Document:

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                                                                    EXHIBIT 10.6

                    AMENDMENT NO. 1 TO VOTING TRUST AGREEMENT

     THIS Amendment No. 1 (this "Amendment"), dated July 25, 2002, to the VOTING
TRUST AGREEMENT (the "Agreement") made the 17th day of December 1999, by and
among Allied Healthcare Group Limited (formerly known as Transworld Holdings
(UK) Limited), a company incorporated in England and Wales with registered
number 3370146 ("UK Parent"), Transworld Healthcare (UK) Limited, a company
incorporated in England and Wales with registered number 3370146 ("TW UK"),
Transworld Healthcare, Inc., a New York corporation, Triumph Partners III, L.P.,
a Delaware limited partnership ("Triumph"), and Richard Green (hereinafter
sometimes referred to, together with his successor in trust, as the "Trustee").
UK Parent and Allied Healthcare International Inc. (f/k/a Transworld Healthcare,
Inc.) ("US Parent") are hereinafter referred to together as the "Initial
Shareholders." US Parent, UK Parent and TW UK are hereinafter referred to
collectively as the "Corporate Group."

                               W I T N E S S E T H
                               - - - - - - - - - -

     WHEREAS, on December 17, 1999, the parties entered into the Agreement to
provide a mechanism for exercising the voting rights attributable to the
outstanding ordinary shares of TW UK and UK Parent owned by the Initial
Shareholders so as to give effect to the commercial understanding between the
Purchasers (as defined in that certain Securities Purchase Agreement (the
"Purchase Agreement"), dated as of December 17, 1999, as amended, among UK
Parent, TW UK, the Purchasers and US Parent), on the one hand, and the Initial
Shareholders, on the other hand, with respect to the exercise of control over
the business and policies of TW UK and UK Parent and other matters of corporate
governance as between majority and minority shareholders;

     WHEREAS, as of the date hereof, US Parent has approved the reorganization
of the Corporate Group, pursuant to which TW UK shall become a wholly-owned
subsidiary of UK Parent, which is and shall remain a wholly-owned subsidiary of
US Parent (the "Reorganization") in accordance with that certain Master
Reorganization Agreement, dated as of April 24, 2002, by and among the Corporate
Group and the Investors named therein (as subsequently amended, the
"Reorganization Agreement"); and

     WHEREAS, in connection with the Reorganization, Triumph shall acquire
shares of US Parent Preferred Stock and it is the intention of the parties that
for so long as such Preferred Stock (or any US Parent Common Stock issuable upon
conversion thereof) remains outstanding, Triumph is to be afforded certain
amended voting rights as fully described herein.

     NOW, THEREFORE, in consideration of the mutual covenants herein contained
and for other good, valuable and sufficient consideration, the receipt of which
is hereby acknowledged, the parties hereto promise, covenant, undertake and
agree as follows:

     1. Definitions. Capitalized terms used in the Agreement and not otherwise
defined shall have the meanings ascribed thereto in Article FIFTH of the
Certificate of Amendment of

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the Certificate of Incorporation of Allied Healthcare International Inc. dated
June 26, 2002 (the "Preferred Stock Certificate"), rather than the Purchase
Agreement.

     2. Transfer of Securities. Effective hereby, the following shall be
substituted in its entirety for clause (iii) of the second paragraph of Section
3 of the Agreement: Intentionally Omitted.

     3. Withdrawal of Shares from Voting Trust.

          (a) Effective hereby, the following shall be substituted in its
     entirety for paragraph (a) of Section 4 of the Agreement:

               "at any time after the fifteenth anniversary of the date hereof,
          provided that all obligations of US Parent, UK Parent and TW UK
          arising from (i) a conversion of the Series A Preferred Stock, (ii)
          the exercise of the Holders' Redemption with respect to the Series A
          Preferred Stock, (iii) the Mirror Preferred Stock, (iv) the Mirror
          Notes or (v) the Mirror PIK Notes, shall have been duly and fully
          satisfied."

          (b) Effective hereby, the following shall be substituted in its
     entirety for paragraph (b) of Section 4 of the Agreement: Intentionally
     Omitted.

     4. Rights, Powers and Duties of the Trustee; Obligations of Initial
Shareholders. Effective hereby, the following shall be substituted in its
entirety for paragraph (f) of Section 5 of the Agreement:

          "Subject to the requirements of Applicable Law, each of the Initial
     Shareholders shall instruct the Trustee to vote their Shares (whether at a
     general or extraordinary meeting of shareholders or by consent in lieu of a
     meeting of shareholders) and where appropriate to give effect to such
     matters, shall convene any necessary shareholders meeting for the purpose
     of passing (and, unless pursuant to an amending resolution required for the
     purpose of authorizing and giving effect to the Holders' Redemption of
     Series A Preferred Stock pursuant to the Preferred Stock Certificate and
     Article VIII of the Purchase Agreement, not revoking) such resolutions as
     may be required by Applicable Law to approve or authorize any purchase of
     securities pursuant to Article VIII of the Purchase Agreement, including
     without limitation, any special resolutions required under Sections 165
     and/or 171 of the Companies Act 1985."

     5. Voting by the Trustee.

          (a) Effective hereby, the following shall be substituted in its
     entirety for paragraph (a)(iii) of Section 6 of the Agreement:
     Intentionally Omitted.

          (b) Effective hereby, the following shall be substituted in its
     entirety for paragraph (a)(vi) of Section 6 of the Agreement:

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          (vi) If a Put Breach shall have occurred and be continuing, the
     Trustee (A) shall vote, sell and transfer the Shares strictly in accordance
     with the instructions of Triumph without any requirement as to action by
     the Board of Directors of UK Parent or TW UK and (B) shall execute and
     deliver as the registered holder of the Shares such agreements, documents
     or instruments as may be reasonably required by Triumph to carry out the
     same consistently with the Purchase Agreement and the TW UK Charter. The
     Trustee shall be required to accept as evidence of the occurrence of a Put
     Breach and of the instructions of Triumph a letter or notice duly signed by
     an authorized representative of Triumph stating that a Put Breach has
     occurred and setting forth any other actions to which such instructions
     shall apply. The Trustee shall not be allowed or bound to call for further
     evidence nor to verify the accuracy of the contents of such letter or
     notice nor be responsible for any losses, liabilities, costs, damages,
     actions, demand or expenses or for any breach of any of the provisions of
     this Agreement that may be occasioned by accepting, acting or relying on
     such letter or notice.

          If US Parent disputes the determination of Triumph that a Put Breach
     has occurred, it shall have the right to take such action as it may
     determine, including seeking injunctive relief, instituting an action for
     damages or an appropriate judicial declaration. Pending resolution of any
     dispute or legal proceeding initiated by US Parent, the Trustee shall be
     required to act in accordance with the instructions of Triumph except in
     the case that an injunction to the contrary is issued by a court of
     competent jurisdiction. Triumph shall respond promptly to any request by US
     Parent for a statement of the grounds upon which Triumph based its
     determination that a Put Breach has occurred and shall afford US Parent an
     opportunity to address Triumph and illustrate any obligations or other
     matters relevant to such determination.

          (c) Effective hereby, the following shall be substituted in its
     entirety for paragraph (a)(vii) of Section 6 of the Agreement:

          (vii) If any resolutions are required to be passed by the shareholders
     to approve or authorize any purchase of Securities pursuant to Article VIII
     of the Purchase Agreement, including, without limitation, any special
     resolutions required under Sections 164, 165 and/or 171 of the Companies
     Act 1985 (whether out of distributable profits or out of the proceeds of
     any new issuance of shares or otherwise), then, subject to the requirements
     of Applicable Laws, the Trustee shall vote the Shares strictly in
     accordance with the instructions of Triumph. The Trustee shall be required
     to accept as evidence of the instructions of Triumph a letter or notice
     duly signed by an authorized representative of Triumph stating that a
     resolution is required and setting forth any other actions to which such
     instructions shall apply. The Trustee shall not be allowed or bound to call
     for further evidence nor to verify the accuracy of the contents of such
     letter or notice nor be responsible for any losses, liabilities, costs,
     damages, actions, demand or expenses or for any breach of any of the
     provisions of this Agreement that may be occasioned by accepting, acting or
     relying on such letter or notice.

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          (d) Effective hereby, the following shall be substituted in its
     entirety for the definition of "Put Breach" in paragraph (b) of Section 6
     the Agreement:

          "Put Breach" means, with respect to any of (i) a Holders' Redemption
     of Series A Preferred Stock , (ii) a redemption or repayment of Mirror
     Preferred Stock or (iii) a redemption or repayment of Mirror Notes and/or
     Mirror PIK Notes (each a "Put"), the failure of US Parent, UK Parent and/or
     TW UK to fulfill their respective obligations in all material respects in
     the manner and at the time provided in the Preferred Stock Certificate, the
     charter of UK Parent (including the terms of the Mirror Preferred Stock) or
     the Purchase Agreement, provided that a failure by UK Parent so to fulfill
     its obligations shall not be deemed to be a Put Breach unless TW UK shall
     also have failed to fulfill its obligations on the corresponding Put.

          (e) Effective hereby, the following shall be substituted in its
     entirety for clause (iv) of paragraph (c) of Section 6 of the Agreement:

          "(iv) Up to four additional persons who (except as provided below) are
     neither partners, directors, agents, Affiliates, officers or employees of
     any of US Parent, Triumph or their Affiliates, nor officers or employees of
     UK Parent or TW UK or any of its Subsidiaries (the "Independent
     Directors"), who will be nominated with the affirmative vote of a majority
     of the directors then in office following the nomination procedure set
     forth below; provided, however, that "independent" directors of US Parent
     who are neither officers or employees of US Parent, UK Parent or TW UK nor
     Affiliates of Hyperion Partners II, L.P., Hyperion TW Fund, L.P., Hyperion
     TWH Fund LLC, Hyperion TWH Fund II LLC or Triumph will be eligible to be
     nominated as Independent Directors pursuant to this Section 6(c);"

          (f) Effective hereby, the following shall be added as clause (v) of
     paragraph (c) of Section 6 of the Agreement:

          "(v) the chief operating officer of TW UK (the "TW UK Director" and,
     also a "Management Director"), provided that the initial TW UK Director
     shall be Sarah Eames;

          (g) Effective hereby, the following shall be substituted in its
     entirety for the second subparagraph of paragraph (c) of Section 6 of the
     Agreement:

          "If at any time, (i) any of Triumph or the registered holders of the
     Voting Trust Certificates shall notify the Trustee and the other parties
     hereto of its desire to remove, with or without cause (as defined below),
     any director of TW UK or UK Parent previously designated by it pursuant to
     this Section 6(c), (ii) either Management Director ceases to be employed as
     the chief executive officer or the chief operating officer, as the case may
     be, of TW UK, or (iii) the directors (other than the director who is
     proposed to be removed) then in office unanimously agree to request the
     removal of an Independent Director, then the Trustee agrees

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     to vote all of the Shares so as to remove such director. If at any time,
     any of the Investor Director, the Parent Director or the TW UK Director
     ceases to serve on the Board of Directors of TW UK or UK Parent (whether by
     reason of death, resignation, removal or otherwise), the party who
     designated such director shall be entitled to designate a successor
     director to fill the vacancy created thereby on the terms and subject to
     the conditions of this Section 6(c) and the Trustee shall vote all of the
     Shares so as to elect any such director. If at any time an Independent
     Director ceases to serve on the Board of Directors of TW UK or UK Parent
     (whether by reason of death, resignation, removal or otherwise), a
     successor director shall be designated and elected on the terms and subject
     to the conditions provided in this Section 6(c)."

          [The remainder of this page is intentionally left blank. Signature
     pages follow.]

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<PAGE>

                    AMENDMENT NO. 1 TO VOTING TRUST AGREEMENT
                             COMPANY SIGNATURE PAGE

         IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 to
Voting Trust Agreement as a deed as of the date first above written.

                                     COMPANIES:

                                     Signed as a deed for and on behalf of
                                     TRANSWORLD HEALTHCARE (UK) LIMITED

                                     By:/s/ Tim Aitken
                                        ------------------------------
                                        Name:
                                        Title:

                                     By:/s/ Charles Murphy
                                        ------------------------------
                                        Name:  Charles Murphy
                                        Title:  Secretary

                                      S-1
<PAGE>

                    AMENDMENT NO. 1 TO VOTING TRUST AGREEMENT
                            UK PARENT SIGNATURE PAGE

         IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 to
Voting Trust Agreement as a deed as of the date first above written.

                                Signed as a deed for and on
                                behalf of ALLIED HEALTHCARE
                                GROUP LIMITED (formerly:
                                TRANSWORLD HOLDINGS (UK)
                                LIMITED) acting by its duly
                                authorized attorney:

                                By:/s/ Scott A. Shay
                                   ----------------------------------------
                                   Name:  Scott A. Shay
                                   Title:  Member of the Board of Directors

                                By:/s/ Charles Murphy
                                   ----------------------------------------
                                   Name:  Charles Murphy
                                   Title:  Company Secretary

                                      S-2
<PAGE>

                    AMENDMENT NO. 1 TO VOTING TRUST AGREEMENT
                             TRUSTEE SIGNATURE PAGE

         IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 to
Voting Trust Agreement as a deed as of the date first above written.

                                      RICHARD GREEN

                                      /s/ Richard Green
                                      ----------------------------------------
                                      Name:

                                      Address:  Selhurst Park, Halnaker
                                                Nr. Chichester
                                                Sussex PO18 0LZ
                                                UK

                                      Telephone:
                                                ------------------------------

                                      In the presence of:

                                      Name:/s/ J.S. Roslyn
                                           -----------------------------------

                                      Address:  68 Elms Drive, Lancing
                                                W. Sussex, BN1S 9LR
                                                UK

                                      Occupation:  Secretary

                                      S-3
<PAGE>

                    AMENDMENT NO. 1 TO VOTING TRUST AGREEMENT
                             TRIUMPH SIGNATURE PAGE

         IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 to
Voting Trust Agreement as a deed as of the date first above written.

                                 Signed as a deed for and on behalf of

                                 TRIUMPH PARTNERS III, L.P.

                                 By: Triumph III Advisors, L.P.,
                                          its general partner

                                 By: Triumph III Advisors, Inc.,
                                          its general partner

                                 By:/s/ Frederick S. Moseley IV
                                    ---------------------------
                                    Name:
                                    Title:

                                 By:/s/ Frederick S. Moseley IV
                                    ---------------------------
                                    Name:
                                    Title:

                                 Address:   Triumph Capital Group, Inc.
                                            28 State Street, 37th Floor
                                            Boston, MA 02109
                                            Attn: Frederick S. Moseley, IV
                                 Telephone: (617) 557-6000

                                      S-4

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                    AMENDMENT NO. 1 TO VOTING TRUST AGREEMENT
                            US PARENT SIGNATURE PAGE

         IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 to
Voting Trust Agreement as of the date first above written.

                                      Signed as a DEED by

                                      ALLIED HEALTHCARE INTERNATIONAL INC.
                                      (formerly: TRANSWORLD HEALTHCARE, INC.)

                                      acting by its duly authorized attorney:

                                      By:/s/ John B. Wynne
                                         -----------------
                                         Name:
                                         Title:

                                      S-5<PAGE>

                                                                     Exhibit 4.1

                         PACKAGING DYNAMICS CORPORATION

                             STOCKHOLDERS AGREEMENT

         This Stockholders Agreement (this "Agreement") is entered into as of
July 1, 2002 (the "Effective Date"), among Packaging Dynamics Corporation, a
Delaware corporation (the "Company"), DCBS Investors, L.L.C., a Delaware limited
liability company ("DCBS"), CB Investors, L.L.C., a Delaware limited liability
company ("CB"), and Packaging Investors, L.P., a Delaware limited partnership
("Packaging Investors" and together with DCBS and CB, collectively, the
"Stockholders").

         The Company and the Stockholders desire to enter into an agreement
concerning, inter alia, the continuity of management of the Company and the
disposition by the Stockholders of the shares of common stock of the Company.

         In consideration of the foregoing and the mutual covenants contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

         1.       Definitions.

         The following terms shall have the following definitions for the
purposes of this Agreement:

         "Act" means the Securities Act of 1933, as amended, or any similar
federal statute, and the rules and regulations of the Commission thereunder, all
as the same shall at that time be in effect.

         "Affiliate" of any person or entity is any other person or entity
controlling, controlled by or under common control with such person or entity.

         "Board" means the Board of Directors of the Company.

         "Closing Date" means the date of the closing of the Merger (as such
term is defined in the Agreement and Plan of Merger, dated March 18, 2002, by
and among Alcoa Inc., AI Merger Sub Inc. and Ivex Packaging Corporation).

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<PAGE>

         "Commission" means the Securities and Exchange Commission.

         "Common Stock" means the Company's common stock, par value $.01 per
share, as constituted on the date hereof, any stock into which such common stock
shall have been changed or any stock resulting from any reclassification of such
common stock, and all other stock of any class or classes (however designated)
of the Company, the holders of which have the right, without limitation as to
amount, either to all or to a share of the balance of current dividends and
liquidating dividends after the payment of dividends and distributions of any
shares entitled to preference.

         "GAAP" means the generally accepted accounting principles in the United
States of America which are applicable on the date hereof.

         "Person" means an individual, partnership, corporation, trust or
unincorporated organization or a government or a political subdivision thereof.

         "Registration Rights Agreement" means the Registration Rights
Agreement, dated the date hereof, among the Stockholders and the Company.

         "Shares" means shares of Common Stock.

         "subsidiary" means any corporation, partnership or other entity or
organization of which a majority of the securities or other interests, having by
their terms ordinary voting power to elect a majority of the board of directors
or others performing similar functions, is directly or indirectly owned or
controlled by the Company, by any one or more subsidiaries, or by the Company
and one or more subsidiaries.

         2. Covenants Regarding Disposition of Shares by the Stockholders. Each
Stockholder agrees that prior to making any voluntary disposition of any Shares
(other than a disposition to the Company, another Stockholder or pursuant to an
effective registration statement under the Act as permitted by the Registration
Rights Agreement), such Stockholder will give written notice to the Company,
describing the manner of such proposed disposition. Each Stockholder further
agrees that such proposed disposition will not be effected until:

         (a) the Company has notified such Stockholder that either:
(i) in the opinion of counsel reasonably acceptable to the Company, no
registration of such Shares under that Act is

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required in connection with such proposed disposition; or (ii) a registration
statement under the Act covering such proposed disposition has been filed by the
Company with the Commission and has become effective under the Act; and

         (b) the Company has notified such Stockholder that either: (i) in the
opinion of counsel reasonably acceptable to the Company no registration or
qualification under the securities or "blue sky" laws of any state is required
in connection with such proposed disposition; or (ii) compliance with applicable
state securities or "blue sky" laws has been effected.

         The Company will use its best efforts to respond to any such notice
from the Stockholder within fifteen (15) days after receipt thereof.

         In the case of any proposed disposition under this Section 2, the
Company will use its best efforts to comply with any such applicable state
securities or "blue sky" laws, but shall in no event be required, in connection
therewith, to qualify to do business in any state where it is not then qualified
to do business or to take any action that would subject it to tax or to the
general service of process in any state where it is not then subject. The
restrictions on transfer contained in this Section 2 shall be in addition to,
and not by way of limitation of, any other restrictions on transfer contained in
any other Section of this Agreement.

         3. Legend on Stock Certificates. Each certificate representing Shares
which are subject to this Agreement shall be endorsed with the following legend
(in addition to any legend required by applicable state securities or "blue sky"
laws):

         "THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A
PRIVATE PLACEMENT, WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"). NO SALE, TRANSFER OR OTHER DISPOSITION OF SUCH
SECURITIES SHALL BE VALID OR EFFECTIVE UNLESS EFFECTED IN COMPLIANCE WITH THE
SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS AND THE
RESTRICTIONS ON TRANSFER SET FORTH IN A STOCKHOLDERS AGREEMENT DATED AS OF JULY
1, 2002, AND ANY AMENDMENTS THERETO, A COPY OF WHICH IS AVAILABLE FOR INSPECTION
AT THE OFFICES OF THE COMPANY. NO TRANSFER OF SUCH SECURITIES WILL BE MADE ON
THE BOOKS OF THE COMPANY UNLESS ACCOMPANIED BY EVIDENCE OF COMPLIANCE WITH THE
TERMS OF SUCH STOCKHOLDERS AGREEMENT."

                                       3
<PAGE>

         Any stock certificate issued at any time in exchange or substitution
for any certificate bearing such legend (except a new certificate issued upon
the completion of a public distribution of securities of the Company represented
thereby) shall also bear such legend, unless in the opinion of counsel,
reasonably acceptable to the Company, the Shares represented thereby need no
longer be subject to restrictions contained in Section 2 of this Agreement. The
Company agrees that it will not transfer on its books any certificate for Shares
in violation of the provisions of this Agreement.

         4. Transfer Restrictions on Shares.

         (a) Certain Transfers of Shares Void. Each Stockholder agrees that such
Stockholder will not sell, transfer or dispose of (hereinafter collectively
called "transfer") any Shares or any stock certificate representing the same now
or hereafter at any time owned by such Stockholder without complying with the
provisions of Section 4(b), (c) and (d) of this Agreement; provided, however,
that nothing contained in Sections 4(b), 4(c) or 4(d) shall prevent or restrict
a Stockholder from distributing, from time to time, its Shares to its members,
partners or stockholders, as the case may be. Any transfer of the Shares in
violation of this subsection (a) shall be void ab initio.

         (b) Right of First Refusal to Purchase Common Stock.

                  (i) Transfer Notice. If DCBS or CB desires to sell for cash
all or any portion of its Shares to any Person (other than to the Company,
another Stockholder, an Affiliate, pursuant to Rule 144, pursuant to an
effective registration statement under the Act or to its members, partners or
stockholders) (a "Third-Party Purchaser") pursuant to a bona-fide offer from
such Third-Party Purchaser, the selling Stockholder (the "Selling Stockholder")
shall give written notice (the "Transfer Notice") to the Company and to
Packaging Investors setting forth such desire and the cash price of such Shares
(the "Offered Shares").

                  (ii) Company Option. Upon the giving of such Transfer Notice,
the Company shall have the first option (but not the obligation) to purchase
all, but not less than all, of the Offered Shares at the cash price specified in
the Transfer Notice by giving a written notice (the "Election Notice") to the
Selling Stockholder and Packaging Investors within fifteen (15) days

                                       4
<PAGE>

after the date of the Transfer Notice. The failure by the Company to deliver the
Election Notice within fifteen (15) days after the date of the Transfer Notice
shall operate as a waiver of the Company's rights under this Section 4(b)(ii).

                  (iii) Packaging Investors Option. If the Company fails to
deliver the Election Notice within fifteen (15) days after the date of the
Transfer Notice, then Packaging Investors shall have the right (but not the
obligation) to purchase all, but not less than all, of the Offered Shares at the
cash price specified in the Transfer Notice by giving a written notice (the
"Second Election Notice") to the Selling Stockholder and the Company within
fifteen (15) days after the earlier to occur of (A) the Company expressly
declines in writing to purchase the Offered Shares pursuant to Section 4(b)(ii),
and (B) the expiration of the 15-day period immediately following the date of
the Transfer Notice. The failure of Packaging Investors to deliver the Second
Election Notice within such fifteen (15) day period shall operate as a waiver of
Packaging Investors' rights under this Section 4(b)(iii).

                  (iv) Purchase and Sale. If the Company or Packaging Investors
elects to purchase the Offered Shares, it shall be obligated to purchase, and
the Selling Stockholder shall be obligated to sell, such Shares. The closing of
such purchase and sale shall be held at the principal executive offices of the
Company at such time as may be mutually acceptable to the Selling Stockholder
and the Company or Packaging Investors, as the case may be (or on the fortieth
(40th) day after the date of the Transfer Notice in the event no mutually
acceptable date is agreeable to the parties).

                  (v) Sale to Third-Party Purchaser. If neither the Company nor
Packaging Investors exercises its right to purchase the Offered Shares pursuant
to Section 4(b), the Selling Stockholder shall have the right to sell the
Offered Shares to the Third-Party Purchaser at a price equal to or greater than
the price set forth in the Transfer Notice, provided, that in the event the
Selling Stockholder does not sell such Offered Shares at a price equal to or
greater than the price set forth in the Transfer Notice within ninety (90) days
after the date of the Transfer Notice, then the Offered Shares shall continue to
be subject to the terms of this Agreement as if no Transfer Notice had been
given.

                  (vi) Subsequent Notices. Neither the Company's nor Packaging
Investors' failure to exercise any rights under this Section 4(b) shall
constitute a waiver of its rights to receive a Transfer Notice with respect to
any subsequent proposed transfer

                                       5
<PAGE>

to a Third-Party Purchaser.

         (c) Drag-Along Right. If, at any time prior to the complete
distribution by DCBS and CB of their Shares to their respective members,
Packaging Investors desires to sell for cash all of its Shares to a Third-Party
Purchaser, then Packaging Investors shall have the right to require DCBS and CB
to sell all of the Shares then owned by them to such Third-Party Purchaser in
connection with such sale. Such right shall be exercisable by written notice (a
"Buyout Notice") given to each of DCBS and CB which shall state (i) that
Packaging Investors proposes to effect the sale of all of its Shares to such
Third-Party Purchaser, (ii) the proposed purchase price per Share to be paid by
the Third-Party Purchaser, and (iii) the name of the Third-Party Purchaser. Each
of DCBS and CB agrees that, upon receipt of a Buyout Notice, each shall be
obligated to sell all of the Shares then owned by them upon the terms and
conditions of such transaction (and otherwise take all reasonably necessary
action to cause consummation of the proposed transaction, including voting such
Shares in favor of such transaction); provided, however, that DCBS and CB shall
be obligated to sell Shares as provided in this Section 4(c) only if each such
Stockholder receives the same consideration per share as Packaging Investors.

         (d) Tag-Along Right. In the event of a proposed sale or series of
related sales (other than pursuant to an effective registration statement under
the Act permitted by the Registration Rights Agreement) by Packaging Investors
or its Affiliates of Common Stock that represents in the aggregate more than
33.0% of the Shares owned by Packaging Investors on the date hereof (a
"Tag-Along Sale") to a Third-Party Purchaser, each of DCBS and CB shall have the
right (but not the obligation) (such right, the "Tag-Along Right") to require,
as a condition to such sale or sales, Packaging Investors to cause the
Third-Party Purchaser to simultaneously purchase the same percentage of Shares
then held by such Stockholder as the number of Shares being sold in such sale or
sales by Packaging Investors represents to the aggregate number of Shares then
held by Packaging Investors (the "Tag-Along Interest") for a per-share amount
equal to the per-share amount being paid by the Third-Party Purchaser to
Packaging Investors (the "Tag-Along Price"). Prior to completing a Tag-Along
Sale, Packaging Investors shall promptly give written notice to DCBS and CB (the
"Tag-Along Notice") setting forth the information required in a Transfer Notice.
Each of DCBS and CB may exercise its Tag-Along Right by delivering written
notice of its election to sell its Shares to Packaging Investors within ten (10)
days after receipt of the

                                       6
<PAGE>

Tag-Along Notice. Delivery of such notice by DCBS or CB shall constitute the
agreement of DCBS or CB, as the case may be, to sell its Tag-Along Interest to
the Third-Party Purchaser at the Tag-Along Price and otherwise on the same terms
and conditions as apply to the Tag-Along Sale (the "Tag-Along Terms") and the
agreement of Packaging Investors to cause the Third-Party Purchaser to purchase
DCBS's and CB's Tag-Along Interest at the Tag-Along Price and upon the Tag-Along
Terms.

         5.  Corporate Governance.

         (a) Election of Directors.

                  (i) Nominees.

                      (a) Until the date on which Packaging Investors shall
cease to own at least 20.0% of the outstanding Shares, at each annual meeting of
stockholders of the Company, the Company will nominate or cause to be nominated
one (1) individual designated by Packaging Investors (the "PI Designee") for
election to the Board.

                      (b) Until the date on which DCBS and CB shall cease to own
at least 5.0% of the outstanding Shares, at each annual meeting of stockholders
of the Company, the Company will nominate or cause to be nominated one (1)
individual designated by DCBS (the "DCBS Designee") for election to the Board.

                  (ii) Election. The Stockholders agree that until the date (i)
on which Packaging Investors shall cease to own at least 20.0% of the
outstanding Shares, Packaging Investors, DCBS and CB shall vote any Shares then
owned by any of them to nominate and elect the PI Designee as a director of the
Company, and (ii) on which DCBS and CB collectively shall cease to own at least
5.0% of the outstanding Shares, Packaging Investors, DCBS and CB shall vote any
Shares then owned by any of them to nominate and elect the DCBS Designee as a
director of the Company.

                  (iii) Removal. If at any time Packaging Investors or DCBS
shall request the right to remove the director or directors nominated by it or
to elect or appoint to the Board a nominee or nominees to which it is entitled
pursuant to this Section 5, each Stockholder shall vote its Shares at any
regular or special meeting and shall take all other actions reasonably necessary
to give effect to the provisions of this Section 5.

         (b) Certain Actions Requiring Special Approval. The

                                       7
<PAGE>

Company agrees that, until the date on which Packaging Investors shall cease to
own 33.0% of the outstanding Shares, it shall not engage in any of the following
transactions or take any of the following actions except with the consent of
Packaging Investors:

                  (i) any creation, incurrence, guarantee, refinancing or
assumption of indebtedness by the Company or any subsidiary in excess of $15
million;

                  (ii) any direct or indirect acquisition (whether by merger,
combination, lease, exchange or otherwise) of any business, assets (other than
the procurement of assets in the ordinary course of business), equity securities
or other securities of, or other investment in, or loan or advance to, any
person or persons, in each case, by the Company or any subsidiary, in any
transaction or in any series of related transactions (other than any loans,
advances or contributions to any wholly-owned subsidiary) in any aggregate
amount exceeding $10 million;

                  (iii) any transfer of assets valued in excess of or in
exchange for consideration valued in excess of $10 million by the Company or any
subsidiary in any transaction or any series of related transactions (other than
transfers in the ordinary course of business and transfers to a wholly-owned
subsidiary);

                  (iv) except pursuant to the Company's 2002 Long-Term Incentive
Stock Plan, the issuance by the Company or any subsidiary of any equity
securities of the Company or any subsidiary (or any of their respective
successors or assigns) (other than in the case of any subsidiary, issuances of
equity securities to the Company or a wholly-owned subsidiary) in a public
offering or otherwise;

                  (v) any transaction of merger, consolidation, amalgamation,
recapitalization or other form of business combination, or any liquidation,
winding up or dissolution of the Company or any material subsidiary (other than
a merger of any wholly-owned subsidiaries with and into each other or the
Company);

                  (vi) the Company or any subsidiary engaging in any business
other than any of the businesses conducted by the Company or a subsidiary on the
date hereof;

                  (vii) any material amendment to the certificate of
incorporation or by-laws (or any similar constituent documents,

                                       8
<PAGE>

including, without limitation, any partnership agreement or limited liability
company agreement) of the Company or any subsidiary;

                  (viii) any dividend or distribution with respect to, or any
redemption or repurchase of, any equity securities of the Company;

                  (ix) except as provided in any applicable Annual Budget (as
hereinafter defined), any individual or series of related expenditures,
commitments, obligations or agreements by the Company or any subsidiary in
excess of $5 million;

                   (x) any material transaction or series of related
transactions between the Company or any subsidiary, on the one hand, and any
party to this Agreement or any Affiliate of such party, on the other hand;

                   (xi) the adoption of any annual budget of the Company
prepared for the Company and its subsidiaries for a succeeding fiscal year (an
"Annual Budget") which is materially inconsistent with the Annual Budget then in
effect, or any material amendment to any such Annual Budget in any fiscal year;
or

                  (xii) the entry into any agreement or arrangement to do any of
the foregoing.

The Company and the Stockholders acknowledge and agree that: (i) Packaging
Investors may exercise the foregoing special approval rights in its sole and
absolute discretion; (ii) in exercising such rights, Packaging Investors is not
a fiduciary to the Company or its stockholders and assumes no fiduciary duties
to the Company or its stockholders; (iii) in exercising such rights, Packaging
Investors may act solely in its best interest even if same may be contrary to
the interests of the Company and its other stockholders and constituents; and
(iv) such special approval rights are separate and apart from any approval of
the Board (including, without limitation, any designee of Packaging Investors
thereon) to accomplish any of the foregoing.

         (c) Financial Statements. The Company shall furnish or cause to be
furnished to the holders of Common Stock (i) within 45 days after the close of
each of the first three quarters of each fiscal year of the Company and within
90 days after the close of each fiscal year of the Company (a) a consolidated
balance sheet of Company as of the end of each such quarter or fiscal year, as
the case may be, all in reasonable detail and, in

                                       9
<PAGE>

the case of such quarterly financial statements, duly certified (subject to
year-end audit adjustments) by the chief financial officer of Company as having
been prepared in accordance with GAAP consistently applied, and in the case of
annual financial statements, certified by independent public accountants of
recognized standing, and (b) consolidated statements of income and cash flow of
Company, all in reasonable detail and, in the case of such quarterly financial
statements, duly certified (subject to year-end audit adjustments) by the chief
financial officer of Company as having been prepared in accordance with GAAP
consistently applied and, in the case of annual financial statements, certified
by independent public accountants of recognized standing, and (ii) other
information as any such Stockholder may reasonably request.

         6. Specific Performance. In the event of a breach or threatened breach
of the terms, covenant and/or conditions of this Agreement by any of the parties
hereto, the other parties shall, in addition to all other remedies, be entitled
(without any bond or other security being required) to a temporary and/or
permanent injunction without showing any actual damage or that monetary damages
would not provide an adequate remedy, and/or a decree for specific performance,
in accordance with the provisions hereof.

         7. Miscellaneous.

         (a) Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the internal laws of the State of Delaware
without regard to principles of conflicts of law.

         (b) Entire Agreement; Amendments. This writing constitutes the entire
agreement of the parties with respect to the subject matter hereof and may not
be modified or amended except by a written agreement signed by the parties
hereto. Notwithstanding anything in this Agreement to the contrary, any
modification or amendment of this Agreement by a written agreement signed by, or
binding upon, the Stockholders shall be valid and binding upon any and all
persons or entities who may, at any time, have or claim and rights under or
pursuant to this Agreement in respect of the Shares originally acquired by such
Stockholder.

         (c) Waiver. No waiver of any breach or default hereunder shall be
considered valid unless in writing, and no such waiver shall be deemed a waiver
of any subsequent breach or default of the same or similar nature.
Notwithstanding anything in this

                                       10
<PAGE>

Agreement to the contrary, any waiver, consent or other instrument under or
pursuant to this Agreement signed by, or binding upon, a Stockholder shall be
valid and binding upon any and all persons or entities who may, at any time,
have or claim any rights under or pursuant to this Agreement in respect of the
Shares originally acquired by each Stockholder.

         (d) Assignments; Successors and Assigns. This Agreement may not be
assigned except as otherwise expressly provided herein.

         (e) Severability. If any provision of this Agreement shall be invalid
or unenforceable, such invalidity or unenforceability shall attach only to such
provision and shall not in any manner affect or render invalid or unenforceable
any other severable provision of this Agreement, and this Agreement shall be
carried out as in any such invalid or unenforceable provision were not contained
herein.

         (f) Headings. The section headings contained herein are for the
purposes of convenience only and are not intended to define or limit the
contents of said sections.

         (g) Further Assurances. Each party hereto shall cooperate and shall
take such further action and shall execute and deliver such further documents as
may be reasonably requested by any other party in order to carry out the
provisions and purposes of this Agreement.

         (h) Gender. Whenever the pronouns "he" or "his" are used herein they
shall also be deemed to mean "she" or "hers" or "it" or "its" whenever
applicable. Words in the singular shall be read and construed as though in the
plural and words in the plural shall be construed as though in the singular in
all cases where they would so apply.

         (i) Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which shall constitute but one
and the same instrument.

         (j) Notices. All notices or other communications provided for herein
shall be in writing and shall be deemed duly given and received (i) on the third
(3rd) business day after the date of the mailing thereof by prepaid, registered
or certified mail, return receipt requested, (ii) the first (1st) business day
after the date of deposit thereof with a reputable overnight courier service, or
(iii) when delivered personally as follows:

                                       11
<PAGE>

                  (i) if to the Company, at the address listed below its
signature, or at such other place as the Company shall have designated by
written notice as herein provided to the Stockholders; and

                  (ii) if to the Stockholders, at the address listed below such
Stockholder's signature, or at such other place as the Stockholder shall have
designated by written notice as herein provided to the Company.

                                       12
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Stockholders Agreement as of the date first above written.

                             PACKAGING DYNAMICS CORPORATION

                             By: /s/ Phillip D. Harris
                                 --------------------------------------
                                    Name: Phillip D. Harris
                                    Title: President and CEO

                             PACKAGING DYNAMICS CORPORATION
                             3900 West 43rd Street
                             Chicago, Illinois 60632
                             Telephone: (773) 254-8000
                             Telecopy: (773) 254-8204
                             Attention: Chief Executive Officer

                             DCBS INVESTORS, L.L.C.

                             By: /s/ Frank V. Tannura
                                 --------------------------------------
                                    Name: Frank V. Tannura
                                    Title: Managing Member

                             DCBS INVESTORS, L.L.C.
                             c/o Packaging Dynamics Corporation
                             3900 West 43rd Street
                             Chicago, Illinois 60632
                             Telephone: (773) 254-8000
                             Telecopy: (773) 254-8204
                             Attention:   Frank V. Tannura
                                          G. Douglas Patterson

<PAGE>

                             CB INVESTORS, L.L.C.

                             By:  DCBS INVESTORS, L.L.C.

                             By: /s/ Frank V. Tannura
                                 --------------------------------------
                                    Name:  Frank V. Tannura
                                    Title: Managing Member

                             CB INVESTORS, L.L.C.
                             c/o Packaging Dynamics Corporation
                             3900 West 43rd Street
                             Chicago, Illinois 60632
                             Telephone: (773) 254-8000
                             Telecopy: (773) 254-8204
                             Attention:   Frank V. Tannura
                                          G. Douglas Patterson

                             PACKAGING INVESTORS, L.L.C.

                             By: /s/ Kevin G. Levy
                                 --------------------------------------
                             Name: Kevin G. Levy
                             Title: Vice President of Group III 31, LLC
                                      General Partner

                             PACKAGING INVESTORS, L.P.
                             201 Main Street, Suite 3100
                             Fort Worth, Texas 76102
                             Telephone: (817) 390-8500
                             Telecopy:  (817) 338-2067
                             Attention: Kevin G. Levy

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