COMBINATION AGREEMENT DATED December 22, 2004

EXHIBIT 99.1

STILE ACQUISITION CORP.

and

MASONITE INTERNATIONAL CORPORATION

COMBINATION AGREEMENT

DATED

December 22, 2004

TABLE OF CONTENTS

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COMBINATION AGREEMENT

THIS AGREEMENT is made the 22^nd day of December, ▇▇▇▇
▇ ▇ ▇ ▇ ▇ ▇ N :

STILE ACQUISITION CORP.

a corporation governed by the laws of Ontario (“Acquisitionco”)

                                  - and -

MASONITE INTERNATIONAL CORPORATION

a corporation governed by the laws of Ontario (the “Company”)

RECITALS:

THEREFORE, the parties agree as follows:

ARTICLE 1
DEFINITIONS AND PRINCIPLES OF
INTERPRETATION

1.1 Definitions

     In this Agreement, unless there is something in the subject matter or context inconsistent therewith, the following terms shall have the following meanings respectively:

     “1933 Act” means the United States Securities Act of 1933;

     “Accounts Receivable” has the meaning ascribed to it in Section (i) of Schedule 3.1;

“Acquisition Proposal” means any proposal or offer with respect to any merger, amalgamation, arrangement, business combination, liquidation, dissolution, recapitalization, take-over bid, tender offer, purchase of any assets representing greater

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than 20% of the fair market value of the Transaction, or purchase of more than 20% of the equity (or rights thereto) of the Company or a Subsidiary of the Company, or similar transactions or series of transactions involving the Company or any Subsidiary of the Company, excluding the Transaction;

“Act” means the Business Corporations Act (Ontario), the governing corporate statute of the Company;

“Affiliate” has the meaning ascribed to it under the Securities Act;

“Agreement” means this agreement, including all schedules, and all amendments or restatements as permitted, and references to “Article”, “Section” or “Schedule” mean the specified Article, Section or Schedule of this agreement.

“Arm’s Length” has the meaning ascribed to it for purposes of the Income Tax Act (Canada);

“Articles of Arrangement” means the articles of arrangement of the Company in respect of the Transaction that are required by the Act to be filed with the Director under the Act after the Final Order is made in order to effect the Transaction;

“Balance Sheet” means the consolidated balance sheet of the Company as at December 31, 2003, forming part of the Financial Statements;

“Business Day” means any day on which commercial deposit taking banks are generally open for business in Toronto, Ontario and New York, New York other than a Saturday, a Sunday or a day observed as a holiday in such locations under applicable Laws;

“Cashed-out Option” means each Company Option in respect of which a duly executed Cash Election (as defined in the Company Stock Option Plan) has been delivered to the Company in accordance with the terms and conditions of the Company Stock Option Plan;

“Certificate of Arrangement” means the Certificate of Arrangement to be issued by the Director in respect of the Articles of Arrangement to be filed by the Company to give effect to the Transaction contemplated by this Agreement;

“Code” means the United States Internal Revenue Code of 1986;

“Commitment Letters” means the equity and debt commitment letters from KKR Millennium Fund (Overseas) Limited Partnership and The Bank of Nova Scotia, respectively, copies of which have been provided by Acquisitionco to the Company on the date hereof;

“Company Benefit Plans” means all “employee benefit plans” (within the meaning of Section 3(3) of ERISA) and all equity-based, severance, employment, change in control, collective bargaining, bonus, incentive, deferred compensation, supplemental retirement and all other employee benefit plans, arrangements, agreements, programs, policies, practices or undertakings, whether oral or written, formal or informal, funded or unfunded, registered or unregistered, whether or not subject to ERISA, under which (i)

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any employees or former employees (or any spouses, dependants, survivors or beneficiaries of any such employees or former employees), directors or officers, individuals working on contract with the Company or its Subsidiaries or other individuals providing services to it of a kind normally provided by employees or eligible dependants of any of the foregoing Persons has any present or contingent right to benefits which are contributed to, sponsored by or maintained by the Company or any of its Subsidiaries or (ii) under which the Company or any of its Subsidiaries has any present or contingent liability;

“Company Circular” means the notice of the Company Meeting and accompanying management information circular, including all appendices thereto, prepared in accordance with this Agreement, to be sent to the Company Shareholders in connection with the Company Meeting;

“Company Documents” has the meaning ascribed to it in Section (v) of Schedule 3.1;

“Company IP” means (i) all domestic, foreign, registered and pending applications for patents, trademarks, service marks, copyrights, trade names, domain names and all material licenses running to or from the Company or any of its Subsidiaries relating to the Company’s or any of its Subsidiaries’ businesses or owned by the Company or any of its Subsidiaries, (ii) all material common law trademarks, service marks, copyrights and copyrightable works (including databases, software and Internet site content), trade names, websites, URLs, brand names and logos; and (iii) all trade secrets, inventions, formulae, data, improvements, know-how, confidential information, material computer programs (including any source code and object code) documentation, engineering and technical drawings, processes, methodologies, trade dress, and all other proprietary technology utilized in or incidental to the businesses of the Company and its Subsidiaries and all common law rights relating to the foregoing.

