INTERCREDITOR AGREEMENT
                             -----------------------

         THIS INTERCREDITOR  AGREEMENT,  dated as of the 15th day of June, 2000,
by and among Bank of America,  N.A.  (as  successor-in-interest  to  BankAmerica
Business Credit,  Inc.) (hereinafter  referred to as "BofA"), in its capacity as
agent for itself and any other  "Lenders" from time to time party to the "Credit
Agreement,"  as those  terms are  defined  below;  State  Street  Bank and Trust
Company of Connecticut,  National  Association,  not in its individual capacity,
but  solely in its  capacity  as Owner  Trustee  and Lessor  under the  "Secured
Sale/Leaseback  Documents,"  as defined  below  (hereinafter  referred to as the
"Initial Trustee");  and BofA, in its capacity as "Collateral Agent", as defined
below.

                                 R E C I T A L S
                                 ---------------

     A.  Sweetheart Cup Company Inc. (the  "Borrower")  and Sweetheart  Holdings
Inc. (the  "Guarantor") are parties to an Amended and Restated Loan and Security
Agreement,  dated as of October 24, 1997, as  heretofore  amended and as amended
and restated as of the date hereof (as so amended and amended and restated,  the
"BofA Credit  Agreement")  with the Lenders  parties thereto and BofA, as agent,
pursuant to which the Lenders  have made  available  to the Borrower a revolving
credit  facility  in  the  initial  maximum   aggregate   principal   amount  of
$135,000,000 and a term loan facility in the initial aggregate  principal amount
of $25,000,000;

     B. The  obligations  of the Borrower  under the BofA Credit  Agreement  are
secured by mortgages,  liens and security  interests in substantially all of the
Borrower's real and personal  property,  as more  specifically  set forth in the
BofA Credit  Agreement and the other  documents  delivered  from time to time in
connection therewith;

     C. The Borrower has entered into the Secured Sale/Leaseback  Documents with
the Initial Trustee, pursuant to which the Borrower sold certain "Equipment" (as
defined below) to the Initial Trustee,  and the Initial Trustee,  as Lessor, has
agreed to lease such Equipment to the Borrower;

     D.  The  obligations  of the  Borrower  under  the  Secured  Sale/Leaseback
Documents   are  secured  by   mortgages,   liens  and  security   interests  in
substantially  all of  the  Borrower's  real  and  personal  property,  as  more
specifically set forth in the Secured Sale/Leaseback Documents;

     E. The  obligations  of the Borrower  under the BofA Credit  Agreement have
been guaranteed by the Guarantor, the direct parent of the Borrower, pursuant to
a certain  Guaranty,  dated as of October 24, 1997, by the Guarantor in favor of
BofA,  as  agent,  and  the  obligations  of  the  Borrower  under  the  Secured
Sale/Leaseback  Documents have been  guaranteed by the Guarantor on a pari passu
basis pursuant to the  Guarantee,  dated as of June 1, 2000, by the Guarantor in
favor of the  Trustee  and the  Owner  Participants  identified  in the  Secured
Sale/Leaseback Documents (collectively, the "Guarantees");

<PAGE>

     F. The  obligations  of the Guarantor  under the  Guarantees are secured by
mortgages,  liens and security interests in substantially all of the Guarantor's
real and  personal  property  which will  initially  consist only of 100% of the
issued and outstanding capital stock of the Borrower; and

     G. The "Credit  Agent",  as defined below,  and the  "Trustee",  as defined
below, wish to enter into this Agreement setting forth their agreement (i) as to
the  relative  priorities  of  the  respective  mortgages,  liens  and  security
interests in the assets of the Borrower  securing the respective  obligations of
the  Borrower  under  the  Credit  Agreement  and  the  Secured   Sale/Leaseback
Documents, (ii) as to the relative priorities of the respective mortgages, liens
and security  interests in the assets of the Guarantor  securing the obligations
of the Guarantor under the Guarantees, and (iii) as to certain related matters.

                                A G R E E M E N T
                                -----------------

         In   consideration  of  the  premises  and  the  mutual  covenants  and
conditions herein  contained,  the Credit Agent, for itself and on behalf of the
Lenders,  and the Trustee,  for itself and on behalf of the Owner  Participants,
intending to be legally bound, agree as follows:

     1. Definitions.  In addition to those terms elsewhere  expressly defined in
this  Agreement,  as used herein,  the  following  terms shall be defined as set
forth below:

        "Accounts" means any "account," as such term is defined in Section 9-106
of the UCC, now owned or hereafter acquired by Sweetheart or in which Sweetheart
now has or hereafter  acquires  any rights,  and, in any event,  shall  include,
without  limitation,  all  accounts  receivable,  book debts and other  forms of
obligations  (other  than  forms of  obligations  evidenced  by  Chattel  Paper,
Documents  or  Instruments)  now owned or  hereafter  received or acquired by or
belonging  or owing to  Sweetheart  arising out of  Inventory  sold or leased or
services rendered by Sweetheart,  whether or not the same have been earned,  and
all of Sweetheart's  rights in, to and under all purchase orders or receipts now
owned  or  hereafter  acquired  by it in  connection  with  any  Disposition  or
anticipated Disposition of Inventory or services, and all of Sweetheart's rights
to  any  Inventory  represented  by any of  the  foregoing  (including,  without
limitation,  unpaid  seller's  rights of rescission,  replevin,  reclamation and
stoppage in transit and rights to returned, reclaimed or repossessed Inventory),
and all moneys due or to become due to  Sweetheart  under all  contracts for the
sale of Inventory or the performance of services or both by Sweetheart  (whether
or not yet earned by performance on the part of Sweetheart or in connection with
any other  transaction),  now in existence or  hereafter  occurring,  including,
without  limitation,  the right to receive the Proceeds of said purchase  orders
and contracts,  and all collateral  security and guarantees of any kind given by
any Person with respect to any of the foregoing.

        "Article 8 Securities"  means all  "securities"  as defined in Article 8
of the UCC,  whether now owned or hereafter  acquired by  Sweetheart or in which
Sweetheart has now or hereafter acquired any rights.

        "BofA"  has  the  meaning   set  forth  in  the  introductory paragraph.
<PAGE>
        "BofA  Credit  Agreement"  has the  meaning  set  forth in the Recitals.

        "Borrower" has the meaning set forth in the Recitals.

        "Business  Day" means any day that is not a  Saturday,  a Sunday,  a day
on which banks are required or  authorized to be closed in the State of New York
or a day on which the Credit Agent or the Trustee is closed for business.

        "Cash   Equivalent   Investments"   means  (i)  United States Government
Securities,  (ii) time deposits and  certificates  of deposit of any  commercial
bank  organized  in the United  States  having  capital and surplus in excess of
$100,000,000  or a commercial bank organized under the laws of any other country
that is a member of the OECD having total assets in excess of  $100,000,000,  in
either  case,  with a  maturity  date  not more  than one year  from the date of
acquisition,  (iii)  repurchase  obligations  with a term of not more than seven
days for  underlying  securities  of the types  described  in  clause  (i) above
entered into with any bank meeting the  qualifications  specified in clause (ii)
above,  (iv)  direct  obligations  issued by any state of the  United  States of
America  or  any  political   subdivision  of  any  such  state  or  any  public
instrumentality  thereof  maturing  within  ninety  (90) days  after the date of
acquisition  thereof  and,  at the time of  acquisition,  having  one of the two
highest ratings  obtainable from either Standard & Poor's Corporation or Moody's
Investors  Service,  Inc.  (or,  if  at  any  time  neither  Standard  &  Poor's
Corporation  nor  Moody's   Investors   Service,   Inc.  shall  be  rating  such
obligations,   then  from  such  other  nationally  recognized  rating  services
acceptable to the Collateral  Agent),  (v) commercial paper issued by the parent
corporation of any commercial bank organized in the United States having capital
and surplus in excess of  $100,000,000  or a commercial bank organized under the
laws of any other  country  that is a member of the OECD having  total assets in
excess of $100,000,000,  and commercial paper issued by others having one of the
two highest  ratings  obtainable  from either  Standard & Poor's  Corporation or
Moody's  Investors  Service,  Inc. (or, if at any time neither Standard & Poor's
Corporation  nor  Moody's   Investors   Service,   Inc.  shall  be  rating  such
obligations,   then  from  such  other  nationally  recognized  rating  services
acceptable to the  Collateral  Agent) and in each case maturing  within one year
after  the date of  acquisition,  (vi)  overnight  bank  deposits  and  bankers'
acceptances at any commercial bank organized in the United States having capital
and surplus in excess of  $100,000,000  or a commercial bank organized under the
laws of any other  country  that is a member of the OECD having  total assets in
excess of $100,000,000, (vii) deposits available for withdrawal on demand with a
commercial  bank  organized in the United States  having  capital and surplus in
excess of $50,000,000 or a commercial bank organized under the laws of any other
country  that  is a  member  of the  OECD  having  total  assets  in  excess  of
$50,000,000 and (viii)  investments in money market funds  substantially  all of
whose assets  comprise  securities of the types described in clauses (i) through
(vii).

        "Chattel  Paper"  means any "chattel paper,"  as such term is defined in
Section 9-105(1)(b) of the UCC, now owned or hereafter acquired by Sweetheart or
in which  Sweetheart  now has or  hereafter  acquires  any rights  and  wherever
located.

        "Collateral" means, collectively, the Lenders' Collateral and the
Trustee Collateral.
<PAGE>
        "Collateral Account" means the account established  by the  Borrower for
the benefit of the Trustee  pursuant to the terms of the Secured  Sale/Leaseback
Documents and this  Agreement and designated as the  "Sweetheart  Cup Collateral
Account."

        "Collateral Account Collateral" means the Collateral Account,all amounts
deposited   therein  from  time  to  time   representing   Proceeds  of  Secured
Sale/Leaseback  Collateral and rents, royalties and other payments in respect of
Secured  Sale/Leaseback  Collateral,  to the extent  assigned  under the Secured
Sale/Leaseback  Documents,  and any and all  investments  of such amounts of any
kind or nature.

        "Collateral Agent" has the meaning set forth in Section 5.1.

        "Collateral  Agent's  Lien" means the Liens of the  Collateral Agent  in
the  Shared  Collateral  granted  pursuant  to the  Shared  Collateral  Security
Documents.

        "Contracts"  means  all  contracts,   undertakings,  or other agreements
(other than rights  evidenced by Chattel Paper,  Documents or Instruments) in or
under which  Sweetheart may now or hereafter  have any right,  title or interest
and wherever  located,  including,  without  limitation,  (a) with respect to an
Account,  any  agreement  relating  to the  terms  of  payment  or the  terms of
performance  thereof and (b) all interest rate or currency exchange  agreements,
including,   without  limitation,   cap,  collar,   floor,  forward  or  similar
agreements,  other rate or  currency  protection  arrangements  or other rate or
currency management arrangements.

        "Credit  Agent"  means BofA in  its  capacity  as agent  for the Lenders
under the Credit  Agreement and not in its  individual  capacity,  any successor
agent to BofA  under the  Credit  Agreement  and any  other  agent,  trustee  or
representative of the Lenders serving in such capacity from time to time and, if
there  is no such  agent,  trustee  or  representative,  "Credit  Agent"  means,
collectively, the Lenders.

        "Credit Agreement" means (a)the BofA Credit Agreement,as the BofA Credit
Agreement may be amended, amended and restated, renewed, extended, restructured,
supplemented,  or  otherwise  modified  from  time to time;  and (b) any  credit
agreement,  loan  agreement,   note  purchase  agreement,   indenture  or  other
agreement, document or instrument refinancing,  refunding or otherwise replacing
the BofA Credit  Agreement,  or any other  agreement  deemed a Credit  Agreement
under  clause (a) or (b) hereof,  whether or not with the same  agent,  trustee,
representative  lenders or holders and,  subject to the  provisions  of the next
succeeding  sentence,  irrespective  of any  change in the terms and  conditions
thereof; provided, that any such agreement, document or instrument effecting any
such refunding,  refinancing or replacement expressly provides that it is deemed
to be a "Credit  Agreement"  hereunder.  Without  limiting the generality of the
foregoing,  the term "Credit  Agreement" shall include any amendment,  amendment
and restatement, renewal, extension,  restructuring,  supplement or modification
to  any  Credit  Agreement  (other  than  any  such  amendment,   amendment  and
restatement, renewal, extension, restructuring,  supplement or modification that
would  result in the  violation  of, or is  otherwise  contrary  to,  any of the
provisions of this Agreement) and all refundings,  refinancings and replacements
of any Credit  Agreement  including  any agreement (i) extending the maturity of
any Credit
<PAGE>
Agreement Obligations;  (ii) adding or deleting issuers, borrowers or guarantors
thereunder; (iii) increasing the amount of Credit Agreement Obligations incurred
thereunder or available to be borrowed  thereunder,  to the extent  permitted by
Section  4.2(a);  or (iv) otherwise  altering the terms and conditions  thereof;
provided,  that any such  agreement,  document or instrument  effecting any such
refunding, refinancing or replacement expressly provides that it is deemed to be
a "Credit Agreement" hereunder.

        "Credit  Agreement  Collateral"  has the  meaning set  forth in  Section
3.1(a).

        "Credit Agreement  Obligations"  means,  collectively,  at any time, (a)
all debts,  liabilities and obligations of Sweetheart,  whether now or hereafter
existing, incurred in connection with the Credit Agreement, the Credit Agreement
Security Documents,  or any other document,  agreement or instrument executed or
delivered in connection therewith to further evidence the debts, liabilities and
obligations of Sweetheart to the Credit Agent and the Lenders (including, in any
event and without  limitation,  all loans  made,  and other  obligations  of the
Borrower  incurred,  under the Original  Credit  Agreement  and assigned to BABC
under the Bank  Assignment  Agreement  (as such terms are  defined in the Credit
Agreement as in effect on the date hereof)), and (b) all Hedging Obligations, in
each case, at such time.

        "Credit Agreement Security Documents"  means, collectively, any and  all
documents from time to time executed in connection with the Credit  Agreement or
in furtherance  thereof  (including,  in any event and without  limitation,  all
Security Documents (as such term is defined in the Credit Agreement as in effect
on the  date  hereof)),  pursuant  to which  Sweetheart  grants  to the  Lenders
(whether  through  the  Credit  Agent  or  otherwise)  a Lien  on  the  Lenders'
Collateral,  as the same may be amended,  modified or supplemented  from time to
time without  resulting in the violation of, or otherwise being contrary to, any
of the provisions of this Agreement.

        "Credit Agreement  Term Loan  Equipment Collateral"  means  all  of  the
Equipment described on Schedule 1.1B to the Credit Agreement as in effect on the
date hereof, and any and all additions, substitutions and replacements of any of
the foregoing,  wherever  located,  together with all  attachments,  components,
parts, equipment and accessories installed thereon or affixed thereto or used or
to be used in connection  therewith,  and all manuals,  drawings,  instructions,
warranties  and rights with respect  thereto;  wherever any of the  foregoing is
located.

        "Cup Making  Machine  Inventory"  means any cup making machine from time
to time  manufactured by Sweetheart (or prior to the merger of Sherwood with and
into the Borrower,  by Sherwood or any of its  Subsidiaries)  other than any cup
making  machine  owned by the Borrower  prior to the merger of Sherwood with and
into the Borrower.
<PAGE>
        "Disposition"  means the sale,  assignment,  transfer, lease, conveyance
or other  disposition  by  Sweetheart  of any  Sweetheart  Property,  including,
without  limitation,  an  involuntary  disposition  as a result of a casualty or
condemnation.

        "Documents"  means any "documents," as such term is  defined in  Section
9-105(1)(f)  of the UCC, now owned or  hereafter  acquired by  Sweetheart  or in
which Sweetheart now has or hereafter acquires any rights and wherever located.

        "Equipment"  means any "equipment," as such term is  defined in  Section
9-109(2) of the UCC, now owned or hereafter  acquired by  Sweetheart or in which
Sweetheart now has or hereafter  acquires any rights and wherever located,  and,
in any event,  shall include,  without  limitation,  all  machinery,  equipment,
Packaging  Equipment,  furnishings,  fixtures,  vehicles and computers and other
electronic  data-processing  and other office  equipment  now owned or hereafter
acquired by Sweetheart or in which Sweetheart now has or hereafter  acquires any
rights (in each instance not constituting  Inventory) and wherever located,  and
any and all additions,  substitutions  and replacements of any of the foregoing,
wherever located,  together with all attachments,  components,  parts, equipment
and accessories installed thereon or affixed thereto.

        "Excluded  Sale/Leaseback  Assets"  means,  collectively, (i) all assets
(including, without limitation,  Equipment and real property) acquired, created,
arising or adopted by  Sweetheart  after the closing of the sale by the Borrower
to the Trustee on the date hereof of certain  Equipment  pursuant to the Secured
Sale/Leaseback   Documents   (other  than  (A)  such  assets  which   constitute
identifiable  Proceeds  of  Trustee  Collateral,   (B)  Equipment   constituting
replacements or substitutions of Equipment in which the Trustee had an ownership
interest  immediately prior to such replacement or substitution,  so long as (x)
such replacement or substitution is effected  pursuant to and in accordance with
the Secured Sale/Leaseback Lease and (y) the replacement or substitute Equipment
does not have a fair market  value in excess of 110% of the fair market value of
the Equipment being replaced or substituted at the time of such replacement, (C)
any additions,  modifications and improvements attached to, incorporated into or
otherwise  made a part  of the  Leased  Equipment,  (D) any  Collateral  Account
Collateral and any Equipment or real property acquired with the Proceeds thereof
and (E) Accounts,  Inventory,  Intercompany Debt and assets described in clauses
(c),  (d) and (e) of  Exhibit A hereto  other  than  those  assets  constituting
identifiable  and segregated  Proceeds from the  Disposition of Equipment,  real
property,  Trademarks,  Patents, Licenses and other intellectual property), (ii)
all right,  title,  interest  and  benefits of  Sweetheart  in, to and under the
Sherwood Stock Purchase Documents, (iii) all right, title, interest and benefits
of  Sweetheart  in, to and  under any  assets  owned by  Sherwood  or any of its
subsidiaries  immediately  prior to  their  merger  with  and into the  Borrower
(whether  owned by any of such Persons or, after such mergers,  by the Borrower)
other than Accounts,  Inventory and Equipment and (iv) any and all  identifiable
Proceeds of the foregoing; provided that in no event shall business interruption
insurance constitute Excluded Sale/Leaseback Assets.

