APPENDIX A
                                                                ----------

                         DEFINITIONS AND RULES OF USAGE

                             Part I: Rules of Usage
                             ----------------------

     The terms defined below have the meanings set forth below for all purposes,
and such  meanings are equally  applicable to both the singular and plural forms
of the terms defined.  "Include",  "includes" and "including" shall be deemed to
be followed by "without  limitation" whether or not they are in fact followed by
such words or words of like import.  "Writing",  "written" and comparable  terms
refer to printing, typing, lithography and other means of reproducing words in a
visible form. Any instrument, agreement or Applicable Law defined or referred to
below  or in any  instrument  that is  governed  by  this  Appendix  means  such
instrument,  agreement or Applicable Law as from time to time amended,  modified
or supplemented,  including (in the case of instruments or agreements) by waiver
or  consent,  (in the case of the  Participation  Agreement)  by  succession  of
comparable successor Applicable Laws and includes (in the case of instruments or
agreements)  references to all attachments thereto and instruments or agreements
incorporated  therein.  References to a Person are, unless the context otherwise
requires,  also to its successors and permitted assigns.  Any term defined below
by reference to any  instrument,  agreement or  Applicable  Law has such meaning
whether  or not such  instrument,  agreement  or  Applicable  Law is in  effect.
"Hereof",  "herein",  "hereunder"  and  comparable  terms  refer  to the  entire
instrument  or agreement in which such terms are used and not to any  particular
article, section or other subdivision thereof or attachment thereto.  References
to any gender include, unless the context otherwise requires,  references to all
genders,  and references to the singular  include,  unless the context otherwise
requires, references to the plural and vice versa. "Shall" and "will" have equal
force and effect. References in an instrument to "Article", "Section" or another
subdivision or to an attachment are, unless the context otherwise  requires,  to
an article, section or subdivision of or an attachment to such instrument.

                              Part II: Definitions
                              --------------------
     "Accounts" means all of Lessee's now owned or hereafter acquired or arising
accounts,  and any  other  rights to  payment  for the sale or lease of goods or
rendition of services, whether or not they have been earned by performance.

     "Adjusted  Coverage  Ratio"  means,  with  respect to any trailing 12 month
period,  the ratio of Guarantor's  EBITDA (as determined in accordance with GAAP
on a  consolidated  basis)  plus  Scheduled  Payment to  Interest  Expense  plus
Scheduled Payment.

     "Adjusted Net Earnings from Operations"  means,  with respect to any period
of time,  Guarantor's  net income on a  consolidated  basis after  provision for
income taxes,  if any, for such period of time, as determined in accordance with
GAAP and reported on Guarantor's financial statements for such period, excluding
any and all of the  following  included  in such  net  income:  (a) gain or loss
arising from the sale of any capital  assets;  (b) gain or loss arising from any
write-up or non-cash charge from the write-down, respectively, in the book value
of any asset; (c)

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earnings  of any  corporation,  substantially  all the assets of which have been
acquired  by  Guarantor  in any  manner,  to the extent  realized  by such other
corporation  prior to the date of  acquisition;  (d)  earnings  of any  business
entity in which  Guarantor  has an  ownership  interest  unless (and only to the
extent) such earnings shall actually have been received by Guarantor in the form
of cash  distributions;  (e) earnings of any Person to which assets of Guarantor
shall have been sold,  transferred or disposed of, or into which Guarantor shall
have been merged,  or which has been a party with Guarantor to any consolidation
or other forms of  reorganization,  prior to the date of such  transaction;  (f)
non-cash  gain or non-cash loss arising from the  acquisition  of debt or equity
securities  of  Guarantor  or  from  cancellation  or  forgiveness  of  Debt  of
Guarantor;  and (g) non-cash  gain or non-cash  loss arising from  extraordinary
items,  as determined in accordance  with GAAP, or from any other  non-recurring
transaction.

     "Adjustment  Date" means a day  occurring  not more than 6 months after the
Basic Term  Commencement  Date selected by Lessee and as to which 15 days' prior
notice shall have been given by Lessee to each Owner Participant.

     "Advisor" means Capstar Partners, LLC.

     "Affiliate"  of any  Person  means  any  other  Person  which  directly  or
indirectly through one or more intermediaries  controls, or is controlled by, or
is under common control with such Person.

     "After-Tax  Basis"  means,  with  respect to any payment to an  Indemnified
Person, on the basis that such payment shall be increased by an amount such that
the total of such payment and such amount shall, after reduction by the total of
all Taxes (the "Gross-Up Taxes") required to be paid by such Indemnified  Person
in respect of the receipt or accrual of such amount and after  consideration  of
any current Tax savings  realized by such Indemnified  Person (without  limiting
the provisions of Section 7.01(c) of the Participation  Agreement, as determined
in the sole  discretion of the  Indemnified  Person) by reason of the payment or
accrual  of such  payment  or the  costs or  expenses  that  such  payment  is a
reimbursement  for, be equal to the payment  otherwise  required.  If any amount
required to be paid on an After-Tax Basis hereunder results in the imposition of
Taxes upon an  Indemnified  Person for any period  other than the period  during
which  such  underlying  payment  is made (as a result  of a  reduction  in loss
carryovers  or credits,  or  otherwise),  then such Taxes at the time so imposed
shall be  considered  Gross-Up  Taxes  for  which  Lessee  shall  indemnify  the
Indemnified Person on an After-Tax Basis upon written demand therefor.

     "Applicable Laws" means all applicable treaties,  laws, regulations,  rules
and ordinances  (including  applicable  Environmental  Laws), and all judgments,
decrees,  injunctions,  writs  and  orders  of any  court,  arbitrator  or other
Governmental Authority.

     "Applicable  Rate"  means,  for any day, the rate of interest in effect for
such day as publicly  announced  from time to time by Bank of America,  N.A., in
New York, New York, (or, if Bank of America, N.A. does not announce such rate of
interest,  the comparable rate of interest announced by a financial  institution
selected by a Majority in  Interest  of the Owner  Participants),  as its "prime
rate" (the "prime rate" being a rate set by Bank of America, N.A. based upon

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various  factors  including  Bank of America,  N.A.'s costs and desired  return,
general economic conditions and other factors,  and is used as a reference point
for pricing some loans,  which may be priced at, above,  or below such announced
rate).  Any change in the prime rate  announced by Bank of America,  N.A.  shall
take  effect at the  opening  of  business  on the day  specified  in the public
announcement of such change.

     "Applicable  Specifications" has the meaning defined in Section 6.02 of the
Lease.

     "Appraisal" means the appraisal by the Appraiser of the Equipment delivered
on the Closing Date pursuant to Section 3.01(e) of the Participation Agreement.

     "Appraisal  Procedure"  means the following  procedure for  determining the
Fair Market  Rental Value or the Fair Market Sales Value of the Equipment or any
element of PPE Collateral (herein, the "Subject Property"):

          (i) At either Lessee's or Lessor's request, as the case may be, Lessor
     and Lessee shall negotiate in good faith to determine the Fair Market Sales
     Value and Fair Market Rental Value of the Subject  Property  within 45 days
     after such request has been given. If after such 45-day period,  Lessor and
     Lessee are unable to agree upon a  determination  of the Fair Market  Sales
     Value or Fair  Market  Rental  Value,  as the case may be,  of the  Subject
     Property,  the Fair Market Sales Value or Fair Market Rental Value,  as the
     case may be, shall be determined in accordance with the appraisal procedure
     set forth in this  definition.  If either  party  shall have given  written
     notice to the other  requesting  determination  of such Fair  Market  Sales
     Value or Fair Market Rental Value by such appraisal procedure,  the parties
     shall  consult  for the  purpose  of  appointing  a  qualified  independent
     appraiser by mutual agreement.  If no such appraiser is appointed within 20
     days after such notice is given,  such  determinations  shall be made by an
     independent  appraiser  selected  by two  appraisers  one of whom  shall be
     selected by Lessee and the other of whom shall be selected by Lessor,  both
     selections to be made within ten days after the end of such 20-day  period.
     If Lessor or Lessee  fails to  appoint  an  appraiser  within  such  10-day
     period,  no other  appraiser  shall be appointed and the appraisal shall be
     made  solely  by  the  appraiser  appointed  by  the  other  party.  If the
     appraisers  selected  by Lessor and Lessee  cannot  agree,  within ten days
     after  the  latter of the two  appraisers  have  been  selected,  upon such
     independent appraiser,  such independent appraiser shall be selected by the
     American  Arbitration  Association  (or any  successor  organization)  in a
     timely  manner  so that the  American  Arbitration  Association  is able to
     select  an  independent  appraiser  sufficiently  early to  facilitate  the
     determination  of the Fair Market  Sales  Value or the Fair  Market  Rental
     Value,  as the case may be,  within  the  applicable  time  period for such
     determination, if any, provided in the Operative Documents.

          (ii) The  determination  of the  appraiser  selected  pursuant  to the
     selection  process described in clause (i) above shall be final and binding
     upon the parties.

          (iii) The appraiser shall be provided with, and instructed to appraise
     in accordance with, the definitions of all terms appearing in the Operative
     Documents and

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     having  a  bearing  on  the  determinations  subject to  appraisal  and  in
     accordance with customary appraisal procedures.

          (iv) The fees and expenses of each appraiser shall  be shared  equally
     by  Lessor and Lessee,  unless such appraisals  are conducted  pursuant  to
     Article XIV of the Lease, or Lessee shall have not consummated its purchase
     or renewal option  pursuant to Article XVI of the Lease, in which event the
     cost  thereof shall be paid by Lessee.

     "Appraiser" means American Appraisal Associates.

     "Assigned  Warranties" has the meaning  specified in Section 6.06(a) of the
Lease.

     "Authorized Officer" means, with respect to any Person, the President,  any
Vice President,  the Treasurer or any Assistant Treasurer,  or any other officer
of any Person duly authorized by appropriate  corporate or partnership action to
execute  any  Operative  Document,  and with  respect to the Owner  Trustee,  an
officer in its Corporate Trust Department.

     "BA Loan Agreement" means the Second Amended and Restated Loan and Security
Agreement  dated as of June 15,  2000  among the  Financial  Institutions  named
therein, Bank of America, N.A., as Agent, Lessee and Guarantor.

     "Basic Rent" means,  without  duplication,  the rent designated as such and
which is payable  pursuant to Section  3.01(b) of the Lease and Section 3 of the
Lease Supplement.

     "Basic Term" means, for the Equipment,  the period  commencing on the Basic
Term Commencement Date for the Equipment and ending on the Basic Term Expiration
Date,  or on such  earlier date as is specified by the terms of the Lease or the
Lease Supplement.

     "Basic  Term  Commencement  Date"  means the Basic Term  Commencement  Date
specified in the Lease Supplement.

     "Basic Term Expiration Date" means the Basic Term Expiration Date specified
in the Lease Supplement.

     "Bill of Sale" means,  with respect to the Equipment,  the warranty bill of
sale described in Section 3.01(d)(v) of the Participation  Agreement,  dated the
Closing Date.

     "Business Day" means any day other than a Saturday,  Sunday or other day on
which banks are  authorized  or  required to be closed in New York,  New York or
Hartford, Connecticut.

     "Claim"  has the meaning  specified  in Section  6.01 of the  Participation
Agreement.

     "Closing  Date" means the date on which the  transactions  contemplated  by
Article II of the  Participation  Agreement  shall be  consummated  and shall be
specified in a notice by Lessee to the Owner Trustee and the Owner  Participants
pursuant to Section 2.04 of the Participation Agreement.

<PAGE>

     "Closing  Notice"  has the  meaning  specified  in  Section  2.04(b) of the
Participation Agreement.

     "Code"  means the Internal  Revenue  Code of 1986,  as amended from time to
time.

     "Collateral" means PPE Collateral and Working Capital Collateral.

     "Collateral Agent" means Bank of America,  N.A. or any successor Collateral
Agent pursuant to the Intercreditor Agreement.

     "Commitment"  means the Commitment of an Owner  Participant,  as defined in
Section 2.01 of the Participation Agreement.

     "Commitment  Percentage"  with respect to an Owner  Participant  equals the
percentage  set forth opposite such Owner  Participant's  name on Schedule II of
the Participation Agreement.

     "Competitor"  means  any  Person  or  entity  which  competes  in a direct,
significant  or material  way with Lessee or Guarantor  in the  disposable  food
service products business or any person or entity which  manufactures  equipment
used in such business.

     "Component"  means any component of the  Equipment  listed on Schedule I to
the Lease  Supplement  and any  substitutions  therefor  and any  modifications,
accessions or additions thereto permitted under the Lease.

     "Consolidated Net Income" means, with respect to any person for any period,
the  aggregate  of the Net Income of such person and its  Subsidiaries  for such
period, on a consolidated basis, determined in accordance with GAAP .

     "Contractual  Obligation"  means, with respect to any Person, any provision
of any security issued by such Person or of any contract,  agreement,  letter of
credit, indenture,  mortgage,  document or undertaking to which such Person is a
party or by which it or any of its property is bound.

     "Debt"  means,  without  duplication,  any  indebtedness,  capital  leases,
synthetic  leases  or  obligation  created,   issued,   guaranteed  directly  or
indirectly, by way of any agreement to purchase or otherwise to provide funds to
be  available  for  payment,  incurred or assumed for money  borrowed or for the
deferred purchase price of property,  other than accounts payable arising in the
ordinary  course of Lessee's or Guarantor's  business on terms  customary in the
trade.

     "Designated Value" means, with respect to any Component,  the dollar amount
listed next to such Component under the heading "Designated Value" in Schedule I
to the applicable Lease Supplement.

     "Disqualified  Stock" means any Equity  Interest which, by its terms (or by
the  terms of any  security  into  which it is  convertible  or for  which it is
exchangeable),  or upon the  happening of any event,  matures or is  mandatorily
redeemable, pursuant to a sinking fund obligation or

<PAGE>

otherwise,  or is redeemable at the option of the holder thereof, in whole or in
part, on or prior to the Scheduled Expiration Date.

     "Document Date" means June 1, 2000.

     "Documentary  Conventions"  has the  meaning set forth in Part III of these
Definitions and Rules of Usage.

     "Dollars" mean the lawful currency of the United States of America.

     "Early Buy-Out  Option" means the purchase option pursuant to Section 16.01
of the Lease.

     "EBITDA"  means,  with  respect  to any  period  of time,  the total of the
following for Guarantor as determined in accordance  with GAAP,  each calculated
for such period of time:  Adjusted Net Earnings  from  Operations  plus,  to the
extent included in the calculation of Adjusted Net Earnings from Operations, the
sum of (a) income tax expense; (b) interest expense paid or payable in cash, net
of cash interest income;  (c) amortization and depreciation  expense;  (d) other
non-cash  charges;  and (e) if EBITDA is being determined in connection with the
incurrence  of Debt  permitted  under clause (h) of the  definition of Permitted
Debt and the proceeds of such Debt will be used to finance an  acquisition  of a
business,  the Adjusted Net Earnings from  Operations of such acquired  business
for such period,  plus the amounts  described  in clauses (a),  (b), (c) and (d)
above with respect to such acquired business.

     "EBO Date" means the date specified in Section 4 of the Lease Supplement.

     "EBO Payment Date" means each of the EBO Payment  Amount dates set forth in
Schedule III-A to the Lease Supplement.

     "EBO Payment Amount" means for any EBO Payment Date an amount determined by
multiplying the Lessor's Cost of the Equipment by the Lessee EBO Factor for such
date as the same may be adjusted from time to time in accordance  with the terms
of the  Operative  Documents,  all as  shown  on  Schedule  III-A  to the  Lease
Supplement.

     "EH&S" has the meaning specified in Section 17.02 of the Lease.

     "EH&S  Letter"  means a letter dated the Closing Date from Lessee to Lessor
and the Owner Participants regarding certain EH&S liabilities.

     "EH&S Program" has the meaning specified in Section 17.02 of the Lease.

     "Environmental  Claim"  means any  administrative,  regulatory  or judicial
suit,  proceeding,  action,  judgment,  demand, claim, lien, penalty,  notice of
non-compliance  or violation,  or  investigation  or proceeding  arising out of,
relating in any way to, or based on any Spill, any Environmental Law, any permit
issued under such law, or the use, exposure, storage,  transportation,  Spill or
other  discharge by Lessee of Hazardous  Substances at any Site or involving the
Equipment or any item of equipment which is PPE Collateral.

<PAGE>

     "Environmental  Laws" means all applicable  Federal,  state and local laws,
rules  and   regulations,   orders,   judgments  and  decrees  and  other  legal
requirements  relating to pollution or the  regulation  and  protection of human
health,  safety,  occupational  safety,  the  environment or natural  resources,
including,  but  not  limited  to,  the  Comprehensive  Environmental  Response,
Compensation  and Liability Act of 1980, as amended (42  U.S.C.ss.9601 et seq.);
the  Hazardous  Material  Transportation  Act, as amended (49  U.S.C.ss.  180 et
seq.); the Resource  Conservation and Recovery Act, as amended (42 U.S.C.ss.6901
et seq.);  the Toxic  Substance  Control Act, as amended (42  U.S.C.ss.  7401 et
seq.);  the Clean Air Act, as amended  (42  U.S.C.ss.740  et seq.);  the Federal
Water  Pollution  Control  Act,  as amended  (33  U.S.C.ss.  1251 et seq.);  the
Occupational  Safety and Health Act, as amended (29 U.S.C.ss.  651 et seq.); the
Safe Drinking Water Act, as amended (42  U.S.C.ss.300f et seq.); and their state
and local counterparts or equivalents and any transfer of ownership notification
or approval statute.

     "Environmental   Permits"  means  any  Governmental   Actions  required  by
Environmental Laws.

     "Equipment"  means  all  equipment  subject  to the  Lease  and  the  Lease
Supplement from time to time in accordance with the terms thereof, including all
Components.

     "Equity Interests" means capital stock or warrants, options or other rights
to acquire  capital stock (but  excluding any debt security which is convertible
into, or exchangeable for, capital stock).

     "ERISA"  means the Employee  Retirement  Income  Security  Act of 1974,  as
amended from time to time, and the rules and regulations promulgated thereunder.

     "ERISA  Affiliate" means any trade or business that together with Lessee or
Guarantor,  is treated as a single  employer  under Section 414(b) or (c) of the
Code or solely for purposes of Section 302 of ERISA and Section 412 of the Code,
is treated as a single employer under Section 414 of the Code.

     "Event of Loss"  means any of the  following  events,  with  respect to the
Equipment:  (a) the  loss or  theft  of the  Equipment  to the  extent  that the
Equipment  is not  recovered  within 30 days of such event or, if  earlier,  the
expiration  of the Term with  respect to the  Equipment,  unless the location of
such  property  is known  and  Lessee is  diligently  pursuing  recovery  of the
Equipment within 90 days of such event or, if earlier,  the Scheduled Expiration
Date with  respect to the  Equipment),  (b) the  destruction  of or  irreparable
damage to the  Equipment,  or damage to the  Equipment  to such  extent as shall
render repair of the Equipment  uneconomical to Lessee,  in Lessee's  reasonable
judgment,  (c)  the  condemnation  or  confiscation  of  the  Equipment  by,  or
forfeiture thereof to, any Governmental Authority, (d) requisition of use of the
Equipment  for a period in excess of 6 months  or,  if  earlier,  the  Scheduled
Expiration  Date, (e) any damage to the Equipment  which results in an insurance
settlement on the basis of an actual or  constructive  total loss,  (f) any Site
Event of Loss  (as  defined  in the Site  Sublease),  or (g) the  recall  of the
Equipment by the  manufacturer  of the Equipment  without prompt  replacement or
repair of the Equipment.

<PAGE>

     "Fair Market Rental Value" means, as to the Equipment or any element of PPE
Collateral,  the fair  market  rental  value,  in-place,  in-use,  that would be
obtained in an arm's-length  transaction  between an informed and willing lessee
and an informed and willing lessor, in either case under no compulsion to lease,
for the lease of the  Equipment  or any  element  of PPE  Collateral,  assuming,
except for  purposes of Article  XIV of the Lease,  that the  provisions  of the
Lease shall have been complied with in all respects;  provided, that such amount
shall not include the value attributable to any Severable Modification.

     "Fair Market Sales Value" means,  as to the Equipment or any element of PPE
Collateral,  the fair market sales value, in-place,  in-use, of the Equipment or
any  element  of PPE  Collateral  that  would  be  obtained  in an  arm's-length
transaction  between an informed  and  willing  buyer/user  and an informed  and
willing seller,  under no compulsion,  respectively,  to buy or sell,  assuming,
except for  purposes  of Section  8.02 and  Article  XIV of the Lease,  that the
provisions of the Lease shall have been complied with in all respects; provided,
that such amount shall not include the value of any Severable Modification.

     "Fiscal Year" means Lessee's fiscal year for financial accounting purposes.
The current Fiscal Year of Lessee will end on September 24, 2000.

     "Fonda" means The Fonda Group, Inc., a Delaware corporation.

     "GAAP" means generally accepted  accounting  principles set forth from time
to time in the opinions and  pronouncements  of the Accounting  Principles Board
and the American  Institute of Certified  Public  Accountants  and statements or
pronouncements  of the Financial  Accounting  Standards  Board (or agencies with
similar functions or comparable stature and authority within the U.S. accounting
profession).

     "Governmental  Action"  means  all  authorizations,   consents,  approvals,
waivers, exceptions, variances, franchises, permits and licenses of, and filings
and declarations with, Governmental Authorities.

     "Governmental Authority" means any Federal, state, local or foreign (which,
for the  avoidance of doubt,  includes any territory or possession of the United
States) governmental Person,  authority or agency, court, regulatory commission,
stock  exchange  or  other  body and any  arbitrator,  whether  governmental  or
private.

     "Gross-Up  Taxes" has the meaning  specified in the definition of After-Tax
Basis.

     "Guarantee"  means the Guarantee  dated as of the Closing Date by Guarantor
in favor of Owner  Trustee  and each Owner  Participant  in respect of  Lessee's
obligations under the Lease and the other Operative Documents.

     "Guarantor" means Sweetheart Holdings Inc., a Delaware corporation.

     "Guarantor's Special Counsel" means Kramer Levin Naftalis & Frankel LLP, as
special counsel to Guarantor.

<PAGE>

     "Hazardous  Substances" means any waste,  pollutant,  hazardous  substance,
toxic substance,  hazardous waste, special waste, petroleum or petroleum-derived
substance or waste,  friable asbestos in any form or condition,  polychlorinated
biphenyls ("PCBs"),  or any hazardous constituent of any such substance or waste
regulated under any Environmental Law.

