Exhibit 10.10


 


Free English Translation


 


MANAGEMENT CONTRACT


 


AND


 


FIRST AND IRREVOCABLE RIGHT OF
REFUSAL TO REPURCHASE


 


In
Santiago, November 11, 2002, between:


 


FIBRANOVA C.A. (“Fibranova”),
corporation established in accordance with the laws of the Bolivian Republic of
Venezuela, located on Sixth Avenue, between the sixth and seventh cross street,
Fifth Asunción, Altamira, Eduardo Miranda 0058, Caracas, Venezuela and for
these purposes, located at 200 Alcántara Street, 5th floor, Comuna
de Las Condes, Santiago, Chile, represented by Mr. Hernán Orellana Hurtado
and Mr. Patricio Reyes Urrutia, of the same aforementioned address;


 


TERRANOVA INTERNACIONAL S.A. (“Terranova
Internacional”), corporation established in accordance with the laws of the
Republic of Chile, (RUT) No. 96.802.690-9, located at 200 Alcántara
Street, 5th floor, Comuna de Las Condes, Santiago, Chile,
represented by Mr. Hernán Orellana Hurtado and Mr. Patricio Reyes
Urrutia, of the same aforementioned address;


 


FORESTAL TERRANOVA S.A. (“Forestal
Terranova”), corporation established in accordance with the laws of the
Republic of Chile, Taxpayer ID No. 96.708.490-5, located at 200 Alcántara,
5th floor, Comuna de Las Condes, Santiago, Chile, represented by Mr. Hernán
Orellana Hurtado and Mr. Patricio Reyes Urrutia, of the same
aforementioned address;


 


TERRANOVA COLOMBIA S.A. (“Terranova
Colombia”), corporation established in accordance with the laws of the Republic
of Colombia, located on Carrera 11a, No. 98-62, Santa Fé de Bogotá,
Colombia, and for these purposes located at 200 Alcántara Street, 5th
floor, Comuna de Las Condes, Santiago, Chile, represented by Mr. Hernán
Orellana Hurtado and Mr. Patricio Reyes Urrutia, of the same
aforementioned address;


 


MASISA S.A. (“Masisa”),
corporation established in accordance with the laws of the Republic of Chile,
Taxpayer ID No. 92.257.000-0, located at 1700 Avda. Los Conquistadores, 13th
floor, Comuna de Providencia, Santiago, Chile, represented by Mr. Gonzalo
Zegers Ruiz-Tagle and Mr. Carlos Marín Olalla, of the same aforementioned
address; and


 


CONSIDERING:


 


•                  That Fibranova is the owner of industrial
facilities located in Puerto Ordaz, Venezuela and which consist of 2 production
lines of wooden boards (particle boards - PB and wooden medium density
fiber board - MDF), complemented by a line of melamine-coated boards and a line
of MDF moldings, whose products are primarily intended for sale in the
Venezuelan and Colombian markets.


 


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•                  That Masisa has experience and knowledge in the
fabrication of bound wooden board, MDF and melamines, and has also developed
marketing models of the products in different countries in Latin America.


•                  That Forestal Terranova S.A. (indirect parent
company of Fibranova), Terranova Internacional (sole shareholder of Fibranova)
and Fibranova, have an interest in contracting the services of Masisa for the
management of Fibranova.


•                  That Terranova Colombia, whose sole
shareholders are Terranova Internacional and Fibranova, has begun activities in
Colombia for the marketing of Fibranova products, and that the shareholders of
Terranova Colombia have an interest in Masisa also taking over the management
of Terranova Colombia and establishing a commercial network in this area.


•                  That Masisa is interested in the acquisition of
Fibranova shares and/or its industrial facilities, and for that purpose is
interested in Fibranova and/or its shareholders granting it a first right of
refusal in the event that they decide to transfer the properties; Masisa is
also interested in acquiring shares of Terranova Colombia and/or its assets.


