EXHIBIT 10.2
NON-COMPETITION AGREEMENT
This Non-Competition Agreement (this "Agreement"), dated as
of September 14, 2004, is between Mr. Gaby
A. Ajram ("Mr. Ajram") and Packaging
Dynamics Corporation, a Delaware
corporation ("Packaging Dynamics").
RECITALS
WHEREAS, Mr. Ajram, Packaging Dynamics and the other parties
thereto have entered into that certain
Acquisition Agreement (the "Acquisition
Agreement"), dated as of August 6, 2004,
pursuant to which Packaging Dynamics
is acquiring from Mr. Ajram all of the
outstanding capital stock of 3141276
Canada Inc., a Canadian numbered holding
company and indirect parent
corporation of Papercon, Inc., a Georgia
corporation (the "Company"); and
WHEREAS, in order to induce Packaging Dynamics to enter into
the Acquisition Agreement and consummate
the transactions contemplated thereby,
Mr. Ajram agreed to enter into this
Agreement.
NOW, THEREFORE, in consideration of the mutual agreements and
obligations contained herein and in the
Acquisition Agreement (including the
payments to Mr. Ajram hereunder and
thereunder), Mr. Ajram and Packaging
Dynamics agree as follows:
1. Representations and Warranties of Mr. Ajram. Mr. Ajram
makes the following representations and
warranties to Packaging Dynamics:
(a) Power and Authority. Mr. Ajram has the requisite
competence and authority to execute and
deliver this Agreement and to perform
his obligations hereunder.
(b) Enforceability. This Agreement has been duly
executed and delivered by Mr. Ajram and,
assuming due and valid authorization,
execution and delivery by Packaging
Dynamics, constitutes the legal, valid and
binding obligation of Mr. Ajram,
enforceable against him in accordance with its
terms.
2. Representations and Warranties of Packaging Dynamics.
Packaging Dynamics makes the following
representations and warranties to Mr.
Ajram:
(a) Corporate Power and Authority. Packaging
Dynamics has the corporate power and
authority to execute and deliver this
Agreement, to perform its obligations
hereunder and to consummate the
transactions contemplated hereby. Packaging
Dynamics has taken all corporate
action necessary to authorize the execution
and delivery of this Agreement and
the performance of its obligations
hereunder.
(b) Enforceability. This Agreement has been duly
executed and delivered by Packaging
Dynamics and, assuming due and valid
authorization, execution and delivery by
Mr. Ajram, constitutes its legal,
valid and binding obligation enforceable
against it in accordance with its
terms, except as the same may be limited by
applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws
affecting the enforcement of
creditors rights generally and general
equitable principles regardless of
whether such enforceability is considered
in a proceeding at law or in equity.
3. Covenants of Mr. Ajram.
(a) Acknowledgment. Mr. Ajram agrees and
acknowledges that in order to assure
Packaging Dynamics that the Company will
retain its value and that of its business
as a going concern, it is necessary
that Mr. Ajram undertakes not to utilize
his special confidential knowledge of
the business and operations of the Company
and his relationship with clients or
customers to compete with Packaging
Dynamics or the Company.
(b) Non-Competition. Except as otherwise provided in
the proviso set forth in the third
paragraph of the Note (as such term is
defined in the Acquisition Agreement), Mr.
Ajram hereby agrees that from and
after the Closing Date and continuing for
ten (10) years from the Closing Date
(the "Restricted Period"), he shall not,
directly or indirectly, as employee,
agent, consultant, stockholder, director,
manager, co-partner or in any other
individual or representative capacity, own,
operate, manage, control, engage
in, invest in or participate in any manner
in, act as a consultant or advisor
to, render services for (alone or in
association with any Person (as such term
is defined in the Acquisition Agreement),
other than the Packaging Dynamics
Companies (as such term is defined in
Section 3(f) herein)), or otherwise
assist any Person, other than the Packaging
Dynamics Companies, that engages in
or owns, invests in, operates, manages or
controls any venture or enterprise
that directly or indirectly engages or
proposes to engage anywhere in the
United States or Canada (the "Territory")
in the business of the Packaging
Dynamics Companies as of the date hereof
and those businesses of the Packaging
Dynamics Companies through the time Mr.
Ajram is an employee or director of any
of the Packaging Dynamics Companies (the
"Restricted Business") or any business
similar to, or competitive with, the
Restricted Business; provided, however,
that nothing contained herein shall be
construed to prevent Mr. Ajram from (i)
investing in the stock of any competing
corporation listed on a national
securities exchange or traded in the
over-the-counter market so long as Mr.
Ajram is not involved in the business of
said corporation and Mr. Ajram does
not own more than five (5%) percent of the
stock of such corporation and (ii)
participating in the business of Flexipak
Industries Inc. as such business is
conducted as of the date hereof; provided,
further, that nothing contained
herein shall be construed to prevent Mr.
Ajram from engaging in a business in
which none of the Packaging Dynamics
Companies are engaged as of the date
hereof but in which a Packaging Dynamics
Company becomes engaged subsequent to
the date hereof, so long as Mr. Ajram
became engaged in such new business prior
to any of the Packaging Dynamics Companies.
With respect to the Territory, Mr.
Ajram specifically acknowledges that the
Packaging Dynamics Companies have
heretofore conducted their businesses
throughout the United States and Canada.
(c) Non-Solicitation. Without limiting the
generality of the provisions of Section
3(b) and except as otherwise provided
in the proviso set forth in the third
paragraph of the Note, Mr. Ajram hereby
agrees that during the Restricted Period,
he will not, directly or indirectly,
without the prior written consent of
Packaging Dynamics (i) induce any Person
which is a customer of any of the Packaging
Dynamics Companies to patronize any
business directly or indirectly in
competition with the Restricted Business
conducted by the Packaging Dynamics
Companies; (ii) canvass, solicit or accept
from any Person who is a customer of the
Packaging Dynamics Companies, any such
competitive business; or (iii) request or
advise any Person who is a customer
or vendor of the Packaging Dynamics
Companies or their successors to withdraw,
curtail or cancel any such customer's or
vendor's business with any such
entity.
(d) Confidential Information. During the Restricted
Period, Mr. Ajram shall keep secret and
retain in strictest confidence, and
shall not, without the prior written
consent of Packaging Dynamics, furnish,
make available or disclose to any third
party or use for the benefit of himself
or any third party, any Confidential
Information. As used in this Section 3(d),
"Confidential Information" shall mean any
information relating to the business
or affairs of the Packaging Dynamics
Companies, including, without limitation,
to information relating to financial
statements, client or customer identities,
potential clients or customers, employees,
suppliers, servicing methods,
equipment, programs, strategies and
information, analyses, profit margins or
other proprietary information; provided,
however, that Confidential Information
shall not include any information which is
in the public domain or becomes
generally known in the public domain
through no wrongful act on the part of Mr.
Ajram. Mr. Ajram acknowledges that the
Confidential Information is vital,
sensitive, confidential and proprietary to
the Company and its Affiliates. Mr.
Ajram agrees to deliver to Packaging
Dynamics at the termination of his
employment, or at any time Packaging
Dynamics may request, all memoranda,
notes, plans, records, reports, analyses,
compilations, computer disks,
forecasts, studies and other documents (and
copies thereof), including any
information stored in digital or analog
form, whether on electronic or magnetic
media, and pictures thereof stored on film
or tape or electronically stored,
relating to the Packaging Dynamics
Companies or other forms of Confidential
Information which Mr. Ajram may then
possess or have under his control.
(e) Interference with Relationships. During the
Restricted Period, Mr. Ajram shall not,
directly or indirectly, without the
prior written consent of Packaging
Dynamics, employ, engage, recruit or solicit
for employment or engagement, any Person
who is (or was within six (6) months
of the Closing Date) employed or engaged by
the Packaging Dynamics Companies or
otherwise seek to influence or alter any
such Person's relationship with any of
the foregoing.
(f) As used in this Agreement, the term "Packaging
Dynamics Companies" shall mean and include
Packaging Dynamics and all of its
present and future subsidiaries including,
without limitation, the Company.
(g) Blue-Pencil. Mr. Ajram recognizes that the
territorial, time and scope limitations set
forth in this Section 3