     "Implicit  Interest  Rate" means that  interest  rate  which,  if used as a
discount rate, would cause the present value as of the Closing Date of all Basic
Rent payable up to the Basic Term  Expiration Date with respect to the Equipment
to equal the aggregate Lessor's Cost of such Equipment.

     "Indemnified  Person"  means  Trust  Company,  Owner  Trustee,  each  Owner
Participant,  and  their  respective  successors,   assigns,  agents,  officers,
directors and employees.

     "Index  Rate" as of any date of  determination  means the rate equal to the
yield on the benchmark 5-year U.S. Treasury Note.

     "Inspector"  shall have the meaning  given such term in Section  8.01(e) of
the Lease.

     "Intercreditor  Agreement"  means the  Intercreditor  Agreement dated as of
June 15, 2000,  among Owner  Trustee and Bank of America,  N.A., as Credit Agent
and Collateral Agent (as defined therein).

     "Interest Expense" means, for any period, all interest accrued by Guarantor
in accordance  with GAAP with respect to its Debt on a consolidated  basis plus,
in connection  with the incurrence of any Debt permitted under clause (h) of the
definition of Permitted Debt, the interest which would have accrued on such Debt
if such Debt had been incurred at the beginning of such period.

     "Inventory"  means  all  of  Lessee's  now  owned  and  hereafter  acquired
inventory,  goods and merchandise,  wherever located,  to be furnished under any
contract  of  service  or held  for  sale or  lease,  all  returned  goods,  raw
materials, other materials and supplies of any kind, nature or description which
are or might be  consumed in Lessee's  business or used in  connection  with the
packing, shipping, advertising,  selling or finishing of such goods, merchandise
and such other personal property,  and all documents of title or other documents
representing them.

     "Landlord's  Waiver" with respect to any material real  property  leased by
Lessee, as lessee, means the landlord's waiver granted in favor of Lessor.

     "Lease" or "Lease  Agreement"  means the Lease Agreement dated the Document
Date between the Owner Trustee and Lessee,  together  with the Lease  Supplement
and any and all Lease  Supplements  that Lessor and Lessee may from time to time
enter into pursuant to such Lease Agreement and the Participation Agreement.

     "Lease  Default" means an event or condition  that, with notice or lapse of
time or both, would become a Lease Event of Default.

<PAGE>

     "Lease  Event of  Default"  means a Lease  Event of  Default  as defined in
Article XIII of the Lease.

     "Lease  Supplement"  means the Lease  Supplement to be entered into between
Lessor and Lessee on the Closing Date, including the Schedules attached thereto,
in  respect  of the  Equipment  identified  in such  Lease  Supplement,  and any
subsequent  Lease  Supplement  entered into in accordance  with the terms of the
Lease.

     "Lessee" means Sweetheart Cup Company Inc., a Delaware corporation.

     "Lessee  Basic Rent Factor" means with respect to any Rent Payment Date the
percentage set forth on Schedule II-A to the Lease Supplement for such date.

     "Lessee EBO Factor"  means,  with  respect to each EBO  Payment  Date,  the
applicable percentage set forth on Schedule III-A to the Lease Supplement.

     "Lessee Person" means Lessee,  any Affiliate  thereof,  or any other Person
(other than Lessor, each Owner Participant or any Person claiming through either
such Person,  other than  pursuant to the Lease) who acquires  possession of the
Equipment during the Term.

     "Lessee SLV Factor"  means with respect to any  Stipulated  Loss Value Date
the  applicable  percentage  determined  pursuant  to  Section  5 of  the  Lease
Supplement.

     "Lessee's  Special  Counsel"  means Kramer Levin Naftalis & Frankel LLP, as
special counsel to Lessee.

     "Lessor"  means Owner  Trustee  acting in its capacity as trustee under the
Trust Agreement and not in its individual capacity.

     "Lessor   Lien"  has  the  meaning   specified   in  Section  5.01  of  the
Participation Agreement.

     "Lessor's Cost" means, with respect to the Equipment,  the amount listed in
Section 1.(b) of the Lease Supplement.

     "Lien"  means  any lien,  mortgage,  deed of  trust,  encumbrance,  pledge,
charge, lease, easement,  servitude, right of others or security interest of any
kind or any interests  similar to the foregoing,  including those existing under
any conditional sales or other title retention agreement.

     "Lily Cup Credit Facility" means the term and revolving  credit  facilities
agreement,  dated as of June 15,  1998  among  Lily Cups,  Inc.,  the  financial
institutions party thereto and General Electric Capital Canada Inc., as lender.

     "Limited  Use  Property"  shall  have the  meaning  set  forth  in  Revenue
Procedure 76-30.

     "Majority  in  Interest  of  Owner  Participants"  means  as of any date of
determination,  the holders of Owner Certificates representing at least 50.1% of
the aggregate  beneficial  interest in the Trust Estate represented by all Owner
Certificates outstanding as of such date, including at

<PAGE>

least  three such  holders,  if there  shall be more than five  holders of Owner
Certificates, or at least two such holders, if there shall be either three, four
or five holders of Owner  Certificates.  For purposes of the preceding sentence,
any holder of an Owner  Certificate  and all Affiliates of such holder that also
hold an Owner  Certificate  shall be counted as only one holder. In the event of
any  determination  that  affects  only  one  Owner   Participant,   such  Owner
Participant shall have the sole authority to make such determination.

     "Material Adverse Effect" means, with respect to any Person, a material and
adverse effect upon (i) the business,  operations, assets or financial condition
of such  Person and its  Subsidiaries  (taken as a whole) or (ii) the ability of
such Person to perform its respective  obligations under the Operative Documents
to which it is a party in any material respect or (iii) the ability of any other
Person party to any Operative  Document to enforce in any material  respect such
Operative Document with respect to such Person.

     "Material Default" means a Lease Default under Section 13.01(a),  (b), (c),
or (i) of the Lease and any Lease Event of Default.

     "Modification" means any modification,  alteration, addition or improvement
to the Equipment or any Component thereof.

     "Moody's" means Moody's Investor Services, Inc.

     "Mortgage"  means with respect to a Site,  the mortgages or deeds of trust,
dated the Document  Date,  given by Lessee or Guarantor,  as the case may be, in
favor of Lessor and relating to such Site.

     "Net  Income" of any person  means the net income (or loss) of such person,
determined in accordance with GAAP.

     "Nonseverable  Modification"  means,  with  respect to the  Equipment,  any
Modification  to the  Equipment or any  Component of the  Equipment  that (i) is
required by law or  insurance  requirements,  (ii) is otherwise  required  under
Article  VI of the Lease or (iii)  cannot be  readily  removed  without  causing
material  damage to the Equipment or such  Component  thereof or  diminishing by
more than a de  minimis  amount  the fair  market or  expected  residual  value,
remaining  economic  useful life or utility the Equipment would have had if such
Modification  had not been made,  assuming  that it had been  maintained  in the
condition required by the Lease.

     "Officer's  Certificate"  means as to any corporation,  a certificate of an
Authorized  Officer  executed on behalf of such corporation and, as to any other
entity,  a certificate  of any  individual  generally  authorized to execute and
deliver contracts on behalf of such entity.

     "Operative  Documents" means the documents listed in Section 3.01(d) of the
Participation Agreement and the Security Documents.

<PAGE>

     "Organic  Document" means,  with respect to any Person,  the certificate or
articles of incorporation, by-laws, articles of organization and regulations and
operating agreement and other organizational  documents, as applicable,  of such
Person.

     "Original  Participant"  means the  corporation  or financial  institutions
whose names appear in Schedule A to the Participation Agreement.

