Document:

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                                                                   EXHIBIT 10.10

                          (SANDERS MORRIS HARRIS LOGO)

March 15, 2005

Orchids Paper Products Company
4826 Hunt Street
Pryor, OK 74361

Taglich Brothers, Inc.
The Chrysler Building
405 Lexington Ave
New York, NY 10194

Ladies and Gentlemen:

         This letter confirms our understanding that Orchid Paper Products
Company, a Delaware corporation (the "Company"), and Taglich Brothers, Inc., a
New York corporation ("Taglich Brothers"), have engaged the services of Sanders
Morris Harris Inc., a Texas corporation ("SMH"), and SMH hereby confirms its
agreement with the Company and Taglich Brothers to provide services as a
"qualified independent underwriter" (the "QIU") within the meaning of Rule
2720(b)(15) of the Conduct Rules of the National Association of Securities
Dealers, Inc. ("NASD") with respect to the proposed offering and sale of shares
(the "Shares") of common stock, [*] par value, of the Company. The price at
which the Shares will be sold to the public shall not be higher than the maximum
price recommended by SMH acting as the QIU.

         Taglich Brothers agrees to pay SMH $100,000 for serving as the QIU in
connection with the offering and sale of the Shares, which shall be paid at the
first closing of the sale of the Shares. In addition, Taglich Brothers agrees to
promptly reimburse SMH for all expenses, including fees and disbursements of
counsel, reasonably incurred in its capacity as QIU.

         The Company agrees to indemnify and hold harmless SMH, its directors,
officers, employees, and agents, and each person who controls SMH within the
meaning of either the Securities Act of 1933 (the "Act") or the Securities
Exchange Act of 1934 against any and all losses, claims, damages, or
liabilities, joint or several, to which they or any of them may become subject,
insofar as such losses, claims, damages, or liabilities (or action in respect
thereof) arise out of or are based upon SMH's acting (or alleged failing to act)
as the QIU in connection with the offering and sale of the Shares, and agrees to
reimburse each such indemnified party for any legal or other expenses reasonably
incurred by them in connection with investigating or

320 PARK AVENUE, 17TH FLOOR   NEW YORK, NY 10022  212-317-2700  FAX 212-317-2710

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Orchids Paper Products Company
Taglich Brothers, Inc.
March 15, 2005
Page 2

defending any such loss, claim, damage, liability, or action as such expenses
are incurred; provided, however, that the Company will not be liable in any such
case to the extent that any such loss, claim, damage, or liability results from
the gross negligence or willful misconduct of SMH or, any misrepresentation or
breach of warranty by SMH under the terms of this letter.

         SMH represents and warrants to, and agrees with, the Company and
Taglich Brothers that with respect to the offering and sale of the Shares:

         (a)      SMH is a member of the NASD and is qualified to act as a
                  "qualified independent underwriter" within the meaning of
                  paragraph (b)(15) of NASD Rule 2720.

         (b)      SMH will participate in the preparation of the registration
                  statement and the prospectus relating to the offer and sale of
                  the Shares and will exercise the usual standards of "due
                  diligence" in respect thereto.

         (c)      SMH will undertake the legal responsibilities and liabilities
                  of an underwriter under the Act, specifically including those
                  inherent in Section 11 of the Act.

         (d)      Based upon (i) a review of the Company, including an
                  examination of the registration statement, information
                  regarding the earnings, assets, capital structure, and growth
                  rate of the Company, and other pertinent financial and
                  statistical data, (ii) inquiries of and conferences with
                  management of the Company and its counsel and independent
                  public accountants regarding the business and prospects of the
                  Company, (iii) consideration of the prospects for the industry
                  in which the Company competes, estimates of the business
                  potential of the Company, assessments of its management, the
                  general condition of the securities markets, market prices of
                  the capital stock and debt securities of, and financial and
                  operating data concerning, companies believed by SMH to be
                  comparable to the Company, and the demand for securities of
                  comparable companies similar to the Shares, and (iv) such
                  other studies, analyses, and investigations as SMH deems
                  appropriate, and assuming the offering and sale of the Shares
                  is made as contemplated in the prospectus, SMH will recommend
                  a maximum initial public offering price for the Shares.

         (e)      SMH will furnish to the Company and the other underwriters of
                  the offering and sale of the Shares a letter, dated as of the
                  first closing date of the sale of the Shares, in form and
                  substance satisfactory to the underwriters, to the effect set
                  forth in clauses (a) through (d) above.

         The Company, Taglich Brothers and SMH agree to comply in all material
respects with all of the requirements of NASD Rule 2720 applicable to them in
connection with the offering and sale of the Shares. The Company and Taglich
Brothers agree to cooperate with SMH to enable SMH to comply with NASD Rule 2720
and to perform the services contemplated by this letter.

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Orchids Paper Products Company
Taglich Brothers, Inc.
March 15, 2005
Page 3

         The Company, Taglich Brothers, and SMH agree that the terms of this
letter shall be incorporated into the underwriting agreement among the Company,
Taglich Brothers, SMH, and the other underwriters who agree to participate in
the offer and sale of the Shares; provided, however, that the rights and
obligations of the parties under this letter shall in no event be deemed to be
duplicative of the parties' rights and obligations under the underwriting
agreement.

         After reviewing this letter, please confirm that the foregoing is in
accordance with your understanding by signing and returning the duplicate of
this letter attached hereto, whereupon it will be our binding agreement.

Very truly yours,

SANDERS MORRIS HARRIS INC.

By       /s/ V. MICHAEL FITZGERALD
         ---------------------------
         V. Michael Fitzgerald
         Managing Director

Accepted and agreed to
this 15th day of March, 2005

ORCHIDS PAPER PRODUCTS COMPANY

By       /s/ Keith R. Schroeder
         ---------------------------
Name:        Keith R. Schroeder
         ---------------------------
Title:       Chief Financial Officer
         ---------------------------

TAGLICH BROTHERS, INC.

By       /s/ Richard C. Oh
         ---------------------------
Name:        Richard C. Oh
         ---------------------------
Title:       Managing Director
         ---------------------------exv4w4

 

EXHIBIT 4.4

TRANSLATION FOR

INFORMATION

PURPOSES ONLY

 

 

 

 

AGREEMENT

entered into by:

THE FEDERAL GOVERNMENT OF THE

UNITED MEXICAN STATES

GRUPO TRANSPORTACION FERROVIARIA

MEXlCANA, S A DE C V

TRANSPORTACION MARITIMA

MEXICANA, S A DE C V

KANSAS CITY SOUTHERN

INDUSTRIES, INC.

June 9, 1997

 

 

 

 

AGREEMENT which is signed on June 9, 1997 by:

	 	(1)	 	THE FEDERAL GOVERNMENT OF THE UNITED MEXICAN STATES, THROUGH THE TREASURY OF
THE FEDERATION (hereinafter the “Federal Government”);
	 
	 	(2)	 	GRUPO TRANSPORTACION FERROVIARIA MEXICANA, S A DE C V (hereinafter “TFM
Group”); and
	 
	 	(3)	 	TRANSPORTACION MARITIMA MEXICANA, S A DE C V (hereinafter “TMM”) and KANSAS
CITY SOUTHERN INDUSTRIES, INC. (hereinafter “KCSI”).

     With the appearance of the MINISTRY OF TRANSPORT AND COMMUNICATIONS

     Pursuant to the following Recitals and Clauses, considering the definitions contained in
Clause I of this Agreement:

R E C I T A L S

     I     Under articles 134 of the Political Constitution of the United Mexican States; 36 of the
Organic Law Governing the Federal Public Administration; 5 of the Law Governing Regulations of
Railroad Services; 32 and 68 of the Federal Law Governing Paraestate Entities; 5th, 6th and 12th of
its Regulations; tenth section IV and twelfth sections III and IV of the Agreement which
incorporates the Intersecretarial Commission of Desincorporation; under numeral 43 of the General
Provisions regarding to open Investment in the Mexican Railroad System and in the agreements
adopted by the Intersecretarial Commission of Desincorporation in Meetings of March 6 and July 24,
1996, as well as in the authorization issued by the Ministry of Finance and Public Credit by means
of an official letter dated August 7, 1996, the Ministry of Transport and Communications, on August
9, 1996, the Federal Government published a summon and its relevant basis (hereinafter the “Bid”)
for the acquisition of eighty percent (80%) of the relevant certificates of the capital stock of
TFM, S A de C V (before known as Ferrocarril del Noreste, S A de C V hereinafter “TFM”).

     II     On December 1996, and pursuant to the Bid, the Ministry of Transport and Communications
issued the Bid in favor of TFM Group.

     III     On January 31, 1997, the Federal Government, Ferrocarriles Nacionales de Mexico and TFM
Group (before known as Transportacion Ferroviaria Mexicana, S de R L. de C V), with the appearance
of the Ministry of Transport and Communications, subscribed a purchase of shares agreement (the
“Purchase Agreement”) by virtue of which the Federal Government and Ferrocarriles Nacionales de
Mexico sold to TFM Group the eighty percent (80%) of shares representing the capital stock of TFM.

     IV     Pursuant to the Purchase Agreement, the Federal Government kept Class III shares,
representing twenty percent (20%) of TFM’s capital stock, in order to sell them by means of a
public offering through the securities market, after registration in the national Registry of
Securities and Brokers and, as the case may be, authorization from the National Banking and

 

 

Securities Commission, or by selling said shares directly to TFM Group, pursuant to the terms
established in that Purchase Agreement (hereinafter the shares representing TFM’s capital stock
referred to in this Recital shall be called “Shares of the Second Block”)

     V     By means of an official letter of January 21, 1997, the Committee of Restructuration of the
Mexican Railroad System of the Ministry of Transport and Communications (the “Commission”) informed
to TFM Group have made the analysis of the proposal made by TFM Group, in which is evidenced the
negative impact that it would have for TFM and its shareholders, to place shares in the market in a
period of time less than twenty four (24) months counted since the date of execution of the
Purchase Agreement, as well as its proposal regarding to the consideration of a placement scheme
within a period of time of eighty-one (81) months starting on the mentioned date, pursuant with the
provisions of Clause Twenty-Sixth of said Purchase Agreement. Moreover, it was considered that:
(i) one of the purposes of the Federal Government participation in TFM is the placement of said
participation between the public investors so that it may have access to its capital and
participate of its benefits, and (ii) it is convenient that TFM reaches adequate levels of
efficiency and rentability, as of solvency and liquidity before placing its shares in the stock
market.

     In the other hand, by means of the mentioned letter in the paragraph above, the Commission
informed that the premature placement of the shares of TFM in the stock market, may have the effect
that such shares may be ranking under its real value, which would limit TFM and its shareholders
the access to financial markets to obtain resources that shall be sent to necessary investments to
maintain the railroad service in an efficient permanent and secure manner.

     BY VIRTUE OF THE FOREGOING, the parties sign this Agreement pursuant to the following:

C L A U S E S

CLAUSE I

DEFINITIONS

     Section 1.01 Definition of Terms As used in, and for the purposes of this
Agreement, the terms listed below shall have the following meanings (which shall be applied equally
to the singular and to the plural of said terms):

     “Shares of the Second Block” shall have the meaning attributed to said term in Recital
IV of this Agreement.

     “TFM Shares” shall mean all shares representing TFM’s capital stock.

     “Class III Shares” shall mean the TFM shares of Class III.

     “Purchase Agreement” shall have the meaning attributed to said term in Recital III of
this Agreement.

     “Mexico” shall mean the United Mexican States.

-2-

 

     “Pesos” shall mean the currency of legal tender in Mexico.

     “Purchase Price” shall mean the price per TFM Share determined pursuant to Clause
Twenty-Six of the Purchase Agreement, at which price, if applicable, and pursuant to the terms and
conditions of this Agreement, TFM Group, TMM or KCSI, as the case may be, shall acquire, from the
Federal Government the Shares of the Second Block.

CLAUSE II

OF THE PUBLIC OFFERING

     Section 2.01 Public Offering Under the terms of Clause Twenty-Sixth of the
Purchase Agreement, a period of eighty one (81) months is provided starting on the date of said
Purchase Agreement, for the placement of the Shares of the Second Block in the stock market, in the
understanding that the period of time to make valid the obligation to purchase the shares that TFM
Group and the Federal Government have mutually granted in the Purchase Agreement, will be extended
for a period of time equal to the one above mentioned.

     Section 2.02 Price The initial price to which, as the case may be, the Shares
of the Second Block be offered in the stock market pursuant to the provisions of Section 2.01
above, may not be under the price established in Clause Twenty-Sixth of the Purchase Agreement.

     Section 2.03 Previous Placement The Shares of the Second Block may be placed
in the stock market before expiration of the period of eighty-one (81) months referred to in
Section 2.01 above, if the market conditions are propitious and the Federal Government and TFM
Group expressly agree as such.

CLAUSE III

OBLIGATION TO ACQUIRE

THE SHARES OF THE SECOND BLOCK

     Section 3.01 Purchase Undertaking If, for any reason, on October 31, 2003,
the Federal Government has not sold all of the Shares of the Second Block, TFM Group undertakes to
acquire the Shares of the Second Block which the Federal Government has not sold, at a price to be
calculated pursuant to the provisions of Clause Twenty-Sixth of the Purchase Agreement

     TFM Group must make payment for the Shares of the Second Block that it acquires pursuant to
the provisions of the preceding paragraph, within sixty (60) calendar days following the date on
which the Ministry of Transport and Communications informs of the number of shares which, pursuant
to this Clause, TFM Group must acquire from the Federal Government,
and against said payment the Federal Government will deliver to TFM Group, the relevant share
certificates, duly endorsed in ownership and free of any lien and limitation.

     Section 3.02 Obligations of TMM and KCSI In the eventuality that, on the date
referred to in the first paragraph of Section 3.01 above, TFM Group does not acquire the Shares of
the Second Block that the Federal Government has not sold, therefore (i) the Ministry of Transport
and Communications will provide the relevant written notice to TMM and to KCSI, (ii) TFM Group will
be discharged of the obligations referred to in Section 3.01 above, and (iii) TMM and KCSI are
solidarily bound to acquire all of said shares of the Second Block that the

-3-

 

Federal Government has not sold, either directly or through TMM Multimodal, S A de C V, and Caymex Transportation, Inc.,
respectively, or through any other of its subsidiaries, in the understanding that, in the event
that, both, TMM and KCSI perform the acquisition referred above, will perform said acquisition in a
proportion manner considering fifty-one percent (51%) for TMM and forty-nine percent (49%) for
KCSI; in the understanding that, in the event referred to in this Section 3.02, the sale to TMM and
to KCSI shall be under the same terms and conditions as any sale that would have been made to TFM
Group.

CLAUSE IV

VARIOUS

     Section 4.01 Notifications, Etc. Unless stipulated to the contrary in this
Agreement, notifications and notices that are referred herein shall be made in writing and shall be
delivered by hand or sent by fax (with telephone confirmation) to each party to this Agreement at
its domicile or, if applicable, to the fax number that is stated under its name on the signature
pages of this Agreement, or to any other domicile or telephone number that any party indicates in
written notice given to the other parties to this Agreement. All notification and notices that are
delivered by hand at the domicile of the corresponding party shall take effect on the date of
delivery thereof and, any that are sent by fax, when the recipient thereof issues a receipt
acknowledging delivery of the corresponding notification or notice.

     Section 4.02 Taxes Each party shall pay the taxes that, pursuant to the
applicable laws, it is supposed to pay in connection with the subscription and performance of the
obligations deriving from this Agreement.

     Section 4.03 Assign No party may assign the rights or obligations that derive
for it from this Agreement, without the prior written consent of the other parties to this
instrument.

     Section 4.04 Law and Jurisdiction
For the interpretation and performance of this Agreement, the parties hereto submit to the
laws applicable in, and to the appropriate courts of the Federal District, Mexico, and waive any
other privilege that might correspond to them by reason of their present or future domicile, or for
any other reason.

     Section 4.05 Titles The titles of the Clauses and Sections that are used in
this Agreement have no purpose other than the convenience of the parties and may not affect the
interpretation of this Agreement.

-4-

 

     IN WITNESS WHEREOF, the parties sign this Agreement by means of their representatives duly
authorized for the purpose, on June 9, 1997.

FEDERAL GOVERNMENT OF THE UNITED

MEXICAN STATES THROUGH THE TREASURY

OF THE FEDERATION

/s/ ILLEGIBLE

By:

Title:

Domicile:

Fax:

 

GRUPO TRANSPORTACION FERROVIARIA MEXICANA, S A DE C V

 

	 	 	 
	/s/ JACINTO MARINA

	 	/s/ JOE MONELLO
	By: Jacinto Marina

	 	By: Joe Monello
	Title: Attorney-in-Fact

	 	Title: Attorney-in-Fact
	Domicile:
	 	 
	Fax:
	 	 

 

TRANSPORTACION MARITIMA MEXICANA, S A DE C V

 

/s/ J. CARLOS MERODIO

By: J. Carlos Merodio

Title: Attorney-in-Fact

Domicile:

Fax:

 

KANSAS CITY SOUTHERN INDUSTRIES, INC.

 

/s/ JOE MONELLO

By: Joe Monello

Title: Attorney-in-Fact

Domicile:

Fax:

-5-

 

With the appearance of the

MINISTRY OF TRANSPORT AND COMMUNICATIONS

 

/s/ ILLEGIBLE

By:

Title:

Domicile:

Fax:

WE AGREE AND ACKNOWLEDGE THE TERMS

AND CONDITIONS OF THIS AGREEMENT:

TMM MULTIMODAL, S A DE C V

 

	 	 	 
	/s/ J. CARLOS MERODIO

	 	/s/ JACINTO MARINA
	 

	 	 
	By: J. Carlos Merodio

	 	By: Jacinto Marina
	Title: Attorney-in-Fact

	 	Title: Attorney-in-Fact
	Domicile:
	 	 
	Fax:
	 	 

 

CAYMEX TRANSPORTACION, INC.

 

/s/ JOE MONELLO

By: Joe Monello

Title: Attorney-in-Fact

Domicile:

Fax:

-6-

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