JIMMY S.H. LEE
                              AMENDED AND RESTATED
                              EMPLOYMENT AGREEMENT
 
 
MEMORANDUM OF AGREEMENT made effective as of the 28th day of April, 2004.
 
BETWEEN:
 
                  MERCER INTERNATIONAL INC., a Massachusetts business trust
                  organized under the laws of the State of Washington with an
                  office at 14900 Interurban Avenue South, Suite 282, Seattle,
                  Washington, 98168
 
                  (hereinafter referred to as the "Corporation")
 
                                                               OF THE FIRST PART
AND:
 
                  JIMMY S.H. LEE, Businessman
 
                  (hereinafter referred to as the "Executive")
 
                                                              OF THE SECOND PART
 
WHEREAS:
 
A.       The Corporation recognizes the valuable services that the Executive has
         provided and is continuing to provide to the Corporation and its
         subsidiaries and believes that it is reasonable and fair to the
         Corporation that the Executive receive fair treatment, in particular,
         in the event of a Change of Control (as hereinafter defined);
 
B.       The Corporation recognizes that the Executive has acquired outstanding
         and special skills relating to the business of the Corporation and its
         subsidiaries and desires, in the best interests of the Corporation, to
         have the Executive continue employment with the Corporation, including
         up to and after such a Change of Control;
 
C.       The Executive is willing to remain in the employment of the Corporation
         but desires assurance that in the event of any such Change of Control
         the Executive will continue employment with the Corporation, including
         during the period up to and after such Change of Control, and will
         continue to have the responsibility and status that the Executive has
         earned; and
 
 
 
 
<PAGE>
                                       2
 
 
D.       Both the Corporation and the Executive wish formally to agree to the
         terms and conditions of the Executive's employment and the terms and
         conditions that will, in certain circumstances hereinafter set forth,
         govern in the event of a termination of the employment of the Executive
         by the Corporation.
 
NOW THEREFORE in consideration of the premises hereof and of the mutual
covenants and agreements hereinafter set forth and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
each of the parties hereto, the parties hereby covenant and agree as follows:
 
 
                                    ARTICLE I
                                    RECITALS
 
1.1      RECITALS. The parties hereby represent and warrant that the above
         recitals are true and correct.
 
 
                                   ARTICLE II
                                 INTERPRETATION
 
2.1      HEADINGS. The headings of the Articles, Sections and subsections herein
         are inserted for convenience of reference only and shall not affect the
         meaning or construction hereof.
 
2.2      DEFINITIONS. For the purposes of this Agreement, the following terms
         shall have the following meanings, respectively:
 
 
         (a)      "Accrued Benefits" has the meaning ascribed to such term in
                  subsection 4.1(b)(iv) hereof;
 
         (b)      "Affiliate" and "Associates" shall have the meanings ascribed
                  to such terms in Rule 12b-2 of the General Rules and
                  Regulations under the Exchange Act, as in effect on the date
                  of this Agreement;
 
         (c)      "Agreement" means this Amended and Restated Employment
                  Agreement and all schedules and amendments hereto;
 
         (d)      "Annual Bonus" has the meaning ascribed to such term in
                  Section 3.6(a) hereof;
 
         (e)      "Banking Day" means a day on which banks are open for business
                  in Vancouver, British Columbia;
 
         (f)      "Base Salary" has the meaning ascribed to such term in Section
                  3.6(a) hereof;
 
         (g)      "Board" means the board of Trustees of the Corporation;
 
 
 
<PAGE>
                                       3
 
 
         (h)      "Change of Control" means the occurrence of any of the
                  following events:
 
                  (i)      Any "person" (as such term is used in Sections 13(d)
                           and 14(d) of the Exchange Act), together with all
                           Associates and Affiliates of such person, directly or
                           indirectly: (a) becomes the "beneficial owner" (as
                           defined in Rule 13d-3 under the Exchange Act) of
                           securities of the Corporation representing the
                           greater of: (i) 15% or more of the aggregate of the
                           Common Shares then outstanding and the Issuable Note
                           Shares; and (ii) 20% of the then outstanding Common
                           Shares; or (b) has sole and/or shared voting, or
                           dispositive, power over the greater of: (i) 15% or
                           more of the aggregate of the Common Shares then
                           outstanding and the Issuable Note Shares; and (ii)
                           20% of the then outstanding Common Shares; or
 
                  (ii)     A change in the composition of the Board occurring
                           within a two-year period prior to such change, as a
                           result of which fewer than a majority of the Trustees
                           are Incumbent Trustees. "Incumbent Trustees" shall
                           mean Trustees who are either: (a) Trustees of the
                           Corporation as of the Effective Date; or (b) elected,
                           or nominated for election, to the Board with the
                           affirmative votes of at least a majority of the
                           Trustees who had been Trustees two (2) years prior to
                           such change and who were still in office at the time
                           of such election or nomination; or
 
                  (iii)    The solicitation of a dissident proxy, or any proxy
                           not approved by the Incumbent Trustees, the result of
                           which is to change the composition of the Board so
                           that fewer than a majority of the Trustees are
                           Incumbent Trustees; or
 
                  (iv)     The consummation of a merger, amalgamation or
                           consolidation of the Corporation with or into another
                           entity or any other corporate reorganization, if more
                           than 50% of the combined voting power of the
                           continuing or surviving entity's securities
                           outstanding immediately after such merger,
                           amalgamation, consolidation or reorganization are
                           owned by persons who were not stockholders of the
                           Corporation immediately prior to such merger,
                           amalgamation, consolidation or reorganization; or
 
                  (v)      The consummation of a sale, transfer or disposition
                           by the Corporation of all or substantially all of the
                           assets of the Corporation; or
 
                  (vi)     The approval by the shareholders of the Corporation
                           of a plan of complete liquidation or dissolution of
                           the Corporation.
 
                  An event shall not constitute a Change of Control if its sole
                  purpose is to change the jurisdiction of the Corporation's
                  organization or to create a holding company, partnership or
                  trust that will be owned in substantially the same proportions
                  by the persons who held the Corporation's securities
                  immediately before such event.
 
