EXHIBIT 4.1



                                RIGHTS AGREEMENT

                          Dated as of December 23, 2003

                                     between

                            MERCER INTERNATIONAL INC.

                                       and

                      COMPUTERSHARE TRUST COMPANY OF CANADA

                                 as Rights Agent


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                                TABLE OF CONTENTS

                                                        PAGE
                                                        ----
1.     Certain  Definitions                              1

2.     Appointment  of  Rights  Agent                    6

3.     Issuance  of  Rights  Certificates                6

4.     Form  of  Rights  Certificates                    8

5.     Countersignature  and  Registration               9

6.     Transfer,  Split  Up,  Combination  and           9
       Exchange of Rights Certificates;
       Mutilated,  Destroyed,  Lost or Stolen
       Rights  Certificates

7.     Exercise  of  Rights;  Purchase Price;            10
       Expiration Date of Rights

8.     Cancellation  and  Destruction  of                12
       Rights  Certificates

9.     Reservation  and  Availability  of                12
       Preferred  Shares

10.    Preferred  Shares  Record  Date                   13

11.    Adjustment  of  Purchase  Price,  Number          14
       of Shares or Number of Rights

12.    Certificate  of  Adjusted  Purchase  Price        21
       or Number of Shares

13.    Consolidation,  Merger  or  Sale or Transfer      21
       of Assets or Earning Power

14.    Fractional  Rights  and  Fractional  Shares       24

15.    Rights  of  Action                                25

16.    Agreement  of  Rights  Holders                    26

17.    Rights  Certificate  Holder  Not                  26
       Deemed  a  Shareholder

18.    Concerning  the  Rights  Agent                    27

19.    Merger  or  Consolidation  or  Change             27
       of  Name of Rights Agent

20.    Duties  of  Rights  Agent                         28

21.    Change  of  Rights  Agent                         30

22.    Issuance  of  New  Rights  Certificates           31

23.    Redemption                                        31

24.    Exchange                                          32

25.    Notice  of  Certain  Events                       34

26.    Notices                                           34

27.    Supplements  and  Amendments                      35

28.    Successors                                        35

29.    Determinations  and  Actions  by  the             35
       Board  of Trustees, etc.

30.    Benefits  of  this  Agreement                     36

31.    Severability                                      36

32.    Governing  Law                                    36

33.    Counterparts                                      36

34.    Descriptive  Headings                             37

EXHIBITS
    A     Articles of Amendment to Declaration          A-1
          of Trust of Mercer International Inc.

    B     Form  of  Rights  Certificate                 B-1

    C     Summary  of  Rights                           C-1

                                      (i)

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                            MERCER INTERNATIONAL INC.

                                RIGHTS AGREEMENT

     Rights  Agreement, dated as of December 23, 2003 (the "AGREEMENT"), between
Mercer International Inc., a Massachusetts trust organized under the laws of the
state  of Washington (the "COMPANY"), and Computershare Trust Company of Canada,
a  Canadian  limited  liability  company,  as Rights Agent (the "RIGHTS AGENT").

                                    RECITALS

     On  November  11, 2003, the Board of Trustees of the Company authorized and
declared  a  dividend of one preferred share purchase right (a "RIGHT") for each
Common  Share of the Company outstanding as of the Close of Business on December
31,  2003 (the "RECORD DATE"), each Right representing the right to purchase one
one-hundredth  of  a Preferred Share (as such number may be adjusted pursuant to
the provisions of this Agreement), having the rights, preferences and privileges
set  forth  in  the Declaration of Trust (a copy of the Articles of Amendment to
the  Declaration of Trust filed on August 17, 1993 creating the Preferred Shares
and setting forth the rights, preferences and privileges of the Preferred Shares
is  attached  to this Agreement as Exhibit A), upon the terms and subject to the
conditions herein set forth, and further authorized and directed the issuance of
one  Right  (as  such  number may be adjusted pursuant to the provisions of this
Agreement)  with  respect  to  each  Common  Share that shall become outstanding
between  the  Record  Date  and  the  earlier  of  the Distribution Date and the
Expiration  Date,  and  in  certain  circumstances  after the Distribution Date.

                                    AGREEMENT

Accordingly,  in  consideration of the premises and the mutual agreements herein
set  forth,  the  parties  agree  as  follows:

1.     CERTAIN  DEFINITIONS.  For  purposes  of  this  Agreement  (including the
recitals  hereto),  the  following  terms  have  the  meanings  indicated:

     (a)     "ACQUIRING  PERSON"  shall  mean  any Person who or which, together
with all Affiliates and Associates of such Person, shall be the Beneficial Owner
of  15%  or  more  of  the  aggregate  of  the Common Shares of the Company then
outstanding and the Issuable Note Shares, but shall not include the Company, any
Subsidiary  of the Company or any employee benefit plan of the Company or of any
Subsidiary  of  the Company, or any Person holding Common Shares for or pursuant
to  the  terms  of  any  such  plan.

     Notwithstanding the foregoing, no Person shall be deemed to be an Acquiring
Person as the result of an acquisition of Common Shares by the Company which, by
reducing the number of shares outstanding, increases the proportionate number of
shares  beneficially owned by such Person to 15% or more of the aggregate of the
Common  Shares  of  the  Company  then outstanding and the Issuable Note Shares;
provided,  however, that if a Person shall become the Beneficial Owner of 15% or
more  of  the aggregate of the Common Shares of the Company then outstanding and
the  Issuable Note Shares by reason of share purchases by the Company and shall,
after  such  share  purchases by the Company, become the Beneficial Owner of any
additional

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Common  Shares  of the Company (other than pursuant to a dividend or
distribution  paid  or  made  by the Company on its outstanding Common Shares in
Common  Shares  or  pursuant to a split or subdivision of the outstanding Common
Shares),  then such Person shall be deemed to be an Acquiring Person unless upon
becoming  the  Beneficial  Owner of such additional Common Shares of the Company
such Person does not beneficially own 15% or more of the aggregate of the Common
Shares  of  the  Company  then  outstanding  and  the  Issuable  Note  Shares.
Notwithstanding the foregoing, if the Board of Trustees determines in good faith
that  a Person who would otherwise be an "Acquiring Person," as defined pursuant
to  the foregoing provisions of this Section 1(a), has become such inadvertently
(including,  without  limitation,  because  (A)  such Person was unaware that it
beneficially  owned a percentage of the Common Shares that would otherwise cause
such  Person  to  be an "Acquiring Person," as defined pursuant to the foregoing
provisions  of  this  Section 1(a) or (B) such Person was aware of the extent of
the  Common  Shares  it  beneficially  owned  but had no actual knowledge of the
consequences of such beneficial ownership under this Agreement), and without any
intention  of changing or influencing control of the Company, and if such Person
divested  or  divests  as  promptly as practicable a sufficient number of Common
Shares  so that such Person would no longer be an "Acquiring Person," as defined
pursuant  to  the  foregoing  provisions  of this Section 1(a), then such Person
shall  not  be  deemed  to  be  or  to have become an "Acquiring Person" for any
purposes  of  this  Agreement.

     (b)     "AFFILIATE"  and  "ASSOCIATE"  shall  have  the respective meanings
ascribed  to such terms in Rule 12b-2 of the General Rules and Regulations under
the  Exchange  Act,  as  in  effect  on  the  date  of  this  Agreement.

     (c)     A  Person  shall  be  deemed the "BENEFICIAL OWNER" of and shall be
deemed  to  "BENEFICIALLY  OWN"  any  securities:

        (i)  which  such Person or any of such Person's Affiliates or Associates
beneficially  owns, directly or indirectly, for purposes of Section 13(d) of the
Exchange  Act  and  Rule 13d-3 thereunder (or any comparable or successor law or
regulation);

        (ii)  which such Person or any of such Person's Affiliates or Associates
has  the  right,  directly  or  indirectly,  (whether  such right is exercisable
immediately  or  only  after  the  passage  of  time or upon satisfaction of any
conditions  or  both):

             (A)  to acquire pursuant to any agreement, arrangement or
understanding,  whether  or not in writing (other than customary agreements with
and  between  underwriters and selling group members with respect to a bona fide
public  offering or an offering pursuant to Rule 144A and/or Regulation S of the
Securities  Act),  or  upon  the exercise of conversion rights, exchange rights,
rights  (other  than  the  Rights), warrants or options, or otherwise; provided,
however,  that a Person shall not be deemed pursuant to this Section l(c)(ii)(A)
to  be  the Beneficial Owner of, or to beneficially own, (1) securities tendered
pursuant  to  a  tender or exchange offer made by or on behalf of such Person or
any of such Person's Affiliates or Associates until such tendered securities are
accepted  for  purchase  or  exchange or (2) securities which a Person or any of
such  Person's  Affiliates  or  Associates  may  be  deemed to have the right to
acquire  pursuant  to  any  merger  or  other  acquisition agreement between the
Company and such Person (or one or more of its Affiliates or Associates) if such
agreement  has  been  approved  by  the  Board of Trustees prior to a Triggering
Event;  or

                                        2

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            (B)  to  vote  pursuant  to  any agreement, arrangement or
understanding  (whether  or  not  in  writing); provided, however, that a Person
shall  not  be  deemed  the  Beneficial  Owner  of,  or to beneficially own, any
security  under  this  Section  l(c)(ii)(B)  if  the  agreement,  arrangement or
understanding  to vote such security (1) arises solely from a revocable proxy or
consent  given  to  such  Person  in  response  to  a  public  proxy  or consent
solicitation  made pursuant to, and in accordance with, the applicable rules and
regulations  of the Exchange Act and (2) is not also then reportable on Schedule
13D  under  the  Exchange  Act  (or  any  comparable  or  successor  report); or


        (iii)  which  are  beneficially  owned,  directly  or indirectly, by any
other  Person  (or any Affiliate or Associate thereof) with which such Person or
any  of such Person's Affiliates or Associates has any agreement, arrangement or
understanding  (whether or not in writing) (other than customary agreements with
and  between  underwriters and selling group members with respect to a bona fide
public  offering  or an offering pursuant to Rule 144A and/or Regulation S under
the Securities Act) for the purpose of acquiring, holding, voting (except to the
extent  contemplated  by the proviso to Section l(c)(ii)(B)) or disposing of any
securities  of  the Company; provided, however, that in no case shall an officer
or  trustee  of the Company be deemed (x) the Beneficial Owner of any securities
beneficially owned by another officer or trustee of the Company solely by reason
of  actions undertaken by such Persons in their capacity as officers or trustees
of  the  Company or (y) the Beneficial Owner of securities held of record by the
trustee  of  any  employee  benefit plan of the Company or any Subsidiary of the
Company  for the benefit of any employee of the Company or any Subsidiary of the
Company, other than the officer or trustee, by reason of any influence that such
officer  or trustee may have over the voting of the securities held in the plan.

     (d)     "BOARD OF TRUSTEES" shall mean the Board of Trustees of the Company
then  in  office.

     (e)     "BUSINESS  DAY" shall mean any day other than a Saturday, Sunday or
a  day  on which banking institutions in the State of Washington or the Province
of  British  Columbia  are  authorized or obligated by law or executive order to
close.

     (f)     "CLOSE  OF  BUSINESS"  on  any  given  date  shall  mean 4:30 p.m.,
Seattle,  Washington time, on such date; provided, however, that if such date is
not  a  Business  Day  it shall mean 4:30 p.m., Seattle, Washington time, on the
next  succeeding  Business  Day.

     (g)     "COMMON  SHARES" when used with reference to the Company shall mean
the shares of beneficial interest of the Company, as authorized in the Company's
Declaration  of  Trust.  "COMMON  SHARES" when used with reference to any Person
other  than  the  Company shall mean the capital stock (or equity interest) with
the  greatest  voting  power  of such other Person or, if such other Person is a
Subsidiary  of  another  Person,  the Person or Persons which ultimately control
such  first-mentioned  Person.

     (h)     "DECLARATION  OF  TRUST"  shall  mean  the  Company's  restated
declaration  of trust dated June 11, 1990, as amended effective January 1, 1992,
July 8, 1993, August 17, 1993 and September 9, 1993, and as further or otherwise
amended,  restated,  or  replaced  from  time  to  time;

                                        3

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     (i)     "DISTRIBUTION  DATE"  shall  mean  the  earlier of (i) the Close of
Business  on the tenth day (or such later date as may be determined by action of
a  majority  of the Board of Trustees) after the Shares Acquisition Date (or, if
the  tenth  day after the Shares Acquisition Date occurs before the Record Date,
the  Close  of Business on the Record Date) or (ii) the Close of Business on the
tenth  day  (or  such later date as may be determined by action of a majority of
the  Board  of  Trustees)  after the date that a tender or exchange offer by any
Person  (other  than  the  Company,  any Subsidiary of the Company, any employee
benefit  plan  of the Company or of any Subsidiary of the Company, or any Person
organized,  appointed or established by the Company for or pursuant to the terms
of any such plan) is first published or sent or given within the meaning of Rule
14d-2(a)  of  the  General  Rules  and  Regulations  under the Exchange Act, if,
assuming  the  successful  consummation  thereof,  such  Person  would  be  the
Beneficial  Owner  of  15%  or more of the aggregate of the Common Shares of the
Company  then  outstanding  and  the  Issuable  Note  Shares.

     (j)     "EQUIVALENT SHARES" shall mean Preferred Shares and any other class
or  series  of  capital  stock of the Company that is entitled to participate in
dividends and other distributions, including distributions upon the liquidation,
dissolution  or  winding  up  of  the  Company, on a proportional basis with the
Common  Shares.  In  calculating the number of any class or series of Equivalent
Shares  for  purposes  of Section 11 of this Agreement, the number of shares, or
fractions  of a share, of such class or series of capital stock that is entitled
to  the same dividend or distribution as a whole Common Share shall be deemed to
be  one  share.

     (k)     "EXCHANGE  ACT"  shall mean the Securities Exchange Act of 1934, as
amended.

     (l)     "EXPIRATION  DATE"  shall  mean  the  earliest  of (i) the Close of
Business  on the Final Expiration Date, (ii) the Redemption Date, (iii) the time
at  which the Board of Trustees orders the exchange of the Rights as provided in
Section  24  of  this  Agreement  or  (iv)  the  consummation  of  a transaction
contemplated  by  Section  13(a)  of  this  Agreement.

     (m)     "FINAL  EXPIRATION  DATE"  shall  mean  December  31,  2005.

     (n)     "ISSUABLE NOTE SHARES" shall mean Common Shares of the Company into
which  the  then  outstanding  Notes  are convertible as if the then outstanding
Notes  had  been  fully  converted;

     (o)     "NASDAQ"  shall  mean  the  Nasdaq  Stock  Market.

     (p)     "NOTES"  shall  mean the 8.5% Convertible Senior Subordinated Notes
due 2010 of the Company issued pursuant to an indenture made between the Company
and Wells Fargo Bank, Minnesota, N.A., as trustee, dated October 10, 2003 (as it
may  be  amended  from  time  to  time).

     (q)     "PERSON"  shall  mean  any  individual,  firm, corporation, limited
liability  company,  partnership,  limited  partnership, trust, joint venture or
other  entity,  and shall include any successor (by merger or otherwise) thereof
or  thereto.

                                        4

<PAGE>

     (r)     "POST TRANSFERREE" shall have the meaning set forth in Section 7(e)
of  this  Agreement.

     (s)     "PREFERRED  SHARES"  shall  mean  shares  of  Series  A  Junior
Participating  Preferred  Stock  of  the  Company.

     (t)     "PRINCIPAL PARTY" shall have the meaning set forth in Section 13(b)
of  this  Agreement.

     (u)     "PRIOR  TRANSFERREE"  shall  have  the meaning set forth in Section
7(e)  of  this  Agreement.

     (v)     "PURCHASE  PRICE"  shall have the meaning set forth in Section 4(a)
of  this  Agreement.

     (w)     "RECORD  DATE"  shall have the meaning set forth in the recitals at
the  beginning  of  this  Agreement.

     (x)     "REDEMPTION  DATE"  shall  mean  the  time  at  which  the Board of
Trustees  orders  redemption  of  the  Rights  as provided in Section 23 of this
Agreement.

     (y)     "REDEMPTION  PRICE"  shall  have  the  meaning set forth in Section
23(a)  of  this  Agreement.

     (z)     "RIGHT"  shall  have  the  meaning set forth in the recitals at the
beginning  of  this  Agreement.

     (aa)     "RIGHTS  CERTIFICATE"  shall have the meaning set forth in Section
3(a)  of  this  Agreement.

     (bb)     "SECTION  13  EVENT" shall mean any event described in clause (i),
(ii)  or  (iii)  of  Section  13(a)  of  this  Agreement.

     (cc)     "SECURITIES  ACT"  shall  mean  the  Securities  Act  of  1933, as
amended.

     (dd)     "SHARES  ACQUISITION  DATE"  shall  mean  the first date of public
announcement  (which,  for  purposes  of this definition, shall include, without
limitation,  a  press  release  or a publicly available report filed pursuant to
Section 13(d) of the Exchange Act) by the Company or an Acquiring Person that an
Acquiring  Person  has  become such; provided that, if such person is determined
not  to  have  become  an  Acquiring  Person  pursuant  to  Section l(a) of this
Agreement,  then  no  Shares  Acquisition Date shall be deemed to have occurred.

     (ee)     "SUBSIDIARY"  of  any  Person  shall  mean  any Person of which an
amount  of  voting  securities  sufficient to elect a majority of the directors,
trustees  or  Persons  having  similar  authority of such Person is beneficially
owned,  directly  or  indirectly,  by  such  Person,  or  any  Person  otherwise
controlled  by  such  Person.

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<PAGE>

     (ff)     "SUMMARY  OF  RIGHTS"  shall have the meaning set forth in Section
3(b)  of  this  Agreement.

     (gg)     "TOTAL EXERCISE PRICE" shall have the meaning set forth in Section
4(a)  of  this  Agreement.

     (hh)     "TRADING DAY" shall have the meaning set forth in Section 11(d) of
this  Agreement.

     (ii)     A  "TRIGGERING  EVENT"  shall  be deemed to have occurred upon any
Person  (other  than  the  Company,  any Subsidiary of the Company, any employee
benefit  plan  of  the  Company  or any Subsidiary of the Company, or any Person
holding  Common  Shares for or pursuant to the terms of any such plan), together
with all Affiliates and Associates of such Person, becoming an Acquiring Person.

     2.     APPOINTMENT  OF RIGHTS AGENT. The Company hereby appoints the Rights
Agent  to  act  as rights agent for the Company in accordance with the terms and
conditions  of  this  Agreement,  and  the  Rights  Agent  hereby  accepts  such
appointment.  The Company may from time to time appoint such co-Rights Agents as
it  may  deem  necessary  or  desirable.  The Rights Agent shall have no duty to
supervise,  and  in  no  event shall be liable for, the acts or omissions of any
such  co-Rights  Agent.

     3.     ISSUANCE  OF  RIGHTS  CERTIFICATES.

     (a)     Until  the  Distribution  Date,  (i)  the  Rights will be evidenced
(subject  to  the provisions of Sections 3(b) and 3(c) of this Agreement) by the
certificates  for  Common  Shares registered in the names of the holders thereof
(which  certificates  shall also be deemed to be Rights Certificates) and not by
separate  Rights  Certificates and (ii) the right to receive Rights Certificates
will  be  transferable  only  in  connection with the transfer of Common Shares.
Until the earlier of the Distribution Date or the Expiration Date, the surrender
for  transfer  of  such certificates for Common Shares shall also constitute the
surrender  for  transfer  of  the  Rights  associated  with  the  Common  Shares
represented  thereby.  As  soon  as practicable after the Distribution Date, the
Company  will  prepare  and  execute, the Rights Agent will countersign, and the
Company  will  send or cause to be sent (and the Rights Agent will, if requested
and  provided  with  all  necessary  information,  send)  by  first-class,
postage-prepaid  mail, to each record holder of Common Shares as of the Close of
Business  on  the  Distribution Date, at the address of such holder shown on the
records  of  the  Company,  a  Rights  Certificate  in substantially the form of
Exhibit  B  to this Agreement (a "RIGHTS CERTIFICATE"), evidencing one Right for
each  Common  Share  so  held,  subject to adjustment as provided herein. In the
event  that an adjustment in the number of Rights per Common Share has been made
pursuant  to Section 11(a)(i), Section 11(i) or Section 11(p) of this Agreement,
then  at  the time of distribution of the Rights Certificates, the Company shall
make  the  necessary  and  appropriate  rounding adjustments (in accordance with
Section  14(a)  of this Agreement) so that Rights Certificates representing only
whole  numbers  of  Rights  are  distributed  and  cash  is  paid in lieu of any
fractional  Rights.  As  of  and after the Distribution Date, the Rights will be
evidenced  solely  by  such  Rights  Certificates  and may be transferred by the
transfer  of  the  Rights Certificates as permitted hereby, separately and apart
from  any  transfer of one or more Common Shares, and the holders of such Rights
Certificates  as  listed  in the records of the Company or any transfer agent or
registrar  for the Rights shall be the

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<PAGE>

record  holders  thereof.  The Company shall promptly notify the Rights Agent in
writing  upon  the occurrence of the Distribution Date and, if such notification
is  given  orally,  the Company shall confirm the same in writing on or prior to
the  next  following  Business  Day. Until such notice is received by the Rights
Agent,  the  Rights  Agent  may  presume  conclusively for all purposes that the
Distribution  Date  has  not  occurred.

     (b)     On  the  Record  Date  or  as  soon  as practicable thereafter, the
Company  will  send  (or  cause  to  be  sent)  a copy of a Summary of Rights in
substantially the form of Exhibit C to this Agreement (the "SUMMARY OF RIGHTS"),
by  first-class, postage-prepaid mail, to each record holder of Common Shares as
of the Close of Business on the Record Date, at the address of such holder shown
on  the  records  of  the  Company.

     (c)     Unless  the  Board  of Trustees, by resolution adopted at or before
the time of the issuance (including pursuant to the exercise of rights under the
Company's benefit plans) of any Common Shares, specifies to the contrary, Rights
shall be issued in respect of all Common Shares that are issued after the Record
Date  but  prior  to the earlier of the Distribution Date or the Expiration Date
or, in certain circumstances provided in Section 22 of this Agreement, after the
Distribution  Date.  Certificates  representing such Common Shares shall also be
deemed  to  be  certificates  for  Rights,  and shall bear the following legend:

This certificate also evidences and entitles the holder hereof to certain rights
("RIGHTS")  as set forth in a Rights Agreement between Mercer International Inc.
("MERCER")  and Computershare Trust Company of Canada, as Rights Agent, dated as
of  December  23,  2003  (the "RIGHTS AGREEMENT"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the principal
executive  offices  of  Mercer. Under certain circumstances, as set forth in the
Rights  Agreement,  such  Rights  will be evidenced by separate certificates and
will  no longer be evidenced by this certificate. Mercer will mail to the holder
of  this certificate a copy of the Rights Agreement without charge after receipt
of  a  written  request  therefor.  Under certain circumstances set forth in the
Rights  Agreement,  Rights  issued  to,  or  held  by, any Person who is, was or
becomes an Acquiring Person or any Affiliate or Associate thereof (as such terms
are  defined in the Rights Agreement), whether currently held by or on behalf of
such  Person  or  by  any  subsequent  holder,  may  become  null  and  void.

With  respect  to  such  certificates containing the foregoing legend, until the
earlier  of  (i)  the  Distribution Date or (ii) the Expiration Date, the Rights
associated  with  the  Common  Shares  represented by such certificates shall be
evidenced by such certificates alone, and the surrender for transfer of any such
certificate shall also constitute the transfer of the Rights associated with the
Common  Shares  represented  thereby. In the event that the Company purchases or
acquires  any  Common Shares after the Record Date but prior to the Distribution
Date, any Rights associated with such Common Shares shall be deemed canceled and
retired  so  that  the  Company  shall  not  be  entitled to exercise any Rights
associated  with  the  Common  Shares  which  are  no  longer  outstanding.

     4.     FORM  OF  RIGHTS  CERTIFICATES.

     (a)     The  Rights  Certificates  (and  the  forms of election to purchase
Preferred  Shares  and of assignment to be printed on the reverse thereof) shall
be  substantially  in  the form of

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<PAGE>

Exhibit  B  to  this  Agreement  and  may  have  such marks of identification or
designation  and  such legends, summaries or endorsements printed thereon as the
Company  may  deem  appropriate  (but  which do not affect the rights, duties or
responsibilities  of  the  Rights  Agent)  and  as are not inconsistent with the
provisions  of  this  Agreement,  or  as  may  be  required  to  comply with any
applicable  law or with any rule or regulation made pursuant thereto or with any
rule  or regulation of Nasdaq or any stock exchange on which the Rights may from
time  to  time  be  listed  or  quoted,  or  to conform to usage. Subject to the
provisions  of  Section  11  and  Section  22  of  this  Agreement,  the  Rights
Certificates,  whenever distributed, shall be dated as of the Record Date (or in
the  case  of  Rights issued with respect to Common Shares issued by the Company
after  the Record Date, as of the date of issuance of such Common Shares), shall
show  the  date of countersignature by the Rights Agent, and on their face shall
entitle  the  holders  thereof  to  purchase  such number of one-hundredths of a
Preferred  Share  as  shall  be set forth therein at the price set forth therein
(such  exercise  price  per  one  one-hundredth  of  a  Preferred  Share  being
hereinafter referred to as the "PURCHASE PRICE" and the aggregate exercise price
of  all  Preferred  Shares issuable upon exercise of one Right being hereinafter
referred  to  as  the  "TOTAL  EXERCISE  PRICE"),  but  the  number  and type of
securities  purchasable  upon  the exercise of each Right and the Purchase Price
shall  be  subject  to  adjustment  as  provided  herein.

     (b)     Any  Rights  Certificate issued pursuant to Section 3(a) or Section
22  of  this  Agreement  that  represents  Rights  beneficially owned by: (i) an
Acquiring  Person  or  any Associate or Affiliate of an Acquiring Person, (ii) a
transferee  of  an  Acquiring Person (or of any such Associate or Affiliate) who
becomes  a  transferee  after  the  Acquiring  Person  becomes  such  or (iii) a
transferee  of  an  Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring Person becoming
such  and receives such Rights pursuant to either (A) a transfer (whether or not
for  consideration)  from the Acquiring Person to holders of equity interests in
such  Acquiring  Person or to any Person with whom such Acquiring Person has any
continuing  agreement,  arrangement or understanding (whether or not in writing)
regarding  the  transferred  Rights or (B) a transfer that the Board of Trustees
has  determined  is  part  of a plan, arrangement or understanding that has as a
primary  purpose  or effect the avoidance of Section 7(e) of this Agreement, and
any  Rights  Certificate  issued  pursuant  to  Section  6 or Section 11 of this
Agreement upon transfer, exchange, replacement or adjustment of any other Rights
Certificate  referred  to  in  this  sentence,  shall contain (to the extent the
Rights  Agent  has  notice  thereof  and  to  the extent feasible) the following
legend:

     The Rights represented by this Rights Certificate are or were beneficially
     owned by a Person who was or became an Acquiring Person or an Affiliate or
     Associate of an Acquiring Person (as such terms are defined in the Rights
     Agreement between Mercer International Inc. and Computershare Trust Company
     of Canada, as Rights Agent, dated as of December 23, 2003 (the "RIGHTS
     AGREEMENT")). Accordingly, this Rights Certificate and the Rights
     represented hereby may become null and void in the circumstances specified
     in Section 7(e) of the Rights Agreement.


     5.     COUNTERSIGNATURE  AND  REGISTRATION.

     (a)     The  Rights Certificates shall be executed on behalf of the Company
by  its Chairman of the Board, its Chief Executive Officer, its President or any
Vice  President, either manually or by facsimile signature, and by the Secretary
or  an  Assistant  Secretary  of  the  Company,  either manually or by facsimile
signature,  and  shall  have  affixed  thereto  the

                                        8

<PAGE>

Company's seal (if any) or a facsimile thereof. The Rights Certificates shall be
manually  countersigned  by  the  Rights  Agent  and  shall not be valid for any
purpose  unless countersigned. In case any officer of the Company who shall have
signed  any  of  the  Rights  Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and issuance and delivery by
the  Company, such Rights Certificates nevertheless, may be countersigned by the
Rights  Agent  and  issued  and delivered by the Company with the same force and
effect  as  though the Person who signed such Rights Certificates had not ceased
to  be  such officer of the Company; and any Rights Certificate may be signed on
behalf  of the Company by any Person who, at the actual date of the execution of
such  Rights  Certificate, shall be a proper officer of the Company to sign such
Rights  Certificate, although at the date of the execution of this Agreement any
such  Person  was  not  such  an  officer.

     (b)     Following  the  Distribution  Date,  receipt by the Rights Agent of
notice  to that effect and all other relevant information referred to in Section
3(a)  of  this Agreement, the Rights Agent will keep or cause to be kept, at its
office  designated  for such purpose, books for registration and transfer of the
Rights  Certificates  issued  hereunder.  Such  books  shall  show the names and
addresses  of  the  respective holders of the Rights Certificates, the number of
Rights  evidenced on its face by each of the Rights Certificates and the date of
each  of  the  Rights  Certificates.

     6.     TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS CERTIFICATES;
MUTILATED,  DESTROYED,  LOST  OR  STOLEN  RIGHTS  CERTIFICATES.

     (a)     Subject  to  the  provisions  of  Sections  7(e), 14 and 24 of this
Agreement, at any time after the Close of Business on the Distribution Date, and
at  or  prior  to  the  Close  of  Business  on  the Expiration Date, any Rights
Certificate  or Rights Certificates (other than Rights Certificates representing
Rights  that  have  become null and void pursuant to Section 7(e) hereof or that
have been exchanged pursuant to Section 24 hereof) may be transferred, split up,
combined  or  exchanged  for  another Rights Certificate or Rights Certificates,
entitling the registered holder to purchase a like number of one-hundredths of a
Preferred  Share  (or,  following  a  Triggering  Event,  Common  Shares,  other
securities,  cash or other assets, as the case may be) as the Rights Certificate
or  Rights  Certificates  surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any Rights
Certificate  or Rights Certificates shall make such request in writing delivered
to  the  Rights  Agent,  and  shall  surrender  the Rights Certificate or Rights
Certificates to be transferred, split up, combined or exchanged at the office of
the  Rights  Agent designated for such purpose. Neither the Rights Agent nor the
Company  shall  be  obligated  to take any action whatsoever with respect to the
transfer of any such surrendered Rights Certificate or Rights Certificates until
the  registered holder shall have completed and signed the certificate contained
in  the  form  of  assignment on the reverse side of such Rights Certificate and
shall  have  provided such additional evidence of the identity of the Beneficial
Owner  (or  former  Beneficial Owner) or Affiliates or Associates thereof as the
Company or the Rights Agent shall reasonably request. Thereupon the Rights Agent
shall,  subject  to  Sections 7(e), 14 and 24 of this Agreement, countersign and
deliver  to  the  Person  entitled  thereto  a  Rights  Certificate  or  Rights
Certificates,  as  the  case  may  be,  as so requested. The Company may require
payment from the holders of Rights Certificates of a sum sufficient to cover any
tax  or governmental charge that may be imposed in connection with any transfer,
split up, combination or exchange of Rights Certificates. The Rights Agent shall
have  no  duty  or  obligation  to  take  any  action  under any Section of this
Agreement  which requires the payment by

                                        9

<PAGE>

a  Rights  holder  of applicable taxes and governmental charges unless and until
the Rights Agent is satisfied that all such taxes and/or charges have been paid.

     (b)     Upon  receipt  by  the  Company  and  the  Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a  Rights  Certificate, and, in case of loss, theft or destruction, of indemnity
or  security  satisfactory  to  them,  and,  at  the Company's or Rights Agent's
request,  reimbursement  to  the  Company and the Rights Agent of all reasonable
expenses  incidental  thereto,  and  upon  surrender  to  the  Rights  Agent and
cancellation  of  the Rights Certificate if mutilated, the Company will make and
deliver  a  new  Rights  Certificate  of  like  tenor  to  the  Rights Agent for
countersignature  and  delivery  to  the registered holder in lieu of the Rights
Certificate  so  lost,  stolen,  destroyed  or  mutilated.

     7.     EXERCISE  OF  RIGHTS;  PURCHASE  PRICE;  EXPIRATION  DATE OF RIGHTS.

     (a)     Subject  to  Sections  7(e),  23(b)  or  24  of this Agreement, the
registered  holder  of  any Rights Certificate may exercise the Rights evidenced
thereby  (except  as  otherwise provided herein) in whole or in part at any time
after  the  Distribution Date upon surrender of the Rights Certificate, with the
form  of  election  to  purchase  on  the reverse side thereof duly executed and
properly  completed,  to  the  Rights  Agent  at  the office of the Rights Agent
designated  for  such  purpose,  together with payment of the Purchase Price for
each  one-hundredth  of  a Preferred Share as to which the Rights are exercised,
and  an amount equal to any tax or charge required to be paid under Section 9(e)
hereof,  at  or  prior  to  the  Expiration  Date.

     (b)     The  Purchase  Price  for  each  one-hundredth of a Preferred Share
issuable pursuant to the exercise of a Right shall initially be $75.00, shall be
subject  to  adjustment  from  time to time as provided in Sections 11 and 13 of
this  Agreement  and  shall  be  payable in lawful money of the United States of
America  in  accordance  with  paragraph  (c)  below.

     (c)     Upon  receipt  of  a  Rights  Certificate  representing exercisable
Rights,  with  the  form  of  election  to  purchase  duly executed and properly
completed,  accompanied  by  payment  of  the  Purchase  Price for the number of
one-hundredths  of  a  Preferred  Share (or Common Shares or other securities or
property,  as  the  case  may  be)  to  be  purchased and an amount equal to any
applicable  tax  or  charge  required  to  be  paid by the holder of such Rights
Certificate  in  cash,  or  by certified check or cashier's check payable to the
order  of  the Company, the Rights Agent shall, subject to Section 20(k) of this
Agreement, thereupon promptly (i) (A) requisition from any transfer agent of the
Preferred  Shares  (or make available, if the Rights Agent is the transfer agent
for  the  Preferred  Shares)  a  certificate  or  certificates for the number of
one-hundredths  of  a  Preferred  Share  to  be purchased and the Company hereby
irrevocably  authorizes  its  transfer agent to comply with all such requests or
(B)  if  the  Company  shall  have  elected  to  deposit  the  total  number  of
one-hundredths  of  a  Preferred  Share  issuable  upon  exercise  of the Rights
hereunder  with  a  depository  agent,  requisition from the depository agent of
depository  receipts  representing  such number of one-hundredths of a Preferred
Share  as  are  to  be  purchased  (in which case certificates for the Preferred
Shares  represented  by  such  receipts shall be deposited by the transfer agent
with  the  depository agent) and the Company hereby directs the depository agent
to comply with such request, (ii) when appropriate, requisition from the Company
the  amount  of  cash  to  be  paid  in lieu of issuance of fractional shares in
accordance  with  Section  14  of  this  Agreement,  (iii) after receipt of such
certificates  or  depository receipts, cause the same to be delivered to or upon
the  order  of  the  registered holder of such Rights Certificate,  registered
in  such  name  or  names as

                                       10

<PAGE>

may  be  designated  by  such  holder  and  (iv) when appropriate, after receipt
thereof, deliver such cash to or upon the order of the registered holder of such
Rights  Certificate.  In  the event that the Company is obligated to issue other
securities  (including Common Shares) of the Company, pay cash and/or distribute
other  property  pursuant  to  Section 11(a) of this Agreement, the Company will
make all arrangements necessary so that such other securities, cash and/or other
property  are  available  for  distribution  by  the  Rights  Agent, if and when
appropriate.

     (d)     In  case  the  registered  holder  of  any Rights Certificate shall
exercise  less  than  all the Rights evidenced thereby, a new Rights Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by  the  Rights  Agent to the registered holder of such Rights Certificate or to
such  registered  holder's duly authorized assigns, subject to the provisions of
Section  14  of  this  Agreement.

     (e)     Notwithstanding  anything  in  this Agreement to the contrary, from
and  after the first occurrence of a Triggering Event or a Section 13 Event, any
Rights  beneficially  owned  by  (i)  an  Acquiring  Person  or  an Associate or
Affiliate  of  an Acquiring Person, (ii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) who becomes a transferee after the Acquiring
Person  becomes  such  (a "POST TRANSFEREE"), (iii) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee prior to
or concurrently with the Acquiring Person becoming such and receives such Rights
pursuant  to  either  (A) a transfer (whether or not for consideration) from the
Acquiring  Person  to holders of equity interests in such Acquiring Person or to
any  Person  with  whom  the  Acquiring  Person  has  any  continuing agreement,
arrangement  or  understanding  (whether  or  not  in  writing)  regarding  the
transferred  Rights or (B) a transfer which the Board of Trustees has determined
is  part  of a plan, arrangement or understanding which has as a primary purpose
or  effect the avoidance of this Section 7(e) (a "PRIOR TRANSFEREE") or (iv) any
subsequent  transferee  receiving transferred Rights from a Post Transferee or a
Prior  Transferee,  either  directly  or  through  one  or  more  intermediate
transferees, shall become null and void without any further action and no holder
of  such  Rights shall have any rights whatsoever with respect to such Rights or
any  Rights  Certificate which formerly evidenced such Rights, whether under any
provision of this Agreement or otherwise, and neither the Company nor the Rights
Agent  shall  have any obligations whatsoever with respect to such Rights or any
Rights  Certificate, whether under any provision of this Agreement or otherwise.
The  Company  shall  use all reasonable efforts to ensure that the provisions of
this  Section  7(e)  and  Section  4(b) of this Agreement are complied with, but
neither  the Company nor the Rights Agent shall have any liability to any holder
of  Rights Certificates or to any other Person as a result of the Company making
or failing to make any determinations with respect to an Acquiring Person or any
of  such  Acquiring  Person's Affiliates, Associates or transferees hereunder or
taking  or  failing  to  take  any  actions with respect to any Rights or Rights
Certificates  of  any  such  Person.

     (f)     Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company shall be obligated to undertake any action with
respect  to a registered holder upon the occurrence of any purported exercise as
set  forth  in  this  Section  7  unless  such  registered holder shall have (i)
properly  completed  and  duly executed the certificate contained in the form of
election  to  purchase  set  forth on the reverse side of the Rights Certificate
surrendered  for such exercise and (ii) provided such additional evidence of the
identity  of the Beneficial Owner (or former Beneficial Owner) and/or Affiliates
and  Associates  thereof  as  the  Company  or  the  Rights Agent shall require.

                                       11

<PAGE>

     8.     CANCELLATION  AND  DESTRUCTION  OF  RIGHTS CERTIFICATES.  All Rights
Certificates  surrendered  for  the  purpose  of  exercise,  transfer, split up,
combination  or  exchange  shall, if surrendered to the Company or to any of its
agents,  be  delivered to the Rights Agent for cancellation or in canceled form,
or,  if  surrendered to the Rights Agent, shall be canceled by it, and no Rights
Certificates  shall  be  issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent  for cancellation and retirement, and the Rights Agent shall so cancel and
retire,  any  other  Rights  Certificate  purchased  or  acquired by the Company
otherwise  than  upon  the  exercise thereof. The Rights Agent shall deliver all
canceled Rights Certificates to the Company, or shall, at the written request of
the  Company,  destroy such canceled Rights Certificates, and in such case shall
deliver  a  certificate  of  destruction  thereof  to  the  Company.

     9.     RESERVATION  AND  AVAILABILITY  OF  PREFERRED  SHARES.

     (a)     The  Company covenants and agrees that it will use its best efforts
to  cause  to  be  reserved  and  kept available out of and to the extent of its
authorized  and  unissued  shares  of  preferred  stock not reserved for another
purpose  (and,  following  the  occurrence  of  a  Triggering  Event, out of its
authorized  and  unissued  Common Shares and/or other securities), the number of
Preferred  Shares (and, following the occurrence of the Triggering Event, Common
Shares  and/or  other securities) that will be sufficient to permit the exercise
in  full  of  all  outstanding  Rights.

     (b)     If  the  Company  shall  hereafter  list  or have quoted any of its
Preferred Shares on a national securities exchange or on Nasdaq, then so long as
the  Preferred  Shares  (and,  following  the  occurrence of a Triggering Event,
Common Shares and/or other securities) issuable and deliverable upon exercise of
the  Rights may be listed or quoted on a national securities exchange or Nasdaq,
the  Company shall use its reasonable best efforts to cause, from and after such
time  as  the  Rights  become  exercisable  (but  only  to the extent that it is
reasonably  likely  that  the Rights will be exercised), all shares reserved for
such  issuance  to  be listed on such exchange or quoted on Nasdaq upon official
notice  of  issuance  upon  such  exercise.

     (c)     The  Company  shall use its reasonable best efforts to (i) file, as
soon  as practicable following the earliest date after the first occurrence of a
Triggering  Event in which the consideration to be delivered by the Company upon
exercise of the Rights has been determined in accordance with Sections 11(a)(ii)
or  11(a)(iii) of this Agreement, or as soon as is required by law following the
Distribution  Date,  as  the  case  may  be,  a registration statement under the
Securities  Act  with respect to the securities purchasable upon exercise of the
Rights  on an appropriate form, (ii) cause such registration statement to become
effective  as  soon  as  practicable  after  such  filing  and  (iii) cause such
registration  statement  to  remain  effective  (with  a prospectus at all times
meeting  the  requirements  of  the Securities Act) until the earlier of (A) the
date  as  of  which the Rights are no longer exercisable for such securities and
(B)  the  Expiration Date. The Company may temporarily suspend, for a period not
to  exceed  one hundred and twenty (120) days after the date set forth in clause
(i) of the first sentence of this Section 9(c), the exercisability of the Rights
in order to prepare and file such registration statement and permit it to become
effective.  Upon  any  such  suspension,  the  Company  shall  issue  a  public
announcement  stating,  and  notify  the  Rights  Agent  in  writing,  that  the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement  and  written  notification to the Rights Agent at such time as the
suspension  is  no  longer  in  effect.  The  Company  will  also  take  such

                                       12

<PAGE>

action as may be appropriate under, or to ensure compliance with, the securities
or  "blue  sky"  laws of the various states and provinces in connection with the
exercisability of the Rights. Notwithstanding any provision of this Agreement to
the  contrary,  the  Rights shall not be exercisable in any jurisdiction, unless
the requisite qualification in such jurisdiction shall have been obtained, or an
exemption  therefrom  shall be available, and until a registration statement has
been  declared  effective.

     (d)     The  Company covenants and agrees that it will take all such action
as  may  be  necessary  to  ensure that all Preferred Shares (and, following the
occurrence  of  a  Triggering  Event,  Common  Shares  and/or  other securities)
delivered  upon  exercise  of  Rights  shall,  at  the  time  of delivery of the
certificates  for  such  Preferred  Shares  (subject  to payment of the Purchase
Price),  be  duly  and  validly  authorized  and  issued  and  fully  paid  and
nonassessable  shares.

     (e)     The  Company further covenants and agrees that it will pay when due
and  payable  any and all taxes and governmental charges which may be payable in
respect  of  the  issuance  or  delivery  of  the  Rights Certificates or of any
Preferred Shares upon the exercise of Rights. The Company shall not, however, be
required  to  pay  any  tax  or  charge  which  may be payable in respect of any
transfer  or  delivery  of  Rights  Certificates  to a Person other than, or the
issuance  or  delivery  of certificates or depository receipts for the Preferred
Shares  in  a  name  other  than  that  of,  the registered holder of the Rights
Certificate evidencing Rights surrendered for exercise or to issue or to deliver
any  certificates  or depository receipts for Preferred Shares upon the exercise
of any Rights until any such tax or charge shall have been paid (any such tax or
charge  being  payable  by  the holder of such Rights Certificate at the time of
surrender)  or  until  it  has  been  established to the Company's or the Rights
Agent's  satisfaction  that  no  such  tax  or  charge  is  due.

     10.     PREFERRED  SHARES  RECORD  DATE.  Each  Person  in  whose  name any
certificate  for  a  number  of  one-hundredths  of a Preferred Share (or Common
Shares  and/or  securities  as  the  case may be) is issued upon the exercise of
Rights  shall  for all purposes be deemed to have become the holder of record of
Preferred  Shares  (or  Common  Shares  and/or  securities  as  the case may be)
represented thereby on, and such certificate shall be dated, the date upon which
the  Rights  Certificate evidencing such Rights was duly surrendered and payment
of  the Purchase Price multiplied by the number of one-hundredths of a Preferred
Share  (or  Common  Shares and/or securities as the case may be) with respect to
which  the  Rights have been exercised (and any applicable taxes or governmental
charges)  was  made;  provided,  however, that if the date of such surrender and
payment  is  a  date  upon  which  the Preferred Shares (or Common Shares and/or
securities  as  the  case may be) transfer books of the Company are closed, such
Person  shall  be deemed to have become the record holder of such shares on, and
such  certificate  shall be dated, the next succeeding Business Day on which the
Preferred  Shares  (or  Common  Shares  and/or  securities  as  the case may be)
transfer  books  of  the  Company  are open. Prior to the exercise of the Rights
evidenced  thereby,  the holder of a Rights Certificate shall not be entitled to
any  rights  of  a  stockholder of the Company with respect to shares (including
Preferred  Shares) for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions or to
exercise  any preemptive rights, and shall not be entitled to receive any notice
of  any  proceedings  of  the  Company,  except  as  provided  herein.

     11.     ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER OF RIGHTS.
The  Purchase  Price, the number and kind of shares or other property covered by
each  Right  and the

                                       13

<PAGE>

number of Rights outstanding are subject to adjustment from
time  to  time  as  provided  in  this  Section  11.

     (a)     (i)  In  the  event the Company shall at any time after the date of
this  Agreement  (A)  declare  a dividend on the Common Shares payable in Common
Shares, (B) subdivide the outstanding Common Shares, (C) combine the outstanding
Common  Shares  (by  reverse  stock split or otherwise) into a smaller number of
Common  Shares,  or  (D)  issue  any  shares  of  its  capital  stock  in  a
reclassification  of  the  Common Shares (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
or  surviving  corporation),  then,  in  each  such  event,  except as otherwise
provided  in  this Section 11(a) and Section 7(e) of this Agreement: (1) each of
the  Rights  outstanding at the time of the record date for such dividend or the
effective  date  of  such  subdivision, combination or reclassification shall be
proportionately adjusted to that number of Rights (calculated to the nearest one
one-thousandth (1/1,000) of a Right) equal to a fraction (the "EXCHANGE RATIO"),
the  numerator  of which shall be the total number of Common Shares or shares of
capital  stock  issued  in  such  dividend,  subdivision,  combination  or
reclassification  of  the  Common  Shares outstanding immediately following such
dividend,  subdivision,  combination  or reclassification and the denominator of
which  shall  be the total number of Common Shares outstanding immediately prior
to  such  time,  and  the  number of Rights that shall thereafter be issued with
respect  to  each  Common  Share or share of such other capital stock that shall
become  outstanding  thereafter prior to the Distribution Date shall be equal to
the total number of outstanding Rights immediately after such event (as adjusted
pursuant  to  this clause (1)) divided by the total number of outstanding Common
Shares  or  shares  of  such  other  capital  stock immediately after such event
(subject  to  further  adjustment pursuant to the provisions of this Agreement);
(2)  the  Purchase  Price  in  effect  at  the  time of the record date for such
dividend  or  of  the  effective  date  of  such  subdivision,  combination  or
reclassification  shall  be adjusted so that the Purchase Price thereafter shall
equal  the  result obtained by dividing the Purchase Price in effect immediately
prior  to  such  time by the Exchange Ratio; provided, however, that in no event
shall  the  consideration to be paid upon the exercise of one Right be less than
the  aggregate  par value of the shares of capital stock of the Company issuable
upon exercise of such Right; and (3) the number of Preferred Shares or shares of
such  other  capital stock issuable upon the exercise of each Right shall remain
unchanged immediately after such event, but, in the event of a reclassification,
the  kind  of  shares issuable upon the exercise of each Right immediately after
such  reclassification  shall be adjusted to be the kind of shares of such other
capital  stock issued in such reclassification, rather than Preferred Shares. If
an  event  occurs  which  would  require  an  adjustment under both this Section
11(a)(i) and Section 11(a)(ii) of this Agreement, the adjustment provided for in
this  Section  11(a)(i) shall be in addition to, and shall be made prior to, any
adjustment  required  pursuant  to  Section  11(a)(ii)  of  this  Agreement.

     (ii)     Subject to Section 24 of this Agreement, in the event a Triggering
Event shall have occurred, then promptly following such Triggering Event, proper
provision  shall  be  made so that each holder of a Right, except as provided in
Section  7(e)  of this Agreement, shall thereafter have the right to receive for
each Right, upon exercise thereof in accordance with the terms of this Agreement
and  payment  of  the  then-current Total Exercise Price, in lieu of a number of
one-hundredths of a Preferred Share, such number of Common Shares of the Company
as  shall  equal  the  result  obtained by multiplying the then-current Purchase
Price  by  the  then  number  of one-hundredths of a Preferred Share for which a
Right  was  exercisable (or would have been exercisable if the Distribution Date
had  occurred)  immediately  prior  to  the  first

                                       14

<PAGE>

occurrence  of  a  Triggering  Event,  and  dividing  that product by 50% of the
current  per  share  market  price (determined pursuant to Section 11(d) of this
Agreement)  for  Common Shares on the date of occurrence of the Triggering Event
(such  number  of  shares  being  hereinafter  referred  to  as  the "ADJUSTMENT
SHARES").  The Company shall notify the Rights Agent when this Section 11(a)(ii)
applies.

(iii)     In  lieu of issuing Common Shares in accordance with Section 11(a)(ii)
of  this  Agreement,  the  Company may, if the Board of Trustees determines that
such  action  is  necessary  or  appropriate and not contrary to the interest of
holders  of Rights (and, in the event that the number of Common Shares which are
authorized by the Company's Declaration of Trust but not outstanding or reserved
for  issuance  for  purposes  other  than  upon  exercise  of the Rights are not
sufficient  to  permit  the  exercise in full of the Rights, the Company shall):
(A) determine the excess of (1) the value of the Common Shares issuable upon the
exercise  of  a  Right  (the  "CURRENT VALUE") over (2) the Purchase Price (such
excess,  the  "SPREAD")  and  (B)  with  respect  to  each  Right, make adequate
provision to substitute for such Common Shares, upon exercise of the Rights, (1)
cash,  (2) a reduction in the Purchase Price, (3) other equity securities of the
Company  (including, without limitation, shares or units of shares of any series
of preferred stock which the Board of Trustees has deemed to have the same value
as  Common  Shares (such shares or units of shares of Preferred Stock are herein
called  "COMMON  STOCK  EQUIVALENTS"),  (4)  debt securities of the Company, (5)
other  assets or (6) any combination of the foregoing, having an aggregate value
equal  to  the  Current Value, where such aggregate value has been determined by
the  Board  of  Trustees  based  upon  the  advice of an investment banking firm
selected  by  the Board of Trustees (which determination shall be described in a
statement filed with the Rights Agent and shall be conclusive and binding on the
Rights  Agent,  the  holders  of  the  Rights  and all other Persons); provided,
however,  if the Company shall not have made adequate provision to deliver value
pursuant  to clause (B) above within thirty (30) days following the later of (x)
the  first  occurrence  of  a  Triggering  Event  and  (y) the date on which the
Company's  right  of  redemption pursuant to Section 23(a) expires (the later of
(x)  and  (y) being referred to herein as the "SECTION 11(A)(II) TRIGGER DATE"),
then  the Company shall be obligated to deliver, upon the surrender for exercise
of  a  Right  and without requiring payment of the Purchase Price, Common Shares
(to  the  extent  available),  and then, if necessary, cash, which shares and/or
cash have an aggregate value equal to the Spread. If the Board of Trustees shall
determine  in  good  faith  that  it is likely that sufficient additional Common
Shares  could  be authorized for issuance upon exercise in full of the Rights or
that  any  necessary regulatory approval for such issuance will be obtained, the
thirty  (30)  day period set forth above may be extended to the extent necessary
(with prompt written notice of such extension to the Rights Agent), but not more
than  ninety  (90)  days after the Section 11(a)(ii) Trigger Date, in order that
the  Company  may  seek  shareholder  approval  for  the  authorization  of such
additional  shares  or  take  action  to  obtain  such regulatory approval (such
period,  as  it  may be extended, the "SUBSTITUTION PERIOD"). To the extent that
the  Company  determines  that  some  action need be taken pursuant to the first
and/or  second  sentences  of  this  Section  11(a)(iii),  the Company (x) shall
provide, subject to Section 7(e) of this Agreement, that such action shall apply
uniformly  to  all  outstanding Rights and (y) may suspend the exercisability of
the  Rights until the expiration of the Substitution Period in order to seek any
authorization  of  additional  shares, to take any action to obtain any required
regulatory  approval and/or to decide the appropriate form of distribution to be
made  pursuant to such first sentence and to determine the value thereof. In the
event  of  any  such  suspension,  the Company shall issue a public announcement
stating,  and notify the Rights Agent in writing, that the exercisability of the
Rights  has  been  temporarily  suspended,  as well as a public announcement and
written  notification  to  the

                                       15

<PAGE>

Rights Agent at such time as the suspension is no longer in effect. For purposes
of  this Section 11(a)(iii), the value of the Common Shares shall be the current
per  share  market  price  (as  determined  pursuant  to  Section  11(d) of this
Agreement)  of  the  Common Shares on the Section 11(a)(ii) Trigger Date and the
value of any "common stock equivalent" shall be deemed to have the same value as
the  Common  Shares  on  such  date.


(b)     In case the Company shall, at any time after the date of this Agreement,
fix a record date for the issuance of rights, options or warrants to all holders
of  Common  Shares or of any class or series of Equivalent Shares entitling such
holders  (for  a period expiring within forty-five (45) calendar days after such
record  date) to subscribe for or purchase Common Shares or Equivalent Shares or
securities  convertible  into  Common Shares or Equivalent Shares at a price per
share (or having a conversion price per share, if a security is convertible into
Common  Shares or Equivalent Shares) less than the then current per share market
price  (as  defined  in Section 11(d) hereof) of the Common Shares or Equivalent
Shares on such record date, then, in each such case, the Purchase Price to be in
effect  after  such  record date shall be determined by multiplying the Purchase
Price  in  effect  immediately  prior  to  such  record  date by a fraction, the
numerator  of  which  shall be the number of Common Shares and Equivalent Shares
(if  any)  outstanding  on such record date, plus the number of Common Shares or
Equivalent Shares, as the case may be, which the aggregate offering price of the
total number of Common Shares or Equivalent Shares, as the case may be, so to be
offered  (and/or  the  aggregate  initial  conversion  price  of the convertible
securities  so  to  be  offered) would purchase at such current per share market
price,  and  the  denominator  of which shall be the number of Common Shares and
Equivalent  Shares  (if any) outstanding on such record date, plus the number of
additional Common Shares or Equivalent Shares, as the case may be, to be offered
for  subscription or purchase (or into which the convertible securities so to be
offered  are initially convertible). In case such subscription price may be paid
in  consideration  part  or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board of
Trustees,  whose  determination shall be described in a statement filed with the
Rights  Agent  and  shall  be  conclusive  and  binding on the Rights Agent, the
holders of the Rights and all other Persons. Common Shares and Equivalent Shares
owned  by or held for the account of the Company shall not be deemed outstanding
for  the  purpose  of  any  such  computation.  Such  adjustment  shall  be made
successively  whenever  such  a record date is fixed, and in the event that such
rights,  options  or  warrants  are  not  so issued, the Purchase Price shall be
adjusted  to  be the Purchase Price which would then be in effect if such record
date  had  not  been  fixed.

     (c)     In  case  the  Company  shall,  at  any time after the date of this
Agreement,  fix a record date for the making of a distribution to all holders of
the  Common Shares or of any class or series of Equivalent Shares (including any
such distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or  assets  (other than a regular quarterly cash dividend, if any, or a dividend
payable in Common Shares) or subscription rights, options or warrants (excluding
those  referred  to  in  Section  11(b)  hereof),  then,  in each such case, the
Purchase  Price  to  be  in effect after such record date shall be determined by
multiplying  the  Purchase Price in effect immediately prior to such record date
by  a  fraction,  the  numerator  of which shall be the current per share market
price  (as  determined  pursuant to Section 11(d) of this Agreement) of a Common
Share or an Equivalent Share on such record date, less the fair market value (as
determined  in good faith by the Board of Trustees, whose determination shall be
described in a statement filed with the Rights Agent and shall be conclusive and
binding on the Rights Agent, the holders of

                                       16

<PAGE>

the  Rights  and  all  other  Persons)  of  the  portion  of the cash, assets or
evidences  of  indebtedness so to be distributed or of such subscription rights,
options  or  warrants  applicable  to a Common Share or Equivalent Share, as the
case may be, and the denominator of which shall be such current per share market
price  of  a  Common  Share  or  Equivalent  Share  on  such  record  date. Such
adjustments shall be made successively whenever such a record date is fixed, and
in  the event that such distribution is not so made, the Purchase Price shall be
adjusted to be the Purchase Price which would have been in effect if such record
date  had  not  been  fixed.

     (d)     For  the  purpose  of  any  computation  hereunder,  other  than
computations made pursuant to Section 11(a)(iii) of this Agreement, the "current
per  share  market  price" of any security (a "SECURITY" for the purpose of this
Section  11(d))  on  any  date  shall  be  deemed to be the average of the daily
closing  prices  per  share  of  such  Security  for the thirty (30) consecutive
Trading  Days immediately prior to but not including such date, and for purposes
of  computations  made  pursuant  to  Section  11(a)(iii) of this Agreement, the
"current  per share market price" of any Security on any date shall be deemed to
be  the  average  of the daily closing prices per share of such Security for the
ten  (10)  consecutive  Trading Days immediately prior to but not including such
date;  provided,  however,  that  in the event that the current per share market
price  of  the Security is determined during a period following the announcement
by  the  issuer  of  such  Security  of  (i)  a dividend or distribution on such
Security  payable in shares of such Security or securities convertible into such
shares  or  (ii)  any  subdivision,  combination  or  reclassification  of  such
Security,  and  prior to the expiration of the requisite thirty (30) Trading Day
or  ten (10) Trading Day period, after the ex-dividend date for such dividend or
distribution,  or  the  record  date  for  such  subdivision,  combination  or
reclassification,  then,  and  in  each  such case, the current per share market
price  shall  be  appropriately adjusted to reflect the current market price per
share  equivalent  of such Security. The closing price for each day shall be the
last  sale price, regular way, or, in case no such sale takes place on such day,
the  average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to  securities listed on the principal national securities exchange on which the
Security  is  listed or admitted to trading or, if the Security is not listed or
admitted to trading on any national securities exchange, the last sale price or,
if  such  last  sale  price is not reported, the average of the high bid and low
asked  prices  on  Nasdaq, as reported by the National Association of Securities
Dealers, Inc. Automated Quotations System or, if the security is not quoted, the
last  sale price or, if such last sale price is not reported, the average of the
high bid and low asked prices on the Toronto Stock Exchange, or, if the security
is  not quoted, the last sale price or, if such last sale price is not reported,
the  average  of  the  high  bid  and  low  asked prices on the Over-the-Counter
Bulletin  Board  of the National Association of Securities Dealers, Inc. or such
other  system then in use, or, if on any such date the Security is not quoted by
any  such  organization,  the  average  of  the  closing bid and asked prices as
furnished  by  a  professional  market  maker  making  a  market in the Security
selected by the Board of Trustees. If on any such date no market maker is making
a  market  in  the  Common Shares, the fair value of such shares on such date as
determined  in good faith by the Board of Trustees (which determination shall be
described in a statement filed with the Rights Agent and shall be conclusive and
binding  on  the  Rights Agent, the holders of the Rights and all other Persons)
shall  be  used.  The term "TRADING DAY" shall mean a day on which the principal
national  securities  exchange  on  which  the Security is listed or admitted to
trading  is  open  for  the  transaction  of business or, if the Security is not
listed  or  admitted  to trading on any national securities exchange, a Business
Day. If the Common Shares are not publicly held or so listed or traded, "current
per  share  market  price"  shall mean the fair value per share as determined in
good  faith  by  the  Board  of  Trustees,  whose  determination  shall

                                       17

<PAGE>

be  described in a statement filed with the Rights Agent and shall be conclusive
and  binding  for  all  purposes.


     (e)     Anything  herein  to the contrary notwithstanding, no adjustment in
the  Purchase  Price  shall  be required unless such adjustment would require an
increase  or  decrease  of at least 1% in the Purchase Price; provided, however,
that  any  adjustments which by reason of this Section 11(e) are not required to
be  made  shall  be  carried  forward  and  taken into account in any subsequent
adjustment.  All calculations under this Section 11 shall be made to the nearest
cent  or  to  the nearest ten-thousandth of a Common Share or other share or one
ten-thousandth  of  a  Preferred  Share, as the case may be. Notwithstanding the
first sentence of this Section 11(e), any adjustment required by this Section 11
shall  be made no later than the earlier of (i) three (3) years from the date of
the  transaction  which  requires  such  adjustment or (ii) the Expiration Date.

     (f)     If  as a result of an adjustment made pursuant to Sections 11(a) or
13(a)  of  this  Agreement,  the  holder of any Right thereafter exercised shall
become  entitled  to  receive  any  shares of capital stock other than Preferred
Shares,  thereafter  the number of such other shares so receivable upon exercise
of  any  Right  and if required, the Purchase Price thereof, shall be subject to
adjustment  from  time  to time in a manner and on terms as nearly equivalent as
practicable  to  the  provisions  with respect to the Common Shares contained in
Sections  11(a),  (b),  (c),  (e),  (h),  (i),  (j),  (k),  (1) and (m), and the
provisions  of Sections 7, 9, 10, 13 and 14 with respect to the Preferred Shares
shall  apply  on  like  terms  to  any  such  other  shares.

     (g)     All  Rights  originally  issued  by  the  Company subsequent to any
adjustment  made  to  the  Purchase  Price hereunder shall evidence the right to
purchase,  at  the  adjusted  Purchase  Price, the number of one-hundredths of a
Preferred  Share  purchasable  from  time to time hereunder upon exercise of the
Rights,  all  subject  to  further  adjustment  as  provided  herein.

     (h)     Unless the Company shall have exercised its election as provided in
Section  11(i),  upon  each  adjustment of the Purchase Price as a result of the
calculations  made in Section 11(b), each Right outstanding immediately prior to
the  making  of such adjustment shall thereafter evidence the right to purchase,
at  the  adjusted Purchase Price, that number of Preferred Shares (calculated to
the  nearest  one ten-thousandth of a share) obtained by (i) multiplying (x) the
number  of  Preferred  Shares  covered  by  a  Right  immediately  prior to this
adjustment,  by  (y)  the  Purchase  Price  in  effect immediately prior to such
adjustment  of  the Purchase Price, and (ii) dividing the product so obtained by
the  Purchase  Price in effect immediately after such adjustment of the Purchase
Price.

     (i)     The Company may elect on or after the date of any adjustment of the
Purchase  Price  as a result of the calculations made in Section 11(b) to adjust
the  number  of  Rights,  in  substitution  for  any adjustment in the number of
Preferred  Shares  purchasable  upon the exercise of a Right. Each of the Rights
outstanding  after  such adjustment of the number of Rights shall be exercisable
for  the  number  of  one-hundredths  of a Preferred Share for which a Right was
exercisable  immediately  prior  to  such  adjustment. Each Right held of record
prior  to  such  adjustment  of the number of Rights shall become that number of
Rights  (calculated  to  the  nearest  ten-hundredth)  obtained  by dividing the
Purchase  Price  in effect immediately prior to adjustment of the Purchase Price
by  the  Purchase  Price  in effect immediately after adjustment of the Purchase
Price.  The  Company  shall make a public announcement of its election to adjust
the  number  of  Rights,  indicating the record date for the adjustment, and, if
known  at  the  time,  the

                                       18

<PAGE>

amount  of the adjustment to be made, and shall promptly give the Rights Agent a
copy  of  such  announcement.  This  record  date  may  be the date on which the
Purchase  Price  is  adjusted  or  any  day  thereafter,  but,  if  the  Rights
Certificates  have  been  issued, shall be at least ten (10) days later than the
date  of  the public announcement. If Rights Certificates have been issued, upon
each  adjustment  of  the  number  of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to holders of
record  of  Rights  Certificates  on  such  record  date  Rights  Certificates
evidencing,  subject  to  Section 14 of this Agreement, the additional Rights to
which  such holders shall be entitled as a result of such adjustment, or, at the
option  of  the Company, shall cause to be distributed to such holders of record
in substitution and replacement for the Rights Certificates held by such holders
prior  to the date of adjustment, and upon surrender thereof, if required by the
Company, new Rights Certificates evidencing all the Rights to which such holders
shall  be  entitled  after  such  adjustment.  Rights  Certificates  so  to  be
distributed  shall  be issued, executed and countersigned in the manner provided
for  herein  (and  may bear, at the option of the Company, the adjusted Purchase
Price)  and  shall be registered in the names of the holders of record of Rights
Certificates  on  the  record  date  specified  in  the  public  announcement.

     (j)     Irrespective  of  any adjustment or change in the Purchase Price or
the  number  of  Preferred  Shares issuable upon the exercise of the Rights, the
Rights  Certificates  theretofore  and thereafter issued may continue to express
the  Purchase Price per one one-hundredth of a Preferred Share and the number of
one-hundredths  of  a Preferred Share which were expressed in the initial Rights
Certificates  issued  hereunder.

     (k)     Before  taking  any  action that would cause an adjustment reducing
the  Purchase  Price  below  the  par  or stated value, if any, of the number of
one-hundredths  of  a  Preferred Share issuable upon exercise of the Rights, the
Company  shall  take  any  corporate  action  which  may,  in the opinion of its
counsel, be necessary in order that the Company may validly and legally issue as
fully paid and nonassessable shares such number of one-hundredths of a Preferred
Share  at  such  adjusted  Purchase  Price.

     (l)     In  any  case  in  which  this  Section  11  shall  require that an
adjustment  in  the  Purchase  Price be made effective as of a record date for a
specified  event,  the  Company  may  elect to defer (with prompt written notice
thereof  to  the Rights Agent) until the occurrence of such event the issuing to
the  holder  of  any  Right  exercised  after  such record date of the number of
one-hundredths of a Preferred Share and other capital stock or securities of the
Company,  if  any,  issuable  upon  such  exercise  over and above the number of
one-hundredths of a Preferred Share and other capital stock or securities of the
Company,  if any, issuable upon such exercise on the basis of the Purchase Price
in  effect  prior  to such adjustment; provided, however, that the Company shall
deliver  to  such  holder  a due bill or other appropriate instrument evidencing
such  holder's right to receive such additional shares (fractional or otherwise)
upon  the  occurrence  of  the  event  requiring  such  adjustment.

     (m)     Anything  in this Section 11 to the contrary notwithstanding, prior
to  the Distribution Date, the Company shall be entitled to make such reductions
in  the  Purchase  Price, in addition to those adjustments expressly required by
this  Section  11,  as  and  to  the extent that it in its sole discretion shall
determine  to be advisable in order that any (i) consolidation or subdivision of
the  Preferred  or Common Shares, (ii) issuance wholly for cash of any Preferred
or  Common  Shares  at  less  than  the  current per share market price, (iii)
issuance  wholly  for  cash  of


                                       19

<PAGE>

Preferred  or  Common  Shares or securities which by their terms are convertible
into or exchangeable for Preferred or Common Shares, (iv) stock dividends or (v)
issuance  of  rights,  options  or  warrants  referred  to  in  this Section 11,
hereafter made by the Company to holders of its Preferred or Common Shares shall
not  be  taxable  to  such  shareholders.

     (n)     The  Company  covenants  and  agrees that it shall not, at any time
after  the  Distribution Date, effect or permit to occur any Triggering Event or
Section  13 Event, if (i) at the time or immediately after such Triggering Event
or  Section  13  Event  there  are  any rights, warrants or other instruments or
securities  outstanding  or  agreements  in  effect  which  would  substantially
diminish  or  otherwise  eliminate  the  benefits afforded by the Rights or (ii)
prior  to,  simultaneously  with or immediately after such Section 13 Event, the
shareholders  of the Person who constitutes, or would constitute, the "Principal
Party"  for  purposes  of  Section 13(b) of this Agreement shall have received a
distribution  of Rights previously owned by such Person or any of its Affiliates
and  Associates.

     (o)     The Company covenants and agrees that, after the Distribution Date,
it  will  not,  except  as permitted by Sections 23, 24 or 27 of this Agreement,
take  (or  permit to be taken) any action if at the time such action is taken it
is  reasonably  foreseeable  that  such  action  will  diminish substantially or
otherwise  eliminate  the  benefits  afforded  by  the  Rights.

     (p)     Notwithstanding  anything in this Agreement to the contrary, in the
event the Company shall at any time after the date of this Agreement (A) declare
a  dividend  on  the Preferred Shares payable in Preferred Shares, (B) subdivide
the  outstanding  Preferred Shares, (C) combine the outstanding Preferred Shares
(by reverse stock split or otherwise) into a smaller number of Preferred Shares,
or  (D)  issue  any  shares  of  its  capital stock in a reclassification of the
Preferred  Shares  (including  any  such  reclassification  in connection with a
consolidation  or  merger  in  which  the Company is the continuing or surviving
corporation),  then,  in  each  such event, except as otherwise provided in this
Section  11  and  Section  7(e)  of  this  Agreement:  (1)  each  of  the Rights
outstanding  at  the  time of the record date for such dividend or the effective
date  of  such  subdivision,  combination  or  reclassification  shall  be
proportionately adjusted to that number of Rights (calculated to the nearest one
one-thousandth  (1/1,000)  of  a  Right)  equal  to  a  fraction  (the "EXCHANGE
FRACTION"), the numerator of which shall be the total number of Preferred Shares
or  shares  of  capital  stock  issued in such reclassification of the Preferred
Shares  outstanding immediately following such time and the denominator of which
shall  be  the total number of Preferred Shares outstanding immediately prior to
such time, and the number of Rights that shall thereafter be issued with respect
to  each  Common Share or share of other capital stock that shall be issued in a
reclassification  of  the  Common Shares prior to the Distribution Date shall be
equal to the total number of outstanding Rights immediately after such event (as
adjusted pursuant to this clause (1)) divided by the total number of outstanding
Common Shares or shares of such other capital stock immediately after such event
(subject  to  further  adjustment pursuant to the provisions of this Agreement);
(2)  the  Purchase  Price  in  effect  at  the  time of the record date for such
dividend  or  of  the  effective  date  of  such  subdivision,  combination  or
reclassification  shall  be adjusted so that the Purchase Price thereafter shall
equal  the  result obtained by dividing the Purchase Price in effect immediately
prior to such time by the Exchange Fraction; provided, however, that in no event
shall  the  consideration to be paid upon the exercise of one Right be less than
the  aggregate  par value of the shares of capital stock of the Company issuable
upon exercise of such Right; and (3) the number of one-hundredths of a Preferred
Share  or  share  of such other capital stock issuable upon the exercise of each
Right  shall  remain

                                       20

<PAGE>

unchanged immediately after such event, but, in the event of a reclassification,
the  kind  of  shares issuable upon the exercise of each Right immediately after
such  reclassification  shall be adjusted to be the kind of shares of such other
capital  stock  issued  in  such reclassification, rather than Preferred Shares.

     12.     CERTIFICATE  OF  ADJUSTED  PURCHASE  PRICE  OR  NUMBER  OF  SHARES.
Whenever  an  adjustment  is  made  as  provided  in  Sections 11 and 13 of this
Agreement,  the  Company  shall promptly (a) prepare a certificate setting forth
such  adjustment  and a brief statement of the computations and facts accounting
for such adjustment, (b) file with the Rights Agent and with each transfer agent
for the Preferred Shares a copy of such certificate and (c) mail a brief summary
thereof  to each holder of a Rights Certificate in accordance with Section 26 of
this  Agreement.  Notwithstanding  the  foregoing  sentence,  the failure of the
Company  to  make  such  certification  or give such notice shall not affect the
validity  of  such adjustment or the force or effect of the requirement for such
adjustment.  The  Rights  Agent  shall be fully protected in relying on any such
certificate  and on any adjustment or statement contained therein and shall have
no  duty or liability with respect to, and shall not be deemed to have knowledge
of,  any  such  adjustment  unless  and  until  it  shall  have  received  such
certificate.

     13.     CONSOLIDATION,  MERGER  OR  SALE  OR  TRANSFER OF ASSETS OR EARNING
POWER.

     (a)     In  the event that, following the Shares Acquisition Date, directly
or  indirectly:
        (i)  the  Company shall consolidate with, or merge with and/or into, any
other  Person  (other  than  a  Subsidiary  of  the Company in a transaction the
principal  purpose  of  which  is  to  change  the state of incorporation of the
Company  or  that  does  not  violate  Section  11(o)  of  this  Agreement);

        (ii)  any  Person  (other  than  a  Subsidiary  of  the  Company  in  a
transaction  that  does  not  violate  Section  11(o)  of  this Agreement) shall
consolidate with the Company, or merge with and into the Company and the Company
shall  be  the  continuing  or  surviving  corporation  of such consolidation or
merger;  or

        (iii)  the  Company  shall sell or otherwise transfer (or one or more of
its Subsidiaries shall sell or otherwise transfer), in one or more transactions,
assets  or  earning power aggregating 50% or more of the assets or earning power
of  the  Company  and its Subsidiaries (taken as a whole) to any other Person or
Persons  (other than the Company or one or more of its wholly owned Subsidiaries
in  one  or  more  transactions, each of which does not violate Section 11(o) of
this  Agreement),

     then,  and  in  each  such  case,  proper  provision  shall be made so that

             (A)  each holder of a Right (except as otherwise provided herein)
shall  thereafter  have  the  right  to  receive,  upon  the exercise thereof in
accordance  with  the terms of this Agreement, such number of validly authorized
and  issued,  fully  paid and nonassessable Common Shares of the Principal Party
free of any liens, charges, encumbrances, security interests, rights of first
refusal or other adverse claims, as shall be equal to the result obtained by (1)
multiplying the then current Purchase Price by the number of one-hundredths of a
Preferred Share for which a Right was exercisable immediately prior to the first
occurrence of a Section 13 Event (or, if a Triggering Event has occurred prior
to the first occurrence of a Section 13 Event,


                                       21

<PAGE>

multiplying  the  number of such one-hundredths of a Preferred Share for which a
Right  was exercisable immediately prior to the first occurrence of a Triggering
Event  by  the  Purchase  Price  in  effect  immediately  prior  to  such  first
occurrence) and (2) dividing that product (which, following the first occurrence
of  a  Section  13 Event, shall be referred to as the "TOTAL EXERCISE PRICE" for
each  Right  and  for  all purposes of this Agreement) by 50% of the current per
share  market  price (determined pursuant to Section 11(d) of this Agreement) of
the  Common  Shares  of such Principal Party on the date of consummation of such
Section  13  Event;

             (B)  such  Principal  Party  shall  thereafter  be liable for,
and  shall  assume,  by virtue of such Section 13 Event, all the obligations and
duties  of  the  Company  pursuant  to  this  Agreement;

             (C)  the  term  "Company"  shall  thereafter  be deemed to refer
to  such  Principal Party, it being specifically intended that the provisions of
Section  11 of this Agreement shall apply only to such Principal Party following
the  first  occurrence  of  a  Section  13  Event;  and

             (D)  such  Principal  Party  shall  take  such steps (including,
but not limited to, the reservation of a sufficient number of its Common Shares)
in  connection with the consummation of any such transaction as may be necessary
to  assure that the provisions of this Agreement shall thereafter be applicable,
as  nearly  as  reasonably  may  be, in relation to its Common Shares thereafter
deliverable  upon  the  exercise  of  the  Rights.

     (b)     "PRINCIPAL  PARTY"  shall  mean,  in  the  case  of any transaction
described  in clause (i), (ii) or (iii) of Section 13(a), the Person referred to
therein or such Person's successor, including, if applicable, the Company, if it
is  the  surviving corporation, provided, however, that in any such case, (i) if
such  Person  is  a  direct or indirect Subsidiary of another Person, "Principal
Party"  shall  refer  to  such  other  Person  and (ii) in case such Person is a
Subsidiary,  directly  or indirectly, of more than one Person, "Principal Party"
shall  refer  to  whichever  of  such Persons is the issuer of the Common Shares
having the greatest aggregate value, and provided, further, that for purposes of
transactions  described in clause (iii) of this Section 13(b), "Principal Party"
shall  refer  to  that  Person  receiving  the greatest portion of the assets or
earning  power  transferred  pursuant  to  such  transaction  or  transactions.

     (c)     If,  for  any  reason,  the  Rights  cannot be exercised for Common
Shares of such Principal Party as provided in Section 13(a), then each holder of
Rights  shall have the right to exchange its Rights for cash from such Principal
Party  in an amount equal to the number of Common Shares that it would otherwise
be  entitled  to  purchase  times  50% of the current per share market price, as
determined pursuant to Section 11(d) of this Agreement, of such Common Shares of
such  Principal  Party.  If, for any reason, the foregoing formulation cannot be
applied  to  determine  the  cash amount into which the Rights are exchangeable,
then  the  Board  of  Trustees,  based upon the advice of one or more investment
banking  firms,  and  based upon the total value of the Company, shall determine
such  amount  reasonably  and  with  good  faith to the holders of Rights (which
determination  shall  be  described in a statement filed with the Rights Agent).
Any  such  determination  shall  be  conclusive and binding on the Rights Agent.

     (d)     The  Company  shall  not consummate any Section 13 Event unless the
Principal  Party shall have a sufficient number of authorized Common Shares that
have  not been issued or reserved for issuance to permit the exercise in full of
the  Rights  in  accordance  with  this  Section

                                       22

<PAGE>

13  and unless prior thereto the Company and such issuer shall have executed and
delivered  to  the  Rights  Agent  a supplemental agreement confirming that such
Principal  Party  shall, upon consummation of such Section 13 Event, assume this
Agreement  in accordance with Sections 13(a) and (b) of this Agreement, that all
rights  of  first  refusal  or  preemptive  rights in respect of the issuance of
Common  Shares  of such Principal Party upon exercise of outstanding Rights have
been  waived,  that  there  are  no  rights, warrants, instruments or securities
outstanding  or  any  agreements  or  arrangements  which,  as  a  result of the
consummation  of such transaction, would eliminate or substantially diminish the
benefits  intended  to be afforded by the Rights and that such transaction shall
not  result  in  a  default  by  such  Principal Party under this Agreement, and
further providing that, as soon as practicable after the date of such Section 13
Event,  such  Principal  Party  will:

        (i)  prepare  and file a registration statement under the Securities Act
with  respect  to the Rights and the securities purchasable upon exercise of the
Rights  on  an appropriate form, use its best efforts to cause such registration
statement  to  become effective as soon as practicable after such filing and use
its  best efforts to cause such registration statement to remain effective (with
a  prospectus at all times meeting the requirements of the Securities Act) until
the  Expiration  Date, and similarly comply with applicable state and provincial
securities  laws;

        (ii)  use  its  best  efforts  to qualify or register the Rights and the
securities  purchasable  upon  exercise of the Rights under the blue sky laws of
such  jurisdictions  as  may  be  necessary  or  appropriate;

        (iii)  use  its  best  efforts  to list (or continue the listing of) the
Rights  and the securities purchasable upon exercise of the Rights on a national
securities  exchange  or  to  meet the eligibility requirements for quotation on
Nasdaq;

        (iv)   deliver  to holders of the Rights historical financial statements
for  such Principal Party which comply in all respects with the requirements for
registration  on  Form  10  (or  any successor form) under the Exchange Act; and

        (v)  take  all such other steps as are required under applicable laws in
the  United States and in other relevant jurisdictions to enable the exercise in
full  of  the  Rights  in  accordance  with  this  Section  13.

     In  the  event  that at any time after the occurrence of a Triggering Event
some  or  all  of  the  Rights  shall  not  have been exercised at the time of a
transaction  described in this Section 13, the Rights which have not theretofore
been  exercised  shall  thereafter  be  exercisable  in  the manner described in
Section  13(a)  (without  taking  into  account any prior adjustment required by
Section 11(a)(ii)). The Company shall not enter into any transaction of the kind
referred  to in this Section 13 if at the time of such transaction there are any
rights,  options,  warrants,  instruments  or  securities  outstanding  or  any
agreements  or  arrangements  which,  as  a  result  of the consummation

of  such  transaction,  would  eliminate  or substantially diminish the benefits
intended  to  be  afforded  by  the  Rights.

        (e)  The  provisions  of  this  Section  13  shall  similarly  apply  to
successive  mergers  or  consolidations  or  sales  or  other  transfers.

                                       23

<PAGE>

        (f)  Notwithstanding  anything  in  this Agreement to the contrary, this
Section  13  shall not be applicable to a transaction described in subparagraphs
(i)  and  (ii)  of Section 13(a) if:  (i) such transaction is consummated with a
Person or Persons who acquired Common Shares of the Company pursuant to a tender
offer  or  exchange  offer for all outstanding Common Shares of the Company at a
price and on terms determined by at least a majority of the members of the Board
of  Trustees  who are not nominees, representatives, Affiliates or Associates of
the  Person  making  such  an  offer,  after  receiving  advice from one or more
investment  banking  firms, to be at a price that is fair to stockholders of the
Company  (taking  into  account  all  factors which such members of the Board of
Trustees  deem  relevant  including,  without  limitation, prices which could be
reasonably  achieved  if the Company or its assets were sold on an orderly basis
designed  to  realize  maximum value) and otherwise in the best interests of the
Company and its stockholders (or a wholly owned Subsidiary of any such Person or
Persons);  (ii)  the  price  per Common Share offered in such transaction is not
less than the price per Common Share paid to all holders of Common Shares of the
Company  whose  shares  were purchased pursuant to such tender offer or exchange
offer;  and  (iii)  the  form  of  consideration  being offered to the remaining
holders of Common Shares of the Company pursuant to such transaction is the same
as  the form of consideration paid pursuant to such offer.  Upon consummation of
any  such  transactions contemplated by this Section 13(f), all Rights hereunder
shall  expire.

        (g)  In no event shall a Rights Agent, except with respect to duties set
forth in this Agreement, have any liability with respect to any transaction with
a  Principal Party, including, without limitation, the proprietary thereof.  The
Rights  Agent may rely upon and be fully protected in relying upon a certificate
of  the  Company  stating  that  the  provisions  of  this  Section 13 have been
fulfilled.  Notwithstanding  anything  in  this  Agreement  to the contrary, the
prior  written  consent  of the Rights Agent must be obtained in connection with
any  supplemental  agreement  which  alters  the  rights or duties of the Rights
Agent.

     14.     FRACTIONAL  RIGHTS  AND  FRACTIONAL  SHARES.

     (a)     The  Company  shall not be required to issue fractions of Rights or
to  distribute  Rights  Certificates that evidence fractional Rights. In lieu of
such  fractional  Rights,  there  shall be paid to the registered holders of the
Rights  Certificates with regard to which such fractional Rights would otherwise
be  issuable, an amount in cash equal to the same fraction of the current market
value  of  a  whole  Right.  For the purposes of this Section 14(a), the current
market  value  of a whole Right shall be the closing price of the Rights for the
Trading  Day immediately prior to the date on which such fractional Rights would
have  been  otherwise issuable, as determined pursuant to the second sentence of
Section  11(d)  of  this  Agreement.

     (b)     The  Company  shall not be required to issue fractions of Preferred
Shares (other than fractions that are integral multiples of one one-hundredth of
a  Preferred  Share)  upon  exercise of the Rights or to distribute certificates
which  evidence  fractional  Preferred  Shares  (other  than  fractions that are
integral  multiples  of  one  one-hundredth  of  a  Preferred Share). In lieu of
fractional Preferred Shares that are not integral multiples of one one-hundredth
of  a Preferred Share, the Company shall pay to the registered holders of Rights
Certificates  at the time such Rights are exercised as herein provided an amount
in  cash  equal  to  the  same  fraction of the current market value of a Common
Share.  For purposes of this Section 14(b), the current market value of a Common
Share  shall  be  the  closing  price  of a Common Share (as determined pursuant


                                       24

<PAGE>

to  the  second sentence of Section 11(d) of this Agreement) for the Trading Day
immediately  prior  to  the  date  of  such  exercise.

     (c)     The  holder  of  a  Right  by the acceptance of the Right expressly
waives  such  holder's  right to receive any fractional Rights or any fractional
shares  upon  exercise  of  a  Right.

     (d)     Whenever a payment for fractional Rights or fractional shares is to
be  made by the Rights Agent, the Company shall (i) promptly prepare and deliver
to  the  Rights Agent a certificate setting forth in reasonable detail the facts
related  to  such payment and the prices and/or formulas utilized in calculating
such  payments,  and  (ii)  provide sufficient monies to the Rights Agent in the
form  of  fully collected funds to make such payments. The Rights Agent shall be
fully  protected  in relying upon such a certificate and shall have no duty with
respect  to,  and  shall  not  be  deemed  to  have knowledge of any payment for
fractional  Rights  or  fractional  shares  under  any Section of this Agreement
relating  to  the  payment  of fractional Rights or fractional shares unless and
until  the  Rights  Agent  shall have received such a certificate and sufficient
monies.

     15.     RIGHTS  OF  ACTION.

     (a)     All  rights  of  action in respect of this Agreement, excepting the
rights  of  action given to the Rights Agent under Section 18 of this Agreement,
are vested in the respective registered holders of the Rights Certificates (and,
prior  to  the  Distribution Date, the registered holders of the Common Shares);
and  any  registered  holder  of  any  Rights  Certificate  (or,  prior  to  the
Distribution  Date,  of  the  Common  Shares), without the consent of the Rights
Agent  or  of  the  holder  of  any  other  Rights Certificate (or, prior to the
Distribution  Date,  of the Common Shares), may, in such holder's own behalf and
for such holder's own benefit, enforce, and may institute and maintain any suit,
action or proceeding against the Company to enforce, or otherwise act in respect
of,  such  holder's  right  to  exercise  the  Rights  evidenced  by such Rights
Certificate  in  the  manner  provided  in  such  Rights Certificate and in this
Agreement.  Without  limiting  the  foregoing  or  any remedies available to the
holders  of  Rights,  it is specifically acknowledged that the holders of Rights
would  not  have an adequate remedy at law for any breach by the Company of this
Agreement and will be entitled to specific performance of the obligations under,
and injunctive relief against actual or threatened violations by the Company of,
the  obligations  of  any  Person  subject  to  this  Agreement.

     (b)     Notwithstanding anything in this Agreement to the contrary, neither
the  Company  nor  the  Rights Agent shall have any liability to any holder of a
Right  or  other  Person  as  a  result  of  its inability to perform any of its
obligations  under  this  Agreement  by  reason  of any preliminary or permanent
injunction  or other order, judgment, decree or ruling (whether interlocutory or
final)  issued  by  a court or by a governmental, regulatory, self-regulatory or
administrative  agency  or commission, or under any statute, rule, regulation or
executive  order  promulgated  or  enacted  by  any  governmental  authority,
prohibiting  or  otherwise restraining performance of such obligation; provided,
however,  that  the  Company  must  use  all reasonable efforts to have any such
injunction,  order,  judgment,  decree  or  ruling  stayed,  lifted or otherwise
overturned  as  soon  as  possible.

                                       25

<PAGE>

     16.     AGREEMENT  OF RIGHTS HOLDERS. Every holder of a Right, by accepting
the  same,  consents  and  agrees with the Company and the Rights Agent and with
every  other  holder  of  a  Right  that:

     (a)     prior  to  the  Distribution  Date, the Rights will be transferable
only  in  connection  with  the  transfer  of  the  Common  Shares;

     (b)     after  the  Distribution  Date,  the  Rights  Certificates  are
transferable  only  on  the registry books of the Rights Agent if surrendered at
the  office  of  the Rights Agent designated for such purposes, duly endorsed or
accompanied  by  a  proper instrument of transfer and with the appropriate forms
and  certificates  fully  executed;  and

     (c)     subject  to  Sections  6(a) and 7(f) of this Agreement, the Company
and  the  Rights  Agent  may  deem and treat the Person in whose name the Rights
Certificate  (or,  prior  to the Distribution Date, the associated Common Shares
certificate)  is  registered  as  the  absolute  owner thereof and of the Rights
evidenced  thereby (notwithstanding any notations of ownership or writing on the
Rights  Certificates  or the associated Common Shares certificate made by anyone
other  than  the  Company  or the Rights Agent) for all purposes whatsoever, and
neither  the Company nor the Rights Agent shall be affected by any notice to the
contrary.

     17.     RIGHTS  CERTIFICATE  HOLDER NOT DEEMED A SHAREHOLDER. No holder, as
such,  of any Rights Certificate shall be entitled to vote, receive dividends or
be  deemed  for  any  purpose  the  holder  of the Preferred Shares or any other
securities  of  the Company which may at any time be issuable on the exercise of
the  Rights  represented  thereby, nor shall anything contained herein or in any
Rights  Certificate  be  construed  to  confer  upon  the  holder  of any Rights
Certificate,  as  such, any of the rights of a shareholder of the Company or any
right  to  vote  for  the  election  of trustees or upon any matter submitted to
shareholders  at  any  meeting  thereof,  or  to give or withhold consent to any
corporate  action,  or  to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 25 of this Agreement), or to receive
dividends  or  subscription  rights,  or  otherwise,  until  the Right or Rights
evidenced  by  such  Rights  Certificate shall have been exercised in accordance
with  the  provisions  of  this  Agreement.

     18.     CONCERNING  THE  RIGHTS  AGENT.

     (a)     The  Company  agrees  to  pay  to  the  Rights  Agent  reasonable
compensation  for  all services rendered by it hereunder and, from time to time,
on  demand  of  the  Rights  Agent, its reasonable expenses and counsel fees and
other  disbursements  incurred  in  the  preparation,  delivery,  amendment,
administration  and execution of this Agreement and the exercise and performance
of  its  duties hereunder. The Company also agrees to indemnify the Rights Agent
for,  and  to  hold  it harmless against, any loss, liability, damage, judgment,
fine,  penalty,  claim,  demand, settlement, cost or expense (including, without
limitation, the reasonable fees and expenses of legal counsel), incurred without
gross  negligence,  bad  faith  or  willful misconduct on the part of the Rights
Agent  (which  gross  negligence,  bad  faith  or  willful  misconduct  must  be
determined  by  a  final,  non-appealable order, judgment, decree or ruling of a
court  of  competent jurisdiction), for any action taken, suffered or omitted by
the  Rights Agent in connection with the acceptance administration, exercise and
performance  of  its duties under this Agreement, including, without limitation,
the costs and expenses of defending against and appealing any claim of liability
arising therefrom, directly or indirectly. The provisions of this Section 18 and

                                       26

<PAGE>

Section  20  below shall survive the termination of this Agreement, the exercise
or  expiration of the Rights and the resignation or removal of the Rights Agent.
The costs and expenses incurred in enforcing this right of indemnification shall
be  paid  by  the  Company.

     (b)     The  Rights Agent shall be authorized and protected and shall incur
no  liability  for, or in respect of any action taken, suffered or omitted by it
in  connection  with its acceptance and administration of this Agreement and the
exercise  and  performance  of its duties hereunder, in reliance upon any Rights
Certificate  or certificate for the Common Shares or for other securities of the
Company,  instrument  of assignment or transfer, power of attorney, endorsement,
affidavit,  letter,  notice, direction, consent, certificate, statement or other
paper  or  document believed by it to be genuine and to be signed, executed and,
where  necessary,  verified or acknowledged, by the proper Person or Persons, or
otherwise  upon  the  advice  of  counsel  as  set  forth  in Section 20 of this
Agreement.  The  Rights Agent shall not be deemed to have knowledge of any event
of  which  it  was  supposed to receive notice thereof hereunder, and the Rights
Agent  shall be fully protected and shall incur no liability for failing to take
any  action in connection therewith unless and until it has received such notice
in  writing.

     19.     MERGER  OR  CONSOLIDATION  OR  CHANGE  OF  NAME  OF  RIGHTS  AGENT.

     (a)     Any  Person  into  which  the  Rights Agent or any successor Rights
Agent  may  be  merged  or  with  which  it  may  be consolidated, or any Person
resulting  from  any  merger  or  consolidation to which the Rights Agent or any
successor  Rights  Agent  shall  be  a  party,  or  any Person succeeding to the
shareholder services business of the Rights Agent or any successor Rights Agent,
shall  be  the  successor  to  the Rights Agent under this Agreement without the
execution  or  filing  of any paper or any further act on the part of any of the
parties to this Agreement; provided, however, that such Person would be eligible
for  appointment  as a successor Rights Agent under the provisions of Section 21
of this Agreement. In case at the time such successor Rights Agent shall succeed
to  the  agency  created by this Agreement, any of the Rights Certificates shall
have  been  countersigned but not delivered, any such successor Rights Agent may
adopt  the  countersignature  of  the  predecessor Rights Agent and deliver such
Rights Certificates so countersigned; and in case at that time any of the Rights
Certificates  shall  not have been countersigned, any successor Rights Agent may
countersign  such  Rights  Certificates  either  in  the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all such cases
such  Rights  Certificates  shall  have  the  full  force provided in the Rights
Certificates  and  in  this  Agreement.

     (b)     In  case  at any time the name of the Rights Agent shall be changed
and  at  such  time any of the Rights Certificates shall have been countersigned
but  not  delivered,  the  Rights Agent may adopt the countersignature under its
prior name and deliver Rights Certificates so countersigned; and in case at that
time  any  of  the  Rights  Certificates  shall not have been countersigned, the
Rights  Agent  may countersign such Rights Certificates either in its prior name
or  in  its  changed  name; and in all such cases such Rights Certificates shall
have  the  full force provided in the Rights Certificates and in this Agreement.

     20.     DUTIES OF RIGHTS AGENT. The Rights Agent undertakes to perform only
the  duties  and obligations expressly imposed by this Agreement (and no implied
duties) upon the following terms and conditions, by all of which the Company and
the holders of Rights Certificates, by their acceptance thereof, shall be bound:

                                       27

<PAGE>

     (a)     The  Rights  Agent may consult with legal counsel (who may be legal
counsel  for the Company or an employee of the Rights Agent), and the opinion or
advice  of  such counsel shall be full and complete authorization and protection
to  the  Rights  Agent  and  the Rights Agent shall incur no liability for or in
respect  of  any  action taken, suffered or omitted by it and in accordance with
such  opinion  or  advice.

     (b)     Whenever  in the performance of its duties under this Agreement the
Rights  Agent  shall  deem  it  necessary  or  desirable that any fact or matter
(including,  without  limitation,  the  identity of any Acquiring Person and the
determination  of  "current per share market price") be proved or established by
the Company prior to taking, suffering or omitting to take any action hereunder,
such  fact  or  matter  (unless  other  evidence  in  respect  thereof be herein
specifically prescribed) may be deemed to be conclusively proved and established
by  a  certificate  signed  by  any  one of the Chairman of the Board, the Chief
Executive  Officer,  the  President,  any  Vice  President,  the Chief Financial
Officer,  the  Secretary or any Assistant Secretary of the Company and delivered
to  the  Rights  Agent;  and  such  certificate  shall  be  full  and  complete
authorization  and  protection  to  the  Rights Agent and the Rights Agent shall
incur no liability for or in respect of any action taken, suffered or omitted by
it  under  the  provisions  of this Agreement in reliance upon such certificate.

     (c)     The  Rights  Agent shall be liable hereunder to the Company and any
other  Person only for its own gross negligence, bad faith or willful misconduct
(as determined by a final, non-appealable order, judgment, decree or ruling of a
court  of  competent jurisdiction). Anything to the contrary notwithstanding, in
no  event  shall  the  Rights  Agent  be liable for special, punitive, indirect,
consequential or incidental loss or damage of any kind whatsoever (including but
not  limited  to lost profits), even if the Rights Agent has been advised of the
likelihood  of such loss or damage. Any liability of the Rights Agent under this
Rights  Agreement  will  be limited to the amount of fees paid by the Company to
the  Rights  Agent.

     (d)     The Rights Agent shall not be liable for or by reason of any of the
statements  of  fact  or  recitals  contained in this Agreement or in the Rights
Certificates  (except its countersignature thereof) or be required to verify the
same,  but all such statements and recitals are and shall be deemed to have been
made  by  the  Company  only.

     (e)     The  Rights  Agent shall not have any liability for or be under any
responsibility in respect of the validity of this Agreement or the execution and
delivery  of  this  Agreement (except the due execution of this Agreement by the
Rights  Agent)  or  in  respect  of  the  validity  or  execution  of any Rights
Certificate  (except  its countersignature thereof); nor shall it be responsible
for  any  breach  by  the Company of any covenant or condition contained in this
Agreement  or  in  any  Rights  Certificate; nor shall it be responsible for any
change  in  the exercisability of the Rights (including the Rights becoming null
and void pursuant to this Agreement) or any change or adjustment in the terms of
the  Rights  (including  the  manner,  method or amount thereof) provided for in
Sections 3, 11, 13, 23 or 24, or the ascertaining of the existence of facts that
would require any such change or adjustment (except with respect to the exercise
of  Rights evidenced by Rights Certificates after receipt by the Rights Agent of
a  certificate furnished pursuant to Section 12 hereof describing such change or
adjustment,  upon  which  the  Rights  Agent  may rely); nor shall it by any act
hereunder  be  deemed  to  make  any  representation  or  warranty  as  to  the
authorization  or  reservation  of  any  Preferred  Shares  to  be

                                       28

<PAGE>

issued pursuant to this Agreement or any Rights Certificate or as to whether any
Preferred Shares will, when issued, be validly authorized and issued, fully paid
and  nonassessable.

     (f)     The  Company  agrees that it will perform, execute, acknowledge and
deliver  or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by  the  Rights  Agent for the carrying out or performing by the Rights Agent of
the  provisions  of  this  Agreement.

     (g)     The  Rights  Agent  is  hereby  authorized  and  directed to accept
instructions  with  respect  to the performance of its duties hereunder from any
one  of  the  Chairman of the Board, the Chief Executive Officer, the President,
any  Vice President, the Chief Financial Officer, the Secretary or any Assistant
Secretary  of  the  Company,  and  to  apply  to  such  officers  for  advice or
instructions  in connection with its duties, and such instructions shall be full
authorization  and protection to the Rights Agent and the Rights Agent shall not
be  liable  for  or in respect of any action taken, suffered or omitted by it in
accordance  with  instructions  of  any  such officer or for any delay in acting
while waiting for those instructions. The Rights Agent shall be fully authorized
and  protected in relying upon the most recent instructions received by any such
officer.  Any  application by the Rights Agent for written instructions from the
Company  may, at the option of the Rights Agent, set forth in writing any action
proposed  to  be  taken,  suffered  or  omitted  by  the Rights Agent under this
Agreement  and  the  date  on  and/or  after which such action shall be taken or
suffered  or  such  omission  shall  be effective. The Rights Agent shall not be
liable  for any action taken or suffered by, or omission of, the Rights Agent in
accordance with a proposal included in any such application on or after the date
specified  in  such  application  (which  date  shall  not be less than five (5)
Business  Days  after the date any officer of the Company actually receives such
application,  unless  any  such  officer  shall  have consented in writing to an
earlier  date) unless, prior to taking any such action (or the effective date in
the  case  of  an  omission),  the  Rights  Agent  shall  have  received written
instructions  in response to such application specifying the action to be taken,
suffered  or  omitted.

     (h)     The  Rights Agent and any shareholder, affiliate, director, officer
or  employee  of  the Rights Agent may buy, sell or deal in any of the Rights or
other  securities  of  the  Company  or  become  pecuniarily  interested  in any
transaction  in  which  the  Company may be interested, or contract with or lend
money  to the Company or otherwise act as fully and freely as though it were not
Rights  Agent  under  this  Agreement.  Nothing herein shall preclude the Rights
Agent  or  any  such  stockholder, affiliate, director, officer or employee from
acting  in  any  other  capacity  for  the  Company  or  for  any  other Person.

     (i)     The  Rights  Agent  may  execute  and exercise any of the rights or
powers  hereby vested in it or perform any duty hereunder either itself (through
its  trustees, officers and employees) or by or through its attorneys or agents,
and  the  Rights  Agent  shall  not  be  answerable  or accountable for any act,
default,  neglect  or misconduct of any such attorneys or agents or for any loss
to the Company or any other Person resulting from any such act, default, neglect
or  misconduct,  absent gross negligence, bad faith or willful misconduct in the
selection  and  continued  employment  thereof  (each  as determined by a final,
non-appealable  order,  judgment,  decree  or  ruling  of  a  court of competent
jurisdiction).

     (j)     No  provision  of  this Agreement shall require the Rights Agent to
expend  or  risk its own funds or otherwise incur any financial liability in the
performance  of  any of its duties

                                       29

<PAGE>

hereunder  or in the exercise of its rights if there shall be reasonable grounds
for  believing  that repayment of such funds or adequate indemnification against
such  risk  or  liability  is  not  reasonably  assured  to  it.

     (k)     If,  with  respect  to  any  Rights  Certificate surrendered to the
Rights  Agent for exercise or transfer, the certificate contained in the form of
assignment or the form of election to purchase set forth on the reverse thereof,
as  the case may be, has not been completed, the Rights Agent shall not take any
further action with respect to such requested exercise or transfer without first
consulting  with  the  Company.

     21.     CHANGE  OF  RIGHTS  AGENT. The Rights Agent or any successor Rights
Agent  may  resign  and  be discharged from its duties under this Agreement upon
thirty  (30)  days' notice in writing mailed to the Company and to each transfer
agent  of the Preferred Shares or the Common Shares known to the Rights Agent by
registered  or  certified mail, and to the holders of the Rights Certificates by
first-class  mail.  The  Company  may  remove  the Rights Agent or any successor
Rights  Agent  upon  thirty  (30)  days' notice in writing, mailed to the Rights
Agent  or successor Rights Agent, as the case may be, and to each transfer agent
of  the  Preferred  Shares or the Common Shares by registered or certified mail,
and to the holders of the Rights Certificates by first-class mail. If the Rights
Agent  shall resign or be removed or shall otherwise become incapable of acting,
the  Company shall appoint a successor to the Rights Agent. If the Company shall
fail  to  make such appointment within a period of thirty (30) days after giving
notice  of  such  removal  or  after  it  has  been  notified in writing of such
resignation  or  incapacity by the resigning or incapacitated Rights Agent or by
the  holder  of  a  Rights Certificate (who shall, with such notice, submit such
holder's  Rights Certificate for inspection by the Company), then the registered
holder  of  any  Rights  Certificate  may  apply  to  any  court  of  competent
jurisdiction  for  the  appointment  of a new Rights Agent. Any successor Rights
Agent,  whether appointed by the Company or by such a court, shall either be (a)
a  Person organized and doing business under the laws of the United States or of
any  state  of the United States, or under the laws of Canada or any province of
Canada,  in good standing, which is authorized under such laws to exercise stock
transfer  powers  and is subject to supervision or examination by federal, state
or  provincial  authority and which has at the time of its appointment as Rights
Agent a combined capital and surplus of at least $50 million or (b) an Affiliate
of  such a Person. After appointment, the successor Rights Agent shall be vested
with  the  same  powers,  rights,  duties and responsibilities as if it had been
originally  named  as  Rights  Agent  without  further  act  or  deed;  but  the
predecessor  Rights  Agent  shall  deliver  and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further  assurance, conveyance, act or deed necessary for the purpose. Not later
than  the  effective date of any such appointment, the Company shall file notice
thereof  in writing with the predecessor Rights Agent and each transfer agent of
the  Preferred Shares or the Common Shares, and mail a notice thereof in writing
to the registered holders of the Rights Certificates. Failure to give any notice
provided  for  in  this  Section  21,  however, or any defect therein, shall not
affect  the  legality  or  validity  of the resignation or removal of the Rights
Agent  or  the  appointment  of  the successor Rights Agent, as the case may be.

     22.     ISSUANCE  OF  NEW  RIGHTS  CERTIFICATES. Notwithstanding any of the
provisions  of this Agreement or of the Rights to the contrary, the Company may,
at  its  option, issue new Rights Certificates evidencing Rights in such form as
may  be approved by its Board of Trustees to reflect any adjustment or change in
the Purchase Price and the number or kind or class of shares

                                       30

<PAGE>

or  other  securities or property purchasable under the Rights Certificates made
in  accordance with the provisions of this Agreement. In addition, in connection
with  the  issuance or sale of Common Shares following the Distribution Date and
prior to the redemption or expiration of the Rights, the Company (a) shall, with
respect  to  Common  Shares  so issued or sold pursuant to the exercise of stock
options  or  under  any  employee  plan  or  arrangement  or  upon the exercise,
conversion  or  exchange of securities hereinafter issued by the Company and (b)
may,  in  any  other  case,  if  deemed necessary or appropriate by the Board of
Trustees,  issue  Rights  Certificates  representing  the  appropriate number of
Rights  in connection with such issuance or sale; provided, however, that (i) no
such Rights Certificate shall be issued and this sentence shall be null and void
ab  initio  if,  and  to  the  extent that, such issuance or this sentence would
create  a  significant risk of or result in material adverse tax consequences to
the  Company  or  the  Person to whom such Rights Certificate would be issued or
would create a significant risk of or result in such options' or employee plans'
or  arrangements'  failing  to  qualify  for  otherwise  available  special  tax
treatment  and  (ii)  no  such Rights Certificate shall be issued if, and to the
extent  that,  appropriate  adjustment shall otherwise have been made in lieu of
the  issuance  thereof.


     23.     REDEMPTION.

     (a)     The  Company  may, at its option and with the approval of the Board
of  Trustees,  at  any time prior to the earlier of (i) the Close of Business on
the tenth day following the Shares Acquisition Date or such later date as may be
determined  by  action  of  a  majority  of  the  Board of Trustees and publicly
announced  by  the  Company  (with  prompt  written notice thereof to the Rights
Agent)  or  (ii)  the Close of Business on the Final Expiration Date, redeem all
but  not  less  than  all  the  then outstanding Rights at a redemption price of
$0.001  per  Right,  appropriately  adjusted  to  reflect any stock split, stock
dividend or similar transaction occurring after the date of this Agreement (such
redemption  price  being  herein  referred to as the "REDEMPTION PRICE") and the
Company  may,  at  its  option, pay the Redemption Price either in Common Shares
(based  on the current per share market price thereof (as determined pursuant to
Section  11(d)  of this Agreement) at the time of redemption), cash or any other
form  of  consideration  deemed  appropriate  by  the  Board  of  Trustees. Such
redemption  by the Company may be made effective at such time, on such basis and
with  such  conditions  as  the  Board  of  Trustees  in its sole discretion may
establish.

     (b)     Immediately  upon  the action of the Board of Trustees ordering the
redemption  of  the  Rights,  evidence  of  which shall have been filed with the
Rights  Agent,  and without any further action and without any notice, the right
to  exercise  the  Rights  will  terminate  and the only right thereafter of the
holders  of  Rights  shall be to receive the Redemption Price. The Company shall
promptly  give  public notice of any such redemption (with prompt written notice
thereof  to  the  Rights Agent); provided, however, that the failure to give, or
any  defect  in,  such  notice shall not affect the legality or validity of such
redemption.  Within  ten  (10)  days  after  the action of the Board of Trustees
ordering  the  redemption  of  the Rights, the Company shall give notice of such
redemption to the Rights Agent and the holders of the then outstanding Rights by
mailing  such  notice to all such holders at their last addresses as they appear
upon  the registry books of the Rights Agent or, prior to the Distribution Date,
on  the  registry  books of the transfer agent for the Common Shares. Any notice
which  is mailed in the manner herein provided shall be deemed given, whether or
not  the  holder  receives the notice. Each such notice of redemption will state
the  method  by  which the payment of the Redemption Price will be made. Neither
the  Company  nor  any  of  its  Affiliates or Associates may redeem, acquire or
purchase  for  value  any  Rights  at  any

                                       31

<PAGE>

time  in any manner other than that specifically set forth in this Section 23 or
in  Section  24  of  this Agreement or in connection with the purchase of Common
Shares  prior  to  the  Distribution  Date.

     24.     EXCHANGE.

     (a)     Subject  to  applicable laws, rules and regulations, and subject to
subsection  (c)  below,  the Company may, at its option, by majority vote of the
Board  of  Trustees,  at  any  time  after the occurrence of a Triggering Event,
exchange all or part of the then outstanding and exercisable Rights (which shall
not  include Rights that have become null and void pursuant to the provisions of
Section  7(e)  of  this Agreement) for Common Shares at an exchange ratio of one
Common Share per Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date of this Agreement (such
exchange  ratio  being  hereinafter  referred  to  as  the "RATIO OF EXCHANGE").
Notwithstanding  the  foregoing, the Board of Trustees shall not be empowered to
effect  such  exchange at any time after any Person (other than the Company, any
Subsidiary  of the Company, any employee benefit plan of the Company or any such
Subsidiary,  or any Person holding Common Shares for or pursuant to the terms of
any  such  plan),  together  with  all Affiliates and Associates of such Person,
becomes  the  Beneficial  Owner  of  50%  or  more  of  the  Common  Shares then
outstanding.

     (b)     Immediately  upon  the action of the Board of Trustees ordering the
exchange of any Rights pursuant to subsection (a) of this Section 24 and without
any  further  action  and  without any notice, the right to exercise such Rights
shall  terminate  and the only right thereafter of a holder of such Rights shall
be  to  receive  that number of Common Shares equal to the number of such Rights
held  by  such  holder  multiplied  by  the Ratio of Exchange. The Company shall
promptly  give  public  notice  of any such exchange (with prompt written notice
thereof  to  the  Rights Agent); provided, however, that the failure to give, or
any  defect  in,  such  notice shall not affect the legality or validity of such
exchange.  The  Company promptly shall mail a notice of any such exchange to all
of  the  holders  of such Rights at their last addresses as they appear upon the
registry  books  of  the  Rights Agent. Any notice which is mailed in the manner
herein  provided  shall  be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the exchange
of  the  Common  Shares  for  Rights  will  be effected and, in the event of any
partial  exchange,  the  number  of  Rights which will be exchanged. Any partial
exchange  shall  be  effected pro rata based on the number of Rights (other than
Rights  which  have  become  null and void pursuant to the provisions of Section
7(e)  of  this  Agreement)  held  by  each  holder  of  Rights.

     (c)     In  the  event  that  there  shall  not be sufficient Common Shares
issued  but not outstanding or authorized but unissued to permit any exchange of
Rights  as  contemplated  in  accordance  with  Section 24(a), the Company shall
either  take  such  action  as  may  be necessary to authorize additional Common
Shares  for issuance upon exchange of the Rights or alternatively, at the option
of  a majority of the Board of Trustees, with respect to each Right (i) pay cash
in  an  amount  equal  to the Current Value, in lieu of issuing Common Shares in
exchange  therefor,  (ii)  issue  debt  or  equity  securities  or a combination
thereof,  having  a  value equal to the Current Value, in lieu of issuing Common
Shares in exchange for each such Right, where the value of such securities shall
be determined by an investment banking firm selected by the Board of Trustees by
majority  vote  of the Board of Trustees (which determination shall be described
in  a  statement filed with the Rights Agent and shall be conclusive and binding
on  the Rights Agent, the holders of the Rights and all other Persons), or (iii)
deliver  any  combination  of  cash,  property,

                                       32

<PAGE>

Common  Shares and/or other securities having a value equal to the Current Value
in  exchange  for  each  Right.  For  purposes  of  this Section 24(c) only, the
"CURRENT  VALUE" shall mean the product of the current per share market price of
Common  Shares  (determined  pursuant  to  Section  11(d)  on  the  date  of the
occurrence  of  the event described above in subparagraph (a)) multiplied by the
number  of  Common Shares for which the Right otherwise would be exchangeable if
there  were  sufficient  shares  available.  To  the  extent  that  the  Company
determines that some action need be taken pursuant to clauses (i), (ii) or (iii)
of  this  Section  24(c),  the  Board  of  Trustees  may temporarily suspend the
exercisability of the Rights for a period of up to sixty (60) days following the
date  on  which the event described in Section 24(a) hereof shall have occurred,
in  order to seek any authorization of additional Common Shares and/or to decide
the  appropriate form of distribution to be made pursuant to the above provision
and  to  determine  the  value thereof. In the event of any such suspension, the
Company shall promptly notify the Rights Agent in writing of such suspension and
shall  issue a public announcement stating that the exercisability of the Rights
has  been  temporarily  suspended,  as well as a public announcement and written
notification  to the Rights Agent at such time as the suspension is no longer in
effect.

     (d)     The  Company  shall  not  be  required to issue fractions of Common
Shares  or to distribute certificates that evidence fractional Common Shares. In
lieu  of  such  fractional  Common Shares, there shall be paid to the registered
holders  of  the Rights Certificates with regard to which such fractional Common
Shares would otherwise be issuable, an amount in cash equal to the same fraction
of  the  current  per  share market value of a whole Common Share (as determined
pursuant  to  the  second  sentence  of  Section  11(d)  of  this  Agreement).

     (e)     The  Company  may,  at its option, by majority vote of the Board of
Trustees, at any time before any Person has become an Acquiring Person, exchange
all  or  part  of  the  then  outstanding  Rights  for  rights  of substantially
equivalent  value, as reasonably determined by the Board of Trustees, based upon
the  advice  of  one  or  more  investment  banking  firms.

     (f)     Immediately  upon  the action of the Board of Trustees ordering the
exchange of any Rights pursuant to subsection (e) of this Section 24 and without
any  further  action  and  without any notice, the right to exercise such Rights
shall  terminate  and the only right thereafter of a holder of such Rights shall
be  to receive that number of rights in exchange therefor as has been determined
by  the  Board  of Trustees in accordance with subsection (e) above. The Company
shall  promptly  give  public  notice  of any such exchange (with prompt written
notice  thereof  to  the  Rights  Agent); provided, however, that the failure to
give, or any defect in, such notice shall not affect the legality or validity of
such  exchange. The Company promptly shall mail a notice of any such exchange to
all  of  the  holders of such Rights at their last addresses as they appear upon
the  registry  books of the transfer agent for the Common Shares of the Company.
Any  notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of exchange will
state  the  method  by  which  the  exchange  of  the  Rights  will be effected.

     25.     NOTICE  OF  CERTAIN  EVENTS.

     (a)     In  case the Company shall propose to effect or permit to occur any
Section  13 Event, the Company shall give notice thereof to the Rights Agent and
to  each  holder  of Rights, in accordance with Section 26 of this Agreement, at
least  twenty  (20)  days  prior  to  occurrence  of  such  Section  13  Event.

                                       33

<PAGE>

     (b)     In case any Triggering Event or Section 13 Event shall occur, then,
in  any  such  case, the Company shall as soon as practicable thereafter give to
the  Rights Agent and to each holder of a Rights Certificate, in accordance with
Section  26  of  this Agreement, a notice of the occurrence of such event, which
shall  specify  the event and the consequences of the event to holders of Rights
under  Sections  11(a)(ii)  and  13  of  this  Agreement.

     26.     NOTICES.  Notices  or  demands  authorized  by this Agreement to be
given  or made by the Rights Agent or by the holder of any Rights Certificate to
or  on  the  Company  shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the  Rights  Agent)  or  by  facsimile  transmission  as  follows:

          Mercer  International  Inc.
          14900  Interurban  Avenue  South,  Suite  282
          Seattle,  WA  98168
          Attention:  Chief  Financial  Officer
          Facsimile  No.:  (206)  674-4639

Subject  to the provisions of Section 21 of this Agreement, any notice or demand
authorized by this Agreement to be given or made by the Company or by the holder
of  any Rights Certificate to or on the Rights Agent shall be sufficiently given
or  made  if sent by first-class mail, postage prepaid, addressed (until another
address  is  filed  in writing by the Rights Agent with the Company) as follows:

          Computershare  Trust  Company  of  Canada
          Suite  408,  510  Burrard  Street
          Vancouver,  BC  V6B  3V9
          Attention:  Manager
          Facsimile  No.:  (604)  683-3694

Notices  or  demands  authorized  by  this  Agreement to be given or made by the
Company  or  the  Rights  Agent to the holder of any Rights Certificate shall be
sufficiently  given  or  made  if  sent  by  first-class  mail, postage prepaid,
addressed  to such holder at the address of such holder as shown on the registry
books  of  the  Company.

     27.     SUPPLEMENTS  AND  AMENDMENTS.  Prior  to the Distribution Date, the
Company  may  supplement  or  amend  this  Agreement  in any respect as it deems
necessary  or  desirable  without  the approval of any holders of Rights and the
Rights  Agent  shall,  if  the  Company  so  directs, execute such supplement or
amendment,  except as otherwise provided herein. From and after the Distribution
Date, the Company and the Rights Agent may from time to time supplement or amend
this  Agreement  without  the  approval of any holders of Rights in order to (i)
cure  any  ambiguity,  (ii) correct or supplement any provision contained herein
which  may  be defective or inconsistent with any other provisions herein, (iii)
shorten  or  lengthen any time period hereunder or (iv) change or supplement the
provisions  hereunder  in  any  manner  that  the  Company may deem necessary or
desirable  and  that  shall not adversely affect the interests of the holders of
Rights  (other  than  an  Acquiring  Person  or  an Affiliate or Associate of an
Acquiring  Person);  provided, this Agreement may not be supplemented or amended
to  lengthen,  pursuant  to  clause  (iii)  of  this sentence, (A) a time period
relating  to  when  the  Rights  may  be  redeemed  at  such  time  as


                                       34

<PAGE>

the  Rights  are  not  then  redeemable or (B) any other time period unless such
lengthening is for the purpose of protecting, enhancing or clarifying the rights
of,  and/or  the  benefits  to,  the  holders  of Rights. Upon the delivery of a
certificate  from  an  appropriate  officer  of the Company that states that the
proposed supplement or amendment is in compliance with the terms of this Section
27, the Rights Agent shall execute such supplement or amendment. Notwithstanding
anything  contained in this Agreement to the contrary, the Rights Agent may, but
shall  not  be obligated to, enter into any supplement or amendment that affects
the  Rights  Agent's  own  rights,  duties, obligations or immunities under this
Agreement  and  it  shall  not  be bound by any such supplement or amendment not
executed  by it. Prior to the Distribution Date, the interests of the holders of
Rights  shall  be  deemed coincident with the interests of the holders of Common
Shares.

     28.     SUCCESSORS.  All  the covenants and provisions of this Agreement by
or  for  the  benefit of the Company or the Rights Agent shall bind and inure to
the  benefit  of  their  respective  successors  and  assigns  hereunder.

     29.     DETERMINATIONS  AND  ACTIONS BY THE BOARD OF TRUSTEES, ETC. For all
purposes  of  this  Agreement,  any  calculation  of the number of Common Shares
outstanding  at  any  particular time, including for purposes of determining the
particular  percentage  of such outstanding Common Shares of which any Person is
the Beneficial Owner, shall be made in accordance with the last sentence of Rule
13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act as in
effect  on the date hereof. The Board of Trustees shall have the exclusive power
and authority to administer this Agreement and to exercise all rights and powers
specifically  granted  to  the  Board  of Trustees, or the Company, or as may be
necessary  or  advisable  in  the  administration  of this Agreement, including,
without  limitation, the right and power to (i) interpret the provisions of this
Agreement and (ii) make all determinations deemed necessary or advisable for the
administration  of  this  Agreement  (including a determination to redeem or not
redeem  the  Rights  or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
of  Trustees  in  good  faith, shall (x) be final, conclusive and binding on the
Company,  the Rights Agent, the holders of the Rights Certificates and all other
Persons  and  (y) not subject the Board of Trustees or any member thereof to any
liability  to  the  holders  of the Rights or any other Person. The Rights Agent
shall  always  be  entitled  to  assume that the Board of Trustees acted in good
faith  and  shall be fully protected and incur no liability in reliance thereon.

     30.     BENEFITS  OF  THIS  AGREEMENT.  Nothing  in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and the
registered  holders  of  the Rights Certificates (and, prior to the Distribution
Date,  the  Common  Shares)  any legal or equitable right, remedy or claim under
this  Agreement;  but this Agreement shall be for the sole and exclusive benefit
of  the  Company,  the  Rights  Agent  and  the registered holders of the Rights
Certificates  (and,  prior  to  the  Distribution  Date,  the  Common  Shares).

     31.     SEVERABILITY.  If  any  term, provision, covenant or restriction of
this  Agreement  is held by a court of competent jurisdiction or other authority
to  be  invalid,  void or unenforceable, the remainder of the terms, provisions,
covenants  and  restrictions  of  this  Agreement shall remain in full force and
effect  and  shall  in  no  way  be affected, impaired or invalidated; provided,
however, that notwithstanding anything in this Agreement to the contrary, if any
such term, provision,
                                       35

<PAGE>

covenant  or  restriction is held by such court or authority to be invalid, void
or unenforceable and the Board of Trustees determines in its good faith judgment
that  severing  the  invalid language from this Agreement would adversely affect
the  purpose  or  effect of this Agreement, the right of redemption set forth in
Section  23 of this Agreement shall be reinstated and shall not expire until the
Close  of  Business on the tenth day following the date of such determination by
the  Board  of  Trustees.

     32.     GOVERNING  LAW.  This  Agreement and each Rights Certificate issued
hereunder  shall  be deemed to be a contract made under the laws of the state of
Washington and for all purposes shall be governed by and construed in accordance
with  the  laws  of  such state applicable to contracts to be made and performed
entirely  within  such  state.

     33.     COUNTERPARTS.  This  Agreement  may  be  executed  in any number of
counterparts  and  each of such counterparts shall for all purposes be deemed to
be  an original, and all such counterparts shall together constitute but one and
the  same  instrument.

                                       36

<PAGE>

     34.     DESCRIPTIVE  HEADINGS.  Descriptive  headings  of  the  several
Sections  of  this  Agreement  are  inserted  for convenience only and shall not
control  or  affect the meaning or construction of any of the provisions of this
Agreement.

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

                      MERCER  INTERNATIONAL  INC.

                      By:  /s/ David M. Gandossi
                           --------------------------------

                      Name:  David M. Gandossi
                             ------------------------------
                      Title:  Secretary
                             ------------------------------


                      COMPUTERSHARE  TRUST  COMPANY  OF  CANADA,
                      AS  RIGHTS  AGENT

                      By:  /s/ Ian Malcolm
                           ---------------------------------

                      Name:  Ian Malcolm
                             -------------------------------
                      Title:  Account Manager
                              ------------------------------

                                       37

<PAGE>

                           EXHIBIT A           [GRAPHIC OMITED]


                            ARTICLES OF AMENDMENT TO
                             DECLARATION OF TRUST OF
                            MERCER INTERNATIONAL INC.

     Mercer International Inc., a Massachusetts trust organized under RCW 23.90,
hereby  amends it Declaration of Trust to establish a series of preferred stock.

1.     The  name  of  the  Massachusetts  trust  is  Mercer  International  Inc.

2.     the  text  of  the  amendment  is  as  follows:

     Section  1.     DESIGNATION AND AMOUNT.  The shares of such series shall be
                     ----------------------
designated  as "Series A Junior Participating Preferred Stock" and the number of
shares  constituting  such  series  shall  be  500,000.

     Section  2.     DIVIDENDS  AND  DISTRIBUTIONS.
                     -----------------------------

          (A)     Subject to the prior and superior rights of the holders of any
shares of any series of Preferred Stock ranking prior and superior to the shares
of  Series  A  Junior Participating Preferred Stock ("Series A Preferred Stock")
with  respect  to  dividends,  the holders of shares of Series A Preferred Stock
shall  be  entitled  to receive, when, as and if declared by the Trustees out of
funds  legally available for the purpose, quarterly dividends payable in cash on
the fifteenth day of March, June, September and December in each year (each such
date  being  referred  to  herein  as  a  "Quarterly  Dividend  Payment  Date"),
commencing on the first Quarterly Dividend Payment Date after the first issuance
of  a  share or fraction of a share of Series A Preferred Stock in an amount per
share  (rounded  to  the nearest cent) equal to the greater of (a) $10.00 or (b)
subject  to  the  provision  for adjustment hereinafter set forth, 100 times the
aggregate  per  share  amount of all cash dividends, and 100 times the aggregate
per  share  amount  (payable  in  kind)  of  all  non-cash  dividends  or  other
distributions  other  than  a  dividend  payable  in common shares of beneficial
interest,  $1.00  par value, of the Company ("Common Stock") or a subdivision of
the  outstanding  shares  of  Common  Stock  (by reclassification or otherwise),
declared  on the Common Stock since the immediately preceding Quarterly Dividend
Payment  Date,  or,  with  respect to the first Quarterly Dividend Payment Date,
since  the  first  issuance  of  any  share  or  fraction of a share of Series A
Preferred  Stock.  In  the  event the Company shall at any time after August 20,
1993  (the  "Rights  Declaration Date") (i) declare any dividend on Common Stock
payable  in shares of Common Stock, (ii) subdivide the outstanding Common Stock,
or  (iii)  combine the outstanding Common Stock into a smaller number of shares,
then  in  each  such  case  the  amount  to  which holders of shares of Series A
Preferred  Stock  were entitled immediately prior to such event under clause (b)
of  the  preceding  sentence  shall  be adjusted by multiplying such amount by a
fraction  the  numerator  of  which  is  the  number  of  shares of Common Stock
outstanding  immediately  after  such  event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.

                                      A-1

<PAGE>

          (B)     The  Company  shall  declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph (A) above immediately after it
declares  a  dividend or distribution on the Common Stock (other than a dividend
payable  in  shares of Common Stock); provided that, in the event no dividend or
distribution  shall  have  been  declared  on the Common Stock during the period
between  any  Quarterly  Dividend Payment Date and the next subsequent Quarterly
Dividend  Payment Date, a dividend of $10.00 per share on the Series A Preferred
Stock  shall  nevertheless  be  payable  on  such  subsequent Quarterly Dividend
Payment  Date.

          (C)     Dividends  shall  begin  to  accrue  and  be  cumulative  on
outstanding  shares  of  Series  A  Preferred  Stock from the Quarterly Dividend
Payment  Date  next  preceding  the  date  of  issue  of such shares of Series A
Preferred  Stock, unless the date of issue of such shares is prior to the record
date  for  the first Quarterly Dividend Payment Date, in which case dividends on
such  shares  shall  begin  to  accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or is a date after
the record date for the determination of holders of shares of Series A Preferred
Stock  entitled  to  receive  a  quarterly  dividend  and  before such Quarterly
Dividend  Payment  Date, in either of which events such dividends shall begin to
accrue and be cumulative from such Quarterly Dividend Payment Date.  Accrued but
unpaid  dividends  shall  not  bear  interest.  Dividends  paid on the shares of
Series  A  Preferred  Stock  in  an  amount  less  than the total amount of such
dividends  at the time accrued and payable on such shares shall be allocated pro
rata  on  a  share-by-share basis among all such shares at the time outstanding.
The Trustees may fix a record date for the determination of holders of shares of
Series  A  Preferred  Stock  entitled  to  receive  payment  of  a  dividend  or
distribution  declared  thereon, which record date shall be no more than 30 days
prior  to  the  date  fixed  for  the  payment  thereof.

     Section  3.     VOTING RIGHTS.  The holders of shares of Series A Preferred
                     -------------
Stock  shall  have  the  following  voting  rights:

          (A)     Subject to the provision for adjustment hereinafter set forth,
each  share  of Series A Preferred Stock shall entitle the holder thereof to 100
votes on all matters submitted to a vote of the stockholders of the Company.  In
the  event  the  Company shall at any time after the Rights Declaration Date (i)
declare  any  dividend  on  Common Stock payable in shares of Common Stock, (ii)
subdivide  the outstanding Common Stock, or (iii) combine the outstanding Common
Stock  into  a  smaller  number  of shares, then in each such case the number of
votes  per  share  to  which  holders of shares of Series A Preferred Stock were
entitled  immediately  prior to such event shall be adjusted by multiplying such
number  by  a  fraction the numerator of which is the number of shares of Common
Stock  outstanding  immediately after such event and the denominator of which is
the  number of shares of Common Stock that were outstanding immediately prior to
such  event.

          (B)     Except  as otherwise provided herein or by law, the holders of
shares  of  Series  A  Preferred Stock and the holders of shares of Common Stock
shall  vote  together  as  one  class  on  all  matters  submitted  to a vote of
stockholders  of  the  Company.

          (C)     (i)     If  at  any  time  dividends on any Series A Preferred
Stock  shall  be  in  arrears  in an amount equal to six (6) quarterly dividends
thereon, the occurrence of such contingency shall mark the beginning of a period
(herein  called  a "default period") which shall extend until such time when all
accrued and unpaid dividends for all pervious quarterly

                                      A-2

<PAGE>

dividend periods and for the current quarterly dividend period on all
shares of Series A Preferred Stock then outstanding shall have been declared and
paid  or  set  apart  for  payment.  During  each default period, all holders of
Preferred  Stock  (including  holders  of  the  Series  A  Preferred Stock) with
dividends  in arrears in an amount equal to six (6) quarterly dividends thereon,
voting as a class, irrespective of series, shall have the right to elect two (2)
Trustees.

               (ii)     During  any  default  period,  such  voting right of the
holders  of  Series  A  Preferred  Stock may be exercised initially at a special
meeting  called  pursuant  to  subparagraph (iii) of this Section 3(C) or at any
annual  meeting  of  stockholders,  and  thereafter  at  annual  meetings  of
stockholders,  provided  that  neither  such  voting  right nor the right of the
holders  of any other series of Preferred Stock, if any, to increase, in certain
cases,  the  authorized number of Trustees shall be exercised unless the holders
of ten percent (10%) in number of shares of Preferred Stock outstanding shall be
present in person or by proxy.  The absence of a quorum of the holders of Common
Stock  shall  not  affect the exercise by the holders of Preferred Stock of such
voting  right.  At  any  meeting  at  which the holders of Preferred Stock shall
exercise  such  voting  right  initially during an existing default period, they
shall  have  the  right,  voting  as  a  class,  to  elect Trustees to fill such
vacancies,  if any, in the Trustees as may then exist up to two (2) Trustees or,
if  such right is exercised at an annual meeting, to elect two (2) Trustees.  If
the number which may be so elected at any special meeting does not amount to the
required number, the holders of the Preferred Stock shall have the right to make
such  increase  in  the  number  of Trustees as shall be necessary to permit the
election  by  them  of  the required number.  After the holders of the Preferred
Stock  shall  have exercised their right to elect Trustees in any default period
and  during  the continuance of such period, the number of Trustees shall not be
increased  or  decreased  except  by  vote  of the holders of Preferred Stock as
herein  provided  or  pursuant  to  the  rights of any equity securities ranking
senior  to  or  pari  passu  with  the  Series  A  Preferred  Stock.
                -----------

               (iii)     Unless  the holders of Preferred Stock shall, during an
existing  default  period,  have  previously  exercised  their  right  to  elect
Trustees,  the  Trustees may order, or any stockholder or stockholders owning in
the  aggregate  not less than ten percent (10%) of the total number of shares of
Preferred Stock outstanding, irrespective of series, may request, the calling of
a  special  meeting  of  the  holders  of  Preferred  Stock, which meeting shall
thereupon  be  called by the President, a Vice-President or the Secretary of the
Company.  Notice  of  such meeting and of any annual meeting at which holders of
Preferred  Stock  are entitled to vote pursuant to this paragraph (C)(iii) shall
be  given  to each holder of record of Preferred Stock by mailing a copy of such
notice  to  him  at  his  last  address  as the same appears on the books of the
Company.  Such  meeting  shall be called for a time not earlier than 20 days and
not  later than 60 days after such order or request or in default of the calling
of  such meeting within 60 days after such order or request, such meeting may be
called  on  similar  notice  by  any  stockholder  or stockholders owning in the
aggregate  not  less  than  ten  percent  (10%) of the total number of shares of
Preferred  Stock  outstanding.  Notwithstanding the provisions of this paragraph
(C)(iii),  no  such  special meeting shall be called during the period within 60
days  immediately  preceding  the  date fixed for the next annual meeting of the
stockholders.

               (iv)     In  any default period, the holders of Common Stock, and
other  classes  of  stock  of  the  Company  if applicable, shall continue to be
entitled  to  elect  the whole number

                                      A-3

<PAGE>

of  Trustees  until  the  holders  of Preferred Stock shall have exercised their
right  to  elect two (2) Trustees voting as a class, after the exercise of which
right  (x)  the  Trustees  so  elected  by  the holders of Preferred Stock shall
continue  in  office  until  their  successors  shall  have been elected by such
holders  or  until  the expiration of the default period, and (y) any vacancy in
the Trustees may (except as provided in paragraph (C) (ii) of this Section 3) be
filled  by  vote  of a majority of the remaining Trustees theretofore elected by
the  holders  of the class of stock which elected the Trustee whose office shall
have  become vacant, or if no such Trustees are in office, by the holders of the
Preferred  Stock.  References  in  this paragraph (C) to Trustees elected by the
holders  of  a  particular class of stock shall include Trustees elected by such
Trustees  to fill vacancies as provided in clause (y) of the foregoing sentence.

               (v)     Immediately  upon the expiration of a default period, (x)
the  right  of the holders of Preferred Stock as a class to elect Trustees shall
cease, (y) the term of any Trustees elected by the holders of Preferred Stock as
a class, shall terminate, and (z) the number of Trustees shall be such number as
may  be  provided  for  in  the  Declaration  of  Trust or Trustees' Regulations
irrespective  of  any  increase made pursuant to the provisions of paragraph (C)
(ii) of this Section 3 (such number being subject, however, to change thereafter
in  any  manner  provided by law or in the Declaration of Trust or the Trustees'
Regulations).  Any  vacancies  in  the  Trustees  effected  by the provisions of
clauses (y) and (z) in the preceding sentence may be filled by a majority of the
remaining  Trustees.

          (D)     Except  as  set  forth  herein  or  otherwise required by law,
holders  of  Series  A  Preferred  Stock shall have no special voting rights and
their  consent  shall not be required (except to the extent they are entitled to
vote  with holders of Common Stock as set forth herein) for taking any corporate
action.

     Section  4.     CERTAIN  RESTRICTIONS.
                     ---------------------

          (A)     Whenever  quarterly  dividends  or  other  dividends  or
distributions  payable  on the Series A Preferred stock as provided in Section 2
are  in  arrears,  thereafter  and  until  all  accrued and unpaid dividends and
distributions,  whether  or  not declared, on shares of Series A Preferred Stock
outstanding  shall  have  been  paid  in  full,  the  Company  shall  not:

               (i)     declare or pay dividends on, make any other distributions
on,  or  redeem or purchase or otherwise acquire for consideration any shares of
stock ranking junior (either as to dividends or upon liquidation, dissolution or
winding  up)  to  the  Series  A  Preferred  Stock;

               (ii)     declare  or  pay  dividends  on  or  make  any  other
distributions on any shares of stock ranking on a parity (either as to dividends
or  upon  liquidation,  dissolution  or  winding up) with the Series A Preferred
Stock,  except  dividends  paid  ratably on the Series A Preferred Stock and all
such  parity stock on which dividends are payable or in arrears in proportion to
the  total  amounts  to  which the holders of all such shares are then entitled;

               (iii)     redeem  or  purchase  or  otherwise  acquire  for
consideration shares or any stock ranking on a parity (either as to dividends or
upon  liquidation, dissolution or

                                      A-4

<PAGE>

winding  up) with the Series A Preferred Stock, provided that the Company may at
any  time  redeem, purchase or otherwise acquire shares of any such parity stock
in  exchange for shares of any stock of the Company ranking junior (either as to
dividends  or  upon  dissolution,  liquidation  or  winding  up) to the Series A
Preferred  Stock;

          (B)     The  Company shall not permit any subsidiary of the Company on
to  purchase  or  otherwise acquire for consideration any shares of stock of the
Company  unless  the  Company  could,  under  paragraph  (a)  of this Section 4,
purchase  or  otherwise  acquire  such  shares  at such time and in such manner.

     Section  5.     REACQUIRED  SHARES.  Any shares of Series A Preferred Stock
                     ------------------
purchased or otherwise acquired by the Company in any manner whatsoever shall be
retired  and  cancelled promptly after the acquisition thereof.  All such shares
shall upon their cancellation become authorized but unissued shares of Preferred
Stock  and  may  be  reissued  as  part of a new series of Preferred Stock to be
created  by resolution or resolutions of the Trustees, subject to the conditions
and  restrictions  on  issuance  set  forth  herein.

     Section  6.     LIQUIDATION,  DISSOLUTION  OR  WINDING  UP.
                     ------------------------------------------

          (A)     Upon  any liquidation (voluntary or otherwise), dissolution or
winding  up  of  the  Company,  no  distribution shall be made to the holders of
shares  of  stock  ranking  junior  (either as to dividends or upon liquidation,
dissolution  or  winding  up)  to  the  Series  A  Preferred Stock unless, prior
thereto,  the  holders of shares of Series A Preferred Stock shall have received
$100  per  share  plus  an  amount  equal  to  accrued  and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment (the
"Series A Liquidation Preference").  Following the payment of the full amount of
the  Series  A Liquidation Preference, no additional distributions shall be made
to  the holders of shares of Series A Preferred Stock unless, prior thereto, the
holders  of  shares of Common Stock shall have received an amount per share (the
"Common Adjustment") equal to the quotient obtained by dividing (i) the Series A
Liquidation  Preference  by  (ii) 100 (as appropriately adjusted as set forth in
subparagraph C below to reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) (such number in clause (ii),
the  "Adjustment  Number").  Following  the  payment  of  the full amount of the
Series  A  Liquidation  Preference  and  the Common Adjustment in respect of all
outstanding  shares  of Series A Preferred Stock and Common Stock, respectively,
holders  of Series A Preferred Stock and holders of shares of Common Stock shall
receive  their  ratable  and  proportionate  share of the remaining assets to be
distributed  in  the  ration  of the Adjustment Number to 1 with respect to such
Preferred  Stock  and  Common  Stock,  on  a  per  share  basis,  respectively.

          (B)     In  the  event,  however, that there are not sufficient assets
available  to  permit payment in full of the Series A Liquidation Preference and
the  liquidation  preferences  of  all  other series of preferred stock, if any,
which  rank  on  a parity with the Series A Preferred Stock, then such remaining
assets  shall  be  distributed  ratably  to the holders of such parity shares in
proportion  to  their respective liquidation preferences. In the event, however,
that  there are not sufficient assets available to permit payment in full of the
Common  Adjustment,  then  such remaining assets shall be distributed ratably to
the  holders  of  Common  Stock.

                                      A-5
<PAGE>

          (C)     In  the  event  the Company shall at any time after the Rights
Declaration  Date  (i) declare any dividend on Common Stock payable in shares of
Common  Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the  Adjustment  Number  in  effect  immediately  prior  to  such event shall be
adjusted  by  multiplying  such Adjustment Number by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event  and the denominator of which is the number of shares of Common Stock that
were  outstanding  immediately  prior  to  such  event.

     Section 7.     CONSOLIDATION, MERGER, ETC.  In case the Company shall enter
                    ---------------------------
into  any  consolidation,  merger, combination or other transaction in which the
shares  of  Common  Stock  are  exchanged  for  or  changed  into other stock or
securities,  cash and/or any other property, then in any such case the shares of
Series  A  Preferred  Stock  shall  at  the  same time be similarly exchanged or
changed  in  an  amount  per  share  (subject  to  the  provision for adjustment
hereinafter  set  forth)  equal  to  100  times  the  aggregate amount of stock,
securities,  cash  and/or  any other property (payable in kind), as the case may
be,  into which or for which each share of Common Stock is changed or exchanged.
In the event the Company shall at any time after the Rights Declaration Date (i)
declare  any  dividend  on  Common  Stock payable in shares of Common Stock (ii)
subdivide  the outstanding Common Stock, or (iii) combine the outstanding Common
Stock  into  a  smaller  number of shares, then in each such case the amount set
forth in the preceding sentence with respect to the exchange or change of shares
of  Series  A  Preferred Stock shall be adjusted by multiplying such amount by a
fraction  the  numerator  of  which  is  the  number  of  shares of Common Stock
outstanding  immediately  after  such  event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.

     Section 8.     NO REDEMPTION.  The shares of Series A Preferred Stock shall
                    -------------
not  be  redeemable.

     Section  9.     RANKING.  The Series A Preferred Stock shall rank junior to
                     -------
all other series of the Company's Preferred Stock as to the payment of dividends
and  the  distribution  of  assets,  unless  the  terms of any such series shall
provide  otherwise.

     Section 10.     AMENDMENT.  The Restated Declaration of Trust Company shall
                     ---------
not  be further amended in any manner which would materially alter or change the
powers,  preferences  or special rights of the Series A Preferred Stock so as to
affect  them adversely without the affirmative vote of the holders of two-thirds
or more of the outstanding shares of Series A Preferred Stock, voting separately
as  a  class.

     Section  11.     FRACTIONAL SHARES.  Series A Preferred stock may be issued
                      -----------------
in  fractions  of a share which shall entitled the holder, in proportion to such
holder's  fractional  shares,  to  exercise  voting  rights,  receive dividends,
participate  in  distributions  and  to  have the benefit of all other rights of
holders  of  Series  A  Preferred  Stock.

                                      A-6

<PAGE>

3.     The  amendment  was  adopted  by  the  Trustees  on  July  15,  1993.

4.     The  amendment  was  duly  adopted  by  the  Trustees.



                               MERCER INTERNATIONAL INC.

                               By:   /s/ Jimmy S.H. Lee
                                   -------------------------
                               Name:  Jimmy S.H. Lee
                               Title: President



DATED:  August  ____,  1993

                                      A-7

<PAGE>


                                    EXHIBIT B

                           FORM OF RIGHTS CERTIFICATE


Certificate  No.  R-____     ____________  Rights

NOT  EXERCISABLE  AFTER  DECEMBER  31, 2005 OR EARLIER IF REDEMPTION OR EXCHANGE
OCCURS.  THE  RIGHTS  ARE SUBJECT TO REDEMPTION AT THE OPTION OF THE COMPANY, AT
$0.001  PER  RIGHT,  AND  TO  EXCHANGE  ON  THE  TERMS  SET  FORTH IN THE RIGHTS
AGREEMENT.

UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR
AN  AFFILIATE  OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN
THE  RIGHTS  AGREEMENT)  AND  BY ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME
NULL  AND  VOID.  [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE
BENEFICIALLY  OWNED  BY  A  PERSON  WHO  WAS OR BECAME AN ACQUIRING PERSON OR AN
AFFILIATE  OR  ASSOCIATE  OF  AN  ACQUIRING  PERSON.  ACCORDINGLY,  THIS  RIGHTS
CERTIFICATE  AND  THE  RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE
CIRCUMSTANCES  SPECIFIED  IN  THE  RIGHTS  AGREEMENT.]*

*The  portion of the Legend in brackets shall be inserted only if applicable and
shall  replace  the  preceding  sentence.

                               RIGHTS CERTIFICATE

                            MERCER INTERNATIONAL INC.

     This  certificate  certifies  that  ________________________, or registered
assigns,  is  the registered owner of the number of Rights set forth above, each
of  which  entitles  the  owner  thereof,  subject  to the terms, provisions and
conditions  of  the Rights Agreement, dated as of December 23, 2003 (the "RIGHTS
AGREEMENT"),  between Mercer International Inc., a Massachusetts trust organized
under  the  laws  of  the state of Washington (the "COMPANY"), and Computershare
Trust  Company  of  Canada,  a  Canadian  limited liability company (the "RIGHTS
AGENT"), unless the Rights evidenced hereby have been previously redeemed by the
Company,  to  purchase  from the Company at any time after the Distribution Date
(as such term is defined in the Rights Agreement) and before 4:30 p.m., Seattle,
Washington  time,  on December 31, 2005 at the office of the Rights Agent, or at
the  office of its successor as Rights Agent, one one-hundredth of a fully paid,
nonassessable share of Series A Participating Cumulative Preferred Stock, no par
value  (the  "PREFERRED  SHARES"), of the Company, at a purchase price of $75.00
per  one  one-hundredth  of  a  Preferred  Share  (the  "PURCHASE  PRICE"), upon
presentation  and surrender of this Rights Certificate with the Form of Election
to  Purchase  duly  executed.  The  number  of  Rights  evidenced by this Rights
Certificate  (and  the number of one-hundredths of a Preferred Share that may be
purchased  upon  exercise  hereof)  set  forth above, and the Purchase Price set
forth above, are the number and Purchase Price as of December 31, 2003, based on
the  Preferred  Shares  as  constituted  at such date. As provided in the Rights
Agreement,  the  Purchase  Price  and  the  number  of  one  one-hundredths of a
Preferred  Share  that

                                      B-1

<PAGE>

may  be  purchased  upon  the  exercise  of  the Rights evidenced by this Rights
Certificate  are  subject  to  modification and adjustment upon the happening of
certain  events.

This  Rights  Certificate is subject to all the terms, provisions and conditions
of  the  Rights  Agreement,  which  terms,  provisions and conditions are hereby
incorporated  herein  by  reference  and  made a part hereof and to which Rights
Agreement  reference  is  hereby  made  for  a  full  description of the rights,
limitations  of  rights,  obligations,  duties  and  immunities hereunder of the
Rights  Agent,  the Company and the holders of Rights, which limitations include
the temporary suspension of the exercisability of such Rights under the specific
circumstances  set forth in the Rights Agreement. Copies of the Rights Agreement
are  on  file  at  the  principal  executive  offices  of  the  Company.

This  Rights  Certificate,  with  or  without  other  Rights  Certificates, upon
surrender  at the office of the Rights Agent designated for such purpose, may be
exchanged  for  another  Rights Certificate or Rights Certificates of like tenor
and  date  evidencing  Rights  entitling the holder to purchase a like aggregate
number  of Preferred Shares as the Rights evidenced by the Rights Certificate or
Rights  Certificates surrendered shall have entitled such holder to purchase. If
this Rights Certificate shall be exercised in part, the holder shall be entitled
to  receive  upon  surrender  hereof  another  Rights  Certificate  or  Rights
Certificates  for  the  number  of  whole  Rights  not  exercised.

Subject  to the provisions of the Rights Agreement, the Rights evidenced by this
Certificate (a) may be redeemed by the Company at a redemption price (in cash or
shares  of  the Company's common stock or other securities of the Company deemed
by the Company's Board of Trustees to be at least equivalent in value) of $0.001
per  Right  (subject  to adjustment, as provided in the Rights Agreement) or (b)
may be exchanged in whole or in part for shares of the Company's common stock or
other  consideration  as  determined  by  the  Company.

The  Company  may,  but  shall  not be required to, issue fractions of Preferred
Shares  or  distribute  certificates that evidence fractions of Preferred Shares
upon  the  exercise  of any Right or Rights evidenced hereby. In lieu of issuing
fractional  shares,  the Company may elect to make a cash payment as provided in
the  Rights  Agreement  for  fractions  of  a share other than one one-hundredth
(1/100)  of  a  Preferred  Share  or  any  integral multiple thereof or to issue
certificates or utilize a depository arrangement as provided in the terms of the
Rights  Agreement  and  the  Preferred  Shares.

No  holder  of  this  Rights  Certificate  shall  be entitled to vote or receive
dividends  or be deemed for any purpose the holder of the Preferred Shares or of
any  other  securities  of  the  Company that may at any time be issuable on the
exercise  hereof, nor shall anything contained in the Rights Agreement or herein
be  construed  to confer upon the holder hereof, as such, any of the rights of a
shareholder  of the Company or any right to vote for the election of Trustees or
upon  any matter submitted to shareholders at any meeting thereof, or to give or
withhold  consent  to

                                      B-2

<PAGE>

any  corporate  action,  or  to  receive  notice  of  meetings  or other actions
affecting  shareholders  (except  as  provided  in  the Rights Agreement), or to
receive  dividends  or  subscriptions  rights,  or otherwise, until the Right or
Rights  evidenced  by  this  Rights  Certificate  shall  have  been exercised as
provided  in  the  Rights  Agreement.

This  Rights  Certificate shall not be valid or obligatory for any purpose until
it  shall  have  been  countersigned  by  the  Rights  Agent.

WITNESS  the  facsimile  signature of the proper officers of the Company and its
corporate  seal.  Dated  as  of  _______________,  20__.

                                      MERCER  INTERNATIONAL  INC.


                                      By:  _________________________

                                      Its:__________________________


COUNTERSIGNED:

COMPUTERSHARE  TRUST  COMPANY  OF  CANADA,
AS  RIGHTS  AGENT

By:  _________________________

Its:  __________________________

                                      B-3

<PAGE>

                  --FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE-

                               FORM OF ASSIGNMENT

       (To be executed by the registered holder if such holder desires to
                        transfer the Rights Certificate)

FOR  VALUE  RECEIVED _____________________________________________ HEREBY SELLS,
ASSIGNS  AND  TRANSFERS  UNTO
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________

(PLEASE  PRINT  NAME  AND  ADDRESS  OF  TRANSFEREE)

THIS  RIGHTS  CERTIFICATE,  TOGETHER WITH ALL RIGHT, TITLE AND INTEREST THEREIN,
AND  DOES  HEREBY  IRREVOCABLY  CONSTITUTE  AND  APPOINT  _____________  AS
ATTORNEY-IN-FACT,  TO  TRANSFER  THIS  RIGHTS  CERTIFICATE  ON  THE BOOKS OF THE
WITHIN-NAMED  COMPANY,  WITH  FULL  POWER  OF  SUBSTITUTION.

The  undersigned  hereby  certifies that (1) the Rights evidenced by this Rights
Certificate  are  not  being  sold, assigned or transferred by or on behalf of a
Person  who  is  or was an Acquiring Person or an Affiliate or Associate thereof
(as such terms are defined in the Rights Agreement), (2) this Rights Certificate
is not being sold, assigned or transferred to or on behalf of any such Acquiring
Person,  Affiliate or Associate, and (3) after inquiry and to the best knowledge
of the undersigned, the undersigned did not acquire the Rights evidenced by this
Rights  Certificate  from  any  Person  who  is or was an Acquiring Person or an
Affiliate  or  Associate.

Dated:_________________________________________________________________

Signature:_____________________________________________________________

Signature  Guarantee*

_______________________________________________________________________

*  Signatures  must  be  guaranteed  by  an  "eligible guarantor institution" as
defined  in  Rule 17Ad-15 promulgated under the Securities Exchange Act of 1934,
as  amended.  Guarantees  by  a  notary  public  are  not  acceptable.

                                      B-4

<PAGE>

                 --Form of Reverse Side of Rights Certificate--
                                   (continued)

                          FORM OF ELECTION TO PURCHASE

              (To be executed if holder desires to exercise Rights
                     represented by the Rights Certificate)

To:  MERCER  INTERNATIONAL  INC.

The  undersigned  hereby  irrevocably  elects  to  exercise  __________  Rights
represented  by this Rights Certificate to purchase the number of one-hundredths
of a Preferred Share issuable upon the exercise of such Rights and requests that
certificates for such number of one-hundredths of a Preferred Share be issued in
the  name  of:

Please  insert  social  security  or  other  identifying
number___________________________

________________________________________________________________________

(Please  print  name  and address)______________________________________________
________________________________________________________________________

If  such  number  of Rights shall not be all the Rights evidenced by this Rights
Certificate,  a  new Rights Certificate for the balance remaining of such Rights
shall  be  registered  in  the  name  of  and  delivered  to:

Please  insert  social  security  or  other  identifying
number___________________________

________________________________________________________________________

(Please  print  name  and address)______________________________________________

________________________________________________________________________

     The  undersigned  hereby  certifies  that  (1) the Rights evidenced by this
Rights  Certificate  are  not  beneficially  owned  by an Acquiring Person or an
Affiliate  or  Associate  thereof  (as  such  terms  are  defined  in the Rights
Agreement)  and  (2) after inquiry and to the best knowledge of the undersigned,
the  undersigned did not acquire the Rights evidenced by this Rights Certificate
from  any  Person who is or was an Acquiring Person or an Affiliate or Associate
thereof  (as  such  terms  are  defined  in  the  Rights  Agreement).

Dated__________________________________________________________________

Signature:_______________________________________________________________

Signature  Guarantee*______________________________________________________

                                      B-5

<PAGE>

     *Signatures  must  be  guaranteed by an "eligible guarantor institution" as
defined  in  Rule 17Ad-15 promulgated under the Securities Exchange Act of 1934,
as  amended.  Guarantees  by  a  notary  public  are  not  acceptable.

                                      B-6

<PAGE>

                  --Form of Reverse Side of Rights Certificate-
                                   (continued)

                                     NOTICE

THE  SIGNATURE IN THE FORM OF ASSIGNMENT OR FORM OF ELECTION TO PURCHASE, AS THE
CASE  MAY  BE,  MUST  CONFORM  TO THE NAME AS WRITTEN ON THE FACE OF THIS RIGHTS
CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE
WHATSOEVER.

IN  THE EVENT THE CERTIFICATION SET FORTH ABOVE IN THE FORM OF ASSIGNMENT OR THE
FORM  OF ELECTION TO PURCHASE, AS THE CASE MAY BE, IS NOT COMPLETED, THE COMPANY
AND  THE  RIGHTS AGENT WILL DEEM THE BENEFICIAL OWNER OF THE RIGHTS EVIDENCED BY
THIS  RIGHTS  CERTIFICATE TO BE AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE
THEREOF  (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND SUCH ASSIGNMENT
OR  ELECTION  TO  PURCHASE  WILL  NOT  BE  HONORED.

                                      B-7

<PAGE>

                                    EXHIBIT C

                            MERCER INTERNATIONAL INC.

                             SHAREHOLDER RIGHTS PLAN

                                SUMMARY OF RIGHTS

Distribution  and  Transfer  of  Rights;  Rights  Certificates

On  November  11,  2003,  the  board  of  trustees  (the  "BOARD")  of  Mercer
International  Inc.  ("MERCER"  or  the  "COMPANY")  declared  a dividend of one
preferred  share  purchase  right  (a  "RIGHT")  for  each  outstanding share of
beneficial interest of Mercer (the "COMMON STOCK"). Before the Distribution Date
described  below the Rights will be evidenced by and trade with the certificates
for  Common  Stock. After the Distribution Date, if any, Mercer will mail Rights
certificates  to  its shareholders and the Rights will become transferable apart
from  the  Common  Stock.

Distribution  Date

The  Rights will separate from the Common Stock and become exercisable following
the earlier of the close of business on the tenth day (or such later date as may
be  determined  by a majority of the Board) after a person or group (i) acquires
beneficial  ownership  of  15%  or more of the aggregate of Mercer's outstanding
Common  Stock  and Common Stock issuable upon conversion of Mercer's outstanding
8.5% Convertible Senior Subordinated Notes due 2010 (the "NOTES") as if the then
outstanding  Notes had been fully converted (the "ISSUABLE NOTE SHARES") or (ii)
announces  a tender or exchange offer for Mercer's outstanding Common Stock that
could  result in the offeror becoming the beneficial owner of 15% or more of the
aggregate  of the outstanding Common Stock and Issuable Note Shares (the earlier
of  such  dates  being  the  "DISTRIBUTION  DATE").

Preferred  Stock  Purchasable  Upon  Exercise  of  Rights

After the Distribution Date, each Right will entitle the holder to purchase, for
$75.00  (the  "EXERCISE  PRICE"), one one-hundredth (1/100) of a share of Mercer
Series  A  junior  participating  preferred stock with economic terms similar to
that  of  one  share  of  Mercer  Common  Stock.

Flip-In

If  an  acquiror becomes the beneficial owner of 15% or more of the aggregate of
Mercer's  outstanding  Common  Stock  and Issuable Note Shares (thus becoming an
"ACQUIRING PERSON"), then each Right (other than Rights beneficially owned by an
Acquiring Person or its affiliates) will entitle the holder to purchase, for the
exercise  price,  that  number  of  shares  of  Mercer  Common  Stock  having  a
then-current  market  value  of  two  times  the  exercise  price.

                                      C-1

<PAGE>

Flip-Over

In certain circumstances, if, after the Shares Acquisition Date (defined below),
(a)  Mercer  merges  into  another  entity,  (b) an acquiring entity merges into
Mercer  or  (c)  Mercer sells more than 50% of its assets or earning power, then
each  Right  (other than Rights beneficially owned by an Acquiring Person or its
affiliates)  will  entitle  the  holder  to  purchase, for the exercise price, a
number  of  shares  of the capital stock (with the greatest voting power) of the
person  engaging  in the transaction having a then-current market value of twice
the exercise price.  However, such Rights will not be exercisable in the case of
a  transaction described in (a) or (b) above, if (i) such transaction involves a
tender  or exchange offer for all of the outstanding Common Stock at a price and
on  terms  determined  by  a  majority  of  the  Board  to  be  fair to Mercer's
shareholders  and  otherwise in the best interests of Mercer, (ii) the per share
price offered in such transaction is not less than the price paid to all holders
of  Common  Stock purchased pursuant to such tender or exchange offer, and (iii)
the form of consideration offered to the remaining holders of Common Stock under
such  transaction is the same form of consideration paid pursuant to such offer.

Exchange  Provisions

After any person or group becomes an Acquiring Person but before the acquisition
of  Mercer or 50% or more of its assets or earning power, the Board may elect to
exchange  each  Right  (other  than  Rights  that  have become null and void and
nontransferable  as  described  above) for consideration per Right consisting of
one-half  of the number of shares of Common Stock that would be issuable at such
time  upon  the exercise of one Right and without payment of the exercise price.

Redemption  of  Rights

The  Rights will be redeemable at the Company's option for $0.001 per Right (the
"REDEMPTION  PRICE")  at any time on or before the tenth day (or such later date
as  may be determined by a majority of the Board) after public announcement that
a  person  has  acquired beneficial ownership of 15% or more of the aggregate of
the  Company's  then  outstanding  Common  Stock  and  Issuable Note Shares (the
"SHARES  ACQUISITION  DATE").

Expiration  of  Rights

The  Rights  are  not exercisable until the Distribution Date and will expire on
December  31,  2005,  unless  earlier  redeemed  or  exchanged  by  Mercer.

Amendment  of  Terms  of  Rights

The  terms of the Rights and the Rights Agreement may be amended in any respect,
without  the  approval  of  any  holder  of  the  Rights, at any time before the
Distribution  Date,  subject  to  certain  restrictions.

                                      C-2

<PAGE>

Voting  Rights

Until  a  Right is exercised, the holder will have no rights as a shareholder of
Mercer,  including,  without limitation, the right to vote or receive dividends.

Antidilution  Provisions

In  order  to preserve the actual or potential economic value of the Rights, the
number  of  shares  of  Series  A  junior participating preferred stock or other
securities issuable upon exercise of a Right, the exercise price, the Redemption
Price  and the number of Rights associated with each outstanding share of Common
Stock  are  all  subject  to  adjustment  by  the  Board,  pursuant to customary
antidilution  provisions.

Taxes

Distribution  of the Rights should not be a taxable event for federal income tax
purposes.  Following  an  event  that  renders  the  Rights  exercisable or upon
redemption  of  the  Rights,  shareholders  may  recognize  taxable  income.

     The  foregoing  is a summary of the principal terms of Mercer's shareholder
rights  plan and is qualified in its entirety by reference to the detailed terms
of  the  Rights Agreement. A copy of the Rights Agreement, which is on file with
the  Securities  and  Exchange Commission as an exhibit to Mercer's Registration
Statement on Form 8-A, may be obtained from Mercer free of charge, upon request.

                                      C-3