NOTICE
OF TRANSFER

|                              |                                                                                                                                                                                                                  
|----------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|DATE:                         | December 3, 2004                                                                                                                                                                                                 
|TO:                           | WeiChange Manchu Mongolia Autonomous County Government of Hebei Province
Yudaokou County Government
Laowopu County Government
(collectively, the "Government Parties")                                           
|FROM:    
AND FROM:
AND FROM: | MFC Bancorp ("MFC")
Cathay Merchant Group, Inc. ("Cathay Merchant")
Cathay Merchant Group Limited, a company incorporated under the International Companies Act of
1987 of Samoa under IC No. 16133 ("CMG Samoa")
|RE:                           | MEMORANDUM OF UNDERSTANDING ENTERED INTO AMONG THE GOVERNMENT PARTIES AND MFC DATED AS OF
SEPTEMBER 16, 2004 (the "MOU")                                                                                         

WHEREAS:

A.    
          MFC and the Government Parties entered into the MOU, which provides that MFC is
          allowed to construct a Wind Power Plant within Yudakou County and Laowopu Couty
          of the Peoples Republic of China on the terms more particularly set forth
          in the MOU;

B.    
          The MOU contemplates and provides that MFC is entitled to transfer the effective
          rights related to the MOU to a subsidiary of MFC;

C.    
          Cathay Merchant is a subsidiary of Sutton Park International Limited, which is a
          wholly-owned subsidiary of MFC;

D.    
          CMG Samoa is a wholly-owned subsidiary of Cathay Merchant; and

E.    
          MFC wishes to transfer the effective rights, interests and obligations related
          to the MOU to CMG Samoa.

NOW NOTICE is hereby given to the
Government Parties that:

1.    
          Pursuant to the provisions of the MOU, MFC hereby transfers all effective
          rights, interests and obligations related to the MOU to CMG Samoa, and CMG Samoa
          hereby accepts and acknowledges all rights, interests and obligations related to
          the MOU and agrees to be bound by the terms and conditions of the MOU as if it
          were an original signatory party thereto.

2.    
          CMG Samoa is in the process of setting up a Wholly-Owned Foreign Enterprise in
          China, based in Shanghai, to be named Cathay Merchant Group Wind Energy Company,
          Ltd. (CMG Wind). CMG Wind will enter into the land lease agreement
          contemplated by the MOU, respecting the land on which the Wind Power Plant will
          be constructed. CMG Samoa will cause CMG Wind to agree to be bound by the terms
          and conditions of the MOU as if it were an original signatory party thereto.

MFC BANCORP by its authorized
signatory:

/s/ Michael Smith Print Name: Michael Smith

CATHAY MERCHANT GROUP, INC. by its
authorized signatory:

/s/ Michael Smith Print Name: Michael Smith

CATHAY MERCHANT GROUP LIMITED by its
authorized signatory:

/s/ Michael Smith Print Name: Michael Smith