (A) the exercise of tag-along rights
                     pursuant to Section 3.5 of the Stockholders' Agreement or
                     (B) a Liquidity Event, clause (x) above shall not apply and
                     the percentage in clause (y) above need not exceed the
                     percentage of shares to be sold pursuant to such
                     transaction. The "CONVERSION PRICE" initially means $47.32,
                     as adjusted from time to time as provided in Section 5(e).

                            (ii)   In addition to the Conversion Amount or
                     Liquidity Conversion Amount (as defined below), as
                     applicable, upon conversion of the Convertible
                     Participating Preferred Stock or a portion thereof pursuant
                     to this Section 5(a) or Section 5(b), the holders of such
                     converted shares shall receive (a) a cash payment for the
                     accrued and unpaid dividends on the Convertible
                     Participating Preferred Stock or portion thereof being
                     converted or (b) to the extent the payment of cash would
                     violate a Debt Instrument or would not be legally
                     permissible (x) if the conversion occurs in connection with
                     an IPO, Common Stock having a Fair Market Value equal to
                     the accrued and unpaid dividends not being paid in cash or
                     (y) otherwise, a number of shares of Redeemable Preferred
                     Stock (as defined in Section 10 hereof) with a liquidation
                     preference equal to the accrued and unpaid dividends on the
                     Convertible Participating Preferred Stock (or such portion
                     thereof being converted); PROVIDED, that if the conversion
                     occurs in anticipation of or in connection with an IPO and
                     the IPO price results in a valuation for the Common Stock
                     issued upon conversion that at least equals the average of
                     the prices set forth in clauses (x) and (y) of Sections
                     6(c)(i), 6(c)(ii), 6(c)(iii) and 6(c)(iv) hereof that would
                     have applied at the time of conversion if a redemption had
                     occurred instead of such conversion, the holder shall not
                     receive any payment (whether in cash, Equity Securities or
                     otherwise) in respect of the accrued and unpaid dividends
                     on such Convertible Participating Preferred Stock or
                     portion thereof being converted (and any right to such
                     accrued and unpaid dividends shall be cancelled without any
                     further consideration and such accrued dividends are deemed
                     paid by delivery of Common Stock on conversion thereof).
                     Notwithstanding anything to the contrary contained herein,
                     in the event a conversion occurs in anticipation of an IPO,
                     no amounts shall be paid or securities issued pursuant to
                     this Section 5(a)(ii) in respect of the accrued and unpaid
                     dividends on the Convertible Participating Preferred Stock
                     being converted, until the pricing of the IPO, at which
                     time the right to receive any such amounts or securities
                     will be


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                     declared and paid or issued, unless this Section 5(a)(ii)
                     otherwise provides that such amounts or securities shall
                     not be paid or issued.

                            (iii)  Immediately prior to the consummation of a
                     Liquidity Event, each holder of Convertible Participating
                     Preferred Stock shall be entitled to convert, at the option
                     and election of such holder, any or all of such holder's
                     shares of Convertible Participating Preferred Stock into a
                     number of duly authorized, validly issued, fully paid and
                     non-assessable shares of Common Stock equal to the greater
                     of the (i) the Conversion Amount or (ii) the Liquidity
                     Conversion Amount.

              (b) MANDATORY CONVERSION. Each share of Convertible Participating
Preferred Stock will be converted automatically into a number of duly
authorized, validly issued, fully paid and non-assessable shares of Common Stock
equal to the greater of (A) the Conversion Amount or (B) the Liquidity
Conversion Amount, upon the closing of an IPO (the "Mandatory Conversion Date").

              (c) FRACTIONAL SHARES. No fractional shares of Common Stock will
be issued upon conversion of the Convertible Participating Preferred Stock. In
lieu of fractional shares, the Company shall, at its option, (i) pay cash equal
to such fractional amount multiplied by the Fair Market Value per share of
Common Stock as of the Conversion Date or (ii) issue the nearest whole number of
shares of Common Stock, rounding up, issuable upon conversion of the Convertible
Participating Preferred Stock. If more than one share of Convertible
Participating Preferred Stock is being converted at one time by the same holder,
then the number of full shares of Common Stock issuable upon conversion will be
calculated on the basis of the aggregate number of shares of Convertible
Participating Preferred Stock converted by such holder at such time.

              (d) MECHANICS OF CONVERSION.

                            (i)    In order to convert shares of Convertible
                     Participating Preferred Stock into shares of Common Stock
                     pursuant to Section 5(a) hereof, the holder must surrender
                     the certificate(s) representing such shares of Convertible
                     Participating Preferred Stock at the office of the
                     Company's transfer agent (or at the principal office of the
                     Company, if the Company serves as its own transfer agent),
                     together with written notice that such holder elects to
                     convert all or such lesser number of shares represented by
                     such certificates as specified therein. Any certificate(s)
                     of Convertible Participating Preferred Stock surrendered
                     for conversion must be duly endorsed for transfer or
                     accompanied by a written instrument of transfer, in a form
                     reasonably satisfactory to the Company, duly executed by
                     the registered holder or his, her or its attorney-in-fact
                     duly authorized in writing. The date of receipt of such
                     certificates, together with such notice, by the transfer
                     agent or the Company will be the date of conversion (the
                     "CONVERSION DATE"). As soon as practicable after the
                     Conversion Date, the Company shall promptly issue and
                     deliver to such holder a certificate for the number of
                     shares of Common Stock to which such


                                       10
<Page>

                     holder is entitled, together with payment in cash, if any,
                     for fractional shares (by means of a wire transfer to such
                     holder's bank account or delivery of a certified bank check
                     to such holder). Such conversion will be deemed to have
                     been made on the Conversion Date, and the Person (as
                     defined in Section 10 hereof) entitled to receive the
                     shares of Common Stock issuable upon such conversion shall
                     be treated for all purposes as the record holder of such
                     shares of Common Stock on such Conversion Date. In the
                     event that fewer than all the shares represented by any
                     such surrendered certificate(s) are to be converted, a new
                     certificate or certificates shall be issued representing
                     the unconverted shares of Convertible Participating
                     Preferred Stock without cost to the holder thereof, except
                     as set forth in the following sentence. The Company shall
                     pay any documentary, stamp or similar issue or transfer tax
                     due on the issue of Common Stock upon conversion or due
                     upon the issuance of a new certificate for any shares of
                     Convertible Participating Preferred Stock not converted in
                     the name of the converting holder, except that the Company
                     shall not be obligated to pay any such tax due because
                     shares of Common Stock or a certificate for shares of
                     Convertible Participating Preferred Stock are issued in a
                     name other than the name of the converting holder and no
                     such issue or delivery shall be made unless and until the
                     Person requesting such issue has paid to the Company the
                     amount of any such tax, or has established to the
                     reasonable satisfaction of the Company that such tax has
                     been or will be paid.

                            (ii)   Upon the conversion of the Convertible
                     Participating Preferred Stock pursuant to Section 5(b)
                     hereof, the shares of Convertible Participating Preferred
                     Stock shall not be transferred on the books of the Company
                     or be deemed to be outstanding for any purpose whatsoever
                     and shall constitute only the right to receive such number
                     of shares of Common Stock as may be issuable upon such
                     conversion upon compliance with the requirements of this
                     Section 5(d)(ii). Such conversion shall occur automatically
                     and without any further action by the holders of such
                     shares of Convertible Participating Preferred Stock and
                     whether or not the certificates representing such shares of
                     Convertible Participating Preferred Stock are surrendered
                     to the Company or its transfer agent; PROVIDED, HOWEVER,
                     that the Company shall not be obligated to issue
                     certificates evidencing the shares of Common Stock issuable
                     upon such conversion unless certificates evidencing such
                     shares of Convertible Participating Preferred Stock so
                     converted are surrendered to the Company. Upon the
                     conversion of the Convertible Participating Preferred Stock
                     pursuant to Section 5(b) hereof, the Company shall promptly
                     send written notice thereof, by registered or certified
                     mail, return receipt requested and postage prepaid, by hand
                     delivery or by overnight delivery, to each holder of record
                     of Convertible Participating Preferred Stock at his or its
                     address then shown on the records of the Company, which
                     notice shall state that certificates evidencing shares of
                     Convertible Participating


                                       11
<Page>

                     Preferred Stock must be surrendered at the office of the
                     Company (or of its transfer agent for the Common Stock, if
                     applicable). Upon the occurrence of such automatic
                     conversion of the Convertible Participating Preferred
                     Stock, the holders of Convertible Participating Preferred
                     Stock shall surrender the certificates representing such
                     shares at the office of the Company or any transfer agent
                     for the Convertible Participating Preferred Stock.
                     Thereupon, there shall be issued and delivered to such
                     holder promptly at his or its address then shown on the
                     records of the Company and in its name as shown on such
                     surrendered certificate or certificates, a certificate or
                     certificates for the number of shares of Common Stock into
                     which the shares of Convertible Participating Preferred
                     Stock surrendered were convertible on the Mandatory
                     Conversion Date.

                            (iii)  The Company shall at all times reserve and
                     keep available, free from any preemptive rights, out of its
                     authorized but unissued shares of Common Stock for the
                     purpose of effecting the conversion of the Convertible
                     Participating Preferred Stock, the full number of shares of
                     Common Stock deliverable upon the conversion of all
                     outstanding Convertible Participating Preferred Stock
                     (assuming for the purposes of this calculation that all
                     outstanding shares of Convertible Participating Preferred
                     Stock are held by one holder), and the Company shall take
                     all actions to amend its Certificate of Incorporation to
                     increase the authorized amount of Common Stock if necessary
                     therefor. Before taking any action which would cause an
                     adjustment reducing the Conversion Price below the then par
                     value of the shares of Common Stock issuable upon
                     conversion of the Convertible Participating Preferred
                     Stock, to the extent legally permitted the Company will
                     take any corporate action which may, in the opinion of its
                     counsel, be necessary in order that the Company may validly
                     and legally issue fully paid and non-assessable shares of
                     Common Stock at such adjusted Conversion Price.

                            (iv)   From and after the Conversion Date, dividends
                     on the Convertible Participating Preferred Stock to be
                     converted on such Conversion Date will cease to accrue;
                     said shares will no longer be deemed to be outstanding; and
                     all rights of the holder thereof as a holder of Convertible
                     Participating Preferred Stock (except the right to receive
                     from the Company the Common Stock upon conversion) shall
                     cease and terminate with respect to said shares; PROVIDED,
                     that in the event that a share of Convertible Participating
                     Preferred Stock is not converted due to a default by the
                     Company or because the Company is otherwise unable to issue
                     the requisite shares of Common Stock, such share of
                     Convertible Participating Preferred Stock will remain
                     outstanding and will be entitled to all of the rights
                     thereof as provided herein. Any shares of Convertible
                     Participating Preferred Stock that have been converted
                     will, after such conversion, be deemed cancelled and
                     retired and have the status of authorized but unissued
                     Preferred Stock, without designation as to series


                                       12
<Page>

                     until such shares are once more designated as part of a
                     particular series by the Board.