•                  That due to the fact that this is a contract of
a transaction between the related parties, while Forestal Terranova S.A. is the
parent company of Masisa S.A., the Board of Directors of the respective
companies allow this transaction be known to the Directorship of the same, in
accordance with article 50 bis of Law No. 18.046,
relating to article 89 of the same body of laws.


•                  That the Directorship of the parties has approved
the signing of this contract.


 


And by virtue of to the parties’ reciprocal
interest, the signing of the following Management Contract and First and
Irrevocable Right of Refusal to Repurchase has been agreed upon.


 


FIRST                                                            Services


 


Forestal
Terranova, Terranova Internacional and Fibranova, put into the hands of Masisa
S.A. the complete management of the operations of Fibranova, including the all
this company’s areas of management which include, among others, the general
management, administration and finances, operations, marketing commercial and
human resources, subject to the restriction that is established in the last
paragraph of this clause. The exercise of this management, will include, among
others, the designation and removal of Fibranova personnel the reorganization,
creation or removal of areas of Fibranova; the fixing of prices and the
commercial policies of Fibranova; the contracting of services and the supply of
raw materials, or the renegotiation of existing contracts, the contracting of technical
assistance, the inclusion of Fibranova in the centers of shared services (“CSC”)
of the Masisa companies and, in general, the inclusion of Fibranova as a
productive unity in addition to the companies of Masisa in Latin America, all
the aforementioned subject to the restrictions that are established in this
contract.


 


Masisa
agrees that the management of Fibranova will comply with the legal norms and
regulations in force governing the environment and others areas, applicable to
its operations. Additionally, it must insure the observance of sustainable
development principles applied by Terranova.


 


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The
parties establish that, except for a future agreement to the contrary,
Terranova Internacional and Forestal Terranova will keep a direct dependency
the areas of Treasury and Accounting of Fibranova, without prejudice to the
coordination of the remaining areas of Fibranova that will be subject to the
management of Masisa, and owing to the adequate financing of the operations of
Fibranova, in accordance with the business plan of this company.


 


SECOND                                            Sustaining legal existence,
managers and powers


 


Fibranova
will maintain its legal existence and will continue operating under its
corporate name.


 


Terranova
Internacional agrees to instruct its agents and directors in such a way so that
they approve the transactions that may be necessary to implement the operative
plans and investment projects previously approved by the Directorship of
Fibranova.


 


The
General Manager of Fibranova will be designated by Masisa and will report
directly to the General Manager of Fibranova, without prejudice to the reports
that he/she must present to the Directorship of Fibranova. The Directorship of
Fibranova agrees to grant the sufficient powers to said General Manager and to
the rest of the agents of Fibranova so that they may fulfill their functions.


 


THIRD Presentation of balances, financial statements and annual
budgets; financing


 


The
General Manager of Fibranova, acting together with Masisa, will present to the
shareholders and directors of Fibranova, the balances and financial statements
in the terms and opportunities that correspond in accordance with Venezuelan
legislation. The balances and financial statements will continue being prepared
in conformity with the generally accepted accounting principles in Venezuela
and according to the policies and practices defined by the parent company of
Fibranova.


 


The
annual budgets and investment projects will have to be prepared following the
same guidelines with which Masisa prepares the budgets and projects for its own
management, with the necessary preparation according to the requirements of the
policies and practices defined by the parent company of Fibranova, and will be
presented to the Directorship of Fibranova in a manner similar to the
presentation of the annual budgets and projects of Masisa and, in all cases, no
later than October 31 of each year.


 


Fibranova
will have to provide the adequate financing for its operations and investments.
This financing will have to be provided by the shareholders of Fibranova or
through loans taken out by Fibranova, always that this financing have prior
approval by the Directorship of Fibranova. The guarantees, in the event that
they are necessary, will have to consist in the goods of Fibranova or will have
to come from its shareholders.


 


In
any event, the investment projects will require the approval of the
Directorship of Fibranova.


 


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FOURTH                                             Contracts of certain companies
related to Fibranova


 


Fibranova
maintains contracts with related parties in Venezuela, according to the
following breakdown:


 


1.-
Back office and administrative services contracted by Fibranova to: Terranova
of Venezuela S.A., Andinos C.A., Coforven S.A., Imataca C.A., Guayamure C.A.
and Oxinova C.A.


 


2.-
Contracts for which Fibranova supplies raw materials: Terranova of Venezuela
S.A. (palpable rolls), Andinos C.A. (sawdust and shavings), Oxinova C.A.
(resin).


 


3.-
Commercial contract for boards and moldings and board supply, by Fibranova to
Terranova Forest Products, Inc.


 


4.-
Vapor Supply contract from Fibranova C.A. to Andinos C.A.


 


Before
this contract becomes valid, the Parties will agree to an appendix to this
contract to which a copy of each of the contracts referred to here in this
clause will be attached.


 


FIFTH                                                             Transactions between the parties


 


The
operations between the related parties will continue to be made under market
conditions.


 


SIXTH                                                          Providing services and technical
assistance by Masisa and/or its affiliates to Fibranova


 


Fibranova will be able to contract with Masisa
and/or its affiliates, services, technical consultants and engineering
projects, in all those areas in which it results convenient or necessary to improve
the management of Fibranova. In the case of technical assistance the contract
will have to contain a breakdown of the fees and all of the associated costs to
said consultants to be reimbursed by Fibranova to Masisa.


 


All the contracts to which this clause refers
to will have to have the prior approval of the Directorship of Fibranova,
without prejudice to the remaining corporate authorizations because it is a
matter of transactions among the related parties.


 


In the event of technical assistance, services
or engineering projects contracted with Masisa and/or its affiliated the sums
will be based in what is established in the Business plan prepared annually by
Masisa for Fibranova.


 


Masisa
and/or its affiliates will be able to also provide general administrative or “back office” services to Fibranova (and indirectly to the
related companies cited in the fifth clause), including to Fibranova in the CSC
of Masisa, in the areas of administration and finance, human resources,
marketing, among other, in the way that the costs of said services be less that
those that Fibranova 


 


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has
at that time. The previous condition must always have the approval of the
Directorship of Fibranova.


 


SEVENTH                                       Brand
names


 


The
products made by Fibranova and that are marketed in Venezuela, Colombia or in
other territories, will carry the MASISA brand name or the brand name that
Masisa indicates; they will have to carry as well, temporarily, the brand name
that Fibranova currently uses or both together.


 


EIGHTH                                                  Commercial
network in Venezuela and Colombia.


 


Fibranova
has an interest in its products being marketed through the commercial network
that Masisa establishes Venezuela and Colombia, once the agreements already
contracted by Fibranova, Terranova Internacional or Forestal Terranova allow
it.


 


For
the establishment of a commercial network in the referred to territories,
Masisa and Fibranova sign with each of the members of this network (“Dealers”),
an agreement (“Placacentro Agreement”) by virtue of which Masisa authorizes to
the Dealers the use of the brand name PLACACENTRO and other brand names, logos
and corporate images created by Masisa, and agrees to offer certain consultants
related with the empowerment of the Dealer’s premises, the improvement of the
management and marketing of the Dealer, the training of the personnel of the
Dealer, the development of common promotion programs and advertising for the
Dealers, the delivery of the licenses and sub-licenses of software intended to
improve the management, communications and handling of the inventory of the
Dealers, among other related materials. For its part, Fibranova will supply to
the Dealer of the products made by Fibranova and, particularly the
complementary products of Masisa or of third parties.


 


The
Placacentro Agreement does not contemplate any payment by the Dealer for the
license and consultancy of Masisa, as long as this Management Contract is still
in force.