        "Future  Subsidiary  Guarantor"  means each of the  Borrower's hereafter
created or  acquired  Subsidiaries  which  becomes a  guarantor  of the  Secured
Sale/Leaseback  Obligations  or the  Credit  Agreement  Obligations,  and  their
respective successors.
<PAGE>
        "General Intangibles" means any "general intangibles," as  such term  is
defined  in  Section  9-106  of the UCC,  now  owned or  hereafter  acquired  by
Sweetheart or in which Sweetheart now has or hereafter acquires any rights, and,
in any event, shall include,  without limitation,  all right, title and interest
which  Sweetheart may now or hereafter have in or under any Contract,  causes of
action,  franchises,  tax refund claims,  customer lists,  Trademarks,  Patents,
rights in intellectual property,  Licenses, permits,  copyrights, trade secrets,
proprietary or confidential  information,  inventions and  discoveries  (whether
patented or patentable or not) and technical information,  procedures,  designs,
knowledge,  know-how,  software,  data  bases,  business  records  data,  skill,
expertise,  experience,  processes,  models,  drawings,  materials  and records,
goodwill, all claims under guaranties, security interests or other security held
by or granted to  Sweetheart  to secure  payment of the  Accounts  by an Account
Debtor obligated thereon, all rights of indemnification and all other intangible
property of any kind and nature.

        "Governmental  Agency" means  (a) any  international,  foreign, federal,
state, county or municipal government, or political subdivision thereof, (b) any
governmental  agency,  authority,  board,  bureau,  commission,   department  or
instrumentality,   (c)  any   court   or   administrative   tribunal,   (d)  any
non-governmental  agency or entity that is vested by a governmental  agency with
applicable  jurisdiction over a Person, or (e) any arbitration tribunal or other
non-governmental  authority to whose jurisdiction a Person has given its general
consent.

        "Guarantees" has the meaning set forth in the Recitals.

        "Guarantor" has the meaning set forth in the Recitals.

        "Hedging  Obligations"  means,  collectively,  at  any time, all  debts,
liabilities  and obligations of Sweetheart,  whether now or hereafter  existing,
incurred in  connection  with the  Interest  Rate  Protection  or Other  Hedging
Agreements (as such term is defined in the Credit Agreement  Security  Documents
as in effect on the date hereof) entered into with any of the Secured  Creditors
(as such term is defined in the Credit Agreement Security Documents as in effect
on the date hereof).

        "Initial   Trustee"  has  the  meaning  set  forth  in  the introductory
paragraph.

        "Instruments" means any "instrument," as such term is defined in Section
9-105(1)(i)  of the UCC, now owned or  hereafter  acquired by  Sweetheart  or in
which Sweetheart now has or hereafter  acquires any rights and wherever located,
other than  instruments  that  constitute,  or are a part of a group of writings
that constitute, Chattel Paper.

        "Intercompany  Debt"  means any  indebtedness  payable  to the Borrower,
the Guarantor or any Future  Subsidiary  Guarantor by any of the Guarantor,  the
Borrower,  any Future Subsidiary Guarantor or any other Person which is a direct
or  indirect  Subsidiary  of any of the  foregoing,  or any  Person  which is an
officer,  director or  employee of the  Borrower,  the  Guarantor  or any Future
Subsidiary Guarantor.
<PAGE>
        "Inventory"  means any "inventory," as such term is defined in  Section
9-109(4) of the UCC, now owned or hereafter  acquired by  Sweetheart or in which
Sweetheart now has or hereafter  acquires any rights and wherever located,  and,
in any event, shall include,  without  limitation,  all inventory,  merchandise,
goods,   repossessed  or  returned   merchandise  and  other  personal  property
(including,  without  limitation,  Cup Making Machine  Inventory),  now owned or
hereafter  acquired by  Sweetheart or in which  Sweetheart  now has or hereafter
acquires  any rights and wherever  located,  which are held for sale or lease or
are  furnished  or are to be  furnished  under a  contract  of  service or which
constitute raw materials, work in process or materials used or consumed or to be
used  or  consumed  in  Sweetheart's  business,  or the  processing,  packaging,
delivery  or  shipping  of the  same,  and all  finished  goods;  provided  that
Packaging Equipment shall not constitute Inventory.

        "Law"  means, when  used in  connection with  any  Person, collectively,
all international,  foreign, federal, state and local statutes, treaties, rules,
regulations,  standards, guidelines, ordinances, codes, orders and judgments (or
any official  interpretation of any of the foregoing) issued by any Governmental
Agency applicable to that Person.

        "Leased  Equipment"  means (x) the  Equipment  that satisfies all of the
following:  (i) it has been  sold by the  Borrower  to the  Trustee  on the date
hereof pursuant to the Secured Sale/Leaseback  Documents,  (ii) it is identified
on Schedule 1 to the Warranty Bill of Sale, dated as of the date hereof,  by the
Borrower to the Trustee and (iii) it is not repurchased or otherwise  reacquired
by the Borrower after the sale thereof to the Trustee  referred to in clause (i)
above and (y) all  substitutions  and  replacements  of  Equipment  described in
clause (x) above (so long as the  substitution  or  replacement  does not have a
fair market  value in excess of 110% of the fair market  value of the  Equipment
being  substituted or replaced at the time of such  substitution  or replacement
and such  substitution or replacement is effected  pursuant to and in accordance
with the Secured  Sale/Leaseback Lease) and all improvements,  modifications and
additions  attached to,  incorporated into or otherwise made a part of Equipment
described in clause (x) above  effected  pursuant to and in accordance  with the
Secured Sale/Leaseback Lease, in each instance under this clause (y), so long as
(1) such substitution,  replacement,  improvement,  modification or addition and
the item to which it is or was attached,  incorporated  into or otherwise made a
part of is not Credit  Agreement  Term Loan  Equipment  Collateral  and (2) such
substitution,   replacement,   improvement,  modification  or  addition  is  not
repurchased or otherwise acquired by the Borrower.

        "Lenders" means,  collectively,  the  holders  from time to  time of the
Credit Agreement Obligations.

        "Lenders'  Collateral"  means,   collectively,  any  and  all Sweetheart
Property now or hereafter subject to a Lenders' Lien,  together with any and all
Proceeds and products  thereof;  provided that Lenders'  Collateral  shall in no
event include any Leased Equipment.

        "Lenders'  Lien" means a Lien now or hereafter  granted  to, or obtained
by, the  Lenders or the Credit  Agent for the benefit of the Lenders as security
for the payment and performance of any Credit  Agreement  Obligations;  provided
that no such Lien shall encumber any Leased Equipment.
<PAGE>
        "License" means any Patent License, Trademark License or  other  license
under which  Sweetheart  is the licensor or licensee and in the case of Licenses
under which Sweetheart is the licensor, all rights to collect royalties
thereunder.

        "Lien" means any mortgage, deed of trust, deed to  secure  debt, pledge,
hypothecation,  assignment for security, security interest, encumbrance, lien or
charge of any kind, whether voluntarily incurred or arising by operation of Law,
by statute,  by contract,  or otherwise,  affecting any Property,  including any
agreement to grant any of the  foregoing,  any  conditional  sale or other title
retention agreement, any lease in the nature of a security interest,  and/or the
filing  of  or  agreement  to  give  any  financing   statement  (other  than  a
precautionary  financing  statement  with  respect to a lease that is not in the
nature  of a  security  interest)  under  the  UCC  or  comparable  Law  of  any
jurisdiction  with  respect  to any  Property  and  including,  in any event and
without limitation, any interest (ownership,  security interest or otherwise) in
any Equipment now or hereafter  leased by the Borrower from the Trustee pursuant
to the Secured Sale/Leaseback Documents.

        "OECD" means the Organization for Economic Cooperation and Development.

        "Officers"  means  the  Chairman of the Board, the  President, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, Controller, Secretary
or any Vice President of the Borrower.

        "Officers'  Certificate"  means a  certificate  signed  by two Officers,
one of whom must be the principal executive officer, principal financial officer
or principal accounting officer of the Borrower.

        "Owner Participants" means General Electric Capital Corporation and such
other  Persons  which  shall from time to time be  participants  under the trust
established pursuant to the Secured Sale/Leaseback Trust Agreement.

        "Packaging  Equipment"  means any  equipment owned by  Sweetheart on the
date hereof which is from time to time leased by Sweetheart to others;  provided
that Packaging Equipment shall not include any Excluded Sale/Leaseback Assets or
any Cup Making Machine Inventory.

        "Patent" or "Patents"  means  one or all of the  following  now owned or
hereafter  acquired by  Sweetheart or in which  Sweetheart  now has or hereafter
acquires  any  rights,  including,  without  limitation,  pursuant to any Patent
License,  and wherever  located:  (a) all letters patent of the United States or
any other country and all  applications  for letters patent of the United States
or  any  other  country,  (b)  all  reissues,   reexaminations,   continuations,
continuations-in-part,  divisions,  and extensions of any of the foregoing,  and
(c) all  inventions  claimed and  disclosed in the Patents and any and all trade
secrets and know-how related thereto.

        "Patent License" means any written agreement granting any right to make,
use, sell and/or  practice any invention or discovery that is the subject matter
of a Patent now owned or hereafter acquired by Sweetheart or in which Sweetheart
now has or hereafter acquires any rights.
<PAGE>
        "Person"  means any entity, whether an individual, trustee, corporation,
general partnership, limited partnership, limited liability company, joint stock
company,  trust,  estate,  unincorporated  organization,  business  association,
tribe, firm, joint venture, Governmental Agency, or otherwise.

        "Proceeds"  means  "Proceeds,"  as  such  term  is  defined  in  Section
9-306(1) of the UCC and, in any event, shall include,  without  limitation,  (a)
any and all Proceeds of any insurance,  indemnity,  warranty or guaranty payable
to Sweetheart from time to time with respect to any of the  Collateral,  (b) any
and all payments (in any form  whatsoever) made or due and payable to Sweetheart
from  time  to  time  in   connection   with  any   requisition,   confiscation,
condemnation,  seizure or forfeiture of all or any part of the Collateral by any
Governmental   Agency  (or  any  Person  acting  under  color  or   governmental
authority),  (c) any claim of  Sweetheart  against  third  parties (i) for past,
present or future infringement of any Patent or Patent License or (ii) for past,
present or future infringement or dilution of any Trademark or Trademark License
or  for  injury  to  the  goodwill  associated  with  any  Trademark,  Trademark
registration or Trademark licensed under any Trademark License,  and (d) any and
all other amounts from time to time paid or payable under or in connection  with
any of the Collateral.

        "Property"  means  any  interest  in  any kind  of  property  or  asset,
whether real, personal or mixed, tangible or intangible.

        "Pro Rata  Share"  means,  with  respect to any Lender or the Trustee at
any time, a fraction equal to the following  amounts owing to such Person (or in
the case of  unutilized  commitments,  the  amount of such  Person's  unutilized
commitment)  divided by the sum of the following amounts,  in each case, at such
time:  (i) the Stipulated  Loss Value of all Leased  Equipment at such time plus
all  Overdue  Rent (as  defined in the Secured  Sale/Leaseback  Documents  as in
effect on the date hereof),  if any, and (ii) the principal balance of all loans
owing under the Credit Agreement,  the aggregate amount of unpaid  reimbursement
obligations  owing with  respect to letters of credit or credit  support  issued
pursuant  to  the  Credit  Agreement,   the  aggregate  undrawn  amount  of  all
outstanding  letters of credit or credit support  issued  pursuant to the Credit
Agreement,  the aggregate amount of all Hedging  Obligations owing to any Lender
and, so long as the Lenders under the Credit Agreement,  whether  immediately or
after the giving of notice or passage of time, or both, would not have the right
to terminate their respective commitments  thereunder,  the unutilized amount of
such  commitments.  For  purposes  of  determining  whether at any such time the
Lenders  have the right (or would  have the right  after the giving of notice or
passage of time or both) to terminate  their  respective  commitments  under the
Credit  Agreement,  an  Officers'  Certificate  delivered by the Borrower to the
Trustee  and the  Collateral  Agent at such time  certifying  that no such right
exists  (or would  exist  after the giving of notice or passage of time or both)
together with a borrowing  under the Credit  Agreement  within two Business Days
after the delivery of such certificate shall constitute conclusive evidence, for
purposes of this Agreement only, that no such right exists (or would exist after
the giving of notice or passage of time or both) at such time.  For  purposes of
determining the amount in clause (i) of the first sentence of this definition at
any time,  the  Trustee  shall,  at the request of the  Collateral  Agent or the
Credit Agent,  deliver or cause to be delivered to the Collateral  Agent and the
Credit Agent a  certificate  by the Trustee or an Owner  Participant  showing in
reasonable detail the calculation of such amount.  For
<PAGE>
purposes of determining  the amount in clause (ii) of the first sentence of this
definition at any time, the Credit Agent shall, at the request of the Collateral
Agent or the Trustee,  deliver or cause to be delivered to the Collateral  Agent
and the  Trustee a  certificate  by the Credit  Agent or any  Lender  showing in
reasonable detail the calculation of such amount.  The Collateral Agent may, but
shall not be required to, rely on such  certificate  for purposes of determining
the Pro Rata Share at such time. For purposes of calculating  the Pro Rata Share
of a Person at any time,  the amount in clause (i) of the first sentence of this
definition shall be deemed to be owing to the Trustee.

        "Refinancing Indebtedness" means any indebtedness issued in exchange for
or the  proceeds  of  which  are  used to  extend,  refinance,  renew,  replace,
substitute or refund the Credit Agreement  Obligations in a transaction in which
the same are repaid or satisfied in full.

        "Remedial  Action"  means any claim,  proceeding  or action to foreclose
upon,  take  possession  or control of,  sell,  lease or  otherwise  dispose of,
terminate the lease of, or in any other manner realize, take steps to realize or
seek to realize upon,  the whole or any part of any  Sweetheart  Property or any
equipment subject to the Secured  Sale/Leaseback  Lease, whether pursuant to the
UCC, by foreclosure,  by setoff, by self-help  repossession,  by notification to
account debtors,  by deed in lieu of foreclosure,  by exercise of power of sale,
by judicial  action or  otherwise,  or the exercise of any other  remedies  with
respect to any  Sweetheart  Property  or any  equipment  subject to the  Secured
Sale/Leaseback Lease available under any of the Security Documents,  the Secured
Sale/Leaseback Lease or under applicable Law.

        "Required  Parties"  means,  at any time,  Lenders  and/or  the  Trustee
holding in the  aggregate  greater  than fifty  percent  (50%) of the sum of the
following  amounts at such  time:  (i) the  Stipulated  Loss Value of all Leased
Equipment  at such  time  plus all  Overdue  Rent  (as  defined  in the  Secured
Sale/Leaseback  Documents as in effect on the date hereof), if any, and (ii) the
principal balance of all loans owing under the Credit  Agreement,  the aggregate
amount of unpaid  reimbursement  obligations  owing  with  respect to letters of
credit or credit support issued pursuant to the Credit Agreement,  the aggregate
undrawn  amount of all  outstanding  letters of credit or credit  support issued
pursuant  to  the  Credit  Agreement,   the  aggregate  amount  of  all  Hedging
Obligations  owing to any Lender and,  so long as the  Lenders  under the Credit
Agreement, whether immediately or after the giving of notice or passage of time,
or both,  would not have the right to  terminate  their  respective  commitments
thereunder,  the  unutilized  amount  of  such  commitments.   For  purposes  of
determining  whether at any such time the Lenders  have the right (or would have
the right  after the giving of notice or  passage of time or both) to  terminate
their  respective   commitments  under  the  Credit   Agreement,   an  Officers'
Certificate delivered by the Borrower to the Trustee and the Collateral Agent at
such time  certifying that no such right exists (or would exist after the giving
of notice or passage of time or both) together with a borrowing under the Credit
Agreement within two Business Days after the delivery of such certificate  shall
constitute  conclusive  evidence,  for purposes of this Agreement  only, that no
such right  exists (or would exist after the giving of notice or passage of time
or both) at such time. For purposes of  determining  the amount in clause (i) of
the first sentence of this  definition at any time,  the Trustee  shall,  at the
request  of the  Collateral  Agent or the Credit  Agent,  deliver or cause to be
delivered  to the  Collateral  Agent and the Credit Agent a  certificate  by the
Trustee or an Owner
<PAGE>
Participant  showing in reasonable  detail the  calculation of such amount.  For
purposes of determining  the amount in clause (ii) of the first sentence of this
definition at any time, the Credit Agent shall, at the request of the Collateral
Agent or the Trustee,  deliver or cause to be delivered to the Collateral  Agent
and the  Trustee a  certificate  by the Credit  Agent or any  Lender  showing in
reasonable detail the calculation of such amount.  The Collateral Agent may, but
shall not be required to, rely on such  certificate  for purposes of determining
the  Required  Parties at such time.  For purposes of  determining  the Required
Parties at any time,  the  Trustee  shall be deemed to be holding  the amount in
clause (i) of the first sentence of this definition.

        "Secured Sale/Leaseback Collateral" has the meaning set forth in Section
3.1(b).

        "Secured   Sale/Leaseback   Documents"  means the Secured Sale/Leaseback
Lease, the Secured  Sale/Leaseback Trust Agreement,  the Secured  Sale/Leaseback
Participation  Agreement and the other  documents  from time to time executed in
connection  with  any  of the  foregoing  or in  furtherance  thereof,  as  such
documents may be amended, amended and restated, renewed, extended, restructured,
supplemented  or otherwise  modified from time to time without  resulting in the
violation  of, or otherwise  being  contrary to, any of the  provisions  of this
Agreement.

        "Secured  Sale/Leaseback  Lease" means the  Lease  Agreement,dated as of
June 1, 2000,  between the Trustee and the  Borrower,  together with any and all
lease  supplements  thereto  entered into from time to time,  as the same may be
amended, amended and restated, renewed, extended, restructured,  supplemented or
otherwise  modified from time to time without  resulting in the violation of, or
otherwise being contrary to, any of the provisions of this Agreement.

        "Secured Sale/Leaseback Lien" means a Lien now or hereafter granted  to,
or obtained by, the Trustee,  as security for the payment and performance of any
Secured  Sale/Leaseback  Obligations;  provided that no such Lien shall encumber
any Excluded Sale/Leaseback Assets.

        "Secured Sale/Leaseback Obligations" means,collectively, all obligations
of Sweetheart,  whether now or hereafter existing, arising pursuant to the terms
of  the  Secured  Sale/Leaseback  Lease,  the  Secured  Sale/Leaseback  Security
Documents and any other Secured Sale/Leaseback Document.

        "Secured Sale/Leaseback Participation Agreement" means the Participation
Agreement, dated as of June 1, 2000, among the Borrower, the Owner Participants,
the Trustee and the Guarantor, as the same may be amended, amended and restated,
renewed, extended, restructured, supplemented or otherwise modified from time to
time without  resulting in the violation of, or otherwise being contrary to, any
of the provisions of this Agreement.

