Exemption Orders (Discretionary)

AINSWORTH LUMBER CO. LTD.


2001 BCSECCOM 1160




ORDER UNDER SECTION 87 OF THE COMPANY ACT, R.S.B.C. 1996, c.62

AINSWORTH LUMBER CO. LTD.

Background

[para 1]
The Company applied for an order under section 87(2) of the Company Act that sections 86 to 97 of the Company Act do not apply to the Trust Indenture to be entered into among the Company, certain of its wholly-owned subsidiaries and The Bank of Nova Scotia Trust Company of New York, as Trustee;

Representations

[para 2]
The Company represents that:

1. it was incorporated and subsequently amalgamated under the laws of British Columbia, is a reporting issuer under the Securities Act, R.S.B.C. 1996, c. 418 and is not in default of any requirement of the Act or Securities Rules, B.C. Reg. 194/97;

2. it has an authorized capital of 201,500,000 shares consisting of 100,000,000 Common Shares without par value (the Common Shares); 1,500,000 Class B Common Shares without par value, of which 350,000 are designated as Series 1 Class B Common Shares, 180,000 are designated as Series 2 Class B Common Shares and 187,500 are designated as Series 3 Class B Common Shares; and 100,000,000 Preferred Shares without par value, of which 300,000 are designated as Series 1 Preferred Shares and 4,000,000 are designated as Series 2 Preferred Shares;

3. as at November 26, 2001, 14,544,800 Common Shares, 120,000 Series 1 Class B Common Shares, 157,500 Series 2 Class B Common Shares and 170,000 Series 3 Class B Common Shares were issued and outstanding;

4. the Common Shares are listed on the Toronto Stock Exchange;

5. the Trustee was incorporated under the laws of the State of New York as a chartered trust company;

6. the Indenture will be governed by the laws of the State of New York;

7. it proposes to make an offering of up to a principal amount of U.S. $95 million of Senior Secured Notes under the Indenture;

8. the Notes are expected to be sold in December, 2001 in the United States of America to qualified institutional buyers in compliance with the exemption from registration provided by Rule 144A of the Securities Act of 1933 of the United States of America (the 1933 Act) and, in transactions outside of the United States of America, in reliance on Regulation S under the 1933 Act;

9. any Notes sold in Canada, or to a resident of Canada, will be sold in compliance with applicable securities legislation, rules and policies;

10. the Indenture will comply in all material respects with the provisions of the Trust Indenture Act of 1939 of the United States of America (the Trust Indenture Act) which are substantially similar to the provisions of sections 86 to 97 of the Company Act; and

11. the issuance of the Notes will be made in compliance with the applicable laws of the jurisdictions in which they are being issued;

Order

[para 3]
Because it is not prejudicial to the public interest, the Executive Director orders under section 87(2) of the Company Act that sections 86 to 97 of the Company Act do not apply to the Indenture, provided that the Indenture complies in all material respects with the provisions of the Trust Indenture Act that are substantially similar to the provisions of sections 86 to 97 of the Company Act.

[para 4]
December 13, 2001



Derek E. Patterson
Manager