 


The
Placacentro Agreement will establish that the Dealer will have to cease the use
of the brand name PLACACENTRO, once 3 years have passed since the termination
of this Management Contract, except by a contrary agreement entered into with
Masisa. During the same time period, Masisa will have to maintain the assistance
that is necessary to allow each Dealer to continue distributing products of
Fibranova under the same conditions. This assistance will be compensated by
Fibranova, in accordance with the amount that Fibranova and Masisa agree to at
the proper time. The use of the brand name Placacentro by the Dealers during
said period will be without charge.


 


NINTH                                                         Compensation


 


By
offering the services described in the first clause of this contract, Fibranova
will pay to Masisa an annual compensation equivalent to 8% of the operational
income of Fibranova, determined in United States dollars and by means of a
balance sheet made according to generally accepted 


 


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accounting
principles in Chile, duly audited, compensation that will be net of any tax
apart from the tax to the rent of the first category that Masisa must pay in
Chile for these revenues. For these purposes, it will be understood by
operational income that which said generally accepted accounting principles in
Venezuela define.


 


The
payment will be made in pesos, national currency of Chile, according to the “observed”
value of the dollar published on the day on the payment.


 


The
payment will have to be made within 30 das following the date of approval of
the balance sheet of Fibranova by the shareholders of Fibranova and, in all
cases, no later than the 31st of May of each year. If at this
date, the balance sheet has not been approved by Fibranova, the parties will
have to act in accordance to that which is established in the fifteenth clause
of this contract.


 


In
the event of a delay or postponement of the compensation payment, an interest
penalty equivalent to the maximum conventional interest for re-adjustable
operations permitted in Chile will accrue in Masisa’s favor.


 


TENTH                                                       Validity and duration of the
Management Contract


 


This
Management Contract will enter into effect on January 1, 2003, subject to
the condition that upon this date the Operative Plan for Fibranova prepared by
Masisa for year 2003 and the estimates for the following years have been
approved by Fibranova. Masisa estimates that it will present this plan no later
than November 30, 2002. If at this date the referred to plan has not been
approved, the parties will have to establish the date when this contract will
enter into force.


 


The
Management Contract will have a period of duration of three years beginning
from the date that it enters into force and will be automatically renewed for
equal periods, except if either of the parties communicates to the other with a
minimum notice of 6 months prior to the expiration of this period of validity.
For the purposes of this paragraph, Forestal Terranova, Terranova
Internacional, Fibranova and Terranova Colombia will be considered as one
party, and Masisa as the other party.


 


The
services, technical assistance and supply contracts between Fibranova and
Masisa and/or its affiliates, which would be in force on the date of
termination of this contract, will end conjointly with this contract, and the
compensations and other services provided will have to be paid once each
contract enters in force.


 


Additionally,
this Management Contract will end immediately and without right to any
indemnification, if Forestal Terranova transfers or looses, for any reason, the
control of Masisa. For the purposes of this document, it is understood by “control”
as the power of the controller of a corporation in conformity with that which
is set forth in article 97 and subsequent articles of the Law of Market
Values.


 


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Without
prejudice to the aforementioned, Masisa will have the right in such case to the
compensation payment proportional to the time which has passed from the end of
the previous fiscal year.


 


The
services or supply contract between Fibranova and Masisa and/or its affiliates,
that will be in force upon the date of termination of this Contract because of
a change of Control of Masisa, will end in accordance to their own conditions,
except that Fibranova communicates its decision to bring them to early
termination. In any case, the compensations and other services provided
proportional to the validity of each contract will have to be paid.


 


ELEVENTH                                Early Termination of the
Management Contract


 


Either
of the parties will be able to bring an early termination to the Management
Contract in the event of a failure to comply with the stipulated obligations in
this document.


