Exhibit 10.9


 


Free English Translation


 


CONTRACT FOR THE SALE, MARKETING, AND DISTRIBUTION OF
MDF MOLDING


BETWEEN


 


MASISA S.A. AND MASISA ARGENTINA S.A.


AND


TERRANOVA FOREST PRODUCTS, INC.


 


In Santiago, Chile, on July 1,
2004, they appear:


 


TERRANOVA S.A., a Chilean open stock corporation in the
forestry business (“Terranova”), [Taxpayer ID No.] 96.802.690-9, represented by
its General Manager, Mr. Gonzalo Zegers Ruiz-Tagle, and by its Auditor, Mr. Patricio
Reyes Urrutia, all domiciled at Avenida Apoquindo N° 3650, piso 10, Comuna de
Las Condes, Santiago;


 


TERRANOVA FOREST PRODUCTS,
INC., a corporation
formed under and in good standing with the laws of the United States of America
(“TFP”), represented by its General Manager, Mr. George MacConnell, both
domiciled at 2440 Clements Ferry Road, Charleston Wando, SC 29492, South
Carolina, United States of America, and, under this contract, also at Avenida
Apoquindo N° 3650, piso 10, Comuna de Las Condes, Santiago;


 


MASISA S.A., a Chilean open stock corporation in the
forestry business (“Masisa”) [Taxpayer ID No.] 92.257.000-0, represented by its
General Manager, Mr. Eduardo Vial Ruiz-Tagle, and by its Administration
and Finance Manager, Mr. Carlos Marín Olalla, all domiciled at Avenida
Apoquindo N° 3650, piso 10, Comuna de Las Condes, Santiago;


 


MASISA ARGENTINA S.A, a corporation formed under and in good standing
with the laws of Argentina, in the forestry business (“Masisa Argentina”),
represented by Eduardo Vial Ruiz-Tagle and by its Administration and Finance Manager,
Mr. Carlos Marín Olalla, all domiciled at Avenida Apoquindo N° 3650, piso
10, Comuna de Las Condes, Santiago;


 





















 


All of the appearing parties
jointly will be referred to as the “Parties” and, under this contract,
Terranova and TFP are considered to be one “Party,” and Masisa and Masisa
Argentina are considered to be the other “Party.” [The Parties] agree to the
following contract for the sale, marketing, and distribution of MDF (Medium
Density Fiberboard) molding:


 


FIRST:                   WHEREAS


 


•                  Terranova is an industrial and forestry company
dedicated to the cultivation, industrialization, and sale of forest products in
several countries. For this purpose, it has, either directly or through its
subsidiaries, plantations in several countries having varieties of forest
species, industrial plants, and distribution and sales centers. Terranova has
two important lines of products: (i) solid wood products—such as sawed
wood, doors, and finger-joint molding—produced by its plants in Chile, Brazil,
and Venezuela and (ii) plywood—specifically MDF plywood and
particleboard—produced by its plywood plant in Venezuela, as well as MDF
moldings, produced by its plant in Charleston, USA. This does not take into
consideration the production of its subsidiary, Masisa S.A., or the production
of [Masisa’s] subsidiaries.


 


•                  TFP is an indirect subsidiary of Terranova that
sells and/or distributes all of the products mentioned in the previous
paragraph that Terranova sells in the U.S. market. TFP has the experience, the
infrastructure, and the appropriate know how, achieving annual sales of
approximately US$ 150,000,000 and having its own warehouses in Charleston and a
warehousing service in Houston and Baltimore. Likewise, TFP has an MDF molding
plant in Charleston with an annual capacity of approximately 30,000 cubic
meters.


 


•                  Masisa is a Chilean open stock corporation and
subsidiary of Terranova. Terranova is Masisa’s controlling shareholder, owning
52.4% of its share capital. Masisa is an industrial and forestry company
dedicated to the cultivation, industrialization, and sale of forest products in
various countries. It has, either directly or through its subsidiaries,
plantations with varieties of forest species, industrial plants, and
distribution and sales centers in several


 


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countries. Masisa’s products consist of plywood and
derivative products, mainly MDF plywood and particleboard, bare or coated, and
OSB plywood. In terms of MDF molding, or simply “Molding,” in Chile Masisa has
a plant with an annual production capacity of 36,000 cubic meters, and in
Argentina, through its subsidiary, Masisa Argentina, it has plants with an
annual production capacity of 72,000 cubic meters.


 


•                  Given TFP’s know how and infrastructure for
selling and distributing molding in the United States, Masisa and Masisa
Argentina wish for TFP to sell and distribute in the United States MDF molding
that Masisa produces in Chile and Argentina, through Masisa Argentina, and/or
molding, destined for the [U.S. market], that Masisa buys from third parties.
TFP, for its part, is interested in selling and distributing Masisa’s and
Masisa Argentina’s molding in the U.S.


 


•                  For its part, TFP will charge Masisa and Masisa
Argentina a “compensation” for the sale and distribution of molding. Likewise,
TFP wishes to increase the volume of molding placed in the U.S. market.


 


•                  Because this contract involves a transaction
between related corporations, since Terranova S.A. is the parent company of
Masisa S.A., the Directors Committees of these companies favorably reported
this transaction to the Boards of Directors of the companies, in accordance
with Article 50 bis of Act No. 18,046, in connection with Article 89
of the same legislation.


 


•                  The Boards of Directors of Terranova S.A. and
Masisa S.A. have approved the execution of this contract.


 


And
in light of the mutual interest of the Parties, they have agreed to execute
this Contract for the Sale and Distribution of MDF Molding.


 


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SECOND:             AGREEMENT


 


•                  Through this instrument,
Terranova and TFP, on the one hand, and Masisa and Masisa Argentina, on the
other hand, agree that Masisa and Masisa Argentina will sell and distribute
their Molding (produced by them or purchased from third parties), that they
wish to export to the United States, through TFP, under the general terms and
conditions established below. To fulfill this, the Parties will agree every
three months, according to the availability of each party, on the tentative volume
of Molding that Masisa and Masisa Argentina will sell to TFP and that TFP will
sell and distribute in the United States. Notwithstanding the above, the
volumes to which the Parties mutually agree will be those specified in each
purchase order that TFP issues to Masisa and Masisa Argentina under the general
conditions stipulated in the following clause.


 


•                  Every three months, TFP will
submit to Masisa and Masisa Argentina a marketing plan, channel strategy
definition, definition of customers and mix of products, etc. Likewise, TFP
will maintain a purchase program sufficient to keep the Masisa and Masisa
Argentina plants operating efficiently and at full capacity. Managing the
contracts of logistical service providers, TFP will also provide excellent logistical
service. TFP will continuously provide Masisa and Masisa Argentina with
relevant information about the U.S. market.


 


•                  Masisa and Masisa Argentina
will export the Molding directly to TFP under a firm purchase arrangement. The
price of each purchase will be the one TFP specifies in each purchase order.
This price will be equal to the price agreed between TFP and the final
customer, less a 3% discount and less logistical expenses [for transportation]
from the port in the United States (CIF) to the final customer. These expenses
include port fees and storage, customs costs and documents, land transportation
expenses, financing costs, discounts to the final customer, if there are any,
and, in general, the expenses associated with the merchandise


 


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as
of the time it arrives in port in the United States. Every six months, TFP will
review the estimated costs and pay any balance that exists. The Parties
expressly agree that under this Contract the above discount will be the “compensation”
that TFP will receive from Masisa and Masisa Argentina for the sale and
distribution of the Molding.


 


•                  To verify the price agreed
between TFP and its final customer, Masisa and Masisa Argentina may request all
relevant information and documents from TFP, who must provide [those records].


 


THIRD:                  PURCHASE CONDITIONS


 


•                  For each purchase, TFP will
issue and send to Masisa and/or Masisa Argentina a purchase order detailing, at
least, the volume, quality, and technical specifications of the product, the
price (CFR), and the price [to be paid] by the final customer, including an
estimate of the costs from CFR port to the final customer, shipment date,
destination port, conditions of the sale, and the other conditions that
typically appear in this kind of document. The purchase order must be delivered
to Masisa and/or Masisa Argentina between 30 and 45 days prior to the shipment
date specified in the order. Masisa and/or Masisa Argentina must accept the
purchase order within 2 [days] of receiving it. If Masisa or Masisa Argentina,
respectively, does not reject the purchase order, or request its modification,
within this [2-day] period, it will be considered tacitly approved. Masisa and
Masisa Argentina may request the modification of a purchase order for
production reasons, [lack of] availability of product or ships, or for any
other cause that reasonably hinders shipment of the volumes of Molding on the
requested dates.


 


•                  Sales will be made CFR.
Nonetheless, Masisa and Masisa Argentina must reserve the ships and handle the
other administrative matters necessary to ensure that the shipments will be
made on the scheduled dates.


 


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•                  TFP will have 60 days from the
invoice date to pay for the Molding. The invoice will be dated with the
shipment date and TFP must accept it within 2 [days] from the date on which the
product is received.


 


•                  TFP will make payments in U.S. dollars, through
bank transfer, to the checking account that Masisa and/or Masisa Argentina
specify.


 


FOURTH:              ACCESS TO PRODUCTS


 


•                  Masisa and Masisa Argentina declare that these
shipments will receive priority and will be shipped from the Region 8 port and
Campana/Buenos Aires, respectively. Whenever it would like, TFP will have the
right to visit the warehouses of Masisa and Masisa Argentina, who must provide
TFP with all the information it requests. [Further,] TFP may freely review all
products, and Masisa and Masisa Argentina must provide any information that TFP
requests. Prior to making such a visit, TFP must make arrangements with Masisa
and Masisa Argentina’s port manager.


 


•                  Masisa and Masisa Argentina will have the right
to review its products at their destinations. To facilitate this review, TFP
will provide all information required by Masisa and Masisa Argentina and
provide their representatives access to the sites where the products are
located, whether these be destination ports, intermediate stations, or plants
of customers of TFP.


 


FIFTH:                   CLAIMS


 


•                  For the record, the parties agree that TFP will
be the customer of Masisa and Masisa Argentina. Consequently, Masisa and Masisa
Argentina will only be responsible to TFP. Nevertheless, Masisa and Masisa
Argentina must cooperate with TFP to resolve any claim brought by a customer of
TFP. Accordingly, Masisa and Masisa Argentina must handle and respond in
writing to TFP’s claims within five business days from the date on which the
claim is


 


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received.
Once the Parties reach an agreement about the claim and its amount, Masisa and
Masisa Argentina must issue a credit note to TFP for the agreed amount. The
note must be issued prior to the expiration of the 60-day term TFP has to pay
for each shipment, as stipulated in Clause Three of this instrument.


 


•                  Notwithstanding the [stipulations] in the above
paragraph, Masisa and Masisa Argentina will respond to all claims due to delays
in shipping or noncompliance with product quality [standards] or technical
specifications agreed on in the purchase order. In this regard, TFP must
demonstrate to Masisa and/or Masisa Argentina, respectively that the claim did
not result from the transportation or handling of the products after their
delivery to TFP.


 


•                  In any event, the Parties agree to make their
best efforts to resolve any possible claims that could arise and try to avoid
or minimize monetary damages.


 


SIXTH:                  REPRESENTATIVES AND ADDRESSES


 


•                  TFP designates Mr. George MacConnell as
its representative.


 


•                  Masisa designates Mr. Eduardo Vial Ruiz-Tagle
as its representative.


 


•                  Masisa Argentina designates Mr. Jaime
Valenzuela as its representative.


 


SEVENTH:            DURATION OF THE
CONTRACT


 


•                  This contract will be effective indefinitely
and the Parties will make their best efforts to maintain a stable and
long-lasting business relationship between them. Either Party may terminate
this Contract, without having to state the cause and without right to
compensation by the other Party, by sending a written notice to the other Party
at least 120 days prior to the desired termination date.


 


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•                  If one of the Parties fails to comply with the
terms of this Contract, goes bankrupt, or becomes notoriously insolvent, this
Contract will terminate immediately.


 


EIGHTH:               ARBITRATION
AND APPLICABLE LAW


 


•                  Any discrepancy, difficulty, problem, or
dispute that may arise between the Parties concerning the validity,
effectiveness, interpretation, nullity, compliance, or incompliance of this
Contract will be submitted to arbitration, in accordance with the [terms of
this contract]. If a dispute arises between the Parties, either Party will have
the right to request that the matter be submitted to arbitration. The Party
that initiates the procedure must notify the other party concerning the dispute
and the Parties must try to resolve the controversy amicably, either directly
or through the participation of a third party that the parties mutually
designate. If an amicable agreement is not reached within 30 days following
notice of the controversy, either party may indicate to the other its intention
to begin arbitration, in accordance with [the terms] in this instrument.


 


•                  The arbitrator will act as a mixed arbitrator,
performing his or her role as an arbitrator but reaching a decision in law. The
arbitrator will issue one definitive decision. The Parties hereby waive the
right to bring an appeal against the arbitrator’s decision, except for a
complaint procedure. The jurisdiction for the arbitration will be Santiago,
Chile.


 


•                  The arbitrator will be designated according to
mutual agreement by the Parties. In the absence of such an agreement, at the
request of either of the Parties, the Santiago Chamber of Commerce will
designate the arbitrator, and the appointment will go to one of the members of
the arbitration list of the Chamber’s Arbitration Center. Accordingly, the
Parties hereby grant the Chamber a special and irrevocable authority to appoint
the arbitrator.


 


•                  Under this Contract, the Parties establish
domicile in the city and municipality of Santiago, where the arbitration will
occur.


 


•                  The law of Chile will apply to this Contract.


 


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Three
identical, original versions of this Contract are granted, with each Party
receiving one.


 


 


	
  GONZALO ZEGERS RUIZ-TAGLE

  	
   

  	
  PATRICIO REYES URRUTIA

  
	
   

  	
  FOR TERRANOVA S.A

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GEORGE MACCONNELL

  	
   

  
	
   

  	
  FOR TERRANOVA FOREST
  PRODUCTS, INC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EDUARDO VIAL RUIZ-TAGLE

  	
   

  	
  CARLOS MARÍN OLALLA

  
	
   

  	
  FOR MASISA S.A.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EDUARDO VIAL RUIZ-TAGLE

  	
   

  	
  CARLOS MARÍN OLALLA

  
	
   

  	
  FOR MASISA ARGENTINA S.A

  	
   

  
										



 


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