“Company Meeting” means the special meeting of the Company Shareholders, including any adjournment or postponement thereof, to be called and held in accordance with the Interim Order to consider the Transaction;

“Company Options” means the options granted under the Company Stock Option Plan to purchase Company Shares;

“Company Securityholders” means the holders of Company Shares and Company Options;

“Company Shareholders” means holders of Company Shares;

“Company Shares” means the common shares of the Company;

“Company Stock Option Plan” means the Masonite International Corporation Share Option Plan, amended and restated as of March 16, 2004 as amended to the date hereof;

“Contract” means a contract, lease, instrument, note, bond, debenture, mortgage, agreement, arrangement or understanding, written or oral, to which a Party, or any of its Subsidiaries, is a party or under which a Party or any of its Subsidiaries is bound, has

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unfulfilled obligations or contingent liabilities or is owed unfulfilled obligations, whether known or unknown, and whether asserted or not;

“Court” means the Superior Court of Justice (Ontario);

“Depositary” means the depositary to be chosen by Acquisitionco, acting reasonably, to receive the Letters of Transmittal and disburse the consideration payable to the Company Securityholders. The Depositary shall be a corporation organized and existing under the laws of Canada and authorized to carry on the business of a trust company in Ontario;

“Director” means the Director appointed pursuant to the Act;

“Disclosure Letter” means the disclosure letter provided by the Company to Acquisitionco prior to the execution of the Agreement;

“Dissent Rights” means the rights of dissent in respect of the Transaction as described in the Plan of Arrangement;

“Dissenting Shareholder” means any Company Shareholder who has properly exercised its Dissent Rights and has not withdrawn or been deemed to have withdrawn such Dissent Rights;

“DSU” means deferred share units granted to management and certain key employees of the Company pursuant to the Company’s 2002 Deferred Share Plan effective as of October 21, 2003 and the Company’s 2004 Full Value Incentive Plan dated as of March 23, 2004 and the deferred share units granted to directors of the Company pursuant to the Directors’ Deferred Unit Plan dated as of March 23, 2004;

“Effective Date” means the date shown on the Certificate of Arrangement to be issued under the Act giving effect to the Transaction, which date shall be determined in accordance with Section 2.6;

“Effective Time” has the meaning ascribed to it in Section 2.6;

“Eligible Properties” means any non-depreciable capital property for the purposes of the Tax Act held by the Company on the Effective Date;

“Environmental Laws” means all applicable Laws relating to the environment, natural resources or employee health or safety, including any such Laws and applicable, enforceable guidelines, policies and codes published by a Governmental Authority relating to Hazardous Substances including the storage, generation, use, handling, control, manufacture, processing, labelling, deposit, disposal, transport, remediation, discharge or release of Hazardous Substances;

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended;

“Exchange Act” means the United States Securities Exchange Act of 1934;

“Existing Credit Facilities” means the credit facilities of the Company or its Subsidiaries listed in section 3.1(j)(iv) of the Disclosure Letter;

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“Final Order” means the final order of the Court approving the Transaction as such order may be amended by the Court at any time prior to the Effective Date or, if appealed, then, unless such appeal is withdrawn or denied, as affirmed or as amended on appeal;

“Financial Statements” means the audited consolidated financial statements of the Company for the fiscal year ended December 31, 2003, including the notes to such statements and the unaudited consolidated financial statements of the Company for the nine months ended September 30, 2004, including the notes to such statements;

“Governmental Authority” means any (a) multinational, federal, provincial, state, regional, municipal, local or other government, governmental or public department, central bank, court, tribunal, arbitral body, commission, board, bureau or agency, domestic or foreign, (b) self-regulatory organization or stock exchange including without limitation the NYSE and the TSX, (c) subdivision, agent, commission, board, or authority of any of the foregoing, or (d) quasi-governmental or private body exercising any regulatory, expropriation or taxing authority under or for the account of any of the foregoing;

“Hazardous Substance” means any hazardous, dangerous or toxic substance, including petroleum (including crude oil or any fraction thereof), petroleum products, asbestos and asbestos-containing materials, polychlorinated biphenyls, radon, toxic mould, urea-formaldehyde solvent, chemical and any other material, substance or thing that is regulated pursuant to any Environmental Law or that could result in liability under any Environmental Law, and shall include any contaminant, pollutant, waste, hazardous waste, special waste or dangerous good as defined under Environment Laws;

“Holders” means, when used with reference to the Company Shares, the holders thereof shown from time to time in the register maintained by or on behalf of the Company in respect of such securities;

“In-the-Money Amount” means, in respect of each Company Share which is subject to a Company Option, the difference between the Purchase Price and the “per share” exercise price of such share under that Company Option to which it is subject.

“Interim Order” means the interim order of the Court, as the same may be amended, in respect of the Transaction, as contemplated by this Agreement;

“Laws” means all applicable laws (including common law), statutes, regulations, statutory rules, by-laws, orders, ordinances, directives and the terms and conditions of any approvals, permits, licences or judgements of any Governmental Authority, together with any applicable enforceable published notes, guidelines or policies, and the term “applicable”, with respect to such Laws and in the context that refers to one or more Persons, means such Laws that apply to such Person or Persons or its or their business, undertaking, property or securities and that emanate from a Governmental Authority having jurisdiction over the Person or Persons or its or their business, undertaking, property or securities;

“Leased Real Property” has the meaning ascribed to it in Section (t) of Schedule 3.1;

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“Material Adverse Change”, when used in connection with the Company, means any change, effect, event or occurrence with respect to the condition (financial or otherwise), properties, assets, liabilities, obligations (whether absolute, accrued, conditional or otherwise), businesses, operations or results of operations or prospects of the Company or its Subsidiaries that is, or would reasonably be expected to be, material and adverse to the Company and its Subsidiaries on a consolidated basis. For certainty, “Material Adverse Change” does not include any change, effect, event or occurrence caused by or arising from (a) changes in the markets in which the Company and its Subsidiaries operate (other than changes in reaction to the announcement of the Transaction) or (b) macroeconomic factors, interest rates, general financial market conditions, war, terrorism or hostilities, except, in each case, to the extent any change, effect, event or occurrence has had a disproportionate effect on the Company and its Subsidiaries as compared to other Persons in the industry in which the Company and its Subsidiaries operate.

“Material Adverse Effect” when used in connection with the Company, means any effect of a Material Adverse Change relating to the Company;

“Material Contracts” has the meaning ascribed to it in Section (j) of Schedule 3.1;

“material fact” has the meaning ascribed to it under the Securities Act;

“Notice Period” has the meaning ascribed to it in Section 4.5;

“NYSE” means the New York Stock Exchange;

“OSC” means the Ontario Securities Commission;

“Outside Date” means March 31, 2005 or such later date as may be mutually agreed by the Parties;

“Owned Real Property” has the meaning ascribed to it in Section (t) of Schedule 3.1;

“Party” means Acquisitionco or the Company and “Parties” means Acquisitionco and the Company, collectively;

“Person” includes any individual, sole proprietorship, partnership, firm, entity, limited partnership, limited liability company, unlimited liability company, unincorporated association, unincorporated syndicate, unincorporated organization, trust, body, corporation, or Governmental Authority, and any group (as defined in Section 13(d)(3) of the Exchange Act) comprised of more than one Person and, where the context requires, any of the foregoing when they are acting as trustee, executor, administrator or other legal representatives;

“Plan of Arrangement” means the plan of arrangement substantially in the form and content of Schedule 1.1A and any amendments or variations made thereto in accordance with this Agreement or the Plan of Arrangement or made at the direction of the Court;

“Pre-Effective Date Period” means the period from the time of the execution and delivery of this Agreement between the Parties and the closing of the Transaction on the

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Effective Date, subject to the earlier termination of this Agreement in accordance with its terms;

“Publicly Disclosed by the Company” means disclosed by the Company in a public filing made by it with the OSC on the SEDAR system or with the SEC on the ▇▇▇▇▇ system prior to the date hereof;

“Purchase Price” means $40.20 cash per Company Share;

“Real Property” has the meaning ascribed to it in Section (t) of Schedule 3.1;

“Real Property Leases” has the meaning ascribed to it in Section (t) of Schedule 3.1;

“Regulatory Approvals” means those sanctions, rulings, consents, orders, exemptions, permits and other approvals (including the lapse, without objection, of a prescribed time under a statute or regulation that states that a Transaction may only be implemented if a prescribed time lapses following the giving of notice without an objection being made) of any Governmental Authority, as set out in Schedule 2.5;

“RSU” means restricted share units granted to management and certain key employees of the Company pursuant to the Company’s 2002 Restricted Share Bonus Plan dated as of October 21, 2003 as amended on March 23, 2004 and the Company’s 2004 Full Value Incentive Plan dated as of March 23, 2004;

“SEC” means the U.S. Securities and Exchange Commission;

“Securities Act” means the Securities Act (Ontario);

“Subsidiary” means, with respect to a specified body corporate, any other body corporate of which more than 50% of the outstanding shares ordinarily entitled to elect a majority of the board of directors thereof (whether or not shares of any other class or classes shall or might be entitled to vote upon the happening of any event or contingency) are at the time owned directly or indirectly by such specified body corporate, and shall include also any partnership, joint venture or other entity over which the specified body corporate is entitled to exercise similar direction or control;

“Superior Proposal” means any bona fide written Acquisition Proposal that, in the good faith determination of the board of directors of the Company after consultation with its financial advisors and with outside counsel, (a) is reasonably likely to be completed, taking into account all legal, financial, regulatory and other aspects of such proposal and the Person making such proposal, and (b) would, if consummated in accordance with its terms be more favourable to the Company Shareholders from a financial point of view than the Transaction;

“Tax” and “Taxes” have the respective meanings ascribed to such terms in Section (p) of Schedule 3.1;

“Tax Act” means the Income Tax Act (Canada);

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“Tax Returns” includes all returns, reports, declarations, elections, notices, filings, forms, statements and other documents (whether in tangible, electronic or other form) and including any amendments, schedules, attachments, supplements, appendices and exhibits thereto, made, prepared, filed or required to be made, prepared or filed by Law in respect of Taxes;

“Termination Payment” has the meaning ascribed to it by Section 6.3(1);

“Transaction” means the arrangement of the Company under Section 182 of the Act on the terms and subject to the conditions set out in the Plan of Arrangement, subject to any amendments or variations thereto made in accordance with this Agreement or the Plan of Arrangement or made at the direction of the Court;

“Transaction Resolution” means the special resolution of the Company Shareholders approving the Transaction, to be substantially in the form and content of Schedule 1.1B;

“TSX” means The Toronto Stock Exchange; and

“WARN” has the meaning ascribed to it in Section 4.2(a)(viii)(C).

1.2 Certain Rules of Interpretation

     In this Agreement:

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1.3 Entire Agreement

     This Agreement, together with the agreements and other documents required to be delivered pursuant to this Agreement, constitutes the entire agreement between the Parties and sets out all the covenants, promises, warranties, representations, conditions, understandings and agreements between the Parties pertaining to the subject matter of this Agreement and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written. No reliance has been made upon, and there are no covenants, promises, warranties, representations, conditions, understandings or other agreements, oral or written, between the Parties in connection with the subject matter of this Agreement except as specifically set forth in this Agreement and any document required to be delivered pursuant to this Agreement. There shall be no liability, either in tort or in contract or otherwise, assessed in relation to any such warranty, representation, opinion, advice or assertion of fact, not reduced to writing as part of this Agreement.

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1.4 Schedules

     The Schedules to this Agreement, as listed below, are an integral part of this Agreement:

1.5 Accounting Matters

     Unless otherwise stated, all accounting terms used in this Agreement shall have the meanings attributable thereto under Canadian generally accepted accounting principles and all determinations of an accounting nature required to be made shall be made in a manner consistent with Canadian generally accepted accounting principles.

1.6 Knowledge

     Any reference to the knowledge of a Party shall mean, unless otherwise specified, to the best of the knowledge, information and belief of such Party’s senior officers after reviewing all relevant records and making reasonable inquiries regarding the relevant matter of such Party’s directors and senior officers. For these purposes the senior officers of Balboa are the persons so designated in the Disclosure Letter.

ARTICLE 2
THE TRANSACTION

2.1 Articles of Arrangement

     The Articles of Arrangement shall provide, with such other matters as are necessary to effect the Transaction, for the implementation of the Plan of Arrangement, as a result of which:

2.2 Implementation Steps by the Company

     The Company shall:

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2.3 Implementation Steps by Acquisitionco

     Acquisitionco shall, subject to obtaining the Final Order and the satisfaction or waiver of the other conditions precedent contained in this Agreement in its favour, on or before the Effective Date deposit or caused to be deposited with the Depositary, immediately available funds equal to the aggregate cash consideration payable under the Transaction.

2.4 Interim Order

     The application referred to in Section 2.2(a) shall request that the Interim Order provide:

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2.5 The Company Circular

     As promptly as reasonably practicable after the execution of this Agreement, the Company shall prepare and complete, in consultation with Acquisitionco, the Company Circular (and any amendments thereto) together with any other documents required by the Securities Act, the 1933 Act and Exchange Act and other applicable Laws in connection with the Company Meeting and the Transaction. As promptly as reasonably practicable thereafter, and after obtaining the Interim Order, but subject to obtaining any required Regulatory Approvals in connection with mailing the Company Circular, the Company shall cause the Company Circular and other documentation required in connection with the Company Meeting to be sent to each Company Shareholder and to be filed with applicable Governmental Authorities, as required by the Interim Order and applicable Laws. The Company shall permit Acquisitionco to review and comment on drafts of the Company Circular and other documentation referred to above in the course of its preparation and shall not file or amend such documentation without the consent of Acquisitionco, not to be unreasonably withheld or delayed.

2.6 Closing Matters

     The Effective Date shall be the third Business Day following the latest of the date of the Company Meeting, the date of issuance of the Final Order (unless appealed in which case, the Effective Date shall be the date such appeal is delivered or withdrawn) and the date upon which the last Regulatory Approval is obtained. Closing shall take place at the office of Osler, ▇▇▇▇▇▇ & Harcourt LLP in Toronto, Ontario at 11:00 a.m. on the Effective Date or at such other place, date and time as the Parties shall agree (the “Effective Time”). Each of Acquisitionco and the Company shall deliver, at the closing of the Transaction, such customary certificates, resolutions and other closing documents as may be required by the other Party, acting reasonably.

2.7 Preparation of Filings, etc.

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2.8 Disclosure Letter

     Notwithstanding anything in the Disclosure Letter to the contrary, all disclosures in the Disclosure Letter must reference or be associated with a particular section in this Agreement (including the Schedules) but will also be interpreted to relate to or modify other sections of this Agreement (including the Schedules) if the intention to so relate or modify is readily apparent on the face of such disclosure. The inclusion of any item in the Disclosure Letter shall not be construed as an admission by the Company of the materiality of such item.

ARTICLE 3
REPRESENTATIONS AND WARRANTIES

3.1 Representations and Warranties of the Company

     The Company represents and warrants on the date hereof to and in favour of Acquisitionco as set out in Schedule 3.1 and acknowledges that Acquisitionco is relying upon such representations and warranties in connection with the matters contemplated by this Agreement.

3.2 Representations and Warranties of Acquisitionco

     Acquisitionco represents and warrants on the date hereof to and in favour of the Company as set out in Schedule 3.2 and acknowledges that the Company is relying upon such representations and warranties in connection with the matters contemplated by this Agreement.

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3.3 Survival

     The representations and warranties of the Company and Acquisitionco contained herein shall survive the execution and delivery of this Agreement but shall terminate on the earlier of the termination of this Agreement in accordance with its terms and as of the Effective Date. Any investigation by a Party or its advisors shall not mitigate, diminish or affect the representations and warranties of the other Party.

ARTICLE 4
COVENANTS

4.1 Retention of Goodwill

     During the Pre-Effective Date Period, the Company shall continue to carry on the business of the Company and its Subsidiaries in a manner consistent with prior practice in all material respects, using commercially reasonable efforts to preserve the attendant goodwill of such entities and to contribute to retention of that goodwill to and after the Effective Date, but subject to the following provisions of this Article 4. The provisions of Section 4.2(a) are intended to be in furtherance of this general commitment.

4.2 Covenants of the Company

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4.3 Covenants of Acquisitionco

     Acquisitionco covenants and agrees to:

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4.4 Covenants of the Company Regarding Non-Solicitation

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     if and only to the extent that, in the case of clause (a) and (b):

and, the board of directors of the Company concludes in good faith, after consultation with its outside legal and financial advisors, (A) in the case of clause (a), that such Acquisition Proposal is or is reasonably likely to be a Superior Proposal, or (B) in the case of clause (b), that such Acquisition Proposal is a Superior Proposal.

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4.5 Notice of Superior Proposal Determination

     The Company shall not accept, approve or recommend or enter into any agreement in respect of an Acquisition Proposal on the basis that it constitutes a Superior Proposal (or change or withdraw its recommendation in favour of the Transaction) unless: (a) it has promptly provided Acquisitionco with a copy of the Acquisition Proposal document which has been determined to be a Superior Proposal; (b) five Business Days (the “Notice Period”) shall have elapsed from the date Acquisitionco received notice of the determination to accept, approve or recommend an agreement in respect of such Acquisition Proposal; and (c) before entering into any agreement with respect to a Superior Proposal, this Agreement shall have been terminated pursuant to Section 6.2(3)(d). During the Notice Period, the Company shall provide a reasonable opportunity to Acquisitionco to consider, discuss and offer such adjustments in the terms and

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conditions of this Agreement as would enable the Company to proceed with its recommendation to the Company Shareholders with respect to the Transaction; provided, however, that any such adjustment shall be at the discretion of Acquisitionco at the time. The board of directors of the Company will review in good faith any offer made by Acquisitionco to amend the terms of this Agreement in order to determine, as part of its exercising its fiduciary duties, whether the proposed amendments would, upon acceptance, result in such Superior Proposal ceasing to be a Superior Proposal (and whether it will change or withdraw its recommendation in favour of the Transaction). If a majority of the board of directors of the Company determines that the Superior Proposal would cease to be a Superior Proposal, the Company will so advise Acquisitionco and will accept the offer by Acquisitionco to amend the terms of this Agreement and the Parties agree to take such actions and execute such documents as are necessary to give effect to the foregoing. If the board of directors of the Company continues to believe, in good faith and after consultation with financial advisors and outside counsel, that such Superior Proposal remains a Superior Proposal and therefore rejects the amendments offered by Acquisitionco, then the Company may, subject to the terms of this Agreement, accept, approve, recommend or enter into an agreement, understanding or arrangement in respect of such Superior Proposal (and change or withdraw its recommendation in favour of the Transaction). Each successive material modification of any Acquisition Proposal or a Superior Proposal shall constitute a new Acquisition Proposal for the purposes of this Section 4.5 and shall require a three Business Day Notice Period from the date a copy of such amendment is provided to Acquisitionco (other than an amendment to improve upon a Superior Proposal in respect of which Acquisitionco has been provided with an opportunity to amend the terms of this Agreement and such Superior Proposal has not ceased to be a Superior Proposal prior to the proposed amendment). If the Company provides Acquisitionco with the notice contemplated in this Section on a date that is less than seven calendar days prior to the Company Meeting, if requested by Acquisitionco, the Company shall adjourn the Company Meeting to a date that is not less than seven calendar days and not more than ten calendar days after the date of such notice.

4.6 Access to Information

     Subject to applicable Laws, upon reasonable notice, the Company shall (and shall cause each of its Subsidiaries to) afford Acquisitionco’s officers, employees, counsel, accountants and other authorized representatives and advisors access, during normal business hours from the date hereof and until the earlier of the Effective Date or the termination of this Agreement, to its and its Subsidiaries’ properties, books, contracts and records as well as to its management personnel and its accountants and use commercially reasonable efforts to afford such access to its other advisors, and, during such period, the Company shall (and shall cause each of its Subsidiaries to) furnish promptly to Acquisitionco all information concerning the Company’s and its Subsidiaries’ businesses, properties and personnel as Acquisitionco may reasonably request, other than information in respect of which the Company is under an enforceable obligation to a third party to maintain confidentiality after the Company has used its commercially reasonable efforts to obtain a waiver of such obligation.

4.7 Financing

     Prior to the Effective Date, the Company shall provide, and shall cause its Subsidiaries to, and shall use its commercially reasonable efforts to cause the respective officers, employees, representatives and advisors, including legal and accounting, of the Company and its Subsidiaries to, provide all cooperation reasonably requested by Acquisitionco in connection

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with the financing of the transactions contemplated by this Agreement, including, without limitation, using commercially reasonable efforts to cause (i) appropriate officers and employees to be available on a customary basis to meet with prospective lenders and investors in presentations, meetings, road shows and due diligence sessions, to assist with the preparation of disclosure documents in connection therewith, to execute and deliver any pledge and security documents, other definitive financing documents, or other certificates, legal opinions or documents as may be reasonably requested by Acquisitionco, and (ii) its independent accountants and counsel to provide assistance to Acquisitionco, including providing consent to Acquisitionco to prepare and use their audit reports relating to the Company and its Subsidiaries and, at the cost of Acquisitionco, to provide any necessary “comfort letters”.

4.8 Indemnification

ARTICLE 5
CONDITIONS

5.1 Mutual Conditions Precedent

     The respective obligations of the Parties to complete the Transaction shall be subject to the satisfaction, on or before the Effective Time, of the following conditions precedent, each of which may only be waived by the mutual consent of Acquisitionco and the Company:

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5.2 Additional Conditions Precedent to the Obligations of Acquisitionco

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5.3 Additional Conditions Precedent to the Obligations of the Company

5.4 Satisfaction of Conditions

     The conditions precedent set out in Sections 5.1, 5.2 and 5.3 shall be conclusively deemed to have been satisfied, waived or released when, with the agreement of Acquisitionco and the Company, a Certificate of Arrangement in respect of the Transaction is issued by the Director.

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ARTICLE 6
AMENDMENT AND TERMINATION

6.1 Amendment

6.2 Termination

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(3) This Agreement may be terminated:

     in each case, prior to the Effective Time.

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6.3 Termination and Other Payments

(1)  If:

then in any such case the Company shall pay to Acquisitionco (or as Acquisitionco may otherwise direct) $27,400,000 (the “Termination Payment”) in immediately available funds to an account designated by Acquisitionco. Such payment shall be made (i) in the case of a termination by Acquisitionco, within one Business Day after written notice of termination by Acquisitionco, and (ii) in the case of a termination by the Company, immediately prior to such termination. The Company shall not be obligated to make more than one payment pursuant to this Section 6.3(1).

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6.4 Effect of Termination Payment

     If the Company pays to Acquisitionco the amounts required by Section 6.3(1) or 6.3(2) as a result of the occurrence of any of the events giving rise to a right of termination referred to therein (except for a breach of Section 4.4), Acquisitionco shall have no other remedy with respect to the occurrence of such event.

6.5 Remedies

     Subject to Section 6.4, the Parties acknowledge and agree that an award of money damages would be inadequate for any breach of this Agreement by any Party or its representatives and any such breach would cause the non-breaching Party irreparable harm. Accordingly, the Parties agree that, in the event of any breach or threatened breach of this Agreement by one of the Parties, the non-breaching Party will also be entitled, without the requirement of posting a bond or other security, to equitable relief, including injunctive relief and specific performance. Such remedies will not be the exclusive remedies for any breach of this Agreement but will be in addition to all other remedies available at law or equity to each of the Parties.

ARTICLE 7
GENERAL

7.1 Notices

     Any notice, consent or approval required or permitted to be given in connection with this Agreement (in this Section referred to as a “Notice”) shall be in writing and shall be sufficiently given if delivered (whether in person, by courier service or other personal method of delivery), or if transmitted by facsimile or email:

     (a) If to Acquisitionco, at:

▇/▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
▇ ▇▇▇▇ ▇▇^▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇▇▇

Attention:          ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇

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Osler, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ ▇▇▇
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Attention:          ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇

(b) If to the Company at:

Masonite International Corporation
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Attention:          Harley Ulster
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Davies ▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
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Attention:          ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇

     Any Notice delivered or transmitted to a Party as provided above shall be deemed to have been given and received on the day it is delivered or transmitted, provided that it is delivered or transmitted on a Business Day prior to 5:00 p.m. local time in the place of delivery or receipt. However, if the Notice is delivered or transmitted after 5:00 p.m. local time or if such day is not a Business Day then the Notice shall be deemed to have been given and received on the next Business Day.

     Any Party may, from time to time, change its address by giving Notice to the other Party in accordance with the provisions of this Section.

7.2 Assignment

     Neither this Agreement nor any rights or obligations under this Agreement shall be assignable by either Party without the prior written consent of the other Party, except that Acquisitionco may assign all or part of its rights or obligations, including without limitation the rights to acquire the Company Shares, without reducing its own obligations hereunder, to an Affiliate. Subject thereto, this Agreement shall enure to the benefit of and be binding upon the Parties and their respective successors (including any successor by reason of amalgamation of any Party) and permitted assigns.

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7.3 Further Assurances

     The Parties shall with reasonable diligence do all such things and provide all such reasonable assurances as may be required to consummate the Transaction, and each Party shall provide such further documents or instruments required by the other Party as may be reasonably necessary or desirable to effect the purpose of this Agreement and carry out its provisions.

7.4 Expenses

     Subject to Section 6.3, the Parties agree that all costs and expenses of the Parties relating to the Transaction and the transactions contemplated hereby, including legal fees, accounting fees, financial advisory fees, regulatory filing fees, stock exchange fees, all disbursements of advisors and printing and mailing costs, shall be paid by the Party incurring such expenses.

7.5 Public Notices

     All public notices to third parties and all other publicity concerning the transactions contemplated by this Agreement shall be jointly planned and co-ordinated by the Parties and neither Party shall act unilaterally in this regard without the prior approval of the other Party, such approval not to be unreasonably withheld, unless such disclosure shall be required to meet timely disclosure obligations of any Party under applicable securities laws and stock exchange rules in circumstances where prior consultation with the other Party is not practicable.

7.6 Execution and Delivery

     This Agreement may be executed by the Parties in counterparts and may be executed and delivered by facsimile and all such counterparts and facsimiles shall together constitute one and the same agreement.

7.7 No Recourse

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legal or equitable proceeding, or by virtue of any Law, it being expressly agreed and acknowledged that no personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by any current or future Affiliate, shareholder or agent of the Company, as such, or any current or future director, officer, employee or shareholder of any of the foregoing, as such, for any obligation of the Company under this Agreement.

7.8 No Third Party Beneficiaries

     Other than Section 4.8 and Section 7.7, this Agreement is not intended to confer on any Person other than the Parties any rights or remedies.

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     IN WITNESS WHEREOF the Parties have executed this Combination Agreement as of the date first written above.

SCHEDULE 1.1A

PLAN OF ARRANGEMENT

Under section 182 of the Business Corporations Act (Ontario)

concerning

STILE ACQUISITION CORP.

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MASONITE INTERNATIONAL CORPORATION

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ARTICLE 1
INTERPRETATION

     Wherever used in this Plan of Arrangement, unless there is something inconsistent in the subject matter or context, the following words and terms shall have the respective meanings set out below and grammatical variations of such terms shall have corresponding meanings:

“Acquisitionco” means Stile Acquisition Corp., a corporation existing under the OBCA;

“Affiliate” has the meaning ascribed to it in the Securities Act;

“Arrangement” means the arrangement under the provisions of section 182 of the OBCA on the terms and conditions set out in this Plan of Arrangement subject to any amendments or variations hereto made in accordance with section 6.1 of the Combination Agreement, section 6.1 of this Plan of Arrangement or made at the direction of the Court in accordance with the Final Order;

“Arrangement Resolution” means the special resolution of the Company Shareholders approving the Plan of Arrangement, to be considered at the Company Meeting, substantially in the form and content of Schedule 1.1B of the Combination Agreement;

“Articles of Arrangement” means the articles of arrangement of the Company in respect of the Arrangement, required by the OBCA to be filed with the Director after the Final Order is made in order for the Arrangement to become effective;

“Business Day” means any day on which commercial deposit taking banks are generally open for business in Toronto, Ontario and New York, New York other than a Saturday, a Sunday or a day observed as a holiday in such locations under applicable laws;

“Cashed-out Option” means each Company Option in respect of which a Cash Election (as defined in the Company Stock Option Plan) has been duly made by a Holder of Company Options prior to the Effective Time in accordance with the terms and conditions of the Company Stock Option Plan;

“Certificate of Arrangement” means the certificate of arrangement issued by the Director pursuant to subsection 183(2) of the OBCA after the Articles of Arrangement have been filed;

“Combination Agreement” means the combination agreement dated as of December 22, 2004, between Acquisitionco and the Company, as the same may be amended in accordance with section 6.1 thereof, providing for, among other things, the Arrangement;

“Company” means Masonite International Corporation, a corporation existing under the OBCA;

“Company Circular” has the meaning ascribed to it in the Combination Agreement;

“Company Credit Facility” means the Amended and Restated Credit Agreement dated July 31, 2002, as amended on January 23, 2004, June 1, 2004 and June 23, 2004, among Masonite Holdings Inc., the Company, the lenders party thereto and Suntrust Bank, as Administrative Agent;

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“Company Credit Facility Payoff Loans” has the meaning ascribed to it in section 3.1(a);

