Document:

Exhibit 10.2

 

HORIZON BANCORP

2013 OMNIBUS EQUITY INCENTIVE PLAN

PERFORMANCE SHARE AWARD AGREEMENT

THIS AGREEMENT (the “Agreement”), made and executed as of the ____ day of ___________, ______, between Horizon Bancorp, an Indiana corporation (the “Company”), and _________________ an officer or employee of the Company or one of its Affiliates, including but not limited to Horizon Bank, N.A., (the “Participant”).

WITNESSETH:

WHEREAS, the Company has adopted the Horizon Bancorp 2013 Omnibus Equity Incentive Plan (the “Plan”) to further the growth and financial success of the Company and its Affiliates by aligning the interests of Participants, through the ownership of Shares and through other incentives, with the interests of the Company’s shareholders; to provide Participants with an incentive for excellence in individual performance; to promote teamwork among Participants; to provide flexibility to the Company in its ability to motivate, attract and retain the services of Participants who make significant contributions to the Company’s success; and to allow Participants to share in the success of the Company; and

WHEREAS, it is the view of the Company that this goal can be achieved by granting Performance Shares to eligible employees; and

WHEREAS, the Participant has been designated by the Committee as an individual to whom Performance Shares should be granted as determined from the duties performed, the initiative and industry of the Participant, and his or her potential contribution to the future development, growth and prosperity of the Company;

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Company and the Participant agree as follows:

1. Award of Performance Shares.  The Company hereby awards to the Participant, effective as of the date the Committee formally approves the award by resolution, _________ ____________ (x,xxx) Performance Shares, subject to the terms and conditions of this Agreement and the provisions of the Plan.  All provisions of the Plan, including defined terms, are incorporated herein and expressly made a part of this Agreement by reference.  The Participant hereby acknowledges that he or she has received a copy of the Plan.

2. Performance Periods.  The Performance Period to which the award of Performance Shares relates is the three-year period beginning on January 1, 20__ and ending on December 31, 20_.

3. Performance Goals.  The Performance Goals for the Performance Period are specified in Schedule A based on a comparison of the Company’s average performance over the Performance Period (i.e., the summation of performance for calendar years one, two and three divided by three) for (a) return on common equity (“ROCE”), (b) compounded annual growth rate of total assets (“CAGR”), and (c) return on average assets (“ROAA”) relative to the average performance for publicly-traded banks with total assets between $1 billion and $5 billion on the SNL Bank Index (the “SNL Index”) for ROCE, CAGR and ROAA over the Performance Period.  Only banks which have reported year-end results by March 1st will be considered for comparison purposes.  In the event SNL Financial LC ceases to publish the SNL Index, the Committee will engage an independent compensation consultant to assist the Committee in selecting a new bank index or bank peer group for purposes of determining if a Performance Goal has been met.

4. Earning and Vesting of Performance Shares.  The Performance Shares will become earned and vested for the Performance Period (a) to the extent the Performance Goals are satisfied in accordance with Schedule A, and (b) only if the employment‐based vesting requirements in Section 5 below have been satisfied (or waived in accordance with Section 6).  If the Performance Goals are satisfied, the percentage of the Performance Shares that will be earned, vested and payable under Section 7 of this Agreement shall be determined through linear interpolation as set forth in Schedule B.  If the Performance Goals are not satisfied, those Performance Shares eligible to be earned and vested during such Performance Period will be forfeited effective as of the last day of the Performance Period.

5. Employment‐Based Vesting Requirements.  Except as otherwise provided in Section 6 below, the Participant satisfies the employment‐based vesting requirements only if he or she does not incur a Termination of Service prior to the last day of the Performance Period; provided, however, if the Participant incurs a Termination of Service due to death or Permanent and Total Disability prior to the last day of the Performance Period, the employment‐based vesting requirements will be treated as satisfied in a pro rata manner based on the number of days in the Performance Period in which the Participant was an employee prior to Termination of Service.

6. Change in Control or Retirement.  Notwithstanding any other provision of this Agreement, the employment‐based vesting requirements of Section 5 shall be deemed satisfied and the Performance Shares shall therefore be vested upon the Participant’s Retirement on or before the last day of the Performance Period or upon a Change in Control of the Company as provided in Section 11.1 of the Plan.  In addition, upon a Change in Control prior to the end of a Performance Period, the Performance Period shall be deemed to end as of the last day of the calendar quarter preceding the Change in Control and the Performance Goals shall be applied based on the abbreviated Performance Period.

7. Form and Timing of Payment of Performance Shares.  Payment of earned and vested Performance Shares will be made in either March or April of the calendar year after the end of the applicable Performance Period.  The Committee, in its sole discretion, may pay earned and vested Performance Shares in the form of cash, in Shares (which have an aggregate Fair Market Value equal to the value of the earned and vested Performance Shares, determined as of the last day of the Performance Period) or a combination thereof.

8. Pass-Through of Dividends.  Prior to the payment of earned and vested Performance Shares, the Participant shall be entitled to receive those cash dividends which would have been paid with respect to a number of Performance Shares established by the Committee as if those Performance Shares had been actual Shares.

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9. Participant’s Representations.  The Participant represents to the Company that:

(a) The terms and arrangements relating to the grant of Performance Shares and the offer thereof have been arrived at or made through direct communication with the Company or a person acting in its behalf and the Participant;

(b) The Participant has received a balance sheet and income statement of the Company and as an employee of the Company or one of its Affiliates:

(i) is thoroughly familiar with the Company’s business affairs and financial condition; and

(ii) has been provided with or has access to such information (and has such knowledge and experience in financial and business matters that the Participant is capable of utilizing such information) as is necessary to evaluate the risks, and make an informed investment decision with respect to, the grant of Performance Shares.

10. Nontransferability.  Performance Shares cannot be (a) sold, transferred, assigned, margined, encumbered, bequeathed, gifted, alienated, hypothecated, pledged or otherwise disposed of, whether by operation of law, whether voluntarily or involuntarily or otherwise, or (b) subject to execution, attachment or similar process.  Any attempted or purported transfer of Performance Shares in contravention of this Section or the Plan shall be null and void and of no force or effect whatsoever.

11. Issuance of Shares.  Within a reasonable period of time following the end of the Period of Restriction, the Company shall issue to the Participant or his beneficiary the number of Performance Shares specified in Section 1 of this Agreement, less any withholding required by Section 13 of this Agreement.

12. Restrictive Legend.  In the event the Participant is an “affiliate” of the Company (as defined by Rule 144 promulgated under the Securities Act of 1933, as amended), the Company may require that the shares to be issued to such Participant contain a legend in substantially the following form:

“THE HOLDER OF THE SHARES EVIDENCED BY THIS CERTIFICATE IS AN “AFFILIATE” OF THE COMPANY (AS DEFINED BY RULE 144 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED), AND THEREFORE, THE SHARES ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS.”

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The Company shall issue such additional certificates as may be required to give effect to Section 17 of this Agreement.

Notwithstanding the foregoing provisions of this Section, the Company shall not be required to deliver any certificates for shares prior to: (a) the end of the Period of Restriction; (b) completing any registration or other qualification of the Shares, which the Company deems necessary or advisable under any federal or state law or under the rulings or regulations of the Securities and Exchange Commission or any other governmental regulatory body; and (c) obtaining any approval or other clearance from any federal or state governmental agency or body, which the Company determines to be necessary or advisable.  The Company has no obligation to obtain the fulfillment of the conditions specified in the preceding sentence.  As a further condition to the issuance of certificates for shares, the Company may require the making of any representation or warranty which the Company deems necessary or advisable under any applicable law or regulation.

13. Income and Employment Tax Withholding.  The Participant shall be solely responsible for paying to the Company all required federal, state, city and local income and employment taxes which arise on the vesting of the Performance Shares. The Committee, in its sole discretion and subject to such rules as it may adopt, shall require the Participant to satisfy any withholding tax obligation by having the Company retain Performance Shares which have a Fair Market Value, determined as of the date of payment for such Performance Shares to the Participant, equal to the amount of the minimum withholding tax to be satisfied by that retention.

14. Mitigation of Excise Tax.  The Participant acknowledges that the Performance Shares issued hereunder is subject to reduction by the Committee for the reasons specified in Section 13.9 of the Plan.

15. Indemnity.  The Participant hereby agrees to indemnify and hold harmless the Company and its Affiliates (and their respective directors, officers and employees), and the Committee, from and against any and all losses, claims, damages, liabilities and expenses based upon or arising out of the incorrectness or alleged incorrectness of any representation made by Participant to the Company or any failure on the part of the Participant to perform any agreements contained herein. The Participant hereby further agrees to release and hold harmless the Company and its Affiliates (and their respective directors, officers and employees) from and against any tax liability, including without limitation, interest and penalties, incurred by the Participant in connection with the Participant’s participation in the Plan.

16. Financial Information.  The Participant understands he or she is able to access the Company’s most recent quarterly balance sheet and quarterly income statement by visiting the following internet address: http://www.snl.com/Irweblinkx/finl.aspx?iid=100750.

17. Changes in Shares.  In the event of any change in the Shares, as described in Section 3.6 of the Plan, the Committee shall make appropriate adjustment or substitution in the number of Performance Shares, all as provided in the Plan.  The Committee’s determination in this respect shall be final and binding upon all parties.

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18. Non-Disclosure; Return of Confidential Information and Other Property.

(a) Access to Confidential Information.  The Participant understands, acknowledges and agrees that during the course of his employment with the Company he has gained or shall gain information regarding, knowledge of and familiarity with the Confidential Information (as defined in subsection 18(c)) of the Company and any Affiliates and that if the Confidential Information was disclosed by the Participant, the Company or Affiliate would suffer irreparable damage and harm.  The Participant understands, acknowledges and agrees that the Confidential Information derives substantial economic value from, among other reasons, not being known or readily ascertainable by proper means by others who could obtain economic value therefrom upon disclosure.  The Participant acknowledges and agrees that the Company and all Affiliates use reasonable means to maintain the secrecy and confidentiality of the Confidential Information.

(b) Non-Disclosure.  At all times while the Participant is employed by the Company or any Affiliate, and at all times thereafter, the Participant shall not (i) directly or indirectly disclose, provide or discuss any Confidential Information with or to any Person (as defined in subsection 18(d) other than those directors, officers, employees, representatives and agents of the Company and any Affiliates who need to know such Confidential Information for a proper corporate purpose, and (ii) directly or indirectly use any Confidential Information (A) to compete against the Company or any Affiliates, or (B) for the Participant’s own benefit or for the benefit of any Person other than the Company or any Affiliate.

(c) Confidential Information Defined.  For purposes of this Agreement, the term “Confidential Information” means any and all:

(i) materials, records, data, documents, lists, writings and information (whether in writing, printed, verbal, electronic, computerized, on disk or otherwise) (A) relating or referring in any manner to the business, operations, affairs, financial condition, results of operation, cash flow, assets, liabilities, sales, revenues, income, estimates, projections, policies, strategies, techniques, methods, products, developments, suppliers, relationships and/or customers of the Company or any Affiliate that are confidential, proprietary or not otherwise publicly available, in any event not without a breach of this Agreement, or (B) that the Company or any Affiliate has deemed confidential, proprietary or nonpublic;

(ii) trade secrets of the Company or any Affiliate, as defined in Indiana Code Section 24-2-3-2, as amended, or any successor statute; and

(iii) any and all copies, summaries, analyses and extracts which relate or refer to or reflect any of the items set forth in (i) or (ii) above.  The Participant agrees that all Confidential Information is confidential and is and at all times shall remain the property of, as applicable, the Company or any of the Affiliates.

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(d) Definition of Person.  For purposes of this Agreement, the term “Person” shall mean any natural person, proprietorship, partnership, corporation, limited liability corporation, bank, organization, firm, business, joint venture, association, trust or other entity and any government agency, body or authority.

(e) Return of Confidential Information and Other Property.  The Participant covenants and agrees:

(i) to keep all Confidential Information subject to the Company’s or any Affiliate’s custody and control and to promptly return to the Company or the appropriate Affiliate all Confidential Information that is still in the Participant’s possession or control at the termination of the Participant’s employment with the Company; and

(ii) promptly upon termination of the Participant’s employment with the Company, to return to the Company, at the Company’s principal office, all vehicles, equipment, computers, credit cards and other property of the Company and to cease using any of the foregoing.

19. Non-Solicitation of Employees and Other Representatives. During the term of Participant’s employment with Horizon Bank, N.A. (the “Bank”) and for twelve (12) months thereafter, (a) Participant will not directly or indirectly encourage, solicit, induce, or attempt to encourage, solicit, or induce any employee, agent, contractor, or representative of the Bank to terminate his/her employment or contractual relationship with the Bank (or devote less than full time and efforts to the Bank’s business), and (b) Participant will not directly or indirectly hire or attempt to hire: (i) for any competitive position with any competitor any person who is an employee, agent, contactor, or representative to the Bank at such time (or who has been an employee, agent, contractor, or representative of the Bank at any time within the preceding 180 days) or (ii) for any position with any business any person who is an employee, agent, contractor, or representative of the Bank at such time (or who has been an employee, agent, contractor, or representative of the Bank at any time within the preceding 180 days).

20. Non-Solicitation of Customers.  During the term of Participant’s employment with the Bank and for twelve (12) months thereafter, Participant will not, in a competitive capacity, on behalf of any person or entity other than the Bank, directly or indirectly:

(a) solicit, divert (or attempt to solicit or divert) or accept competitive business from any customer of the Bank with whom the Participant had contact (either directly or indirectly) or over which Participant had responsibility at any time in the one (1) year preceding Participant’s separation;

(b) solicit, divert (or attempt to solicit or divert) or accept any competitive business from any customer of the Bank about whom Participant has obtained Confidential Information while employed by the Bank;

(c) solicit, divert (or attempt to solicit or divert) or accept competitive business from any identified prospective customer of the Bank with whom Participant had contact (either directly or indirectly) or over which Participant had responsibility at any time in the one (1) year preceding Participant’s separation; or

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(d) solicit, divert (or attempt to solicit or divert) or accept competitive business from any identified prospective customer of the Bank about whom Participant has obtained Confidential Information.

21. Limited Covenant Not to Compete.

(a) During Participant’s employment by the Bank, Participant shall not, directly or indirectly, have any ownership interest in, work for, advise, manage, act as an agent or consultant for, or have any business connection, or business or employment relationship, with any entity or person which competes with the Bank.

(b) Moreover, for a period of six (6) months after Participant’s separation from the Bank for any reason, Participant shall not:

(i) Within the ________ county of __________;

(ii) Within forty (40) miles of any Bank branch in, or for which Participant performed services or has been assigned responsibility, at any time within one (1) year preceding Participant’s separation; or

(iii) in the Indiana and/or Michigan cities or towns for which Participant has been assigned responsibility, in writing, at any time within one (1) year preceding Participant’s separation;

directly or indirectly and in a competitive capacity own, manage, finance, operate, control, or participate in ownership, management, or operation of, act as an agent, consultant, or be employed with, any business engaged in the marketing, sale, or servicing of any service or product:

(1) with which Participant was involved during Participant’s last year of employment with the Bank; or

(2) which the Bank is developing, marketing, selling, or servicing (or plans to develop, market, sell, or service) and about which Participant gained any Confidential Information in the course of Participant’s employment with the Bank.

(c) For purposes of this Agreement, the term “competitive capacity” shall mean (i) performing tasks or duties similar to those Participant performed in Participant’s last year of employment at the Bank for a competitor of the Bank; (ii) managing/supervising those who, for a competitor of the Bank, perform tasks or duties similar to those which Participant performed in Participant’s last year of employment with the Bank; or (iii) performing, on behalf of a competitor of the Bank, tasks or duties in which Participant utilizes any Confidential Information that Participant learned in the course of Participant’s employment with the Bank.

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22. Periods of Noncompliance and Reasonableness of Periods. The restrictions and covenants contained in Sections 19, 20, and 21 shall be deemed not to run during all periods of noncompliance, the intention of the parties hereto being to have such restrictions and covenants apply during the Term of this Agreement and for the full periods specified in Sections 19, 20 and 21.  The Company and the Participant understand, acknowledge and agree that the restrictions and covenants contained in Sections 18, 19, 20 and 21 are reasonable in view of the nature of the business in which the Company and the Affiliates are engaged, the Participant’s positions with the Company and/or the Bank and the Participant’s advantageous knowledge of and familiarity with the business, operations, affairs and customers of the Company and the Affiliates, including but not limited to the Bank.

The Company’s obligation to pay the amounts otherwise payable to the Participant pursuant to this Agreement shall immediately terminate in the event that the Participant breaches any of the provisions of Sections 18, 19, 20 or 21.  Notwithstanding the foregoing:

(a) the covenants of the Participant set forth in Sections 18, 19, 20 or 21 shall continue in full force and effect and be binding upon the Participant;

(b) the Company shall be entitled to the remedies specified in Section 24; and

(c) the Company shall be entitled to its damages, costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses) resulting from or relating to the Participant’s breach of any of the provisions of Sections 18, 19, 20 or 21.

23. Survival of Certain Provisions.  Upon any termination of the Participant’s employment with the Bank, the Participant and the Company hereby expressly agree that the provisions of Sections 18, 19, 20, 21, 22, 23 and 24 shall continue to be in full force and effect and binding upon the Participant and the Company in accordance with the applicable respective provisions of such Sections.

24. Remedies.  The Participant agrees that the Company or the Bank shall suffer irreparable damage and injury and shall not have an adequate remedy at law in the event of any actual, threatened or attempted breach by the Participant of any provision of Sections 18, 19, 20 or 21.  Accordingly, in the event of a breach or a threatened or attempted breach by the Participant of any provision of Sections 18, 19, 20 or 21, in addition to all other remedies to which the Company and the Bank are entitled at law, in equity or otherwise, the Company and the Bank may be entitled to a temporary restraining order and a permanent injunction or a decree of specific performance of any provision of Sections 18, 19, 20 or 21.  The foregoing remedies shall not be deemed to be the exclusive rights or remedies of the Company or the Bank for any breach of or noncompliance with this Agreement by the Participant but shall be in addition to all other rights and remedies available to the Company or the Bank at law, in equity or otherwise.