        "Secured Sale/Leaseback Security Documents" means, collectively, any and
all documents executed in connection with the Secured Sale/Leaseback Lease or in
furtherance  thereof,  pursuant to which Sweetheart grants to the Trustee a Lien
on the Trustee Collateral, as the same may
<PAGE>
be amended,  modified or supplemented from time to time without resulting in the
violation  of, or otherwise  being  contrary to, any of the  provisions  of this
Agreement.

        "Secured  Sale/Leaseback Site Lease" means any Site Lease (as defined in
the Secured Sale/Leaseback  Participation  Agreement as in effect on the date of
execution thereof).

        "Secured Sale/Leaseback Site Sublease" means any Site Sublease (as
defined in the Secured  Sale/Leaseback  Participation  Agreement as in effect on
the date of execution thereof).

        "Secured  Sale/Leaseback  Trust  Agreement"  means the  Trust Agreement,
dated as of June 1, 2000, between the Owner Participants and the Trustee, as the
same may be amended,  amended and  restated,  renewed,  extended,  restructured,
supplemented  or otherwise  modified from time to time without  resulting in the
violation  of, or otherwise  being  contrary to, any of the  provisions  of this
Agreement.

        "Security Documents" means, collectively, the Credit  Agreement Security
Documents,   the  Secured  Sale/Leaseback  Security  Documents  and  the  Shared
Collateral Security Documents.

        "Shared Collateral" has the meaning set forth in Section 3.1(c).

        "Shared  Collateral  Account"  means  the  account  established  by  the
Borrower for the benefit of the  Collateral  Agent pursuant to the terms of this
Agreement and designated as the "Sweetheart Cup Shared Collateral Account".

        "Shared  Collateral Security  Documents" means the documents,instruments
and  agreements  granting the Liens in the Shared  Collateral to the  Collateral
Agent and all other documents, instruments, certificates and agreements executed
in connection  therewith and, to the extent  permitted  pursuant to the terms of
this Agreement,  as the same may be amended,  modified or supplemented from time
to time.

        "Sherwood" means Sherwood Industries, Inc.

        "Sherwood Stock Purchase  Agreement" means the Stock Purchase Agreement,
dated as of December 20, 1999,  among the Borrower,  as  purchaser,  and Paul R.
Corazzo,  William Corazzo, Donna Corazzo Reed and Patrick W. Caccavale Trust, as
sellers, as amended from time to time.

        "Sherwood  Stock Purchase  Documents"  means, collectively, the Sherwood
Stock Purchase Agreement,  the related escrow agreement and all other documents,
agreements and instruments executed and/or delivered in connection therewith.

        "Significant Subsidiary" has the meaning given to such term in Rule 1-02
of  Regulation  S-X of the United  States  Securities  and Exchange  Commission,
provided  that all  references to "10 percent" in such Rule shall be "5 percent"
for purposes of this definition.
<PAGE>
        "Spare  Parts" means all  spare  parts  owned by  Sweetheart  which  are
reflected on the Guarantor's consolidated balance sheet as an asset.

        "Stipulated Loss Value" means,on any date of determination, with respect
to the Leased  Equipment,  the Stipulated  Loss Value (as defined in the Secured
Sale/Leaseback  Participation  Agreement  as in effect on the date of  execution
thereof and, subject to the provisions of Section 4.2(b),  as adjusted from time
to time  pursuant  to the  terms  of the  Secured  Sale/Leaseback  Participation
Agreement  or  increased  to  reflect   additional   investments  by  the  Owner
Participants  to fund  modifications,  alterations or improvements to the Leased
Equipment)  on the first  Stipulated  Loss Value Date (as defined in the Secured
Sale/Leaseback  Participation  Agreement  as in effect on the date of  execution
thereof)  occurring on or next  preceding  such date as determined in accordance
with the applicable lease supplement to the Secured Sale/Leaseback Lease.

        "Stock  Collateral"  means  all  of  the  capital  stock or other equity
interests  of any Person  owned by the  Borrower,  the  Guarantor  or any Future
Subsidiary Guarantor,  including,  without limitation,  the capital stock of the
Borrower  owned by the Guarantor  and the capital  stock of Lily Canada  Holding
Corporation.

        "Subsidiary"  means any  Person of  which at  least a  majority  of  the
capital stock or other  ownership  interest having ordinary voting power for the
election of  directors  or other  governing  body of said Person is owned by the
Guarantor, the Borrower or any Future Subsidiary Guarantor,  directly or through
one or more Subsidiaries.

        "Sweetheart" means, collectively,  the Borrower, the  Guarantor and each
Future Subsidiary Guarantor, and their respective successors.

        "Sweetheart   Property"   means  any  and  all   Property of Sweetheart,
or rights,  title or interests of  Sweetheart  in Property,  howsoever  arising,
acquired or obtained,  whether now or hereafter  existing,  whether  tangible or
intangible, whether real or personal, and wherever located.

        "Sweetheart  Real  Property"  means  all  Sweetheart Property consisting
of real  property or interests in real  property,  but  excluding  any leasehold
interest  in real  property  acquired  after  the date of this  Agreement  which
leasehold  interest,  in the good faith  determination of Sweetheart's  Board of
Directors (a) does not have a fair market value at any time in excess of $50,000
and (b) which relates to real  property the  possession of which is not material
to the business or operations of the Borrower,  the Guarantor or any Significant
Subsidiary.

        "Trademark" or "Trademarks"  means one or all of the following now owned
or hereafter  acquired by Sweetheart or in which Sweetheart now has or hereafter
acquires any rights (including,  without  limitation,  pursuant to any Trademark
License):  (a) all trademarks,  trade names,  corporate  names,  business names,
trade styles, service marks, logos, other source or business identifiers, prints
and labels on which any of the foregoing  have  appeared or appear,  designs and
general  intangibles  of like  nature,  now  existing  or  hereafter  adopted or
acquired, all registrations and
<PAGE>
recordings  thereof,  and all applications in connection  therewith,  including,
without  limitation,  registrations,  recordings and  applications in the United
States  Patent and  Trademark  Office or in any similar  office or agency of any
State of the United  States or any other  country or any  political  subdivision
thereof,  (b) all  extensions  or  renewals  thereof  and (c)  the  goodwill  of
Sweetheart's  business and other General Intangibles  connected with the use of,
and symbolized by, any of the foregoing.

        "Trademark  License" means any written  agreement  granting any right to
use any Trademark or Trademark  registration now owned or hereafter  acquired by
Sweetheart or in which Sweetheart now has or hereafter acquires any rights.

        "Trustee"  means the Initial Trustee, any successor owner trustee/lessor
to the Initial Trustee under the Secured Sale/Leaseback  Documents and any other
agent,  trustee  or  representative  of the Owner  Participants  serving in such
capacity  from  time  to  time  and,  if  there  is no such  agent,  trustee  or
representative, "Trustee" means, collectively, the Owner Participants.

        "Trustee  Collateral"  means  any  and all  Sweetheart  Property  now or
hereafter subject to a Secured  Sale/Leaseback  Lien,  together with any and all
Proceeds and products  thereof;  provided  that Trustee  Collateral  shall in no
event include any Excluded Sale/Leaseback Assets.

        "UCC"  means the  Uniform Commercial Code as in effect from time to time
in the State of New York,  or, if  another  jurisdiction  is  specified  in this
Agreement,  the Uniform  Commercial  Code as in effect from time to time in such
jurisdiction.

        "United States Government  Securities"  means securities issued directly
and fully  guaranteed or insured by the United States of America or any agent or
instrumentality  thereof  (provided that the full faith and credit of the United
States of America is pledged in support thereof).

     2.  Consents.  Subject  to the  terms  and  conditions  of  this  Agreement
(including, without limitation, Section 4.2):

     (a) The Credit Agent, for itself and on behalf of the Lenders,  consents to
(i) the execution and delivery of the Secured  Sale/Leaseback Lease, the Secured
Sale/Leaseback   Security   Documents  and  any  other  Secured   Sale/Leaseback
Documents;  (ii) the incurrence of any Secured Sale/Leaseback  Obligations;  and
(iii) the  granting  of any  Secured  Sale/Leaseback  Liens;  provided  that the
Secured  Sale/Leaseback  Liens in  Trustee  Collateral,  whether  granted by the
Borrower, the Guarantor or otherwise,  shall not at any time secure greater than
$165,000,000 in aggregate amount of Secured Sale/Leaseback Obligations; and

     (b) The  Trustee,  for  itself  and on behalf  of the  Owner  Participants,
consents  to (i) the  execution  and  delivery of any Credit  Agreement  and any
Credit Agreement Security Document;  (ii) the incurrence of any Credit Agreement
Obligations;  and (iii) the granting of any Lenders'  Liens;  provided  that the
Lenders' Liens in Credit  Agreement Term Loan Equipment  Collateral shall not at
any time secure greater than $25,000,000 in aggregate principal amount of Credit
Agreement Obligations.
<PAGE>
     3. Priority of Liens; Remedial Actions; Other Agreements.

     3.1 Priority of Liens.  The Lenders'  Liens and the Secured  Sale/Leaseback
Liens  shall,  as  between  the  Lenders  and the  Trustee,  have the  following
priorities:

     (a) The  Lenders'  Liens in all that  Sweetheart  Property  set  forth  and
described on Exhibit A hereto (the "Credit Agreement Collateral") shall be first
priority Liens in such Property, superior to any Secured Sale/Leaseback Liens in
such Property,  and the Secured  Sale/Leaseback  Liens in such Property shall be
subordinate to the Lenders' Liens in such Property.

     (b) The Secured  Sale/Leaseback  Liens in all that Sweetheart  Property set
forth  and   described  on  Exhibit  B  hereto  (the   "Secured   Sale/Leaseback
Collateral")  shall be first priority  Liens in such  Property,  superior to any
Lenders' Liens in such  Property,  and the Lenders' Liens in such Property shall
be subordinate to the Secured Sale/Leaseback Liens in such Property.

     (c) The Lenders' Liens, the Secured Sale/Leaseback Liens and the Collateral
Agent's Liens in all that Sweetheart Property set forth and described on Exhibit
C hereto (the "Shared  Collateral")  shall be pari passu in priority and subject
to the sharing arrangements contained herein.

The foregoing provisions shall be effective at all times during the term of this
Agreement,  notwithstanding:  (i) the initiation of any bankruptcy,  moratorium,
reorganization or other insolvency  proceeding with respect to Sweetheart;  (ii)
the  priorities  which  would  otherwise  result  from the  order  of  creation,
attachment or perfection of any such Lien; (iii) the taking of possession of any
of the Sweetheart  Property by the Credit Agent, the Trustee,  any Lender or any
Owner Participant;  (iv) the filing of any financing  statement or the recording
of any mortgage or other  instrument in any recording  office;  (v) the order in
which any of the Credit  Agreement  Obligations  or the  Secured  Sale/Leaseback
Obligations is created;  (vi) whether any such Lien is now perfected,  hereafter
ceases to be perfected,  is avoidable by any bankruptcy  trustee or otherwise is
set aside,  invalidated  or lapses;  or (vii) any other matter  whatsoever;  and
shall  continue in full force and effect unless and until this  Agreement  shall
have terminated in accordance with Section 6 hereof.  The Trustee shall not have
a Lien in any  Excluded  Sale/Leaseback  Assets  and,  to the extent any Secured
Sale/Leaseback  Document  provides  for a Lien in such  Property,  such  Lien is
hereby released and discharged.  The Trustee further agrees, on behalf of itself
and the Owner  Participants,  that neither the Trustee nor any Owner Participant
shall  request or accept from  Sweetheart a Lien in any Excluded  Sale/Leaseback
Assets. Effective upon the latest of (i) the amendment and restatement as of the
date  hereof  of the  Credit  Agreement,  (ii) the sale by the  Borrower  to the
Trustee on the date hereof of the Leased  Equipment  described  in clause (x) of
such defined term pursuant to the Secured Sale/Leaseback Documents and (iii) the
release and  discharge of the Liens in favor of United  States Trust  Company of
New York,  as  trustee,  securing  the payment of the Senior  Secured  Notes (as
defined in the Credit  Agreement as in effect on the date hereof) as a result of
the  redemption  of all such notes,  the Lien of the Credit  Agent in the Leased
Equipment described in clause
<PAGE>
(x) of  such  defined  term is  released  and  discharged.  Effective  upon  any
substitution,  replacement,  improvement,  modification or addition of or to any
Leased  Equipment  described in clause (x) of such defined term becoming  Leased
Equipment in accordance  with clause (y) of such defined  term,  the Lien of the
Credit Agent in such  substitution,  replacement,  improvement,  modification or
addition shall be released and  discharged.  It is understood and agreed that if
any Leased Equipment is repurchased or otherwise acquired by the Borrower,  such
Leased  Equipment  shall be subject to the  Lenders'  Lien and shall  constitute
Lenders'  Collateral.  Subject to Section 3.6, the Trustee,  on behalf of itself
and the Owner Participants,  hereby agrees that the Secured Sale/Leaseback Liens
in  Trustee  Collateral,  whether  granted by the  Borrower,  the  Guarantor  or
otherwise,  shall,  automatically  and without further  action,  be released and
discharged  upon the  earlier  of (i) the  indefeasible  payment  in full of all
Secured Sale/Leaseback Obligations and the termination of the lease arrangements
under the Secured  Sale/Leaseback  Lease and (ii) the application to the payment
of Secured  Sale/Leaseback  Obligations of Proceeds of Trustee  Collateral in an
aggregate amount of  $165,000,000.  Subject to Section 3.6, the Credit Agent, on
behalf of itself and the Lenders,  hereby agrees that the Lenders'  Liens in the
Credit Agreement Term Loan Equipment Collateral shall, automatically and without
further action, be released and discharged upon the earlier of (i) the latest to
occur of the indefeasible  payment in full of all Credit Agreement  Obligations,
the  termination of all letters of credit and credit support issued  pursuant to
the Credit  Agreement,  the  termination  of all  obligations  to extend further
advances pursuant to the Credit Agreement,  the indefeasible  payment in full of
all Hedging  Obligations and the termination of the related  agreements and (ii)
the application to the payment of principal on the Credit Agreement  Obligations
of Proceeds of Credit  Agreement Term Loan Equipment  Collateral in an aggregate
amount of $25,000,000.

     3.2  Remedial  Actions.  Unless  and until this  Agreement  shall have been
terminated in accordance  with Section 6, the Credit Agent and the Trustee shall
have the right, as between themselves,  to take or fail to take Remedial Actions
with respect to any Collateral as follows:

     (a) The Credit  Agent  shall have the sole and  exclusive  right to take or
fail to take any Remedial Action with respect to the Credit Agreement Collateral
as provided in the Credit Agreement  Security  Documents or under applicable Law
in any manner  deemed  appropriate  by the Credit Agent or the Lenders in its or
their sole discretion (without regard to any Secured Sale/Leaseback Lien in such
Property),  and neither the  Trustee  nor any Owner  Participant  shall take any
Remedial  Action with  respect to the Credit  Agreement  Collateral  without the
prior written consent of the Credit Agent;

     (b) The Trustee shall have the sole and exclusive  right to take or fail to
take any Remedial Action with respect to the Secured  Sale/Leaseback  Collateral
as provided in the Secured Sale/Leaseback Security Documents or under applicable
Law in any manner deemed appropriate by the Trustee or the Owner Participants in
its or their  sole  discretion  (without  regard  to any  Lenders'  Lien in such
Property),  and neither the Credit  Agent nor any Lender shall take any Remedial
Action with respect to the Secured  Sale/Leaseback  Collateral without the prior
written consent of the Trustee;

     (c) The Required Parties shall have the sole and exclusive right to take or
fail to take any  Remedial  Action  with  respect  to the Shared  Collateral  as
provided herein, in the Shared Collateral Security Documents or under applicable
Law in any manner deemed appropriate by the
<PAGE>
Required  Parties in their sole  discretion,  and neither the Credit Agent,  any
Lender,  the Trustee nor any Owner  Participant  shall take any Remedial  Action
with respect to the Shared  Collateral  without the prior written consent of the
Required Parties (or the Credit Agent and/or the Trustee, as the case may be, on
behalf of the Required Parties); and

     (d) The  Credit  Agent  shall have the sole and  exclusive  right to adjust
settlement  of, and collect the Proceeds of, any and all insurance  insuring the
Credit  Agreement  Collateral  and the Trustee shall have the sole and exclusive
right to  adjust  settlement  of,  and  collect  the  Proceeds  of,  any and all
insurance insuring the Secured Sale/Leaseback  Collateral.  The Collateral Agent
at the direction of the Required Parties shall have the sole and exclusive right
to adjust settlement of any and all insurance insuring or otherwise constituting
the Shared Collateral.  Any such Proceeds received shall be promptly distributed
in accordance with Section 3.3.

Notwithstanding  the  foregoing,  nothing  contained  in this  Section 3.2 shall
prohibit the Credit Agent, the Lenders,  the Trustee,  the Owner Participants or
the  Collateral  Agent  from  filing a proof  of  claim  in any  case  involving
Sweetheart, as debtor, under Title 11 of the United States Code, as amended, nor
from intervening or participating in any other judicial proceeding to the extent
necessary to establish  or preserve its  interests,  subject in each case to the
provisions of this Agreement.

