Document:

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                              EMPLOYMENT AGREEMENT

made by and between

                           ZPR Zellstoff- und Papierfabrik Rosenthal Holding
                           GmbH, Pirnaer Str. 31-33, 01809 Heidenau

                           (hereinafter referred to as the "company")

and

                           Mr. Maarten Reidel, Neudorf, 24321 Howacht

                           (hereinafter referred to as "Employee")

                                    SECTION 1
                         FUNCTIONS AND RESPONSIBILITIES

1. Mr. Reidel will be responsible for the strategic development of the Company.
The company may assign the Employee to positions with affiliates of the company
which positions the Employee agrees to fill out without additional compensation.
This in particular includes the position as CFO of the Company's shareholder
Mercer International Inc..

2. The Employee shall report to the Company and its shareholder Mercer
International Inc if not decided otherwise by the shareholder's meeting.

3. The Employee's office location is Berlin.

                                    SECTION 2
                                TERM OF AGREEMENT

1. This agreement is effective from 1. July, 2002 and replaces all earlier
agreements between the parties.

2. This agreement is entered into for indefinite time.

3. This agreement may be terminated by the parties by giving three (3) months'
notice to the end of a month unless the termination is due to serious breach of
this contract or illegal actions in which cases no notice period is required.
The termination notice for termination of this agreement has to be in writing.

4. If termination notice is given with respect to this agreement, no matter by
which party, the company is entitled to suspend the Employee's obligation to
perform services for the company until the actual termination date or may, for
the transitory period until the actual termination date, assign the Employee to
other positions with the company or its affiliates. If the Employee's
obligations are suspended he shall use all reasonable effort to find gainful

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employment during the transitory period, and the company shall be no longer
obligated to pay to the Employee compensation under this agreement to the extent
that the Employee receives compensation from such new employment.

5. This agreement shall terminate without expressed termination notice at the
end of the month in which the Employee completes his 65th year of life.

                                    SECTION 3
                                  COMPENSATION

1. The Employee shall as compensation for his services receive an annual gross
salary of EUR 300.000,- (in words: three hundred thousand Euro). The annual
salary shall be paid in twelve equal instalments at the end of each calendar
month under withholding of applicable tax and social security deductions
(statutory pension plan, unemployment insurance).

2. Additionally the Employee is entitled to a bonus payment according to the
Mercer International Inc. Bonus Program. The bonus payment will be agreed
between the shareholder of the Company, Mercer International Inc., and the
Employee after the end of each business year.

3. The Employee is entitled to participate in the Mercer stock option program.
He will receive a total of 100.000 Mercer stock options of which 48.000 are due
with the signature of this agreement. The remaining 52.000 stock options will be
transferred to the Employee until 31. December 2002.

                                    SECTION 4
                     COMPENSATION IN CASE OF INCAPACITATION

1. In case of temporary incapacitation of the Employee caused by illness or
another reason for which the Employee is not responsible, statutory law is
applicable for the continuation of compensation payments.

2. The Company agrees to take out for the Employee, an accident insurance with a
total coverage of EUR 125.000,- in case of death and EUR 250.000,- in case of
disability.

                                    SECTION 5
                                    VACATION

The Employee is entitled to an annual vacation of thirty (30) working days (one
week = five working days). The time during which such vacation is taken shall be
decided after the consultation with the Company.

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                                    SECTION 6
                                 OTHER BENEFITS

1. The Employee shall, for the performance of his function under this Agreement,
be provided with a company car with a maximum value of 60.000,- Euros which he
may also use for personal purposes. The income tax on the monetary advantage of
the private use shall be paid by the Employee.

2. Expenses which the Employee will incur in performing his responsibilities
under this Agreement, including travel and other expenses, shall be reimbursed
if supported by individual vouchers. At the Employee's option, per diem and
overnight allowances may be reimbursed on a lump-sum basis at the maximum rate
from time to time permitted under applicable tax laws.

3. The Employee is entitled to reimbursement of half of his costs of private
health insurance against invoice.

4. The Company will provide the Employee with a mobile telephone.

5. The Company will reimburse to the Employee the amount of 1.200,- EUR per
month for cost of rent for a period of 12 months.