25. Severability.  In case any one or more of the provisions (or any portion thereof) contained herein will, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement, but this Agreement shall be construed as if such invalid, illegal or unenforceable provision or provisions (or portion thereof) had never been contained herein.  If any provision of this Agreement shall be determined by a court of competent jurisdiction to be unenforceable because of the provision’s scope, duration or other factor, then such provision shall be considered divisible and the court making such determination shall have the power to reduce or limit (but not increase or make greater) such scope, duration or other factor or to reform (but not increase or make greater) such provision to make it enforceable to the maximum extent permitted by law, and such provision shall then be enforceable against the appropriate party hereto in its reformed, reduced or limited form; provided, however, that a provision shall be enforceable in its reformed, reduced or limited form only in the particular jurisdiction in which a court of competent jurisdiction makes such determination.

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26. Effect of Headings.  The descriptive headings of the Sections and, where applicable, subsections, of this Agreement are inserted for convenience and identification only and do not constitute a part of this Agreement for purposes of interpretation.

27. Controlling Laws.  Except to the extent superseded by the laws of the United States, the laws of the State of Indiana, without reference to the choice of law principles thereof, shall be controlling in all matters relating to this Agreement.

28. Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which collectively shall constitute one and the same instrument.

29. Compliance with Section 409A.  The parties acknowledge and agree that, to the extent applicable, this Agreement shall be interpreted in accordance with, and the parties agree to use their best efforts to achieve timely compliance with or exemption from Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the Treasury Regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the date the Performance Shares are awarded. Notwithstanding any provision of this Agreement to the contrary, in the event that the Company determines that any compensation or benefits payable or provided under this Agreement may be subject to Section 409A of the Code, the Company may adopt such limited amendments to this Agreement and appropriate policies and procedures, including amendments and policies with retroactive effect, that the Company reasonably determines are necessary or appropriate to (i) exempt the compensation and benefits payable under this Agreement from Section 409A of the Code and/or preserve the intended tax treatment of the compensation and benefits provided with respect to this Agreement or (ii) comply with the requirements of Section 409A of the Code. Although the Company intends to take such actions so as to allow the Performance Units award under this Agreement to avoid adverse tax treatment pursuant to Section 409A of the Code and otherwise, the Company makes no representation to that effect and expressly disavows any covenant to maintain favorable or avoid unfavorable tax treatment. The Company shall be unconstrained in its corporate activities without regard to the potential negative tax impact on the Participant.  Notwithstanding any other provision of this Agreement, to the extent the delivery of cash or the Shares represented by the Performance Shares is treated as non‐qualified deferred compensation subject to Section 409A of the Code, then (a) no delivery of such cash or the Shares shall be made upon a Participant’s termination of employment unless such termination of employment constitutes a “separation from service” within the meaning of Section 1.409A-1(h) of the Treasury Regulations and (b) if the Participant is deemed at the time of termination of employment to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, then to the extent delayed delivery of the cash or the shares to which the Participant is entitled under this Agreement, and which is deliverable to the Participant due to termination of employment, is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, such delivery of cash or the Shares shall not be made to the Participant prior to the earlier of (x) the expiration of the six-month period measured from the date of the Participant’s “separation from service” (as such term is defined in Section 1.409A-1(h) of the Treasury Regulations) or (y) the date of the Participant’s death. The determination of whether the Participant is a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code as of the time of separation from service shall be made by the Company in accordance with the terms of Section 409A of the Code and applicable guidance thereunder (including without limitation Section 1.409A-1(i) of the Treasury Regulations and any successor provision thereto).

IN WITNESS WHEREOF, the Company, by its officer thereunder duly authorized, and the Participant, have caused this Performance Share Award Agreement to be executed as of the day and year first above written.

HORIZON BANCORP PARTICIPANT

By: _____________________________                    _____________________________

       Craig M. Dwight         [Name]

       Chief Executive Officer

ATTEST

By: _____________________________

       Mark E. Secor

       Executive Vice President &

       Chief Financial Officer

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SCHEDULE A

PERFORMANCE GOALS AND EARNINGS LEVELS 

FOR PERFORMANCE PERIOD

	
Performance Goal

	
Weight

	
 

Threshold

25%‐49% Payout

 

	
Target

100%‐149% Payout

	
Maximum

150% Payout

	
Return on Common Equity :  The ROCE of the Company compared with the ROCE of the banks included in the SNL Bank Index.

 

	
34%

	
25th to 49th Percentile

	
50th to 84th Percentile

	
Greater than 84th Percentile

	
Compounded Annual Growth Rate of Total Assets:  The CAGR of total assets for the Company compared with the CAGR of total assets for the banks included SNL Bank Index.

 

	
33%

	
25th to 49th Percentile

	
50th to 84th Percentile

	
Greater than 84th Percentile

	
Return on Average Assets:  The ROAA for the Company compared with the ROAA for the banks included in the SNL Bank Index.

 

	
33%

	
25th to 49th Percentile

	
50th to 84th Percentile

	
Greater than 84th Percentile

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SCHEDULE B

LINEAR INTERPOLATION PAYOUT

	
 

2017 Linear Interpolation Payouts

 

	
 

Threshold

	
Target

	
Maximum

	
Threshold Percentile

	
Payout %

	
Target Percentile

	
Linear Payout %

	
Target Percentile

	
Maximum Payout %

	
49

	
49

	
50

	
100

	
85% or higher

	
150% of Target

	
48

	
48

	
51

	
101

	 	 
	
47

	
47

	
52

	
103

	 	 
	
46

	
46

	
53

	
104

	 	 
	
45

	
45

	
54

	
106

	 	 
	
44

	
44

	
55

	
107

	 	 
	
43

	
43

	
56

	
109

	 	 
	
42

	
42

	
57

	
110

	 	 
	
41

	
41

	
58

	
111

	 	 
	
40

	
40

	
59

	
113

	 	 
	
39

	
25

	
60

	
114

	 	 
	
38

	
25

	
61

	
116

	 	 
	
37

	
25

	
62

	
117

	 	 
	
36

	
25

	
63

	
119

	 	 
	
35

	
25

	
64

	
120

	 	 
	
34

	
25

	
65

	
121

	 	 
	
33

	
25

	
66

	
123

	 	 
	
32

	
25

	
67

	
124

	 	 
	
31

	
25

	
68

	
126

	 	 
	
30

	
25

	
69

	
127

	 	 
	
29

	
25

	
70

	
129

	 	 
	
28

	
25

	
71

	
130

	 	 
	
27

	
25

	
72

	
131

	 	 
	
26

	
25

	
73

	
133

	 	 
	
25

	
25

	
74

	
134

	 	 
	 	 	
75

	
136

	 	 
	 	 	
76

	
137

	 	 
	 	 	
77

	
139

	 	 
	 	 	
78

	
140

	 	 
	 	 	
79

	
141

	 	 
	 	 	
80

	
143

	 	 
	 	 	
81

	
144

	 	 
	 	 	
82

	
146

	 	 
	 	 	
83

	
147

	 	 
	 	 	
84

	
149

	 	 

 

11EX-10.1

 Exhibit 10.1 

REGISTRATION RIGHTS AGREEMENT 

by and among 
 Mercer
International Inc., 
 and 

Credit Suisse Securities (USA) LLC 

Dated as of March 27, 2017 

 REGISTRATION RIGHTS AGREEMENT 

This Registration Rights Agreement (this “Agreement”) is made and entered into as of March 27, 2017, by and among Mercer
International Inc., a Washington corporation (the “Company”), and Credit Suisse Securities (USA) LLC (the “Initial Purchaser”), which has agreed to purchase $25,000,000 in aggregate principal amount of the Company’s 6.500%
Senior Notes due 2024 (the “Offered Notes”) on the Closing Date (as defined below), pursuant to the Purchase Agreement (as defined below). 

This Agreement is made pursuant to the Purchase Agreement, dated March 16, 2017 (the “Purchase Agreement”), among the Company
and the Initial Purchaser (i) for the benefit of the Initial Purchaser and (ii) for the benefit of the holders from time to time of the Offered Notes, including the Initial Purchaser. In order to induce the Initial Purchaser to purchase
the Offered Notes, the Company has agreed to provide the registration rights set forth in this Agreement. The execution and delivery of this Agreement is a condition to the obligations of the Initial Purchaser set forth in Section 5(h) of the
Purchase Agreement. 
 The Company has previously issued on February 3, 2017, (the “Original Issue Date”) an aggregate
of $225,000,000 of 6.500% Senior Notes due 2024 (the “Existing Notes” and together with the Offered Notes, the “Notes”) under the Indenture (as defined below). The Offered Notes are an additional issuance of the
Issuer’s Existing Notes and will be treated as a single class with the Existing Notes issued, pursuant to the Indenture and will bear the same CUSIP as the Existing Notes. 

The parties hereby agree as follows: 

SECTION 1. Definitions. As used in this Agreement, the following capitalized terms shall have the following
meanings: 
 Additional Interest: As defined in Section 6 hereto. 

