<Page>
EXHIBIT 10.16
MANAGEMENT AGREEMENT
This Management Agreement is made as of February 27, 2004, among Solo
Cup Investment Corporation, a Delaware corporation ("HOLDINGS"), Solo Cup
Company, a Delaware corporation (the "COMPANY"), and Vestar Capital Partners, a
New York general partnership ("VESTAR").
WHEREAS, Vestar, by and through its officers, employees, agents,
representatives and affiliates, has expertise in the areas of corporate
management, finance, investment, acquisitions and other matters relating to the
business of Holdings and its subsidiaries (including the Company); and
WHEREAS, each of Holdings and the Company desires to avail itself, for
the term of this Agreement, of the expertise of Vestar in the aforesaid areas,
in which it acknowledges the expertise of Vestar.
NOW, THEREFORE, in consideration of the foregoing recitals and the
covenants and conditions herein set forth, the parties hereto agree as follows:
1. APPOINTMENT. Each of Holdings and the Company hereby appoints Vestar to
render advisory and consulting services referred to in Section 2 commencing upon
the Closing Date (as defined in the Convertible Participating Preferred Stock
Purchase Agreement (the "STOCK PURCHASE AGREEMENT"), dated as of February 27,
2004, among Holdings, Vestar Cup Investment, LLC ("VCI"), Vestar Cup Investment
II, LLC ("VCI II") and Vestar Capital Partners IV, L.P. ("VCP IV")).
2. SERVICES. Vestar hereby agrees that, commencing upon the Closing Date,
it shall render to each of Holdings and the Company (and their subsidiaries)
from time to time by and through such of Vestar's officers, employees, agents,
representatives and affiliates as Vestar, in its sole discretion, shall
designate from time to time, advisory and consulting services in relation to the
affairs of Holdings and the Company (and their subsidiaries) in connection with
strategic financial planning and other services not referred to in the next
sentence, including advisory and consulting services in relation to the
selection, supervision and retention of independent auditors, outside legal
counsel and investment bankers or other financial advisors or consultants. It is
expressly agreed that the services to be performed hereunder shall not include
(x) investment banking or other financial advisory services rendered by Vestar
and its affiliates to Holdings and the Company (and their subsidiaries) after
the Closing Date in connection with acquisitions, divestitures, refinancings,
restructurings and similar transactions by Holdings and the Company (and their
subsidiaries) or (y) full or part-time employment by any of Holdings and the
Company (and their subsidiaries) of any employee or partner of Vestar or any of
its affiliates. The services described in the preceding sentence may be provided
by Vestar if the parties hereto so mutually agree, and the rendering of and
compensation for such services shall be pursuant to the terms and conditions
contained in a written instrument executed by the parties hereto.
<Page>
2
3. FEES. Subject to the provisions of Section 6, Holdings and the Company
and their respective successors hereby jointly and severally agree to pay to
Vestar a per annum management fee (the "FEE") equal to $800,000, which shall not
vary regardless of the level of services provided pursuant to Section 2 for such
year. For the period from the Closing Date through July 1, 2004, the Fee shall
be pro rated based on the number of days in such period and shall be payable in
full on the Closing Date. For all periods beginning after July 1, 2004, the Fee
shall be payable semi-annually in advance on each January 1 and July 1;
PROVIDED, HOWEVER, that Vestar shall promptly reimburse to Holdings a pro rated
portion of the Fee attributable to any period occurring after the termination of
this Agreement, based on the number of days in such period. All references to
"per annum" or "annual" herein refer to the fiscal year of the Company.
4. REIMBURSEMENTS. In addition to the Fee, Holdings and the Company hereby
jointly and severally agree to pay directly or reimburse Vestar for its
reasonable Out-of-Pocket Expenses incurred after the Closing Date in connection
with services provided pursuant to Section 2. For the purposes of this
Agreement, the term "OUT-OF-POCKET EXPENSES" shall mean the amounts paid by or
on behalf of Vestar in connection with services provided pursuant to Section 2,
including (i) reasonable fees and disbursements of counsel and accountants, (ii)
reasonable fees and disbursements of other independent professionals retained by
Vestar with the prior written consent of Holdings or the Company, (iii)
reasonable costs of outside services or independent contractors, such as
couriers, business publications or similar services, and (iv) reasonable
transportation, long-distance telephone, out-going telecopy and similar expenses
not associated with Vestar's ordinary operations. All reimbursements for
Out-of-Pocket Expenses shall be made from time to time upon the reasonable
request of Vestar after presentation by Vestar of reasonable documentation
therefor.
5. INDEMNIFICATION. Except as provided below, Holdings and the Company
hereby jointly and severally agree to indemnify and hold harmless Vestar and its
affiliates, partners, members, officers, directors, employees, agents,
representatives and stockholders (each being an "INDEMNIFIED PARTY") from and
against any and all losses, claims, damages and liabilities of whatever kind or
nature, joint or several, absolute, contingent or consequential, to which such
Indemnified Party may become subject under any applicable federal or state law,
or any claim made by any third party, or otherwise, to the extent they relate to
or arise out of the services contemplated by this Agreement or the engagement of
Vestar pursuant to, and the performance by Vestar of the services contemplated
by, this Agreement. Except as provided below, Holdings and the Company hereby
jointly and severally agree to reimburse any Indemnified Party for all
reasonable costs and expenses (including reasonable attorneys' fees and
expenses) as they are incurred in connection with the investigation of,
preparation for or defense of any pending or threatened claim for which the
Indemnified Party would be entitled to indemnification under the terms of the
previous sentence, or any action or proceeding arising therefrom, whether or not
such Indemnified Party is a party hereto; provided that in no event shall
Holdings and/or the Company be required to pay fees and expenses under this
section for more than one firm of attorneys in any jurisdiction in any one legal
action or group of related actions. Holdings and the Company will not be liable
under the foregoing indemnification provisions to the extent that any loss,
claim, damage, liability, cost or expense is determined by a court, in a final
judgment from which no further appeal may be taken, to have resulted from the
gross negligence, bad faith or willful misconduct of an Indemnified Party, and
in such case, an Indemnified Party shall promptly reimburse to Holdings any
amounts advanced by Holdings or the Company to or on
<Page>
3
behalf of such Indemnified Party with respect to such loss, claim, damage,
liability, cost or expense. No Indemnified Party seeking indemnification or
reimbursement under this Section will, without Holdings' and the Company's prior
written consent, which consent shall not be unreasonably withheld, settle,
compromise, consent to the entry of any judgment in or otherwise seek to
terminate any action, claim, suit, investigation or proceeding referred to in
this Section.
6. TERM. This Agreement shall become effective as of the Closing Date and
shall terminate at such time after the Closing Date as VCP IV and the partners
therein and the affiliates thereof cease to beneficially own (as defined in the
Stock Purchase Agreement) at least 10% of the outstanding Common Stock (as
defined in the Stock Purchase Agreement). The provisions of Sections 4, 5, 7 and
8 and this Section 6 and the joint and several obligations of Holdings and the
Company to pay Fees accrued during the term of this Agreement pursuant to
Section 3 shall survive the termination of this Agreement.
7. PERMISSIBLE ACTIVITIES. Subject to (a) the Stockholders' Agreement,
dated as of February 27, 2004, among VCP IV, VCI II, VCI, SCC Holding Company
LLC, Holdings and the Management Investors and (b) all applicable provisions of
Delaware law that impose fiduciary duties upon Vestar or its partners, members
or affiliates, nothing herein shall in any way preclude Vestar or its partners,
members, officers, employees or affiliates from engaging in any business
activities or from performing services for its or their own account or for the
account of others, including for companies that may be in competition with the
business conducted by Holdings, the Company or their subsidiaries.
Notwithstanding the foregoing, Vestar acknowledges that it will receive
information with respect to Holdings, the Company and their respective
affiliates and subsidiaries and agrees such information will contain information
that is non-public, confidential or proprietary in nature (the "CONFIDENTIAL
INFORMATION"). Vestar agrees that it will use the Confidential Information
solely for the purposes contemplated by this Agreement and in no manner
detrimental to Holdings, the Company and their affiliates and subsidiaries.
Vestar agrees that the Confidential Information will be kept confidential and
will not be disclosed, other than in connection with the performance of its
duties under this Agreement and as required by law. The term "Confidential
Information" shall not include (i) information that is generally available to
and known by the public (other than as a result of disclosure by Vestar) or (ii)
was available to Vestar on a non-confidential basis prior to disclosure by
Holdings, the Company or their affiliates and subsidiaries.
8. GENERAL. (a) No amendment or waiver of any provision of this Agreement,
or consent to any departure by any party from any such provision, shall in any
event be effective unless the same shall be in writing and signed by the parties
to this Agreement and then such amendment, waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
(b) Any and all notices hereunder shall, in the absence of receipted
hand delivery, be deemed duly given when mailed, if the same shall be sent by
registered or certified mail, return receipt requested, and the mailing date
shall be deemed to be the date from which all time periods pertaining to a date
of notice shall run. Notices shall be addressed to the parties at the following
addresses:
<Page>
4
If to Vestar: Vestar Capital Partners
245 Park Avenue, 41st Floor
New York, New York 10167
Attention: Norman W. Alpert and General Counsel
With a copy to: Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, New York 10017
Attention: Peter Gordon
If to Holdings or the Company: Solo Cup Investment Corporation
1700 Old Deerfield Road
Highland Park, Illinois 60035
Attention: Ronald L. Whaley
With a copy to: Skadden, Arps, Slate, Meagher & Flom LLP
333 West Wacker Drive
Chicago, Illinois 60606
Attention: Brian W. Duwe, Esq.
(c) This Agreement shall constitute the entire Agreement between the
parties with respect to the subject matter hereof, and shall supersede all
previous oral and written (and all contemporaneous oral) negotiations,
commitments, agreements and understandings relating hereto.
(d) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
MADE AND TO BE PERFORMED THEREIN. THE PARTIES TO THIS AGREEMENT HEREBY AGREE TO
SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE FEDERAL AND STATE COURTS LOCATED IN
NEW YORK, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT. Each of the parties hereto waives any right it may have to trial
by jury in respect of any litigation based on, arising out of, under or in
connection with this Agreement or any course of conduct, course of dealing,
verbal or written statement or action of any party hereto. This Agreement shall
inure to the benefit of, and be binding upon, Vestar, the Indemnified Parties,
Holdings, the Company and their respective successors and assigns.
(e) This Agreement may be executed in two or more counterparts, and
by different parties on separate counterparts; each set of counterparts showing
execution by all parties shall be deemed an original and shall constitute one
and the same instrument.
(f) The waiver by any party of any breach of this Agreement shall not
operate as or be construed to be a waiver by such party of any subsequent
breach.
* * * *
<Page>
IN WITNESS WHEREOF, the parties have caused this Management Agreement
to be executed and delivered by their duly authorized officers or agents as set
forth below.
VESTAR CAPITAL PARTNERS
By its General Partner:
By: /s/ Norman W. Alpert
----------------------------------------
Name:
Title:
SOLO CUP INVESTMENT CORPORATION
By: /s/ Ronald L. Whaley
----------------------------------------
Name:
Title:
SOLO CUP COMPANY
By: /s/ Ronald L. Whaley
----------------------------------------
Name:
Title: