Document:

EXECUTION COPY

         CONSULTING   AGREEMENT,   dated  as  of  April  3,  2006  (the
         "AGREEMENT"),   between  Midnight  Holdings  Group,   Inc.,  a
         Delaware corporation (the  "CORPORATION"),  and Russell Bailey
         (the "CONSULTANT").
         --------------------------------------------------------------

         The Corporation wishes to engage  Consultant,  and Consultant wishes to
be  engaged  by the  Corporation,  pursuant  to the  terms  set  forth  in  this
Agreement.

         The  parties  desire to set forth the terms upon  which the  Consultant
will be engaged by the Corporation.

         1.       WORKING RELATIONSHIP.

                  (a)   SERVICES.  The Corporation hereby engages the Consultant
to perform,  and the Consultant shall perform for the  Corporation,  services as
are  described  in EXHIBIT A  (attached  hereto and  incorporated  herein)  (the
"SERVICES").  The Consultant shall perform all of the Services in a professional
and diligent  manner,  in accordance with all applicable laws, and in accordance
with all policies and standards of the  Corporation.  The Consultant will devote
twenty (20) hours per week to the performance of the Services during the term of
this  Agreement.  In  connection  with  the  performance  of the  Services,  the
Consultant  will  report  to and  follow  the  direction  of  the  Corporation's
President and Chief Executive  Officer (the "CEO").  Upon prior written approval
of the CEO, the Consultant may devote additional hours to the performance of the
Services during the term of this Agreement.

                  (b)   INDEPENDENT  CONTRACTOR.  Notwithstanding  any  term  or
provision in this  Agreement to the contrary,  the  Consultant is an independent
contractor with respect to the performance of the Services,  and not an employee
or agent of the  Corporation,  and neither the  Corporation  nor the  Consultant
shall be liable for or bound by, contractually or otherwise, any representation,
act or omission of the other party in  connection  with the  performance  of the
Services.  The  Consultant  agrees not to take any action which leads,  or could
reasonably be expected to lead, a third party to believe that the Consultant has
the  power  or  authority  to bind or  otherwise  obligate  the  Corporation  in
connection with the  performance of the Services,  except with the prior written
consent of the Corporation, which may be withheld in its sole discretion.

         2.       COMPENSATION; TERMS OF COMPENSATION.

                  (a)   In consideration of the Consultant's  performance of his
duties and obligations under this Agreement (including,  without limitation, the
Services) the Corporation will:

                        (i)     pay the Consultant at a rate of US$6,666 per pay
period  for  Services  performed  during  the  term  of  this  Agreement,  which
represents a rate of US$159,984 per calendar year.  Payments of consulting  fees
shall be made at the end of each of the

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Corporation's pay periods during which the Consultant performed the Services. It
being understood that the Corporation has 24 pay periods during a calendar year.
Consulting fees for any partial period shall be prorated;

                        (ii)    pay the  Consultant at a rate of US$125 per hour
for any Services performed during any given week above the requisite twenty (20)
hours per week during the term of this  Agreement.  The Consultant  will invoice
the  Corporation  for the consulting  fees in this Section  2(a)(ii),  in a form
reasonably  satisfactory to the Corporation,  and the Corporation  agrees to pay
such invoices on a monthly basis after receipt thereof.  Consulting fees for any
partial period shall be prorated;

                        (iii)   reimburse  the  Consultant  for  his  reasonable
travel and other  expenses  incurred in connection  with the  performance of the
Services,  as are evidenced by receipt or other appropriate  written evidence of
such expenditures as required by the Corporation);  PROVIDED,  HOWEVER, that the
Consultant  shall  obtain  the  written  consent  of the  Corporation  prior  to
incurring any aggregate expenses in any calendar month in excess of US$3,000, in
connection with the performance of the Services; and,

                        (iv)    grant  the  Consultant  a  warrant  to  purchase
150,000 shares of common stock, par value $0.00005 per share of the Corporation,
exercisable  from July 1, 2006 to July 1, 2010 at an exercise price of $1.00 per
share with a "cashless" exercise provision.

                  (b)   The Consultant shall be responsible for keeping accurate
records of all work  performed  and such records  shall be subject to review and
final  approval  by the  Corporation  in its sole  discretion  for  purposes  of
determining  compliance  with the  provisions  in clauses (i)  through  (iii) of
Section 2(a).

         3.       TERMINATION  OF AGREEMENT.  The term of this  Agreement  shall
commence on the date hereof and shall  terminate  upon thirty (30) days  written
notice to the other party. In the event of termination,  the Consultant shall be
entitled  to payment  for  Services  performed  prior to the  effective  date of
termination.

         4.       COVENANTS.

                  (a)   For  purposes  of this  Section 4, the  following  terms
shall have the following definitions.

                        (i)     "BUSINESS"  means any  business  or  activity in
which the Corporation or any of its subsidiaries or affiliates is engaged, or is
actively  preparing  to engage,  during the term of this  Agreement,  including,
without limitation,  the operation and service of retail automobile  aftermarket
products and auto concierge service centers.

                        (ii)    "COMPETITIVE  ACTIVITIES"  means  the  following
activities  or  businesses  (i)  developing,  producing,  marketing,  selling or
distributing products or services which compete with the Business, operations or
activities of the  Corporation or any of its  subsidiaries  or affiliates,  (ii)
soliciting or endeavoring to cause any Person who or which is or was a customer,

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supplier, service provider or vendor of the Corporation or its affiliates at any
time during the term of this  Agreement,  to terminate  or  adversely  alter the
volume or nature of their business  relationship  with the Corporation or any of
its  subsidiaries  or  affiliates  (including,  without  limitation,  to use any
products or services  which compete with the Business if offered by anyone other
than the  Corporation  or its  affiliates),  and (iii)  causing or assisting any
Person in any way to do, or attempt to do, any of the  foregoing  in clauses (i)
or (ii) above, directly or indirectly.

                        (iii)   "CONFIDENTIAL INFORMATION" means any information
of a confidential or proprietary  nature pertaining to the Business,  operations
or activities of the Corporation or of any of its subsidiaries or affiliates, or
of any other Person with which the  Consultant  has been involved as a direct or
indirect result of the Consultant's  performance of consulting or other services
(including,  without  limitation,  as a director,  manager,  employee,  officer,
employee,  advisor,  agent, consultant or other independent contractor) for, the
Corporation,  or any of  its  subsidiaries  or  affiliates,  including,  without
limitation,  any (i) plans, strategies (including,  economic and market data and
research selection and analysis  strategies),  tactics,  policies,  resolutions,
inventions, patents, trademarks,  copyrights, trade secrets, know how, patent or
trademark  applications  and other  intellectual  property or other  proprietary
information  of  the  Corporation,  (ii)  information  regarding  litigation  or
negotiations, (iii) any marketing information, sales or product plans, prospects
and market research data, (iv) financial information,  cost and performance data
and  any  debt   arrangements,   equity  ownership  or  securities   transaction
information,  (v) technical  information,  technical drawings and designs,  (vi)
personnel information,  personnel lists, resumes, personnel data, organizational
structure,  compensation and performance evaluations,  (vii) customer, vendor or
supplier information, (viii) information regarding the existence or terms of any
agreement or relationship  between the Corporation or any of its subsidiaries or
affiliates  and any other  party,  and (ix) any other  information  of  whatever
nature,   including,   without  limitation,   information  which  gives  to  the
Corporation or any of its subsidiaries or affiliates an opportunity to obtain an
advantage  over  its  competitors  who or  which  do not  have  access  to  such
information;  PROVIDED, HOWEVER, that Confidential Information shall not include
(A)  information  which  is or  becomes  (through  no  improper  action  by  the
Consultant)  generally  available to the public,  or (B) information that was in
the possession of the Consultant or known by such Consultant without restriction
prior to receipt from the Corporation.

                        (iv)    "INVENTIONS"   means  any  and  all  inventions,
discoveries and improvements made, conceived,  created, developed or contributed
to by the Consultant during the term of this Agreement which are (i) directly or
indirectly related to the Business,  operations or activities of the Corporation
or any of its subsidiaries or affiliates, (ii) directly or indirectly related to
the Consultant's engagement by, or performance of other services (including as a
director, manager, officer, advisor, agent, representative,  consultant or other
independent  contractor)  for, the  Corporation  or any of its  subsidiaries  or
affiliates, or (iii) based upon Confidential Information.

                        (v)     "PERSON"  means  an   individual,   partnership,
corporation,  limited liability company,  limited liability partnership,  trust,
joint venture, joint stock company or unincorporated organization.

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                        (vi)    "REMAINING RIGHTS" means all of the Consultant's
rights, titles and interests in and to the following intellectual property as of
the date of this Agreement: any and all inventions,  discoveries,  improvements,
sales  approaches,   sales  material,   training  material,  computer  software,
documentation,  and other copyrightable works or any other intellectual property
(including,  but not limited to,  materials or services  subject to trademark or
service mark registration),  made, conceived,  created, developed or contributed
to by the Consultant during the term of this Agreement which are (i) directly or
indirectly related to the business,  operations or activities of the Corporation
or any of its subsidiaries or affiliates, (ii) directly or indirectly related to
the Consultant's engagement by, or performance of other services (including as a
director, manager, officer, advisor, agent, representative,  consultant or other
independent  contractor)  for, the  Corporation  or any of its  subsidiaries  or
affiliates, or (iii) based upon confidential or proprietary information which is
or was owned by the Corporation or any of its  subsidiaries or affiliates at the
time that such intellectual property was made, conceived,  created, developed or
contributed to by the Consultant.