Additional Interest Payment Date: With respect to the Offered Notes, each Interest Payment Date. 

Advice: As defined in Section 7 hereto. 

Agreement: As defined in the preamble hereto. 

Broker-Dealer: Any broker or dealer registered under the Exchange Act. 

Business Day: Any day other than a Saturday, Sunday or U.S. federal holiday or a day on which banking institutions or trust companies
located in New York, New York are authorized or obligated to be closed. 
 Closing Date: The date of this Agreement. 

 Commission: The Securities and Exchange Commission. 

Company: As defined in the preamble hereto. 

Consummate: A registered Exchange Offer shall be deemed “Consummated” for purposes of this Agreement upon the occurrence of
(i) the filing and effectiveness under the Securities Act of the Exchange Offer Registration Statement relating to the Exchange Notes to be issued in the Exchange Offer, (ii) the maintenance of such Registration Statement continuously
effective and the keeping of the Exchange Offer open for a period not less than the minimum period required pursuant to Section 4(b) hereof, and (iii) the delivery by the Company to the Registrar under the Indenture of Exchange Notes in
the same aggregate principal amount as the aggregate principal amount of Offered Notes that were tendered by Holders thereof pursuant to the Exchange Offer. 

Effectiveness Period: As defined in Section 5(a) hereof. 

Effectiveness Target Date: As defined in Section 6 hereof. 

Entitled Securities: Each Note (which may include the Existing Notes and the Offered Notes), until the earliest to occur of
(a) the date on which such Offered Note has been exchanged by a Person other than a Broker-Dealer for an Exchange Note in the Exchange Offer, (b) following the exchange by a Broker-Dealer in the Exchange Offer of such Offered Note for an
Exchange Note, the date on which such Exchange Note is sold to a purchaser who receives from such Broker-Dealer on or prior to the date of such sale a copy of the Prospectus contained in the Exchange Offer Registration Statement, (c) the date
on which such Offered Note has been effectively registered under the Securities Act and disposed of in accordance with a Shelf Registration Statement, (d) the date on which such Offered Note is actually sold pursuant to Rule 144 under the
Securities Act. 
 Exchange Act: The Securities Exchange Act of 1934, as amended. 

Exchange Notes: The 6.500% Senior Notes due 2024, of the same series under the Indenture as the Offered Notes, to be issued to Holders
in exchange for Entitled Securities pursuant to this Agreement. 
 Exchange Offer: The registration by the Company under the
Securities Act of the Exchange Notes pursuant to a Registration Statement pursuant to which the Company offers the Holders of all outstanding Entitled Securities the opportunity to exchange all such outstanding Entitled Securities held by such
Holders for Exchange Notes in an aggregate principal amount equal to the aggregate principal amount of the Entitled Securities tendered in such exchange offer by such Holders. 

Exchange Offer Effectiveness Target Date: As defined in Section 4(a) hereof. 

Exchange Offer Registration Statement: The Registration Statement relating to the Exchange Offer, including the related Prospectus.

  
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 Exempt Resales: The transactions in which the Initial Purchaser proposes to sell the
Offered Notes to certain “qualified institutional buyers,” as such term is defined in Rule 144A under the Securities Act and to certain non-U.S. persons pursuant to Regulation S under the Securities Act. 

Existing Notes: See the introductory paragraphs hereto. 

FINRA: Financial Industry Regulatory Authority, Inc. 

Holders: As defined in Section 2(b) hereof. 

Indemnified Holder: As defined in Section 9(a) hereof. 

Indenture: The Indenture, dated as of February 3, 2017, by and between the Company and Wells Fargo, National Association, as
trustee (the “Trustee”), pursuant to which the Existing Notes were issued and pursuant to which the Offered Notes are to be issued, as such Indenture is amended or supplemented from time to time in accordance with the terms thereof. 

Initial Placement: The issuance and sale by the Company of the Offered Notes to the Initial Purchaser pursuant to the terms of the
Purchase Agreement. 
 Initial Purchaser: As defined in the preamble hereto. 

Interest Payment Date: February 1 and August 1, commencing August 1, 2017. 

Offered Notes: As defined in the preamble hereto. 

Original Issue Date: February 3, 2017 the date of original issuance of the Existing Notes. 

Person: An individual, partnership, corporation, trust or unincorporated organization, or a government or agency or political
subdivision thereof. 
 Prospectus: The prospectus included in a Registration Statement, as amended or supplemented by any prospectus
supplement and by all other amendments thereto, including post-effective amendments, and all material incorporated by reference into such Prospectus. 

Registration Default: As defined in Section 6 hereof. 

Registration Statement: Any registration statement of the Company relating to (a) an offering of Exchange Notes pursuant to an
Exchange Offer or (b) the registration for resale of Entitled Securities pursuant to the Shelf Registration Statement, which is filed pursuant to the provisions of this Agreement, in each case, including the Prospectus included therein, all
amendments and supplements thereto (including post-effective amendments) and all exhibits and material incorporated by reference therein. 

Securities Act: The Securities Act of 1933, as amended. 

Shelf Registration Statement: As defined in Section 5(a) hereof. 

  
 3 

 Suspension Period: As defined in Section 5(a) hereof. 

Trust Indenture Act: The Trust Indenture Act of 1939, as amended. 

Underwritten Registration or Underwritten Offering: A registration in which securities of the Company are sold to an underwriter for
reoffering to the public. 
 SECTION 2. Securities Subject to this Agreement. 

(a) Entitled Securities. The securities entitled to the benefits of this Agreement are the Entitled Securities. 

(b) Holders of Entitled Securities. A Person is deemed to be a holder of Entitled Securities (each, a “Holder”) whenever such
Person owns Entitled Securities. 
 SECTION 3. Authorization of the Exchange Notes. The Company hereby
represents, warrants and covenants to the Initial Purchaser that the Exchange Notes have been duly and validly authorized for issuance by the Company, and when issued and authenticated in accordance with the terms of the Indenture, this Agreement
and the Exchange Offer, will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles including limitations and other restrictions on a party’s rights to specific performance and indemnification and
will be entitled to the benefits of the Indenture. 
 SECTION 4. Registered Exchange Offer. 

(a) Unless the Exchange Offer shall not be permissible under applicable law or Commission policy (after the procedures set forth in
Section 7(a) hereof have been complied with), the Company shall (i) cause to be filed with the Commission the Exchange Offer Registration Statement under the Securities Act relating to the Exchange Notes and the Exchange Offer,
(ii) use its commercially reasonable efforts to cause such Exchange Offer Registration Statement to become effective at the earliest practicable time, but in no event later than 240 days after the Original Issue Date (or if such 240th day is
not a Business Day, the next succeeding Business Day) (the “Exchange Offer Effectiveness Target Date”), (iii) in connection with the foregoing, file (A) all pre-effective amendments to such Exchange Offer Registration Statement
as may be necessary in order to cause such Exchange Offer Registration Statement to become effective, (B) if applicable, a post-effective amendment to such Exchange Offer Registration Statement pursuant to Rule 430A under the Securities Act and
(C), subject to the proviso in Section 7(c)(x), cause all necessary filings in connection with the registration and qualification of the Exchange Notes to be made under the state securities or blue sky laws of such jurisdictions as are
necessary to permit Consummation of the Exchange Offer, (iv) upon the effectiveness of such Exchange Offer Registration Statement, commence the Exchange Offer and (v) issue Exchange Notes in exchange for all Offered Notes tendered prior to
the Consummation of the Exchange Offer. The Exchange Offer Registration Statement shall be on the appropriate form permitting registration of the Exchange Notes to be offered in exchange for the Entitled Securities and to permit resales of Offered
Notes held by Broker-Dealers as contemplated by Section 4(c) hereof. Notwithstanding any other provision hereof, the Company shall not be obligated to file a Prospectus with the securities commissions or similar regulatory authority in any of
the provinces or territories of Canada. 

  
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 (b) The Company shall use its commercially reasonable efforts to cause the Exchange Offer
Registration Statement to be effective continuously and shall keep the Exchange Offer open for a period of not less than the minimum period required under applicable federal and state securities laws to Consummate the Exchange Offer; provided,
however, that in no event shall such period be less than 20 Business Days from and including the date notice of the Exchange Offer is mailed to the Holders. The Company shall cause the Exchange Offer to comply in all material respects with all
applicable federal and state securities laws. No securities other than the Exchange Notes, which may include the Existing Notes and the Offered Notes, shall be included in the Exchange Offer Registration Statement. The Company shall use its
commercially reasonable efforts to cause the Exchange Offer to be Consummated within 30 Business Days (or longer if required by applicable securities laws) of the Exchange Offer Effectiveness Target Date. 