                                    SECTION 7
                  ADDITIONAL EMPLOYMENT, NON-COMPETITION CLAUSE

1. The Employee shall devote his full attention and time, as well as
professional knowledge and experience, exclusively to the company. The
acceptance of any compensated or non-compensated additional employment as well
as of the service on supervisory or advisory boards or similar positions is
subject to the prior written consent of the shareholder's meeting.

2. During the time of his employment with the company the Employee shall not
engage, directly or indirectly, in any venture, business or enterprise which
competes with the company or with which the company maintains relations.

                                    SECTION 8
                                 CONFIDENTIALITY

The Employee agrees that he will keep all affairs of the company absolutely
confidential to third parties. This obligation shall survive the termination of
the services for the company.

                                    SECTION 9
                       RECORDS AND OTHER COMPANY PROPERTY

When leaving the service of the company, or after being suspended from his
obligation to render services pursuant to ss. 2 subparagraph 4, the Employee
agrees to return to the Company any and

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all documents, correspondence, records, drafts and the like which concern
Company matters and which are still in his possession. The Employee is not
entitled to exercise a right of retention with respect to such records and
objects.

                                   SECTION 10
                                FINAL PROVISIONS

1. Amendments and additions to this Agreement, including this provision, must be
in writing. There are no oral side agreements to this Agreement. This Agreement
supersedes all earlier agreements.

2. Should any provision of this Agreement become wholly or in part invalid, the
remaining parts of this Agreement shall not be affected. The invalid provision
shall be replaced in such case by such valid provision which comes as close as
possible to the economic intent of the parties.

/s/ Jimmy Lee
-----------------------------------------------
ZPR Zellstoff- und Papierfabrik Rosenthal Holding GmbH
Jimmy Lee, Managing Director

/s/ Maarten Reidel
-----------------------------------------------
Maarten Reidel<Page>

                                                                 EXHIBIT 10.19

                          TRUSTEE'S INDEMNITY AGREEMENT

THIS AGREEMENT dated for reference the o day of January, 2003.

BETWEEN:

                  o, Businessman

                  (the "Trustee")

AND:

                  MERCER INTERNATIONAL INC., a Massachusetts business trust
                  organized under the laws of the State of Washington with an
                  office at One Renton Place, 555 S. Renton Village Place,
                  Suite 700, Renton, Washington, 98055

                  (the "Company")

WITNESSES THAT WHEREAS:

A.       It is essential to the Company to retain and attract as trustees and
         officers the most capable persons available;

B.       The Trustee is a trustee and/or officer of the Company;

C.       Both the Company and the Trustee recognize the increased risk of
         litigation and claims being asserted against directors, trustees and
         officers of public companies in today's environment; and

D.       In recognition of the Trustee's need for substantial protection
         against personal liability and in order to enhance the Trustee's
         continued service to the Company in an effective manner, the Company
         wishes to provide in this Agreement for the indemnification of the
         Trustee to the fullest extent permitted by law and as set forth in
         this Agreement.

NOW THEREFORE in consideration of the premises, the respective covenants of the
parties herein and other good and valuable consideration (the receipt and
sufficiency of which is hereby acknowledged), the parties hereto covenant and
agree as follows:

1.       INTERPRETATION

1.1      DEFINITIONS. For the purposes of this Agreement, the following terms
         shall have the following meanings, respectively:

         (a)      "BOARD" means the board of trustees of the Company;

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         (b)      "CLAIM" or "CLAIMS" has the meaning ascribed to such term in
                  Subsection 2.1(a) hereof;

         (c)      "CHANGE IN CONTROL" shall be deemed to have occurred if:

                  (i)      any "person" (as such term is used in Sections 13(d)
                           and 14(d) of the SECURITIES EXCHANGE ACT OF 1934, as
                           amended), other than a trustee or other fiduciary
                           holding securities under an employee benefit plan of
                           the Company or a corporation owned, directly or
                           indirectly, by the shareholders of the Company in
                           substantially the same proportions as their ownership
                           of shares of beneficial interest of the Company,
                           becomes the "beneficial owner" (as defined in Rule
                           13d-3 under said Act), directly or indirectly, of
                           securities of the Company representing 20% or more of
                           the total voting power represented by the Company's
                           then outstanding Voting Securities;