                        (vii)   "WORK  FOR   HIRE"   means  any  and  all  sales
approaches, sales material, training material, computer software, documentation,
other copyrightable works or any other intellectual property (including, but not
limited  to,  materials  or  services  subject  to  trademark  or  service  mark
registration,  but excluding Inventions) made, conceived,  created, developed or
contributed to by the Consultant during the term of this Agreement and which are
(i) directly or indirectly related to the Business,  operations or activities of
the  Corporation  or any of its  subsidiaries  or  affiliates,  (ii) directly or
indirectly  related to the  Consultant's  engagement by, or performance of other
services  (including  as a manager,  officer,  advisor,  agent,  representative,
consultant or other  independent  contractor) for, the Corporation or any of its
subsidiaries or affiliates, or (iii) based upon Confidential Information.

                  (b)   In   consideration   for,   and  as  a   condition   to,
Consultant's engagement and the compensation referred to in this Agreement:

                        (i)     The Consultant  shall not directly or indirectly
participate or engage in, or assist,  any  Competitive  Activities in the United
States of America prior to the six-month  anniversary  of the end of the term of
this Agreement.  Each of the Consultant and the  Corporation  recognize that the
territorial,  time and scope  limitations  set forth in this Section 4(b)(i) are
reasonable  and are properly  required for the  protection of the  Corporation's
legitimate interest in client  relationships,  goodwill and trade secrets of the
Corporation's  business.  In the event that any such  territorial  time or scope
limitation is deemed to be  unreasonable  by a court of competent  jurisdiction,
the Consultant and the Corporation  agree,  and the Consultant  submits,  to the
reduction of any or all of said  territorial,  time or scope limitations to such
an  area,  period  or  scope as said  court  shall  deem  reasonable  under  the
circumstances.  If partial  enforcement is not possible,  the provision shall be
deemed severed,  and the remaining  provisions of this Agreement shall remain in
full force and  effect.  It shall not be a breach of this  Section  4(b)(i) as a
result of the  ownership  by the  Consultant  of less than an  aggregate of five
percent  of any class of stock of a Person  engaged in  Competitive  Activities,
provided  that such  stock is listed on a  national  securities  exchange  or is
quoted on the National Market System of the Nasdaq Stock Market.

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                        (ii)    Prior to the Two-year  anniversary of the end of
the term of this  Agreement,  the  Consultant  shall not directly or  indirectly
solicit,  recruit,  hire or engage  any (i)  Persons  employed  or  retained  as
consultants or other  independent  contractors by the  Corporation or any of its
subsidiaries or affiliates, (ii) strategic partners of the Corporation or any of
its subsidiaries or affiliates,  (iii) customers,  clients, vendors or suppliers
of the  Corporation  or any of its  subsidiaries  or  affiliates,  with whom the
Consultant has had contact with during the term of this Agreement, or (iv) other
Persons  with  whom or  which  the  Corporation  or any of its  subsidiaries  or
affiliates  maintains a commercial  relationship,  or encourage any such Persons
described  in clauses (i),  (ii),  (iii) or (iv) above to terminate or adversely
alter their  relationship  with the  Corporation or any of its  subsidiaries  or
affiliates  (including,  without limitation,  soliciting or endeavoring to cause
any such Person to use any products or services  offered or provided by a Person
other than the Corporation or its  subsidiaries or affiliates which compete with
the Business, products or services of the Corporation or any of its subsidiaries
or affiliates).

                  (c)   The Consultant  agrees that he shall not use or disclose
(except to the extent  necessary during the term of this Agreement in connection
with the necessary and proper  performance of the Consultant's  duties on behalf
of the  Corporation  and in good faith,  or as  required by law or  governmental
authority) any  Confidential  Information  until such  information  ceases to be
Confidential  Information.  Upon the end of the term of this Agreement,  or upon
the  earlier  request  of the  Corporation,  the  Consultant,  and his  legal or
personal  representatives  will promptly  return to the  Corporation any and all
information, documents or other materials relating to or containing Confidential
Information  which are, and any and all other property of the Corporation  which
is, in the Consultant's possession,  care or control, regardless of whether such
materials  were created or prepared by the Consultant and regardless of the form
of, or medium containing, such information, documents or other materials.

                  (d)   (i)     The Consultant  shall  promptly disclose  to the
Corporation any and all Inventions. The Consultant shall promptly communicate to
the Corporation all  information,  details and data pertaining to any Inventions
in such form as the Corporation requests.  The Consultant agrees that Inventions
are the property of the Corporation, and any and all rights, titles or interests
in and to Inventions which the Consultant may have in any and every jurisdiction
are hereby assigned by the Consultant to the  Corporation in full.  Whenever the
Consultant is requested to do so by the Corporation, during or after the term of
this  Agreement,  the  Consultant  shall use his best  efforts  to  execute  and
deliver,  at the Corporation's sole cost and expense,  any and all applications,
assignments or other  documents or instruments  deemed  reasonably  necessary or
advisable  by the  Corporation  to apply for and  obtain  Letters  Patent of the
United  States or any  foreign  country  or to  otherwise  protect,  confirm  or
establish the Corporation's full and exclusive interests in any Inventions.  The
obligations set forth in this Section 4(d) shall be binding upon the successors,
assigns,  executors,  administrators  and  other  legal  representatives  of the
Consultant.

                        (ii)    Any and all Works for Hire  shall be  considered
"works made for hire" under the copyright  laws of the United States or property
of the Corporation under applicable federal,  state, local and foreign trademark
laws  (as  appropriate).  The  Consultant  shall  promptly  communicate  to  the
Corporation any and all Works for Hire, and any and all information, details and
data pertaining to any Works for Hire, in such form as the Corporation requests.
To the extent  that Works for Hire fail to qualify as (A) "works  made for hire"
under the

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copyright laws of the United States or any other jurisdiction or (B) property of
the Corporation  under applicable  federal,  state,  local or foreign  trademark
laws, the Consultant hereby assigns each Work for Hire and all right,  title and
interest therein in any and every jurisdiction to the Corporation.  Whenever the
Consultant is requested to do so by the Corporation, during or after the term of
this  Agreement,  the  Consultant  shall use his best  efforts  to  execute  and
deliver,  at the Corporation's sole cost and expense,  any and all applications,
assignments or other  documents or instruments  deemed  reasonably  necessary or
advisable by the  Corporation to apply for and confirm and  effectuate  full and
exclusive  ownership of Works for Hire in the  Corporation,  including,  but not
limited to, ownership of any moral rights under the copyright law of any nation,
or any other  rights under the  intellectual  property  laws of any nation.  The
obligations  set  forth  in this  Section  4(d)(ii)  shall be  binding  upon the
successors,  assigns, executors,  administrators and other legal representatives
of the Consultant.

                        (iii)   The  Consultant  shall  bear the burden of proof
that  any  invention,  discovery,  improvement  or other  intellectual  property
(including, without limitation,  Inventions and Works for Hire) made, conceived,
created,  developed  or  contributed  to  by  the  Consultant  was  first  made,
conceived, created, developed or contributed to before or after the term of this
Agreement.  The  Consultant  shall bear the burden of proof that any  invention,
discovery,  improvement  or  other  intellectual  property  (including,  without
limitation,  Inventions and Works for Hire) made, conceived,  created, developed
or  contributed  to by the  Consultant  during  the  term of this  Agreement  is
unrelated to any of the Business, operations or activities of the Corporation or
any of its  subsidiaries or affiliates,  to the  Consultant's  engagement by, or
performance of other services  (including,  without  limitation,  as a director,
manager, employee, officer, advisor, agent, representative,  consultant or other
independent  contractor)  for, the  Corporation  or any of its  subsidiaries  or
affiliates, and was not based upon Confidential Information.

                  (e)   The  Consultant  hereby  transfers,   assigns,  conveys,
grants and sets over to the Corporation and its successors and assigns  forever,
and the Corporation hereby accepts, assumes and acquires from the Consultant for
itself and its successors and assigns forever,  all of the  Consultant's  right,
title and interest in and to the Remaining Rights in any and every jurisdiction.
The  Consultant  hereby  covenants and agrees that, at any time and from time to
time after the date hereof,  at the request of the Corporation or its successors
or assigns,  he will use his best  efforts to (i)  promptly and duly execute and
deliver,  or cause to be executed  and  delivered to the  Corporation,  all such
further  documents  and  instruments,  and (ii) promptly take all such other and
further  action,  as may be  reasonably  requested  by the  Corporation  to more
effectively transfer,  assign,  convey, grant, set over, vest, protect,  confirm
and establish full and exclusive right,  title and interest in and to all of the
Remaining  Rights  in and to the  Corporation  and its  successors  and  assigns
forever in any and every jurisdiction,  including,  without limitation,  any and
all applications, assignments or other documents or instruments deemed necessary
or advisable by the  Corporation  to apply for and obtain  Letters Patent of the
United States or any foreign  jurisdiction.  The  obligations  set forth in this
Section  4(e)  shall  be  binding  upon  the  successors,   assigns,  executors,
administrators and other legal representatives of the Consultant. The Consultant
hereby  represents and warrants to the  Corporation  that the Consultant has not
transferred  any right,  title or interest in or to the Remaining  Rights to any
other Person as of the date of the  execution of this  Agreement  and, as of the
date of the execution of this  Agreement,  has not entered into any agreement to
do so.