     "Original  Participation"  has the meaning specified in Section 4.08 of the
Trust Agreement.

     "Overdue Rate" means the Applicable  Rate plus 2% per annum, or such lesser
maximum rate as is permitted by law.

     "Overdue  Rent" means all unpaid  Basic Rent  payable  with  respect to the
Equipment on any Rent Payment Date occurring before such date.

     "Owner  Certificate"  means the certificate in the form of Exhibit A to the
Trust Agreement evidencing each Owner Participant's Percentage Interest.

     "Owner Participant" means each of General Electric Capital  Corporation,  a
New  York   corporation,   MDFC  Equipment  Leasing   Corporation,   a  Delaware
corporation,  Dana Lease Finance  Corporation,  a Delaware  corporation,  FINOVA
Capital Corporation, a Delaware corporation,  General Foods Credit Investors No.
3 Corporation,  a Delaware  corporation,  and Transamerica  Equipment  Financial
Services Corporation, a Delaware corporation.

     "Owner Participant's Basic Rent Percentage" means with respect to any Owner
Participant for any Rent Payment Date the percentages set forth on Schedule II-B
to the Lease Supplement for such Owner Participant corresponding to such date.

     "Owner Participant's EBO Amount Percentage" means with respect to any Owner
Participant  for any EBO Payment Date the applicable  EBO Amount  Percentage set
forth on Schedule III-B to the Lease Supplement for such Owner Participant.

     "Owner  Participant's EBO Price Percentage" means with respect to any Owner
Participant  for any EBO Payment Date the  applicable  EBO Price  Percentage set
forth on Schedule III-B to the Lease Supplement for such Owner Participant.

     "Owner Participant's Economics" means with respect to the investment by any
Owner Participant in the Equipment,  such Owner  Participant's (i) net after-tax
book yield (computed  using the multiple  investment  sinking fund method),  and
(ii)  aggregate  after-tax  cash  flow,  each  of  clauses  (i) and  (ii)  being
calculated  both for the period from the Closing Date to the EBO Date  (assuming
that Lessee  elects to purchase  pursuant to Section 16.01 of the Lease) and for
the period from the  Closing  Date to the end of the Basic Term  (assuming  that
Lessee does not elect to purchase  pursuant to Section 16.01 of the Lease),  and
each as  computed  on the basis of the same  economic  and tax  assumptions  and
methodology (including constraints) utilized by such

<PAGE>

Owner  Participant in calculating  the Basic Rent and Stipulated Loss Values for
the Equipment as stated in the Lease Supplement.

     "Owner  Participant's  Percentage Interest" means with respect to any Owner
Participant  its  percentage  interest  in the Trust  Estate as set forth on its
Owner  Certificate and the register  maintained by the Owner Trustee pursuant to
the Trust Agreement.

     "Owner Participant's SLV Amount Percentage" means with respect to any Owner
Participant  for any  Stipulated  Loss  Value Date the  percentage  set forth on
Schedule IV to the Lease Supplement for such Owner Participant  corresponding to
such date.

     "Owner Participants' Special Counsel" means Thelen Reid & Priest LLP.

     "Owner Participants' Tax Counsel" means Thelen Reid & Priest LLP.

     "Owner  Trustee" means State Street Bank and Trust Company of  Connecticut,
National  Association,  not in its  individual  capacity,  but solely as trustee
under the Trust Agreement.

     "Owner  Trustee  Office"  means the office  set forth in  Schedule I to the
Participation Agreement for the Owner Trustee.

     "Owner  Trustee Parent  Guaranty"  means the guarantee of State Street Bank
and Trust Company, a Massachusetts corporation.

     "Owner Trustee's Special Counsel" means Shipman & Goodwin LLP.

     "Parent Pledge  Agreement"  means the Parent Pledge  Agreement  dated as of
June 15, 2000 between the  Guarantor  and Bank of America,  N.A.,  as Collateral
Agent.

     "Parent Security Agreement" means the Security Agreement dated the Document
Date among Sweetheart Holdings Inc., the Designated  Depository  Institution and
Owner Trustee.

     "Participation Agreement" means the Participation Agreement dated as of the
Document Date among Lessee, Guarantor, Owner Trustee and the Owner Participants.

     "Patent Security Agreement" means the Patent Security Agreement dated as of
the Document Date between Lessee and Owner Trustee.

     "PBGC" means the Pension Benefit  Guaranty  Corporation or any Governmental
Authority succeeding to the functions thereof.

     "Pension  Plan" means a pension  plan (as defined in Section 3(2) of ERISA)
subject to Title IV of ERISA which Lessee or Guarantor sponsors,  maintains,  or
to which it makes, is making, or is obligated to make  contributions,  or in the
case of a  Multi-employer  Plan has made  contributions  at any time  during the
immediately preceding 5 plan years.

<PAGE>

     "Permitted  Contest" means  appropriate  proceedings  being  conducted in a
reasonable  manner  and in  good  faith  that  does  not  adversely  affect  any
Indemnified Person in any material respect (but only so long as such proceedings
do not  involve (A) any  material  risk of the sale,  forfeiture  or loss of the
Equipment or any interest therein,  (B) the imposition of any criminal liability
on any  Indemnified  Person or (C) any material  risk of the  imposition  of any
other  liability not  indemnified  against by Lessee pursuant to Section 6.01 of
the  Participation  Agreement  and which does not  extend  beyond the end of the
Basic Term (or Renewal Term, if applicable),  or the earlier  termination of the
Lease) and for which  appropriate  reserves are  maintained in  accordance  with
GAAP.

     "Permitted Debt" means:

          (a) indebtedness  incurred by Lessee or Guarantor in respect of the BA
     Loan Agreement;

          (b) without  duplication,  the maximum committed amount of loans to be
     made  under  the  BA  Loan  Agreement,  plus  any  term  loans  outstanding
     thereunder,  and after a merger with Fonda, the aggregate maximum committed
     amount  under  the BA Loan  Agreement,  plus  any  term  loans  outstanding
     thereunder,  plus the aggregate  maximum  committed  amount under currently
     existing revolving credit facilities of Fonda on a combined basis;

          (c) convertible subordinated notes in an aggregate principal amount of
     $5,000,000  issued  by  Lessee  in  connection  with  the  purchase  of the
     outstanding capital stock of Sherwood Industries, Inc.;

          (d)  all  indebtedness  of  Lessee,  Guarantor  and  Fonda  and  their
     respective Subsidiaries existing on the Closing Date;

          (e) the refinancing, renewal, replacement,  extension, substitution or
     refunding  of the Lily Cup Credit  Facility  up to an  aggregate  principal
     amount of $20,000,000;

          (f) Debt  which is  recourse  solely  to (i) newly  acquired  property
     financed with the incurrence of such Debt, (ii) any Unrestricted Subsidiary
     or (iii) the tangible assets of Sherwood, and not in any such case recourse
     to any other property of or to the general  credit of Lessee,  Guarantor or
     any Subsidiary other than an Unrestricted Subsidiary;

          (g) an aggregate of $25,000,000 in principal amount of additional Debt
     outstanding  at any time  incurred by Lessee or  Guarantor  or any of their
     respective Subsidiaries after the Closing Date;

          (h) other Debt incurred by Lessee if, at the time of such  incurrence,
     Lessee  has,  on a  trailing  12 month  basis  (determined  quarterly),  an
     Adjusted  Coverage  Ratio of no less than 1.9:1  (increasing  to 2:1 on and
     after October 1, 2001);

<PAGE>

          (i)  the  incurrence  of  intercompany   Debt  between  or  among  the
     Guarantor, Lessee or any of their respective Subsidiaries after the Closing
     Date; and

          (j) any refinancing, renewal, replacement,  extension, substitution or
     refunding of any of the  foregoing,  provided that no such  refinancing  or
     renewal shall (i) increase the  principal  amount of such Debt to an amount
     greater than the sum of (x) the principal  amount of such Debt  immediately
     prior to such  refinancing  or renewal plus (y) the unused  commitment,  if
     any, with respect to the Debt being refinanced or renewed immediately prior
     to such  refinancing or renewal or (ii) with respect to any  refinancing or
     renewal other than of Debt under clauses (a) or (b) above,  add guarantors,
     obligors or security from that which applied to such Debt being  refinanced
     or renewed,  and all other terms of such  refinancing or renewal  including
     terms of subordination, are no more restrictive or less favorable to Lessee
     or Guarantor, as applicable,  than previously existing with respect to such
     Debt.