                            (v)    If the conversion is in connection with any
                     sale thereof, the conversion may, at the option of any
                     holder tendering Convertible Participating Preferred Stock
                     to the Company for conversion, be conditioned upon the
                     closing of the sale of such Convertible Participating
                     Preferred Stock with the purchaser in such sale, in which
                     event such conversion of such shares of Convertible
                     Participating Preferred Stock shall not be deemed to have
                     occurred until immediately prior to the closing of such
                     sale; and the Company shall be provided with reasonable
                     evidence of such closing prior to effecting such
                     conversion.

              (e) ADJUSTMENTS TO CONVERSION PRICE.

                            (i)    SPECIAL DEFINITIONS. For purposes of this
                     Section 5(e), the following definitions apply:

                            (A)           "OPTIONS" means any rights, options,
              warrants or similar securities to subscribe for, purchase or
              otherwise acquire Additional Shares of Common Stock or Convertible
              Securities.

                            (B)           "CONVERTIBLE SECURITIES" means any
              debt or other evidences of indebtedness, capital stock or other
              securities directly or indirectly convertible into or exercisable
              or exchangeable for Additional Shares of Common Stock.

                            (C)           "ADDITIONAL SHARES OF COMMON STOCK"
              means any shares of Common Stock issued or, as provided in clause
              (ii) below, deemed to be issued by the Company after the Original
              Issuance Date; PROVIDED, that notwithstanding anything to the
              contrary contained herein, Additional Shares of Common Stock will
              not include any of the following:

                                   (1)           shares of Common Stock issued
                     or issuable as a Dividend or other distribution on shares
                     of Convertible Participating Preferred Stock or Common
                     Stock;

                                   (2)           shares of Common Stock issued
                     or issuable upon conversion of shares of Convertible
                     Participating Preferred Stock;

                                   (3)           shares of Common Stock issued
                     or issuable upon the exercise of Options issued to
                     employees, officers or directors of, or consultants or
                     advisors to, the Company or its Subsidiaries pursuant to
                     the Company's benefit plans or arrangements approved by the
                     Board;

                                   (4)           shares of Common Stock issued
                     in connection with a Public Offering;


                                       13
<Page>

                                   (5)           shares of Common Stock issued
                     in connection with (x) the acquisition of any business,
                     products, technologies or other assets from any Persons
                     pursuant to any transaction approved by the Board, (y) any
                     strategic partnership, joint venture, licensing arrangement
                     or similar transaction approved by the Board and (z) credit
                     arrangements or similar strategic transactions with
                     financing institutions or lessors approved by the Board;
                     and

                                   (6)           shares of Common Stock issued
                     in connection with any split of then outstanding shares of
                     Common Stock into a greater number of shares of Common
                     Stock.

                            (D)           "MEASUREMENT DATE" means the date of
              issuance of Additional Shares of Common Stock.

                            (ii)   DEEMED ISSUANCES OF ADDITIONAL SHARES OF
                     COMMON STOCK. The maximum number of shares of Common Stock
                     (as set forth in the instrument relating thereto without
                     regard to any provision contained therein for a subsequent
                     adjustment of such number) issuable upon the exercise,
                     conversion or exchange of Options or Convertible Securities
                     will be deemed to be Additional Shares of Common Stock
                     issued as of the time of the issuance of such Options or
                     Convertible Securities; PROVIDED, HOWEVER, that:

                            (A)           No adjustment in the Conversion Price
              will be made upon the subsequent issue of shares of Common Stock
              upon the exercise, conversion or exchange of such Options or
              Convertible Securities;

                            (B)           To the extent that shares of Common
              Stock are not issued pursuant to any Option or Convertible
              Security upon the expiration or termination of an unexercised,
              unconverted or unexchanged Option or Convertible Security, the
              Conversion Price will be readjusted to the Conversion Price that
              would have been in effect had such Option or Convertible Security
              (to the extent outstanding immediately prior to such expiration or
              termination) never been issued; and

                            (C)           In the event of any change in the
              number of shares of Common Stock issuable upon the exercise,
              conversion or exchange of any Option or Convertible Security or a
              repricing of the exercise or conversion price thereof, but not a
              change resulting from the anti-dilution provisions thereof, the
              Conversion Price then in effect will be readjusted to the
              Conversion Price that would have been in effect as if, on the date
              of issuance, such Option or Convertible Security were exercisable,
              convertible or exchangeable for such changed number of shares of
              Common Stock.


                                       14
<Page>

                            (iii)  DETERMINATION OF CONSIDERATION. The Fair
                     Market Value of the consideration received by the Company
                     for the issue of any Additional Shares of Common Stock will
                     be computed as follows:

                            (A)           CASH AND PROPERTY. Aggregate
              consideration consisting of cash and other property will:

                                   (1)           insofar as it consists of cash,
                     be computed at the aggregate of cash received by the
                     Company, excluding amounts paid or payable for accrued
                     interest or accrued dividends;

                                   (2)           insofar as it consists of
                     property other than cash, be computed at the Fair Market
                     Value thereof on the Measurement Date; and

                                   (3)           insofar as it consists of both
                     cash and other property, be the proportion of such
                     consideration so received, computed as provided in clauses
                     (1) and (2) above, as determined in good faith by the
                     Board.

                            (B)            OPTIONS AND CONVERTIBLE SECURITIES.
              The aggregate consideration per share received by the Company for
              Options and Convertible Securities will be determined by dividing:

                                   (1)           the total amount, if any,
                     received or receivable by the Company as consideration for
                     the issue of such Options or Convertible Securities, plus
                     the minimum aggregate amount of additional consideration
                     (as set forth in the instruments relating thereto, without
                     regard to any provision contained therein for a subsequent
                     adjustment of such consideration) payable to the Company
                     upon the full and complete exercise, conversion or exchange
                     of such Options or Convertible Securities, by

                                   (2)           the maximum number of shares of
                     Common Stock (as set forth in the instruments relating
                     thereto, without regard to any provision contained therein
                     for a subsequent adjustment of such number) issuable upon
                     the full and complete exercise, conversion or exchange of
                     such Options or Convertible Securities.

                            (iv)   STOCK SPLITS AND COMBINATIONS.  If the
                     outstanding shares of Common Stock are split into a greater
                     number of shares, the Conversion Price then in effect
                     immediately before such split will be proportionately
                     decreased. If the outstanding shares of Common Stock are
                     combined into a smaller number of shares, the Conversion
                     Price then in effect immediately before such combination
                     will be proportionately increased. These adjustments will
                     be effective at the close of business on the date the split
                     or combination becomes effective.


                                       15
<Page>

                            (v)    ISSUANCES OF ADDITIONAL SHARES OF COMMON
                     STOCK. If the Company issues or is deemed to issue
                     Additional Shares of Common Stock to any Person without
                     consideration or for a consideration per share less than
                     the Conversion Price per share of Common Stock on the
                     Measurement Date, then the Conversion Price will be
                     reduced, effective at the close of business on the
                     Measurement Date, to a price (calculated to the nearest
                     cent) determined by multiplying such Conversion Price by a
                     fraction:

                            (A)           the numerator of which will be the sum
              of (x) the number of shares of Common Stock outstanding, on a
              fully diluted basis, immediately prior to the Measurement Date
              plus (y) the number of shares of Common Stock which the aggregate
              consideration received by the Company for the total number of
              Additional Shares of Common Stock so issued would purchase at the
              Conversion Price in effect immediately prior to the Measurement
              Date, and

                            (B)           the denominator of which will be the
              sum of (x) the number of shares of Common Stock outstanding
              immediately prior to the Measurement Date plus (y) the number of
              such Additional Shares of Common Stock issuable or so issued.

                            (vi)   MINIMUM ADJUSTMENT. Notwithstanding the
                     foregoing, the Conversion Price will not be reduced if the
                     amount of such reduction would be an amount less than
                     $0.01, but any such amount will be carried forward and
                     reduction with respect thereto will made at the time that
                     such amount, together with any subsequent amounts so
                     carried forward, aggregates to $0.01 or more.

                            (vii)  RULES OF CALCULATION; TREASURY STOCK. All
                     calculations will be made to the nearest one-tenth of a
                     cent or to the nearest one-hundredth of a share, as the
                     case may be. The number of shares of Common Stock
                     outstanding will be calculated on the basis of the number
                     of issued and outstanding shares of Common Stock on the
                     Measurement Date, not including shares held in the treasury
                     of the Company. The Company shall not pay any dividend on
                     or make any distribution to shares of Common Stock held in
                     treasury.

                            (viii) WAIVER. Notwithstanding the foregoing, the
                     Conversion Price will not be reduced if the Company
                     receives, within ten (10) days following the Measurement
                     Date, written notice from the holders representing at least
                     a majority of the then outstanding shares of Convertible
                     Participating Preferred Stock, voting together as a
                     separate class, that no adjustment is to be made as the
                     result of a particular issuance of Additional Shares of
                     Common Stock. This waiver will be limited in scope and will
                     not be valid for any issuance of Additional Shares of
                     Common Stock not specifically provided for in such notice.