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                  (f)   The Consultant  acknowledges and admits that a breach of
any of the  covenants  contained  in this  Section 4 will cause the  Corporation
irreparable  harm.  The  Consultant  further  acknowledges  and admits  that the
damages  resulting  from  such a  breach  will be  difficult  or  impossible  to
ascertain,  and will be of the sort that cannot be compensated by money or other
damages. The Corporation shall be entitled to seek specific performance or other
injunctive relief to compel  compliance with such terms and provisions,  without
requirement of posting a bond. The Consultant  therefore waives (and is estopped
from  asserting  in a court of law or equity) any argument  that the breach,  or
threatened breach, of any of the covenants  contained in this Section 4 does not
constitute  irreparable harm for which an adequate remedy at law is unavailable.
Nothing  contained in this Section 4 or  elsewhere  in this  Agreement  shall be
construed as  prohibiting  the  Corporation  from  pursuing  any other  remedies
available  at law or in  equity  for a  breach,  or  threatened  breach,  by the
Consultant of any of the covenants contained in this Section 4.

                  (g)   If a court  declares  that any term or provision of this
Section 4 is invalid or unenforceable,  the parties to this Agreement agree that
the court making the determination of invalidity or unenforceability  shall have
the power to reduce the scope,  duration  or area of the term or  provision,  to
delete  specific  words or phrases,  or to replace any invalid or  unenforceable
term or provision  with a term or provision  that is valid and  enforceable  and
that comes closest to expressing  the intention of the invalid or  unenforceable
term or provision, and this Agreement shall be enforceable as so modified.

         5.       NON-DISPARAGEMENT.  The  Consultant  agrees that during and at
all times  following  the term of this  Agreement the  Consultant  shall not (i)
disparage the  Corporation,  its  subsidiaries or affiliates or their respective
products,  services,  directors,  officers  or  employees  and (ii)  directly or
indirectly make or cause to be made any oral or written  statement  which, or is
reasonably  likely to be  detrimental  in any material  respect to the Business,
operations,   activities  or  reputation  of  the  Corporation  or  any  of  its
subsidiaries  or  affiliates  or  their  respective   directors,   officers,  or
employees.

         6.       CONSULTANT  REPRESENTATIONS  AND  WARRANTIES.  The  Consultant
hereby   represents,   warrants  and  acknowledges  to,  and  agrees  with,  the
Corporation as follows:  (a) the Consultant  has the requisite  legal  capacity,
power and authority to execute, deliver and perform this Agreement and there are
no  agreements  or  understandings  that would make  unlawful  the  Consultant's
execution or delivery of this Agreement or the  performance of the  Consultant's
duties  and  obligations  hereunder,  (b) the  execution  and  delivery  of this
Agreement and the performance of the Consultant's  duties and obligations  under
this  Agreement,  will not conflict with, or breach or cause a default under, or
give any party a right to damages under, or terminate,  or require the giving of
notice under, any other agreement to which the Consultant is a party or by which
he or his assets are bound, (c) in connection with the Consultant's  performance
of this  Agreement,  the  Consultant  will not violate any  non-solicitation  or
non-disclosure  covenant  by which he is bound,  or use or  disclose or infringe
upon any  confidential  or  proprietary  information  or  intellectual  property
obtained  from,  derived  from,  or  developed  for,  any third  party,  (d) the
Consultant  has had  full  opportunity  to seek  advice  and  representation  by
independent  counsel  of  his  own  choosing  in  connection  with  the  review,
interpretation, negotiation, execution and delivery of this Agreement.

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         7.       ENTIRE AGREEMENT. This Agreement contains the entire agreement
among the parties with respect to the matters contemplated hereby and supersedes
all prior  agreements or  understandings  among the parties with respect to such
matters.

         8.       DESCRIPTIVE HEADINGS. Descriptive headings are for convenience
only and  shall not  control  or  affect  the  meaning  or  construction  of any
provision of this Agreement.

         9.       NOTICES. All notices, requests and other communications to any
party  hereunder  shall be in writing and sufficient if delivered  personally or
sent by telecopy  (with  confirmation  of receipt) or by registered or certified
mail, postage prepaid, return receipt requested, addressed as follows:

         If to the Consultant:      Russell W. H. Bailey
                                    7566 Fieldwood Circle
                                    Mattawan, MI 49071
                                    Facsimile: (269) 372-9477

         If to the Corporation:     Midnight Holdings Group, Inc.
                                    3872 Rochester Road
                                    Troy, MI  48083
                                    Attention: Chief Executive Officer
                                    Facsimile: (585) 783-1367

         With a copy to:            Reitler Brown & Rosenblatt LLC
                                    800 Third Avenue, 21st Floor
                                    New York, New York 10022
                                    Attention: Robert S. Brown
                                    Facsimile: (212) 371-5500

or to such other address or telecopy number as the party to whom notice is to be
given may have  furnished to the other party in writing in accordance  herewith.
Each such notice,  request or communication shall be effective when received or,
if given by mail, when delivered at the address  specified in this Section or on
the fifth business day following the date on which such communication is posted,
whichever occurs first.

         10.      SURVIVAL.  The  representations,   warranties,  covenants  and
agreements  contained  in Sections 4, 5, 6, 7, 9, 10, 12, 13, 14, 15, 16, 17 and
18 shall survive the termination of this Agreement.

         11.      COUNTERPARTS.  This  Agreement  may be executed in one or more
counterparts, and each such counterpart hereof shall be deemed to be an original
instrument,  but  all  such  counterparts  together  shall  constitute  but  one
agreement.

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         12.      BENEFITS OF AGREEMENT.  This Agreement is for the sole benefit
of the  parties  hereto and not for the  benefit of any third  party,  including
creditors of the parties hereto.

         13.      AMENDMENTS AND WAIVERS.  No modification,  amendment or waiver
of any provision of, or consent required by, this Agreement,  nor any consent to
any departure herefrom, shall be effective unless it is in writing and signed by
the parties hereto.  Such  modification,  amendment,  waiver or consent shall be
effective only in the specific instance and for the purpose for which given.

         14.      ASSIGNMENT.  This  Agreement  and the rights  and  obligations
hereunder  shall not be assignable or  transferable  by any party hereto without
the prior written consent of the other party. Any instrument  purporting to make
an  assignment  in violation of this  Section 14 shall be void.  All  covenants,
agreements and undertakings in this Agreement made by and on behalf of any party
hereto  shall bind and inure to the  benefit  of the  successors  and  permitted
assigns of such party.

         15.      GOVERNING  LAW.  THIS  AGREEMENT  SHALL  BE  GOVERNED  BY  AND
CONSTRUED IN ACCORDANCE  WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT  GIVING
EFFECT TO ANY CHOICE OR CONFLICT OF LAWS PROVISIONS).

         16.      CONSENT  TO  JURISDICTION.  EACH  OF THE  CORPORATION  AND THE
CONSULTANT HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF
ANY FEDERAL OR STATE COURT OF NEW YORK SITTING IN NEW YORK CITY AND  IRREVOCABLY
AGREES  THAT ALL  ACTIONS OR  PROCEEDINGS  ARISING  OUT OF OR  RELATING  TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE LITIGATED EXCLUSIVELY
IN  SUCH  COURTS.  EACH OF THE  CORPORATION  AND THE  CONSULTANT  AGREES  NOT TO
COMMENCE ANY LEGAL PROCEEDING  RELATED HERETO EXCEPT IN SUCH COURT.  EACH OF THE
CORPORATION AND THE CONSULTANT IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH  PROCEEDING IN ANY SUCH
COURT AND HEREBY FURTHER IRREVOCABLY AND  UNCONDITIONALLY  WAIVES AND AGREES NOT
TO PLEAD OR CLAIM IN ANY SUCH COURT  THAT ANY SUCH  ACTION,  SUIT OR  PROCEEDING
BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

         17.      WAIVER  OF  JURY  TRIAL.  EACH  OF  THE  CORPORATION  AND  THE
CONSULTANT HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHT HE OR IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY
OR INDIRECTLY  ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT.  EACH
OF  THE   CORPORATION   AND  THE   CONSULTANT   HEREBY  (A)  CERTIFIES  THAT  NO
REPRESENTATIVE,  AGENT OR ATTORNEY OF THE OTHER PARTY HAS

                                  Page 9 of 12
<PAGE>

REPRESENTED,  EXPRESSLY  OR  OTHERWISE,  THAT THE OTHER  PARTY WOULD NOT, IN THE
EVENT OF LITIGATION,  SEEK TO ENFORCE THE FOREGOING  WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE  OTHER  PARTY  HERETO  HAVE  BEEN  INDUCED  TO ENTER  INTO  THIS
AGREEMENT, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 17.

         18.      TAXES.  The Consultant  shall be responsible for the filing of
any and all  documents  and for the payment of any and all taxes to any federal,
state and local government, however denominated, associated with compensation to
be made to the Consultant hereunder.

              [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

                                  Page 10 of 12
<PAGE>

    IN WITNESS  WHEREOF,  the parties have executed this Agreement as of the day
and year set forth above.

                            Midnight Holdings Group, Inc.