     "Permitted  Encumbrances" means the Liens permitted on the Collateral shown
on Schedule VII to the Participation Agreement.

     "Permitted Investment" 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 7 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  90 days  after  the  date of  acquisition  thereof  and,  at the time of
acquisition, having one of the two highest ratings obtainable from either S&P or
Moody's  (or,  if at any time  neither  S&P nor  Moody's  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 S&P or Moody's (or, if at any time
neither S&P nor Moody's 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

<PAGE>

(viii)  investments  in money  market  funds  substantially  all of whose assets
comprise securities of the types described in clauses (i) through (vii).

     "Permitted Liens" means, with respect to the Equipment,  (i) the respective
rights and interests of Lessee,  the Owner Participant and Lessor as provided in
the  Operative  Documents;  (ii) Lessor  Liens;  (iii) Liens for taxes of Lessee
either not yet due or which are subject to a Permitted Contest; (iv) mechanics',
workmen's,  repairmen's,  employees',  carriers',  warehousemen's  or other like
Liens  arising in the  ordinary  course of  business  of  Lessee,  which are not
overdue  for more than 30 days or are subject to a  Permitted  Contest;  and (v)
Liens which arise out of  judgments  or awards  against  Lessee with  respect to
which (A) at the time an appeal or  proceeding  for  review is being  diligently
prosecuted in good faith,  (B) there shall have been secured a stay of execution
pending such appeal or proceeding for review, (C) during such proceedings, there
is not, and such proceedings do not involve any risk of the sale,  forfeiture or
loss of the Equipment,  any part thereof or interest  therein,  (D)  appropriate
reserves are  maintained  in  accordance  with GAAP,  and (E) if such Liens have
specifically  attached to the Equipment or portion  thereof or the Trust Estate,
Lessee or Guarantor has provided Lessor or the Owner  Participant with security,
reasonably satisfactory to the Owner Participant, in the amount of such claims.

     "Person"  shall  mean  any  individual,  corporation,   partnership,  joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.

     "Plan" means an employee benefit plan (as defined in Section 3(3) of ERISA)
which Lessee or Guarantor  sponsors or maintains or to which Lessee or Guarantor
makes, is making or is obligated to make  contributions and includes any Pension
Plan.

     "Pledge  Agreement"  means the Pledge  Agreement  dated as of June 15, 2000
between Lessee and Collateral Agent.

     "PPE  Collateral"  means all Secured  Sale/Leaseback  Collateral and Credit
Agreement  Term  Loan  Equipment  Collateral  as  defined  in the  Intercreditor
Agreement  to the  extent a lien  therein is created  pursuant  to the  Security
Documents.

     "Qualifying Bid" has the meaning specified in Section 7.03 of the Lease.

     "Reasonable  Basis"  means a basis  satisfying  the  criteria  set forth in
American Bar Association Formal Opinion 85-352.

     "Related  Indemnitee"  means,  in respect of any  Indemnified  Person,  any
directors,  officers,  employees,  servants,  attorneys  and  agents,  it  being
understood  that the Owner  Trustee (in its  individual  capacity  and its trust
capacity) and each Owner  Participant  are Related  Indemnitees of each other to
the extent such Owner Participant directs the actions of Owner Trustee.

     "Renewal Notice" shall have the meaning given such term in Section 16.03 of
the Lease.

<PAGE>

     "Renewal Option" shall have the meaning given such term in Section 16.03 of
the Lease.

     "Renewal  Term" shall have the meaning  given such term in Section 16.03 of
the Lease.

     "Renewal  Term Basic Rent" means the rent  designated  as such and which is
payable pursuant to Section  3.01(b)(iii) of the Lease as determined pursuant to
Section 16.03 of the Lease.

     "Rent" means the Basic Rent, Renewal Term Basic Rent and Supplemental Rent.

     "Rent Payment Date" means, with respect to the Equipment,  any of the dates
specified  in Schedule  II-A of such Lease  Supplement  and if a Renewal Term is
entered  into  pursuant  to  Section  16.03 of the  Lease,  with  respect to the
Equipment set forth in the Lease  Supplement,  any of the dates specified in the
relevant schedule to such Lease Supplement.

     "Responsible  Officer" means, with respect to a Person, the chief executive
officer,  the president,  the treasurer,  the assistant  treasurer,  or any vice
president thereof,  or, when used with respect to the Owner Trustee,  shall mean
an officer in its corporate trust administration department.

     "Scheduled Expiration Date" means, with respect to the Equipment,  the last
day of the Term applicable to the Equipment.

     "Scheduled Payment" means, for any 12 month period, the amount set forth on
Schedule VI to the Participation Agreement.

     "S&P" means Standard & Poor's  Ratings  Group,  a division of  McGraw-Hill,
Inc.

     "Secured  Obligations"  means all obligations of Lessee and Guarantor under
the Operative Documents; provided, however, that in no event shall Owner Trustee
be  entitled  to  receive  in excess of  $165,000,000,  in the  aggregate,  from
realization upon the Collateral under the Security Documents.

     "Security  Agreement" means the Security  Agreement dated the Document Date
among Lessee, the Designated Depository Institution and Owner Trustee.

     "Security  Documents"  means  each of the  Mortgages,  Security  Agreement,
Parent  Security  Agreement,  Patent  Security  Agreement,   Trademark  Security
Agreement,  Landlord's  Waivers,  Parent Pledge Agreement,  Pledge Agreement and
Intercreditor Agreement.

     "Senior Subordinated Note Indenture" means the Indenture dated as of August
30, 1993, by and among Cup Acquisition, U.S. Trust Company of Texas, as trustee,
and SHI Holdings Company, L.L.C., as Guarantor, and as thereafter amended.

     "Senior Subordinated Notes" means the 10 1/2% Senior Subordinated Notes due
2003 issued pursuant to the Senior Subordinated Note Indenture.

<PAGE>

     "Severable Modification" means any Modification which is not a Nonseverable
Modification.

     "Sherwood" means Sherwood Industries, Inc., a Connecticut corporation.

     "Site" means (i) with respect to Equipment  each of Lessee's  manufacturing
facilities located in Chicago,  Illinois,  Owings Mills,  Maryland,  and Dallas,
Texas,  and any location which  subsequently  becomes a Site pursuant to Section
6.04(a)(iii) of the Lease and (ii) with respect to the PPE  Collateral,  each of
Lessee's   manufacturing   facilities  located  in  Somerville,   Massachusetts;
Springfield,  Missouri;  Manchester,  New Hampshire;  Augusta, Georgia; Conyers,
Georgia;  and Dallas,  Texas, in each case consisting of the land, buildings and
related site improvements.

     "Site Lease" means each Site Lease, dated the Document Date, between Lessee
or Guarantor as ground lessor, and Lessor as ground lessee,  with respect to the
Sites  listed in clause (i) of the  definition  of "Site"  and any ground  lease
entered into pursuant to Section 6.04(a)(iii) of the Lease.