                                       16
<Page>

              (f) EFFECT OF RECLASSIFICATION, MERGER OR SALE. If any of the
following events occur, namely (x) any reclassification of or any other change
to the outstanding shares of Common Stock (other than a change in par value or
from par value to no par value or from no par value to par value or as a result
of a stock split or combination to which Section 5(e) applies), (y) any merger,
consolidation or other combination of the Company with another Person as a
result of which all holders of Common Stock become entitled to receive capital
stock, other securities or other property (including but not limited to cash and
evidences of indebtedness) with respect to or in exchange for such Common Stock,
or (z) any sale, conveyance or other transfer of all or substantially all of the
assets of the Company to any other Person as a result of which all holders of
Common Stock become entitled to receive capital stock, other securities or other
property (including but not limited to cash and evidences of indebtedness) with
respect to or in exchange for such Common Stock, then shares of Convertible
Participating Preferred Stock will be convertible into the kind and amount of
shares of capital stock, other securities or other property (including but not
limited to cash and evidences of indebtedness) receivable upon such
reclassification, change, merger, consolidation, combination, sale, conveyance
or transfer by a holder of a number of shares of Common Stock issuable upon
conversion of such shares of Convertible Participating Preferred Stock
(assuming, for such purposes, a sufficient number of authorized shares of Common
Stock available to convert all such Convertible Participating Preferred Stock)
immediately prior to such reclassification, change, merger, consolidation,
combination, sale, conveyance or transfer; PROVIDED, that:

                            (i)    if the holders of Common Stock were entitled
                     to exercise a right of election as to the kind or amount of
                     capital stock, other securities or other property
                     (including but not limited to cash and evidences of
                     indebtedness) receivable upon such reclassification,
                     change, merger, consolidation, combination, sale,
                     conveyance or transfer, then the kind and amount of capital
                     stock, other securities or other property (including but
                     not limited to cash and evidences of indebtedness)
                     receivable in respect of each share of Common Stock which
                     would have otherwise been issuable upon conversion of the
                     Convertible Participating Preferred Stock immediately prior
                     to such reclassification, change, merger, consolidation,
                     combination, sale, conveyance or transfer will be the kind
                     and amount so receivable per share by a plurality of the
                     holders of Common Stock; or

                            (ii)   if a tender offer (which includes any
                     exchange offer) is made to and accepted by the holders of
                     Common Stock under circumstances in which, upon completion
                     of such tender offer, the maker thereof, together with
                     members of any Group (as defined in Section 10 hereof) of
                     which such maker is a part, and together with any Affiliate
                     or Associate (as defined in Section 10) of such maker and
                     any members of any such Group of which any such Affiliate
                     or Associate is a part, own beneficially more than 50% of
                     the outstanding shares of Common Stock, each holder of
                     Convertible Participating Preferred Stock will thereafter
                     be entitled to receive, upon conversion of such shares, the
                     kind and amount of capital stock, other securities or other
                     property (including but not limited to cash and evidences
                     of indebtedness) to which such holder would


                                       17
<Page>

                     actually have been entitled as a holder of Common Stock if
                     such holder had converted such holder's Convertible
                     Participating Preferred Stock immediately prior to the
                     expiration of such tender offer, accepted such tender offer
                     and all of the Common Stock held by such holder had been
                     purchased pursuant to such tender offer, subject to
                     adjustments (from and after the consummation of such tender
                     offer) as nearly equivalent as possible to the adjustments
                     provided for in Section 5(e).

This Section 5(f) will similarly apply to successive reclassifications, changes,
mergers, consolidations, combinations, sales, conveyances and transfers. If this
Section 5(f) applies to any event or occurrence, Section 5(e) will not apply.

              (g) NOTICE OF RECORD DATE. In the event of:

                            (i)    any stock split or combination of the
                     outstanding shares of Common Stock;

                            (ii)   any declaration or making of a dividend or
                     other distribution to holders of Common Stock in Additional
                     Shares of Common Stock, any other capital stock, other
                     securities or other property (including but not limited to
                     cash and evidences of indebtedness);

                            (iii)  any reclassification, change, merger,
                     consolidation, combination, sale, conveyance or transfer to
                     which Section 5(f) applies; or

                            (iv)   the dissolution, liquidation or winding up of
                     the Company;

then the Company shall file with its corporate records and mail to the holders
of the Convertible Participating Preferred Stock at their last addresses as
shown on the records of the Company, at least ten (10) days prior to the record
date specified in (A) below or at least twenty (20) days prior to the date
specified in (B) below, a notice stating:

                            (A)           the record date of such stock split,
              combination, dividend or other distribution, or, if a record is
              not to be taken, the date as of which the holders of Common Stock
              of record to be entitled to such stock split, combination,
              dividend or other distribution are to be determined, or

                            (B)           the date on which such
              reclassification, change, merger, consolidation, combination,
              sale, conveyance, transfer, liquidation, dissolution or winding up
              is expected to become effective, and the date as of which it is
              expected that holders of Common Stock of record will be entitled
              to exchange their shares of Common Stock for the capital stock,
              other securities or other property (including but not limited to
              cash and evidences of indebtedness) deliverable upon such
              reclassification, change, merger, consolidation, combination,
              sale, conveyance, transfer, liquidation, dissolution or winding
              up.

Neither the failure to give any such notice nor any defect therein shall affect
the legality or validity of any action described in clauses (i) through (iv) of
this Section 5(g).


                                       18
<Page>

              (h) CERTIFICATE OF ADJUSTMENTS. Upon the occurrence of each
adjustment or readjustment of the Conversion Price pursuant to this Section 5,
the Company at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to each holder of
Convertible Participating Preferred Stock a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based and shall file a copy of such certificate
with its corporate records. The Company shall, upon the reasonable written
request of any holder of Convertible Participating Preferred Stock, furnish to
such holder a similar certificate setting forth (i) such adjustments and
readjustments, (ii) the Conversion Price then in effect, and (iii) the number of
shares of Common Stock and the amount, if any, of capital stock, other
securities or other property (including but not limited to cash and evidences of
indebtedness) which then would be received upon the conversion of Convertible
Participating Preferred Stock. Despite such adjustment or readjustment, the form
of each or all certificates representing the Convertible Participating Preferred
Stock, if the same shall reflect the initial or any subsequent Conversion Price,
need not be changed in order for the adjustments or readjustments to be valid in
accordance with the provisions of this Certificate of Designations, which shall
control.

              (i) NO IMPAIRMENT. Except (A) in connection with any action taken
to finance a redemption of all of the Convertible Participating Preferred Stock
pursuant to Section 6 hereof and duly approved by all necessary corporate action
or (B) pursuant to the prior vote or written consent of holders representing at
least a majority of the then outstanding shares of Convertible Participating
Preferred Stock, voting together as a separate class, the Company shall not,
whether by any amendment of its Certificate of Incorporation, by any
reclassification or other change to its capital stock, by any merger,
consolidation or other combination involving the Company, by any sale,
conveyance or other transfer of any of its assets, by the liquidation,
dissolution or winding up of the Company or by any other way, impair or restrict
its ability to convert shares of Convertible Participating Preferred Stock and
issue shares of Common Stock therefor. Except (A) in connection with any action
taken to finance a redemption of all or a portion of the Convertible
Participating Preferred Stock pursuant to Section 6(b), 6(c), 6(d) or 6(f)
hereof and duly approved by all necessary corporate action or (B) pursuant to
the prior vote or written consent of holders representing at least a majority of
the then outstanding shares of Convertible Participating Preferred Stock, voting
together as a separate class, the Company shall not avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Company. The Company shall at all times in good faith take all
such action as appropriate pursuant to, and assist in the carrying out of all
the provisions of, this Section 5.

              Section 6.    REDEMPTION.

              Each share of Convertible Participating Preferred Stock is
redeemable as provided in this Section 6.

              (a) MANDATORY REDEMPTION. On the eleventh anniversary of the
Original Issuance Date (the "MANDATORY REDEMPTION DATE"), if any shares of the
Convertible Participating Preferred Stock shall be outstanding, to the extent
the Company shall have funds legally available for such payment, the Company
shall redeem all outstanding shares of Convertible Participating Preferred Stock
at a price, payable in cash, equal to the amount set forth in clause (i) of the
definition of Liquidation Preference set forth in Section 3(a) hereof (such
amount, the


                                       19
<Page>

"MANDATORY REDEMPTION PRICE"). To the extent such funds are not legally
available on the Mandatory Redemption Date, the Company shall use its reasonable
best efforts to redeem the outstanding shares of Convertible Participating
Preferred Stock as promptly as practicable and shall redeem as many shares of
Convertible Participating Preferred Stock as it may legally redeem, ratably from
the holders thereof in proportion to the number of shares held by them, and
shall thereafter from time to time, as soon as it shall have funds legally
available therefore, redeem as many shares of Convertible Participating
Preferred Stock as it legally may until it has redeemed all of the outstanding
shares of Convertible Participating Preferred Stock.

              (b) CALL REDEMPTION. Upon the occurrence of (A) a Change of
Control or (B) a Bankruptcy Event, the Company shall offer to redeem all
outstanding shares of Convertible Preferred Stock (a "CHANGE OF CONTROL
REDEMPTION" or a "BANKRUPTCY REDEMPTION", as applicable), at a price, payable in
cash, equal to the greatest of (x) the Fair Market Value of the Convertible
Participating Preferred Stock being redeemed; PROVIDED that if the Change of
Control is a sale of the entire Company for cash that has been approved in
accordance with the Stockholders' Agreement at a time when no Additional
Convertible Participating Preferred Stock Directors are members of the Board in
accordance with Section 4(d) hereof, this clause (x) shall be deemed to refer to
the Fair Market Value of the Common Stock underlying the Convertible
Participating Preferred Stock being redeemed; PROVIDED, FURTHER, that a
conversion of Convertible Participating Preferred Stock in anticipation of or in
conjunction with a Change of Control described in the preceding proviso shall
not achieve a result contrary to the intentions of this Section 6(b)
notwithstanding anything to the contrary under Section 5(a) hereof, (y) the
Liquidation Preference thereof or (z) the sum of the Original Purchase Price
plus the Per Share Minimum Rate of Return (such greatest applicable amount, the
"CALL REDEMPTION PRICE"). To the extent such funds are not legally available to
redeem such shares of Convertible Participating Preferred Stock, to the extent
such offer is accepted, on the Redemption Date, the Company shall use its
reasonable best efforts to redeem such shares as promptly as practicable and
shall redeem as many shares of Convertible Participating Preferred Stock as it
may legally redeem, ratably from the holders thereof who have accepted the
Company's offer in proportion to the number of shares held by them, and shall
thereafter from time to time, as soon as it shall have funds legally available
therefore, redeem as many shares of Convertible Participating Preferred Stock
from such holders who have accepted the offer as it legally may until it has
redeemed all such shares of Convertible Participating Preferred Stock. A Change
of Control shall not be consummated unless all shares of Convertible
Participating Preferred Stock tendered for purchase pursuant to the Change of
Control Redemption have been redeemed in accordance with the provisions hereof.

              (c) OPTIONAL CONTINGENT REDEMPTION.

                            (i)    On and after the 3rd anniversary of the
                     Original Issuance Date and prior to the 4th anniversary of
                     the Original Issuance Date, the Company, at its option and
                     election, or its designee, may redeem in whole or in part
                     the outstanding shares of Redemption Securities held, on
                     the date on which such shares are being redeemed, by
                     Redemption Securities Holders (as defined in Section 10
                     hereof), at a price payable in cash equal to (A) the Fair
                     Market Value on the date on which the applicable Redemption
                     Notice is sent of (i) the outstanding Common Stock being


                                       20
<Page>

                     redeemed and (ii) the Common Stock underlying the
                     Convertible Participating Preferred Stock being redeemed
                     (in each case, without taking into account any accrued and
                     unpaid dividends due thereon) minus (B) the Cash Dividend
                     Credit applicable to such shares being redeemed (such
                     amount, the "OPTIONAL CONTINGENT REDEMPTION PRICE");
                     PROVIDED, that (x) this redemption right shall not be
                     exercisable unless the Optional Contingent Redemption Price
                     exceeds an amount equal to the Initial Investment Amount
                     (or such portion thereof being redeemed) multiplied by 2
                     (for purposes of this clause (x), such Optional Contingent
                     Redemption Price shall be deemed to include the percentage
                     of the applicable Cash Dividend Credit (as defined in
                     Section 10 hereof) equal to the percentage of the
                     Redemption Securities being redeemed); (y) in no event
                     shall the Optional Contingent Redemption Price exceed an
                     amount such that the total amount paid to the holder of
                     such shares (including the applicable Cash Dividend Credit)
                     exceeds the Initial Investment Amount (or such portion
                     thereof being redeemed) multiplied by 3 and (z) at least
                     25% of the Redemption Securities that were either issued on
                     the Original Issuance Date or issued thereafter in
                     connection with the conversion of the Redemption Securities
                     issued on the Original Issuance Date, if any, must be
                     redeemed ratably, from the Redemption Securities Holders
                     subject to this Section 6(c).