                  (ii)     during any period of two consecutive years,
                           individuals who at the beginning of such period
                           constitute the Board and any new trustee of the
                           Company whose election by the Board or nomination
                           for election by the Company's shareholders was
                           approved by a vote of at least two-thirds of the
                           trustees of the Company then still in office who
                           either were trustees of the Company at the beginning
                           of such period or whose election or nomination for
                           election was previously so approved, cease for any
                           reason to constitute a majority thereof; or

                  (iii)    the shareholders of the Company approve a merger or
                           consolidation of the Company with any other
                           corporation, other than a merger or consolidation
                           which would result in the Voting Securities of the
                           Company outstanding immediately prior thereto
                           continuing to represent (either by remaining
                           outstanding or by being converted into Voting
                           Securities of the surviving entity) at least 50.1%
                           of the total voting power represented by the Voting
                           Securities of the Company or such surviving entity
                           outstanding immediately after such merger or
                           consolidation, or the shareholders of the Company
                           approve a plan of complete liquidation of the
                           Company or an agreement for the sale or disposition
                           by the Company of (in one transaction or a series of
                           transactions) all or substantially all of the
                           Company's assets;

         (d)      "COSTS" has the meaning ascribed thereto in Subsection 2.1(b)
                  hereof;

         (e)      "EXPENSE ADVANCE" has the meaning ascribed to such term in
                  Section 2.2 hereof;

         (f)      "INDEMNIFIABLE EVENT" has the meaning ascribed to such term in
                  Subsection 2.1(a) hereof;

         (g)      "INDEPENDENT LEGAL COUNSEL" means an attorney or firm of
                  attorneys, selected in accordance with the provisions of
                  Section 6.1 hereof, who shall not have

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                  otherwise performed services for the Company or the Trustee
                  within the last [TWO] years (other than with respect to
                  matters concerning the rights of the Trustee under this
                  Agreement, or of other trustees of the Company under similar
                  indemnity agreements);

         (h)      "POTENTIAL CHANGE IN CONTROL" shall be deemed to have occurred
                  if:

                  (i)      the Company enters into an agreement, the
                           consummation of which would result in the occurrence
                           of a Change in Control;

                  (ii)     any person (including the Company) publicly
                           announces an intention to take or to consider taking
                           actions which if consummated would constitute a
                           Change in Control;

                  (iii)    any person, other than a trustee or other fiduciary
                           holding securities under an employee benefit plan of
                           the Company or a corporation owned, directly or
                           indirectly, by the shareholders of the Company in
                           substantially the same proportions as their
                           ownership of shares of beneficial interest of the
                           Company, who is or becomes the beneficial owner,
                           directly or indirectly, of securities of the Company
                           representing [10%] or more of the combined voting
                           power of the Company's then outstanding Voting
                           Securities, increases his beneficial ownership of
                           such securities by [FIVE PERCENTAGE POINTS (5%)]
                           or more over the percentage so owned by such
                           person; or

                  (iv)     the Board adopts a resolution to the effect that,
                           for purposes of this Agreement, a Potential Change
                           in Control has occurred;

         (i)      "RELATED COMPANIES" has the meaning ascribed to such term in
                  Subsection 2.1(a) hereof;

         (j)      "REVIEWING PARTY" means any appropriate person or body
                  consisting of a member or members of the Board or any other
                  person or body appointed by the Board who is not a party to
                  the particular Claim for which the Trustee is seeking
                  indemnification, or the Independent Legal Counsel; and

         (k)      "VOTING SECURITIES" means any securities of the Company which
                  vote generally in the election of trustees of the Company.

1.2      EFFECTIVE DATE. Notwithstanding the date of its execution and
         delivery, this Agreement shall be conclusively deemed to commence on,
         and be effective as of, the day upon which the Trustee first became or
         becomes a trustee or officer of the Company and shall survive and
         remain in full force and effect after the Trustee ceases to be a
         trustee or officer of the Company and after the termination of the
         Trustee's employment with the Company.