(c) The Company shall indicate in a “Plan of Distribution” section contained in the Prospectus forming a part of the Exchange Offer
Registration Statement that any Broker-Dealer which holds Offered Notes that are Entitled Securities and that were acquired for its own account as a result of market-making activities or other trading activities (other than Entitled Securities
acquired directly from the Company), may exchange such Offered Notes pursuant to the Exchange Offer; however, such Broker-Dealer may be deemed to be an “underwriter” within the meaning of the Securities Act and must, therefore, deliver a
prospectus meeting the requirements of the Securities Act in connection with any resales of the Exchange Notes received by such Broker-Dealer in the Exchange Offer, which prospectus delivery requirement may be satisfied by the delivery by such
Broker-Dealer of the Prospectus contained in the Exchange Offer Registration Statement. Such “Plan of Distribution” section shall also contain all other information with respect to such resales by Broker-Dealers that the Commission may
require in order to permit such resales pursuant thereto, but such “Plan of Distribution” shall not name any such Broker-Dealer or disclose the amount of Offered Notes held by any such Broker-Dealer except to the extent required by the
Commission as a result of a change in policy after the date of this Agreement. 
 The Company shall use its commercially reasonable efforts
to keep the Exchange Offer Registration Statement continuously effective, supplemented and amended as required by the provisions of Section 7(c) hereof to the extent necessary to ensure that it is available for resales of Offered Notes acquired
by Broker-Dealers for their own accounts as a result of market-making activities or other trading activities, and to ensure that it conforms with the requirements of this Agreement, the Securities Act and the policies, rules and regulations of the
Commission as announced from time to time, for a period ending on the earlier of (i) 90 days from the date on which the Exchange Offer Registration Statement is declared effective and (ii) the date on which a Broker-Dealer is no longer
required to deliver a prospectus in connection with market-making or other trading activities. 

  
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 The Company shall provide sufficient copies of the latest version of such Prospectus to
Broker-Dealers promptly upon request at any time during such 90-day (or shorter as provided in the preceding paragraph) period in order to facilitate such resales. 

SECTION 5. Shelf Registration. 

(a) Shelf Registration. If (i) the Company is not permitted to file an Exchange Offer Registration Statement or to Consummate the
Exchange Offer because the Exchange Offer is not permitted by applicable law or Commission policy (after the procedures set forth in Section 7(a) hereof have been complied with), (ii) for any reason, the Exchange Offer is not Consummated
within 30 Business Days of the Exchange Offer Effectiveness Target Date, or (iii) any Holder of Entitled Securities notifies the Company in writing that (A) such Holder is prohibited by applicable law or Commission policy from
participating in the Exchange Offer, or (B) such Holder may not resell the Exchange Notes acquired by it in the Exchange Offer to the public without delivering a prospectus and the Prospectus contained in the Exchange Offer Registration
Statement is not appropriate or available for such resales by such Holder, or (C) such Holder is a Broker-Dealer and holds Offered Notes acquired directly from the Company or one of its affiliates, then, upon such Holder’s written request,
the Company shall: 
 (i) cause to be filed a shelf registration statement pursuant to Rule 415 under the Securities Act,
which may be an amendment to the Exchange Offer Registration Statement (in either event, the “Shelf Registration Statement”), which Shelf Registration Statement shall provide for resales of all Entitled Securities the Holders of which
shall have provided the information required pursuant to Section 5(b) hereof; and 
 (ii) use its commercially
reasonable efforts to cause such Shelf Registration Statement to be declared effective by the Commission on or before the 240th day after so requested or required pursuant to this Section 5 and to keep it continuously effective until the
earliest of (i) the date on which all Entitled Securities entitled to the benefit of this Section 5(a) have been sold pursuant to the Shelf Registration Statement, (ii) the date on which all Entitled Securities are no longer
“restricted securities” within the meaning of Rule 144 of the Securities Act and (iii) the date which is one year after the Closing Date, such shortest time period referred to as the “Effectiveness Period.” 

During the Effectiveness Period, the Company shall use its commercially reasonable efforts to keep such Shelf Registration Statement
continuously effective, supplemented and amended as required by the provisions of Sections 7(b) and (c) hereof to the extent necessary to ensure that it is available for resales of Offered Notes by the Holders of Entitled Securities entitled to
the benefit of this Section 5(a), and to ensure that it conforms in all material respects with the requirements of this Agreement, the Securities Act and the policies, rules and regulations of the Commission as announced from time to time. 

Notwithstanding the foregoing and any other provision hereof, the Company may suspend the availability of the Shelf Registration Statement,
without being required to pay any Additional Interest (as defined below), upon written notice to the Holders (which notice shall be accompanied by an instruction to suspend the use of the Prospectus), for one or more periods not to exceed 60
consecutive days in any 90-day period, and not to exceed, in the aggregate, 95 days in any 365-day period (each such period, a “Suspension Period”) if: 

  
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 (i) an event occurs and is continuing that, in the Company’s good faith
judgment, would require the Company to make changes in the Shelf Registration Statement or the Prospectus in order that the Shelf Registration Statement or the Prospectus does not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein (in the case of the prospectus, in light of the circumstances under which they were made) not misleading; and 

(ii) the Company reasonably determines that the disclosure of such event at such time would have a material adverse effect on
the business of the Company (and its subsidiaries, if any, taken as a whole). 
 (b) Provision by Holders of Certain Information in
Connection with the Shelf Registration Statement. No Holder of Entitled Securities may include any of its Entitled Securities in any Shelf Registration Statement pursuant to this Agreement unless and until such Holder furnishes to the Company in
writing, within 7 Business Days after receipt of a request therefor, such information as the Company may reasonably request for use in connection with any Shelf Registration Statement or Prospectus or preliminary Prospectus included therein. Each
Holder as to which any Shelf Registration Statement is being effected agrees to furnish promptly to the Company all information required to be disclosed in order to make the information previously furnished to the Company by such Holder not
materially misleading. 
 SECTION 6. Additional Interest. If (i) the Company fails to file any of the
Registration Statements required by this Agreement on or before the date specified for such filing, if any; (ii) any of the Registration Statements required by this Agreement has not been declared effective by the Commission on or prior to the
date specified for such effectiveness in this Agreement (the “Effectiveness Target Date”), (iii) the Exchange Offer has not been Consummated within 30 Business Days of the Exchange Offer Effectiveness Target Date or (iv) any
Registration Statement required by this Agreement is filed and declared effective but shall thereafter cease to be effective (other than for a Suspension Period) without being succeeded within five Business Days by a post-effective amendment to such
Registration Statement that is declared effective (each such event referred to in clauses (i) through (iv), a “Registration Default”), the Company hereby agrees that the interest rate borne by the Entitled Securities shall be
increased by 0.25% per annum during the 90-day period immediately following the occurrence of any Registration Default and shall increase by 0.25% per annum at the beginning of each subsequent 90-day period (such increase, “Additional
Interest”) until all Registration Defaults have been cured, but in no event shall such increase exceed 1.00% per annum. Following the cure of all Registration Defaults relating to any particular Entitled Securities, the interest rate borne
by the relevant Entitled Securities will be reduced to the original interest rate borne by such Entitled Securities; provided, however, that, if after any such reduction in interest rate, a different Registration Default occurs, the interest rate
borne by the relevant Entitled Securities shall again be increased pursuant to the foregoing provisions. The Company shall not be required to pay Additional Interest for more than one Registration Default at a time. The amount of Additional Interest
will be determined on the basis of a 360-day year comprised of twelve 30-day months and the actual number of days on which Additional Interest accrued during such period. 

  
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 In connection with a Registration Default in respect of a Shelf Registration Statement,
notwithstanding anything to the contrary herein, a Holder will not be entitled to any Additional Interest under this Article 6 if such Holder has not provided all registration information to the Company as required herein at least two Business Days
prior to the Effective Date of the Shelf Registration Statement or any subsequent amendment (with respect to any period subsequent to such amendment and prior to the next amendment in respect of which such information is so provided). 

All obligations of the Company set forth in the preceding paragraph to pay Additional Interest that are outstanding with respect to any
Entitled Security at the time such security ceases to be an Entitled Security shall survive until such time as all such obligations with respect to such security shall have been satisfied in full. 

SECTION 7. Registration Procedures. 

(a) Exchange Offer Registration Statement. In connection with the Exchange Offer, the Company shall comply with all of the provisions of
Section 7(c) hereof, shall use its commercially reasonable efforts to effect such exchange so that it permits the sale of Entitled Securities being sold in accordance with the intended method or methods of distribution thereof, and shall comply
with all of the following provisions: 
 (i) As a condition to its participation in the Exchange Offer pursuant to the terms
of this Agreement, each Holder of Entitled Securities shall furnish, upon the request of the Company, prior to the Consummation thereof, a written representation to the Company (which may be contained in the letter of transmittal contemplated by the
Exchange Offer Registration Statement) to the effect that (A) it is not an affiliate of the Company (within the meaning of Rule 405 of the Securities Act), (B) it is not engaged in, and does not intend to engage in, and has no arrangement
or understanding with any Person to participate in, a distribution of the Exchange Notes to be issued in the Exchange Offer and (C) it is acquiring the Exchange Notes in its ordinary course of business. In addition, all such Holders of Entitled
Securities shall otherwise cooperate in the Company’s preparations for the Exchange Offer, including providing all information relating to the Holder required to be included in a Registration Statement under applicable law. Each Holder hereby
acknowledges and agrees that any Broker-Dealer and any such Holder using the Exchange Offer to participate in a distribution of the securities to be acquired in the Exchange Offer (1) could not under Commission policy as in effect on the date
of this Agreement rely on the position of the Commission enunciated in Morgan Stanley and Co., Inc. (available June 5, 1991) and Exxon Capital Holdings Corporation (available May 13, 1988), as interpreted in the
Commission’s letter to Shearman & Sterling dated July 2, 1993, and similar no-action letters (which may include any no-action letter obtained pursuant to clause (i) above), and (2) must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction and that such a secondary resale transaction should be covered by an effective registration statement containing the selling security holder
information required by Item 507 or 508, as applicable, of Regulation S-K if the resales are of Exchange Notes obtained by such Holder in exchange for Offered Notes acquired by such Holder directly from
the Company. 