 


TWELFTH                                    First and Irrevocable Right of
Refusal of Repurchase


 


Terranova Internacional grants to Masisa, for
it or for its affiliate that it designates, a first and irrevocable right of
refusal of repurchase of the total or part of the shares or rights in Fibranova
or of any of its affiliates. Additionally, Fibranova grants an option to
Masisa, under the same terms, for the acquisition of all or part of the assets
of the property of Fibranova or of any of its affiliates. The right which is
referred to in this clause is applied to possible transfers to third parties
other than the companies of the Business Group to which Forestal Terranova
belongs. For these purposes, it is understood that the Business Group is
defined by the Market of Values Law of Chile.


 


Masisa will have the right to exercise this
right within a period of 60 days counting from when it communicates this right
to Masisa, in accordance with the procedure established in the sixteenth clause
of this instrument.


 


Masisa will have the right to exercise the
right, be it Fibranova or Terranova Internacional that decides to initiate a
transfer of assets or shares, whether they have received offers not requested
by third parties for the acquisition of assets or shares.


 


Additionally, Masisa will have to be invited to
participate in any increase in capital, merger or reorganization to any title
of Fibranova, if as a consequence of it, Terranova Internacional and Forestal
Terranova are will lose control of Fibranova. 
In this case, the same 60 day period will have to be granted to Masisa
to exercise its right, beginning from the time that Masisa is invited to
participate in the increase of capital.


 


Under no circumstances, Fibranova or Terranova
Internacional will be able to make a transfer under more favorable terms for
the buyer, than those offered to Masisa. Once 90 days have passed without the
transfer with the third party having taken place, the first right of refusal
referred to in this cause will have to be renewed.


 


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The first right of refusal that is referred to
in this clause will be in force during the Management Contract and up to three
years after its termination, except in the case that the Management Contract
ends because Forestal Terranova loses control of Masisa, in which case the
referred to right will end with the Management Contract.


 


THIRTEENTH                                          Conflict Resolution


 


In
the case of any difficulty or controversy that arises between the parties with
respect to the application, interpretation, duration, validity or execution of
this contract or any other cause, the parties will put forth their best efforts
to solve the conflict within a period of 60 days, whether in direct form or
with the intervention of a third party that the parties designate from a common
agreement.


 


In
the event that the parties do not reach a resolution to the controversy during
the period mentioned previously, the conflict will be submitted to Arbitration, in accordance to the Procedural Arbitration
Regulations of the Mediation and Arbitration Center of Santiago.


 


The
parties confer the special, irrevocable power to the Business Court of Santiago
A.G., so that, upon their written request, it can designate the arbitrator from
among the members of the arbitration body of the Mediation and Arbitration
Center of Santiago.


 


In
the event that the resolutions of the arbitrator do not produce any recourse,
we expressly resign to them. The arbitrator remains especially empowered to
resolve all matters related to the authority and/or jurisdiction.


 


FOURTEENTH                                      Communications and Notices


 


All
of the communications that are made related to this document, except where
otherwise expressly stated, will be made in writing, in Spanish, and sent (a) via
fax o telecopy, (b) by e-mail, (c) by certified mail, (d) by
personal delivery, or (e) by an internationally recognized mail service,
to all the people indicated below.


 


(a)          For Fibranova, Terranova Internacional, Forestal Terranova and/or to
Terranova Colombia:


 


	
  Mr.

  	
   

  	
   

  
	
  Hernán Orellana Hurtado

  	
   

  	
   

  
	
  General Manager

  	
   

  	
   

  
	
  Forestal Terranova S.A.

  	
   

  	
   

  
	
  Alcántara 200 Oficina 502, Santiago

  
	
  Telephone:

  	
   

  	
  350 6000

  
	
  Fax:

  	
   

  	
  350 6001

  
	
  E-mail:

  	
   

  	
  horellana@terranova.cl

  
					



 


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  Mr.

  	
   

  	
   

  
	
  Patricio Reyes Urrutia

  	
   

  	
   

  
	
  Fiscal

  	
   

  	
   

  
	
  Forestal Terranova S.A.

