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     FIRST SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated as of
May 19, 2004, among Ainsworth Engineered Corp. (the “Guaranteeing Subsidiary”),
a subsidiary of Ainsworth Lumber Co. Ltd., a corporation incorporated under the
laws of the Province of British Columbia (the “Company”), the Company, and The
Bank of New York, as Trustee under the Indenture referred to below (the
“Trustee”).



W I T N E S S E T H




     WHEREAS, the Company has heretofore executed and delivered to the Trustee
an indenture (the “Indenture”), dated as of March 3, 2004 providing for the
issuance of an unlimited aggregate principal amount of Senior Notes due March
15, 2014 (the “Notes”);



     WHEREAS, the Indenture provides that under certain circumstances a
Subsidiary providing a Subsidiary Guarantee shall execute and deliver to the
Trustee a supplemental indenture pursuant to which such Subsidiary shall
unconditionally guarantee all of the Company’s Obligations under the Notes and
the Indenture on the terms and conditions set forth herein (the “Subsidiary
Guarantee”); and



     WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.



     NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
parties mutually covenant and agree for the equal and ratable benefit of the
Holders of the Notes as follows:



     1. CAPITALIZED TERMS. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.



     2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby agrees as
follows:




     (a) Along with all Guarantors named in the Indenture, to jointly and
severally unconditionally guarantee to each Holder of a Note
authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, irrespective of the validity and enforceability
of the Indenture, the Notes or the obligations of the Company hereunder
or thereunder, that:




(i) the principal of and interest, premium and Special
Interest, if any, on the Notes will be promptly paid in full
when due, whether at maturity, by acceleration, redemption or
otherwise, and interest on the overdue principal of and
interest on the Notes, if any, if lawful, and all other
obligations of the Company to the Holders or the Trustee
hereunder or thereunder will be promptly paid in full or
performed, all in accordance with the terms hereof and
thereof; and



 









 






(ii) in case of any extension of time of payment or renewal of
any Notes or any of such other obligations, that same will be
promptly paid in full when due or performed in accordance with
the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. Failing payment when
due of any amount so guaranteed or any performance so
guaranteed for whatever reason, the Guarantors shall be
jointly and severally obligated to pay the same immediately.




     (b) The obligations hereunder shall be unconditional, irrespective
of the validity, regularity or enforceability of the Notes or the
Indenture, the absence of any action to enforce the same, any waiver or
consent by any Holder of the Notes with respect to any provisions hereof
or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of a guarantor.




     (c) The obligations of the Guaranteeing Subsidiary under this
Subsidiary Guarantee are independent of the obligations guaranteed by the
Guaranteeing Subsidiary hereunder, and a separate action or actions may
be brought and prosecuted by the Trustee on behalf of, or by, the
Holders, subject to the terms and conditions set forth in the Indenture,
against the Guaranteeing Subsidiary to enforce this Subsidiary Guarantee,
irrespective of whether any action is brought against the Company or
whether the Company is joined in any such action or actions.




     (d) In the event of a default in payment of principal (or premium
and Special Interest, if any) or interest on a Note, whether at its
stated maturity, by acceleration, purchase or otherwise, legal
proceedings may be instituted by the Trustee on behalf of, or by, the
Holder of such Note, subject to the terms and conditions set forth in the
Indenture, directly against the Guaranteeing Subsidiary to enforce the
Subsidiary Guarantee without first proceeding against the Company or any
other Guarantor. If, after the occurrence and during the continuance of
an Event of Default, the Trustee or any of the Holders are prevented by
applicable law from exercising their respective rights to accelerate the
maturity of the Notes, to collect interest on the Notes, or to enforce or
exercise any other right or remedy with respect to the Notes, the
Guaranteeing Subsidiary shall pay to the Trustee for the account of the
Holder, upon demand therefor, the amount that would otherwise have been
due and payable had such rights and remedies been permitted to be
exercised by the Trustee or any of the Holders.




     (e) The following is hereby waived: diligence presentment, demand
of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first
against the Company, protest, notice and all demands whatsoever.



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     (f) This Subsidiary Guarantee shall not be discharged except by
complete performance of the obligations contained in the Notes, the
Indenture and this Supplemental Indenture, and the Guaranteeing
Subsidiary accepts all obligations of a Guarantor under the Indenture.




     (g) If any Holder or the Trustee is required by any court or
otherwise to return to the Company, the Guarantors (including the
Guaranteeing Subsidiary), or any custodian, trustee, liquidator or other
similar official acting in relation to either the Company or the
Guarantors, any amount paid either to the Trustee or such Holder, this
Subsidiary Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect.




     (h) The Guaranteeing Subsidiary shall not be entitled to any right
of subrogation in relation to the Holders in respect of any obligations
guaranteed hereby until payment in full of all obligations guaranteed
hereby.




     (i) As between the Guaranteeing Subsidiary, on the one hand, and the
Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6
of the Indenture for the purposes of this Subsidiary Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (y) in
the event of any declaration of acceleration of such obligations as
provided in Article 6 of the Indenture, such obligations (whether or not
due and payable) shall forthwith become due and payable by the
Guaranteeing Subsidiary for the purpose of this Subsidiary Guarantee.




     (j) The Guaranteeing Subsidiary shall have the right to seek
contribution from any non-paying Guarantor so long as the exercise of
such right does not impair the rights of the Holders under this
Subsidiary Guarantee.




     (k) Pursuant to Section 10.02 of the Indenture, after giving effect
to all other contingent and fixed liabilities that are relevant under any
applicable Bankruptcy or fraudulent conveyance laws, and after giving
effect to any collections from, rights to receive contribution from or
payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under Article 10 of the Indenture,
this new Subsidiary Guarantee shall be limited to the maximum amount
permissible such that the obligations of such Guaranteeing Subsidiary
under this Subsidiary Guarantee will not constitute a fraudulent transfer
or conveyance.




     (l) This Subsidiary Guarantee shall remain in full force and effect
and continue to be effective should any petition be filed by or against
the Company for liquidation, reorganization, should the Company become
insolvent or make an assignment for the benefit of creditors or should a
receiver or trustee be appointed for all or any significant part of the
Company’s assets, and shall, to the fullest extent permitted by law,
continue to be effective or be reinstated, as the case may



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be, if at any time payment and performance of the Notes are,
pursuant to applicable law, rescinded or reduced in amount, or must
otherwise be restored or returned by any obligee on the Notes and
Subsidiary Guarantee, whether as a “voidable preference”, “fraudulent
transfer” or otherwise, all as though such payment or performance had not
been made. In the event that any payment or any part thereof, is
rescinded, reduced, restored or returned, the Note shall, to the fullest
extent permitted by law, be reinstated and deemed reduced only by such
amount paid and not so rescinded, reduced, restored or returned.




     (m) In case any provision of this Subsidiary Guarantee shall be
invalid, illegal or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.




     (n) This Subsidiary Guarantee shall be a general unsecured
obligation of such Guaranteeing Subsidiary, ranking pari passu with any
other future senior Indebtedness of the Guaranteeing Subsidiary, if any.




     (o) Each payment to be made by the Guaranteeing Subsidiary in
respect of this Subsidiary Guarantee shall be made without set-off,
counterclaim, reduction or diminution of any kind or nature.



     3. EXECUTION AND DELIVERY. The Guaranteeing Subsidiary agrees that the
Subsidiary Guarantee shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of this Subsidiary Guarantee.



     4. GUARANTEEING SUBSIDIARY MAY CONSOLIDATE, ETC. ON CERTAIN TERMS.




     (a) Except as otherwise provided in Section 10.05 of the Indenture,
the Guaranteeing Subsidiary may not sell or otherwise dispose of all or
substantially all of its assets to, or consolidate, amalgamate with or
merge with or into (whether or not such Guaranteeing Subsidiary is the
surviving Person) another Person other than the Company or another
Guarantor unless:




     (b) immediately after giving effect to that transaction, no Default
or Event of Default exists; and




     (c) either:




     (1) the Guaranteeing Subsidiary is the surviving Person, or
the Person acquiring the property in any such sale or disposition
or the Person formed by or surviving any such consolidation,
amalgamation or merger assumes all the obligations of the
Guaranteeing Subsidiary under the Indenture, this Subsidiary
Guarantee and the Registration Rights Agreement pursuant to a
supplemental indenture satisfactory to the Trustee and completes
all other required documentation; or




     (2) the Net Proceeds of such sale or other disposition are
applied in accordance with the provisions of Section 4.10 of the
Indenture;



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     (d) In case of any such consolidation, amalgamation, merger, sale or
conveyance and upon the assumption by the successor Person (where
applicable), by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of this Subsidiary
Guarantee endorsed upon the Notes and the due and punctual performance of
all of the covenants and conditions of the Indenture to be performed by
the Guaranteeing Subsidiary, such successor Person shall succeed to and
be substituted for the Guaranteeing Subsidiary with the same effect as if
it had been named herein as a Guaranteeing Subsidiary. Such successor
Person thereupon may cause to be signed the Subsidiary Guarantee to be
endorsed upon all of the Notes issuable hereunder which theretofore shall
not have been signed by the Company and delivered to the Trustee. The
Subsidiary Guarantee so issued shall in all respects have the same legal
rank and benefit under the Indenture as the Subsidiary Guarantees
theretofore and thereafter issued in accordance with the terms of the
Indenture as though all of such Subsidiary Guarantees had been issued at
the date of the execution hereof.




     (e) Except as set forth in Articles 4 and 5 of the Indenture, and
notwithstanding clauses (a) and (b) above, nothing contained in the
Indenture or in any of the Notes shall prevent any consolidation,
amalgamation or merger of a Guaranteeing Subsidiary with or into the
Company or another Guarantor, or shall prevent any sale or conveyance of
the property of the Guaranteeing Subsidiary as an entirety or
substantially as an entirety to the Company or another Guarantor.



     5. RELEASES.




     (a) In the event of a sale (including by way of merger, amalgamation
or consolidation in compliance with Section 5.01 of the Indenture) of all
the capital stock of the Guaranteeing Subsidiary to a Person that is not
(either before or after giving effect to such transaction) the Company or
a Restricted Subsidiary then the Guaranteeing Subsidiary (in the event of
a sale or other disposition, by way of merger, consolidation or
otherwise, of all of the capital stock of such Guaranteeing Subsidiary)
will be released and relieved of any obligations under this Subsidiary
Guarantee; provided, that the sale complies with Section 4.10 of the
Indenture. Further, if the Company redesignates any Restricted
Subsidiary that is a Guarantor as an Unrestricted Subsidiary in
accordance with Section 4.17 of the Indenture then the Guaranteeing
Subsidiary will be released and relieved of any obligations under this
Subsidiary Guarantee. Upon delivery by the Company to the Trustee of an
Officers’ Certificate and an Opinion of Counsel to the effect that such
sale or other disposition was made by the Company in accordance with the
provisions of the Indenture, including without limitation Section 4.10 of
the Indenture, the Trustee shall execute any documents reasonably
required in order to evidence the release of the Guaranteeing Subsidiary
from its obligations under this Subsidiary Guarantee.




     (b) The Guaranteeing Subsidiary not released from its obligations
under this Subsidiary Guarantee shall remain liable for the full amount
of principal of



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and interest on the Notes and for the other obligations of the
Guaranteeing Subsidiary under the Indenture as provided in Article 10
thereof.



     6. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator, shareholder or agent of the Guaranteeing
Subsidiary, as such, shall have any liability for any obligations of the
Company or any Subsidiary under the Notes, any Subsidiary Guarantees, the
Indenture or this Supplemental Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each Holder of the
Notes by accepting a Note waives and releases all such liability. The waiver
and release are part of the consideration for the issuance of the Notes. Such
waiver may not be effective to waive liabilities under the federal securities
laws and it is the view of the Commission that such a waiver is against public
policy.



     7. THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE
THIS SUPPLEMENTAL INDENTURE, THE INDENTURE, THE NOTES AND THE SUBSIDIARY
GUARANTEES.



     8. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.



     9. EFFECT OF HEADINGS. The Section headings herein are for convenience
only and shall not affect the construction hereof.



     10. THE TRUSTEE. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this
Supplemental Indenture or for or in respect of the recitals contained herein,
all of which recitals are made solely by the Guaranteeing Subsidiary and the
Company.



     11. SUBROGATION. The Guaranteeing Subsidiary shall be subrogated to all
rights of Holders of Notes against the Company in respect of any amounts paid
by the Guaranteeing Subsidiary pursuant to the provisions of Section 2 hereof;
provided, however, that, if an Event of Default has occurred and is continuing,
the Guaranteeing Subsidiary shall not be entitled to enforce or receive any
payments arising out of, or based upon, such right of subrogation until all
amounts then due and payable by the Company under the Indenture or the Notes
shall have been paid in full.



     12. BENEFITS ACKNOWLEDGED. The Guaranteeing Subsidiary acknowledges that
it will receive direct and indirect benefits from the financing arrangements
contemplated by the Indenture and this Supplemental Indenture and that the
guarantee and waivers made by it pursuant to this Subsidiary Guarantee are
knowingly made in contemplation of such benefits.



     13. SUCCESSORS. All agreements of the Guaranteeing Subsidiary in this
Supplemental Indenture shall bind its Successors, except as otherwise provided
in Section 2(k) hereof or elsewhere in this Supplemental Indenture. All
agreements of the Trustee in this Supplemental Indenture shall bind its
successors.



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     IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, all as of the date first above written.



Dated: May 19, 2004,



	 	 	 	 	 
	 	 	Ainsworth Lumber Co. Ltd.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	
 
	

	 	 	 	Name:
	

	 	 	 	Title:
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	
 
	

	 	 	 	Name:
	

	 	 	 	Title:
	 
	 	 	 	 
	 	 	Ainsworth Engineered Corp.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	
 
	

	 	 	 	Name:
	

	 	 	 	Title:
	 
	 	 	 	 
	 	 	The Bank of New York, as Trustee
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	
 
	

	 	 	 	Authorized Signatory








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