     "Site  Sublease" means the sublease by Lessor to Lessee of the Sites leased
under the Site Leases.

     "Special Local  Counsel"  means (i) with respect to Illinois,  Katz Randall
Weinberg & Richmond, (ii) with respect to Maryland,  Venable, Baetjer and Howard
LLP,  (iii) with  respect to Texas,  Andrews & Kurth LLP,  (iv) with  respect to
Georgia,  Powell,   Goldstein,   Frazer  &  Murphy  LLP,  (v)  with  respect  to
Massachusetts,  Sherin and Lodgen LLP, (vi) with respect to Missouri, Bryan Cave
LLP, and (vii) with respect to New Hampshire, Devine, Millimet & Branch.

     "Spill" has the meaning defined in Section 10.01 of the Lease.

     "Stipulated Loss Value" means, as of any Stipulated Loss Value Date through
and including the last day of the Basic Term  applicable  to the  Equipment,  an
amount  determined by multiplying  the Lessor's Cost for the Equipment by Lessee
SLV Factor opposite such Stipulated Loss Value Date, as the same may be adjusted
from  time to time in  accordance  with the  terms of the  Operative  Documents.
Stipulated  Loss Value as of any date  includes  Basic Rent or Renewal  Rent, as
applicable,  otherwise  payable  on such date and  reflects  any  prepayment  or
deferral of Basic Rent as of such date, as set forth on Schedule IV to the Lease
Supplement.

     "Stipulated  Loss Value Date"  means any of the monthly  dates set forth on
Schedule IV to the Lease Supplement.

     "Subsidiary"  means,  with  respect  to any  Person,  (i) a  corporation  a
majority  of whose  voting  securities  at any time is at such time  directly or
indirectly  owned or  controlled  by such Person or (ii) any other Person (other
than a corporation) in which such Person, or one or more  subsidiaries  thereof,
at such time directly or indirectly has at least a majority  ownership  interest
and the power to direct  the  policies,  management  and  affairs  thereof.  For
purposes of this

<PAGE>

definition, any directors' qualifying shares shall be disregarded in determining
the ownership of a subsidiary.

     "Supplemental  Rent" means payments of Stipulated  Loss Value,  Fair Market
Sales Value,  EBO Price,  indemnities,  any damages for breach of any covenants,
representations, warranties or agreements therein and any and all other amounts,
liabilities  and  obligations  other than Basic Rent and Renewal Term Basic Rent
that Lessee is obligated to pay under any Operative Document.

     "Tangible   Net  Worth"  means   shareholder's   equity   determined  on  a
consolidated basis under generally accepted accounting principles,  less the sum
of  all  unamortized  debt  discount  expense,   unamortized  deferred  charges,
goodwill,  patents,  trademarks,  service marks, tradenames,  anticipated future
benefits of tax loss carry forwards,  copyrights,  organization  and development
expenses and other intangible assets and similar items.

     "Tax" means any fee  (including,  but not limited to, any license,  filing,
recording,  documentary and registration  fee), tax (including,  but not limited
to,  any  gross  receipts,  gross  or net  income,  franchise,  doing  business,
occupational,  sales, use, property,  ad valorem,  value-added,  excise or stamp
tax), levy, impost, duty, assessment,  withholding or other charge of any nature
whatsoever,  together with any  penalties,  fines,  additions to tax or interest
relating  thereto,  which  may  be  imposed  by any  Federal,  State,  or  local
government  or political  subdivision  thereof or taxing  authority of or in the
United States of America,  or by any government or taxing authority of or in any
territory, possession or commonwealth of the United States of America, or by any
government  or  taxing  authority  of  or  in  any  other  country,  or  by  any
international taxing authority.

     "Tax  Assumption  Change" has the meaning  specified in Section 9.04 of the
Participation Agreement.

     "Tax Indemnity Agreement" means each of the Tax Indemnity Agreements,  each
dated as of the Document Date between Lessee and an Owner Participant.

     "Technical  Expert"  means an  independent  mechanical  engineer (or if not
independent,  a mechanical  engineer  reasonably  acceptable to Lessor) with not
less than five  years  experience  in the  design,  use,  operation,  repair and
improvement of automated  manufacturing  equipment  used in the disposable  food
products business.

     "Term" means the Basic Term and, if applicable, the Renewal Term applicable
to the Equipment.

     "Termination Date" has the meaning defined in Section 7.01 of the Lease.

     "Trademark Security Agreement" means the Trademark Security Agreement dated
as of the Document Date between Lessee and Owner Trustee.

<PAGE>

     "Transaction  Expenses"  means all reasonable  fees,  costs and expenses of
documenting  and  closing the  transactions  contemplated  by the  Participation
Agreement  on the  Closing  Date,  including  but not  limited  to (i)  document
preparation  and  distribution  costs;  (ii) the fees and  expenses  of  outside
counsel  for  Lessee  and the  Owner  Participants  (subject  to  caps,  if any,
previously  agreed  upon);  (iii) the  initial  fees and  expenses  of the Owner
Trustee and its counsel;  (iv) the fees and expenses of the  Appraiser;  and (v)
the  fees  and  expenses  of  Advisor;  (vi)  Owner  Participant's   reasonable,
out-of-pocket expenses, including, without limitation, third-party computer time
shared charges;  and (vii) the fees and expenses of environmental  and valuation
technical consultants (subject to caps, if any, previously agreed upon).

     "Transactions"  means the  transactions  and  activities  referred to in or
contemplated by the Operative Documents.

     "Trust  Agreement"  means the Trust Agreement dated as of the Document Date
between the Owner Participant and Owner Trustee.

     "Trust  Company" means State Street Bank and Trust Company of  Connecticut,
National Association, a national banking association.

     "Trust  Estate"  has the  meaning  specified  in  Article  II of the  Trust
Agreement.

     "Trustee" means the Owner Trustee.

     "UCC" means the Uniform Commercial Code of the applicable jurisdiction.

     "Unrestricted  Subsidiary"  means (1) any Subsidiary of Guarantor or Lessee
(a) which at the time of determination  shall be an Unrestricted  Subsidiary (as
designated by the Board of Directors of Guarantor or Lessee as provided  below),
and (b) all the Debt of which  shall be without  recourse to  Guarantor  and its
Subsidiaries  other  than its  Unrestricted  Subsidiaries  and their  respective
assets,  and shall not be guaranteed by any such person,  and (2) any Subsidiary
of an Unrestricted  Subsidiary;  provided,  that  notwithstanding  clause (1)(b)
above,  Guarantor or a Subsidiary of Guarantor may guarantee,  endorse, agree to
provide funds for the payment or maintenance of, or otherwise become directly or
indirectly liable with respect to, Debt of an Unrestricted  Subsidiary  pursuant
to Section 5.10 hereof and any such Guarantee, endorsement or agreement shall be
deemed an  incurrence  of Debt by Guarantor for purposes of Section 5.09 hereof.
The Board of Directors of Guarantor or Lessee may designate  any newly  acquired
or  newly  formed  Subsidiary  to  be an  Unrestricted  Subsidiary  unless  such
Subsidiary  owns any capital stock of, or owns or holds any Lien on any property
of,  Guarantor  or any  Subsidiary  of  Guarantor  which is not an  Unrestricted
Subsidiary.  Any such  designation  by the Board of  Directors  of  Guarantor or
Lessee  shall be  evidenced  to the Owner  Trustee by filing  with the Trustee a
certified  copy of the  resolution  of the Board of  Directors  of  Guarantor or
Lessee giving effect to such designation and an Officers' Certificate certifying
that such designation complied with the foregoing conditions.