                            (ii)   After the 4th anniversary of the Original
                     Issuance Date and prior to the 5th anniversary of the
                     Original Issuance Date, the Company, at its option and
                     election, or its designee, may redeem in whole or in part
                     the outstanding shares of Redemption Securities, held on
                     the date on which such shares are being redeemed, by
                     Redemption Securities Holders, at a price payable in cash
                     and equal to the Optional Contingent Redemption Price;
                     PROVIDED, that (x) this redemption right shall not be
                     exercisable unless the Optional Contingent Redemption Price
                     exceeds an amount equal to the Initial Investment Amount
                     (or such portion thereof being redeemed) multiplied by 2?
                     (for purposes of this clause (x), such Optional Contingent
                     Redemption Price shall be deemed to include the percentage
                     of the applicable Cash Dividend Credit equal to the
                     percentage of the Redemption Securities being redeemed);
                     (y) in no event shall the Optional Contingent Redemption
                     Price exceed an amount such that the total amount paid to
                     the holder of such shares (including the applicable Cash
                     Dividend Credit) exceeds the Initial Investment Amount (or
                     such portion thereof being redeemed) multiplied by 3? and
                     (z) at least 25% of the Redemption Securities that were
                     either issued on the Original Issuance Date or issued
                     thereafter in connection with the conversion of the
                     Redemption Securities issued on the Original Issuance Date,
                     if any, must be redeemed ratably, from the Redemption
                     Securities Holders subject to this Section 6(c) (or, if
                     less than 25% of such shares are outstanding as of such
                     date, such lesser amount as is outstanding on the
                     applicable Redemption Date).



                                       21
<Page>

                            (iii)  After the 5th anniversary of the Original
                     Issuance Date and prior to the 6th anniversary of the
                     Original Issuance Date, the Company, at its option and
                     election, or its designee, may redeem in whole or in part
                     the outstanding shares of Redemption Securities, held on
                     the date on which such shares are being redeemed, by
                     Redemption Securities Holders, at a price payable in cash
                     and equal to the Optional Contingent Redemption Price;
                     PROVIDED, that (x) this redemption right shall not be
                     exercisable unless the Optional Contingent Redemption Price
                     exceeds an amount equal to the Initial Investment Amount
                     (or such portion thereof being redeemed) multiplied by 2?
                     (for purposes of this clause (x), such Optional Contingent
                     Redemption Price shall be deemed to include the percentage
                     of the applicable Cash Dividend Credit equal to the
                     percentage of the Redemption Securities being redeemed);
                     (y) in no event shall the Optional Contingent Redemption
                     Price exceed an amount such that the total amount paid to
                     the holder of such shares (including the applicable Cash
                     Dividend Credit) exceeds the Initial Investment Amount (or
                     such redeemed portion thereof) multiplied by 3? and (z) at
                     least 25% of the Redemption Securities that were either
                     issued on the Original Issuance Date or issued thereafter
                     in connection with the conversion of the Redemption
                     Securities issued on the Original Issuance Date, if any,
                     must be redeemed ratably from the Redemption Securities
                     Holders subject to this Section 6(c) (or, if less than 25%
                     of such shares are outstanding as of such date, such lesser
                     amount as is outstanding on the applicable Redemption
                     Date).

                            (iv)   After the 6th anniversary of the Original
                     Issuance Date and prior to the 7th anniversary of the
                     Original Issuance Date, the Company, at its option and
                     election, or its designee, may redeem in whole or in part
                     the outstanding shares of Redemption Securities, held on
                     the date on which such shares are being redeemed, by
                     Redemption Securities Holders, at a price payable in cash
                     and equal to the Optional Contingent Redemption Price;
                     PROVIDED, that (x) this redemption right shall not be
                     exercisable unless the Optional Contingent Redemption Price
                     exceeds an amount equal to the Initial Investment Amount
                     (or such portion thereof being redeemed) multiplied by 3
                     (for purposes of this clause (x), such Optional Contingent
                     Redemption Price shall be deemed to include the percentage
                     of the applicable Cash Dividend Credit equal to the
                     percentage of the Redemption Securities being redeemed);
                     (y) in no event shall the Optional Contingent Redemption
                     Price exceed an amount such that the total amount paid to
                     the holder of such shares (including the applicable Cash
                     Dividend Credit) exceeds the Initial Investment Amount (or
                     such portion thereof being redeemed) multiplied by 4 and
                     (z) at least 25% of the Redemption Securities that were
                     either issued on the Original Issuance Date or issued
                     thereafter in connection with the conversion of the
                     Redemption Securities issued on the Original Issuance Date,
                     if any, must be redeemed ratably from the Redemption
                     Securities Holders subject to this Section 6(c) (or, if
                     less than 25% of such shares are outstanding as of such
                     date, such lesser


                                       22
<Page>

                     amount as is outstanding on the applicable Redemption
                     Date). Notwithstanding anything in this clause (iv) to the
                     contrary, if the Company delivers a Redemption Notice in
                     accordance with this Certificate of Designations prior to
                     the 7th anniversary of the Original Issuance Date and the
                     Optional Contingent Redemption is delayed until after such
                     7th anniversary because the Majority Redemption Securities
                     Holders object to the Optional Contingent Redemption Price
                     pursuant to Section 6(c)(vi) hereof, the Company may
                     complete the Optional Contingent Redemption in accordance
                     with this clause (iv) promptly after the determination of
                     the Optional Contingent Redemption Price in accordance with
                     Section 6(c)(vi) hereof, but in no event later than the
                     ninetieth (90th) day after such 7th anniversary.

                            (v)    The redemption of shares of Redemption
                     Securities pursuant to clauses (i) through (iv) above shall
                     be referred to collectively as an "OPTIONAL CONTINGENT
                     REDEMPTION".

                            (vi)   In the event that the Majority Redemption
                     Securities Holders (as defined below) object to the
                     Optional Contingent Redemption Price set forth in a
                     Redemption Notice for an Optional Contingent Redemption in
                     accordance with Section 6(e) hereof, and solely with regard
                     to the determination of the Optional Contingent Redemption
                     Price for such Optional Contingent Redemption, the "Fair
                     Market Value" of the Common Stock (in such case, the
                     "VALUATION AMOUNT") shall be determined: (x) mutually by
                     the Board (excluding for all purposes of this Section
                     6(c)(vi), any Convertible Participating Preferred Stock
                     Director and any Additional Convertible Participating
                     Preferred Stock Director) and the Majority Redemption
                     Securities Holders or (y) if a mutual agreement is not
                     reached within twenty (20) days of the delivery of the
                     Redemption Notice for such Optional Contingent Redemption,
                     by an arbitration conducted by nationally recognized
                     investment bank experienced in the valuation of securities
                     that is independent of each of the Company and its
                     Affiliates and the Majority Redemption Securities Holders
                     and their Affiliates (such entity, an "ARBITER") (whose
                     fees and expenses shall be paid by the Company). The
                     Arbiter shall be selected by the mutual agreement of the
                     Board and the Majority Redemption Securities Holders;
                     PROVIDED, that if such mutual agreement is not reached
                     within five (5) days after the expiration of the time
                     period provided for in the preceding sentence, then the
                     Arbiter shall be selected by two other nationally
                     recognized investment banks (the "SELECTING FIRMS"), one of
                     which to be selected by each of the Board and the Majority
                     Redemption Securities Holders; in each case to be selected
                     not later than five (5) days after the expiration of the
                     time period set forth in the immediately preceding clause.
                     The Selecting Firms shall choose an Arbiter within ten (10)
                     days of the first date that both Selecting Firms have been
                     appointed and such selection of an Arbiter shall be
                     conclusive and binding on upon



                                       23
<Page>

                     the parties. The Board and the Majority Redemption
                     Securities Holders shall submit their respective
                     presentations, including their proposed valuation amounts
                     and other relevant data to the Arbiter, and the Arbiter
                     shall, within fifteen (15) days of its appointment, make
                     its own determination of the valuation amount based solely
                     on the presentations made to the Arbiter. The final
                     Valuation Amount for purposes hereof shall be the average
                     of (i) the valuation amount calculated by the Arbiter and
                     (ii) the valuation amount from among the valuation amounts
                     submitted by the Board and the Majority Redemption
                     Securities Holders which, in the sole discretion of the
                     Arbiter, is closer to the valuation amount calculated by
                     the Arbiter. The determination of the final Valuation
                     Amount by the Arbiter shall be conclusive and binding upon
                     the parties. For the avoidance of doubt, if the final
                     Valuation Amount of the Common Stock underlying the
                     Convertible Participating Preferred Stock as determined in
                     accordance with the provisions of this Section 6(c)(vi)
                     results in an Optional Contingent Redemption Price which is
                     less than that set forth in the Redemption Notice for such
                     Optional Contingent Redemption, the Redemption Securities
                     Holders shall be obligated to surrender their shares at
                     such lesser Optional Contingent Redemption Price, so long
                     as such lesser Optional Contingent Redemption Price
                     otherwise meets or exceeds the minimum applicable multiple
                     of the Initial Investment Amount (or such portion thereof
                     being redeemed) for such time period. If required by any
                     such Arbiter, the Board and the Majority Redemption
                     Securities Holders shall execute a retainer and engagement
                     letter containing reasonable and customary terms and
                     conditions consistent with this Section 6(c)(vi).

                            (vii)  For the avoidance of doubt, clause (i) shall
                     apply to an Optional Contingent Redemption that is
                     consummated prior to the 4th anniversary of the Original
                     Issuance Date, clause (ii) shall apply to an Optional
                     Contingent Redemption that is consummated prior to the 5th
                     anniversary of the Original Issuance Date, clause (iii)
                     shall apply to an Optional Contingent Redemption that is
                     consummated prior to the 6th anniversary of the Original
                     Issuance Date and clause (iv) shall apply to an Optional
                     Contingent Redemption that is consummated prior to the 7th
                     anniversary of the Original Issuance Date.