2.       INDEMNITY

2.1      INDEMNIFICATION. Subject to Section 3.1, the Company shall indemnify
         and save harmless the Trustee to the fullest extent permitted by law
         against and from:

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         (a)      any and all charges and claims of every nature and kind
                  whatsoever which may be brought, made or advanced by any
                  person, firm, corporation or government, or by any
                  governmental department, body, commission, board, bureau,
                  agency or instrumentality against the Trustee, and any and
                  all threatened, pending or completed actions, suits or
                  proceedings, or any inquires or investigations, whether
                  instituted by the Company or any other person, that the
                  Trustee in good faith believes might lead to the institution
                  of any such action, suit or proceeding, whether civil,
                  criminal, administrative, investigative or other, against the
                  Trustee, including any and all actions, suits, proceedings,
                  inquires or investigations in which the Trustee was, is,
                  becomes or is threatened to be made a party to or witness or
                  other participant in (a "CLAIM", or, collectively, "CLAIMS"),
                  by reason of (or arising in part out of) the Trustee being a
                  director, officer, trustee, employee or agent of the Company,
                  any of the Company's subsidiaries, or any company,
                  partnership, joint venture, trust or other enterprise related
                  to or affiliated with the Company or which the Trustee was
                  serving at the request of the Company as a director, officer,
                  trustee, employee or agent (the "RELATED COMPANIES"), or that
                  arise out of or are in any way connected with the management,
                  operation, activities, affairs or existence of the Company or
                  any of its Related Companies (an "INDEMNIFIABLE EVENT");

         (b)      any and all costs, damages, expenses (including legal fees
                  and disbursements on a full indemnity basis), judgements,
                  fines, liabilities, penalties (statutory and otherwise),
                  losses and amounts paid in settlement (including all
                  interest, assessments and other charges paid or payable in
                  connection with or in respect of such costs, damages,
                  expenses, judgements, fines, liabilities, penalties, losses
                  or amounts paid in settlement) (referred to herein as
                  "COSTS") which the Trustee may sustain, incur or be liable
                  for by reason of (or arising in part out of) an
                  Indemnifiable Event whether sustained or incurred by reason
                  of his negligence, default, breach of duty, breach of
                  trust, failure to exercise due diligence or otherwise in
                  relation to the Company or its Related Companies or any of
                  their affairs; and

         (c)      in particular, and without in any way limiting the generality
                  of the foregoing, any and all Costs which the Trustee may
                  sustain, incur or be liable for as a result of or in
                  connection with the release of or presence in the environment
                  of hazardous substances, contaminants, litter, waste,
                  effluent, refuse, pollutants or deleterious materials and that
                  arise out of or are in any way connected with the management,
                  operation, activities, affairs or existence of the Company or
                  any of its Related Companies.

2.2      EXPENSE ADVANCES. Subject to Section 3.1, the Company shall advance to
         the Trustee the Costs reasonably estimated to be sustained, incurred or
         suffered by him, in connection with the indemnification set forth in
         Section 2.1 hereof within two business days of receipt by the Company
         of a written request for such advance (an "EXPENSE ADVANCE"). The
         Trustee hereby undertakes to repay such amounts advanced only if, and
         to the extent that, it shall ultimately be determined by a court of
         competent jurisdiction, which

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         determination is not subject to any subsequent appeals, that the
         Trustee is not entitled to be indemnified by the Company as authorized
         by this Agreement.

2.3      INDEMNIFICATION OF EXPENSES OF SUCCESSFUL PARTY. Notwithstanding any
         other provision of this Agreement, to the extent that the Trustee has
         been successful on the merits or otherwise in the defence of any Claim
         or in the defence of any charge, issue or matter therein, including the
         dismissal of a Claim, the Company shall indemnify the Trustee against
         any and all Costs actually and reasonably sustained or incurred by him
         in connection with the investigation, defence or appeal of such Claim.

2.4      INDEMNIFICATION FOR EXPENSE OF A WITNESS. Notwithstanding any other
         provision of this Agreement, the Company will indemnify the Trustee if
         and whenever he is a witness or participant, or is threatened to be
         made a witness or participant, to any action, suit, proceeding,
         hearing, inquiry or investigation to which the Trustee is not a party,
         by reason of the fact that he is or was a trustee, director, officer,
         employee or agent of the Company or any of its Related Companies or by
         reason of anything done or not done by him in such capacity, against
         any and all Costs actually and reasonably sustained or incurred by the
         Trustee or on the Trustee's behalf in connection therewith.

2.5      INDEMNIFICATION FOR EXPENSES IN OBTAINING INDEMNITY. The Company
         shall indemnify the Trustee against any and all Costs, and, if
         requested by the Trustee, shall subject to Section 3.1 hereof
         (within two business days of such request) advance such Costs to the
         Trustee, which are sustained, incurred or suffered by the Trustee in
         connection with any action, suit or proceeding brought by the
         Trustee for: (i) indemnification, or an advance thereof, by the
         Company under this Agreement, any other agreement or the Restated
         Declaration of Trust of the Company, as amended; or (ii) recovery
         under any trustees', directors' and officers' liability insurance
         policies maintained by the Company, regardless of whether the
         Trustee ultimately is determined to be entitled to such
         indemnification or insurance recovery, as the case may be.

2.6      PARTIAL INDEMNITY. If the Trustee is entitled under any provisions of
         this Agreement to indemnification by the Company for some or a portion
         of the Costs sustained, incurred or suffered by him but not, however,
         for all of the total amounts thereof, the Company shall nevertheless
         indemnify the Trustee for the portion thereof to which Trustee is
         entitled.

3.       INDEMNITY EXCEPTIONS

3.1      EXCEPTIONS TO INDEMNIFICATION. Notwithstanding the provisions of
         Sections 2.1, 2.2 and 2.5 hereof, the Company shall not be obligated
         to indemnify or save harmless the Trustee against and from any Claim
         or Costs or make an Expense Advance:

         (a)      if, in respect thereof, a court of competent jurisdiction
                  determines, which determination is not subject to any
                  subsequent appeals, that the Trustee failed to act honestly
                  and in good faith with a view to the best interests of the
                  Company;

         (b)      arising out of any criminal conviction of the Trustee if the
                  Trustee pleaded guilty or was found guilty by a court of
                  competent jurisdiction, which finding is not
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                  subject to any subsequent appeals by the Trustee, other than
                  in the case of a criminal proceeding in respect of which the
                  Trustee had no reasonable cause to believe that his conduct
                  was unlawful;

         (c)      arising out of a determination by a court of competent
                  jurisdiction, which determination is not subject to any
                  subsequent appeals, that: (i) the Trustee failed to disclose
                  his interest or conflicts as required under the WASHINGTON
                  BUSINESS CORPORATION ACT - Title 23B of the Revised Code of
                  Washington, as amended (the "RCW"); or (ii) the Company
                  is not permitted to indemnify the Trustee as provided in RCW
                  23B.08.510(4);

         (d)      in connection with any liability under Section 16(b) of the
                  SECURITIES EXCHANGE ACT OF 1934, as amended, or under United
                  States federal or state securities laws for "insider
                  trading";

         (e)      if, in respect thereof, the Expense Advance, or any other
                  advance to the Trustee under this Agreement, is prohibited by
                  the SARBANES-OXLEY ACT OF 2002, as amended; or

         (f)      in connection with any settlement of a Claim effected without
                  the Company's written consent.

4.       BURDEN OF PROOF AND PRESUMPTIONS

4.1      BURDEN OF PROOF. In connection with any determination by the Company
         as to whether the Trustee is entitled to be indemnified hereunder, the
         burden of proof shall be on the Company to establish that the Trustee
         is not so entitled.

4.2      NO PRESUMPTIONS. For purposes of this Agreement, the termination of
         any Claim, by judgement, order, settlement (whether with or without
         court approval) or conviction, or upon a plea of nolo contendere,
         or its equivalent, shall not create a presumption that the Trustee
         did not meet any particular standard of conduct or have any particular
         belief or that a court had determined that indemnification is not
         permitted by applicable law.

5.       CONTRIBUTION

5.1      If the indemnification provided in this Agreement is unavailable and
         may not be paid to the Trustee for any reason other than statutory
         limitations set forth in applicable law, then in respect of any
         Claim in which the Company is jointly liable with the Trustee (or
         would be if joined in such Claim), the Company shall contribute to
         the amount of Costs actually and reasonably sustained or incurred
         and paid or payable by the Trustee in such proportion as is
         appropriate to reflect (i) the relative benefits received by the
         Company and all officers, trustees, directors or employees of the
         Company and any of its Related

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         Companies, other than the Trustee, who are jointly liable with the
         Trustee (or would be if joined in such Claim) on the one hand, and
         the Trustee, on the other hand, from the transaction from which such
         Claim arose, and (ii) the relative fault of the Company and all
         officers, trustees, directors or employees of the Company and any of
         its Related Companies, other than the Trustee, who are jointly
         liable with the Trustee (or would be if joined in such Claim), on
         the one hand, and of the Trustee, on the other, in connection with
         the events which resulted in such Costs, as well as any other
         relevant equitable ocnsiderations. The relative fault referred to
         above shall be determined by reference to, among other things, the
         parties' relative intent, knowledge, access to information and
         opportunity to correct or prevent the circumstances resulting in
         such Costs. The Company agrees that it would not be just and
         equitable if contribution pursuant to this Section were determined
         by pro rata allocation or any other method of allocation that does
         not take account of the foregoing equitable considerations.