                            By: /s/ Nicholas A. Cocco
                                ---------------------
                                    Name:  Nicholas A. Cocco
                                    Title: Chief Executive Officer and President

                                /s/ Russell W. H. Bailey
                                ------------------------
                                    Russell W. H. Bailey

<PAGE>

                                   SCHEDULE A

Duties and Responsibilities:

               i. Identify and repair any current operations holes,  develop and
                  implement solutions and actions.

              ii. Stabilize  and  increase  the top line  revenue,  set targets,
                  goals and action plans for each Service  Facility to return to
                  consolidated Gross Revenue of $18.9K per day.

             iii. Review  internal   candidates,   select,   train  and  provide
                  leadership  to newly  appointed  Regional  Operations  Leaders
                  (ROL)

              iv. Divide Service Center  operations  into two Regions and assign
                  responsibility  to two  respective  ROL's and establish  clear
                  goals and objectives.

               v. Develop a incentive  compensation  program for the position of
                  ROL

              vi. Review the current Collision Revision Partner Store Operations
                  and make a  recommendation  to Nicholas  Cocco relative to any
                  current facilities that will not support the ANA model.

             vii. Stabilize the Collision Revision partnership and implement the
                  contracts.

            viii. Support finance in inventory reconciliation.

              ix. Bring  the  company  operations  to  a  level  that  would  be
                  conducive  to the hiring of a Director  of Sales.  Stabilized,
                  operating  efficiently  and on a  measurable  track  for gross
                  revenue sales growth.

               x. Interview  Director of Sales  candidates  and meet a consensus
                  with other members of the executive team on the selection of a
                  candidate.

              xi. Indoctrinate,  train  and lead new hire to ensure  success  as
                  Director of Sales.

             xii. Evaluate  Director  of  Sales  performance  with  the  goal of
                  assuming the position of COO.

            xiii. Assist in the facility  expansion  of the company  through new
                  store openings and or acquisitions.

             xiv. Move help desk function from vendor to in house support.

              xv. Develop  an  overall  Service  Center   employee   recognition
                  program.

             xvi. Develop  a  business   relationship  with  NAPA  and/or  other
                  national  parts/vendor  relationships xvii. Perform additional
                  duties and  responsibilities  as may be  delegated  by the CEO
                  from time to timeRestructuring Agreement - Mass Financial Corp.

 

EXHIBIT 4.38

RESTRUCTURING AGREEMENT

THIS AGREEMENT is made as of the 29 day of December, 2005

BETWEEN:

KHD HUMBOLDT WEDAG INTERNATIONAL LTD., a corporation continued under
the laws of British Columbia, Canada

(“KHD”)

AND:

MASS FINANCIAL CORP., a company continued under the laws of Barbados

(“MFC”)

WHEREAS:

A. KHD’s business consists of two segments: (i) an industrial and engineering services business
segment (the “Industrial and Engineering Services Business”), and (ii) a financial services
business segment (the “Financial Services Business”);

B. KHD wishes to realign its business to focus on the expansion of the Industrial and Engineering
Services Business and to pursue an active acquisition program to acquire other companies that will
compliment such operations;

C. As part of KHD’s realignment of its business, KHD wishes to distribute the Financial Services
Business, which includes commodities trading and merchant banking, to its shareholders by way of a
dividend in kind consisting of all the Class A common shares of MFC;

D. As part of the proposed distribution of the Financial Services Business, KHD wishes to transfer
to MFC its interests in certain subsidiaries, which are involved or related to the Financial
Services Business and not complimentary to the Industrial and Engineering Services Business and MFC
wishes to transfer to KHD its interests in certain subsidiaries, which are complimentary to the
Industrial and Engineering Services Business;

E. Each of the boards of directors of KHD and MFC has determined that the proposed distribution is
expected to enhance the success of both KHD and MFC and is expected thereby to maximize shareholder
value over the long-term for each company by enabling each company to continue to pursue its own
focused strategy and enable investors to evaluate the financial performance, strategies and other
characteristics of each of KHD and MFC separately in comparison to companies within their
respective industries; and

F. KHD and MFC have agreed to enter into this Agreement setting out the terms and conditions on
which the restructuring and distribution will be carried out;

 

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NOW THEREFORE THIS AGREEMENT WITNESSES THAT in consideration of the premises and the respective
covenants and agreements herein contained, the parties hereto covenant and agree as follows:

ARTICLE 1

INTERPRETATION

	1.1	 	Definitions
	 
	 	 	In this Agreement, unless the subject matter or context is inconsistent therewith:

	 	(a)	 	“Act” means the Business Corporations Act (British Columbia), as now enacted or
as the same may be amended;
	 
	 	(b)	 	“Agreement”, “hereof”, “herein”, “hereunder” and similar expressions means this
Agreement, including Schedules A, B and C, and not any particular article, section or
other portion hereof and includes any agreement or instrument supplementary or
ancillary hereto;
	 
	 	(c)	 	“Business Day” means a day other than a Saturday, Sunday or a civic or
statutory holiday in Vancouver, British Columbia;
	 
	 	(d)	 	“Confidential Information” has the meaning ascribed thereto in Section 4.8 of
this Agreement;
	 
	 	(e)	 	“Disclosing Party” has the meaning ascribed thereto in Section 4.8 of this
Agreement;
	 
	 	(f)	 	“Distribution Date” means the date on which the KHD Distribution is effected;
	 
	 	(g)	 	“Distribution Record Date” has the meaning ascribed thereto in Section
2.1(b)(iv) of this Agreement;
	 
	 	(h)	 	“Exemption Order” has the meaning ascribed thereto in Section 2.1(a) of this
Agreement;
	 
	 	(i)	 	“Financial Services Business” has the meaning ascribed thereto in Recital A of
this Agreement;
	 
	 	(j)	 	“Industrial and Engineering Services Business” has the meaning ascribed thereto
in Recital A of this Agreement;
	 
	 	(k)	 	“Intended Purposes” has the meaning ascribed thereto in Section 4.8 of this
Agreement;
	 
	 	(l)	 	“KHD Distribution” has the meaning ascribed thereto in Section 2.1(b)(v) of
this Agreement;

 

- 3 -

	 	(m)	 	“KHD Financial Instruments” includes all credit facilities, guaranties,
commercial paper, foreign currency forward exchange contracts, comfort letters, letters
of credit and similar instruments related to the Industrial and Engineering Services
Business under which MFC or any of its subsidiaries (after completion of the KHD
Transfers and the MFC Transfers) has any primary, secondary, contingent, joint, several
or other Liability after the Distribution Record Date;
	 
	 	(n)	 	“KHD Shareholders” means at any time the holders at that time of KHD Shares;
	 
	 	(o)	 	“KHD Shares” means the common shares in the capital of KHD;
	 
	 	(p)	 	“KHD Transfers” means the share transfers by KHD and its subsidiaries, if
applicable, to MFC as set out in Schedule A for the consideration as set out in Section
2.1(b) of this Agreement;
	 
	 	(q)	 	“Liability or Liabilities” includes all debts, liabilities and obligations
whether absolute or contingent, matured or unmatured, liquidated or unliquidated,
accrued or unaccrued, known or unknown, whenever arising, and whether or not the same
would properly be reflected on a balance sheet;
	 
	 	(r)	 	“MFC Financial Instruments” includes all credit facilities, guaranties,
commercial paper, foreign currency forward exchange contracts, comfort letters, letters
of credit and similar instruments related to the Financial Services Business under
which KHD or any of its subsidiaries (after completion of the KHD Transfers and the MFC
Transfers) has any primary, secondary, contingent, joint, several or other Liability
after the Distribution Record Date;
	 
	 	(s)	 	“MFC Shareholders” means at any time the holders at that time of MFC Shares;
	 
	 	(t)	 	“MFC Shares” means the Class A common shares in the capital of MFC;
	 
	 	(u)	 	“MFC Split” has the meaning ascribed thereto in Section 2.1(b)(iv) of this
Agreement;
	 
	 	(v)	 	“MFC Transfers” means the share transfers by MFC to KHD as set out in Schedule
B for the consideration as set out in Section 2.1(b) of this Agreement;
	 
	 	(w)	 	“Restructuring” means the transactions set out Section 2.1 of this Agreement;
	 
	 	(x)	 	“Rule 12g3-2(b) Exemption” means the exemption granted by the Securities and
Exchange Commission from the registration requirements of Section 12(g) of the
Securities and Exchange Act of 1934;
	 
	 	(y)	 	“Securities Act” means the Securities Act (British Columbia), as now enacted or
as the same may be amended;
	 
	 	(z)	 	“Securities Legislation” means the United States Securities Act of 1933, the
United States Securities Exchange Act of 1934, and such other provincial, state or
territorial securities legislation as may be applicable, as now enacted or as the same
may be amended and the applicable rules, regulations, rulings, orders and

 

- 4 -

	   	     	 	      forms made or promulgated under such statutes and the published policies of the
regulatory authorities administering such statutes;

	 	 (aa)	 	  “Share Exchange Agreement” means the share exchange agreement dated December
29, 2005 between KHD and MFC;
	 
	 	 (bb)	 	  “Tax Act” means the Income Tax Act (Canada), as now enacted or as the same may
be amended; and
	 
	 	 (cc)	 	  “Termination Date” means 11:59 p.m., Pacific Standard Time, on March 31, 2006.

	1.2	 	Subsidiaries
	 
	 	 	When reference is made in this Agreement to subsidiaries of any entity, the word
“subsidiary” means any corporation of which outstanding voting securities carrying more than
50 percent of the votes for the election of directors are, or any partnership, joint venture
or other entity more than 50 percent of whose total equity interest is, directly or
indirectly, owned by such entity.
	 
	1.3	 	Currency
	 
	 	 	All sums of money which are referred to in this Agreement are expressed in lawful money of
Canada unless otherwise stated.
	 
	1.4	 	Interpretation Not Affected by Headings, etc.
	 
	 	 	The division of this Agreement into articles, sections and other portions and the insertion
of headings are for convenience of reference only and shall not affect the construction or
interpretation of this Agreement.
	 
	1.5	 	Number, etc.
	 
	 	 	Unless the subject matter or context requires the contrary, words importing the singular
number only shall include the plural and vice versa; words importing the use of any gender
shall include all genders; and words importing persons shall include natural persons, firms,
trusts, partnerships and corporations.
	 
	1.6	 	Date for Any Action
	 
	 	 	In the event that any date on which any action is required to be taken hereunder by any of
the parties hereto is not a Business Day, such action shall be required to be taken on the
next succeeding day which is a Business Day.
	 