                            (viii) Notwithstanding anything to the contrary
                     contained herein and subject to the terms of Section
                     6(c)(vii) and this Section 6(c)(viii), the Company may
                     exercise its rights pursuant to clauses (i) through (iv) of
                     this Section 6(c) at any time within the applicable time
                     periods set forth therein, without regard to whether the
                     Optional Contingent Redemption Price as computed pursuant
                     to the terms thereof would meet or exceed the minimum
                     applicable multiple of the Initial Investment Amount (or
                     such portion thereof being redeemed) for the applicable
                     time period, if the Company delivers a Redemption Notice
                     for an Optional Contingent


                                       24
<Page>

                     Redemption in accordance with Section 6(e) hereof to the
                     Redemption Securities Holders containing an offer of the
                     Company to pay an Optional Contingent Redemption Price
                     at least equal to the minimum applicable multiple of the
                     Initial Investment Amount (or such portion thereof being
                     redeemed) for the applicable time period.
                     Notwithstanding anything to the contrary contained
                     herein, the Company shall not be precluded from
                     submitting a valuation of the Fair Market Value of such
                     underlying Common Stock to any Arbiter (as defined in
                     Section 6(c)(vi) hereof) which differs from that set
                     forth in any Redemption Notice for such Optional
                     Contingent Redemption.

              (d) REDEMPTION UPON AN IPO. If VCP exercises its right pursuant to
Section 3.6 of the Stockholders' Agreement and requires the Company to commence
an IPO prior to the 7th anniversary of the Original Issuance Date, the Company
or its designee shall have the option to redeem all of the outstanding
Redemption Securities (the "IPO REDEMPTION") for an aggregate amount equal to
the product of (i) the maximum proposed IPO price per share of Common Stock
determined in good faith by the independent lead managing underwriter (proposed
in accordance with to the Registration Rights Agreement) and (ii) the number of
shares of Common Stock issued or issuable upon conversion of the Redemption
Securities (such amount, the "IPO REDEMPTION PRICE"), in lieu of proceeding with
such IPO. The rights in this Section 6(d) are in addition to the Optional
Contingent Redemption rights set forth in Section 6(c) above.

              (e) NOTICE OF BANKRUPTCY REDEMPTION, CHANGE OF CONTROL REDEMPTION,
MANDATORY REDEMPTION, OPTIONAL CONTINGENT REDEMPTION OR IPO REDEMPTION. Notice
of any Bankruptcy Redemption, Change of Control Redemption, Mandatory
Redemption, Optional Contingent Redemption or IPO Redemption of shares of, as
applicable, Convertible Participating Preferred Stock or Redemption Securities,
specifying the time and place of redemption and the applicable Redemption Price
(in each case, a "REDEMPTION NOTICE"), shall be sent by courier to each holder,
as applicable, of Convertible Participating Preferred Stock or Redemption
Securities, to be redeemed, at the address for such holder shown on the
Company's records, (i) within ninety (90) days following the occurrence of a
Bankruptcy Event, in the case of a Bankruptcy Redemption or (ii) not more than
ninety (90) nor less than thirty (30) days prior to (w) the Mandatory Redemption
Date, (x) an Optional Contingent Redemption Date, (y) an IPO Redemption Date or
(z) a Change of Control Redemption Date, in each such case. If, in the case of a
Bankruptcy Redemption, a Change of Control Redemption or an Optional Contingent
Redemption, less than all the shares of, as applicable, Convertible
Participating Preferred Stock or Redemption Securities, then owned by such
holder are to be redeemed, the Redemption Notice shall also specify the number
of shares which are to be redeemed; PROVIDED, HOWEVER, that no failure to give
such Redemption Notice nor any defect therein shall affect the validity of the
procedure for the redemption of any shares of Convertible Participating
Preferred Stock or Redemption Securities to be redeemed except as to the holder
to whom the Company has failed to give said Redemption Notice or except as to
the holder whose Redemption Notice was defective. Each such Redemption Notice
shall state:

                            (i)    the applicable Redemption Date;

                            (ii)   the applicable Redemption Price;


                                       25
<Page>

                            (iii)  the number of shares of, as applicable,
                     Convertible Participating Preferred Stock or Redemption
                     Securities, to be redeemed and, if fewer than all the
                     shares of Convertible Participating Preferred Stock or
                     Redemption Securities held by a holder are to be redeemed,
                     the number of shares thereof to be redeemed from such
                     holder;

                            (iv)   the manner and place or places at which
                     payment for, as applicable, the shares of Convertible
                     Participating Preferred Stock or Redemption Securities, to
                     be redeemed will be made, upon presentation and surrender
                     to the Company of the certificates evidencing the shares
                     being redeemed;

                            (v)    the then effective Conversion Price;

                            (vi)   that the rights of holders to convert shares
                     of Convertible Participating Preferred Stock being redeemed
                     shall terminate at the close of business on the Redemption
                     Date unless the Company defaults in the payment of the
                     applicable Redemption Price; and

                            (vii)  that, in the case of a Bankruptcy Redemption,
                     a Bankruptcy Event has occurred, or in the case of a Change
                     of Control Redemption, a Change of Control will occur,
                     along with a description of such Bankruptcy Event or Change
                     of Control.

Upon mailing any such Redemption Notice, the Company shall become obligated to
redeem at the applicable Redemption Price on the applicable Redemption Date all
shares of Convertible Participating Preferred Stock therein specified; PROVIDED,
HOWEVER, that in connection with any Redemption Notice pursuant to an Optional
Contingent Redemption, if the holders of at least a majority of the voting power
of the Company represented by the outstanding Redemption Securities (the
"MAJORITY REDEMPTION SECURITIES HOLDERS") object to the Optional Contingent
Redemption Price set forth in such Redemption Notice in a writing delivered to
the Company within fifteen (15) days after the delivery of such Redemption
Notice by the Company, then, the Optional Contingent Redemption Price shall be
determined in accordance with the provisions of Section 6(c)(vi) hereof;
PROVIDED FURTHER, that the Company shall not be obligated to effect such
Optional Contingent Redemption unless the Optional Contingent Redemption Price
as determined in accordance with the provisions of Section 6(c)(vi) hereof is
equal to or less than 105% of the Optional Contingent Redemption Price as set
forth in the Redemption Notice issued by the Company pursuant to such Optional
Contingent Redemption unless the Company elects, in its sole discretion, to
consummate such Optional Contingent Redemption at such higher Optional
Contingent Redemption Price; PROVIDED FURTHER, that in the event that the
Company does not so elect, then the Company shall pay the reasonable
out-of-pocket expenses incurred by the Majority Redemption Securities Holders in
connection with the determination of the Optional Contingent Redemption Price in
accordance with the provisions of Section 6(c)(vi) hereof. Anything to the
contrary herein notwithstanding, if the Company, pursuant to this Section 6(e),
is not required to consummate an Optional Contingent Redemption, the Company
shall not be in default of its obligations under this Certificate of
Designations with respect to such unconsummated Optional Contingent Redemption.


                                       26
<Page>

              (f) PUT REDEMPTION. If at any time after the Original Issuance
Date an Event of Default occurs and the lenders under such Debt Instrument
accelerate the indebtedness thereunder (a "PUT REDEMPTION EVENT"), then the
Company shall immediately notify the holders of the Convertible Participating
Preferred Stock of such occurrence in writing and the holders of the Convertible
Participating Preferred Stock shall have the right to require the Company to
redeem any or all of the shares of Convertible Participating Preferred Stock
held by such holders, in the manner provided in Section 6(g) hereof (a "PUT
REDEMPTION"), at a price per share equal to the greater of (A) the Liquidation
Preference of such shares of Convertible Participating Preferred Stock or (B)
the sum of the Original Purchase Price plus the Per Share Minimum Rate of Return
(such greater applicable amount, the "PUT REDEMPTION PRICE"). To the extent it
is not legally permissible to redeem such shares on the applicable Redemption
Date, the Company shall use its reasonable best efforts to redeem the
outstanding shares of Convertible Participating Preferred Stock as promptly as
practicable and shall redeem as many shares of Convertible Participating
Preferred Stock as it may legally redeem, ratably from the holders thereof who
have surrendered shares in proportion to the number of shares held by them, and
shall thereafter from time to time, as soon as it shall have funds legally
available therefor, redeem as many shares of Convertible Participating Preferred
Stock from such holders who have accepted the offer as it legally may until it
has redeemed all of the outstanding shares of Convertible Participating
Preferred Stock.

              (g) NOTICE OF PUT REDEMPTION. The Company shall send written
notice of such Put Redemption (the "PUT REDEMPTION NOTICE") by courier as
promptly as possible but in any event within two (2) Business Days following the
Put Redemption Event to each holder of record of Convertible Participating
Preferred Stock at such holder's address as the same appears on the stock
register of the Company; PROVIDED, HOWEVER, that no failure to give such Put
Redemption Notice to any holder or holders nor any deficiency therein shall
affect the validity of the procedure for the redemption of any shares of
Convertible Participating Preferred Stock to be redeemed except as to the holder
or holders to whom the Company has failed to give notice or has given deficient
notice. The Put Redemption Notice shall state:

                            (i)    that a Put Redemption Event has occurred and
                     that each holder of Convertible Preferred Stock has the
                     right to require the Company to redeem any or all of such
                     holder's Convertible Preferred Stock at the Redemption
                     Price;

                            (ii)   the applicable Redemption Date;

                            (iii)  a description of the Put Redemption Event;

                            (iv)   the applicable Redemption Price;

                            (v)    the manner and place or places at which
                     payment for the shares of Convertible Participating
                     Preferred Stock surrendered for redemption will be made,
                     upon presentation and surrender to the Company of the
                     Certificates evidencing the shares being redeemed;

                            (vi)   the then effective Conversion Price; and


                                       27
<Page>

                            (vii)  that the rights of holders to convert shares
                     of Convertible Participating Preferred Stock that holders
                     elect to surrender for redemption shall terminate at the
                     close of business on the Redemption Date unless the Company
                     defaults in the payment of the applicable Redemption Price.

              (h) REDEMPTION DATES. The Company shall fix the date for a Put
Redemption (the "PUT REDEMPTION DATE"), the date for a Bankruptcy Redemption (a
"BANKRUPTCY REDEMPTION DATE"), the date for an Optional Contingent Redemption
(an "OPTIONAL CONTINGENT REDEMPTION DATE") or the date for an IPO Redemption (an
"IPO REDEMPTION DATE"), as the case may be, no earlier than thirty (30) but not
more than ninety (90) days after the Redemption Notice or the Put Redemption
Notice, as the case may be, is sent as set forth in Section 6(c)(viii), 6(e) or
6(g) hereof, as the case may be; PROVIDED, HOWEVER, that in the event that the
provisions of Section 6(c)(vi) hereof are applicable to any Optional Contingent
Redemption, the Optional Contingent Redemption Date shall be the later of (i)
the date set forth in the Redemption Notice and (ii) the date which is ten (10)
Business Days after the date that the Arbiter determines the Valuation Amount.
The Company shall fix the date for a Change of Control Redemption (the "CHANGE
OF CONTROL REDEMPTION DATE"), such that the redemption of such shares occurs
concurrently with the consummation of such Change of Control.