 
<PAGE>
                                       4
 
 
                  Additionally, a Change of Control will not be deemed to have
                  occurred, with respect to the Executive, if the Executive is
                  part of a purchasing group that consummates the Change of
                  Control event;
 
         (i)      "Common Shares" means the issued and outstanding shares of
                  beneficial interest of the Corporation;
 
         (j)      "Compensation Committee" means the independent committee of
                  the Board consisting of two or more Trustees, not employed by
                  the Corporation and each of whom is an independent Trustee
                  under applicable laws and regulations and the listing
                  requirements of the Nasdaq National Market, which committee is
                  responsible for making any and all decisions to award Stock
                  Options under the Plan to officers of the Corporation, in the
                  event the Corporation does not have a Compensation Committee
                  all references herein to Compensation Committee shall be
                  deemed to refer to the Board as a whole;
 
         (k)      "Date of Termination" means the date of termination of the
                  Executive's employment with the Corporation;
 
         (l)      "Disability" shall mean the Executive's failure to
                  substantially perform his material duties for the Corporation
                  on a full-time basis for twelve (12) consecutive months as a
                  result of physical or mental incapacity;
 
         (m)      "Disability Termination" has the meaning ascribed thereto in
                  Section 4.1 hereof;
 
         (n)      "Effective Date" means the date first above written;
 
         (o)      "Exchange Act" means the SECURITIES EXCHANGE ACT OF 1934, as
                  amended;
 
         (p)      "Good Reason" means, without the express written consent of
                  the Executive, the occurrence of any of the following events:
 
                  (i)      Any material reduction or diminution (except
                           temporarily during any period of physical or mental
                           incapacity or disability of the Executive) in the
                           Executive's titles, status or positions, any material
                           reduction or diminution in the Executive's authority,
                           duties or responsibilities with the Corporation
                           (including any position or duties as a Trustee of the
                           Corporation and the failure to re-elect the Executive
                           as a Trustee and to the Board), it being acknowledged
                           that, in the event any entity becomes the beneficial
                           owner (as defined in Rule 13d-3 under the Exchange
                           Act), directly or indirectly, beneficially or
                           otherwise of more than the greater of: (i) 15% of the
                           aggregate of the Common Shares then outstanding and
                           the Issuable Note Shares; and (ii) 20% of the Common
                           Shares then outstanding, it shall be Good Reason if
                           the Executive is not the Chief Executive Officer of
                           such entity; or
 
<PAGE>
                                       5
 
 
 
                  (ii)     A breach by the Corporation of any material provision
                           of this Agreement, including, but not limited to, a
                           breach of the obligations of the Corporation under
                           Sections 3.2, 3.6, 6.1, 7.5 and 7.9 (other than a
                           reduction in the Executive's Base Salary that does
                           not exceed an aggregate of ten percent (10%) of the
                           Executive's then current Base Salary and which
                           reduction applies, in equal percentages, to all
                           senior officers of the Corporation) or any failure to
                           timely pay any part of the Executive's compensation
                           hereunder, including, without limitation, the
                           Executive's Base Salary, Annual Bonus and any other
                           bonuses payable to him or to materially provide, in
                           the aggregate, the level of benefits contemplated
                           herein; or
 
                  (iii)    The failure of the Corporation to obtain and deliver
                           to the Executive a written agreement, in a form
                           reasonably satisfactory to the Executive, to be
                           entered into with any successor, assignee or
                           transferee of the Corporation to assume and agree to
                           perform this Agreement in accordance with Section
                           7.11 hereof; or
 
                  (iv)     Any failure by or of the Corporation to continue in
                           effect any benefit, bonus, profit sharing, incentive,
                           remuneration, compensation, stock ownership, stock
                           purchase, stock option, life insurance, disability,
                           pension or retirement plans in which the Executive is
                           participating or entitled to participate on the date
                           hereof, or the Corporation takes, or fails to take,
                           any action that materially adversely affects the
                           Executive's participation in, or reduces his rights
                           or benefits, under or pursuant to such plans (other
                           than a failure that results in a reduction in
                           benefits under any such plan that does not reduce the
                           Executive's benefits under such plan by more than an
                           aggregate of ten percent of the Executive's then
                           existing benefits under such plan and which said
                           reduction applies, in equal percentages, to all
                           senior officers of the Corporation), or the
                           Corporation fails to increase or improve such rights
                           or benefits on a basis consistent with practices in
                           effect prior to such failure, or with practices
                           implemented subsequent to a Change of Control, with
                           respect to senior officers of the Corporation; or
 
                  (v)      The relocation of the Executive by the Corporation to
                           a place other than the location at which he performed
                           his duties for the Corporation immediately prior to
                           such relocation, except for required travel on the
                           Corporation's business to an extent substantially
                           consistent with the Executive's business obligations
                           to the Corporation;
 
                  (vi)     Any failure by the Corporation to provide the
                           Executive with the number of paid vacation days to
                           which he is entitled, as set forth herein, or the
                           Corporation failing to increase such paid vacation
                           days on a basis consistent with practices in effect
                           prior to such failure, or with practices implemented
 
 
<PAGE>
                                       6
 
 
                           subsequent to a Change of Control, with respect to
                           the senior officers of the Corporation; or
 
                  (vii)    The Corporation taking any action to deprive the
                           Executive of any material fringe benefit enjoyed by
                           him immediately prior to such deprivation (other than
                           a reduction in benefits under such plan that does not
                           reduce the Executive's benefits under any plan by
                           more than an aggregate of ten percent of the
                           Executive's then benefits under such plan and which
                           said reduction applies, in equal percentages, to all
                           senior officers of the Corporation) or the
                           Corporation failing to increase or improve such
                           material fringe benefits on a basis consistent with
                           practices in effect prior to such deprivation, or
                           with practices implemented subsequent to a Change of
                           Control, with respect to senior officers of the
                           Corporation;
 
         (q)      "Incumbent Trustees" has the meaning ascribed thereto in
                  Section 2.2(h)(ii);
 
         (r)      "Issuable Note Shares" shall mean Common Shares of the Company
                  into which the then outstanding Notes are convertible as if
                  the then outstanding Notes had been fully converted;
 
         (s)      "Just Cause" means the occurrence of any of the following
                  events:
 
                  (i)      Serious misconduct, dishonesty or disloyalty of the
                           Executive directly related to the performance of his
                           duties for the Corporation which results from a
                           willful act or omission or from gross negligence and
                           which is materially injurious to the operations,
                           financial condition or business reputation of the
                           Corporation;
 
                  (ii)     Willful and continued failure by the Executive to
                           substantially perform his duties under this Agreement
                           (other than any such failure resulting from his
                           incapacity due to physical or mental disability or
                           impairment); or
 
                  (iii)    Any other material breach of this Agreement by the
                           Executive.
 
