STENDAL CELLULOSE PROJECT Agreement on the Implementation of the Project

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Exhibit 10.23

FI No. 22.349
Agora No. 1997 1040

STENDAL CELLULOSE PROJECT

Agreement on the Implementation of the Project

between the

European Investment Bank

and

Stellstoff Stendal GmbH

(Translator thinks Stellstoff is misprint)

Luxemburg, December 12, 2003
Arneburg, December 11, 2003

European
Investment Bank

E U R O P E A N    I N V E S T M E N T    B A N K

FI No. 22.349

1

STENDAL CELLULOSE PROJECT

Agreement on the Implementation of the Project

between the

European Investment Bank

and

Zellstoff Stendal GmbH

(Stendal Cellulose Co. Ltd.)

Luxemburg, December 12, 2003
Arneburg, December 11, 2003

2

THE UNDERSIGNED,

the European Investment Bank, with Head Office
in Luxemburg, Grand Duchy of Luxemburg,
represented by Mr. J. Link, Director, and
Dr. G. Hütz, Department Head,

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TAKING INTO CONSIDERATION:

1.

That the END BORROWER intends to construct and operate a cellulose mill out in the open country (hereinafter referred to as "PROJECT"), in which will be given priority to the use of domestic softwood to produce Northern Bleached Softwood Kraft, and which is technically described in Appendix A of this contract;

2.

That 63.58% of the company shares of the END BORROWER are indirectly owned by Mercer International Inc., and 29.42% of the company shares are directly owned by RWE Industrie — Lösungen GmbH (RWE Industrial Solutions Co. Ltd.), and around 7% are directly owned by Fahr Beteiligungen GmbH (Fahr Participations Co. Ltd.);

3.

That the BANK, for financing purposes of the PROJECT, concluded on December 9, 2003 a financing agreement, hereinafter referred to as "FINANCING AGREEMENT" with the Norddeutschen Landesbank (North German State Bank), Girozentrale, in the amount equivalent to 250,000,000 Euros.

4.

That the Bank intends, for additional financing of the PROJECT, to make one or more financing agreements, hereinafter referred to as "FINANCING AGREEMENTS" with the Norddeutschen Landesbank, Girozentrale, or with another acceptable credit institution, up to an amount of 245,000,000 Euros;

5.

That the BANK estimates the costs of the project to be around 958,000,000 Euros (hereinafter referred to as "construction costs");

6.

That this agreement for the carrying out of the PROJECT will be used for all other FINANCING AGREEMENTS of the PROJECT,

                                                                                 THE FOLLOWING IS AGREED UPON:

ARTICLE 1

Carrying out and bringing into service of the PROJECT

        The END BORROWER will construct the PROJECT according to the technical description as indicated in Appendix A.

ARTICLE 2

Exceeding the cost of the PROJECT

        The END BORROWER shall, if the construction costs of the PROJECT exceed the projected estimates, take the appropriate measures whereby the excess costs will be covered without the assistance of the BANK and that the PROJECT will be completed as per technical description indicated in Appendix A.

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ARTICLE 3

Maintenance

        The END BORROWER will, in the framework of the PROJECT, maintain the buildings and equipment in a business-like manner and capacity and renovate them, as the case may be.

ARTICLE 4

Contract allocations for labour, supplies and services; environmental regulations

        The END BORROWER will, when allocating contracts for labour, supplies and services needed for the construction of the PROJECT, as much as possible and within reason, invite competing international bids, which should at least be extended to all the states which have signed the agreements of the European Economic Union. The END BORROWER, as far as the PROJECT is concerned, will follow the related guidelines of the Council of the European Union.

        As per Point A.1.2 of the Appendix A, the END BORROWER will for all components of the PROJECT, in accordance with the national and European environmental legislations, have an environmental study undertaken, including the identification of the necessary corrective measures. The END BORROWER will adhere to the environmental regulations applicable to the PROJECT.

ARTICLE 5

Insurance

        During the entire period of the loan issued as per financing agreement, the END BORROWER will take out and maintain an insurance policy for the appropriate mounts covering the PROJECT, its buildings and equipment, in the manner that is usual in the German Federal Republic

ARTICLE 6

Proceeding with the PROJECT

        The END BORROWER will, for the entire period of the loan, remain the owner the property and assets of the PROJECT, in conformity with the original plans as outlined in Appendix A, that is to which the BANK has given its written permission.

        The BANK may refuse to give its permission when the financing capability of the PROJECT by the BANK is not possible anymore, as per Article 267 of the criteria determined by the EG Agreement.

ARTICLE 7

Information and supervision

7.01    Information concerning the PROJECT

        The END BORROWER

a)

will send to the BANK, during the period of the loan as per FINANCING AGREEMENT, quarterly reports on March 13, June 30, September 30, and December 31, the first quarterly report to be sent on March 31, 2004, and, until the PROJECT is completed, a detailed report on the development of the construction, an overview in table format of the incurred costs of the parts of the PROJECT built during the preceding year, as well as a report on the projected conclusion of the construction; the END BORROWER will also provide the BANK with all the documents and will supply answers to all reasonable requests concerning the financing, the construction and the operations of the PROJECT;

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b)

will immediately inform the BANK during the period of the loan as per FINANCING AGREEMENT, as soon as a sale or disposal is i