“Company Meeting” means the special meeting of the Company Shareholders, including any adjournment or postponement thereof, to be called and held in accordance with the Interim Order to consider, and if deemed advisable, approve the Arrangement;

“Company Options” means the options granted under the Company Stock Option Plan to purchase Company Shares that remain outstanding on the Effective Date;

“Company Securityholders” means Holders of Company Shares and Company Options;

“Company Shareholders” means Holders of Company Shares;

“Company Shares” means the common shares of the Company;

“Company Stock Option Plan” means the Masonite International Corporation Share Option Plan, amended and restated as of March 16, 2004 as amended to the date hereof;

“Court” means the Superior Court of Justice (Ontario);

“Depositary” means Computershare Trust Company of Canada, being the depositary appointed by the Company for the purpose, amongst other things, of exchanging certificates representing Common Shares for cash;

“Director” means the Director appointed under section 278 of the OBCA;

“Dissent Rights” has the meaning ascribed to it in section 5.1;

“Dissenting Shareholder” means any Company Shareholder who has properly exercised its Dissent Rights and has not withdrawn or been deemed to have withdrawn such Dissent Rights;

“Effective Date” has the meaning ascribed to it in the Combination Agreement;

“Effective Time” means 11:30 a.m. on the Effective Date;

“Final Order” means the final order of the Court approving the Arrangement as such order may be amended by the Court at any time prior to the Effective Date or, if appealed, then unless such appeal is withdrawn or denied, as affirmed or as amended on appeal;

“Governmental Authority” means any (a) multinational, federal, provincial, state, regional, municipal, local or other government, governmental or public department, central bank, court, tribunal, arbitral body, commission, board, bureau or agency, domestic or foreign, (b) self-regulatory organization or stock exchange including without limitation the New York Stock Exchange and the Toronto Stock Exchange, (c) subdivision, agent, commission, board, or authority of any of the foregoing, or (d) quasi-governmental or private body exercising any regulatory, expropriation or taxing authority under or for the account of any of the foregoing;

“Holders” means (a) when used with reference to the Company Shares, the holders thereof shown from time to time in the register of holders of Company Shares maintained by or on behalf of the Company and, where the context so provides, includes joint holders of such

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Company Shares and (b) when used with reference to the Company Options, means the holders thereof shown from time to time in the register maintained by or on behalf of the Company in respect of Company Options;

“Interim Order” means the interim order of the Court, as the same may be amended, in respect of the Arrangement;

“In-the-Money Amount” means, in respect of each Company Share which is subject to a Company Option, the difference between the Purchase Price and the “per share” exercise price of such share under that Company Option to which it is subject;

“ITA” means the Income Tax Act (Canada), as amended;

“Letter of Transmittal” means the letter of transmittal for use by the Company Shareholders, in the form accompanying the Company Circular;

“OBCA” means the Business Corporations Act (Ontario), as amended;

“Option Payment Loan” has the meaning ascribed to it in section 3.1(a);

“Person” includes any individual, sole proprietorship, partnership, firm, entity, limited partnership, limited liability company, unlimited liability company, unincorporated association, unincorporated syndicate, unincorporated organization, trust, body, corporation, or Governmental Authority, and any group (as defined in section 13(d)(3) of the United States Securities Exchange Act of 1934) comprised of more than one Person and where the context requires any of the foregoing when they are acting as trustee, executor, administrator or other legal representatives;

“Plan of Arrangement”, “hereof’, “herein”, “hereunder”, and similar expressions refer to this Plan of Arrangement including the appendices hereto and not to any particular Article, section or other portion hereof and includes any agreement or instrument supplementary or ancillary hereto;

“Purchase Price” has the meaning ascribed to it in section 3.1(e);

“Qualifying Company Shareholder” means a Company Shareholder but, for greater certainty, does not include (i) a Dissenting Shareholder or (ii) Acquisitionco or any Affiliate of Acquisitionco;

“Securities Act” means the Securities Act (Ontario), as amended; and

“Tax” and “Taxes” have the meanings ascribed thereto in the Combination Agreement.

     The division of this Plan of Arrangement into Articles and sections and the insertion of headings are for convenience of reference only and do not affect the construction or interpretation of this Plan of Arrangement. Unless otherwise specified, references to Articles and sections are to Articles and sections of this Plan of Arrangement.

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     Unless otherwise specified, time periods within or following which any payment is to be made or act is to be done shall be calculated by excluding the day on which the period commences and including the day on which the period ends and by extending the period to the next Business Day following if the last day of the period is not a Business Day.

     All sums of money which are referred to in this Plan of Arrangement are expressed in lawful money of Canada unless otherwise specified.

     Unless otherwise indicated, all times expressed herein or in any Letter of Transmittal are to local time, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇.

     In this Plan of Arrangement:

     This Plan of Arrangement shall be governed by and construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein.

ARTICLE 2
PURPOSE AND EFFECT OF THE PLAN OF ARRANGEMENT

     This Plan of Arrangement is made pursuant to, is subject to the provisions of and forms part of, the Combination Agreement.

     This Plan of Arrangement, upon filing the Articles of Arrangement and the issuance of the Certificate of Arrangement, will become effective and will be binding without any further authorization, act or formality on the part of the Court, the Director, Acquisitionco, the

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Company, or the Company Securityholders, from and after the Effective Time. Other than as expressly provided in Article 3, no portion of this Plan of Arrangement shall take effect with respect to any Person until the Effective Time.