                  For purposes of this Agreement, no act, or failure to act, by
                  the Executive shall be "willful" unless it is done, or omitted
                  to be done, in bad faith and without a reasonable belief that
                  the act or omission was in the best interests of the
                  Corporation;
 
         (t)      "Market Price" means on any date, the average market price of
                  the Common Shares calculated as the simple average of the
                  closing price of the Common Shares as quoted through NASDAQ on
                  each of the 10 business days preceding such date on which a
                  closing price was quoted;
 
         (u)      "NASDAQ" means the National Association of Stock Dealers
                  Automated Quotation System;
 
<PAGE>
                                       7
 
 
         (v)      "Notes" shall mean the 8.5% Convertible Senior Subordinated
                  Notes due 2010 of the Company issued pursuant to an indenture
                  made between the Company and Wells Fargo Bank, Minnesota,
                  N.A., as trustee, dated October 10, 2003 (as it may be amended
                  from time to time);
 
         (w)      "Plan" has the meaning ascribed to such term in Section
                  3.6(b)(i) hereof;
 
         (x)      "Prime" means the prime lending rate charged by Royal Bank of
                  Canada to its most credit worthy customers for U.S. dollar
                  commercial loans at its main branch in Vancouver, British
                  Columbia;
 
         (y)      "Prorated Bonus" has the meaning ascribed to such term in
                  subsection 4.1(c) hereof;
 
         (z)      "SEC" means the United States Securities and Exchange
                  Commission;
 
         (aa)     "Securities Act" means the SECURITIES ACT OF 1933, as amended;
 
         (bb)     "Stock Options" has the meaning ascribed to such term in
                  Section 3.6(b)(i) hereof; and
 
         (cc)     "Trustees" means the trustees of the Corporation, and
                  "Trustee" means any one of them.
 
 
                                   ARTICLE III
                  TERMS AND CONDITIONS OF CONTINUING EMPLOYMENT
 
3.1      EMPLOYMENT. The parties acknowledge and agree that the Executive is
         employed by the Corporation and will, from the Effective Date, continue
         to be employed by the Corporation and will serve the Corporation as the
         President and Chief Executive Officer, and in such other related senior
         capacity as the Board may from time to time reasonably require. The
         Executive shall report to the Board and shall have such authority as
         the Board may from time to time delegate to the Executive. The
         Executive's duties shall include those duties set forth in Schedule A
         hereto and any other duties consistent with the Executive's position in
         the Corporation.
 
3.2      APPOINTMENT AS TRUSTEE. During the term of this Agreement, the
         Corporation agrees to nominate the Executive to the position of Trustee
         and Chairman of the Board and support the Executive in seeking office
         as a Trustee and Chairman of the Board.
 
3.3      ORDERS OF BOARD. The Executive shall always act in accordance with any
         reasonable decision of and obey and carry out all lawful and reasonable
         orders given to him by the Board.
 
<PAGE>
                                       8
 
 
3.4      TIME AND ENERGY. Unless prevented by ill health, or physical or mental
         disability or impairment, the Executive shall, during the term hereof,
         devote sufficient business time, care and attention to the business of
         the Corporation in order to properly discharge his duties hereunder. It
         is acknowledged and agreed that the Executive is currently, and may
         continue to act as, a director, trustee, officer, shareholder or
         investor in other businesses, ventures, entities, institutions and
         organizations (herein this Section 3.4 "entities") during the term of
         this Agreement provided that: (i) he may only devote time, care and
         attention thereto so long as his doing so does not materially adversely
         affect the ability of the Executive to devote sufficient time and
         energy to properly discharge his duties hereunder; and (ii) he shall
         not act as a director or trustee of more than two other entities that
         are publicly held or which have their securities listed on any
         exchange, quoted on any quotation system or traded on the
         over-the-counter market without the prior consent of the Board.
 
3.5      FAITHFUL SERVICE. The Executive shall well and faithfully serve the
         Corporation and use his reasonable efforts to promote the interests
         thereof and shall not use for his own purposes, or for any purposes
         other than those of the Corporation, any non-public information he may
         acquire with respect to the business, affairs and operations of the
         Corporation.
 
3.6      COMPENSATION. During the term of this Agreement, and any extension
         thereof, the Corporation shall pay and provide the Executive the
         following:
 
         (a)      CASH COMPENSATION. As compensation for his services to the
                  Corporation, the Executive shall receive a base salary (the
                  "Base Salary") and in addition to the Base Salary shall be
                  eligible to receive in respect of each calendar year (or
                  portion thereof) additional variable cash compensation, in an
                  amount determined in accordance with any bonus, profit sharing
                  or short term incentive compensation program which may be
                  established by the Board or the Compensation Committee, as
                  applicable, either for the Executive or for senior officers of
                  the Corporation (the "Annual Bonus"). As of the Effective
                  Date, the Executive's annualized Base Salary shall be EURO
                  325,000. During the term of this Agreement the Board shall
                  review the Executive's Base Salary and Annual Bonus then in
                  effect annually to ensure that such amounts are reasonably
                  competitive with awards granted to similarly situated
                  executives of publicly held companies comparable to the
                  Corporation as may be determined by the Board or the
                  Compensation Committee, as applicable, from time to time. The
                  Board shall not reduce the Executive's Base Salary except as
                  set forth herein. The Board may reduce the Executive's Base
                  Salary provided such reduction in the Executive's Base Salary
                  does not exceed an aggregate total of ten percent (10%) of the
                  Executive's Base Salary in effect as of the Effective Date and
                  which reduction applies, in equal percentages, to all senior
                  officers of the Corporation. The Executive's Base Salary and
                  Annual Bonus shall be payable in accordance with the
                  Corporation's normal payroll practices, as applicable. No
                  increase in the Executive's Base Salary and Annual Bonus shall
                  be used to offset or otherwise reduce any obligations of the
                  Corporation to the Executive hereunder or otherwise.
 
 
<PAGE>
                                       9
 
 
         (b)      EQUITY COMPENSATION.
 
                  (i)      STOCK OPTIONS. The Corporation has granted to the
                           Executive non-qualified stock options (the "Stock
                           Options") under the Corporation's Amended and
                           Restated 1992 Non-Qualified Stock Option Plan (the
                           "Plan") to purchase as at the Effective Date a total
                           of 1,585,000 Common Shares. The Stock Options shall
                           expire at the close of business on the first day
                           following the tenth (10th) anniversary of the date of
                           their grant. In the case of termination by the
                           Corporation without Just Cause, voluntary termination
                           by the Executive for Good Reason, retirement, death
                           or a Disability Termination, the Stock Options and
                           any other options or equity grants by the Corporation
                           then held by the Executive shall remain exercisable
                           until the earlier of one (1) year from the Date of
                           Termination or the expiration of such Stock Options
                           or other options or equity grants. As of the
                           Effective Date, all the Stock Options granted to the
                           Executive have vested and are exercisable. The
                           Compensation Committee may issue additional options,
                           restricted shares or share appreciation rights to the
                           Executive as incentive compensation determined in
                           accordance with any bonus or incentive compensation
                           plans or programs which may be established by the
                           Board either for the Executive or senior officers of
                           the Corporation. The determination as to the amounts
                           of any awards available to the Executive under such
                           plans or programs shall be reviewed annually by the
                           Board or the Compensation Committee, as applicable,
                           to ensure that such amounts are reasonably
                           competitive with awards granted to similarly situated
                           executives of publicly held companies comparable to
                           the Corporation as may be determined by the
                           Compensation Committee from time to time.
 