6.       CHANGE IN CONTROL

6.1      CHANGE IN CONTROL. The Company agrees that if there is a Change in
         Control of the Company (other than a Change in Control which has
         been approved by a majority of the trustees of the Company who were
         trustees of the Company immediately prior to such Change in Control)
         then with respect to all matters thereafter arising concerning the
         rights of the Trustee to indemnity payments and Expense Advances
         under this Agreement, any other agreement or the Restated
         Declaration of Trust of the Company, as amended, now or hereafter in
         effect relating to Claims for Indemnifiable Events, the Company
         shall seek legal advice only from Independent Legal Counsel selected
         by the Trustee and approved by the Company (which approval shall not
         be unreasonably withheld). Such counsel, among other things, shall
         render its written opinion to the Company and the Trustee as to
         whether and to what extent the Trustee would be permitted to be
         indemnified under applicable law. The Company agrees to pay the
         reasonable fees of the Independent Legal Counsel referred to above
         and to indemnify fully such counsel against any and all Costs,
         claims and charges arising out of or relating to this Agreement or
         its engagement pursuant hereto.

6.2      ESTABLISHMENT OF TRUST. In the event of a Potential Change in
         Control, the Company shall, upon written request by the Trustee,
         create a trust for the benefit of the Trustee and from time to time
         upon written request of the Trustee shall fund such trust in an
         amount sufficient to satisfy any and all Costs reasonably
         anticipated at the time of such request to be sustained or incurred
         in connection with investigating, preparing for and defending any
         Claim, and the Costs sustained or incurred by the Trustee from time
         to time, or reasonably anticipated to be sustained or incurred by
         the Trustee in connection with any Claim, provided that in no event
         shall more than [$25,000] be required to be deposited in any trust
         created hereunder in excess of amounts deposited in respect of
         reasonably anticipated Costs. The amount or amounts to be deposited
         in the trust pursuant to the foregoing funding obligation shall be
         determined by the Reviewing Party in any case in which the
         Independent Legal Counsel referred to above is involved. The terms
         of the trust shall provide that upon a Change in Control (i) the
         trust shall not be revoked or the principal thereof invaded, without
         the written consent of the Trustee, (ii) the trustee of such trust
         shall advance to the Trustee, within two business days of a request
         by the Trustee, the Costs sustained or incurred, or reasonably
         anticipated to be sustained or incurred, by the Trustee in
         connection with any Claim (and the Trustee hereby agrees to
         reimburse the trust under the circumstances under which the Trustee
         would be required to reimburse the Company under Section 2.2
         hereof), (iii) such trust shall continue to be

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         funded by the Company in accordance with the funding obligation set
         forth above, (iv) the trustee of such trust shall promptly pay to
         the Trustee all amounts for which the Trustee shall be entitled to
         indemnification pursuant to this Agreement or otherwise, and (v) all
         unexpended funds in such trust shall revert to the Company upon a
         final determination by the Reviewing Party or a court of competent
         jurisdiction, as the case may be, that the Trustee has been fully
         indemnified under the terms of this Agreement. The trustee of the
         trust established hereunder shall be chosen by the Trustee. Nothing
         in this Section 6.2 shall relieve the Company of any of its
         obligations under this Agreement.

7.       RESIGNATION

7.1      Nothing in this Agreement shall prevent the Trustee from resigning as
         a trustee or officer of the Company or any of its Related Companies at
         any time.

8.       DEFENCE

8.1      NOTICE TO COMPANY. Upon the Trustee becoming aware of any pending or
         threatened Claim, written notice shall be given by or on behalf of the
         Trustee to the Company as soon as is reasonably practicable.

8.2      INVESTIGATION BY COMPANY. The Company shall conduct such investigation
         of each Claim as is reasonably necessary in the circumstances, and
         shall pay all costs of such investigation.

8.3      DEFENCE BY COMPANY. Subject to this Section, the Company shall, upon
         the written request of the Trustee, defend, on behalf of the Trustee,
         any Claim, even if the Claim is groundless, false or fraudulent.

8.4      APPOINTMENT OF DEFENCE COUNSEL. The Company shall consult with and
         accept the reasonable choice of the Trustee concerning the appointment
         of any defence counsel to be engaged by the Company in fulfillment of
         its obligations to defend a Claim pursuant to Section 8.3; thereafter
         the Company shall appoint such counsel.

8.5      SETTLEMENT BY COMPANY. With respect to a Claim for which the Company
         is obliged to indemnify the Trustee hereunder, the Company may conduct
         negotiations towards the settlement of a Claim and, with the written
         consent of the Trustee (which the Trustee agrees not to unreasonably
         withhold) the Company may make such settlement as it deems expedient,
         provided however that the Trustee shall not be required, as part of
         any proposed settlement of a Claim, to admit liability or agree to
         indemnify the Company in respect of, or make contribution to, any
         compensation or other payment for which provision is made under the
         settlement. The Company shall pay any compensation or other payment
         for which provision is made by such settlement.

9.       GENERAL

9.1      LIMITATION OF ACTIONS. No legal action shall be brought and no cause
         of action shall be asserted by or in the right of the Company or any
         of its Related Companies against the Trustee, the Trustee's spouse,
         heirs, executors or personal or legal representatives after the

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         expiration of [TWO] years from the date of accrual of such cause of
         action, and any claim or cause of action of the Company and any of
         its Related Companies shall be extinguished and deemed released
         unless asserted by the timely filing of a legal action within such
         [TWO]-year period; provided, however, that if any shorter period of
         limitation is otherwise applicable to such cause of action such
         shorter period shall govern.

9.2      GENDER; PLURAL. In this Agreement wherever the singular or masculine
         is used it will be construed as if the plural or feminine or neuter,
         as the case may be, had been used where the context otherwise
         requires, and a reference to a section by number is a reference to
         the section so numbered in this Agreement.

9.3      NOTICES. All notices and other communications required to be given
         by a party hereunder shall be in writing and shall be deemed to have
         been duly given: (a) upon delivery, if delivered by hand; (b) one
         (1) business day after the business day of deposit with an overnight
         courier, if delivered by overnight courier, freight prepaid; (c)
         five (5) days after deposit with the applicable postal service, if
         delivered by first class mail postage prepaid; or (d) one (1) day
         after the business day of delivery by facsimile transmission, if
         delivered by facsimile transmission and a facsimile transmission
         confirmation is obtained in respect thereof, with a copy by first
         class mail postage prepaid, to the other party at the other party's
         address specified above or to the last known facsimile number of
         such party, as applicable, or at such other address or to such other
         facsimile number as the other party may have last specified in
         writing to the party intending to convey the notice or other
         communication.

9.4      TIME.  Time shall be of the essence of this Agreement.

9.5      HEADINGS. The headings in this Agreement are inserted for ease of
         reference only and shall have no effect on the construction or
         interpretation of this Agreement.

9.6      GOVERNING LAW. This Agreement shall be construed, interpreted,
         governed by and enforced in accordance with the laws of the State of
         Washington, U.S.A., applicable to contracts made and to be performed
         in the State of Washington, U.S.A., without giving effect to the
         principles of conflicts of laws. Each of the parties hereby
         irrevocably attorns to the non-exclusive jurisdiction of the courts
         of Seattle, Washington, U.S.A., with respect to any matters arising
         out of this Agreement.

9.7      ENTIRE AGREEMENT. [OTHER THAN o CONTAINED IN THE EMPLOYMENT AGREEMENT
         BETWEEN THE TRUSTEE AND THE COMPANY DATED THE o DAY OF o, o
         (THE "EMPLOYMENT AGREEMENT")], this Agreement contains the entire
         agreement between the parties relating to the subject matter hereof
         and there are no agreements, representations or warranties, express or
         implied, which are collateral hereto. [FOR GREATER CERTAINTY,
         NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEM ENT, THE
         PARTIES HERETO ACKNOWLEDGE AND AGREE THAT NOTHING CONTAINED HEREIN
         IS INTENDED TO MODIFY, ABRIDGE, LIMIT OR AFFECT ANY OF THE RIGHTS OR
         OBLIGATIONS OF THE PARTIES HERETO CONTAINED IN THE EMPLOYMENT
         AGREEMENT. NTD: AMEND ACCORDINGLY DEPENDING ON WHETHER TRUSTEE HAS A
         PRE-EXISTING EMPLOYMENT AGREEMENT WITH THE COMPANY.]