              (i) MECHANICS OF REDEMPTION.

                            (i)    The Company shall pay the Redemption Price on
                     the Redemption Date upon surrender of the certificates
                     representing the Redemption Securities to be redeemed
                     (endorsed or assigned for transfer, if the Board shall so
                     require and is so stated in the notice sent by the
                     Company); PROVIDED that if such certificates are lost,
                     stolen or destroyed, the Board may require such holder to
                     indemnify the Company, in a reasonable amount and in a
                     reasonable manner, prior to paying such Redemption Price.
                     In the event that the Company does not pay the Redemption
                     Price in full on the applicable Redemption Date, the
                     Company shall pay the holders of Redemption Securities to
                     be redeemed and for which the Redemption Price has not yet
                     been paid interest on the Redemption Price (or the portion
                     thereof not paid by the Company on the applicable
                     Redemption Date) in an amount equal to 2% per annum,
                     compounded daily, payable monthly in arrears in cash to
                     each such holder notwithstanding that dividends continue to
                     accrue on such Redemption Securities until the Redemption
                     Price is paid therefore. In case fewer than all of the
                     Redemption Securities represented by any such certificate
                     are to be redeemed, a new certificate shall be issued
                     representing the unredeemed Redemption Securities without
                     cost to the holder thereof, except as set forth in the
                     following sentence. The Company shall pay any documentary,
                     stamp or similar issue or transfer tax due upon the
                     issuance of a new certificate for any Redemption Securities
                     not redeemed in the name of the redeeming holder, except
                     that the Company shall not be obligated to pay any such tax
                     due because a certificate for Redemption Securities is
                     issued in a name other than the name of the redeeming
                     holder and no such issue or delivery shall be made unless
                     and until the Person


                                       28
<Page>

                     requesting such issue has paid to the Company the amount of
                     any such tax, or has established to the reasonable
                     satisfaction of the Company that such tax has been or will
                     be paid.

                            (ii)   From and after the Redemption Date, dividends
                     on the Redemption Securities to be redeemed on such
                     Redemption Date will cease to accrue; said Redemption
                     Securities will no longer be deemed to be outstanding; and
                     all rights of the holder thereof as a holder of Redemption
                     Securities (except the right to receive from the Company
                     the Redemption Price) shall cease and terminate with
                     respect to said Redemption Securities; PROVIDED that in the
                     event that any Redemption Securities are not redeemed due
                     to a default in payment by the Company or because the
                     Company is otherwise unable to pay the Redemption Price,
                     such Redemption Securities will remain outstanding and will
                     be entitled to all of the rights provided herein. In case
                     fewer than all the Redemption Securities represented by any
                     such certificate are to be redeemed, a new certificate
                     shall be issued to and in the name of such redeeming holder
                     representing the unredeemed Redemption Securities without
                     cost to the holder thereof. Any Redemption Securities that
                     have been redeemed will, after such redemption, be deemed
                     cancelled and retired and have the status of authorized but
                     unissued, as applicable, Common Stock or Preferred Stock
                     (without designation as to series until such shares are
                     once more designated as part of a particular series by the
                     Board).

                            (iii)  If fewer than all of the outstanding
                     Redemption Securities are to be redeemed, the Redemption
                     Securities to be redeemed must be selected pro rata (as
                     nearly as may be practicable without creating fractional
                     shares) or by any other equitable method determined by the
                     Board.

                            (iv)   Notwithstanding anything in this Section 6 to
                     the contrary, each holder shall retain the right to convert
                     shares of Convertible Participating Preferred Stock held by
                     such holder at any time on or prior to the close of
                     business on the Redemption Date unless the Company defaults
                     in the payment of the Redemption Price; in such event, each
                     holder who has not received payment of the Redemption Price
                     on the Redemption Date shall retain the right to convert
                     such shares at any time prior to receipt of the Redemption
                     Price therefore.

                            (v)    Except (A) in connection with any action
                     taken to finance a redemption of all of the Convertible
                     Participating Preferred Stock pursuant to Section 6 hereof
                     and duly approved by all necessary corporate action or (B)
                     pursuant to the prior vote or written consent of holders
                     representing at least a majority of the then outstanding
                     shares of Convertible Participating Preferred Stock, voting
                     together as a separate class, the Company shall not,
                     whether by any amendment of its Certificate of
                     Incorporation, by any reclassification or other change to
                     its capital stock, by any merger,


                                       29
<Page>

                     consolidation or other combination involving the Company,
                     by any sale, conveyance or other transfer of any of its
                     assets, by the liquidation, dissolution or winding up of
                     the Company or by any other way, impair or restrict its
                     ability to convert shares of Convertible Participating
                     Preferred Stock and issue shares of Common Stock therefore.
                     Except (A) in connection with any action solely taken to
                     finance a redemption (or is reasonably necessary to
                     facilitate a redemption or is reasonably required as a
                     result of the redemption or such other actions) of all or a
                     portion of the Convertible Participating Preferred Stock
                     pursuant to Section 6(b), 6(c), 6(d) or 6(f) hereof and
                     duly approved by all necessary corporate action or (B)
                     pursuant to the prior vote or written consent of holders
                     representing at least a majority of the then outstanding
                     shares of Convertible Participating Preferred Stock, voting
                     together as a separate class, the Company shall not avoid
                     or seek to avoid the observance or performance of any of
                     the terms to be observed or performed hereunder by the
                     Company. The Company shall at all times in good faith take
                     all such action as appropriate pursuant to, and assist in
                     the carrying out of all the provisions of, this Section 6.


                                       30
<Page>

              Section 7.    HEADINGS AND SUBDIVISIONS.  The headings of various
subdivisions hereof are for convenience of reference only and shall not affect
the interpretation of any of the provisions hereof.

              Section 8.    SEVERABILITY. If any right, preference or
limitations of the Convertible Participating Preferred Stock set forth in these
resolutions and the Certificate of Designations filed pursuant hereto (as such
Certificate of Designations may be amended from time to time) is invalid,
unlawful or incapable of being enforced by reason of any rule or law or public
policy, all other rights, preferences and limitations set forth in such
Certificate of Designations, as amended, which can be given effect without the
invalid, unlawful or unenforceable right, preference or limitation shall,
nevertheless remain in full force and effect, and no right, preference or
limitation herein set forth shall be deemed dependent upon any other such right,
preference or limitation unless so expressed herein.

              Section 9.    MUTILATED OR MISSING CONVERTIBLE PARTICIPATING
PREFERRED STOCK CERTIFICATES. If any of the Convertible Participating Preferred
Stock certificates shall be mutilated, lost, stolen or destroyed, the Company
shall issue, in exchange and substitution for and upon cancellation of the
mutilated Convertible Participating Preferred Stock certificate, or in lieu of
and in substitution for the Convertible Participating Preferred Stock
certificate lost, stolen or destroyed, a new Convertible Participating Preferred
Stock certificate of like tenor and representing an equivalent amount of shares
of Convertible Participating Preferred Stock, but only upon receipt of evidence
of such loss, theft or destruction of such Convertible Participating Preferred
Stock certificate and indemnity reasonably satisfactory to the Company in amount
and form, if requested by the Company.

              Section 10.   ADDITIONAL DEFINITIONS.  For purposes of these
resolutions, the following terms shall have the following meanings:

              (a) "ADDITIONAL CONVERTIBLE PARTICIPATING PREFERRED STOCK
DIRECTORS" shall have the meaning set forth in Section 4(d) hereof.

              (b) "ADDITIONAL SHARES OF COMMON STOCK" shall have the meaning set
forth in Section 5(e)(i)(C) hereof.

              (c) "AFFILIATE" shall mean, with respect to any Person, (i) any
Person that directly or indirectly controls, is controlled by or is under common
control with such Person or (ii) any Person directly or indirectly owning or
controlling ten percent (10%) or more of any class of outstanding equity
interests of such Person after giving effect to the exercise, exchange or
conversion of options, warrants or other securities owned or controlled by such
Person which are exercisable, exchangeable or convertible into such equity
interests or (iii) any director, officer, partner, trustee, or member of such
Person or any Person specified in clause (i) or (ii) above or (iv) in the case
of any Person specified in clause (i), (ii) or (iii) above who is an individual,
Family Members of such Person.

              (d) "ARBITER" shall have the meaning set forth in Section 6(c)(vi)
hereof.


                                       31
<Page>

              (e) "ASSOCIATE" has the meaning assigned to such term in Rule
12b-2 under the Exchange Act.

              (f) "BANKRUPTCY EVENT" means commencing 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,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or
other relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian or other similar official for it or for all or any
substantial part of its assets, or the making by any of the Company and its
Subsidiaries of a general assignment for the benefit of its creditors;

              (g) "BANKRUPTCY REDEMPTION" shall have the meaning set forth in
Section 6(b) hereof.

              (h) "BANKRUPTCY REDEMPTION DATE" shall have the meaning set forth
in Section 6(h) hereof.

              (i) "BENEFICIAL OWNER" or "BENEFICIALLY OWN" has the meaning given
such term in Rule 13d-3 under the Exchange Act, and a Person's beneficial
ownership of securities will be calculated in accordance with the provisions of
such Rule; PROVIDED, HOWEVER, that a Person will be deemed to be the beneficial
owner of any security which may be acquired by such Person, whether within sixty
(60) days or thereafter, upon the conversion, exchange or exercise of any
rights, options, warrants or similar securities to subscribe for, purchase or
otherwise acquire (x) capital stock of any Person or (y) debt or other evidences
of indebtedness, capital stock or other securities directly or indirectly
convertible into or exercisable or exchangeable for such capital stock of such
Person.

              (j) "BOARD" means, unless otherwise specified hereunder, the Board
of Directors of the Company.

              (k) "BUSINESS DAY" means a day other than a Saturday, Sunday,
federal or New York State holiday or other day on which commercial banks in New
York City are authorized or required by law to close.

              (l) "CALL REDEMPTION PRICE" shall have the meaning set forth in
Section 6(b) hereof.

              (m) "CAPITAL STOCK" means any and all shares, interests,
participations or other equivalents (however designated, whether voting or
non-voting) of capital stock, partnership interests (whether general or limited)
or equivalent ownership interests in or issued by such Person, and with respect
to the Company includes, without limitation, any and all shares of Common Stock
and Preferred Stock.