                  (ii)     TAX LIABILITY. In the event the Executive incurs any
                           withholding tax liability in connection with the
                           exercise of the Executive's Stock Options, or any
                           other rights or options to acquire Common Shares, the
                           Executive may elect to satisfy his resulting
                           withholding tax obligation by having the Corporation
                           retain that number of such Common Shares or other
                           stock or equity awards having a fair market value
                           equal to such withholding tax obligation.
 
                  (iii)    ONGOING AWARDS. The Board shall ensure, and shall
                           take the necessary action to ensure, that the
                           Executive participates in the Corporation's incentive
                           stock plans and any other long-term incentive
                           programs which may be established by the Board for
                           senior officers of the Corporation at levels
                           commensurate with his position as may be determined
                           by the Compensation Committee.
 
         (c)      EMPLOYEE BENEFITS. The Executive shall, to the extent
                  eligible, be entitled to participate at a level commensurate
                  with his position in all of the Corporation's employee
                  benefit, welfare and retirement plans and programs, as well as
                  equity plans, provided by the Corporation to its senior
                  officers in accordance with the terms thereof as in effect
                  from time to time.
 
 
 
<PAGE>
                                       10
 
 
         (d)      PERQUISITES. The Corporation shall provide the Executive, at
                  the Corporation's cost, with all perquisites which other
                  senior officers of the Corporation are entitled to receive and
                  such other perquisites which are suitable to the character of
                  the Executive's position with the Corporation and adequate for
                  the performance of his duties hereunder, including a housing
                  and living allowance not to exceed in aggregate EURO 75,000
                  per annum. To the extent legally permissible under applicable
                  laws, the Corporation shall not treat such amounts as income
                  to the Executive.
 
         (e)      BUSINESS AND ENTERTAINMENT EXPENSES. Upon submission of
                  appropriate documentation in accordance with its policies in
                  effect from time to time, the Corporation shall pay or
                  reimburse the Executive for all business expenses which the
                  Executive incurs in the performance of his duties under this
                  Agreement, including, but not limited to, travel,
                  entertainment, professional dues and subscriptions, and all
                  dues, fees, and expenses associated with membership in various
                  professional, business, and civic associations and societies
                  in which the Executive participates in accordance with the
                  Corporation's policies in effect from time to time.
 
         (f)      FLEXIBLE TIME OFF. The Executive shall be entitled to paid
                  time off in accordance with the standard written policies of
                  the Corporation with regard to its senior officers, but in no
                  event less than twenty (20) days per calendar year not
                  including, and in addition to, weekends and statutory
                  holidays.
 
         (g)      DEMAND REGISTRATION RIGHTS.
 
                  (i)      REQUEST FOR REGISTRATION. Subject to subsection
                           3.6(i)(ii) of this Agreement, the Executive shall be
                           entitled to make a written request ("Demand
                           Registration Request") to the Corporation for
                           registration with the SEC under and in accordance
                           with the provisions of the Securities Act of all or
                           part of the Common Shares owned by the Executive (a
                           "Demand Registration") (which Demand Registration
                           Request shall specify the intended number of Common
                           Shares to be disposed of by the Executive and the
                           intended method of disposition thereof); provided,
                           that the Corporation may, if the Board so determines
                           in the exercise of its reasonable, good faith
                           judgment that due to a pending or contemplated
                           acquisition or disposition or public offering or
                           other similar occurrence it would be inadvisable to
                           effect such Demand Registration at such time, defer
                           such Demand Registration for a single period not to
                           exceed one hundred eighty (180) days; provided,
                           however, in the event that the Corporation proposes
                           to register shares of beneficial interest of the
                           Corporation under the Securities Act, whether or not
                           for sale for its own account, during such single
                           period, the Corporation shall, as part of or in
                           conjunction with such registration, register the
                           Common Shares set forth in the Executive's Demand
                           Registration Request. Within ten (10) days after
                           receipt of such request, the Corporation will use its
                           best efforts to effect the
 
<PAGE>
                                       11
 
 
                           registration under the Securities Act of the Common
                           Shares which the Corporation has been so requested to
                           register by the Executive.
 
                  (ii)     NUMBER OF DEMAND REGISTRATIONS. At any time on or
                           after the Effective Date, the Executive shall be
                           entitled to make one Demand Registration Request at
                           any time; provided that (i) the Corporation shall not
                           be obligated to effect more than one Demand
                           Registration and (ii) the Executive shall not be
                           entitled to make a Demand Registration Request during
                           any period during which (A) all of the Common Shares
                           may be freely transferred at the same time pursuant
                           to Rule 144 promulgated under the Securities Act, or
                           (B) all of the Common Shares have been properly
                           registered on a registration statement under the
                           Securities Act, such registration statement is
                           effective under the Securities Act and all of the
                           Common Shares may be freely transferable pursuant to
                           such registration statement.
 
                  (iii)    EFFECTIVE REGISTRATION AND EXPENSES. A registration
                           will not count as a Demand Registration until it has
                           become effective (unless the Executive withdraws the
                           Common Shares, in which case such demand will count
                           as a Demand Registration unless the Executive agrees
                           to pay all the expenses of such registration). The
                           Corporation shall be solely responsible for any and
                           all costs and expenses of all registrations and
                           qualifications under the Securities Act, and of all
                           other actions the Corporation is required to take in
                           order to effect the registration of Common Shares
                           under the Securities Act whether pursuant to this
                           Agreement or otherwise.
 
                  (iv)     PRIORITY ON DEMAND REGISTRATIONS. If the offering of
                           the Executive's Common Shares pursuant to such Demand
                           Registration is in the form of an underwritten
                           offering and the managing underwriter or underwriters
                           of such offering advise the Corporation and the
                           Executive in writing that in their opinion the number
                           of Common Shares requested to be included in such
                           offering is sufficiently large to adversely affect
                           the success of such offering, the Corporation will
                           include in such registration the aggregate number of
                           Common Shares which in the opinion of such managing
                           underwriter or underwriters can be sold without any
                           such adverse effect, and such amount shall be
                           allocated in the following order of priority: (i)
                           first, any Common Shares that the Corporation or any
                           other holder proposes to sell; and (ii) second, the
                           Common Shares of the Executive subject to any such
                           Demand Registration.
 