<Page>
                                               10

9.8      NONEXCLUSIVITY. The rights of the Trustee hereunder shall be in
         addition to any rights the Trustee may have under
         [THE EMPLOYMENT  AGREEMENT,] the Restated Declaration of Trust of
         the Company, including  any amendments thereto or restatements
         thereof, Chapter 23.90 of the  RCW, as amended, Title 23B of the
         RCW, as amended, or otherwise. To the  extent that any change(s) in
         Chapter 23.90 and/or Title 23B of the RCW  (whether by statute or
         judicial decision) permits greater  indemnification by agreement
         than would be afforded currently under the  Company's Restated
         Declaration of Trust, as amended, and this  Agreement, it is the
         intent of the parties hereto that the Trustee  shall enjoy by this
         Agreement the benefits so afforded by such  change(s).

9.9      INSURANCE. To the extent the Company maintains an insurance policy or
         policies providing trustees', directors' and officers' liability
         insurance, the Trustee shall be covered by such policy or policies, in
         accordance with its or their terms, to the maximum extent of the
         coverage available for any trustee, director or officer of the Company.

9.10     AMENDMENTS. This Agreement may only be amended by a written agreement
         signed by both of the parties hereto.

9.11     WAIVERS. No waiver of any of the provisions of this Agreement shall be
         deemed or shall constitute a waiver of any other provisions hereof
         (whether or not similar) nor shall such waiver constitute a continuing
         waiver.

9.12     FURTHER ASSURANCES. Each of the parties agrees to promptly do all such
         further acts, and promptly execute and deliver all such further
         documents, as may be necessary or advisable for the purpose of giving
         effect to or carrying out the intent of this Agreement.

9.13     SUCCESSORS AND ASSIGNS. This Agreement shall enure to the benefit of
         and be binding upon the parties hereto and their respective successors,
         including any direct or indirect successor by purchase, merger,
         consolidation or otherwise to all or substantially all of the business
         and/or assets of the Company, assigns, spouses, heirs, executors and
         personal and legal representatives. This Agreement shall continue in
         effect regardless of whether the Trustee continues to serve as a
         director, officer or trustee of the Company, any of its Related
         Companies or of any other enterprise at the Company's request.

9.14     SEVERABILITY. The provisions of this Agreement shall be severable in
         the event that any of the provisions hereof (including any provision
         within a single section, paragraph or sentence) are held by a court of
         competent jurisdiction to be invalid, void or otherwise unenforceable
         in any respect, and the validity and enforceability of any such
         provision in every other respect and of the remaining provisions
         hereof shall not be in any way impaired and shall remain enforceable
         to fullest extent permitted by law.

<Page>
                                               11

9.15     COUNTERPARTS. This Agreement may be executed in any number of
         counterparts with the same effect as if all parties had signed the
         same document. All counterparts will constitute one and the same
         agreement. This Agreement may be executed and transmitted by
         facsimile transmission and if so executed and transmitted this
         Agreement will be for all purposes as effective as if the parties
         had delivered an executed original Agreement.

IN WITNESS WHEREOF the parties hereto have executed this Agreement, in the case
of a corporate party by its duly authorized officer or officers, as of the date
first written above.

<Table>
<Caption>

<S>                                   <C>                            <C>                             <C>

SIGNED, SEALED AND DELIVERED by o in  )
the presence of:                      )
                                      )
--------------------------------------)
Signature                             )
                                      )
--------------------------------------)
Name                                  )
                                      )   ---------------------------
                                      )   o
--------------------------------------)
Address                               )
                                      )
--------------------------------------)
                                      )
--------------------------------------)
Occupation                            )
                                      )
                                      )
MERCER INTERNATIONAL INC.             )
                                      )
By: ----------------------------------)
                                      )
Name:---------------------------------)
                                      )
Title:--------------------------------)

</Table>

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