  
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 (b) Shelf Registration Statement. In connection with the Shelf Registration Statement, the
Company shall comply with all the provisions of Section 7(c) hereof and shall use its commercially reasonable efforts to effect such registration so that it permits the sale of the Entitled Securities being sold in accordance with the intended
method or methods of distribution thereof. 
 (c) General Provisions. In connection with any Registration Statement and any Prospectus
required by this Agreement to permit the sale or resale of Entitled Securities (including, without limitation, any Registration Statement and the related Prospectus required to permit resales of Offered Notes by Broker-Dealers), the Company shall:

 (i) subject to the terms hereof, use its commercially reasonable efforts to keep such Registration Statement continuously
effective and provide all requisite financial statements (including, if required by the Securities Act or any regulation thereunder, its financial statements for the period specified in Section 4 or 5 hereof, as applicable); upon the occurrence
of any event that would cause any such Registration Statement or the Prospectus contained therein (A) to contain a material misstatement or omission or (B) not to be effective and usable for resale of Entitled Securities during the period
required by this Agreement, the Company shall file promptly an appropriate amendment to such Registration Statement, in the case of clause (A), correcting any such misstatement or omission, and, in the case of either clause (A) or (B), use its
commercially reasonable efforts to cause such amendment to be declared effective and such Registration Statement and the related Prospectus to become usable for their intended purpose(s) as soon as practicable thereafter; 

(ii) prepare and file with the Commission such amendments and post-effective amendments to the applicable Registration
Statement as may be necessary to keep the Registration Statement effective for the applicable period set forth in Section 4 or 5 hereof, as applicable, or such shorter period as will terminate when all Entitled Securities covered by such
Registration Statement have been sold or cease to be Entitled Securities; cause the Prospectus to be supplemented by any required Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the Securities Act, and to comply
fully with the applicable provisions of Rules 424, 430A and 430B under the Securities Act in a timely manner; and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration
Statement during the applicable period in accordance with the intended method or methods of distribution by the sellers thereof set forth in such Registration Statement or supplement to the Prospectus; 

  
 9 

 (iii) advise the underwriter(s), if any, and selling Holders within five Business
Days and, if requested by such Persons, to confirm such advice in writing, (A) when the Prospectus or any Prospectus supplement or post-effective amendment has been filed, and, with respect to any Registration Statement or any post-effective
amendment thereto, when the same has become effective, (B) of any request by the Commission for amendments to the Registration Statement or amendments or supplements to the Prospectus or for additional information relating thereto, (C) of
the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement under the Securities Act or of the suspension by any state securities commission of the qualification of the Entitled Securities for offering
or sale in any jurisdiction, or the initiation of any proceeding for any of the preceding purposes, (D) of the existence of any fact or the happening of any event that makes any statement of a material fact made in the Registration Statement,
the Prospectus, any amendment or supplement thereto, or any document incorporated by reference therein untrue, or that requires the making of any additions to or changes in the Registration Statement or the Prospectus in order to make the statements
therein not misleading. If at any time the Commission shall issue any stop order suspending the effectiveness of the Registration Statement, or any state securities commission or other regulatory authority shall issue an order suspending the
qualification or exemption from qualification of the Entitled Securities under state securities or blue sky laws, the Company shall use its commercially reasonable efforts to obtain the withdrawal or lifting of such order at the earliest possible
time; 
 (iv) upon written request, furnish without charge to the Initial Purchaser, each selling Holder named in any
Registration Statement, and each of the underwriter(s), if any, before filing with the Commission, copies of any Registration Statement or any Prospectus included therein or any amendments or supplements to any such Registration Statement or
Prospectus, which documents will be subject to the review and comment of such Holders and underwriter(s) in connection with such sale, if any, for a period of at least two Business Days, and the Company will not file any such Registration Statement
or Prospectus or any amendment or supplement to any such Registration Statement or Prospectus to which the Initial Purchaser of Entitled Securities covered by such Registration Statement or the underwriter(s), if any, shall reasonably object in
writing within two Business Days after the receipt thereof (such objection to be deemed timely made upon confirmation of telecopy transmission within such period) provided, that this clause (iv) shall not apply to any filing by the
Company of any annual report on Form 10-K, quarterly report on Form 10-Q or current report on Form 8-K with respect to matters unrelated to the Entitled Securities and the offering or exchange thereof; 

(v) in the case of an Underwritten Registration, make available during normal business hours for inspection by the Initial
Purchaser, the managing underwriter(s), if any, participating in any disposition pursuant to such Registration Statement and any attorney or accountant retained by the Initial Purchaser or any of the underwriter(s), all of its financial and other
records, pertinent corporate documents and properties and cause its officers, directors and employees to supply all information reasonably requested by the Initial Purchaser, underwriter, attorney or accountant in connection with such Registration
Statement or any post-effective amendment thereto subsequent to the filing thereof and prior to its effectiveness and to participate in meetings with investors to the extent requested by the managing underwriter(s), if any; 

  
 10 

 (vi) in the case of a Shelf Registration Statement, if requested by any selling
Holders or the underwriter(s), if any, promptly incorporate in any Registration Statement or Prospectus, pursuant to a supplement or post-effective amendment if necessary, such information as such selling Holders and underwriter(s), if any, may
reasonably request to have included therein, information relating to the “Plan of Distribution” of the Entitled Securities, information with respect to the principal amount of Entitled Securities being sold to such underwriter(s), the
purchase price being paid therefor and any other terms of the offering of the Entitled Securities to be sold in such offering; and make all required filings of such Prospectus supplement or post-effective amendment as soon as practicable after it is
notified of the matters to be incorporated in such Prospectus supplement or post-effective amendment; 
 (vii) upon request,
furnish to the Initial Purchaser, each selling Holder and each of the underwriter(s), if any, without charge, at least one copy of the Registration Statement, as first filed with the Commission, and of each amendment thereto, including financial
statements and schedules, all documents incorporated by reference therein and all exhibits (including exhibits incorporated therein by reference); 

(viii) deliver to each selling Holder and each of the underwriter(s), if any, who is required to deliver a Prospectus in
connection with the sale of its Entitled Securities, without charge, as many copies of the Prospectus (including each preliminary prospectus) and any amendment or supplement thereto as such Persons reasonably may request; the Company hereby consents
to the use of the Prospectus and any amendment or supplement thereto by each of the selling Holders and each of the underwriter(s), if any, in connection with the offering and the sale of the Entitled Securities covered by the Prospectus or any
amendment or supplement thereto; 
 (ix) enter into such agreements (including an underwriting agreement), and make such
representations and warranties, and take all such other actions in connection therewith in order to expedite or facilitate the disposition of the Entitled Securities pursuant to any Shelf Registration Statement contemplated by this Agreement, all to
such extent as may reasonably be requested by the Initial Purchaser or by any Holder of Entitled Securities or underwriter and as are reasonably on terms customary for transactions of such nature in connection with any sale or resale pursuant to any
Registration Statement contemplated by this Agreement; and if an underwriting agreement is entered into and the registration is an Underwritten Registration, the Company shall: 

(A) furnish to the Initial Purchaser, each selling Holder and each underwriter, if any, in such substance and scope as they may
reasonably request and as are customarily made by issuers to underwriters in primary underwritten offerings, upon the date of the Consummation of the Exchange Offer or, if applicable, the effectiveness of the Shelf Registration Statement: 

(1) a certificate, dated the date of Consummation of the Exchange Offer or the date of effectiveness of the Shelf Registration
Statement, as the case may be, signed by (y) the President or any Vice President and (z) a principal financial or accounting officer of the Company, confirming, as of the date thereof, the matters set forth in paragraphs (i) and
(ii) of Section 5(d) of the Purchase Agreement and such other matters as such parties may reasonably request; 

  
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 (2) opinions, dated the date of Consummation of the Exchange Offer or the date
of effectiveness of the Shelf Registration Statement, covering such matters as are customarily covered in legal opinions to underwriters in connection with primary underwritten offerings of securities; and 

(3) a customary comfort letter, dated the date of effectiveness of the Shelf Registration Statement, from the Company’s
independent accountants for the three fiscal years ended December 31, 2016 and all subsequent financial reporting periods, if permitted by applicable accounting standards or pronouncements, in the customary form and covering matters of the type
customarily requested to be covered in comfort letters by underwriters in connection with primary underwritten offerings, and covering or affirming the matters set forth in the comfort letters delivered pursuant to Section 5(h) of the Purchase
Agreement; 
 (B) set forth in full or incorporate by reference in the underwriting agreement, if any, the indemnification
provisions and procedures of Section 9 hereof with respect to all parties to be indemnified pursuant to said Section; and 

(C) deliver such other documents and certificates as may be reasonably requested by such parties to evidence compliance with
Section 7(c)(xi)(A) hereof and with any customary conditions contained in the underwriting agreement or other agreement entered into by the Company pursuant to this Section 7(c)(xi), if any. 