     3.3 Priority on Distribution of Proceeds of Collateral. In the event of:

     (a) any  distribution  of any  Sweetheart  Property  upon  the  bankruptcy,
arrangement,  receivership, assignment for the benefit of creditors or any other
action  or  proceeding   involving  the  readjustment  of  the  obligations  and
indebtedness of Sweetheart, or the application of any Sweetheart Property to the
payment thereof;

     (b) any  distribution  of the Sweetheart  Property upon the  liquidation or
dissolution  of  Sweetheart,  or the  winding  up of the assets or  business  of
Sweetheart;

     (c) any realization by any of the Lenders or the Credit Agent,  the Trustee
or  the  Collateral  Agent  with  respect  to the  Lenders'  Lien,  the  Secured
Sale/Leaseback  Lien,  or the  Collateral  Agent's Lien,  respectively,  whether
through a Remedial Action or otherwise; or

     (d) any Disposition of any Sweetheart Property, to the extent that any part
of the  proceeds of such  Disposition  are  required to be applied to any of the
Credit Agreement Obligations or the Secured  Sale/Leaseback  Obligations or held
by the Credit Agent,  the Trustee or the Collateral Agent in accordance with the
provisions of the Credit Agreement,  the Secured  Sale/Leaseback Lease or any of
the Security Documents, or the provisions of this Agreement;

then, in any such event, as between the Credit Agent and the Lenders, on the one
hand,  and the  Trustee,  on the other  hand,  (i) all of the  Credit  Agreement
Collateral  and any Proceeds  thereof so  distributed,  applied or realized upon
shall  be  distributed  or  paid  to (or  retained  by)  the  Credit  Agent  for
application  to the Credit  Agreement  Obligations to the extent of the Lenders'
Lien therein, and, after
<PAGE>
the payment in full of all Credit Agreement  Obligations then due and owing, the
remaining  amount of such  Proceeds  (to the  extent  such  Proceeds  constitute
Trustee Collateral) shall be distributed or paid to (or retained by) the Trustee
for  application  to the  Secured  Sale/Leaseback  Obligations,  (ii) all of the
Secured  Sale/Leaseback  Collateral  and any  Proceeds  thereof so  distributed,
applied or realized  upon shall be  distributed  or paid to (or retained by) the
Trustee for application to the Secured Sale/Leaseback  Obligations to the extent
of the Secured Sale/Leaseback Lien therein and, after the payment in full of all
Secured  Sale/Leaseback  Obligations then due and owing, the remaining amount of
such Proceeds  shall be distributed or paid to (or retained by) the Credit Agent
or any Lender for application to the Credit Agreement Obligations, and (iii) all
of the Shared  Collateral and any Proceeds  thereof so  distributed,  applied or
realized upon shall be distributed,  first,  to the Collateral  Agent to pay the
Collateral Agent's fees, expenses and indemnities provided for in this Agreement
and in the Shared  Collateral  Security  Documents,  in each case, to the extent
related to its  duties,  obligations  and  liabilities  as  Collateral  Agent or
otherwise  related to the Shared Collateral and, second, to the Credit Agent and
the Trustee for application to the Credit Agreement  Obligations and the Secured
Sale/Leaseback Obligations,  respectively. Any amounts described in clause (iii)
above  available to be  distributed to the Credit Agent and the Trustee shall be
distributed  to each  based  upon the Pro Rata  Shares  of the  Lenders  and the
Trustee at the time of the  commencement  of any Remedial  Action giving rise to
such proceeds until the respective Credit Agreement  Obligations and the Secured
Sale/Leaseback  Obligations  are paid in full, or if not arising from a Remedial
Action the Pro Rata  Shares of the  Lenders  and the Trustee at the time of such
distribution  until the respective Credit Agreement  Obligations and the Secured
Sale/Leaseback  Obligations  are paid in full.  Any  amounts  paid to the Credit
Agent and the Trustee  shall be allocated to the Lenders and the Trustee (and by
the Trustee to the Owner  Participants),  respectively,  in accordance  with the
terms  of  the  Credit  Agreement  and  the  Secured  Sale/Leaseback  Documents,
respectively.

     3.4 Agency for Perfection;  Parties to Hold Proceeds in Trust.  The Trustee
and the Credit  Agent  hereby  appoint  each other as agent for the  purposes of
perfecting their respective Liens in the Collateral described hereunder.  In the
event that:

     (a) the Credit Agent, any Lender or the Collateral Agent obtains possession
of any of the Secured  Sale/Leaseback  Collateral  or receives any Proceeds from
any Remedial  Action with respect to Secured  Sale/Leaseback  Collateral  or any
Disposition of Secured Sale/Leaseback  Collateral described in Section 3.3 or as
a result of its Lien on any Secured Sale/Leaseback  Collateral at any time prior
to payment in full of all Secured Sale/Leaseback Obligations;

     (b) the Trustee,  any Owner  Participant  or the  Collateral  Agent obtains
possession  of any of the Credit  Agreement  Collateral or receives any Proceeds
from any Remedial  Action with  respect to Credit  Agreement  Collateral  or any
Disposition  of Credit  Agreement  Collateral  described  in Section 3.3 or as a
result  of its Lien on any  Credit  Agreement  Collateral  at any time  prior to
payment in full of all Credit Agreement Obligations; or
<PAGE>
     (c) the Credit  Agent,  any Lender,  the  Trustee or any Owner  Participant
receives  any  Proceeds  from any  Remedial  Action  with  respect to the Shared
Collateral, or any Disposition of the Shared Collateral at any time;

then,  in any such  event,  the party  receiving  such  Proceeds  shall  (unless
otherwise  provided  by Law) hold the same in trust for the  party  entitled  to
receive  the same and  promptly  notify  and pay over the same to such party for
application  to the  Credit  Agreement  Obligations  (in the case of the  Credit
Agent)  and to the  Secured  Sale/Leaseback  Obligations  (in  the  case  of the
Trustee) or for  distribution  to the Credit  Agent and the Trustee  pursuant to
Section 3.3 (in the case of the Collateral Agent).

     3.5 Dispositions of Collateral;  Consents. In the event of a Disposition by
Sweetheart of all or any portion of the Sweetheart Property, either:

     (a) on a basis  permitted by or consented to under or not prohibited by the
terms of the Credit Agreement and the Secured Sale/Leaseback Lease, or

     (b) at the request of or pursuant to the action of the Credit Agent, in the
case of Credit Agreement  Collateral,  or of the Trustee, in the case of Secured
Sale/Leaseback  Collateral,  following the occurrence and during the continuance
of an event of default  under the Credit  Agreement  or a Lease Event of Default
under and as defined in the Secured Sale/Leaseback Lease, as the case may be,
whether as a result of or in lieu of a Remedial Action;

then, in either such event,  provided that the net Proceeds of such  Disposition
are (i) in the case of Credit Agreement  Collateral,  applied in accordance with
the requirements, if any, set forth in the Credit Agreement and (ii) in the case
of Secured  Sale/Leaseback  Collateral,  held by or on behalf of the Trustee (in
the Collateral Account or otherwise) or otherwise applied in accordance with the
requirements  set forth in the  Secured  Sale/Leaseback  Documents,  each of the
Credit  Agent and the Lenders in the case of Secured  Sale/Leaseback  Collateral
and  each of the  Trustee  and the  Owner  Participants  in the  case of  Credit
Agreement  Collateral  shall be deemed  to have  consented  to such  Disposition
(notwithstanding  any provision of the Security Documents,  the Credit Agreement
or the Secured Sale/Leaseback  Documents to the contrary) and no further consent
thereto  on the  part of any  thereof  shall  be  required  and the  subordinate
Lenders'  Lien in such  Secured  Sale/Leaseback  Collateral  or the  subordinate
Secured  Sale/Leaseback  Lien in  such  Credit  Agreement  Collateral  shall  be
automatically released upon such Disposition.

     3.6  Payment  Invalidated.  In the event that any of the  Credit  Agreement
Obligations  or  Secured  Sale/Leaseback  Obligations  shall be paid in full and
subsequently,  for whatever reason  (including,  but not limited to, an order or
judgment for  disgorgement  of a preference  under Title 11 of the United States
Code, or any similar Law, or the  settlement  of any claim in respect  thereof),
formerly   paid  or   satisfied   Credit   Agreement   Obligations   or  Secured
Sale/Leaseback   Obligations  become  unpaid  or  unsatisfied,   the  terms  and
conditions of this  Agreement  shall be  reinstated,  notwithstanding  any prior
termination of this Agreement  pursuant to Section 6, and all provisions of this
Agreement  shall  again be  operative  until  all  such  obligations  are  again
indefeasibly paid in full.
<PAGE>
     3.7  Notice of  Acceleration,  Etc.  (a) Each of the  Credit  Agent and the
Trustee agrees to deliver to the other:

                  (i) In the case of the Credit Agent, (x) prompt written notice
of the acceleration of the Credit Agreement  Obligations  pursuant to the Credit
Agreement  (such  notice to be  provided  in the same  manner and  substantially
contemporaneously  with any  notice  provided  to  Sweetheart),  and (y)  prompt
written  notice  of  any  Remedial  Action  with  respect  to  Credit  Agreement
Collateral; and

                  (ii) In the case of the Trustee,  (x) prompt written notice of
(1)  the  declaration,   pursuant  to  Article  XIV  thereof,   of  the  Secured
Sale/Leaseback Lease to be in default, (2) the declaration of a Material Default
(as defined in the Secured  Sale/Leaseback  Documents) or (3) the termination of
such lease (such  notice to be  provided  in the same  manner and  substantially
contemporaneously  with any  notice  provided  to  Sweetheart),  and (y)  prompt
written  notice of any Remedial  Action with  respect to Secured  Sale/Leaseback
Collateral or Leased Equipment.

     (b) The Credit Agent shall give the Trustee a copy of any written notice of
the  declaration  of default  given to the  Borrower  with respect to the Credit
Agreement  Obligations.  The Trustee  shall give the Credit  Agent a copy of any
written notice of the  declaration of default given to the Borrower with respect
to the Secured Sale/Leaseback  Obligations.  The failure of either party to give
the other such  notice  shall have no effect on (x) the  validity  of the notice
against the  Borrower or (y) the  agreements  made  herein  (including,  without
limitation, as to the priorities of Liens and the limitations on the exercise of
Remedial Actions with respect to Collateral).

     (c)  Notwithstanding  any  provision  of the Credit  Agreement,  the Credit
Agreement  Security  Documents  or the Secured  Sale/Leaseback  Documents to the
contrary, the Trustee or any Owner Participant shall have the right (but not any
obligation) to cure, on behalf of the Borrower, any payment default with respect
to the Credit  Agreement  Obligations,  and the Credit Agent or any Lender shall
have the right (but not any obligation) to cure, on behalf of the Borrower,  any
payment default with respect to the Secured Sale/Leaseback Obligations; provided
that in each case (i) such right to cure shall not extend the grace  period,  if
any,  provided to the Borrower with respect to such payment default and an Event
of Default (as defined in the Credit  Agreement) or a Lease Event of Default (as
defined in the Secured Sale/Leaseback Lease), as the case may be, shall arise if
such payment is not made within the grace period,  if any, therefor and (ii) the
Trustee  and the Owner  Participants,  collectively,  on the one  hand,  and the
Credit Agent and the Lenders, collectively, on the other hand, may exercise such
right to cure only once in any 60-consecutive day period.

     (d)  In  the  event  the  Credit  Agent  shall  have  given  notice  of the
acceleration of the Credit Agreement  Obligations (which notice is not withdrawn
or revoked),  the Trustee, on behalf of the Owner Participants,  may elect, in a
written  notice  received  by the Credit  Agent  within ten (10) days after such
notice of acceleration is given (which election shall be irrevocable and binding
on the Trustee and the Owner  Participants),  to purchase  all right,  title and
interest of the Credit Agent and the Lenders in respect of the Credit  Agreement
Obligations for a purchase price equal to the then outstanding and
<PAGE>
unpaid  Credit  Agreement  Obligations;  provided  that  (i)  such  purchase  is
consummated  within 10 days after the Credit  Agent's  receipt of notice of such
election,  (ii) on or prior to the date of such  purchase  all letters of credit
and credit  support  issued  pursuant  to the Credit  Agreement  shall have been
terminated and all  agreements  with respect to Hedging  Obligations  shall have
been  terminated  (or, with respect to any such hedging  agreement for which the
applicable  Lender has no liabilities or obligations to any third parties (other
than the Borrower)  arising from such agreement,  all of the obligations of such
Lender under such hedging agreement shall have been assumed by the Trustee or an
Owner Participant,  such Lender shall have been irrevocably and  unconditionally
released and discharged of all obligations and liabilities  thereunder  pursuant
to an agreement in form and substance reasonably satisfactory to such Lender and
such Lender shall have received  payment in full of all amounts which were owing
and would be owing to such Lender if such agreement were  terminated on the date
of such Lender's  release and discharge  from such  agreement as aforesaid;  the
Borrower hereby consenting to any such assumption of liabilities and obligations
under such hedging agreement) and (iii) none of the Credit Agent nor any Lenders
shall have any obligation as a result of such election to terminate any Remedial
Actions  commenced  by it or to forego  taking any Remedial  Actions  unless and
until such purchase is consummated in accordance with the terms hereof. Upon the
consummation  of such purchase in accordance  with the terms hereof  (including,
without  limitation  and in  any  event,  payment  of  such  purchase  price  in
immediately  available funds to the Credit Agent on the purchase date),  each of
the Credit Agent and Lenders shall assign,  without recourse,  representation or
warranty,  all of its right, title and interest under the Credit Agreement,  the
Credit Agreement Security Documents,  the Lenders' Collateral and this Agreement
and in and to the Credit Agreement Obligations to the Trustee or its designee.

     3.8 Other Collateral. Each of the Credit Agent, for itself and on behalf of
the  Lenders,   and  the  Trustee,  for  itself  and  on  behalf  of  the  Owner
Participants, agrees that:

     (a) The  Credit  Agent  will not take  any  action  to note its Lien on any
certificate of title unless, with respect to Secured  Sale/Leaseback  Collateral
only, it shall also take whatever  action may be required to note the prior Lien
of the Trustee on such certificate;

     (b) In the event any Lien on Sweetheart Property is granted to or perfected
by either  party,  the party to which  such  Lien is  granted  or by which it is
perfected  shall  cooperate in all reasonable  respects with the other to permit
the other  concurrently  to be granted  or to perfect a Lien in such  Sweetheart
Property,  to the  extent  that  the  other is then  entitled  to a Lien on such
Sweetheart Property under the terms of the Secured  Sale/Leaseback Lease and the
Secured Sale/Leaseback  Security Documents, in the case of the Trustee, or under
the terms of the Credit Agreement and the Credit Agreement  Security  Documents,
in the case of the Credit Agent, in each case as then in effect,  and subject to
the terms and conditions of this Agreement (including,  without limitation, that
the  respective  Liens  of the  Credit  Agent  and the  Trustee  shall  have the
priorities  set forth in this  Agreement and that the Trustee shall have no Lien
in Excluded Sale/Leaseback Assets);

     (c) In the  event  that  either  the  Credit  Agent  or the  Trustee  takes
possession of any  Sweetheart  Property  subject to a Lenders' Lien or a Secured
Sale/Leaseback Lien, the Credit Agent,
<PAGE>
if such Property  constitutes  Secured  Sale/Leaseback  Collateral and is in the
possession of the Trustee, or the Trustee,  if such Property  constitutes Credit
Agreement  Collateral  (but not  Excluded  Sale/Leaseback  Assets) and is in the
possession of the Credit Agent,  may give to the other party,  as bailee of such
Property,  written  notice of the notifying  party's Lien on such  Property,  in
order to perfect its Lien on such Property  pursuant to Sections 9-304 and 9-305
of the  UCC of the  applicable  jurisdiction,  and the  other  party  agrees  to
acknowledge  such  notification in accordance with the terms and conditions of a
bailee  letter  substantially  in the  form of  Exhibit  D-1 or D-2  hereto,  as
appropriate (it is understood and agreed that the Credit Agent is deemed to have
given  such a  notice  to the  Trustee,  and  the  Trustee  is  deemed  to  have
acknowledged  such  notification,  with  respect to any  original  leases in the
possession of the Trustee relating to Packaging Equipment); and

     (d) The  Collateral  Agent shall not have a Lien on Leased  Equipment,  the
Secured Sale/Leaseback Lease or any Secured Sale/Leaseback Site Lease or Secured
Sale/Leaseback Site Sublease.

     3.9 Contesting Liens. Each of the Credit Agent, for itself and on behalf of
the  Lenders,   and  the  Trustee,  for  itself  and  on  behalf  of  the  Owner
Participants,  agrees  that it  shall  not  contest  the  validity,  perfection,
priority or enforceability of any Lenders' Lien in Lenders'  Collateral,  in the
case of the Trustee and the Owner  Participants,  or any Secured  Sale/Leaseback
Lien in Trustee Collateral,  in the case of the Credit Agent and the Lenders, so
long as such Lien is permitted by this Agreement.

     3.10 Further Assurances. From time to time during the term hereof:

     (a) Each of the Credit Agent and the Trustee,  at the reasonable request of
the other and at Sweetheart's cost and expense, shall execute and deliver to the
other such notices of the  subordination and other provisions of this Agreement,
in  recordable  form,  and shall  execute and deliver such other  documents  and
instruments  and take such other  actions,  as shall  reasonably be necessary to
carry out the  intentions or to facilitate  the  performance  of this  Agreement
including,  without limitation,  in connection with any Remedial Action of which
such Person has received notice; and

     (b) If, in connection with any Remedial Action  permitted by Section 3.2 or
any  Disposition  of any  Sweetheart  Property  contemplated  by Section 3.5, it
becomes  necessary or advisable for the Credit Agent,  the Trustee or Sweetheart
to  obtain a  release  or  discharge  of any  subordinate  Lenders'  Lien or any
subordinate Secured  Sale/Leaseback Lien in any such Property in order to convey
title thereto unencumbered by such Lien, then so long as such Remedial Action or
Disposition, and the application of the Proceeds derived therefrom, have been or
will  contemporaneously  be accomplished in conformity with this Agreement,  the
Credit  Agent or the Trustee,  as  appropriate,  shall,  upon the request of the
other (or of  Sweetheart),  execute such  instruments of release or discharge of
such Liens,  in recordable  form, as may be  reasonable  or  appropriate  in the
circumstances; provided, however, that any such release or discharge may, to the
extent  required  under  the  Credit  Agreement  or the  Secured  Sale/Leaseback
Documents,  be expressly  conditioned upon the requirement that any net Proceeds
of such  Remedial  Action or  Disposition  in excess of the amount  necessary to
satisfy the Credit Agreement Obligations or Secured Sale/
<PAGE>
Leaseback  Obligations,  as the case may be, shall be paid over to the other for
application  to the  Credit  Agreement  Obligations  (in the case of the  Credit
Agent)  and to the  Secured  Sale/Leaseback  Obligations  (in  the  case  of the
Trustee) or as otherwise provided by applicable Law.