ARTICLE 3
THE ARRANGEMENT

     Pursuant to the Arrangement the following transactions shall occur and shall be deemed to occur at the Effective Time (unless otherwise specified), in the following order without the requirement of any further authorization, act or formality:

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ARTICLE 4
PAYMENT

     At or before the Effective Time, Acquisitionco shall deposit or cause to be deposited with the Depositary, for the benefit of each Company Securityholder (and in the case of the amount of the Option Payment Loan, the Company), the cash, in Canadian dollars, to which each such Company Securityholder is entitled pursuant to section 3.1 upon the transfer of the Company Shares to Acquisitionco and the cancellation of the Cashed-out Options. Upon surrender by a Company Shareholder to the Depositary of a certificate which immediately prior to the Effective Time represented one or more Company Shares, together with a duly completed and executed Letter of Transmittal, the Holder of such surrendered certificate(s) of Company Shares shall be entitled to receive in exchange therefor, and the Depositary shall deliver to such Company Shareholder, as soon as practicable after the Effective Time, a cheque issued by the Depositary (or other form of immediately available funds) representing that amount of cash which such Company Shareholder has the right to receive, less any amounts withheld pursuant to section 4.5 and any certificate(s) of Company Shares so surrendered shall forthwith be cancelled. In addition, the Company shall deliver to each holder of Cashed-out Options, as soon as practicable after the Effective Time, a cheque issued by the Company (or other form of immediately available funds) representing that amount of cash which such holder of Cashed-out Options has the right to receive, less any amounts withheld pursuant to section 4.5. In the event of a transfer of ownership of Company Shares that is not registered in the transfer records of the Company, a cheque representing the proper amount of cash (or other form of immediately available funds) may be delivered to the transferee if the certificate representing such Company Shares is presented to the Depositary, accompanied by a duly completed and executed Letter of Transmittal and all documents required to evidence and effect such transfer. Until surrendered as contemplated by this section 4.1, each certificate of Company Shares shall be deemed at all times after the Effective Time to represent only the right to receive upon such surrender a cash payment as contemplated by this section 4.1, less any amounts withheld pursuant to section 4.5.

     No dividends or other distributions declared or made after the Effective Time with respect to Company Shares with a record date after the Effective Time shall be paid to the Holder of any unsurrendered certificate which immediately prior to the Effective Time represented outstanding Company Shares that were transferred pursuant to section 3.1, and no cash payment pursuant to section 3.1 shall be paid to any such Holder, unless and until the Holder of such certificate shall surrender such certificate in accordance with section 4.1. Subject to applicable laws, at the time of such surrender of any such certificate, there shall be paid to the Holder of the certificates representing Company Shares, without interest, the amount of cash to which such Holder is entitled pursuant to section 3.1.

     In the event any certificate which immediately prior to the Effective Time represented one or more outstanding Company Shares that were transferred pursuant to section 3.1 is lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such certificate to be lost, stolen or destroyed, the Depositary will issue in exchange for such lost,

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stolen or destroyed certificate, a cheque (or other form of immediately available funds) for the cash amount, deliverable in accordance with such Holder’s Letter of Transmittal. When authorizing such payment in exchange for any lost, stolen or destroyed certificate, the Person to whom cash is to be delivered shall, as a condition precedent to the payment thereof, give a bond satisfactory to Acquisitionco and the Company and their respective transfer agents in such sum as Acquisitionco and the Company may direct or otherwise indemnify Acquisitionco and the Company in a manner satisfactory to Acquisitionco and the Company against any claim that may be made against Acquisitionco and the Company with respect to the certificate alleged to have been lost, stolen or destroyed.

     Any certificate which immediately prior to the Effective Time represented outstanding Company Shares that were transferred pursuant to section 3.1, and not deposited, with all other instruments required by section 4.1, on or prior to the sixth anniversary of the Effective Date shall cease to represent a claim or interest of any kind or nature as a shareholder of the Company or for the receipt of cash. On such date, the cash to which the former Holder of the certificate referred to in the preceding sentence was ultimately entitled shall be deemed to have been surrendered for no consideration to Acquisitionco, together with all entitlements to dividends, distributions and interest thereon held for such former Holder. None of Acquisitionco or the Company shall be liable to any Person in respect of any cash delivered to a public official pursuant to any applicable abandoned property, escheat or similar Law.

     Acquisitionco, the Company and the Depositary shall be entitled to deduct and withhold from any consideration payable to any Holder of Company Shares or Company Options, such amounts as Acquisitionco, the Company or the Depositary determines is required to deduct and withhold with respect to such payment under the ITA, the United States Internal Revenue Code of 1986 or any provision of federal, provincial, territorial, state, local or foreign tax laws, in each case, as amended. To the extent that amounts are so withheld, such withheld amounts shall be treated for all purposes hereof as having been paid to the Holder of the securities in respect of which such deduction and withholding was made, provided that such withheld amounts are actually remitted to the appropriate taxing authority.

ARTICLE 5
RIGHTS OF DISSENT

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     In no circumstances shall the Company, Acquisitionco or any other Person be required to recognize a Person exercising Dissent Rights unless such Person is a Holder of those Company Shares in respect of which such rights are sought to be exercised.

     Neither the Company nor Acquisitionco nor any other Person shall be required to recognize a Dissenting Shareholder as a Holder or beneficial owner of Company Shares at or after the Effective Time, and after the Effective Time the names of such Dissenting Shareholders shall be deleted from the register of Holders of Company Shares maintained by or on behalf of the Company.

     A Holder is not entitled to exercise Dissent Rights with respect to Company Shares if such Holder votes (or instructs, or is deemed, by submission of any incomplete proxy, to have instructed his, or her or its proxyholder to vote) in favour of the Arrangement Resolution.

ARTICLE 6
AMENDMENTS

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ARTICLE 7
FURTHER ASSURANCES

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SCHEDULE 1.1B

TRANSACTION RESOLUTION
SPECIAL RESOLUTION OF SHAREHOLDERS

BE IT RESOLVED THAT:

SCHEDULE 2.5

REGULATORY APPROVALS

SCHEDULE 3.1

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

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SCHEDULE 3.2

REPRESENTATIONS AND WARRANTIES OF ACQUISITIONCO

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SCHEDULE 5.2

SENIOR EXECUTIVES