If at any time the representations and warranties contemplated in Section 7(c)(xi)(A)(1) hereof cease to be true and
correct, the Company shall so advise the Initial Purchaser and the underwriter(s), if any, and each selling Holder promptly and, if requested by such Persons, shall confirm such advice in writing; 

(x) prior to any public offering of Entitled Securities, cooperate with the selling Holders, the underwriter(s), if any, and
their respective counsel in connection with the registration and qualification of the Entitled Securities under the state securities or blue sky laws of such jurisdictions as the selling Holders or underwriter(s), if any, may reasonably request and
do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Entitled Securities covered by the Shelf Registration Statement; provided, however, that the Company shall not be required to
register or qualify as a foreign corporation where it is not then so qualified or to take any action that would subject it to the service of process in suits or to taxation, in any jurisdiction where it is not then so subject; 

  
 12 

 (xi) shall issue, upon the request of any Holder of Offered Notes covered by the
Shelf Registration Statement, Exchange Notes having an aggregate principal amount equal to the aggregate principal amount of Offered Notes surrendered to the Company by such Holder in exchange therefor or being sold by such Holder; such Exchange
Notes, if in certificated form, to be registered in the name of such Holder or in the name of the purchaser(s) of such Exchange Notes, as the case may be; in return, the Offered Notes held by such Holder, if in certificated form, shall be
surrendered to the Company for cancellation; 
 (xii) cooperate with the selling Holders and the underwriter(s), if any, to
facilitate the timely preparation and delivery of certificates representing Entitled Securities to be sold and not bearing any restrictive legends; and enable such Entitled Securities to be in such denominations and registered in such names as the
Holders or the underwriter(s), if any, may request at least two Business Days prior to any sale of Entitled Securities made by such Holders or underwriter(s); 

(xiii) use its commercially reasonable efforts to cause the Entitled Securities covered by the Registration Statement to be
registered with or approved by such other governmental agencies or authorities as may be necessary to enable the seller or sellers thereof or the underwriter(s), if any, to consummate the disposition of such Entitled Securities, subject to the
proviso contained in Section 7(c)(xii) hereof; 
 (xiv) if any fact or event contemplated by Section 7(c)(iii)(D)
hereof shall exist or have occurred, prepare a supplement or post-effective amendment to the Registration Statement or related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of Entitled Securities, the Prospectus will not contain an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein not misleading; 

(xv) provide a CUSIP number for all Exchange Notes not later than the effective date of the Registration Statement covering
such Exchange Notes and provide the Trustee under the Indenture with printed certificates for such Exchange Notes which are in a form eligible for deposit with the Depository Trust Company and take all other action necessary to ensure that all such
Securities are eligible for deposit with the Depository Trust Company; 
 (xvi) cooperate and assist in any filings required
to be made with the FINRA and in the performance of any due diligence investigation by any underwriter that is required to be retained in accordance with the rules and regulations of the FINRA; 

(xvii) otherwise use its commercially reasonable efforts to comply in all material respects with all applicable rules and
regulations of the Commission, and make generally available to its security holders, as soon as practicable, a consolidated earnings statement meeting the requirements of Rule 158 under the Securities Act (which need not be audited) for the
twelve-month period (A) commencing at the end of any fiscal quarter in which Entitled Securities are sold to underwriters in a firm commitment or best efforts Underwritten Offering or (B) if not sold to underwriters in such an offering,
beginning with the first month of the Company’s first fiscal quarter commencing after the effective date of the Registration Statement; 

  
 13 

 (xvii) cause the Indenture to be qualified under the Trust Indenture Act not
later than the effective date of the first Registration Statement required by this Agreement, and, in connection therewith, cooperate with the Trustee and the Holders of Exchange Notes to effect such changes to the Indenture as may be required for
such Indenture to be so qualified in accordance with the terms of the Trust Indenture Act; and to execute and use its commercially reasonable efforts to cause the Trustee to execute, all documents that may be required to effect such changes and all
other forms and documents required to be filed with the Commission to enable such Indenture to be so qualified in a timely manner; 

(xviii) cause all Exchange Notes covered by the Registration Statement to be listed on each securities exchange or automated
quotation system on which similar securities issued by the Company are then listed if requested by the Holders of a majority in aggregate principal amount of Offered Notes or the managing underwriter(s), if any; and 

Each Holder agrees by acquisition of a Entitled Security that, upon receipt of any notice from the Company of a Suspension Period or the
existence of any fact of the kind described in Section 7(c)(iii)(D) hereof, such Holder will forthwith discontinue disposition of Entitled Securities pursuant to the applicable Registration Statement until such Holder’s receipt of the
copies of the supplemented or amended Prospectus contemplated by Section 7(c)(xvi) hereof, or until it is advised in writing (the “Advice”) by the Company that the use of the Prospectus may be resumed, and has received copies of any
additional or supplemental filings that are incorporated by reference in the Prospectus. If so directed by the Company, each Holder will deliver to the Company (at the Company’s expense) all copies, other than permanent file copies then in such
Holder’s possession, of the Prospectus covering such Entitled Securities that was current at the time of receipt of such notice. In the event the Company shall give any such notice, the time period regarding the effectiveness of such
Registration Statement set forth in Section 4 or 5 hereof, as applicable, shall be extended by the number of days during the period from and including the date of the giving of such notice pursuant to Section 7(c)(iii)(D) hereof to and
including the date when each selling Holder covered by such Registration Statement shall have received the copies of the supplemented or amended Prospectus contemplated by Section 7(c)(xvi) hereof or shall have received the Advice; provided,
however, that no such extension shall be taken into account, except in connection with a Suspension Period, in determining whether Additional Interest is due pursuant to Section 6 hereof or the amount of such Additional Interest, it
being agreed that the Company’s option to suspend use of a Registration Statement pursuant to this paragraph shall be treated as a Registration Default for purposes of Section 6 hereof. 

  
 14 

 SECTION 8. Registration Expenses. 

(a) All expenses incident to the Company’s performance of or compliance with this Agreement will be borne by the Company, regardless of
whether a Registration Statement becomes effective, including, without limitation: (i) all registration and filing fees and expenses (including filings made by the Initial Purchaser or Holder with the FINRA (and, if applicable, the fees and
expenses of any “qualified independent underwriter” and its counsel that may be required by the rules and regulations of the FINRA)); (ii) all fees and expenses of compliance with federal securities and state securities or blue sky
laws; (iii) all expenses of printing (including printing certificates for the Exchange Notes to be issued in the Exchange Offer and printing of Prospectuses), messenger and delivery services and telephone; (iv) all fees and disbursements
of the Company’s counsel and, subject to Section 8(b) hereof, the Holders of Entitled Securities; (v) all application and filing fees in connection with listing the Exchange Notes on a securities exchange or automated quotation system
pursuant to the requirements thereof; and (vi) all fees and disbursements of the Company’s independent certified public accountants (including the expenses of any special audit and comfort letters required by or incident to such
performance). 
 The Company will, in any event, bear its internal expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expenses of any annual audit and the fees and expenses of any Person, including special experts, retained by it. 

(b) In connection with any Registration Statement required by this Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company will reimburse the Initial Purchaser and the Holders of Entitled Securities being tendered in the Exchange Offer and/or resold pursuant to the “Plan of Distribution” contained in
the Exchange Offer Registration Statement or registered pursuant to the Shelf Registration Statement, as applicable, for the reasonable fees and disbursements of not more than one counsel, who shall be such counsel as may be chosen by the Holders of
a majority in principal amount of the Entitled Securities for whose benefit such Registration Statement is being prepared. 

SECTION 9. Indemnification. 

(a) The Company agrees to indemnify and hold harmless (i) each Holder and (ii) each Person, if any, who controls (within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act) any Holder (any of the Persons referred to in this clause (ii) being hereinafter referred to as a “controlling person”) and (iii) the respective
officers, directors, partners, employees, representatives and agents of any Holder or any controlling person (any Person referred to in clause (i), (ii) or (iii) may hereinafter be referred to as an “Indemnified Holder”), to the
fullest extent lawful, from and against any and all losses, claims, damages, liabilities and expenses (or actions in respect thereof) (including, without limitation, and as incurred, reimbursement of all reasonable costs of investigating, or
defending any claim or action, or any investigation or proceeding by any governmental agency or body, including the reasonable fees and expenses of counsel to any Indemnified Holder), joint or several, directly or indirectly caused by, related to,
based upon, arising out of or in connection with any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement or Prospectus (or any amendment or supplement thereto), or any omission or alleged omission
to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages, liabilities or expenses are caused by an untrue statement or omission or
alleged untrue statement or omission that is made in reliance upon and in conformity with information relating to any of the Holders furnished in writing to the Company by any of the Holders expressly for use therein. This indemnity agreement shall
be in addition to any liability which the Company may otherwise have. 