3.7      SHARES IN LIEU OF CASH. Subject to receipt of all necessary regulatory
         approvals including, but not limited to, any approvals under any
         securities legislation and the rules and regulations of NASDAQ, if any,
         the Executive may, at his sole option, exercisable by notice in writing
         to the Corporation at least seven (7) business days prior to the
         commencement of each period in respect of which such election is made,
         elect to have all or a portion of his Base Salary and/or Annual Bonus
         paid by way of delivery of Common Shares of the Corporation at a price
         per
 
<PAGE>
                                       12
 
 
         share equal to the Market Price as at the day prior to the date of
         issue to the Executive equal to the Base Salary and/or Annual Bonus or
         a portion thereof elected to be so paid.
 
3.8      TERM. This Agreement shall remain in force until this Agreement is
         terminated pursuant to Article 4 herein.
 
 
3.9      AMOUNTS PAYABLE CONSIDERED DEBT. All amounts payable by the Corporation
         under this Agreement shall constitute a debt owing by the Corporation
         to the Executive.
 
 
                                   ARTICLE IV
                 OBLIGATIONS OF THE CORPORATION UPON TERMINATION
 
4.1      DEATH OR DISABILITY. The Corporation may terminate the Executive's
         employment in the event the Executive has been unable to perform his
         material duties hereunder because of Disability by giving the Executive
         notice of such termination while such Disability continues (a
         "Disability Termination"). The Executive's employment shall
         automatically terminate on the Executive's death. In the event the
         Executive's employment with the Corporation terminates during the term
         of this Agreement by reason of the Executive's death or as a result of
         a Disability Termination, then upon and immediately effective the Date
         of Termination:
 
         (a)      the Executive shall be fully and immediately vested in his
                  unvested stock options or equity awards granted by the
                  Corporation to the Executive, that are unvested on the Date of
                  Termination so that such options and equity awards are fully
                  and immediately exercisable by the Executive;
 
         (b)      the Corporation shall promptly pay and provide the Executive
                  (or in the event of the Executive's death, the Executive's
                  estate):
 
                  (i)      any unpaid Base Salary and any outstanding and
                           accrued regular and special vacation pay through the
                           Date of Termination;
 
                  (ii)     any unpaid Annual Bonus and other bonuses accrued
                           with respect to the fiscal year ending on or
                           preceding the Date of Termination;
 
                  (iii)    reimbursement for any unreimbursed expenses incurred
                           through to the Date of Termination; and
 
                  (iv)     all other payments, benefits or fringe benefits to
                           which the Executive may be entitled subject to and in
                           accordance with the terms of any applicable
                           compensation arrangement or benefit, equity or fringe
                           benefit plan or program or grant, and amounts which
                           may become due under this Agreement (the payments
                           referred to herein in subsections 4.1(b)(i) to
                           4.1(b)(iv) shall, collectively, be referred to as
                           "Accrued Benefits"); and
 
<PAGE>
                                       13
 
         (c)      the Corporation shall pay to the Executive (or in the event of
                  the Executive's death, the Executive's estate) at the time
                  other senior executives are paid under any cash bonus or long
                  term incentive plan, a PRO RATA Annual Bonus equal to the
                  amount the Executive would have received if his employment
                  continued (without any discretionary cutback) multiplied by a
                  fraction where the numerator is the number of days in each
                  respective bonus period prior to the Executive's termination
                  and the denominator is the number of days in the bonus period
                  (the "Prorated Bonus").
 
4.2      TERMINATION FOR JUST CAUSE. The Corporation may terminate the
         Executive's employment for Just Cause. In the event that the
         Executive's employment with the Corporation is terminated during the
         term of this Agreement by the Corporation for Just Cause, the Executive
         shall not be entitled to any additional payments or benefits hereunder,
         other than the Accrued Benefits (including, but not limited to, any
         then vested Stock Options or other options or equity grants) and the
         Prorated Bonus which the Corporation shall pay or provide to the
         Executive immediately upon the Date of Termination.
 
                  Notwithstanding the foregoing, no event shall constitute or be
                  deemed the basis for termination of the Executive's employment
                  for Just Cause unless the Executive is terminated therefor
                  within sixty (60) days after such event is known to the
                  Chairman of the Corporation, or, if the Executive is the
                  Chairman, known to a majority of the Board (other than the
                  Executive) and the Executive shall not be deemed to have been
                  terminated for Just Cause without:
 
         (a)      advance written notice received by the Executive not less than
                  thirty (30) days prior to the Date of Termination setting
                  forth the Corporation's intention to consider terminating the
                  Executive and including a statement of the proposed Date of
                  Termination, the specific detailed basis for such
                  consideration of termination for Just Cause and demanding that
                  the Executive remedy the event, conduct, condition, act or
                  omission that is the basis for such consideration of
                  termination for Just Cause set forth in such notice (the "Just
                  Cause Event") within thirty (30) days of receipt of such
                  notice by the Executive;
 
         (b)      an opportunity for the Executive, together with his counsel,
                  to be heard before the Board at least ten (10) days after the
                  giving of such notice and prior to the proposed Date of
                  Termination;
 
         (c)      the failure on the part of the Executive to remedy the Just
                  Cause Event within thirty (30) days from receipt of such
                  notice, or any extension thereof granted by the Board, or the
                  failure on the part of the Executive to take all reasonable
                  steps to that end during such thirty (30) day period, or any
                  extension thereof;
 
         (d)      a duly adopted resolution of the Board stating that in
                  accordance with the provisions of the next to the last
                  sentence of this Section 4.2 that the actions of the Executive
                  constituted Just Cause and the basis thereof; and
 
 
 
<PAGE>
                                       14
 
 
         (e)      a written determination provided by the Board setting forth
                  the acts and omissions that form the basis of such termination
                  of employment. Any determination by the Board hereunder shall
                  be made by the affirmative vote of at least a two-thirds (2/3)
                  majority of all of the members of the Board (other than the
                  Executive). Any purported termination of employment of the
                  Executive by the Corporation which does not meet each and
                  every substantive and procedural requirement of this Section
                  4.2 shall be treated for all purposes under this Agreement as
                  a termination of employment without Just Cause.
 