     "U.S." or "United  States"  shall mean the United  States of  America,  its
territories and possessions.

<PAGE>

     "Working Capital  Collateral"  means all Credit Agreement  Collateral other
than Credit Agreement Term Loan Equipment Collateral and Excluded Sale/Leaseback
Assets as defined in the Intercreditor Agreement to the extent a lien therein is
created pursuant to the Security Documents.

                        Part III: Documentary Conventions
                        ---------------------------------

     With respect to an instrument or agreement that states in substance that it
is  governed  by the  Documentary  Conventions,  except  as  expressly  provided
therein, the following meanings shall apply:

          (a) Survival.  The  representations,  warranties and agreements of the
     parties  contained  or provided  for in such  instrument  and the  parties'
     obligations  under any and all  thereof  shall  survive the  execution  and
     delivery  of such  instrument,  the  execution  and  delivery  of the other
     Operative  Documents,  any disposition of any interest in any Equipment and
     the  expiration or other  termination of any other  Operative  Document and
     shall be and continue in effect notwithstanding the fact that any party may
     waive  compliance  with any  other  term,  provision  or  condition  of any
     Operative Document.

          (b) Payment on Business Days. If any payment under such  instrument is
     required to be made on a day other than a Business Day, the date of payment
     shall be extended to the next Business Day without additional  interest for
     such extension period.

          (c) Notices.  Subject to paragraph (k) below,  all notices,  consents,
     directions,  approvals,  instructions,  requests  and other  communications
     required or  permitted by the terms of such  instrument  to be given to any
     Person shall be in writing,  and any such notice  shall become  effective 5
     Business Days after being  deposited in the United States mails,  certified
     or registered,  with  appropriate  postage prepaid for first class air mail
     or, if delivered  by hand or courier  service or in the form of a telecopy,
     when received by the person to whom addressed, and shall be directed to the
     address or  telecopy  number of such  Person set forth in Schedule I to the
     Participation Agreement. From time to time any party to such instrument may
     designate  a  new  address  or  telecopy  number  for  purposes  of  notice
     thereunder by notice to each of the other parties  thereto,  effective when
     received.

          (d)  Severability.  Any  provision  of such  instrument  that shall be
     prohibited  or  unenforceable  in  any  jurisdiction   shall,  as  to  such
     jurisdiction,   be  ineffective  to  the  extent  of  such  prohibition  or
     unenforceability  without invalidating the remaining provisions thereof and
     any such  prohibition or  unenforceability  in any  jurisdiction  shall not
     invalidate   or  render   unenforceable   such   provision   in  any  other
     jurisdiction.  To the extent  permitted by  Applicable  Law, the parties to
     such  instrument  thereby  waive  any  provision  of law that  renders  any
     provision thereof prohibited or unenforceable in any respect.

          (e) Entire Agreement, Amendment and Waiver. Such instrument,  together
     with the  other  applicable  Operative  Documents  constitutes  the  entire
     agreement of the

<PAGE>

     parties  thereto with respect to the subject  matter thereof and supersedes
     all oral and all prior written agreements and  understandings  with respect
     to such  subject  matter.  Neither  such  instrument  nor any of the  terms
     thereof  may be  terminated,  amended,  supplemented,  waived  or  modified
     orally,  but only by an instrument  in writing  signed by the party against
     which the enforcement of the termination,  amendment, supplement, waiver or
     modification  shall  be  sought.  No  failure  or  delay  of any  party  in
     exercising  any power or right  under such  instrument  shall  operate as a
     waiver thereof,  nor shall any single or partial exercise of any such right
     or power, or any abandonment or  discontinuance  of steps to enforce such a
     right or power,  preclude  any other or  further  exercise  thereof  or the
     exercise of any other right or power.

          (f) Amendment  affecting the Lease or Lessee.  Neither such instrument
     nor any of the terms  thereof  may be  terminated,  amended,  supplemented,
     waived or modified in any manner  affecting the Lease or Lessee without the
     prior written consent of the Guarantor.

          (g) Table of Contents:  Headings.  The table of contents,  if any, and
     headings, if any, of the various articles,  sections and other subdivisions
     of such  instrument  are for  convenience  of reference  only and shall not
     modify, define or limit any of the terms or provisions of such instrument.

          (h) Parties in Interest:  Limitation on Rights of Others. The terms of
     such  instrument  shall be binding  upon,  and inure to the benefit of, the
     parties thereto and their permitted successors and assigns. Nothing in such
     instrument,  whether  express or implied,  shall be  construed  to give any
     Person (other than the parties thereto and their  permitted  successors and
     assigns and as expressly  provided  therein) any legal or equitable  right,
     remedy or claim under or in respect of such  instrument  or any  covenants,
     conditions or provisions contained therein.

          (i) Method of Payment. All amounts required to be paid by any party to
     such  instrument  to any  other  party,  either  thereunder  or  under  any
     Operative  Document,  shall  be paid in such  freely  transferable  coin or
     currency of the United  States of America as at the time of payment,  shall
     be legal  tender  for the  payment  of public and  private  debts,  by wire
     transfer,  or other acceptable method of payments of immediately  available
     funds  to  the  account  of  the  payee  set  forth  in  Schedule  I to the
     Participation  Agreement  or to such  other  account  located in the United
     States as such payee may specify by notice to the other parties.

          (j)  Counterparts.  Such  instrument  may be  executed  by the parties
     thereto  in  separate  counterparts,  each of which  when so  executed  and
     delivered shall be an original,  but all such  counterparts  shall together
     constitute but one and the same  instrument.  All signatures need not be on
     the same counterpart.

          (k) GOVERNING LAW. SUCH  INSTRUMENT  SHALL IN ALL RESPECTS BE GOVERNED
     BY, AND CONSTRUED IN ACCORDANCE WITH,
<PAGE>

     THE LAWS (EXCLUDING PRINCIPLES OF CONFLICT OF LAWS OTHER THAN ss. 5-1401 OF
     THE  GENERAL  OBLIGATION  LAW)  OF THE  STATE  OF NEW  YORK  APPLICABLE  TO
     AGREEMENTS MADE AND TO BE PERFORMED  ENTIRELY WITHIN SUCH STATE,  INCLUDING
     ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.

          (l) Jurisdiction,  Court  Proceedings.  Any suit, action or proceeding
     against  any party to such  instrument  arising  out of or  relating to any
     Operative Document, any Transaction or any judgment entered by any court in
     respect of any thereof may be brought in the Supreme  Court of the State of
     New York, County of New York or in the United States District Court for the
     Southern  District of New York as any party  hereto in its sole  discretion
     may  elect,  and  each  such  party  thereby  submits  to the  nonexclusive
     jurisdiction  of such  courts for the  purpose of any such suit,  action or
     proceeding.  To the extent that  service of process by mail is permitted by
     Applicable  Law,  each such party  irrevocably  consents  to the service of
     process  in any such  suit,  action  or  proceeding  in such  courts by the
     mailing of such process by registered or certified mail,  postage  prepaid,
     at its address for notices provided for above.  Each such party irrevocably
     agrees not to assert any objection  which it may ever have to the laying of
     venue of any such suit,  action or  proceeding  in the Supreme Court of the
     State of New York,  County  of New York or in the  United  States  District
     Court for the  Southern  District of New York,  and any claim that any such
     suit, action or proceeding brought in any such court has been brought in an
     inconvenient  forum. TO THE EXTENT  PERMITTED BY APPLICABLE LAWS, EACH SUCH
     PARTY  WAIVES  ANY  RIGHT  TO A TRIAL  BY JURY IN ANY  JUDICIAL  PROCEEDING
     INVOLVING ANY CLAIM UNDER SUCH INSTRUMENT.