  
 15 

 In case any action or proceeding (including any governmental or regulatory investigation
or proceeding) shall be brought or asserted against any of the Indemnified Holders with respect to which indemnity may be sought against the Company, such Indemnified Holder (or the Indemnified Holder controlled by such controlling person) shall
promptly notify the Company in writing; provided, however, that the failure to give such notice shall not relieve any of the Company of its obligations pursuant to this Agreement. Such Indemnified Holder shall have the right to employ its own
counsel in any such action and the fees and expenses of such counsel shall be paid, as incurred, by the Company (regardless of whether it is ultimately determined that an Indemnified Holder is not entitled to indemnification hereunder).
Notwithstanding the foregoing, the Company shall not, in connection with any one such action or proceeding or separate but substantially similar or related actions or proceedings in the same jurisdiction arising out of the same general allegations
or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) at any time for such Indemnified Holders, which firm shall be designated by the Holders. The Company
shall be liable for any settlement of any such action or proceeding effected with the Company’s prior written consent, which consent shall not be withheld unreasonably, and the Company agrees to indemnify and hold harmless any Indemnified
Holder from and against any loss, claim, damage, liability or expense by reason of any settlement of any action effected with the Company’s written consent. The Company shall not, without the prior written consent of each Indemnified Holder,
settle or compromise or consent to the entry of judgment in or otherwise seek to terminate any pending or threatened action, claim, litigation or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not
any Indemnified Holder is a party thereto), unless such settlement, compromise, consent or termination includes an unconditional release of each Indemnified Holder from all liability arising out of such action, claim, litigation or proceeding.

 (b) Each Holder of Entitled Securities agrees, severally and not jointly, to indemnify and hold harmless the Company and its directors
and officers who sign a Registration Statement, and any Person controlling (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) the Company and the officers, directors, partners, employees,
representatives and agents of each such Person, to the same extent as the foregoing indemnity from the Company to each of the Indemnified Holders, but only with respect to claims and actions based on information relating to such Holder furnished in
writing by such Holder expressly for use in any Registration Statement or Prospectus. In case any action or proceeding shall be brought against the Company or its directors or officers or any such controlling person in respect of which indemnity may
be sought against a Holder of Entitled Securities, such Holder shall have the rights and duties given the Company, and the Company, its directors and officers and such controlling Person shall have the rights and duties given to each Holder, in each
case, by the preceding paragraph. 

  
 16 

 (c) If the indemnification provided for in this Section 9 is unavailable to an indemnified
party under Section 9(a) or (b) hereof (other than by reason of exceptions provided in those Sections) in respect of any losses, claims, damages, liabilities, judgments, actions or expenses referred to therein, then each applicable
indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to
reflect the relative benefits received by the Company, on the one hand, and the Holders, on the other hand, from the Initial Placement (which in the case of the Company shall be deemed to be equal to its total gross proceeds from the Initial
Placement), the amount of Additional Interest which did not become payable as a result of the filing of the Registration Statement resulting in such losses, claims, damages, liabilities, judgments actions or expenses, and such Registration
Statement, or if such allocation is not permitted by applicable law, the relative fault of the Company, on the one hand, and the Holders, on the other hand, in connection with the statements or omissions which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative fault of the Company, on the one hand, and of the Indemnified Holder, on the other hand, shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company, on the one hand, or the Indemnified Holders, on the other hand, and the
parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include, subject to the limitations set forth in the second paragraph of Section 9(a) hereof, any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any
action or claim. 
 Each of the Company and the Holders of Entitled Securities agrees that it would not be just and equitable if
contribution pursuant to this Section 9(c) were determined by pro rata allocation (even if the Holders were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations
referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities or expenses referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 9, none
of the Holders (and its related Indemnified Holders) shall be required to contribute, in the aggregate, any amount in excess of the amount by which the total discount received by such Holder with respect to the Offered Notes exceeds the amount of
any damages which such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. The Holders’ obligations to contribute pursuant to this Section 9(c) are several in proportion to the respective
principal amount of Offered Notes held by each of the Holders hereunder and not joint. 
 SECTION 10. Rule 144A.
The Company hereby agrees with each Holder, for so long as any Entitled Securities remain outstanding, to make available to any Holder or beneficial owner of Entitled Securities in connection with any sale thereof and any prospective purchaser
of such Entitled Securities from such Holder or beneficial owner, the information required by Rule 144A(d)(4) under the Securities Act in order to permit resales of such Entitled Securities pursuant to Rule 144A under the Securities Act. 

  
 17 

 SECTION 11. Participation in Underwritten Registrations. No Holder may
participate in any Underwritten Registration hereunder unless such Holder (a) agrees to sell such Holder’s Entitled Securities on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (b) completes and executes all reasonable questionnaires, powers of attorney, indemnities, underwriting agreements, lock-up letters and other documents required under the terms of such underwriting arrangements. 

SECTION 12. Selection of Underwriters. The Holders of Entitled Securities covered by the Shelf Registration
Statement who desire to do so may sell such Entitled Securities in an Underwritten Offering. In any such Underwritten Offering, the investment banker(s) and managing underwriter(s) that will administer such offering will be selected by the Holders
of a majority in aggregate principal amount of the Entitled Securities included in such offering; provided, however, that such investment banker(s) and managing underwriter(s) must be reasonably satisfactory to the Company;
provided further, that if the Company is conducting a primary issuance of securities in such Underwritten Offering, the Company shall have sole discretion in such selection. 

SECTION 13. Miscellaneous. 

(a) Remedies. The Company hereby agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a
breach by it of the provisions of this Agreement and hereby agree to waive the defense in any action for specific performance that a remedy at law would be adequate. 

(b) No Inconsistent Agreements. The Company will not, on or after the date of this Agreement, enter into any agreement with
respect to its securities that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. The Company has not previously entered into any agreement granting any registration rights
with respect to its securities to any Person. The rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of the Company’s securities under any agreement in effect
on the date hereof. 
 (c) Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and
waivers or consents to or departures from the provisions hereof may not be given unless the Company has (i) in the case of Section 6 hereof and this Section 13(c)(i), obtained the written consent of Holders of all outstanding Entitled
Securities and (ii) in the case of all other provisions hereof, obtained the written consent of Holders of a majority of the outstanding principal amount of Entitled Securities (excluding any Entitled Securities held by the Company or its
Affiliates). Notwithstanding the foregoing, a waiver or consent to departure from the provisions hereof that relates exclusively to the rights of Holders whose securities are being tendered pursuant to the Exchange Offer and that does not affect
directly or indirectly the rights of other Holders whose securities are not being tendered pursuant to such Exchange Offer may be given by the Holders of a majority of the outstanding principal amount of Entitled Securities being tendered or
registered; provided, however, that, with respect to any matter that directly or indirectly affects the rights of the Initial Purchaser hereunder, the Company shall obtain the written consent of the Initial Purchaser with respect to
which such amendment, qualification, supplement, waiver, consent or departure is to be effective. 

  
 18 

 (d) Notices. All notices and other communications provided for or permitted hereunder
shall be made in writing by hand-delivery, first-class mail (registered or certified, return receipt requested), telex, facsimile, or air courier guaranteeing overnight delivery: 

(i) if to a Holder, at the address set forth on the records of the Registrar under the Indenture, with a copy to the Registrar
under the Indenture; and 
 (ii) if to the Company: 

Mercer International Inc. 

Suite 1120, 700 West Pender Street 

Vancouver, British Columbia 

Canada, V6C 1G8 
 Facsimile:
(604) 684-1094 
 Attention: Chief Financial Officer 

With a copy to: 
 Sangra Moller
LLP 
 Barristers & Solicitors 

1000 Cathedral Place 
 925 West
Georgia Street 
 Vancouver, British Columbia 

Canada, V6B 3L2 
 Facsimile:
(604) 669-8803 
 Attention: Harjit Sangra 

All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five
Business Days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt acknowledged, if faxed; and on the next Business Day, if timely delivered to an air courier guaranteeing overnight delivery.

 Copies of all such notices, demands or other communications shall be concurrently delivered by the Person giving the same to the Trustee
at the address specified in the Indenture. 
 (f) Successors and Assigns. This Agreement shall inure to the benefit of and be binding
upon the successors and assigns of each of the parties, including, without limitation, and without the need for an express assignment or assumption, subsequent Holders of Entitled Securities; provided, however, that this Agreement
shall not inure to the benefit of or be binding upon a successor or assign of a Holder unless and to the extent such successor or assign acquired Entitled Securities from such Holder. 

  
 19 

 (g) Counterparts. This Agreement may be executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. 

(h) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning
hereof. 
 (i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 (j) Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby. 

(k) Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted by the Company with respect to the Entitled Securities. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter. 

[Signature pages follow] 
  

  
 20 

 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

  

			
	Mercer International Inc.
		
	By:	 	 /s/ David K. Ure

		 	Name: David K. Ure
		 	Title: Senior Vice President Finance, Chief Financial Officer and Secretary

  

 The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date first
above written: 
 Credit Suisse Securities (USA) LLC 
  

			
	By:	 	 /s/ Jonathan Singer

		 	Name: Jonathan Singer
		 	Title: Managing Director

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