              (n) "CASH DIVIDEND CREDIT" means the sum of (i) all cash dividends
paid as of such date with respect to Redemption Securities and (ii) with respect
to Common Stock that is a


                                       32
<Page>

Redemption Security, all cash dividends that were paid on the Convertible
Participating Preferred Stock prior to, and in connection with, its conversion
into such shares, in each case, excluding Participating Dividends.

              (o) "CAUSE" means (i) willful malfeasance or willful misconduct by
a director in connection with the performance of his duties as such, (ii) the
commission by a director of (a) any felony or (b) a misdemeanor involving moral
turpitude or (iii) a determination by a court of competent jurisdiction in the
United States that such director, as such or in any other capacity (whether or
not relating to the Company), breached a fiduciary duty owed by him or her to
another Person.

              (p) "CERTIFICATE OF INCORPORATION" shall have the meaning set
forth in the Preamble.

              (q) "CHANGE OF CONTROL" means (i) any merger, consolidation or
other business combination of the Company or Holdings LLC with or into any other
entity, recapitalization, spin-off, distribution or any other similar
transaction, whether in a single transaction or series of related transactions,
where VCP and the beneficial owners of units of Holdings LLC on the Closing
Date, and their respective Affiliates, collectively, cease to beneficially own
at least 50% of the voting power of the voting securities of the entity
surviving or resulting from such transaction (or the ultimate sole parent
thereof) (such ownership being based solely on the voting securities owned by
such Persons immediately prior to such event), (ii) any transaction or series of
related transactions as a result of which VCP and the beneficial owners of units
of Holdings LLC on the Closing Date, and their respective Affiliates,
collectively, cease to beneficially own at least 50% of the voting power of the
voting securities of the Company (or the ultimate sole parent thereof) or (iii)
any sale, transfer, lease, assignment, conveyance, exchange, mortgage or other
disposition of all or substantially all of the assets, property or business of
the Company and its Subsidiaries.

              (r) "CHANGE OF CONTROL REDEMPTION" shall have the meaning set
forth in Section 6(b) hereof.

              (s) "CHANGE OF CONTROL REDEMPTION DATE" shall have the meaning set
forth in Section 6(h) hereof.

              (t) "CLOSING DATE" means the date of the sale of Convertible
Participating Preferred Stock pursuant to the Preferred Stock Purchase
Agreement.

              (u) "COMMON STOCK" shall mean the common stock, par value $.01 per
share, of the Company.

              (v) "COMMON STOCK EQUIVALENTS" means any warrants, rights, calls,
options or other securities exchangeable or exercisable for or convertible into
Common Stock, including shares of Convertible Participating Preferred Stock.

              (w) "COMPANY" shall have the meaning set forth in the Preamble.


                                       33
<Page>

              (x) "CONVERTIBLE PARTICIPATING PREFERRED STOCK" shall have the
meaning set forth in Section 1(a) hereof.

              (y) "CONVERTIBLE PARTICIPATING PREFERRED STOCK DIRECTOR" shall
have the meaning set forth in Section 4(c) hereof.

              (z) "CONVERSION AMOUNT" shall have the meaning set forth in
Section 5(a) hereof.

              (aa) "CONVERSION DATE" shall have the meaning set forth in Section
5(d) hereof.

              (bb) "CONVERSION PRICE" shall have the meaning set forth in
Section 5(a) hereof.

              (cc) "CONVERTIBLE SECURITIES" shall have the meaning set forth in
Section 5(e)(i)(B) hereof.

              (dd) "CREDIT AGREEMENT" shall mean that certain Credit Agreement,
dated as of February 27, 2004 among Solo Cup Company, as the Borrower, the
Company, Bank of America, N.A., and the other lenders party thereto, and any
amendments thereto approved in accordance with the terms of the Stockholders
Agreement; PROVIDED, that for purposes of Section 4 hereof no effect shall be
given to any amendments thereto or waivers of the terms thereof after the date
hereof.

              (ee) "DGCL" means the General Corporation Law of the State of
Delaware.

              (ff) "DEBT INSTRUMENT" shall mean each of the Credit Agreement,
the Senior Subordinated Notes and the Senior Subordinated Notes Indenture, and
any amendments thereto approved in accordance with the terms of the Stockholders
Agreement; PROVIDED, that for purposes of Section 4 hereof no effect shall be
given to any amendments thereto or waivers of the terms thereof after the date
hereof.

              (gg) "DIVIDENDS" shall have the meaning set forth in Section
2(a)(ii) hereof.

              (hh) "EQUITY SECURITIES" means any and all shares of Common Stock
and Common Stock Equivalents and Redeemable Preferred Stock.

              (ii) "EVENT OF DEFAULT" shall have the meaning assigned to such
term in the applicable Debt Instrument.

              (jj) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.

              (kk) "FAIR MARKET VALUE" for any property means (except where
Section 6(c)(vi) is applicable, in which case Section 6(c)(vi) shall govern) the
fair market value thereof as determined in good faith by the Board of Directors
using any appropriate valuation method, assuming an arms-length sale (and solely
with respect to such determination for Equity Securities, assuming an
arms-length sale of the Company and its Subsidiaries in the entirety) to an
independent party, which determination must be set forth in a written resolution
of the Board of Directors, in accordance with the following rules:


                                       34
<Page>

                            (i)    for any security listed on any domestic
                     securities exchange or quoted in the NASDAQ National Market
                     System or the domestic over-the-counter market, the "Fair
                     Market Value" of such security shall be the Twenty Day
                     Average of the average closing prices of such security's
                     sales on all domestic securities exchanges on which such
                     security may at the time be listed, or, if there have been
                     no sales on any such exchange on any day, the average of
                     the highest bid and lowest asked prices on all such
                     exchanges at the end of such day, or, if on any day such
                     security is not so listed, the average of the
                     representative bid and asked prices quoted in the NASDAQ
                     National Market System as of 4:00 P.M., New York City time,
                     on such day, or, if on any day such security is not quoted
                     in the NASDAQ National Market System, the average of the
                     highest bid and lowest asked prices on such day in the
                     domestic over-the-counter market as reported by the
                     National Quotation Bureau, Incorporated, or any similar or
                     successor organization (and in each such case excluding any
                     trades that are not bona fide, arm's length transactions);
                     or

                            (ii)   for any security or other property which at
                     any time is not listed on any domestic securities exchange
                     or quoted in the NASDAQ National Market System or the
                     domestic over-the-counter market, the "Fair Market Value"
                     of such security or other property shall be the fair market
                     value thereof as determined by the Board in good faith,
                     using any appropriate valuation method, assuming an
                     arms-length sale to an independent party; PROVIDED,
                     HOWEVER, that holders of a majority of the outstanding
                     shares of Convertible Participating Preferred Stock may
                     dispute such determination by the Board by delivering
                     written notice thereof to the Board within ten (10)
                     Business Days of receipt of written notice of the Board's
                     determination, in which case an Arbiter shall be appointed
                     (whose fees and expenses shall be paid by the Company) and
                     an arbitration shall be conducted in accordance with
                     Section 6(c)(vi) (excluding the first and penultimate
                     sentences thereof);

       PROVIDED, that in determining the Fair Market Value of any class or
       series of securities, (1) such determinations shall be made without
       giving regard to (i) the annual management fee and the aggregate amount
       of annual compensation being paid to Holdings LLC and the Solo Family
       Members and (ii) the annual management fee being paid to Vestar Capital
       Partners, an Affiliate of VCP and (2) a sale of all of the outstanding
       securities will be assumed, without giving regard to the lack of
       liquidity of such security due to any restrictions (contractual or
       otherwise) applicable thereto or any discount for minority interests and
       assuming the conversion or exchange of all securities then outstanding
       that are convertible into or exchangeable for such securities and the
       exercise of all rights and warrants then outstanding and exercisable to
       purchase shares of such securities or securities convertible into or
       exchangeable for shares of such security (provided that any applicable
       exercise price shall have been paid or such unpaid exercise price shall
       reduce the Fair Market Value of such convertible securities); PROVIDED,
       HOWEVER, that such assumption will not include those securities, rights
       and warrants


                                       35
<Page>

       convertible into such security where the conversion, exchange or exercise
       price per share is greater than the Fair Market Value.

              (ll) "FAMILY MEMBER" means with respect to any individual (i) any
member of the immediate family of such individual (which shall mean any parent,
spouse, child or other lineal descendants (including by adoption), brother or
sister thereof or any spouse of any of the foregoing), (ii) each trust created
for the benefit of such individual or in which one or more members of such
individual's immediate family has a beneficial interest and (iii) any Person who
is controlled by any such immediate family member or trust (including each
custodian of property for one or more such Persons).

              (mm) "GAAP" shall have the meaning set forth in the Credit
Agreement.

              (nn) "GOVERNMENTAL AUTHORITY" means 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;

              (oo) "GROUP" has the meaning assigned to such term in Section
13(d)(3) of the Exchange Act;

              (pp) "HEREOF", "HEREIN" and "HEREUNDER" and words of similar
import refer to these resolutions as a whole and not merely to any particular
clause, provision, section or subsection.

              (qq) "HOLDINGS LLC" means SCC Holding Company LLC, a Delaware
limited liability company.

              (rr) "INITIAL INVESTMENT AMOUNT" means $240 million.

              (ss) "JUNIOR SECURITIES" shall have the meaning assigned to such
term in Section 1(b).

              (tt) "IPO" means the initial Public Offering of Common Stock.

              (uu) "IPO REDEMPTION" shall have the meaning set forth in Section
6(d) hereof.

              (vv) "IPO REDEMPTION DATE" shall have the meaning set forth in
Section 6(h) hereof.

              (ww) "IPO REDEMPTION PRICE" shall have the meaning set forth in
Section 6(d) hereof.

              (xx) "LIEN" shall mean any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other), charge,
or preference, priority or other security interest or preferential arrangement
in the nature of a security interest of any kind or nature whatsoever (including
any conditional sale or other title retention agreement and any financing lease
having substantially the same economic effect as any of the foregoing).


                                       36
<Page>

              (yy) "LIQUIDATION PREFERENCE" shall have the meaning assigned to
such term in Section 3(a) hereof.

              (zz) "LIQUIDITY CONVERSION AMOUNT" shall mean that amount of
Common Stock with a Fair Market Value equal to sum of the Original Purchase
Price plus the Per Share Minimum Rate of Return.

              (aaa) "LIQUIDITY EVENT" shall mean (i) a Change of Control or (ii)
any Transfer to a Third Party by (A) Holdings LLC of 20% or more of the
aggregate equity interest in the Company on the Closing Date or (B) beneficial
owners of units of Holdings LLC on the Closing Date which would result in such
Third Parties owning, directly or indirectly, 28.5% or more of the units in
Holdings LLC on the Closing Date.

              (bbb) "MANDATORY CONVERSION DATE" shall have the meaning set forth
in Section 5(b) hereof.