     3.11  Access to  Collateral  and Leased  Equipment.  (a) Each of the Credit
Agent and the Trustee  agrees to allow the other and its  respective  agents and
employees  reasonable access to any Sweetheart Property and equipment subject to
the  Secured  Sale/Leaseback  Lease  in its  possession  or under  its  control,
including,  without  limitation,  any Sweetheart  Real  Property,  any equipment
subject to the Secured  Sale/Leaseback  Lease and any customer lists,  software,
data bases,  business  records  data and other  books and records of  Sweetheart
pertaining  to any of the  Collateral,  for the purposes of any Remedial  Action
then permitted by this Agreement and the relevant  Security  Documents.  Without
limitation of the foregoing,  upon notice (the "Election  Notice") by the Credit
Agent to the Trustee,  given not later than ten Business Days (as defined in the
Credit  Agreement)  after the date of the  acceleration of the Credit  Agreement
Obligations, the Credit Agent shall have the option to lease, from the Occupancy
Date  (as  hereinafter  defined)  until  the  date  which  occurs  three  months
thereafter (or until such earlier date that the Credit Agent shall select in its
sole discretion by notice to the Trustee given at any time after exercising such
lease option), at the then fair market value, any or all of the property,  plant
and  equipment  which  at  such  time  constitutes,  or at any  time  previously
constituted,  Secured  Sale/Leaseback  Collateral  or  equipment  subject to the
Secured  Sale/Leaseback Lease (in each instance, to the extent in the possession
or under the  control  of the  Trustee  or any Owner  Participant)  as is deemed
necessary  or  desirable  by the Credit  Agent or its  agent(s)  to convert  raw
materials (including  work-in-process)  constituting Credit Agreement Collateral
into inventory (which lease shall be accompanied,  at no additional cost, by the
right to use,  during the term of such lease,  all Patents,  Patent Licenses and
General  Intangibles  necessary or  desirable  to convert such raw  materials as
described  above),  to enable them to sell such Credit Agreement  Collateral (it
being  agreed  that in the  event the  Credit  Agent  desires  to lease any such
property, plant or equipment at any particular physical location owned or leased
by  Sweetheart,  the Credit  Agent  shall be  required  to lease,  to the extent
constituting  Secured  Sale/Leaseback  Collateral  or  equipment  subject to the
Secured  Sale/Leaseback  Lease in the  possession  or under the  control  of the
Trustee or any Owner  Participant,  all of the property,  plant and equipment at
such physical  location).  The Occupancy  Date shall mean the earlier of (x) the
date of actual  occupancy by the Credit Agent after the Election Notice is given
of the  premises  to be leased and (y) the date  which is thirty  days after the
date of the  acceleration of the Credit Agreement  Obligations.  For purposes of
the second  preceding  sentence  "fair market value" rental for such  Sweetheart
Property  or  equipment  subject to the  Secured  Sale/Leaseback  Lease shall be
agreed upon between the Credit  Agent and the Trustee,  or in the absence of any
such agreement, shall be determined by an appraiser selected by both the Trustee
and the Credit Agent.

     (b) At any time that the Credit Agent is exercising its rights  pursuant to
paragraph (a) above to make use of Sweetheart  Property or equipment  subject to
the Secured Sale/Leaseback Lease, to the extent such insurance is not maintained
by Sweetheart,  it shall maintain,  or cause to be maintained,  on behalf of the
Lenders,  liability  insurance with respect to its activities  conducted on such
Property  in such  amounts and  against  such risks as is deemed  prudent in the
circumstances  by the Credit  Agent's  risk  managers,  naming the Trustee as an
additional insured.  In the
<PAGE>
event that any insurance  required to be maintained by the Credit Agent pursuant
to the immediately  preceding sentence is maintained by the Trustee, the Trustee
shall use  reasonable  efforts (which  reasonable  efforts shall not include the
payment of any money or the  incurrence  of any  liability  by the  Trustee)  to
extend such coverage to the Credit Agent's and the Lenders' activities conducted
on such Property. In addition,  the Credit Agent on behalf of the Lenders agrees
(i) to maintain the  Sweetheart  Property and  equipment  subject to the Secured
Sale/Leaseback  Lease which is made  available to it, to provide  utilities  and
guard  service  for such  Property  and to  maintain  and provide to the Trustee
copies of  maintenance  records  describing  all  maintenance  done  during such
period;  (ii) that in the event that any of the Sweetheart Property or equipment
subject to the Secured  Sale/Leaseback  Lease is damaged or destroyed by any use
thereof by the Credit Agent  pursuant to paragraph  (a) above,  the Credit Agent
and the Lenders  will cause such  damaged or  destroyed  Sweetheart  Property or
equipment subject to the Secured Sale/Leaseback Lease, as the case may be, to be
repaired or restored to its general condition before such damage or destruction;
and (iii) to  indemnify  and hold  harmless  the  Trustee  and each of the Owner
Participants  against any and all  liabilities,  obligations,  losses,  damages,
penalties,  actions, judgments, suits, costs, expenses or disbursements that may
be imposed upon,  incurred by or asserted against any of them as a direct result
of the Credit  Agent's use of  Sweetheart  Property or equipment  subject to the
Secured Sale/Leaseback Lease pursuant to paragraph (a) above.

     (c) As  compensation  for the use of the Sweetheart  Property and equipment
subject to the Secured  Sale/Leaseback Lease described in this Section 3.11, the
Credit  Agent on behalf of the  Lenders  agrees  to pay to the  Trustee  for the
benefit of the Owner  Participants  the then fair market  rental  value for such
Property for each week or part thereof  after the  Occupancy  Date for which any
Lender, the Credit Agent or their respective agents uses such Property.

     (d) Nothing in this  Section 3.11 shall  prevent the Trustee from  entering
into a  contract  of  sale,  transfer  or other  disposition  of,  or  otherwise
foreclosing  on, any of the Secured  Sale/Leaseback  Collateral or any equipment
subject to the Secured  Sale/Leaseback  Lease so long as such contract provides,
or such  foreclosure  is subject to  providing,  the Credit  Agent with the same
access to such  Collateral and equipment  subject to the Secured  Sale/Leaseback
Lease as provided by this Section 3.11.

     (e) The Trustee  agrees that it shall not take any legal action or commence
any  legal  proceeding  to  prevent  the  Credit  Agent's  use  of  the  Secured
Sale/Leaseback  Collateral  or equipment  subject to the Secured  Sale/Leaseback
Lease as provided in this Section 3.11 or the Credit Agent's  non-exclusive  use
of any Patents, Patent Licenses or General Intangibles necessary or desirable to
convert raw materials  constituting Credit Agreement  Collateral into inventory,
to the extent that  Sweetheart has granted the Credit Agent the right to use any
such property for such purpose.

     3.12  Trademark  Licenses.  (a) The  Trustee  consents  to the  granting by
Sweetheart to the Credit Agent of an exclusive  license to use each Trademark of
the Borrower and the Guarantor to enable them to manufacture and sell the Credit
Agreement  Collateral,  the  exclusivity  of which license (if such Trademark is
Secured  Sale/Leaseback  Collateral)  shall  terminate  on the date which is six
months
<PAGE>
after the peaceful  possession  by the Credit Agent or its agent(s) as owners or
pursuant to a Remedial  Action,  of all or  substantially  all of the  inventory
constituting Credit Agreement  Collateral,  and after such six month period, the
Credit  Agent  shall  have a  non-exclusive  right  to use such  Trademarks,  to
manufacture or sell the Credit Agreement Collateral (such non-exclusive  license
to  use  any  such  Trademark  (if  such  Trademark  is  Secured  Sale/Leaseback
Collateral)  to terminate on the date which is twelve  months after the peaceful
possession  by the  Credit  Agent or its  agent(s)  as owners or  pursuant  to a
Remedial  Action,  of all or  substantially  all of the  inventory  constituting
Credit  Agreement  Collateral).  Such license and such right shall be world-wide
and  royalty  free.  The Credit  Agent  covenants  and  agrees  that it will use
reasonable efforts after the acceleration of the Credit Agreement Obligations to
obtain possession of the Credit Agreement  Collateral and to promptly  terminate
such  license  with  respect to any  Trademark  that is  Secured  Sale/Leaseback
Collateral  by  notice  to the  Trustee  at the time any such  Property  (in the
judgment of the Credit Agent) is no longer  necessary or desirable in connection
with the manufacture or sale of the Credit Agreement Collateral. Notwithstanding
anything to the contrary  contained in this Section  3.12, if at any time during
the six month  period  referred to above  during  which the Credit  Agent or the
Lenders  party to the Credit  Agreement  are in  peaceful  possession  of all or
substantially all of the inventory  constituting the Credit Agreement Collateral
(including  finished  goods,   work-in-process  and  raw  materials)  the  Owner
Participants or the Trustee is selling all or  substantially  all of the Secured
Sale/Leaseback  Collateral,  and if the respective buyer or buyers thereof agree
to purchase all inventory  (including  finished goods,  work-in-process  and raw
materials) then constituting the Credit Agreement Collateral at the cost thereof
consistent  with the basis  used for  determining  the  amount  of the  eligible
inventory for purposes of the  borrowing  base under the Credit  Agreement  (but
without  reduction for ineligible  items,  the  discounting for purposes of such
borrowing  base or any  sublimit  thereunder),  then either (x) the Credit Agent
shall sell all of such Credit  Agreement  Collateral  to such buyer or buyers at
such price (with the  Borrower and the  Guarantor,  by their  execution  hereof,
hereby  agreeing in advance to any such sale and its commercial  reasonableness)
or (y) if, and only if, such  Credit  Agreement  Collateral  is not sold to such
buyer or buyers  because the Credit Agent  declines in its  discretion  (and not
because of any restraints,  court orders or similar reasons) to sell such Credit
Agreement  Collateral  to such buyer or buyers,  then, at the time such buyer or
buyers  purchase  all  or  substantially  all  of  the  Secured   Sale/Leaseback
Collateral,  the exclusive  license  period  referenced in this Section  3.12(a)
(with respect only to Trademarks constituting Secured Sale/Leaseback Collateral)
shall terminate,  although the non-exclusive rights shall continue.  In addition
to the  foregoing,  the Trustee  agrees  that,  notwithstanding  anything to the
contrary contained in Section 3.1, the Secured  Sale/Leaseback  Lien in all such
Trademarks  shall be subject to the Credit Agent's interest therein by virtue of
such license or sublicense (that is, foreclosure on such Lien will not terminate
such license or sublicense).  The right of the Trustee to take Remedial  Actions
with  respect  to such  Trademarks  shall  not be  affected  by the  immediately
preceding  sentence  or any  provision  set forth in  Section  3.12(d),  but any
conveyance  by the  Trustee of such  Trademarks  and  Trademark  Licenses or any
interest  therein shall be subject to the aforesaid  limited licenses granted in
favor of the Credit Agent or the prior security  interest of the Credit Agent to
the extent of such security interest set forth in Section 3.12(d).

     (b) The Credit  Agent  acknowledges  that,  to the extent  that the Trustee
shall  have the right to use or  license  the  Trademarks  constituting  Secured
Sale/Leaseback Collateral, the Trustee
<PAGE>
shall have the right to grant  non-exclusive  licenses  and  sublicenses  in the
Trademarks  and the  Trademark  Licenses to Persons  other than the Credit Agent
notwithstanding  the grant of the license to the Credit  Agent  contemplated  by
Section 3.12(a).  Any such license so granted by the Trustee shall not relate to
any period  during which the Credit Agent shall have the  exclusive  use of such
Trademarks as set forth in Section 3.12(a).

     (c) The  Credit  Agent  shall not have any such  right to  assign,  convey,
transfer or grant  licenses and  sublicenses in the Trademarks and the Trademark
Licenses  constituting  Secured  Sale/Leaseback  Collateral to any other Person,
other than,  subject to the limitations of this Section 3.12, in connection with
the uses permitted by Section  3.12(a) above to any Person  acquiring  Inventory
from the Credit Agent in connection with the exercise by the Credit Agent of its
rights as a secured  creditor of Sweetheart with respect to such Inventory,  and
any  purported  assignment,  conveyance,  transfer or grant (except as expressly
permitted herein) shall be void.

     (d)  Notwithstanding  anything to the contrary set forth in this Agreement,
in the event that the trademark  license granted to the Credit Agent referred to
in Section 3.12(a) above does not for any reason (including, without limitation,
by reason of the occurrence of any bankruptcy, insolvency or other similar event
with respect to  Sweetheart)  confer on the Credit Agent the rights and benefits
contemplated  thereby,  then the  security  interest of the Credit  Agent in the
Trademarks  (to the  extent not Credit  Agreement  Collateral)  shall be a first
priority  security  interest,  and the security  interest of the Trustee in such
Trademarks shall be a second priority security interest, in each case, solely to
the extent necessary to confer on the Credit Agent the use of such Trademarks as
contemplated  by  such  trademark  license.   Notwithstanding  anything  in  the
immediately  preceding sentence to the contrary,  in the case of any Disposition
of any of the Trademarks  constituting Secured  Sale/Leaseback  Collateral,  any
Proceeds of such Disposition shall constitute Secured Sale/Leaseback  Collateral
and otherwise be distributed and applied as Secured Sale/Leaseback Collateral in
accordance with the terms of this  Agreement.  The rights of the Trustee to take
Remedial   Action  with  respect  to  such   Trademarks   constituting   Secured
Sale/Leaseback  Collateral shall not be affected by such security interest,  but
any conveyance by the Trustee of such  Trademarks or any interest  therein shall
be subject to the Credit Agent's prior security interest, but only to the extent
of such prior security interest as provided in this Section 3.12(d).

     3.13 Release of Lien in Connection with  Refinancing  Indebtedness.  (a) In
the event the Borrower shall incur any Refinancing Indebtedness to refinance the
Credit Agreement  Obligations,  the Person or Persons providing such Refinancing
Indebtedness  shall  elect in  writing  by  notice to the  Credit  Agent and the
Trustee to either (i) retain the benefits of the subordinate Lien on the Secured
Sale/Leaseback   Collateral  or  (ii)  release  the  subordinate  Lien  on  such
Collateral.

     (b) In the event the provider of such Refinancing  Indebtedness shall elect
to retain the benefits of such subordinate  Lien, such Person(s) or the agent or
trustee for such Person(s) shall become a party to this Agreement and assume all
of the rights and  obligations of the Credit Agent  hereunder.  In the event the
provider of such Refinancing Indebtedness shall elect not to retain the benefits
of such  subordinate  Lien and no default  shall have occurred and be continuing
under the
<PAGE>
Secured  Sale/Leaseback  Lease,  the  Trustee  shall  automatically  release any
subordinate  Secured  Sale/Leaseback  Lien  it  holds  on the  Credit  Agreement
Collateral  upon the release of such  subordinate  Lenders'  Lien, in connection
with the incurrence of any Refinancing  Indebtedness and the Person(s) providing
such Refinancing Indebtedness or the agent or trustee for such Person(s) and the
remaining party to this Agreement shall enter into a new intercreditor agreement
governing the  relationship of such remaining party and the Person(s)  providing
such  Refinancing  Indebtedness  on the terms set forth in this  Agreement,  but
eliminating  any  provisions no longer  applicable as a result of the release of
such Liens.

     3.14  Allocation of Reduction in  Guarantees.  In the event,  in connection
with any bankruptcy,  moratorium,  reorganization or other insolvency proceeding
with  respect to the  Guarantor,  the  obligations  of the  Guarantor  under the
Guarantees are determined to be a fraudulent  conveyance or fraudulent  transfer
and as a result thereof the  obligations  of the Guarantor  under the Guarantees
are  reduced,  such  reduction to the  Guarantees  shall be made on a pari passu
basis  based upon the Pro Rata Shares of the Lenders and the Trustee at the time
such reduction occurs.

     4. Reliance, Waivers, Etc.

     4.1  Creation  of  Future  Obligations.  (a)  All of the  Credit  Agreement
Obligations  shall be deemed to have been funded by the Lenders and  incurred by
Sweetheart  in  reliance  upon this  Agreement,  and the  Trustee and each Owner
Participant  expressly  waive notice to the Trustee or any Owner  Participant of
the  acceptance  of the  subordination  and other  agreements  set forth herein,
notice of reliance on such  subordination and other agreements and notice of the
creation of any of the Credit Agreement  Obligations after the date hereof,  and
agree that the  Lenders  shall be entitled  to rely upon the  subordination  and
other  agreements set forth herein at all times in creating the Credit Agreement
Obligations.

     (b) All of the Secured  Sale/Leaseback  Obligations shall be deemed to have
been  incurred by Sweetheart  in reliance  upon this  Agreement,  and the Credit
Agent and each Lender  expressly  waive notice to the Credit Agent or any Lender
of the acceptance of the  subordination  and other  agreements set forth herein,
notice of reliance on such  subordination and other agreements and notice of the
creation of any of the Secured Sale/Leaseback Obligations after the date hereof,
and agree that the Trustee shall be entitled to rely upon the  subordination and
other  agreements  set  forth  herein  at all  times  in  creating  the  Secured
Sale/Leaseback Obligations.

     4.2 Right to Amend,  Etc. As between the Lenders and the Credit  Agent,  on
the one hand, and the Trustee and the Owner Participants, on the other hand:

     (a) The Credit Agent and the Lenders may at any time and from time to time,
in their sole  discretion,  and  without  any  obligation  to give any notice or
receive  any  consent  from the  Trustee  or any Owner  Participant,  change the
manner,  place or terms of payment,  or change or extend the time of payment of,
or renew, alter, refinance, increase or add to the Credit Agreement Obligations,
or  obtain,  release,  or  dispose  of any  Collateral  therefor,  or  amend  or
supplement in any manner the Credit  Agreement,  the Credit  Agreement  Security
Documents or any other agreements or instruments
<PAGE>
evidencing,  securing or relating to the Credit Agreement Obligations,  and this
Agreement  shall  continue  in full  force and effect  with  respect to all such
Credit Agreement Obligations; provided, however, that (i) the Credit Agent shall
comply with all applicable provisions of this Agreement in respect of any of the
foregoing  and (ii) the  aggregate  principal  amount  of the  Credit  Agreement
Obligations  shall not exceed an amount which would cause a violation of Section
5.09 of the  Secured  Sale/Leaseback  Participation  Agreement  (without  giving
effect to any amendment or modification thereof or of the defined term Permitted
Debt used therein that would cause the restrictions set forth therein to be more
restrictive).  With  respect to the  limitation  set forth in clause (ii) of the
immediately  preceding  sentence,  the Credit  Agent shall be  permitted to rely
conclusively on an Officers' Certificate as to the permissibility of such Credit
Agreement Obligations under the Secured
Sale/Leaseback Participation Agreement.