4.3      VOLUNTARY TERMINATION FOR GOOD REASON; INVOLUNTARY TERMINATION OTHER
         THAN FOR JUST CAUSE. The Executive may terminate his employment with
         the Corporation for Good Reason at any time within one hundred eighty
         (180) days after the occurrence of the Good Reason event by written
         notice to the Corporation. If the Executive's employment with the
         Corporation is voluntarily terminated by the Executive for "Good
         Reason" or is involuntarily terminated by the Corporation other than
         for "Just Cause", then the Corporation shall pay or provide the
         Executive with the following:
 
         (a)      any Accrued Benefits;
 
         (b)      a severance amount equal to three (3) times the sum of: (A)
                  the Executive's then Base Salary; and (B) the higher of (x)
                  the Executive's then current Annual Bonus and (y) the highest
                  variable pay and incentive bonus received by the Executive
                  from the Corporation for the three (3) fiscal years last
                  ending prior to such termination, which severance amount is
                  payable in substantially equal installments over twelve (12)
                  months in accordance with the Corporation's standard payroll
                  practice; provided, however, that:
 
                  (i)      in the event of a Change of Control following such
                           termination, the unpaid portion of such severance
                           amount, if any, shall be paid to the Executive in
                           full in a single lump sum cash payment immediately
                           following such Change of Control; and
 
                  (ii)     if such termination occurs in contemplation of, at
                           the time of, or within three (3) years after a Change
                           of Control, the Executive shall instead be entitled
                           to a lump sum cash payment immediately following such
                           termination equal to three (3) times the sum of: (A)
                           the Executive's then Base Salary; and (B) the higher
                           of (x) the Executive's then current Annual Bonus and
                           (y) the highest variable pay and annual incentive
                           bonus received by the Executive for the three (3)
                           fiscal years last ending prior to such termination;
                           and
 
         (c)      the Executive shall be fully and immediately vested in his
                  unvested Stock Options and any other options or equity awards
                  granted by the Corporation to the Executive so that such Stock
                  Options, options and equity awards are fully and immediately
                  exercisable by the Executive.
 
 
 
<PAGE>
                                       15
 
 
4.4      WITHOUT GOOD REASON. The Executive may terminate his employment at any
         time without Good Reason by written notice to the Corporation. In the
         event that the Executive's employment with the Corporation is
         terminated during the term of this Agreement by the Executive without
         Good Reason, the Executive shall not be entitled to any additional
         payments or benefits hereunder, other than Accrued Benefits (including,
         but not limited to, any then vested Stock Options, or other options or
         equity grants) and the Prorated Bonus which the Corporation shall pay
         or provide to the Executive immediately upon the Date of Termination.
 
4.5      MITIGATION AND OFFSET. In the event of the termination of the
         Executive's employment under this Agreement;
 
 
         (a)      The Executive shall be under no obligation to seek other
                  employment or otherwise mitigate the value of any compensation
                  or benefits contemplated by this Agreement, nor shall any such
                  compensation or benefits be reduced in any respect in the
                  event that the Executive shall secure, or shall not reasonably
                  pursue, alternative employment or earnings or benefits that
                  the Executive may receive from any other source;
 
         (b)      The amounts payable by the Corporation hereunder shall not be
                  subject to setoff, offset, counterclaim, recoupment, defence
                  or other right which the Corporation may have against the
                  Executive or others; and
 
         (c)      The Executive may, at his sole option, set-off or offset any
                  amounts payable by the Executive to the Corporation against
                  any amounts payable by the Corporation to the Executive under
                  this Agreement.
 
4.6      CHANGE OF CONTROL VESTING ACCELERATION. In the event of a "Change of
         Control" and either (i) the Executive is involuntarily terminated by
         the Corporation other than for Just Cause, or (ii) the Executive
         terminates his employment with the Corporation for Good Reason, the
         Executive shall be fully and immediately vested in any unvested stock
         options, or other equity awards granted by the Corporation to the
         Executive that are unvested on the Date of Termination so that any such
         options and equity awards are fully and immediately exercisable by the
         Executive.
 
 
                                    ARTICLE V
                           FURTHER EXECUTIVE BENEFITS
 
5.1      HOUSING. If, at the Date of Termination, the Executive was residing in
         a home provided to him by the Corporation, pursuant to a lease or
         rental agreement, or other arrangement, between the Corporation and a
         third party the Executive may elect, at any time during the sixty (60)
         days following the Date of Termination, and the Corporation will permit
         the Executive, to assume, or take the assignment of, any such lease or
         rental agreement, or other arrangement, respecting such housing in
         accordance with the terms of any such lease or
 
<PAGE>
                                       16
 
         rental agreement, or other arrangement, in force between the
         Corporation and the party leasing or renting such housing to the
         Corporation prior to the Date of Termination.
 
5.2      OUT OF POCKET AND RELOCATION EXPENSES. Upon termination (other than
         termination for Just Cause by the Corporation), the Corporation shall
         pay additional reasonable moving and relocation expenses that shall be
         incurred by the Executive in connection with the relocation by the
         Executive and his family to another location in Europe or North
         America. For greater certainty, if the Executive is terminated for Just
         Cause pursuant to Section 4.2, he shall not be entitled to recover or
         otherwise receive any costs, expenses or other amounts pursuant to this
         Section 5.2.
 
 
                                   ARTICLE VI
                                 INDEMNIFICATION
 
6.1      INDEMNIFICATION. The Corporation hereby covenants and agrees that if
         the Executive is made a party, or is threatened to be made a party, to
         any action, suit or proceeding, whether civil, criminal, administrative
         or investigative of any nature whatsoever (a "Proceeding"), by reason
         of, or as a result of, the fact that he is or was a Trustee, officer or
         employee of the Corporation or is or was serving at the request of the
         Corporation as a trustee, director, officer, member, employee or agent
         of another corporation, partnership, joint venture, trust or other
         enterprise, including service with respect to employee benefit plans,
         whether or not the basis of such Proceeding is the Executive's alleged
         action in an official capacity while serving as a Trustee, director,
         officer, member, employee or agent of the Corporation, the Executive
         shall be indemnified and held harmless by the Corporation to the
         fullest extent legally permitted or authorized by the Corporation's
         constating documents or, if greater, by applicable federal, state or
         provincial legislation, against all costs, expenses, liability and
         losses of any nature whatsoever (including, without limitation,
         attorney's fees, judgments, fines, interest, taxes or penalties and
         amounts paid or to be paid in settlement) reasonably incurred or
         suffered by the Executive in connection therewith (collectively, the
         "Indemnification Amounts"), and such indemnification shall continue as
         to the Executive even if he has ceased to be a officer, Trustee,
         director, member, employee or agent of the Corporation or other entity
         and shall inure to the benefit of the Executive's heirs, executors and
         administrators. The Corporation shall: (i) promptly advance to the
         Executive the Indemnification Amounts incurred; or (ii) to the extent
         legally permissible reasonably estimated to be incurred, by him
         immediately upon receipt by the Corporation of a written request for
         such advance.
 
6.2      STANDARD OF CONDUCT. Neither the failure of the Corporation or the
         Board to have made a determination prior to the commencement of any
         proceeding concerning payment of amounts claimed by the Executive under
         Section 6.1 hereof that indemnification of the Executive is proper
         because he has met the applicable standard of conduct, nor a
         determination by the Corporation or the Board that the Executive has
         not met such applicable standard of conduct, shall create a presumption
         that the Executive has not met the applicable standard of conduct.
 
<PAGE>
                                       17
 
 
                                   ARTICLE VII
                                     GENERAL
 
7.1      NO PROHIBITION ON EMPLOYMENT. The Executive shall not be prohibited in
         any manner whatsoever from obtaining employment with or otherwise
         forming or participating in a business competitive to the business of
         the Corporation after termination of employment with the Corporation.
 
7.2      RESIGNATION OF POSITIONS. The Executive agrees that after termination
         of his employment with the Corporation he will tender his resignation
         from any position he may hold as an officer, director or Trustee of the
         Corporation or any of its affiliated or associated companies if so
         requested by the Board.
 
7.3      RIGHTS AND OBLIGATIONS SURVIVE. The respective rights and obligations
         of the parties hereunder shall survive any termination of the
         Executive's employment to the extent necessary to preserve such rights
         and obligations. For greater certainty, notwithstanding anything to the
         contrary in this Agreement, the parties hereto acknowledge and agree
         that Sections 4.1, 4.2, 4.3, 4.5, 4.6, 5.1, 5.2, 6.1, 7.3, 7.5, 7.7,
         7.8, 7.13, 7.14 and 7.16 shall survive the termination of the
         Executive's employment with the Corporation and remain in full force
         and effect.
 
7.4      BENEFICIARIES. The Executive shall be entitled, to the extent permitted
         under any applicable law, to select and change a beneficiary or
         beneficiaries to receive any compensation or benefit payable hereunder
         following the Executive's death by giving the Corporation written
         notice thereof. In the event of the Executive's death or a judicial
         determination of his incompetence, reference in this Agreement to the
         Executive shall be deemed, where appropriate, to refer to his
         beneficiary, estate or other legal representative.
 
7.5      LEGAL, ACCOUNTING AND PROFESSIONAL EXPENSES. The Corporation shall pay,
         to the full extent permitted by law, all legal, accounting and other
         professional fees and related expenses the Executive, the Executive's
         legal representatives or the Executive's family may reasonably incur in
         connection with the preparation of this Agreement, any contest by the
         Corporation, the Executive or others of the validity or enforceability
         of, interpretation of, or liability under, any provision of this
         Agreement or as a result of any action by the Executive, the
         Executive's legal representatives or the Executive's family to enforce
         his or their rights under this Agreement, plus interest, compounded
         quarterly, on the total unpaid amount determined to be payable under
         this Agreement, such interest to be calculated at a rate equal to 2% in
         excess of Prime in effect from time to time during the period of such
         non-payment. The Corporation shall advance to the Executive such fees
         and expenses incurred, by him in connection with such negotiation and
         preparation, contest or action within ten (10) Banking Days after
         receipt by the Corporation of a written request for such amount.
         Notwithstanding any other provision herein, in the event that an
         action, proceeding or other claim whatsoever is made in a court of
         competent jurisdiction by the Executive, his legal representatives or
         family or the Corporation (collectively, a "Proceeding") and is
         determined by such court in favour of the
 
<PAGE>
                                       18
 
 
         Corporation pursuant to a final non-appealable judgment or order, the
         Executive shall repay to the Corporation all amounts for professional
         fees provided to him in respect of that particular Proceeding pursuant
         to this Section 7.5.
 
7.6      FAIR AND REASONABLE PROVISIONS. The Corporation and Executive
         acknowledge and agree that the provisions of this Agreement regarding
         further payments of the Executive's Base Salary, Annual Bonus and other
         bonuses, and the exercisability and vesting of his Stock Options, and
         other options or equity grants, constitute fair and reasonable
         provisions for the consequences of such termination, do not constitute
         a penalty, and such payments and benefits shall not be limited or
         reduced by amounts the Executive might earn or be able to earn from any
         other employment or ventures during the remainder of the agreed term of
         this Agreement.
 
7.7      LUMP SUM PAYMENT. Except as otherwise specifically provided in this
         Agreement, the Corporation shall pay the Executive any lump sum payment
         due to him under this Agreement within ten (10) Banking Days of the
         Date of Termination. Any payments due to the Executive under this
         Agreement that are not paid within such time shall accrue interest,
         compounded quarterly, on the total unpaid amount payable under this
         Agreement, such interest to be calculated at a rate equal to 2% in
         excess of Prime then in effect from time to time during the period of
         such non-payment. No payments due to the Executive under this Agreement
         may be offset by the Corporation by amounts due to the Corporation from
         the Executive.
 
7.8      LIABILITY INSURANCE. The Corporation shall use its best efforts to
         obtain and continue coverage of the Executive under trustees and
         officers liability insurance both during and, while potential liability
         exists, after the Executive's employment with the Corporation in the
         same amount and to the same extent, if any, as the Corporation covers
         its other Trustees, officers and directors.
 
7.9      NO DEROGATION OF RIGHTS. Nothing herein derogates from any rights
         the Executive may have under applicable law.
 
7.10     ASSIGNABILITY. This Agreement shall be binding upon and inure to the
         benefit of the parties hereto and their respective successors, heirs
         (in the case of the Executive) and assigns. No rights or obligations of
         the Corporation under this Agreement may be assigned or transferred by
         the Corporation except that such rights or obligations may be assigned
         or transferred pursuant to a merger, amalgamation, reorganization,
         continuance or consolidation in which the Corporation is not the
         continuing entity, or the sale or liquidation of all or substantially
         all of the assets of the Corporation, provided that the assignee or
         transferee is the successor to all or substantially all of the assets
         of the Corporation and such assignee or transferee assumes the
         liabilities, obligations and duties of the Corporation, as contained in
         this Agreement, either contractually or as a matter of law. The
         Corporation further agrees that, in the event of a sale of assets or
         liquidation as described in the preceding sentence, it shall take
         whatever action it legally can in order to cause such assignee or
         transferee to expressly assume the liabilities, obligations and duties
         of the Corporation hereunder. No rights or obligations of
 
<PAGE>
                                       19
 
 
         the Executive under this Agreement may be assigned or transferred by
         the Executive other than: (a) his rights to compensation and benefits,
         in whole or in part, which may be transferred by the Executive to (i) a
         corporation owned or controlled by the Executive or members of the
         Executive's family, (ii) a trust, the beneficiaries of which are the
         Executive or members of the Executive's family, (iii) a charity, a
         foundation or trust established for charitable purposes, or which may
         be transferred by the Executive's will or the operation of law; (b) to
         a corporation through which the Executive shall provide the services
         required of him hereunder; and (c) as provided in Section 7.4 hereof.
 
7.11     AUTHORIZATION. The Corporation represents and warrants that it is fully
         authorized and empowered to enter into this Agreement and perform its
         obligations hereunder, which performance will not violate any agreement
         between the Corporation and any other person, firm or organization nor
         breach any provisions of its constating documents or governing
         legislation.
 
7.12     AMENDMENT OR WAIVER. No provision in this Agreement may be amended
         unless such amendment is agreed to in writing and signed by the
         Executive and an authorized officer of the Corporation. No waiver by
         either party hereto of any breach by the other party hereto of any
         condition or provision contained in this Agreement to be performed by
         such other party shall be deemed a waiver of a similar or dissimilar
         condition or provision at the same or any prior or subsequent time. Any
         waiver must be in writing and signed by the Executive or an authorized
         officer of the Corporation, as the case may be.
 
7.14     INTERPRETATION OF PLAN AND OPTION AGREEMENTS. In the event of a
         conflict between, or inconsistency with, any, or any part, of the terms
         or provisions of this Agreement and the terms or provisions of the Plan
         or any written stock option agreement between the Executive and the
         Corporation (the "Option Agreements"), as the case may be, the terms
         and provisions of this Agreement shall be deemed to govern, supersede,
         and take precedence over such inconsistent or conflicting terms and
         provisions contained in the Plan and the Option Agreements, as the case
         may be.
 
7.15     GOVERNING LAW AND VENUE. This Agreement shall be construed and
         interpreted in accordance with the laws of the Province of British
         Columbia. Each of the parties hereby irrevocably attorns to the
         non-exclusive jurisdiction of the courts of the Province of British
         Columbia, situate in Vancouver, with respect to any matters arising out
         of this Agreement.
 
7.16     NOTICES. Any notice required or permitted to be given under this
         Agreement shall be in writing and shall be properly given if delivered
         or mailed by prepaid registered mail addressed as follows:
 
<PAGE>
                                       20
 
 
         (a)      in the case of the Corporation:
 
                  Mercer International Inc.            with a copy to:
                  14900 Interurban Avenue South
                  Suite 282                            Mercer International Inc.
                  Seattle, Washington, 98168           c/o Suite 1790,
                                                         400 Burrard Street
                                                       Vancouver, B.C.  V6C 3A6
 
         (b)      in the case of the Executive:
 
                  to the last address of the Executive in the records of the
                  Corporation and its subsidiaries or to such other address as
                  the parties may from time to time specify by notice given in
                  accordance herewith.
 
                  Any notice so given shall be conclusively deemed to have been
                  given or made on the day of delivery, if delivered, or if
                  mailed as aforesaid, upon the date shown on the postal return
                  receipt as the date upon which the envelope containing such
                  notice was actually received by the addressee.
 
7.17     SEVERABILITY. If any provision contained herein is determined to be
         void or unenforceable for any reason, in whole or in part, it shall not
         be deemed to affect or impair the validity of any other provision
         contained herein and the remaining provisions shall remain in full
         force and effect to the fullest extent permissible by law.
 
7.18     ENTIRE AGREEMENT. Other than the Amended and Restated Trustee's
         Indemnity Agreement between the Executive and the Corporation dated for
         reference February 4, 2003 (the "Indemnity Agreement"), this Amended
         and Restated Employment Agreement contains the entire understanding and
         agreement between the parties concerning the subject matter hereof and
         supersedes all prior agreements, understandings, discussions,
         negotiations and undertakings, whether written or oral, between the
         parties with respect thereto. For greater certainty, notwithstanding
         anything to the contrary in this Agreement, 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 Indemnity Agreement.
 
7.19     CURRENCY. Unless otherwise specified herein all references to EURO,
         Euro or Euros are references to European Union Euros.
 
7.20     FURTHER ASSURANCES. Each of the Executive and the Corporation will do,
         execute and deliver, or will cause to be done, executed and delivered,
         all such further acts, documents and things as the Executive or the
         Corporation may require for the purposes of giving effect to this
         Agreement.
 
7.21     COUNTERPARTS/FACSIMILE EXECUTION. This Agreement may be executed in
         several parts in the same form and such parts as so executed shall
         together constitute one original document, and
 
<PAGE>
                                       21
 
 
         such parts, if more than one, shall be read together and construed as
         if all the signing parties had executed one copy of the said Agreement.
 
7.22     AMENDMENT AND RESTATEMENT. This Amended and Restated Employment
         Agreement is hereby amended, ratified and confirmed by each of the
         parties hereto and shall amend and restate in its entirety the amended
         and restated employment agreement made between the parties dated
         November 20, 2000 which is hereby terminated and null and void.
 
IN WITNESS WHEREOF the parties have executed this Agreement as of the date first
above written.
 
 
MERCER INTERNATIONAL INC.
 
By:      /S/ WILLIAM MCCARTNEY
         ------------------------------------
Name:    William McCartney                             /S/ JIMMY S.H. LEE
Title:   Trustee                                       -------------------------
                                                       Jimmy S.H. Lee
 
 
 
 
 
 
 
<PAGE>
 
                                       A-1
 
                                   SCHEDULE A
 
 
                               EXECUTIVE'S DUTIES
 
 
Management of all matters relating to the operations of the Corporation,
including:
 
1.       Performance of the duties of President of the Corporation and Trustee
         of the Corporation normally associated with the office of Chief
         Executive Officer;
 
2.       Supervision of investor relations and corporate information
         dissemination;
 
3.       Participation in the development of policies and programs for review
         and approval by the Board;
 
4.       The review and assessment of business opportunities presented to the
         Corporation;
 
5.       Preparation of business plans as required from time to time for review
         and approval by the Board;
 
6.       Monitoring and control of the operations of the Corporation; and
 
7.       Performance of such other duties consistent with the Executive's
         position which the Board shall, from time to time, reasonably direct.
 
 
 
</TEXT>
</DOCUMENT>