	1.7	 	Entire Agreement
	 
	 	 	This Agreement constitutes the entire agreement between the parties hereto pertaining to the
subject mater hereof and supersedes all prior agreements, understandings, negotiations, and
discussions, whether oral or written, between the parties hereto with

 

- 5 -

	   	   	  respect to the subject matter hereof. There are no representations, warranties, covenants
or conditions with respect to the subject matter

  hereof except as contained herein.

ARTICLE 2

THE RESTRUCTURING

	2.1	  	 The Restructuring

		(a)	 	As soon as reasonably practicable, KHD and MFC shall apply to the United States
Securities and Exchange Commission for the Rule 12g3-2(b) Exemption and apply to all
relevant Canadian securities commissions for a discretionary exemption order (the
“Exemption Order”) in connection with the KHD Distribution.
	 
	 	(b)	 	Subject to the issuance of the Rule 12g3-2(b) Exemption and the Exemption Order
and prior to the Termination Date:

	 	(i)	 	KHD will complete and, if applicable, cause its subsidiaries to
complete, the KHD Transfers in consideration of the issuance by MFC of one (1)
common share of MFC to KHD and the completion of the MFC Transfers;
	 
	 	(ii)	 	MFC will complete the MFC Transfers in consideration of the KHD
Transfers;
	 
	 	(iii)	 	upon the completion of the KHD Transfers and the MFC
Transfers, KHD and MFC will complete the transaction set out in the Share
Exchange Agreement;
	 
	 	(iv)	 	upon the completion of the Share Exchange Agreement, MFC will
divide the issued and outstanding MFC Shares by a factor to be determined
jointly by MFC and KHD so that the number of issued and outstanding MFC Shares
is equal to the number of issued and outstanding KHD Shares (the “MFC Split”)
on the record date set by KHD to distribute all of the MFC Shares held by KHD
as part of the KHD Distribution (the “Distribution Record Date”);
	 
	 	(v)	 	upon the completion of the MFC Split, KHD will declare a
dividend payable to KHD Shareholders by distribution of the post-split MFC
Shares KHD received under the Share Exchange Agreement pursuant to which
holders of one KHD Share will receive one MFC Share (the “KHD Distribution”);
and KHD Shareholders will not be required to pay for the MFC Shares received in
the KHD Distribution or to surrender or exchange KHD Shares in order to receive
MFC Shares or to take any other action in connection the KHD Distribution;
	 
	 	(vi)	 	MFC will use all reasonable commercial efforts to apply to have
the MFC Shares listed and traded on the Cayman Islands Stock Exchange or other

 

- 6 -

	 	 	 	exchange or market acceptable to the applicable regulatory authorities; and

	 	(vii)	 	KHD will prepare an information statement that will contain
information substantially similar to that information which would be made
available to shareholders in a proxy or information statement complying with
Schedule 14A or 14C of the United States Securities Exchange Act of 1934,
describing the Distribution and MFC, to be sent to KHD Shareholders.

	2.2	 	Transfers and Conveyancing Agreements

	 	 (a)	 	In connection with the KHD Transfers and the MFC Transfers, each of KHD and MFC
herewith assigns the shares being transferred, as set out in this Agreement, to the
other party who accepts the assignment. For reasons of precaution, each of KHD and MFC
herewith assigns in accordance with Sec. 398,410 German Civil Code to the other party,
who accepts such assignment, all of the membership rights pertaining to the shares
being transferred, as set out in this Agreement. Where shares exist in physical form
(“Physical Shares”), such Physical Shares shall be physically delivered to the other
party. Where shares are entered into an electronic system (e.g. where shares are booked
in security deposits of banks), each of KHD and MFC herewith assigns to the other
party, who accepts such assignment, each and any of its claims for return of the shares
against both the bank and Clearstream. If applicable, each of KHD and MFC herewith
irrevocably instructs the depositary bank to transfer the shares being transferred, as
set out in this Agreement, to the other party’s account and to instruct Clearstream to
hold constructive possession of the shares for the other party’s bank.
	 
	 	 (b)	 	In connection with the KHD Transfers and the MFC Transfers, KHD and MFC shall
execute, or cause to be executed by the appropriate entities, such transfer and
conveyancing instruments, notarized deeds, bank directions and other documents, in such
forms as shall be reasonably acceptable to KHD and MFC to effect the KHD Transfers and
the MFC Transfers.

	2.3	 	Transfers Not Effected Prior to the Distribution; Transfers Deemed Effective as of the
Distribution Date
	 
	 	 	To the extent that the any of the KHD Transfers or the MFC Transfers have not been
consummated on or prior to the Distribution Date, the parties shall cooperate and use
reasonable best efforts to effect the transfer of such shares as promptly following the
Distribution Date as shall be practicable. Nothing herein shall be deemed to require the
transfer of any of shares contemplated by the KHD Transfers or the MFC Transfers which by
their terms or operation of law cannot be transferred until such time as all legal
impediments to such transfer have been removed; provided, however, that KHD and MFC shall,
and shall cause their respective subsidiaries to, use its reasonable best efforts to obtain
any necessary consents or approvals for the completion of the KHD Transfers and the MFC
Transfers. In the event that any of the KHD Transfers or the MFC Transfers have not been
consummated, effective on or before the Distribution Date, the party retaining the shares
subject to such transfer shall thereafter hold such shares in trust for the use and benefit
of the party entitled thereto (at the expense of the party entitled

 

- 7 -

	 	 	thereto) and take such other action as may be reasonably requested by the party to which
such shares are to be transferred, in order to place such party, insofar as reasonably
practicable, in substantially the same position as would have existed had such shares been
transferred as contemplated hereby. As and when any such shares becomes transferable, such
transfer automatically and without any further action shall be effected forthwith. Subject
to the foregoing, the parties agree that, as of the Distribution Date (or such earlier time
as any such shares may have been transferred or indebtedness assumed), each party hereto
shall be deemed to have acquired complete and sole beneficial ownership over all of such shares, together with all rights, powers and privileges incident thereto, which such party
is entitled to acquire pursuant to the terms of this Agreement.

	2.4	 	 Guarantee Obligations and Liens Relating to MFC

	 	(a)	 	KHD and MFC shall cooperate and use their respective reasonable best efforts
to:

	 	(i)	 	cause MFC, or one of its subsidiaries (after completion of the
KHD Transfers and the MFC Transfers) to be substituted in all respects for KHD
or any of its subsidiaries (after completion of the KHD Transfers and the MFC
Transfers) in respect of, all obligations of KHD or any of its subsidiaries
(after completion of the KHD Transfers and the MFC Transfers) under any
Liabilities of MFC for which such may be liable, as guarantor, original tenant,
primary obligor or otherwise; and
	 
	 	(ii)	 	cause assets of MFC to be substituted in all respects for any
assets of KHD or any of its subsidiaries (after completion of the KHD Transfers
and the MFC Transfers) in respect of, any liens or encumbrances on any assets
of KHD or any of its subsidiaries (after completion of the KHD Transfers and
the MFC Transfers) which are securing any Liabilities of MFC.

	 	(b)	 	If such a termination or substitution is not effected by the Distribution Date,
MFC shall indemnify and hold harmless KHD and any of its subsidiaries (after completion
of the KHD Transfers and the MFC Transfers) for any loss arising from or relating
thereto.

2.5    Guarantee Obligations and Liens Relating to KHD

	 	(a)	 	KHD and MFC shall cooperate and use their respective reasonable best efforts
to:

	 	(i)	 	cause KHD, or one of its subsidiaries (after completion of the
KHD Transfers and the MFC Transfers) to be substituted in all respects for MFC
or any of its subsidiaries (after completion of the KHD Transfers and the MFC
Transfers) in respect of, all obligations of MFC or any of its subsidiaries
(after completion of the KHD Transfers and the MFC Transfers) under any
Liabilities of KHD for which such may be liable, as guarantor, original tenant,
primary obligor or otherwise; and
	 
	 	(ii)	 	cause assets of KHD to be substituted in all respects for any
assets of MFC or any of its subsidiaries (after completion of the KHD Transfers
and the MFC Transfers) in respect of, any liens or encumbrances on any assets
of

 

- 8 -

	 	 	 	MFC or any of its subsidiaries (after completion of the KHD Transfers and
the MFC Transfers) which are securing any Liabilities of KHD.

	 	 (b)	 	If such a termination or substitution is not effected by the Distribution Date,
KHD shall indemnify and hold harmless MFC and any of its subsidiaries (after completion
of the KHD Transfers and the MFC Transfers) for any loss arising from or relating
thereto.

	2.6	 	Guarantee Obligations and Liens of MFC and KHD following the Distribution
	 
	 	 	Notwithstanding any provision to the contrary, MFC and KHD agree that all current
obligations under any Liabilities of each party and their respective subsidiaries for which
such may be liable, as guarantor, original tenant, primary obligor or otherwise
(collectively, the “Guarantees”), that are not terminated or otherwise extinguished prior to
the Distribution Date shall continue to be in force for a reasonable period of time
following the Distribution Date and both parties and their respective subsidiaries shall
issue such Guarantees as are reasonably required for a reasonable period of time following
the Distribution Date.
	 
	2.7	 	Financial Instruments

	 	 (a)	 	MFC will, at its expense, take or cause to be taken all actions, and enter into
(or cause the subsidiaries of MFC to enter into) such agreements and arrangements, as
shall be reasonably necessary to effect the release of and substitution for each member
of KHD and/or its subsidiaries (after completion of the KHD Transfers and the MFC
Transfers), as of the Distribution Date, from all primary, secondary, contingent,
joint, several and other Liabilities in respect of MFC Financial Instruments to the
extent related to the Financial Services Business (it being understood that all such
Liabilities in respect of MFC Financial Instruments are Liabilities of MFC).
	 
	 	 (b)	 	KHD will, at its expense, take or cause to be taken all actions, and enter into
(or cause its subsidiaries to enter into) such agreements and arrangements, as shall be
necessary to effect the release of and substitution for MFC and its subsidiaries (after
completion of the KHD Transfers and the MFC Transfers), as of the Distribution Date,
from all primary, secondary, contingent, joint, several and other Liabilities, if any,
in respect of KHD Financial Instruments to the extent related to the Industrial and
Engineering Services Business (it being understood that all such Liabilities in respect
of KHD Financial Instruments are Liabilities of KHD).
	 
	 	 (c)	 	The parties’ obligations under this Section 2.7 will continue to be applicable
to all MFC Financial Instruments and KHD Financial Instruments identified at any time
by KHD or MFC, whether before, at or after the Distribution Date.

 

- 9 -

	2.8	 	Intercompany Accounts

	 	(a)	 	KHD and MFC shall agree on the amounts of all intercompany accounts that
existed among KHD and MFC, and their respective subsidiaries, as at December 31, 2005
(or at such other applicable date) (the “Intercompany Accounts”).
	 
	 	(b)	 	KHD and MFC may adjust the Intercompany Accounts provided that such adjustment
does not give rise to any tax cost or liabilities on the part of KHD, MFC or any of
their respective subsidiaries. KHD and MFC may settle any Intercompany Accounts
through the issuance of preferred shares.

	2.9	 	Tax Adjustments
	 
	 	 	If the Minister of National Revenue or any other competent authority at any time questions
or proposes to issue or issues any assessment or assessments that would impose or imposes
any liability for tax of any nature or kind on any of the parties or on any other person in
connection with the Restructuring or the KHD Distribution, then the parties shall do all
such things and perform all such acts as may be necessary to minimize the liability for such
assessment or assessments.

	2.10	 	The Agent and Delivery of Shares to the Agent

	 	 (a)	 	Prior to the Distribution Date, MFC shall enter into an agreement with a
transfer agent (the “Agent”) providing for, among other things, the distribution to the
KHD Shareholders of the MFC Shares.
	 
	 	 (b)	 	On or prior to the Distribution Date, KHD shall irrevocably authorize the
book-entry transfer by the Agent of all of the outstanding MFC Shares to be distributed
in connection with the KHD Distribution, immediately following which the Agent shall
distribute by book-entry transfer all of the MFC Shares. After the Distribution Date,
upon the request of the Agent, MFC shall provide all book-entry transfer authorizations
that the Agent shall require in order to issue shares certificates to evidence the MFC
Shares.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES

	3.1	 	Mutual Representations and Warranties
	 
	 	 	Each party represents and warrants to the other party as follows and acknowledges that the
other party is relying upon such representations and warranties in connection with the
matters contemplated by this Agreement:

	 	 (a)	 	it is duly incorporated and validly existing under the laws of its jurisdiction
of incorporation and has the corporate power and authority to own or lease its property
and assets and to carry on its business as now conducted by it;
	 
	 	 (b)	 	the execution and delivery of this Agreement by it, including all matters
contemplated hereby, have been authorized by all necessary corporate action and

 

- 10 -

	 	 	 	it has the corporate power and authority to enter into and perform its obligations
under this Agreement;

	 	 (c)	 	it has duly executed and delivered this Agreement, and this Agreement is a
valid and binding agreement enforceable against it in accordance with its terms,
subject to bankruptcy, insolvency and other laws affecting the enforcement of
creditors’ rights generally and to general principles of equity; and
	 
	 	 (d)	 	the execution and delivery of this Agreement and the completion of the
transactions contemplated hereby do not now and will not:

	 	(i)	 	conflict with, or result in a breach of, or create a state of
facts which after notice or lapse of time or both results or may result in a
breach of, any of the terms, conditions or provisions of its constating
documents or the constating documents of any of its subsidiaries or any
material agreement, instrument, licence, permit, undertaking, commitment or
understanding to which it or any of its subsidiaries is a party or by which it
is bound; or
	 
	 	(ii)	 	violate any provision of law or administrative regulation or
any judicial or administrative award, judgment or decree applicable and known
to it (after due inquiry), the breach of which would have a material adverse
effect on it.

ARTICLE 4

COVENANTS

	4.1	 	Covenants of KHD

	 	 (a)	 	Subject to the issuance of the Rule 12g3-2(b) Exemption and Exemption Order,
KHD will execute and deliver all documents, and cause its subsidiaries to execute and
deliver all documents necessary to complete the Restructuring in the order as set out
in Section 2.1 of this Agreement, subject to the satisfaction or waiver of the
conditions in Sections 5.1 and 5.3 of this Agreement, on or before the Termination
Date.
	 
	 	 (b)	 	Subject to the satisfaction or waiver of the conditions contained in Sections
5.1 and 5.3 of this Agreement, KHD shall complete the Restructuring.
	 
	 	 (c)	 	KHD will use all reasonable commercial efforts to procure the Rule 12g3-2(b)
Exemption and the Exemption Order.

	4.2	 	Covenants of MFC

	 	 (a)	 	Subject to the issuance of the Exemption Order, MFC will execute and deliver
all documents, and cause its subsidiaries to execute and deliver all documents
necessary to complete the Restructuring in the order as set out in Section 2.1 of this
Agreement, subject to the satisfaction or waiver of the conditions in Sections 5.1 and
5.2 of this Agreement, on or before the Termination Date.

 

- 11 -

	 	(b)	 	Subject to the satisfaction or waiver of the conditions contained in Sections
5.1 and 5.2 of this Agreement, MFC shall complete the Restructuring.
	 
	 	(c)	 	MFC will use all reasonable commercial efforts to procure the Rule 12g3-2(b)
Exemption.

	4.3	 	Mutual Covenants
	 
	 	 	Except as contemplated in this Agreement, each of KHD and MFC agrees, except with the prior
written agreement of the other, that:

	 	(a)	 	it will use all reasonable commercial efforts to satisfy (or cause the
satisfaction of) the conditions precedent to its obligations hereunder and to take, or
cause to be taken, all other action and to do, or cause to be done, all other things
necessary, proper or advisable under applicable laws and regulations to complete the
Restructuring;
	 
	 	(b)	 	to co-operate with the other in good faith in order to ensure the timely
completion of the Restructuring;
	 
	 	(c)	 	to use all reasonable commercial efforts to co-operate with each other in
connection with the performance by the other of its obligations under this section;
	 
	 	(d)	 	prior to the KHD Distribution, it will not, and will not permit any of its
subsidiaries to, enter into any transaction or perform any act which might interfere
with or be inconsistent with the successful completion of the Restructuring or which
would render inaccurate any of its representations and warranties set forth herein if
such representations and warranties were made at a date subsequent to such transaction
or act and all references to the date hereof were references to such later date; and
	 
	 	(e)	 	it will not take or fail to take any action within its control which would
result in a condition precedent to the Restructuring not being satisfied.

	4.4	 	Co-operation, Consents and Approvals
	 
	 	 	Each party will, and will cause its subsidiaries to, co-operate and use their respective
reasonable commercial efforts to obtain all authorizations, waivers, exemptions, consents,
orders and other approvals from domestic or foreign courts, governmental or regulatory
agencies, boards, commissions or other authorities, shareholders and third parties as are
necessary for the consummation of the transactions contemplated by the Restructuring and the
KHD Distribution. Each party will vigorously defend or cause to be defended any lawsuits or
other legal proceedings brought against it or any of its subsidiaries challenging this
Agreement or the completion of the Restructuring or the KHD Distribution. Neither party
will settle or compromise any claim brought by their respective present, former or purported
holders of any of their securities in connection with the transactions contemplated by this
Agreement prior to the KHD Distribution without the prior written consent of the other, such
consent not to be unreasonably withheld.

 

- 12 -

	4.5	 	Public Announcements
	 
	 	 	No news release or other public announcement concerning the proposed transactions
contemplated by this Agreement will be made by any party hereto without the prior consent of
the other, such consent not to be unreasonably withheld; provided, however, that any party
may without such consent make such disclosure as may be required by any stock exchange on
which its securities are listed or by any Securities Legislation or any regulatory authority
having jurisdiction over such party and, if such disclosure is required, the party making
the disclosure will use reasonable efforts to give prior oral or written notice to the other
party and an opportunity to allow the other party to comment on the disclosure.
	 
	4.6	 	Material Changes
	 
	 	 	Each party will advise the other party orally and in writing of any material change with
respect to it or its subsidiaries on a consolidated basis (and for this purpose, MFC and its
subsidiaries shall not be considered subsidiaries of KHD at any time) promptly after it has
occurred and will promptly send to the other a copy of any press release or material change
report filed by it with securities regulatory authorities.
	 
	4.7	 	Notification
	 
	 	 	Each party will promptly notify the other if any of the representations and warranties made
by it in this Agreement ceases to be true, accurate and complete in any material respect and
of any failure to comply in any material respect with any of its obligations hereunder.
	 
	4.8	 	Confidential Information
	 
	 	 	Each of the parties confirms and acknowledges that it has been provided, in connection with
the review of the proposed transactions among them and the preparation of materials required
to implement those transactions which have culminated in the parties entering into this
Agreement (the “Intended Purposes”), certain confidential information concerning the affairs
of the disclosing party (the “Disclosing Party”) in written, electronic, spoken or other
form in presentations, discussions, tours or other means including direct disclosure and
disclosure by way of authorized agents, representatives and consultants (which disclosed
information together with all third party reports to any party based in whole or in part on
such disclosed information is herein referred to as the “Confidential Information”). Each
party acknowledges that the Confidential Information is the property of the Disclosing
Party, is confidential and material to the interests, business and affairs of the Disclosing
Party and includes information that has not been generally disclosed to the public and that
disclosure thereof, other than as contemplated herein, would cause irreparable harm to the
Disclosing Party and its shareholders. Accordingly, each party will maintain the
confidentiality of the Confidential Information and will not disclose the Confidential
Information to any person except as part of the Intended Purposes or except as required by
applicable law or legal process, in which latter case such party shall provide the
Disclosing Party with prompt notice of such requirement to allow the Disclosing Party to
seek an appropriate protective order or other remedy. Each of the parties acknowledges and
agrees that any Disclosing Party and its

 

- 13 -

	 	 	shareholders would be irreparably damaged and that compensation by damages alone would be
insufficient if any provision of this Section 4.8 is not performed by any of the other
parties in accordance with its terms. Accordingly, the Disclosing Party will be entitled to
an injunction or injunctions to prevent breaches of the provisions of this Section 4.8 and
may specifically enforce such provisions by an action instituted in a court having
jurisdiction and the party in breach of such provisions will be deemed to have waived
defences to such an action. These specific remedies are in addition to any other remedy to
which a Disclosing Party may be entitled at law or in equity.
	 
	4.9	 	Provision of Corporate Records

	 	(a)	 	Prior to or as promptly as practicable after the Distribution Date, KHD shall
deliver or make available to MFC all corporate books and records of MFC and any of its
subsidiaries (after completion of the KHD Transfers and the MFC Transfers) in its
possession and complete and accurate copies of all relevant portions of all corporate
books and records relating directly and primarily to the Financial Services Business.
KHD and its subsidiaries may retain complete and accurate copies of such books and
records. From and after the Distribution Date, all such books, records and copies shall
be the property of MFC.
	 
	 	(b)	 	Prior to or as promptly as practicable after the Distribution Date, MFC shall
deliver or make available to KHD, all corporate books and records of KHD and any of its
subsidiaries (after completion of the KHD Transfers and the MFC Transfers) in its
possession and complete and accurate copies of all relevant portions of all corporate
books and records relating directly and primarily to the Industrial and Engineering
Services Business. MFC may retain complete and accurate copies of such books and
records. From and after the Distribution Date, all such books, records and copies shall
be the property of KHD.

	4.10	 	Access to Information
	 
	 	 	From and after the Distribution Date, each of KHD and MFC shall afford to the other and to
the other’s representatives reasonable access and duplicating rights during normal business
hours to all information within the possession or control of such party relating to the
other party’s business as it existed prior to the KHD Distribution or relating to or arising
in connection with the relationship between the parties on or prior to the Distribution
Date, insofar as such access is reasonably required for a reasonable purpose. Without
limiting the foregoing, information may be requested under this Section 4.10 for audit,
accounting, regulatory, claims, litigation and tax purposes, as well as for purposes of
fulfilling disclosure and reporting obligations.
	 
	4.11	 	Production of Witnesses
	 
	 	 	After the Distribution Date, each of KHD and MFC shall, and shall cause each member of its
respective business to make available to the other party. upon reasonable prior written
request, such party’s directors, managers or other persons acting in a similar capacity,
officers, employees and agents as witnesses to the extent that any such person may
reasonably be required in connection with any litigation, administrative or other
proceedings in which the requesting party may from time to time be involved and relating

 

- 14 -

	 	 	to other party’s business as it existed prior to the KHD Distribution or relating to or in
connection with the relationship between the parties on or prior to the Distribution Date.
	 
	4.12	 	Retention of Records
	 
	 	 	Except as otherwise agreed in writing, each of KHD and MFC shall, and shall cause its
respective subsidiaries, retain all information in such party’s possession or under its
control, relating directly and primarily to other party’s business as it existed prior to
the KHD Distribution as required by law.
	 
	4.13	 	Cooperation with Respect to Government Reports and Filings
	 
	 	 	KHD, on behalf of itself and each of its subsidiaries (after completion of the KHD Transfers
and the MFC Transfers), agrees to provide MFC or any of its subsidiaries (after completion
of the KHD Transfers and the MFC Transfers), and MFC, on behalf of itself and each of its
subsidiaries (after completion of the KHD Transfers and the MFC Transfers), agrees to
provide KHD or any of its subsidiaries (after completion of the KHD Transfers and the MFC
Transfers), with such cooperation and information as may be reasonably requested by the
other in connection with the preparation or filing of any government report or other
government filing contemplated by this Agreement or in conducting any other government
proceeding relating to the businesses or each party as such existed prior to the KHD
Distribution or relating to or in connection with the relationship between the parties on or
prior to the Distribution Date. Such cooperation and information shall include promptly
forwarding copies of appropriate notices, forms and other communications received from or
sent to any government authority. Each party shall make its employees and facilities
available during normal business hours and on reasonable prior notice to provide explanation
of any documents or information provided hereunder.

ARTICLE 5

CONDITIONS

	5.1	 	Mutual Conditions Precedent
	 
	 	 	The obligations of each of the parties to this Agreement to complete the Restructuring are
subject to the fulfilment or mutual waiver by each of KHD and MFC of each of the following
conditions:

	 	(a)	 	the Rule 12g3-2(b) Exemption shall have been granted in form and substance
satisfactory to each of KHD and MFC;
	 
	 	(b)	 	the Exemption Order shall have been obtained in form and substance satisfactory
to each of KHD and MFC;
	 
	 	(c)	 	the Restructuring and this Agreement shall have been approved by the respective
board of directors of each of the parties;
	 
	 	(d)	 	there shall not have occurred any actual or threatened (including any proposal
by the Minister of Finance (Canada)) change or amendment to the Tax Act or

 

- 15 -

	 	 	 	regulations thereunder or to any applicable provincial tax legislation or the
regulations thereunder or any publicly stated administrative position or practice in
relation thereto which, directly or indirectly, has or may have any material adverse
significance with respect to the Restructuring including, without limitation, the
KHD Distribution;
	 
	 	(e)	 	all requisite stock exchange approvals, all requisite domestic and foreign
regulatory approvals and consents, and rulings or orders from the securities regulatory
authorities providing that all trades relating to the KHD Transfers and the MFC
Transfers are exempt from prospectus and registration requirements, shall each have
been obtained on terms and conditions satisfactory to KHD and MFC, acting reasonably;
	 
	 	(f)	 	no order or decree of any domestic or foreign court, tribunal, governmental
agency or other regulatory authority or administrative agency, board or commission, and
no law, regulation, policy, directive or order shall have been enacted, promulgated,
made, issued or applied to cease trade, enjoin, prohibit or impose material limitations
on, the Restructuring or the transactions contemplated thereby;
	 
	 	(g)	 	there shall not exist any prohibition at law against the completion of the
Restructuring; and
	 
	 	(h)	 	this Agreement shall not have been terminated pursuant to the provisions
hereof.

	5.2	 	Additional Conditions Precedent to the Obligations of MFC
	 
	 	 	The obligations of MFC to complete the Restructuring will also be subject to the following
conditions, each of which is for MFC’s exclusive benefit and may be asserted or waived by it
in its sole discretion at any time, in whole or in part:

	 	(a)	 	KHD shall have performed each covenant or obligation to be performed by it
hereunder in favour of MFC;
	 
	 	(b)	 	the representations and warranties of KHD set out in this Agreement shall be
true and correct on and as of the date of the KHD Distribution as if made on and as of
such date, except as affected by transactions contemplated or permitted by this
Agreement;
	 
	 	(c)	 	any required governmental or regulatory approvals, which if not received would
have a material adverse effect on the business or prospects of KHD or MFC and their
respective subsidiaries on a consolidated basis, shall have been obtained or waived on
terms satisfactory to MFC, acting reasonably;
	 
	 	(d)	 	no act, action, suit or proceedings shall have been taken before or by any
domestic or foreign court or tribunal or governmental agency or other regulatory
authority or administrative agency or commission by any elected or appointed public
official or private person (including, without limitation, any individual, corporation,
firm, group or other entity) in Canada or elsewhere, whether or not

 

- 16 -

	 	 	 	having the force of law, or no law, regulation or policy shall have been proposed,
enacted, promulgated or applied which, in the sole judgement of MFC, acting
reasonably in the circumstances, if the Restructuring was consummated would
materially and adversely affect MFC and its subsidiaries; and
	 
	 	(e)	 	KHD and its subsidiaries shall have co-operated in taking all steps required to
meet regulatory requirements, provided that such steps would not have adverse
consequences to the holders of MFC Shares or to MFC or any of its subsidiaries if the
Restructuring were not completed.

	5.3	 	Additional Conditions Precedent to the Obligations of KHD
	 
	 	 	The obligations of KHD to complete the Restructuring will also be subject to the following
conditions, each of which is for KHD’s exclusive benefit and may be asserted or waived by it
in its sole discretion at any time, in whole or in part:

	 	(a)	 	MFC shall have performed each covenant or obligation to be performed by it
hereunder in favour of KHD;
	 
	 	(b)	 	the representations and warranties of MFC set out in this Agreement shall be
true and correct on and as of the date of the KHD Distribution as if made on and as of
such date, except as affected by transactions contemplated or permitted by this
Agreement;
	 
	 	(c)	 	MFC’s registrar and transfer agent has received valid and irrevocable
instructions to distribute by book-entry transfer, all of the MFC Shares to the holders
of KHD Shares;
	 
	 	(d)	 	any required governmental or regulatory approvals, which if not received would
have a material adverse effect on the business or prospects of KHD or MFC and their
respective subsidiaries on a consolidated basis, shall have been obtained or waived on
terms satisfactory to KHD, acting reasonably;
	 
	 	(e)	 	no act, action, suit or proceedings shall have been taken before or by any
domestic or foreign court or tribunal or governmental agency or other regulatory
authority or administrative agency or commission by any elected or appointed public
official or private person (including, without limitation, any individual, corporation,
firm, group or other entity) in Canada or elsewhere, whether or not having the force of
law, or no law, regulation or policy shall have been proposed, enacted, promulgated or
applied which, in the sole judgement of KHD, acting reasonably in the circumstances, if
the Restructuring was consummated would materially and adversely affect KHD and its
subsidiaries; and
	 
	 	(f)	 	from and after the date of this Agreement, there shall not have occurred or
arisen (or there shall have been generally disclosed or discovered, if not previously
disclosed in writing to and acknowledged by KHD), any change or fact (or any condition,
event or development involving a prospective change) in the business, operations,
affairs, assets, liabilities (including any contingent liabilities that may arise
through outstanding, pending or threatened litigation or otherwise),

 

- 17 -

	 	 	 	capitalization, financial condition, licenses, permits, rights or privileges,
whether contractual or otherwise, or prospects of MFC and any of its subsidiaries
considered on a consolidated basis which, in the sole judgement of KHD, acting
reasonably in the circumstances, has or may have a material adverse effect either on
the value of MFC and its subsidiaries considered on a consolidated basis.

	5.4	 	Satisfaction of Conditions
	 
	 	 	The conditions set out in Sections 5.1, 5.2 and 5.3 hereof shall be conclusively deemed to
have been satisfied, waived or released when the Restructuring and Distribution are
complete.

ARTICLE 6

TERMINATION AND AMENDMENT

	6.1	 	Termination
	 
	 	 	This Agreement may be terminated at any time prior to the date of the KHD Distribution:

	 	(a)	 	by agreement in writing executed by KHD and MFC;
	 
	 	(b)	 	by MFC at any time on or after the Termination Date if, by that date, the
conditions set forth in Sections 5.1 and 5.2 have not been satisfied or waived; or
	 
	 	(c)	 	by KHD at any time on or after the Termination Date if, by that date, the
conditions set forth in Sections 5.1 and 5.3 have not been satisfied or waived.

	6.2	 	Effect of Termination
	 
	 	 	In the event of any termination of this Agreement, the provisions hereof will become void
and no party will have any liability to any other party in respect of this Agreement, except
in respect of any breach of this Agreement which occurred on or before the Termination Date.
	 
	6.3	 	Amendment
	 
	 	 	Subject as hereinafter provided, this Agreement may, at any time and from time to time, but
not later than the date of the KHD Distribution, be amended by written agreement of KHD and
MFC (or, in the case of a waiver, by written instrument of the party giving the waiver)
without, subject to applicable law, notice to or authorization on the part of the
shareholders of KHD or MFC. Without limiting the generality of the foregoing, any such
amendment may:

	 	(a)	 	change the time for performance of any of the obligations or acts of the
parties hereto;
	 
	 	(b)	 	waive any inaccuracies or modify any representation or warranty contained
herein or in any document to be delivered pursuant hereto; or

 

- 18 -

	 	(c)	 	waive compliance with or modify any of the covenants herein contained or waive
or modify performance of any of the obligations of the parties hereto.
	 
	 	Notwithstanding the foregoing, the terms of this Agreement shall not be amended in a manner
prejudicial to KHD or MFC without the approval of KHD or MFC, as the case may be.

ARTICLE 7

GENERAL PROVISIONS

	7.1	 	Notices
	 
	 	 	All notices and other communications hereunder shall be in writing and shall be delivered by
hand to the parties at the following addresses or sent by telecopy at the following
telecopier numbers or at such other addresses or telecopier numbers as shall be specified by
the parties by like notice:

	 	(a)	 	if to KHD:

	 	 	 
	 

	 	Unit 803, 8/F, Dina House, Ruttonjee Centre

11 Duddell Street, Central

Hong Kong
	 
	 	 
	 

	 	Attention: Michael J. Smith
	 

	 	Fax: 852.2537.3689

	 	(b)	 	if to MFC:

	 	 	 
	 

	 	Palm Court
	 

	 	28 Pine Road
	 

	 	Belleville, St. Michael
	 

	 	Barbados
	 
	 	 
	 

	 	Attention: Michael J. Smith
	 

	 	Fax: 246.429.5143

The date of receipt of any such notice shall be deemed to be the date of delivery thereof
or, in the case of notice sent by telecopy, the date of successful transmission thereof
(unless transmission is received after normal business hours, in which case the date of
receipt shall be deemed to be the next Business Day).

	7.2	 	Survival of Representations and Warranties
	 
	 	 	The respective representations, warranties and covenants of KHD and MFC contained herein
shall expire with, and be terminated and extinguished upon, completion of the Restructuring
except for the provisions of Section 4.8 which shall survive as continuing covenants
following the completion of the Restructuring.

 

- 19 -

	7.3	 	Applicable Law
	 
	 	 	This Agreement shall be governed by, and construed in accordance with, the laws of the
Province of British Columbia and the federal laws of Canada applicable therein and shall be
treated in all respects as a British Columbia contract.
	 
	7.4	 	Binding Effect and Assignment
	 
	 	 	This Agreement and all the provisions hereof shall be binding upon and enure to the benefit
of the parties hereto and their respective successors and permitted assigns. Neither this
Agreement nor any of the rights hereunder or under the Restructuring shall be assigned by
any of the parties hereto without the prior written consent of the other party hereto.
	 
	7.5	 	Time of Essence
	 
	 	 	Time shall be of the essence of this Agreement.

	 
	7.6	 	Counterparts
	 
	 	 	This Agreement may be executed in counterparts, each of which shall be deemed an original,
and each signed copy sent by electronic facsimile transmission shall be deemed to be an
original, but all of which together shall constitute one and the same instrument.
	 
	7.7	 	Further Assurances
	 
	 	 	Each party shall make, do and execute, or cause to be made, done and executed all such
further acts, deeds, agreements, transfers, assurances, instruments or documents as may be
reasonably required in order to implement this Agreement.

 

- 20 -

	7.8	 	Bulk Transfer Laws
	 
	 	 	Each of KHD and MFC hereby waive compliance, on their own behalf and on behalf of each of
their respective subsidiaries, with the requirements and provisions of the “bulk-sale” or
“bulk-transfer” laws of any jurisdiction.

IN WITNESS WHEREOF each of the parties hereto has executed this Agreement as of the date first
written above.

KHD HUMBOLDT WEDAG INTERNATIONAL LTD.

	 	 	 
	Per:

	 	/s/ Michael J. Smith
	 

	 	Authorized Signatory

MASS FINANCIAL CORP.

	 	 	 
	Per:

	 	/s/ Michael J. Smith
	 

	 	Authorized Signatory

 

- 21 -

SCHEDULE A

TRANSFERS FROM KHD AND SUBSIDIARIES TO MFC

In the event of a good faith error or omission as to the number of shares to be transferred from
KHD to MFC, the parties to the Restructuring Agreement have agreed to use their best efforts to
rectify such error or omission with the issuance of additional shares of preferred stock.

	 	 	 	 	 
	 	 	Corporate Jurisdiction	 	Number and Class of Shares
	Name of Company	 	of the Company	 	to be Transferred from
	to be Transferred	 	to be Transferred	 	KHD to MFC
	 
	 	 	 	 
	Cathay Merchant Group, Inc.

	 	U.S.A.
	 	1,486,100 common shares
	 
	 	 	 	 
	CVD Financial Corporation

	 	British Virgin Islands
	 	2,611,881 common shares
	 

	 	 	 	1,467,150 preferred shares
	 
	 	 	 	 
	DTA Holding AG (In Liquidation)

	 	Germany
	 	all shares held by KHD
	 
	 	 	 	 
	Ellsway Holdings Limited

	 	Canada
	 	10,097,441 common shares
	 
	 	 	 	 
	 

	 	 	 	10,097,342 preferred shares
	 
	 	 	 	 
	Lasernet Limited

	 	Liberia
	 	266,797 shares
	 
	 	 	 	 
	MFC Bancorp Ltd. (formerly

Ballinger Holding Corporation)

	 	Canada
	 	1 common share
	 
	 	 	 	 
	New Image Investment Company

Limited

	 	U.S.A
	 	7,640,960 common shares
	 
	 	 	 	 
	Newfoundland and Labrador

Corporation Limited

	 	Canada
	 	all shares held by KHD
	 
	 	 	 	 
	Trimble Resources Corporation

	 	Turks and Caicos Islands
	 	all shares held by KHD

 

- 22 -

SCHEDULE B

TRANSFERS FROM MFC TO KHD

In the event of a good faith error or omission as to the number of shares to be transferred from
MFC to KHD, the parties to the Restructuring Agreement have agreed to use their best efforts to
rectify such error or omission with the issuance of additional shares of preferred stock.

	 	 	 	 	 
	 	 	Corporate Jurisdiction	 	Number and Class of Shares
	Name of Company	 	of the Company	 	to be Transferred from
	to be Transferred	 	to be Transferred	 	MFC to KHD
	 
	 	 	 	 
	MFC Industrial Holdings AG

	 	Germany
	 	6,015,985 common shares
	 
	 	 	 	 
	Sasamat Capital Corporation

	 	Canada
	 	2,671,767 common shares
	 
	 	 	 	 
	Tianjin Humboldt Wedag

Liyuan Machinery &
Technology Ltd.

	 	China
	 	70% of MFC’s Holdings
	 
	 	 	 	 
	MFC & KHD International
Industries
 Limited

	 	Samoa
	 	all shares held by MFC

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