     (b) The Trustee and the Owner Participants may at any time and from time to
time, in their sole discretion, and without any obligation to give any notice or
receive any  consent  from the Credit  Agent or any  Lender,  change the manner,
place or terms of payment, or change or extend the time of payment of, or renew,
alter, refinance,  increase or add to the Secured Sale/Leaseback Obligations, or
amend or supplement in any manner the Secured  Sale/Leaseback Lease, the Secured
Sale/Leaseback  Security  Documents  or any  other  agreements,  instruments  or
documents  evidencing,  securing  or  relating  to  the  Secured  Sale/Leaseback
Obligations,  or  obtain,  release,  or dispose of any  Collateral  therefor  in
accordance with the terms of this  Agreement,  and this Agreement shall continue
in full  force  and  effect  with  respect  to all such  Secured  Sale/Leaseback
Obligations;  provided,  however,  that (i) the  Trustee  shall  comply with all
applicable provisions of this Agreement in respect of any of the foregoing;  and
(ii) the aggregate  Stipulated  Loss Value of all Leased  Equipment  shall in no
event exceed $227,275,544 as such amount is adjusted and/or reduced from time to
time pursuant to the terms of the Secured Sale/Leaseback  Documents or increased
to  reflect   additional   investments  by  the  Owner   Participants   to  fund
modifications,  alterations or improvements to the Leased  Equipment (but in any
event  immediately  after  giving  effect to such  adjustment  or  increase  the
aggregate  Stipulated  Loss Value of all Leased  Equipment  shall not exceed the
lesser  of (x) 10% above  the  aggregate  Stipulated  Loss  Value of all  Leased
Equipment in effect  immediately  prior to such  adjustment  or increase and (y)
$227,275,544).

     (c) No provision of any Shared Collateral  Security Document may be waived,
supplemented,  amended or  modified  without  the prior  written  consent of the
Credit Agent and the Trustee.

     4.3 Responsibility  For Credit Decisions;  No Duty to Inform Other Parties.
(a) The Trustee has, independently and without reliance on the Credit Agent, any
Lender  or the  directors,  officers,  agents,  employees  or  attorneys  of any
thereof,  and instead in reliance upon  information  supplied to it on behalf of
the  Borrower  and upon such  other  information  as it has  deemed  appropriate
(including, without limitation, all such information as it deemed advisable with
respect to the Borrower's  compliance or  non-compliance  with any environmental
Laws),   made  its  own   independent   decision   to  enter  into  the  Secured
Sale/Leaseback Lease and the other Secured Sale/Leaseback Documents and to serve
as  the  Trustee  thereunder  and  under  the  Secured  Sale/Leaseback  Security
Documents; and the
<PAGE>
Trustee shall, for itself and on behalf of the Owner Participants, independently
and  without  reliance  upon the  Credit  Agent,  any  Lender or the  directors,
officers,  agents,  employees or attorneys of any thereof,  continue to make its
own independent analysis and decisions in acting or not acting under the Secured
Sale/Leaseback  Lease,  the Secured  Sale/Leaseback  Security  Documents and the
other Secured Sale/Leaseback Documents.

     (b) The  Credit  Agent  has,  independently  and  without  reliance  on the
Trustee, any Owner Participant or the directors,  officers, agents, employees or
attorneys of any thereof,  and instead in reliance upon information  supplied to
it on behalf of the  Borrower and upon such other  information  as it has deemed
appropriate  (including,  without limitation,  all such information as it deemed
advisable with respect to the Borrower's  compliance or non-compliance  with any
environmental  Laws), made its own independent decision to enter into the Credit
Agreement  and to serve as the  Credit  Agent  thereunder  and under the  Credit
Agreement  Security  Documents;  and the Credit Agent  shall,  for itself and on
behalf of the Lenders,  independently and without reliance upon the Trustee, any
Owner Participant or the directors,  officers, agents, employees or attorneys of
any thereof,  continue to make its own  independent  analysis  and  decisions in
acting or not  acting  under  the  Credit  Agreement  and the  Credit  Agreement
Security Documents.

     (c)  Neither  the  Credit  Agent nor any Lender  shall have any  present or
future duty or  responsibility to the Trustee or any Owner Participant to advise
it of  information  known to any of them  regarding the  financial  condition of
Sweetheart  or of any  circumstances  bearing upon the risk of nonpayment of the
Credit Agreement Obligations or the Secured  Sale/Leaseback  Obligations and the
Trustee,  on behalf of itself  and each  Owner  Participant,  acknowledges  that
neither  the  Credit  Agent  nor any  Lender  has  made any  representations  or
warranties  to the  Trustee  or any Owner  Participant  with  respect to the due
execution,  delivery,  validity or enforceability of the Credit Agreement or the
Credit Agreement Security Documents,  the validity or perfection of the Lenders'
Liens, the validity or enforceability of the Credit Agreement  Obligations,  the
existence,  condition  or value of any of the Lenders'  Collateral  or as to any
other matter whatsoever. If, notwithstanding the foregoing, any such information
is  conveyed  by the  Credit  Agent or any  Lender to the  Trustee  or any Owner
Participant,   neither  the  Credit   Agent  nor  any  Lender   shall  have  any
responsibility  to the  Trustee or any Owner  Participant  for the  accuracy  or
completeness of any such information,  nor any continuing duty or responsibility
to  advise  the  Trustee  or any Owner  Participant  of any  inaccuracy  in such
information  that is  subsequently  discovered,  or of any updated or subsequent
information, whether or not of like kind.

     (d) Neither the Trustee nor any Owner Participant shall have any present or
future duty or  responsibility to the Credit Agent or any Lender to advise it of
information known to any of them regarding the financial condition of Sweetheart
or of any  circumstances  bearing  upon the risk of  nonpayment  of the  Secured
Sale/Leaseback  Obligations or the Credit  Agreement  Obligations and the Credit
Agent,  on behalf of itself  and each  Lender,  acknowledges  that  neither  the
Trustee nor any Owner Participant has made any  representations or warranties to
the Credit  Agent or any Lender  with  respect to the due  execution,  delivery,
validity  or  enforceability  of the  Secured  Sale/Leaseback  Lease or  Secured
Sale/Leaseback  Security  Documents,  the validity or  perfection of the Secured
Sale/Leaseback   Liens,   the   validity  or   enforceability   of  the  Secured
Sale/Leaseback Obligations, the
<PAGE>
existence,  condition  or value of any of the  Trustee  Collateral  or as to any
other matter whatsoever. If, notwithstanding the foregoing, any such information
is conveyed by the Trustee or any Owner  Participant  to the Credit Agent or any
Lender,   neither  the  Trustee  nor  any  Owner   Participant  shall  have  any
responsibility   to  the  Credit  Agent  or  any  Lender  for  the  accuracy  or
completeness of any such information,  nor any continuing duty or responsibility
to advise the Credit Agent or any Lender of any  inaccuracy in such  information
that is subsequently  discovered,  or of any updated or subsequent  information,
whether or not of like kind.

     4.4 Order of Enforcement of Remedial  Actions.  Subject to all of the terms
and conditions of this Agreement, including, without limitation, Section 3.3:

     (a) The Credit  Agent and the  Lenders  shall have the right at any and all
times to determine the order in which (i) any Remedial  Action or other recourse
is sought  against  Sweetheart  or any other  obligor with respect to the Credit
Agreement  Obligations,  and  (ii)  any or all of the  Lenders'  Liens  shall be
enforced;  and the  Trustee,  on behalf of itself  and each  Owner  Participant,
hereby  waives  any and all rights to require  that the Credit  Agent  pursue or
exhaust any rights or remedies  with  respect to  Sweetheart  or any  Sweetheart
Property  prior to  exercising  its rights and  remedies  with respect to Credit
Agreement Collateral or in any other manner to require the marshalling of assets
or security in connection with the exercise by the Credit Agent or any Lender of
any Remedial  Action with  respect to Credit  Agreement  Obligations  and Credit
Agreement Collateral.

     (b) The Trustee and the Owner  Participants shall have the right at any and
all  times to  determine  the order in which  (i) any  Remedial  Action or other
recourse is sought  against  Sweetheart or any other obligor with respect to the
Secured  Sale/Leaseback  Obligations,  and  (ii)  any  or  all  of  the  Secured
Sale/Leaseback  Liens  shall be  enforced;  and the Credit  Agent,  on behalf of
itself and the  Lenders,  hereby  waives any and all rights to require  that the
Trustee  pursue or exhaust any rights or remedies  with respect to Sweetheart or
any Sweetheart Property prior to exercising its rights and remedies with respect
to Secured  Sale/Leaseback  Collateral  or in any other  manner to  require  the
marshalling of assets or security in connection with the exercise by the Trustee
or any  Owner  Participant  of any  Remedial  Action  with  respect  to  Secured
Sale/Leaseback Obligations and Secured Sale/Leaseback Collateral.

     4.5 Waiver of Liability For Actions Taken With Respect To  Obligations  and
Collateral.  (a) Except as provided in Section 3.11(b), neither the Credit Agent
nor any Lender shall have any liability to the Trustee or any Owner  Participant
for, and the  Trustee,  on behalf of itself and each Owner  Participant,  hereby
waives to the extent  permitted by applicable  Law any claim,  right,  action or
cause of action which it may now or  hereafter  have against the Credit Agent or
any Lender (including,  without limitation,  any and all claims, rights, actions
or causes of action that the Trustee or any Owner Participant may otherwise have
against the Agent or any Lender  under  Sections  9-207,  9-504 and 9-507 of the
UCC) arising out of, any and all actions  which any Lender or the Credit  Agent,
in good  faith,  takes or omits to take with  respect  to the  Credit  Agreement
Obligations, any obligor with respect to the Credit Agreement Obligations or any
Credit Agreement Collateral, including, without limitation, actions with respect
to: the creation, perfection or continuation of Liens with respect to any
<PAGE>
Credit  Agreement  Collateral;  any Remedial Action or Disposition of any Credit
Agreement  Collateral;  the  release of any  Credit  Agreement  Collateral;  the
custody, valuation, protection,  preservation, use or depreciation of any Credit
Agreement  Collateral;  the realizing upon or failure to realize upon any Credit
Agreement Collateral; or the collection of the Credit Agreement Obligations.  To
the extent that any of the foregoing waivers is not permitted by applicable Law,
the  Trustee  agrees  that the  applicable  standard  by which any  non-waivable
rights,  duties or claims are to be  measured  shall be that  neither the Credit
Agent nor any Lender shall have any liability or  responsibility  to the Trustee
or to any Owner  Participant  for any actions or omissions other than actions or
omissions constituting gross negligence or wilful misconduct.

     (b) Neither the Trustee nor any Owner  Participant shall have any liability
to the Credit  Agent or the  Lenders  for,  and the Credit  Agent,  on behalf of
itself and each  Lender,  hereby  waives any  claim,  right,  action or cause of
action  which it may now or  hereafter  have  against  the  Trustee or any Owner
Participant (including,  without limitation, any and all claims, rights, actions
or causes of action  that the  Credit  Agent or any Lender  may  otherwise  have
against the Trustee or any Owner  Participant  under Sections  9-207,  9-504 and
9-507 of the UCC)  arising out of, any and all actions  which the Trustee or any
Owner  Participant,  in good faith,  takes or omits to take with  respect to the
Secured  Sale/Leaseback  Obligations,  any obligor  with  respect to the Secured
Sale/Leaseback Obligations or any Secured Sale/Leaseback Collateral,  including,
without  limitation,  actions  with  respect  to: the  creation,  perfection  or
continuation of Liens with respect to any Secured Sale/Leaseback Collateral; any
Remedial  Action or Disposition of any Secured  Sale/Leaseback  Collateral;  the
release  of any  Secured  Sale/Leaseback  Collateral;  the  custody,  valuation,
protection,  preservation,  use or  depreciation  of any Secured  Sale/Leaseback
Collateral;   the  realizing  upon  or  failure  to  realize  upon  any  Secured
Sale/Leaseback  Collateral;  or the  collection  of the  Secured  Sale/Leaseback
Obligations. To the extent that any of the foregoing waivers is not permitted by
applicable  Law, the Credit Agent agrees that the  applicable  standard by which
any  non-waivable  rights,  duties or claims  are to be  measured  shall be that
neither  the  Trustee  nor any Owner  Participant  shall have any  liability  or
responsibility to the Credit Agent or to any Lender for any actions or omissions
other  than  actions  or  omissions  constituting  gross  negligence  or  wilful
misconduct.

     5. Agency.

     5.1 Appointment of Collateral Agent; Powers and Limitations. (a) Subject to
the resignation and removal  provisions of Section 5.5, the Credit Agent and the
Trustee hereby irrevocably designate,  appoint and authorize the Credit Agent as
Collateral Agent hereunder (the Credit Agent in such capacity being  hereinafter
referred to as the "Collateral Agent") to take such action,  including,  without
limitation,  the exercise of rights and the pursuit of remedies pursuant to this
Agreement and the Shared Collateral Security Documents, as agent on their behalf
and to exercise such other powers under this Agreement and the Shared Collateral
Security  Documents as are expressly  delegated to the  Collateral  Agent by the
terms hereof and thereof, together with such powers as are reasonably incidental
thereto.
<PAGE>
     (b) Nothing herein or in the Shared  Collateral  Security  Documents  shall
impose  or be  construed  to  impose  on the  Collateral  Agent  any  duties  or
obligations  other than those  expressly  provided  for herein or therein or any
fiduciary  relationship  with the  Credit  Agent or the  Trustee  and no implied
covenants,  functions or  responsibilities  shall be read into this Agreement or
the Shared Collateral Security Documents.

     5.2 Instructions,  Voting and Meetings.  (a) Notwithstanding any provisions
of this Agreement, the Collateral Agent is authorized, but not obligated, (i) to
take any action reasonably required to perfect or continue the perfection of the
Liens on the Shared  Collateral  for the  benefit of the Lenders and the Trustee
and (ii) when  instructions from the Required Parties have been requested by the
Collateral  Agent but have not yet been  received,  to take any action which the
Collateral Agent, in good faith,  believes to be reasonably  required to promote
and  protect  the  interests  of the  Lenders  and  the  Trustee  in the  Shared
Collateral;  provided that once instructions have been received,  the actions of
the Collateral  Agent shall be governed  thereby and the Collateral  Agent shall
not take any further action which would be contrary thereto.

     (b)  As to any  matters  relating  to the  Shared  Collateral,  the  Shared
Collateral Security Documents or Sweetheart not otherwise expressly delegated to
the Collateral  Agent, the Trustee or the Credit Agent by the Credit  Agreement,
the Secured  Sale/Leaseback  Documents,  the  Security  Documents  or the Shared
Collateral  Security  Documents,  the Collateral Agent shall act or refrain from
acting  on the  instructions  of the  Required  Parties.  Without  limiting  the
generality  of the  foregoing,  in the event the  Collateral  Agent shall act or
refrain  from acting upon the  direction  of Lenders  constituting  the Required
Parties,  such action or inaction,  as the case may be,  shall not  constitute a
breach of any fiduciary  obligation  which the Collateral Agent might owe to the
Trustee or the Owner  Participants even if the Trustee or the Owner Participants
are damaged by such action or inaction.

     (c) If, with respect to a proposed action to be taken by it, the Collateral
Agent shall determine in good faith that the provisions of this Agreement or any
Shared   Collateral   Security   Document   relating   to   the   functions   or
responsibilities  or discretionary  powers of the Collateral Agent are or may be
ambiguous or  inconsistent,  the Collateral  Agent shall notify the Credit Agent
and the Trustee,  identifying  the proposed  action and the  provisions  that it
considers  are or may be ambiguous or  inconsistent,  and may decline  either to
perform such function or responsibility or to exercise such discretionary  power
unless it has received the written confirmation of the Required Parties that the
Required  Parties  concur in the  circumstances  that the action  proposed to be
taken by the Collateral  Agent is consistent with the terms of this Agreement or
such Shared  Collateral  Security  Document  or is  otherwise  appropriate.  The
Collateral  Agent shall be fully  protected in acting or refraining  from acting
upon  the  confirmation  of the  Required  Parties  in this  respect,  and  such
confirmation  shall be binding upon the Credit Agent,  the Lenders,  the Trustee
and the Owner Participants.

(d)  Notwithstanding  any provisions  herein,  the Collateral Agent shall not be
required to take any action that  exposes or, in the good faith  judgment of the
Collateral Agent may expose,  the Collateral  Agent or its officers,  directors,
agents or employees to personal  liability  unless the Collateral Agent shall be
adequately  indemnified  as  provided  herein or that is,  or in the good  faith
<PAGE>
judgment  of the  Collateral  Agent may be,  contrary  to the Shared  Collateral
Security Documents or applicable law.

     (e) Except for action expressly required of the Collateral Agent hereunder,
the  Collateral  Agent  shall in all  cases be fully  justified  in  failing  or
refusing to act  hereunder  unless it shall be  indemnified  (in addition to the
indemnity  provided by Section 5.4) to its  satisfaction by the Credit Agent and
the Trustee in advance  against any and all  liability  and expense which may be
incurred by it by reason of taking or continuing to take any such action.

     (f)  Notwithstanding  anything  to the  contrary in this  Agreement  or the
Shared Collateral Security Documents, the Collateral Agent shall not be required
to exercise  any rights or remedies  under this  Agreement  or any of the Shared
Collateral Security Documents or give any consent under this Agreement or any of
the Shared Collateral  Security Documents or enter into any agreement  amending,
modifying,  supplementing  or waiving any  provision  of this  Agreement  or any
Shared Collateral  Security Document unless it shall have been directed to do so
by the Required Parties (and if so directed, such action of the Collateral Agent
shall be binding upon the Credit Agent,  the Lenders,  the Trustee and the Owner
Participants).

     (g) Upon the  request  of the  Collateral  Agent or the Credit  Agent,  the
Trustee shall notify the Collateral  Agent, or the Credit Agent, as the case may
be, in writing of the aggregate  principal amount of the Secured  Sale/Leaseback
Obligations outstanding at any time and of the amount in clause (i) of the first
sentence  of either of the defined  terms Pro Rata Share or Required  Parties at
such time.

     5.3 Disclaimer; Good Faith Reliance on Advice and Information.  (a) Neither
the  Collateral  Agent nor any of its directors,  officers,  agents or employees
shall be liable for any action  taken or omitted to be taken by it or them under
or in connection with the Shared Collateral Security  Documents,  except for its
or their own gross negligence,  willful misconduct or knowing violations of law.
Without  limiting the generality of the foregoing,  the Collateral Agent (i) may
consult with legal counsel, independent public accountants, appraisers and other
experts  selected by the Collateral Agent and shall not be liable for any action
taken or omitted to be taken in good faith in accordance with the advice of such
counsel,  accountants,  appraisers or experts, and (ii) shall incur no liability
under or in respect of the Shared Collateral  Security  Documents by acting upon
any representation or warranty of Sweetheart made in connection  therewith or by
relying  upon any written  information  supplied by any  predecessor  Collateral
Agent(s) or by acting  upon any notice,  instruction,  consent,  certificate  or
other  instrument,  writing or communication  (which may be by telegram,  cable,
telex or telephone) in good faith  believed by it to be genuine and to have been
signed, sent or made by the proper party or parties.

     (b) For purposes of this Section 5.3,  "known" shall mean that  information
has come to the attention of an officer of a party with  responsibility  for the
applicable  transaction  under this Agreement giving such party actual knowledge
of the existence or non-existence of the fact in question.