  	
   

  	
   

  
	
  Alcántara 200 Office 502, Santiago

  
	
  Telephone:

  	
   

  	
  350 6000

  
	
  Fax:

  	
   

  	
  350 6001

  
	
  E-mail:

  	
   

  	
  preyes@terranova.cl

  
					



 


(b)         For Masisa


 


	
  Mr.

  	
   

  	
   

  
	
  Gonzalo Zegers Ruiz-Tagle

  	
   

  	
   

  
	
  General Manager

  	
   

  	
   

  
	
  Masisa S.A.

  	
   

  	
   

  
	
  Los Conquistadores 1700 13th Floor, Santiago

  
	
  Telephone:

  	
   

  	
  232 8302

  
	
  Fax:

  	
   

  	
  234 2668

  
	
  E-mail

  	
   

  	
  gzegers@masisa.cl

  
					



 


	
  Mr.

  	
   

  	
   

  
	
  Alfredo Montaner Lewin

  	
   

  	
   

  
	
  Cariola Diez Pérez-Cotapos & Cía. Ltda.

  	
   

  	
   

  
	
  Av. Andrés Bello 2711 19th floor, Santiago

  	
   

  	
   

  
	
  Telephone:

  	
   

  	
  368 3557

  
	
  Fax:

  	
   

  	
  360 4030

  
	
  E-mail:

  	
   

  	
  amontaner@cariola.cl

  
					



 


Either of
the parties can change their address, fax number or e-mail address, for these
purposes, through a notice to the other party, as it is set forth in this
clause. Any time period must be counted from the date of the notification of
one party to the other, through a communication sent in the terms set forth in
this clause, will begin to run (a) from midnight of the date of personal
delivery of the communication or (b) from midnight of the fourth working
day of the country where the communication originated following the day of the
receipt of the communication by the mail or courier service.


 


In all
cases, if the communication is sent by fax or by e-mail, any of the other
stipulated methods will have to be used as well, which is to say, personal
delivery, certified mail or courier, the time periods beginning to run in
agreement with that indicated in the preceding section (b).


 


FIFTEENTH                                                      Terranova Colombia


 


The
parties give evidence that all the clauses of this contract, are made extensive
mutatis mutandi to the management on the
part of Masisa S.A. of Terranova Colombia and to the right of acquisition of
shares and/or assets of Masisa S.A. of Terranova Colombia. In that which is
referred 


 


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to
as the stipulated compensation in the eleventh clause, Terranova Internacional
will pay to Masisa an annual compensation equivalent to 8% of the operational
revenues of Terranova Colombia, determined in US Dollars and through a balance
sheet made according to the generally accepted accounting principles in
Columbia, duly audited.


 


SIXTEENTH                                                   Applicable Law


 


This
Contract will be subject to the laws of the Republic of Chile.


 


TEMPORARY CLAUSE                                     Temporary Services and Technical
Assistance


 


The
temporary services and technical assistance that are provided by Masisa and/or
its affiliates before this contract enters in force will be compensated by
Fibranova to Masisa in the form that the Parties timely agree upon. Also,
Fibranova will have to reimburse Masisa and/or its affiliates by the costs
incurred in the offering of said services and consultants. The payment of the compensation
as well as the reimbursement for the costs will be made within 30 days
following the delivery by Masisa and/or its respective affiliate, of the
document of charge and surrender of charges. The compensation and the
reimbursement of costs will have to be paid in the same currency that is
referred to in the eleventh clause of this contract.


 


 


pp.:
FIBRANOVA C.A.                                             
MASISA S.A.


 


 


TERRANOVA
INTERNACIONAL S.A.


 


 


FORESTAL
TERRANOVA S.A.


 


 


TERRANOVA
COLOMBIA S.A.


 


 


Local
Human Rights Authorities:


 


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