              (ccc) "MANDATORY REDEMPTION DATE" shall have the meaning set forth
in Section 6(a) hereof.

              (ddd) "MANDATORY REDEMPTION PRICE" shall have the meaning set
forth in Section 6(a) hereof.

              (eee) "MAJORITY REDEMPTION SECURITIES HOLDERS" shall have the
meaning set forth in Section 6(e) hereof.

              (fff) "MEASUREMENT DATE" shall have the meaning set forth in
Section 5(e)(i)(D) hereof.

              (ggg) "NASD" means the National Association of Securities Dealers,
Inc.

              (hhh) "NASDAQ" means the NASD Automated Quotation System.

              (iii) "ORIGINAL ISSUANCE DATE" means the date on which the first
share of Convertible Participating Preferred Stock was issued.

              (jjj) "ORIGINAL PURCHASE PRICE" shall have the meaning set forth
in Section 2(a)(i) hereof.

              (kkk) "OPTIONAL CONTINGENT REDEMPTION" shall have the meaning set
forth in Section 6(c)(v) hereof.

              (lll) "OPTIONAL CONTINGENT REDEMPTION DATE" shall have the meaning
set forth in Section 6(h) hereof.

              (mmm) "OPTIONAL CONTINGENT REDEMPTION PRICE" shall have the
meaning set forth in Section 6(c)(i) hereof.

              (nnn) "OPTIONS" shall have the meaning set forth in Section
5(e)(i)(A) hereof.


                                       37
<Page>

              (ooo) "PARTICIPATING DIVIDENDS" shall have the meaning set forth
in Section 2(a)(ii) hereof.

              (ppp) "PER SHARE MINIMUM RATE OF RETURN" means an 18% per annum
return, compounded on a quarterly basis from the date of issuance based on a
three hundred sixty (360) day year consisting of four ninety (90) day quarters,
on the Original Purchase Price taking into account all Regular Dividends,
whether paid in (i) cash, (ii) shares of Redeemable Preferred Stock (valued at
the liquidation preference thereof as set forth in Section 3(a) of the
Redeemable Preferred Stock Certificate of Designations) or (iii) shares of
Common Stock (valued at the Fair Market Value thereof), in each case,
theretofore accrued and paid on such share, and accrued and paid in connection
with the conversion of such share, of Convertible Participating Preferred Stock.

              (qqq) "PERMITTED INDEBTEDNESS" means (i) intercompany debt, (ii)
indebtedness for borrowed money incurred under the Debt Instruments, (iii)
indebtedness outstanding on the date hereof listed on Schedule 7.02 of the
Credit Agreement, (iv) other indebtedness for borrowed money permitted by the
Debt Instruments and (v) Refinancing Indebtedness.

              (rrr) "PERMITTED TRANSFEREES" shall have the meaning assigned to
such term in the Stockholders' Agreement.

              (sss) "PERSON" shall mean any individual, corporation, limited
liability company, partnership, trust, association, trust or business trust,
unincorporated organization or joint venture, Governmental Authority or other
entity of any nature whatsoever.

              (ttt) "PREFERRED STOCK" shall have the meaning set forth in the
Preamble.

              (uuu) "PREFERRED STOCK PURCHASE AGREEMENT" means the Preferred
Stock Purchase Agreement dated as of the Closing Date, among the Company, VCP,
Vestar Investment and Vestar Investment II.

              (vvv) "PUBLIC OFFERING" means the sale of Equity Securities to the
public pursuant to an effective registration statement filed under the
Securities Act, which results in an active trading market in such Equity
Securities (it being understood that such an active trading market shall be
deemed to exist if, among other things, such Equity Securities are listed on a
national securities exchange or on the NASDAQ National Market).

              (www) "PUT REDEMPTION" shall have the meaning set forth in Section
6(f) hereof.

              (xxx) "PUT REDEMPTION DATE" shall have the meaning set forth in
Section 6(h) hereof.

              (yyy) "PUT REDEMPTION EVENT" shall have the meaning set forth in
Section 6(f) hereof.

              (zzz) "PUT REDEMPTION NOTICE" shall have the meaning set forth in
Section 6(g) hereof.


                                       38
<Page>

              (aaaa) "PUT REDEMPTION PRICE" shall have the meaning set forth in
Section 6(f) hereof.

              (bbbb) "REDEEMABLE PREFERRED STOCK" means the redeemable preferred
stock of the Company with terms as set forth in the Redeemable Preferred Stock
Certificate of Designations.

              (cccc) "REDEEMABLE PREFERRED STOCK CERTIFICATE OF DESIGNATIONS"
means the certificate of designations of the Company setting forth the terms of
the Redeemable Preferred Stock.

              (dddd) "REDEMPTION DATE" means the Mandatory Redemption Date, the
Bankruptcy Redemption Date, the Change of Control Redemption Date, the Optional
Contingent Redemption Date, the IPO Redemption Date or the Put Redemption Date,
as the case may be.

              (eeee) "REDEMPTION NOTICE" shall have the meaning set forth in
Section 6(e) hereof.

              (ffff) "REDEMPTION PRICE" means the Mandatory Redemption Price,
the Call Redemption Price, the Optional Contingent Redemption Price, the IPO
Redemption Price or the Put Redemption Price, as the case may be.

              (gggg) "REDEMPTION SECURITIES" means, at any time, the outstanding
shares of Convertible Participating Preferred Stock, and all shares of Common
Stock or Redeemable Preferred Stock received upon conversion of or in payment of
dividends accrued on Convertible Participating Preferred Stock, held, on the
date on which such shares are being redeemed, by a Redemption Securities Holder;
PROVIDED, that any of the foregoing securities which are sold by a Redemption
Securities Holder in connection with a Public Offering or disposition in
accordance with Rule 144 under the Securities Act shall, upon consummation of
such sale, no longer be deemed Redemption Securities.

              (hhhh) "REDEMPTION SECURITIES HOLDER" means VCP, Vestar
Investment, Vestar Investment II, any Management Investor (as defined in the
Stockholders' Agreement), any Permitted Transferee (as defined in the
Stockholders' Agreement) of any of the foregoing and any other Stockholder (as
defined in the Stockholders' Agreement) who acquired shares of Redemption
Securities as a transferee of, or as a result of a transfer from, any of the
foregoing; PROVIDED, that any such Permitted Transferee or transferee which
acquired securities in connection with a Public Offering or disposition in
accordance with Rule 144 under the Securities Act shall not be deemed a
Redemption Securities Holder in respect of such securities.

              (iiii) "REFINANCING INDEBTEDNESS" means, as of the date of the
refinancing of any indebtedness, indebtedness for borrowed money in a principal
amount not in excess of the principal amount of, and accrued and unpaid interest
on, existing indebtedness for borrowed money that is being refinanced thereby
plus, in the case of the Credit Agreement or similar debt instruments, the
aggregate amount of unused lines of credit thereunder.


                                       39
<Page>
              (jjjj) "REGISTRATION RIGHTS AGREEMENT" shall mean the Registration
Rights Agreement dated as of the Closing Date among the Company, Vestar
Investment, Vestar Investment II, VCP, Holdings LLC and the Management
Investors.

              (kkkk) "REGULAR DIVIDENDS" shall have the meaning set forth in
Section 2(a)(i) hereof.

              (llll) "REGULAR DIVIDEND PAYMENT DATE" shall have the meaning set
forth in Section 2(b) hereof.

              (mmmm) "SECURITIES ACT" means the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.

              (nnnn) "SELECTING FIRMS" shall have the meaning set forth in
Section 6(c)(vi) hereof.

              (oooo) "SENIOR SUBORDINATED NOTES" means the 8 1/2% unsecured
subordinated notes of the Borrower (as defined in the Credit Agreement) due
February 15, 2014 in an aggregate principal amount of $325,000,000 issued and
sold on February 27, 2004 pursuant to the Senior Subordinated Notes Indenture,
and any amendments thereto approved in accordance with the terms of the
Stockholders Agreement.

              (pppp) "SENIOR SUBORDINATED NOTES INDENTURE" means the Indenture,
dated as of February 27, 2004, by and among U.S. Bank National Association, as
trustee, the Borrower (as defined in the Credit Agreement) and the Subsidiary
Guarantors (as defined in the Credit Agreement), and any amendments thereto
approved in accordance with the terms of the Stockholders Agreement.

              (qqqq) "SOLO FAMILY MEMBER" shall have the meaning assigned to
such term in the Stockholders' Agreement.

              (rrrr) "STOCKHOLDER" shall have the meaning assigned such term in
the Stockholders' Agreement.

              (ssss) "STOCKHOLDERS' AGREEMENT" means the Stockholders Agreement
dated as of the Closing Date among the Company, Vestar Investment, Vestar
Investment II, VCP, Holdings LLC, the Management Investors named therein and the
other signatories thereto, as amended in accordance with its terms.

              (tttt) "SUBSIDIARY" means, with respect to any Person, any
corporation, partnership, association or other business entity of which fifty
percent (50%) or more of the total voting power of shares of capital stock
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof, or fifty percent (50%) or
more of the equity interest therein, is at the time owned or controlled,
directly or indirectly, by any Person or one or more of the other Subsidiaries
of such Person or a combination thereof.


                                       40
<Page>

              (uuuu) "SUBSTANTIALLY UNDERPERFORMS" shall have the meaning
assigned such term in the Stockholders' Agreement.

              (vvvv) "THIRD PARTY" shall mean any Person (including, solely for
purposes of the determination of a Third Party, any Group) other than the VCP,
Vestar Investment, Vestar Investment II, Holdings LLC and the Management
Investors and their Permitted Transferees.

              (wwww) "TWENTY DAY AVERAGE" means, with respect to any prices and
in connection with the calculation of Fair Market Value, the average of such
prices over the twenty (20) Business Days ending on the Business Day immediately
prior to the day as of which "Fair Market Value" is being determined.

              (xxxx) "VALUATION AMOUNT" shall have the meaning set forth in
Section 6(c)(vi) hereof.

              (yyyy) "VCP" means Vestar Capital Partners IV, L.P., a Delaware
limited partnership.

              (zzzz) "VESTAR INVESTMENT" means Vestar Cup Investment, LLC, a
Delaware limited liability company and an Affiliate of VCP.

              (aaaaa) "VESTAR INVESTMENT II" means Vestar Cup Investment II,
LLC, a Delaware limited liability company and an Affiliate of VCP.

                    [Rest of page intentionally left blank.]


                                       41
<Page>

              IN WITNESS WHEREOF, the Company has caused this Certificate of
Designations to be executed by a duly authorized officer of the Company as of
February 27, 2004.


                                       SOLO CUP INVESTMENT CORPORATION



                                       By: /s/ RONALD L. WHALEY
                                           -------------------------------------
                                           Name:  Ronald L. Whaley
                                           Title: President and Chief Operating
                                                  Officer