     (c) The Collateral Agent shall not be responsible to any Person for (i) the
due execution, legality, validity, enforceability,  genuineness,  sufficiency or
value of the Shared Collateral
<PAGE>
Security  Documents,  any Shared Collateral  provided  thereunder,  or any other
instrument or document furnished pursuant thereto; (ii) the priority of any Lien
granted under the Shared Collateral Security  Documents;  (iii) any omissions or
errors on the part of government officials,  failure of mail deliveries,  losses
of documents by Federal  Express or other  courier  services,  mistakes by title
companies or lien search companies,  or other similar events;  (iv) any recital,
statement,  representation  or warranty made by Sweetheart,  or any affiliate of
Sweetheart  or any  officer,  employee  or agent of any such party in the Shared
Collateral  Security  Documents or any certificate or other document referred to
or provided  for therein;  (v) any failure by  Sweetheart,  or any  affiliate of
Sweetheart,  to perform its  obligations  under the Shared  Collateral  Security
Documents or any document or instrument  related  thereto;  or (vi) any conflict
among the  Shared  Collateral  Security  Documents  or any other  instrument  or
document to which Sweetheart,  any Lender,  the Credit Agent, the Trustee or any
Owner  Participant  is a party.  The  Collateral  Agent  shall  not be under any
obligation  to  the  Credit  Agent,  the  Trustee,  the  Lenders  or  the  Owner
Participants  to ascertain or to inquire as to the  observance or performance of
any of the  agreements  contained  in, or conditions  of, this  Agreement or the
Shared Collateral Security Documents.

     5.4  Indemnity;  Expenses.  (a) Each of the  Credit  Agent and the  Trustee
severally  agrees to indemnify  and hold harmless the  Collateral  Agent and its
officers,  directors,  agents  and  employees  (each an  "Indemnitee"),  ratably
according  to the Pro  Rata  Share(s)  held  by the  Lenders  and  the  Trustee,
respectively,  from and against any and all  liabilities,  obligations,  losses,
damages,  penalties,  actions,  judgments,  suits,  costs,  expenses,  claims or
disbursements  ("Claims") of any kind or nature  whatsoever  that may be imposed
on, incurred by, or asserted against the Indemnitee in any way relating directly
or indirectly  to or arising  directly or  indirectly  (whether  before or after
termination  of this  Agreement)  out of (i) this Agreement or any of the Shared
Collateral  Security  Documents  (including  without limitation the negotiation,
execution,  and enforcement thereof),  or any transaction  contemplated thereby,
(ii) any action taken or omitted by the Indemnitee pursuant to this Agreement or
any of the  Shared  Collateral  Security  Documents,  or (iii) any breach of any
agreement  or  instrument  as a result of any  action  taken or  omitted  by the
Indemnitee  hereunder or under any of the Shared Collateral  Security Documents;
provided, however, that neither the Credit Agent nor the Trustee shall be liable
for any  portion of such  Claims  found to result  from the  Indemnitee's  gross
negligence,  willful  misconduct  or  knowing  violations  of  Law  (as  may  be
determined by New York law),  unless such breach has been waived by the Required
Parties or the Required  Parties shall have  instructed the Collateral  Agent to
take an action which violates applicable Law. The Pro Rata Shares of the Lenders
and the Trustee for purposes of this Section  5.4(a) shall be determined  (i) in
the case the Collateral  Agent has taken any Remedial Action with respect to the
Shared  Collateral,  at the time of the commencement of such Remedial Action and
(ii) in the case the Collateral  Agent has not taken any such action,  as of the
date such Claim  commenced to be incurred,  in each case,  as  determined by the
Collateral Agent in good faith.

     (b) Without  limiting the  generality of the  foregoing,  and to the extent
that the Indemnitee is not promptly  reimbursed for such expenses by Sweetheart,
the Credit Agent and the Trustee  severally  agree to reimburse  the  Indemnitee
promptly  upon  demand  ratably  according  to the Pro Rata  Shares  held by the
Lenders and the Trustee, respectively, for any out-of-pocket expenses (including
regular time billing charges of in-house or outside counsel) incurred by the
Indemnitee and
<PAGE>
permitted  by  this  Section  5.4  in  connection  with  the  administration  or
enforcement  of, or legal  advice  in  respect  of  rights  or  responsibilities
hereunder or under any of the Shared Collateral  Security  Documents  (including
without  limitation the enforcement of this  indemnity).  The Pro Rata Shares of
the  Lenders  and the  Trustee for  purposes  of this  Section  5.4(b)  shall be
determined  (i) in the case the Collateral  Agent has taken any Remedial  Action
with respect to the Shared  Collateral,  at the time of the commencement of such
Remedial Action and (ii) in the case the Collateral Agent has not taken any such
action,  as of the date such Claim  commenced to be incurred,  in each case,  as
determined by the Collateral Agent in good faith.

     (c) Any  Indemnitee  may retain its own counsel to prosecute,  negotiate or
defend any Claims; provided, however, that the indemnification obligations under
this  Section  5.4 shall only  apply to one  counsel  with  respect to any Claim
regardless of the number of Indemnitees.  Any Indemnitee shall have the right to
compromise any Claims with the prior written consent of the Required Parties.

     (d) The  obligations  of the Credit  Agent and the  Trustee,  respectively,
under this  Section  5.4 shall  survive  the  payment  of all  Credit  Agreement
Obligations  and the Secured  Sale/Leaseback  Obligations and the termination of
this Agreement.

     5.5  Resignation  and Removal of Collateral  Agent.  (a)(i) The  Collateral
Agent may  resign at any time by giving  sixty (60) days  prior  written  notice
thereof to the Trustee,  the Credit Agent and the Borrower and may be removed at
any time,  with or without  cause,  by the  Required  Parties by written  notice
delivered to the Borrower, the Trustee and the Credit Agent.

         (ii)  Upon  receiving  notice of any such  resignation  or  removal,  a
successor  Collateral  Agent  shall be  appointed  by the Trustee and the Credit
Agent;  provided,  however,  that such successor Collateral Agent shall be (A) a
bank or  trust  company  having  a  combined  capital  and  surplus  of at least
$100,000,000 subject to supervision or examination by a federal or state banking
authority;  and  (B)  authorized  under  the  laws  of the  jurisdiction  of its
incorporation  or organization to assume the functions of the Collateral  Agent.
If the  appointment  of such  successor  shall  not have  become  effective  (as
hereafter provided) within such sixty (60) day period after the Collateral Agent
shall have given such notice, then the Collateral Agent may assign the Liens and
its duties hereunder and under the Shared Collateral  Security  Documents to the
Trustee and the Credit Agent,  as their  interests may appear,  and in such case
all  references  herein  to  "Collateral  Agent"  shall  be  deemed  to refer to
"Required  Parties."  The  Required  Parties may  petition a court of  competent
jurisdiction  for the appointment of a successor  Collateral  Agent.  Such court
shall, after such notice as it may deem proper,  appoint a successor  Collateral
Agent meeting the qualifications  specified in this Section 5.5(a). The Trustee,
the Credit Agent, the Lenders and the Owner Participants  hereby consent to such
petition and appointment so long as such criteria are met.

         (iii) The  resignation  or removal of a  Collateral  Agent shall become
effective  upon the execution and delivery of such  documents or  instruments as
are necessary to transfer the rights and  obligations  of the  Collateral  Agent
under the Shared Collateral Security Documents.  Copies of
<PAGE>
each such  document  or  instrument  shall be  delivered  to the Trustee and the
Credit Agent.  The appointment of a successor  Collateral Agent pursuant to this
Section 5.5(a) shall become  effective  upon the acceptance of such  appointment
and such successor  Collateral Agent shall succeed to and become vested with all
the rights, powers, privileges and duties of the retiring Collateral Agent.

     (b) After any resignation or removal hereunder of the Collateral Agent, the
provisions  of this  Section 5 shall  continue to inure to its benefit as to any
actions  taken  or  omitted  to be  taken by it in  connection  with its  agency
hereunder while it was Collateral Agent.

     5.6  Shares  of  Collateral.  Where the  Collateral  Agent is  required  or
permitted  hereunder,  under any of the Shared Collateral  Security Documents or
otherwise to do or refrain from doing any act in accordance  with the consent or
instructions  of  the  Trustee,   the  Credit  Agent,  the  Lenders,  the  Owner
Participants or any group thereof, and where the Collateral Agent is required or
permitted to make any payment,  disbursement  or distribution to any such Person
(or to require any payment from any such Person), then in calculating the Credit
Agreement  Obligations or Secured  Sale/Leaseback  Obligations  held by any such
Person  or the  amount  in clause  (i) of the  first  sentence  of either of the
defined  terms Pro Rata Share or Required  Parties or the amount of any payments
to be made to any such Person  (anything  to the  contrary  herein or  elsewhere
notwithstanding)  the  Collateral  Agent may assume in the  absence of a written
representation to the contrary that (i) all scheduled  payments of principal and
interest or rent,  as the case may be, have been made as required by the Secured
Sale/Leaseback  Documents and the Credit  Agreement;  and (ii) no prepayments on
the Credit Agreement Obligations or Secured Sale/Leaseback Obligations have been
received  since the last  date the  Credit  Agent or the  Trustee  reported  the
outstanding   amount  of  the  Credit  Agreement   Obligations  or  the  Secured
Sale/Leaseback Obligations,  respectively,  to the Collateral Agent, as the case
may be, except those amounts received by the Collateral Agent in accordance with
this  Agreement  and disbursed to the Trustee and the Credit Agent in accordance
with the provisions  hereof. In the event of any controversy with respect to any
payment or prepayment  made or the amount in clause (i) of the first sentence of
either of the defined terms Pro Rata Share or Required  Parties,  the Collateral
Agent shall be permitted to rely conclusively (in the absence of manifest error)
upon its own records with respect to any payments  made to or by the  Collateral
Agent and, in every other case,  upon the written  representation  of any of the
Trustee,  the  Credit  Agent,  a  Lender  or an  Owner  Participant  as to facts
regarding the Credit Agreement Obligations or Secured Sale/Leaseback Obligations
owed to it or the  amount in clause (i) of the first  sentence  of either of the
defined terms Pro Rata Share or Required Parties,  notwithstanding  any contrary
representation  by any other party.  The  Collateral  Agent shall be entitled to
retain funds or make a partial  distribution of funds to any such Person pending
any investigation or resolution of any such controversy.

     5.7  Compensation  and Expenses.  The Collateral Agent shall be entitled to
charge such  reasonable  fees (in addition to its  expenses) for services of the
Collateral Agent as may be agreed from time to time between the Collateral Agent
and the  Borrower.  The  Collateral  Agent may incur  such  reasonable  expenses
(including, without limitation, attorneys' fees and regular time billing charges
of in-house or outside  counsel)  directly or indirectly in connection  with the
discharge or exercise of any of its rights,  powers or obligations hereunder and
under the Shared Collateral Security Documents as it in its
<PAGE>
sole and absolute  discretion may deem necessary or  appropriate.  Said fees and
expenses shall be charged to the Borrower by the  Collateral  Agent and shall be
included in the amounts secured by the Shared Collateral Security Documents.

     5.8 Authorized Investments.  Any and all funds held by the Collateral Agent
in its capacity as Collateral Agent, whether pursuant to any provision of any of
the Shared  Collateral  Security  Documents  or  otherwise,  shall to the extent
feasible  within a reasonable  time be invested by the Collateral  Agent in Cash
Equivalent  Investments.  Any  interest  earned on such funds shall be deposited
into the Shared  Collateral  Account and disbursed to the Trustee and the Credit
Agent in accordance with this Agreement.  The Collateral Agent may hold any such
funds in a common interest bearing  account.  The Collateral Agent shall have no
duty to place funds held  pursuant  to this  Section  5.8 in  investments  which
provide a maximum return; provided,  however, that the Collateral Agent shall to
the extent feasible invest funds in Cash Equivalent  Investments with reasonable
promptness.  The Collateral  Agent shall not be responsible  for any loss of any
funds invested in accordance with this Section 5.8.

     5.9 Collateral Agent Counsel, Joint Defense Privilege.  The Trustee and the
Credit Agent acknowledge that the Collateral Agent may hire counsel to advise it
with respect to its rights and duties hereunder,  and that such counsel does not
and will not  represent  the  interests of the Trustee,  the Credit  Agent,  any
Lender or any Owner Participant,  individually. The Trustee and the Credit Agent
acknowledge  that conflicts may arise among such Persons and waive any conflicts
of  interest  which  arise or exist for such  counsel  as a result of  counsel's
representation of the Collateral Agent. The Trustee and the Credit Agent further
agree to be bound by the joint  defense  privilege  with  respect to all matters
relating to this Agreement,  the Shared  Collateral  Security  Documents and the
Shared Collateral. All communications from the Collateral Agent's counsel to the
Credit  Agent,  the  Trustee,  the  Collateral  Agent,  any  Lender or any Owner
Participant  are subject to such  privilege  and each Person agrees not to waive
such privilege,  or to disclose any such communications,  without the consent of
all such Persons.

     6. Term. This Agreement shall be irrevocable and shall remain in full force
and effect  until (i) all of the  letters of credit  and credit  support  issued
pursuant to the Credit  Agreement have been terminated and the loans,  notes and
unpaid letter of credit and credit  support  drawings,  together with  interest,
fees and all other Credit Agreement Obligations incurred thereunder, are paid in
full,  all  obligations  to  extend  further  advances  pursuant  to the  Credit
Agreement  have been  terminated and all Hedging  Obligations  have been paid in
full and the related agreements  terminated,  or (ii) the payment in full of all
amounts  owing by the Borrower  under the Secured  Sale/Leaseback  Lease and all
other Secured  Sale/Leaseback  Obligations then owing and the termination of the
lease arrangements under the Secured  Sale/Leaseback  Lease,  subject to Section
3.6 hereof,  shall  automatically  terminate,  provided,  however,  that (x) the
obligations  of the Credit Agent and the Lenders  under  Section  3.11(b)  shall
survive  for a period  of sixty  (60) days  following  the  termination  of this
Agreement  and, if any claim  thereunder is asserted  prior to the expiration of
such sixty (60) day period,  shall survive thereafter,  solely as to such claim,
until such claim has been fully resolved or until the expiration of such statute
of  limitations  applicable  thereto,  (y) as set forth in Sections  3.11(d) and
3.12(a), the rights of the Credit Agent pursuant to Sections 3.11 and 3.12 shall
continue to apply in accordance with the terms thereof
<PAGE>
notwithstanding  any sale of the  Secured  Sale/Leaseback  Collateral  or of any
equipment subject to the Secured  Sale/Leaseback Lease and (z) the provisions of
Section 5 shall survive the termination of this  Agreement.  At the time of such
termination,  (a) if such  termination  occurs  pursuant  to  clause  (i) of the
preceding  sentence,  the Credit  Agent  shall (x)  deliver to the  Trustee  any
Collateral  (other than Excluded  Sale/Leaseback  Assets) then in its possession
unless the Trustee  advises the Credit Agent that  possession of such Collateral
by the Trustee is not required pursuant to the Secured  Sale/Leaseback  Security
Documents and (y) terminate or assign to the Trustee any landlords'  agreements,
warehouse  operators'  agreements and similar  agreements in favor of the Credit
Agent pertaining to the Collateral (other than Excluded  Sale/Leaseback Assets);
and (b) if such  termination  occurs  pursuant to clause  (ii) of the  preceding
sentence,  the Trustee shall (x) deliver to the Credit Agent any Collateral then
in its possession unless the Credit Agent advises the Trustee that possession of
such  Collateral  by the Credit  Agent is not  required  pursuant  to the Credit
Agreement Security Documents and (y) terminate or assign to the Credit Agent any
landlords' agreements, warehouse operators' agreements and similar agreements in
favor of the Trustee  pertaining to the Collateral;  and (c) if such termination
occurs  pursuant to clauses (i) and (ii)  concurrently,  then each of the Credit
Agent and the Trustee shall (x) deliver to Sweetheart any Collateral then in its
possession and (y) terminate any  landlords'  agreements,  warehouse  operators'
agreements and similar agreements in its favor pertaining to the Collateral.

     7.  Representations  and Warranties.  Each of the Credit Agent, the Trustee
and the  Collateral  Agent,  as to itself only,  represents  and warrants to the
other that:

     (a)  It  is  a  duly  organized  and  validly  existing   national  banking
association;  has all  requisite  power and  authority  to execute,  deliver and
perform under this Agreement; and the execution,  delivery and performance by it
of this Agreement have been duly authorized by all requisite  corporate or other
action; and

     (b)  Pursuant to the terms of the Credit  Agreement,  the Credit  Agent has
been  granted all  requisite  authority  to bind the Lenders and pursuant to the
terms of the Secured Sale/Leaseback  Documents, the Trustee has been granted all
requisite authority to bind the Owner Participants by their respective execution
and  delivery  of this  Agreement,  and  pursuant  to the  terms  of the  Credit
Agreement  and the  Secured  Sale/Leaseback  Documents,  no  further  consent or
approval on the part of the Lenders or the Owner  Participants,  as the case may
be, is or will be  required  in  connection  with the  execution,  delivery  and
performance of this Agreement.

     8. Miscellaneous.

     8.1  Notices.  Whenever  it is provided  herein  that any  notice,  demand,
request, consent,  approval,  declaration or other communication shall or may be
given to or served upon either of the parties by the other,  or whenever  either
of the  parties  desires to give or serve upon the other any such  communication
with respect to this  Agreement,  each such notice,  demand,  request,  consent,
approval,  declaration  or other  communication  shall be in writing  and either
shall be delivered in person with receipt  acknowledged,  delivered by reputable
overnight courier or telecopied and confirmed
<PAGE>
immediately in writing by a copy mailed by registered or certified mail,  return
receipt requested,  postage prepaid,  or mailed by registered or certified mail,
return receipt requested, postage prepaid, addressed as follows:

                           If to the Credit Agent or the Collateral Agent at:

                           Bank of America, N.A.
                           335 Madison Avenue
                           New York, New York  10017
                           Attention:  Richard Levenson

                           If to the Trustee at:

                           State Street Bank and Trust
                           Company of Connecticut,
                           National Association
                           225 Asylum Street
                           Hartford, Connecticut 06103
                           Attention: Corporate Trust Department

or at such  other  address  as may be  substituted  by  notice  given as  herein
provided.  The giving of any notice required  hereunder may be waived in writing
by the party  entitled to receive such notice.  Every notice,  demand,  request,
consent, approval,  declaration or other communication hereunder shall be deemed
to have been duly  given or  served on the date on which  personally  delivered,
with  receipt  acknowledged,  on the date of  delivery  by  reputable  overnight
courier  service,  on the date of telecopier  transmission or three (3) Business
Days after the same  shall have been  deposited  with the  United  States  mail.
Failure or delay in delivering copies of any notice, demand,  request,  consent,
approval,  declaration or other communication to the persons designated above to
receive  copies  shall in no way  adversely  affect  the  effectiveness  of such
notice, demand, request, consent, approval, declaration or other communication.

     8.2 Entire  Agreement;  Amendment.  This Agreement  constitutes  the entire
agreement  between the Credit Agent,  the Trustee and the Collateral  Agent with
respect to the subject  matter  hereof and  supersedes  all prior  negotiations,
understandings  and  agreements  between the Credit  Agent,  the Trustee and the
Collateral  Agent in respect of such subject  matter,  whether  written or oral.
This  Agreement  may be  amended,  modified  or  supplemented  only by a written
instrument executed by the Credit Agent, the Trustee and the Collateral Agent.

     8.3 WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION.  (a) EACH OF THE PARTIES
HERETO  WAIVES,  TO THE FULLEST  EXTENT  PERMITTED BY LAW, ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION OR  PROCEEDING  TO  ENFORCE  OR DEFEND ANY RIGHTS  UNDER THIS
AGREEMENT.
<PAGE>
     (b) EACH OF THE PARTIES  HERETO  SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY
LEGAL ACTION OR PROCEEDING  RELATING TO THIS  AGREEMENT OR FOR  RECOGNITION  AND
ENFORCEMENT  OF ANY JUDGMENT IN RESPECT  HEREOF,  TO THE  NON-EXCLUSIVE  GENERAL
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE COURTS OF THE UNITED
STATES OF AMERICA FOR THE SOUTHERN  DISTRICT OF NEW YORK,  AND APPELLATE  COURTS
FROM ANY THEREOF.

     8.4 Severability. Wherever possible, each provision of this Agreement shall
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this  Agreement  shall be prohibited by or invalid under
applicable  Law,  such  provision  shall be  ineffective  to the  extent of such
prohibition or invalidity,  without invalidating the remainder of such provision
or the remaining provisions of this Agreement.

     8.5 Survival.  The  representations  and  warranties of the parties in this
Agreement  shall survive the execution,  delivery and  acceptance  hereof by the
parties hereto until the termination of this Agreement pursuant to Section 6.

     8.6  Counterparts.  This  Agreement  may  be  executed  in  any  number  of
counterparts,  all of which,  taken together,  shall constitute one and the same
instrument,  and either of the parties  hereto may  execute  this  Agreement  by
signing any such counterpart.

     8.7 GOVERNING LAW. THIS AGREEMENT SHALL BE INTERPRETED,  AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HERETO DETERMINED, IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE.

     8.8 Parties.  This Agreement  shall be binding upon, and shall inure to the
benefit  of, the  parties  hereto,  the  Lenders  from time to time party to the
Credit Agreement,  the Owner  Participants from time to time party to any of the
Secured  Sale/Leaseback  Documents and their respective  successors and assigns;
provided,  however,  that  any  successor  Credit  Agent  or the  Trustee  shall
expressly assume the obligations of such party hereunder.

     8.9 No Third Party Beneficiaries. Nothing contained in this Agreement shall
be deemed to indicate that this  Agreement has been entered into for the benefit
of Sweetheart or any other Person  except for the parties  hereto,  the Lenders,
the Owner Participants and their respective successors and assigns.

     8.10 Legend.  Each of the Credit Agreement,  the Credit Agreement  Security
Documents,  the  Secured  Sale/Leaseback  Lease and the  Secured  Sale/Leaseback
Security  Documents  shall  be  made  specifically  subject  to  the  terms  and
conditions of this Agreement.
<PAGE>
     8.11 Section Titles. The Section titles contained in this Agreement are and
shall be without  substantive  meaning or content of any kind whatsoever and are
not a part of the agreement between the parties hereto.

     8.12  Trustee  Not  Acting  in  Individual  Capacity.   Each  party  hereto
acknowledges  that the Initial Trustee is entering into this Agreement solely as
Owner  Trustee and Lessor under the Secured  Sale/Leaseback  Documents  and not,
except as expressly provided herein, in its individual capacity,  and in no case
whatsoever  shall it or any entity acting as successor  Owner Trustee and Lessor
under the Secured Sale/Leaseback  Documents be personally liable for any loss in
respect of any of the  statements,  representations,  warranties,  agreements or
obligations  of Trustee  hereunder,  except that each Trustee shall be severally
liable, in its individual capacity,  (a) for its own willful misconduct or gross
negligence;  (b) in the case of the inaccuracy of any of its  representations or
warranties contained in Section 7(a) of this Agreement;  and (c) for the failure
to use ordinary care in the receipt and disbursement of moneys actually received
by it in accordance with the provisions hereof.

                            [Signature Page Follows]
<PAGE>

                  IN WITNESS WHEREOF,  this Agreement has been signed and sealed
by the undersigned  duly authorized  signatories of the parties hereto as of the
date and year first above written.

                                          BANK OF AMERICA, N.A., as Credit Agent


                                          By:    _____________________
                                                 Name:
                                                 Title:


                                          STATE STREET BANK AND TRUST
                                          COMPANY OF CONNECTICUT,
                                          NATIONAL ASSOCIATION,
                                          not in its  individual
                                          capacity, but
                                          solely as Trustee

                                          By:    _____________________
                                                 Name:
                                                 Title:


                                          BANK OF AMERICA, N.A.,
                                          as Collateral Agent

                                          By:    _____________________
                                                 Name:
                                                 Title:
<PAGE>

     Each  of  the   undersigned,   Sweetheart  Cup  Company  Inc.,  a  Delaware
corporation,   and  Sweetheart  Holdings  Inc.,  a  Delaware  corporation,   (a)
acknowledges  receipt of a copy of this  Agreement and agrees to the  provisions
hereof;  (b) agrees to cooperate  with the parties hereto by granting all Liens,
and by taking all such other  actions,  as are  contemplated  by Section  3.8(b)
hereof;  (c) acknowledges  that, as provided by Section 8.9 hereof,  it is not a
third party beneficiary  hereof,  and has no rights hereunder;  (d) acknowledges
and consents to the priority of the liens  purported to be  established  by this
Agreement,  as in effect on the date  hereof;  (e)  agrees  not to object to the
enforcement  by the Credit Agent against the Trustee or the Trustee  against the
Credit Agent of any of the respective rights granted to them pursuant to Section
3.11(a) hereof, as in effect on the date hereof;  (f) agrees to the provision in
Section 3.12(a) hereof,  as in effect on the date hereof,  pursuant to which the
Borrower  and the  Guarantor  agree  to  certain  sales  of  Collateral  and the
commercial  reasonableness  thereof;  and (g) agrees not to assert any provision
hereof as a defense  to any  Remedial  Action  (except  to the  extent  that the
provisions of this Agreement are expressly referred to in or incorporated in the
Credit Agreement, the Secured Sale/Leaseback Lease or any Security Document as a
limitation on its obligations thereunder or on the Credit Agent's, Lenders', the
Trustee's or the Owner  Participants'  rights thereunder) nor to assert any such
provision as a counterclaim or basis for set-off or recoupment against any party
hereto.  Such  acknowledgments and agreements by Sweetheart Cup Company Inc. and
Sweetheart   Holdings  Inc.  do  not,   however,   constitute   any   amendment,
modification, or waiver by them or either of them of any provision of the Credit
Agreement,  the Secured  Sale/Leaseback  Lease or any  Security  Document or any
right available to them or either of them thereunder.


                                              SWEETHEART CUP COMPANY INC.


                                              By:    ________________________
                                                     Name:
                                                     Title:


                                              SWEETHEART HOLDINGS INC.


                                              By:    ________________________
                                                     Name:
                                                     Title:

<PAGE>

                                    EXHIBIT A
                                    ---------

                           CREDIT AGREEMENT COLLATERAL
                           ---------------------------

     All of the following Sweetheart Property, whether now existing or hereafter
acquired,  arising  or  created  and  wheresoever  located  unless  specifically
excluded pursuant to the relevant Credit Agreement Security Documents:

     (a) All  Accounts  other  than  Accounts  constituting  Proceeds  from  the
Disposition of Secured Sale/Leaseback Collateral;

     (b) All Inventory and Spare Parts;

     (c) All  lockboxes,  bank  accounts  and deposit  accounts  (other than the
Collateral Account and the Shared Collateral  Account) and all amounts deposited
therein and investments held therein;

     (d) General Intangibles constituting (i) claims under guaranties,  security
interests or other  security held by or granted to Sweetheart to secure  payment
of the Accounts  described in clause (a) above by the account  debtor  obligated
thereon, (ii) rights of indemnification relating to the Inventory or Spare Parts
described in clause (b) above,  (iii) warranty  claims relating to the Inventory
or Spare Parts described in clause (b) above, or (iv) computer programs, ledgers
and other books and records, in each case, to the extent directly related to the
Accounts described in clause (a) above;

     (e) All Chattel  Paper,  Documents  or  Instruments  to the extent the same
relate to the  settlement  or payment of the  Accounts  described  in clause (a)
above or the Disposition or acquisition of Inventory or Spare Parts described in
clause (b) above;

     (f) All insurance  policies to the extent  related to the foregoing  (other
than business interruption insurance);

     (g) All Credit Agreement Term Loan Equipment Collateral;

     (h) All Excluded Sale/Leaseback Assets; and

     (i) To the extent not otherwise included, all Proceeds (including insurance
proceeds  other than business  interruption  insurance  proceeds) of each of the
foregoing and all accessions to,  substitutions and replacements for, and rents,
profits and products of each of the foregoing.

     Notwithstanding the foregoing, Credit Agreement Collateral shall not in any
event include any Leased Equipment or Shared Collateral.

<PAGE>

                                    EXHIBIT B
                                    ---------

                        SECURED SALE/LEASEBACK COLLATERAL
                        ---------------------------------

     All of the following Sweetheart Property, whether now existing or hereafter
acquired,  arising  or  created  and  wheresoever  located  unless  specifically
excluded pursuant to the relevant Secured Sale/Leaseback Security Documents:

     (a) All Equipment  (other than Spare Parts and Credit  Agreement  Term Loan
Equipment Collateral);

     (b) Except to the extent included in Credit Agreement  Collateral described
on Exhibit A, all General Intangibles;

     (c) Except to the extent included in Credit Agreement  Collateral described
on Exhibit A, all Chattel Paper, Contracts, Documents, and Instruments;

     (d) All right, title or interest in any Sweetheart Real Property;

     (e) Except to the extent included in Credit Agreement  Collateral described
on Exhibit A, all other  goods and  personal  property  of  Sweetheart,  whether
tangible or  intangible,  now owned or hereafter  acquired by  Sweetheart  or in
which Sweetheart now has or hereafter acquires any rights and wherever located;

     (f) All insurance  policies to the extent  related to the foregoing  (other
than business interruption insurance); and

     (g)  The  Collateral   Account  and  all  amounts   deposited  therein  and
investments held therein (including,  without limitation, the Collateral Account
Collateral)  and, to the extent not otherwise  included  above and not otherwise
constituting Shared Collateral, all Proceeds (including insurance proceeds other
than business interruption  insurance proceeds) of each of the foregoing and all
accessions  to,  substitutions  and  replacements  for,  and rents,  profits and
products of each of the foregoing.

     Notwithstanding the foregoing,  Secured Sale/Leaseback Collateral shall not
in  any  event  include  any  Excluded   Sale/Leaseback  Assets  or  any  Shared
Collateral.

<PAGE>

                                    EXHIBIT C
                                    ---------

                                SHARED COLLATERAL
                                -----------------

     All of the following Sweetheart Property, whether now existing or hereafter
acquired, arising or created and wheresoever located:

     (a) All Stock Collateral;

     (b) All Intercompany Debt;

     (c) The Shared  Collateral  Account and all amounts  deposited  therein and
instruments held therein;

     (d) Business  interruption  insurance,  all proceeds thereof and all rights
under insurance policies related thereto; and

     (e) All Proceeds of each of the foregoing  (including,  without limitation,
any Proceeds of any of the foregoing  deposited in bank accounts of  Sweetheart)
and all accessions to,  substitutions and replacements  for, and rents,  profits
and products of each of the foregoing.

Notwithstanding  the foregoing,  Shared  Collateral  shall not in any event
include any Excluded Sale/Leaseback Assets.

<PAGE>

                                   EXHIBIT D1
                                   ----------

                                     [Date]
                                     ------

State Street Bank and Trust Company
of Connecticut, National Association,
as Trustee
225 Asylum Street
Hartford, Connecticut 06103
Attn: Corporate Trust Department

Ladies and Gentlemen:

     Please  refer to the  Intercreditor  Agreement  dated  as of June 15,  2000
between you and Bank of America,  N.A., as Credit Agent and Collateral Agent, to
which the form of this letter is  attached  as Exhibit  D-1 (the  "Intercreditor
Agreement").  Capitalized terms which are defined in the Intercreditor Agreement
shall have the meanings assigned to them therein.

     [Sweetheart] has pledged the [Securities,] [Instruments,] [Documents,] [and
other  Collateral]  described  on  Schedule  I  attached  hereto  (the  "Pledged
Collateral")  to  the  Trustee  as  security  for  the  Secured   Sale/Leaseback
Obligations pursuant to the Secured Sale/Leaseback  Security Documents,  and has
delivered  possession  thereof to the  Trustee in order to perfect  the  Secured
Sale/Leaseback  Lien  therein.  [Sweetheart]  has  further  pledged  the Pledged
Collateral to the Credit Agent as security for the Credit Agreement  Obligations
pursuant to the Credit Agreement Security Documents.  As more fully set forth in
the  Intercreditor  Agreement,  the Lenders' Lien in such Pledged  Collateral is
subordinate to the Secured  Sale/Leaseback Lien in such pledged  collateral,  to
the extent set forth in the Intercreditor Agreement.

     The undersigned,  the Credit Agent and [Sweetheart],  hereby (a) notify the
Trustee,  as a bailee of the  Pledged  Collateral  by virtue of the  pledge  and
delivery  of  the  Pledged   Collateral   to  the  Trustee   under  the  Secured
Sale/Leaseback  Security  Documents,  of  the  Lenders'  Lien  in  such  Pledged
Collateral;  (b) acknowledge  that  possession of the Pledged  Collateral by the
Trustee, as bailee,  will perfect the subordinate  Lenders' Lien in such Pledged
Collateral  pursuant to Section 9-304 or 9-305 of the UCC; and (c) authorize and
direct the Trustee,  upon the termination of the Secured  Sale/

<PAGE>

Leaseback Lien in the Pledged Collateral,  to deliver possession of such Pledged
Collateral  to the  Credit  Agent  to be  held in  accordance  with  the  Credit
Agreement.

                                      Yours very truly,

                                      BANK OF AMERICA, N.A., as Credit Agent


                                      By:    __________________________
                                             Name:
                                             Title:

                    The  undersigned  joins in the  execution  of this letter to
                    confirm  the  matters  set  forth  in  this  letter  and  to
                    authorize  the Trustee to comply with the  instructions  set
                    forth herein.


                                      [SWEETHEART]


                                      By:    __________________________
                                             Name:
                                             Title:


The undersigned,  as Trustee,  acknowledges
receipt of this letter and agrees to
comply with the instructions set forth herein.

STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
not in its individual capacity, but solely as Trustee


By:      ________________________
         Name:
         Title:
<PAGE>
                                    EXHIBIT D2
                                    ----------

                                     [Date]

Bank of America, N.A., as Credit Agent
335 Madison Avenue
New York, New York  10017
Attn:  Richard Levenson

Ladies and Gentlemen:

     Please  refer to the  Intercreditor  Agreement  dated  as of June 15,  2000
between you, as Credit  Agent and  Collateral  Agent,  and State Street Bank and
Trust Company of Connecticut,  National  Association,  as Trustee,  to which the
form of this letter is attached as Exhibit D-2 (the "Intercreditor  Agreement").
Capitalized  terms which are defined in the  Intercreditor  Agreement shall have
the meanings assigned to them therein.

     [Sweetheart] has pledged the [Securities,] [Instruments,] [Documents,] [and
other  Collateral]  described  on  Schedule  I  attached  hereto  (the  "Pledged
Collateral")  to  the  Credit  Agent  as  security  for  the  Credit   Agreement
Obligations  pursuant  to the  Credit  Agreement  Security  Documents,  and  has
delivered  possession  thereof  to the  Credit  Agent in order  to  perfect  the
Lenders' Lien therein.  [Sweetheart] has further pledged the Pledged  Collateral
to the Trustee as security for the Secured  Sale/Leaseback  Obligations pursuant
to the Secured Sale/Leaseback Security Documents. As more fully set forth in the
Intercreditor  Agreement,  the  Secured  Sale/Leaseback  Lien  in  such  Pledged
Collateral is  subordinate to the Lenders' Lien in such Pledged  Collateral,  to
the extent set forth in the Intercreditor Agreement.

     The undersigned, the Trustee and [Sweetheart], hereby (a) notify the Credit
Agent,  as a bailee  of the  Pledged  Collateral  by virtue  of the  pledge  and
delivery  of the  Pledged  Collateral  to the  Credit  Agent  under  the  Credit
Agreement Security Documents, of the Secured Sale/Leaseback Lien in such Pledged
Collateral;  (b) acknowledge  that  possession of the Pledged  Collateral by the
Credit Agent,  as bailee,  will perfect the subordinate  Secured  Sale/Leaseback
Lien in such Pledged  Collateral  pursuant to Section 9-304 or 9-305 of the UCC;
and (c)  authorize  and direct the Credit  Agent,  upon the  termination  of the
Lenders' Lien in the Pledged  Collateral,  to deliver possession of such Pledged

<PAGE>

Collateral  to  the  Trustee  to  be  held  in   accordance   with  the  Secured
Sale/Leaseback Security Documents.

                                Yours very truly,

                                STATE STREET BANK AND TRUST COMPANY
                                OF CONNECTICUT, NATIONAL ASSOCIATION,
                                not in its individual capacity,
                                but solely as Trustee


                                By:      ____________________
                                         Name:
                                         Title:

                    The  undersigned  joins in the  execution  of this letter to
                    confirm  the  matters  set  forth  in  this  letter  and  to
                    authorize  the Credit Agent to comply with the  instructions
                    set forth herein.


                                [SWEETHEART]


                                By:      _____________________

                                         Name:
                                         Title:


The undersigned, as Credit Agent,
acknowledges receipt of this letter and agrees
to comply with the instructions set forth herein.

BANK OF AMERICA, N.A.,
as Credit Agent

By:      ______________________
         Name:
         Title: